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CNN: Trump Frustrated with Hick's Role in Porter's Scandal; Sources: Porter Fallout won't Cost Kelly his Job; Trump Signs Bipartisan Spending Deal. Aired 10-10:30a ET

Aired February 9, 2018 - 10:00   ET

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


[10:00:37] ERICA HILL, CNN ANCHOR: Good morning, top of the hour here. I'm Erica Hill in today for John and Poppy.

The budget deal signed, the short government shutdown over, the president says let the negotiations begin on immigration. We're going to break down all of that in a moment.

First, though, this morning at the White House, questions, incriminations, over the top aide who couldn't get a security clearance and finally lost his job over allegations he abused his former wives. One of those exes telling CNN Rob Porter asked her to take down a blog she had posted last April in which she claimed the threats were personal, the terror was real.

(BEGIN VIDEO CLIP)

JENNIFER WILLOUGHBY, ROB PORTER'S EX-WIFE: Another thing that he wanted me to say was that I had taken some liberties with this therapeutic post, which it was for me, that I had taken liberties with that therapeutic post. And when I thought about it, I didn't. The things that I said were factual statements. He was asking me to downplay it. And he was asking me to emphasize more the relationship that he and I have now as opposed to what I experienced in our marriage.

(END VIDEO CLIP)

HILL: We're now hearing those incriminations could affect one of the president's closest confidants who happens to be Porter's current significant other.

Our CNN's Kaitlan Collins joining us more now on this. What more are we hearing about Hope Hicks this morning, Kaitlin?

KAITLAN COLLINS, CNN WHITE HOUSE REPORTER: Well, Erica, another stunning development as the White House continues to deal with the fallout from this Rob Porter scandal and that is the president's relationship with one of his top aides, and closest confidantes, because sources are now telling CNN that the president is growing increasingly frustrated with Hicks and the role she has played in all of this, with Rob Porter, because of several reasons. One being that he -- the president was not consulted when Hope Hicks and several other top aides here at the White House were drafting that initial statement on behalf of the White House that defended Porter. And secondly, because the president feels that Hicks has let her relationship with Porter cloud her decision-making and her judgment- making from the White House standpoint.

Now, Erica, overall, the president feels that Hope Hicks has put her priorities above his in this situation. Now, Rob Porter's last day was at the White House was Wednesday, but we are told that he was here yesterday to clean out his desk and on that same day Hicks continued to defend Porter to her White House colleagues here. So we're continuing to see that fallout. But Hicks certainly isn't the only aide facing some backlash over this. John Kelly and his handling of the situation is as well and here's what one of Rob Porter's ex-wives had to say about John Kelly's handling of all of this.

(BEGIN VIDEO CLIP)

ANDERSON COOPER, CNN ANCHOR, "ANDERSON COOPER 360": Is it important to you that somebody like General Kelly believes your story?

WILLOUGHBY: It is important to me in general that anyone who is coming forward with a story like that is believed up front. That it is not on the burden of proof for me or anyone else to justify those claims.

(END VIDEO CLIP)

COLLINS: Now Erica, there is certainly not a sense that John Kelly and Hope Hicks are in jeopardy here in this White House, but it does give you insight into how their relationship with the president has changed amid the fallout from this situation.

HILL: Kaitlan Collins live for us at the White House. Kaitlan thank you.

Joining us now for more perspective on General Kelly and his response to -- the Porter scandal rather, Pentagon correspondent Barbara Starr. So, Barbara, when we look at this, not a lot of people know all that much about General Kelly's background before he became chief of staff. In terms of his reputation, does he have a reputation for being careful with what he says, how he says it?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, you know, Erica, like many Pentagon journalists, I cover John Kelly while he served in the Marine Corps, while head of Southern Command, while he was a top military aide to the secretary of defense. And what you always saw was indeed a four star marine general. As one of his former colleagues said to me yesterday, you know, he always was a very gruff person. That was what this person said.

But this person also went on to say, I don't recognize the John Kelly I see now. He served very honorably in the Marine Corps, of course, but many people will tell you, it was the death of his son in Afghanistan in combat in 2010 that really changed perhaps quite understandably who John Kelly is and was. He went on to head of U.S. Military operations in Central and South America and began to take a very hardline on border security, on drugs, on al Qaeda and terrorist threats on the southern border, something that would eventually obviously appeal to President Trump. [10:05:09] But that something inside the military was seen as maybe just a little too hard charging, maybe a little more of his views than backed up by rock solid intelligence at the time. Kelly always wanted to be very relevant in the debate, in the operations on terrorism. He went on, of course, to become secretary of Homeland Security where he could engage in those issues much more significantly than he could in the military. Someone who served very honorably as a marine but has gone on to something different in that political atmosphere.

HILL: And that is his atmosphere and those differences. Obviously, the skills that work so well in the military don't always translate in the same way politically, Barbara.

STARR: Well, they don't. You know, and we all know that President Trump likes to have generals around him. He talks about it. So he's got Kelly, he's got Mattis, two former four star marines, very similar in many respects. They speak bluntly in the Marine Corps as a four star, that is celebrated, not maybe the best route in a political environment. Four star generals are very used to having everybody salute smartly, agree with what they want to do, carry out their orders on a staff level, and in turn up the chain of command, they never tell the boss no. And that may or may not be serving President Trump well at this point in the West Wing. One of the key questions, though, if Kelly is essentially functioning as a four star, why didn't he know more about Rob Porter and why did he -- if he did, didn't he do something about it?

HILL: And that is an important question many people have this morning. That is for sure. Barbara Starr, appreciate it, thank you.

Joining me now to discuss, CNN senior political analyst Ron Brownstein, CNN political commentators, Scott Jennings and Symone Sanders. Barbara just brought up such an interesting point there, you never tell the boss no, Ron. And we know that it seems to be the president likes to have people around him who are not telling him no.

RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: I once did a session with James Bakker who I think widely considered the greatest White House chief of staff of modern times and he said the single hardest thing was to find people who would go into the office and tell the president that he was wrong and as chief of staff, you always try to recruit people that tell the president he was wrong and usually they chicken out and you -- having to do it yourself. Whether or not John Kelly is telling the president is wrong, what we see from him in public, Chief of Staff Kelly, is he's echoing many of the president's views, hardline views and kind of reinforcing that side of him, rather than what many people thought originally that he would be something of a kind of if not moderating force, at least a constraining force. So, I think this is -- this continues a pattern that we have seen with Kelly, the idea that he was going to be, quote, "the adult in the room," and was going to point Trump in a new direction. I don't think that's been borne out by the record.

HILL: It is also interesting to see, we just heard from former Trump campaign manager Corey Lewandowski who spoke on Fox News, saying that the buck actually stops with General Kelly. Take a listen. (BEGIN VIDEO CLIP)

COREY LEWANDOWSKI, FORMER TRUMP CAMPAIGN MANAGER: Look, the general is there to put in policies and processes and procedures and in this case, those didn't work and we need to find out why. And so where the buck stops, I guess at the end of the day is what the general -

(END VIDEO CLIP)

HILL: So there is sort two of parts there. Number one, always interesting when we see people out speaking, perhaps this is a direct note to the president, Scott. But also does the buck really stop with General Kelly or does the buck stop with the president?

SCOTT JENNINGS, CNN POLITICAL COMMENTATOR: Well, I think Mr. Lewandowski is clearly unhappy with General Kelly and the processes that according to some reporting have kept him out of the Oval Office. So you can see him out there using this to his advantage. Ultimately what happened this week was mishandled, both from a procedural standpoint but then from a PR standpoint. I mean, they never at any time this week got to a place where they fully went through the timeline of what General Kelly knew and what other people knew. We got a lot of reporting on it, but the White House never really took control of that narrative. That's going to cause more questions to have to be asked next week.

And if I'm the president, look, I don't think the president is involved in the day to day management of background checks on White House staff, but if I'm the president, I'm asking this morning who is watching out for me here, you all have let a situation get out of control that is negatively affecting my presidency, this is not a situation of my making and I want to know what happened. So when I read that the president is upset, I think he ought to be upset, because the staffs is supposed to protect him from things like this.

HILL: To your point about that timeline, our own reporting, a source telling Jim Acosta there was no tick tock per se at the briefing yesterday because it would be, quote, "too damming." Symone, no matter where you fall on the political spectrum, you don't want something like this to be overtaking the White House, because it distracts from everything else that needs to be done to lead the country.

SYMONE SANDERS, CNN POLITICAL COMMENTATOR: I mean, I'm actually more concerned about the fact that in January of 2017, White House counsel again noted that even after knowing about everything about Rob Porter, about these allegations, that he thought it was more important to keep a Harvard Law trained veteran on staff because he was good professionally. That's what I'm concerned about.

[10:10:11] So the White House can't get it together on policy, and working with this -- with Congress, and Congress can't get it together on its own efforts, we can have a whole separate conversation about the shutdown, because the White House is not internally on the same page. And so, why, why was Rob Porter allowed to operate in the White House at the highest levels with no real security clearance, because the good old boys club protected him and that's what we're not talking about.

BROWNSTEIN: There is a backdrop to all of this. I mean, this reminds me many ways of the White House struggle, the paralysis initially and their embrace of Judge Roy Moore in Alabama after he faced his allegations. And the backdrop of all of this is that all the allegations that President Trump has faced over his personal behavior, ranging from the Access Hollywood tape, to what he - was alleged to have done in the junior of beauty pageants.

I think the White House always has a fear that when they act on -- when they move on to this ground, they are in effect opening themselves to the question, well if this was cause to moving in to Rob Porter or Judge Moore, what about the president? And I think that is -- that is always -- I've never been a big believer in the gender gap as a driving force in American politics. I think other things have been more important, class and geography, even religion.

But when you look at what's been happening over the last year, look at the role of African-American women in the Alabama and Virginia elections, look at the decline the president is facing and his approval, not only among college educated white women, but now even among the blue collar white women, which so important to his victory, this -- there is something happening, coalescing in the way women are looking at the president across racial and class lines that does have a big potential to be a large factor in both 2018 and certainly 2020.

HILL: Scott, how much of that message do you think is getting through, not just to the White House, but not just to the White House, but to the president himself in terms of how things are consistently being mishandled and how that is now impacting him.

JENNINGS: Well, I think the -

HILL: Or is it being ignored.

JENNINGS: -- last couple of months have gone pretty well. The president has been working well with the Congress. They got the tax cut. His numbers have gone up on job approval. They have gone up on the economy up until the hiccup with the Dow this week. You know that had been bumping along although I think it's going to rebound and it is today.

So, things have been moving forward here and there was a real sense that maybe the president and the White House and the Republicans in Congress had gotten a handle on everything and that the country was responding. You saw it in the polling. But now this comes along and it reminds us that there is still issues at play in how we're running the White House and running the government and it has got to be frustrating to the president to see things moving along in a smoother fashion, interrupted this week, and frankly I don't think the president knew about this, I think this all landed on him this week and he's got to be wondering, my goodness, we had everything going right and now this happens and we're back to where we were when we started. It has got to be enormously frustrating.

(CROSSTALK) SANDERS: Erica -- is it an opportunity?

JENNINGS: And like Ron said, how this affects the way they view him.

HILL: But, Scott, to your point, the president consistently complains that he doesn't think his victories, what he sees as his successes are covered well enough. Not to his liking. We don't talk about the economy, which we talk about a lot. So we're constantly hearing this from the president, if all of this is overshadowing, all of those positive notes that you just laid out, why isn't the president then stepping in and doing something about it? Why isn't he working on the messaging there? Why isn't he talking to his chief of staff, to his White House and saying, fix this, and do it properly.

JENNINGS: Yes, my suspicion is the president over the last couple of days had some pretty stern conversations with people at the top of his White House about we have got to get this under control because, look, we're doing the things we said we wanted to do. We're funding the military. We're moving on to deal with immigration. We're taking care of money for the opioid crisis. We're doing all the things we said, but you're making it hard for that to breakthrough with this staff problem. And so my suspicion is it has been a long couple of days for the White House staff and they have to get this timeline right if they ever hope to move on from it.

HILL: Symone, there is the timeline issue there is also the question of the FBI. So the fact that somebody was working without this clearance for so long, had access to classified materials that they were sharing with the president, look, we're also wondering about Jared Kushner's clearance. And it brings up a further question of perhaps how this administration and this White House is viewing the FBI, just given the public statement that we heard from the president about the FBI. How much do you think we will start to see now perhaps pressure from lawmakers to double down on background checks, on security clearances? Is there concern there?

SANDERS: You know I do believe that there is bipartisan concern there. I would at least hope because a lot of these lawmakers, Republican lawmakers, especially, are some of the same folks that put Hillary Clinton on the barbecue for perceived security risks with her e-mail and handling of classified information. So -- but I am not encouraged by this Republican Congress. Look, Congress is a co-equal branch of government. But they have yet to stand up forcefully to this president. Congress is supposed to work with the president, where appropriate and check him where appropriate as well. We have yet to see the latter happen.

[10:15:09] So, no, I don't think lawmakers and Congress are going to stand up to the president, and demand that background checks be taken seriously. Security clearances be taken seriously. Unfortunately, until something far more egregious happens. We know that Rob Porter is not the only person operating in this White House without actual security clearance. There are at least 12 other people according to reporting from the "Washington Post" and other outlets that do not have actual security clearances. Come on. HILL: Ron, just to bring this -- to bring this back to General Kelly for a moment here, the big question is does he survive this. But perhaps the question should be is there anybody else to take his place?

BROWNSTEIN: Well, the president already floated the idea with friends of Mick Mulvaney, who already has two jobs. So you know --

HILL: Why not a third?

BROWNSTEIN: The White House chief of staff is a fruit fly job. It is a short life span for anyone. Under Donald Trump, it is you know fruit fly on accelerated fruit fly, very hard to imagine anybody staying in this job very long for Donald Trump, who has shown that his view of loyalty is a one way street. I mean, he expects constant deference and praise, but if you cause him any trouble, he's very quick, as Corey Lewandowski knows, to cut ties himself. So I do not expect that General Kelly will be in this job indefinitely. I suspect that we'll have three or four White House chief of staff, even first term of the Donald Trump presidency.

HILL: All right and we'll be watching it all. Ron, Scott, Symone, appreciate it. Stay with me here.

President Trump signing a major bipartisan budget deal, already celebrating what he calls a big victory. Dozens of Republicans, though, voted against that bill. Democrats are angry too about what wasn't in it.

Meantime, U.S. stocks right now are rebounding after yesterday's 1,000 point plunge. But, of course, the big question, will this trend last. Forget the day, will it last through the hour. Investors are bracing at this point. And reality star Omarosa, she has a lot to say about her former boss, President Trump. Why she says she was scared while working in the White House.

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[10:21:11] HILL: President Trump is already trashing the long term government spending bill he just signed and declaring the start of immigration negotiations, even though they have been kind of going on for months.

CNN's Suzanne Malveaux joining us now from Capitol Hill with the latest. Suzanne?

SUZANNE MALVEAUX, CNN NATIONAL CORRESPONDENT: Good morning, Erica. Well, the president signing HR-1892 officially before the 9:00 a.m. hour ending this nine-hour essential government shutdown. And already trashing, if you will, and taunting Democrats and ignoring the bipartisan nature of this legislation. It was early in the morning, 5:30 a.m., when the House voted 240-186 to push this forward.

It was also very bipartisan in the Senate, but the president this morning ignoring that, and putting out this tweet, saying that, "Costs on non-military lines will never come down if we do not elect more Republicans in the 2018 Election, and beyond. This bill is a big victory for our Military, but much waste in order to get Dem votes. Fortunately, DACA not included in this Bill, negotiations to start now!"

Taunting Nancy Pelosi who had called for her own caucus to reject the legislation because there was no tie to the fate of Dreamers and real reluctant, if you will, real suspicion of House Speaker Paul Ryan, whether or not he was serious about committing to putting legislation on the House floor for those Dreamers.

It was early in the morning, Erica, that we saw this drama unfold. On the House side, it was the House Democrats slow walking their support for this legislation to try to maximize their leverage. And on the Senate side, it was Senate -- Kentucky Senator Rand Paul who refused to actually vote early before that midnight deadline, along with his colleagues. Instead taking to the Senate floor, making speeches, berating Republicans, calling them hypocrites for spending this much on this bipartisan bill.

When they come back, the House and the Senate next week, there is a lot to discuss and a lot to mull over. Essentially what is the commitment to the Dreamers on the Senate side, Senate Majority Leader Mitch McConnell saying yes, Monday, they will open it up for debate to take a look at potential legislation for those Dreamers. Not quite sure what that means on the House side, what kind of commitment Paul Ryan is going to make. And, of course, the big question that many lawmakers have is how they're going to pay for this staggering cost of this and the long run and the national debt. Erica?

HILL: Absolutely, Suzanne Malveaux with the latest for us there from Capitol Hill. Thank you.

Could investors be breathing a sigh of relief? U.S. stocks rebounding after yesterday's big plunge.

Joining me now Alison Kosik, CNN correspondent, who is at the New York Stock Exchange and our chief business correspondent Christine Romans. So, Alison, I want to go first to you, almost an hour into trading at this point. It's nice to see the green there obviously on the big board. What is the mood on the floor at this point?

ALISON KOSIK, CNN CORRESPONDENT: Certainly much calmer right now than it was at yesterday's close, Erica. We are seeing those green arrows, but everybody here knows the kind of witching hour that really happens here is around 3:00 a.m., an hour before the market closed at 4:00 a.m., Because we saw that tsunami of a sell-off yesterday, literally happen from 3:00 a.m. to 4:00 a.m. yesterday where we saw the Dow drop hundreds of points to fall 1,035 points or so.

So that was a second biggest drop of the week, historically, the second biggest drop as well. And that put the Dow into correction mode and also put the S&P into correction mode as well. A correction is a 10 percent drop from a recent high.

Now, the levels have certainly moved up. The indices no longer in that correction mode, but all eyes really are on those numbers because it could easily happen because volatility really is the norm these days, because there's a lot of uncertainty. There is uncertainty after that jobs report that came out on Friday showing that jump in wage growth that stoked fears about inflation.

[10:25:06] And that in turn stoked fears about the fed being more aggressive in raising rates. That is why investors not only had their eye on stocks. They got their eyes on the bond market as well. Yields, yields have been rising. Today they are settling down a bit. That's probably part of the reason you're seeing green arrows for stocks. Erica?

HILL: All right. As we look at those green arrows before the bell, Christine, we were talking about this being the worst week in a decade.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Yes, still is.

HILL: So even though we see this green, we should not be lulled into this false sense of all is roses again.

ROMANS: No, no. It could take -- when you have a correction, which is what we're in the midst of, it can take days. It can take weeks. It can take a couple of months, you know. And there's just no way to really tell. And when you look at a - you know, a .6 percent move, 162 points, that's not a very big move. Big moves are 4 percent, 5 percent moves and that's what we saw yesterday and almost 5 percent move on the Dow Jones industrial average.

The S&P 500 lower today than it was when the tax bill passed, December 20th. So think about that. Part of that reason is because that tax bill is a stimulus, but it also adds to the deficit. We have this spending bill, the past overnight, this morning, really, the president signing this morning, that also adds to the deficit and that's another reason why interest rates rise, you know, worried about inflation.

The economy is strong, though. We talk about a decade ago, people get nervous talking about 2008. This isn't like 2008. 2008 was a financial crisis and the economy cratered. The economy is good here. You're going to see probably a jobless rate that goes below 4 percent, maybe by the summer many economists say. You have companies that are having trouble hiring people. They have so much work to do, and so, so much business.

You have a strong economy overall. You have corporate profits that are very, very good. So keep that in mind. The fundamentals here are strong. In fact, so strong with this added stimulus, right, of tax cuts that essentially there is worry about overheating and that the fed will have to start raising interest rates. The era of super low interest rates is over. And there was a decade of very artificially low interest rates to protect the economy from that financial crisis. That is over. And so now interest rates are rising.

HILL: That being said, even though they're rising, they are still -- I mean, pretty manageable. Look at where interest rates are.

ROMANS: And most people feel an interest rate, by say mortgage rate, the 30-year fixed rate mortgage, 4.32 percent, it's gone up every week for five weeks. So if you're trying to do a deal right now, you're noticing -

HILL: Right, right.

ROMANS: -- but still, it is way below the average of 6.5 percent. So, keep that in mind.

But I think that you are -- if you're trying to lock in a mortgage, rates are probably going to keep rising. I mean, I would say that's the best piece of advice for somebody doing that. Higher rates make it more expensive to borrow money for the government, which is going to have to borrow a trillion dollars over the next year for you and me and for businesses. So that's why it freaks out the stocks market -

But also, higher rates become -- at some point become more attractive, people say, hey. I'm not going to put my money in the stock market. It's been going up, up, for years. I'm not going to put it into something that's going to guarantee me, you know, 3.5, 4 percent. And then that's where you start to see money moving out of the stock market into the bond market.

HILL: We'll certainly keep us going for a little bit. Volatility is here for a bit.

ROMANS: We have no idea how it's going to close. I really want to be careful. If you have no idea how this thing is going to end up.

HILL: Still very early in the day. We're not even officially an hour into the trading day. So I'll leave it at that. Christine, Alison, thank you both.

Frigid temperatures outside at the Winter Olympics, possibly the coldest place in Pyongyang could be that VIP box at the opening ceremonies. Highlighted there, Vice President Mike Pence, you may have also noticed another bubble we showed you. Kim Jong-un's sister sitting just feet away, not much said between these two.

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