worked with a number of institutions. reince priebus came to him, they knew each other from political days. what reince didn't know was he knew jerry -- jared from their school days. hello, i'm wolf blitzer. it's 1:00 p.m. in washington. wherever you're watching around the world, thanks very much for joining us. let's begin with breaking news on wall street. once again the dow plunging while swings continue. let's go live to cnn's maggie lake. she's on the floor over there at the new york stock exchange. maggie, update our viewers. >> the remarkable thing about this is the day started very calm. the dow was only off about a tenth of a percent. as the afternoon progressed, we saw the selling pick up. a lot of people talking about

stock investors looking at bonds, concerns that the u.s. economy is overheating, it's growing too fast, it's pushing up bond yields and that is what is spooking people. but other traders say they don't think that's the reason. this is just a market that overshot on the up side, rallied too far too fast, and now the sellers are in control of the market. what's unnerving is the speed that they're selling on the downside to pick up again. so the volatility we saw at the beginning of the week seems to be coming back with a vengeance this afternoon. >> what's interesting, maggie, if you take a look, the record dow high was only a couple weeks ago or so on january 26, the dow closed at 26,616. it's now, as we speak, 24,300. that's a drop of 2,000 in a couple weeks. what do they say about that?

>> for it to happen in such a short period is unnerving, but hey, you have to take it at a new view. earnings 38% of s&p companies, interesting on their earnings. the long-term lookout is good, but there is a feeling that the market is looking for a floor, that maybe that record high we saw wasn't justified by the fundamentals. if you're in a rising interest rate environment, maybe that was too high a level. so we're trying to figure out what seems like fair value in an era where we're looking at interest rates move higher, a federal reserve that may be a little more aggressive and an era of really cheap money that's over. what's fair value there? no one seems to know and that's why you're seeing this volatility. people would like it to be a little bit more orderly over a longer period of time and not condensed into one week. but that is some of the themes that people are talking about over here. >> a lot of nervousness right

now. 2,000-plus point drop in two weeks or so, that will create some nervousness. maggie, thank you very much. let's get to the firestorm surrounding the white house chief of staff, john kelly. kelly is under a lot of fire right now for his full h-throat defense of the white house secretary, rob porter. he called him a man of honor. even after allegations became public that porter had abused two ex-wives. >> you have kelly saying he believes the man? what does he base that on? he looked deep into the man's soul and perceived innocence? i doubt kelly went out and interviewed these women himself and decided they were liars. he just determined that the secretary didn't beat his wives because he said he didn't. shame on kelly. >> kelly said, i was shocked by

the new allegations released today, even though he had known about the allegations for months. how has the president been reacting to this upheaval in the west wing? >> reporter: well, wolf, we should point out, at this hour, actually, at this very moment, the white house was supposed to hold its daily briefing. the white house press secretary sarah sanders is away. her deputy raj shaw is supposed to hold that briefing at 2:30 this afternoon. obviously that briefing is going to be about rob porter and what was going on behind the scenes in the last 40 months. the white house was aware last fall that there were problems with porter's background check, the security clearance background check that goes on for people at the white house for people who are in critical condition, and there was a few people that had more critical positions than the staff secretary, rob porter, who is stepping down. he was with the president on basically a daily basis, yet he had this very dark past. what is curious to a lot of

people, and i think this will be a topic at the briefing, is what did john kelly, the chief of staff, know and when did he know it? obviously he put out that glowing statement of rob porter right before sarah sanders put out that press report, basically defendi defending porter. then there was a statement from kelly basically walking back his praise. a senior white house official told me one of the reasons why they were putting those glowing statements out about porter yesterday afternoon was that they were reacting slowly, essentially, to the latest story, the latest bombshell that included that photograph of one of porter's ex-wives with a black eye. so this was an acknowledgment essentially from the white house that they were just responding to slowly to events. you have to wonder, wolf, and we were discussing this last night, why did it take a photograph for the white house to change its attitude, its posture toward rob

porter who we understand will be out the door and permanently gone from the white house as soon as today. and i think the real question is what does the future hold for chief of staff john kelly, because this goes right to the heart of judgment for who is supposed to run the west wing staff. he served with kelly in iraq. he said to me, i didn't know this john kelly, raising questions about the chief of staff's judgment, wolf. >> jim acosta at the white house. we'll stand by for the white house briefing. clearly a lot of questions on this expected. let's bring in our panel. pamela phillips is joining us. also with us, cnn political director david challian and chief political analyst gloria borger. he said he's shocked now.

he's known the fbi, any permanent security clearances, even though he's the person that gives the president the. >> and we learned that kelly has known about this since last fall. the question is how much did he know? did he see the fbi documents? we don't know the answer to that. his conflicting statements last night seemed to say. he was misled in some way. there was no new information --. i think the subtext here is. we don't know and porter said to him, this isn't true or whatever, and maybe he just

believed him. but we have to do some digging about the conflict active elements we're all getting in this story as we talk to people both inside and inside of the white house. one thing we do know,. what we didn't know was the president knew all about this. and when the president was told about this, let's just say he was unhappy. >> the president didn't know he had security access? >> the president wfirst heard about it from general kelly when he broke the story. >> he would know all about the fbi refusing to give him security clearances, because presumably he would want that aide to get those type of

clearances. . he's running the entire ship there in the west wing. chief operating officer, if you will, of this enterprise. here is a person who has to be in charge of the entire paper fl flow. that involves dealing with some sensiti sensitive. when you have some dark past like this, it gets revealed in an fbi background check. i guess we have to learn what does it mean for the president to learn of this? had he heard any conversations or rumblings before? was it a completely -- we have to learn what the president learned of it just as it became public. and it is clear, and you're right, you mentioned the photo,

gloria. from the public perception of data points, the photo seemed to change from a 100% rally around rob porter, defensive white house to champion him in a lot of initial statements. >> they couldn't look at the fbi reports, obviously many, which said they had a restraining order against him, which is a huge red flag. >> we know general kelly has made some other mistakes, the president wasi irritated over some other issues. how much trouble is he in? >> it's hard to say, but i would say from the perspective of president trump, what we know about this. he doesn't want aides to be taking the headlines from him.

he doesn't want id and is large. they yell at each other, sometimes there's profanities, but the president respects this attorney general. the longer this goes on, and if it looks like there, indeed, was a cover-up, i could see the president arguing that not only rob porter needs to go, but so does the person covering it up as well. >> and i know if the support upset, he has a lot of reasons. one is having this interview

loom i looming, but it's clear to me they're trying to advice president for a. >> forget about kelly for a moment. i think he's in some trouble right now, for this and other divisions he's made. . she had a relationship with rob porter and she continued writing these very positive statements at a time when she presumably should have recused herself from doing that. and donna gann who was supposedly being briefed by the fbi. how much trouble is he in. >> i think the mcsgg -- she was involved in crafting statements around this and sort of preparing her community banker's

destroyi destroying. but for mcgahn, the white house counsel, that is where the vetting of everyone in the white house exists, right? all of this process finds its way through the white house counsel's office. clearly there was a vetting issue with rob porter. and i would imagine that there are going to be questions that the white house counsel has to answer. considering this what did he know, when did he know, i do think if john kelly had information, it will be interesting to know his process and how the president feels about it, about what he chose to share or not share with the president. >> all right, guys. there's a lot more we're going to have on this story. it's developing right now. we're standing by for the white house briefing as well. we'll see what they have to say about rob porter and more . the briefing room still pretty empty but that will be full pretty soon. the white house set to respond to these very serious new

questions. it won't be sarah sanders, by the way, it will be the deputy secretary raj shaw. he's never done it before. we'll have live coverage of that. hell, no. that's what one republican says about the daca that's been presented. the dow down 581 points. as this wild swing continues, you're going to hear what's driving today's sales.

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talk to your doctor about xarelto®. there's more to know™. i'm never gonna be able i'll take a sick day tomorrow. on our daughter's birthday? moms don't take sick days... moms take nyquil severe. the nighttime, sniffling, sneezing, coughing, aching, fever, best sleep with a cold, medicine. congress votes today on a two-year spending bill. a bipartisan agreement means a government shutdown at midnight tonight is unlikely, but it's not a done deal yet. the senate is expected to approve the agreement pretty soon. things could get pretty dicey. phil mattingly is up on capitol

hill following the bill. they are deciding whether to support the bipartisan deal. what's the dilemma and will there be enough of them to get it passed? >> what the dilemma is daca, and there is hopefulness that they will come to an agreement. a bill with no finger or thumb on the scale one way or the other will be put on the floor, and the one who gets the most votes for amendments will end up winning. the dispute is over four words. speaker ryan saying he wants to deal with daca, he wants to put something on the floor that the president supports. that's the issue for democrats. they want that clause to be wiped away. if you want a sense of the dispute, take a list ton ten to two leaders earlier today. >> our priorities are in the bill. i have an unease with it and

hope that the speaker will man up and decide that we in the house can also have what mitch mcconnell guaranteed in the senate, a vote on the floor. >> we want a daca solution. guess what? in order to shift our focus and get on to the next big priority which is a daca solution, we got to get this agreement done so we can go and focus on this. i'll say it once and i'll say it again. we will bring the daca solution to the floor. >> wolf, the speaker making it clear he's not going to remove the president from this equation, and that leaves the question of where the votes actually are. if you take the first part of that sound bite with nancy pelosi, you get a taste of where the democrats are. they were crucial to bringing very significant wins for democrats that are in this spending bill. it's a $300 billion spending deal overall. it costs about $500 million. that's something democrats want, the 100-plus billion dollars on

the democratic side addresses a lot of concerns the democrats have. that's why when i talked to staffers at the house in the last 24 hours, they're very frustrated with daca, they're very frustrated with the speaker. but in the end they believe the votes will be there, at least enough votes to get them over the edge. it's the size and scale of this deal. the group of conservatives, fiscal hawks, made it clear that the spending goes too far. the non-defense is a problem. the $90 billion in disaster relief that's not paid for, that's a problem as well. speaker ryan will lose a decent chunk of his caucus, maybe 30 or 40 congressmen. that's why they need democrats. how many they're going to get is still an open-ended question. aides still comfortable to get there. it's just a matter of how and when. >> they have to do it by midnight to prevent a government

shutdown. i assume they'll do that. one of the conservatives on the outside is joining us right now, republican congressman ted yelo on the floor. congressman, thank you for being here. >> good to be here, wolf. >> its official position on twitter. hfc opposes the caps deal. we support funding our troops but growing the size of the government by 13% is not what the voters sent us here to do. that's in contrast to what we heard from speaker paul ryan. he said he believes there would be enough votes in the house to pass the senate deal. you think any members of your freedom caucus will vote yeah? >> yeah, there's a few votes in there. we got the bill this morning. it's 250 pages. about 130 pages are an amendment that was on oethe other senate

bill. we haven't been all the way through that so we have to weigh in on that. we have to fund the government, i think we're all in agreement with that, but how you fund it is a difficult question we have to work through. there are fundamentals in this that add to our debt, and as one of the generals in the past said, the biggest threat to our national security is our debt. this is adding $1.2 trillion just to our deficit before the fiscal year end of 2018. just the deficit. and so the bill is going to have 50 500 or a little over $500 billion extra spending. we've got a balance on our nation. >> you heard defense secretary james mattis, he really wants it. the military wants the additional funding for the men and women of the u.s. military. but you're saying right now you're still undecided? >> i'm undecided on this, yeah. i've got to do that balancing,

you know. this is where it really gets tough. admiral mullens said this years back. we can do the short-term fixes on this now, but the long-term bill will be there on the back of the american taxpayers. you see the rise of the interest rates. you know what the interest on our debt is, and so it's a juggling act. do we serve the immediate now or do we look long-term? the mere fact we're just funding until march 24th, this is the fifth cr since the end of the fiscal year. you remember the days we had the little donut spare tires on our cars? the manufacturers did that to cut costs and save money. it was meant to be a temporary fix for our tires to go from the flat surface to the service station. then you would go down the road and see three of them on there. >> critical spending issue is a two-year plan. it's not simply going to go

until the end of march. certainly the republican leadership and the democratic leadership in the senate want it. here's what a lot of your fiscal conservatives like you -- >> i agree with that. we need that longer term. >> -- probably find it hard to believe that there is a republican in the white house, republican leadership in the senate, republican leadership in the house. the last couple years, mostly during the obama administration, the federal annual budget deficit was around 500 or $600 billion. do you know what it's going to be this current fiscal year, fiscal year 2018 if all of this goes through? do you know what the federal annual deficit for this year, congressman, is going to be? >> it's $1.2 trillion is what i heard from a member from the ways and means committee. >> it's going to be more than a trillion dollars. it's been a long time since there was a trillion-dollar annual debt. the question, i guess, a lot of people are asking, is who is

responsible for increasing this federal deficit? the debt in this year going from 600 billion to over a trillion dollars. who do you blame for that? are you blaming the president? >> no. the american people are going to look at congress and say, you guys, we gave you the majority for a reason, so we're going to take a hit on this. again, wolf, you and i have talked about this. this is going up regardless of who is in the white house until congress -- >> let me interrupt, congressman, because as you know, you want to cut what's called sbeettentitlement spendi social security -- >> mandatory spending. >> you want to cut it, the speaker wants to cut it, the republican leadership wants to cut it. do you know who doesn't want to touch any of that? >> yes, the president. >> so i subcommittee ah. if you're not going to deal with that because the president says

you can't touch social yourt, we're just going to an increase in the deficit every year. sdwlz you're right, and you and i have said it's not cutting those programs, it's formulating those programs so they meet the long-term goal they were designed for. you and i talked about it doesn't matter if this president or the next president wants to deal with mandatory spread spending. for mandatory spending, we'll deal with the american people or t the. we've seen him nm puerto rico, it will be fixed. we need to grow up and say, we have got to address these as a nation. thmt is something that will affect every american a krocrose

board. >> i'll be interested to see how this comes out. let's switch gears. the white house chief of staff john kelly, as you know, cnn is reporting that general kelly knew about the domestic abuse allegations against the white house secretary rob porter. for months -- porter has now resigned -- knew but did nothing. do you think we can trust john kelly to have that critical and important job? >> i feel very comfortable with general kelly. i've met with him, i've talked to him. i don't know the ins and outs of what went on there. i can't answer that. they have offices of ethics, they have protocol over there. we don't tolerate those kind of abuses anywhere. . is now presumably going to be.

>> the question general kelly served for many years. he's a four-star general marine corps. he dealt with security clearance, classified information his whole career. if the fbi keeps telling him, you know what, it's a year now, more than a year. we're not dwg to be able to give your top deputy over there. and if he's told the allegations are beating up two ex-wives, he's not going to get top security clearance. you know what, maybe he should have a different job. >> i would agree 100% with you, but again, i don't know what the conversations were. i would have to agree with you. >> waiting for a year for security clearances.

>> if you think that's all the classified information, that's a problem in itself. >> we've got to focus on getting this government running and doing what it's supposed to do so we can work through these things so much quicker and we can focus 20 years down the road. we need to look outside of what's going on here in america. we need to prepare for what china is doing, the growth of china, the aggression of china. and we can't do that if we're focused on short-term crisis management, and this is where i fault the leadership of the majority party, which i'm in, is that we need to raise up our days so that we're looking down the road, we're looking not just at the end of this congress, but 20, 50 years down the road so we don't always operate in short-term spending crisis management. it's the worst way to spend the american people's money and

we've been out spospoken about since we've been up here and we'll continue until it changes. >> congress, thanman, thanks fo joining us. >> thank you. have a great day. >> you, too. the first relative from the dynasty crossing the border into south korea who kim jong-un is meeting with, his sister. there are to be talks as well. and lasts for up to 12 hours, with zicam extreme congestion relief and zicam intense sinus relief. for colds and allergies, get your better back with zicam nasal sprays.

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top stories of very disturbing allegations of domestic abuse against rob

porter. porter expected to be out of the office today. telling cnn that white house aides have known about the allegations against porter for months, including white house chief of staff john kelly. kelly apparently learned about the allegations last fall. months ago when porter was denied a top security clearance, still he was allowed to continue working in the white house all this time. let's talk more about the process of obtaining a security clearance. joining us, attorney john barry who represents people trying to get clearances, others who are denied clearances. you have a lot of experience in security clearances. what does it say that rob porter couldn't get permanent security clearances for more than a year even though he worked on a daily basis with the president and the white house chief of staff. >> it's very shocking. there seems to be two standards in the security clearance process. one for those that are higher up and one for those involving every other federal employee and

contractor. i cannot imagine someone with this type of access being allowed to go on when there are security clearance issues. you just don't see that. >> the fbi does interviews with friends, relatives, associates, someone who is applying for security clearances, but also questions the individual himself or herself, right? >> that's correct. >> now, when the fbi questions these individuals, if that person lies about something, that's a crime, right? >> that's a criminal offense. >> in this particular case, let's say the fbi asked rob porter, is there anything in your past that could cause any serious problems for the u.s. government if it came to light, and if that person, rob porter, for example, didn't talk about these allegations of spousal abuse, would that be a lie? >> yeah. i mean, depending on what part of the sf-86, which is the form that's used, depending on what the nature, if there was a criminal issue or some other issues. when you're filling out that form, you have to do it

accurately, completely. you don't generally get to amend it. and if you lie, that's a criminal offense. and some people do get charged for that. >> so potentially, he could be in legal trouble in addition to all of his other problems, legal trouble if he lied to the fbi if he denied that there was any spousal abuse with his two wives? >> or if he was not 100% in his description. there could be a lie, there could be an omission, there could be a number of factors that could cause an issue. >> so i assume the fbi is now going back and looking at the document he filled out and the interview that he gave to see if there was a formal lie. if there is, he could have legal troubles, perjury in front of the fbi. even if you're not under oath, you cannot lie to the fbi. >> no, you absolutely cannot. >> thank you very much, john berry, helping us appreciate this process. we'll have more on the scandal inside the white house that's unfolding. we'll take a closer look at hope

hicks' role in rob porter. a continuous steep decline in the dow. almost 493 points down right now. we'll update on you that. stay with us.

it's one of the most powerful jobs at the white house, communications director. it's a position held now by hope hicks, very trust the confidante of the president. now she's front and center with the rob porter mess. she's been ro mamantically invod with porter. sarah, tell us a little about hope hicks because she has a very important job. >> she does have an important job. she was working with the trump organization before donald trump decided to run for president.

he hand-selected her to be his spokeswoman and then go to the transition and obviousal pointed h -- obviously appointed her to this role of communications direct director. her office is right outside of his, and she's dealing with the president on all confrontations that come his way. she probably has the closest relationship in the white house than anyone not related to him. >> he trusts her. clearly he elevated her. talk a little bit about her role now in this whole scandal that has emerged. >> it's not that she is trust bid the president, she's trusted by the family. she is the closest you can get without being a trump family member in trump's orbit. now she's in a difficult position because she was ro manhattan -- ro mamantically

involved with porter. you don't want her to be in this situation, and it sort of casts her in a negative light. and in the white house you're dealing with someone who never worked in government, never worked in an administration, so they tend to make errors like that where you say, okay, maybe with a little bit of time she won't be involved in things like this. but she was. is there fallout for john kelly who knew about these allegations and kept him on, anyway, and is there fallout for hope hicks who knew how serious these allegations for porter really were. >> don mcgahn skplt whiand the house counsel and others who

knew for months but didn't do anything about it. thank you very much for that report. an alarming revelation from the security chief. why the white house believed russia penetrated some voter rolls. now that's cool! coolsculpting safely freezes and removes fat cells with little or no downtime. and no surgery. results and patient experience may vary. some rare side effects include temporary numbness, discomfort and swelling. ask your doctor if coolsculpting is right for you and visit coolsculpting.com today... for your chance to win a free treatment. and with ancestrydna liveson sale for just $69,

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revelations of russia's breach during the 2016 election, demanding new hearings of hacking, followed by new revelations from the cyber security chief. >> i can't talk about classified information publicly. targeting 21 states,

exceptionally small number of that 21 were actually successfully penetrated. >> jake tapper joins us now. this expert on cyber security says the russians penetrated voter roles. >> no sign that they actually changed votes but we heard this for some time, that russians got in to some systems and attempted to get into 21 systems. the secretary of state, rex tillerson, in an interview with fox and mike pompeo, cia director in an interview with the bbc both talk about the russians continuing to do it. not just in 2016, but in 2018 and tillerson, himself, said i don't know that i would say we're better prepared. so there's a real question about if this vulnerability from 2016 is going to rear its head again

this year. >> we hear these warnings about russia's involvement from these top officials, but not from the president. >> no. because i believe he perceives anything having to do with russia and the 2016 election to be an attempt to delegitimize him when, obviously, some of it is but a lot of the alarms are being sounded by his own officials and individuals who care about the integrity of the vote doesn't have anything to do with that. has to do with just protecting the integrity of the vote. >> you've got an important interview with aly raisman, the gymnast, that will air later today on "the lead." give us some background and tell us about this. our viewers will be pretty interested. >> obviously she's a gold medal award-winning gymnast, part of the team in 2012 and 2016. she's been very dismayed at the way that both michigan state and the usa gymnastics, but also the u.s. olympic committee have tried to, in her view, covered up what's going on and really not tried to get to the bottom. she's calling for the u.s.

olympic committee to start a truly independent investigation. one in which all of their data and e-mails is available for the investigators, one in which the investigation is released to the public at the same time of the olympic committee. and she gave me an example of something that people in the public don't know about. an incident that happened in 2011 that will surprise you. take a look. >> from my reporting, i understand that in 2011, one of your fellow athletes, in a car with somebody who was going to become an olympic coach, talked about nassar abusing her. >> yeah. when i was in the car with her, you know, like i said, we would talk about it amongst ourselves and one of my teammates described in graphic detail what nassar had done to her the night before. and john gedder was in the car with us and he just didn't say anything. i don't know what he did or didn't do from there. i know he didn't ask us any

questions. but that just is why we need the full, independent investigation to really get to the bottom of who knew about this, because, you know, we -- i can't even really remember all the times we would talk about it. but i think we talked about it a lot because we were very confused and we would always convince ourselves that, you know, we were the problem. but the fact that john gedder overheard us, i know maggie naples and i were overheard by somebody else in another training camp. concerns me who else overheard us and didn't do anything about it. we need an investigation. >> now, we should point out we reach ed out to john gedder, wh went on one year later to be the olympic coach in 2012. we did not hear back. we reached out to his attorney. he is being investigated already for other alleged abuse

practices. aly doesn't know necessarily that he heard but said she was in the car and this other girl was describing the abuse, john gedder was in the car with them. nassar was still abusing people through august 2016. now we have aly raisman saying, hey, an olympic coach may even have heard about this in 2011. >> much more will air later today at 4:00 p.m. eastern. >> exactly. >> thank you so much for doing this, jake. extraordinary moment unfolding as we speak. the first relative from north korean dynasty crossing the border into south korea. kim jong-un's sister. who is she meeting with? that and more when we come back.

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historic meeting is set to take place on the sidelines of the winter olympic games. south korean president is set to have lunch with the north korean leader's sister. national correspondent will ripley is following late-breaking developments from seoul. will? >> reporter: wolf, a lot of significant developments here. we saw two very different scenes

unfolding in north korea and south korea. in pyongyang, a massive show of force, kim jong-un unveiling more intercontinental ballistic missiles than we've seen before. telling the world north korea is a nuclear power and will not back down despite pressure from the united states. moon jae-in speaking along with vice president pence in south korea. moon talking about diplomacy and confirming he will have lunch with the sister of kim jong-un, kim yo jong, first north korean to step on south korean soil. as historic as it is, there are no north korean diplomats who will be attending and north korea says they have no desire to engage in diplomacy with the united states at the olympics, no intention to talk with the united states. also happening, protests. people here in south korea outside a north korean concert venue clashing with police,

saying south korea is getting taken advantage of here, that north korea is getting everything it wants, all-expense paid trip to the olympics and no diplomatic breakthrough or lasting peace after the olympics. north korea is already preparing its next moves, given that the united states will kick off joint military drills with south korea after the olympics. in the past, north korea has launched missiles, or conducted nuclear tests after drills like this. what will be kim jong un's next move after the olympics is really anyone's guess. wolf? >> that's it for me. the news continues right now, right here on cnn. >> wolf, we'll take it. thank you so much. hi, everyone. i'm brooke baldwin. you're watching cnn. white house briefing will soon begin. officials will no doubt be confronted with more questions about