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Congress Nears Budget Deal to Avert Shutdown; Soon: Former Trump Campaign Aide Appears in Court; Dem Wins Missouri House Seat in Pro-Trump District. Aired 10-10:30a ET

Aired February 7, 2018 - 10:00   ET

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


[10:00:40]

JOHN BERMAN, CNN ANCHOR: Good morning, everyone. I'm John Berman.

The breaking news this morning, are you sitting down? Two things, we don't see very much. They might happen very, very shortly. Number one, a spending deal that lasts longer than a minute, a week, a month. We're talking about two whole years of funding without a government shutdown, unheard of in Washington. And number two, this deal it's bipartisan as in Republicans and Democrats. Both of them seem to agree on this in the Senate at least.

Now, the big question for all of them is will the president help or will he get in the way? This is the president who just said he would love another shutdown. Let's get the very latest on where these negotiations are going. Our Suzanne Malveaux on Capitol Hill. Suzanne, what are you hearing?

SUZANNE MALVEAUX, CNN NATIONAL CORRESPONDENT: Well, John, there is a sense of excitement and anticipation here, a flurry of activity in about 90 minutes. This is when the Senate will gavel to order. They're going to take up a number of votes of one of them is going to be on a standalone spending bill for the military. Then they're going to take on the House version of a continuing resolution to keep the government open, strip it off its language, throw it back to the House.

Tomorrow the House will vote on a measure which we expect will keep this government going on. At the same time you're talking about this big deal, potentially very big deal, bipartisan deal on the Senate side that would really avoid all of this fits and starts, stops and starts in funding the government and clear the way for the long term funding here. So, yes, it would extend government funding for six weeks up to March 23rd but then also pave the way for funding for several years, significantly increasing defense and domestic spending in the tune of $300 billion for two years, including disaster relief as well as raising the debt ceiling past midterm elections so it's not a political hot potato and finally also funding some health care programs as well.

Big compromise, big concession on the Democrat's side here, it does not include a DACA deal ordeal for the Dreamers, I spoke with Senator Dick Durbin, Democrat who really pushing that, trying to convince his House Democratic colleagues to go along with his plan, trying to reassure them that yes, that would be dealt on a separate manner. And that they will actually be able to handle that. In the meantime, House Democrats, now starting their three-day retreat, moving it from the eastern shore here right to the Capitol to deal with these very critical issues in whether or not this moves forward. John?

BERMAN: All right, Suzanne Malveaux on Capitol Hill. Keep us posted as to what you hear.

Let's go to the White House now. CNN's Kaitlan Collins is there. And one of the problems, Kaitlan, for these bipartisan negotiations is the president and the chief of staff, they've been saying things.

KAITLAN COLLINS, CNN WHITE HOUSE REPORTER: Yes, that's right. John. They've been saying a lot of things, some really stunning comments coming out of the White House yesterday. First one being from the president where he casually embraced the idea of a government shutdown if Congress does not accept his immigration proposal and not only did a lot of people, lawmakers, aides on Capitol Hill say that those comments were unhelpful. They are also divorced from what's going on Capitol Hill. As you just heard from Suzanne, saying that immigration isn't even really part of the talks right now about this budget deal before the government runs out of money later this week. And the president certainly wasn't the only one making some news worthy comments. His chief of staff John Kelly also raised a lot of eyebrows when he said this on Capitol Hill yesterday.

(BEGIN VIDEO CLIP)

JOHN KELLY, UNITED STATES CHIEF OF STAFF: The difference between 690,000 and 1.8 million were the people that some would say were too afraid to sign up, others would say were too lazy to get off their asses but they didn't sign up.

(END VIDEO CLIP)

COLLINS: Now, the White House said, John, you're going to have to decide for yourself if those comments are offensive, and we're still waiting to see if they will throw a wrench in those ongoing immigration negotiations. But what it certainly does show us is that the chief of staff can sometimes be just as disruptive as the president himself.

BERMAN: All right, Kaitlan Collins for us at the White House. Kaitlan, thank you very much. Keep us posted.

Joining us now, Republican Representative Dave Brat of Virginia, a member of the House Freedom Caucus and the Budget Committee. Congressman, thank you so much for being with us.

We could be on the verge of a big spending deal inside the Senate. Your colleague from the House Freedom Caucus, Jim Jordan, he doesn't like it. He doesn't like it a lot. Let me read you what he says about this. He told the "Washington Post."

[10:05:00] This is a bad, bad, bad -- you could say bad 100 times deal when you put it all together, a quarter of a trillion dollar increase in the discretionary spending -- not what we're supposed to be doing." Bad 100 times deal he says. Is that what you think?

REP. DAVE BRAT (R), VIRGINIA, BUDGET COMMITTEE: Yeah, on steroids, I agree with Jim. I just heard, kind of the hype -- I don't want to rain on the parade either. But bipartisan budget deal right, so the House sent over a bill that basically is consistent with a trillion dollar deficit every year, right, because the Democrats demand that. Then you send it over to the Senate and what happens when you get the deal? They add another third of a trillion dollars, right? And the mainstream media is kind of reporting, hey, no big deal. It's a two- year budget deal.

It's $1.3 trillion a year for the foreseeable future, every year out. We're already at 21 trillion in debt. -- We add 1.3 trillion in debt after we do our tax plan and everybody gets excited about a deficit. We only need to come up with $50 billion a year to pay for our taxes. This thing adds 300 billion right off the bat. And any their grader -- I taught economics for 20 years, if you're at $21 trillion in debt, you're supposed to be going down, not adding to it --

BERMAN: To be clear, you don't like the Senate deal, number one. But I'm confused, right? Because the projections for the deficit now just went from $513 billion to a trillion dollars largely because of revenues, largely because of tax collections, what they will be with the new tax plan which you voted for. You're OK with deficits there but you're not OK with getting deficits this way. Are you for them or against them?

BRAT: John, you should have signed up for my Econ 101 class. If I just got it on saying, I'm not for them. Our tax plan pays for a third of it but the economy is predicted to grow at 5.4 percent GDP by the fed next quarter.

BERMAN: That's the - Atlanta fed. It's one bank. OK, go ahead.

BRAT: At any rate, all you need to do is grow it about 3 percent to pay for the entire tax bill. That thing is only $150 billion per year that is getting you 5.4 economic growth. Tell me any American that doesn't want that deal right now? This thing, what we just sent over is consistent with a trillion dollar deficit this year and I'll just repeat, once you send it over to the Democrats -

BERMAN: Right.

BRAT: -- the compromise adds another $300 billion. All we need -

(CROSSTALK)

BERMAN: Just so the American people know, you're OK with the trillion dollar deficit but not the 1.3 trillion?

BRAT: No, I am not.

John, you just missed the lecture -

BERMAN: You just said we sent over -- we sent over a bill which means you, we sent over a bill which has a $1 trillion deficit. BRAT: I don't like that either.

BERMAN: OK.

BRAT: I'm on the Budget Committee. We found $200 billion in savings. We did regular order, we did all 12 appropriations bills, 150 days ago. To our credit we did regular order in the House. We passed a budget. We passed 12 appropriate bills. We saved$ 200 billion in mandatory spending for first time in history. All of that was dismissed in the last round of the budget shutdown because the Democrats we have nine Democrats who are shutting down the entire government.

BERMAN: Well, at this point now we're talking about the saying nine Democrats in the Senate. It seems as if they may be on board with this bipartisan deal. Ultimately you'll get a chance to vote on this, I think. And you seem to be a no vote on what the Senate is talking about right now. If we can move on to a different subject -

BRAT: Sure.

BERMAN: The president is now considering whether to release this Democratic memo, which is a response to the Republican memo for the House Intelligence Committee. What would advise the president do with this Democratic memo?

BRAT: Yes, just make sure there's no national security claims and be transparent, release everything. It's pretty astounding, the evidence that the average American sees, Bernie had all of the energy with him on the Democrat side until they rigged it against him and Donna Brazile admitted as such. But he wanted to clean the swamp. Trump wants to drain the swamp, you have six FBI folks who have either been fired or downgraded and lost their jobs. That doesn't normally happen.

(CROSSTALK)

BERMAN: So, let's say -- we're going to take -

BRAT: -- why is that, right? Why is that happening?

BERMAN: We'll take yes for an answer on releasing Democratic memo, yes on releasing the Republican memo also. Also, Congressman, do you like parades?

BRAT: I love parades.

BERMAN: Do you think that there should be a military parade paid for by the taxpayers and you're very, very careful before you spend taxpayer money. Do you think there should be a military parade in Washington?

BRAT: I'm going to wait to see the details on this military parade. I heard it yesterday reported. I don't know what it is yet. But I love a good parade but I don't like spending money. So we'll see what the details look like.

BERMAN: If it cost taxpayer dollars, is this not something you would get behind?

BRAT: Well, I mean, most parades cost taxpayer dollars, that's what I'm saying, I can't make a comment on that without seeing -

BERMAN: You can make a comment. You comment on a lot of things, Congressman. Based on what you've read in the "Washington Post" right now. If it is as advertised, right now, it seems that you're saying, you're not totally into it, you have some concerns?

[10:10:05] BRAT: I haven't even read the "Washington Post" -- I saw a headline. I heard about it on the newscast and that's it. So get me on a later date when I find out what it costs and I'm happy to comment as you say.

BERMAN: How much is too much?

BRAT: Well, what's too much since we're doing policy, the Democrat tax plan -

(CROSSTALK)

BERMAN: No, no, no. How much would be -- how much parade -- how expensive would be too expensive? How expensive will be too expensive? Give me a price tag.

BRAT: You're spending a lot of time on this. The Democrats raised taxes by -

BERMAN: No, we spend a lot of time on the budget. We spend more time on the budget than this. I just want to know how much is too expensive for a parade.

BRAT: You're trying to talk about parade costs when the Democrats raised taxes in their progressive caucus by $10 trillion, would have brought economic growth to zero immediately. So that - come on, they are not even in the ballpark.

BERMAN: I wasn't comparing the parade to what Democrats have done.

BRAT: You should be. You should be.

BERMAN: You compared -- I was asking you whether you supported the parade. You seem to say no but you dodged it at the end there. But we'll have you back on when we get a price tag. Congressman Dave Brat, thanks for being with us. Appreciate it.

BRAT: Thanks.

BERMAN: A former key Trump campaign aide expected in court this hour because his legal team wants out. What does this shake-up mean for Rick Gates? Could a deal be in the works for a special counsel?

(COMMERCIAL BREAK)

[10:15:30] BERMAN: A spending deal, maybe, a shutdown threat, really, and a parade, also, really. Let's get to it. I'm joined by CNN senior political analyst and a senior editor of "The Atlantic," Ron Brownstein, CNN political commentators, Paul Begala and Jason Miller.

Ron Brownstein, to you, look, we could be on the verge as in minutes away from the Senate announcing they've reached this bipartisan deal to fund the government for two years, which is a long time. I mean, a very long time in Washington terms at this point, avoid a shutdown, raise the debt ceiling past the midterm elections right now. This would be a significant accomplishment yet just on the show I had one Democratic Congressman Eric Swalwell say he doesn't love this deal and I have one Republican Congressman Dave Brat, just on, saying I don't love this deal either. What's going on?

RON BROWNSTEIN, CNN POLITICAL ANALYST: Well, look, I mean, this is first of all, this is -- you can trace all of this back, all the way to 2011 and the grand bargain between John Boehner and Barack Obama that failed which led on deficit reduction at a time when Republicans were very hawkish on the deficit. And that led to the so-called spending caps on domestic and military spending that Congress has strained against ever since and has voted repeatedly to loosen, which is essentially what this would be again, another agreement in the Senate to increase both domestic and military spending which allows both sides to claim a victory to allow it to move forward.

But it is a reminder of just kind of how much the gyroscope that shifted here. Where you have, you said, Congressman Dave Brat who beat Eric Cantor from the right, essentially saying a trillion dollar a year deficit was fine. You know, that was OK. And it's kind of - it underscores how much Republicans have now moved towards tax reduction obviously over deficit reduction as a priority. But it does allow a way forward if the House -- if the House can pull together 2018 votes to do it.

BERMAN: You know Paul, what's interesting is that this requires a separation really between spending and the budget and immigration, which is something that House Democrats and progressive Democrats aren't one bit happy about.

PAUL BEGALA, CNN POLITICAL COMMENTATOR: That's right. That would be a big gift by the Democrats. So they would have to give up an important priority. Now, Senator McConnell has given his word that they will have a vote at least on the Dreamers. Now Mitch McConnell, of course a man of his most recent word, so we really can't expect him to actually fulfill that, just his solemn pledge to the United States Senate. But you're right. This is a big deal that the Democrats came out.

Now -- and they are also giving up by the way their leverage on the debt ceiling as Ron pointed out. This would extend the debt ceiling for two years. It's one of the few times that the minority has some real leverage. So they are giving up a lot. Well, they are getting a lot. They're lifting the caps on domestic side of the budget as well as military and they're funding community health centers which is somebody everybody -- a lot of people in Trump country don't have access to health care. Community health centers can help that a lot. But what I'm struck by is how they are ignoring the president. Last night and yesterday afternoon, the president said I want a shutdown. This morning, they look like they are coming together with a long-term deal to fund the government for two years. It's very instructive if the president is simply treated like a guy in the cheap seats just heckling as the grown-ups in Congress look like they are trying to actually get the job done. I think it's great but it is really noteworthy. You're going to see more of that as we get pass the filing deadline for Republican primary challengers.

BERMAN: Let's listen to what he said because you're talking about the president's comments yesterday in this closed-door meeting. This is the president.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: If we don't change it, let's have a shutdown. We'll do a shutdown and it's worth it for our country. I would love to see a shutdown if we don't get the stuff taken care of.

(END VIDEO CLIP)

BERMAN: So Jason Miller, is Paul right? Is the Senate now ignoring the calls from the cheap seats here?

JASON MILLER, CNN POLITICAL COMMENTATOR: I think it's important that we don't lose sight of the policy prescription as we look at the policy pressure that the president was using yesterday. So what he was saying in the first part is that he actually wants to get a deal done regarding DACA. He wants to actually solve our illegal immigration problem and do something about border security. And he knows that the American public will hold congressional and Senate Democrats responsible for any shutdown so he's putting political pressure then on members of the Hill to go and get their acts together to get something done.

And I think -- it doesn't matter if it was 1995 or 2013, any shutdown talk is always going to go against those on Capitol Hill trying to push this. So I think this goes back to the president putting political pressure, try to get something done. And you know what's really surprising here is the fact that Democrats who campaigned for a DACA fix to for so long are completely quiet in this debate right now and I think that's really going to cause them problems as we go into the election cycle.

[10:20:11] BERMAN: The House Democrats aren't quiet about it, first of all and they - I think are going to take this up as a separate issue quite loudly after. But whether or not separating it is a mistake is something you and Paul and Ron can argue ad nauseam, I think.

Ron, the three of you are great to talk about this other interesting development overnight that I do not want to overlook, which is that in Missouri there was a special election in a district, a suburban district of St. Louis for a seat that the president had won, an area that the president had won by 28 points in a Democrat won it by three overnight. This is yet another special election victory, Ron. So how do we look at this? This is former Congressman Joe Walsh who looked at this and said there's a blue tsunami coming.

BROWNSTEIN: Well, I mean tsunami is a big word you know. And I don't know if it's that big. What it's clear, two things, first, this is a district -- this area Jefferson County, Democrats have performed well in in the past, although not recently. It's an indication that there's enormous Democratic energy and that basically every kind of district you can expect a lot of Democratic turnout this fall. It's also to some extent an indication of this continuing suburban move against Republicans which have been the most consistent note that we have seen in races like the New Jersey and Virginia governor's races and Alabama. That's real.

Now, whether it also indicates that Democrats have overcome the last hurdle, I think to have a truly big 2018, which is showing gains in blue collar and nonurban, non-suburban areas, which I really have not done so far. That's another question. We'd have to look at the precinct by precinct results in the district. But there's no question there's a suburban vulnerability in places like the suburbs of Philadelphia, Denver, Chicago, Orange County, California. The issue is whether Democrats can extend beyond that into kind of more rural and blue collar places where the president has been so strong.

BERMAN: You know, Paul, and yet the president's approval numbers are creeping up and yet generic congressional ballot test numbers are closing in, the lead for Democrats is shrinking. I know, you know, you like to campaign on fear. I mean, you say the only way to campaign is afraid or stupid, right, Paul? So how do you look at this?

BEGALA: Well, yes. I think that I'm both actually, afraid and stupid. But I think that what you look for in a way is one side motivated and the other side depressed. You know full sides are just fired up at each other's throats. That not a way of election. It's very, very -- we're like 270 days before the election. The early signs -- I'll point to another one, Western Wisconsin, Patty Schachtner, the new state senator there. She ran as Democrat, won handily in a district that Donald Trump won by double digits, that the really big test, Brownstein is right about this, can Democrats win again in rural areas, blue collar areas like Western Pennsylvania where there's a special election in March?

I talked to some folks yesterday who say that Conor Lamb, the Democrat who is a Bob Casey Democrat, pro second amendment, pro-life, he's within single digits. I heard one guy tell me, haven't seen the poll yet, but one guy told me private poll had it a three-point race in a district that Trump won overwhelmingly. That's the kind of place where they are hunting Democrats down with dogs and if a Democrat is in single digits there in a heart of Trump country, then you may be seeing a wave.

BERMAN: Jason Miller, we've eaten up most of your time, 10 seconds.

MILLER: Well, I think you hit the nail on head when you talked about the president's numbers going up and also the gap between Democrats and Republicans narrowing here. But ultimately, elections are about choices, just the same way we saw Trump and Clinton against each other, that that was ultimately two candidates on the ballot, so some of these races might be outliers a little bit.

But the thing that we can't lose side of this as we head into the fall is the trending economy, the way people are getting more money in their paychecks, I think that's going to make it a little bit tougher for Paul's friends on the left to go and get some of the lefties all whipped up when the economy is doing really good.

BERMAN: Jason Miller, Paul Begala, Ron Brownstein, great to have you with us gentlemen. I appreciate it.

All right, we have our eyes on Washington in just a few short minutes, a former key aide to the Trump campaign goes to court. Could he be close to striking a deal with the special counsel? We're live at the courthouse.

(COMMERCIAL BREAK)

[10:28:44] BERMAN: Any moment now, former Trump campaign aide Rick Gates will appear in a Washington, D.C. District Court for a hearing on a change of counsel. He's changing lawyers. His attorneys are expected to layout their reasons for withdrawing from the case. This is interesting. So we're watching this very closely.

CNN's Jessica Schneider joins us now with the details. Jessica?

JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: Well, you know John, this hearing scheduled to start in just a few minutes here. This is a closed door hearing. It will be protected by attorney-client privilege. So we're not sure what's going to happen inside. Like you said, a recent filing is providing us few clues here. It was just last week that Rick Gates' defense attorneys, they filed a motion to withdraw from this case. The reasoning for their proposed withdrawal is still under seal but we know these are the defense attorneys who have ushered Rick Gates through the first three months of these legal proceedings. They have helped him to plead not guilty in this case

They also, recently got him released from House arrest. However, while this motion to withdraw is pending, CNN has learned that the prominent white color criminal defense attorney Tom Green, he has been added to Rick Gates team. What we know about Tom Green is that he does often fight to trial but at the same time, he's well versed in plea deals. And that matters because we've actually seen several attorneys in the past few weeks from Tom Green's law firm going into the same building where special counsel Robert Mueller's team is based. So that of course raises the question.