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Steve Bannon Sentenced To Four Months For Contempt Of Congress; Deficit Shrinks Under Biden, But Student Debt Relief Adds To It. Aired 11-11:30a ET

Aired October 21, 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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[11:00:28]

KATE BOLDUAN, CNN ANCHOR: Hello, everyone. Thank you so much for being here. I'm Kate Bolduan. We do begin with breaking news, Donald Trump's longtime adviser, Steve Bannon, he's in a federal courtroom right now about to be sentenced for defying a subpoena from the January 6th Congressional Committee. Earlier this year, a jury convicted Bannon, you'll remember, on two counts of contempt of Congress regarding this insurrection investigation and defying that subpoena. This comes also at a really interesting moment when everyone is also standing by for that Committee, the January 6th Committee, to formally issue a subpoena to Donald Trump himself.

Let's get to Washington. CNN's Sara Murray is live outside the federal courthouse where Bannon is listening to his sentencing right now. Sara, what are you hearing from -- is happening inside the courtroom right now?

SARA MURRAY, CNN POLITICAL CORRESPONDENT: That's right, Kate. The judge just ran through the factors at play here. And it's just handed down the sentencing. Steve Bannon is going to be sentenced to four months in prison. Now it's four months for each count, but it's going to run concurrently. So that means, you know, a total of four months, as well as a $6,500 fine. This is of course for his convictions, refusing to show up for testimony before the January 6th Committee, refusing to hand over any documents to the January 6th Committee.

Now, this is a lesser sentence than what the government was hoping for. They said Bannon should spend six months behind bars and pay a $200,000 fine. But of course, it's significantly more than what Steve Bannon was hoping for. He did not want to do any jail time. He was hoping for probation only. The judge made it clear earlier today that he was not going to go for that that there was going to be some minimum jail time.

And, you know, one of the things the judge has made clear today, he said Steve Bannon has clearly shown no remorse for his actions. You know, he also pointed out that he never tried to comply with the subpoena at all, never handed over any documents. And he said that, you know, there does need to be a deterrence for other people so that other people don't feel like they can just not comply with subpoenas from Congress.

But again, still a lesser sentence than the government is hoping for, and the judge also just said that Bannon is not going to have to serve the prison sentence until his appeal plays out. So it's possible, it could be quite some time before Bannon actually has to serve this, depending on how his appeal of his conviction goes, Kate.

BOLDUAN: That's an interesting element to all of this. Sara, thank you so much for bringing us the breaking news.

From inside the federal courtroom, the judge just handing down this sentence after quite a long time, and Steve Bannon has been fighting that subpoena and fighting this court action. Joining me right now to understand a little bit more of what this means, U.S. -- former U.S. Attorney Harry Litman. So first, Harry, what do you think of this sentence, four months for Steve Bannon?

HARRY LITMAN, FORMER U.S. ATTORNEY: You know, the time itself, Kate, is on the overall scheme of things not insubstantial. He wanted zero, government said six months, the time you can see it. But there's two other aspects that strike me as very favorable to Bannon. One is he refused as part of his overall sort of content for the whole proceedings to give any financial information to probation, and said, I'll just pay the maximum. And there's no reason not to have given him the maximum, but Nichols didn't.

Second and more importantly, he could have been ordered to surrender today and walk into jail for his four month sentence. And Nichols said, well, I will let you take it on appeal and not be in jail and tell them. That means that Nichols found there was a substantial issue for ban and to raise on appeal of his conviction. And that I think is really the number one thing he was hoping for. But, you know, from the start, he's been the most unrepentant, most contemptuous defendant imaginable.

And I think it's clear he values his sort of image as an outline, a swashbuckling anti-government guy more than he does actually playing by the rules. And that's why he got more than most people would get in terms of time at four months.

BOLDUAN: Harry, I think it's interesting what you say. That the -- what the judges action suggests, potentially suggest about the appeal. Talk to me more about this because we all know that Steve Bannon is appealing the conviction this has been playing out at the same time, and it's also been something that Bannon and his legal team have raised in the midst of this court battle happening. How do you think this sentence plays in to that -- to the appeal?

LITMAN: Well, I don't think the time of the sentence does but the issue does. And I'm surprised because the claims he raised didn't seem very substantial to me. He has said I relied on a lawyer's advice. The lawyer himself says, I relied on a lawyer's advice. The lawyer himself says I didn't give you that advice. I gave you the opposite. He said, just as it was on the eve of trial, OK, I'll comply now but that's, of course, he'd already committed the crime. That's not very weighty, either. [11:05:22]

So Nichols is I think, giving him something of a break to say, it's enough -- there's enough there for you to try your luck with the Court of Appeals. And I will find that the standard which is to say a substantial issue is presented has been met here. So you get to stay at liberty and doing all the mischief and kind of rabble rousing he has been doing all the way through.

BOLDUAN: So you think that he should have been told that he needs to serve his sentence, start his sentence immediately?

LITMAN: Discretionary call by the judge, it's not unusual to do that. But I wouldn't have been surprised from what I know about the case. And Nichols is a fine judge. So he knows, you know, I'm sure he delved into the record, but I would have said he better bring his toothbrush. Yes. And so he's -- I think that is the biggest sort of boon for him of today's sentence.

He doesn't care about the money. He expected to do some jail time. But not having to surrender immediately. And obviously, he does not want to go to jail. I think he counts himself a lucky man, as he lunches now with his lawyers.

BOLDUAN: Let me let me suggest something to you. I'm seeing some reporting from other reporters who are in the courtroom, saying that the judge is saying that Bannon has to file his notice of appeal on time, or else he'll need to surrender to the to the Bureau of Prisons in mid-November. What does this mean?

LITMAN: Really nothing. I mean, if you don't file an appeal, what he's saying is, you get to stay out, because I'm going to let you try your luck and take the appeal. If he doesn't, if he doesn't meet the jurisdictional requirement of filing a piece of paper, then he's got a, you know, he's yanked and he goes right back in. So it's just one of the many procedural requirements to filing an appeal and a brief having an argument, et cetera.

And as you said, at the top, you know, that could be at a minimum, six months or so until the D.C. Circuit goes through his issues.

BOLDUAN: One of the things about this conviction and the sentence with Steve Bannon had to do with far beyond Steve Bannon. It had to do with what message does this being held accountable for defying a congressional subpoena, what does -- what message does it send. And so what message do you think this sentence now sends to everyone else who has stonewalled the January 6th Committee and even beyond that?

LITMAN: I think it's an ambivalent message. I mean, he really screamed out for the full treatment, which probably would have been six months in order, because he was so unrepentant, so kind of contemptuous, really, all the way through four months as, you know, no picnic. But still, I think all in all, it's not the real sort of knuckle wrapping that the both the Committee and the government would have wanted. I think he can come out and continue to pontificate and do his Steve Bannon thing. And for at least his supporters, he'll still be able to claim something of hero status. So I think it's a mixed message and doesn't really put down the hammer, the way the Committee might have liked. Still, four months is more than a normal sentence would be for contempt. But I think it will play as, you know, balanced and not the kind of real serious sentence. He could have received, especially that he gets to stay out during appeal.

BOLDUAN: The January 6th Committee could also at really any moment issue a subpoena for the testimony of the former president himself or Donald Trump. When they do, do you think the legal fight that we've seen here with Bannon has an impact on the President or how the Committee proceeds?

LITMAN: I think the short answer to that is no, because the real telling point with the Committee is how little time they have. A subpoena lasts only as long as the Congress that issues it lasts, that means it automatically sunsets at the end of December. So I think the strategy on both sides will be, do we have the time to do it? Is it worth the fight? I think for the Committee, it probably isn't.

There's a possibility and Trump has just hired sort of aggressive lawyers for just this issue that he tries to bring an action. I don't see why that's in his interest because he could lose it and lose it in short order. So my best guess even though this goes against the sort of betting odds, most people are assuming, a fight will ensue, is that nothing happens. Trump makes some, you know, poor excuses they go they'll back and forth and there's no actual court battle. But the final report includes the point, hey, we subpoenaed, him he refused to come. He to like Bannon snubbed his nose at the Committee and his obligation to the American people to say -- to tell the truth.

[11:10:15]

BOLDUAN: We'll standing by to see what happens on that one as well. But thanks so much for jumping on Harry to help us cover the breaking news of Steve Bannon's sentence of four months for defying a congressional subpoena.

A quick programming note, everybody, a CNN special report on Steve Bannon: Divided We Fall airs tonight at 11:00 p.m. only on CNN.

So President Biden, he's about to deliver remarks at the White House on the state of the U.S. economy especially of course ahead of the midterm elections. We're going to bring that to live as soon as it begins.

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UNIDENTIFIED FEMALE: So as you know, Mr. Bannon was sentenced today.

BOLDUAN: Let's go to Washington. Steve Bannon, his attorney addressing reporters outside of the courtroom after his four months sentence just came down.

UNIDENTIFIED MALE: As usual, the judge listened carefully and entered a decision that he thought was appropriate. We certainly fully respect the judge's decision. But we will be filing a notice of appeal, as the judge indicated, very grateful to the judge for thinking through the issues candidly. And it's an extraordinary move to permit a stay pending appeal. It was the appropriate move. There are, the standard is whether the case raises substantial issues that reasonable jurists could differ over, meaning is there a solid chance for an appeal to be successful. And there's certainly more than that in this case.

I've said before, and I would confirm it. I believe that the appeal in this case is bulletproof. The issue, the constitutional issues involved in this case, a very important. But Mr. Bannon never got to tell the reason for his actions with respect to the subpoena. Never got to tell the story because the government insists, the government assisted from day one, on prohibiting any mention, any evidence or any discussion to go before the jury as to why Mr. Bannon reacted as he did to the subpoena on the advice of counsel. Thank you very much. I look forward to adjudicating an appeal.

UNIDENTIFIED MALE: Mr. Bannon, your silence was nowhere near in the case, Mr. Bannon.

UNIDENTIFIED MALE: His silence wasn't my direction.

STEVE BANNON, FORMER TRUMP ADVISER: Hang on. By the way, I want to say one thing, I respect the judge, the sentence he came down with today is his decision. I fully respect. I've been totally respectful in this entire process on the legal side. I also want to make one other statement before I talk about a broader topic. More than any person in the Trump administration, I testified before the Mueller commission for more hours. I testified in front of a shift in the House Intelligence Committee, more than any other person in the Trump administration.

I had test -- I testified in front of the Senate Intelligence. I think more than all of that the issues related to Russia gate to all of that. OK. The same process every time. I had lawyers that were engaged. They worked through the issues of privilege. And at that time, I went and testified. And this thing about I'm above the law is an absolute and total lie.

Now, more importantly, for and more importantly, the judge, today was my judgment day by the judge, and he stated for the appeal. We'll have a very vigorous appeals process. I've got a great legal team. And it'll be multiple areas of appeal. But is that sign says right there, can we have the vote sign?

[11:15:11]

On November 8th, on November 8th, on November 8th, there's going to have judgment on the illegitimate Biden regime and quite frankly, and quite frankly, that Nancy Pelosi and the entire committee. And we know which way that's going. Either they've already been turfed out, like Liz Cheney, right, or I've quit like Kinzinger and other the Democrats, or they're about to be beaten like Luria and others, or they will lose their power and becoming a minority. And Nancy Pelosi and Tom Sherman challenges all of them. This is a, this is a -- this is democracy. This is democracy. The American people are weighing and measuring what went on with the Justice Department, and how they comported themselves. They're weighing and measuring that right now. And they will vote on November 8th. They will -- hang on, they will vote, hang on, they will note that -- can I go ahead and finish. Can I? Thanks.

On November 8th, on November 8th, the American people raise judgment and we will groom. The Biden administration ends on the eighth evening of the eighth of November. And let me be, some other thing is that the Department of Justice, Merrick Garland, will end up being the first attorney general that's brought up on charges impeachment, and he'll be removed from office. Thank you very much.

BOLDUAN: So Steve Bannon being true to form to Steve Bannon, which I'm sure will continue as he reacted to his sentence of four months. He seems actually relatively pleased with the outcome and also promising there will be an appeal and taking the opportunity in the way that I guess Steve Bannon is saying to tell people to vote on November 8th. There you have it.

We're standing by at this very same moment to hear from President Biden touting what he sees as his administration's economic accomplishments. He's going to be speaking from the White House, but his target audience, far from there. Every voter whose mind isn't yet made up about the midterm elections, that's his target audience today.

Later this afternoon, President Biden heads to Delaware to tout his student debt relief plan. Millions of Americans have already applied for loan forgiveness through that program. CNN's Jeremy Diamond is live at the White House with more on this. Jeremy, what do we expect to hear from the President today?

JEREMY DIAMOND, CNN WHITE HOUSE CORRESPONDENT: Well, Kate, President Biden has been talking about a series of issues important to voters in these midterm elections all week. We heard him deliver a speech on abortion rights. He talked about gas prices. Yesterday, he was talking about infrastructure. And today we're going to hear him talk about another pair of issues, deficit reduction any moment now from the White House talking about what's expected to be pretty dramatic top line decrease in the federal deficit numbers this year.

And then later today, at Delaware State University, the President will be talking about his student debt relief program, 8 million Americans had already begun the process of applying when those applications formally opened on Monday. And we're expecting the President to share another update today on the status of that program. The President is also going to be going on offense against a Republican lawmakers who have attacked this program. The criticism from Republicans, of course, is that this is a program that is too costly, that's going to affect the deficit.

And also they've criticized the question of fundamental fairness in this issue. The President is expected to go after Republican members of Congress who accepted a pandemic relief loans that were forgiven by the federal government trying to point out a hypocrisy there. But what's interesting, Kate, is the timing between the deficit reduction event that we're going to see from the President at the White House, followed by that student loan event later today.

That deficit reduction event, you can expect that to be a prebuttal of sorts to some of those criticisms that you're going to hear from Republicans once again, as the President talks about the student debt relief program later in the day. The President yesterday, while he was in Pennsylvania, that key battleground state. He also talks about his plans for midterm campaign travel, he said 16 to 18 campaigns have requested that he go out and travel.

We know that he will be traveling. But the White House is also saying that he's going to be doing a lot fewer rallies, a lot more of these official types of events. And of course, fundraising, fundraising, fundraising has been a prolific fundraiser for the party. Kate?

BOLDUAN: For sure. It's good to see Jeremy, thank you for laying that all out for us. I really appreciate it.

As Jeremy was just getting that, under the Biden administration, we have seen deficit reduction but we've also seen very big spending, like the President's student loan program, which he is out to promote today. CNN's Matt Egan has been looking at the numbers for us. So Matt, the President often talks about progress and he has very recently been really pushing the progress that they've been making that he says they've made in reducing the deficit. What are the numbers tell you?

[11:20:12]

MATT EGAN, CNN REPORTER: Well, Kate, the deficit is coming down very sharply. But let's talk about why and put this all into context, starting with the Inflation Reduction Act that President Biden signed into law over the summer. The CBO says it's cutting the deficit by $238 billion. Now, this is a step in the right direction, but it's really just a baby step.

Moody's economist, Dan White, he told me that this is just a drop in the bucket in the grand scheme of things. Also, it's been offset by the student debt relief, which the CBO says is boosting the deficit by $400 billion completely wiping out the improvement in the deficit from the Inflation Reduction Act. Let's also just put all of this into perspective.

Clearly, deficits are coming down sharply. In 2020, this was a record high, $3.1 trillion. It has been cut in half during the most recent fiscal year. That is a big deal. But also, why is that happening? A lot of it is because there's not as much COVID emergency spending, there's no bailout, stimulus checks out, rescues of small businesses, also, because the economy is doing better. But when you really zoom out, clearly, deficits are still very high.

They've come down in recent years, but they're way higher than they had been at almost any other point. And we haven't had a fiscal surplus since 2001. Clearly, Kate, I think that we can say that the budget deficit is improving, but it's far too early to declare mission accomplished there.

BOLDUAN: Yes, it is a much broader picture, a more complex picture than maybe one bumper sticker or soundbite may suggest, but you lay it out perfectly. Great to see you, Matt, thank you so much.

Joining me now for more on all of this is CNN political director, David Chalian. So David, the Biden team clearly thinks that this is a winning issue, or they wouldn't be talking about it in terms of deficit reduction, right. But in pushing specifically on deficit reduction, I don't want this to come across as flippant, but do you think Americans care about that right now?

DAVID CHALIAN, CNN POLITICAL DIRECTOR: Well, I think what the White House is attempting to do here is to show Joe Biden on top of all aspects of the economy, right? I don't think they're looking to sort of make an argument to voters on deficit reduction alone. But we've seen a lot of Democrats, Kate, out on the campaign trail, have been somewhat reluctant to tout all the legislative accomplishments that the administration and the Democratic Congress has had because of the price tag, right?

So yes, there are some popular things in there. But some expensive legislation and a lot of spending got passed through in this Democratic controlled Congress. And so I think what Joe Biden is trying to show here is, hey, we're doing this in a responsible way. That's from his perspective. So don't be scared off by the price tag. I think he's trying to give Democrats a way to talk about their accomplishments without fear of voter backlash on the price tag. That is the goal here. I don't think it's purely a deficit reduction play. I think it's the larger economic management.

BOLDUAN: Yes. And standby to see how effective that play is, if you will. So in the President's chief of staff, David, had an interesting take I thought last night when asked about the trend that we've been seeing with President Biden in the -- in really specifically, especially recently, which is kind of a relative absence. I know that they are sensitive to hearing that but a relative absence from the campaign trail, this midterm cycle, not headlining big rallies, like you would see with Donald Trump or even Obama before that. I want to play for everyone what Ron Klain said.

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RON KLAIN, WHITE HOUSE CHIEF OF STAFF: And both President Obama, I was here, I'll share responsibility for it, and President Trump got walloped in the midterms. So I don't think it should surprise anyone that we're not using the strategy that failed in 2010 and the strategy that failed in 2018.

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BOLDUAN: What do you think of that, David?

CHALIAN: Yes, my ears perked up when I heard the chief of staff say that as well, Kate. I mean, the facts are on his side. So given that, he is right that Obama and Trump were both walloped -- BOLDUAN: -- on your side, yes.

CHALIAN: -- in their in their midterms. But it seems to me a convenient way to sidestep the actual issue here, which is that Joe Biden is numbers are upside down. He is more unpopular than popular with the American public. And so a lot of battleground district Democrats are not eager necessarily to stand with him as they're trying to win over. They're going to need to win over some folks who disapprove of the job Biden's doing if they have a chance of getting reelected. This is not uncommon, by the way, for us to see throughout modern political history at midterms as each sort of district and state candidate sort of makes the calculation of whether or not the President brings more good or harm.

You saw in Pennsylvania, a key battleground state yesterday, John Fetterman can't make the calculation, you know, having him help fundraise, having him there talking about infrastructure, that does more help than good they hope. And whatever negative blowback may come with it, they think could be mitigated. I don't know. It's clearly not true everywhere. We see Democrats making different calculations and not bringing the President in. But I do give claim a couple of credit points there for the way in which he sidestepped the question.

[11:25:12]

BOLDUAN: Aren't fully sidestepped for 200. It's great to see you, David. Thank you so much.

CHALIAN: You too. Take care.

BOLDUAN: All right, so the U.S. Defense Secretary just got off the phone with his Russian counterpart as Ukraine's president says that they have uncovered a plot of a pending attack. The very latest on the war in Ukraine, next.

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