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The Trump shutdown Trasncript 1/19/2018 All In with Chris Hayes

Guests: Tim O`Brien, Richard Painter, Karine Jean-Pierre, Josh Earnest, Sherrod Brown, Jim Manley, Erika Andiola

Show: ALL IN with CHRIS HAYES Date: January 19, 2018 Guest: Tim O`Brien, Richard Painter, Karine Jean-Pierre, Josh Earnest, Sherrod Brown, Jim Manley, Erika Andiola

CHRIS HAYES, MSNBC HOST: Tonight, the last ditch effort to avoid the crisis President Trump created.

SEN. CHUCK SCHUMER (D-NY), SENATE MINORITY LEADER: The discussions will continue.

HAYES: A far-right Republican standing in the way of a deal.

SEN. TOM COTTON (R), ARKANSAS: I hope the President talks some sense into Senator Schumer and the Democrats.

HAYES: And how much does the blame game really matter?

UNIDENTIFIED MALE: I really think the pressure is on the President.

HAYES: And new details from President Trump`s porn scandal.

UNIDENTIFIED MALE: The money is what`s important here not the sex.

HAYES: New questions about who paid Stormy Daniels, when ALL IN starts right now.

(END VIDEO CLIP)

HAYES: Good evening from New York, I`m Chris Hayes. With four hours to go until the federal government runs out of money, we`re barreling towards a government shutdown that is in a strange way over the President`s border wall. In half an hour, Senate Democrats will meet on Capitol Hill to plan their strategy for a key procedural vote at 10:00 p.m. A make or break measure to advance the GOP`s short-term spending bill, which requires 60 votes to pass. This hour, it is not at all clear Republicans have those votes. Now, the irony here, the thing that you need to keep in mind as you watch all this unfold, is that there are big bipartisan majorities right now in both houses of Congress to pass a bill that takes care of both major sticking points in the current talks. The Children`s Health Insurance Program, which ran out of funding in September, and protected status for DREAMers.

But a week ago, the President rejected a bipartisan deal to take care of the DREAMers, blowing up the negotiations. And amid the fallout, Republicans have pitted those two priorities against each other trying to force Democrats into a painful false choice. The majority leader actually tweeted this out today, being very honest about what they`re doing. Democrats have a choice to make, who do you want to save, DREAMers or sick kids? But before we get to the big vote in a couple hours, it`s worth taking a step back to remember how we got to the point. Because the original sin, the fateful choice that sent us down a path to this moment was a campaign promise made by the President.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I would build a great wall, and nobody builds walls better than me, believe me. And I`ll build them very inexpensively. I will build a great, great wall on our southern border, and I will have Mexico pay for that wall. Mark my words.

(END VIDEO CLIP)

HAYES: It was arguably the central theme of Trump`s candidacy, the signature proposal of a campaign otherwise light of policy and a rallying cry for his base. Donald Trump would build a wall on the southern border, and as the crowd would cheer, Mexico would pay for it. But once he took office, it became clear, as it always should have been, that Mexico, of course, had zero intension of paying for Trump`s wall. So the President looked to another source of funding, namely you, the American taxpayer and getting Congress to foot the bill turned out to be harder than it looked mainly because we don`t actually need a wall. Border security is already tough. Because lawmakers who actually represent the border region know that and they don`t want a wall, and probably because of that whole Mexico paying for it thing. So the president floated a different tactic to try and get his wall.

(BEGIN VIDEO CLIP)

TRUMP: Build that wall. Now, the obstructionist Democrats would like us not to do it, but believe me, if we have to close down our government, we`re building that wall.

(END VIDEO CLIP)

HAYES: There it is right there. The threat of the government shutdown to get the wall built. Now, that was not his only ploy, because, in September, the trump administration announced it was taking away DREAMers protected status under DACA, something they did not have to do, leaving them subject to deportation unless Congress came in and intervened. And it was clearly very straightforward hostage-taking and the ransom was also very explicit. Give me my border wall and the DREAMers don`t get kicked out of the country.

(BEGIN VIDEO CLIP)

TRUMP: We`re looking at DACA. We have to get something for it, but we`re looking at DACA and we`ll see what happens. I`d love to do a DACA deal, but we have to get something very substantial for it including the wall, including security.

(END VIDEO CLIP)

HAYES: Last week, the President basically got his ransom or at least some part of it. A bipartisan group of Senators went to the White House with a deal that included a $1.5 billion down payment on his wall. Not provided by the Mexican government, but by the American taxpayer. But instead of taking that deal, the President responded that he doesn`t want people from s-hole countries coming to the U.S., and so here we are. Steve Schmidt is MSNBC Political Analyst and Republican Strategist, Jason Johnson, also an MSNBC Political Analyst and the Politics Editor for The Root. Steve, do you -- do you see this as essentially about that initial wall promise that he`s trying to keep?

STEVE SCHMIDT, MSNBC POLITICAL ANALYST: It`s certainly about that, Chris, but it`s also about the chaos and the incompetence of the governing majority, both at the executive branch and in the Congress. Once again, we`re flirting with a government shutdown. We see a total incompetency around the ministerial functions of governing. What -- if we avert a shutdown, no doubt it will be hailed as some great victory that we`ve managed to keep government functioning and open. It just -- I think it`s about the wall. It`s about a dozen things but nothing greater than just the total ineptitude of this governing majority.

HAYES: You know, to Steve`s point, Jason, about a deal here. You know, it strikes me there`s actually some political upside for the President to make a deal, which is why I think it`s a little odd he has yet to do that because that`s obviously how he ran. And this is what he had to say back in 2013 about the role of the President in the shutdown. Take a listen.

(BEGIN AUDIO CLIP)

TRUMP: It always has to be the top. I mean, problems start from the top, and they have to get solved from the top and the president`s the leader and he`s got to get everybody in a room and he`s got to lead. You know, the interesting thing is, in 25 years, in 50 years, in 100 years from now, when the government, you know, when they talk about the government shutdown, they`re going to be talking about the President of the United States, who was the president at that time. They`re not going to be talking who the head of the House was, the head of the Senate, who`s running things in Washington. So I really think the pressure is on the President.

(END AUDIO CLIP)

HAYES: You think the same is true here?

JASON JOHNSON, MSNBC POLITICAL ANALYST: Well, it should be, Chris, but again, we have seen all along the incredible elasticity to Donald Trump`s support. I mean, the core issue here, we have seen he`s a bad business manager, we`ve seen he`s a bad deal maker. He`s not a good hostage taker either, right? I mean, he keeps screaming I`m the captain now, and he`s telling people what he`s going to do, but he can`t even control his own party. And until the Republicans actually feel that they can negotiate with the President as opposed to him saying one thing on Thursday and then saying something else on Friday, they can`t really -- they can`t work anything out.

HAYES: That -- you know, Steve, this gets to your point about the incompetence here. A few people have said this and I think they`re right, that if the President actually sent a clear signal in either direction about DACA, I`m committed to a deal and we`re going to do it, or I`m not going to give you a deal, those kids are out of luck, those people are out of luck and you`re screwed, that would probably avert the shutdown. It`s the fact that no one actually knows what the White House`s position that keeps bringing us to points like this.

SCHMIDT: Including the White House, which doesn`t know its position. So the negotiators go up there, and every day it`s like Charlie Brown and Lucy with the football. They pull the football away, Charlie Brown lines flat up on his back. And so they don`t have a fixed position on any of this stuff. It`s their transacting moment to moment. There`s no fixed ideology. There`s an absurd slogan from the campaign, that`s the one thing that everyone in the country remembers for is that it was Mexico that was going to pay for the wall, not the American taxpayer.

And so now we got two issues. We have -- we have a defunded Children`s Health Insurance Program, that hospital executives all over the country are increasingly worried about. They said, how are we going to treat sick kids if you talk to a hospital executive on the one hand. And then we have on the other, we have 90 percent of the country, 90 percent of the country believes that the DREAMers should have a protected status, period. And yet on both of these issues, just as simple of things as you could think to solve, the ineptitude doesn`t allow it to be solved. It`s amazing to watch.

HAYES: That`s the crazy thing, Jason. To Steve`s point, the two contentious issues here which is CHIP funding and protection for DREAMers, are -- there`s bipartisan majorities in both houses to take care of them, A. B, they`re not you know, 50/50 issues. This is not abortion, this is not something having to do with Israel and the occupied territories. These are fairly easy gimmes politically that you could solve if you wanted to.

JOHNSON: Right, who doesn`t like a bunch of college kids who want to stay in America, and who doesn`t want to feed children? What kind of horrible party do you want to look at? But this is where it gets back to being President Trump`s fault. Because look, when he made his excrement whole comments last week, what it showed the Democrats was like OK, you know what, we don`t know if we can negotiate with this guy in good faith because his core issue is he doesn`t want these people here.

And then when he lied about what he said, it makes it more difficult for people to cut deals because all of this could be solved. And remember, we don`t just have a situation of running out of funding for the government. We`ve also got the debt ceiling coming up in March, we`ve got DACA coming up in March. They need to get some of these things fixed now or this shutdown could be much worse than anyone anticipated.

HAYES: Yes, also it`s hard to see how this is generally a useful way of funding a government month to month, which has been another complaint people have. Steve Schmidt and Jason Johnson, it`s great to have you both.

JOHNSON: Thanks, Chris.

HAYES: Joining me live from Capitol Hill where he`s about to head into a meeting with his caucus, Democratic Senator Sherrod Brown of Ohio. And Senator, you are in -- you`re in a state that Donald Trump won by a fairly healthy margin. You`re up for re-election in 2018. Several other people in that cohort, including Heidi Heitkamp and Joe Donnelly, if I`m not mistaken, have already said they`re going to vote for this continuing resolution. They don`t want to shut the government down. Where do you stand?

SEN. SHERROD BROWN (D), IOWA: I`m going to vote no. And I`m going to vote no because, first of all, it`s clear what they have done. I mean, listen to them, listen to what Steve Schmidt said, listen to what Jason said, that clearly what`s happened here is they have taken two very popular issues, 80, 90 percent support, and played politics with it. I have tried since September, before it expired, to get CHIP reauthorized. 209,000 children in Ohio will benefit from CHIP. We tried in September, October, November, December, nothing. The Republicans have done nothing except do a big tax cut for rich people and now they`re using it for some sort of political talking point.

But you know, we just can`t run the government a month at a time. The Secretary of Defense came into talk to us and said we can`t -- we can`t have a military where I don`t know month to month if we`re going to have funding for the next month. And so it`s clear, I have a petition I`m asking people to sign. Go to sherrodbrown.com, sign a petition saying to Mitch McConnell, set this up in a way that we don`t close the government down, negotiate for a couple more days, come to the floor with something that won`t shut the government down. Mitch McConnell can do that, but he chooses not to. He chooses to play politics.

HAYES: That seems the play right now from Schumer and the Democratic Caucus is let`s do something for three or four days, keep the government open, keep negotiating in good faith. But I want to go to the CHIP issue because you did raise this with Senator Hatch back in November about CHIP and I want to play that sound for you of you and Senator Hatch having an exchange, and then play to you Senator Hatch today bemoaning the fact that CHIP won`t get passed if the government shuts down. So first, listen to this exchange you had with Senator Hatch back in November precisely on CHIP.

(BEGIN VIDEO CLIP)

BROWN: This is not a giveaway, this is something we have done bipartisanly. Is there something we can do to protect the Children`s Health Insurance Program?

SEN. ORRIN HATCH (R), UTAH: Let me take the floor back. Nobody believes more in the CHIP program than I. I invented it. I was the one who wrote it. And I believe in helping those who cannot help themselves but would if they could. I have a rough time wanting to spend billions and billions and trillions of dollars to help people who won`t help themselves, won`t lift a finger and expect the federal government to do everything. Let`s quit playing these silly games that are so often played around here. I don`t mind them maybe in bills that are lesser and important in nature, but to do it on the CHIP bill, my gosh, it`s incredible to me. Madam President, this is the greatest country in the world, but we do have some really stupid people representing it from time to time.

(END VIDEO CLIP)

HAYES: Do you want to respond to your colleague from Utah today, bemoaning people playing politics for the CHIP?

BROWN: Well, first, several months ago, he said those people should help themselves, those 209,000 children in Ohio. And I know he doesn`t really believe that. I don`t know what`s happened with Senator Hatch. I think he`s just doing the bidding of the far right. He`s always afraid of a primary in Utah, the far right against the far, far right. I think he`s also trying to do the bidding of Senator McConnell, who could have teed up CHIP any time. And we ask -- we were going to the floor today, we were talking about a consent request, just go to the floor and say do this. We could have passed CHIP any day in these last four months close to unanimously, maybe five no votes, and just done it.

And you know, what`s happened, when a bunch of members of Congress who get health insurance paid for by government don`t do their job so that people can get insurance and whether it was taking away the Affordable Care Act, for Medicaid, 200,000 -- I`m sorry, 600,000 Medicaid beneficiaries in Ohio. And Senator Hatch in his leadership didn`t seem to care. So we know this is a game they`re playing. Again, come to sherrodbrown.com, sign up, say, Mitch McConnell, quilt playing games. Don`t shut the government down. Let`s do this. We can do this in the next three or four days.

HAYES: But if you can`t -- you can`t do that, right? I just -- I get the forced choice, it is a forced choice. I think you and I are in agreement in that. They have constructed the choices, the force choice. The question to you is, you know, is the shutdown worth not just taking essentially the CHIP deal and fighting on DACA and other stuff down the road?

BROWN: Well, we just can`t -- as I said, Chris, we just can`t keep running the government one month at a time, so nobody can plan anything. It`s expensive for taxpayers. We don`t know what`s going to happen next month, next year. I talked to a number of people from children`s hospitals. I know -- I know all kind of people in children`s hospitals, I visit them all the time in Ohio. I know what they -- I work with them all the time. I actually wrote the graduate medical education bill 20 years ago that funds education for pediatricians in this -- in this country. And they want more certainty.

Health care system and the community health centers, as Senator Casey said on the floor today, you know, we passed this continuing resolution that they asked for, only for a month, we don`t do anything for children`s health centers, and we don`t do for community health centers. We`re not taking care of the other things children need with opioid addiction in their families and all those things, as Senator Hassan has said. So it`s clear what we need to do today. We need to -- we need to get to pass a resolution for three or four days, finish the negotiations, do the major things that Steve Schmidt just said and move forward.

HAYES: That`s -- that is the game plan, and I have already heard it before you went to the caucus meeting. Senator Sherrod Brown, thanks for making the time tonight.

BROWN: Thanks, Chris.

HAYES: Next, it`s not just the President standing in the way of the deal. Why Senator Tom Cotton of all people apparently has veto power over the whole thing in two minutes.

(COMMERCIAL BREAK)

HAYES: -- has been instrumental in persuading the President to blow up the deal to keep the government from shutting down, it`s Republican Senator and immigration hardliner Tom Cotton of Arkansas. Cotton played a central role in convincing the President to reject that bipartisan deal to protect DACA recipients.

He went on to claim that Democratic Senator Dick Durbin was lying about Trump using the term s-hole countries to describe African nations in that meeting despite pretty good evidence from a variety of sources since then that Cotton is actually the one who is lying about it. That kind of behavior has resulted in a bipartisan agreement to keep Tom Cotton out. According to Politico, Senator Minority Leader Chuck Schumer told Trump that there will be no deal on DREAMers if Cotton is involved. Republican Senator Lindsey Graham echoed that sentiment with a choice comparison this morning.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: We`re not going to end family immigration for DACA. The Tom Cotton approach has no viability here. You know, he`s become sort of the Steve King of the Senate.

(END VIDEO CLIP)

HAYES: Steve King, of course, is someone who tweets things like we can`t restore our civilization with somebody else`s babies. But despite that insult from a fellow Republican, no less, Cotton is still apparently in the mix, and with veto power, no less. Freedom Caucus Chairman Mark Meadows telling reporters today Trump committed to him, he wouldn`t back an immigration bill unless he and Senator Tom Cotton backed it. And if that`s true, well, then good luck on making any kind of deal at all.

Joining me now, Jim Manley, 21 year veteran at the U.S. Senate, former Chief Spokesman for Senate Majority Leader Harry Reid, and Erika Andiola, DACA recipient, Lead Organizer for Our Dream Campaign which is fighting to get the DREAM Act passed. Jim, let me start with you. What do you make of Cotton`s role or the idea that Cotton and Meadows would have a veto on any of this?

JIM MANLEY, FORMER CHIEF SPOKESPERSON, HARRY REID: You know, it`s just another symbol of the degradation of the political process in this country. It`s one thing for Mark Meadows to run around blowing things up in the House because, you know, that`s the House. But for this kind of thought process to start moving over into the Senate is very, very dangerous.

But having said that, you know, Senator Cotton can think of these ideas all he wants, but the fact of the matter is they`re widely unpopular and under the current rules of the Senate, you know, nothing he suggests is ever going to get through the Senate. Maybe that`s his point. He just wants to, you know, score political points but he`s going to lose in the overall thrust of things.

HAYES: Erika, what is your perspective, the folks you work with, organize with, who have been obviously are on the front lines of this. What is your perspective as you watch this happen?

ERIKA ANDIOLA, DACA RECIPIENT: I mean, I`m really, really glad that we have gotten, you know, a lot of pressure, and trust me, the movement has been really pushing. And not just the movement, the American people have been asking members of Congress of the Democratic side of the party, and also those Republicans who say they support us, to really do what is right and to actually do, you know, put the DREAM Act in this budget bill.

It hasn`t happened yet, but we`re glad to see that the pressure that we have put on Democrats has really worked. And that right now, they`re holding the line, and we hope they continue to hold the line until we`re able to get the DREAM Act through. Because this is just the right thing to do. We can`t stop. You know, Trump wants to shut down the government, he can do whatever he wants at this point. But the American people want the DREAM Act.

HAYES: I want to give you an argument that folks are making Erika, just to follow up on that.one is that. One is that you`ve got this court decision which is somewhat remarkable, which essentially has put on pause the suspension of DACA as ordered by the President of the United States. Now that obviously would be appealed. So in some ways, DACA now exists for the moment, thanks to that court ruling. There`s also the March 5th deadline for that cohort of people. What do you say to people who say, look, you`ve got time and space to negotiate some permanent fix? There`s no reason to make your last stand on DACA right now?

ANDIOLA: I mean, what I said to those members who have been saying that I mean, I just heard McConnell in one of the speeches on the floor saying that we have no more time. His children are not about to get deported, his children are not -- are not losing their DACA. The fact is that every day DREAMers are now losing their DACA.

And the fact is that what the court did is a great step, but it`s not fixing what is supposed to get fixed. We need to get permanent protection for undocumented youth. Trump ended this. Trump has not wanted to negotiate. He doesn`t want to come to the table and fix what he broke, what he, you know, ended up doing to DREAMers. And so, he needs to fix it and Republicans need to come around, and Democrats need to keep the line.

HAYES: You know, Jim, it seems to me that this all hinges basically on two things. One, the President, and two, what`s called the Hastert Rule. The Hastert Rule, the idea that you don`t bring votes to a vote if you don`t have a majority of the majority, right, which is -- and it`s sort of applied in both Houses now, the House and Senate. I mean, there`s bipartisan majorities for both of these things now. You can pass the DREAM Act tonight. The President could fly to Mar-a-Lago and go to his party tomorrow if he wanted to, but it`s really a question of whether the White House would direct them to do that. It doesn`t seem there`s enough wherewithal in the White House to know what they want.

MANLEY: Well, I mean, you yourself said it best just a couple minutes ago in the previous segment.

HAYES: Thank you, Jim.

MANLEY: No one knows what the President wants right now, and it`s causing some real problems as we speak. Walking into this building tonight, I was told that there`s in fact, you know, they are moving towards a deal, and people are optimistic something can get done. But they`re having a real problem because no one knows what the President wants. And furthermore, some people are telling me that, you know, Trump, whatever comes out of this doesn`t want his fingerprints on it, so you know --

HAYES: Right.

MANLEY: There goes his, you know, leadership stuff.

HAYES: Wait a minute. Wait, zero in on that. What do you mean by that?

MANLEY: This is a guy who came into office claiming he could cut deals. There are discussions going on that he is, I have been told, you know, may sign off on, but he`s not going to fully embrace. Keeping you know, his hands off and moving the dirty work to McConnell and Ryan. So much for leadership.

HAYES: I see. Yes that is --- that`s the problem -- well, that`s the problem here right now. That seems to be the problem of why we`re here. I wonder, Erika, you guys have sort of an incredible political coalition and organizing force that you built over the years. I have reported on it, I have watched it grow. Do you have lines to the White House, to this White House at all? Are there people in this White House that you can have direct contact with to make your case?

ANDIOLA: We don`t. And the fact is -- my understanding is that Trump doesn`t know what he`s doing. He doesn`t understand the issue. He doesn`t understand policy on this specific issue. So he`s trying to figure out who to listen to. Unfortunately, Steve Miller has been one of those people in the White House who has been over and over again trying to kill this. Any type of DREAM Act, any type of solution, and then there`s other people within the GOP who have been trying to get in to do something different because they understand that we need to fix this.

And so it`s really hard to get to Trump, but I think right now what we have to look at is what is right in front of us. We really urge Democrats to continue to hold that line tonight. They`re going into a meeting soon in the Democratic Caucus. Please hold that line. Fight for DREAMers, fight for CHIP, for children who are sick right now and make sure that you are doing the right thing. You can be the party that does the right thing for Americans. Let the GOP be the party that`s trying to hurt children and undocumented youth.

HAYES: All right, Jim Manley and Erika Andiola, thank you both for joining me. I learned a lot there. Coming up, amidst a pending government shutdown and with details emerging with a payoff to an adult film actress to keep an encounter quiet, the President is planning to hold a fund-raiser for his re-election. More on that after this quick break.

(COMMERCIAL BREAK)

HAYES: The clock is ticking on two big deadlines. One, of course, is the looming government shutdown. We have been reporting on, set to begin in three and a half hours. The second comes tomorrow night. That is when Donald Trump is set to mark the one-year anniversary of his presidency with a gala at Mar-a-Lago.

A gala he might have to miss if the shutdown isn`t averted, and I`ll leave it to you, dear viewer too, guess which one of those two deadlines matter most to the president. Tomorrow`s gala, unlike the gala Trump held on New Year`s Eve, is a joint fund-raiser for the RNC and Trump`s re-election committee. Though because it`s held at Trump-owned Mar-a-Lago, money is presumably also going into the President`s pocket.

Bloomberg reports that tickets start at $100,000 a pair, which will pay for dinner and a photograph with the President. For $250,000, which is, I don`t know, a lot of money, a couple can also take part in a roundtable with Trump. No word on if people will get a refund if the President does not show. Last night, there was a far more reasonably priced celebration of Trump at Mar-a-Lago.

Organized by self-styled Trumpette Toni Holt Kramer, the entry fee was just $300, though guested had to settle for cardboard self-cutouts for the first couple for selfies along with an in the flesh appearance by first son Eric. The party was hosted by Fox News bomb thrower and Trump superfan Jeanine Pirro, who charmingly kicked off her keynote address by saying, welcome to Mar-a-Lago, a magnificent place, it sure isn`t no s-hole.

Pirro also complemented Trump by saying he, "would always talk to his help, meaning his servants as the night progressed, things got kind of weird, or I guess weirder." The Washington Post reports that due to windy conditions, those cardboard cutouts of trump kept blowing over. Man down, one guest shouted when the cardboard president fell over. Another guest propped him up again and two posing women pretended to grope the President.

Now, if Mar-a-Lago isn`t your scene, there`s another Trump-related event taking place tomorrow night. Adult performer Stormy Daniels is making an appearance in Greenville, South Carolina. She`s advertising it with a picture of her and Trump together and the tagline, he saw her live, you can too. The latest on the Stormy saga and why Trump`s lawyer Michael Cohen won $130,000 payout to keep her quiet could have real legal consequences right after this.

(COMMERCIAL BREAK)

HAYES: You remember John Edwards, the 2004 Democratic vice presidential nominee, two-time presidential candidate? He was prosecuted and almost went to jail for a long time because he used campaign money to pay off the woman he secretly had an affair with.

And there`s a good reason I`m bringing this up. Last week, thanks to some amazing reporting by the Wall Street Journal, might even call it dogged, we learned that Trump lawyer Michael Cohen arranged a $130,000 payment for adult film Stormy Daniels` silence shortly before the 2016 presidential election. Daniels, whose real name is Stephanie Clifford, allegedly had a sexual encounter with Trump in 2006, not long after Trump married Melania. At the time, Barron Trump was 4-months-old.

Both Michael Cohen and a White House official denied that Trump had a sexual encounter with Stormy Daniels. They did not deny the payment, though Cohen produced a recent letter signed by Stormy Daniels denying the encounter and rumors of hush money.

But long before the 2016 election, Daniels gave an interview to InTouch magazine, published in full today, describing the encounter with Trump in lengthy, and indeed, excruciating detail.

We will spare you that because it`s not really the sex that matters, it`s the money. Yesterday, the journal followed up with a report that Michael Cohen used a private company and pseudonyms to pay Stormy Daniels. Cohen`s decision to establish the company in Delaware offered him privacy, so we don`t yet know where the money came from and whether Trump, like John Edwards before him, used campaign funds to buy a woman`s silence.

Joining me now, MSNBC political analyst Tim O`Brien of Bloomberg, author of Trump Nation: the Art of Being The Donald. Also with me Richard Painter, chief White House ethics lawyer under George W. Bush.

As someone who has covered Trump for a long time, how fitting with the MO are the basic contours of this story?

TIM O`BRIEN, MSNBC POLITICAL ANALYST: Around the money and the LLCs? Well, it`s -- this is total Trump. And I think that this is a very significant development beyond the scandal, beyond the fact that a porn star is possibly landed in the White House, is that this gives Bob Mueller a way in to pierce one of the financial veils surrounding Trump`s businesses.

HAYES: Explain that.

O`BRIEN: Which is for years, he`s used LLCs to park debt into mass business transactions. There`s a lot of legitimate reasons to use an LLC. There are benefits from a tax standpoint, it limits your liability as a business operator. There is also, there can be shady reasons for it, to hide the source of money possibly coming in from overseas, or to park debt so your lenders don`t know that you may have more debt than you have disclosed.

And of course, Donald Trump has been a debt carnivore his whole career, and he`s now the subject of a very sophisticated and serious federal investigation run by Bob Mueller that is going to look at money laundering.

HAYES: That`s very interesting.

O`BRIEN: And if he gets into this, and he gets into Michael Cohen`s transactions writ large, Michael Cohen was Trump`s personal attorney. Michael Cohen was involved with Felix Seder and other deals with the Trump administration with career criminals, it`s a problem.

HAYES: Richard, there`s no contention of anything that happened here being not consensual. It was in the interview that`s published, consensual encounter, which is now being denied, but if you read the interview, you can make up your own mind about whether it happened.

I guess, to the extent that you don`t care about the president being unfaithful to his wife, what ethical issue is there here from your perspective?

RICHARD PAINTER, BLOOMBERG: Well, the whole thing is disgusting. But we have had disgusting past week to ten days. We have a president who refers to the countries where Americans of African descent come from as s-holes, and now we have this, using hundreds of thousands of dollars to buy off silence from some porn star that he`s having some kinky sex with.

And now he`s going to fly down to Mar-a-Lago, get $100,000 a head on some fund-raiser and guess who`s going to pay for him to fly down there on Air Force One: the taxpayers. I mean, that`s the big picture here.

He probably does not have legal liability with respect to this payment. The prosecution theory in the Jon Edwards case I think was a very weak one.

HAYES: Yep.

PAINTER: We had a lot of right wingers spending money to try to nail Clinton on his sexual affairs, and nobody called those campaign contributions to Republicans. I don`t think that theory works very well.

If he engaged in money laundering or anything like that, he could get in trouble. I don`t think he made the mistakes that Dennis Hastert made when he was trying to buy silence of people he had actually sexually abused as children.

But the main point here is Donald Trump uses these LLCs and all these shell entities, and he has hundreds of them, for all sorts of purposes. And paying off porn stars who he`s had affairs with is only one of his purposes. He may get money from the Russians.

I mean, Robert Mueller needs to get to the bottom of what`s going on with the finances. And every time Robert Mueller goes there, Trump gets upset, which means there`s something there.

HAYES: so, how -- I mean, I guess the question, if you talk about the origins of this $130,000, I don`t know Donald Trump`s history as well as you do. You have covered him for a long time, but he`s very reticent to pay. It`s interesting to me that they actually...

O`BRIEN: Reticent is a polite description.

HAYES: Yeah, like, no one gets paid ever. And in fact the story here was that they struck this deal, she was afraid he wasn`t going to pay. Michael Cohen wasn`t coming through with the payment. She starts talking to outlets. He creates actually another LLC, ends up actually paying her.

O`BRIEN: Days before the election.

HAYES: Just days before the election.

Is there any way to know -- I guess the question is like how much can you get into the sources of revenue in an LLC like that? Can you know actually where the money came from in any definitive sense?

O`BRIEN: Sure, Mueller can begin to look at Cohen`s own bank transactions. Presumably, money went into a Cohen bank account and out of a Cohen bank account into the LLC, or he had power of attorney over some of the Trump accounts. There`s multiple ways for Robert Mueller to dig into this.

And it could become a hornet`s nest, because if he goes into a fishing exhibition to go into the source of these payments, it could blow up a channel of money Trump doesn`t want exposed.

HAYES: And Richard, would that be -- I mean, would view that as outside the scope of the Mueller investigation if an article about Michael Cohen`s LLC for this woman, which has nothing to do with Russia and Russian collusion, et cetera, if that became the precipitating incident for Mueller to start looking at that, do you think that is fair and square, essentially, is that within the ambit of what Mueller has to investigate?

PAINTER: Well, we have known that Donald Trump has had these LLCs, many of them. We have known that for months. And that Mr. Cohen set up a lot of them, some of his other lawyers set up other ones. Robert Mueller needs to look at every single one of them. Robert Mueller is not going to make the mistake that Ken Starr did at getting all worked up about the sex.

Yes, we know we have a pervert in the White House, but he is going to focus. Robert Mueller is going to focus on the money and money that comes from foreign nationals and from other sources. If there is money laundering, that will be prosecuted. That`s Robert Mueller`s job, not focusing on the sex.

But we have known about the LLCs and all these shell entities and all the games that go on in the Trump organization for years. Everybody in New York knew that he used all these entities to conceal things and everything else.

HAYES: All right. Tim O`Brien and Richard Painter, thanks to you both. Have a good weekend.

Still to come, if the government does shut down tonight, will that change anybody`s vote in nine months when they go back to the ballot we have known about the LLCs and all these shell entities and everything else.

HAYES: All right, Tim OBrien and Richard Painter, thanks to you both. Have a good weekend.

Still to come, if the government does shut down tonight, will that change anybody`s vote in nine months when they go back to the ballot box. Why that`s unlikely ahead.

And the president`s sales pitch for his big, beautiful wall, in tonight`s Thing One, Thing Two next.

(COMMERCIAL BREAK)

HAYES: Thing One tonight, last night, I asked Republican congressman Roger Marshall why the president and the GOP in congress are demanding money for a border wall since we all go Trump relentlessly assured America that Mexico was going to pay for it.

(BEGIN VIDEO CLIP)

REP. ROGER MARSHALL, (R) KANSAS: Maybe long term, he`ll figure out a way for Mexico to pay for it. But in the meantime, we have to appropriate money so we can get the job done.

HAYES: So, the American taxpayer should front the money because what Trump promised can`t happen.

MARSHALL: I think you`re taking everything a little bit too literally.

(END VIDEO CLIP)

HAYES: That could be true. It`s not like Trump literally produced an infomercial to sell his wall, but we literally did. And that`s Thing Two in 60 seconds.

(COMMERCIAL BREAK)

HAYES: We are told by Republicans now we should not take Donald Trump literally about his border wall. But I sure seem to recall a lot of promises during the campaign about a big beautiful literal wall. It was almost like a year long nonstop border wall infomercial.

(BEGIN VIDEO CLIP)

CROWD: Build that wall! Build that wall! Build that wall!

ANNOUNCER: From the man who brought you Trump Steaks.

TRUMP: I have just raised the stakes.

ANNOUNCER: Comes this exclusive offer.

TRUMP: A big fat beautiful physical, tall, beautiful, powerful, a great border wall.

ANNOUNCER: That`s right, an actual real wall.

TRUMP: A proper wall.

ANNOUNCER: That we`re actually going to build.

TRUMP: This will be a real wall.

ANNOUNCER: A tall wall.

TRUMP: See that ceiling up there, I mean, this is a wall if you get up there, you`re not coming down very easy.

ANNOUNCER: A serious wall.

TRUMP: A serious wall. Going to be a serious wall. I`m talking about a wall that`s got to be like serious.

ANNOUNCER: And if you act right now, you`ll also receive...

TRUMP: Towers, aerial surveillance, and manpower.

We want to have vision through the wall. Has to be see through. A big, fat, beautiful door. Above and below ground sensors. Solar wall panels. Beautiful.

ANNOUNCER: But that`s not all.

TRUMP: The wall just got 10 feet higher. We love it.

ANNOUNCER: Normally, this wall retails for billions.

TRUMP; These guys do it, it will end up costing $200 billion.

ANNOUNCER: But our wall can be yours for the low, low price of...

TRUMP: Mexico will pay for the wall.

Who`s going to pay for the wall?

CROWD: Mexico.

TRUMP: Who?

CROWD: Mexico.

ANNOUNCER: Trump does not guaranteeing a wall will be built or that it will be big or beautiful or physical or that Mexico in any form or fashion pay for the wall. If you believed any of these promises, seek medical help immediately.

TRUMP: Yeah, OK, OK, we`ll build the wall, but who`s going to pay for the wall?

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

TRUMP: I really believe the Democrats want a shutdown to get off the subject of the tax cuts because they have worked so well. Nobody thought, including the Democrats, they could work this well. They have been so good that I think the Democrats would like to see a shutdown in order to get off that subject.

(END VIDEO CLIP)

HAYES: Despite controlling the entire federal government and despite polls showing 48 percent of Americans blame them for what`s happening right now, Republicans are trying to rebrand the upcoming shutdown as a Democratic Party failure, hoping Democrats will bear the brunt of any political fallout.

The idea that anything that happens now in either direction will have any major effect on how people vote in November seems, well, highly unlikely, especially considering what happened after the last government shutdown. Someone who knows about that all too well, former White House Press Secretary Josh Earnest joins me next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MARC SHORT, WHITE HOUSE DIRECTOR OF LEGISLATURE AFFAIRS: It appears unfortunately Senate Democrats are enforcing a shut down. But what`s unclear, what is it the Democrats are asking to get out of a shut down? It seems they are just hell bent on getting to a shut down.

(END VIDEO CLIP)

HAYES: Joining me now, Karine Jean Pierre, senior adviser and national spokesperson for MoveOn; and Josh Earnest, former White House press secretary for Barack Obama.

Josh, let me start with you as I believe you`re a veteran of the government shutdown.

JOSH EARNEST, FORMER WHITE HOUSE PRESS SECRETARY: Unfortunately, yes.

HAYES: And I remember, then, I was -- we were doing the show at this point that was the fall of 2013, and it was about 13 months before the 2014 election and it was bad for the Republicans. People blamed the Republicans. We watched -- everyone watched Ted Cruz go and meet with his House colleagues and find a way to blow things up. And basically engineer an shutdown, and it stopped after I guess two weeks or something. Republicans got nothing. It was bad for the party. And then do you think it had any effect whatsoever, enduring effect?

EARNEST: Well, Chris, I had been a little nostalgic tonight, because about three hours before the last government shutdown, it was about 9:00 p.m. in my West Wing office in which an assistant in the White House press office was teaching me how to use the mass email distribution system so that we could send the president`s schedule and presidential statements out in the event of a government shutdown, because foolishly we considered assistants in the White House press office to be non-essential personnel.

So, I had some scars from the last government shutdown. But, look, Chris, the fact is, Republicans would have been blamed politically for the last government shut down had not an even more cataclysmic political event occurred in the timeframe before the next mid-term elections, which was, unfortunately, the botched rollout of the Healthcare.gov website. And that was actually something that also started on October 1.

HAYES: Same day, I remember.

EARNEST: And it didn`t get that much attention because people were still focused on the government shut down. But after 16, 17 days of a shut down, once order was restored to the daily functioning of the federal government, people checked out the website and it turned out it didn`t work. It took a couple of months to fix it. And that did, unfortunately, absolve Republicans of their political sins.

HAYES: OK, so that is interesting. That`s sort of your theory of the case of why that didn`t resonate.

Let me ask you this, Karine, so there is two pieces of data to think about here. You`ve got the polling showing most people, the majorities will blame, or plurality, will blame Trump and the Republicans and fewer people blame the Democrats, and yet, you`ve got Doug Jones just announcing from Alabama he`s going to vote for the continuing resolution, means voting against a shut down. Heidi Heitkamp, Joe Donnelly in Indiana, people who are vulnerable red state Democrats. Does that suggest to you the politics of this? What does it suggest to you about the politics of this moment?

KARINE JEAN-PIERRE, MOVEON: Well, I think what is important about this moment is that folks need to be on the right side of history when it comes to this. I just want to touch on Josh`s point for a second. I think what happened in 2013 was that Obamacare wasn`t popular. The difference here in 2018 is that you have DACA, the Dream Act which is incredibly popular and CHIP, the Children Health Insurance Plan, which is very popular. If you put those two bills stand alone on the floor, if Mitch McConnell would put that to the floor, they would pass overwhelmingly in a bipartisan way.

And so that`s really what the difference is. And you have Washington that the Republicans own. So, I think those two things are very different than what we saw in 2013, but you have -- I mean, you have to be on the right side of history here. This is incredibly important. We`re talking about children, 9 million children, who need health care. You`re talking about 800,000 DACA recipients, which really is going to affect millions of people if you really look at the data, if you really look at the numbers. And so I think that`s what we have to focus on here.

HAYES: Josh, it`s been interesting to watch this kind of message discipline rollout from Ryan and McConnell. Suddenly, they are just all so upset that CHIP hasn`t been funded yet. Finally, if CHIP is going to be funded. And they are calling it the Schumer shutdown.

Like, it is remarkable to watch the kind of message machine whir to life in these kinds of moments.

EARNEST: Yeah. It`s a little ham-handed, though, Chris. I mean, I don`t think anybody is buying that Republicans are the true advocates for CHIP. when you consider that Democrats have been advocating for them to put CHIP up for a vote for months now and all of a sudden Republicans somehow are the savior of the program? It strikes me as something people are not likely to believe.

But, Chris, I think the bigger problem for Republicans, actually, is in 2013 in the midst of the shut down and the days leading up to it, and actually during the shutdown, in the White House we were actually doing conference calls with Democrats on Capitol Hill and throughout my tenure in the Obama White House, we were often criticized for not maintaining close ties with Democrats on Capitol Hill. Some of that criticism was legitimate, but not during a government shut down. We actually were closely synced up, because Democrats on the Hill knew that they were going to be counting on the president to have their back and to lead the charge in making an argument to the public about the wisdom of their approach.

Republicans, in no way, can have that kind of confidence that President Trump, who is supposed to be leading the charge here, won`t inadvertently or intentionally cut them off at the knees.

HAYES: That is a great point.

Let me -- Karine, let me ask you this, one way to map the trajectory of bringing us this moment, aside from the wall, is also a lot of grass roots activation among the Democrats. There was a real push by grass roots groups to say you need to take a stand on DACA at some point. There was some frustration back in the Chuck and Nancy deal that happened last year that it didn`t include DACA, this idea they are going to keep kicking the can and the DACA recipients left out in the cold and there was real organization by grass roots groups, to make a stand is that -- do you see that organizing as part of why Democrats seem to be holding firm on this now?

JEAN-PIERRE: Absolutely. Let`s not forget about a year ago, when there was a story about Senator Chuck Schumer possibly working with Donald Trump on infrastructure, 1,000 people showed up at his home protesting and saying no, don`t do that, and it kind of changed that trajectory of how he was going to handle Donald Trump.

So I think the resistance, the progressive movement has been incredibly strong as we saw with beating back the repeal of Obamacare and also, with this moment that we`re in currently, yes, the resistance progressive moment, grass roots organizing is the reason why you have Democrats really just standing their ground on this and saying no, we`re not kicking the can down the road, because this is not fair. This is not the right thing to do. We have to be on the right side of history.

HAYES: I think analytically that`s correct. I think in the absence of that kind of agitation I think they probably would be happy to just sort of make the vote and take another run at it in 30 days.

We will see what happens in the next few hours. Karine Jean-Pierre and Josh Earnest, thanks for joining us.

That is All In for this evening, the Rachel Maddow Show starts right now. Good evening, Rachel.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

END

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