♪ welcome to "inside politics." i'm john king. it's day two of a partial government shutdown and no end in sight. tens of thousands of federal workers face uncertainty this christmas as the president digs in, even though it's clear he lacks the votes for his border wall. >> we're totally prepared for a very long shutdown. this is our only chance we'll ever have, in our opinion, because of the world and the way that it breaks out, to get great border security.

>> plus, new world disorder. the defense secretary quits as the president ignores his generals and the republican establishment and makes abrupt calls to bring half the troops in afghanistan and all the forces in syria. >> we have won against isis. we've beaten them and we've beaten them badly. so our boys, our young women, our men, they're all coming back and they're coming back now. we won. >> to say they're defeated is an overstatement and is fake news. it is not true. they have been severely damaged, but they will come back. >> and in this packed week even more turmoil, lashing out is acting attorney general threatening his presidency and acting aides if he can fire the chairman of the federal reserve for raising interest rates. >> this may have been the most chaotic week of what's undoubtedly the most chaotic

presidency ever in the history of the united states. all of this turmoil is causing chaos in the markets. chaos abroad. and it's making the united states less prosperous and less secure. >> with us this sunday to share their reporting and insights, manu raju, martin, alana shore of the associated press. a partial government shutdown born of a last-minute about face and adds christmas week stress to the lives of 800,000 workers. 380,000 will stay home as long as the shutdown continues. 420,000 or so are deemed essential and will work without pay until the politicians make a deal. >> president trump, if you want to open the government, you must

abandon the wall. plain and simple. >> the majority leader mitch mcconnell sent the senate home until thursday and said he won't bring anything to the floor that isn't first blessed by both the democrats and the president. >> that's how we make a law in this situation. 60 votes in the senate, majority in the house and president trump's signature. that's what's needed. that's what will end this regrettable episode. >> now it's the third shutdown in two years of full republican control of washington. and if it continues another 11 days, democrats will take control of the house and make it even harder for the president to get what he wants. we are here because the president stayed silent all week as gop lawmakers urged him to make clear his bottom line. his aides sent word, the president understood a math and would take a deal with no border control money but when his conservative base took to

twitter and fox news to call the president weak, he changed his mind knowing full well he doesn't have the votes. can you give me $2.5 billion so i can take that offer to the president? chuck schumer said no? >> both sides are pretty far apart. both sides are waiting and assuming this will be a prolonged shutdown. we're not talking about days. we're talking about potentially weeks. i can't overemphasize enough how much the republicans believe this blunder by the president. nancy pelosi and chuck schumer got in the argument with president trump, there were no conversations in the aftermath of that, when the senate moved forward on the short-term measure. the president didn't raise any concerns. he signaled he was supportive.

vice president told republican senators privately he would sign it into law. they went home, thinking he would. now that they changed his mind, the republicans don't believe they have a negotiating partner in this president and on top of that, they won't be back until the 27th. they have to give a day's notice. the earliest they can vote is on the 28th. that's five days before democrats retaking control of the house? it's unclear what he's going to get. >> two things, first of all, to what manu said. republicans have a hard loss because democrats take control january 3rd. for any additional border security money when you're able to hold one chamber of congress in literally hours? the fact that the president wouldn't take some kind of deal and call it a victory. to watch mcconnell's body language and his language on the

senate floor was telling. and walking around the capitol friday he is plainly frustrated with the president. you can see him do this one on one -- not even one on one but remedial science, explaining how a bill becomes a law. when he does that, he's speaking to one person on the floor, talking to the president over doing that. he's simmering over this, because his members have had to stay here, fly back. it's very frustrating. >> part of what's going on here is the increasing isolation of the president, which i'm sure we'll talk about more on the show as we go on. the problem is everybody in washington is describing for this president the dilemma that he faces, the math that he faces, the fact that the leverage will change ain the democrats' favor. president trump is only listening to one kind of input and that's the fox news hard core part of his base and increasingly shutting out all the other parts of the system

that normally advise a president. your legislative team, chief of staff, allies on the hill, all the people that normally feed into how a president makes a decision, he's shutting them out. >> to me -- to me, does he not get this, two years in, in the sense that is it really this? all week long the senate passes its version on the impression that the president doesn't like it, but will sign it. mark meadows and jim jordan go on fox news and say mr. president, you can't do this? ann coulter writes this, gutless president and wallless country, president trump unfollowed her on twitter after that. is that what it takes? what signal does it send? if you disagree with this president, go on fox news and scream, he'll change his mind? >> it sends a signal that those pundits' opinions may be more important than the lawmakers who need to pass his agenda. it can't be overstated how distressing this will be for

republicans who voted for something -- how can you unanimously pass something that you thought he would sign only to see him spurn it? and i think it will have long-term consequences. >> and that's why they did it i see the rug being pulled out from under me. mr. president, we're not going to budge. you can send jared kushner to the hill all i want. until i hear you say it, i'm not taking any deal. >> the president must publicly support and say he will sign an agreement before it gets a vote in either chamber. repeatedly, the president has privately agreed to a deal with congressional leaders only to reverse himself when criticized by the far right. we can't have another situation when the president signals support at first but then

reverses himself, which is precisely what caused this shutdown in the first place. >> he's right on the facts. my question is, is the trust deficit that low that essentially, you know, okay, mr. vice president, i just don't believe that you speak for the president? >> yeah. you have yet to see a tweet from the president that he will support this deal. that's why they would get behind something. to think about how divided they are right now. that remark, you must abandon the wall, that is a significant red line that schumer is drawing here. if they move off of that, he's going to get hammered by his left. it's hard to see that being reconciled. end of the day, this may come down to what is the meaning of "wall"? there will probably be money for border security. schumer's office has the $1.6 million that was agreed to,

doesn't go for the wall, but fencing and border security. >> and let's put up the president's tweet in the middle of this conversation. because the president won't publicly lay out clearly or changes his mind, people are look at this tweet and aing is this somehow an indication from the president that he's willing to take steel slats, not a concrete wall? is that significant? >> one thing that a democratic control of the house means that they'll not only have votes but control of drafting whatever they want to put on the floor. and it will be interesting to see if nancy pelosi can get something that's put on the floor that does have border security, which democrats have, in the past, supported but doesn't have construction of a wall and and says okay, mr. president, here is $3 billion, $5 billion, but specifically for other things and not including a wall, does that then put a lot of pressure on the president? >> the president so clearly wanted to declare a victory from whatever he got from congress.

that was obviously the plan in the weeks leading up to this, he started calling it steel slats instead of a wall, border security. and it wasn't until the pushback that obviously -- >> fox news. >> correct. that was always the plan, to take the $1.6 billion and declare victory. what's striking about this, john, is that this president, the ultimate deal maker, not only is sort of not doing the deal here in the final days of this negotiation, it's that he had a deal months ago. you could have traded legalizing the dreamers for something approximating a wall. that would have been like the trumpian grand bargain. >> but he walked away from that for the very same reasons he walked away here, there was criticism that he was weak and had gotten soft on immigration. >> he scored on something we're not talking about because of the blunder he made. he stumbled into this. >> he's different.

up next, turmoil on the world stage, too. defense secretary quits as the president ignores the advisers and troops brought home from syria and afghanistan. often politicians say the darndest things. today, politicians do historic things, bringing the average of females to both chambers in nevada to 57%. congratulations.

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♪ ♪ ♪ ♪ the president testing the limits of his power is a common theme of our sunday conversations. his power and its limits is central in the just-discussed fight over the government shutdown and will be a bit later when we get to the growing cloud of investigations and troubling signs of the economy. not in debate, though, is the broad power that america gives its commander in chief. the new question here, the president exercising that power. he will rapidly withdraw all u.s. forces fighting in syria

and bring home half the u.s. troops still fighting the longest war in afghanistan. his defense secretary quit and remarkably made crystal clear his disagreements. being clear eyed about maligned actors are strongly held. because you have the right to have a secretary of defense whose views are better aligned with yours on those and other subjects, i believe it is right for me to step down from my position. anxious questions across the globe, troop levels in japan and south decreea. the president said we should not be surprised. true, he did make clear as a candidate his dim view of america's role in syria and afghanistan. once in office he took more establishment positions. no more. we end here, too, with his own party more at odds with the world view, coddling of saudi arabia and now what it views as a dangerous retreat. >> it's a terrible mistake and,

unfortunately, i think we'll pay a price for it if it's not reversed. >> it's hard to imagine that any president would wake up and make this kind of decision with this little communication, with this little preparation. >> the only reason they're not dancing in tehran and isis camps is they just don't believe in dancing. >> this is fascinating and potentially very consequential and politically in the sense that he's running back to his america first nativist base on domestic policy and completing abandoning the republican establishment here on foreign policy. >> the republican party for the most part on capitol hill, they've stuck with him because they believe that on policy they've been on the same page for the most part. he has been pushing going after regulations, foreign policy,

thinking they could put up with his behavior and tweets and try to ignore it, all the scandals and investigations and say at least we're getting things on policy. when he starts breaking from them on their core values, particularly foreign policy, as we saw this past week, that's when you'll see a revolt increasingly within his party. that's not to mention the very significant consequences of pulling out and the stark warnings about how this could affect this country and the world order. you know, this is a risk for the president. >> and there's the how. the chaotic process. normally if you're going to do this -- the president has the right to do this. you bring your own team in first, get consensus there. they all disagree with him. you bring in your own party and hopefully bipartisan. troops overseas. this president sends a tweet. >> what so rattled lawmakers was the combination of the policy decisions and how they were achieved. and i think the two of them

together has what's got folks scared. on policy, yes, they do part ways. it's not just that. he did it impulsively, without looping in the joint chiefs of staff. he ignored all of his civilian advisers in making this decision on syria. and talking to folks in the capitol at the end of the week, i can't recall a time where there was that much open contempt for this president and his conduct. and not just among folks like senator corker, who has obviously been a critic on and off for a while now but from members like pat roberts, jim imhoff, cassidy. mainstream conservative senators who are openly saying we don't like the behavior and the policy. that's worrisome. >> a little flashback here. what some republicans are warning, they're saying, mr. president, remember, we and you were very critical of, say, president obama, when he, in their view, pulled troops prematurely out of iraq.

>> see the way isis was created in the vacuum left by hillary clinton and barack obama out of iraq. >> obama took us out, with hillary clinton, to create this incredible vacuum. isis was formed. we should have never been in iraq. once we were there, we should have never got out way they wanted to get out. >> members of his own party saying you're going to be having that conversation with yourself pretty soon. that's their fear. >> part of the problem is that president trump has learned this lesson that when he does try to engage the rest of kind of his government, his allies on capitol hill, they talk him out of things. he would say about the syria decision that he wanted to get out of syria months ago, tried to express that and got pushed back from his administration, fell back for a while. the lesson that he's learning now is that no, i don't want to follow the process that every

other president has followed because that -- i get talked out of things. rather i'm just going to wake up one morning and pull the switch. >> if he doesn't want to follow the normal process, but the ap had fascinating reporting, matched by others. the process seemed to be he's on the phone call with the president of the turkey who says we can handle this, sir, and there are lots of questions about the kurds and the people they've been working with are terrorists. >> even his own national security adviser was shocked by the haste with which the president listened to erdogan and said sure, why not? there wasn't much consultation. >> that doesn't happen on those calls. it just doesn't happen. those calls to world leaders traditionally, they're scripted. they're planned. they've got aides and advisers sitting around the president in the oefbl office talking and

knowing exactly what every question is going to be and what every answer is going to be. >> it's not even clear how much mike pence knew himself when he came to the capitol to brief lawmakers after this was announced. he got an earful from republican senators to try to get him to discipline this he said this is the commander in chief's position. they were very frustrated. it was clear that pence didn't know much about this and simply said this was trump's decision. he didn't even seem to loop in his vice president. >> he's president. fair enough. up next, deja vu at the justice department. jeff sessions long gone but the president still mad about the investigations and lashing out at his hand-picked acting attorney general. so shark invented duo clean. while deep cleaning carpets, the added soft brush roll picks up large particles, gives floors a polished look, and fearlessly devours piles. duo clean technology, corded and cord-free.

the headlines of recent days are both damning and disturbing. a president without guardrails.

if you don't think this past week was extraordinary even by the trump chaos standard, consider this. he even called fox fake news. among the many developments causing those headlines and talk of turmoil, the president reporting at least twiashing ou hand-picked acting attorney general. he alleges the president had a direct role in hush money payments. in lashing out, the president again makes clear his view of power and his belief that the attorney general or acting attorney general, in this case, should protect him, whatever the evidence shows. just one example in a week where it's been a different presidency. yet again yelling at his attorney general, essentially saying your job is to protect

me. that's not the attorney general's job. >> remember how much outrage there was when bill clinton met on a tarmac with loretta lynch in 2016 during the hillary clinton e-mail investigation? >> they still call her up to capitol hill. and all the republicans criticizing the president for doing this? >> he is calling out his attorney general for not stopping this investigation, at least calling him out on that privately. whitaker will face a lot of scrutiny in this new house democratic majority. nadler wants to bring him to the hill. in a private phone call he agreed to come and talk but have

not agreed on a date. that could be one of the first subpoenas we see, calling him up to the hill to answer these questions. >> and proxy, if you will. the question is more for the president than mr. whchlt whitaker. sally yates, former deputy attorney general tweeting this. this shouldn't get lost in the avalanche of crazy. the wall we need is between the doj and the white house, foundation of our democracy. the rule of law dpensd on it. two years in, this president doesn't believe in those rules. >> and it appears that bill barr, his attorney general nominee, will face questions about this because he will come into the senate for confirmation hearings pretty fast. lindsey graham, furious with the president's syria policy, will be chairman of the judiciary committee. so, of course, it's good that we have a 53-seat majority for the president, that's a cushion he needs in the senate to get this new ag confirmed but this is going to be difficult because of stories like this. >> you milwaukee a good point about connecting, whether it's

the shutdown. whether it's foreign policy. whether it's here, this chaotic. there's no longer any escaping the reality of what the past two years have produced, a president who is facing multiple investigations by special counsel robert mueller and by others. the country is heading into a year in which many of these could come to a head and by the time the house could be in democratic camps. that last part i'm still not sure the president fully comprehends how difficult his life is about to become. >> right. i think to manu's point on this latest story about the president complaining to whitaker about the cohen investigation, yeah, it's well established that the president sort of blows past

normals and has no grounding in the traditions of the country's governance and obviously the rule of law. but you would think he would get politics by now and understand that when you do that kind of thing in this new environment, it's going to have consequences of the look, that story six, nine months ago would have been good and it would have been gone the next day. this is a different kind of moment now. that kind of story doesn't go away when you've got democrats controlling this chamber of commerce. they'll hold this president to account and do oversight the way that the ryan house never did. >> he likes an enemy, the flip side of that, and giving him someone to fight against. >> pelosi is telling her folks to be prudent and do oversight.

>> former vice chair committee is leaving, didn't run for re-election, in part because of his differences between the president. listen to this closely. people are becoming significantly concerned. one thing to have issues on the domestic side when you start willy nilly partisan moves. i question whether he runs again. he's having difficulty handling the situation. i don't think he understands the seriousness of what he just did in syria. is this just a critic who often said he said to mattis, tillerson, kelly, all done, it was a child daycare center. he has grievances against the president. have you to run through the filter of his grievances against the president. i question whether he runs again. some republicans think the president will get frustrated with all the investigations. there are other republicans who think the investigation also disable him to the point that he can't run again. most don't say that publicly. >> the politics are interesting that somebody like that, in the president's party would say something like that.

and whether or not he runs again, i don't know. what this sort of gets to, connecting the dots as we said before, the president either doesn't understand the consequences of his actions or decides to ignore them, as in the syrian case, and he's living with the consequences. the mueller investigation, we're increasingly seeing that, too. first year people all around the president were pulling him back from the brink when he would want to fire somebody or take more aggressive action against the investigation and now we're seeing a president who, if he's getting that advice from folks, is more and more willing to simply live with the consequences of what could be, in the end, really dramatic consequences about shattering the wall that has stood for a long time. at least since the nixon years, between the justice department and the president. >> he, above all else, trusts

his instincts. everyone said he couldn't win the republican nomination or the presidency. the question is, does he understand the page that's about to turn when the democrats take power? another fed interest rate hike has the president angry. this was supposed to be his 2020 script. >> nobody has ever been president that has the greatest economy in the history of our country. this is the greatest economy in the history of our country. jardiance asked-

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the president approaching the two-year mark is the president gearing up for a re-election campaign. so the president, like most of us, paid attention to a tumultuous week on wall street. first, the good news. the president has a lot to brag about. consumer confidence, way up. growth in the economy, on its highest pay since 2005. wage growth, starting to go up. a persistent problem in the economy. there is a lot for the president to brag about when it comes to the economy. but people are starting to get a tad nervous about what they see. look at this, nbc wall street journal poll. the percentage of americans who think the economy will get worse now up to 33%. you have to go to 2013 to see it higher than that, a third of americans now nervous. the economy is about to get worse. nor that's not good for a president heading into a

re-election. nor are these headlines. surveys of ceos, recession could come some time next year. this played out in recent weeks. dow now on pace for the worst year since the financial crisis of 2008. up, up, up, up, up, down this year. here, the president got mad about this week and in the middle of this, the fed raised interest rates. one of his top economic advisers say what the fed did is actually a good sign. >> the fed just increased rates because they signaled a couple more things that they're going to do next year based on the fact that they believe the economy is strong. the flip from that to my gosh we're going to have a recession, the world is falling apart, is a jump too far. >> smart white house adviser going out saying calm down. little turbulence. all is good. smiling. then why is the president asking friends and advisers, can i fire the fed chairman? >> good question. >> great question.

>> looking for someone to blame for the market tumbling. >> correct. >> this is a president who does not ever take blame. he is taking credit for when the market was doing well. now we're seeing concerns about where things are headed and he needs something to point the finger out. a lot of people who believe that the last fed chairman intervention in economy, like what the current fed chairman is doing, but the president needs someone to blame. >> if you're his loyal treasury secretary, you have to go out and say i've spoken with the president and he said i totally disagree with fed policy, it's an absolute terrible thing to do but i didn't suggest firing him nor do i believe the right to do. trust the reporting on this one, the president has asked people do i have this right? should i do this? the secretary of the treasury trying to keep the markets from tanking monday. >> and it's conspicuous that the president isn't tweeting this. mnuchin is coming out.

it's the republican senators rebelling, publicly sending the message, no, no, no. the fed's independence is real. it's not one more norm that it's okay to trample. that makes a difference for this president's agenda. the fact that he needs these guys and they are not happy. >> his campaign organization, this i find funny, this is the trump re-election campaign. they know the president is upset, so they do this. >> president trump has achieved more in his office than any president in history. i need every trump supporter to deliver a personal thank you to your president. we have a booming economy, historic low unemployment, lowest unemployment rate, we're bringing jobs back to america and the world is a safer place. >> his re-election campaign thinks two years out from the re-election campaign they need to prop him up, boost his mood? >> trying to get him votes in 2020, that's more placate the

president. >> he sees that on tv and says i'm doing great? >> we're out there. the recurring theme that this president has, he has lost his allies. if you read our colleagues' story today, peter and mag's story today, it gets to that. where have my friends and defenders gone? that's very frustrating for him. firing the fed chairman, i think it's pretty easily explained in the kind of creto that maggie haberman has devised it. he lives life in ten-minute increments. what he says and does is all about that. and so the idea of like you can't actually fire the fed chairman because you just can't, that's not how it works in this country. that doesn't occur to him. he's thinking i've been touting the market for a long time, running on this great economy.

how do i get out of that for the next ten minutes? you do that by finding a fall guy and the fed and powell are the fall guy for the moment. he's looking for somebody to blame for this issue. >> to that point that he lives ten minutes, ten minutes, ten minutes, he's keeping score all the time. that's destructive. >> and part of the problem with living that way is that you do exactly what former presidents -- former white houses have always tried not to do. when the market is up, you don't take credit, sole credit for being the one that this is my stock market because most administrations know it goes up and down. if you take credit for one moment, you'll get blamed for the next. >> giant decisions in the year ahead on trade. >> having the dems control the house does give him the opportunity to have a new fall

guy. economy was doing great, dems took over. >> i agree. >> he's already started. getting ready. 11 days from now the world changes. our reporters share their notebooks, including the latest buzz about beto o'rourke. he couldn't beat ted cruz in a senate race. can he beat president trump? - [narrator] the typical vacuum head has its limitations,

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let's head one last time around the table and ask our reporters to share something from their notebooks. jonathan? >> ten days ago the senate passed a resolution, overwhelmingly, to condemn the saudi crown prince, mohammed bin salman, for the murder of journalist jamal khashoggi. in the house there's been silence, over whether the republican leaders who will move forward with this measure in the final days of congress. this resolution that was passed

was a joint resolution. if the house and senate would pass this, it would land on the president's desk. the president, as we know, has sided with the saudis and mohammed bin salman in the aftermath of this murder. paul ryan, his final days in congress, has not said if he would put it up for a vote. they keep saying they have no update about this. it appears that perhaps the republican leadership could be shielding the president from a very awkward decision of signing this into law in the final days and bob corker, senate committee chairman, has said he has not gotten a commitment and he is leaving office. this could quietly go away as the outrage over this murder continue continues. >> jonathan?

>> the 2020 race right now on the dems side is what does congressman beto o'rourke do? he issued a statement that was withering in his critique of president trump and chaotic behavior. my understanding is that this last week has gotten his attention. he is thinking now more seriously about the country and this moment and perhaps may be look at a race more seriously. i will say this. the about u about o'rourke is real. there's a lot of chatter about him. i talked to one senator last week, a democrat who said flatly beto is going to be our nominee. john, you know it's not every day that a senator speaks so warmly of a member of the house. >> that is a world turned upside down right there. michael? >> as we finish out this year,

one thing we should be focused on is what president trump will face next year when the new democratic congress comes to town, the democratic house. a lot of investigations and one of the topics that democrats are itching to investigate him on, in addition to the mueller probe, is immigration. he will face questions and hearings about his travel ban, decision to end daca, revamp the asylum system. you've seen jerry nadler, congressman who is likely to take over the judiciary committee, has already made -- sent a letter for 15 demands for information from the administration about the zero tolerance policy that led to all of those family separations at the border. you'll see that and all the other immigration topics be a real thorn in president trump's side as he deals with this new democratic majority. >> 11 days away.

alana? >> speaking of beto o'rourke, he and bernie sanders and joe biden are leading the nomination conversation. warren, klobuchar, gillibrand, they're starting from behind. there's a sense of democratic women, there has to be a woman on the ticket, but there's also a huge amount of problems with the media double standard that a woman will face, trouble raising money and boosting name recognition against these three men. >> it will be fun. at least one of them will challenge the boys at some point. don't hold your breath for that, but it will happen. mick mulvaney hasn't officially started as chief of staff but some voicing their concerns that he's not up to the

job. their thought is that mulvaney, former house member, is not up to the challenge of dealing with all the investigations, including newly democratic house, while also integrating the white house with the president's re-election campaign. potential search joked he has forged his own death certificate. david bossey's name gets mentioned as an outside pick, ward baker. one big question, does the president agree he needs both a new chief of staff and a new chief strategist? that's unclear. although the president is already complaining to friends about mulvaney. that's it for "inside politics." thanks for sharing your sunday morning. catch us weekdays. bob corker and rand paul, plus democratic congressman adam schiff join jake tapper. enjoy your sunday. it powerfulls from floors to carpets,

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chaos for christmas. the dow plunging, and paychecks on hold as president trump's wall shuts down the federal government. and the president contradicts himself. >> i will be the one to shut it down. call it a democrat shutdown. >> which party will pay the political price? senator rand paul is here next. >> and turning on trump. republicans live republicans livid, feeling betrayed. >> after the president announcing a pullout of