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House Pushes Immigration-Free Funding Bill; Parties Blame Each Other for Shutdown Threat; Number Twos Holding Immigration Meeting; Bannon Subpoenaed By Mueller. Aired 12-12:30p ET

Aired January 17, 2018 - 12:00   ET

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

[12:00:15] JOHN KING, CNN ANCHOR: Welcome to INSIDE POLITICS. I'm John King. Thank you for sharing your day with us.

The House speaker bets on a go it alone strategy to avoid a government shutdown, but, an important but, some conservatives aren't happy.

Plus, the partisan divide over protecting the so-called dreamers is as big as ever, yet there are some positive vibes after the White House Chief of Staff John Kelly clears the air with some Latino Democrats.

And Steve Bannon in the Russia meddling spotlight. A new deal to answer questions from the special counsel and a raw mood on Capitol Hill, including Republicans, after the president's former right-hand man refuses to answer their questions.

(BEGIN VIDEO CLIP)

REP. TREY GOWDY (R), INTELLIGENCE COMMITTEE: Keep in mind the president and some of his supporters want Congress to hurry up and conclude these investigations. So do I. The best way to do that is to instruct witnesses to answer our questions instead of going through this charade of executive privilege.

(END VIDEO CLIP)

KING: Back to that in a few moments.

But we begin with Speaker Ryan's big, new gamble, pass another temporary government spending deal and deal with DACA, the dreamers, down the road a bit. House Democrats are making clear today they won't go for it. The speaker, this morning, confident, but without an answer to the biggest question.

(BEGIN VIDEO CLIP)

REP. PAUL RYAN (R), HOUSE SPEAKER: Well, I think cool heads, hopefully, will prevail on this thing.

QUESTION: Do you have the Republican votes?

RYAN: We haven't even whipped it yet.

(END VIDEO CLIP) KING: It is a giant test for the speaker and the Republican Party. Democrats won't go along because of their immigration demands. But many Republicans are also annoyed with another temporary spending fix, including the Conservative Freedom Caucus, which has enough votes to tank the speaker's plan.

CNN's Phil Mattingly live on Capitol Hill for us.

Phil, maybe no official whip count yet, but listening to the speaker there, does he have some reason to believe he can find the votes?

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Yes, look, his one outside Republican adviser, supporter of leadership, put it rather bluntly, never underestimate their ability of the Republican House Conference to step on a rake when it comes to their own spending bills.

But, yes, I think Republican leaders, they thought they had a good closed-door meeting last night when they unveiled this proposal. As you noted, they haven't gotten a hard whip count yet. They're going to start that in about an hour when they -- their next floor vote. And they feel like they can get there.

And I think the reality is the reason why right now. The way you explain this is, we know this isn't a good proposal. We know this isn't what the vast majority of the conference wants. We know this isn't what conservatives want any part of right now, but it's the only thing that keeps the process moving forward and perhaps more importantly, John, means they don't have to negotiate with Democrats. If they want to move something forward, if they want to get a deal that they like, they need the Republican votes to move this forward at this point.

And you noted, conservatives obviously very unhappy with this, but their outrage is really directed at the Senate. The feel like they send a bunch of things over to the Senate and the Senate never addresses them, never takes them. The big question now, can they put that aside, just for this brief moment? Can the speaker get their help one more time on a short term spending bill?

KING: And, Phil, the Republicans run the show, so the biggest burden is on them.

But what about the Democrats? Any internal conflicts with the leave the Republicans alone approach?

MATTINGLY: Yes, an enormous amount of internal conflict. And I think the reality right now is, right now they're waiting for Republicans, right? They want to see if Republicans can actually get this done because as one Democrat told me earlier, they have to prove to us that they can do something because, as I think everybody knows, if it implodes over in the House, all of a sudden the Democratic leverage grows even more.

But if House Republicans get something passed, and as you noted House Democrats are opposed. Nancy Pelosi, the leader of the Democratic Party over in the House, is whipping against the bill, then the spotlight shines solely on Democrats in the Senate. There's a very real split right now, and it's not just based on the ten Democrats that are running for re-election in red states. There's other Democrats as well that don't necessarily believe this is the best politics.

Right now, John, they're keeping their powder dry. They want to see what the House is going to do. This is a very difficult issue. There's a lot of passion behind it. There's a lot of base politics behind it. There's a lot of advocates behind it. They really have a lot of impact in these offices. There are some big questions Democrats are going to have to answer in the Senate if the House Republican conference can actually get this done, John.

KING: Wednesday noon. The deadline is midnight Friday. A lot of caffeine between now and then for Phil Mattingly on Capitol Hill.

Phil, appreciate it.

With us in studio here to share their reporting and their insights, Rachael Bade of "Politico," CNN's Jeff Zeleny, FiveThirtyEight's Perry Bacon, and Mary Katharine Ham of "The Federalist."

I want to start with -- look, the Republicans run the show. The Republican president, the Republican House, the Republican Senate. Republicans are, understandably, Democrats are too, I hope independents are, annoyed that Congress can't actually pass a big budget, can't do the one basic thing they're elected to do, keep the government funded. They have every right to be annoyed. They have differences over defense spending, differences over the temporary, differences over other things.

But let's start with the internal Republican divide.

Rachael, you walk the halls all the time. Listen to Adam Kinzinger here, a more moderate Republican from Illinois, who hears the House Freedom Caucus saying, maybe we will pull our votes from this. Maybe we will force the speaker to have a different plan. He's a tad annoyed at them.

(BEGIN VIDEO CLIP)

CHRIS CUOMO, CNN ANCHOR, "NEW DAY": Do you have the votes?

REP. ADAM KINZINGER (R), ILLINOIS: I don't know. We just -- you know, we're kind of figuring out what we're doing as of last night. We're hearing the plan. I guess our friends over at the freedom club decided they want to oppose this. So we'll see.

[12:05:03] But, you know, I ultimately think that we're going to get through. I'm not -- I'm a little less optimistic this time, this Friday, than I was, say, December 23rd.

That's not what I'm hearing from the freedom club, our friends over there. They're -- I don't know what their reasoning is because they're not the ones that have been advocating for robust military spending. In fact, many of them over in the Freedom Caucus were actually fans of sequester, which I am not.

(END VIDEO CLIP)

KING: Well, he actually got -- het got to Freedom Caucus at the end there after two rather scornful freedom clubs. Explain this big divide within the Republican family.

RACHAEL BADE, "POLITICO" CONGRESSIONAL REPORTER: Yes, in no -- when he answered that question about, are they going to be able to pass this with Republican votes, he seemed a little annoyed himself. He's a defense hawk.

People -- Republicans on The Hill are not happy with this. They know that this is irresponsible government by just funding the government time -- a little bit of time -- a little bit at a time.

The issue here is that conservatives, by withholding their votes, they're going to make Speaker Paul Ryan have to turn to Democrats and give them something. So a lot of Republicans on The Hill sort of see this as the lesser of the two evils, right. Do something like this, a short-term funding bill, but at least they don't have to cave on DACA. And so a lot of people are taking that and running with it, specifically Mo Brooks, who is a member of the Freedom Caucus, came out of conference last night and he said he could back this because it doesn't include amnesty, as he called it.

So I think people are looking at this, again, the lesser of the two evils. But Republican leadership, from what I hear, still has some work to do to get that 2018 votes. They're not going to get a single Democrat at least at first.

KING: Your government at work.

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: It is, indeed. And the president at the White House has been saying, you know, the Democrats will be blamed for this. The reality is Republicans are in charge of Washington, at least at the beginning of this year. We'll see about the end of the year.

So who knows how the politics falls. But I believe that they will get the votes because the president does not want a government shutdown on his watch. There is all evidence to show that that would be nothing short of a disaster, particularly on his one year in office. We are reaching the one-year point. That's not how he wants to celebrate it.

So, my guess is, he will be on the phone with Mark Meadows, who he talks to all the time anyway, several times a week, we're told. I would be surprised if they didn't have the (INAUDIBLE).

KING: And that is one of the debates we're watching play out every minute just about here in Washington, is the Friday midnight deadline approaches. If the government shuts down, who is to blame, right? It -- I think, could it be a pox on all their houses that the voters out there think that everyone's to blame? I could see that. It's kind of asinine to think and to argue that, with a Republican president, a Republican Senate and a Republican House that Republicans have zero responsibility if the government shuts down. That doesn't mean the Democrats don't share the blame. But I think for Republicans who think we can put this all on the Democrats, I think that's sort of wishful thinking. Yet, they try. Listen here, the two top leaders in the Senate, the Republican first.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R), MAJORITY LEADER: Senators face a lot of hard decisions, but this is not one of them. A bill that prevents a government shutdown, funds SCHIP for up to six years should be a simple choice for every senator in this chamber. And until very recently, our Democratic colleagues agreed.

SEN. CHUCK SCHUMER (D), MINORITY LEADER: Leader McConnell, on this instance, as on many, many others, says our way or no way. That's wrong. We will do everything we can to avoid a shutdown. If, God forbid, there's a shutdown, it will fall on the majority leader's shoulders and the president's shoulders. We all know what the president has said. He wants a shutdown.

(END VIDEO CLIP)

KING: They do a lot more blame gaming than they go governing, don't they?

PERRY BACON, FIVETHIRTYEIGHT: They do a lot of blame gaming. I think it depends on how the shutdown happens. If the bill can't get through the House and that's why the shutdown happens, the Freedom Caucus is fighting other members, that's obviously a Republican issue. If the Senate Democrats don't let the bill go through because they don't -- they want a DACA bill, then that's more likely to be blamed on the Democrats. It is more of the Democrats doing that. (INAUDIBLE) depends on where we are. And I think at this moment right now at 12:10 on Wednesday, I don't know where we're headed because I think its -- neither party has really agreed upon their strategy going forward.

KING: But that's a great distinction, watching the process and where -- if there's a landmine or if we go off the tracks, where it happens is going to be a big part of the conversation.

I'm asking you an impossible question, and I apologize for it in advance.

MARY KATHARINE HAM, "THE FEDERALIST": Go for it.

KING: But it -- a lot of the conversation in this town now is about President Trump. He's certainly central to this. The DACA blow-up over immigration is certainly a factor in this. But the idea of another temporary spending plan, another potential government shutdown predates President Trump. This is a part of a larger, broader Washington dysfunction that one could argue might be why we have President Trump. The voters just decided, I wanted something different and I'll take a risk on something different. Why?

HAM: It's stupid and irresponsible. Wash, rinse, repeat. I mean this is -- this is what we do here. I do think that shutdown politics are good politics for your base. But

they're not good politics for almost anything else. And I don't care which party it is. And so I think you're right that it matters which house or which side sort of holds this thing up.

Ryan has pulled a couple rabbits out of his hat when we thought it was impossible. Health care, I think, being the toughest of them, although, once again, that did not go very far in the Senate.

[12:10:00] But -- so I think there's potential for him to pull out something here. And I think both sides, both Republican leadership and Democratic leadership on DACA, have an incentive to sort of keep this ball rolling. The deadline is in March for DACA and they actually -- if they actually do want a solution, and many of them I think do, although there's cynical politics involved as well, this can give Republicans a chance to say, look, we're not caving on this. We're still at the table. And Democrats to say, we are working on this.

KING: Right. And early 2018 already looks very bleak for the Republicans. Even if they share the blame with Democrats, Republicans can afford to take, I don't think, any more negative hits here.

One of the fascinating dynamics, Phil touched on this, is when we get toward the Senate especially is you will see a short-term versus long- term, meaning Democrats on the ballot in 2018 in some tough places and Democrats who are thinking about running for president in 2020 who want to keep the base happy.

As Mary Katharine just noted, you look at the difference here. If you're Joe Donnelly from Indiana, Claire McCaskill from Missouri, John Tester and Heidi Heitkamp and Joe Manchin from states that Donald Trump carried two -- a year ago by 20 points, 25 points, 30 points, 42 points, I think, in the case of West Virginia, maybe you don't want to be shutting down the government if you're on the ballot next year. If you're in 2020 and you're Cory Booker, or Kirsten Gillebrand or Kamala Harris, Bernie Sanders, Elizabeth Warren, you want to keep the base on your said as you gear up for 2020.

How big of a factor is that?

BADE: It's a huge factor. I think that, yes, Republicans are scared that they're going to be blamed for any shutdown, but these Democrats in particular that are up again in these swing states are particularly worried about being blamed to -- for shutting down the government at a time when, you know, the country's readiness is very important with the standoff with North Korea, et cetera, to protect undocumented immigrants.

And that's exactly what Republicans are going to blare out of their microphones.

KING: Yes, that will be the campaign (INAUDIBLE).

BADE: And they don't -- they are worried about that. So, of course, I cannot see Schumer being able to whip all the Senate Democrats into voting against any CR that does pass the House and come to the Senate. And that's one of the reasons why I don't think we're going to see a shutdown on Friday.

KING: That's a great point. Does he -- does Schumer really care, or is it a wink nod? All you base Democrats vote no. You guys who have to, of course, vote yes, we're all good here. We'll pretend -- we'll pretend that we're mad at you, but we're not.

BACON: That's what it means (INAUDIBLE).

ZELENY: He understands --

KING: Yes.

BACON: Yes.

ZELENY: The politics of this better than anyone else in the chamber. So, absolutely.

I've -- you know, we've seen this, a shutdown showdown continue happen so many times. I'll be very surprised if it happens.

But --

KING: He has an outside chance of being the majority leader next year. So he doesn't want to do anything that might put one of those Democratic seats in peril.

ZELENY: Which would, without question, right.

KING: Yes.

All right, before we go to break, today in political history, oh a day I remember all too well. Twenty years ago today, Matt Drudge breaking the biggest story of his career, that "Newsweek" had just killed a story by Michael Isikoff about President Clinton. It became a big deal.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: CNN has confirmed that Whitewater Counsel Kenneth Starr has been granted permission to expand his investigation.

UNIDENTIFIED FEMALE: There are new allegations of infidelity and perjury this morning against President Clinton.

LARRY KING, CNN: The former White House intern in question is Monica Lewinsky, who eventually left the White House to work at the Pentagon.

PAT BUCHANAN: If what the -- what the young lady said is true, Clinton lied to the country today, he suborned perjury.

UNIDENTIFIED MALE: Impeachment might very well be an option.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

[12:17:14] KING: Welcome back.

Lawmakers back at the starting line today, trying to piece together a stalled immigration deal. The odds looking more than a little grim. One senior Republican aide telling CNN, until President Trump decides what he really wants, nothing will move through Congress.

Last night a bipartisan group of lawmakers unveiled a narrow bill in the House, but neither leadership, Democrat nor Republican or the White House has given it any modicum of support. And today we expect to see the details of a proposal from the so-called gang of six, led by Senators Lindsey Graham and Dick Durbin. It's that proposal that set off the big dust-up at the White House last week.

Senate Majority Whip John Cornyn giving it what you might call quite a welcome, tweeting this. The gang of six deal to fix DACA will not get a vote in the House or the Senate because POTUS will not sign it.

And that's actually pretty gentle.

Listen here. Here's how Senator Tom Cotton approached that bill. Might as well roll it straight into the trash can.

Kumbaya. Kumbaya.

On an issue in which almost everybody says they want a deal on, I guess the big question is, will they ever get away from the point that they all want a deal but they all want a different deal?

ZELENY: It's hard to imagine that they will actually, especially in this midterm election year where both sides are, you know, locked in. It's only been a week since that long meeting at the White House, that 55-minute meeting, where it seemed like, wow, has the fever broken in Washington? Of course not. So now we're sort of back to status quo, how things are.

But it is -- you know at some point they are going to have to deal with this. I mean March is going to be here fairly soon. So I'm not sure how it ends. I think it will be with presidential leadership. As Lindsey Graham said earlier this week, it's going to be incumbent on the president to not, you know, just talk about this, to bring both sides together. He's the only one who can control Tom Cotton, John Cornyn, and -- and et cetera.

KING: You mentioned John Cornyn, the number twos, as they call them, John Cornyn in the Senate on the Republican side, Dick Durbin on the Democratic side, Steny Hoyer on the Democratic side in the House, Kevin McCarthy, the majority leader, the Republican in the House, they are meeting at this house to discuss this yet again. Significantly, maybe, Marc Short, the White House legislative affairs director, and the chief of staff, John Kelly, are in that meeting. So we will see if they can make any progress, or at comparing notes.

The one interesting thing today, we talk often about the discord, is the chief of staff did go up to Capitol Hill to sit down with the Democratic Hispanic Caucus. Latino members from the House side, liberals, Democrats, they want a DACA deal, they want it yesterday. The chief of staff has had tough relationships with them. A lot of positive words out of that meeting.

Now, that doesn't mean they struck a deal. That doesn't mean there's substantive compromise. But the only way you get compromise is to get people who don't like each other, don't trust each other to start talking to each other. Should we take that as a sign of progress?

BADE: Yes, we heard that that meeting actually went pretty well. At least that's what they're saying right now. The whole -- the vulgar comments we heard last week regarding the president and comments he made about immigrants from Africa and Haiti, apparently the Democrats didn't even bring that up because they thought if they brought that up the whole thing would implode and they wouldn't make any progress.

[12:20:05] Obviously they didn't make any deals. Right now Republican leadership is petrified to strike any sort of deal without President Trump. They say the president has -- is the only one who has the political capital to actually strike this deal. And so the problem is, the president is getting advice -- totally different advice from Republicans. You have Tom Cotton in one ear, and then Senator Lindsey Graham in the other ear, who wants him to strike this deal now. Cotton wants him to take a hard line. It's just -- it's going to really depend -- I think there's going to have to be a moment if a deal's going to come together, there's going to have to be a moment where Lindsey Graham gets him in a negotiating mood.

KING: And we all know the quick sand this causes in all of our politics, but especially in Republican politics. And it is fascinating. It was one week ago yesterday, the big Tuesday meeting, we saw 50 minutes of it. Democrats and Republicans. The president talked about an act of love. I'll take the heat. First send me a DACA deal. Then send me comprehensive immigration reform. Talk radio and Fox News went crazy. And, since then, the president has -- listen to his attorney general last night -- the president seemingly has moved back to the right.

(BEGIN VIDEO CLIP)

JEFF SESSIONS, ATTORNEY GENERAL: What good does it do to bring in somebody who's illiterate in their own country, has no skills, and is going to struggle in our country and not be successful? That is not what a good nation should do. And we need to get away from it. A good debate needs to be happening this year. The president is right on the lottery. That's ridiculous. How absurd is that for a policy for a great nation.

(END VIDEO CLIP)

KING: It's not even so much what he says. The attorney general's views are well known on this issue. But the fact that he is out there representing the administration and the White House doesn't say, oh, don't do that right now, that tells you that they're comfortable drifting right again.

HAM: Yes. I mean I think he's sensitive to the sounds from his base. And the fact is that, look, with the responsibility for shutdown and that also comes the fact that Republicans are in the majority. They were elected on some of these promises, particularly Trump, and Democrats have to bring something to the table. And if that something looks nothing like even the many hundreds of miles of, well, I don't know, wall they agreed to back in the good old gang of eight days, then, yes, the base is going to revolt and Trump is going to feel that. That's part of doing this deal.

It's interesting the part that came out of this meeting that they did not use last week's talking point, which made him very vulnerable and made his job a lot harder and Republicans' job a lot harder to go after him because I think that is perhaps the right way to get something done because Trump does not want to lose this base. He needs a feint, at the very least, to border security, and Democrats have agreed to it in the past on principle during the Obama years. So --

KING: But if Democrats can't get it during the spending deal, as the clock ticks toward the DACA deadline in March, but also to the November election, are Republicans going to be less likely to cut a deal they think is going to anger their base as we get closer to the election?

BACON: Yes, I think that's right. I guess part of what I'm a little bit perplexed by (INAUDIBLE) is a gang of six, this Lindsey Graham, Jeff Flake, Cory Gardner, all pretty moderate. They agree with the Democrats on immigration a lot. It seems that the gang should include Tom Cotton or Steven Miller or people who -- there's a split in the Republican Party on immigration policy, and we seem to have the people who are on the left of that -- are all talking on TV. But the reality for a deal to happen, the people on the right have -- have to -- they almost have three parties here on this issue. And I'm not sure why the gang of six includes members who I could tell you Lindsey Graham does not speak for the Republicans on immigration at this point. I think that's sort of obvious to --

KING: That's excellent point. If you really want a deal, you've got to get --

BACON: Tom Cotton's got to be in it.

KING: All the voices in there so you can sell it, if you will.

Up next, after frustrating congressional Democrats and Republicans investigating the Russia mess, Steve Bannon, get this, makes a deal to talk to the special counsel.

(COMMERCIAL BREAK)

[12:27:43] KING: Some important and fast-moving developments surrounding Steven Bannon, the former White House chief strategist, who's now been subpoenaed by Special Counsel Robert Mueller. Sources tell CNN Bannon has struck a deal with Mueller's team and will now be interviewed by prosecutors. That instead of testifying before a grand jury about possible collusion between the Trump campaign and Russia. We are told by our sources Bannon will cooperate with the special counsel and is expected to speak openly. That would be in stark contrast to what we were told about yesterday's appearance. Yesterday, Steve Bannon before the House Intelligence Committee. Lawmakers from both parties expressed frustration, slapped Bannon with their own subpoena after his attorney told Mr. Bannon not to answer certain questions about what happened during the transition, that according to the ranking Democratic member of the committee, Adam Schiff. Republicans on that panel also mad.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I am frustrated whenever people assert privileging that do not exist. And I am really frustrated when witnesses have all the time in the world to talk to the media on and off the record and they can help people write books, but they can't talk to the representatives that are elected by their fellow citizens.

I mean, picture that, he's happy to tell an author about treasonous, unpatriotic acts, but he won't tell members of Congress when he's pressed on it. I'm not aware of any privilege that lets you pick and choose.

(END VIDEO CLIP)

KING: Set your partisanship aside for a moment. The gentleman has a point. Steve Bannon goes on the record in a book about certain thing, doesn't want to tell Congress.

Let's come back to Congress in a second, though.

Yesterday we were reporting the special counsel felt compelled to issue a subpoena for a witness. That's a big deal. Everybody else has come in so far, at least according -- those we know about, has come in voluntarily. Now Steve Bannon has negotiated, said I'll come in voluntarily, I'll talk with you.

What does -- what is the significance if Steve Bannon, who the president would say was only around for a little while during the campaign, didn't do all that much, was a big deal in the Trump general election, was a very big deal in the first 100 days of the Trump White House. What is the significance of Steven Bannon going before the special counsel?

ZELENY: I think it's incredibly significant. The most important witness probably that we know about at this point. And he is, you know, or at least he was, I guess, a member of the president's inner circle for a very long time. The White House has tried to diminish their relationship.

[12:29:58] You know, the reality here is, Steven Bannon is seeing more consequences from talking to Michael Wolff because the, you know, he's infuriated Republicans on that committee who should have been allies of his.