'This Week' Transcript 12-23-18: Mick Mulvaney and Sen. Jeff Merkley This is a rush transcript for "This Week" on Dec. 23, 2018 and may be updated.

A rush transcript 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.

ANNOUNCER: This Week with George Stephanopoulos starts right now.

JON KARL, CHIEF WHITE HOUSE CORRESPONDENT: Christmas chaos in the Capitol.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We're totally prepared for a very long shut down.

KARL: An impasse over how to pay for the president's border wall forces a partial government shutdown just in time for the holidays.

SEN. CHUCK SCHUMER, (D) NEW YORK: You're not getting the wall today, next week or on January 3 when Democrats take control of the House.

KARL: After saying he would be proud to shut the government down over border security the president is blaming the opposition.

TRUMP: It's really up to the Democrats, totally up to the Democrats.

KARL: Under pressure from the far right, the president upended a deal to keep the government open. How long will the stand off last? And who will blink first?

Plus...

DAVID MUIR, ABC NEWS ANCHOR: We're coming on the air with breaking news.

WOLF BLITZER, CNN ANCHOR: President Trump just tweeting.

JUAN WILLIAMS, FOX NEWS: Defense Secretary...

BLITZER: James Mattis is leaving.

KARL: A stunning resignation. Defense Secretary Jim Mattis calls it quits after the president declares mission accomplished in Syria.

TRUMP: Our young women, our men, they're all coming back and they're coming back now.

KARL: The president is planning to pull troops out from Syria and Afghanistan, but he now faces a backlash from fellow Republicans.

SEN. LINDSEY GRAHAM, (R) SOUTH CAROLINA: None of us believe that ISIS has been defeated.

SEN. MARCO RUBIO, (R) FLORIDA: It's a terrible mistake and unfortunately I think we're going to pay a price for it.

KARL: The president has fought his party before. But does this represent the biggest break yet? We take it all to Mick Mulvaney in his first interview since being named acting White House chief of staff.

Plus, the response from a leading Democratic senator considering a run for president, and insight and analysis from our Powerhouse Roundtable.

ANNOUNCER: From ABC News, it's This Week. Here now chief White House correspondent Jonathan Karl.

KARL: Good morning and welcome to This Week. We have witnessed an extraordinary level of chaos this week even by the standards of the past two years. A sudden troop withdrawal, a stunning resignation, a breakdown in negotiations, a partial government shutdown, and a volatile stock market suffering its worst week since the Great Recession. Amidst it all, investigations seeming to close in, investigations that have already hit the president's former campaign chairman, national security adviser, and personal lawyer. This week it brought down the Trump family foundation.

With Democrats just 11 days away from taking over the House, the president needs his party's backing now more than ever, but there are signs that Republican faith in Trump is beginning to waiver.

(BEGIN VIDEO CLIP)

TRUMP: Man, have I become the ultimate outsider, right?

KARL: Donald Trump campaigned on being a disrupter, proudly unpredictable, unapologetically playing by his own rules. But now, those very qualities are shaking the Republican Party.

REPORTER: Mr. President, can we ask about the shutdown?

TRUMP: We'll see what happens.

KARL: After the White House first signaled the president's support for a bipartisan bill to keep the government open, the president suddenly reversed course, rejecting the plan because it did not include money for his border wall.

TRUMP: We're going to have a shut down. There's nothing we can do about that.

KARL: Dragging reluctant Republicans into a shutdown showdown.

SEN. JOHN KENNEDY, (R) LOUISIANA: I haven't seen shut downs ever work.

SEN. MITCH MCCONNELL, (R) KENTUCKY: I think a government shutdown is not a good option.

KARL: But it was the surprise resignation of Defense Secretary Jim Mattis over the president's abrupt decision to withdraw from Syria that prompted the loudest criticism from fellow Republicans, including a rare rebuke from Senate Leader Mitch McConnell: "I'm distressed that Mattis is resigning due to sharp differences with the president on these and other key aspects of America's global leadership."

A group of senators, including four Republicans, urged the president to reconsider the Syria withdrawal, calling it a costly mistake that, quote, "not only threatens the safety and security of the United States, but also emboldens ISIS, Bashar al-Assad, Iran and Russia."

But after reports of the president's plans to also withdraw thousands of troops from Afghanistan, one of the president's staunchest allies in the Senate issued an ominous warning.

GRAHAM: If we withdrew any time soon, you would be paving the way for a second 9/11.

KARL: All this played out against a backdrop of a rocky week on Wall Street. It was not only the stock market's worst week since the Great Recession, but also on track to be the worst December since 1931.

(END VIDEOTAPE)

KARL: And joining us now is Mick Mulvaney, the man just named acting White House chief of staff. This is his first interview being since given the job, and he's also be 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 -- the steel --

KARL: With the spikes on the top. 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 – as to what the number is, all I can tell you 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 billion but the discussions, now we’re between $1.6 billion and $1.5 billion.

KARL: But let me ask you -- I mean, 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.

(BEGIN VIDEO CLIP)

TRUMP: 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)

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. Also --

KARL: But boy, 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 – budge, the Department of Homeland Security can’t actually spend money from Mexico, we have to get it from Treasury.

KARL: I understand that. That’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, the 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 Jay 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 ability to fire...

KARL: We heard from Treasury Secretary Mnuchin...

(CROSSTALK)

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

MULVANEY: I must have heard it -- I did speak with the treasury secretary last night about a bunch of things, including the lapse in appropriations and the shutdown and he didn't 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 of 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 we're so proud to have the president come out this year and talk the first time about this nickel plan, about going to all of the agencies and getting them to reduce their spending by 5 cents on the dollars. The president gets it, but we need a willing partner on the Hill.

I'm a little worried about the fact the Democrats are now coming in to control of the House, because they're not famous for their fiscal discipline.

KARL: I mean we can do a -- we can talk more about this another time, but I mean, look, the defense spending is skyrocketed. He's bragged about that. He's done nothing to even talk about controlling entitlements. Spending across the board has gone up.

MULVANEY: Actually, we should have that conversation at the time, because the last three budgets we put out -- or two budgets we put out, the next one we'll 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 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 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 worldview. You heard the president say a couple of weeks ago I think on 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 disagreements.

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

KARL: 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’ 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 lockstep in his views?

MULVANEY: I think the president wants a little bit of both and I look across the cabinet agencies and look at who the president thinks is doing a really good job, and 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’d encourage 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 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 – 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 the nickel plan to reduce spending …

KARL: Right.

MULVANEY: Mattis and he just could never get on the same page. He was – the president has told people since the campaign that he wanted to get out of Syria. I think he’s entitled to have a secretary of defense who’s committed to that same end.

KARL: But it’s not just Mattis. We also saw Brett McGurk who was the 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 a 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. 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 disagreements.

So this is not – this is why cabinet secretaries should leave.

KARL: Well, if you look at what the president responded – 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 – the 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 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 kept on …

MULVANEY: He took that – did he take that position under the Obama 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 certainly – 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. We saw 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: Jon, 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 a 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 hadn’t 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 he 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 are 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 at OMB – I got to OMB, we had this -- 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 -- 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 --

MULVANEY: It has made the rounds. He and I’ve -- he and I’ve talked about it --

(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.

(COMMERCIAL BREAK)

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 passed 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 giveaway 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 national 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 really 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 that 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 that 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 that 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.

(COMMERCIAL BREAK)

KARL: The roundtable’s all here and ready to go. And all week long you can get the greatest on politics and breaking news alerts on the ABC News app. We will be right back.

(COMMERCIAL BREAK)

KARL: Let's bring in our Powerhouse Roundtable. Former New Jersey Governor and ABC News Contributor Chris Christie, Democratic strategist and former DNC Chair Donna Brazile, National Review Editor Rich Lowry and Elisabeth Bumiller, the Washington bureau chief for the New York Times. Governor Christie, stock market tumbling, shutdown, the mess over Mattis and Syria. This has been a rough week for the president.

CHRIS CHRISTIE, ABC NEWS CONTRIBUTOR: Yeah, listen, you know, there are good weeks and bad weeks when you’re an executive in government and this wasn't one of the best weeks that he's had. But in the end, I don’t think anybody should be surprised about what's going on here. There are certain things -- and I’ve said this on this program a number of times before -- that -- that the president has been pretty consistent on. The two that he’s been consistent on is trade and on the border.

And so I can't say I’m surprised by it. I think that the execution of the strategy could have been significantly better but I'm not surprised where we've ended up, which is he feels like he has to take a stand on this politically because as you said earlier in the program, it was a central promise in the 2016 campaign.

KARL: Well that was Mexico paying for it.

(CROSSTALK)

CHRISTIE: Well, by the way, and the wall --

KARL: -- taxpayers paying for it --

CHRISTIE: But -- but wait a second, the wall too, because listen, I was in those debates.

KARL: Yes.

CHRISTIE: And there were a number of us who were --

KARL: I remember that. Yes.

CHRISTIE: -- debating the other side of that and saying that a wall wasn't the best way to do this. So the centrality of the -- of -- of the promise is not just the Mexico payment, although that is part it, it is the wall itself.

KARL: Is the wall itself. But Donna, explain to me why Democrats are not willing to give anything on this. Couldn’t they get -- they could get all -- I mean, come on. Think about what you could get out of Trump --

CHRISTIE: Wow. Wow, that’s quite a groan you gave there.

(CROSSTALK)

KARL: What was that sound?

CHRISTIE: Wow.

BRAZILE: That is the sound of Nancy Pelosi about to take power -- no, and she is going to wield it.

(LAUGHTER)

BRAZILE: No, I'm groaning because Democrats have offered the president a little bit to get a lot more and he rejected it. He rejected it because he thought he could get even more from a Republican controlled Congress. He didn’t get it. And my good friend, it's Christmas, so you know me and you going to show a little love right here.

CHRISTIE: Yeah, of course you will.

BRAZILE: But let me say this -- the president, he's unraveled. Things are unraveling. This is more --

CHRISTIE: Donna --

BRAZILE: -- than the wall. And by the way, he promised a beautiful wall and now we're talking about steel slats. I don’t even --

CHRISTIE: I think steel slats are beautiful. But -- but

BRAZILE: Really? Really?

KARL: With the spikes on top.

CHRISTIE: But let me just -- but -- but Donna, listen, if I -- I don't have enough fingers and toes --

BRAZILE: OK.

CHRISTIE: -- to count the number of times that I’ve sat on this set or the one in New York and heard Democrats say it's unraveling over the last two years. It's unraveling. This is it. This is the fulcrum, this is the point where Trump will fall apart --

BRAZILE: Would you prefer the chaos? It’s chaotic.

CHRISTIE: Listen -- let me tell you something --

KARL: It feels a little differently this time, doesn’t it?

BRAZILE: It’s chaotic.

CHRISTIE: No, it -- no, listen, it doesn’t feel differently to me. This is -- this is who this president is. And so why are we -- why are we surprised that he's upending everything? That's who he is. That's who people voted for. So I don't feel it being any different than I felt--

BRAZILE: I don’t think -- I don’t think they voted for this.

KARL: Rich, let me ask you -- the president actually surprised me this week with a tweet -- that happens on -- time to time. But look at this tweet. He said even President Ronald Reagan tried for eight years to build a border wall or fence and wasn’t able -- unable to do so. That surprised me. So I -- I called up Lou Cannon, the great Reagan biographer and I said did you ever hear -- did President Reagan ever push for a wall? He said no. And then this quote surfaced from Reagan in 1980.

(BEGIN VIDEO CLIP)

RONALD REAGAN, FORMER PRESIDENT OF THE UNITED STATES: Rather than making them -- or talking or talking about putting up a fence, why don't we work out some recognition of our mutual problems, make it possible for them to come here legally with a work permit and then while they're working and earning here they pay taxes here.

(END VIDEO CLIP)

KAR; What happened to that Republican Party?

LOWRY: Well, Reagan was open-handed on immigration, I think too open-handed on immigration. And one reason Republicans are so skeptical of any big immigration deal is Reagan had one in 1986 where we were supposed to get enforcement in exchange for an amnesty and the enforcement never really came.

So on the wall now, I'm sympathetic to the need for more structure there. But this strategy on the shutdown is a box canyon. First rule of a shutdown, don't take credit for a shut down. He blew through that rule in the Oval Office, therefore Democrats feel no pressure. And they also know with every day that passes and you get closer to January 3, their influence and power is going to increase, because Nancy Pelosi is going to take the gavel.

So, I fear the two likeliest outcomes here for the president are a defeat that he claims as a victory or the defeat that he blames on congressional Republicans.

KARL: How does it end?

BUMILLER: That's my-- that’s a good question. So, January 3, Nancy Pelosi opens up -- the House votes to open the government, Senate goes along, then what does the president do, does he veto that bill and say I’m going to keep the government shut, keep 400,000 -- 800,000 workers without pay? Where does he go from there?

So, I think the only -- you see a little bit of a glimmer of -- what you saw with Mick Mulvaney this morning, maybe after Christmas there's -- somebody says -- they reach a number of $2 billion. Democrats call it border security and the Republican -- Trump calls it a wall.

KARL: But Rich, we see -- and obviously there was a shut down. You had Mike Pence -- the vice president, basically went up and told the Republican senators earlier this week that the president was OK with the measure to keep the government open.

LOWRY: Right.

KARL: They backed down on that. And then Syria and Mattis.

LOWRY: Yeah.

KARL: And I'm starting to hear something a little bit different which is Republican senator after Republican senator coming out and expressing openly criticism of the White House.

LOWRY: Yeah, so the president has to be careful, because, you know, Mattis -- there were deeper problems with Mattis. The president thought Mattis was basically ignoring him on everything, not just trying to talk him out of bad decisions on -- on big things, but Mattis represented the marriage of the Republican establishment to this president. And the breaking of that bond is -- is not a good thing for the president, because he needs the entire spectrum of the party to feel as warmly as possible towards him because he has these very high stakes, very intense political and legal fights coming up in the new year and he needs every single Republican to have his back on this.

KARL: Yeah, so what does-- what does the new year look like? I mean, is this this precursor?

CHRISTIE: One of the things I've often said to the president is when you're on executing executive power in government there has to be a strategy that has an end game. And what I'm concerned about is what Rich said, I don't know what the end game is here. And it hasn't been articulated. And -- and all this stuff, the other thing that this administration at times has really not appreciated is the cross currents. Everything affects everything else.

The president comes from a world where each deal is discrete. It's this piece of real estate. We argue. We sue each other. We fight and then it's only money, so let's make a compromise and we move on. In this world everyone remembers every slight. Everyone remembers every time they were told, OK, pass this and I'll sign it and then you change your mind. And they lie in the weeds and they wait to get you.

If you have issues coming up, like the Mueller report, like potential investigations from House Democrats, if you have those things, you have to keep, as Rich very well put, your Republicans completely in line with you to be able to fight off a political or legal attack from the other side.

KARL: And Democrats smell blood.

BRAZILE: Smell blood? I mean, he's splattered blood all over Washington with, you know, the way he's treating not just General Mattis, but the way he's treating a lot of other top Republicans.

Look, leaving Syria without a strategy is an open door for Moscow. Leaving the Kurds without protection is an open door for Iran. So I don't know what the president's strategy is. I mean, you say he's not unravelling, but this is the worst chaos I've seen in a generation.

LOWRY: One thing that we --

BUMILLER: I would agree with that. I have never seen -- you're talking about this presidency as if it's sort of a normal presidency that's going along...

CHRISTIE: Well, I never said that.

(LAUGHTER)

BUMILLER: I have been in Washington a long time. I've never seen anything like this, not -- nothing. And I think you were talking about leaving Syria, I mean the interesting thing is that this -- leaving Syria is something Obama probably would have done, but he would have done it much differently. There would have been a long review.

LOWRY: But that’s what I was going to say, it's very interesting that these are Obama and Trump, supposed to be complete, diametric opposites, but Trump is doing the same thing in Syria that Obama did in Iraq. And I think the reason is Obama wouldn't have been president, Trump wouldn't have been president if both of them hadn't vociferously opposed the Iraq War, so they had kind of similar DNA in that respect.

CHRISTIE: So then, let me

BRAZILE: Well, then how do you explain Afghanistan and giving the Taliban, you know, some…

BUMILLER: That-- that --

LOWRY: I think they're both horrible decisions.

CHRISTIE: And let me be clear, since Elizabeth brought up this point, I didn't say this is a normal presidency, I said this is what people voted for. Now --

(CROSSTALK)

BRAZILE: No.

BUMILLER: No. No.

BRAZILE: No.

CHRISTIE: Now wait a second -- the president -- the president is acting --

BUMILLER: They voted for this stock market?

CHRISTIE: Wait a second. The president -- well, listen, the stock market -- you -- you vote for it when it's up and nobody wanted to give him credit when it’s up and he took credit and now everybody wants to give him blame when it’s down. That’s not fair. What they voted for was Washington to be upended. They hate Washington D.C. --

KARL: That’s certainly happened.

CHRISTIE: Right? But Jon, that’s my point. You know, this hysteria about oh, I’ve never seen chaos like this. This is what the American people voted for. They said that the way Washington was being run by both parties --

BRAZILE: They wanted a disrupter.

CHRISTIE: -- was not effective and they wanted a disrupter and now they've got a disrupter. Now, you know, people may decide they don’t like this much disruption but don't tell me this is not what people expected. People who voted for him -- if you talk to people who are supporters of him, they like this. They like not every bit of it. They don’t agree with every policy decision --

BRAZILE: You're not going to tell me -- you’re not going to tell me those workers in Michigan and Pennsylvania who are about to lose their job from GM, they’re liking this. No. They don't -- they don’t like this. They don’t like this -- this form of disruption --

CHRISTIE: I don't know how you connect the two, Donna.

BRAZILE: Oh, I can make a lot of connections --

CHRISTIE: But by the way --

BRAZILE: -- between his trade policies, tariff --

CHRISTIE: Wait a second. You're telling me that the CEO of GM has decided to cut these jobs because of Donald Trump’s trade policy? That’s ridiculous.

BRAZILE: No --

CHRISTIE: That’s not why she decided to do it. She decided to do it to serve her shareholders.

BRAZILE: But Donald Trump promised to save jobs and to bring more jobs and he’s not even delivering on that.

(CROSSTALK)

KARL: But we still have the lowest unemployment rate that we’ve seen --

BRAZILE: Well that was going down under Obama.

CHRISTIE: But Donna -- Please. No. All right, so -- anything that’s good was started under Obama and anything that’s bad that’s happened it Trump. And -- and this is why people watch these shows.

BRAZILE: That’s true. I’m not saying good or bad, that’s not what I said. --

(CROSSTALK)

CHRISTIE: That’s not what I’m talking about. This is why people watch these shows and go like what the hell are you talking about.

BRAZILE: No, that’s not what I said. You’re speaking for me without lipstick (ph).

CHRISTIE: Unemployment is as low as it’s ever been and he’s created a huge number of jobs.

KARL: But -- but there are clearly dark clouds in the horizon.

BRAZILE: Dark clouds --

(CROSSTALK)

CHRISTIE: Which dark clouds, Jon? Are you just talking about the stock market?

LOWRY: Well, I think the financial markets, they are reacting to the -- the trade war with China, they are reacting some to the chaos, but it’s also driven by a global economy that’s slowing down even though ours is still doing really well.

CHRISTIE: Right.

KARL: So -- so let me ask you, Rich -- because I -- I -- I am old enough to remember when National Review was dead set against Donald Trump. Let’s call up the cover you famously put out during the campaign ‘Against Trump. And you wrote, Trump is philosophically -- a philosophically unmoored political opportunist who would trash the broad conservative ideological consensus within the GOP in favor of a free-floating populism with strong man overtones. Now, you've been more supportive since -- you know, since he won the nomination and won the presidency.

But are you now seeing your worst fears -- or --

(CROSSTALK)

KARL: -- some of your worst fears being realized?

LOWRY: -- first of all, the context of that editorial is when we had 16 others guys to choose from.

KARL: Right. I understand that (ph).

LOWRY: Present company included.

CHRISTIE: Thank you.

LOWRY: But I think if you look back, he's been better on domestic policy than I would have expected. And that’s a big deal. But our concerns about his temperament and his shambolic style have largely proved out and unfortunately this -- this week has been a prime example of it.

KARL: And -- and is he starting to lose those -- I mean, his bulwark is -- are those Republican senators --

BUMILLER: Right.

KARL: -- who have been so supportive by and large --

BUMILLER: Well, McConnell’s --

KARL: I mean there have been the Corkers and the Flakes on the outside, but by and large, McConnell, the conservative Republicans --

BUMILLER: McConnell’s criticism this week of Mattis' resignation and how he couldn’t agree with the president was a big, big warning sign for Trump about Republicans. I mean, McConnell is very disappointed. We all know that. Doesn’t show his cards. The fact that that statement was so tough. And we know what McConnell thinks privately, which is Trump is a big problem for the party. But to have it said so publicly was significant. Now look, and Trump is -- you know, fabulous reporting this morning by -- by Peter Baker and Maggie Haberman.

You know, he’s very isolated in the White House, he sees enemies everywhere, as he’s more distant from his children, he doesn’t listen to Jared and Ivanka, he’s watching a lot of television, he doesn’t come down to the Oval Office until 11:00 am most days. I mean, this is not a chief --

LOWRY: I’m with Chris on this. Like every other week we’ve had this -- this news cycle --

CHRISTIE: Armageddon.

LOWRY: -- that says the whole thing is falling apart. And -- and my belief is just the wheels are never quite coming off the way they seem like they’re coming off. This has been a bad week. But he’ll get someone respectable to be defense secretary. These are plum jobs that people want.

KARL: And Mulvaney? How’s he going to do?

CHRISTIE: Well listen, I mean that's going to be up to him. I was encouraged by hearing him say this morning he wasn't going to try to manage the president. And I do think that one of the -- the mistakes -- and I think a very well-intentioned mistake that General Kelly made was that he tried to manage the president. I don't think you can do that. And I think what you need to try to do is to say to the president, what are the areas that you want me to manage, and then manage those areas. And if he impedes you in those areas, then say Mr. President, that wasn't our deal.

And so I think Mick is right that he shouldn't try to manage the president because I think that’s just not a job that’s going to happen.

(CROSSTALK)

CHRISTIE: And I wonder -- and I want to ask everybody who’s out in the audience today. If they have a 72-year-old relative whose behavior is like …

KARL: Is like Donald Trump?

(LAUGHTER)

CHRISTIE: … No, no, hold on. Whose behavior they’re attempting to change. When people get older …

(LAUGHTER)

… When people get older – let’s get ready because it’s happening to me now. When people get older, they become more and more convinced of the fact that what they’re doing is the right thing and it becomes harder to convince them otherwise.

KARL: Especially if they’re president of the United States.

(LAUGHTER)

CHRISTIE: Add to it president of the United States, a lot of wealth and a lot of fame --

BRAZILE: All right.

CHRISTIE: It becomes even harder. Manage the things you can manage. And if Mick does that, I think he’ll be successful. If he doesn’t, it’ll be hard.

BRAZILE: Well, look. I’m looking forward to January 3rd. I’m coming back early because I cannot wait to see this remarkable, diverse Congress come to Washington D.C. to hold this president accountable. But look, to your point, he wakes up every day, he watches television. If someone criticizes him, especially from his base, he just goes in the opposite direction.

KARL: All right. We are – we are out of time. We’ll be back …

BRAZILE: Merry Christmas.

CHRISTIE: Merry Christmas, Donna.

BRAZILE: Merry Christmas.

(CROSSTALK)

KARL: Merry Christmas to all of you. We will be right back.

(COMMERCIAL BREAK)

KARL: All right, that is all for us today. Thank you for sharing part of your Sunday with us. Check out World News Tonight and tune into ABC this evening for a look back at the remarkable events of 2018 in the primetime special The Year. That’s 9:00 Eastern tonight. Have a great day and a very merry Christmas.

END