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Democrats Frustrated on Way Forward as Biden Agenda Stalls; Vice President Harris Takes Criticism from All Sides in First Foreign Trip; Organizers Say Tokyo Olympic Games Will Have Limited Impact on Japan's COVID-19 Situation. Aired 10:30-11a ET

Aired June 09, 2021 - 10:30   ET

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

POPPY HARLOW, CNN NEWSROOM: Economics professor at Harvard, and the man who didn't write that headline, right, Jason?

[10:30:03]

JASON FURMAN, FORMER CHAIRMAN OF OBAMA'S COUNCIL OF ECONOMIC ADVISERS: I did not write the headline.

HARLOW: But it's true. I mean, you're not sounding the inflation alarm as much maybe as Larry Summers but loudly enough to get the White House's attention on a few fronts. So if we could start with inflation and you're saying that it's coming faster than people have expected. And you say, we'll likely get more of it, so be prepared. Is the White House prepared? I mean, what if they're wrong that it's not temporary?

FURMAN: Yes. I don't know whether or not they're prepared. I'll tell you what I think. We've had inflation at a 6 percent annual rate so far this year. That rate is likely to moderate, but we could easily end up with inflation about 3 percent this year. I don't think 4 percent this year is out of the question. And if that's the case, we'll probably have a decent amount carrying forward into next year as well.

HARLOW: But that's a problem, and not a problem that the White House has to contend with alone. The Fed, namely, has to contend with it. And I read -- it was a few weeks ago in The Times you were quoted saying, one of the main tools the Fed has to combat inflation is it has the ability to create a recession. That's not entirely comforting. It's not. So what should the Fed be doing?

FURMAN: Yes. So, first of all, I think the biggest problem our country faces is employment and jobs. We're 10 million jobs short. There's a lot of job openings. So I think the main solution to the job problem is to be patient, and over the next couple months, I think the pace of job creation is going to pick up.

In terms of inflation, that's the Fed's responsibility. Congress assigned that responsibility to the Fed. I think they're going to have to look at the numbers and understand they're not coming in the way they expected as recently as two or three months ago and adjust accordingly. HARLOW: Stop some of these purchasing programs, et cetera?

FURMAN: Yes, that's a great example. They're buying mortgage-backed securities. That's keeping mortgage rates down. It's lovely to have low mortgage rates. We all would much rather have low mortgage rates. But house prices are exploding right now. Everything in the house sector is going up in price. It probably isn't the case at that the Fed should be continuing to artificially hold mortgage rates down.

HARLOW: Let's talk about child care. And I want your response to just the overall argument. It's exemplified in a tweet a few weeks ago from Democratic Senator Patty Murray, who, of course, chairs the Health, Education, Labor and Pension Community. She wrote this, if we don't solve our child care crisis, there isn't going to be an economic recovery.

You recently came out with a study that argues the opposite. And it's controversial, because you're basically saying child care -- a lack of child care isn't keeping people out of the workforce. How do you know that?

FURMAN: So, first of all, I just don't think jobs and GDP are the only thing that matters. I care about children, as the father of a five-year-old. I also care about my own personal sanity. So I like the idea of kids in school. I like preschool. I like -- I want schools to reopen. So I feel all that passionately.

When I study though the very specific question of what's holding the jobs numbers back, there's two really important facts that make it that child care does not appear to be playing a very big role. First of all, most people in our economy aren't mothers. It's a smaller group than you'd think to begin with. You're in that group, Poppy, but not everyone is. And, second of all, mothers have cut back their working only a little bit more than other people in the economy. There's not actually a big difference in job losses among mothers over the last year than others.

So I put that together and what I see is an economy that costs jobs across the board for lots of different reasons for many people. I don't think child care is what cost us jobs, but it has definitely has affected children and parents and all sorts of important, non-economic ways.

HARLOW: I hear you and I read through the study. It just leaves me and I think a lot of our viewers scratching our heads who have anecdotally heard from or watched our friends walk away from jobs very painfully that they didn't want to, because they had to choose between their child and their job, and how do you choose that as a parent.

I mean, there was -- I don't know if you saw it, but there was this recent Federal Reserve study that actually came out the same week as your research, and it looked at this, and it was of 11,000 adults. And what they found in it is that black, Hispanic and single mothers, as well as mothers with low incomes, were more likely not to be working or to be working less due to the child care disruption. Are you sure what you looked at isn't overlooking them? FURMAN: So, first, we looked by race, we looked by ethnicity, we looked by lots of different cuts. I must have run this 50 times.

[10:35:00]

And I'm not saying it's zero, by the way. I'm saying, there's 10 million fewer jobs right now in the economy. I think about 2 percent of that is because of the child care issue. if you do it a different way, you might get a number like 3 percent, maybe get 1 percent. It can't be much more than that. And I looked at the fed survey. We can talk about it in more detail another time. But it's not very good at comparing parents and non-parents. I just asks parents what they're doing.

But, again, I'm not denying the hardship and I'm not saying it played zero role. It's just, when you run the numbers, smaller than what you might have thought.

HARLOW: No. I mean, it's one of the reasons I wanted to have you on. It's important to hear what you found, and as you said, not just as an economist, but as a parent too.

Final question then, what is holding people back, again, as someone who worked with President Biden, then-V.P. in the Obama White House, you've been pretty clear you do think the $300 extra-supplemental weekly unemployment benefit is holding more than just restaurant workers back. Is it a mistake for the 25 states that are keeping it continue it?

FURMAN: Yes. So, the first thing rolling things back, it takes time to find jobs. People still weren't vaccinated back in April and May. So those are really big factors. And I certainly think unemployment insurance has been playing a role. I think in most cases, it's just delaying people's job finding and they'll find them a month or two or three later.

But just to ask you a question, 11 million people would have been thrown off unemployment insurance in March and April were it not for the American rescue plan. I think some of those people would have gone into jobs, because there's a lot of jobs out there. I'm not sure I think that's a good thing.

So I don't mind that unemployment insurance is delaying some. But as states get their unemployment rates down, as they get their vaccination rates up, I think it is appropriate for them to drop the supplement. And I think President Biden is right, that it shouldn't be continued in its current form after September.

HARLOW: Okay. Jason, come back soon. Thanks for the time.

FURMAN: Thank you.

HARLOW: Jim?

JIM SCIUTTO, CNN NEWSROOM: Some interesting data there. Well, Vice President Kamala Harris is facing criticism for her response during an interview to a question about why she hasn't yet, as vice president, visited the U.S.-Mexico border. Hear what she's now saying about it. We're going to have a live report from the White House, next.

(COMMERCIAL BREAK)

[10:40:00]

SCIUTTO: A man accused of joining the violent insurrection at the Capitol is now asking to be released from jail. His defense, well, his attorney, Douglas Jensen's attorney told a judge that his client felt deceived and recognizes that he bought into a, quote, pack of lies, fueled not just by QAnon but the former president.

HARLOW: Our Whitney Wild joins us with more details. Whitney, this is so important because it's got to be broader than him. I mean, it just shows the danger of these lies being carried out on the internet and by the former president.

WHITNEY WILD, CNN LAW ENFORCEMENT CORRESPONDENT: Well, there is this sort of growing defense that these people are, in some ways, victims of these fake lies and that they were -- believed that they were acting on behalf of the president and they were basically just duped. We've seen more than one person argue that.

Douglas Jensen was among the most visible of the rioters on January 6th. He's seen on video wearing a QAnon T-shirt pursuing Capitol Police Officer Eugene Goodman ahead of -- when Officer Goodman runs up the stairs. Douglas Jensen leading this crowd follows him up the stairs of the Capitol. Jensen claims he was misled into joining the deadly insurrection and that he was not part of an angry mob. He simply came to Washington from Des Moines, Iowa, to, quote, observe. He even argues that he felt threatened by Officer Goodman.

Jensen is asking to be released from jail until his trail. In a court filing, his attorney writes, Jensen's initial attraction to QAnon was its stated mission to eliminate pedophiles from society. For reasons he does not even understand today, he became a true believer and was convinced he was doing a noble service by becoming a digital soldier for Q. He fell victim to this barrage of internet-sourced info and came to the Capitol at the direction of the president of the United States to demonstrate that he was a true patriot.

Prosecutors, of course, see this very differently as the crowd coalesced into a violent mob, they say Jensen was among the first to push his way inside the Capitol.

Jensen is just the latest Capitol riot suspect to express remorse and to blame QAnon or the former president himself for inciting the violence. So far, the federal judges overseeing these Capitol riot cases have not been moved by those arguments. Jensen has been charged with seven federal crimes, including obstructing congressional proceedings, interfering with police officers, civil disorder. That's just a few on that list of seven. So far, he has pleaded not guilty. He's been in jail since his arrest in January. There's a hearing scheduled for this to -- to deal with all of this next week specifically about his detention. But these cases are really interesting because what we see is these detention hearings are where we're learning a lot more about sort of the perceived mindset that these defense attorneys believe that their clients had. So this is where we're getting a lot of details about how this happened, the mindset of these defendants and then also what prosecutors think about them.

SCIUTTO: Does that defense work, just to say they were fooled, in effect, and enacted on those things by carrying out violence? We'll see. Whitney Wild, thanks very much.

Vice President Kamala Harris has now adjusted her response to a question at the end of her first foreign trip to Guatemala and Mexico. She caused frustration even for some in the White House because she didn't answer clearly a simple question why she hasn't yet visited the U.S.-Mexico border as vice president.

[10:45:04]

Here is one instance to Lester Holt.

(BEGIN VIDEO CLIP)

LESTER HOLT, MSNBC HOST: Do you have any plans to visit the border?

KAMALA HARRIS, U.S. VICE PRESIDENT: At some point. We are going to the border. We have been to the border. So this whole thing about the border -- we've been to the border. We've been to the border.

HOLT: You haven't been to the border.

HARRIS: And I haven't been to Europe. I mean, I don't understand the point that you're making.

(END VIDEO CLIP)

HARLOW: Now, she says she will go back to the border. She's been before in her role as U.S. senator.

Let's get to John Harwood at the White House with more. John, what's she saying now?

JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: Well she's saying she's going to go, she's not giving a date. But it's not surprising, Poppy, that administration officials were frustrated by that answer. She was uncomfortable with Lester Holt's question. That nervous laughter was a tell. And it's a question that's quite familiar that the administration has been dealing with for some time. She has an answer for it, which is that she's dealing with the conditions that cause the flow of migrants to the border, not what happens at the border. And she ultimately gave that answer to our colleague, Jeremy Diamond.

(BEGIN VIDEO CLIP) HARRIS: The reality is we need to prioritize what's happening at the border, and we have to prioritize why people are going to the border. And so let's talk about what's going on in the places causing the issue at the border. I think it's shortsighted for any of us who are in the business of problem solving to suggest we're only going to respond to the reaction as opposed to addressing the cause.

(END VIDEO CLIP)

HARWOOD: Now, of course, part of the reason she hasn't been to the border is that this is not an issue that the Biden administration wants to elevate. Immigration is not a politically beneficial issue for them. The irony, of course, is that the fumbling answer that she gave to Lester Holt is likely to increase attention on that. And by the end of the trip, as we discussed earlier, Poppy, she said I will go to the border. She hasn't given a date. And that's going to be the next set of questions for her.

HARLOW: Of course it is, yes.

SCIUTTO: John Harwood at the White House, thanks so much.

HARLOW: Democratic Congresswoman Alexandria Ocasio-Cortez is calling out her fellow Democrats, saying she does not believe the reason Joe Manchin gave for not supporting the latest sweeping voting rights bill, HR-1.

SCIUTTO: Yes. It's a real split within the Democratic Party. She accuses Manchin of being on the wrong side of certain interests in Washington. Watch her words.

(BEGIN VIDEO CLIP)

REP. ALEXANDRIA OCASIO-CORTEZ (D-NY): HR-1 stands up against lobbyists and dark money. And I would reckon to think that this is probably just as much a part of Joe Manchin's calculus as anything else. Because when it comes to this bipartisan argument, I've got to tell you, I don't buy it because Joe Manchin has voted for bills that have not been bipartisan before.

(END VIDEO CLIP)

SCIUTTO: Quite a charge, a friendly fire within the Democratic Party. Ocasio-Cortez also said that Manchin represents a state that is not very diverse, meaning he does not have a large number of voters whose right to vote is threatened under current regulations. That's her argument.

Well, ahead of the start of the Tokyo Olympic Games, officials are studying how the upcoming games will impact Japan's ongoing COVID-19 crisis, very low vaccination rate there, their findings. A live report from Tokyo, next.

(COMMERCIAL BREAK)

[10:50:00] SCIUTTO: The CDC says that some young people, particularly male teens, age 14 to 19, are experiencing a mild heart inflammation at higher than expected rates after getting their second dose of both the Pfizer and Moderna vaccines.

HARLOW: Let's be very clear here that the CDC is emphasizing how rare this is, and the patients recover quickly with treatment. Some of the symptoms include chest pain, shortness of breath and heart palpitations. It's also unclear if the vaccines are causing this heart inflammation or if it's simply a coincidence. Is there a causality here or not, they just don't know at this point.

Despite increasingly louder calls to cancel the Tokyo Olympic Games, organizers are determined to push forward, now saying the games will have a limited impact on Japan's COVID-19 situation.

SCIUTTO: CNN's Selina Wang joins us now live from Tokyo. So you have a new study here that looks at the differences between canceling games outright and going forward with just domestic spectators. International spectators have been barred. You've looked at the study. What does it actually show?

SELINA WANG, CNN INTERNATIONAL CORRESPONDENT: Yes, that's exactly right. Now, context is key here when it comes to the study and showing this is part of the organizers' attempts to reassure the public, which is largely opposed to these Olympic Games here in Japan.

Now, they point to the study by an economist, notably, not a public health expert, at Tokyo University that found the Olympic Games would lead to 50 new cases and one severe new COVID case per day. Now, it sounds promising but the study did not take into account more contagious COVID-19 variants and Olympic organizers failed to mention a key conclusion from the study, which was that more movement among the Japanese public, more gatherings as a result of the Olympics could lead to a significant spike in COVID-19 cases.

But more generally here, the very optimistic picture that is being painted by Olympic organizers runs completely counter to what much of the medical community here is saying.

[10:55:02]

They say there's still a risk that this event could turn into a super- spreader event with only 3.5 percent of the Japanese population fully vaccinated.

HARLOW: Selina Wang, thank you very much for your reporting on all of this. We'll keep a close eye on it.

Thanks to all of you for joining us today. I'm Poppy Harlow.

SCIUTTO: And I'm Jim Sciutto. At This Hour with Erica Hill today starts right after a quick break.

(COMMERCIAL BREAK)

ERICA HILL, CNN AT THIS HOUR: Hi, everyone. I'm Erica Hill in today for Kate Bolduan. Here is what we're watching at this hour.

[11:00:00]

President Biden on the world stage, a packed schedule for his first trip abroad. We'll lay out what's at stake for the White House.