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Aides: Trump is 'Actively Working' to Prevent Shutdown; Last- Ditch Efforts Underway to Avert Government Shutdown; Government Shutdown Would Affect Millions. Aired 5-6p ET

Aired January 19, 2018 - 17:00   ET


WOLF BLITZER, CNN HOST: Happening now, breaking news. Melting down. The government is seven hours away from running out of money amid chaotic efforts to come up with a spending bill. Lawmakers describe bewilderment and confusion up on Capitol Hill. Will this melt-down lead to a shutdown?

[17:00:30] Last-ditch effort. President Trump calls Senate Democratic Leader Chuck Schumer to the White House for a last-ditch negotiating session. Can the president use the art of the deal to find a solution?

Partisan findings. Republican allies are stepping up -- stepping up their attacks on the FBI and circulating a report about alleged domestic surveillance. Is it a move to discredit the Russia investigations?

And Stormy clouds. CNN tracks down a company set up by a Trump lawyer shortly before the presidential election. And the "Wall Street Journal" reports that a shell company was used to pay porn star Stormy Daniels to keep quiet about an alleged relationship with Donald Trump. Could that have clouded the election?

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: Breaking news, the United States is just seven hours away from a potential shutdown, meaning federal agencies and offices could close their doors, with hundreds of thousands of federal employees forced out on furloughs and more than a million others forced to work without pay.

As the clock ticks down, there are now high-stakes negotiations happening up on Capitol Hill and over at the White House.

I'll talk to Democratic Senator Ben Cardin and Mick Mulvaney. And our correspondents and analysts, they're all standing by. They're covering the fast-moving developments.

Let's begin with our chief White House correspondent, Jim Acosta.

Jim, the president now very personally involved. JIM ACOSTA, CNN CHIEF WHITE HOUSE CORRESPONDENT: He is, Wolf. With

the clock ticking down to a government shutdown, President Trump just spoke by phone, we're told, with House speaker Paul Ryan. Earlier today, he reached out to a fellow New Yorker and Democrat in Senate Minority Leader Chuck Schumer in search of a break-through. But so far the man who wrote "The Art of The Deal" can't seem to find one.


ACOSTA (voice-over): Biting his tongue, President Trump declined to answer questions about the looming government shutdown, preferring to do his talking behind closed doors with a special guest. No, not with fellow Republicans but with Senate Minority Leader Chuck Schumer.

UNIDENTIFIED MALE: Mr. Schumer, is there a deal?

ACOSTA: A source familiar with the 90-minute meeting said it was a sign the president wants a deal. But Schumer returned to Capitol Hill apparently without an agreement.

SEN. CHUCK SCHUMER (D-NY), MINORITY LEADER: We made some progress, but we still have a good number of disagreements. The discussions will continue.

ACOSTA: Despite the party being in control of the White House and Congress...

MICK MULVANEY, OFFICE OF MANAGEMENT AND BUDGET: OMB is preparing for what we're calling the Schumer shutdown.

ACOSTA: ... Trump administration officials are saying, "Don't blame us."

(on camera): How can it be the Schumer shutdown when Republicans control the White, House, the House, and the Senate?

MULVANEY: I have to laugh when people say that. Oh, we control the House and the Senate, the White House. "Why can't you get this done?"

You know as well as anybody that it takes 60 votes in the Senate to pass a reparations bill. You know that. OK. So we only have 51 votes in the Senate, then you have to have Democrat support in order to keep the government to fund the government. That's the answer.

ACOSTA (voice-over): While Democrats are glad Schumer is negotiating with the president...

REP. NANCY PELOSI (D-CA), MINORITY LEADER: I'm so glad Chuck Schumer is the one who's over there.

ACOSTA: Republicans are struggling to keep their members fully on board for a short-term spending bill or C.R.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: I'm not going to vote for a 30-day C.R. What the House sent over is unacceptable to me. ACOSTA: Senator Lindsey Graham put his finger on the problem. GOP leaders won't yield to a bipartisan effort to shield young, undocumented immigrants known as the DREAMers from deportation. A sign of the frustrations, Graham is taking swings at hardliners in his own party.

GRAHAM: The Tom Cotton approach has no viability here. You know, he's become sort of the stay (ph) king of the Senate.

UNIDENTIFIED MALE: The difference between Lindsey Graham and Steve King is that Steve King can actually win an election.

ACOSTA: The immigration talks broke down and the shutdown threat mushroomed after the president's racially offensive language last week dashed hopes for a fix to the DACA program for DREAMers.

(on camera): The president asked Congress to come up with a solution for the DREAMers. Congress was in the room -- members of Congress were in the room with the president last week. It seemed to be a fairly productive meeting, and then the whole process got blown up. When Republicans tried...

MULVANEY: If I may...

ACOSTA: It seems that the whole process was blown up by the president's comments.

MULVANEY: When Republicans tried to add -- when Republicans tried to add -- when Republicans tried to add a discussion about Obamacare to the funding process in 2013, we were accused by Nancy Pelosi and Chuck Schumer of inserting a non-fiscal, a non-financial issues into the spending process in order to shut the government down.

There is no reason that you have to deal with DACA this week.

[17:05:03] ACOSTA (voice-over): The government shutdown would force more than a million members of the military to work without pay while hundreds of thousands of federal workers are furloughed, even employees at critical agencies like the Centers for Disease Control, while the administration is trying to keep some national parks open. The president need only look back to his past comments to figure out where the buck stops in Washington.

TRUMP (via phone): Problems start from the top, and they have to get solved from the top. And the president is the leader, and he's to get everybody in a room and he's got to lead.

(on camera): If there is a shutdown, I think it would be a tremendously negative mark on the president of the United States. He's the one that has to get people together!


ACOSTA: Now the White House says the president's trip to Mar-a-Lago this weekend to celebrate his first year in office has been canceled for now. That, of course, could all change if there's a deal. But this could get more disruptive for the president, who had planned to travel to Switzerland, Wolf, next week for a global economic forum at Davos, where he had hoped to tout his economic record. At this point, the White House is indicating he's still going to take that trip, but that's hard to do in the middle of a shutdown, Wolf.

BLITZER: Got a few hours left. We'll see what happens. All right, Jim Acosta, thank you very much.

Let's go live to Capitol Hill right now, where one lawmaker has described a state of bewilderment and confusion. Our congressional correspondent, Sunlen Serfaty, is getting new information.

What are you learning, Sunlen?

SUNLEN SERFATY, CNN CORRESPONDENT: Yes, Wolf, much of Capitol Hill tonight is locked in this holding pattern, taking something of a wait- and-see approach as, meanwhile, the clock really does tick down.

Most of this, at this hour, is going to come down to just a few people negotiating behind closed doors and on the phone at this very late hour. But as of now, there's no agreement, there's no path forward and there's no vote scheduled in the Senate.

All day we have been operating under the expectation that at some point there would be a cloture vote files in the Senate on the House- passed spending bill. We believe that will happen at some point tonight. That coming from the Senate whip, John Cornyn. But even he is not so sure. He says that probably will happen. But he does not know yet.

Now if and when that does come to the Senate floor, the expectation is that yes, it will fail. Republicans taking one more Democrat up just in the last hour. Senator Joe Donnelly crossing over and saying he, yes, will vote on that House-passed plan to keep the government open. But that means Republicans only have two Democratic crossover votes. They need about 12 to get it passed through. So no expectation that that is going to go anywhere.

So where does this all go next? That's what many lawmakers up here that I've talked to today are wondering the same thing. Throwing up their hands, saying where does this all end come midnight tonight?

Democrats and the leadership certainly have been trying to give some legs to an idea that, potentially, there could be some sort of short- term, very few days short-term C.R. passed, three, four, five days, get them into next week, continue to negotiate. But Republican leaders were very clear that that is a nonstarter. So a lot of -- not a lot of clarity tonight and certainly not a lot of time -- Wolf.

BLITZER: Certainly not a lot of time indeed. All right, Sunlen. Thank you very much.

Depending on what happens over the next few hours, 850,000 federal employees could be forced to stay home. Close to 2 million other federal employees could have to work, though without pay.

Let's bring in our government regulation correspondent, Rene Marsh.

Rene, what impact would a shutdown have?

RENE MARSH, CNN GOVERNMENT REGULATION CORRESPONDENT: Right, Wolf. So people are watching this all unfold on Capitol Hill. One question that Americans have is how does what either happens or doesn't happen in Washington, D.C., affect them?

Well, by the numbers, more than 850,000 federal workers could be furloughed without pay. More than 1 million federal workers will be required to work without pay. And more than 2 million military service members could see their pay delayed.

However, for those federal workers, the government would likely repay them retroactively after the shutdown is over.

But people on Main Street, they will feel the impact of this, too. And the longer that a government shutdown drags on, the more painful it will be for Americans.

Now, when it comes to Social Security checks, they will continue to go out. But for new claims for benefits, seniors would feel the delay. Medicaid and Medicare in the short term, those would not be disrupted, and patients would continue to get treatment.

However, with CHIP, which provides low-cost health coverage to children and families that just earn too much money for Medicaid, well, they could be impacted, depending on how long a shutdown lasts.

States are already running out of money for the program. And so what you would have is sick children left without coverage.

So there is some silver lining to all of this. There will be things that will not be impacted. People who keep us safe will remain on the job. We're talking about law enforcement, the military, national security employees. We know that the mail service, that service will continue. And if you're traveling, air traffic control will still be on the job, safely directing airplanes. TSA, Customs and Border Protection will remain on the front lines at airports, as well as on the borders. Federal court, they will remain open, and so will veterans' hospitals.

[17:10:14] However, Wolf, you know, if you're a veteran and you're looking to file a new claim, those benefits would likely also be delayed.

One thing that's different from the last time, Wolf, I remember covering this in 2013. National parks as you can remember, those were shut down. They now say that those national parks will remain open in this shutdown. So you know, lots of folks could be impacted, depending on how long this drags out.

BLITZER: Yes, there's going to be disruption if there's a shutdown. There's no doubt about that. Rene, thank you very, very much.

Joining us now, Democratic Senator Ben Cardin of Maryland. Senator, thanks so much for joining us.

SEN. BEN CARDIN (D), MARYLAND: Wolf, it's good to be with you. Thank you.

BLITZER: So Maryland is the home to a very large portion of the federal work force. What kind of impact would a shutdown have on the people you represent?

CARDIN: A shutdown will hurt federal workers. It will hurt families. It will hurt federal contractors who depend upon the contracts with the federal government. Taxpayers will end up paying more. People who need timely government services will be hurt. It makes no sense at all.

So I am hopeful, in these next few hours, that reason will prevail, and we'll be able to at least keep government open as we negotiate a budget. There should have been a budget long before now. We're now into past -- four months without a federal budget in this fiscal year. We need to make sure there is a federal budget. You can't operate on continuing resolutions. We've heard that from the Defense Department. We've heard it from other agencies.

It's time for Congress to make decisions. Republicans control the House, Senate and the White House. Bring these bills up. Let's vote on them, but let's keep government open.

BLITZER: But they don't completely control the Senate, as you know. You need 60 votes. The Republicans only have 51. So in order to get something done, they need a whole bunch of Democrats to be with them. So they're not in complete control.

How close are you to a deal with the Republicans and the president? And I wonder if you've gotten a report from Senator Schumer about his meeting with the president?

On the individual issues we're a lot closer than you think. In regard to the DREAMers, we already have a bipartisan agreement that's ready to go. In regards to disaster relief and the Children's Health Insurance Program, I'm confident we're very close.

The challenge is a process that allows government to stay open and complete these negotiations now. Don't just delay it another 28 days, because we did that 28 days ago; and we didn't get anywhere. Congress needs to make decisions.

BLITZER: What's your bottom line right now for a deal?

CARDIN: I think the bottom line is let's keep government open, and let's negotiate in good faith and let's make some decisions. Whether it's deals with the budget issues or whether it deals with the opioid crisis. The people in this country that want to us to resolve these issues. Mitch McConnell, the Republican leader, needs to put these issues on the floor of the United States Senate.

BLITZER: So do you have 60 votes for a four- or five-day deal? CARDIN: I think so. I think there's -- this was a suggestion by

Republicans, was to give us a three- or four-day delay, and let's sit down and resolve the issues. Three or four Republicans made that suggestion yesterday, and Senator Schumer, others have said that would be acceptable for us.

We want to stay in town. We want to resolve these issues. We don't want to say another month has to go by. We're getting very close to deadlines. We're already past deadlines on the budget. We believe it's important to stay in town and get our work done.

BLITZER: I assume that's what Senator Schumer put forward in his meeting with the president earlier in the Oval Office. Do you know how the president responded to a three- or four- or five-day extension?

CARDIN: I have not gotten a read out from Senator Schumer on the president's meeting. The president, of course, has had different positions on different days on different parts of the budget. It would be extremely helpful if we had a consistent position coming out of the White House.

BLITZER: In the past, as you know, the president has come out of various meetings with top Democrats, looking like a man ready to make a deal with them, only to reverse course under pressure from his base, others in the White House, other Republicans. Do you worry that may happen again?

CARDIN: Absolutely. We've seen this on several occasions where we thought we had an understanding with the White House only to find the president tweet out something a couple days later that's totally inconsistent. We've had that problem on several votes recently in Congress, where there was inconsistent messages coming out from the president and the Trump administration.

So yes, it's been very difficult to negotiate with the president when he's with you one day, and he changes his mind the next. He certainly gave a green light on the immigration issues, and then he completely reversed himself a couple days later.

[17:15:00] BLITZER: The White House is referring to this as the Schumer shutdown. Are Democrats going to take the heat, take the blame if Congress can't keep the government open?

CARDIN: Wolf, the people of Maryland, the people of this country, they're not looking at to us place blame. They're looking at us to keep government open. And Mitch McConnell has an opportunity tonight to keep government open. Let's keep government open. Don't challenge on a vote that can't pass. Bring up a vote that can pass so we can keep government open. Recognize that Democrats and Republicans need to work together. There's plenty of blame in Washington. What we need is results.

BLITZER: What are the chances you'll have a vote tonight on this four- or five-day extension and eventually have a deal? CARDIN: I certainly hope that we do. I think it's critically

important that we have a clean vote to keep government operating and keep members here to resolve these issues, and not delay a budget for our country.

It's not -- it's against our national security interests. It's against what we need as far as protecting the interests of Americans. We've got to resolve these issues. We're past deadline. Let's get our work done.

BLITZER: Do you have faith it will happen tonight?

CARDIN: You know, I'm here. We're going to all work hard. I've talked to a lot of Republicans during the course of the day. I think there's good will here to try to resolve this issue.

I just hope that the meeting with the president went well and that Leader McConnell will bring up a workable plan that can pass the United States Senate tonight. He has the power to do it, and he'll have the support of enough Democrats to get it done if he's reaching out and working with us.

BLITZER: As you know, Senator Schumer and the president, they have a long-standing relationship. They're both New Yorkers, the president originally from Queens, the senator from Brooklyn. They've known each for many years. Do you think the two of them can get this done?

CARDIN: Well, you know, I have a lot of confidence in Senator Schumer. He certainly has taken into consideration not just all the members of the Democratic delegation in the Senate, but he knows the Republicans well. He's reached out to Republicans.

I would hope that Senator McConnell would recognize that there's certainly the votes in the United States Senate to keep government open. But he's got to reach out and work with the Democrats. You can't do this on a party line vote. You've got to work with each side and listen to each other. We haven't done that enough in Washington.

If we listen to both sides, I am confident we can keep government open and we can resolve the issues, from immigration to opioid to dealing with the budget numbers, dealing with the health extensions. We can get all that done, but we have to work together.

BLITZER: Senator Cardin, thanks very much for joining us.

CARDIN: Thank you.

BLITZER: Up next, with the hour clearly ticking down, is there any room for an agreement that would keep the government open after midnight? I'll speak with the White House budget chief, Mick Mulvaney. He's standing by live.

And we're digging into new reports that say a shell company was used to pay a porn star to keep quiet about her alleged relationship years ago with Donald Trump.


[17:22:13] BLITZER: Our breaking news: urgent efforts are underway to avert a government shutdown, now less than seven hours away unless there's a last-minute agreement on some sort of spending bill.

President Trump has just tweeted this. Listen very carefully. His exact words. "Excellent preliminary meeting in Oval Office -- in Oval with Senator Schumer. Working on solutions for security and our great military together with Senate Majority Leader McConnell and Speaker Ryan. Making progress. Four-week extension would be best." His words. That's the tweet.

Joining us now from the White House, the budget chief, Mick Mulvaney.

Mick, thanks so much for joining us.

MICK MULVANEY, OFFICE OF MANAGEMENT AND BUDGET: Wolf, thanks as always for having me.

BLITZER: So the president sounds pretty upbeat that the meeting with Senator Schumer went well. Update us on exactly where things stand right now.

MULVANEY: Well, not much has changed, actually, during the course of the day. There's been a lot of discussions. The president, as you know and have reported, has been actively engaged all day. But where we are legislatively right now is that that bill passed the House late last night. It's sitting in the Senate. I understand that they're due for a procedural vote in the Senate any minute now -- it could be now; it could be an hour from now -- on a four-week extension. Added to that would be a six-year extension to the Children's Health Insurance Program and a two-year delay to some of the Obamacare taxes, the two most prominent being the medical device tax and the Cadillac tax. So there's not much changed during the day, other than all of the work going back and forth, led in large part by the president.

BLITZER: We're hearing from a senior White House official, and I'll be precise, Mick, that smoke signals coming from Capitol Hill are giving the administration some optimism. Where does this stand as far as -- as far as a deal that will avert, at midnight tonight, a government shutdown, though?

MULVANEY: Keep in mind that probably the only way you could avoid any shutdown, even for just a little bit. And again, we're in the weekend, so we get a little bit more flexibility here.

The only way to avoid an entire shutdown would be to -- probably for the Senate to pass exactly what the House has passed already. I guess in theory, the Senate could pass something that's a little bit different, and the House may go through some special procedural actions to try and get it approved very, very quickly. But generally speaking, if the Senate makes any changes, it will have to go back to the House, and that could take a couple hours, maybe even a day to get that done.

But again, there has been a great deal of progress, as you mentioned. BLITZER: A great deal of progress. The president has had an

excellent preliminary meeting in the Oval, in the Oval Office. So it looks like you're moving things forward.

Earlier in the day, as you remember, you called it the "Schumer shutdown," because the measure needs at least some Democratic support in the Senate to pass. You can do it with Republicans alone in the House. You can't do it alone with the Republicans in the Senate, because Republicans, they don't have 60 votes. They have 51 votes in the Senate.

If you can't get your own party, though, united behind your position -- there are a couple at least a couple of Republicans now who say they will vote "no." You can't completely blame the Democrats, right?

[17:25:12] MULVANEY: I guess in theory that's probably right. But if we lose one or two Republicans, and again, didn't get any Democrats at all, you can still lay it at the feet of the Democrats.

The real question -- and by the way, I understand. I just got this news before we walked on that Senator Donnelly has now indicated that he will be voting for it. So it sounds like there are some Democrats, especially Democrats in some red states that President Trump carried, who are taking a longer look at this as the day goes on, understanding what's at stake here.

There really is no reason to put military pay at risk. There's no reason to ask firefighters to work without pay or Border Patrol agents to work without pay, which is what a shutdown does. And folks are starting to realize that a shutdown is not really a very good thing. Maybe even some of the Senate Democrats are reading their own rhetoric from the 2013 shutdown, when they said it would be just absurd to shut a government down over a non-fiscal issue.

BLITZER: Let me get precisely, because you heard Senator Cardin just a little while ago on this show. And Senator Schumer in the past day or so, he suggested, "You know what? Don't shut down the government. Do a clean spending bill for three or four or five days. And during that period, you work out some of these issues.

The president in his tweet, he said a four-week extension would be best. Would you be ready for, let's say, a four- or five- or six-day extension?

MULVANEY: Yes, I saw Cardin, and I appreciate that input. But it made me sort of laugh to myself. So let me get this straight. Schumer is OK for voting for a five-, six-, seven-, eight-day without DACA but not a 28-day without DACA. Again, the DACA deadline, Wolf, as you well know, is not until the first week in March. So it's not a pressing emergency, and there isn't that much difference between a five-day or an eight-day and an 18-day.

Keeping in mind what's really driving this, obviously, a larger discussion about a larger spending deal for the year and DACA. And the chances of getting that done in five or six days is zero. Which is why we probably -- or excuse me, why the House was focusing on that four-week extension to begin with. That's the amount of time it would take to not only cut a deal.

But as you know better than anybody, it takes a while to draft these things, to review these things, to go through the various procedures and even if you're going to go through committees. You don't do a major piece of legislation like a DACA...

BLITZER: But it's better to have four or five days than a shutdown tonight, right?

MULVANEY: Absolutely. Don't get me straight [SIC]. The administration is against a shutdown. Period, end of story.

BLITZER: During the 2013 shutdown, during the Obama administration, Donald Trump, then a private citizen, said then-President Obama was responsible for the shutdown. He was the leader. He was the president of the United States. Why should that standard change this time? If there's a shutdown, will he take the blame?

MULVANEY: I think that's especially easy. And I lived through the 2013 shutdown. In fact, I think I was on your show several times during that 16 days. And there is one big difference. President Obama wanted a shutdown. At least, I fully believe that he did. He did not engage. He did not call, certainly, Republican leaders or conservative members of the House who were involved in that debate at that time. Didn't talk to what the precursor of the Freedom Caucus was. Wasn't engaged like the president was. I absolutely believe that President Obama wanted the shutdown, because he thought Republicans would get blamed. This president is doing the exact opposite. He's out there trying to make sure the government stays open. And that's the difference between...

BLITZER: You saw it in that tweet from the president not that long ago where he thought maybe a shutdown would be good.

MULVANEY: Well, that was back in September, and that was -- listen, the president was just as frustrated then as I am and we continue today go from precipice to precipice, from shutdown to shutdown. One of the reasons we're here, in fact the primary reason we're here is that the ordinary spending process is broken. It has been...

BLITZER: So what has changed since September?

MULVANEY: Well, again, right now here, we are trying to make sure we don't shut the government down. We're not having a discussion about appropriations. We're having a discussion about immigration, of all things, a non-fiscal issue, a non-financial issue.

Another comparison again, go back to 2013. I was accused of being a terrorist by Nancy Pelosi, because I wanted to have an Obamacare discussion during a funding discussion. What they said is "No, you can't do that. You Republicans are being absurd to introduce this topic."

BLITZER: But remember, it was last week during that televised meeting in president had with Democrats, Republicans, Lindsey Graham, Dick Durbin among others, where he specifically said he wanted them to bring him a deal on immigration that would include border security, would include something for the DACA recipients, the DREAMers. He himself said, "Bring me that deal. I'll take the heat. I'll support you. I want a bill of love." Do you remember those words?

MULVANEY: Sure, sure. And let's be perfectly clear. The president wants a deal on DACA. He's been very transparent about this for the past several weeks. In fact, General John Kelly, who's know chief of staff...

BLITZER: So why didn't he take the deal put forward by Lindsey Graham and Dick Durbin?

MULVANEY: Well, a couple different things. First of all, you don't take the first deal that they bring to you. The president was very clear. He wanted a deal that a broad -- it could get broad support from both parties in both chambers. And I think when Senator Graham and Senator Durbin came in, they hadn't even talking -- had not even talked to the House about it yet.

But let's get more specific than that. There is no deal. They've not been presented with the deal. They got a list of principles. That's not a deal. You cannot vote on a piece of paper. You vote on a bill. And as you know, the devil is often in the details.

[17:30:00] This administration has been very clear General John Kelly going back to my original point will tell you that when he was going through confirmation for the Department of Homeland Security Secretary back in December of last year, he was telling the Senate you need to do something about DACA now. The President wants to do something about DACA now. Congresses grabbed its feet and it's simply gone on too long.

BLITZER: Because the President, you're absolutely right. He keeps saying he wants to protect the dreamers. He's got a big heart. He wants them to be able to stay legally here. They've grown up here in the United States they shouldn't be kicked out. So, how can he claim he's compromising if he shares that bill with the Democrats? Why not just go ahead and accept that and get over this whole government shutdown issue?

MULVANEY: Well, because again you're -- you're only giving half of the story of that when you ask the President wants to help the DACA recipients he wants to help those people stay but he also wants in his part of a large deal. That's the nature of Politics. The Republicans gets something. The Democrats gets something. Especially in the day and age, we have the 60 vote rule in the Senate. What does he want? He wants more security. Yes, that includes the wall and also includes technology. He wants a change, to chain migration and to the visa lottery system and he wants better interior enforcement. That is -- There is a basis for a deal to be made there Wolf, it just hasn't been made yet. And critically I don't think it's going to get (INAUDIBLE) five or six days.

BLITZER: As you remember it was the President who created this artificial early March deadline for the DACA recipients. What are the prospects that he might create another artificial deadline? Especially since the Federal Courts now have rejected his ruling and they say the DACA recipients can continue to register.

MULVANEY: Yes, we'll push back on that a little bit. I don't think it was the President who created this artificial deadline. I don't think that's an accurate recasting --

BLITZER: He's the one who said -- He's the one who said it was illegal, it wasn't constitutional. He was going to reject it. Then he came up with the March deadline.

MULVANEY: Yes. I think a lot of courts would either had agreed with him or getting ready to agree with him. (CROSSTALK) What President Obama did was illegal. You cannot make law from the White House. Believe me. If we could, we would already have funded the Government but we can't do it. Congress makes the law. The White House executive branch is enforces that. So, I disagree with the -- with the concept that President created an arbitrary in by line. He gave congress 6 months and wished to do something. Here we are once again pumping up against a deadline because Congress can't do its work in advance. That's not the president's fault.

BLITZER: You're right. The Congress has to pass legislation. The President signs it into law but the President can also sign executive orders which become legal documents at the same time. And the President has done plenty of that. Since taking off that's right.

MULVANEY: But only if they're legal. And granting people the right to work. Giving them things that they could only get through law is not legal in the executive work. That's --


BLITZER: Is he ready to extend the deadline beyond March?

MULVANEY: I don't -- I don't think there's any reason to do it. Look at it this way Wolf. If he were to extend the deadline and I'm not talking about this. We all know exactly what would happen. Pick an arbitrary date. Pick July 1st. Congress would wait until the last minute to dealt with it then. It needs to be dealt with before March fifth but it doesn't need to be deal and it won't be resolved in the next five days.

BLITZER: You've outlined the negative consequences of a government shutdown. Earlier today in your briefing at the White House we heard -- we heard your understanding of how this would impact Federal workers and the American public. But remember, I'm going to play a clip for you. You didn't seem nearly as concerned during the shutdown fight of 2013. And Senator John McCain the Republican, he described your approach to the Federal budget during the speech on the Senate Floor last year opposing your nomination to your current position. We'll play the clip:

SEN. JOHN MCCAIN (R), ARIZONA: I'm also concerned about Congressman Mulvaney's support for reckless budget strategies that led to a government shutdown. He made frequent attempts to diminish the impact of a shutdown by referring it to at as a quote "Government slowdown" or the more Orwellian term "Temporary lapse in appropriations" unquote. There are few people whose views and record are more representative of the dysfunction that has gripped Washington for the last several years in that attitude.

BLITZER: So which is it? Is the shutdown dangerous? As you see. Or as you suggested back in 2013, a temporary lapse in appropriations?

MULVANEY: A couple different things. And I have a great deal of respect for Senator McCain. He and I have disagreed regularly in my time as we watch it. I hope we wish him well. I know he's in Arizona tonight. Probably watching your show. But again -- Let's say a couple of things to response that the term, temporary lapse in appropriations is not Orwellian. Well, I guess it could be Orwellian. It just happens to be statutory. When we get to a lapse in appropriation, a temporary lapse in appropriation the media calls it a shutdown. But the legal term for it as a temporary lapse appropriation.

So put that aside. What I said this warning was that shutdowns are different under Republican Administrations than they are under Democrat Administrations. During the 2013 shutdown, what the Obama administration did was simply weaponize this. They made the shutdown appear much worse than it needed to be. You heard McCain -- Mr. McCain refer to what I said about a government slowdown.

[17:35:01] The government does not come to a complete shutdown. It does not stop. The Military still goes to work. Firefighters who are fighting the fires out west will still go to work. The border is still secured. It's just that people aren't paid and that's not right. So there's real harm done to Federal workers. Especially in terms of not knowing whether or not they're going to get paid.

Now, we have a couple days here because the next Federal paycheck is until next Friday. But I know I actually disagree with Mr. McCain we will manage this temporary lapse appropriation. I used his terms. We'll manage this shutdown as best as we can. That's what OMB's responsibility is and it will be well managed. And people -- If we're unfortunate enough to go to a shutdown, we'll see a marked difference this shutdown and the one on 2013.

BLITZER: Bottom line, will there be a deal tonight?

MULVANEY: Yes. I think there's a deal in the next 24 hours. Because of the nature of the back and forth between the House and the Senate. I look at more of in terms what gets done before the offices supposed to open on Monday. And I think you're going to have to see a deal. Yes, sir.

BLITZER: Alright. You got six hours 24 minutes. Good luck. You've been very generous with your time. We're counting on you. And the Democrats and the Republicans to get some sort of deal and avoid avert a government shutdown. Mick Mulvaney, the Director of the Office Management and Budget. Thanks so much for joining us.

MULVANEY: Thanks, Wolf.

BLITZER: Alright, Let's bring our political specialists. And Dana, Senator Schummer said there was progress but no deal. The President just tweeted excellent preliminary meeting in Oval with Senator Schumer. It looks -- And you just heard Mick Mulvaney say they're getting closer and closer. What do you think?

DANA BASH, CNN SENIOR POLITICAL CORRESPONDENT: I think that there is a huge difference between now, 5:36 eastern time, and just three, four hours ago where the whole dialogue was in public, everybody blaming the other, trying to come up with a better hashtag terms for Twitter so that it would be either Schumer shutdown or a Trump shutdown that would be trending and that would catch on. This is what's supposed to happen now. It's not supposed to happen with six hours left. It is supposed to happen when their -- the Congress and the White House, but the Congress mostly is supposed to do their jobs. We'll see. We'll see if they can get something done. I think that the strong indication you heard the OMB Director is that they don't necessarily fear the 6:00 deadline, excuse me the six-hour deadline tonight. Technically there would be a shutdown. Technically it would be on their watch. But in terms of the practical effect, it probably wouldn't happen until Monday. --


BLITZER: Because 6-1/2 hours. Not a whole lot of time. Although some optimistic talk coming from Schumer from the President and from Mick Mulvaney. BASH: Alright. And -- But we have to see if that's -- we have to see where the Democrats are on this. And what deal on DACA is, if there is a deal on DACA. The reason that the Democrats want to keep this to a short term. I,e. four, five days. Is because they want to keep the pressure on. To give something down on DACA. They figure if you just extend it for a month to here. Because out of the blue and that -- you know -- and that's it. The President has said very directly he doesn't want anything less than a month. So what are the Democrats going to get for that?

Are they going to get something on DACA? And you know, there are a lot of Democrats I talk to who are upset that chip is being used as this kind of the children's health program is being used literally as a bargaining chip. Because they have a lot of opportunity to extend chip all fall. And in fact, it was voted on in the House and the Senate and it passed the extension. Although, Republicans and Democrats disagreed to that how to pay for it. But it went to the Senate and it sat there. So now, for Senators to say oh my God the Democrats are against chip is more than a little disingenuine. Because of course they're not.

BLITZER: You know it's interesting that the Democrats Schumer Ben Cardin was on that show a little while ago. They said let's get another four or five-day extension. Keep the negotiations going. And the Tweet the President posted what a few 15, 20 minutes ago. He said four-week extension would be best. But he didn't say his rejecting something should.

MARK PRESTON, CNN SENIOR POLITICAL ANALYST: Knowing at the same time, there's also a fundraising e-mails that were going on behalf of Republicans where President Trump was telling his base and his supporters, look, I just told Chuck Schumer you cannot shut down the government. Now, we understand that's protocol hyper bully like we get it. But it's interesting that you hear these different messages that are being sent out to different people. You know, to Gloria's point to when we're talking about whether Republicans or Democrats are to blame about the government shutdown. At least in my view, they're both to blame. You know for the shutdown. The fact to the matter is, this is why people hate Washington. This is why people look at Congress and their approval ratings is in the teens. But there is something to be said. As much as you hear from these House members to some Senators, the founding fathers created the government in a way that the United States Senate gave a little bit of power to the minority party. And that's what we're seeing right now.

[17:40:00] BLITZER: Sabrina Sidiqque of the Guardians is with us, Let me show you. Sabrina, show our viewers these new poll numbers just released by CNN. Who would be most responsible for government shutdown? 21 percent Donald Trump, 26 percent Republicans and Congress, 31 percent Dems and Congress, 10 percent all of them. What does those numbers tell you?

SABRINA SIDDIQUE, POLITICAL REPORTER, THE 31GUARDIANS: Well I think certainly, as you see that's pre-emptive blame game, it's clear that because Republicans control both chambers of Congress and the White House. They're more likely in course of initial blame. You can even see that shift to both parties if there is, in fact, a shutdown. And I think that as you point out in your interview with Mick Mulvaney, although Democrats can filibuster this house bill and the Senate, the Republicans don't have enough votes to pass this on their own either. I think the real issue is what Gloria would have to if there's a look of trust. Between the President and Democrats. Where Democrats have no reason to believe that if you kick the can down the road to February, that this President going to do something for dreamers. Because he hasn't taken a definitive issue on what kind of Immigration bill he would be willing to sign.

BASH: That's true. The other thing is that the dynamic among Democrats right now is push, push, push. Resist, resist, resist. Use this moment of leverage to get what they want. Because the feeling is that's the mood in the Democratic base. And one of the things that really surprised me about a brand new poll today, is among Democrats, just Democrats were asked. Which is more important? Avoiding a shutdown or continuing DACA. 42 percent and 49 percent. They weren't that different. I wonder if Democrats are misreading the base.


BLITZER: Everybody, standby. There's a lot more were watching on this last-ditch effort to avert a government shutdown also. And the latest battle report, a Shell company was used to pay a porn star to keep quiet about our alleged relationship with Donald Trump years ago.


[17:46:30] BLITZER: We have much more ahead on the breaking news. The last-ditch very desperate efforts to avoid the Federal government shutdown a little over six hours from now. Well also breaking tonight, some Republicans lawmakers there stepping up their attacks in the FBI. Pushing for public release of a partisan report laying out concerns about alleged surveillance abuses here in the United States. Is it a move by allies of the President to discredit the Russia investigations? Let's bring in our Justice Correspondent Jessica Schneider. Jessica, what are you learning?

JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: Well for Republicans are claiming that this report that was spearheaded by House Intelligence Committee Chairman Devin Nunes, they are saying that the information about widespread abuse by the FBI and now they want that report released publicly. The Democrats meanwhile they're contending that this all amounts to highly misleading instead of talking points and it's only meant to distract from the Russia investigation.

So Chairman Nunes has classified report and can now be accessed and read by every house member and Republicans who have reviewed it, they say it demonstrates rampant FBI abuse during 2016 and also misuse of the Fiscal Law. Now conservatives repeatedly accused the FBI of relying on that so-called Steele dossier and its own investigations and Republicans also want to know how and if the FBI used that dossier to obtain Fiscal warrants for Trump associates during the campaign.

Now, CNN has previously reported that the dossier was used in part to obtain these warrants for Paul Manafort and Carter Page on the basis that they may have been acting as foreign agents. Now, Chairman Nunes, he's met with the FBI Director also the Deputy Attorney General, he's also reviewed DOJ and FBI documents in his efforts. And this classified report is his compilation of those findings. So in the meantime, here fusion GPS Co-founder Glen Simpson he's previously testified that the FBI did not use the dossier as the sole basis for its Russia investigation. But despite all of this, Republican Congressman Matt Gaetz of Florida he's saying that he has seen this Nunes report. And now he believes the American public needs to see it too.

REP. MATT GAETZ (R), FLORIDA: Our Republic is in jeopardy if we allow this type of a palace coup environment to continue to persist. And that's why I'm one of the members of the Congress who will be encouraging today Intelligence Chairman Devin Nunes to release the memo. If we get this memo into the Public Square, heads are going to roll at the FBI and at the Department of Justice. I think there could be people who could face criminal consequences as a result of the activities that are laid out in this memo.

SCHNEIDER: And it turns out, it's not just Republicans making this push to make the report public. Russian linked Twitter accounts with the hashtag, Release the Memo. They're also in on this. A Twitter tracking tool that's called Hamilton 68, they're now reporting that Twitter accounts linked to Russian influence operations. Well, they've been upping the frequency with which they're promoting this hashtag Release the Memos.

And even WikiLeaks is getting in on it. They're saying that WikiLeaks will reward anyone who provides them with that memo. Now, in response to all of this, top Democrats on the House Intelligence Committee Adam Schiff he's told CNN and really a tongue in cheek comment and it appears the GOP majority is using the usual suspects Julian Assange and WikiLeaks and now these Russian Twitter bots. To get out there talking points. So Wolf, these release that the memo hashtag it's now being perpetuated by these Russian bots using these Twitter accounts.

[17:49:58] BLITZER: And I understand that Jessica these serve some new information involving with Trump ties to Russia?

SCHNEIDER: Well, we know that fusion GPS, the transcript of its Cofounder Glenn Simpson, it has been released. It was a 165-page transcript. Really, Simpson in that -- in that hearing, he detailed the suspicious connections that his firm found between Trump World and Russia. He also talked about Christopher Steele's probe into Real Estate deals by both the Trump Organization and Jared Kushner. Also, the connections between Trump and his associates and Russian Oligarchs. And this all led to the possibility that the Russian government had blackmail on Donald Trump and Trump associates.

Now, Simpson said that -- the possibility that -- it was that possibility that led Christopher Steele to go to the FBI with the dossier. The top Democrat on the House Intelligence Committee Adam Schiff. He said that Simpson's testimony reveals serious allegations that the Trump organization may have engaged in money laundering with Russian Nationals. And of course, that's what Adam Schiff wants the house intelligence committee to focus on. But we see with all of this other information including the Nunes report, there's a lot going on when it comes to partisan politics.

BLITZER: Jessica Schneider with that report. Thank you very much. Meanwhile a new report on "The Wall Street Journal" says one of the President's -- the President's private lawyers for many years actually set up a Shell company that may have been used to pay a porn star and ensure her silence about an alleged sexual encounter with the future President. CNN Brian Todd has been doing some checking for us. He's joining us from Delaware -- Dover, Delaware right now. What are you finding out Brian?

BRIAN TODD, CNN CORRESPONDENT: Wolf we tracked this company, this mysterious company reportedly set up property by Michael Cohen (AUDIO GAP) here in Dover, Delaware. We found no one who works for that company here or anywhere else. It turns out the people here are just registering agents for this company and several other companies. Still, we have new details about the way to the company allegedly paid money to a porn star who reportedly had a relationship with President Trump.

This nondescript office building in Delaware is the Headquarters of a company reportedly used to hide an alleged $130,000 payment from Donald Trump's Lawyer to the porn star Stormy Daniels. All to sign to cover up an alleged sexual affair. "The Wall Street Journal" and other news outlet says just weeks before the election, the Actress told reporters she had a relationship with Trump after meeting him at a Golf Tournament back in 2006. Daniels told journalists that "Slate" and "ABC News" she was ready to talk. But they say she suddenly went silent. "The Wall Street Journal," says at the same time Trump's Lawyer arranged the payment to stop her from talking. Tonight, documents obtained by CNN and first reported by "The Journal"

show Michael Cohen, Trump's longtime lawyer, set up at least 2 corporations in Delaware around that time, including one called Resolution Consultants LLC on September 30th, 2016. Records show he dissolved it a few weeks later on October 17th, 2016.

And the same day incorporated a new entity Essential Consultants LLC. The journal says Cohen used that company to make the payoff using a series of elaborate pseudonyms and legal contracts. The company was registered to this address in Dover, Delaware. An office that helps people outside of Delaware create companies here. Why would Cohen choose Delaware? Experts say the State has few disclosure requirements.

ED RATLEDGE, DIRECTOR, UNIVERSITY OF DELAWARE: It gives you a way of moving money to wherever you want to move it without necessarily having to say that a particular person sent the money.

TODD: Experts say that fits with this part of an alleged draft settlement agreement. Slate Magazines editor says Daniels texted to him in 2016. In it, Daniels would be called Peggy Peterson and Trump would apparently be known as David Dennison. Cohen the White House and Daniels deny any affair ever happened. And Daniels denies getting hush money in a statement sent by Cohen. Cohen, however, has never denied making the payment. Today the full transcript of a 2011 interview with her was published by the "Gossip Magazine in Touch" in which she spells out details of an alleged sexual encounter with Trump at a resort in Nevada in 2006. She claims Trump Captain Touch afterwards. And said he hope he could be on a show "The Apprentice". And that one time he quote "He told me he was going to give me a condo there" because they were building a Trump Tower there in Tampa. Experts say there's nothing illegal with establishing secret companies or even paying hush money.

SETH BERENZWEIG, BUSINESS ATTORNEY: As long as the case doesn't involve straight up blackmail, there's nothing illegal about trying to enter into a nondisclosure agreement in exchange for payment of hush money.

TODD: But if Daniel story and her possible pay off had been reported in October of 2016. Could have it changed the Election?

LYNN SWEET, WASHINGTON D.C. BUREAU CHIEF, CHICAGO SUN-TIMES: The first impression would be of course this would have an impact. But we know how many things did not have an impact in this Election, particularly the release of the access Hollywood tapes.

[17:55:11] TODD: Trump Attorney Michael Cohen did not reply to our inquiries today about this company that he set up here this LLC Company. But he reiterated this week that any allegation about an affair between Stormy Daniels and Donald Trump was quote "Old news that wasn't true then and isn't true now". Another Attorney represents Stormy Daniels did not return our calls. Wolf.

BLITZER: Ryan Todd at Dolven, Delaware for us. Thank you. Coming up, the breaking news, last-ditch efforts are underway to avert a government shutdown just hours from now. President Trump has gotten personally involved and reports progress from lawmakers report bewilderment and confusion up on Capitol Hill as the clock ticks down.