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Powell Signals Potential Interest Rate Cut; Acting DHS Secretary: Trump's Border Strategy is Working; The High-Stakes Battle Over ObamaCare in Court; Republican Gender Battle Emerges Over NC Primary. Aired 12:30-1p ET
Aired July 10, 2019 - 12:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[12:31:37] JOHN KING, CNN ANCHOR: A new record for the S&P on Wall Street this morning. That after new signals President Trump will get his wish. The president has long wanted an interest rate cut heading into the election year and he's berated the Fed chairman Jerome Powell for not delivering one. Today, Powell telling lawmakers up on Capitol Hill the global economic slowdown means he's willing to change his mind.
(BEGIN VIDEO CLIP)
JEROME POWELL, FEDERAL RESERVE CHAIRMAN: Many of whom participants saw that the case for a somewhat more accommodative monetary policy stance strengthened. Since then, based on incoming data and other developments, it appears that uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook.
(END VIDEO CLIP)
KING: In English, that would be financial speak there for lower interest rates and markets expect them now to come, those cuts, a cut at the end of the month. A big question, will Powell cut the rate just once? Will it be an insurance cut under last year's rate hikes? Will that satisfies the president?
Damian Paletta of the Washington Post joins us. Damian, translate what we heard from the Fed chairman today and are the -- is he right, are the market conditions the reason there's likely to be at least one rate cut or is he bowing to pressure from the boss?
DAMIAN PALETTA, WHITE HOUSE ECONOMIC POLICY REPORTER, THE WASHINGTON POST: That's a great question that we might not know the answer to for some time. I mean, what the Fed is seeing is that global growth is slowing and the Fed also notices that inflation remains low. And typically, you raise interest rates to combat inflation so if inflation is low and there's all these concerns about trade in China, they feel like it's best to, you know, lower rates to try to keep the economy juiced.
Now the risk is that the unemployment rate is only 3.7 percent. The stock market as you just said is at an all-time high. So, you know, why exactly are they juicing the economy if, you know, we had a really strong jobs report last week, as well. It is confusing. There is no precedent for cutting rates in an economy like this before. And it is going to open them up to criticism that they are bowing to pressure from the president to, you know, really get the economy hot going into 2020.
KING: And to that point, we know how the president feels. I want you to -- this is Larry Kudlow, the president's top economic adviser in the White House, someone who says he's trying to protect Jerome Powell, someone who says he's trying to calm the president down when the president says we should, you know, demote him or replace him or do whatever. Larry Kudlow says sure, the Fed is independent, but.
(BEGIN VIDEO CLIP)
LARRY KUDLOW, NATIONAL ECONOMIC COUNCIL DIRECTOR: I personally believe that should be independent. But that word, independent, I mean, it doesn't mean they operate from another planet. In a day-to- day sense, certainly, they're independent. But that doesn't mean that they shouldn't listen to advice from their elders.
(END VIDEO CLIP)
KING: There's a bit of intellectual inconsistency there. If you're independent and the president is your elder and he says cut rates and you do it, you're not independent, are you?
PALETTA: Exactly. And what does elder mean? I mean, that suggests that the White House is in a position to dictate what the Fed should do. I mean, the reason the Fed was created to be independent of the White House is so you don't have a situation where there's political interference in what the central bank is doing.
We just saw in Turkey, the leader of Turkey just fired the head of their central bank because he wasn't happy with the way their central bank was doing things. And the risk obviously is if you have a central bank that is making decisions about interest rates that many Americans, you know, quite frankly don't have the time to understand, but if the interest rates are being changed based on political fears, you could have the situation where you have runaway inflation, and we get back into the 70s, where it's a huge mess and it's really hard to sort that out.
[12:35:04] And so that's what I think people at the Fed have been trying to guard against. But it does seem like -- a lot of people are surprised but it does seem like they are getting ready to cut interest rates which is something that the president has been jawboning them to do for about a year.
KING: And Democrats don't often come to the aid of Trump appointees. But I want you to listen to this exchange. As we note at the top, the president has been suggesting that he thinks he has the authority to move Powell if he doesn't like what he does. Listen here.
(BEGIN VIDEO CLIP) UNIDENTIFIED FEMALE: You get a call from the president today or tomorrow and he said I'm firing you, pack up, it's time to go. What would you do?
POWELL: Of course, I would not do that.
UNIDENTIFIED FEMALE: I can't hear you.
POWELL: My answer would be no.
(END VIDEO CLIP)
KING: It's both a funny moment and an important moment. Jerome Powell said my answer would be no.
PALETTA: Right. I mean, I guess we'd have to see it to believe it. It will be an incredibly awkward situation when you have the Fed chairman who has lost the confidence of the White House, obviously, the president would be kind of walking on eggshells there because the stock market could fall a couple of thousand points if he felt like he was really trying to interfere with the central bank. So there'd be big risks for both.
But I think Powell is trying to send a signal, you know, don't go there to the White House and Trump, you know, keeps attacking the Fed. And he's going to be watching closely as we all will be to see what happens later this month when the Fed has to make its decision on the rate cut.
KING: On the rate cut heading into a re-election season. Damian Paletta from the Post, appreciate your insights. We'll bring you back as this continues.
And before we go to break, the World Cup champion, U.S. women's soccer team in New York for a big parade today. The squad's star Megan Rapinoe couldn't resist taking advantage of the moment.
(BEGIN VIDEO CLIP)
MEGAN RAPINOE, CO-CAPTAIN, U.S. WOMEN'S NATIONAL SOCCER TEAM: New York City, you're the mother (INAUDIBLE) best!
(END VIDEO CLIP)
[12:41:19] KING: Topping our political radar today, President Trump tweeting his reaction to winning an emoluments case. Today, a federal appeals court is dismissing a lawsuit claiming the president is profiting from foreign governments who visit the Trump International Hotel here in Washington. That lawsuit brought by the attorneys general of the District of Columbia and Maryland.
A big first 24 hours from Mitch McConnell's Democratic challenger, Amy McGrath's campaign says it raised $2.5 million since she announced her Senate bid Tuesday. 2.5 million is a pretty big number for a Senate race. It rivals the first-day haul of some (INAUDIBLE) Democratic presidential candidates and it is more than the former governor of Colorado John Hickenlooper has raised in the three months he's been running for president.
President Trump is defending Home Depot, slamming people who choose not to shop at the hardware store because co-founder Bernie Marcus donated to the president's campaign. The president tweeting, "They are vicious and totally crazed and they don't care who gets hurt." Remember though, the president himself has called for boycotts of a company when he hasn't liked their positions. Some of those companies he's targeted, Harley Davidson, AT&T, right here at CNN, the NFL, and Apple.
The acting Homeland Security secretary telling CNN's Chris Cuomo the Trump administration strategy at the southern border is working. Kevin McAleenan says there's been a 28 percent drop in enforcement actions at the border in the month of June and he credited President Trump for helping those numbers go down.
(BEGIN VIDEO CLIP)
KEVIN MCALEENAN, ACTING HOMELAND SECURITY SECRETARY: So we're very much still in a crisis mode but what we see in June is that our strategy is working. The president is engaging with Mexico. The deal to enforce immigration and security on their southern border to partner with us on tackling transnational organizations, that's clearly having an impact on the flow.
(END VIDEO CLIP)
KING: He says the president's policy is working. Those are the numbers we know the president focuses on. The apprehensions at the border month to month, those statistics. One month for the administration, good news, a little risky to bet on one month, but we'll see, right?
MOLLY BALL, CNN POLITICAL ANALYST: We'll see. I mean, it is like looking at the monthly jobs numbers and trying to make a big conclusion about the economy. Experts say the result -- there's naturally a summer dip in the number of migrants trying to cross the border. I think the trend is what to look like at, not any single month. For now, it does look like they have achieved what they set out to do but I think we have to see what happens next.
JULIE HIRSCHFELD DAVIS, CNN POLITICAL ANALYST: And this has happened before where the Trump administration has gotten very excited about lower numbers. It happened right when he took office. And then the other side of that sword is that when they start to go up again, the president is still very much focused on them and it kind of -- it blows back in the other direction. And so I think it's -- they have no choice now but to focus on the downtick and say that it's a good thing but it's a risky thing to hang your hat on.
ELIANA JOHNSON, CNN POLITICAL ANALYST: Yes. It's a little bit hard to chart cause and effect here. So McAleenan is saying that the numbers have gone down because of the deal the president struck with Mexico. The president has made similar comments to that effect crediting Mexico's increase enforcement with the dip in the numbers.
We'll have to see future months, I think, to know if that's really the case. But for now, it does look like a win for the Trump administration. Again, the numbers are variable, so you really have to pattern spot more than point at one particular number.
KING: At least a temporary piece, a relative piece --
KING: -- if you're Kevin McAleenan. Anyway, the phone is not ringing at much.
Up next for us, ObamaCare being tested in court could have an impact on the next election.
[12:49:13] KING: New signs today, another big challenge to ObamaCare could be getting back to the Supreme Court. Perhaps even in a presidential election year. This after two GOP appointed judges on an appeals court in New Orleans signaled they might side with the Texas judge on a lower court who ruled late last year the Affordable Care Act is unconstitutional. The Trump administration in conjunction with 18 Republican-led states is on the side of striking down the entire law.
New questions about the constitutionality come after the Republican Congress effectively eliminated the individual mandate in ObamaCare by reducing the penalty to zero. That's a point Jennifer Walker Elrod, a George W. Bush appointee to the bench raised in that court hearing.
(BEGIN VIDEO CLIP)
JUDGE JENNIFER WALKER ELROD: If you no longer have the tax, why isn't it unconstitutional?
(END VIDEO CLIP)
[12:50:01] KING: A significant question because it was the mandate the Chief Justice John Roberts angering many Republicans siding with the more Democratic progressive members of the court, that's how they protected ObamaCare. That judge seems to suggest that's gone now because of what the Congress did. Is it possible this court is going to throw out ObamaCare and we're going to have this debate again in the middle of a presidential election?
JOHNSON: You know, it's a tricky question because -- and particularly tricky political question because the president ran on protecting pre- existing conditions and he says it over and over again. And yet, after the midterms, he did a 180 and said actually the administration's position is going to be that ObamaCare should be entirely gutted. So it's entirely possible that this case could go to the Supreme Court again and we could have the debate. But I think it's one that actually puts the Trump administration and this president in a difficult position even as Democrats themselves are having their own debate about where they should be on healthcare.
KING: Right. If they had to revisits in the House, they'd have the Medicare for All versus just redoing ObamaCare, the pieces of ObamaCare debate. Mitch McConnell has said we would immediately pass bipartisan legislation on pre-existing conditions. Good luck. The Republicans had control for two years and they couldn't pass anything.
If ObamaCare gets thrown out or at least put into limbo, this is what the American people would have to think of, like the law or not. No protections for pre-existing conditions that could all go away. That thing that allows you to let your -- keep your kids on until they're 26 years old on their parents' plan, that could go away. Caps on out- of-pocket expenses, go away. Return of the annual lifetime caps on coverage could come back.
Are the Republicans prepared? They want to rip up ObamaCare, are they prepared for the political fallout if that happens?
DAVIS: No, they're not. And that's what that whole -- this whole debate that we saw playing out in the last two years when they did have the majority in both the House and the Senate really showed you is that, when it came time for them to articulate a vision for what would come instead of or after, they were successful in repealing ObamaCare, they weren't able to do it, they weren't able to reach consensus in their ranks for what that would look like. And there is no sign that they have gotten any closer to that.
Now, the onus would be in part on Democrats if this happened, you know, in the short-term because they have the majority in the House. You're right, they would have to have what could be a pretty divisive debate among themselves about what it looks like for them, but they would also be able to point to the Trump administration and said it's their fault that we don't have the Affordable Care Act anymore. All of those popular things that you just outlined are gone because of the Republicans and we're just trying to pick up the pieces.
KING: And the president says he will have a plan. That's when?
TOLUSE OLORUNNIPA, CNN POLITICAL ANALYST: Oh, he's been saying that for --
UNIDENTIFIED FEMALE: Two weeks.
OLORUNNIPA: -- two years. Republicans more broadly and just not only putting this on the Trump administration, but Republicans have been saying that they are going to repeal and replace ObamaCare for the better part of the last decade. And President Trump came in and he's been saying, you know, even though we weren't able to get it done in my first two years, just, you know, re-elect me and we'll do it in 2021.
It is not clear that there is any plan or there is any strategy for what to do on the Republican side if their courts were to throw this out. I would point out that the Supreme Court still has the same justices, the same five justices that upheld ObamaCare in the past. They're still on the court even though there have been some changes in the court. So there is a chance that they uphold this, but it is causing a lot of turbulence going into 2020.
KING: The chief justice would have to come up with a new reason after the mandate. We shall see. Interesting to watch.
Up next, is there a gender battle brewing within the Republican Party?
[12:57:50] KING: The Republican Party has a women problem and one GOP effort to try to fix it just suffered a big defeat. In a North Carolina House primary yesterday, Republican voters advanced Greg Murphy over Joan Perry. Murphy won by nearly 20 points in a primary that exposed the GOP divide. Two Freedom Caucus congressmen backed Murphy. All Republican women in the house backed Perry. One of them, Congresswoman Cathy McMorris Rodgers reacting to Perry's lose by saying, quote, if Republican -- we wouldn't win back the majority. It's that simple.
Am I right in translating that as Congresswoman McMorris Rodgers telling the men in the Republican caucus, you guys just don't get it?
JOHNSON: That's -- I mean, that's exactly what she's saying. And she's not the only one, Elise Stefanik, another Republican congresswoman has been saying the same thing and she's gone up against Republican men who seemed not to really be hearing this. Greg Murphy was backed by other Republican groups and there's really only one Republican outside group that is putting money behind women to win Republican primaries. If Republican women don't win primaries, they can't win general elections and get into Congress.
KING: And look at these numbers, women on the majority in American politics, they simply are. That's a fact. Republicans have a problem with voters of color. Look at this, among the House, it's still a (INAUDIBLE) male-dominated game. But 77 percent of the members of the House are men.
But when there are women, Democrats by a lopsided margin, 20 percent women, only three percent of Republican women in the House. Senate, again, mostly men, 17 percent Democratic women, eight percent Republican. Governors, 12 percent Democratic women, only six percent Republican women.
State legislatures, the bench, if this is going to change in Congress next year, or the year after or whatever, only nine percent Republican women. This is a demographic cliff for the Republican Party.
DAVIS: It absolutely is. And I was in this district last week and I met the candidate, Dr. Perry. And I think the real challenge is not only that there's just one group that's trying to put money behind this effort, but also that even with those efforts, Republican women do not seem to be responding. And Republican voters, in general, don't be seemed to be responding so you can dump what was nearly a $1 million of money into this race, have a qualified candidate who fits her district and they still can't them across the finish line. So it's a continuing challenge.
KING: If you look at this -- go ahead, quick.
BALL: I was going to say, in 2018 in the primaries, when a Democratic woman-run against a Democratic man in a non-incumbent seat, the woman was -- for Republicans, Republican women versus Republican men, the woman was less likely to win.
KING: Come back tomorrow. Brianna Keilar starts right now.