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April Jobs Report Crushes Expectations; Pence Agrees with Trump: Fed Should Consider Cutting Interest Rates after Jobs Report; Trump Says McGahn Should Not Testify Before Congress; Nadler Threatens Barr with Contempt of Congress. Aired 11-11:30a ET

Aired May 3, 2019 - 11:00   ET


[11:00:00] JIM SCUITTO, CNN ANCHOR: And we found out, when we researched that voice, it was not his. The sound was lions, bears and badgers.


SCIUTTO: Yes, mixed together for his voice.

HARLOW: Our thoughts with his family, of course.

Thanks you for joining us today. Have a great weekend. I'm Poppy Harlow.

SCIUTTO: I'm Jim Scuitto.

"AT THIS HOUR" with Kate Bolduan starts right now.

KATE BOLDUAN, CNN ANCHOR: Hello, everyone. I'm Kate Bolduan. Thank you so much for joining me.

We're going to begin with big news on the economy, and good news for the president. April's jobs report out this morning, and the U.S. economy continues to be on fire. It shows 263,000 jobs added to the U.S. economy in the past month. And the unemployment rate dropped. Now at 3.6 percent. The last time it was that low, the Beatles' "Come Together" song was at the top of the charts, 1969. President Trump's reaction, pretty -- about as straightforward as they come. Jobs, jobs, jobs, as you see right there.

CNN's Cristina Alesci is here with a closer look at it all.

Take us in there. What's behind this report, Cristina?

CRISTINA ALESCI, CNN POLITICS & BUSINESS CORRESPONDENT: So, from a headline perspective, it's a gangbuster report. A political win for the president for sure.

Let me put some context around those numbers that you just described, 263,000 jobs. We are now in the 103rd straight month of job gains. Again, this is the strong economy story we have been telling, 3.6 percent unemployment, the lowest since December 1969, as you pointed out. And another important metric that we have been paying attention to, wage growth, 3.2 percent year over year. That is even better when you factor in price increases of 1.9 percent. That means that prices are going up 1.9 percent and people are making 3.2 percent more in their paychecks. That's a good thing for the consumer that should bolster consumer spending, which is another strong economic indicator. And then on top of all of that, you have, obviously, the president being very happy about these numbers.

I think going forward, the two things that I'm going to be looking at is, one, it does become harder for the president to make the argument that we need a cut in interest rates with this strong of a showing in the jobs report. And it also begs the question, how do you keep this up. Part of what we're seeing play out here is the result of the tax cuts and the stimulus given to companies to perhaps go ahead and hire people. And part of it is reduced regulation. Now that you have done those two things, what other levers can the administration pull, perhaps without Congress onboard, in order to sustain this kind of economic activity.

BOLDUAN: Cristina, do you see, are there any signs in the report of weakness?

ALESCI: The low unemployment rate was interesting at 3.6 percent. Now, the reason it dipped slightly is because we had a lower labor force participation. And that, you generally want to see higher, not lower. So if there's anything you want to pick out of here, it's that.

But again, I think the big story coming out of this report is that when the president goes out and attacks the Fed for essentially leaving rates unchanged, it doesn't make economic sense for most economists at this point to do it because you want to save that stimulus for when we need it in a potential recession going forward.

BOLDUAN: Yes, right now, good news for the White House.

Cristina, good to see you. Thank you so much.

Good news for the White House, good news for the economy, good news for everybody.

Joining me now, CNN political analyst, Washington bureau chief for "The Daily Beast, Jackie Kucinich, and "Washington Post" opinion columnist, CNN political commentator, Catherine Rampell.

Thank you for being here.

Catherine, this is a really good number, a really good report. What do you think is behind all of it?

CATHERINE RAMPELL, CNN POLITICAL COMMENTATOR: Well, some of this is just that we are in one of the longest stretches of an expansion in history. We're about to actually break the record for that stretch in June. We have already broken the record for the longest stretch of consistent month-to-month job growth. Some of this is a continuation of trend. Some of this is likely stimulus from the tax cuts, which will wear off at some point. But right now, we're basically growing above trend in terms of GDP and, arguably, to some extent. in terms of actual job growth. The question is, can we actually keep this up if in fact this is really more about temporary stimulus.

BOLDUAN: Look, we have talked many times. You're no fan of President Trump's economic policies, but there's no denying this is good news.

RAMPELL: Yes. The question is also, to what extent is this Trump's doing? I think there's definitely a demand-side stimulus effect from the tax cuts, but presidents generally get too much credit when the economy is good.

BOLDUAN: They'll take it no matter what.

[11:04:59] RAMPELL: I know. And too much blame when the economy is bad. They can't actually control the economy. We don't know what the counterfactual is. We don't know what things would have looked like had we not had a tax cut. We don't know what things would have looked like had we not had trade wars. Maybe things would have been much better. So, yes, the president, of course, is going to take credit when things are good. If things turn sour, which they might, given where we are, just statistically speaking, how far we are into this expansion, will he accept the blame. Probably not. So maybe he should moderate on both fronts.

BOLDUAN: That will never happen, I'll tell you that right now.

Jackie, do you see this now becoming, in looking at -- with the economy, the economy -- the economy -- but the economy is always politics or always bleeds into the political realm. Is this becoming an issue that Democrats cannot run on? Yes, presidents get more credit and more blame than they're likely due, but it's two years in, and for all intents and purposes, politically speaking, it's Trump's economy. What are you hearing?

JACKIE KUCINICH, CNN POLITICAL ANALYST: Democrats, what you're hearing them talk about on the trail is not the economy, it's health care. They're focusing on -- because of what the Trump administration is doing by trying to undermine the Affordable Care Act. But you know, they also in President Trump have someone who is his own worst enemy when it comes to messaging. If he just talked about the economy for the next two years, we would be looking probably at a very different race. And I'm going to take you down memory lane, really quickly, to prove this. So right before the Senate was going to start their hearings to impeach President Clinton, Americans were saying they didn't -- they didn't trust him, they thought he committed perjury -- or they didn't think highly of him, thought he committed perjury, yet his approval ratings were at 67 percent. That's because of the economy. They thought -- 89 percent thought that the economy was doing well. That's from a CNN poll at the time. So if a president is just talking about the economy and is really pushing that message, that would reflect. We just don't have a president that's able to do that. He talks about immigration, about Mueller, about all sorts of things that are polarizing, so his approval ratings are his own doing in a lot of ways.

BOLDUAN: I wonder, Jackie, the one thing that I continue to think about is jobs numbers, they were looking good back in 2018, right around the midterms as well. KUCINICH: Yes.

BOLDUAN: Democrats won back the House then. So is there a feeling that folks are voting on something else these days, defying what history has shown us?

KUCINICH: Well, let's remember what the president was talking about during the midterms. He was talking about a caravan of migrants invading the country and raising the immigration issue. And so he wasn't focusing on the economy. And you heard Republicans at the time saying, oh, my god, let's just talk about the economy. So you know, I think, again, I think that matters. And I think that, you know, we'll see what he's able to do going into 2020, because Democrats also ran --


KUCINICH: -- again on health care.

BOLDUAN: And people -- folks have short memories. How could they not have short memories, considering how fast things move these days.


BOLDUAN: It really comes down to what is it like at the time people are heading to the polls.

Catherine, I want to get your take on the lingering question recently, especially in light of this, and Cristina Alesci was getting to this, what does it mean for interest rates. You have the Fed leaving them as is, despite public pressure the president to slash them.

Vice President Mike Pence weighed in this morning. Let's listen to him.


MIKE PENCE, VICE PRESIDENT OF THE UNITED STATES: This might be a time for us to consider lowering interest rates. But, look, we just don't see any inflation in this economy.


BOLDUAN: No surprise that he's in lockstep with the president. But they're still talking now is the time to slash interest rates.


BOLDUAN: What would that mean?

RAMPELL: So a couple points. We need to step back and talk about how, and acknowledge, how bizarre and inappropriate it is for anyone in the executive branch, other than the Fed --


RAMPELL: -- to be talking about interest rates.

BOLDUAN: Such a good point.


BOLDUAN: Glossed over at this point.

RAMPELL: Yes. It's become normalized. For decades, there was a policy that the White House, the Treasury, anyone appointed by the president, who was not in the Fed, would not talk about interest rates in order to make sure that people still viewed the Fed as politically independent, as it needs to be, both in practice and in perception. That's just inappropriate and bizarre on its face. And it's arguably possibly doing long-term damage to the credibility of the Fed.

Second of all, in terms of the actual content of what he's saying about Fed policy, there's massive tension between saying, hey, the economy is going gangbusters and also, hey, we need to stimulate the economy.


RAMPELL: If the economy is doing well, that's generally not cause for monetary stimulus, fiscal stimulus. As I said, we have already been engaging on in the fiscal side with tax cuts. And does this mean if the economy were to do badly, suddenly, we would be arguing for higher interest rates? This makes absolutely no sense. No economist will make the argument that the reason why we need to cut interest rates is because the economy is doing too well.

[11:10:06] There's, to be clear, some debate amongst serious people about, like, well, what is the right level of interest rates. Is there more slack in the economy? A more nuanced conversation. But that's not what Pence is saying. That's not what Trump is saying. What they are arguing for is we need to juice the economy just as Trump is coming up for re-election.

BOLDUAN: Kerosene already on a massive bonfire.

RAMPELL: Exactly.

BOLDUAN: Thank you guys. Great to see you.

Jackie, thank you. Great to see you as well.

KUCINICH: Thanks, Kate.

BOLDUAN: Coming up for us, President Trump's war with House Democrats heats up further, if it's even possible at this point. President Trump now says former White House counsel, Don McGahn, will not, should not, he will not allow to testify before Congress. Who has the final say, and what happens now?

Plus, he's an admitted terrorist who plotted to bomb the New York City subway system. Why would he walk out of prison a free man in just days? This is a fascinating tale of what they say is an amazing change of heart. Stay with us.


[11:15:33] BOLDUAN: It's done. That's the view from President Trump. And that means all-out war between him and congressional Democrats.

First, the president laying it out last night that he is going to try and block former White House counsel, Don McGahn, from testifying before Congress. Listen here.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I have had him testifying already for 30 hours.


TRUMP: I don't think I can let him and then tell everybody you can't because -- especially him because he was a counsel. So they have testified for many hours, all of them. Many, many --


UNIDENTIFIED CORRESPONDENT: As far as you're concerned, it's really kind of done.


TRUMP: I can't say, well, one can and the others can't.


TRUMP: So I would say it's done. We have been through this. Nobody has ever done what I have done. I have given total transparency. It's never happened before like this. They -- they --



TRUMP: Congress shouldn't be looking anymore. This is all. It's done.


BOLDUAN: Democrats, however, beg to differ. They're not backing down, demanding not only that Don McGahn come to testify about what he told the special counsel but also now about discrepancies between what he said to the special counsel and what the president is now saying.

Then, there's the attorney general. House Judiciary Chairman Jerry Nadler threatening to hold Barr in contempt of Congress. This is over Barr disregarding a subpoena to hand over the full unredacted Mueller report with the underlying evidence.

And now just coming in to CNN, there's more. Let me get right over to Manu Raju on Capitol Hill.

This is all tied together now, Manu. Nadler seems to be laying down -- is it a new ultimatum? What is he telling you? What are you learning?

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Yes. A new offer from the House Judiciary chairman to the attorney general, Bill Barr, in saying that if this is not complied with to the Democrats' satisfaction, that Jerry Nadler plans to move forward with contempt proceedings next week for the attorney general.

Now, in this letter, there are four conditions that Nadler lays out asking the Justice Department to comply with, the demands, the subpoena that was issued and expired yesterday to turn over the full Mueller report and the underlying evidence. As part of this, Nadler has four demands. He wants the full report. He wants all members of Congress to see what's behind those blacked-out lines. He's asking for a court order to release the grand jury information that the Justice Department has not been willing to give to Capitol Hill. He also said they're willing to look at prioritize what information should come to Capitol Hill first. The significant thing he offers here, Jerry Nadler, they're prepared to discuss limiting and prioritizing all requests for the underlying evidence obtained by the special counsel.

So that's a little bit of movement by Jerry Nadler. But he's making it clear here -- Kate, I want to read you a part from this letter saying if he doesn't get a response by 9:00 a.m. on Monday, they're going to start to move forward with contempt proceedings. He says, "The committee is prepared to make every realistic effort to reach an accommodation with the department, but if the department persists in its baseless refusal to comply with the validly issued subpoena, the committee will move to contempt proceedings and seek further legal resource."

So that is a significant threat. Some movement, but a significant threat. A late offer. We'll see what the Justice Department ultimately does.

He makes the case here that they need to look at this information because the Justice Department has said it cannot indict a sitting president. They need to look at what remedies are available to them, essentially, impeachment. That's why they're saying they need this information to determine whether they should move forward with another sort of recourse, a constitutional remedy that's available. It says here, "The Mueller report makes clear this need is amplified, whereas, here department policy, the indictment of a sitting president, relies on Congress to evaluate whether constitutional remedies are appropriate, in addition to the extent these materials are classified or contain sensitive law enforcement information, we're prepared to maintain their confidentiality as we regularly do with similar information."

Interesting argument they're making. We'll see what the Justice Department does. But a warning, no compliance by Monday, then contempt proceedings will occur next week -- Kate? BOLDUAN: As you're saying, and this is significant, at least in

appearance, this is some wiggle room, if you will. This is some movement coming from the Judiciary chairman in trying to get this information. Yes, now ball back in DOJ's court. We'll see how quickly they respond and what this means.

[11:20:07] Great stuff, Manu. Thank you so much.

We have a lot to discuss now. Let me bring in the congressional reporter for "The Washington Post," CNN political analyst, Karoun Demirjian, CNN legal analyst, former prosecutor, Paul Callan, and CNN political director, David Chalian.

Let me start with you, Paul, on what this means on the legal front in terms of this negotiation. Here's a subpoena for this unredacted report. We're not going to -- we're not going to hand it over, and now this. What does it mean?

PAUL CALLAN, CNN LEGAL ANALYST: Well, the backdrop on this is, first of all, only one cabinet secretary in American history has ever been held in contempt of Congress. That was Eric Holder. That case went eventually into the federal courts and the federal courts threw out the contempt citation. You have to lay a very clear foundation before you hold somebody like a cabinet secretary in contempt. That's exactly what Chairman Nadler is trying to do. He's trying to go through the negotiating process now to say Congress is willing to compromise on some of these issues, but you're going to have to produce the material. So that he's in a more defensible position if he winds up in front of a federal judge to enforce a contempt subpoena.

BOLDUAN: That's fascinating.

David, in the tennis match of back and forth, the ball is in whose court now, obviously, DOJ needs to respond. But what does this indicate to you? When we're talking about this, there's a whole lot if almost all politics involved in each move of this negotiation to try to get the unredacted report, at least to Congress, if not released publicly, of course. Does this mean that Nadler didn't see that they had more room to run and they needed to then open up a little door?

DAVID CHALIAN, CNN POLITICAL DIRECTOR: I wonder if this is sort of the basis of what some of the questions would have been had Barr sat before the House Judiciary Committee --

BOLDUAN: Ah, yes.

CHALIAN: -- to try and get some of these concessions out and lay that predicate, as Paul is saying.

What is interesting to me, politically here, Kate, is that Nadler seems to be following exactly the path that Nancy Pelosi put forth, which is that she wants the committees to go methodically, pursuing their strands of the investigation and oversight. But she doesn't want to become completely consumed with a President Trump versus the House Democrats impeachment side show. It seems to me Jerry Nadler here is trying to follow that very methodical path down the road of just crossing "T"s and dotting "I"s to make sure that, as Nancy Pelosi said, when that investigative work is fully done, then we'll be able to see what kind of remedy, as Manu was talking about, would be justified.

BOLDUAN: David, that's a great point, because as we all watched yesterday, Nancy Pelosi came out yesterday to say what he did was lie to Congress, that is a crime. Should he be in jail was the question, and she says, we have a process in place. And she did not go there.

As David is saying, she said, as she has said all along, this -- she's pushed for this kind of methodical approach, but fascinating still that Nadler in this letter, the impeachment is still dangling out there.

KAROUN DEMIRJIAN, CNN POLITICAL ANALYST: Right. I think it would be kind of counterfactual of the reality we're operating in if Nadler tried to pretend there wasn't that potential end game down the line given that we keep talking about it. And Nancy Pelosi, too. She's using tough language and then pulling back and saying we're not going all the way there. Frankly, the public sentiment isn't on their side to do that. If they did decide to move quickly into something that looked like an intense contempt proceeding that led to impeachment and got that intense right now, that's going to dominate the next 18 months and it will never get through the Senate. That's a complicated thing, where clearly she wants to slow this down and do the House investigation and not just take Mueller's report as the gospel, but have a full investigation happen in the House. I think every time they run into a bit of an impasse with the administration, it kind of pushes the impetus for moving toward something tougher or at least in the rank-and-file members of the party. They start to rattle the chains, wanting for impeachment again. Then later say, OK, what's our next step here. We have seen the back and forth play out both in what the speaker is saying and the chairman of the Judiciary Committee is doing. Because they're trying to basically walk a very thin tightrope in between wanting to do this methodically but having people in their party that really want to push ahead with this and having to make the smart decision about what is the right thing to do that's most advantageous given the political climate they're in.

BOLDUAN: I'm getting mystified as to what is the final straw, where is the line of we have exhausted all possibilities, and then we go to kind of the punishment phase of "you have not cooperated at all." Yet to be seen. Let's see where that goes.

[11:25:03] On one other element of this, in terms of, Paul, the stonewalling and the lack of cooperation and this kind of all-out war, is this: Will Don McGahn, the former White House counsel, will he testify? Donald Trump last night made it very clear he at least is not going to let McGahn testify. Donald Trump last night made it very clear he at least is not going to let McGahn testify. Can he do that? Who has the final say? Is it cut and dry?

CALLAN: Boy, it's an interesting process because there are two ways Congress can enforce a subpoena. One is they make a referral to the Justice Department for a criminal prosecution. But guess who's in charge of the Justice Department? William Barr. And no Justice Department has ever agreed to prosecute a federal high-ranking federal official like Don McGahn. The second thing is called the inherent powers of Congress. Congress -- there is actually a little jail cell in the bottom of the capitol awaiting Don McGahn or William Barr if Congress held them in contempt and sent the sergeant-at-arms to take them into custody. It hasn't been done since 1935. And it's never been done with respect really to a high-ranking official. So I don't think you'll see Congress using its inherent contempt powers.

In the end, you'll see this going to the federal courts. You'll see decisions made by federal judges as to whether it is a legitimate subpoena or whether the president can exert executive privilege, deliberational privilege, and about four other privileges that might apply.

BOLDUAN: Again, I always have this in the back of my mind. We're living in extraordinary times. Just look at the topics we talk about every day. Then we're reverting to extraordinary measures that haven't been tried since 1935. We will break out the history books and be part of it in a second.

Great to see you guys. Thank you. Thank you so much. Really appreciate it, covering that breaking news coming out of Capitol Hill.

Coming up for us still, he's a former terrorist, liked to al Qaeda. He pleaded guilty to planning a bomb attack on the New York City subway system. So what did he tell prosecutors that convinced them he had a complete change of heart and that they should let him walk free? Stay with us.