‘This Week’ Transcript 12-23-18: Mick Mulvaney and Sen. Jeff Merkley

A rush transcript of a special edition of “This Week with George Stephanopoulos” airing on Sunday, Dec. 23, 2018 on ABC News is below. This copy may not be in its final form and may be updated. For previous show transcripts, visit the “This Week” transcript archive.

JONATHAN KARL, CHIEF WHITE HOUSE CORRESPONDENT, ABC NEWS: And joining us now is Mick Mulvaney, the man just named acting White House chief of staff. This is his first interview since being given the job and he’s also been at the center of the shutdown negotiations as the director of the Office of Management and Budget. Mr. Mulvaney, thank you for joining us.

MICK MULVANEY, ACTING WHITE HOUSE CHIEF OF STAFF: Morning, Jon. Merry Christmas.

KARL: Merry Christmas to you. Let me start with the negotiations. Where do they stand right now?

MULVANEY: We met most of the day yesterday. The vice president and I were on the hill, I think all day yesterday, most of the day before that, meeting with Democrat leadership, Mr. Schumer, also various members of the Republican party in both the House and the Senate. We gave them an offer late yesterday afternoon and we’re waiting to hear back from them right now.

KARL: What’s the bottom line for the president? Is he willing to accept anything that does not include money specifically to build a new border wall, even if the Democrats, as they have said, are willing to get money for more border security?

MULVANEY: Sure, and not going to tell you what our bottom line is in the negotiation but it’s a fair question as to what we would accept. No, the president’s not going to not accept money for a border wall. Now, what one people call a wall and another person might call a fence. But I think you saw the tweet he put out this week about the steel with the spikes on the top …

KARL: I didn’t see any design like that.

MULVANEY: Exactly. And that’s what we want to build and that’s what the president needs to have money for. As between (ph) – as to what the number is, all I can tell is that the Democrats offered us – I think they offered us $1.6 billion a couple weeks ago, then they offered the president $1.3 billion this week. That’s a negotiation that seems like it’s going in the wrong direction.

We’ve insisted on 5 for the discussions, now we’re between $1.6 billion and $1.5 billion.

KARL: But let me ask you, I was out with the president throughout the presidential campaign. Mexico was going to pay for this wall, from day one. Let me remind you what he said the day that he announced he was running for president.

(VIDEO BEGINS)

TRUMP: I will build a great, great wall on our southern border and I will have Mexico pay for that wall. Mark my words.

(VIDEO ENDS)

KARL: Mark his words. Now, the president has forced a government shutdown because he’s insisting that American taxpayers pay for that wall. What gives?

MULVANEY: And if you ask the president, he’ll point you immediately to something else that didn’t get a lot of news in the last couple weeks, which is this new U.S.-Mexico-Canada agreement, USMCA which is so much better for us than the NAFTA deal that American workers are going to do better, the government is going to do better and you could make the argument that Mexico is paying for it in that fashion.

KARL: But when he’s asking for billions of dollars from American taxpayers right now, hasn’t he broken one of the central promises of his campaign?

MULVANEY: Let me finish, because another story that I don’t think you covered this week, and I don’t know why no one did, is that Mexico has now agreed, for the first time in history, to keep asylum seekers, folks who are trying to get into the USA, on the Mexican side of the border. So these are folks in Mexican facilities maintained by Mexican officials. They’re actually doing more for border security than many Democrats in Congress.

So we really think we’re in a good place in terms of getting the wall built and also getting Mexico to participate in our border security.

KARL: But none of that is Mexico paying for the wall. Let’s just be clear about this …

MULVANEY: Technically, you and I both know that it cannot work exactly like that. I can’t spend any money at the office of management – budget that – Department of Homeland Security can’t actually spend money for Mexico. We have to get it from Treasury.

KARL: I understand that, it’s not the way it sounded during the campaign. So let me ask you how we get out of this. There’s been one proposal that’s been put forward by Newt Gingrich together with Don Graham, former publisher of the Washington Post. They are proposing a compromise where the president gets his money for the wall and he also agrees to allow a path to citizenship for the Dreamers. Here’s what they write.

“Whether you support money to build the wall or regard it as a waste, everyone knows it is of central importance to the president and he is proving he is prepared to fight for it. Why shouldn’t Congress take advantage of the best opportunity in years and give the Dreamers the open door they deserve?”

So would the president be open to a grand compromise where it is essentially amnesty for the Dreamers, if he gets money for his wall?

MULVANEY: Again, I don’t like the word “amnesty.” The president has made it very clear, however, that he is willing to discuss a larger immigration solution. The wall does not solve all of our problems. A border fence does not solve all of our problems because so many of our laws are broken. The reason that so many people are still trying to come here is they know that our laws work to their disadvantage – to their advantage.

If you try to enter the country illegally, the law works to your advantage. That needs to be fixed as well in order to solve this issue of the difficulties on the southern border. We are more than willing to talk about all of those things. No one else —

KARL: But citizenship for — for — for the DREAMers?

MULVANEY: Citizenship I think is one of those things that — that many folks in our party disagree with. I think a lot of folks in our party support some type of status. But again, we’re not going to negotiate here. The point is this — yes, we are more than interested in talking about larger agreements. No one’s actually shown any interest in doing that.

KARL: So this shutdown happens amid a brutal week on Wall Street. Just look at some of the headlines from Friday. We have signs of a bear market, the worst week since the Great Recession. The worst month, it looks like, of December since the Great Depression. The president we’ve heard over and over again talk about the stock market as basically a barometer of his leadership. So does he — now that we are seeing this dramatic downturn — bear some responsibility for that?

MULVANEY: Oh no. The fundamentals are still strong. You ask anybody who talks about the market and they’ll tell you that they still look at the fundamentals. What are the fundamentals of the economy, the thing that this administration is so proud of? Unemployment is still low, capital investment is still high, GDP is still growing at above three percent. All of the things that the president said that his economic policies would deliver have delivered. The stock market goes up, the stock market goes down, we’re no more happier than anybody else over the performance of the stock market for the last month.

Love to have a conversation with you about one of the — some of the things the Fed is doing and some of the things we think —

KARL: Let’s — let’s — let’s talk about that. By the way — and he did certainly take credit when it was — when it was booming. But you mention the Fed. It was just over a year ago that the president nominated Jerome Powell to lead the Fed. This is what he said at the time.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Based on his record, I am confident that J. has the wisdom and leadership to guide our economy through any challenges that our great economy may face.

(END VIDEO CLIP)

KARL: So the Fed is now led by his man, who has now raised interest rates again. And the New York Times is reporting that the president has told advisors that Powell, quote, will turn me into Hoover with these — with these rate increases. Hoover of course presided over the Great Depression. Does the president think it’s potentially that bad?

MULVANEY: Listen, it’s not at all unusual for a president to complain about the actions of the Federal Reserve chairman. I think Ronald Reagan is famous for it. Paul Volcker’s book I think just came out a couple months and he has a very specific passage where he was called into the chief of staff’s office and told, let me make one thing perfectly clear, the president’s telling you to lower rates. The tension between the president and an independent Fed is — is traditional as part of our system, so it shouldn’t be surprising to anybody that the president’s not happy that the Fed is raising rates and we think driving down the value of the — of the stock market.

KARL: But Hoover? I mean, is he worried we’re on the precipice of something really bad?

MULVANEY: The fundamentals, Jon, are what’s going to drive this economy in the long run. They didn’t have the same fundamentals back in the 1920’s. So I recognize the president meant Hoover but no one thinks we’re going into a Great Depression.

KARL: OK, so bottom line, though, does the president believe that he has the authority to fire the Fed chairman?

MULVANEY: Oh no, in fact I think — and I’m sorry, we should have talked about this beforehand. I think he put out a tweet last night specifically saying that he now realizes he does not have the authority to (ph) —

KARL: We heard from Treasury Secretary Mnuchin —

(CROSSTALK)

KARL: — the president had told him that. We haven’t heard directly from the president (ph).

MULVANEY: (Inaudible) I must have heard it — I did speak with the treasury secretary last night about a bunch of things, including the lapse in appropriations (ph) and the shutdown and he did (ph) mention that to me.

KARL: OK, I want to get to the change at the Pentagon and Syria, but first, you of course are the — currently still the budget chairman. I know you’re — you’re one of the real deficit hawks, budget hawks, you’re founder of the Freedom Caucus. How crushingly disappointing is it to you to see what has happened to the federal deficit and federal spending? If you look at it — you had a $600 billion-plus deficit in 2017, now we are approaching a trillion dollar deficit and it is driven, as you know better than anybody, overwhelmingly by out of control government spending.

MULVANEY: It’s — it’s hard. It really is. And I just have to keep reminding myself that the president’s budget, the things that he and I do together have been really fiscally responsible. We introduced a budget two years ago that would have balanced. Couldn’t do it last year just because you can’t — the numbers don’t add up anymore. The budget you’re going to see us put out in a couple months is going to continue that fiscal responsibility. I just can’t convince — the president can’t convince Congress to go along with those things.

Congress spends the money and they’re addicted to that spending. It’s why I was so proud to have the president come out this year and talk for the first time about this nickel plan, about going to all of the agencies and getting them to reduce their spending by five cents on the dollar. The president gets it but we need a willing partner on the Hill. I’m a little worried about the fact that Democrats are now coming in to control the House because they’re not famous for their fiscal responsibility (ph).

KARL: I mean, we — I mean, we can do it — we can talk more about this another time, but I mean if you look, the defense spending has skyrocketed, he’s bragged about that, he’s done nothing to even talk about controlling entitlements, spending across the board has — has gone up.

MULVANEY: Actually we should have that conversation another time because —

KARL: Yes.

MULVANEY: — the last three budgets we put out — or the two budgets we put out, the next one we put out next month have included the most aggressive reforms of mandatory spending, what some people call entitlements, in history.

KARL: OK, let’s move to secretary — Defense Secretary Mattis. Was the president surprised when Mattis handed him that letter of recommendation — resignation and did he try to change his mind, try to get him to stay?

MULVANEY: I don’t know the answers to those questions, I’m going to give you an educated guess. No. I think the president had known for — for quite some time now that he — that Secretary Mattis and he did not share some of the same philosophies about — they didn’t have the same world view. You heard the president say a couple weeks ago, I think, in an interview that he recognized that Mr. Mattis — he called him a Democrat — recognized that he had — I think Mattis had to leave the service of the Obama administration over similar types of — of disagreements.

So no, I don’t think it was a surprise. I’m not aware as to whether he tried to (ph) talk him out of it.

KARL: You saw — you saw Mitch McConnell’s response. Let’s bring it up again. He said it is regrettable that the president must now choose a new Secretary of Defense but I urge him to select a leader who shares Secretary Mattis’s understanding of these vital principles and his total commitment to American service members. And we’ve seen other Republicans say that — actually call for the president to nominate a Mattis clone to replace him. So what is the bottom line for the president? Does he want a defense secretary who is willing to challenge him or does he want somebody who will be lock step in his views?

MULVANEY: I think the president wants a little bit of both. And I — I look across the cabinet agencies and look at who — who the president thinks is doing a really good job and this is — this is how I describe it. It’s folks who don’t always agree with the president but don’t always disagree with the president. I’ve encouraged him to find people who have some overlap with him but don’t see the world in lockstep with him. It’s the same way I’ve dealt with the budget. Look, if I had come to you — the president six weeks ago and said, Mr. President, you just told me to raise spending by a dollar on a dollar, a 100 percent increase, I can’t do that, I’m not your guy, I don’t see the world that way, no one would accuse that of — me of insulting the president.

They would simply say that the OMB director and the president can’t see eye to eye on some fundamental things. By the way, he didn’t do that, he had that nickel plan to reduce spending —

KARL: Right.

MULVANEY: Mattis and he just could never get on the same page. And he — he was — the president has told people since the campaign that he wanted to get out of Syria. Think he’s entitled to have a Secretary of Defense who is committed to that same end.

KARL: But — but it’s not — it’s not just Mattis. We also saw Brett McGurk, who was top U.S. diplomat for the campaign against ISIS. He’s resigned also to protest the president’s sudden withdrawal from Syria. He said in an e-mail to his staff, the recent decision by the president came as a shock and was a complete reversal of the policy that was articulated to us. It left our coalition partners confused and our fighting partners bewildered. Is there any chance the president changes his mind about this, reverses course?

MULVANEY: No. I think the president has told people from the very beginning that he doesn’t want us to stay in Syria forever. You’re seeing the end result now of two years worth of work. But keep in mind it’s not unusual for a president to lose members of the cabinet over these types of disagreements. I think Chuck Hagel quit at the Obama administration over similar types of – of disagreements. So this is not at all – this is why cabinet secretaries should leave.

KARL: Well, if you look at what the president – how the president responded to McGurk, he said that he had never met him, he doesn’t know him. McGurk’s title is the special presidential envoy for the global coalition to counter ISIS. How is it that the president doesn’t know his point person in the battle against ISIS?

MULVANEY: You know the answer to that. The administration is thousands of – the executive branch of government is millions of – I have no idea who that person is. Never heard of him …

KARL: You don’t know (ph) Brett McGurk?

MULVANEY: … Until yesterday. All I know is that there’s an Obama appointee who saw an opportunity …

KARL: He was a Rehnquist clerk …

MULVANEY: He was.

KARL: … He served throughout the Bush administration, he’s a lifelong Republican. He’s not an Obama appointee. He was tapped on (ph) …

MULVANEY: He took that – did he take that position under Obama’s administration?

KARL: He was – he was held over from the Bush administration.

MULVANEY: But you see my point.

KARL: This is not a Democrat.

MULVANEY: I’m certain – I’m certain he’s well-known within the folks who follow this topic, the fact …

KARL: Very well.

MULVANEY: … That the president of the United States doesn’t know him, I just don’t think should cause anybody any concern.

KARL: OK. I want to get into this decision to withdraw from Syria. You’ve seen – we’ve seen McGurk opposed it, whether or not the president knows him. Mattis opposed it. It’s been reported that Pompeo opposed it, Josh – John Bolton opposed it. Was there anybody on the president’s senior national security team who was in favor of this move?

MULVANEY: John, in all fairness – first of all, I’ve not been heavily involved in that decision because I’m not the chief of staff yet. What little I know about it, I wouldn’t tell you on this program, so I apologize.

KARL: OK. And let me ask you one quick question about – the president is blaming, in a – in a tweet overnight, the media. He’s saying that the media hit me hard over this decision, they should have praised me. But this is not the media. I mean, we saw – Lindsey Graham called it terrible mistake, Marco Rubio called it a terrible mistake, Lindsey Graham called it a disaster on multiple fronts.

Even Mike Huckabee said it’s a betrayal of the courage that leaves Syrian Christians as sitting ducks.

MULVANEY: This is something he told people to their faces when he ran for office. You ran a clip earlier about the thing about Mexico. If you had stayed with that clip, my guess is you would have said, and let’s bring our men and women back from Syria. He’s been telling people he was going to do this from the beginning. If he has to fight against the Defense Department to do that, he’s going to do that. That’s what the president does.

This is a promise kept by the president of the United States. It may upset a lot of people but the folks that voted for the president like it.

KARL: OK, let’s talk about your new job. About to take over as acting chief of staff. You’ll be the third chief of staff in less than two years. How are you going to succeed where your predecessors failed?

MULVANEY: I think I know the president a little better now. Keep in mind, when Reince Priebus, who I thought did a decent job, came on, he and the president hadn’t worked together very much. And I don’t think when John Kelly came in, he had much experience with the president. I’ve had two years working with him now almost every single day. I think we’ve had some really good conversations in the last two weeks about what he wanted out of a chief of staff, what I thought a chief of staff should do.

I had a conversation with James Baker, widely regarded as one of the great chief of staffs last week, and reminded me again, and this is sort of a – this is an operating sort of theory, you’re not the chief of the president. You’re the chief of the staff. You’re not going to change the way the president behaves, the president thinks, the president operates. You’ve got to figure out a way to take the staff, to make the president successful.

When we were over OMB – I got to OMB, we had this mission that we were going to be quietly competent. I don’t think you can be quiet in the chief of staff’s office, but I think you can be sort of calmly competent. And that’s what we’re going to bring to the office.

KARL: So you’re the acting chief of staff. How long do you expect to stay?

MULVANEY: I don’t know, I talked to the president about that. And I think, first of all, every position in the administration is temporary. We all serve at the – at the will of the president, he could fire all of us tomorrow and everybody knows that. That’s the way cabinets work and the staff works. But I think we’ll just do is take a couple weeks, a couple months and see if he likes the way I’m handling the job, if I’d like the job.

So no, this is — this is an ordinary thing to sit down and say look, you and I have to spend a lot of time together over the — over the next couple of — of months, let’s see if we can get along.

KARL: So as you know, this clip from 2016, just days before the election has been making the rounds. Let’s play it one more time.

(BEGIN VIDEO CLIP)

MULVANEY: Do I like Donald Trump? No. Is he a role model for my sons? Absolutely not. We have perhaps two of the most flawed human beings running for president in the history of the country. Yes, I supported Donald Trump. I’m doing so as enthusiastically as I can given the fact I think he’s a terrible human being. But the choice on the other side is just as bad.

(END VIDEO CLIP)

KARL: Terrible human being. I mean, that’s made the rounds —

(CROSSTALK)

KARL: So have you talked to the president about it?

MULVANEY: Sure. We joked about it last night. So look — I think the president — what’s wrong with Washington D.C. — people spend a lot more time looking at what people say instead of what they do. I think my actions for the last two years — in fact I know they have because I asked the president about this. He knows that I’ve been fighting with him to fight for ordinary Americans the last two years. He likes having me around and I — I like working for him.

KARL: And one very quick one before you go. The deputy chief of staff — one of them — Zach Fuentes has told people he wants to stick around for six months, apparently is reported in the New York Times, and wait so he can get a big retirement package from the — from the Coast Guard. Is that the kind of thing you would allow, somebody to stick around for six months without a real job?

MULVANEY: Yes. I’ll put my Donald Trump OMB hat back on for a second. Donald Trump doesn’t let people sit around and do nothing for six months. So Zach’s a good man, we’ll find something for him to do productive.

KARL: OK. All right. Mick Mulvaney, the incoming acting chief of staff. Thank you for joining us.

MULVANEY: Thanks, Jon.

KARL: Coming up, the response from the Democrats. We’ll be talking live with Democrat senator and potential 2020 presidential candidate Jeff Merkley next. And later the powerhouse roundtable. We’ll be right back.

KARL: Joining me now is Oregon Senator Jeff Merkley, a member of the Foreign Relations Committee who is also weighing a presidential run in 2020. Senator Merkley, thank you for joining us.

JEFF MERKLEY (D), OREGON: You’re welcome. Good to be with you, Jon.

KARL: So you just heard director, soon to be Acting Chief of Staff Mulvaney say the president’s not backing down, he’s not going to agree to anything that doesn’t include funding for his border wall. How do we get out of this impasse?

MERKLEY: Well I think the president is determined to carry this forward at least until the Democratic Congress comes in. He’s not — it’s not about border security, Jon. He’s sitting on over $1 billion, 94 percent of what we sent him last year for border security he hasn’t bothered to spend. If you’re not going to spend nine out of 10 dollars on an issue, you obviously don’t care about it that much. This is politics, not policy.

KARL: But if you look at this question of the wall, this is something the president campaigned on, it is something that the House has voted to approve funding for, it’s something that half the Senate, roughly, has said that — is — is willing to support. Why are the Democrats so insistent — Chuck Schumer insistent nothing — nothing for the border wall? Why not give in a little bit on that?

MERKLEY: Because we’re absolutely willing to fund border security. The American people want us to spend money in a smart way. $5 billion is a lot of money. That’s 650,000 children attending head start. It’s 2 million meals a day for a year — for a year for — for seniors. And to spend it on a 4th century strategy rather than on stuff that actually improves border security is something we’re just not going to do.

KARL: So — so let me be clear. Democrats are not going to agree to any funding to build a new border wall? None?

MERKLEY: That’s correct. None.

KARL: What — what about this idea of a —

MERKLEY: Border security all the way. Border security all the way. In fact, again, the president has a lot of money we gave him last year for border security and he’s not using it.

KARL: So what — what about this idea of — of a compromise where the president gets some money for his wall in exchange for agreeing to — to providing some kind of legal status for the DREAMers?

MERKLEY: Well you know, we went through the broader negotiation last year. The president said, bring me a bipartisan plan, I’m ready to move on the DREAMers. We sent up two senators from each party, went and briefed the president and he went within two days from being, I will take the heat, I will stand behind this plan, to completely melting down as soon as he was attacked by Breitbart. And so we — we have a president who has shown no interest since in the broader negotiation. We’re certainly standing ready for that.

We have a plan a bipartisan plan that’s on the table. We have the 2013 plan that pssed by a super majority in the senate that would address the vast bulk of these issues. So, we’re ready for a broader discussion. The president hasn’t been there.

KARL: But that 2013 plan, which you supported, included money for some 700 miles of border fence and you just told me…

MERKLEY: Border security.

KARL: A border fence, a wall…

MERKLEY: There’s a difference between a fence and wall.

KARL: There is?

MERKLEY: 30-foot concrete wall, 30-foot steel spikes, that’s not the smart way, and that’s what all the experts on the border tell us.

You know, I went to the border a couple times. And I must say when you talk with the border
guards they fill you in on what’s really happening and say the president’s vision and understanding of the law, he just doesn’t get it. He doesn’t get that the drugs are coming through tunnels. He doesn’t get that they need high security sensors, he doesn’t need personnel. All of that we are supporting. The things that are effective, we support. Broader negotiations, let’s have them.

KARL: You also heard Director Mulvaney say that the fundamentals of the economy are strong. Do you agree.

MERKLEY: I had to laugh when I heard him say the economy has delivered just as planned. When they were putting together that, well, $2 trillion give away to the wealthy from the tax bill in
2017, they said, hey, this is going to increase wages for working Americans. Well, that didn’t happen. They said it’s going to reduce the deficit. Well, that didn’t happen. And of course Mick Mulvaney is saying today saying that we need to cut Medicare and Medicaid and Social Security, he’s called them entitlements.

Well, that was the big plan, wasn’t it? To give away the ntional treasury to the wealthy, the wealthiest among us, and then proceed to cut the benefits for ordinary working people. I don’t think you’re not going to find support for that strategy of rip off ordinary people to give extra money to the rich.

KARL: Although, as I’m sure you know, the revenues are up actually up slightly since the tax cut. It’s relly spending that’s gone up so much driving that deficit.

But let me ask you about the other big story, the withdrawal from Syria and the resignation of Jim Mattis. You’ve been very critical of American military involvement in the Middle East over the years. Do you support this decision by the president to withdraw U.S. troops?

MERKLEY: So, in syria we have a complex set of folks on the ground, a big, big alliance. The fact is that this was done without close consultation. I think he said it all when he said tht he didn’t have any idea who McGurk is, the person coordinating all the work in Syria. Who’s the first person you bring in to talk about how you provide an exit plan? When it’s the right moment, when the objective is achieved, how do you avoid a vacuum, how do you honor the allies that are there, Turkey and the folks from Kurdistan, it’s a whole set of pieces tht he didn’t even think about or talk to people about and work out, so it’s very precipitous and it means it leaves our allies and our partners in the field out in the cold.

I think there is a moment you have to withdraw from battles abroad, but you have to do it in a coordinated and smart way.

KARL: All right, before you go, you were just in Iowa this week. You said you’re considering a run for president. I know you haven’t made that decision yet, but let me ask you do you have any
doubt tht you are prepared to be president?

MERKLEY: Well that I have no doubt about.

I will tell you that there are three things keeping me up at night. And one is the corruption of the we the people constitution through gerrymandering and voter suppression, the second is the climate destroying our environment, the third is the complete neglect for the foundations for working families. And if we don’t take on some very powerful forces, we won’t address these three big threats.

I can tell you that families are really suffering in my blue collar communities and in blue collar communities across the country. And we are going to have to make a difference and change that.

KARL: All right, Senator Merkley, thank you for joining us this morning.

MERKLEY: Thank you very much, Jon. Take care.

KARL: Up next, Chris Christie and Donna Brazile join our Powerhouse Roundtable. We will be right back.

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