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Government Shutdown Looms; Schumer and Trump Meeting; Stormy Daniels Paid to Keep Quiet. Aired 1-1:30p ET

Aired January 19, 2018 - 13:00   ET


ANNOUNCER: This is CNN breaking news.

WOLF BLITZER, CNN ANCHOR: Hello, I'm Wolf Blitzer. It's 1:00 p.m. here in Washington. Wherever you're watching from around the world, thanks very much for joining us.

Up front first, shutdown showdown. We're less than 11 hours away from a possible government shutdown here in the United States. The blame game is in full effect and all eyes are on the U.S. Senate right now.

And we've just gotten word there's breaking news that the Senate minority leader, Chuck Schumer, has arrived at the White House at the president's invitation to discuss this critically important situation.

The Senate majority leader, Mitch McConnell needs 60 votes to keep the federal government from running out of money at midnight tonight. But even some of the 51 Senate Republicans say they'll vote against this short-term spending bill.

So, what would a shutdown mean? Here's a closer look at some of those who would be affected. Nine million children covered under the Children's Health Insurance Program, known as CHIP.

The short-term spending bill does extend the program for six years. But if it doesn't pass, CHIP would only be funded through March.

Also, 1.3 million active-duty military personnel, they would continue working, of course, but they might not -- but they might have to work without pay, since the military is currently paid only through February 1st.

And as many as 850,000 government employees, federal employees, could be furloughed as federal agencies are forced to shut down.

Most of the Senate Democrats already say they'll vote against the current short-term spending bill to keep the government open and running. And at least two Republican senators say they'll also vote no.

Let's get an update on where things stand right now. Our Congressional Correspondent Phil Mattingly is tracking all these late- breaking developments up on Capitol Hill.

Phil, what are you hearing about whether the Senate will reach that 60-vote threshold?

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Well, Wolf, it's been clear, for the last 24 hours almost, that they did not have the votes. Senator Majority Leader Mitch McConnell would not have the votes to be able to move forward on that short-term spending bill.

Obviously, the major new development is within the last hour. The White House reached out to Senate Democratic Leader Chucker Schumer. Invited him to the White House.

There was an agreement that it would be a one-on-one meeting. A meeting between the Senate Democratic leader and the president. One on one. There would be no Republican leaders there. There would be no Republican staff there as well.

That is, obviously, a key play for Senate Democrats. They believe that if they get in a room with the president, there is an opportunity, if there is nobody else around him, to perhaps strike a deal.

Now, the big question is, what is the White House goal right now? I'm told the White House made very clear to Republican leaders that this invitation was going out. They were aware of it. They knew it was coming.

I'm also told that this morning, White House staff in calls with different Republican aides, made clear that there was no daylight between where the president is and where Republican leaders are right now.

And to make very clear where Republican leaders are right now. There's no other option on the table than the four-week short-term spending bill that the House passed last night.

Senator Majority Leader Mitch McConnell has made clear, that is the option. There is no negotiation. That is what keeps the government open.

And that's what allows negotiations to continue on the myriad of other items that are currently out there.

So, obviously, we're watching this meeting very, very close.

I think the big question is, is this a meeting where they're just checking the box, showing that talks are ongoing? They've made the effort and when it's all over, things are still very much divided? Or is this a meeting that leads to some type of breakthrough?

Again, a key point here. Republicans leaders are set in their strategy. They're comfortable with their strategy. Will that change because of this meeting? We'll have to wait and see, Wolf.

BLITZER: We'll soon find out.

Phil, thanks very much. Phil Mattingly up on Capitol Hill.

Joining us now, the deputy White House press secretary, Hogan Gidley. Hogan, thanks very much for joining us.

HOGAN GIDLEY, U.S. DEPUTY PRESS SECRETARY, WHITE HOUSE. Thanks, Wolf. It's great to be with you.

BLITZER: All right. So, tell us about this meeting, a critically important meeting. The president has invited the Senate majority leader, Chuck Schumer, over. Is this a one-on-one meeting, just the two of them?

GIDLEY: Look, I don't want to get into details of the meeting, or who's in it and who's not in it.

But I will say this. This isn't the first time that the president has invited Chuck Schumer over to the White House to have a conversation about funding this government.

Sadly, for whatever reason, Democrats are controlled by Chuck Schumer on this particular vote. And we're talking about shutting down the federal government. Not funding our troops. Not funding the folks who protect us on a daily basis. Not funding 8.9 million American children who are impoverished.

It is a sad day when Democrats won't vote for those simple, responsible, rational and compassionate things.

BLITZER: Why wasn't the Republican leader, the Senate majority leader, Mitch McConnell, invited to this meeting with the president and Senator Schumer? Shouldn't he be part of this discussion?

GIDLEY: I don't want to get into that.

Look, the president is the negotiator in chief, he's the one who sets the deal. He sets the terms and I'll leave it at that.

[13:05:00] BLITZER: The president, earlier back in 2013, suggested that, you know, the president of the United States is responsible for all of this. He was very critical of President Obama when there was an 18-day government shutdown. He's very sensitive to this right now.

So, these last-minute maneuvers by him, I take it, are designed to avoid a government shutdown tonight?

GIDLEY: Absolutely. He's been very clear, he wants to fund this government. Look, you guys were in the meeting. It was a 55-minute meeting in the cabinet room. It was bipartisan, bicameral. You -- the world got to see everything he wanted. They open negotiations.

But, first and foremost, he wants to fund this government. What he really wants, the president's been very clear about this. He wants a two-year clean funding bill. There should be no ties to this bill.

In fact, it was Senator Schumer, himself, who said it was ridiculous to add anything to a spending bill. They wanted clean budgets when they were in power. Now, for whatever reason, the situation's worse and the only difference is, the president is in the White House. BLITZER: Hogan, you know you'd get overwhelming support in the Senate and overwhelming support in the House if you attached the compromise on the Dreamers and border security that's been put forward by Lindsey Graham and Dick Durbin and other Democrats and Republicans.

Why not just attach that compromise and get the government operating?

GIDLEY: No, there is no reason so do that because there is no bill. Show me the bill. Nothing exists.

BLITZER: They could easily write -- they could easily write an amendment that includes the language from the Lindsey Graham-Dick Durbin compromise.

The president, himself, seemed to enjoy, in that Tuesday meeting that was open to the press. 55 minutes. We all saw it unfold here on CNN and other cable news networks.

The president seemed very responsive, as you correctly point out to all of that discussion. But then, two days later, he changed his mind.

GIDLEY: Absolutely not true, Wolf. What he came out of that meeting saying was we had drilled down to four main areas. And it was border security. It was ending chain migration. Ending the visa lottery. And also, working on a long-term DACA fix.

BLITZER: But the president -- Hogan, let me interrupt. The president did say -- he said, give me a compromise. I'll take the heat. I want a bill of love. I want this included. He said that during that open meeting. But then, later, he changed his mind.

GIDLEY: No, that's not what the bill gave him. He asked for something serious about funding border security.

And, look, I'll give you one piece. DHS did a study and came to the president and said, we need -- not want but we need $18 billion to fund border security. We have to keep people out of this country from coming in illegally.

Lindsey Graham and Dick Durbin came to the president and said, we have a serious plan. It's bipartisan.

And when it came to the table, they had $1.6 billion funding for that (INAUDIBLE) piece.

BLITZER: But you know why, Hogan. That was a one --

GIDLEY: It's one-tenth.

BLITZER: Hogan, that was a one-year plan. It was a one-year plan. You were talking about a 10-year plan. It was a one-year plan, and they made it clear the long-term plan would be separate comprehensive immigration reform.

They both said, Lindsey Graham and Dick Durbin, just fund it for a year, it'll be a down payment. And then, we'll have plenty of time to get a long-term arrangement working.

That's why it was only a tenth of what you eventually wanted. What you want is for 10 years.

GIDLEY: Right, the bill was a joke. It wasn't serious. Everybody know it. And, look, there's no daylight on immigration and open borders and amnesty between Dick Durbin and Lindsey Graham.

And there hasn't been for a long time. He's my senator. I know him very well. I'm from South Carolina.

But that's not what the president wanted. He asked for a bipartisan bill. Two people come into the office with a bill that doesn't touch the things he wants taken care of to protect the people of this country. It was a joke.

Senator Tom Cotton came out and said he never saw the bill. People in the House, Speaker Ryan said he never saw the bill. So, to pretend as though this was bipartisan and bicameral is absolutely a joke.

BLITZER: I know you've got to run, Hogan, otherwise we would continue this interview. But thanks so much for joining us. Always good to have you here on CNN.

GIDLEY: Anytime, Wolf. Thanks so much, Wolf.

BLITZER: Thank you very much. Hogan Gidley is the Deputy White House Press Secretary.

All right, let's talk a little bit more about what we just heard, the critical issues as stake right now, the blame game that's underway. Joining us right now, our CNN Political Analyst April Ryan and our Chief Political Analyst Gloria Borger.

They didn't like the compromise put forward by Lindsey Graham and Dick Durbin.


BLITZER: But, you know, I wouldn't be surprised and I'm anxious for both of you to weigh in. If -- after this meeting with Schumer, just Schumer and the president, the president comes around and says, well, you know what? He wants the Dreamers to be allowed to stay.

He said -- always said he has a big heart. I wouldn't be surprised if they worked something out. But go ahead.

BORGER: Well, you know, I mean, with this president, the person who gets to him last is, very often, the person that he -- that he agrees with. And that's why it's kind of interesting that Schumer is getting down there alone.

As we know, they actually have a pretty decent personal relationship. You know, both New Yorkers and a long history. And the president actually donated to Schumer's campaign. I think the issue here is, right now, that the Republicans feel that they're on some pretty good terra firma. That they passed this in the House. They gave the Democrats CHIP which is really important to them.

[13:10:01] BLITZER: The Children's Health Insurance Program.

BORGER: A six-year -- a six-year commitment to it.

And so, now, they're turning around to the Democrats and saying, well, why are you holding this up? And the Democrats are saying, no, no, no. We also need a commitment. We need a commitment on Dreamers.

Each side can back into their -- into their corner. The Democrats can say, you could have approved the children's health program any time. They don't want the pressure -- the Democrats don't want the pressure to be let out of the balloon right now.

They say if you work the next three, four, five days, maybe we could get it done because DACA can pass on its own. Children's health could pass on its own. So, why can't you put it into something that'll pass?

APRIL RYAN, CNN POLITICAL ANALYST: So, there the devil is in the details on this. And it really -- I mean, this is the fifth time, if they are going to do a C.R. in this administration, kicking the can down the road.

But there are some issues, really, on the table and it's in the weeds now. When you talk about chip, I just got on the phone with somebody who just left the Democrats caucus meeting. And I just left the White House as well. There is a sense of urgency on the Hill as well as the White House.

But here is the problem when it comes to CHIP. The Democrats say he has six years but 10 years, it would have saved money. OK? But you get into the weeds when you try to give insurance to these low-income children. Where are they going to go when they're in need of help?

They also want a funding of low-income health centers. They also want funding for community of health centers for these low-income kids in low-income communities. So, that's one issue.

There's also a big concern about the disaster issue, the supplemental for disasters. We've seen what had happened --


RYAN: -- yes, with Puerto Rico. These hidden variables that just crop up. They want to be assured about that as well.

And then, I'm hearing also that will, you know, the Republicans are not actually sure sometimes where the president stands and what he really wants.

And, you know, yes, Chuck Schumer is at the White House. You know, one minute they're friends until Schumer says something is wrong and he'll tweet again. And that could just throw everything up in the air.

BLITZER: Are you surprised? Are you surprised that Chuck Schumer is there meeting with the president.


BLITZER: But the Senate majority leader, Mitch McConnell, is not there?

BORGER: Yes. Well, he knows where Mitch McConnell is. Although, Mitch McConnell this week said, I'd like to know where the president is on immigration. I don't think Mitch McConnell is clear.

We don't know where the president is on immigration. You mentioned earlier, we saw him at the public meeting, then he changed his mind, then conservatives got to him. Lindsey Graham said it was Steven Miller over at the White House.

So, I think what the president is trying to do is to be the negotiator he told us he was.

BLITZER: He always said he was the greatest deal maker. This is a moment the president of the United States, he could have a deal right now. He could sell it to the Republicans in the Senate, sell it to the Republicans in the House.

If he includes something for the Dreamers, the overwhelming majority, the Democrats support it. He could get 70 or 80 votes in the Senate. He could get 300 votes in the House, if the Democrats work with the Republicans. They've got the CHIP.

If they get something on the Dreamers, the president makes a deal. The government doesn't shut down.

RYAN: Yes, you're right, he said he was going to be the greatest deal maker. But here's the problem. There is a couple of things right now. When -- last week, when we saw this bill of love, it totally changed the beginning of the week. It was, like, yes, let's look at possibly the pathway to citizenship.

Then, it wound up, no, we want a merit-based system. And then, we had the s-hole. We had whiplash. We had -- we don't have the collar for it, either.

So -- and then, you know, the thing of it is, we had all of this overhead, this s-hole statement. And there was a question of, is he working in good faith, as it comes to these serious issues of immigration?

And then, you also have this issue where Republicans and Democrats are saying that there is a crisis, a confidence crisis, because they really don't know what he's doing.

And that spills over to so much. And that is one of the reasons why we are where we are. What is it, 10 hours away from a possible government shutdown?

BLITZER: You know, Chuck Schumer did throw out this idea, in the past 24 hours or so. You know, this is a 30-day proposal, this stopgap measure to keep the government going. Maybe do something for three, or four, or five days.

BORGER: That's what they want.

BLITZER: Get some more time. Negotiate a little bit more on the Dreamers, on border security, other issues. I suspect he's raising that possibility with the president. Would the president go along with that and could he sell it to the Senate and the House?

BORGER: I don't -- I don't know if he could sell it to the Senate. I know, for a fact, I just got off the phone with a Senate leadership aide, that is what Chuck Schumer wants.

Chuck Schumer says, let's keep the pressure on. Because if you let this go for 30 days, the air goes out of the balloon. And we're almost there on DACA. We can negotiate this and why should we give up our leverage?

I think the interesting political part of all of this, Wolf, is that the Democrats are so emboldened. You know, Mitch McConnell thought that he was going to be able to win over a bunch of these Democrats, of these 10 Democrats who were up for reelection in red states. Well, he's not because everybody is playing base politics in this.

And so, you saw Jon Tester yesterday, from the state of Montana, a very red state, not going along with this. So, the Democrats and the Republicans thought they could depend on it. They cannot depend on it.

[13:15:10] BLITZER: And just -- and just to be precise, April, the Republicans control the House of Representatives --

RYAN: Yes.

BLITZER: Where they need a simple majority.

RYAN: Exactly.

BLITZER: But the Republicans don't control the Senate when it comes to this legislation. They only have 51 Republican senators. They need 60 under the rules of the U.S. Senate.

BORGER: That's right.

BLITZER: They don't have 60 unless they include something, presumably, on the dreamers.

RYAN: Well, yes, but, you know, these 12 Democrats they need, they're not going to get. They've got to sweeten it and they've got to know for sure that the president means this. And it's not going to shift. It's not going to change. This dreamer issue is not just a piece of legislation. This goes to

the heart of the nation. What we were founded on. You know, all of the different peoples. And they want to make sure that some pieces of this nation, granted people this base of this president want change, but they want to make sure certain pieces of this nation stay in place even though this talk happened last week.

BORGER: You know, it's a sad thing, though, that Congress seems to only be able to do things in a crisis environment.

RYAN: Reactionary.

BORGER: It's a, you know, it's an institution that is cited activated. And so sometimes you do have to have this. And I think the Schumer point is that if you let -- if you kick the ball -- can down the road for a length of time, you lose the momentum here and you lose the moment.

RYAN: But Democrats are tired of that.

BORGER: And you lose the movement. And of course they're tired.

RYAN: Yes.

BORGER: And I think Republicans are tired of legislating like this as well. So this is a moment, and either you punt or you get something done.

BLITZER: Let's see what the --

RYAN: This is the moment at the one-year mark.

BLITZER: Let's see what these two guys from New York City, Chuck Schumer, President Trump, what they can do in their private little meeting that's going on in the Oval Office right now.

RYAN: I'm waiting for the tweet.

BLITZER: Let's see what happens. Two guys from New York. Let's see what they can do as far as making a deal and then if they can sell it.

Gloria, April, guys, thanks very, very much.

RYAN: Sure.

BLITZER: There's much more on the breaking news. Plus, the secret silence. An explosive new report showing the president's personal lawyer supposedly using a fake name and a private company to pay a porn star to keep quiet about her alleged affair with then citizen Donald Trump.


[13:21:25] BLITZER: All right, we're standing by. There's an urgent meeting underway right now. We're following the breaking news. The president is meeting with Chuck Schumer, the Democratic leader, the minority leader in the U.S. Senate. The action right now is in the Senate. Will they be able to come up with some sort of deal to avert a government shutdown at midnight tonight?

As soon as that meeting breaks up, we expect to get reaction, get to word -- some sort of readout from both Senator Schumer and the president. We'll see what -- what comes up. This is an urgent meeting.

And, interestingly, the Senate majority leader, Mitch McConnell, is not -- was not invited to this meeting between the president and the Democratic leader in the Senate.

We're staying on top of this. So much is at stake. So much is at stake. Millions of Americans will be impacted if there is a government shutdown tonight. So, stand by for that.

There is other news we're following. We're learning more right now about the lengths that President Trump's longtime private, personal attorney went to in order to keep a porn star silent in the weeks leading up to last year's presidential election back in 2016. I should say, according to "The Wall Street Journal," the president's lawyer used a private company and pseudonyms to pay hush money to the adult film star Stormy Daniels, as she's called. Daniels claims to have had an affair with Donald Trump way back in 2006. Obviously long before he ran for president.

Let's bring in the attorney Seth Berenzweig and CNN politics media and business reporter Hadas Gold.

First of all, Hadas, walk us through the new reporting on this because it's pretty explosive.

HADAS GOLD, CNN POLITICS, MEDIA AND BUSINESS REPORTER: It is. Now, last week "The Wall Street Journal" first reported about this alleged money that was exchanged between President Trump's private lawyer and this adult film star, Stormy Daniels, whose real name is Stephanie Clifford. But now we have a little bit more proof, it seems. "The Wall Street Journal" is now reporting that there was a company established in Delaware called Established Consultants LLC that was used to send payment to Stormy Daniels' lawyer, who was also working under pseudonyms. So there's a lot of trying to hide the money here.

Now, the president, Michael Cohen and Stormy Daniels have --

BLITZER: Michael Cohen is the president's long time personal lawyer.

GOLD: Yes, yes, personal attorney, have denied that a relationship took place. Michael Cohen has said these rumors have circulated time and again since 2011. President Trump, once again, vehemently denies any such occurrence, as has Ms. Daniels.

However, so far Cohen has not addressed the $130,000 payment, nor has he responded to our request for comments about this company that was created.

Daniels herself has also denied the relationship and she says that she never received any sort of hush money from Donald Trump. But keep in mind that this money did not actually come from Donald Trump. It came from this Established Consultant LLC and via the attorney Michael Cohen.

BLITZER: Seth, you're a business and compliance attorney. How unusual is this type of an arrangement to have this LLC, this, you know, a private LLC and pseudonyms at the same time as reported, I want to be precise, as reported by "The Wall Street Journal"?

SETH BERENZWEIG, BUSINESS AND COMPLIANCE ATTORNEY: Well, it's bizarre and it's incredibly rare. This appears to be a botched cover-up of a porn star payoff. And we have various red flags that are shining here, demonstrating an apparent intent to conceal.

So, for example, they're using an LLC, a limited liability company. LLCs are typically used for an operating business. It doesn't have to be fancy. It doesn't have to be General Electric. But it has to be an operating business. There's no such role here. This is just a single payoff, one and done.

Also, if you take a look at the signature lines of the settlement agreement, it is signed anonymously, so they anonymize the name in the settlement agreement. So instead of saying that it's Stephanie Clifford, I believe they used Peggy Peterson (ph). Well, Peggy Peterson doesn't exist, so it's really almost legally laughable to see a fictionalized signature page.

[13:25:13] When you look at these kinds of factors, it really just shows that there is an attempt to conceal and it's just something that you really never see.

BLITZER: This private LLC was established in Delaware, right?

BERENZWEIG: That's exactly right.

BLITZER: Tell us why Delaware.

BERENZWEIG: Well, Delaware is co-called very business friendly. And as a result of that, it has a reputation amongst the business attorney circles of allowing very friendly, anonymous-oriented ways to register and to operate a company. Ironically, Michael Cohen didn't even use that. He really botched that part too, because, at the end of the day, he didn't really use the Delaware venue to the best of his advantage. He actually put himself in at the beginning of the formation. Ultimately, people were able to dig through and apparently find his name. He didn't even have to do that. He could have had some kind of legal representative. But at the end of the day, he put Donald Trump's fingertips all over this botched deal.

BLITZER: All right. "The Wall Street Journal" doing extensive reporting on this. And we'll continue to follow it.

Guys, thanks very, very much.

One of the president's appointees abruptly resigning after CNN uncovers racist, sexist, anti-Muslim comments he's made in the past and now he's responding publicly. Also, we'll have more on the breaking news we're following right now.

You're looking at live pictures coming in from the Senate floor. Will Democrats hold their ground, keep Republicans from getting the votes, the 60 votes they need to keep the government running? I'll speak live with one of the key Democrat senators. He's right in the middle of the negotiations. Senator Leahy is standing by. We'll discuss when we come back.