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EARLY START

Government Shutdown Drags Into Its Third Day; Pence Defends Remarks On Government Shutdown; Tokyo Conducts First Missile Drill. Aired 5:30-6a ET

Aired January 22, 2018 - 05:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


[05:30:00] DAVE BRIGGS, CNN ANCHOR: A top aide said McConnell's commitments are just not firm enough. And a Republican source tells CNN McConnell made no promises the House will take up whatever the Senate passes.

Still, some optimism in the GOP. The number two Senate Republican, John Cornyn, says it's better to have a successful vote today than a failed vote overnight.

CHRISTINE ROMANS, CNN ANCHOR: A senior Republican aide says leaders think they have a shot at picking off enough Democrats to move forward. The aide says this is their off-ramp.

Let's bring in CNN's Suzanna Malveaux in Washington with the latest -- Suzanne.

SUZANNE MALVEAUX, CNN NATIONAL CORRESPONDENT: Good morning, Dave and Christine.

All those who thought they'd be pulling all-nighters for this 1:00 a.m. vote on the Republican proposal to reopen the government -- well, they got to sleep on it overnight. But two Democratic sources say that this 11-hour extension is not likely enough to get the 60 Senate votes necessary or the seven Democrats necessary to fund and restart the government when this critical test vote comes at noon.

So the question is what can move, if anything, during this critical window?

Well, first, what's on the table? After hours of negotiations Sunday by a bipartisan group of 20 senators, and a late meeting between Senate Majority Leader Mitch McConnell and Minority Leader Chuck Schumer, McConnell offered this.

Fund the government for three weeks and during those three weeks, the Senate would address the Democrats' demand to come up with a plan to protect the hundreds of thousands of Dreamers from deportation and perhaps, take it up afterwards.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY), SENATE MAJORITY LEADER: It would be my intention to resolve these issues as quickly as possible so that we can move on to other business that's important to our country. Assuming that the government remains open, it would be my intention to proceed to legislation that would address DACA, border security, and related issues.

(END VIDEO CLIP)

MALVEAUX: The problem is, as Schumer stated right after McConnell's announcement, is that it's way too vague. It doesn't definitively give dates or a timetable to force Republicans to put real legislation on the table to push forward.

If you listen to what McConnell says, he talks about his intentions to address DACA, border security spending but doesn't give ironclad commitments. And so, it's this lack of trust between the Republicans and the Democrats that is undercutting the possibility of a deal.

What is notable also, though -- what happened this weekend -- both sides did move a bit on their positions. McConnell gave up his demand that President Trump sign off on any immigration bill before it moves to the Senate floor, and Schumer offered to give the president funding for his border wall in exchange for protection for the Dreamers.

So watch in just a few hours -- 10:00 a.m. -- for the Senate talks to resume and then with that critical vote to follow at noon -- Dave, Christine.

BRIGGS: Suzanne Malveaux, thank you.

Two Republican senators who broke from their party on Friday night now back in the fold. Arizona's Jeff Flake and Lindsey Graham of South Carolina agreeing to vote yes on the stopgap funding bill known as a continuing resolution.

Flake and Graham had been key participants in negotiations with the Democrats and they believe the White House has not done enough to strike a deal.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Senator, do you really think you can come up with an agreement by the eighth?

SEN. JEFF FLAKE (R), ARIZONA: I don't know. I mean, I hope we can but I'm doubting it because that relies on the White House to actually work with us on this and we haven't seen that yet.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: The White House staff, I think, is making it very difficult.

I've talked with the president. His heart is right on this issue. I think he's got a good understanding of what will sell and every time we have a proposal, it is only yanked back by staff members.

As long as Stephen Miller's in charge of negotiating immigration we're going nowhere. He's been an outlier for years.

(END VIDEO CLIP) ROMANS: The White House using the senator's own words to defend Miller and attack Graham, saying "As long as Sen. Graham chooses to support legislation that sides with people in this country illegally, we're going nowhere. He's been an outlier for years."

BRIGGS: Overnight, the White House kept up pressure on the Democrats.

Quote, "Democrats can't shut down the booming Trump economy so they shut down the government instead. The president's position is clear. We will not negotiate on the status of unlawful immigrants while the Democrats hold our government and our military hostage."

ROMANS: Even before that statement the White House talking point on the military being held hostage, it angered Iraq veteran and double amputee Sen. Tammy Duckworth -- listen.

(BEGIN VIDEO CLIP)

SEN. TAMMY DUCKWORTH (D), ILLINOIS: I will not be lectured about what our military needs by a five-deferment draft dodger. But I have a message for cadet bone spurs. If you cared about our military, you'd stop baiting Kim Jong Un into a war that could put 85,000 American troops and millions of innocent civilians in danger.

(END VIDEO CLIP)

BRIGGS: All right, helping us break it all down this morning, David Drucker, senior congressional correspondent for the "Washington Examiner." And, Chris Deaton, deputy online editor of "The Weekly Standard."

ROMANS: Good morning, guys. Good morning, again.

BRIGGS: All right, gentlemen, let's just keep this first question to 20 seconds or less and we'll start with you, Chris.

Are you optimistic a deal gets done today at noon? Why or why not?

[05:35:02] CHRIS DEATON, DEPUTY ONLINE EDITOR, THE WEEKLY STANDARD: Not particularly, just because of the ascension of the Hill that Republicans have to complete here. I mean, I still think that they're seven votes short of the 60 necessary to pass this test vote, as of the last count overnight, so that's a steep hill to climb in such a short period of time.

BRIGGS: David?

DAVID DRUCKER, CNN POLITICAL ANALYST, SENIOR CONGRESSIONAL CORRESPONDENT, WASHINGTON EXAMINER: Mildly optimistic that moving the 1:00 a.m. vote to noon to try and give this conversation a time to get -- some time to get somewhere where it could reopen the government is encouraging but it doesn't yet look like Democrats are ready to give this thing up.

And I don't think Republicans are going to move off their general position that you need to reopen the government before they will entertain talks to resolve the DACA issue.

ROMANS: Chris, what about who gets the blame here because the conventional wisdom this weekend was that the White House is going to say this is Democrats holding the government hostage? The Democrats -- Sen. Schumer -- military hostage. Senator Schumer saying oh, I had a deal for the border wall and they didn't -- they didn't want to take it, you know. They're beholding to the hardliners around --

BRIGGS: Yes.

ROMANS: -- the president.

But once people -- real people -- stop getting paychecks and you have regular workdays where you've got the government shutdown where you can't get through to the IRS when you have a question about your tax audit, then Americans are going to start being angry.

DEATON: Yes, and this is where all of the voters in flyover country where I come from who are raising their fists to televisions and saying throw them all out comes into play. I mean, this is that exact type of situation that we're looking at right here. It's just the same thing that we've seen for a long time when it comes to this sort of stuff.

A lot of blame to go around. I think the polling bears that out.

About 31 percent hold congressional Democrats responsible. You have about 25-26 percent holding the president responsible -- a little bit less than that holding congressional Republicans responsible. That adds up to a near majority. So you spread all of this around and nobody ends up looking good.

And I think that if you ask Republicans, they're going to say Democrats are doing certain things that squarely puts the blame at their feet. Vice versa when it comes to Democrats -- their assessment of Republicans. The shoe always finds its way to the other foot -- it's politics.

BRIGGS: But it is, to quote the show, breaking bad for Democrats at this point because the congressional generic ballot has swayed big time against them in the last couple of weeks if that's an indicator.

Now, as for who wins or loses, I think Lindsey Graham perhaps summed it up best when asked about how these ends -- how this ends for either party -- listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Do you think your Democratic colleagues are feeling the pressure after this weekend, of the government shutdown? What have you been hearing from them?

GRAHAM: If they don't they're not good listeners, and I've been there. And listen, it's not a win for us.

The first prize in a government shutdown is you get to be dumb, not dumber. That's the best you can hope for is to be looked at as dumb, not the dumbest guy in the room -- or gal.

(END VIDEO CLIP)

ROMANS: Boy.

BRIGGS: You get to be dumb, not dumber, David. Brilliant words there from Lindsey Graham.

What's at the heart of this, though, and how big is trust and lack thereof when it comes to Democrats and the White House?

DRUCKER: Right. So, I think that there is a lack of trust all around. I mean, Republicans --

BRIGGS: Yes.

DRUCKER: -- have a hard time trusting the White House the same as the Democrats do because the president has a tendency to agree to anything in a meeting very politely and engages, and then you leave the meeting and he changes his mind or the administration shifts its positions. And so, it's very hard to understand what the parameters of a deal that he will accept is.

At the same time, what Republicans and Democrats I think have to understand is that the further they get into a shutdown, as we learned in 2013 with the Obamacare shutdown driven by Republicans, is that it's more about politics and saving face and less about policy every day that the shutdown goes on.

And I think Republicans feel very confident, for now, that this is a shutdown that has been driven by a minority of Democrats in the Senate. In other words, the Democratic minority.

And voters proved in 2013 that they can dislike a law but not like the method in which the party trying to undo the law is using and, therefore, side with the party in favor of the policy they don't like. That's what Democrats have to watch for here.

American support resolving the DACA issue -- they may not support using a shutdown to do it--

BRIGGS: Right.

DRUCKER: -- and that will put them in a very tough spot.

ROMANS: And look, the whole --

BRIGGS: The deadline's March fifth.

ROMANS: The whole thing is so politicized. I mean, even you call the White House public comment line, Chris, and this is what you hear -- listen.

(BEGIN VIDEO CLIP)

WHITE HOUSE ANSWERING MACHINE: Thank you for calling the White House. Unfortunately, we cannot answer your call today because congressional Democrats are holding government funding, including funding for our troops and other national security priorities, hostage to an unrelated immigration debate. Due to this obstruction, the government is shut down.

(END VIDEO CLIP)

ROMANS: This is the people's house. That's the answering machine --

BRIGGS: That is unusual.

[05:40:00] ROMANS: -- for the people's house.

That is unusual but I think also, Chris, it shows how dug in each side is on how they're going to brand this event.

DEATON: Yes. First of all, they stole that voicemail message from me because that's the one I put up when I'm trying to sleep.

(LAUGHTER)

I think that if you look at -- this really kind of goes back, Christine, to this idea that we were just talking about of the shoe being on the other foot and who's pointing fingers at who.

When you get into the 2013 debate over defunding -- and I use air quotes for that -- defunding Obamacare that Ted Cruz and a cadre of conservative Republicans backed, it was criticized at the time for being about a largely nondiscretionary spending law. A lot of mandatory spending that is in Obamacare that does not pertain to the normal appropriations process that you would go through.

You fast-forward five years, it's not like there's a line item for DACA in a spending bill. I mean, that's just not how it works.

So when you begin to pair spending bills and these types of issues that don't go through the normal appropriations process, a lot of people come out looking bad as a result of that because you're kind of making requests that are unusual and a little difficult to satisfy from a justification standpoint of going through the spending process --

BRIGGS: Yes.

DEATON: -- the appropriations process.

So it's really strange all around and it has been for a while.

BRIGGS: It's perhaps why Chuck Schumer, in 2013, called this very tactic they're using the politics of idiocy. D.C. -- you can't make that stuff up.

David Drucker, Chris Deaton, thank you, both. We appreciate it.

DRUCKER: Thanks, guys. BRIGGS: All right. Vice President Mike Pence in Israel this morning where he's being forced to defend some comments he made about this government shutdown. Here's what he told troops near the Syrian border.

(BEGIN VIDEO CLIP)

MIKE PENCE, VICE PRESIDENT OF THE UNITED STATES: And the Senate has decided to play politics with military pay, but you deserve better. You and your family shouldn't have to worry for one minute about whether you're going to get paid as you serve in the uniform of the United States.

(END VIDEO CLIP)

BRIGGS: Now, critics accusing Pence of using U.S. troops as a prop.

CNN's Ian Lee is live in Jerusalem.

Ian, moments ago, the V.P. said he was honored to be received in Israel's capital of Jerusalem, but is his agenda there being overshadowed by those earlier comments and the shutdown. How's it playing this morning?

IAN LEE, CNN NATIONAL CORRESPONDENT: Yes, the vice president, Dave, doubled down on what he said that the Democrats are playing politics with the salaries of military personnel.

You know, this shutdown is following him here to Jerusalem. A lot of the local papers are asking the question, if the Trump administration cannot broker a deal with the Democrats then how can they expect it to broker a deal between the Israelis and Palestinians, especially after December's announcement by the Trump administration that Jerusalem is the capital of Israel, something the vice president reiterated?

That infuriated Palestinians. They're boycotting this trip of the vice president, saying they don't want to meet him and they don't want to deal with the United States when it comes to the peace process.

You know, also local clergy -- the vice president was eager to meet with them. They also canceled their meetings with the vice president after that declaration on Jerusalem.

We do know also that the prime minister of Israel, as well as the vice president, will be talking about Iran and the neighboring war in Syria -- Dave.

BRIGGS: Twelve forty-three there in Jerusalem. Ian Lee live for us. Thank you.

ROMANS: All right. Trump and the GOP are still riding the success of the tax bill but the shutdown has crippled the agency that oversees taxes. It is tax season and the IRS will furlough most of its workers, keeping enough staff to begin processing returns.

If you're waiting on an existing audit or another tax matter you are out of luck. The shutdown could potentially delay your refund. The 2013 shutdown deferred $4 billion in payments.

It's tough on Americans you rely on that money to pay off debt or other expenses -- that's Main Street. But investors could also lose out.

The SEC, the agency that polices Wall Street, may furlough most of its staff, suspending investigations, even postponing stock market debuts. That's a first for the SEC. It worked all full force during previous shutdowns but most of those shutdowns, Dave, occurred in the fall when the agency still has money from the prior year.

Speaking of investors, will the shutdown hurt stocks and confidence? Well, today is Wall Street's first chance to respond. Currently, futures are a little bit lower here.

Overall though, I've got to say that tax cut -- the tax cut for corporations is so powerful in terms of what it means to driving their profits --

BRIGGS: It far outweighs this?

ROMANS: So far, it outweighs this. If this is long and ugly then I think you'll start to have a confidence problem.

BRIGGS: But repatriated money from companies like Apple is just --

ROMANS: The forecast of $6 billion a week is the cost to the American economy. They're getting more than that from their tax cuts.

BRIGGS: A comfy amount. All right.

A live missile drill in the heart of Japan. How did it play out in real time? CNN's Will Ripley live in Tokyo with a report, next.

(COMMERCIAL BREAK)

[05:49:00] BRIGGS: Five forty-eight Eastern time.

House conservatives demanding the release of a classified memo spearheaded by Congressman Devin Nunes that is critical of the FBI's conduct during the 2016 election. The memo can now be viewed by all House members after a vote by the Intel panel along party lines.

The memo said to contain details of alleged missteps by the FBI and Justice Department in their use of FISA, the Foreign Intelligence Surveillance Act.

ROMANS: Democrats claim the hastily prepared memo presents a skewed version of events, insisting it is an attempt to torpedo Special Counsel Robert Mueller's Russia investigation.

House conservatives who have reviewed the report say they believe it contains evidence of widespread FBI abuse.

BRIGGS: Women taking center stage at this year's Screen Actors Guild Awards. The show featuring nearly all female presenters. Kristen Bell became the first person, man or woman, to host the SAG Awards in the ceremony's 24-year unhosted history.

As for the winners, the dark comedy "THREE BILLBOARDS OUTSIDE EBBING, MISSOURI" taking home three prizes, including the top prize of Best Cast in a Motion Picture.

[05:50:05] ROMANS: Among the major T.V. categories the HBO limited series "BIG LITTLE LIES" notched a couple of wins for Nicole Kidman and Alexander Skarsgard. Kidman lauding all the great acting roles for women over 40, saying that there's great roles for women over 40 like her.

BRIGGS: Good news.

ROMANS: "VEEP" took home Best Cast in a Comedy and "THIS IS US" won as Outstanding Drama Ensemble. One of that show's stars, Sterling K. Brown, became the first African-American actor to win for Male Actor in a Drama.

And, Julia Louis-Dreyfus snagged two wins. She broke the record for the most SAG honors for a single actor. She now has nine SAG statuettes.

Louis Dreyfus was not at the ceremony. She is home recovering from breast cancer treatment.

BRIGGS: She tweeted that she enjoyed, though, being home in her p.j.'s.

ROMANS: Yes.

BRIGGS: Congratulations to her.

ROMANS: All right. Imagine a supermarket with no checkout lines. Just walk in, pick something up, walk out.

Amazon just opened its first physical cashier-less story. Details on "CNN Money Stream," next.

(COMMERCIAL BREAK)

BRIGGS: Government officials in Tokyo conducting the city's first missile evacuation drill to counter the nuclear threat from North Korea. Hundreds of volunteers rushing for cover inside buildings and underground after a siren signaled an approaching simulated ballistic missile. The drill taking place right in the heart of the city.

That's where CNN's Will Ripley is, live from Tokyo with the details, as it snows down there. Good morning, Will.

WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: Hey, Dave.

I'll tell you, I saw two things today I haven't seen during four years of living in Tokyo. One, the kind of snow that can make snowballs like this. It keeps getting bigger every live shot. [05:55:06] And the other thing is the North Korean missile drill.

Even though Japan has held dozens of these drills over the last year or so, they've never done it in the big cities, in part because of the logistics involved.

They had to shut down a portion of central Tokyo. They had 600 volunteers. They got the alert message on their phones. The alarm sounded, telling people to either take shelter in sturdy concrete buildings or underground in the subways.

All of this Japan didn't do in large metropolitan areas until now because they say this is the time that this country must remain vigilant, even though things have quieted down with North Korea. There are those inter-Korean talks happening, the Winter Olympics are coming up. But, Japan believes there is a very good chance that this country could be targeted.

Meanwhile, in South Korea where they're also hoping for snow like this, there is a delegation on the ground led by the lead singer of that country's Moranbong Band, one of the most popular music groups. And in the coming hours, they will be scouting out they will be scouting out concert locations where they will be performing during the winter games -- Dave.

BRIGGS: All right, Will Ripley, building a snowman right in front of our very eyes in Tokyo. Thank you.

There it is. That is a massive chunk.

OK. The Philadelphia Eagles punching their ticket to the Super Bowl with a 38-7 mauling of the Minnesota Vikings. They'll face the defending champion Super Bowl champs.

Patriots first quarter, NFC title game, Eagles defense really made a statement. It was seven-zip, then came 38 unanswered points. Fifty- yard intercept for a return for a touchdown here by Patrick Robinson. What a terrific block sprung him right there at the 15.

And the momentum, boy, did it shift dramatically. The Eagles offense steamrolled Minnesota. There you see LeGarrette Blount, but Nick Foles just shredded that top-ranked defense.

Third Super Bowl for the Eagles. They've never won the big game. They did face the Patriots back in 2005.

Earlier Sunday, vintage Tom Brady. The only difference was the stitched up throwing hand and it didn't make a difference. Same old Brady.

Two fourth-quarter touchdown passes to the hero of the night who was Danny Amendola, capping the comeback 24-20. And some brilliant back of the end zone work here from Amendola as he tap dances, gets them down.

Eighth Super Bowl for Brady and Belichick. They have won five. Patriots a five and a half point favorite. Tickets, though, just a shade under $5,000 a ticket at this point.

ROMANS: That Amendola last move -- more -- less tap dancing, more, I would say, acrobatics --

BRIGGS: Brilliance.

ROMANS: -- stayed in there. All right, ballet.

Let's get a check on "CNN Money Stream" this morning.

Global stock markets don't seem to care the U.S. government is closed. You -- but you can see futures here are down heading into day three of the government shutdown.

So far, Wall Street has not been too concerned. The thinking is a short impasse will not hurt the economy in the long-term, if it's short. In the past, shutdowns have not caused significant sellouts in the stock market.

In fact, U.S. stocks hit a record high again on Friday, helped along by big corporate profits. Another -- expect another slew of earnings this week. We get reports from Netflix, Horizon, United, Ford, Caterpillar, and Starbucks.

All right, the majority of the wealth, though, created in 2017 went to the top one percent. The bottom half of the population saw no increase in wealth at all. That is according to Oxfam International proving, it says, that the global economy is skewed to favor the rich.

It released this report ahead of the World Economic Forum in Davos. That conference, of course, is synonymous with the rich and the elite -- global elites.

Now, President Trump's supposed to head there this week but those plans could change if the shutdown endures.

Twitter will tell nearly 700,000 they interacted with Kremlin-linked Internet trolls. Users either followed a troll account or they retweeted one of their tweets.

Twitter identified thousands of accounts connected with a Russian troll army that meddled in the presidential election in 2016. It turns out a lot of folks -- almost 7,000 of you were interacting with them.

Imagine a supermarket with no checkout lines. Amazon just opened a cashier-less store.

Its customers walk in, scan the Amazon Go app when they enter. Sensors track their movement, charge their Amazon account for the items they grabbed. Shoppers then just walk out the door.

Amazon opening a physical shop, of course, is laced with irony. It's widely blamed for driving traditional retailers out of business. But that Seattle store, really interesting experiment there.

BRIGGS: Yes. Tweet us @EarlyStart if you can check that out later in Seattle.

ROMANS: Thanks for joining us. I'm Christine Romans.

BRIGGS: I'm Dave Briggs.

"NEW DAY" starts right now. Three Democratic senators weigh in on the shutdown.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Nobody wins in a government shutdown. Too many people are hurt.

BRIGGS: The government shutdown entering day three.

SEN. CHUCK SCHUMER (D-NY), SENATE MINORITY LEADER: It was the Republicans' job to govern, it was their job to lead. They have failed.

MICK MULVANEY, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET: I had no idea that the Democrats in the Senate were this dysfunctional.

SEN. RAND PAUL (R), KENTUCKY: I think the blame game is ridiculous.

MCCONNELL: Let's stop victimizing the American people and get back to work on their behalf.

SEN. CHRIS COONS (D), DELAWARE: He should, instead of throwing tweets, pull together the four leaders of the House and the Senate and negotiate.

GRAHAM: As long as Stephen Miller is in charge of the negotiating immigration, we're going nowhere.

DUCKWORTH: I will not be lectured about what our military needs by a five-deferment draft dodger.

UNIDENTIFIED MALE: We have soldiers fighting for us who will not be getting paid. This is ridiculous.

(END VIDEO CLIP)

ANNOUNCER: This is NEW DAY with Chris Cuomo and Alisyn Camerota.