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INSIDE POLITICS

CNN Obtains Trump Tower Moscow Letter Signed By Trump; Federal Reserve Expected to Raise Interest Rates; Senate Overwhelmingly Passes Criminal Justice Reform; What Will House Speaker Paul Ryan's Legacy Be?. Aired 12:30-1p ET

Aired December 19, 2018 - 12:30   ET

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


[12:30] SHIMON PROKUPECZ, CNN CRIME AND JUSTICE REPORTER: So it does go to the overall narrative that we're seeing the special counsel try to put together whether it's an obstruction case or whether there's something else going on. People consistently try to protect this president.

JOHN KING, CNN ANCHOR: In this case though, is he protecting the president by saying something on Sunday that there's a document that just proves it's just blatant? That he says the letter the BS, what he said is BS. I mean, he's gone from being America's mayor and kind of an icon post 9/11, forgive me, it's like the president's court gesture now when you watch him out in television.

KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: And that's why the question is sometimes, is it Rudy Giuliani being Rudy Giuliani? Or is he sometimes revealing information because he knows it's going to come out at a later date as he did when he told everyone via an interview on Fox News that the president had actually paid back Michael Cohen for the $131,000 they paid to Stormy Daniels.

Here, it doesn't seem to be anything that's helping the president by saying he didn't sign this because then when it comes out that the president did sign it and you've got the letter in your hands as you just showed with that classic Trump signature, it makes people question, well, why did they lie and why did they say he didn't sign this letter? Why did Rudy Giuliani get so specific as to say he didn't sign the letter if he had signed it? Because if he -- their defense is that the president essentially did nothing wrong and there's nothing wrong with him pursuing this business deal as he was becoming increasingly clear that he was going to be the Republican nominee. And still pursuing a business deal along with hi attorney that was going to require Russian government approval and that's why it's a problem.

But if you think there's nothing wrong with that, then why are you continuing to say things that aren't true about that pursuant?

KING: And more proof today from the president's own Twitter feed that he understands where we are. Which is just about everything he's touch is under investigation. Whether it's the Trump White House, Trump campaign, the Trump inauguration committee, the Trump Organization, and including now an agreement with the New York state attorney general to dissolve the Trump Foundation.

We're going to put up a tweet storm here. I'm not going to read it all. It is that the president's own foundation agreed to dissolve. They agreed to dissolve under supervision of the New York state attorney's office which filed papers saying, essentially it was an illegal scam that the president use the foundation to support himself and to support his campaign. The president lashing out at everybody there, including Hillary Clinton, she has nothing to do with this.

What does that tell us about the president's end of the year, shall we say, anger, as he process this understandably, the depth of his problems?

TAMARA KEITH, WHITE HOUSE CORRESPONDENT, NPR: Well -- and this tells us that it's not over. Also, I mean, the New York attorney general will tell us that that it's not over. This case is ongoing, dissolving the foundation is only one step in the process and they're continuing to pursue what they say is self-dealing and other misdeeds by the foundation. Trying to prohibit Trump family members from serving on any foundation boards.

This is not the end of the story, this is I guess, probably the middle of it. (INAUDIBLE) so many things, so many threads hanging out there, you know, and Trump University was shut down before President Trump has not had a great record of late with things that he had did.

MARGARET TALEV, SENIOR WHITE HOUSE CORRESPONDENT, BLOOMBERG: And definitely this is a reminder of why it's been so important for Congress to make sure to protect the Mueller investigation's ability to go forward, because there really is fundamentally a difference between the campaign you wage in the public or in the press. And then I guess I would call the congressional hearing sort of a middle ground where they have authority but it's mixed with politics and so people don't know what to believe.

But always at the core of this has been the special counsel, the special prosecutor's ability to pursue things and have the force of law behind them to hold people accountable. We saw some of this play out with Michael Flynn this week. Whether a letter of intent was signed or not signed, it can be a debatable fact in the public arena. But in Mr. Mueller's world, it is not a debatable fact and that is what's so fundamentally important.

KING: It's a great point. The court (INAUDIBLE) of all the documents. Forget what the politicians say, (INAUDIBLE) don't forget, if you don't and forget, just discount it a bit and read the documents.

To that point, let me end with asking you playing Sherlock Holmes for us here. One of the great mysteries was what the secret case. There's a secret grand jury case, we knew Mueller's lawyers were involved, we didn't know what it was about. Political at one point, and an essay, not the news organization but an essay on its site, wondering, was this a fight over a subpoena for the president? Well, it turned out not to be a fight over a subpoena for the president. But here's the final ruling yesterday. The grand jury seeks information from a corporation, owned by country A. After receiving the subpoena, this goes on say, so a company owned by a country fought a subpoena and the court finally said turn over what the government is asking for which is Robert Mueller, in this case. Do we have any clue what this is about and how it fits?

PROKUPECZ: We can only speculate this does sound that it could have some to do with the financial institution, maybe a bank in another country. We don't know. But these are the kinds of things you will see when there are -- when the government, the U.S. government is trying to get information from a bank or a financial institution in money laundering cases. What's really interesting here is the efforts by which this company has gone to try and not give this information over.

[12:35:01] KING: Weeks and weeks and weeks.

PROKUPECZ: The money they're spending. They're held in contempt so they're paying a penalty for doing that. So clearly, whatever is going on here, it's important for both the special counsel and for this company. And it could also signal to us that this is nowhere near over.

This could go to -- we know that Mueller has been looking at money that went into to the inauguration. Russian money that is, overseas money from other countries as well. People (INAUDIBLE) Mueller about this. So it could be related to that.

We really don't know. Eventually, we probably will find out but this does seem to go in line with what we see in money laundering cases.

KING: Country A.

PROKUPECZ: That's right.

KING: We know. Love to identify.

PROKUPECZ: We'll know soon enough.

KING: Country A. Please slip a note in my stocking, will you?

Up next, decision day for the Fed. Will it heed the president's warning or will the Fed's raise rates as experts predict. Live from the Stock Exchange when we come back.

(COMMERCIAL BREAK)

[12:40:24] KING: Topping our political radar today, some lawmakers calling for an investigation into the death of that seven-year-old Guatemalan girl who died after crossing the U.S. border. Jakelin Caal Maquin became ill after border agents took her and father into custody in a remote New Mexico desert. She was then flown to Texas hospital where she later died. Her family now speaking out through their lawyer just moments ago.

(BEGIN VIDEO CLIP)

ENRIQUE MORENO, ATTORNEY OF JAKELIN CAAL MAQUIN'S FAMILY: What happened to Jakelin? Could her death have been prevented? What circumstances, what policies may have contributed to her death? These questions must be answered.

(END VIDEO CLIP)

KING: Here in Washington, getting a new sense today of just how vigorously House Democrats will question the president and his policies once they get the majority in the House come January. The incoming Oversight and Government Affairs Chairman Elijah Cummings sent more than 50 letters to the administration today. Demanding answers from questions ranging from family separations on the Mexican border to the water crisis in Flint, Michigan. In a statement, Congressman Cummings says, these are documents in most cases even Republicans have asked for but refuse to issue subpoenas for, in the days they have controlled the House.

All eyes today on the Federal Reserve. The agency expected to hike interest rates despite weeks of unprecedented criticism, public lashings from President Trump. So how will the market and investors respond?

CNN's Cristina Alesci is live at the New York Stock Exchange. Cristina?

CRISTINA ALESCI, CNN POLITICS AND BUSINESS CORRESPONDENT: So the Fed here is in a really tough spot because it doesn't want to tip a scale of economic growth. It doesn't want to raise interest rates too much and slow down economic growth at the same time. It wants to protect against the economy overheating. That's the case for raising interest rates.

Now, investors here today and the ones I spoke with on the phone have pretty much come to terms with the fact that the Fed will hike rates today. But what they will be listening for is Jerome Powell's comments and what he says about the possibility of Fed rate hikes in 2019. They'll be listening to hear whether or not Jerome Powell is sympathetic to the volatility that we've seen on Wall Street. They'll also be listening to whether or not he mentions any kind of economic data, and whether there is any softening in the economy.

And we've seen little signs of that here and there, John. For example, the housing and the auto markets are showing some signs of weakness and we have companies, a range of corporate companies basically saying that they're worried about global trade wars. They're hunkering down, saving cash for a potential, you know, problem down the line.

But Jerome Powell was in a really tough spot because if he does pull back on Fed, on these rate increases, then it may look like he's caving to political pressure from Donald Trump. And the Federal Reserve is supposed to be an independent body, not subject to political pressure.

John?

KING: Economics colliding with politics. Cristina, thanks for the update from the floor. You see the market up about 300 right now. Let's check back in the 3:00 hour and see how we're doing then once we know from the Fed. Cristina, appreciate it.

Up next for us here, a very rare sight on Capitol Hill, bipartisanship as the Senate and the House soon to follow, passes major criminal justice reform.

(COMMERCIAL BREAK)

[12:47:50] KING: Welcome back.

A rare showing of bipartisanship on Capitol Hill and this one with far reaching consequences for America's prison population. Late last night, the Senate voted overwhelmingly to approve the largest criminal justice reform in decades. The "First Step Act" as it's called reduces sentences for non-violent drug crimes, expands programs to help inmates reintegrate into society, eliminates penalties for possessing a gun while committing a non-violent crime, and addresses the big sentencing disparity between crack and powder cocaine convictions, an issue disproportionately affecting minorities.

Despite the last minute push by the White House, there are 12 Republicans from across the conservative spectrum did vote no. The House plans to give the measure its blessing before the week is out and the president is celebrating. On Twitter this, quote, my job is to fight for all citizens even those who have made mistakes. Congratulations to the Senate on the bipartisan passing of historic criminal justice reform bill. This will keep our community safer and provide hope and a second chance to those who earn it. I look forward to signing this bill into law."

It is rare, incredibly rare that we use the word bipartisanship. I used to come up a lot. There's a celebration on Capitol Hill today among the lawmakers. One of the people they're crediting, let me put it out right here, is Jared Kushner, the president son-in-law, who fought for months to get this done.

(BEGIN VIDEO CLIP)

SEN. DICK DURBIN (D) ILLINOIS: Jared Kushner, played a key role in this. I called him last night to thank him. He did more to line up Republicans in the right on this issue than anyone else and he deserves credit for it.

LINDSEY GRAHAM (R) SOUTH CAROLINA: Well, now, Jared's tenacity and his team putting together a coalition I've never seen from conservative liberals. This would not have happened.

(END VIDEO CLIP)

KING: Interesting in and of itself but also in the sense that Jared Kushner has been a pinata when it comes to how the administration deals with Saudi Arabia. So where are we? SAHIL KAPUR, NATIONAL POLITICAL REPORTER, BLOOMBERG: I also spoke to Senator Ted Cruz who praised Jared Kushner on this, so this seems to be another element of bipartisan consensus. Eighty-seven senators, it's hard to that number of senators to agree on the color of the sky. So this is extraordinary.

But these are modest series of steps that liberals supported because they viewed it as a fair dispensing of justice. That conservative supported because they thought it would improve public safety and save taxpayer money, discourage recidivism. It's hard to get a bill where you have everyone from Elizabeth Warren and Bernie Sanders on the left agreeing with Rand Paul and Mike Lee on the right.

[12:50:03] The level of consensus here was extraordinary. You have the ACLU and the Koch Brothers together. You have the Trump administration for it. Let's see if this can happen on anything else.

KING: We've Cory Booker and Donald Trump on the same page. Van Jones and Donald Trump on the same page. To the point about Jared, the president took his time before he himself said he was for this. He let Jared work it for a long time and Jared finally convinced his father-in-law, the president, you want this, let's get it done.

COLLINS: Which was a big factor in all of this. And it's not just that, even Mitch McConnell made the joke about how many people Jared Kushner had gotten to call him, trying to lobby him to get him to support this. But I do think this will be a big bipartisan success that the president can tout as he is running for re-election.

This is something he could say, hey, we reached across the aisle and we got this done. Because as you noted, it's pretty rare that the ACLU and the Koch Brothers are both praising something, that this is something one of those things. And I do think Jared Kushner played a big role in this. I don't think anyone in the White House would discount this.

And I do think that for his critics, who criticize him being in the White House, his position, what he's talked about with Saudi Arabia, this is going to be something where they can say, look, here is something he did, able to accomplished. And without him, it's unclear if they would have been able to been done.

KEITH: This is also a lesson in the slow process of pushing a rock up a hill. This is -- this did not start with the Trump administration. This did not -- this started a very long time ago. It's been a slow process of members of Congress working, these coalitions being built, and then sort of gradually building the support for this.

They were trying to pass this at the tail end of the Obama administration and they just couldn't get it over the line. And now they have been able to do this in part because, you know, President Trump is not a conventional Republican in some ways with his ideology.

KING: It's interesting to see in campaigns down the road though where their challengers try to use votes for this to suggest people are soft on crime. These people get release and as Tom Cotton suggesting as much in his statement last night. We'll come back to this issue as we do.

Just in to CNN, Nancy Pelosi, the House Speaker-to-be, the Democratic leader of the moment said she will support the continuing resolution meaning the stop-gap funding effort. That means, the Senate majority leader, the Senate Democratic leader, the House Democratic leader is going to pass. Question still remains, will the president sign.

When we comeback, maybe you've notice. Beard is making a comeback in Washington. Senator Ted Cruz, Congressman Adam Kinzinger, the outgoing House Speaker Paul Ryan. Ryan's got a plenty time of work on that beard in retirement. Next

hour, he's got a big farewell address.

That's next.

(COMMERCIAL BREAK)

[12:57:02] KING: The House Speaker Paul Ryan bids Congress farewell next hour. Speech at the Library of Congress. The final act in a week long campaign to promote his achievements.

(BEGIN VIDEO CLIP)

REP. PAUL RYAN, OUTGOING HOUSE SPEAKER: -- kid from Janesville, Wisconsin, I never thought I'd work on the Hill, let alone be a member of Congress. I just feel very blessed to have had these opportunities here, to take ideas, to push these ideas, to see them go into law and make a huge positive difference in people's lives. It's a great system we have.

People get frustrated. People get angry. The system is a great system. The republic works.

(END VIDEO CLIP)

KING: Optimistic there but the reality is that Ryan leaves town frustrated. His long stated mission was to balance the budget and to reform expensive entitlement programs like Medicare and social security. But the rise of Donald Trump was the end of Ryan's ambitions. A growing deficits, now part of Ryan's legacy as a speaker. And he also vouched the reality that President Trump is just simply not interested in touching social security and Medicare.

So he leaves Washington a very different figure than he thought he would be in Washington.

KAPUR: The tragedy of Paul Ryan is that he came along and said the Republican Party should be pro-immigration, pro-trade, and anti- entitlements and the American votes said no, we want to be anti- immigration, anti-trade and protect entitlements. That is why he's retiring. That is why Donald Trump is president.

He wanted two things in his career. One is to cut taxes as much as possible. He has achieved that. The second thing he wanted was to cut social security and Medicare and put this on a sustainable path. He's not going to achieve that. KING: And it tells you a lot about Paul Ryan. But to be fair to him, it tells you a lot to your point, the Republican Party was taken up from under his feet.

TALEV: Yes. And I think a lot of people who have watched the last two years unfold have often asked the question sometimes, why doesn't Paul Ryan do something. But the truth is that probably his moment to do something was in those months before Donald Trump secured the nomination. That was the window. And he was unable or not sure if he should take it at the time.

And to try to shut down the sitting president of your own party on these issues that what which he disagreed both ideologically in some cases personally would have been a leadership suicide mission. You can argue about whether he should have taken that leadership suicide mission but he did not. And now -- and he's a young man and a decent man and a thoughtful person and he now has probably several years or decades worth of a mission to try to, even -- whether it's outside of government, rebuild the ideals and the personal story to try to get back on track with that message.

COLLINS: Yes. It was so interesting to see what the Republican Party looks like once Donald Trump is out of office and what -- how the people like Paul Ryan who were just completely different than Donald Trump. How they fare later on in politics? Does the party continue to change and be molded around people like President Trump or does -- do Republicans try to get back to where it was before President Trump came to Washington.

And I do think it completely changed the trajectory for Paul Ryan and I don't think he thought his time in Washington was going to come to an end this way.

KING: My memory goes back to when he was working for Jack Kent, a long, long time ago. This is not the way he thought it was going to end.

Thanks for joining us on today on the INSIDE POLITICS. See you back here this time tomorrow. Stay with us though. A lot of news ahead. Brianna Keilar starts right now.