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Russia Attacks Multiple Targets in Odessa; Finland and Sweden Poised to Join NATO; Russian Victory in Donbas Unlikely to End War; U.S. Gas Prices at New High; President Biden to Deliver Remarks on Inflation. Aired 11-11:30a ET

Aired May 10, 2022 - 11:00   ET

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

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BIANNA GOLODRYGA, CNN ANCHOR: Hello, everyone, I'm Bianna Golodryga in for Kate Bolduan. We begin with new developments on the war in Ukraine.

Ukraine says Russian forces fired hypersonic missiles at a shopping mall, two hotels and other targets in Odessa. At least one person was killed in the attack.

Near Kharkiv, Russian troops attacked a civilian convoy. Several people were reportedly killed, including a 13-year-old girl.

And more evidence of Russian atrocities are being uncovered. Ukrainian officials say they found the bodies of 44 civilians in the rubble of a five-story building in Izyum.

All this as gas prices hit a new record high here in the U.S. and stock markets near their lowest levels of the year.

We are just minutes away from President Biden delivering remarks on his administration's efforts to fight soaring inflation. We'll bring it to you live when it happens. Let's begin in Ukraine, CNN's Scott McLean is live in Lviv.

Scott, what is the latest on the ground there?

SCOTT MCLEAN, CNN CORRESPONDENT: Hey, Bianna. Officials in Odessa, they've been getting -- they've been bracing for a while for these missile strikes we saw. The city has been getting hit for weeks now, so they were expecting that, on May 9th, Russia's victory day, there would be a new barrage of attacks.

That's what they got, with missile strikes up and down the Black Sea coast. One of those strikes hit a warehouse, causing three warehouses to catch fire. You mentioned that shopping mall that was also hit, Ukrainians say, with seven missiles.

This is a large American-style mall, a huge parking lot, a lot of international stores in there. And what's remarkable, Bianna, is that only one person was killed; five people, we're told security guards at the mall who were there, were killed.

And what explains this is that nobody was there and that is because of a government-imposed curfew that the mayor says saved lives. Listen.

(BEGIN VIDEO CLIP)

MAYOR GENNADIY TRUKHANOV, ODESSA (through translator): Regular peace process was taking place. The curfew introduced saved us all.

Some people ask, why do we need these excessive measures of precaution?

We can see now that they are not excessive.

(END VIDEO CLIP)

MCLEAN: Now all of these missile strikes -- or at least some of these missile strikes -- came during a visit from Charles Michel, the E.U. council president, who was there meeting with the Ukrainian prime minister.

And during that meeting, we're told by an E.U. official, that he actually had to pause to seek shelter because of some of those incoming missiles. Now two other ones hit hotels. One of them was a hotel in the southern part of the city right on the beach, right on the coast.

This is a hotel that is owned by a pro-Russian business man, was frequently frequented by some Russian elites as well.

The second hotel was actually outside the city in a village south of Odessa right near a very important bridge that's actually been hit a few times over the last few weeks. It is important because it links the entire southwest corner of Ukraine to the rest of the country.

And it is the only link by road or rail for anyone to get there. So again, unclear whether that hotel was the actual target or perhaps something nearby. Bianna.

GOLODRYGA: Odessa there a key port city. Scott McLean, thank you.

Finland and Sweden could be on the verge of joining NATO as Russia's unprovoked war on Ukraine rages on. A Finnish official tells CNN that it's increasingly likely they will apply for NATO membership. CNN's Nic Robertson is live in Helsinki with the latest.

We've talked about this earlier. This was unthinkable just four months ago.

Now how soon could this membership happen?

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: The transition has been so far, at the moment public support is according to local polls, at least there's 76 percent. And that really ramped up from about only 30 percent support for NATO before Russia invaded Ukraine. That was the turning point. Tomorrow the foreign affairs committee is going to present its

analysis of the government's -- the government's security document, which really sort of outlines why the country could join NATO, what would be the benefits of it.

And on Thursday, the president of Finland is going to speak. And really, as I say, 76 percent of Finns already think supporting NATO is a good idea. The president is expected to say very much the same and the parliament to follow through on the weekend.

We've been out on the border with Russia. It's a very long border. It will double NATO's border if Finland does join. But it's a surprisingly flimsy border as well, literally a waist-high fence of wooden posts set every 10 yards apart, with wire running between the posts. So a very flimsy border that Finland worries Russia could attack them across.

And Russia has been very bellicose since Finland said it might join NATO. The Russian officials have said that they would perhaps have to rebalance the military equation, if you will, along the border, meaning that they might move forces closer to the border.

So far that hasn't happened. But Finland does seem set within a matter of days to decide to ask to join NATO.

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ROBERTSON: And it's expected to be quite a swift process when they do.

GOLODRYGA: Yes, that calculus has changed there on the ground ever since Vladimir Putin invaded a sovereign country there in Ukraine. Nic Robertson, thank you.

We turn now to Washington, where President Biden is urging Congress to quickly pass nearly $40 billion in additional aid for Ukraine. The president warning that the current assistance will run out next week. CNN's Manu Raju is live on Capitol Hill.

Two noteworthy developments here: one, that the president agreed to separate COVID funding from this bill and that the price tag has been raised from the initial $33 billion.

MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Yes, really a staggering amount of money, nearly $40 billion. That's the total package that the House is expected to approve tonight. The Senate acts will happen soon after that.

This coming after just weeks when Congress approved nearly $14 billion, so this will bring about $54 billion total so far to the efforts to help Ukraine. And expect much more money coming down, assuming this war continues to drag on.

Now this package divided up into several categories: $20.4 billion for military assistance. You see another $8.5 billion in economic assistance for Ukraine; $3 billion in humanitarian assistance; $500 million for domestic food production assistance and an increased food aid to the tune of $3.4 billion and military equipment as well.

That food aid a major concern in Washington, about the impacts that Ukraine, this war is having on the global food supply, particularly in the region.

Now there is still some back and forth and criticism on both sides about why COVID aid was not included. Roughly $10 billion, less than half of what the White House wanted, has been waiting on action for weeks, because it has been stalled over a dispute over the so-called Title 42 restrictions at the U.S. border with Mexico.

Republicans want to vote targeting that as part of the COVID aid package. Democrats don't want to give them that vote. And the Senate appropriations chairperson Patrick Leahy told me moments ago that Republicans need to change course.

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SEN. PATRICK LEAHY (D-VT): They've already said that they're not -- they will not support COVID aid. Mitch McConnell has made that very clear. My concern is I support aid to Ukraine. I support aid to the people of the United States on COVID. I'm sorry that the Republican leader will only support the aid to Ukraine, not for the United States.

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RAJU: Now the Republicans have gotten behind this bipartisan $10 billion package to deal with COVID relief efforts that they had demanded to be fully offset, so would not increase the budget deficit.

They have agreed to that. But it is that procedural dispute over whether to allow an amendment, going after the Biden administration lifting that Title 42 restriction at the border.

So while that dispute plays out, there's still questions about whether the United States can continue to respond aggressively to this pandemic or if that response will suffer if Congress continues to dither.

GOLODRYGA: We'll talk more about COVID aid later in this hour. Manu Raju, thank you.

Joining me now is CNN military analyst, retired Lieutenant General Mark Hertling, also with us CNN national security analyst Steve Hall, a former CIA chief of Russia operations.

Welcome both.

General Hertling, let me again with you on that barrage of missile strikes on Odessa. This isn't the first strike against that important port city. We focus on Russia's failure to advance on the ground in Ukraine.

But what is the message that Russia's sending by firing missiles all the way to Odessa and hypersonic missiles at that? LT. GEN. MARK HERTLING, CNN MILITARY ANALYST: You know, I can't

figure it out, much like I haven't been able to figure out many of the actions Russia is doing.

But firing these three hypersonic missiles -- they're called Kinzhals -- from a strategic bomber and then releasing the film of it to the world, firing missiles from a standoff range, they can travel up to 2,000 miles at 6,000 miles per hour -- and not hitting strategic targets with these so-called strategic missiles, fired off a strategic long range bomber.

It doesn't make a whole lot of sense to me, especially given the fact that Russia has ships in the Black Sea that could easily fire cruise caliber missiles at that port. When they hit things like shopping malls and warehouses, it doesn't make sense to me that they would use these multimillion dollar weapons to destroy those kinds of things.

But it is sending a signal, especially with the E.U. secretary general there. So it may just have been to send a message. But it's really a dumb message to send, in my military point of view.

GOLODRYGA: Yes, the U.N. secretary general was there in the city over the weekend, when they were victims of another attack by Russia, so you were right there.

Steve, this morning the Director of National Intelligence, Avril Haines, testified before lawmakers and said a Russian victory in the Donbas might not end this war.

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GOLODRYGA: We've been focusing so much on Russia there in the east.

Does this suggest that Vladimir Putin may make another attempt at going after Kyiv after all?

STEVE HALL, CNN NATIONAL SECURITY ANALYST: Yes, I mean, it certainly is in the realm of the possible, Bianna.

And one of the things that I think all of us have been trying to struggle with, probably to include Vladimir Putin, is exactly what is going to constitute a win, what is going to constitute a victory for him?

Apparently the DNI has, from all source intelligence report, meaning CIA, NSA, everybody across the board, to include our allies, who are sharing intelligence with us obviously, the assessment is that he might not stop at the Donbas.

And that's important because there is a train of thought that kind of goes like, all right, it's not going well in general in Ukraine as Mark was just alluding to. And so maybe we'll just take Donbas and call it a victory and go home.

But if the intelligence community is saying, well, hold on just a second, we actually have indications that he might not stop there, that's just a thought that he's going to double down and try to continue in a longer war of attrition, which is, I think, of great concern to the Ukrainians and rightfully so.

GOLODRYGA: Well, to follow up on Director Haines' testimony, she also said there are indications that Russia wants to extend a land bridge to Transnistria, that breakaway region in Moldova.

Could that be why they are once again targeting Odessa, to focus on the crucial port cities there in the south but also to get to the Russian speaking separatists there in Moldova?

HERTLING: Yes, it may be their desire, Bianna. And that was part of their original strategic objective, is to close the Black and the Azov Sea port to Ukraine's economic system.

But truthfully, that would only be, again, expanding their requirement for more forces. The DNI also said, as well as other intelligence agencies, that, specifically, that they just don't have the force to put manpower into the ports of Kherson, Mykolaiv, Odessa and then on to Transnistria.

So whereas they may have that desire to continue that land bridge, they don't have the force capability, in many people's view -- and I'm one of those. They just seem to be trying to figure out where to go next, as Steve just said. They don't have an end state in terms of what they can accomplish, based on the military forces they have in the region.

GOLODRYGA: Because Vladimir Putin has promised the Russian people not to bring in conscripts to this fighting, what he's not calling a war but we all know, for the sake of it, is a war.

This goes to the bigger issue of how this all ends. President Biden last night said at a fundraiser that he himself is worried that Vladimir Putin doesn't have a way out of this now.

Do you share those concerns and, if so, what are some of the options that, most importantly at this point, Ukraine would be on board with?

HALL: Yes, really that's the big question is, what's going to constitute victory?

What can Vladimir Putin feel like he can walk away with?

Is there anything, short of complete domination over Ukraine -- or short of that, a protracted war, sort of like we saw in all the other Russian conflicts, whether it's Chechnya or even Syria, whether that would be sufficient for him to sell to the Russian population and other Russian leaders in his inside circle, saying, yes, we're still doing the right thing. It's going to cost us time.

So the only thing the DNI mentioned as well, which is of some concern, is the unpredictability factor.

What happens if Vladimir Putin feels, I don't know what I'm left with, I've got to do something significant? I think we have to be careful not to self-edit out of fear of that.

But it is a legitimate question, policy and intelligence wise, what would Vladimir Putin do if faced with there's nothing else I can do?

And that's a question I don't think we know yet.

GOLODRYGA: Yes, she said that he may use and resort to nuclear weapons if he feels that Russia is facing existential threat.

But what is that threat?

That's the big unknown. Lieutenant General Mark Hertling, Steve Hall, thank you as always.

And coming up, gas prices are going up as the war in Ukraine and inflation worsens. In just moments, President Biden will outline what he will do about that. Stay with us.

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GOLODRYGA: Gas prices in the U.S. are once again soaring to a new record high. AAA reports the national average of regular gasoline is now $4.37 a gallon. That's up $0.17 in just the last week. CNN's Pete Muntean is live at a gas station in Cincinnati, Ohio, with more.

These numbers are just going in the wrong direction, Pete.

PETE MUNTEAN, CNN CORRESPONDENT: And they're rising so fast, Bianna. You know, earlier here in this neighborhood, it was $4.09 for a gallon of regular; now $4.37. That's higher than the national average for a gallon of regular, according to AAA. Now $4.37.

The last time we saw a number this high, this actually surpassed, even completely beat out the previous record, was $4.33 back on March 11th. Highest number we saw since July of 2008.

But this is going up so fast. Just a week ago it was $4.20. Back a year ago, $2.97. Kind of hard to think about when you consider the numbers today. This is going up so quickly because Brent crude is trading higher. There's a lot of uncertainty because of the war in Ukraine, a lot of uncertainty in Europe.

And suppliers really have not upped their production since the depths of the pandemic. I just want you to listen now to AAA, which says $4.50 gas not completely out of the question.

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(BEGIN VIDEO CLIP) ANDREW GROSS, AAA SPOKESPERSON: It's entirely possible that the upward pressure on gasoline prices is going to continue because the war certainly doesn't look like it's going anywhere. But summer driving season is just kicking in. Warmer weather, longer days, people are going to be out on the roads, more demand for gasoline.

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MUNTEAN: I said the gas was $4.37 on the way in; it's actually $4.39. It's easy to get the numbers mixed up when it's going up so quickly.

A lot of people here in Cincinnati are just going across the river into Kentucky. Just checked Gas Buddy, some of the lowest prices in the region here are just across the state line, although AAA says really not all that productive when you're driving around, hunting for gas. Just go to where you need to go.

GOLODRYGA: We know demand's going to only go up as we approach Memorial Day weekend as well. Pete Muntean, thank you.

The soaring prices at the pump are dealing another blow to the U.S. economy. In just moments, President Biden will deliver remarks about his plans to fight inflation.

Joining me now to talk about this, CNN White House correspondent John Harwood and CNN global economic analyst Rana Foroohar. She is a columnist and associate editor at the "Financial Times."

Gone are the days when the administration can, you know, dismiss inflation as just something that's transitory. They're no longer using that word. This is clearly a major concern for Americans, for the Federal Reserve, for the president now.

Earlier measures that he took, such as alleviating supply chain constraints at ports and releasing oil from the Strategic Petroleum Reserve didn't move the needle much.

What more can he actually do?

JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: Not all that much that's going to be much more effective than what he's already done.

It wasn't just President Biden who said inflation was going to be transitory. That was also the view of the Federal Reserve in 2021. There were people, Larry Summers, most conspicuously, who were warning that the American Rescue Plan was too big and that inflation pressures were about to accelerate.

Larry Summers turns out it appears to have been right. So in terms of what the president can do now, this is mainly the Federal Reserve's job. As you know, Bianna, he's done a few things, released oil from the strategic reserve, tried to smooth out supply chains, get ports operating on a more 24/7 kind of basis.

There are things you can do. There are things in his legislative agenda that would bring down prescription drug costs. And the semiconductor bill would try to address the shortage of semiconductors, although it wouldn't happen immediately.

There are some additional things he could do that are pretty unpopular: getting rid of tariffs on China might have some modest effect. But there are geopolitical ramifications there. Increasing immigration would help slow down or cool off these overly tight labor markets. But that's not very popular.

So the likelihood is that the president is going to continue doing some of the things that he's been doing, make some gestures that are going to have only a modest impact and try to counter the message from Republicans.

GOLODRYGA: But one could argue that the administration is at least arguing that those stimulus checks help cushioned some of the blow from this inflation and that inflation --

(CROSSTALK)

HARWOOD: Double-edged sword.

GOLODRYGA: -- right and it's not just a U.S. problem, right?

It's something we're seeing happening around the world.

Rana, let's talk about the Federal Reserve. Combating inflation largely now lies with them. They began to raise interest rates last week. At the time, we saw Fed chair Powell say that he felt pretty confident about what he called a softish landing for the economy.

Explain to our viewers what that means and the likelihood that the Fed can lower inflation without putting the economy into a recession.

RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: Yes, well, let's be clear. The action is all with the Fed and has been, not just for months or quarters but for years and even decades.

And you know, I have to say, Larry Summers and other centrist Democrats may be blaming Biden's fiscal policy -- not the main factor here. The Fed has always been the main factor.

We have had a huge and unprecedented money dump following the 2008 crisis, which, frankly, you know, centrists on both sides of the aisle have a lot to answer for that crisis. And we've had decades of easy money. And the bill is now coming due.

Now you can argue that the Fed was a little bit late this time around on raising rates. You can argue that. But they are doing it now. They say they're committed to sticking with this to fight inflation.

They've also made some pretty unprecedented comments about potential market volatility. They said on Monday, look, we are entering a period of volatile trading, the likes of which we haven't seen in a while. So they're saying, buckle in, American public, we're going to fight inflation but it's going to be tough.

GOLODRYGA: John, we're also expecting to hear something similar to what we heard from the president last week and that is going after Republicans. Today, going after the Republicans' plans, which he says would raise taxes in terms of fighting and tackling inflation.

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GOLODRYGA: Is that true?

Is that the Republican plan?

And what is the Republican plan?

HARWOOD: Well, it's true that it's Rick Scott's plan. For his own reasons, Rick Scott, who is the head of the Senate Republican campaign committee, might want to run for president, was appealing to conservatives with the plan that's pretty much the opposite of what would assist ordinary Americans with inflation.

It calls for taxing people, whose incomes are now too modest, that they owe federal income taxes. He talks about sunsetting federal programs, which tend to help people who don't have a lot of money.

And he's talking about slashing the IRS budget, which is involved in enforcement of the tax laws; in particular, auditing high income people like Rick Scott.

Now is it going to happen?

Is it the Republican plan?

No. Mitch McConnell knows that it's a very unpopular plan that Scott proposed. So he said we're not going to pass it. But that's the to and fro of politics that we're going to see for the next six months before midterms.

GOLODRYGA: The Republicans focusing on inflation while the White House would like to focus on an economy that, in any other circumstance, would be doing very, very well.

John Harwood, Rana Foroohar, thank you. If the president is on time we'll have you back as we bring the president's remarks to you live when he speaks.

An escaped inmate back behind bars. The former corrections officer who police say helped him is now dead. The dramatic end to their manhunt is up ahead.

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