Return to Transcripts main page
At This Hour
U.S. Economy Shrank Less in Q2 Than Originally Thought; Biden Forgives Millions in Student Loans, Critics Fear Inflation; Georgia Governor Fighting Subpoena to Testify in Election Probe; Justice Department to Submit Redactions for Trump Search Affidavit; Judge Blocks Idaho's Abortion Ban in Medical Emergencies. Aired 11-11:30a ET
Aired August 25, 2022 - 11:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KATE BOLDUAN, CNN ANCHOR: Hello, everyone. AT THIS HOUR, new numbers give a mixed picture once again of the state of the economy. And President Biden's big student loan announcement gets mixed reviews.
And California is set to take an extreme step, banning gas-powered cars.
Plus, new concerns about the danger posed by monkeypox to children returning to school.
This is what we're watching AT THIS HOUR.
BOLDUAN: Thank you for being here. I'm Kate Bolduan. Another read on the complicated and somewhat confusing U.S. economy. New data this morning shows the economy shrank 0.6 percent in the second quarter.
Said another way that shrinking slightly less than first thought. The U.S. also is seeing a decrease in the number of people filing for new unemployment benefits. Said another way, the labor market is still strong.
This comes as Americans try to understand what President Biden's student loan debt plan, what it means for them and their families, even as some members of his own party say it misses the mark.
Republicans are unified in saying they don't think it is fair. And some economists say that it could fuel inflation. There is a lot to get to. Let's begin with CNN's Matt Egan on this new economic data.
What do you see in all this, Matt?
MATT EGAN, CNN BUSINESS SENIOR WRITER: The economy's spring slump wasn't as bad as feared. Second quarter GDP was just revised up by the government, in part because Americans spent more money than originally reported. The bad news is that, despite this upgrade, the economy still shrank
for the second quarter in a row. That is a big deal because one common rule of thumb is that back-to-back quarters of negative GDP means the economy is in recession.
But that is just a rule of thumb. The National Bureau of Economic Research, they're in charge of officially declaring a recession and they take into account a wide range of metrics, including jobs. And all signs are that the jobs market continues to chug along.
New numbers out today show that initial jobless claims fell for the second month in a row. During recessions, you expect a surge of layoffs but we just aren't seeing that.
All of this leads up to a big speech tomorrow from one of the most powerful people on the planet, Fed chairman Jay Powell. Powell is going to drop some hints about what the Fed has to do to get inflation under control.
Everyone wants to know, how much higher do interest rates have to go?
And the answer to that question, Kate, is going to go a long way in deciding whether this economy can keep growing or stumble into recession.
BOLDUAN: As with every time Jerome Powell speaks, everyone will be listening very closely tomorrow.
BOLDUAN: You on top of that list. Good to see you. Appreciate it.
President Biden's plan to cancel student loan debt for millions of Americans is definitely getting applause today. But it is also running into criticism from both parties right now. CNN's Jeremy Diamond is live at the White House with more on this.
Jeremy, how is the White House responding to this criticism?
JEREMY DIAMOND, CNN WHITE HOUSE CORRESPONDENT: Well, we heard President Biden yesterday saying he believes this is a step that is fundamentally fair and responsible and that he says this is a plan that will help millions of people climb out from what he described as a mountain of debt.
It will ultimately benefit the economy by allowing Americans to, instead of focusing of paying down loans, think about buying a house, starting a business, starting a family. That's how the president is handling this.
But there is no question the president is also facing criticism from a lot of different corners, including from some economists, some Democratic-leaning economists, who believe this will fuel inflation. Other economists say the impact on inflation will be negligible.
And then you have Republicans talking about this fundamental question of fairness, pointing out that this is something that leaves out blue collar workers, who may not have gone to college, or even those who did go to college and chose to focus on paying down their student loans before this forgiveness came about.
The president addressing some of those criticisms yesterday.
(BEGIN VIDEO CLIP)
QUESTION: Is this unfair to people who paid their student loans or chose not to take out loans?
JOE BIDEN (D), PRESIDENT OF THE UNITED STATES: Is it fair to people who, in fact, do not own multi-billion-dollar businesses, if they see one of these guys getting all the tax breaks?
Is that fair?
What do you think?
(END VIDEO CLIP)
DIAMOND: And this is a step that ultimately is expected to benefit about 40 million borrowers, $10,000 in loan forgiveness for people earning under $125,000. That's up to $20,000 in loan forgiveness for those who received Pell grants.
And there is also this possibility of capping your loan repayments at 5 percent. Ultimately the White House defending this step.
DIAMOND: But they don't have an estimate for how much this is going to cost. Some nonpartisan estimates say it can be anywhere from $300 million to $0.5 trillion.
BOLDUAN: Wait and see on that is not going to tamp down criticism for sure. Great to see you, Jeremy, thank you so much.
With more on this is Chris Wallace, host of "WHO'S TALKING TO CHRIS WALLACE?"
Great to see you.
CHRIS WALLACE, CNN HOST: Great to be with you, Kate.
BOLDUAN: We know they have been debating internally about what to do with student debt relief for a long time at the White House.
Part of this plan, part of this is a campaign promise fulfilled, forgiving up to $10,000. Part of this is a campaign promise broken, because they -- it is not going to be paid for.
But what is the political strategy behind all of this?
WALLACE: Well, I think the White House calculation is that this is going to satisfy -- well, not satisfy; it will please the progressive base of the party, the Bernie Sanders, Elizabeth Warren wing.
I say please, not satisfy, because they would like to see a much bigger debt forgiveness in the neighborhood of $50,000. And it also may energize younger people, who will benefit from this, to get out and vote come November midterms.
The flip side is there really was remarkable opposition, vocal opposition from the start yesterday, from Democrats who were running in the Senate in some of the closest races -- Catherine Cortez Masto in Nevada, Tim Ryan in Ohio, Tim Bennett -- Michael Bennet in Colorado -- all hit on the equity issue, which Jeremy Diamond just talked about.
The idea that, yes, it is going to benefit college graduates that took out student loans; it doesn't help people who didn't go to college and it doesn't help those people who actually honored their loans and paid them off and sometimes had to sacrifice to do so.
So you know, the people that are on the front lines and some of those closest Senate races are concerned about this and have distanced themselves from the president's decision.
BOLDUAN: And that's part of one of the curiosities in this. The White House must have known that was coming. Biden, when he announced it, acknowledged it wasn't going to make people happy on both sides. So it was a calculated risk that they think is worth it.
WALLACE: Yes. That's right. And, look, you got a party that is so split, so divided -- just look at the Senate, from Bernie Sanders on the left of the Democratic Party in the Senate, to Joe Manchin in the center right.
You can't satisfy everybody with almost anything you're going to do. It is worth pointing out, in 2021, both Joe Biden and Nancy Pelosi said that the president didn't have the unilateral power to forgive student loans.
So you know, there is a big jump from that to what the president ended up doing yesterday. And as a result, you're going to definitely see court challenges to this sooner rather than later.
BOLDUAN: For sure, because the legal basis behind this, the Department of Education put out, gets back to an act that was passed post 9/11 to help in times of war and emergency. And they're trying to attribute this to pandemic, to apply to this as well. So there is 100 percent going to be legal challenges to this.
But I'm still left with a question that I actually asked last night of the Secretary of Education. I want to play for you -- I want to get your take on it. Let me play it for you first.
(BEGIN VIDEO CLIP)
BOLDUAN: If this is such a good thing, why are so many people upset about it? MIGUEL CARDONA, U.S. EDUCATION SECRETARY: Look, the people that I'm talking to are thrilled. I talked to a teacher yesterday, who said this is going to help me. Now I can help my daughter go to college.
I've gotten communication from folks all over the country, saying, we needed this, thank you.
And I think what the president was referring to earlier, about it reminds me a lot of school reopening. I had people telling me, don't open schools, it is unsafe. I had other people saying, if you don't open it, you're doing a disservice to students.
We're delivering for the American people based on what we know to be true.
(END VIDEO CLIP)
BOLDUAN: What do you think of that?
WALLACE: Well, they're delivering for some of the American people; if you're under the income limit of $125,000, a single person and you're going to get a $10,000 break or if you had a Pell grant, a $20,000 break, it is certainly delivering for you.
If you're a working class person who never went to college, you're not going to get any of this $300 billion. It is going to cost the government. There is also the concern about inflation.
Larry Summers, who's probably more accurate about projecting inflation than anybody else, says, look, these people that are spending that -- paying off their student loans, that's more money in their pocket, they're going to go out and spend.
That raises demand, that raises prices, that raises inflation, which may well be the number one concern, certainly the number one economic concern of most Americans, according to the polls. So it didn't deliver for them.
BOLDUAN: So let me ask you, on the economy, actually, the economic news out this morning, the way Christine Romans put it this way I think is pretty perfect. The outlook for the economy is looking less lousy. Second quarter GDP declined less than previously thought.
I just really love that take, probably because we're all cynics.
BOLDUAN: But the economy is still shrinking; we've got the new jobs numbers showing the labor market is still strong but as you said inflation is still a huge problem. Whenever we have anyone from the White House on and I ask them to set their bar or their goal of when they are going to think we're out of the inflation woods, they will not go there.
Is it clear to you how good it has to get for people, voters, the public, to feel like it is getting better? WALLACE: Well, certainly lower. You're talking 8 -- close to 9 percent inflation. Nobody thinks that's good. It is a hard question and a totally subjective question. If it is 6 percent or 7 percent, less lousy than 8 percent or 9 percent, people may say, as we do, a lot of us with gas prices, when it is a dollar lower than a month ago, you know, that's better.
Whether that's enough to make them vote for Democrats rather than Republicans, that's a real question.
And one of the reasons, you know, was mentioned earlier, Jay Powell, the chairman of the Federal Reserve, is speaking at a big economic symposium in Jackson Hole tomorrow. One of the things people will be looking at is how long he thinks he's going to have to go heavy on these interest rates.
But people really will be looking, what he is going to say about later in the year, about 2023?
And, you know, that's going to be a real indication of the increasing threat, because we are not in a recession now by most standards; maybe technically, one could argue. But if you keep raising interest rates by so much, into next year, it certainly increases the threat of a recession that everybody agrees and is not just a technical marker.
BOLDUAN: I think I have landed on what our goal can be, at least for today, to be less lousy.
WALLACE: That's my goal today, less lousy.
BOLDUAN: Perfect, mission accomplished. Really appreciate it. Good to see you. Thank you very much.
WALLACE: Thank you, Kate.
BOLDUAN: Turning now to the war in Ukraine. At least 25 people are dead after a Russian missile strike on a train station in southeast Ukraine on the very day marking the country's independence. Let's get over to CNN's David McKenzie, live in Kyiv with the latest on this.
When I spoke to you last night, air raid alarms were going off behind you.
What are you learning about this attack now today?
DAVID MCKENZIE, CNN CORRESPONDENT: Well, Kate, you look at these devastating images of this train that has been completely wrecked by attacks, multiple of them, according to Ukrainian officials.
At least 25 dead, many injured among the dead; two children, 11 and 6 years old. And the area around that train station also completely smashed up. The Ukrainians say it is yet another example of Russians attacking civilian infrastructure.
The Russian ministry of defense saying that it was a strike on Ukrainian reservists and that they had great success in that strike. But you know, wow, images are very devastating and point to the ongoing impact of this war, as it is six months plus one day now of the fighting here in Ukraine.
A very disturbing development in the last few minutes of the Zaporizhzhya power plant. Both Russia and Ukraine admit there was a brief -- we don't know how long -- power outage at that plant.
That's important because when you stop the power going into a nuclear reactor, there is a short window, if there is no backup power, to stop a major calamity. It appears it is back, the power. But it points again to the very tenuous situation down there at that nuclear power plant. Kate.
BOLDUAN: Absolutely. David, thank you so much.
Coming up for us, deadline day for the Justice Department to submit to a judge what it wants kept out of public view in that Mar-a-Lago search warrant affidavit.
So what will the judge do?
BOLDUAN: AT THIS HOUR, lawyers for Georgia governor Brian Kemp are in court, fighting against a subpoena, calling him to testify. We're going to show you live pictures inside the Fulton County courthouse right now where this is going on.
The Fulton County district attorney wants to put Kemp in front of a special grand jury investigating former president Trump's alleged efforts to overturn the 2020 election. Here is Nick Valencia with more.
NICK VALENCIA, CNN CORRESPONDENT: Georgia governor Brian Kemp and his attorneys argue he should not have to be compelled to testify before the special purpose grand jury because he's protected by executive privilege and sovereign immunity.
Attorneys for Kemp also questioned the timing of Fani Willis' investigation, saying that it is agenda driven and political in nature, because it is taking place in the middle of an election cycle. It was in July that Kemp volunteered for a taped interview but that
never happened. And it appears that communication between the governor's office and the district attorney's office has broken down.
The district attorney's office is arguing that Kemp should be compelled to testify because he's uniquely knowledgeable about election interference matters that the special purpose grand jury is investigating, including a December 2020 phone call between former president Trump and Kemp.
In a recent court filing by the district attorney's office, they laid out several lines of testimony they believe Kemp could provide details on, including that phone call, as well as any specifics of the contents of conversations between the former president and Kemp and whether or not Trump or others made threats related to the election. Kate.
BOLDUAN: Nick, thank you.
The Justice Department is facing also a noon deadline today to submit its redactions to the affidavit used to justify the FBI's search of Mar-a-Lago.
BOLDUAN: The judge will then consider those redactions and the reasoning behind them as he decides whether or not to release that document that has been the source of so much conversation and speculation. Joining me right now is CNN legal analyst, Paul Callan, and CNN law enforcement contributor, Steve Moore, a former FBI supervisory special agent.
Thank you both for being here.
Paul, on the affidavit deadline for the Justice Department, whatever is released, if something is released, how redacted do you think it is going to be?
PAUL CALLAN, CNN LEGAL ANALYST: I think it is going to be very heavily redacted. We're talking about potentially very, very serious classified documents that are part of the whole package here.
And the witnesses that they relied on, to have a federal judge issue this search warrant, had to refer to the importance of those documents and other things. So I think, as a result of it, it is probably going to be very heavily redacted.
BOLDUAN: I was also wondering, Steve, as a former FBI agent, within the FBI, do you think they see public good in transparency here, in less redactions?
STEVE MOORE, CNN LAW ENFORCEMENT CORRESPONDENT: You know, the agent on the street and the people who write those affidavits generally don't have in their mind the biggest picture. They're sitting here, saying what can I do for this case.
And this case is obviously good for the United States. So if I can help this case, that's the best. And helping the case is going to be keeping anything out of the defense's hands, keeping any and all information on potential informants and grand jury material out of the public eye.
It is not -- it is not an intent to be secretive. It is just -- it is the reason football players don't like to discuss their game plans before they go on the field.
BOLDUAN: Paul, just what will happen now?
Noon deadline, then the judge takes it up; is there any guidance or kind of past is prologue for what -- when it would be released or if it is?
CALLAN: This is a very interesting thing, because, normally, search warrant material like this does get revealed during the course of a criminal trial. A indictment is handed down; the defense demands the information to prove the search was legitimate.
So these materials do get released eventually. But here, we have no indictment, this is a preliminary investigation, ongoing. And we're releasing this information. So it is very, very unusual.
What would normally happen, though, if it happened in the context of a trial, is that the judge would look at the redactions and say, you know something, this is not fair; this is not fair; this should not be redacted. Ultimately it is up to the judge to decide.
And the other aspect of it that I find to be fascinating is that the judge has skin in the game here, because, remember, the judge issued the search warrant.
So it is really in the judge's interest to present to the public a strong and compelling case that this warrant was eminently warranted, even though he was dealing with a former President of the United States.
BOLDUAN: Steve, we also are learning more about the backstory, about some of the documents in question and how long the National Archives had actually been asking for and pleading, really pleading, to get Donald Trump to hand them over.
We have an email dated May of 2021 from the chief counsel of the National Archives to Trump's lawyers. According to the email, White House counsel Pat Cipollone agreed the documents needed to be turned over.
What does, as an investigator, what does that add to all this?
MOORE: Well, it adds intent. As soon as somebody says, yes, we have something; we admit we shouldn't have them and we know we need to get them back to you. And then they don't follow through, you can take that as an intent not to comply with the law. The -- and it also talks to me, as an agent, about a problem between
Trump's counsel and Trump; when the counsel themselves say, yes, we're going to do this and obviously somewhere along the line, Trump or somebody working for him said, we're not going to go down that road.
This is very troubling and may -- may inform the FBI as to the fact that they have to go to further measures, measures I'm sure they understand the gravity of.
BOLDUAN: Yes, and one thing that we don't have in the reporting; that is, we have the email -- and that's from the National Archives -- what the communication was then between Trump's lawyers and Trump, with all of these pleas and all of these requests coming from the Archives.
But nonetheless, it is where we are in this moment. It's great to see you both. Thank you very much.
MOORE: Thank you.
BOLDUAN: Coming up, floodwaters forcing more rescues and evacuations in Mississippi overnight. And now more life threatening rain is in store today in the Southeast. A live report is next.
BOLDUAN: New this morning, so-called trigger laws are putting the right to have an abortion possibly out of reach for millions of women. New laws go into effect today in Idaho, Tennessee and Texas.
Idaho's ban is being partially blocked by a federal judge, the court ruling that the state's criminal abortion statute conflicts with federal standards for emergency care.