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EARLY START

Border Wall Battle; Rudy Giuliani Versus Southern District Of New York; Obamacare Up In The Air Again; Big Spike In Teen Vaping; NBC Polls 62 Percent Think Trump Is Lying About Russia. Aired 4:30-5a ET

Aired December 17, 2018 - 04:30   ET

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


[04:30:00] (COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CHUCK SCHUMER, SENATE MINORITY LEADER: We're going to do whatever is necessary to build a border wall. He is not going to get the wall in any form.

(END VIDEO CLIP)

DAVE BRIGGS, CNN HOST: Five days until the government shutdown. No closer to the deal on the border wall. Now questions about whether Republicans will even show up to vote.

(BEGIN VIDEO CLIP)

RUDY GUILIANI, ATTORNEY FOR PRESIDENT TRUMP: $130,000 to Stormy whatever and $100,000 to the other one is not a crime.

(END VIDEO CLIP)

CHRISTINE ROMANS, CNN HOST: Michael Cohen may disagree. Rudy Giuliani at odds with prosecutors. Now where the Russia probe, may be hampered by big tech.

BRIGGS: Healthcare once again in limbo for more than 20 million Americans. A Texas judge scraps the entire law. But those ruling stand up on appeal?

ROMANS: And there is a huge spike in the number of teen's vaping nationwide. Even as alcohol and other drug used declines. These numbers are really, really revealing. And I think, educators and parents across the country really need to take a hard look at that. Welcome back to "Early start." I'm Christine Romans.

BRIGGS: There have been some changes with those flavors going forward some maybe we will see numbers slowdown. I'm Dave Briggs. 4:31 Eastern Time on a Monday. We start in the nation's capital where we are less than five days until a partial government shutdown unless President Trump and Congress can reach a deal on funding for a border wall. The White House is demanding $5 billion for the wall, which, remember, Mexico was going to pay for it, Congressional Democrats, rejecting that request. The White House Senior Adviser Stephen Miller, taking a hard line on "Face the Nation" echoing the president's demand.

(BEGIN VIDEO CLIP)

STEPHEN MILLER, SENIOR POLICY ADVISOR TO PRESIDENT TRUMP: We will do whatever is necessary to build the border wall, to stop this ongoing crisis of illegal immigration. This is a very -- if it comes to it, absolutely. This is a fundamental issue. At stake is a question of whether or not the United States remains a sovereign country. Whether or not we can establish and enforce rules for entrance into our country.

(END VIDEO CLIP)

ROMANS: "The New York Times" reports that House Republicans leaders have a more immediate problem. Members, who are retiring or defeated in November, they just don't want to show up to vote anymore. Many have been skipping votes since the midterms and GOP leaders are unsure if they will ever return. Senate Minority Leader, Chuck Schumer, says the president just don't have the support to get billions for the wall.

(BEGIN VIDEO CLIP)

SCHUMER: President Trump should understand there are not the votes for the wall. In the House or the Senate, he is not going to get the wall in any form.

(END VIDEO CLIP)

BRIGGS: If a partial shutdown happens at the end of the week, the consequences could ripple across the U.S. economy, but of course, nothing concentrates minds in Washington like a holiday. The President is scheduled to leave this week for his Christmas vacation in Florida, 16 days at Mar-a-Lago.

ROMANS: A damning new report due this week, claiming Silicon Valley may have done the bare minimum to help the Senate Russia investigation. The Intelligence Committee commissioned a report from an online Intel Firm. The report claims social media companies could have done a better job providing data about Russian accounts that posed as Americans. "The Washington Post" has obtained a separate report prepared for the Intel Committee. That report finds the Russians used every major social media platform to influence voters to elect President Trump and work even harder to support him once he was in office.

BRIGGS: Meantime, President Trump's attorney Rudy Giuliani says his client may have been involved in conversations about Trump tower Moscow significantly later than previously known. The President's former personal attorney Michael Cohen had claimed those talks ended in January of 2016, before the primaries. Then when Cohen pleaded guilty to lying to Congress about the project, he said talks in his latest, June. Now Giuliani said the talks could have gone on even longer through the whole campaign.

(BEGIN VIDEO CLIP) UNIDENTIFIED MALE: Did Donald Trump know that Michael Cohen was

pursuing the Trump tower Moscow into the summer of 2016?

GUILIANI: According to the answer that he gave, it would have covered all the way up to November of 2016. He said he had conversations with him.

(END VIDEO CLIP)

ROMANS: CNN reported last week, the Special Counsel, Robert Mueller, is still interested in interviewing the President in person, but Giuliani is having none of it.

(BEGIN VIDEO CLIP)

[04:35:03] GUILIANI: Good luck. Good luck. After what they did to Flynn and the way they trapped him into perjury and no sentence for him? 14 days for Papadopoulos, I did better on traffic violations than I did with Papadopoulos.

UNIDENTIFIED MALE: So, when you say, good luck, no interview.

GUILIANI: They were joke. Over my dead body, but you know, I could be dead.

(END VIDEO CLIP)

ROMANS: For more CNN's Boris Sanchez, is at the White House.

(BEGIN VIDEO)

BORIS SANCHEZ, CNN WHITE HOUSE CORRESPONDENT: Dave and Christine, Rudy Giuliani in clean up mode this weekend after Michael Cohen was sentence to three years in prison and made some negative comments about the President in public. Giuliani, effectively trying to discredit Michael Cohen and put some distance between the president's former fixer and the White House, Giuliani insisting that the payments that were made to Stormy Daniels and Karen McDougal were not campaign contributions.

GUILIANI: It is not a crime. It is not a crime, George. Paying $130,000 to Stormy whatever and paying $100,000 to the other one is not a crime. If there is not a purpose, it is no longer a campaign contribution. It is just a personal purpose. Now think about this, supposed he tried to use his campaign funds to pay off Stormy Daniels that would be totally illegal, if it is not a campaign expense, it can't be campaign contributions.

SANCHEZ: Though, in the Southern District of New York, Michael Cohen pleads guilty to campaign finance violations for those specific payments. And so there is what Rudy Giuliani is saying and there is what is actually happening in court. We should point out that we may not have heard the last of Michael Cohen. Representative Elijah Cummings, the incoming chairman of the House Oversight Committee has said that he would like to invite Michael Cohen back to Capitol Hill to testify once more, Dave and Christine. (END VIDEO)

BRIGGS: OK. Boris, thank you for that. A new poll finds most Americans believe President Trump is lying about the Russia investigation. In the NBC Wall Street Journal poll, 62 percent now think that the President is not being honest about Russia, up six points from August.

And a new CNN good morning register poll has mixed news for the President, from the first in the nation caucus state. 2/3 of Iowa Republican voters say they would definitely vote to reelect Mr. Trump if the general election were held today. But the caucus is to pick the 2020 general election candidate. Only 2.3 of Republican say the state party should welcome challengers to the President.

ROMANS: The future of Obamacare once again up in the air, a Federal Judge in Texas, striking down the entire Affordable Care Act as unconstitutional. You may remember back in 2012, the Supreme Court did uphold the law declaring individual mandate at its core was a legal tax. But last year, Congress reduced that tax to zero and the judge's now decided zero tax means, zero individual mandates. Ad he argues about it, the whole law falls.

BRIGGS: Remember the affordable care act provides coverage for people with pre-existing conditions. The state's expand Medicaid for low income adults and allows young people to stay on their parent's policies until the age of 26. President Trump declared that the decision is a great ruling for our country, but even some Republicans are not sold. Maine Senator Susan Collins believes the ruling will be overturned on appeal.

(BEGIN VIDEO CLIP)

SEN SUSAN COLLINS, (D) MAINE: There's no reason why the individual mandate provision can't be struck down and keep all of the good provisions of the affordable care act.

(END VIDEO CLIP)

ROMANS: A group of states led by California vowing to appeal the decision and another Judge is considering a case brought by Maryland defending Obamacare. So we may get dueling rulings. The Texas judge's decision is not immediately affect coverage enrollment by the way for 2019 ended Saturday.

BRIGGS: All right, sources tells CNN, Arizona governor Dough Ducey is likely to pick Martha McSally to replace outgoing Senator John Kyl. Kyl plans to step down at the end of the year, moths after being appointed temporarily to fill the seat of the late John McCain. McSally lost her bid for Arizona's other Senate seat during the 2018 elections. Cindy McCain may hold the key here to whether McSally gets her husband sit. McCain had been upset with McSally for not speaking out against President Trump when he criticized her late husband, but Mrs. McCain and McSally (inaudible) Friday. Whoever Ducey picks will serve until 2020. At that time, there will be a special election to fill the remaining two years of Senator McCain's term. ROMANS: All right. A terrible two weeks for stock market investors.

Trade war, a fight over government spending, Brexit chaos all making for wild swings in the stock market. And the results is basically down. The DOW dropped 497 points it is 2 percent to end a really bad week. The S&P500 fell to the lowest level since early April. The NASDAQ lost 2.3 percent Friday. This is shaping up folks to be the second worst year for investors in a decade. Three problems, the economic growth in the U.S. The fight on that ongoing U.S.-China trade war, concerns about rising interest rates.

And, you know, Wall Street basically isn't listening to the president when he is tweeting about these breakthroughs with China, by the way. The president tweeted that a big and very comprehensive deal with China could happen rather soon, but that did not influence investors at all. He has been tweeting so much, you know, play by play, they are starting to ignore him, honestly.

[04:40:10] This week focuses shifts to the Federal Reserve. The center bank widely expected to hike interest rates on Wednesday. Usually at the end of the year, investors look forward to something called the Santa Claus rally, ho-ho- no, it does not look like this year is going to be one of those years. Only a handful of trading days left in the year.

BRIGGS: Wow. This is not the outlook you are looking for. The tax cuts were just a short-term sugar rush?

ROMANS: A year ago this week, the President signed those corporate tax cuts into law. And this was his signature legislative achievement. The DOW is down 3 percent since then.

BRIGGS: the trouble with using the Dow as your scorecard is when it flips against you.

All right ahead, new U.S. sanctions on North Korea could block the path to denuclearization forever. Strong new words overnight from Pyongyang. We will have a live report next.

[04:45:00] (COMMERCIAL BREAK)

BRIGGS: North Korea lashing out over the U.S. decision to level sanctions against three of its senior most government officials. In an editorial over the weekend, Pyongyang warns the sanctions pressure could very well blocked the path to denuclearization forever. Will Ripley, live for us in Hong Kong with the latest. Will, you had been to North Korea more than a dozen times, how serious are these sanctions, were they meant to send a message?

WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: The sanctions, Dave, will not have a significant of an impact. They are much more symbolic, because they are targeting three officials who stand next to Kim Jong-un on stage. I have seen these men in Pyongyang at events with Kim Jong-un, naming them is essentially shaming them especially over an issue like human rights that North Korea calls nonexistent despite reports from the U.N. thousands of people in prison in labor camps and punished from expressing views that may differ from those of the government of the ruling workers party of Korea.

But it is the sanctions pressure that the U.S. continues to put on Kim Jong-un's regime that is really angering to the North Koreans and surprising to them, because they thought since things seem to go so well in Singapore. President Trump, Kim Jong-un had a friendly rapport. They thought the U.S. would start easing sanctions by now. Of course, the U.S. often North Korea would start giving up its nuclear weapons by now. Neither side is getting what they want at the moment.

But what is striking about the messaging that is out there in state media over the weekend. They are caught saying that the sanctions issued could not only derail denuclearization talks, but could potentially bring back the really unforgettable times of just one year ago when North Korea was launching missiles on a regular basis and conducting nuclear test, and of course we all know how close we potentially came to the United States came potentially to military conflict with North Korea at that time.

Nobody wants to see a return to that, certainly not the North Koreans and what I think is why their messaging is increasing in strength, hoping that the United States will change his position and give them some of the economic relief that they want, but of course the U.S. is sad. They are not going to do that unless North Korea's transparent about the weapons it possesses and starts to take real steps to get rid of them, Dave.

BRIGGS: Of course Trump administration hasn't ruled out a second Summit in early 2019 with Kim and Trump. Interesting times, Will Ripley, live for us in Hong Kong. Thanks.

ROMANS: All right, now to a CNN exclusive. Two weeks after the Israeli army got operation Northern Shield off the ground along the border with Lebanon, CNN's is getting a firsthand look at this effort to uncover and disable tunnels built by Hezbollah. There are fears these underground passageways could be used on attacks against civilians. CNN is the first broadcaster anywhere to go inside and our Ina lee is live in Jerusalem with this extraordinary access. Walk us through it.

IAN LEE, CNN CORRESPONDENT: Christine, we were taken by the Israeli military literally right next to the border with Lebanon and that's where we saw this huge hole in the ground where Israel had been drilling and we dropped our camera down tens of yards deep underground past thick solid limestone to expose this tunnel. And Israel says they drove in that location, because they wanted to show how these tunnels originate in Lebanon and then cross into Israel. They also are drill down to them so that they are able to later neutralize them, but it wasn't really what they saw that tip them off to these tunnels, but rather what they heard. Take a listen.

(BEGIN VIDEO)

(DRILLING SOUND)

(END VIDEO CLIP) LEE: And what you're hearing there is drilling through solid rock and

Israel was able to hear that they other advanced technology that they say they're using to identify these tunnels so that they can neutralize him. They got about 75 miles of border to search. Well, what they want they say is action from the United Nations. Israel says that this violates U.N. Security Council resolution 1701 that ended the war in 2006 between Israel and Hezbollah.

They want action. The U.N. says that they know these tunnels exists, they had been to them, they are there going to take their investigation to the Security Council. It will be up to the Security Council to determine what to do next. Meanwhile, Israel's hunting for more tunnels.

ROMANS: Fascinating. Our Ian Lee, thank you so much for that access. Wow, all right, Johnsons and Johnson stock plunge Friday after a stunning report from Reuters that it knew about asbestos in baby powder for decades. Some remarkable journalism and a 10 percent declined, CNN Business next.

[04:50:00] (COMMERCIAL BREAK)

BRIGGS: A new report shows vaping among America's teens climbing rapidly this year, a 50 percent in the last 30 days alone. The use of other substances like alcohol and opioids has declined in recent years. The report comes from the University of Michigan Institute for social research, which is vaping was the second most common substance use in 2018. Those numbers up sharply from last year, the director of the National Institute on drug abuse, which funded the reports as vigilance is needed, because vaping could lead teens to other drugs.

ROMANS: Colorado police now offering a $25,000 reward for information leading to the location or safe return of missing woman, Kelsey Barreth. The money is being provided by an anonymous donor. There is -- a 29-year-old mother was last seen on Thanksgiving Day.

[04:55:03] Investigators are searching her fiance Patrick Phrases home and property. The police chief calls Barreth's disappearance suspicions. Phrases attorney says his client continue to cooperate with law enforcement.

BRIGGS: A Disney actor has been fired after police say he tried to meet a 13-year-old boy or sex. 48 year-old Stoney Westmoreland, has been drop from his recurring role on the Disney channel show Andy Mack. Court documents say Westmoreland used the dating app to chat with someone he thought was a 13-year-old boy. He said he sent the boy explicit pictures and try to arrange a meeting when Westmoreland arrived at the location. He was arrested. No word yet from Westmoreland or his attorney.

ROMANS: California has dropped plans to tax text messages, the state hope to act new monthly fees to increase funds for programs that bring connectivity to underserved residents, but the California public utilities commission says a recent FCC ruling prevents the state from imposing the tax. The ruling determines text messages are in information service, not a telecommunications service. The proposed tax faced strong opposition from industry trade groups would call that harmful to consumers.

BRIGGS: Expressions of love and support pouring in for Saturday Night Live cast member Pete Davidson. New York City police even conducted a wellness check on the comedian after he posted an alarming note on Instagram Saturday. That said, quote I really don't want to be on this earth anymore. The entire Instagram account was later deleted.

(BEGIN VIDEO CLIP)

PETE DAVIDSON, SNL CAST MEMBER: Once again, Mark Ronson and Miley Cyrus.

(END VIDEO CLIP)

ROMANS: Relief for his fans when he made a brief appearance late on SNL this weekend. This has been a rough year for the 25-year-old comedian. He went through a painful breakup with the singer Arianna Grande in October then he had to apologize last month for mocking the appearance of Texas congressional candidate Dan Crenshaw, who lost his eye serving in Afghanistan. That is the top of the hour. Let us go check on CNN's business this

morning. Global markets are mixed right now you can see Tokyo Shanghai both higher, but Hong Kong down and London and Paris and Frankfurt all closed lower. Friday's economic data released missed expectations from China and has really spread through the market here showing that the trade war is biting the Chinese economy.

On Wall Street right now, futures are higher after a terrible day Friday. You know, the Dow closed 497 points lower on Friday. The Dow down almost 3 percent by the way, since the tax cuts were signed into law last year and the S&P 500 declined 1.9 percent Friday. It is the lowest level since April and the NASDAQ fell 2.3 percent.

Usually at the end of the year, investors look forward to something called the Santa Claus rally, ho-ho no. It does not look like that is going to happen this year. Only a handful of trading days left in the year, and frankly stocks on track for either the worst of their second worst year in a decade.

Boeing delivers its first 737 airliner permits new factory in China, Saturday, a debut that comes amid a 90 day truce in the U.S.-China trade war. The 100 acres site where workers install interiors to the 737 as built in Seattle for sale in the Chinese market. Part of a Boeing plan to strengthen ties to what will soon be the world's largest aviation market. According to the international air transport Association, China is track to surpass the U.S. as the world's largest air travel market by the year 2022. The Chinese plants, the first was kind for Boeing outside the U.S., expanding its presence in China, key for Boeing to stay competitive with European arrival Airbus. Boeing estimates China will need more than 7600 new planes with $1.2 trillion over the next 20 years.

All right. All eyes on the Johnson & Johnson today after a Reuter's investigation found the company knew about asbestos in its baby powder for decades. Johnson & Johnson stock plunged 10 percent Friday, the worst days in 2002. Johnson & Johnson has been dealing with lawsuits, alleging some of the talcum powder products cause cancer. But the Reuters report like stock indicate company executives, scientists and others knew about the problem and failed to disclose it to regulators or the public. In a statement, J&J said, quote the Reuters article is one-sided, false inflammatory Johnson & Johnson baby powder is safe and asbestos free.

BRIGGS: Major story to stay tuned to, yes. Early Start continues right.

(BEGIN VIDEO CLIP)

SCHUMER: We're going to do whatever is necessary to build a border wall. He is not going to get the wall in any form.

(END VIDEO CLIP)

BRIGGS: Five days until the government shutdown. No closer to the deal on the border wall. And now questions about whether Republicans will even show up to vote.

(BEGIN VIDEO CLIP)

GUILIANI: $130,000 to Stormy whatever and $100,000 to the other one is not a crime.

(END VIDEO CLIP)

ROMANS: Michael Cohen may disagree. Rudy Giuliani at odds with prosecutors. Now where big tech may not be doing enough to help the Russia probe.

BRIGGS: Health care once again in limbo for some 20 million Americans. A Texas Judge scraps the entire law, but will the ruling stand on appeal?

ROMANS: And a big spike in the number of teens vaping --