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Dow Regains Ground after Monday's Record Drop; Clock Ticking on Trump Decision to Release Dem Memo; Soon: House Votes on Bill to Fund Government through March 23. Aired 10-10:30a ET
Aired February 6, 2018 - 10:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ERICA HILL, CNN ANCHOR: Good morning. I'm Erica Hill in for John Berman and Poppy Harlow.
We are half an hour into the trading day on Wall Street. And one of our producers just said, if you ever bungee jumped, you might feel at home right now. A day after the biggest single day point drop in the history of the Dow, blue chips plunging another 500 plus at the open before surging as you can see there on your screen into the green.
We are also taking stock of Congress at this hour. A new government funding deadline is looming, of course this week. As immigration deal is in limbo, Republican leaders of the House due to brief reporters any moment now.
We begin though with the markets. CNN's Christine Romans - so, Christine, as we're looking at this, everybody wants to know why, what's next, easier to ask than to answer.
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Yes. Well, look, the stocks don't just go straight up forever. And that's what we've learned over the past few days. You have a -- bond market yield started to go up that spooked stock market investors. Yesterday was a really terrible day. 1,175 points dropped off the Dow yesterday. That is, you know the worst point loss in history. But not even in the top 20 of percentage losses. That was 4.6 percent percentage loss.
Market opened this morning, continued with that selling and then, boom, found buyers and bounced. So this is a return of volatility in the stock market, the stock market that has not had a correction since 2015. We have seen the market over the past few days. Now officially lose 10 percent from the recent high. That is the textbook definition of a correction. And those can be healthy in a stock market.
The stock market is not reflecting right now the fundamentals of what is happening in the economy. The economy is strong. The job market is strong. We're starting to see some wage inflation that caused some fears in the bond market about inflation. And that's what sort of triggered all of this.
But, again, Erica, we have gone so long without a correction, you know, a couple of years without a correction that one was very long overdue. How it is going to close, I have no idea. If you have a 401(k), just, you know, read a book today, you know. I mean, if you're very close to retirement, you should not have all of your money in the stock market. That's a tried and true fact. If you have money you can't live without, it should not be in the stock market. But if you have a well-designed portfolio for retirement, just don't worry.
HILL: All right.
ROMANS: Don't worry --
HILL: I'm not worried at all because I just turn to you and you make me feel better. Christine, thank you.
I want to turn now to CNN's Cristina Alesci who's on the floor of the New York Stock Exchange. As we've been talking about all this morning, the market. It is said move on to emotions, greed and fear. Which of those two are you seeing this morning?
CRISTINA ALESCI, CNN CORRESPONDENT: Well, we're seeing basically a reset right now. I think a lot of investors this morning are seeing basically, you know, they're saying we went too far too fast in the market and this is a natural correction as Christine said. That was in part overdue. And what is really -- what is really remarkable here is that, you know, we've had a tremendous rally in stocks over the last year. And don't forget, this has been an eight-year rally.
So at some point, you know, the day was going to come where we had to have a correction. What investors -- what spooks investors a little bit is violent turns of events like yesterday, where we saw that drastic drop at 3:00. That's what spooks investors. But, look, the mood overall is stability breeds instability. So things were just too calm for too long, underlying all of this as Christine pointed out is a fundamentally healthy economy.
I mean, what sparks this downturn in part was a strong jobs number, ironically, the fact that wages showed increases and that sparked fears of inflation, which would actually potentially cause the fed to raise rates at a much higher -- much faster than expected.
[10:05:03] So, that is what is going on here. And right now we're monitoring things, but we've rebounded quite a bit, and we're just going to keep an eye on it today.
HILL: All right, sounds good. Cristina Alesci, live there at the NYSE, thank you.
Also this morning, a new deadline for President Trump, he now has five days to decide whether to release a Democratic memo, which is a response to the GOP allegations in the Nunes memo that the FBI abused surveillance laws. This as White House lawyers are urging the president not to sit down with special counsel Robert Mueller over concerns he could be caught lying.
CNN's Kaitlan Collins joins us now live. Kaitlan, so this morning, we're hearing from the White House about possibly releasing this memo. Do we know which way it is leaning? KAITLAN COLLINS, CNN WHITE HOUSE REPORTER: No, the fate of that memo is still uncertain right now, Erica. But we do know that the White House has received that memo, the president now has five days to decide whether he's going to block the release of that memo and the Press Secretary Sarah Sanders issued a statement this morning saying they had a memo and adding as stated many times, the administration will follow the same process with this memorandum from the minority as it did last week when it received the memorandum from the majority.
So, two things to keep in mind here, Erica. That there will be serious backlash if the White House tries to block the release of this memo, especially even though the White House has maintained their using the same processes as they did with the Republican one last week. We know that the president had decided to release that memo before he had even read the memo. So it will be interesting to see what happens there.
And then secondly there will almost certainly be outcry as well if there are some White House initiated redactions for this memo as there were none last week with the Republican memo.
HILL: We will be watching for that. Meantime, separately "The New York Times" reporting, Kaitlan, that White House attorneys do not want the president to sit down with Robert Mueller. We know the president has said previously he's looking forward to it. What is the latest from -- on that this morning?
COLLINS: Well, yes, the president has said publicly he's happy to sit down with him, looking forward to it, but quickly the president's lawyer John Dowd said really it is up to him if the president is going to sit down with Mueller. But this "New York Times" reporting we're seeing that the president's lawyers do not think that's a good idea.
And we've also heard from some of the president's outside advisers, Chris Christie, Newt Gingrich, they don't believe the president should sit down with Mueller as well. So that's where we are right now. But the president has said publicly he's willing to sit down with him.
HILL: We will be watching to see what happens. Kaitlan Collins, thank you.
I want to turn this now over to our panel, CNN political analyst Jackie Kucinich and Molly Ball and CNN's senior political analyst, David Gergen.
As we look at all of this, David, and we're seeing this reporting from "The New York Times," there is a concern about a possible subpoena if the president does not sit down with, David, Mueller. How realistic is that and where could that end up because really It is a gamble for both the White House and for Robert Mueller on that one.
DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: I think less of a gamble for Mueller than I guess from President Trump about whether he sits down or not. Bob Mueller is clearly going to call the president to voluntarily testify. Come in with his lawyers, sit down around the table and go through things. And that way vulnerability for the president, if he forgets or something or misstates something. But if he does not, then the likelihood is very high that Mueller will do what he would do in a standard case and that is issue a subpoena and put the president in front of a grand jury. And the danger for the president there is he will not have his lawyers by his side to talk to him about the answers before he gives them. He is sort out of there on his own. He's you know - he's a trapeze artist without a net.
HILL: And how much could his comments come back to hurt him where he has said publicly, you know, I look forward to sitting down with Robert Mueller. He has said repeatedly I have nothing to hide.
GERGEN: I think this is a real problem for him because once he says -- I'm glad he did say, I'm happy to do it, I'll sit down with him. And if the lawyers then veto it, it looks as if that was a dodge. It was a two-step. I really want to do it. But these guys are so smart, they think that -- for the country's sake, -- I don't think that's going to fly with the country, same way with this memo, releasing the memo.
His whole party -- all the Republicans on that committee said release this second memo. How can he buck his party on that? His instinct is going to be I don't want to do it. His preference will be I've already been vindicated, why should I have to do it. But I think the politics of it -
HILL: The politics seem to be overshadowing everything we talk about these days as we know.
GERGEN: Even the markets.
HILL: Even the markets. Yes. But picking up on your point there about this memo and if the president decided not to release it, of course, then the next option is that it can be put to a full House vote. And there will be a lot of pressure on Republicans, especially those who voted to release it on the Intel Committee.
Jackie, is there the stomach in Washington among Republicans to potentially go against the president if it got that far?
[10:10:00] JACKIE KUCINICH, CNN POLITICAL ANALYST: It is hard to say. I don't know anyone has gone that far yet. I think there is a hope that the president will release this. What it seems like he's already posturing to do is with those tweets against Adam Schiff yesterday. You know calling him a liar, saying that he can't be trusted and he's a leaker, perhaps politicize this Democratic memo before even, you know, before it could be made public. So perhaps he'll just dismiss it as partisan nonsense. And use that to spin it so it is not perhaps taken as seriously as the Republican memo was in some circles. Other circles the Republican memo was a nonstarter anyway. The partisans met.
HILL: Yes, that pretty much sums it up. Molly, separately what we're going to see, hopefully a little more action on today as we're heading in -- as we're -- the deadline looms, of course, for government funding. This will be the fifth CR, obviously that needs to go through. What is it going to take to get this done and I mean how -- we're kicking the can down the road again to March 23rd? MOLLY BALL, CNN POLITICAL ANALYST: Yes. It is probably going to take a miracle. It is actually really amazing how little progress has been made since that last brief shutdown on finding a solution to the impasse at which lawmakers find themselves on multiple issues, particularly the immigration issue, which has been the sticking point on this.
It has been a sticking point before. It has been the sticking point for Republicans for two decades. They just can't do immigration in any form. And the president arguably made this harder by changing the terms of the immigration debate and putting legal immigration on the table in a way that Democrats believe is a nonstarter. And it has really moved the debate into territory where it is never been before.
So, you know, on the spending deal, there has been some progress, the negotiators are coming to a point where they might be able to agree, but without immigration, eventually there is -- we're going to hit another sticking point. Patience is going to run out. And so whether it is this time or after the, you know 17th or the 117th CR, at some point they have to solve this and nobody has any idea how.
HILL: Which is a major issue not knowing how. David, to you, just in terms of immigration, is there any incentive here on either side to give a little?
GERGEN: I think that there is powerful incentive if they want to go home and be able to tell the country that the Congress is working. Right now this looks look a total dysfunctionality, you know to go into a fifth continuing resolution, what that means is no agency, no department of government can plan with assurance about what their finances are going to be, about what their revenue is going to be. That's particularly hard and we've heard along about the Defense Department. You know they're supposed to think strategically and here they're caught up in this craziness, in this kind of debate. So I think there is enormous public interest, enormous public desire to get this resolved and move on.
HILL: But is that really trickling down because we even had seen -- just a couple of weeks ago, we were talking about the polling even when it comes to what to do with Dreamers and the overwhelming support among the American public. And a lot of that seems to get lost somehow in translation in terms of getting that information about how your constituents really feel to lawmakers.
GERGEN: Well, I think that -- what we know in the last couple of months is that when the Republican led Congress actually passed a tax bill, their favorability ratings went up. The president say favorability ratings went up. So showing that you can actually govern when you're in the majority does make a difference to them politically.
Right now, they're caught up in the spokes of the wheel. I think it is nuts what is going on right now. I must say I don't understand -- every time in the past when we're in a situation like this, the president of the United States weighs in. He may do it behind the scenes but he weighs in as a leader. Where is the leadership on this to get it done, to get this budget straightened out?
HILL: And it is not weigh -- in terms of not weighing in, Jackie, I mean what is the sense there because not only would a lot of people like to hear from the president on this, but there is also the very -- the reality that we're staring down midterm elections, so If nothing else -- that is incentive for lawmakers here to get something done and yet here we are.
KUCINICH: Well, it is kind of a double-edged sword, right, because yes, its incentives for some lawmakers to get something done. But when you look at - particularly conservative Republicans that they're not getting what they want on the issue of immigration, which has become kind of a third rail, in some districts. The closer the midterms are, the more they're going to dig in their heels.
And as far as the president is concerned, you know when the president weighed in, in recent past, it is sort of obscured the picture. He said that he did want a deal on DACA with heart and then was -- as Molly said, started throwing in legal immigration into the mix. And it seems like lately he's siding more with the hard-liners which are going to make it an extremely hard thing to pass the Senate when you're talking about immigration or even getting some kind of pathway for these DACA recipients. So-so far the president has just made a mess of things when he's -
[10:15:00] When he's weighed in because he hasn't been able to make up his mind and take up a consistent position.
HILL: Molly, before I let you go, I do want to get just a sense of in Washington how this issue of the market is playing out. So two days of losses, which I'm looking at right now, kind of the corner of my eye, at the moment, the Dow back in the green.
BALL: Right. And I think that kind of like people on the stock floor, there is a lot of just nervousness, trepidation, not knowing where this is going to go, not know how it's going to play politically. A lot has been said about you know how much the president touted the stock market, when it was going up and now he's sort of conspicuously silent. But it does appear to be the case that as the Press Secretary Sarah Sanders said yesterday, the economy is still strong underneath all of this --
HILL: Molly, I'm going to stop you right there. We want to - we're going to listen in, because Paul Ryan just about to start taking questions here. Let's listen in.
REP. PAUL RYAN (R), HOUSE SPEAKER: Very clear about this. We'll take a bill that the president supports, so we - look, put it this way. President Trump made a very serious and sincere offer of goodwill with the reforms that he sent to the Hill. That is what we should be working off of. Those are the bipartisan negotiations that the majority leader is conducting on our behalf. So we're not going to bring immigration legislation through the president doesn't support. We're working on something here in the House. We're working on bipartisan negotiations. It is going to be a bill that we support, that the president supports. QUESTION: Speaker Ryan, (INAUDIBLE) Democrats say they do want to find -
RYAN: Great, we're going to give them the opportunity today. I think that's wonderful.
RYAN: We have been trying to get a budget cap agreement for six months. And I would argue strongly that the reason we do not have a budget cap agreement, which affects these issues, is because they're holding government funding, particularly funding for our military hostage on completely unrelated items that have nothing to do with funding the government. Casey?
QUESTION: Would you urge the president to declassify the minority memo in?
RYAN: Well, again, it is all about sources and methods. So, we, look - you know what is kind of ironic about this issue is the Republicans on the Intelligence Committee voted to declassify their memo and the Democrats' memo. The Democrats voted against declassifying the Republican memo but not their memo.
So I think what you see is Republicans are for letting all of this information out there, provided that we scrub for sources and methods. The Republican memo was written to make sure that sources and methods were not compromised so that full disclosure could occur. We do not now know whether that's the case for the Democrat memo, It has to go through that scrubbing process.
Here's what I would like to encourage all of you, you're the press. Avatars are the first amendment, protecting a critical component of our civil liberties, FISA abuse matters to each and every one of us as citizens. And if our government abused the FISA process, a very unique selective process, which if mishandled could complicate and compromise American civil liberties.
We should care about that. So this is about making sure that our civil liberties as citizens are protected in the FISA court, and that it is not politicized. Manu?
MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Last week, you made the case that the memo -- the Nunes memo was separate from the Mueller investigation.
RYAN: I continue to say that.
RAJU: Over the weekend, the president claimed total vindication from the Nunes memo. Was he vindicated in any way?
RYAN: Let me go back to what I just said. This is about FISA abuse and this is about holding our government accountable and this is about Congress doing its job in conducting oversight over the executive branch, which in this particular case has been given great power over us as citizens. We need to make sure that that power is used correctly.
RAJU: Was the president vindicated?
HILL: Paul Ryan taking questions there. Not answering one from our Manu Raju about whether the president was vindicated as the president said in response to that Nunes memo which was released on Friday. In terms of the memos, Paul Ryan just saying there, this is about -- protecting the FISA court and not about politicizing anything that's going on here.
David Gergen, would you agree with that?
GERGEN: I think that's the argument. I don't think that's the truth. I think this is much more about trying to discredit the Mueller investigation. The president has been telling people privately that he thinks it will discredit. And I think what is really important here to remember, the FISA court didn't act just once. Wasn't as if they were led into a mysterious place where they were told untrue things.
The government had to go back. The FBI had to go back on three different occasions after that. There were three different tests of whether it was appropriate to have this FISA ruling on Carter Page. And you have to show new information each time. You have to show new evidence that is worth continuing. So they had four times they convinced different judges that this was a good idea. Seems to me that's pretty compelling. Let's wait and see the Democratic memo.
HILL: To your point, it wasn't one piece of information, each of those four times.
HILL: It is a lengthy process. David Gergen, appreciate it, Jackie Kucinich and Molly Ball as well, thank you all.
[10:20:02] Still ahead, Attorney General Jeff Sessions is calling for a fresh start at the FBI. So, what does that mean for the bureau?
Plus, we are keeping a close watch on the markets. As you just saw on your screen here, now going red, a lot of back and forth expected throughout the day after that record-breaking fall on Monday.
HILL: Happening right now, Republican leaders in the House trying to beat the clock. Soon, the House will vote on another short-term spending bill. Meantime, Democrats and Republicans, still far apart when it comes to immigration.
Joining me now, congressional correspondent Sunlen Serfaty. Sunlen, good morning.
SUNLEN SERFATY, CNN CONGRESSIONAL CORRESPONDENT: Good morning to you, Erica. That's right. This is a scramble on multiple fronts that are somehow all really intersecting at multiple points. You have the government funding, which runs out at midnight on Thursday night. And without Congress passing another spending bill, the government could shut down.
[10:25:05] Now, aides on both sides say that they think that this is something that can be avoided, but at this hour, at this moment, how they get there is very unclear. The House, they will move to a vote at 6:30 tonight to pass a short-term spending bill. That is expected to pass. It funds the government through March 23rd. It also includes one year defense spending boost in federal funds for the Pentagon.
But that issue is a nonstarter in the Senate. The Senate Minority Leader Chuck Schumer saying that would be like barreling head first into a dead end if the House sends over that short-term spending bill. And likely they would strip out that federal funding, wrapped up into all of this, and as the talks continue, about potentially trying to broker some broader deal is, of course, getting a deal for Dreamers, addressing DACA, which many Senate Democrats are pushing for.
Senate Majority Leader Mitch McConnell has said that he intends to bring immigration to a floor debate next week as long as the government stays open and funded past the Thursday deadline. But what form that is, what exactly is the base of that bill, right now it is very much an open question. Lawmakers up here, Erica, are throwing up their hands saying we don't even know what that base bill is. So, certainly a lot to iron out, very short amount of time. Erica?
HILL: Sunlen Serfaty, thank you.
Joining me now, Republican Congressman Claudia Tenney of New York. Good to have you with us. Obviously Sunlen just laying out there for us, we know there is a busy not just today but next few days ahead of you here, in terms of this -- what would be the fifth short-term spending bill here. Where does this all end?
REP. CLAUDIA TENNEY (R-NY), FINANCIAL SERVICES COMMITTEE: I hope it ends with us actually passing 12 appropriations bills in the Senate that we passed last September in the House and finalizing our budget. But I'm afraid we're going to probably be stuck with a continuing resolution that we will vote on tonight and we will wait for the Democratic minority to decide if they want to shut the government down again to take money away from our community health centers, to give unpredictability to our troops, to deny our troops raises and all the things they would be doing if they shut the government down. And I'm just really disappointed that they haven't learned from the last shutdown that this is not going to be a good thing. Not just for our citizens, but, you know, for the government's integrity.
HILL: Obviously, you know, the pushback there is you're the party in power.
TENNEY: Yes. We're not though, actually. Under the 60 vote rule, of course, we don't have the extra -- we need Democrats to join along with us and vote and support those. When you say that, I would love to get rid of the 60 vote rule if we could and pass things on a simple majority, so that we can continue to grow and take care of our military to secure this country.
I had a very sobering meeting recently with the Republicans in our retreat with General Mattis and our Secretary of State Rex Tillerson about the importance of predictability and funding especially for defense. My son is an active duty marine officer, who has described to me how devastating this is for our military and how much it puts our security at risk. I wish Chuck Schumer would recognize that as a fellow New Yorker.
HILL: As we look at what happened on funding, we know that this is obviously intertwined when it comes to immigration. Now I know you have gone -
TENNEY: Actually it is not. There is really no -- immigration has nothing to do with this. The DACA situation has been extended by the president. We don't have - we have until March 5th originally. The president said we'll move on and I thought it was really incredible was the president offered the Democrats basically more than what they wanted and Chuck Schumer, Dick Durbin and Senator Feinstein have voted for everything that the president offered in his State of the Union speech, which I find incredible.
I think the president's right. The Democrats really don't want a fix for this. They want to use it as a club to say that we're against immigration. I'm a strong supporter of immigration. I worked with our refugees coming from war torn Bosnia, someone who spent a lot of time in the former Yugoslavia. This is just a mischaracterization much like many other things that go on Washington.
HILL: What about some of the efforts that we have seen. Yesterday we have seen the bipartisan -- proposal was going to be put forth by Senators McCain and Coons and before it was even formally addressed, the president shooting it down. Is there enough incentive on both sides here to come together and to have a meaningful discussion and to at least work with a proposal as opposed to shooting it down before it is even formally introduced?
TENNEY: Well, if you look at the legislation, it is the legislation is I don't agree with what Senator McCain and Senator Coons -- I think it was terrible. I think what the president offered was actually a very, very big -- a very generous, much more than was in the secure - the Goodlatte bill, called Secure America's Future Act.
But I think what the president offered was basically, you know, amnesty after about 10 years to give security to our borders and to stop the visa lottery system, to end chain migration, all those things have been supported by Chuck Schumer and many of the Democrats, not just supported, they voted for these things in the past. And you can just roll back on your old YouTube videos and find you know many examples of that and their voting record.