GOP Drops Ethics Rule Change After Trump Criticism; Interview with Rep. Adam Schiff; Republicans in Control as New Congress Sworn



with Rep. Adam Schiff; Republicans in Control as New Congress Sworn

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[17:00:11] WOLF BLITZER, CNN ANCHOR: Happening now, about face. After a critical tweet from President-elect Trump, House Republicans reverse a move to gut a congressional ethics watchdog. But on the first day of the new Congress, Republicans are ready to get to work on Trump's agenda. Can Democrats do anything about it?

Back on the Hill. CNN has learned that despite the extraordinarily bitter election campaign, Bill and Hillary Clinton will attend Donald Trump's inauguration. So will George W. Bush, who refused to support Trump.

Pushback. The Kremlin says it had nothing to do with the election cyberattacks in the United States, and the WikiLeaks founder agrees. But as intelligence agencies wrap up a full review, the Obama administration says the evidence is, quote, "rock solid."

And new neighbors. Close enough to borrow a cup of sugar, not far from the homes of the Obamas and the Clintons, could this -- could this be the swanky new House where Ivanka Trump and her family will be living here in Washington?

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

On the first day of the new GOP-controlled Congress, Donald Trump may have let fellow Republicans know who will be calling the shots. After a critical tweet from the president-elect, the House GOP quickly dropped a move to gut an independent ethics office. Newly sworn-in Republicans are eager to start working on Trump's to-do list and undo key elements of President Obama's legacy.

While both sides say they hope for common ground, Democrats warn they will hold their ground and hold Trump's feet to the fire.

In one bipartisan move, a group of senators is pushing for more sanctions against Russia. Officials say the intelligence community's review of election related cyberattacks may be ready this week. And Trump will be briefed by the intelligence chiefs.

While the president-elect has repeatedly raised doubts about Russia's role in the hacking, the State Department says the information is rock solid.

And Ivanka Trump and her family may soon be living in the same neighborhood as the Obamas, just a couple minutes' walk from the soon- to-be former president. She may also be able to call Bill and Hillary Clinton neighbors.

I'll speak with Congressman Adam Schiff. He's the senior Democrat on the Intelligence Committee. And our correspondents, and analysts and guests, they are all standing by with full coverage of the day's top stories.

Let's start with the president-elect, who criticized fellow Republicans even as they were celebrating their control of the new Congress.

CNN senior White House correspondent Jim Acosta is joining us from New York. Jim, is Donald Trump letting congressional Republicans know who's the boss?

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: Wolf, he certainly did that today. Donald Trump bucked his own party today after Republicans in Congress were poised to weaken the process for dealing with ethics violations on Capitol Hill. The president-elect blasted that move. As one of his top aides told me, lawmakers should not try anything that gets in the way of Trump's pledge to drain the swamp in Washington.


ACOSTA (voice-over): This was not draining the swamp. On the very first day of the new Congress, Republicans in the House were set to pass a proposal to gut the Office of Congressional Ethics, the independent watchdog that investigates allegations of wrongdoing on Capitol Hill.

The plan, which would have placed ethics probes under the control of lawmakers, was yanked. Republicans suddenly reversed course after an outcry from Democrats and public watchdogs, not to mention pressure from President-elect Donald Trump who tweeted, "Bad idea. All that Congress has to work on," Trump tweeted, "do they really have to make the weakening of the independent ethics watchdog, as unfair as it may be, their No. 1 act and priority?"

Trump's tweet seemed to undercut one of his top advisors, Kellyanne Conway, who cautioned she hadn't discussed the matter with the president-elect but sounded warm to the proposal.

KELLYANNE CONWAY, TRUMP SENIOR ADVISOR: Many of these people, members and their staffers who have been under investigation, have complained about their due process rights being violated and being compromised.

ACOSTA: But Democrats were already pouncing.

REP. STEVE ISRAEL (D), NEW YORK: You know, they said they would drain the swamp. They've just -- they're distributing free swimming passes in the swamp by this change in the regulations. ACOSTA: Trump is also going against much of his party on trade, again threatening high tariffs on U.S. companies that shift jobs to other countries.

Today's target, auto giant GM. Trump tweeted, "General Motors is sending Mexican-made model of Chevy Cruze to U.S. car dealers tax-free across border. Make in USA or pay big border tax!"

SEAN SPICER, INCOMING WHITE HOUSE PRESS SECRETARY (via phone): He doesn't want companies in the United States to leave this country and then sell back to the U.S., leaving the American worker behind.

ACOSTA: Problem is GM says Trump is wrong, adding in a statement, all Chevrolet Cruze sedans sold in the U.S. are built in G.M.'s assembly plant in Lordstown, Ohio. GM builds the Chevrolet Cruze hatchback for global markets in Mexico, with a small number sold in the U.S."

[17:05:04] But aides argued they're getting results, pointing to Ford's decision to scrap plans to build a new plant in Mexico after candidate Trump warned of consequences.

TRUMP: We'll be calling the executives at Ford or whatever the company is and we'll tell them very nicely that if they want to move their factory or their plant to another country, they will have to pay a 35 percent tax when they sell their cars or their product back into the United States.

ACOSTA: Still, Trump and the GOP are on the same page when it comes to opposing President Obama's plans to pare down the number of detainees at Guantanamo, with the president-elect tweeting, "There should be no further releases from GITMO. These are extremely dangerous people and should not be allowed back onto the battlefield."

The White House snapped back Trump's tweet will have no impact on the current administration's plans.

JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: No, it will not. He'll have an opportunity to implement the policy for -- that he believes is most effective when he takes office on January 20.


ACOSTA: Now, as for January 20, CNN has confirmed Hillary and Bill Clinton will both attend Trump's inauguration, as will former president George W. Bush and Laura Bush.

As for Trump's cabinet, a source close to the transition tells me former California governor or lieutenant governor, I should say, Abel Maldonado, is a frontrunner for agriculture secretary. Wolf, he would be the first Latino to join Trump's cabinet, some much-needed diversity according to people inside and outside this Trump transition team, Wolf.

BLITZER: All right, Jim, thank you. Jim Acosta reporting.

The changing of the guard is well underway here in Washington. Republicans are eager to push their agenda. Democrats say they'll try to hold the line.

Let's go to our senior Washington correspondent, Jeff Zeleny. He's up on Capitol Hill right now.

Jeff, after a very bitter campaign, is there any serious talk right now of compromise?

JEFF ZELENY, CNN SENIOR WASHINGTON CORRESPONDENT: Wolf, the vitriol of that campaign has subsided somewhat. But amid all the pomp and circumstance here today on the opening day of the 115th Congress, talk of compromise was in very short supply. As Republicans were eager to point out, elections do indeed have consequences.


REP. PAUL RYAN (R-WI), SPEAKER OF THE HOUSE: Do you solemnly swear...

ZELENY (voice-over): The new Republican order is taking shape tonight in Washington. For the first time in a decade, Republicans set to control the House, Senate and White House.

SEN. MITCH MCCONNELL (R-KY), MAJORITY LEADER: We know that the coming days are going to require hard work and cooperation from both sides.

ZELENY: Mitch McConnell of Kentucky becoming Senate majority leader as the 115th Congress opened for business. Paul Ryan of Wisconsin easily reelected speaker of the House.

RYAN: In the heat of the kind of campaign we had, you start to wonder, will the tempers ever cool? Will the system still hold? Does our old rich tradition still have that magic? Well, it turns out it does. In the end, they all dissolve in the silent and peaceful transfer of power.

In just 17 days Donald Trump will join them as president, completing the GOP's ascension to power. The optimistic applause echoing across the Capitol will soon give way to the challenges of governing, with Republicans facing the burden of delivering on the change voters demanded. For making good on their pledge to repeal and replace Obamacare to passing tax reform and easing government regulations, Republicans are crafting a bold agenda. Speaker Ryan called it a once-in-a-lifetime opportunity.

RYAN: The people have given us unified government. And it wasn't because they were feeling generous. It was because they want results. How could we live with ourselves if we let them down?

ZELENY: Out of power, Democrats say they will find common ground when they agree and hold their ground when they do not. In the House, Republicans now have a majority of 241 to 194. Yet in the Senate, Republicans still need Democrats, with Republicans holding 52 seats and Democrats 48. Most pieces of legislation need 60 votes to pass.

SEN. CHUCK SCHUMER (D-NY), MINORITY LEADER: When you lose an election like this, you can't flinch. You can't blink. You have to look it right in the eye, analyze it, learn from it. ZELENY: New York Senator Chuck Schumer is the new Democratic leader. He told CNN's Dana Bash Democrats won't be the obstructionists Republicans were to Obama.

SCHUMER: Ninety, 95 percent of the time, we'll be holding his feet to the fire and holding him accountable. But we're Democrats. We're not going to just oppose things to oppose them.

ZELENY: The Trump cabinet will be one early test. Secretary of state nominee Rex Tillerson and defense secretary nominee retired General James Mattis visiting Capitol Hill today, preparing for their confirmation hearings.

In a day of pomp and pageantry, the new Congress came with one old touch.


ZELENY: Vice President Joe Biden, in his formal role presiding over the Senate, swearing in one final class of senators. It's one of his last official acts after 44 years in Washington.

BIDEN: Tell them in 14 days, when I'm no longer vice-president, tell them to still say hi to me.


[17:10:07] ZELENY: And, of course, the next president, vice-president Indiana Governor Mike Pence, will be on Capitol Hill tomorrow talking with Republicans about their agenda going forward. Wolf, he is going to play a critical role in the Trump administration by getting this agenda through.

Now, the House is voting right now at this hour on the first vote of this new Congress, and that will include the rules package. That does not include that ethics bill that was so controversial earlier this morning.

Wolf, one other note: President Obama also will be on Capitol Hill tomorrow, trying to give some parting words to Democrats about how to fight back against the repeal of Obamacare and other rulings and laws he has passed in his eight years here in Washington -- Wolf.

BLITZER: Another busy day tomorrow Up on Capitol Hill. Jeff Zeleny, thank you.

Democrats are warning they'll try to work with Donald Trump but will focus on trying to hold him accountable. Joining us now, Congressman Adam Schiff of California, the senior Democrat of the House intelligence committee.

Congressman, thanks for joining us.

REP. ADAM SCHIFF (D), CALIFORNIA: Good to be with you, Wolf. BLITZER: So, react to this about-face move by Republicans today on the whole ethics panel. Does President-elect Trump deserve credit for convincing his fellow Republicans in the House of Representatives to drop that plan to gut the ethics plan -- the ethics panel?

SCHIFF: Well, ironically, you have a tweet from a president-elect coming into office with probably some of the most profound conflicts of interest himself, that propelled a change in the GOP plan in term of the ethics rules.

And I think all you need to know about what this Congress is going to look like took place in the first five minutes, with a dead-of-the- night rules change, the first product of the abuse of unified authority by the Republicans, pushed back by a president-elect through a tweet, and a president-elect himself with these profound conflicts. I think you're going to see a lot of internal divisions between GOP members, between the GOP and the Trump administration, let alone between Democrats and Republicans.

BLITZER: The new Senate minority leader, Chuck Schumer, the top Democrat in the Senate, he told our Dana Bash today he's open to making a deal with President-elect Trump, if it's something Democrats can get behind. Are you with him, with Chuck Schumer on this?

SCHIFF: Absolutely. You know, for example, the president-elect is serious about a major infrastructure build. The country could certainly use it.

If, on the other hand, what he has in mind is a package of tax cuts for people engaged -- you know, construction executives that are doing things they're already planning, that's not going to stimulate the economy. That's not going to have Democratic support. But there should be things where we can find common ground that are in the country's best interests; and in those areas we should absolutely work together.

BLITZER: Like where? Give me an example or two.

SCHIFF: Well, I really think infrastructure is one of them. By the same token -- and this is not something we're in common ground with the administration -- where Democrats and Republicans and Congress can find common ground on stronger sanctions against Russia. We should work together across the party aisles and send that bill to the president.

So, I think both with our colleagues in Congress when we find common ground, in common with the administration when he proposes something that makes sense, Democrats ought to look for opportunities to make progress.

BLITZER: The president, as you heard, he'll be going to Capitol Hill tomorrow to meet with Democrats to try to come up with a strategy to defend Obamacare, the affordable healthcare law. What parts of Obamacare do you think Democrats realistically have a chance of keeping? SCHIFF: I think we have a chance of keeping a lot of Obamacare. Republicans are about to find out that making a hollow campaign promise is one thing. It may be enough to get you votes, but having to deliver on it, having to fulfill what Donald Trump said when he said, "We're going to have great health care, and people are going to pay less for it. Believe me." Well, we're about to find out whether he can be believed.

My guess is Republicans are going to have a lot of trouble coming up with something that makes sure that people with preexisting conditions can hold onto their health care, that millions of people that have been added to the healthcare roles through the expansion of Medicaid can keep their healthcare. It's going to be very hard for them to do that without, frankly, reinventing the same thing that Obamacare represents and calling it something new.

So, we'll see what they come up with, but I think they're going to find it very difficult without casting millions of people off their healthcare insurance.

BLITZER: All right. Congressman, stand by. There are new developments emerging right now on the Russian hacking of the Democratic national committee and Hillary Clinton's campaign chairman. We're getting new information about a briefing That's coming up. We're going to discuss this and more right after a quick break.


[17:18:33] BLITZER: We're talking with Congressman Adam Schiff, the top Democrat of the House Intelligence Committee.

Stand by, Congressman. We're getting some new information on the investigation into the election cyberattacks which U.S. intelligence is blaming on Russia. Our justice correspondent, Pamela Brown, is here in THE SITUATION ROOM.

Pamela, what are you learning?

PAMELA BROWN, CNN JUSTICE CORRESPONDENT: Well, Wolf, tonight we are learning that intelligence chiefs are planning to brief President- elect Trump as early as this Friday on the findings of the comprehensive review about Russian and the election hacks.


BROWN (voice-over): Tonight, CNN has learned President-elect Trump will soon be briefed by leaders of the U.S. intelligence community, including chief spy James Clapper and CIA director John Brennan, on the unprecedented interference of the U.S. election system. The high- profile briefing will come after months of Trump publicly challenging the intelligence community's assessment Russia is to blame.

TRUMP: It could be somebody else. And I also know things that other people don't know and, so, they cannot be sure.

It could be Russia, but it could also be China, could also be lots of other people. It also could be somebody sitting on their bed that weighs 400 pounds, OK?

Maybe there is no hacking, but they always blame Russia. And the reason they blame Russia, because they think they're trying to tarnish me with Russia.

BROWN: President Obama ordered the full review last month, to look at the cyber intrusions impacting U.S. elections, going back to 2008. And specifically the hack against the Democratic Party during the 2016 election.

[17:20:02] Expected in the public version of the report: newly de- classified information laying out the evidence supporting the intelligence community's assessment that the Russian government is the perpetrator.

JOHN KIRBY, STATE DEPARTMENT SPOKESMAN: President Obama and this administration is 100 percent certain in the role that Russia played in trying to sow doubt and confusion and getting involved, through the cyber domain, into our electoral process. The information is there, and it's rock solid.

BROWN: Tonight U.S. officials tell CNN companies across the country have detected I.P. addresses and malware that could be connected to Russian hackers, though it's unclear if they penetrated the networks.

The discovery comes after the FBI and DHS put out this report last week naming the Russian hacking operation "Grizzly Steppe" and warning companies what to be on the lookout for.

The intelligence community has also traced the hack back to specific keyboards with the Cyrillic text, an alphabet used by Russians. Adding to U.S. intelligence officials' confidence Russia carried out the hack.

Today Russia dismissed that evidence, a Kremlin spokesman saying, "Cyrillic characters can be used everywhere. Once again, I reject any possibility that official Russia can be involved in any way."


BROWN: And tonight a group of bipartisan senators is preparing a bill that would offer additional sanctions against Russia. Meantime, officials say a declassified version of that comprehensive report will likely be released to the public after this week -- Wolf.

BLITZER: Look forward to reading that report. Thanks very much, Pamela Brown, for that reporting.

We're back with Congressman Adam Schiff of California, the senior Democrat on the House Intelligence Committee.

Congressman, as you just heard the intelligence committee wrapping up this new review of the election hacks it will soon brief, as early as this Friday, President-elect Trump. What are you hearing about this review. Is there more concrete evidence in it proving beyond a shadow of a doubt that the Russian government is behind the hacking? SCHIFF: I think it's been known, Wolf, for quite some time that the Russians were behind the hacking; and there was very high confidence in that assessment.

Over the weeks and months, I think we've continued to gather further intelligence that cements that assessment, and I imagine what the intelligence community is doing, among other things, right now, is trying to figure out how much of this can they make public without compromising sources and methods? How should they conduct that briefing of the president-elect to convince him to stop saying that they don't know what they're doing, to stop denigrating the intelligence community?

I think we'll find out. Is the president-elect someone who has the character to admit when they're wrong? Or is he nonetheless, in the face of these facts, in the face of that intelligence, going to continue to maintain that we have no idea who is responsible?

BLITZER: U.S. officials, as you just heard, are telling CNN companies across the country have now detected I.P. addresses that could be connected to Russian hackers, but will this new evidence that is presumably going to emerge directly link all of this to President Putin?

SCHIFF: Well, you know, part of what's going to be, I think, important to determine is when did they find the evidence of the code or the origin, the I.P. addresses that have now been made public by the U.S. intelligence community.

Are these people who are now spoofing or trying to masquerade as Russian intel? Or were these things that were detected earlier that we can now go back and say that the Russians were involved in this? This is part of the problem when you do go public. That is, it makes it easier now for the Russians to hide. It also makes it easier for others to create mischief, but you know, I think forensically, there's a lots of ways to track down when and where the Russians have been.

BLITZER: As you know, back on October 7, the head of the director of national intelligence, the secretary of homeland security said only Russia's senior most officials could have authorized these activities. Does that mean Putin?

SCHIFF: I think it means Putin. The president was asked this during his press conference. I think he quite artfully said, look, it's hard to imagine that you had people in Russia, in the Russian government, in the Kremlin who were freelancing when it came to interfering in the democratic affairs of the United States. That would be, I think, unthinkable in the Russian, the hierarchy in a system where Putin essentially controls everything. So basically, when you're pointing at senior levels of the Kremlin, you're really pointing at Putin himself.

BLITZER: WikiLeaks founder Julian Assange reiterated today that WikiLeaks -- WikiLeaks source was not the Russian government. Do you find he's lying? SCHIFF: I don't find him credible in any way. I never have. I certainly don't now. And I think this only impugns his credibility more.

BLITZER: Donald Trump is warning President Obama on another key subject not to release more prisoners from Guantanamo Bay, from the prison there, tweeting -- let me read it to you -- "There should be no further releases from GITMO. These are extremely dangerous people and should not be allowed back onto the battlefield."

[17:25:07] Is he trying to tell President Obama what to do?

SCHIFF: He is trying to tell the president what to do, but he's also making a political statement. I think he knows well he's not going to dictate the president's actions during these last couple weeks.

I hope that, when he gets the intelligence briefings, he'll come to understand that Guantanamo continues to be a recruiting tool of jihadis. That, in fact, we can keep these terrorists that need to be detained, we can detain them in maximum-security prisons as we have done other terrorists.

I hope he'll listen to those briefings. I hope they'll leave their mark. But I have to say, given what the president-elect has been saying up until now, I don't have a great deal of confidence.

BLITZER: He also tweeted this about North Korea yesterday. Quote, "North Korea just stated that it is in the final stages of developing a nuclear weapon capable of reaching parts of the United States. It won't happen!" exclamation point.

Do you think this kind of rhetoric in a tweet, potentially, could provoke the North Korean leader Kim Jong-un?

SCHIFF: Well, I think the Korean leader needs very little provocation. He's a dangerous, belligerent erratic leader. But nonetheless, the president-elect shouldn't be using his Twitter account to talk about ICBMs, nuclear arsenals. In fact, I think the adults on his team need to take the Twitter account away from Dad. This is just not the way to be conducting major foreign policy decisions. And I think it will get him in trouble if he persists this way.

BLITZER: Congressman Adam Schiff, thanks very much for joining us.

SCHIFF: Thanks, Wolf.

BLITZER: Coming up, is this swanky house in an exclusive area of Washington, D.C., the future home of Ivanka Trump and her husband Jared Kushner? Stand by. We have new details.


BLITZER: The new Congress convened today here in Washington. Already Donald Trump has forced House Republicans to reverse course. The GOP leadership backed off from a plan to gut the independent Office of Congressional Ethics after Trump criticized the move on Twitter earlier in the morning. And I'm quoting the president-elect now: "With all that Congress has to work on, do they really have to make the weakening of the independent ethics watchdog, as unfair as it may be, their No. 1 act and priority? Focus on tax reform, health care and so many other things of far greater importance," close quote.

[17:31:20] Let's bring in our political experts. Let me start with the former congressman, Mike Rogers. React to this. What does it tell you about the president-elect, soon-to-be president's relationship, his attitude towards House Republicans?

MIKE ROGERS, CNN COMMENTATOR: Well, I think he fired the first shot today. And probably rightly so. Doing this in a rules package which -- in order to change it, you'd have to do it in a rules package. There was no advanced notice. I'm going to guarantee you there's a lot of members of Congress didn't even realize they were going there in this rules package change.

So what he did is probably caught on to what he was hearing in some rebellious members of Congress who were saying this is a bad idea. And by the way, even the speaker thought it was a bad idea to put it in the rules package to move forward. So I think he took advantage of it to his own political...

BLITZER: He and Kevin McCarthy, the majority leader, S.E., they did think it was a bad idea, but they were overruled by the other Republicans. But then this morning the speaker issued a statement defending it, saying, "You know what? We could live with this. We're going to work with it."

And then very quickly, they abandoned it, because of -- presumably in part, let's say, because of Trump's tweet.

S.E. CUPP, CNN POLITICAL COMMENTATOR: A couple things. I talked to the speaker's office today; and they said that that statement was not defending the measure. It was explaining it. It was explaining how it came to be.