welcome to "inside politics." i'm john king. thank you for sharing your day with us. the government is back in business after a brief overnight shutdown. the president brought in a new spending plan that throws the debt onto the trash heap. korean athletes north and south march carrying unification flags. vice president mike pence looks on with kim-un's sister just a

few feet away. democrats? they have thoughts, too. >> rob porter was a serial wife beater. this guy is astonishing. it's illegal, it's immoral, and by the way, it's really cowardly. and john kelly in the white house was aware of this for over a year. how did this person, who committed crimes, he didn't even have a security clearance yet he was being allowed to see the most secret documents involving our national security. so this is just, on every level, inexcusable. >> back to that story in a moment. but we begin this hour with what happened while most of you were sleeping. the government shut down and then congress agreed to reopen it again. 340 voted in the house of representatives before sunrise this morning and had a signature from the president. it means washington now has a

new budget and both parties have adopted a new mentality: spend now, pay later. now is the president content to add $5 billion to the deficit over the next two years? add this to the heap of campaign promises. >> you'll balance your first budget or it will take a couple years? >> no, but it will be fairly quickly. i like the penny plan. it's actually very good and you can get more than a penny, by the way. it will go rather quickly. >> the president said, yes, there is some waste in this but he called it a big victory for the military. unfortunately daca not included in this bill. negotiations to start now. to share with us today carla with the "washington post," olivia knox, eleanor johnson

with politico. i think everybody agrees that it's good to keep the shutdown to five or six hours overnight while most people are sleeping. but it is a relevant document the president signed today, especially when you think of what he campaigned on, saying in eight years i'm going to get rid of the national debt. and to think you have a republican house, republican congress and republican senate. normally you would never dream of getting this through the congress. >> it's pretty remarkable that the republicans who were so united around this deficit message, many have abandoned it. there were a few that stuck to it and they wouldn't vote for the bill yesterday, or i guess the early hours of this morning. the democrats are the ones who don't get to view the shutdown and last-minute things. nothing to see here on that one as they're trying to make these deals and trying to get a win for the president.

yes, they did as a party try to push for more defense spending without the matching domestic dollars, but that's the way these agreements and arrangements and deals work, that you have to match and have more parody than not, and that balloons the size of these budgets and that balloons the deficit. it's a real market shift from the republican party of 2016 to the republican party of 2018 as to how important it is. >> to be fair to republicans, they have to compromise with the democrats. they can't get everything they want. is it just because of that or is the republican party moving away from the past? the one person who did stand up in the senate and who did force a government shutdown for about eight hours and 39 minutes is rand paul. listen. >> i want people to feel uncomfortable. i want them to have to answer people at home who said, how come you were against president

obama's deficits and how come you're for republican deficits? whose fault is it? republicans? yes. whose fault is it, democrats? yes, it's both parties' fault. you realize this is the secret of washington. the dirty little secret is the republicans are loudly clamoring for more military spending. but they can't get it unless they give the democrats welfare spending. so they raise all the spending. >> what happened to the republican party that we had for at least eight years of barack obama? >> well, rand paul did succeed in making everybody feel uncomfortable because they were exhausted. i'm not sure they felt uncomfortable because they approved $500 billion in extra spending, but i think it's both. republicans approved it because they have a slim majority in the senate and a relatively slim majority in the house, the much larger majority. but also because i think donald trump, in his 2016 victory and a

huge, smashing victory in the primary, showed that republican voters don't care as much about fiscal austerity, debt and deficits as they originally thought, and that the base is much closer to donald trump than it is to paul ryan, who for years before was campaigning on fiscal restraint. and so you see the party moving much closer to donald trump, who you showed a clip of him during the campaign, but during the presidency, he hasn't talked much about balancing the budget or, you know, that and deficit. >> it's also the way of tribalism and governance. they are the majority party responsible for keeping the government open, obviously, and we've seen mathe voters did car when they were the opposition party. when donald trump came and kind of swept to victory, one of the things he was able to campaign on was an infrastructure bill, a

message that didn't look at the deficit and debt that much, so that gave them some wiggle room for what they did this morning. >> to your point, this is without a doubt donald trump's republican party. a write-up in the washington examiner, the headline, the republicans repeal the tea party. then this cartoon, it's a great cartoon. he said, this is about right, a cartoon of an elephant and a donkey, the representatives of the groups with a weight going down shaking hands. this is adult behavior. they shut down the government but they didn't really shut down the government. this is a giant shift in republican philosophy. >> no, it's not. they discovered this when they're crafting a budget. >> with all the political message, it's never what they really believe. >> basically republicans

discovered this when they were writing a budget, which is meaningless, or when they're in the opposition party. we didn't see this under george w. bush with massive tax cuts, we didn't see this under ronald reagan. we saw this under clinton and obama. we don't see it now. this has never really been a core belief. paul ryan may be where he is as speaker because he was, in the words of an he iesteemed bloomb edito editor -- >> i'm interested if we have republican primaries out there saying -- >> as the president said, things look different behind the oval office desk and it's proved tremendously difficult for republicans to cut spending when they run the government. you remember president bush. it was medicare part d, no child left behind.

these were extraordinarily expensive programs, and both times, during the reagan administration and during the bush administration, there were some -- there was a minority in the party. mike pence was a vocal proponent of those programs during the bush administration, there were others during the reagan administration. but those voices did not win out. >> by the way, they're going to rediscover the deficit, probably, on short order when they start going after entitlement spending. >> the president has told them don't do it. >> i think it's part of what you're spending on. we've seen republicans rediscover that message when it comes to entitlements and other programs they want to restructure. while they may have put it to the side tonight, i imagine they'll come back. >> if in the end you have to deliver results which sends the budget results or spending down, not today. quick show of hands before we go to break. is there anyone at this table who believes -- the senate

starts monday on immigration. is there anybody at the table who thinks by march, the deadline for the dreamers, we will have a deal. if you think yes, raise your hands. i didn't think so. those of you who weren't watching the house floor live at 5:00 a.m. -- debbie was -- taking their time to vote yes on the budget deal. up next, the president frustrated with three of his top aides, at least, who stayed silent on what they knew about rob porter. your insurance company won't replace the full value of your totaled new car. the guy says you picked the wrong insurance plan. no, i picked the wrong insurance company. with liberty mutual new car replacement™, you won't have to worry about replacing your car because you'll get the full value back including depreciation. switch and you could save $782

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they appear out of nowhere. my secret visitors. hallucinations and delusions.

the unknown parts of living with parkinson's. what plots they unfold, but only in my mind. over 50% of people with parkinson's will experience hallucinations or delusions during the course of their disease. if your loved one is experiencing these symptoms, talk to your parkinson's specialist. there are treatment options that can help. my visitors should be the ones i want to see. welcome back. in a moment the president's anger and a white house fallout now that a trusted insider has been forced out because he's been publicly abusing his wives and girlfriends. first, how we got here and how it was rob porter was allowed to stay on the job so long. two of his ex-wives told the fbi last year of the abuse. that's why porter couldn't get a security clearance.

a former girlfriend alerted the white house counsel. but porter was kept on as staff despite allegations like this. last night one of his ex-wives shared her story with anderson cooper. >> it was a low-grade, constant terror of not knowing what i might do to set something off, what mood he would have. the reality is he's not a monster. he is an intelligent, kind, chivalrous, caring, professional man, and he is deeply troubled and angry and violent. i don't think those things are mutually exclusive. >> and the people he works with may not have seen that side of him at all. >> of course not. of course not. it's reserved for the most intimate and most vulnerable moments in his life.

>> again, we'll get to the president's anger about all this in a moment. it includes, we are told, unhappiness with his chief of staff john kelly, unhappiness with his long-time aide hope hicks. why was porter allowed to stay on the job for months when his behavior was released to officials? the judgment of the chief of staff by not bringing this to the president, if he was truly blindsided by this in recent days that, tells you about the operation. this is cnn reporting now, some of it first reported by the "washington post" and confirmed by cnn. january 17, 2016, the earliest days of the administration, porter went to the white house council, asked about the background check process, said my ex-wife has some potentially damaging information. right out of the box, the white house council is teed up about this. in january 2017 when don mcgahn,

the white house council, learned of the allegations, he wanted porter to stay put because he saw the harvard law-named capitol hill veteran as a steadying professional voice in the white house, according to people familiar with the matter. his view didn't change in june when the fbi flagged some of its findings to the white house. nor did he act in september when he learned that the domestic violence claims were delaying porter's security clearance, or in november when porter's former girlfriend contacted him about the allegations, according to these people. help me with this. >> he had highlighted the fact of domestic abuse and that this might cause problems in the future is troubling. >> despite what i did, they're going to let me keep this

important job? >> don mcgahn is notified about this. he's the white house council, and we know that john kelly, the ultimate decision maker, really, along with the president of whether this person could stay knew of this as far back as last fall. so i think the buck really does stop with the chief of staff, and, you know, to give these people the most benefit of the doubt, i really do think that chief of staff kelly and don mcgahn were trying to reconcile somebody who they knew to be an incredibly competent person in the workplace who had a sterling resume that the president admired and who had developed a relationship with the president with somebody with a police record that they saw and claims that they saw as wildly inconsistent with this. that's what i think was happening internally in the white house. it is tremendously difficult to explain, but i think they were grappling with, could this possibly be the person that we

work with day to day? >> this goes to john's point. >> they had the files, though. if they wanted to, they could say, we love you, rob, we think you're great. go get some help and we'll save a job for you. they could have done that. instead they kept him. >> they made a security decision. there is a lot of paper that flows in and out of that office. the president overrules that office. but the fbi isn't saying, we frown on domestic violence. what they're saying is they look at things like substance abuse, extramarital affairs, financial problems, anybody that might make somebody liable to black ma blackmail. they didn't make a moral judgment, they made a security judgment and the white house overruled that judgment. >> i think what i find a musing is kellyanne conway's statement praising rob porter's character

knowing he knew all this. that is truly mystifying to me and a tremendous lack of judgment on behalf of the chief of staff. >> i think that's quite important. yes, for centuries, probably, this has been a thing of, oh, the person who he is in the office is not the same person that he is at home. is it a green light to porter that they're going to turn a blind eye to this in the future? you have to wonder if anybody brought this up to hope hicks when she started dating him as well. but the other thing, this is the white house. this is the example-setting institution for the entire country. more concerning about whether it's a green light to rob porter, is it a green light to everybody who saw this play out, that you can have this record recorded and you don't care. >> furthermore, one of his former girlfriends called the white house.

>> the judgment was these accusations are not disqualifying for someone no matter how competent they were, no matter how qualified they were for that job. and any time that he spends with that inside clearance when they knew of the allegation was a judgment on their part. now, that judgment may have changed when the photos became public, but we also see that chief of staff kelly made another decision to defend him after those photos came out. so this was a serious lack of judgment when the white house was saying the serious allegations that the communications spokesman calls credible yesterday, that these credible allegations were not invalidated. >> again, what you see is another case -- i'll give you michael flynn as a different n issue but the same example. only when it's made public is it reprehensible. and rob porter went to don mcgahn early on and said there

may be a problem with my background check. his ex-girlfriend wrote a blog about her experience. she said when he got the job at the white house, he tried to change it or take it down. >> i went back and forth with him for an hour or so about what language i would be comfortable with, and the ultimately the language he came up with i wasn't comfortable with, and he came out with that statement an hour later. >> can you say what he wanted you to do? >> i don't remember the exact wording, but it was something along the lines of "the post doesn't accurately predict my marriage." he was asking me to downplay it. >> a calculated effort to try to -- to help make this go away. >> and to improve the image that was there on line that people could easily connect the dots over and what was going to be there to see. you drew a comparison with the

flynn situation. not excusing the flynn situation, but we're in a moment in the year right now where we're beyond the country talking about how this sort of thing is arguably criminal, is not okay to treat women in a way that is disparaging even before you throw the punch. this is so out there in terms of a publicly adjudicated thing in the fact that it still has to go through four levels of warning and actually hit newspapers before you see any sort of crack or shift. that is why that is so publicly shocking. flynn situations don't happen every day. this is a more commonplace and more publicly aired discussion. >> that's a great point. i will continue this conversation in just a moment. the president is angry about it, he's disappointed in his staff. what the president thought of rob porter before he learned about all of this.

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here's the biggest issue for a white house in damage control mode after the sudden dismissal of rob porter. his allies are asking if the team is up to the challenge. the president seemed blindsided to the fact that rob porter has two abused ex-wives. both kelly and hicks initially scrambled to defend porter and told friends and outsiders outside the white house the president is getting bad advice. others argue even if he has mishandled the porter scandal, kelly has brought much organization to the white house and should stay. a rare moment of hue millty --y

at the white house podium. >> i think it's fair to say we all could have done a better job dealing with this situation. >> true. i shouldn't say it that way, actually. it's good for him to stand up. they don't often say that, especially in this administration. most administrations don't like to say, we didn't get this right. there were other things at the briefing we could talk about if you wish, but at least he said, yeah, we didn't get this right. now the president is mad. now the president is making phone calls. he said chief of staff kelly blew this. >> the president doesn't like bad press and he's getting a whole lot of bad press. >> that's all it is. he's not asking, why did this guy get one of the most trusted jobs in the white house? he's just saying it's bad press? >> he doesn't like to see his administration getting bad press, he doesn't like to see his communications director get bad press. there's been a whole lot of

solacious coverage on an issue that's been front and center. i think that makes him tremendously angry. >> i would say he also doesn't like to take blame, and he is now outwardly looking at who can he blame for that bad press and has isolated hicks s has isolated kelly as the people to do that. >> this president is reaching to outside advisers who helped him when he took office. there might be rivals on the inside he's asking, hey, should i get rid of my chief of staff? he might be considering firing someone when that's not the case. >> again, this is part of the constant -- some people call it chaos, some call it his behavior, but it's constant in the trump administration. he's calling outside asking people to rate and score his inside team, among them, his foreign campaign manager corwin lewandowski who was fired from the campaign. still talks to the president

fairly frequently. not a fan of john kelly because john kelly has tried to limit his contact with the president. he sees the fix. >> the president is the only one to make the decision if john kelly stays on the job. the general is there to put in policies and procedures, and in this case those didn't work, and we need to find out why. where the buck stops, i guess at the end of the day is with the general. >> it t's the president's decision, but i know he watches a lot of cable television, especially fox news, so i'm going to give him a suggestion on tv. >> the buck doesn't stop with john kelly, the buck stops with the president, which, if the president is watching, it may be very soothing for him to hear the buck stops with general kelly. >> again, the president we are told -- i don't have any information, if anybody does, please step up -- the president feels blindsided by this. if that's not true, please step up.

porter, trump told cohn, gary cohn, had not one, but two degrees from harvard and he was a rhodes scholar. even gorsuch wasn't a rhodes scholar, trump said. maybe he'll be my next supreme court pick. this is somebody who the president very much enjoyed. >> he did. porter really did develop a nice relationship with trump, in part because he really did have a sterling resume. he was a graduate of harvard college, a graduate of harvard law school, overlapped at harvard law school with jared kushner. he was really impressed that he had been a rhodes scholar, and he said, joking around to gary cohn, that he's the smartest guy in the white house. i thought he was this guy who just handed me papers, and then i realize td this guy was the smartest guy in the white house. even gorsuch wasn't the smartest guy, he wasn't a rhodes scholar. when john kelly learned his background was a real problem,

he had some difficulty acting upon it. i think it's important to note that the fact rob porter was working on an interim security clearance was a real problem for john kelly, and he had told confidantes in recent days that he wanted to work on not only porter but everyone else in the white house continuing to work on security. >> we'll continue to talk about that in the days ahead, because rob porter deserves a top of the list in the spotlight, but there are a number of other aides who still don't have security clearance a year and a month in, and if they can't get one, the chief is right to think they can't get one. next, omarosa turning on the president. >> should we be rude? >> don't say that. >> because we are worried, but i need you to say no, it's going to be okay. >> no, it's not going to be okay.

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a couple things on our political radar today, president trump planning to hit the road, head to pennsylvania again this month hoping to save a republican seat in congress. the president doubling down support for candidate rick sicon. the special, as it edges closer, democrats think they may have a chance to steal a seat. senator chuck grassley says they may get a chance to find out what happened in that june 16 trump tower meeting.

interview transcripts with people present that day, including the president's john donald trump jr. are being prepared for release and the senator says we can expect them in public in a few weeks. don't want to miss this. omarosa newman giving her "big brother" housemates an earful. >> did anybody say, what are you doing? >> i tried to be that person, and then everyone around me tried to attack me. they said, don't give her access, don't let her talk to him. >> would you work for him again? >> god, no. never. in a million years, never. >> had to have a little fun, right? omarosa continuing her public service on tv.

after leaving her white house position in december, her big brother asked her if she thinks the administration will be okay under the trump administration. her answer in one word: no. is that a fair amount of self-promotion? >> not at all. >> the president gave her a pretty important white house job. i know it didn't end well, she didn't get along with the chief of staff. he can't be happy to see this, or does he just think, hollywood, whatever. >> i do think she has a personal understanding of her job, and charlton knows that omarosa is a self-promoter. so while he may not be happy to see some of those, he'll know what omarosa is doing. >> and if there is someone who is kind of testy, i remember in "the apprentice" the two were

not exactly best friends. >> did you see that on reality tv? >> yesterday press secretary raj shaw said omarosa was fired three times on "the apprentice" and this is the first time we let her go. the vice president is in south korea for the olympic games. so is kim jong-un's sister. who isn't? the president and the dictator. full diplomacy on the world stage. your insurance company

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look, right now they're talking olympics. it's a start. it's a big start. if i weren't involved, they wouldn't be talking about olympics right now, they would be doing no talking or it would

be much more serious. >> welcome back. is that true? well, it's impossible to say. but look at these improbable pictures this morning in south korea. kim jong-un's sister, kim yo jong, taking in the opening ceremonies in pyeongchang. she's the first north korean family member to set foot in the south in 50 years. run row from her, vice president pence, targeting the royal regime. is the vice president's icy tone the right tone? experts from the previous administration say no. the olympics will be the sharp contrast between the charmo fence sieve led by kim yo jong and the spine-stiffening led by vice president pence. i don't know if that's right, but it is the debate. with the north korean athletes there, with kim jong-un's sister there for the historic visit to

the south, the march of the ceremonies with the flags, the images are pretty powerful, and the vice president thinks this is all propaganda, a waste of time, implicitly critical of the south for agreeing to it. should they have a "we think it's propaganda but prove it" tone? >> the president has never been willing to give the south koreans the driver's seat. you're seeing a visual representation of the olympics which is a happy, let's all link arms type of thing than your usual standoff with nuclear weapons development. you've got pence kind of resisting the way the administration has resisted at every turn when the south koreans want to take a more conciliatory approach. they're right there. it matters to them on a more day-to-day sense. it's not theoretical when you're talking about nuclear weapons, but it's more of a distance and we have the privilege of taking a harder line against north

korea. now you have pence trying to keep that stiff upper lip to show he's not satisfied with it, that he's not going to take a backseat to what the south koreans want, and the south koreans are putting some expert seating arrangements together to make that as awkward as possible. >> you see it in the images. olivia, you've written about this, but even while in south korea, there are some defectors who were there. otto warmbier's parents are there. you see these images here and then you see paula hancock, our correspondent is there. lots of cheers for north koreans marching to their flag. everyone in the stadium took to their feet. should the vice president say, we don't believe you, we don't trust you? but hey, it's great you're here and now prove it more than this? or is he taking the right line? >> everyone is playing their assigned roles in a diplomatic sense. the south koreans want a

long-term goal to say pet niee peninsula reunified. this is what we expected from the moon administration. we expected them to divert from the trump administration. the surprise is that for months and months and months, they did not. they lined up with trump. this is much more than we can expect. i don't pretend to know if this is the right call or the wrong call, but pence is using the maximum pressure campaign. >> lester holt, who is reporting from the olympics, no opening at all for diplomacy when you listen to this. >> well, president trump and our allies in the region have agreed to delay our military exercises until after the olympics. i know president moon has appreciated that, but we're going to make it crystal clear that our military, our japanese self-defense forces, our allies

here in south korea, all our allies across the region are fully prepared to defend our nation and to take what action is necessary to defend our homeland. >> it's almost as if they're saying, we agree to hit the pause button during the games, but the moment the games are over, we're not going to give the north any credit for this outrage. >> yeah, he's really throwing cold water on the kind of efforts that the north and south have put together here. but again, that's the role he's going to play. that is what the policy of the trump administration has been and even policies going back further, and that's the kind of relationship that these places have, and so i don't think it's necessarily surprising. the question is what happens next? >> and i don't know what mike pence is telling the south koreans privately, but one thing that's happening is this is one of china's dreams, is seeing the united states split off from its allies in the region. some differences, public differences of opinion with south korea, though not with japan. japan is lined up very carefully with mike pence.

if there is a downside to this, if there is a potential danger it's that. if this turns into a more lasting and deeper rift with south korea. >> you watch the repeated opening ceremonies, sports diplomacy matters. up next, don't look at your 401(k). don't blame me if you do. the dow down triple digits again. does it suggest the president might stop crowing about the markets?

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>> and that means your 401(k)s and all the things that you have. >> you've heard that, the president bragging about the stock market since day one of his administration. if you've been through this week or even this day, you know it's been much more volatile in the last few days. in the last few hours, it went down more than 300 points. it went up 300 points to start the day. is this market volatility going to do damage to what had been gradual kbroovrimprovement on t president's numbers. the president had reason to brag. this is what happened recently but it's still up pretty good. let's look in the last month. this is where you have the volatility kick in. this is where it closed yesterday, still the market in trouble today. there's coming a time when the president started to get more credit for the economy. 67% of americans in march 2017 gave president trump credit for the economy.

but look at the swing. boom. president trump gets more credit for the economy than his predecessor. that helps a president especially in a midterm election year. the president's approval rating still only at 40%, but if you look there, he's starting to go up a little bit. the president is starting to go up. some of it clearly has to do with passing the tax cut plan. the tax cut plan boosting the numbers a little. people feel better about the economy, giving the president credit. traders don't care so much about politics. they're saying the credit is the way the economy works, mr. president. get used to it. >> at the moment you have to be defensive and, you know, everything would indicate that we're going to trade lower. i mean, it would be almost very book style if it were to hold here and rally, but a 10% correction is what folks were suggesting we would get as a reversal of the trend. when we get these reversals, it

sharpens teeth and very painful. >> what do we make of this? i don't want to do commentary on the markets. i'm certainly not qualified. they tend to go up and they tend to go down. but the timing is interesting, because as you began this week, they were saying, yes, a very steep election. it's good the president's numbers are going up a little bit. it is good the president is given credit for the economy. voters like the tax cut and people feel better about the economy. does this volatility change that mood? >> the polls show that people feel more optimistic about the economy under president trump. the difference is really people's expectations. economic performance is largely the same over the past few years, but i think what the president has learned this past week is that there is a real danger in taking personal credit for economic performance. let people give you the credit. they're going to credit you no matter what, they're going to blame you no matter what. but when there are video clips

to go to showing the president taking the credit for the ups and downs in the stock market, that's dangerous. >> it's especially dangerous because as the party is trying to make changes, we just had a budget that will probably end tips for a while, there are headlines in recent newspapers, is this good for traders? we're seeing that volatility right now, and the president has tied himself to that volatility, as you said, so it's a dangerous risk. >> i think there is a political question, too. the president, as we have said, has tied himself to the markets. the republicans may, going into this midterm year, no matter the tweets, no matter the cultural fights the president has started that the economic fundamentals would, at some point, maybe stop the wave of democratic wins that some seem to expect. the problem is that if the

markets continue to turn and that shoots the president's narrative, maybe that will cause people to focus on the other bad things a little more. >> the question is, is it limited? the question is can the president get those approval numbers up a little bit as people feel better about the economy. stay with us. that will be the conversation throughout the year. have a great weekend. wolf blitzer is up in just a second. hello, i'm wolf blitzer. it's 1:00 p.m. here in washington, 8:00 p.m. in damascus. 3:00 a.m. in pyeongchang. from around the world, thank you for watching if you're joining us. abuse allegations against the top aide now zeroing in on the president's chief of staff and the white house counsel. what did they know and when did they know it? plus, new revelations from porter's ex-wife. how she says he asked her to downplay the a