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EARLY START

Congress Nears Deal Despite Trump's Rhetoric; Wall Street Rebounds After Wild Swings; Pence Vows To Stand With Japan Against N.K.; SpaceX Launches Falcon Heavy. Aired 5:30-6a ET

Aired February 7, 2018 - 05:30   ET

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


[05:30:20] (BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Let's have a shutdown. We'll do a shutdown, and it's worth it for our country. I'd love to see a shutdown.

(END VIDEO CLIP)

DAVE BRIGGS, CNN ANCHOR: That's three times in 10 seconds. Congress inching toward deals on a budget and immigration, but will comments from the president and his chief of staff throw a wrench into delicate talks?

CHRISTINE ROMANS, CNN ANCHOR: And after seeing this spectacle in France, the president has ordered a military parade in Washington. Objections are being raised, though, over using weaponry and American troops as political props.

BRIGGS: And a successful launch for the most powerful rocket since the Apollo missions. The SpaceX rocket passing beyond the orbit of Mars and a Tesla Roadster now floating through space --

ROMANS: So cool.

BRIGGS: -- rocking out to David Bowie.

ROMANS: So cool.

BRIGGS: It is so cool.

Welcome back to EARLY START, everybody. I'm Dave Briggs.

ROMANS: And, I'm Christine Romans. Thirty-one minutes past the hour.

The federal government runs out of money in about, oh, 42 and a half hours, but leaders from both parties say they are near a deal to fund the government for two years.

Republican and Democratic leaders in the Senate huddling to hash out their remaining differences on defense and domestic programs. Sources tell us immigration and a deal on DACA have not been a part of the spending talks.

BRIGGS: Even so, negotiators on both sides got a brief scare when President Trump cannonballed into that issue.

(BEGIN VIDEO CLIP)

TRUMP: If we don't get rid of these loopholes where killers are allowed to come into our country and continue to kill, and gang members -- and we're just talking about MS-13. There are many gang members that we don't even mention.

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'd love to see a shutdown if we don't get this stuff taken care of.

(END VIDEO CLIP)

BRIGGS: "I'd love to see a shutdown." The White House later saying the president was not advocating for the shutdown. Press Secretary Sarah Sanders turning the president's shutdown comments back onto Democrats, saying if they want to hold the government hostage over immigration, the president welcomes that fight.

ROMANS: In case a budget deal is not settled by midnight tomorrow, the House passed a short-term bill funding most agencies through March 23rd and the Pentagon for a full year. Senate Democrats are likely to oppose it but that may not matter. Sources say budget negotiators are on track to announce a two-year deal as soon as this morning.

With the very latest, CNN's Phil Mattingly on Capitol Hill.

(BEGIN VIDEOTAPE)

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Well, Christine and Dave, there's no question the clock is ticking down to the government running out of money, essentially needing to extend a short-term funding agreement. But, the biggest development that's occurred up to this point is not the usual kicking the can down the road.

At this point in time, aides on both the Republican side and Democratic side of the Senate and House tell me they are on the verge of a major budget deal; something that would increase spending caps for both defense and non-defense discretionary spending up to $300 billion. The type of deal that would essentially lock in a two-year budget agreement.

It would also include an increase of the debt ceiling. It includes more than $80 billion in disaster relief for hurricane-ravaged Florida, Texas, and Puerto Rico. It would include some health care spending as well.

This is the kind of thing that lawmakers have been pointing to as a possibility, essentially clearing the decks of all these major items. It looks like they're finally there.

The big question now is what are House Democrats going to do? Democrats, for a long period of time, have held up the possibility of doing a deal like this because they want a DACA resolution and they need leverage to get that DACA resolution. At least that's what aides in both chambers have been saying.

Right now, Senate Democrats very clearly on board. House Democrats wary, and House Democrats are going to be needed if it's going to have to move through the House.

There's a lot of Republicans who are very uncomfortable with the large number of spending increases, which means Speaker Paul Ryan is going to need, obviously, some Republicans. He's going to need a lot of Democrats, too -- Christine and Dave.

(END VIDEOTAPE)

ROMANS: Phil, thank you.

BRIGGS: Capitol Phil. Let's get that straight. All right.

Let's welcome in "CNN POLITICS" digital director Zach Wolf. Good to see you, sir.

ZACHARY WOLF, DIGITAL DIRECTOR, "CNN POLITICS": Good morning.

BRIGGS: With every political negotiation I harken back to the bible of all deals -- that's the "Art of the Deal." And the president said in that book, "I always go into the deal anticipating the worst."

How do we describe the negotiating deal of both sides of the aisle when the president says something like this? Is it ignore the president?

WOLF: I think, clearly, yes. I mean, he's talking about immigration. He's saying let's have a shutdown over immigration.

You'll notice the one thing the two sides on Capitol Hill -- the leaders are not talking about right now is immigration.

BRIGGS: Or a shutdown.

WOLF: Right. So they're kind of moving beyond him and working around him, essentially, I guess assuming he's going to sign whatever they send him. And if it doesn't involve immigration and it funds the government and deals with the debt ceiling and does all these other great things they want to do, I'm sure he will.

[05:35:03] ROMANS: Speaking of immigration, the president's chief of staff with some kind of shocking comments about people who qualify -- would qualify to be so-called Dreamers but didn't sign up -- listen.

(BEGIN VIDEO CLIP)

JOHN KELLY, WHITE HOUSE CHIEF OF STAFF: There are 690,000 official DACA registrants and the president sent over what amounts to be two and a half times that number, to 1.8 million.

The difference between 690 (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)

ROMANS: "Too lazy to get off their asses." Is this revealing at all about what's happening behind closed doors in this administration, talking about Dreamers and DACA?

WOLF: Well, I mean, you certainly see these comments clearly don't, I think, take into account what these people are going through -- the sort of wink and a nod, the promise from the federal government to sign up for this. There was no legislative framework behind DACA. It was a promise --

ROMANS: There's also a $500 application fee --

WOLF: Right.

ROMANS: -- so that's something.

WOLF: There was something to do.

But you do see, you know, with the way they're treating the death of the Colts player with --

ROMANS: Right.

WOLF: -- these comments from the White House chief of staff. This sort of demonization of these DACA people as immigration becomes something that Democrats are stepping away from as a bargaining chip.

ROMANS: Yes.

WOLF: This is the one thing that we're really supposed to do was save the DACA people and now they're apparently not going to do it, at least not in this spending bill.

ROMANS: Well, in the case of that tragic death of the Colts player and the Uber driver he was with -- you know, that was somebody who had been deported from the country two times.

BRIGGS: Twice.

ROMANS: You could argue that was the immigration system. He'd been kicked out of the country twice, you know. That wasn't necessarily a Dreamer but they had to conflate it.

WOLF: Yes. And, you know, still, Donald Trump's political identity goes to building walls and creating an other (ph) of people and this is part of that, I think.

BRIGGS: All right. Also news today in "The Washington Post" that the president would like a military parade; one that actually tops what he attended in France. The one on Bastille Day. We don't do these military parades.

ROMANS: Very often.

BRIGGS: Here's what Sarah Huckabee Sanders said about the notion of a military parade in the nation's capital.

It's actually on paper, we have the quote. She didn't say it. She released a statement.

"President Trump incredibly supportive of America's great service members who risk their lives every day to keep our country safe."

Certainly, everyone would like to see us celebrate our troops more and honor their service. Is this the right way to go about it, and what's the criticism?

WOLF: Well, I think in the past when we've done this it's been to celebrate the victory. There's no victory that I know of right now that you would be celebrating. It's not the end of World War II, it's not the end of the Gulf War in 1991.

And the other thing is that the U.S. has traditionally not done this. We spend so much money on the military. We are so powerful --

ROMANS: We don't have to show it off.

WOLF: Exactly. You know, Theodore Roosevelt -- speak softly and carry your big stick. We have the big stick. We don't need to show it off but, you know, this is a new thing.

And the other question is when do you do this? Do you do it on a political day? Do you do it on Veterans Day?

"The Washington Post" was reporting --

BRIGGS: Yes.

WOLF: -- they are kind of looking for the right time to do this. But the president has said he wanted it repeatedly so they're trying to make it happen.

ROMANS: This year is the centennial of the end of World War I, so you could use it sort of that kind of timing maybe to remark on that.

But you're right, we don't do this very often and when we have done it it's been criticized. It's been criticized as being kind of bragging, I guess.

BRIGGS: North Korea does this and they will do it tomorrow night --

ROMANS: That's right. That's right.

BRIGGS: -- on the eve of the Olympics.

ROMANS: All right. Thanks, Zach. Nice to see you.

WOLF: Thanks.

BRIGGS: Thank you.

ROMANS: Nice to have you in the studio. WOLF: Yes.

BRIGGS: All right.

Chief of Staff John Kelly says he expects recommendations by tomorrow on how to handle the Democratic memo rebutting Republican claims of surveillance abuses by the FBI.

Kelly said the Democratic memo is lengthier than the GOP, somewhere around 10 pages, and claims the White House is not leaning in either direction when it comes to releasing it. But he did offer this warning.

(BEGIN VIDEO CLIP)

KELLY: Where the first one was very clean relative to sources and methods, my initial cut is this one is a lot less clean. But at the end of it all, it'll be guys like Rod Rosenstein, Chris Wray from FBI -- certainly, the national security attorneys at the White House giving the president a recommendation on it.

(END VIDEO CLIP)

ROMANS: Remember, the FBI advised against releasing the Republicans' Nunes memo, but the president did it anyway.

The president met Tuesday with Deputy Attorney General Rod Rosenstein about the Democratic memo. The president targeted Rosenstein after the Nunes memo was released.

Trump received the Democrats' document Monday night and is working with a five-day window now to make a decision.

BRIGGS: The inspector general of the Justice Department nearing the end of his investigation into the FBI's actions during the 2016 election.

On Tuesday, Michael Horowitz briefed a group of bipartisan lawmakers on the status of his probe which includes scrutiny of Hillary Clinton's e-mails, as well as the conduct of former FBI director James Comey and former deputy director Andrew McCabe.

[05:40:05] Republican Congressman Trey Gowdy attended that briefing. He called it quote, "useful and objective."

Horowitz's report expected to be done as early as next month but that date could still be pushed back.

ROMANS: All right, 40 minutes past the hour.

Volatility is back. Markets around the world adjusting to a new reality the era of low interest rates is over. U.S. stocks tanked, then roared back for a huge gain. And then overnight, now the anxiety has returned.

Some Asian markets fell. Hong Kong and Shanghai are now closed. U.S. futures have turned lower. Dow futures down about 200 points but we've got the European market slightly higher.

So anything could happen here at the opening bell when it rings in a few hours.

Yesterday was remarkable. The Dow swinging over a trading range of 1,200 points, changing direction 29 times before closing up 567 points, a huge gain of 2.3 percent.

The S&P 500 also up almost two percent. The Nasdaq higher.

The sell-off was sparked by a few things. Rumblings in the bond market, concerns about wage inflation. Whether that would force the Federal Reserve to raise interest rates sooner than planned. Posing a risk to a bull market in stocks that's nearly nine years old.

But as stocks turned volatile the market's cheerleader-in-chief, President Trump, has kept quiet.

Testifying on Capitol Hill yesterday the Treasury secretary Steven Mnuchin -- he said that the economic fundamentals in the U.S. are quote "quite strong." And he was asked if the Trump administration would accept blame for the recent stock market drop.

(BEGIN VIDEO CLIP)

STEVEN MNUCHIN, U.S. SECRETARY OF THE TREASURY: I think we'll still claim credit for the fact that it's up over 30 percent since the election.

(END VIDEO CLIP)

ROMANS: They believe long -- he says he believes long-term in the impact of the stock market.

He's referring to the Dow there. It's up about 35 percent since the election but a quarter of that Trump rally wiped away.

And volatility is really back here. I mean, it's -- the bottom line --

BRIGGS: Will it be another day of that?

ROMANS: Oh, yes. I think we're heading into a period of volatility where anything can happen.

BRIGGS: Yes.

ROMANS: I mean, yesterday was just insane.

BRIGGS: All right, buckle up.

Former vice president Joe Biden with a blunt takedown of President Trump.

(BEGIN VIDEO CLIP)

JOE BIDEN (D), FORMER VICE PRESIDENT OF THE UNITED STATES: The president has some difficulty with precision.

(END VIDEO CLIP)

BRIGGS: What makes Biden label Trump, quote "a joke?" That's next.

(COMMERCIAL BREAK)

[05:46:49] ROMANS: Former vice president Joe Biden going right after President Trump's relationship with the truth. Biden telling our Chris Cuomo if he were the president's lawyer he would advise against talking to Robert Mueller.

(BEGIN VIDEO CLIP)

BIDEN: The president has some difficulty with precision --

CHRIS CUOMO, CNN HOST, "CUOMO PRIME TIME," CNN ANCHOR, "NEW DAY: That's one of the most subtle things I've ever heard you say, Joe Biden.

BIDEN: -- and one of the things that I -- that I would worry about if I were his lawyer is him saying something that was simply not true without him even planning to be -- to be disingenuous.

CUOMO: Do you think he has that little control over whether he tells the truth or not?

BIDEN: I just -- I just marvel at some of the things he says and does like, what, two days ago? Anybody who didn't stand up and clap for him was un-American and maybe even treasonous? I mean --

CUOMO: They say it was tongue-in-cheek. Democrats can't take a joke.

BIDEN: Well let me tell you, he's a joke.

(END VIDEO CLIP)

ROMANS: The president's allies say he is still eager to speak with the special counsel's team even as his lawyers try to delay or stop a potential sit-down.

BRIGGS: It's time for a look at what's coming up on "NEW DAY." Chris Cuomo joining us this morning.

Chris, you sat down with the former vice president. Yes or no, is he running?

CHRIS CUOMO, CNN ANCHOR: I think that he's got a long way to go to actually get himself across the line. There's no question he has the fire but you have to remember, guys, he's a man who's run twice.

BRIGGS: Yes.

CUOMO: He's been in the business for a very, very long time. It is who he is, it is what he's about. And now, he has this turbocharge to his soul in the form of the memory of his son who was one of the most special people I've ever met in the public arena before. He was probably, certainly, the best of my generation.

So it's hard. And also, he's now watching a President of the United States who believes is a complete anathema to him. So that's why it was an important time to talk to him.

And, in fact, it's been a little odd if you think about it that we haven't heard more from him. More from former President Obama. I know presidents are usually reserved but these are not usual times. So we're going to go through that.

ROMANS: Right.

CUOMO: And we also have some very big news items breaking both on the Russia probe and where the president wants to take this country. So we'll take you all through it --

ROMANS: Great.

CUOMO: -- at the top of the hour.

ROMANS: Sounds good, Chris. Thank you so much.

BRIGGS: Look forward to it. Thank you.

All right.

Meanwhile, nearly 90 million people under winter weather alerts from Oklahoma to Maine. The latest now from meteorologist Pedram Javaheri.

(BEGIN VIDEOTAPE)

PEDRAM JAVAHERI, AMS METEOROLOGIST: Yes, Dave and Christine, a pretty busy day across the country, especially when it comes to travel here.

These frontal boundaries stretching out of the south all the way towards the northeast. It spans some 1,500 miles across here. And the temperatures to the north certainly cold enough to support snow showers to the south.

A milder perspective in place but when you have upwards of 90 million people -- roughly 90 million people in line here for winter weather advisories and winter storm warnings. It stretches into parts of New England where some significant snow is possible.

But you notice the flood threat also in place across the southern U.S. And we're talking about heavy rainfall over the next several hours, already pushing in, in fact, upwards of 200 lightning strikes per hour in the early morning hours across parts of the south.

So a lot of Gulf moisture being shifted up to the north and elements in place here to produce at least a quarter of an inch of ice. Pretty widespread coverage of some freezing rain so some travel obstructions could be expected as you approach your way towards interior New England.

Syracuse, about 25. New York, into the 40s. Seventies down around parts of the south. And the seven-day forecast shows a little bit more milder trend across New York City -- guys.

(END VIDEOTAPE)

[05:50:09] ROMANS: All right, Pedram Javaheri. Thank you so much.

"Ground Control to Major Tom."

BRIGGS: Sing it.

ROMANS: I'd almost sing it but it's not good.

Elon Musk sent his personal Tesla Roadster into space. This is not -- this is real. This is actually in space.

BRIGGS: Double take on that.

ROMANS: The dummy passenger -- this was aboard SpaceX latest rocket. More on this awesome launch on "CNN Money Stream."

(COMMERCIAL BREAK)

BRIGGS: Vice President Mike Pence in Tokyo this morning. Overnight, alongside Prime Minister Shinzo Abe, the vice president vowed to stand with Japan in the face of North Korea's provocation.

[05:55:00] CNN's Ivan Watson in PyeongChang live, where members of the North Korean delegation are now arriving for the Olympics. Hi there, Ivan.

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Hi there, David.

That's right. Vice President Pence, he's been vowing that at every stop on his journey to South Korea to lead the U.S. delegation at the opening of the Olympics in just a couple of days' time -- he said that he's going to tell the truth, or his version of the truth about North Korea.

And in his speech alongside the Japanese prime minister, both of them basically said do not be taken in, do not be fooled by the friendly face North Korea is showing by participating in these Winter Olympics, albeit at the very last minute.

Take a listen to what actually he had to say.

(BEGIN VIDEO CLIP)

MIKE PENCE, VICE PRESIDENT OF THE UNITED STATES: This week, as the world knows, North Korea is sending a delegation to participate in the Winter Olympics. They'll march under the same banner as South Korea. But we should not forget that North Korea and South Korea have marched under the same banner before, only to see North Korea continue its pursuit of threats and provocations.

(END VIDEO CLIP)

WATSON: Now, Pence also went on to say that the U.S. will soon unveil what he called the toughest and most aggressive round of sanctions on North Korea ever.

Meanwhile, we've learned that the North Korean delegation which is already now approaching 500 people -- its top officials will soon arrive and they will include the sister of Kim Jong Un, the North Korean leader himself.

Her name is Kim Yo Jong. She was sanctioned by the U.S. Treasury Department in January of 2017 and will be the first of the Kim -- ruling Kim dynasty from North Korea to ever pay a visit here south of the demilitarized zone -- David and Christine.

BRIGGS: Tomorrow night we'll see some figure skating but right now, politics remains the main event.

Ivan Watson live for us. Thank you.

ROMANS: All right, time for money. Let's get a check on "CNN Money Stream" this morning.

Volatility is back. Markets around the world adjusting to a new reality. The era of low interest rates is over.

U.S. stocks tanked, then roared back for a big gain. Now, looking at this overnight, the anxiety returned.

Some Asian markets fell. U.S. futures turned lower, Dow futures down about 200 points, Europe is higher. OK, that's what yesterday looked like.

Yesterday remarkable, the Dow swinging in a range of 1,200 points, changing directions 29 times, then up 567 points. That's 2.3 percent. Big swings and big closes higher for the S&P 500 and the Nasdaq, too.

Snapchat's stock is soaring 20 percent after ending its earnings losing streak, posting sales and user growth for the first time since going public last year. Sales grew 72 percent from a year ago. Snap credits moving to an automated ad sales auction proving to advertisers its app can be a rival to both Google and Facebook.

All right. SpaceX has launched the world's most powerful rocket, pulling off a seamless, first-ever launch of Falcon Heavy. It took flight yesterday from Florida's Kennedy Space Center before a crowd of thousands. The success stunned founder Elon Musk, calling it surreal.

The launch not the only achievement. It also guided two first-stage rocket boosters back down to earth. Very cool. A third booster was supposed to land but crashed.

President Trump tweeted congrats. "This achievement, along with NASA's commercial and international partners, show -- continues to show American ingenuity at its best."

As the rocket heads into space, onboard is Musk's personal Tesla Roadster with a dummy star man behind the wheel. The car will play David Bowie's "Space Oddity" on repeat.

BRIGGS: "Don't panic" there on the dashboard.

ROMANS: Yes. Elon Musk, you know, a native of South Africa. Became an American citizen, I think, in 2000 and -- maybe 10 years ago -- 2004, I think or 2002 rather. So, a proud American immigrant in the best tech and science background -- awesome.

BRIGGS: They might say that's what they want. Merit-based, right?

ROMANS: May be. All right, 58 minutes past the hour. Thanks for joining us. I'm Christine Romans.

BRIGGS: I'm Dave Briggs. "NEW DAY" starts right now. We'll see you tomorrow.

(BEGIN VIDEO CLIP)

TRUMP: I'd love to see a shutdown if we don't get this stuff taken care of.

SEN. CHUCK SCHUMER (D-NY), SENATE MINORITY LEADER: We're making real progress on a spending deal.

SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: I don't think we expect the budget deal to include specifics on immigration reform.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: We're back in the ballgame now.

KELLY: People who were too afraid to sign up, others too lazy to get off their asses.

UNIDENTIFIED MALE: Where is the level of political discord drawn in this country?

KELLY: This is a different memo. Where the first one was very clean, this one is a lot less clean.

UNIDENTIFIED MALE: There would be an enormous political price if he refuses to reveal the whole story.

SARA MURRAY, CNN WHITE HOUSE CORRESPONDENT: Despite concerns from his lawyers the president still wants to sit down with Robert Mueller.

BIDEN: If I were the president's lawyer I would probably tell him not to sit down with the special counsel. The president has some difficulty with precision.

(END VIDEO CLIP)

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

CUOMO: Joe Biden rarely gets credit for being understated.

ALISYN CAMEROTA, CNN ANCHOR: Understated. I look forward to hearing more of that great interview.

CUOMO: There's plenty of it.

Welcome to you, our viewers in the United States and around the world. This is your new day. It's Wednesday, February seventh, 6:00 here in New York, and here's our "Starting Line."