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EARLY START

Government Shuts Down Again; John Kelly Under Pressure; Olympics Begin Today. Aired 4-4:30a ET

Aired February 9, 2018 - 04:00   ET

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


[04:00:13] ANNOUNCER: This is CNN breaking news.

(BEGIN VIDEO CLIP)

SEN. RAND PAUL (R), KENTUCKY: Drawing attention to how much debt we're accumulating is something that is important.

(END VIDEO CLIP)

DAVE BRIGGS, CNN ANCHOR: Breaking news, being that we are shutdown. Senator Rand Paul made his point. He also shut down the government all by himself. It could last just a few hours. The spending bill in the hands of the House.

That is live pictures, folks, live at 4:00 a.m. Eastern Time.

(BEGIN VIDEO CLIP)

RAJ SHAH, WHITE HOUSE SPOKESMAN: There's been reports about the chief of staff. He became fully aware of the allegations yesterday.

(END VIDEO CLIP)

CHRISTINE ROMANS, CNN ANCHOR: Fully aware? The White House is dancing around what John Kelly knew about abuse allegations against the top White House aide. What does fully aware mean?

BRIGGS: And the eyes of the world on the Olympics in Pyeongchang. The opening ceremony is a short time away with the vice president and Kim Jong un's sister in the building. The House is in session at this hour.

Good morning. Welcome to EARLY START. I'm Dave Briggs.

ROMANS: Yes, they are working our shift today. I'm Christine Romans. It is Friday, February 9th. It is 4:00 a.m. in the East.

Right now, the federal government is shutdown for the second time in three weeks. Couple of hours ago, the Senate voted to pass a two-year spending bill that would reopen the government.

BRIGGS: But the House is an open question at this hour. They're debating right now on the House floor. These are live pictures once again as they try to find the votes.

For the latest, we are joined by Suzanne Malveaux live in Washington.

Good morning to you, Suzanne.

So, this passed 71-28 in the Senate despite Rand Paul's best objections and long they were. What are the likelihood of it sailing through the House?

SUZANNE MALVEAUX, CNN NATIONAL CORRESPONDENT: We don't think it's going to sail through the House. There is more work to be done. But we do expect it will pass. It's going to be a little bit more massaging. You see that the lawmakers are up early this morning. Many have not gone to bed.

We've been following all of the drama, and the action on the House floor. You did see Nancy Pelosi urging people to think about the DACA, the Dreamers and how they are related to this debate and how this is going to unfold is that there will be a series of procedural matters and a debate on the deal itself. That vote expected perhaps in this hour or the next hour, the 5:00 hour. All of this last-minute drama while the government is in fact shutdown, again for the second time in three weeks.

Now, what happened overnight is the Senate passed this massive two- year bipartisan budget deal, 71-28. But this was after the midnight deadline when the money ran out for the government. This was because Kentucky Senator Rand Paul, Republican, took to the Senate floor many times refusing to agree to move up the time to vote on this bill which required unanimous consent from all 100 senators. So, in doing so, he forced the voting to be delayed while he protested about the huge amount of government spending that is in the bill and the hypocrisy that he says that his own party is driving this.

Take a listen.

(BEGIN VIDEO CLIP)

SEN. RAND PAUL (R), KENTUCKY: Drawing attention to how much debt we're accumulating, is something that is important. We waited all week long to put this at the very end of the week and let it expire towards the end as people get tired, and then everybody says, well, you don't want to shutdown government do you?

I really don't. My intention has never been to shut down the government. But my intention is also not to keep it open and borrowing $1 million a minute. My intention is not to vote for bills so just keeping it open, but bills that actually spend so much money that I think they endanger our security.

(END VIDEO CLIP)

MALVEAUX: So, getting the budget bill through the House is not a done deal. But House Speaker Paul Ryan, he says he is confident that they are at least in a good place to get to the finish line. The fiscal hawks, the Freedom Caucus, they as you know are against it. So, he's going to obviously need some Democrats to break-away. You have some House Democrats frankly who are livid that there is no

commitment to the Dreamers or DACA deal in the spending bill. And so, their caucus led by Pelosi, they have a meeting behind closed doors holding their cards close to the vest. And Pelosi talked about the letter she sent to Speaker Ryan telling him that they do want a firmer commitment to DACA, to bring legislation to the House floor.

We saw overnight Senator Mitch McConnell announcing that he would keep to his word that he will be opening debate on the immigration issue on the Senate side on Monday.

So, what is at stake now? We are looking at the massive spending bill that provides $160 billion in defense spending, $128 billion in nondefense spending, $80 billion for disaster relief, raises the debt ceiling until March 2019, provide some $20 billion infrastructure investment, $6 billion for opioids, substance abuse programs, and a ten-year reauthorization of CHIP, the CHIP, the Children's Health Insurance Program.

[04:05:14] But most importantly, Dave and Christine, it gets the government running again. So, we'll see how quickly this happens.

BRIGGS: So, major objections on both sides in the House. They're going to have to thread that needle to get it through and get the lights back on.

Suzanne Malveaux live in Washington this morning, thank you.

ROMANS: Nice to have Suzanne with us bright and early this morning from Capitol Hill.

BRIGGS: Indeed.

ROMANS: OK. White House Chief of Staff John Kelly's job is safe for now even though there is mounting frustration in and out of the White House over his handling of abuse allegations against former staff secretary Rob Porter. According to one official, Kelly's job is still secure largely because no one can identify a natural replacement.

BRIGGS: CNN has also learned President Trump telling associates he is disturbed by the Porter scandal, but not sure how to fix it. He spent the last two nights phoning friends and including Kelly's predecessor, Reince Priebus, and got wildly differing opinions on the way forward.

On Thursday, deputy press secretary Raj Shah was asked about the White House response to the Porter debacle.

(BEGIN VIDEO CLIP)

RAH SHAH, WHITE HOUSE PRINCIPAL DEPUTY PRESS SECRETARY: It is fair to say that, you know, we all could have done better over the last few hours or last few days.

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ROMANS: Sources tell CNN Shah's admission of error there did not sit well with the president. Shah also said Kelly became, quote, fully aware, those are the words he used, full aware of the allegations this week. But according to CNN's reporting, Kelly has known about the accusations for months. Now, "The Washington Post" reports White House counsel Don McGahn was told last January Porter's ex-wives were prepared to make damaging accusations. A White House official tells "The Post" McGahn didn't ask what the allegations were because Porter denied them.

BRIGGS: One of Porter's accusers, ex-wife Jennie Willoughby, tells Anderson Cooper her ex-husband asked her to take down a blog post from last which detailed his alleged abuse without naming him.

(BEGIN VIDEO CLIP)

ANDERSON COOPER, CNN HOST: Can you say what he wanted?

JENNIFER WILLOUGHBY, EX-WIFE OF ROB PORTER: I don't remember the exact wording. It was something along the lines of the post does not accurately depict my marriage. There were some other things that were associated with it and not just didn't feel right to me because it does accurately depict my marriage. And 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 with that therapeutic post, when I thought about it, I didn't. The things I said were factual statements.

COOPER: It does sound like he was asking to you deny what you had --

WILLOUGHBY: He was asking me to downplay it and he was asking me to emphasize more of the relationship that he and I have now as opposed to what I experienced in our marriage.

(END VIDEO CLIP)

BRIGGS: Kelly sent a long memo to White House staffers Thursday night, addressing the allegations against Porter, calling them shocking and troubling while insisting the administration takes matters of domestic violence seriously.

ROMANS: The stock market is officially in correction. And Wall Street woes have spread overseas. Asian markets plummeting 2 percent, 3 percent overnight. Big losses there.

Europe opened lower just one hour ago. Right now, U.S. futures though are up a little bit. Both the Dow and S&P 500 simply tanked yesterday, closing in correction territory. That's a technical term for when an index or average drops 10 percent from a recent high. The Nasdaq shy of a correction. The Dow fell 1,033 points yesterday. You now, right on the lows for the day. So, it closed really weak.

This is the second time in history it lost more than 1,000 points in a single day. The other time is Monday. That puts the Dow and S&P on the worst week since 2008.

When with I say things like worse week since 2008, it makes you twitch. That was a very terrible time, right? You can blame fears about soaring bad yields and inflation, both could force faster interest rate hikes for the Federal Reserve.

On Wall Street, that threatens this bull market, this nine-year old bull market. On Main Street, it means higher mortgage rates, folks. Interest rates affect borrowing costs and mortgage rates just hit their highest level in two years, two year-high for mortgage rates. The benchmark 30-year rate is up 30 basis points this year.

But, home buyers, don't panic just yet. Despite that bump, look at this, mortgage rates are still historically low. Even with that little bump up, look at that. That's since like 1999.

BRIGGS: So, I'm still supposed to feel comfortable that the fundamentals are healthy?

ROMANS: Yes.

BRIGGS: Because we lay people say this --

ROMANS: The fundamentals are so strong that the mortgage rates and bond market are rising.

BRIGGS: So, ear muffs. Just don't listen to this craziness on the Dow.

ROMANS: Yes.

BRIGGS: OK. If the president's tweets make you cringe, folks, you're not alone. They have the same effect on Omarosa, "The Apprentice" contestant turned White House aide turned "Celebrity Big Brother" participant, said this or rather whispered this in her new gig about her last job.

(BEGIN VIDEO CLIP)

[04:10:04] OMAROSA MANIGAULT, REALITY TV STAR: Like I was haunted by tweets every single day, like what is he going to tweet next?

UNIDENTIFIED MALE: Does anybody say to him, what are you doing?

MANIGAULT: I tried to be that person and all of the people around him attacked me. It was like -- don't give her access. Don't let her talk to him. Its like Ivanka's there, Jared's there.

(END VIDEO CLIP)

BRIGGS: Almost hysterical, wasn't it?

The White House says Omarosa's comments are not taken seriously.

(BEGIN VIDEO CLIP)

SHAH: Omarosa was fired three times on "The Apprentice" and this is the fourth time we let her go. She had limited contact with the president while here. She has no contact now.

(END VIDEO CLIP) BRIGGS: I'm not sure why he had to look down at his notes to deliver that statement but that's another story.

ROMANS: It was his first day.

BRIGGS: It's first day.

Big Brother Omarosa described the White House as bad, adding it's not going to be OK, but Stephen Colbert, late night comedian, not sympathetic.

(BEGIN VIDEO CLIP)

STEPHEN COLBERT, HOST, THE LATE SHOW WITH STEPHEN COLBERT: Oh, really? You were haunted? Out here, it's been the Trumpityville horror. Also, Omarosa, pro tip, when you are on a reality show -- whispering doesn't really work. Trump can still hear you.

(END VIDEO CLIP)

BRIGGS: But certainly she knew that. She knew that whispering would get picked up by microphones as everything does. The show is called "Big Brother."

ROMANS: It's a reality show talking about another reality show. The whole world is a reality show.

All right. Eleven minutes past the hour. The games, the politics, the protests all happening right now in Pyeongchang where the real show, the Olympics, getting under way. We have a trio of reporters live in South Korea.

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[04:15:51] ROMANS: In South Korea, opening ceremony for the Winter Olympics kicking off at 6:00 a.m. Eastern Time. The games officially begin in Pyeongchang with momentous political overtones, of course.

We start our coverage of the Winter Olympics with CNN's Will Ripley. He is live outside of the stadium where the opening ceremony, Will, is happening in just a few hours.

WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: And politics are overshadowing the opening ceremonies. A lot of people are going to be watching just to see where Vice President Pence is sitting and where the North Korean delegation is sitting, and where South Korea's President Moon is sitting, because he is right caught in the middle of these two sides.

You have the vice president with Fred Warmbier, the father of Otto Warmbier, the American college student who died just six days after being released from North Korean custody. At one point, the vice president's communications spokesperson tweeted a photo of Fred Warmbier embracing a North Korean defector, saying the American people stand with the North Korean people who yearn for freedom. And then you had Kim Jong un's sister Kim Yo-jong arriving on Kim

Jong-un's official state jet. They landed at Incheon Airport. They have arrived here in Pyeongchang. They had a meet and greet with President Moon. They're going to have lunch tomorrow.

And several diplomatic sources are telling me that it is a good possibility that Kim Yo-jong will actually President Moon to visit North Korea at some point later this year. That would be significant because it would allow essentially North Korea to prolong this period of diplomacy and kind of put the pressure on United States not to continue to tighten the screws as they're pledging to do.

Vice President Pence saying he wants South Korea to disengage with the North. Clearly, North Korea is here, Christine, trying to warm up the relationship with Seoul and drive that wedge between Seoul and Washington.

ROMANS: The North Korea watchers here saying the sister of Kim Jong- un is a savvy political operator, one of the savviest and not a threat to him because as a woman, she can't have his job. So, she has kind of a safe space to operate and diplomatically we'll see how that works out.

Thanks, Will. Nice to see you.

BRIGGS: All right. North Korea's presence at the Winter Games is not sitting well with those who felt the oppressive hand of the Kim regime.

Let's go live now to Pyeongchang and bring in CNN's Ivan Watson.

Good evening, Ivan.

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Hey there. We're just a few hours away from the opening ceremony. It will be taking place in that open air stadium over there. It is going to be frosty. The organizers are anticipating more than 40,000 spectators.

Some people are not happy with the North Korean participation here in the Olympics. And do, there, you've got some die-hard conservative demonstrators waving Korean flags, South Korean flags, U.S. flags, Israeli flags, surrounded by police as well. And we have seen these protests around Korea, everywhere that the North Korean delegation comes to.

But overall, the atmosphere here is bitterly, bitterly cold, it's pretty festive. The theme of the opening ceremony is going to be peace in motion, a story of five children trying to find a way towards peace. Greece will lead the parade of nations, the ancestral homeland of the Olympics. Korea will close out the parade of nations, marching under the unified Korea unification flag, this blue and white flag. Athletes from North and South marching together, a male athlete from South Korea, a female ice hockey player from North Korea carrying the flags together -- Dave.

BRIGGS: Extraordinary back drop there. Ivan Watson live for us -- thank you.

ROMANS: Also, at the Olympics, sports.

BRIGGS: Oh, yes.

ROMANS: The actual sports.

Coy Wire joins us live from South Korea.

Hey, Coy.

COY WIRE, CNN SPORTS CORRESPONDENT: Good morning, Christine. Mountains in Pyeongchang known for their wicked winds that whip down from Siberia. The opening ceremony begins at just about an hour and a half, and the temperatures are expected to feel like they're in the 20s. So, the organizing committee made preparations.

Every spectator there at the opening ceremony getting rain coat, a lap blanket, knit caps, heated seat cushions, as well as hand and feet warmers. So, we know it's going to be cold for those expected 40,000- plus spectators Ivan told you about.

But what is it like for the athletes dreaming of this moment?

[04:20:03] I caught up with two-time Olympian Team USA freestyle skier Gus Kenworthy.

(BEGIN VIDEO CLIP)

GUS KENWORTHY, FREESTYLE SKIER: It really takes your breath away. I mean, you walk out and it's just those massive stadium. Everyone is screaming, there's lights flashing. USA is chanted. Everyone wearing the beautiful, matching opening ceremony outfits that Ralph Lauren made. And there's just a crazy sense of camaraderie.

(END VIDEO CLIP)

WIRE: Opening ceremony around the corner, but events already under way. Earlier, USA's 18 phenom figure skater Nathan Chen fell during his short program of the team event. So, what happened? Two-time U.S. champ, but he has never been on this big stage. Can he handle the magnitude of the moment? Nathan is a favorite for individual gold. Team USA still in second place after the first day of the team event.

Now, our friends, you heard Gus talk about the outfits. Our friends at Ralph Lauren allowed me to don the gear the athletes will be wearing. They're going to be toast.

I have to tell you, I have a heated parka on. It stays this way for about 11 hours. It's rain proof. The sweat gloves. I mean, they did get mixed reviews on social media. Everyone I talked to, it is their favorite part.

I mean, Christine, this is right up Dave Briggs' alley.

(CROSSTALK)

ROMANS: I feel like I'm in the Wild West. I love it.

BRIGGS: I don't think they go with the jacket. But the whole thing there, I like it. It's working well.

ROMANS: It says God bless America. That's what it says to me.

BRIGGS: We could use some gear. Just saying.

ROMANS: Yes.

BRIGGS: Good job, Coy. Thank you.

All right. A case involving the president's border wall heads to court today and you won't believe which federal judge is hearing the case, one the president has gone after before. That's next.

(COMMERCIAL BREAK)

[04:26:14] BRIGGS: Federal courts remain open during a government shutdown which we are right now. There is an interesting case on the docket today in San Diego. It will be heard by District Court Judge Gonzalo Curiel. You will recall, he's the federal judge who's impartiality was questioned by then candidate Donald Trump who cited Curiel's Mexican heritage. He is from Indiana, by the way.

The case is being brought by the state of California and multiple groups. They are challenging the Department of Homeland Security's power to wave environmental laws and the construction of a border wall.

ROMANS: Two ISIS fighters captured in Syria last month had reportedly given information to U.S. allied Syrian forces about the possible location of the remains of several U.S. and Western hostages. They were beheaded by Mohammed Emwazi, the British ISIS operative known as "Jihadi John" in those gruesome videos.

U.S. intelligence officials have long suspected the hostages were killed outside Raqqa but they needed more specific details to launch a search. Officials cautioned very early in the process. The remains still have to be fully recovered and identified. "Jihadi John" was killed in a U.S. airstrike in Syria in 2015.

BRIGGS: A California state assemblywoman who has been at the front of the Me Too movement is now herself under investigation for alleged sexual misconduct. "Politico" reporting Cristina Garcia is accused of groping a former legislative staffer Daniel Fierro in 2014. He claimed she cornered him alone after the annual assembly softball game, squeezed his buttocks and attempted to touch his crotch.

ROMANS: Cristina Garcia's face was featured with the "TIME" magazine's story announcing silence breakers as a person of the year. She has released a statement saying every complaint should be taken seriously. And she says she will participate fully in any investigation. All right. The government is shutdown this morning. Senator Rand

Paul used a late-night political maneuver to complain about late-night political maneuvers. The House is debating the bill right now. Everyone is up. One Republican leaders says he's confident it will pass.

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN breaking news.

(BEGIN VIDEO CLIP)

PAUL: Drawing attention to how much debt we're accumulating is something that is important.

(END VIDEO CLIP)