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Trump Travels to Border; Border Wall Fight; U.S. and China Try to Make a Deal; Biden Run for President. Aired 12-12:30p ET

Aired January 07, 2019 - 12:00   ET

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

(COMMERCIAL BREAK)

[12:00:21] JOHN KING, CNN ANCHOR: Welcome to INSIDE POLITICS. I'm John King. Thank you for sharing your day with us.

President Trump tweets his position on pulling U.S. troops from Syria hasn't changed. His national security adviser, though, is telling allies pay no attention to the president's initial promise to withdraw quickly.

Plus, day 17 of the partial government shutdown and no evident progress. A White House letter to Congress demands several things Democrats label nonstarters, not just the border wall. By the way, the president just announcing he's headed to the border.

And as Democrats take charge in the House, first termer Alexandria Ocasio-Cortez is unapologetic, promising to push her liberal priorities and dismissing those who question her budget math.

(BEGIN VIDEO CLIP)

ALEXANDRIA OCASIO-CORTEZ (D), NEW YORK: If people want to really blow up one figure here or one word there, I would argue that they're missing the forest for the trees. I think that 'ere is a lot of people more concerned about being precisely, factually and semantically correct rather than about being morally right.

(END VIDEO CLIP)

KING: We begin the hour with a little breaking news out of the White House. The president now saying he will head to the southern board. The trip scheduled for Thursday, according to the White House press secretary. That trip will be a big moment for the president on what his White House calls the front lines of a national security crisis. Here in Washington, no talks, no progress and no sign the president or Democrats are interested in putting furloughed federal workers back at the office.

The president said he expected a Sunday meeting between negotiators to produce nothing. The meeting met that lack of expectations. Right now, we are where we were a week ago, with one notable exception. The White House finally putting an offer on paper, $5.7 billion for what the White House calls a steel barrier, $800 million to address humanitarian needs, $798 million in additional money for detention beds, and $571 million to put more agents on the southern border.

Democrats say the document is a dead letter and the president's new math, they say, wildly unrealistic. But look close enough for some new division in the Democratic line. The minority leader, Chuck Schumer, telling an audience in New York just this morning, the president cannot, will not get his way.

(BEGIN VIDEO CLIP)

SEN. CHUCK SCHUMER (D), MINORITY LEADER: If when every time President Trump throws a tantrum and demands he get his way unless the government will be shut down, it will create disaster. It will encourage his worst instincts, which are bad enough now. Maybe he thinks he can bully us. But I'm from Brooklyn. If you let a bully succeed, you'll be bullied again worse.

(END VIDEO CLIP)

KING: Listen here, though, Democrat Senator Chris Coons apparently sees it a least a little differently.

(BEGIN VIDEO CLIP)

SEN. CHRIS COONS (D), DELAWARE: I am someone who's willing to see more border fencing as long as we choose a technology that DHS says is going to be effective. And I do think his moving toward steel slats rather than concrete wall, if it holds, is important.

What you've just cited there is progress.

(END VIDEO CLIP)

KING: All right. With me this day to share their reporting and their insights, Catherine Lucey with the "Associated Press," CNN's Phil Mattingly, Toluse Olorunnipa with "Bloomberg," and Lisa Lerer with "The New York Times."

I want to come back to whether there's a crack there among the Democrats, at least the Senate Democrats. We could have a Senate and a House play. But let's start with what we just learned before we came on the air.

Sarah Sanders tweeting, the president will now go to the border on Thursday. Number one, it's Monday. That tells us there will not be a solution to the government shutdown before Thursday, or at least unlikely now that the president has decided, this is a big political move to go stand at the border and say the Democrats are wrong I want my wall.

CATHERINE LUCEY, WHITE HOUSE REPORTER, "ASSOCIATED PRESS": Yes, that's right. I mean they are -- there's no movement over the weekend, as we saw from talks led by the vice president and with senior congressional staff. The president, in fact, before the second set of talks on Sunday declared he was expecting nothing and that only he could resolve this with principals. So the White House has not seen a lot of momentum here. They have

suggested a shift from concrete to steel that has not, you know, gotten a ton of Democratic interest so far, and they want to make a big statement. And there's been chatter for a while about doing a wall visit to try and reinforce what they say is a national security crisis.

KING: Does he have -- does he have a big enough bully pulpit? Can he create, if he doesn't have the support now, can he create it using his platform, using his -- he has, whether you like him or not, he has communication skills.

LISA LERER, NATIONAL POLITICAL REPORTER, "THE NEW YORK TIMES": I mean part of the problem here is that the wall has become symbolic, not only for the president, but for Democrats, because it was pushed so much during the campaign. It's been really a central point of the president's candidacy and then presidency. It's become a central point of opposition to Democrats, and the Democratic base, seem -- you know, they have said from the beginning of this administration that there is no point of compromise with the president. So it's not really about the building materials. Concrete, steel, it doesn't matter. It could be --

[12:05:07] LUCEY: No, it's potato, potato when it comes to steel versus concrete.

LERER: It's like, right, it could be made of, I don't know, like dirt and bricks and the Democrats would oppose it. It's become deeply symbolic for the base of both parties. And that makes it really hard to find a compromise.

KING: Well, to that point, if you have two very stubborn people who believe, a, in their position, b, that they have to answer to their base, meaning the president, who's now going to his corner, which is the border. Nancy Pelosi, the new speaker, in her corner, which as Democrats' know non-starter, none. She says nothing. She says nothing. I don't know if she can hold the nothing part if there is an eventual shutdown. But when you get two stubborn, proud people in their corners, we're on day 17, where are we going?

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: To continue at the current path for at least the next couple of days, potentially in the next couple of weeks.

Look, I think the key has already remained the same in this issue, and that is, given the entrenched parties, given their entrenched positions on this, it's the pain that a shutdown will lead to that is eventually going to jar people back to the negotiating table. And I think one of the interesting elements of this shutdown is the fact that it's happened over a holiday season. It's happened over a new Congress taking their seats. It's happened with only 25 percent of the government, which limits the disruption to some degree. That's about to start changing in a major, major way.

January 11th, the first full paychecks for most federal workers are starting to be missed. You've got pay-go (ph) cuts to -- the sequestration is supposed to start coming up in the next couple of weeks. Pain is starting. And that's when lawmakers start to hear it. That's when rank and file lawmakers start to get very antsy, want to put something on the table, want to get talks together. Can you jar the two kind of leaders positions out of their current place? Not if everything remain static. But because that pain is coming, you look at past shutdowns, that's what brings people to the table. And I think, to be frank, I talked to congressional staffers who are working on that. They're waiting for that to really bite before anything starts to move.

KING: And yet it would be apparent to me, anyway, that if the president's announcing through his press secretary he's going to the border wall that he believes that that's his leverage, or at least that's his next step to get more leverage. And so don't look for anything to happen over the next three days, I wouldn't think, because the Democrats aren't going to raise their hand and say, oh, no, no, here, let's settle this now, Mr. President.

This is Barry Bannon (ph), a former Trump campaign aide, speaking to the "Associated Press" over the weekend. I guarantee polling-wise with his base he is right in the sweet spot. If he cut a deal now, it would hurt him.

Is that where the president is, that, again, we're talking in early 2019, we're talking about nearly a million federal workers, we're talking about the Smithsonian Institutions are now closed down, National Parks are having trouble. We're talking about really, most of the politicians are looking at 2020 when they're on the ballot. Is that where we are, he's just backed into his corner with his base?

TOLUSE OLORUNNIPA, WHITE HOUSE REPORTER, "BLOOMBERG": Yes, this is a complete base strategy that the president is employing here. If you look at polling, it doesn't show that the wall is broadly popular with the American populace, but if you look at Trump's base specifically, they want the wall and they have been focusing on the wall and they're been disappointed that Republicans have not been able to put together a package that has delivered the wall in the first few years of the Trump presidency. So the base does want President Trump to fight on this.

The problem that we've seen so far is that the president is sort of continuing with the same argument. Even if he goes down to the southern border and talks about the wall, we're going to hear the same message that he's been putting out for the past several weeks, the same message that the White House has been putting out. They haven't moved at all. Democrats haven't moved at all. So we're at this standstill. And both sides playing to their base is not going to solve this problem. They're going to need to have some sort of broader consensus about how to put together a deal that both sides -- that allow both sides to save face. And we're nowhere closer to that than we were several weeks ago (INAUDIBLE).

KING: And the president's kind of gone back and forth. At one point the furloughed workers were all Democrats. At another point he has said that he thinks a lot of them want the wall and support his position. He said this yesterday, which, again, I don't begrudge the president

his wealth, but it's hard for a guy who lives in a penthouse, who is a multi-millionaire, he says multi-billionaire, to say that those people who are living paycheck to paycheck, who might miss -- about to miss a paycheck, that he relates.

(BEGIN VIDEO CLIP)

PRESET: I can relate. And I'm sure that the people that are on the receiving end will make adjustment. They always do. And they'll make adjustment. People understand exactly what's going on. But many of those people that won't be receiving a paycheck, many of those people agree 100 percent.

(END VIDEO CLIP)

KING: And you wrote about this over weekend, in his negotiating history, if you will, that's him trying to expand his base. I'm not quite sure he can be so successful to say "I relate to you," the guy who's got about -- or woman about to have a hard time paying your mortgagor or paying your tuition bill. Now he's going to the border. What is his play?

LUCEY: I mean we've seen this before, the president again and again, he views himself as a master negotiator. He ran as the dealmaker who could make, you know, get deals America had never seen before. But his strategy typically has been incredibly erratic.

So he tries to sort of keep people guessing and so he makes big statements, he'll pull them back. He -- one this he has sort of suggested that he was interested in a short-term deal before the holidays and then he turned around and said he wasn't. He, you know, he said he would own the wall -- own the shutdown and then he sort of has tried to blame Democrats. He said it would be a concrete wall, now it's a steel wall. So he's gone back and forth again and again.

[12:10:14] In terms of, you know, the plight of people not getting paychecks, this is also something that we have seen in previous times of national, you know, tragedy or tension. He struggles with showing empathy. That has been a consistency with this president. I mean I'm not quite sure what making adjustments means, but I don't think that's going to be particularly helpful for people who literally do live paycheck to paycheck and have to pay a mortgage.

KING: And so then -- so then who blinks? At the top of the hour we showed you the sound, Chuck Schumer saying no way, Mr. President. Chris Coons saying, well, maybe he's coming our way a little bit.

You have a Democrat versus Republican argument. You have a Pelosi versus Trump argument. Will we end up having a House versus Senate argument, that if you're the Democrats in the Senate and you want to get the majority back in 2020, you're looking at North Carolina, you're looking at Maine, you're looking at places where you think you can play, but especially when it comes to North Carolina, some places south of the Mason-Dixon line, you don't want to be no border wall funding and be competitive in those places. Might we see a split among the Democrats as this drags on?

MATTINGLY: So far, no, but to your point, Senator Coons and others have been having conversations over the course of the last couple of weeks about a way out of this, about potential deals -- potential areas of agreement on border enforcement that could kind of give everybody a semantic win and thread the needle a little bit.

I think the biggest issue right now that I pick up in talking with staff -- and, John, you know this as well as anybody -- the staff themselves can make this work whenever they get the green light. They have done enough of these kind of crisis era negotiations, fiscal talks, shutdowns, to be able to thread the needle on something that gives everybody a little bit of something and everybody can claim victory and everybody can claim the other side was completely defeated. They can't do that until they get a green light from their leaders.

Now, to your point, can there be an organic uprising of sort inside the Senate, which has happened before in the past, that could lead to a solution? Yes. But I think the difference right now is just that both sides are so entrenched. And to Toluse's point, both bases are so behind them that the upside of that, particularly at the leadership level, hasn't become apparent yet.

KING: If the president were willing to accept $3 billion instead of $5.7 billion, could Nancy Pelosi even bring that to the floor, at this moment, in the first month of her speakership? That's my question.

MATTINGLY: I think the answer's no right now.

KING: That's -- because that's your normal deal, split the difference. Split the difference would be how traditional Washington works, but we don't live in traditional Washington.

We shall watch as we go.

Up next for us, trade negotiations with China underway and is there a deal to be had or will those talks add even more turmoil to an already rock stretch for financial markets?

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[12:16:49] KING: U.S. and Chinese officials meeting in Beijing today, attempting to resolve the trade disputes to keep roiling global markets. Today's meeting is the first face to face discussion between the two countries since President Trump and Xi Jinping met in Argentina late last year. You might remember, they bargained out a 90 day truce. President Trump feeling pretty optimistic heading into today's discussions.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: The China talks are going very well. I spoke to President Xi recently. I really believe they want to make a deal. The tariffs have absolutely hurt China very badly. But our country is taking in a lot of money through tariffs. A lot of money. A lot of tariffs. Steel-dumping tariffs and others. But I think China wants to get it resolved. Their economy is not doing well.

(END VIDEO CLIP)

KING: CNN's Matt Rivers here from Beijing with more on why the Trump administration might be feeling so upbeat.

MATT RIVERS, CNN INTERNATIONAL CORRESPONDENT: Well, John, day one is in the books of this latest round of trade negotiations between the U.S. and China. And no real word yet on how those talks went. But looming over them is a March 1st deadline. That's when the administration will take tariffs on $200 billion worth on Chinese imports currently at 10 percent up to 25 percent, a huge escalation in this trade war, a trade war that will hurt both average Chinese and American consumers. Only a trade deal worked out by then can stop that.

Now, these meetings today are mainly focused on laying the groundwork for more senior-level talks that could happen later this month or next. The Trump administration is betting that China's slowing economy will make China more willing to make a deal by making key concessions, something the international community generally says China should have done a long time ago.

But, of course, there's the risk that the U.S. overplays its hand and we end up right back where we started, no deal and a lot more tariffs. China, of course, says its economy is fine.

So, really, we'll just have to wait and see how negotiations go over the next eight weeks or so.

And if all that, John, isn't enough for you, a U.S. warship today sailed right nearby artificial islands China is building and militarizing in the South China Sea in order to challenge China's territorial claim there. Now, those operations are planned months in advance. So today's mission really is just a coincidence. But, still, Beijing really doesn't like it when the Navy does that.

So, John, it just goes to show you there's a lot more to worry about besides trade when you're talking U.S.-China.

KING: A tense time indeed.

Joining me now with his insight and expertise, Mark Zandi. He's the chief economist for Moody's Analytics.

Mark, let's start there. President Trump thinks China's ready to blink, that this might be hurting the Chinese economy. President Xi is going to make concessions. But here's what the "China Global Times" says. China's stance has been consistent from the very beginning. If Beijing had wanted to raise the white flag, it would have done so already. The longer the trade war continues, the less unrealistic expectations the outside world should hold for China.

Now, there's always posturing and negotiations, but do you see, in the short term, an off-ramp here where both leaders say, let's cut a deal, I'll take this, you take that, let's stop this?

MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: Yes, I do, in large part because both the Chinese economy and the U.S. economy are suffering. You can see that in our respective stock markets. The Chinese stock prices are down 25, 30 percent from their peak, U.S. stock prices are down 10, 15 percent from their peak. Lots of reasons for that, but a big reason is the president's trade war. So it's doing damage to both sides. And I think that's putting a lot of pressure on both sides to come up with some kind of arrangement. And I think, at the end of the day, they're going to come up with a face-saving arrangement to end this thing.

[12:20:24] KING: Face-saving arrangement, but do you see the big structural questions, let me just put intellectual property on the table. In eight weeks or so, is that going to be resolved? That has gone on for years. And the administration's dead right about China's behavior, but can it get an agreement?

ZANDI: No. I mean maybe on paper, but I don't think -- it will be meaningless. It will be much ado about nothing. You know, very similar to the NAFTA deal, that was really much ado about nothing. And remember the deal the president struck with the European Union back in the summer? There was nothing there either.

So, you know, at the end of the day, I don't think he's going to make any substantive progress here. But the good news is that he's going to end this war because it is doing damage and if he ends it then I think the economy can hang together.

KING: Potentially doing damage at a time we've already seen a bit of a roller coaster in the markets and in the broader economy. We -- day 17 now as we have this conversation of the partial government shutdown. What's your take on when, a, average Americans, and, b, financial markets, the broader economy, might start to see the impact of that?

ZANDI: Well, it's going to start to mount. So far no big deal. You know, most of this was during the holiday season. Not a lot going on. So, you know, not a lot of impact. People had gotten paid, so, you know, it wasn't disrupting their rent payments or everything else they were doing.

But as this drags on, as it goes to the end of January and into February, then it's going to start to really be disruptive. It's going to affect food stamps and, of course, lots of low-income households really depend on those food stamps. They're going to go into panic mode. It's going to affect tax refunds. A lot of middle Americans, every year about this time, February/March, rely on those tax refunds.

It's going to potentially affect initial public offerings of some high-flying companies like Uber and Lyft. You know, the Securities and Exchange Commission is out of commission and can't do what it needs to do to get those things to market. And the housing market could suffer as well. So there's a lot -- the government does a lot of things, even the 25 percent of government that's shut down, does a lot of things and we're going to get to -- we're going to get to know that very, very well over the next few weeks. So no big deal now, maybe, not such a big deal by the end of the

month, but if we get into February/March and it conflates with everything else that's going on, I think this could be a real problem for financial markets and for the economy.

KING: Well, let me come back to the everything else that's going on. The Chinese trade negotiations, the government shutdown, two very different things. You can't connect the dots, except if there's continued uncertainty maybe you can?

ZANDI: Yes, absolutely. And it's not just that, you know, and it's not just the president's trade war, it's not just the government shutdown, it's, you know, all of the political problems that the president is facing. You know, it's very clear that's going to heat up. You know that better than anyone else.

You know, we forget about what's going on overseas, which could be a big deal. I mean we have this whole thing called Brexit going on in the U.K., the United Kingdom, which is going to come to a head in March as well, and that's just, you know, a part of it. So there's a whole stew of things, an noxious (ph) stew of things going on, and if they come together and conflate, you know, that could be a real problem for this economy.

KING: Mark Zandi, as always, appreciate your insights.

ZANDI: Thanks, John.

KING: Take care, Mark.

Up next for us, strong hints from the former vice president. Is Joe Biden getting close to making his big 2020 decision?

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[12:28:09] KING: Joe Biden closing in on a big decision about 2020. CNN has learned the former vice president will decide in the coming month whether or not he'll make a third run for the White House. A friend telling CNN's Jeff Zeleny, quote, he understands that he needs to make a decision relatively early in the process. He knows he can't wait.

One reason is that other Democrats are recruiting staff and recruiting donors. Elizabeth Warren, early out of the gates, taking a big Iowa test drive just this past weekend. Biden, though, doesn't see a threat when he looks at the list of Democratic hopefuls. Speaking for "The New York Times," a Biden friend quoting the former vice president as saying this, quote, if you can persuade me there's somebody better who can win, I'm happy not to do it. But I don't see the candidate who can clearly do what has to be done to win.

Biden's brother Frank, earlier today, putting it this way to Michael Smerconish.

(BEGIN VIDEO CLIP) FRANK BIDEN, JOE BIDEN'S BROTHER: I am a Machiavellian when it comes to electability. And I certainly wouldn't want him to even dream about running if I didn't think we could annihilate Trump. You are absolutely correct, the election will be the primary.

(END VIDEO CLIP)

KING: Jeff Zeleny joins our conversation.

It's good that, you know, if you are running for president, you want your brother on your side. You want your brother to think that you can annihilate Trump. But the vice president, number one, has the age question. Number two, third time. The first two times were not good.

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: No doubt about it. So that's a question, does he -- to return to the stage at the same place he left it in '07, '08? No, he doesn't. Of course he would have much more stature now. But the history books will say the race in '88, terribly unkind to him. The race in '07''08, not kind to him either. But then, of course, Barack Obama needed someone, so he now is in a different place.

[12:29:55] But the question is, would he be a stronger candidate on his own? I think he would be without question. He's beloved by a lot in the party. But his brother may have hit it on the head there. He said the election is the primary.