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U.S. Government Shuts Down; Tensions Grow between U.S. and North Korea. Aired 2-3a ET

Aired January 20, 2018 - 02:00   ET




UNIDENTIFIED MALE (voice-over): This is CNN breaking news.

CYRIL VANIER, CNN ANCHOR (voice-over): Hey, everyone, I'm Cyril Vanier with more breaking news here on CNN. We're in the third hour of a U.S. federal government shutdown. Most federal offices will remain closed and hundreds of thousands of government employees will be sent home without pay.

That's all because the U.S. Senate failed to agree on a spending bill to keep the government funded. The bill needed 60 votes to pass. It got 50. Only a handful of Democrats, five to be precise, went along with the Republican plan. It's worth noting four Republicans also voted against it.

So the government is shutting down, of all days, on the first anniversary of the presidency of Donald Trump. We haven't heard from the president since the Senate vote but the White House did release a statement with Trump-like language calling the Democrats "obstructionist losers." Here's part of that statement.

"Senate Democrats own the Schumer shutdown. Tonight they put politics above our national security, military families, vulnerable children and our country's ability to serve all Americans.

"We will not negotiate the status of unlawful immigrants while Democrats hold our lawful citizens hostage over their reckless demands.

The "reckless demands" specifically refers to the DACA issue, the program that protects from deportation undocumented immigrants brought to the United States as children, the DREAMers.

There have been shutdowns before but this is the first time with the same party controlling the White House, the House and the Senate.

So the big question is now, how long is this going to last?

And how do Democrats and Republicans find common ground after this?

Listen to the party leaders, Senate majority leader Mitch McConnell and Democratic leader Chuck Schumer, moments after the vote. (BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R), MAJORITY LEADER: What we just witnessed on the floor was a cynical decision by Senate Democrats who shove aside millions of Americans for the sake of irresponsible political gains.

The government shutdown was 100 percent avoidable, completely avoidable. Now it is imminent, all because Senate Democrats chose to filibuster a non-controversial funding bill that contains nothing, not a thing they do support. Nothing they do not support.

Perhaps, across the aisle, some of our Democratic colleagues are feeling proud of themselves.

But what has their filibuster accomplished?

What has it accomplished?

The answer is simple: their very own government shutdown. The shutdown effects on the American people will come as no surprise. All week, as we've sat on the floor and begged our colleagues to come to their senses, Senate Republicans have described exactly what this will mean.



SEN. CHUCK SCHUMER (D-N.Y.), MINORITY LEADER: Republican leadership can't get to yes because President Trump refuses to.

Mr. President, President Trump, if you are listening, I am urging you, please take yes for an answer. The way things went today, the way you turned from a bipartisan deal, it is almost as if you were rooting for a shutdown.

And now we'll have one and the blame should crash entirely on President Trump's shoulders.

This will be called the Trump shutdown. This will be called the Trump shutdown because there is no one, no one who deserves the blame for the position we find ourselves in more than President Trump.


VANIER: It was a day of give and take on Capitol Hill.

But who did the giving and who did the taking?

That just depends on who you ask. Here's CNN congressional correspondent Phil Mattingly on how it went down.


(BEGIN VIDEOTAPE) PHIL MATTINGLY, CNN CORRESPONDENT: Well, at one point on Friday, with the clock ticking towards that midnight deadline, it appeared, at least according to some Democrats, that there was an opening to prevent a shutdown, to prevent the Republicans in Congress, the Democrats in Congress, the president, Republican Donald Trump in the White House, from actually seeing things totally fall apart.

Senate minority leader Democrat Chuck Schumer, over to the White House for a one-on-one meeting with the president, a meeting where Senator Schumer would later say he put money for the wall, something Democrats have been deeply opposed to, on the table for a potential deal, which is a deal that would never come.

Even furious lobbying at the last minute after the government had already shut down into Saturday morning on the Senate floor in live view for everyone, there was no solution, no resolution and one clear fact: things are probably going to get worse before they get better.

Instead of trying to figure out the pathway forward, instead, Republicans and Democrats now framing who is to blame.

For Senator Schumer, there's only one answer.


SCHUMER: Every American knows the Republican Party controls the White House, the Senate, the House. It is their job to keep the government open. It is their job to work with us on a way to move things forward.

But they did not reach out to us once on this C.R. No discussion, no debate. Nothing at all. It was produced without an ounce of Democratic input and dropped on our laps.


MATTINGLY: And for Republicans, it's very clear. They believe and they're very comfortable, aides tell me, in their current position, the idea the House passed a four-week spending bill. That bill includes a six-year extension of the Children's Health Insurance Program. That is where they stand.

They are unlikely to move off of that. Maybe they trim a week off the length. But that's about as far as they're going to go.

Now compare that to where Democrats are. Democrats have made very clear, DACA, the DREAMers, a huge issue for them. And not only do they want some agreement on what happens next with that issue, they want actual policy proposals on the table before they are willing to agree to anything.

The divide between where the two parties right now are is immense. The question is what's going to bridge it. The answer, at least according to some people, could be the president. But nobody's technically sure what his role will be going forward. Obviously, he had the meeting with Senator Schumer. Didn't lead to

anything. Senator Schumer saying the president needs to take yes for an answer while the White House, in a statement before the vote actually was finalized, calling Democrats "obstructionist losers." Clearly there's a long way to go and no clear resolution -- Phil Mattingly, CNN, Capitol Hill.


VANIER: Let's see if we can figure out some of the answers to the questions Phil Mattingly was asking. With me, Democratic strategist Caroline Heldman and Republican consultant John Thomas.

John, is this a Schumer shutdown or a Trump shutdown or perhaps it's a very rare thing in Congress these days, it's a bipartisan shutdown?

What do you think?

JOHN THOMAS, CNN POLITICAL COMMENTATOR: I think it's more of a Schumer shutdown. I'll tell you why. First of all, there was no path to passing this action without Democrat support. There was nothing in this bill the Democrats fundamentally disagreed with.

They were just willing to put DREAMers or illegal aliens ahead of keeping the government going. That's what it is.

So yes, do we have some work to do on the Republican side?

No doubt about it. But the Democrats knew they had the ability to pass this thing and chose not to.

VANIER: Let's look at the numbers; you say it's mostly a Schumer shutdown in your opinion.

Who do Americans blame for this?

Here's the CNN poll. They blame the president, Donald Trump, 21 percent; the GOP, 26 percent -- by the way, if you add those two up, that's 47 percent. Almost half of Americans blame the Republicans and the president -- and Democrats 31 percent. All of them, all of them, 10 percent.

Caroline, let's get to the point John was making that, on the substance, there isn't a whole lot of disagreement. The actual issues at the heart of this, funding the Child Health Insurance Program and giving some protection to DREAMers are not that divisive, are they?

CAROLINE HELDMAN, DEMOCRATIC STRATEGIST: They're absolutely not divisive. In fact, 87 percent of Americans support DACA extension. And so, using John's argument, the Republicans knew that they needed about a dozen Democrats to get this passed. And they refused to make concessions on a policy that nine out of 10 Americans agree with and a policy which the Republicans broke, right?

This was a retraction of President Obama's executive order issuing DACA. There was no reason to withdraw that order. This is a crisis that the Republicans created. And they're not willing to compromise.

If you look at what's trending on Twitter right now, almost 1 million tweets, the number one slot is Trump shutdown and I think that's what we'll see this week going forward. The Republicans and --


HELDMAN: -- Trump will be blamed.

VANIER: Here, another number for our viewers for some perspective. How important DACA should be to the president and to Congress, according to a poll: extremely important 27 percent, very important 36 percent. That means two-thirds of the American public believe that this is something government should deal with as a matter of priority.

In the end, this is what literally broke government. All right.

Who benefits now, as time passes and the government stays shut, if there isn't a quick fix to this?

Who is going to benefit, John?

Do Democrats get more or less leverage as time passes?

THOMAS: Well, first of all, the other polling that CNN did that we didn't put on the screen was that I think almost 60 percent of Americans say they value keeping the government going and avoiding a shutdown versus like the mid 30s for prioritizing DACA.


VANIER: Which kind of stands to reason, keeping the government running, yes. You would expect everybody to be in favor of that.

THOMAS: It does. I think quite frankly both parties will hurt over this. Actually, real Americans will be hurt because of this; our military that won't get paid, CHIP funding, firefighters.


VANIER: Hold on, the military are getting paid for now. They're not among the people who are going to see their paychecks just disappear or even be delayed over the next few days.

THOMAS: It's my understanding that members of the military will have their paychecks delayed. But perhaps I'm wrong on that.

But I think to your point, the problem here is that, certainly on the Democratic side, California's U.S. Senator Dianne Feinstein said, I think it was yesterday, that people will die if a government shutdown occurs. And she fundamentally believes that. Yet she still voted in favor of a shutdown.

I think it goes to a larger statement about how much of a partisan divide we have that somebody like Dianne Feinstein might be pandering to her base because she's worried about a challenge to the Left that simply -- worried about resisting Trump and not what's in the best interests of Americans.

VANIER: A quick thing, by the way, on the issue of military funding. CNN reporting over the last couple hours is that they're basically shielded from the most direct impact and effect of this in terms of their pay, for at least until the end of the month.

Now if this rolls into February then that becomes a different matter. As far as the things that are shutting down, a number of things are staying open. I think both Americans and our international viewers need to understand this.

Your postal service and your government benefits continue. Schools remain open. Airports remain open. But all the federal agencies shut down and you'll have hundreds of thousands of people who will be furloughed, which is really just a very sort of interesting word to say people will be sent home without pay.

Caroline, Mr. Trump is ushering in his second year in office with a government shutdown. That just can't be a comfortable position to be in for him.

HELDMAN: Not at all.

I mean, this is symbolic of his first year, right?

That the government literally shut down on the day that a year after he was inaugurated. He has the lowest approval rating of any president at this point in time. And I think that his flip-flop on DACA last week is really what put the Republicans in this position, in a position to stand firm against a policy that 87 percent of Americans want and that Democrats have prioritized because the 800,000 DACA folks, the DREAMers in the United States, this is matters in their life.

We're not talking about some minor thing here. We're talking about the lives and the balance of 800,000 people. We saw a 39-year-old man, who didn't fit the requirements of DACA, who hasn't been in Mexico for 30 years get deported, a father of three. This is draconian. And this is the policy that the Trump party has aligned itself with.

THOMAS: We're pretending as if DACA were expiring tonight. It's not. And so it can be dealt with.

VANIER: It expires in about six weeks.

THOMAS: You're right. And it can be dealt with. That's what Republicans and Trump wanted to do was temporarily fund the government and deal with it later on down the road.

HELDMAN: Democrats have no reason to believe that, John.

THOMAS: It was worth shutting down the government over this one issue and all the harm that will come of it even though that issue wasn't even expiring tonight. It's unbelievable.

VANIER: The Democrats wanted to use their leverage to handle an issue that was close to their hearts.

Caroline, John, stick with us because we've got more a lot questions for you. But I have to come back to you in a few moments.

The government shutdown will have immediate effects. We want to explain this to our viewers.

On the front line, as we were saying, hundreds of thousands of federal workers.

How does it work?

Tom Foreman takes a look.


TOM FOREMAN, CNN CORRESPONDENT: 850,000 government workers locked out of their offices and left out of their paychecks. That's what happened when the government shut down in 2013. And it would likely be the same this time.

Many services would be stopped or delayed for the public.


FOREMAN: The Centers for Disease Control and Prevention, for example, would back down on its flu tracking, even as the nation faces the worst outbreak in several years. Some senior nutrition programs would be paused; 200,000 passport applications went unprocessed during the shutdown in 1995.

Congress funds much of the science research being done in this country. In 2013, the shutdown meant that some experiments went on hold and suffered costly losses of data.

In space that same year, NASA put a monitoring system for looking for dangerous asteroids on hold for about two weeks, reportedly. A big one, by the way, is expected to brush by Earth on February 4th.

As for the 417 national parks, the administration wants to keep limited access where ever possible. But services would be reduced in all 19 of the Smithsonian's museums, would shut their doors after this weekend.

Beyond that, not everybody would be out. For example, in the military, there's a lot of worry about the impact on the military. There would be some discomfort no doubt for some military families if their pay was delayed, other benefits, that sort of thing.

But Congress has previously gone out of its way to keep that from being too egregious. And the troops would stay on duty. Indeed, roughly 1.9 million government workers would keep at it since their jobs are considered essential: air traffic controllers, security officers, food inspectors, prison guards.

Social Security checks would also go out as would be expected for the senior population out there. The post office would remain open. But in virtually all of these cases, people would be working without pay until the shutdown is over. That could cause them some difficulties undeniably. And it could all be pricy for us, too. One current estimate, shutting down the government could cost taxpayers $6 billion a week.


VANIER: All right, so how do you fix this and how do Democrats and Republicans come to an understanding after what happened tonight?

More on all of that when we come back.

And as the shutdown begins, so does year two of the Trump administration. What to expect for president's second year.

More of the same?

We'll take a look back at his first 365 days. Stay with us.





VANIER: Back to our breaking news, the U.S. government is now shutting down many of its services since Congress didn't agree on funding the government. The procedural vote late Friday night needed 60 votes to pass. That would have required at least 10 Democrats to support it. But the vote was 50-49. Only five Democrats voted with the Republicans. Four Republicans voted against the spending bill devised by their own party.

So Congress goes back to drawing board to find a way to fund the government now. It's impossible to tell at this stage when this is going to end. The last shutdown back in 2013 lasted 16 days.

Let's bring back Democratic strategist Caroline Heldman and Republican consultant John Thomas.

John, let's see who Donald Trump blamed for the shutdown back in 2013. Listen to this.


DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: So I really think the pressure is on Obama to make a deal because he doesn't want this in his resume.

In 25 years and 50 years and 100 years from now, when the government is -- they talk about the government shutdown, they're going to be talking about the President of the United States, who was the president at that time. They're not going to be talking who the head of the House was, the

head of the Senate. They're not going to be talking about Boehner. They're not going to be talking about -- they're going to be talking about the president's administration.

So he's got a lot of pressure on him to get this thing solved. But you have to negotiate. He doesn't want to negotiate, he doesn't want to meet. He doesn't want to talk to people. And the right guy would get everybody into a room and would make a deal.


VANIER: John, you were telling me earlier, this is a Democratic shutdown. It looks like Donald Trump disagrees with you.

THOMAS: Well, the president isn't wrong back in 2013 when he is saying the American people don't understand that in fact it requires 60 votes in the Senate to get this passed, that there is no mathematical solution without Democrats voting for this. He's not wrong there.

But the fact is, this is Chuck Schumer's -- this is his mess. He had an ability to pass this.

VANIER: Wait, so in 2013 he was right to blame it on the president but now you are right to blame it on the opposition party.

THOMAS: Well, no, I think he was right in order to say that Americans would default toward the president and that's what you're going to see Trump -- you're already seeing.


VANIER: OK. Let me make it simple.

Was he right to blame it on the president back then?

THOMAS: No. He wasn't. Because Congress is involved. But he's right that Americans would initially default to assuming that the president should get this done. In this case, that's what Americans are starting to think. But you're seeing Trump push back on that.

The fact is, like I said, it was Chuck Schumer's who shut this down. It was not Republicans. I think, as Republicans start to push that out and Americans start to get -- you've got to count to 60, opinion will turn.

VANIER: So it was interesting, what he said at the end of that sound bite. Granted, it was a couple years ago. But he said Barack Obama should have gotten everybody around a table and made a deal. Those were his words.

Well, guess what, John, Caroline, Donald Trump is the ultimate dealmaker. At least that's how he presents himself.

So, Caroline, why didn't he make a deal this time? Was he unwilling or unable?

HELDMAN: Chuck Schumer went and saw him today and attempted to make a deal and in fact put a very unpopular policy that only a third of Americans support, which is building the wall, on the table.

THOMAS: We don't know what the specifics were of that, Caroline.


HELDMAN: What we do know is that Chuck Schumer said he put it on the table and he said that the president rejected it. And oddly enough, back in 2013, the Republicans were blamed for what happened because Ted Cruz orchestrated that.

So Donald Trump was absolutely wrong in terms of where the public placed its blame. and I can't imagine, given the fact that Republicans and Trump's party control both the House, the Senate and the presidency that they're not going to be blamed for this.

VANIER: If you actually flip this around, Caroline, I think back a couple months ago, when Trump decided to sunset DACA and everybody said essentially he's daring Congress to fix it. He's just giving them a deadline to fix this problem.

Right now, that's not looking like a winning proposition. But if they do find a fix --


VANIER: -- over the next couple weeks, don't you think Donald Trump will be able to claim that victory and say, look, my strategy worked out?

HELDMAN: Yes, he should if indeed that happens. But right now, he's actually obstructing that process by flip-flopping on it last week, by not accepting proposals that are perfectly reasonable for a policy, as I pointed out, that almost nine out of 10 Americans support. Lindsey Graham has put proposals. Lots of folks put proposals together from his own party and he hasn't made this happen.

THOMAS: The president's willing to make a deal on DACA. He wants something meaningfully on his wall, which he hasn't gotten yet. It was cute for Schumer to say he talked about the wall. We have no idea what that meant. So the reality is, tonight, we saw Nancy Pelosi and Chuck Schumer put DACA ahead of Americans.

VANIER: Well, John, Caroline -- John, whether or not the president's willing to make a deal, that actually remains to be seen. We can't just take that for granted for the moment. We don't know how this story ends and who ends up compromising what way.

But John, Caroline, it's been fantastic talking to you. Thank you so much for joining us on the show.

About 23 missile launches by Rocket Man. That's one way to sum up U.S.-North Korea tensions during Mr. Trump's first year in office. Coming up, we'll look where that's headed in his second year.





VANIER: Welcome back. The U.S. Senate has failed to avoid a government shutdown here in the U.S. so it's now underway. A bill to keep funding the government needed 60 votes to pass. It failed, 50- 49.

Five Democrats voted with the majority Republicans and four Republicans voted against the short-term spending bill.

It's not known how long the shutdown might last. The House and Senate both return to work on Saturday, presumably in just a matter of hours. Throughout the day on Friday, there had been encouraging signs that a government shutdown could be avoided. But as the hours ticked by, that hope just faded away. CNN's Jeff Zeleny explains.


JEFF ZELENY, CNN SR. WASHINGTON CORRESPONDENT: On the one-year anniversary of President Trump's inauguration, a federal government shutdown. The Senate failed to pass the House-passed version to keep the government open. That funding deadline expired at midnight on Friday.

President Trump will be waking up on Saturday here at the White House, now presiding over his first government shutdown. Not since 2013 has there been a government shutdown.

Then, of course, it was President Obama's, a 16-day government shutdown, to be exact. At that point, then Donald Trump, private citizen Donald Trump, said it was the president's responsibility to lead the way out.

Now indeed it is this president's responsibility to do the same. Of course a predictable fight broke out Friday evening between Republicans and Democrats.

The White House called it a Schumer shutdown, of course referring to minority leader Chuck Schumer of New York. Senator Schumer called it a Trump shutdown. Regardless of what you call it, it is an indeed an American government shutdown.

But the White House came out with a blistering statement at the stroke of midnight about the shutdown.

White House press secretary Sarah Sanders said this, "Senate Democrats own the Schumer shutdown. Tonight they put politics above our national security, military families, vulnerable children and our country's ability to serve all Americans." So, again, going after Democrats there, the White House press

secretary. What they failed to mention were four Republicans; four key Republicans also voted against this in the Senate, Lindsey Graham, first among them, who, of course, had been close to this president.

Now the pathway forward is unclear. Senate majority leader Mitch McConnell proposing an three-week solution to February 8th. President Trump will still have to weigh in on that.

But the underlying issue remains the same, immigration. That is the central issue here that neither side has been able to agree upon. Democrats were pressing for immigration to be included in the spending measure. Republicans balked at that. That's why the shutdown is happening.

President Trump, starting his second year in office, here in Washington, was scheduled to fly to Florida. Next week was scheduled to be in Davos, Switzerland. Both of those trips are in question as the shutdown now becomes official -- Jeff Zeleny, CNN, the White House.


VANIER: And President Trump is also supposed to be partying Saturday night.


Because Saturday is January 20th. That means Donald Trump became President of the United States one year ago to the day.


TRUMP: From this day forward, it's going to be only America first. America first.


VANIER: Despite that call for America first, it was his dealings with North Korea that dominated a lot of Mr. Trump's first year in office. Pyongyang fired 23 missiles in 2017, one of which landed in Japan's territory.

Meanwhile, President Trump has fired verbal missiles of his own at North Korea's leader, Kim Jong-un.

Let's get a sense of how tension with North Korea is spreading across East Asia. We're joined by Matt Rivers in Dandong, China, on the border with North Korea, and we've also got Paula Hancocks in Seoul, South Korea.

We've been talking to both of you extensively throughout the year.

I want to hear the same thing from you, which is how has Mr. Trump's -- how would you sum up Mr. Trump's impact on the Korean Peninsula?

Matt, what was the Trump effect over the last year?

MATT RIVERS, CNN CORRESPONDENT: Really, the U.S.-China relationship, of course there's a lot of things to deal with there. You've got environmental issues, you've got trade. But North Korea has absolutely dominated what is called by many the most important bilateral relationship in the world.

In some sense, it's an been an example of cooperation to some extent between the United States and China and look no further than the three different rounds of sanctions that were passed by the United Nations.

And here along the border, that's where China is enforcing those sanctions. And we really have seen an effect here in cities like Dandong.


RIVERS (voice-over): There are fewer trucks these days, the bridge quieter than months and years --


RIVERS (voice-over): -- past. And if bridge traffic is this light, it means trade between China and North Korea is slowing down.

That's the word on the ground in Dandong, a key trading hub on the Chinese-North Korean border. The main reason comes from 7,000 miles away in New York City.

UNIDENTIFIED MALE: The draft resolution shell has been adopted unanimously.

RIVERS (voice-over): A series of increasingly tough sanctions approved by the U.N. Security Council in 2017 has put the squeeze on North Korea and, as a result, its largest trading partner, China. These sanctions, more than anything else, have come to define U.S.- China cooperation under president Donald Trump.

And yet, few expected both sides to work together after Trump's divisive 2016 campaign.

TRUMP: Whether it's China with our trade agreements, no matter what it is, it seems that we don't seem to have it.

RIVERS (voice-over): China was a favorite target of the Republican candidate, who accused China of, quote, "raping the U.S. economically" and for failing to solve the North Korea problem.

But an April meeting in Mar-a-lago in Florida changed the president's tune. He got on well with Chinese president Xi Jinping and a calculation was made. The administration would back off on trade issues in the hopes of Chinese help on pressuring the Kim Jong-un regime to stop developing nuclear weapons.

The result? Three rounds of sanctions, all approved by the Chinese after different North Korean nuclear and missile tests. They targeted everything from oil shipments to joint business ventures with North Korean companies.

And Dandong is one of the places where you come to see if they're being enforced. Popular businesses here, like these restaurants, staffed and run by North Koreans, have recently shuttered.

RIVERS: We've been here to Dandong four times in the last two years. And I can tell you that these streets used to be filled with North Koreans, buying items in these stores to sell back home. But today it's basically empty.

We spoke to six different business owners in this area, who told us that since the sanctions went into effect, business has plummeted, though none of them would talk to us on camera for fear of wading into a sensitive issue.

RIVERS (voice-over): To be clear, trade is still happening. We still see trucks loaded down with goods arriving from North Korea. And the president recently told Reuters China could still be doing more to curb Pyongyang's ambitions.

One example: tackle smuggling, still rampant all along the border. Back in September, we saw illegal North Korean seafood being sold openly on Chinese streets.

But back at the bridge, the effects of American lobbying for tougher sanctions is clear. According to Chinese customs data, total trade between China and North Korea fell by 50 percent in December 2017.


RIVERS: The big question, though, Cyril, is that if the North Koreans continue to fire missiles to test nuclear devices and the United States wants more sanctions, will the Chinese go along with that?

And the answer to that question is, well, the Chinese always say we don't answer hypothetical questions such as those.

VANIER: Matt Rivers, let me turn for a second to Paula Hancocks in Seoul, South Korea.

Paula, it's great to have you on. I feel like I spent the last year -- myself and pretty much all the CNN anchors spent the last year coming to you after each Trump tweet, feverishly asking you, do we understand better now what is the Trump policy on North Korea?

What has he done and how is it going to impact one of the most volatile situations in the world?

Now you have a year, a year's worth of material to look back on.

What's your assessment? PAULA HANCOCKS, CNN CORRESPONDENT: Well, Cyril, it is very interesting how much things have changed in one year. If you look back, just before the inauguration, there were North Korean officials, who were officially saying, on the record, we could have a new relationship with a new Trump administration.

You had about three months, where North Korea wasn't testing missiles and was being relatively well behaved in international terms. Of course, that, could have been internal issues, as well.

But there seemed to be hope there could be a different relationship with the Trump administration. And then at the New Year's Day address with Kim Jong-un this year, he's effectively bypassed the United States. He is saying he wants to talk to South Korea.

North Korea is talking to South Korea. There's negotiations ongoing about the delegations coming to the PyeongChang Winter Olympics next month. So Washington has been sidelined. It's a very different feel now.

And not just because North Korea has been firing so many missiles over 2017 but the reaction from U.S. president Donald Trump, not just words that could be "fire and fury" but personal attacks against the North Korean leader, Kim Jong-un.

There really is a case that many officials say you just don't -- you don't offend. You don't insult personally the likes of Kim Jong-un because he is deified in --


HANCOCKS: -- North Korea. It's sort of a red line you don't cross. The U.S. president has crossed it a number of times. He has talked about him being Little Rocket Man. He has, even in the United Nations at the General Assembly, stood up and say, if necessary, we will totally destroy North Korea.

So the relationship between these two countries -- and specifically between these two leaders -- could not be worse at this point. In between all that, you have Donald Trump also saying, well, maybe I would talk to him, maybe I wouldn't. So really keeping everyone guessing, as well -- Cyril.

VANIER: Paula Hancocks in the South Korean capital; Matt Rivers currently in Dandong in China. Thank you both for coming on the show. I have absolutely no doubt that we'll continue to talk to you almost daily throughout 2018. This issue far from resolved. Thank you very much.

Coming up, "The Wall Street Journal" is reporting new details about an alleged encounter between President Trump and a porn star. It involves private companies and thousands of dollars in hush money. We'll have the details ahead.




VANIER: A reminder of our breaking news this hour, the U.S. government is --


VANIER: -- shutting down.


Congress couldn't agree on a bill to fund the federal government. Democrats wanted to use their leverage to get a deal on DREAMers. Republicans wanted to use theirs to get funding for border security.

The vote on a spending bill late Friday night needed 60 votes to pass and fell way short of that. It got only 50 votes. Five Democrats voted with the majority Republicans. Four Republicans voted against the bill proposed by their own party.

So Congress now has to go back to the proverbial drawing board and find a way to fund the government.

Meanwhile, "The Wall Street Journal" is reporting more details about a hush money payoff to quiet an alleged affair between Donald Trump and a porn star in 2006, a story that the paper first broke a week ago.

The new report says Mr. Trump's personal lawyer used a private company and pseudonyms in the payoff agreement with the woman for her to keep quiet about the alleged encounter. Brian Todd has the latest details on this.


BRIAN TODD, CNN CORRESPONDENT (voice-over): This nondescript office building in Delaware is the headquarters of a company reportedly used to hide an alleged $130,000 payment from Donald Trump's lawyer to the porn star, Stormy Daniels, all designed to cover up an alleged sexual affair.

"The Wall Street Journal" and other news outlets say just weeks before the election, the actress told reporters she had a relationship with Trump after meeting him at a golf tournament back in 2006. Daniels spoke to journalists at several news outlets about telling them her story. But they say she suddenly went silent.

"The Wall Street Journal" says, at the same time, Trump's lawyer arranged a payment to stop her from talking.

Now documents obtained by CNN and first reported by "The Journal" show Michael Cohen, Trump's longtime lawyer, set up at least two corporations in Delaware around that time, including one called Resolution Consultants LLC, on September 30th, 2016.

Records show he dissolved it a few weeks later on October 17th, 2016 and the same day incorporated a new entity, Essential Consultants LLC. "The Journal" says Cohen used that company to make the payoff using a series of elaborate pseudonyms and legal contracts.

The company was registered to this address in Dover, Delaware, an office that helps people outside of Delaware create companies here.

Why would Cohen choose Delaware?

Experts say the state has few disclosure requirements.

ED RATLEDGE, DIRECTOR, UNIVERSITY OF DELAWARE: It gives you a way of moving money to wherever you want to move it without necessarily having to say that a particular person sent the money.

TODD: Experts say that fits with this part of an alleged draft settlement agreement "Slate" magazine's editor says Daniels texted to him in 2016. In it, Daniels would be called "Peggy Peterson" and Trump would apparently be known as "David Dennison."

Cohen, the White House and Daniels deny any affair ever happened. And Daniels denies getting hush money in a statement sent by Cohen. Cohen, however, has never denied making the payment.

The full transcript of a 2011 interview with her was published Friday by the gossip magazine "In Touch," in which she spells out details of an alleged sexual encounter with Trump at a resort in Nevada in 2006.

She claims Trump kept in touch afterwards and said he hope she could be on his show, "The Apprentice," and that one time, quote, "He told me he was going to give me a condo there," because they were building a Trump Tower there in Tampa.

Experts say there's nothing illegal with establishing secret companies or even paying hush money.

SETH BERENZWEIG, BUSINESS ATTORNEY: As long as the case doesn't involve straight-up blackmail, there's nothing illegal about trying to enter into a nondisclosure agreement in exchange for payment of hush money.

TODD: But if Daniels' story and her possible payoff had been reported in October of 2016, could have it changed the election?

LYNN SWEET, WASHINGTON D.C. BUREAU CHIEF, "CHICAGO SUN-TIMES": The first impression would be, of course, this would have an impact. But we know how many things did not have an impact in this election, particularly the release of the "Access Hollywood" tapes.

TODD: Trump attorney Michael Cohen did not return our inquiries about the company that he reportedly set up here. But this week Cohen reiterated that any allegation of an affair is, quote, "old news that wasn't true then and isn't true now." Another attorney who represents Stormy Daniels did not return our calls -- Brian Todd, CNN, Dover, Delaware.

(END VIDEOTAPE) VANIER: Stay with us. When we come back, the Senate majority and minority leaders weigh in on the U.S. government shutdown.





VANIER: And the U.S. government shutdown is real. Senators were unable to come to an agreement on a bill to keep the government funded. So about three hours ago now, parts of the federal government started closing.

The funding bill needed 60 votes to pass. Senators didn't even come close to that. The bill got 50 votes with just a helpful of Democrats and Republicans voting against party lines. The White House didn't waste any time in assigning blame.

In a statement, they called Democrats, quote, "obstructionist losers." Here's what the Senate majority and minority leaders had to say.


SCHUMER: Tomorrow marks a year to the day President Trump took the oath of office on the Capitol steps. Unfortunately, a Trump shutdown would be a perfect encapsulation of the chaos he has unleashed on our government.

Instead of bringing us all together, he has pulled us apart. Instead of governing from the middle, he has outsourced his presidency to the extremes. Instead of living up to the great dealmaker he marketed himself to be, he's been the single driving force in scuttling bipartisan deals in Congress.

And now at this late hour, his behavior is on the verge of grinding our government to a halt --


SCHUMER: -- a Trump shutdown.



MCCONNELL: I think our friends on the other side took some bad advice, really bad advice. I'd hate to have to be trying to explain this myself. They ignored the governors, including seven Democrats, who wrote Congress, begging us, begging us to extend S-CHIP for 9 million children.

They ignored the needs of millions of Americans who rely on the federal government for important services. They held all this hostage, all of it hostage over the completely unrelated issue of illegal immigration.

Republicans in the Senate have done all we can to continue the normal operations of the federal government and secure a certainty for these S-CHIP kids. We could pass it tonight. It could go to the president for signature. These kids would be OK.

Well, we are going to continue to do all we can. We'll vote again so the American people knows who stands for them. And when our friends across the aisle remember who it is they actually represent, we'll be ready to come together in a bipartisan discussion that will be necessary to clean up all of this mess.


VANIER: The Senate and the House will be back in session in a matter of hours. See if they can find a deal. No clues yet as to how long this will last. The last shutdown lasted 16 days.

Thanks for watching. I'm Cyril Vanier. Our breaking news coverage continues throughout the night with Natalie Allen and George Howell.