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EARLY START

Funding Deal Delay Shuts Down Government Again; John Kelly Under Pressure; Olympics Begin Today. Aired 5-5:30a ET

Aired February 9, 2018 - 05:00   ET

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


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.

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CHRISTINE ROMANS, CNN ANCHOR: 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.

[05:00:03] The House spending bill is in the hands right now of those Congress members. They're debating.

(BEGIN VIDEO CLIP)

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

(END VIDEO CLIP)

DAVE BRIGGS, CNN ANCHOR: So, what does fully aware mean? The White House dancing around what John Kelly knew about abuse allegations against the top White House aide.

ROMANS: And all of the eyes of the world on the Olympics in Pyeongchang. The opening ceremony a short time away with the vice president and Kim Jong-un's sister both in the building.

All right. Good morning. Welcome to EARLY START. I'm Christine Romans.

BRIGGS: I'm Dave Briggs.

Minute by minute updates by folks on the House floor. They are voting right now.

It's Friday, February 9th, 5:00 a.m. in the East. They are trying to get enough votes to pass a deal that would reopen the government has shutdown right now at 5:00 Eastern Time. That's 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. It sailed through 71-28.

ROMANS: But the House remains an open question this hour as Democrats weigh their options for getting action on their priorities. They are debating right now on the House floor right now. We expect a final vote this hour.

You just want to listen in a little bit on Nancy Pelosi at this hour? Let's listen to the House --

REP. NANCY PELOSI (D-CA), MINORITY LEADER: To compromise to address the military strife and critical domestic priorities like fighting the opioid crisis, boosting NIH, moving forward to resolve the pension crisis, caring for our veterans, making college more affordable and invest in child care for working families. Indeed, that is what the fight has been about all along. We have had to fight the resistance on the Republican side to invest in the domestic agenda.

ROMANS: She spent eight hours on the floor yesterday. She is up all night here.

For the latest, we're joined by CNN's Suzanne Malveaux live in Washington.

Hi, Suzanne.

SUZANNE MALVEAUX, CNN NATIONAL CORRESPONDENT: Good morning, Dave and Christine.

Well, we are following the action on the House floor. As you saw, Nancy Pelosi again on the House floor this morning. She was there before 4:00 in the morning as well.

We heard from a number of Democrats calling this maddening unjustifiable, that there is nothing for those Dreamers in this. This debate is going to probably going to last for about an hour. At least that's what it is slated for, perhaps a bit less. The voting expected between 5:30 and 6:00 according to our calculations.

And as we had mentioned before, Pelosi again calling for House Speaker Paul Ryan to make a firmer commitment to bring the issue of immigration reform, a deal for the Dreamers, DACA, 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 did pass the massive two-year budget deal, 71-28. That was at 2:00 in the morning after the midnight deadline when the money ran out.

And why the delay? Well, that was because of what happened. Republican Senator Rand Paul taking 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 and he protested, protested about the amount of money that the government is spending in this bill and hypocrisy, he says, that his own party is driving this.

Take a listen.

(BEGIN VIDEO CLIP)

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?

And 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, again, live pictures looking at what's happening on the House floor at this rather emotional debate, if you will. It is far from a done deal whether or not it is going to pass. But my colleague Deirdre Walsh, she caught up with a very important member of the House, the Republican whip Steve Scalise. It's his job to whip up support among his Republican colleagues. She asked if he was confident that they have the votes lined up. He did, in fact, say yes.

But you've got the fiscal hawks, the freedom caucus against it. So, Republicans are going to need those Democrats to support them for this. There are some House Democrats who we have heard this morning who are livid, that there's no commitment to the Dreamers here.

And Pelosi mentioned this morning that she has sent a letter to Ryan, telling him that they want that firmer commitment on immigration legislation. We also have a development on the Senate side. Senate Majority Leader Mitch McConnell announcing that he's going to keep to his word, open the debate on that issue, the immigration issue on the Senate side on Monday.

[05:05:04] So, what's at stake? Well, we are looking at a lot here, that lawmakers have to weigh in. Some stuff for Democrats and Republicans, $160 billion in defense spending, $128 billion in nondefense spending, $80 billion for disaster relief, raising the debt ceiling, providing $20 billion for infrastructure, $6 billion for the opioid substance abuse programs, and 10-year reauthorization of the Children's Health Insurance Program.

Most importantly, Dave and Christine, it also allows the government to reopen. And that is what everyone is waiting on this morning.

ROMANS: It adds to the deficits which they didn't like when it was the Obama administration.

All right. Suzanne Malveaux, thank you so much.

BRIGGS: All right. Let's now turn to political economist Greg Valliere. He's the chief strategist for Horizon Investments.

ROMANS: Hi, Greg.

BRIGGS: Good morning to you, Greg.

GREG VALLIERE, POLITICAL ECONOMIST: Hi, guys.

BRIGGS: Let's talk about how all this started, how the shutdown officially began with Rand Paul taking to the Senate floor, talking about the hypocrisy of fiscal conservatives in the Republican Party. Listen.

(BEGIN VIDEO CLIP)

PAUL: The reason I'm here tonight is to put people on the spot. I want people to feel uncomfortable. I want them to have to answer people at home who said how come you were against President Obama's deficits and then how come you are for Republican deficits? Isn't that the definition of intellectual dishonesty? If you are against President Obama's deficits, and now you're for the Republican deficits, isn't that the very definition of hypocrisy?

(END VIDEO CLIP)

BRIGGS: You might see that in 2018. A Democrat may run that as a campaign ad.

Greg, if and when this gets through the Senate and it looks like that's the case, when the president signs this legislation, does he sign the death certificate for fiscal conservatives in the Republican Party?

VALLIERE: What a transformation. This is one of the most dramatic fiscal policy changes in our lifetimes.

BRIGGS: Yes.

VALLIERE: And I really do think that the Republicans now are going to be tied to a bill that's a pig-out. When you talk about hypocrisy, Rand Paul voted for a one-trillion-plus dollar tax cut that would lose ton of money. He voted for that. So, there is enough hypocrisy to go around. His colleagues, of course, are furious with him.

But, you know, I think on the heels of the Senate approval a few hours ago, the House will probably go along. It is not a slam dunk. You are right. When Donald Trump signs this bill, it will label the Republicans as the party of big deficits.

ROMANS: You know, the president on the campaign trail said he would cut the national debt in half or get rid of it in eight years. We can balance the budget. Not to just put too fine a point on it, but I would just like to show you what Mitch McConnell and Paul Ryan and the president have said about what this party's position is going to be on debt and spending.

(BEGIN VIDEO CLIP) REP. PAUL RYAN (R-WI), SPEAKER OF THE HOUSE: We face a crushing burden of debt. The debt will soon eclipse our economy and grow to catastrophic levels in the years ahead.

We want to balance the budget. They don't. We want to restrain spending. They want to spend more money.

SEN. MITCH MCCONNELL (R-KY), MAJORITY LEADER: We would like to do something about the nation's biggest problem, spending and debt.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I know more about debt than practically anybody. I love debt. I also love reducing debt. I know how to do it better than anybody.

(END VIDEO CLIP)

ROMANS: How much risk is this for Paul Ryan and Mitch McConnell and other who screamed and ranted during the Obama administration about debt and deficits, and now they've lost that fiscal restraint?

VALLIERE: The great irony here, Christine, is the bond market has not changed its opinion, that extreme levels of debt. We're going to see deficits go up dramatically. One of the major reasons we have the market problem this week.

ROMANS: Yes.

VALLIERE: The bond market is freaking out over higher deficits and red hot economy. Maybe some inflation down the road. And if you live by the sword, you're going to have to die by the sword in terms of debt. And the markets are not happy about this.

BRIGGS: Because to your point, two of the biggest point drops in the history of the Dow occurred in the last four days. But we are told the fundamentals of the economy are still strong. Are they?

VALLIERE: Oh, absolutely. I have been arguing for the last few weeks and with you, guys, as well, that the problem for the bond market is that economy could overheat. There's so much stimulus, whether it's the tax cut or spending or very, very tight labor market, synchronized global growth. You've got an economy that could be overheating.

ROMANS: Gosh. You know, what I learned covering markets over the last 20 years, when the economy is good, that's when you cut deficits and debt.

VALLIERE: Right.

ROMANS: When the economy is bad, that's what h when you spend to get out of it. We go upside down. Just upside down.

Go ahead.

VALLIERE: Just a real quick point. A lot of it is just about the timidity of politicians. Even a little tiny change to the CPI calculation on the Social Security cost of living adjustment has been rejected by both parties and the president.

[05:10:02] They don't even want to try minor deficit reduction. So, the move on the next several years on deficits is going to be sharply higher.

ROMANS: All right. Greg Valliere, come back in a few minutes. Let's talk more about it.

BRIGGS: Greg who calls the Senate bill a pig-out.

ROMANS: Pig out.

BRIGGS: White House Chief of Staff John Kelly's job is safe for now, even though there's mounting frustration in and out of the White House over his handling of abuse allegations against former staff secretary Rob Porter, who is really the last line of defense getting documents into the Oval Office. 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's disturbed by the Porter scandal, but is not sure how to fix it. He spent the last two nights phoning friends and former aides, including Kelly's predecessor Reince Priebus. He got differing opinions on the way forward.

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

(BEGIN VIDEO CLIP)

SHAH: I think it is fair to say that we all could have done better in the last few hours or last few days.

(END VIDEO CLIP)

BRIGGS: Could they have done worse?

Sources tell CNN Shah's admission of error there did not sit well with the boss. Shah also said Kelly became fully aware of the allegations this week, but according to CNN's own 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. White House official tells "The Post" McGahn did not ask what the allegations were 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 without naming him.

(BEGIN VIDEO CLIP)

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.

(END VIDEO CLIP)

ROMANS: Kelly sent a long memo to staffers addressing the allegations against Porter calling them, quote, shocking and troubling, insisting the administration takes matters of domestic violence seriously.

BRIGGS: All right. Let's go live to the House floor. Paul Ryan now speaking. He wants the bill to get through the House.

They are debating it. They will vote on it shortly, we are told. We will have the latest for you later on the show.

But next, the games, the protests, the politics all happening right now in Pyeongchang as the Olympics get under way. We have a trio of live reporters in South Korea right ahead.

(COMMERCIAL BREAK)

[05:17:46] ROMANS: All right. Welcome back.

That is a live shot of the house floor in Washington, D.C. where voting is under way on the spending bill. Folks, the government is shutdown. This is officially a government shutdown here. Senator Rand Paul took to the floor really concerned about debt and deficits and hypocrisy of his party. Now, you have the House voting on their spending bill here. Those are live pictures.

BRIGGS: After Rand Paul finished, it sailed through the Senate 71-28, this massive funding bill for two years, which kicks the debt ceiling for a year. This thing looks like it will eek through the House. There are concerns on the right and far left. We will get the latest for you shortly.

Also happening right now in Pyeongchang, the Winter Olympics are under way. This is a live look outside of the stadium where the opening ceremony will take place in just about 40 minutes from now. A lot of action happening here on a Friday.

The games begin in Pyeongchang with momentous political overtones. It's not just the sports. We start coverage of the games with Will Ripley outside the stadium, where it's just a short time from the opening ceremonies.

Hi there, Will.

WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: Hi there, Dave.

Yes, some people accusing North Korean politics of overshadowing what is supposed to be the Peace Olympics here. You have U.S. Vice President Mike Pence with Fred Warmbier, the father of Otto Warmbier, who died six days after being released from North Korean custody. They met with North Korean defectors. They posted pictures.

They talked about standing in solidarity with the North Korean people. They called North Korea a repressive regime. They are encouraging South Korea to disengage completely with North Korea after the Olympics and join the United States in upping the already intense pressure of sanctions and diplomatic isolation.

But President Moon Jae-in caught right in the middle here because North Korea sent their high ranking delegation, Kim Jong-un's official private landed in South Korea's Incheon Airport and was carrying a high level delegation, including his sister, Kim Yo-jong, who is the first member of the rolling Kim family to step foot in this country since the Korean War in 1950.

She will be having lunch tomorrow with President Moon and several diplomatic sources are telling me there is a good chance she will offer him an invitation to visit North Korea sometime this year.

[05:20:05] That would be highly significant, but also potentially could drive a wedge with Seoul and Washington because the U.S. is saying distance yourselves from North Korea. Don't fall for the charm offensive. They're still developing nuclear weapons. They had a massive military parade just yesterday on the eve of the opening ceremonies which is due to kickoff.

But President Moon does want to engage with the North, and clearly, what North Korea appears to be trying to do here is to use diplomacy to try to warm up relations to extend this period of easing of sanctions, trying to get concessions from South Korea and again, drive that wedge between the U.S. and it's key ally here in the peninsula -- Dave.

BRIGGS: The games totally normalizing a brutal and oppressive North Korean regime.

Will Ripley live for us -- thank you.

ROMANS: All right. North Korea's presence of the Winter Games not setting too well with those who felt the oppressive hand of the Kim regime.

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

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

We are very close to the entrance of the stadium where the opening ceremony begins shortly. As you can see, people, spectators kind of coming down this tunnel of light, big smiles on their faces despite the frigid, frigid cold here. Not everybody is happy. There are small groups of opposition protesters denouncing North Korea's participation in these Olympics, claiming that it effectively is appeasement of a country that's still technically at war with South Korea.

But overwhelmingly, you have this crowd of people from all around the world gathering here in the small ski resort that normally has a population of some 43,000 people. The mayor told me he expects 2 million.

Ticket sales lower than expected. Only about 85 percent sold as of Thursday night. The target was 90 percent by that time. And we'll just have to see how that unfolds.

But there is certainly a festive atmosphere despite the political controversies and overtones to what's supposed a festival of sports -- Christine and Dave.

ROMANS: Yes, festival, sports and a little bit politics and an awful lot of international diplomacy. Thank you so much for that, Ivan.

BRIGGS: That being said. Let's not leave out the sports. Coy Wire is live with the update on that.

Good morning, Coy.

COY WIRE, CNN SPORTS CORRESPONDENT: Good morning, Dave.

Baby, it's cold on the outside. The opening ceremony begins in less than 40 minutes. The temps are expected to feel like they're in their 20s. These mountains in Pyeongchang get really cold, on pace to be the coldest winter games ever, edging out Lillehammer back in '94.

So, the organizing committee, they're making preparations for the spectators at the opening ceremony. Everyone is going to get a blanket, knit caps and heated seat cushion, as well some hand, feet warmers and other cold conquerors. So, it's going to be cold for those 40,000 plus people.

But what is it like for the athletes? They have been dreaming of this moment for their entire lives.

I caught up with two Olympian, Team USA freestyle Gus Kenworthy to hear what he thought.

(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 under way.

Earlier, USA's 18-year-old figure skater Nathan Chen fell during his short program of the team event. What in the world happened, many are wondering? This guy is a two-time U.S. champ already. But he is young. He has never been on the big stage like. Can he conquer those demons? Will he able to gather himself?

He is one of the favorites for the individual gold here in Pyeongchang. Team USA still in second place after the first day of the team event.

Now, you heard Gus talking about the Ralph Lauren gear that all those Olympians for the USA are going to be wearing at the opening ceremony. They allowed me to wear this and test it out. I have the sweet suede leather gloves getting mixed reviews on the social media, because of this fringe.

All the athletes, this is my favorite part. My favorite right now, because of this cold, the heated parka. This thing gets warm and toasty, I feel great.

BRIGGS: Coy could still be an Olympian. He is in that kind of shape.

ROMANS: The gloves remind me like Buffalo Bill and Annie Oakley and like Old West. That's what I like.

All right. Lots happened over here. Thanks. Nice to see you, Coy.

BRIGGS: All right. Right now, on Capitol Hill, the House is voting on the spending bill to end the government shutdown. It began when Senator Rand Paul used a late night political maneuver to complain about late-night political maneuvers.

(BEGIN VIDEO CLIP)

PAUL: Congress waits until the last minute and gloms all of the spending together in one h enormous bill. At the very last minute, we are told we don't have time to debate and amend the bill.

(END VIDEO CLIP)

BRIGGS: Amazing stuff happening right now on the House floor.

[05:25:00] The latest from Capitol Hill, next.

(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) BRIGGS: Breaking right now, just about 5:30 Eastern Time. The house is voting to end the government shutdown which began after Senator Rand Paul refused to allow a vote. It could last a little while longer. You see the vote count. This could be close. We shall see if this bill to fund the government for two years actually gets through.

(BEGIN VIDEO CLIP)

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

(END VIDEO CLIP)