welcome to a special christmas edition of inside politics. john king is off. asian markets are down as the president's asked whether his treasury secretary still has confidence. out going democratic senator clair mccaskill is confusied wh alexandria ocasio-cortez is the thing. on day four of the shut down, president trump finds a common thread between his fight for the border wall and the russia probe. >> as soon as i said i wanted to

build a wall, they were all against it. take another example. take comey. everybody hated comey. they thought he did a horrible job. the democrats hate him and the day before i fired him they said he should be fired. then they said it was a terrible thing to do. it's a disgrace what's happening in our country. other than that, i wish everybody a very merry christmas. >> merry, merry christmas indeed. we start with the president entrenched in his white house. his christmas wishes couples with christmas complains. the border wall is still the sticking point in a shut down standoff on the fourth day. the president had no answers for federal employees worried about their next paycheck. >> i can't tell you when the government is going to be open. it's not going to be open until we have a wall, a fence, whatever they would like to call it. i will call it whatever they

want. it's a barrier from people pouring into our country. >> the president said he won't budge on the border wall, but in his remarks there are signals his demands are moving. in a phone call with troops, he put his inner monologue on public display. the offense of the oval office as a hint at the president's mind set. he is increasingly alone and under siege. his life, political, professional and personal under investigation. he is about to lose control of the house and asked this morning about what happens when democrats assume power, president repeated a familiar line. >> it's probably presidential harassment. we know how to handle that. i handle that better than anybody. no collusion. after two years, no collusion. there has been collusion, but it's by the tdemocrats. >> the president said he wants a

wall, but creating wiggle room on what exactly the wall is and what he needs. what can you tell us about it? >> what we saw from the president was shifting demands and claims about the status of the situation on the border. first he said you can call it whatever you want. a fence perhaps or steel slats and then he said he wants 500 miles of wall. that's down from 900 miles that he said was necessary at the border. this president was digging in his heels on the demand for funding on something he can call to supporters a border wall and is saying at the same time the wall is already being built at the southern border and he wants to finish it before the next election. there in lies the underlying problem with this whole issue. president trump wants this for his base and democrats are unwilling to give him that political victory. president trump going even so far as to say the workers want

him to keep the government closed until he gets his border wall funding. now, president trump is here in washington for the fourth day after cancelling plans to go to florida. his aides are signalling this will not end soon. mick mulvaney made the point that federal worker's next paycheck that might be affected is not for another week or two. i think we are getting into territory where president trump doesn't seem to be giving much, but he is signalling he wants this victory to go into the election campaign with a win. >> shut down the collapse for sometime. abby philipp from the white house. thanks so much. here with me to share their supporting and insights, with the associated press, jake sherman with politico and cnn's sarah murray. i want to start with the president's remarks from this morning. one thing that stuck out is he made it clear this wall needs to

be done before 2020. this is tied, in his mind, very clearly to the next election. i wonder how much his base will punish him if he is not able to get funding and he is not able to carry through. >> he believes there will be consequen consequences. the backlash that drove him to this remarkable about-face. his withdrawal from syria which ask another promise to his base. trump is already preparing for reelection. >> he doesn't seem to be feeling much pressure from the workers who have been impacted by this. many furloughed and some working without paychecks. he mentioned and he was asked about the workers and the concerns about them and if he had concerns. this was his message. >> i think they understand what's happening. they want border security. the people of this country want border security. it's not a question of me.

i would rather not be doing shutdowns. many workers said to me and communicated stay out until you get the funding for the wall. these federal workers want the wall. >> in case you missed that, he said many of the workers said stay out until you get funding. this is a president who does not seem to be feeling any heat whatsoever to try to get a deal any time soon. >> the treasury is shut down. i'm not sure how many treasury employees are communicating the desire for a wall. with each day, the president loses more leverage as democrats get closer to holding the majority and emboldened to block trump. the president is entering -- we don't know if he understands this, but the most hostile president of his presidency so far and this stretches from the new year and possibly midway

into january. democrats have literally zero incentive to give in after the president rejected a host of offers that they put forward. >> what you guys have seen, the shutdowns get worse the longer they go. it's one thing with a partial shut down that hasn't hit their paychecks yet. people are on holiday and enjoying a christmas vacation and tuned out to all of this. the longer it goes on, the worse it gets. the more you hear the stories of people expecting paychecks and people who have to show up and go to work without pay. that's when the president begins to feel the pressure. it's not surprising that he is holed up at the white house all alone. >> he made a point of saying his family is down in florida and he's not able to spend it with them. you mentioned shutdowns past. that lasted for more than two

weeks. what was different is there were a lot of negotiations happening. president obama brought republicans and democrats to the white house. those may not have been fruitful, but there were talks. this happened several years ago. >> the congressional republican leadership came to the white house and met with the president for more than three hours, but again failed to break the impasse. >> the president basically called us all down to tell us he is not interested in negotiating. it was essentially a negotiation about not negotiating. now we hear he is off campaigning in rockville rather than sitting down to get this thing solved which is summer disappointing. >> that first one was newt gingrich. this was after mccob ble --

mcconnell met with obama. >> for democrats and republicans got used to the shutdowns and they doecht have the same sense of urgency. you played the mitch mcconnell shut down and he tried to place himself at the center of any negotiation or non-negotiation. he seated everything to schumer and said you make a deal with the president. the president made a deal with republicans and democrats. mitch mcconnell had them walk the plank and that hurt them in a future primary and the president changes his mind. republicans don't have any interest in cutting deals with the president that he might change his mind on. that's one of the reasons why this impasse is going last past the third and democrats take the house and you look at the problem the president has. shutdowns are questions and who knows where voters a couple of weeks from now decide where they are on this and saying the president may not be

unreasonable. let's end this thing. the reason is president is having trouble getting money for the wall, the 40-sit drumming they took, it all failed and it's become toxic. just like obamacare in the obama years, when people would poll, they like everybody in it. but we don't like obamacare. right now they are not so hot on trump's wall and that's why democrats are emboldened. >> that was certainly an indication after talking to members on the hill. even after meeting with them, democrats are saying the same thing. they made a lot of statements, but different people from the white house from the same white house saying different things about what the president would

accept make it impossible to know where they stand at any given moment. they were guided by the house saying it's hard to come up with the solution passing both chambers. we don't know where the president stands right now. look at senate democrats. they are lost. they are gone from washington. chuck schumer used to have his position up. we have to protect these guys. we have to think about cutting a deal on this. he has very little incentive to do that. >> the president tried to tie this to james comey. unprompted to criticize the democrats saying they have taken hypocritical positions with james comey. >> take comey. everybody hated comey. they thought he did a horrible

job. the democrats hated him and called for his resignation and firing including schumer and nancy pelosi. until i fired him. as soon as i fired him, they said what did you fire him for? that was a terrible thing to do. >> the merits of the arguments aside, he is trying to make the case that the democrats have taken both sides. he said he would own the shut down and he is trying to say it's the democrats. >> the argument for border security. they were for border security when it came along with massive changes to the immigration system including path to citizenship. they are not for a $5 billion wall in and of itself. >> it's not great policy. even republicans don't think it's great policy.

let's drop another $5 billion into concrete blocks. no one thinks it's to build this enormous wall. there are lots of things you can do that don't involve a concrete wall. there are a lot of things you can do with the visa process and not building this wall on the border. part of it is not good policy. >> that opens up a can of worms that it's not getting resolved any time soon. by spending christmas in the capit capital, the streak that lasted 18 years. not since 2000 has a president spent christmas in washington. the clintons did some shopping and attended midnight mass.

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>> welcome back. the economy also on the president's mind in the oval office meeting today as he vented more frustration over the

fed's decision to raise interest rates. the markets are closed for christmas, but picked up where wall street left off. allison is with us now. global traders struggling to find anything positive as december winds down. >> that are is certainly happened overnight. what happens is you see global markets move in lock step with u.s. markets when you see such dramatic moves as yesterday in the u.s. where the dow fell 650 points. the nikkei fell 5% into bear market territory. the shanghai composite fell and made up the losses. clearly the u.s. problems become other countries's problems as well and concerns in this point. one endless market is getting pummelled and there are worries about a slow down and not just

here in the u.s., but around the world as well. there is the issue of the unresolved trade situation between the u.s. and china. then of course there are the concerns at least in the market of the fed. the federal reserve not pulling back on its path of raising rates. something to the consternation of president trump. that brings me to my other prong of concern, something new. it usually didn't affect the market as much as it is now. how the markets saw president trump when he would tweet about the fed and the markets, it is more of a distraction. now we are seeing president trump when he tweets impact the market's moves. i saw it yesterday. 10:45 when the president tweeted saying that the economy, there is nothing wrong with the economy and the fed is the problem, the market took a turn for the worse and the market plunged to that 650 points lower on the dow. it was on an upswing before he

tweeted that. >> thanks so much. to be back, there is friction between the president and the federal reserve over rising interest rates and the failed effort from steven mnuchin to soothe the markets or attempt to. the president was asked if he had confidence in his treasury secretary. >> very talented guy. very smart person. >> what about the fed chair? >> they are raising interest rates too fast. that's my opinion. i certainly have confidence. >> it's hard to overstate how much the president must be concerned about the state of affairs. he used this as a central point of his presidency. look at what he tweeted last year at this exact same time about the economy. he said we are delivering historic tax relief for the american people and the stock market is setting record after record and the unemployment is

at a 17-year low. it will help next year to be helped by the tax cut. this is a great year for companies and jobs and not ending on the note he wanted. >> one of the reasons the markets and the economy is so resilient in down periods is because there is a certain level of political stability that comes with putting your money into the united states. the president is turning all of that on his head. i am so concerned that i'm going to get blamed, i'm going to blamed the fed. you can argue about monetary or tax policy. markets don't like unpredictability and upheaval and having the president call out the fed chair is the last thick you want when you have natural softening as the sugar high wears off as the president's multifront trade war or trade dispute or attempt to

rejigger u.s. trade policy continues. this makes markets nervous. if you are the president of the united states and you are yapping about the fed on twitter, the best thing he can do is leave it alone. he doesn't know how to do that. >> we have seen that time and again. it was interesting today, he didn't take a wack at j pow. he took his foot off the gas and said we'll see. how long is that going to last? >> maybe someone showed him the market dive after he took to twitter. there is a reason people put money into the u.s. also because the fed is not dependent. the fed does not make monetary policy based on the stock market doing day in and day out. that's the way investors like it. the way the monetary policy system is supposed to work and when the president decides he will inject himself and he knows

better than anybody who works for him, he has a private business and he understands how monetary policy works. you are going to rattle the markets. >> and listen to him this morning also blaming president obama or at least saying president obama had low interest rates. >> the economy is doing so well that they raised interest rates. that's as a form of safety. president obama didn't do much of that. much easier to run when you have no interest rate. he had a low interest rate. we have a normalized interest rate. a normalized interest rate is good for a lot of people. they have money in the bank and get interest on their money for nobody years. nobody got interest on their money. >> there is standard trump blaming obama and now said obama benefitted from a low interest rate. does that square? >> the statute of limitations

with obama has run out. this has to be seen of a piece. the comments about the fed and the shut down. it paints a picture of a government the investors cannot rely on. they don't know what he's doing next. >> obama had double-digit unemployment. >> they felt it was overregulate and didn't feel it grew fast enough and they felt better about this economy until a few days ago. >> look at the brought picture. you have the president's advisers saying we have a hot economy and the stock market is nose diving. we don't see any signs for any economy. any asset class is down this year. i'm not sure what the advisers are seeing and investors say we can't take this seriously anymore. >> a lot of fears at the white house. next, an exit interview with clair mccaskill.

first, big christmas get togethers equal chuck grassley. 24 people in a vacuum clinic. 24 hours late getting beth cranked up. mrs. g and daughter wendy have mostly finished food for about 24 people. good luck with that, senator. we'll be right back. in baltimore, a community sees new life rise from ruin. in southern california, a small family business becomes a beacon of hope. in seattle, people with disabilities create success and shatter barriers. day in, day out, people prove that when we work as one, we have the power to create better futures for us all.

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after over a decade of service in the united states senate, democrat clair mccaskill is bowing out. she lost her campaign to a trump favorite. attorney general josh hawly. he tried to bridge the divide between herself and trump supporters in part by distancing herself from members of her own party. >> clair is not afraid to stand up against her party. >> clair is not one of the crazy democrats. >> before she left washington, i sat down with her. >> you said you are not one of the crazy democrats. who are the state democrats? >> we have a senator who thought president trump should be assassinated. that's a crazy democrat. the people during trump's inauguration breaking windows, that's a crazy democrat.

people who go into restaurants and scream in elected official's faces when they are eating with their family, those are crazy democrats. that doesn't mean i don't believe in my party. >> what are about alexandria ocasio-cortez. is she a crazy democrat? >> i don't know her. i am a little confused why she is the thing. it's a good example of what i'm talking about. a bright and shiny new object came oust nowhere and surprised people when she was a very experienced congressman. she is talked about a lot. i'm not sure what she has done yet to generate that kind of enthusia enthusiasm. i wish her well. i hope she hangs the moon, but i hope she also realizes that parts of the country that are rejecting the democratic party like a whole lot of white working class voters need to

hear about how their work is going to be saved and the dignity of their jobs and how we can stick to issues we can accomplish something on. the rhetoric is cheap. getting results is a lot harder. everyone knows they won't get 60 votes for free college for everyone in the senate in the next three cycles. that's not going to happen. that's great to talk about, but it makes people more cynical when you don't get it done. the way you get it done is by reasonable negotiation and compromise and finding things that people agree on like the cost of prescription drugs. like opioids. ike criminal justice reform. somebody talks about leading in that direction is places like florida, ohio, wisconsin, michigan and maybe compete in a place like missouri. >> do you think elizabeth warren

can win those places? >> i don't know. i think it's hard. i don't know. >> it's a surprise that the republicans have not said more to this president about these legal problems he had over the past couple of years and his attacks against the fbi. for the most part they stood up to himself. has that surprised you? >> it has with some of them. i'm perplexed that some of my colleagues have not stood up. >> like who? >> i'm not going to name names. they are keeping their head down and here's what they are rationalizing in their heads. they will tell you if it's just the two of you, he is nuts and he doesn't have a grasp of the issues and making brash decisions and not listening to people who know the subject matter. in public, if they go after him, they know they get a primary. they know that's tough. they watched what happened to

their colleagues who did go after him and neither are coming back. in their minds, i will keep my head down and do what i can to thwart the instincts and i can stick around and it will be over soon. look down and hold your breath and it will be over. this is not going to last forever. this is a completely different republican party. i think history will judge my colleagues harshly that they didn't stand up to the president when he has been unhinged about the rule of law. >> when you heard the president was involved in hush money to silence women he may have had affairs with, what was your reaction? >> it's weird that it's not a bigger deal. he's almost the master of i'm going to do so much stuff that's crazy that nobody notices crazy anymore. that's where we find ourselves.

kanye west was in the oval office on live tv. think about that. that is crazy weird. you going to stay in washington? >> no, no, no. i'm taking a train out of toxic land. i'm going to be home mostly, but i have other things planned that allow some travel. my mouth got me in a lot of trouble during these years in public service. i figure now the sky's the limit. i can really get in trouble with my mouth. >> thank you. i will dissect some of this. one of the things she mentioned is talking about her advice to the democratic party, saying we need to focus on tangible achievable results. you talk about the big policy ideas like tuition-free tej tco

that feeds cynicism and donald trump rails against washington. this is a huge debate for the party come 2020 with how you position yourself. do you embrace the middle of the road or talk about the ig issues. >> she had advice for folks like elizabeth warren who she said couldn't win her red state. don't veer too far to the left. mccaskill's words are important. you have to leave room to tell people here's what's possible and not a dream of what i would do in a fantasy world. >> that's hard in a campaign environment. she did talk about brett kavanaugh and the impact it had on her race and whether it cost her her seat. >> there were a number of things beyond our control. donald trump won my state by almost 20 points. he camped out so often in missouri, i figured he was building a golf course. we had the kavanaugh spectacle

combined with the caravan optics with him being there every 10 minutes. >> he did not step down from the supreme court. do you think he would win that race? >> it would be much more likely. >> much more likely, she would have won if not for the kavanaugh fight. how much did kavanaugh shape things? they helped democrats to energize their base, but it could have affected things in the senate. >> tough to say. i was traveling after the kavanaugh stuff and the one thing that was tangible was fervor among republicans in the camp to get out and vote. i think it's tough to make that argument that the president won by 20 points and the state had been trending away from clair mccaskill that is represented by all but one and all republicans but one in the house. it's tough to make, but maybe you disagree.

>> i was in tennessee as all of the kavanaugh stuff was going down towards the end. there was clearly an uptick in republican interest. in the month of september before kavanaugh became a thing, the democrats are starting to profit from this idea that they could possibly win the senate. the doldrums are setting for republicans. we are going to lose the house and things don't look good. voter interest on the right was not that great. kavanaugh gave them something to believe in. in tennessee and missouri, it had the effect of putting the lid on any hope for democratic upsets. that's why it was so key to what ended up happening in the senate. one thing about the interview with mccaskill. she had a chance to take key votes with the president over the last couple of years. she decided not to every time. there may be crazy democrats in

missouri, but she didn't do herself any favors by trying to at least say on the votes you notice and you like trump, i'm with him on those votes. joe manchin did a better job of that. >> she privately said republicans tell her trump is nuts. you look at the new congress, are any of these people going to speak out as more comes out of the mueller investigation. do you think that dynamic will shift or is it going to be democrats railing against trump and republicans hiding? >> it's hard to see the dynamic shifting. he was running for president and they voted for him and the ones who refused to endorse him voted with him when he won the presidency and came to washington. it's hard to see they are going to wake up and reenergize. they will be out there holding his feet to the fire. you are more likely to see with

mitch mcconnell. stepping back a little bit and saying it's your fight. >> that's right. we love that. in the months ahead. before we go to break, outgoing secretary james mattis had a war message for the troops one day before he filed his resignation. >> since washington crossed the delaware at christmas in 1776, american troops have missed holidays at home to defend our experiment in democracy. to all you lads and lasses holding the line in 2018 on land, at sea, or in the air, thanks for keeping the faith. merry christmas and may god hold you safe. protected. (mom vo) more than fifty thousand animals rescued. (old man vo) nearly two million meals delivered. (mom vo) over eighteen hundred wishes granted. (vo) that's one hundred and forty million dollars

donated to charity by subaru and its retailers over eleven years. (girl) thank you. (boy) thank you. (old man) thank you. (granddaughter) thank you. omar, check this out. uh, yeah, i was calling to see if you do laser hair removal. for men. notice that my hips are off the ground. [ engine revving ] and then, i'm gonna pike my hips back into downward dog. [ rhythmic tapping ]

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topping our radar, the late army captain whose parents feuded with trump in 2016 is being honored by the president. he named a post office for khan. his father got into a war of words with the president after criticizing him at the convention. they hailed the measure, recognizing captain khan killed in iraq in 2004. congressman beto o'rourke of texas helping a group of 200 migrants who were dropped off at a bus station in el paso with no warning. a police spokesman said ice had no plan for housing them, leaving them desperate to find shelter. they planned more releases today with one congressman-elect

saying they expect 1200 more people the next few days. they blamed inaction by congress while insisting they worked with agencies to help migrants before they are released. defense secretary jim mattis not taking the day off this christmas with just a week left on the job. a dod official said secretary mattis is working in his pentagon office today. meanwhile, new insight into mattis's sudden resignation last week. the widely respected several trump officials said he believed he should have resigned sooner and disagreed with mattis and how he went about it. cnn's pentagon correspondent, barbara star is with us. >> look, i think it's important to say this is some people we have talked to. not a massive unilateral view, if you will, a monolithic view as the days have gone on since mattis's resignation.

everyone comes out with their opinion about what happened and what should have happened. some say look, it was well-known he had disagreements with the white house and his influence was on the wane as secretary of state mike pompeo seemed to appear more influential and the president was not paying attention to him. syria withdrawing troops was the final straw. the question is maybe should mattis have thought about leaving earlier and getting time for another person to come in who might be more influential with the president. this is a question that has no answer. we may never know everything that happened until mattis either writes a book or decides to speak publicly for now. he doesn't appear to be doing either. manu? >> at the pentagon, thanks. up next, a lighter side of president trump as he tracks santa with kids. first a christmas day flash back

to 1961 when president kennedy wrote a letter to a child wor worried aboworr worried about santa's safety: i did a lot of research into dna tests. most can tell the continent or country that your ancestors are from, but ancestrydna showed me the specific places they called home. 20 million members have connected to a deeper family story. order your kit at ancestry.com. every road in the world is now an information superhighway. (phone ringing) and the car has become an accessory to the smartphone. ride hailing, car sharing, carpooling... mobility services are proliferating. and there's a new generation who don't seem to want to own cars in the first place. it all means massive disruption to the car industry, cities, businesses and investors. i'm martyn briggs for bank of america merrill lynch.

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it was surprising to me. >> you hear people when they meet with the president and say that they see a different side of this president. >> he can be charming and whether they agree with his policies and not often come away with that impression. that is often times when it's a private side of him. it doesn't fit with his public brand of breaking things down. >> the president himself, he obviously is concerned about this, but maybe you can help him with women voters and other who is don't like his brash style.

>> if you look at the instagram feed of the trumps and he can stand to put himself around family more in 2019. norad's santa tracker was essential during the shut down. >> we see if they got paid. maybe they won't and maybe they will. thank you to the viewers for spending part of your day with us. see you tomorrow on inside politics. kate baldwin picks up our coverage after a quick break. the in-laws have moved in with us. and, our adult children are here. so, we save by using tide. which means we use less. three generations of clothes cleaned in one wash. those are moms. anybody seen my pants? nothing cleans better. put those on dad! it's got to be tide.

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