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Federal Government Now Shut Down Again; John Kelly Under Pressure; Soon: Winter Olympics Opening Ceremony Kicks Off. Aired 4:30-5a ET

Aired February 9, 2018 - 04:30   ET


[04:30:04] ANNOUNCER: This is CNN breaking news.


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


CHRISTINE ROMANS, CNN ANCHOR: Senator Rand Paul made his point. He also shut down the government again. It could last a little while longer. The spending bill now in the hands of the House. They're debating right now.


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


DAVE BRIGGS, CNN ANCHOR: What does fully aware mean, though? That question has to be on the minds of Americans and John Kelly as well as the White House dances around what the chief of staff knew about the domestic abuse allegations against a top White House aide.

ROMANS: And the eyes of the world on the Olympics in Pyeongchang. The opening ceremony is a short time away. The vice president and Kim Jong-un's sister both in the building. We've got sports, we've got diplomacy, guys, all under one roof.

Welcome back to EARLY START. I'm Christine Romans.

BRIGGS: I'm Dave Briggs. It is anything but an ordinary Friday, folks, 4:31 Eastern Time.

Again, the House is in session right now. We've got a lot happening. We start with the federal government, though, in a shutdown for the second time in three weeks.

A couple of hours ago, the Senate voted to pass a two-year spending bill that would reopen the government, sailed through 71-28. ROMANS: The House remains an open question at this hour as Democrats

weigh their options for getting action on their priorities. They're debating right now on the House floor.

And we are joined by CNN's Suzanne Malveaux, live this morning bright and early at 4:31 a.m. in Washington, D.C.

Good morning. Where do we stand?


We are following the action on the House floor. They have been voting on the procedural matter which clears the way for that debate, an hour debate on the budget bill itself. Then expect the vote perhaps starting around 5:30 this morning.

We earlier today saw Democratic Leader Nancy Pelosi speak on the floor. That was just before 4:00 in the morning, again calling for House Speaker Paul Ryan to make a firmer commitment to bring the issue of immigration reform, deal for the Dreamers, a bill to the House floor to satisfy her Democratic caucus. All of this last-minute drama while the government is in fact shutdown again for the second time in three weeks.

The Senate passed a massive two-year bipartisan budget deal 71-28. That happened around 2:00 a.m. in the morning, but that was after the midnight deadline when the money for the government essentially ran out.

How did this happen? Kentucky Senator Rand Paul, Republican, took to the Senate floor many times, refusing to agree to move the time of the vote of the bill which required unanimous consent from all 100 senators. So, in doing so, he forced the voting to be delayed while he protested the huge amount of government spending that is in the bill and hypocrisy about his own party driving this.


PAUL: 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.


MALVEAUX: So, getting this budget bill through the House, it is not a done deal here. But my colleague Deirdre Walsh, who actually did catch up with the

House Republican whip Steve Scalise this morning, just moments ago, asked if he was confident if they had these votes lined up and he did reply yes. But you do have those fiscal hawks, the Freedom Caucus, they're against it. They will need some Democrats to break-away and join the Republicans on the House side. There are some House Democrats who frankly are livid there is no commitment to the Dreamers or the DACA deal in the spending bill.

And Pelosi as I mentioned before, sent a letter to Speaker Ryan, telling him that they wanted this firmer commitment that he is going to bring immigration legislation to the House floor. In the meantime, we do have a development on the Senate side. Senate Majority Leader Mitch McConnell announcing early this morning that he is going to keep his word by opening debate on the immigration issue on the Senate side on Monday.

So, what's at stake with the spending bill? Well, it provides $160 billion in defense spending, $128 billion in non-defense, $80 billion in disaster relief. It raises the debt ceiling beyond the midterm elections, provides $20 billion in infrastructure investment, $6 billion for substance abuse programs and a 10-year reauthorization of the Children Health Insurance Program.

But most importantly, at this moment, it reopens the government and basically keeps the government running again -- Dave and Christine.

[04:35:05] ROMANS: Yes, it's so remarkable. We are talking about trillion dollar deficits.

Party of fiscal restraints. Where did it go? It looks like it's only Rand Paul and maybe a couple of other people. After all those years of bashing the Obama administration for spending money they did not have, here we are.

All right. Thanks so much, Suzanne Malveaux.

MALVEAUX: All right. Thank you.

BRIGGS: Say goodbye to the Tea Party Movement indeed.

Meanwhile, 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 the 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.

ROMANS: CNN has also learned President Trump is telling associates he is disturbed by the Porter scandal, but is not sure how to fix it. He spent the last couple nights phoning friends and former aides, including Kelly's predecessor Reince Priebus. And we're told he got wildly differing opinions on the way forward, out of the scandal.

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


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.


BRIGGS: Sources tell CNN Shah's admission of error did not sit well with the president. Shah also said Kelly became fully aware of the allegations this week, but according to CNN reporting, Kelly has known about the accusations for months now.

Now, "The Washington Post" reporting that the 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 about the allegations because Porter denied them.

ROMANS: One of Porter's accusers, his 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 but didn't name him.


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

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.


ROMANS: General Kelly sent a memo to staffers Thursday night, addressing the allegations against Porter, calling them, quote, shocking and troubling. And he insisted the administration takes matters of domestic violence seriously.

All right. About 38 minutes past the hour.

The U.S. stock market is now officially in a correction. And Wall Street's woes overnight spread overseas. Asians markets plummeting 2 percent, 3 percent, 4 percent. Those are ugly moves.

Europe just opened lower. Just over an hour ago. Right now, U.S. futures, though, watching U.S. futures there up. So, we'll see if maybe the rest of the world is digesting that point decline by the Dow. Too hard to know right now.

Both the Dow and the S&P 500 simply tanked, closing in correction territory. That is the technical term when the index drops 10 percent from the recent high. The Nasdaq almost there.

The Dow fell 1,033 points yesterday. The second time in history it lost more than 1,000 points in a single day. The other time that happened was Monday. That puts both the Dow and S&P 500 on track for the worst week since 2008. Blame fears of soaring bond yields and inflation. Both could force faster interest rate hikes from Federal Reserve.

On Wall Street, that threatens the bull stock market. On Main Street, it means interest rates which affect borrowing costs. And mortgage rates, if you are out there buying a home, you know this, mortgage rates just hit their highest level in two years. The benchmark 30- year rate is up 30 basis points this year. But home buyers, don't panic just yet. Despite the bump, mortgage rates are still historically low.

BRIGGS: All right. If the president's tweets make you cringe, well, you are not alone. They have the same affect on former White House staff Omarosa, "The Apprentice" contestant turned White House aide turned "Celebrity Big Brother" participant, said this or whispered this on "Big Brother" last night.


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.


ROMANS: I guess she did not know there was a microphone?

BRIGGS: Right, didn't know there was mic in the show called "Big Brother."

[04:40:02] The White House says Omarosa's comments are not taken seriously.


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.


BRIGGS: On "Big Brother", Omarosa described the situation inside the White House as bad, adding it's not going to be OK.

Stephen Colbert not sympathetic.


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.


BRIGGS: But, of course, she is well aware how to stay relevant. She --

ROMANS: Sure, absolutely. That's 15 minutes that's going to turn into hours of fame.

BRIGGS: Years, in fact.

ROMANS: You are right.

All right. The games, the protests, the politics, all happening right now in Pyeongchang. The Olympics under way. We have a trio of reporters. We are live in South Korea.


[04:45:13] BRIGGS: All right. Check it out. Some live pictures from the Winter Games in Pyeongchang in South Korea. The opening ceremony for the Winter Olympics kickoff at 6:00 a.m. Eastern Time. The games officially begin in Pyeongchang with momentous political overtones.

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

WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: Hi, Dave. You know, I'm actually only supposed to be 20 minutes away, although it is an hour and a half drive with all the traffic. That is why we're here instead of over at the stadium, not to mention the fact everybody is on their cell phones, so the signals are crashing but yes, a lot of excitement in the air, even here in the quieter portion of Pyongyang.

But the political situation is overshadowing the sporting events. You have two very different scenarios unfolding. You have the U.S. Vice President Mike Pence with the father of Otto Warmbier meeting with north Korean defectors, talking about how America stands with the North Korean people who yearn for freedom. Also saying that South Korea needs to disengage with the north after the Olympics are over and continue and join with the United States with the campaign of maximum pressure and engagement.

But then you have South Korea's President Moon Jae-in just within the last hour shaking hands with North Korea's ceremonial head of state Kim Yan-nam. And, of course, the big guest that everybody is talking is Kim Jong-un's sister.

Kim Yo-jong arrived on the North Korean leader's private jet in South Korea. She is now here in Pyeongchang. She's going to be attending the opening ceremonies. She is also going to be having lunch tomorrow with President Moon.

And several diplomatic sources are telling me there's a very good chance she will extend an invitation to the South Korean president to visit North Korea. This would be a huge. This would be a major diplomatic development, something that the South Korean president has wanted. However, it could potentially drive a wedge further between Washington and Seoul because clearly they have different views how to handle the North Korean situation moving forward -- Dave.

BRIGGS: A lot of lipstick going on the pig that is the North Korean regime.

Will Ripley live for us, thank you.

ROMANS: Yes, let's not forget, they promised annihilation, nuclear annihilation, and now sort normalized in international stage.

North Korea's presence at the Winter Games is not sitting well for those with the oppressive hand of the Kim regime.

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

And there are some protests.

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: There have been protests not far from where we are right now. There are these kind of conservative South Korean groups have been showing up everywhere the growing North Korean delegation has been active around Korea. And they basically he claim that what the South Korea has done by inviting them is akin to appeasement.

The government's position has been, hey, it's better to get the North Koreans in the tent rather than angry just 60 miles away on the other side of the demilitarized zone, potentially launching missiles or conducting ballistic missile tests. But as you can see, people are coming into the opening ceremony which is due to begin very shortly. The theme of that is peace in motion. The government has been calling this the peace games.

And what you're going to have is a parade of nations led by Greece, ended by Korea, teams from North and South Korea marching under a unification Korea flag -- Dave and Christine.

ROMANS: Fascinating.

It's so interesting. Gordon Chang who's a North Korea watcher here was saying the two teams literally also don't speak the same language. The North Koreans speak a dialect from the 1950s and the North Koreans have -- you know, their language has involved so much that they almost -- you know, these teams almost can't speak to each other. Fascinating. All right. Ivan, thank you so much.

BRIGGS: And lastly, oddly, yes, lastly, the actual sports that are happening at the Olympics. Coy Wire joining us geared up in South Korea.

Good morning to you, my friend.


Team USA's Lindsey Vonn, the world's most decorated female alpine skier, competing in the last Olympic Games almost did not make it to the opening ceremony. She live tweeted a crazy series of events. She said, well, hopefully, we get to Korea. Apparently we don't have the right documents to fly. About two hours on the plane and sitting at the gate. Then she said after over six hours of hanging out at the gate, we are off.

Well, Lindsey made it. She has been through a lot. This is her fourth Olympic Games, but it's been eight years since she's competed in one, a devastating injury kept her from competing in 2014.

And just three months ago, she lost her grandfather. He fought for our nation here in the Korean War, not far from where these Olympic Games are held. And she wanted so badly to bring him with her so he could cheer her on.

[04:50:02] When I asked her a few hours ago how his memory is resonating with her now that she's here in South Korea without him, she broke into tears. Listen to this.


LINDSEY VONN, SKIER: I want so badly to do well for him and I miss him so much. He's been such a big part of my life. I really hoped he could be alive to see me, but I know he's watching and I know that he's going to help me. I'm going to win for him.


WIRE: That's powerful stuff. It will be incredible to watch Lindsey Vonn, along with other athletes compete here, often not for themselves but something that's more than just them.

Opening ceremony just around the corner. Team USA athletes are going to be wearing the sweet gear from Ralph Lauren. We've got a sneak peek and I'll tell you what, these heated parkas are the real deal. I'm getting hot over here.

BRIGGS: You are looking good, too, my friend. Nice gear. We appreciate the coverage there. We eagerly await sports to take center stage. Thank you, Coy.

ROMANS: Yes, exactly. I love the buffalo bill fringe.

BRIGGS: You love those gloves? Statement piece. ROMANS: All right. Fifty-one minutes past the hour.

How do you feel about fast food delivery? You may soon be order KFC and Taco Bell right to your door step. This is making me hungry. Details on money stream, next.


BRIGGS: A California state assemblywoman who has been at the front of the Me Too Movement is 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 butt 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.

Strong winter storm pushing through the Midwest today, heavy snow and high winds and dangerous travel conditions are in store. More than 1,000 flights have been canceled, folks. Schools in Chicago and Detroit are closed.

Meteorologist Ivan Cabrera joins us from the weather center -- Ivan.


IVAN CABRERA, AMS METEOROLOGIST: Hey, guys, good morning.

The snow is getting heavy. And we're going to have a mess on our hands as far as travel is concerned from Chicago. I'll show you the snowfall rates in a second. But there you see the snow from Iowa and southern Minnesota and now getting into Chicago where it will continue to snow throughout the day today.

We had 1,500 miles of snow as far as the warnings which stretch from Billings, all the way into Chicago and points east. Detroit as well. The snowfall rate is going to be one to two inches an hour. That's going to cause visibility to be zero at times here.

So, treacherous travel across the region here and as far as the accumulation, upwards up eight to as much 12 inches of snowfall, and watch out some areas could pick up a little bit more.

So, again, just a strip here through Chicago and to Michigan, Detroit will be impacted, oh, and, yes, the Arctic air will follow. So, the snow is not going to melt anytime soon. We have temperatures today in the single digits to teens -- guys.


ROMANS: All right. Ivan, thank you so much.

All right. That's the weather. This is your money this morning.

Let's get a check on money stream. The Dow and S&P 500 is officially in a correction, folks. That's the technical term from when an index drops 10 percent from a recent high. The Dow alone fell 1,033 points yesterday. It closed right in the low. It was ugly last half hour of trading.

The second time in history it lost more than 1,000 points in one day. The other time was Monday. You can blame fears of soaring bond yields and inflation. But could force faster interest rate hikes from the Federal Reserve.

And now, Wall Street's woes have spread overseas. Asian marketing plummeting up to 4 percent overnight, Europe opened lower. We could see a bit of a rebound in the U.S. Dow futures up a bit, but anything can happen. The opening bell rings at 9:30 Eastern.

All right, air travelers. In 2017, fewer passengers were bumped off flights than the last 20 years, that's according to the Department of Transportation. For every 10,000 passengers, just 0.34 were denied boarding. That rate is half the year before, the lowest on record since 1995.

Last year, the forcible removal of a United passenger triggered public outrage, forcing airlines to approach bumping, including offering travelers incentives for giving up their seats.

You may soon be able to order KFC or Taco Bell right to your doorstep. Yum Brands, the parent company of KFC and Taco Bell partnering with the delivery app Grubhub. The plan is to roll out delivering in thousands of locations in the next few months. Americans love fast food delivery and fast food wants a piece of this $100 billion market. McDonald's partnered with Uber eats last year. Wendy's also uses delivery service Door Dash.

What are we going to order? I'm starving right now. We've got a government shutdown. We've got voting under way soon. Your debate on the House floor. I'm hungry.

BRIGGS: It is breakfast time. But, you know, I think about these tings. Fries don't hold up well. They don't heat. They hold, get soggy. I'm not in favor.

ROMANS: Right, taco, (INAUDIBLE) I'm not sure.


All right. EARLY START continues right now as the government remains in shutdown at 4:59 Eastern Time.


ANNOUNCER: This is CNN breaking news.


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


ROMANS: Senator Rand Paul made his point. He also shut down the government again. It could last just a little bit longer.

These are live pictures. Nancy Pelosi on the House floor at 4:59 a.m. Eastern Time. The House spending bill is in the hands of those Congress members. They're debating.