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The Lead with Jake Tapper

Jury Reaches Partial Verdict In Sean Diddy Combs Trial; Senate Passes Trump Bill, House Set To Vote On Final Passage; Trump Threatens DOGE Monster Could Eat Elon; Plea Deal Divides Families Of Murder Victims; Trump: Israel "Agreed To The Necessary Conditions" To Finalize A 60-Day Gaza Ceasefire. Aired 6-7p ET

Aired July 01, 2025 - 18:00   ET

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

[18:00:00]

JAKE TAPPER, CNN HOST: Welcome to The Lead. I'm Jake Tapper. And we are following a lot of breaking news today. We're going to start in our Law and Justice Lead, where moments ago, the jury in the Sean Combs federal sex trafficking trial was dismissed for the day after reaching a verdict on four of the five counts against the music mogul.

Jurors will now come back tomorrow morning to continue their deliberations on that one count that they were deadlocked on. The one count that the four women and eight men on the jury could not agree on is the racketeering conspiracy charge, which carries a maximum sentence of life in prison.

Let's go to CNN's Chief Legal Analyst and Anchor Laura Coates, also with us CNN's Kara Scannell outside the New York courthouse.

And, Kara, you were just inside the courtroom as all of this unfolded. Tell us what you saw and heard as the jury revealed that they had reached a verdict on four counts, but not the fifth, and the judge wanted them to go back and figure out that fifth, tell us about the scene.

KARA SCANNELL, CNN CORRESPONDENT: So, Jake, it was just a little after 4:00 P.M. and it was pretty quiet and casual in the courtroom when the marshal came out with an envelope in his hand, so we knew that there was a note. Now, Mark Agnifilo, Combs' lead attorney, had just walked into the courtroom unaware that there was a note, he then left to get the rest of the team. We then started to see the lawyers come in and then Combs was brought out of the holding cell because he's not allowed to stay in the courtroom since he's in custody.

His lawyers surrounded him and they were standing around him and he had a very confused, a very serious look on his face as they were talking to him as though he was trying to grapple with what they were saying. Then they all sat down and they made a tight circle around Combs as they were discussing different topics and lawyers were fairly animated. Then Agnifilo got up, walked to the courtroom deputy, got the actual note, a handwritten note in his hand, walked it back to Combs and gave it to Combs so he was able to read it himself.

At this point, all of us in the room did not yet know what was going on. It was then that the judge got on the bench and that he then stood up and said that the jury had reached a partial verdict. He said that they were unable to make a verdict on the count one, the RICO conspiracy, saying that the jurors were unpersuadable in their opinions on both sides. And at that point, the judge asked what they wanted to do.

Now, again, Combs' team was huddling with him as they're trying to come up with their response. But both the government and Combs' lawyers wanted the jury to continue to deliberate. It was just a matter of how that message was going to be delivered. The judge then brought the jury back in. The jurors walked in, resumed their seats. No one looked over at Combs. They all just had that face looking straight ahead.

The judge told them he wanted them to continue to deliberate, and the jury then sent another note back saying they were done for the day and they would return at 9:00 A.M. tomorrow.

TAPPER: And, Laura, walk us through what happens next.

LAURA COATES, CNN ANCHOR AND CHIEF LEGAL ANALYST: Well, a sleepless night for Sean Diddy Combs and the prosecution team as well. But what happens next is tomorrow they're going to come back and deliberate on that first charge, the RICO, racketeering conspiracy. That carries a possible lifetime in prison sentence, is by far the most serious and the most complex charge.

Remember, the juror verdict form we received, we all looked at, it asks them to say whether they have found him guilty or not guilty of RICO, which requires an enterprise, a group who is engaged in a different variety of criminal activity, whether it's kidnapping or arson or bribery and the like, and if they have engaged in that in a pattern within ten years.

Well, if they find that, then they go to the next thing. And they have to tell them whether they have proven or not proven each of those predicate crimes. And then they include sex trafficking. And then there's a standalone cases as well.

So, this is a very complex moment for these jurors. For them to be hung on this gives the prosecution pause. Was I clear enough? Did I bring the right charge? What is the count? Is it 11 to 1? Is it 12 people -- or 11 people feeling one way, is it 9-2? What could it possibly be? But tomorrow, they'll continue.

Now, if they are still deadlocked, the judge will likely inquire yet again, whether it's hopeless, whether it's an impasse that could be temporarily reprieved by having clarification or questions answered. If it is not, that might be the outcome where this case involves a hung jury on one count and four other verdicts. And if that's the case, as you know, Kara, that opens a door for the prosecutor to try to re-bring that charge later on, which means they could consider that if it really is hung.

TAPPER: And, Kara, Combs reportedly slumped in his chair with his hands clasped in his lap after reading the jury's note that they had reached a verdict. What, in general, has been his demeanor like in the last few days?

SCANNELL: I mean, since the closing arguments, he has been in the courtroom just unlimited amount of time when there is a juror's note, because he was kept in a holding cell outside of the courtroom. But when he has come in, and these have been notes for testimony, he is very involved, as he has been throughout this entire trial, talking to his legal team.

[18:05:04]

Earlier in the day when the jury had asked for the transcript of certain portions of Cassie Ventura's testimony, the judge proposed giving it all back to the jury and Combs shook his head no, he did not want that to happen. So, he's been very involved.

But when he came out today, there was a definite change in his appearance. He looked very serious. He looked confused. When he was sitting down, he was slumped in his chair and as all of the lawyers were discussing things around him, they're quite animated around him and he is just kind of staring forward, looking down as this was happening.

I mean, he did turn around at the end when all of six of his adult children, his mom and his sister sitting in that second row, and he looked over to each of the kids, you know, kind of to reassure them. His mother had leaned toward him before he was escorted out of the courtroom, and she'd asked him some questions. He then had said to her, I'll be all right, love you, and tapped his chest before he was escorted out.

And that was the scene that we saw early this morning after that first note came out with seeking the testimony, his mother again leaning in toward him and he told her, then, you know, it'll be all right. So, he is clearly trying to reassure his family while his fate is so uncertain.

TAPPER: All right. Kara Scannell, Laura Coates in New York doing an excellent job, thanks so much, Laura, of course, will have more tonight on her show, Laura Coates Live, which is it tonight at 11:00 Eastern also on her podcast, Trial By Jury. You can catch new episodes wherever you get your podcasts.

Let's discuss this all with Criminal Defense Trial Attorney Stacy Schneider and Mark Eiglarsh, criminal defense attorney and former prosecutor.

Stacy, if you were on Diddy's defense team right now, what would you be thinking in light of this news?

STACY SCHNEIDER, CRIMINAL DEFENSE TRIAL ATTORNEY: Jake, I would be scared to death right now if I were on the defense team. If the jury has not decided the racketeering count, which is the number one count, but they have reached a decision on the sex trafficking counts and the transportation of people across state lines for prostitution, I think it looks really bad for Diddy right now. They wouldn't even be considering the racketeering charge, I believe, and this is my conjecture, if they had decided he was not guilty on the sex trafficking and the prostitution charges. They wouldn't even need to look at the racketeering charge anymore. It is the most complicated charge. It's the charge where they have to decide if his business enterprise engaged in a pattern of criminal conduct in a conspiracy. I don't think they'd even be looking at it if they had found him not guilty on the other counts.

TAPPER: And, Mark, the jury heard more than six weeks' worth of testimony, 34 witnesses from the prosecution, zero witnesses from the defense. The jury has deliberated for about 12.5 hours so far. What does this timing suggest to you that they were able to reach a verdict on four out of the five counts?

MARK EIGLARSH, CRIMINAL DEFENSE ATTORNEY: Well, this has been extremely unusual. The note that we got yesterday suggested we would never see anything unanimous. When they went to the judge and said, that guy's not playing nicely with us. He's not following the law, a 51-year-old scientist. Apparently, he came together in that jury room and they were able to accomplish their job out of four counts.

The only thing that remains is a very challenging endeavor by the government. It still remains unusual to charge something that's typically reserved for Al Capone, and they're trying to make it apply to a music mogul who's into Astroglide and lube. It generally doesn't fit with most of these jurors. Although the judge is going to make them stay back there reading them what we call an Allen charge, saying, we're all counting on you. We've put a lot of money, time, and energy, and a future jury wouldn't do any better than you all. Please go back and listen to each other and deliberate longer.

TAPPER: And, Stacy, the July 4th holiday is coming right up Friday, the court's going to be closed even though the courthouse will also be closed Thursday. Both the prosecution and defense are open to letting the jury deliberate that day if they choose to do so, if they need to do so. Do you think this looming holiday weekend is going to impact the jury's mindset at all as they resume deliberations?

SCHNEIDER: I think it will. I think most juries try to finish before a holiday weekend or a holiday period. They're going to have a full day tomorrow of open court to do so, and they're so close, they're one count away. So, it sounds like they'll have enough hours during the day tomorrow to decide on the racketeering conspiracy count and then be done for the holiday.

And most juries want to get out of there and move on with their lives after an experience like this. This was weeks and weeks of very cumulative testimony, very difficult to listen to, and I can imagine that somehow they may be able to pull -- on the racketeering count, which is going to require a good deal of discussion because it is so complicated, and like Mark said, it's sort of the one count that doesn't really belong here.

[18:10:09]

So we'll see what happens.

TAPPER: And, Mark, you touched on this a second ago, but yesterday, the jury sent a note concerning juror number 25, saying that number 25 was unable to follow the judge's instructions. Is that something the defense could raise on appeal?

EIGLARSH: They can raise anything they want. I think it has no merit. They didn't initiate it. The judge didn't initiate it. The jurors just came out and the foreperson said, we've got a problem with him. I think the judge handled it perfectly. Had the judge said anything, or if the judge does say anything that, in any way, interferes with the sacred deliberations, then that's an issue for appeal.

What the judge did yesterday is by the book, I can't get involved in your deliberations. Go back there and deal with it, like a dad would say to his kid, you kids go figure it out. Moving forward, if he says anything like, well, how are you guys divided, or what are you thinking? Done, if there's a conviction, it will boomerang back. The judge cannot, in any way get involved in their jury deliberations.

TAPPER: Mark, how many times do you think a judge can send them back if the jury keeps saying, we're deadlocked, we're not going to be able to resolve this?

EIGLARSH: As many times as he wants. At some -- may say, oh, Judge, it's futile. The notes are making it very clear that we're just wasting time. But we're not there yet. We're at the beginning stages. The judge will send them back at least one more time with a full Allen charge and maybe even do it again because, listen, everyone's invested a lot of time, money, and energy and the government, they really want that initial count.

TAPPER: Yes. Mark Eiglarsh and Stacy Schneider, thanks so much.

We've got so many other big stories today to cover President Trump's One, Big Beautiful Bill Act has finally passed the Senate, but there's still one major step before the legislation makes its way to the Resolute Desk in the Oval Office. Will it make Trump's July 4th deadline?

And the head of the Federal Reserve makes a candid admission that the Fed would have cut interest rates this year if it weren't for one thing. So, what's that reason you're still paying more for those loans and credit card borrowing? We'll explain.

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[18:15:00]

TAPPER: In our Politics Lead, after narrowly passing the U.S. Senate today by the narrowest of margins, one, 51-50, President Trump's One, Big Beautiful Bill Act is now heading back to the House, where Republicans have a razor thin majority, they cannot lose more than three House Republican votes.

CNN's Lauren Fox is on Capitol Hill. And, Lauren, I'm doing the math here. Tom Massie is already a no, so that's one, so they can't -- now it's just they can't afford to lose two more, and some House Republicans are already criticizing the revisions that the Senate made to Trump's massive agenda bill. They don't like some of the changes. What are their concerns specifically?

All right, we've lost Lauren, there's something wrong with the, connection there. So, let us go to our other incredible correspondent, CNN Chief Whitehouse Correspondent Kaitlan Collins.

So, Kaitlan, we're going to go back to Lauren when she comes -- pops back up. But earlier, President Trump says he thinks it's going to be easier to pass the bill in the House than it was in the Senate. I don't -- how does he figure?

KAITLAN COLLINS, CNN ANCHOR AND CHIEF WHITE HOUSE CORRESPONDENT: I mean, that's a good question. And what we've been hearing from White House officials is they don't want any changes made to this bill that came from the Senate and is now back in the hands of the House. Of course, the House theoretically could change it, but then they'd have to go back to the Senate before making it to the president's desk. And so that's really the question here. But this idea that it's going to be easier, I mean, right now we're seeing opposition from several Republicans who are saying that they're voting no, or they have deep skepticism and questions about it.

Now, who knows? Ultimately, maybe they will flip as we saw people like Josh Hawley, Ron Johnson do with this bill in the Senate when it comes to saying they were against it until they weren't and they voted for it. And so what the White House though is pushing here is this timeline. They still say they want the House to vote on this. They want them to pass it ASAP and get it to the president's desk. Do they have to necessarily do that? No, it's not a real timeframe that they have to have it. It's a self-imposed deadline.

TAPPER: This July 4th deadline, it's not real, it's not based on anything?

COLLINS: Well, it's real. It's just not that -- it's not like if they miss it that this bill won't get passed or this legislation.

TAPPER: It's not like your taxes are due April 15th is my point.

COLLINS: Right. There's not going to be any fine or anything like that. But I do think they feel like they'll lose momentum if they don't get it passed. I mean, they held a background call with reporters immediately after it passed the Senate basically saying, here's all the reasons it should get passed.

I just spoke to Russ Vought, who is the president's OMB director at the White House. We saw him and he was -- I said, any changes that the White House once made, and they said they want it to his desk ASAP. And so, essentially that's the argument they've been making.

But we've seen people like Chip Roy coming out and saying they have questions about it. Elon Musk has been criticizing this bill. We'll see if he has any influence over these House Republicans. He's been praising Thomas Massie and his opposition to this bill. So, it's a real question of what's going to happen here, I think, and how quickly they're going to get this.

TAPPER: I noticed that Vice President J.D. Vance issued a tweet, tweeted something about --

COLLINS: It sounds very formal.

TAPPER: The most -- yes, I know. It is not that formal. But, basically, he made the argument like this is a border security bill. Like he kind of like pivoted, you know, forget that -- he didn't say forget, but --

COLLINS: He said the rest is minutia.

TAPPER: He said the rest is minutia in terms of the Medicaid changes, the CBO score, all that stuff. I mean, millions of Americans are going to no longer have access to health insurance because of this bill, so it's not minutiae. But beyond that, I wonder about the messaging change, is that part of this new emphasis?

COLLINS: Well, and it's safe to say moderates in the House don't view it that way. Hardliners don't view it that way when it comes to how much money it could add to the debt. I mean, the latest projection from the Congressional Budget Office was $3.3 trillion. They don't like that number. That is why Elon Musk and Thomas Massie are against this.

[18:20:00]

But in terms of the Medicaid and the concerns of who is going to lose benefits here, the president was pressed on this specifically earlier, including this, you know, 11.8 million number of people. And he essentially argued that he doesn't think that number is real, that it's overdone. But he didn't say what number he does believe of people who are going to potentially lose healthcare over this.

TAPPER: Yes. I mean, they keep talking about the -- I think it's something like somewhere between 1.5 and 2 million undocumented immigrants who are on Medicaid who will be taken off because of this bill, but there's millions of other Americans who will lose access to health insurance because of this bill, because of the work requirements, because they have access to insurance in other ways.

There's also provisions in this bill, according to a Washington Post analysis I just read, that end the COVID era subsidies that helped bring more people into the health insurance market via Obamacare. I mean, the number that the Washington Post was talking about was more than 15 million.

COLLINS: Yes. And I think that's not something -- you know, what we keep hearing from the White House is they don't believe these outside estimates of the people who could lose their healthcare coverage as a result of this. They've been downplaying them or saying that they're wrong, but these are Republicans who are voicing concerns about this. I mean, Thom Tillis was saying that some 600,000 people in North Carolina as a result of the bill, as it was, were going to lose healthcare because the funding is not there. Also that's the other concern that they have.

And so I think that's the question of what that looks like in terms of what this number is actually going to be and how they're trying to kind of try to stave that off. Because as Thom Tillis has pointed out, Trump is on the record dozens of times saying we are not going to interfere with your Medicaid benefits.

TAPPER: And it's also a concern that a lot of Republicans -- I mean, nobody should be concerned about who gets health insurance or whatever based on what party they are, but there are raw politics here that there are a lot of Republicans that these Republicans are worried are going to be hurt by the cuts to food stamps or SNAP and the cuts to Medicaid coverage, not to mention the rural hospitals that are potentially going to suffer because of this bill.

COLLINS: Yes. And the rural hospitals obviously was a big concern, which is why they put in that provision close to $25 billion to try to shore them up. It seemed to help some Republican senators get over the line with that. But, obviously, there were still concerns from others in terms of what this could look like because the question is, are they going to take a beating in the midterms because of this? I mean, obviously that's a cynical political view in addition to how it would affect people's daily lives, but that's how they're looking at this in terms of what does it mean for them going forward.

The White House has not been expressing any concerns over that. I mean, they just flatly rejected Senator Tillis' argument, even though the president said today he quit. He didn't quit. He just said he is not seeking reelection. But I think, I mean, he doesn't really have a lot to lose his incentive there. I mean, he's not going to be running for reelection.

TAPPER: Yes. It's also interesting to go back and look what Vice President Vance had to say in 2017 about efforts to kick people off Obamacare, to end Obamacare, which is kind of perhaps at odds with the language that we hear now.

Kaitlan Collins, thank you so much. I appreciate it. And do not miss Kaitlan. She has a show, it's called The Source with Kaitlan Collins, and that's tonight and every weeknight at 9:00 Eastern on CNN. Unfortunately, I don't think we're going to be able to get Lauren Fox back. I assume that's because of the storms here in D.C.

The feud between President Trump and his former first buddy is reigniting after Elon Musk once again took to Twitter or X to slam the One, Big Beautiful Bill Act. And now the president says his administration's going to look at deporting the Tesla CEO from the country. Did he actually mean it? That's next.

(COMMERCIAL BREAK)

[18:25:00]

(BEGIN VIDEO CLIP) DONALD TRUMP, U.S. PRESIDENT: We might have to put DOGE on Elon, you know? You know what DOGE is? DOGE is the monster that might have to go back and eat Elon. Wouldn't that be terrible? He gets a lot of subsidies.

(END VIDEO CLIP)

TAPPER: The monster that ate Elon, that was President Trump this morning talking about his renewed feud with billionaire and former first buddy, Elon Musk, whose companies get at least $38 billion in federal subsidies, according to a Washington Post analysis. The president also suggested he could deport the South African tech CEO after Musk supercharged his criticism of Trump's domestic policy mega Bill. Musk replied on his platform X, quote, so tempting to escalate, so, so tempting. But I will refrain for now. Mr. Restraint, Elon Musk, that's how he's known.

Joining us now, CNN's Vanessa Yurkevich and Hadas Gold. And, Hadas, this Trump Musk truce did not even last a month, and now Musk is threatening again to form a new party and campaign against Republicans who voted yes on the legislation.

HADAS GOLD, CNN MEDIA CORRESPONDENT: Yes. And also I should note about the threat to deport Elon Musk. He is a U.S. citizen. I will make that clear. He was a naturalized citizen in the early 2000s.

But, yes, these are some of the most concrete political threats we have heard from Elon Musk about what he plans to do going forward, because there was a big cloud of questioning after this dust up with President Trump. What will Elon Musk do in the midterms? And now we know. He says that he is going to support the primary challenge of any member of Congress who has talked about cutting government spending but voted for this bill. He put up a poster that looked like a Pinocchio in flames saying that your face is going to be on this poster in your primary challenges, and I'm going to support them.

He's thrown his support behind Congressman Massie, of course, who voted against this bill. President Trump said today, Massie's going to be history, but Elon Musk confirmed today on X that he has donated to Massie's campaign.

And then he talked about creating this new political party, the America Party, saying that if this insane spending bill passes, the America Party will be formed the next day.

Lots of conversations we can have about how difficult it is to create a new political party, but Elon Musk is still saying that this is not about the E.V., the electric vehicle mandates, or about the federal subsidies.

[18:30:09]

In fact, he posted on X saying in response to a post about Donald Trump's Truth Social post on this saying, I am literally saying, cut it all now. He's saying this is all about the debt. He's saying this is all about the spending. And he's also saying that, once again, this bill, he says, makes a mockery of the work DOGE said, and he even said, how are we supposed to get to Mars if America is going to go bankrupt?

But I can tell you, Jake, investors in Tesla, one of his most important companies, they're not very happy. Tesla stock was down today. They want Elon Musk to go back focusing on things like Robotaxis and his rockets to Mars.

TAPPER: And, Vanessa, Trump's mad at someone else, Federal Reserve Chair Jerome Powell. Yesterday, Trump wrote Powell a handwritten letter urging him to substantially cut interest rates. How is Powell responding?

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Well, Jerome Powell at the Central Banking Forum earlier today was asked point blank, is President Donald Trump with his harsh public comments making it more difficult for you to do your job? And he answered by saying, quote, I'm very focused on just doing my job, so brushing off the president's comments, which include, as you mentioned, that letter that you're seeing on screen there, a handwritten letter to Jerome Powell on what is a sheet of paper that contains other central bank's interest rates.

He notes on that letter there that there are 34 countries that have interest rates lower than the United States. He goes on to say that Jerome Powell is costing the United States billions of dollars and suggests setting rates at 1 percent. Currently, interest rates are more than four times that.

But Jerome Powell was also asked about why the Federal Reserve has not cut rates this year and what is the correlation with the trade war. Listen to what he said.

(BEGIN VIDEO CLIP)

REPORTER: Chair, would the Fed have cut more by now if it weren't for the tariffs?

JEROME POWELL, CHAIRMAN, FEDERAL RESERVE: So, I do think that -- I think that's right. In effect, we went on hold when we saw the size of the tariffs and where, and essentially all inflation forecasts for the United States went up materially as a consequence of the tariffs. So, we didn't overreact at, in fact, we didn't react at all. We're simply taking some time.

(END VIDEO CLIP)

YURKEVICH: And that time that the Federal Reserve is taking is this wait-and-see mode, waiting to see if the tariffs in fact do show up in the economy. Jerome Powell went on to say he does expect inflation to rise. He is not saying whether or not we are going to see a rate cut later this month.

After that, there are three more opportunities for the Federal Reserve to cut rates. Jerome Powell in that same event earlier today, Jake, did say that he does expect by the end of the year that is when we will start to see some interest rate cuts, but likely not before that. Jake?

TAPPER: All right. Vanessa Yurkevich, Hadas Gold, thanks to both you.

Former Trump White House Communications Director Mike Dubke and Democratic Strategist Karen Finney joins us now.

We'll get to Musk in a second, Karen. I'm sure any American would love lower interest rates, of course. It would be a tangible win for Trump in a sense if Powell does go ahead and lower interest rates.

KAREN FINNEY, CNN POLITICAL COMMENTATOR: Sure. But here's the thing, remember that at the beginning of the year before we knew, before Trump was inaugurated, before we knew what his tariff regime was really going to look like. The forecast was actually pretty good. The forecast was, we were expecting, that he would lower interest rates. The forecasts were pretty positive in terms of the rate of people's incomes, keeping track with costs. That's not happened.

And so this whole thing and that silly, you know, note that he wrote, that is an absolute distraction. That is so that we are not talking about that. It's also creating a scapegoat so that we're not talking about the fact that it's Donald Trump's fault. It's Trump's fault that the costs have not gone down. He's put more energy into, you know, having fights with Musk and other countries than saying to, let's say, grocers, hey, we need you to lower costs, or you know, again, the tariff regime, which has created all kinds of economic uncertainty.

We know that now we're seeing weeks of polls where his approval ratings are going down. Even his approval rating on the economy, the number one issue in the election was inflation and, you know, costs. So, sure, let's go ahead and blame someone that he claims he can fire, which he really can't until next year instead of taking any kind of accountability for his own failure.

TAPPER: And, Mike, Musk says that the Republican Party is now, quote, the Porky Pig Party.

MIKE DUBKE, FORMER TRUMP WHITE HOUSE COMMUNICATIONS DIRECTOR: Yes.

TAPPER: Right. He actually might have been talking about both the Democrats and Republicans. I'd have to go back and look at that. But he's, once again -- a lot of people say this, there's a uniparty when it comes to spending, especially. And, you know, he obviously feels very motivated by this issue of fiscal responsibility. And this bill would add $3.2, $3.3 trillion to the national debt.

DUBKE: For us to believe right now that Elon Musk is about fiscal responsibility rather than E.V. tax credits and other things is really a leap of faith.

[18:35:05]

TAPPER: Well, just in his defense, he says, get rid of them all. Get rid of the E.V. tax credits. Get rid of the subsidies to oil and gas. Get rid of all of it. DUBKE: I'm sure all of the Tesla stockholders that realize that they earn $2 billion on E.V. tax credits from other companies every year, $1.2 billion to their company straight up are not happy with Elon's take on that.

But, look, you've got the president of the United States now having an open fight with the chairman of the Federal Reserve and the richest man in the world and getting one big, beautiful bill passed at least out of the Senate today.

So, I don't understand why he picks all of these fights, but going back to what you're saying about Powell. we're looking at a Federal Reserve chairman that may have miscalculated. And I'm going to make one little defense here. The New York Times followed 40 products to see if the tariffs affected their increase. 10 of them did go up in cost, 3 came down, 27 stayed the same.

The tariffs haven't raised interest, or, I'm sorry, haven't raised inflation in the way that the Fed has thought. So, at some point, they should be lowering rates. We are higher than the E.U., higher than Japan, higher than Canada, higher than everybody but Russia right now.

FINNEY: But, Mike, he just said they're kind of waiting it out, holding back. Hold on. There have been a number of forecasts that have suggested that tariffs would raise costs more.

DUBKE: They've been wrong month after month after month.

FINNEY: Okay. But you and I do politics, and the reality is that's not what people feel. People are feeling the anxiety. The numbers that Trump is looking at in terms of the lack of his disapproval rate on handling the economy is abysmal. And that is in part because people don't feel like it's getting better. And he's not taking -- I mean, fighting with Powell is not going to change that.

DUBKE: No. But we -- you know, you and I have sat here and we have had this, you know, how is he not paying attention to the stock market and now the S&P 500 on Friday was at the highest rate that it's been. I mean, things are --

TAPPER: Just talk more about Alligator Alcatraz and --

DUBKE: And Alligator Alcatraz is -- yes.

TAPPER: Well, you're the -- I mean, you worked for him. I mean, you tell me.

DUBKE: Look, I -- when you work for Donald Trump, you bob and weave, like you're running from an alligator sometimes, it sounds like. And I'm saying right now, the man is on a winning streak and it's -- and he -- no, I think -- but I (INAUDIBLE) on policy, he's got a point when it comes to interest rates. They are too high.

TAPPER: The bill is unpopular, but it's still probably going to become law.

FINNEY: Oh, of course, absolutely.

TAPPER: Right, probably. And. Musk says the moment that that happens, he's forming the America Party. And, look, third parties are always this whimsical kind of thing, but, you know, Ross Perot actually had an impact on electoral politics in the 90s, and he was not nearly as wealthy as Elon Musk.

DUBKE: He did. And Michael Bloomberg --

TAPPER: On the same issue, by the way, the deficit and trade.

DUBKE: Michael Bloomberg decided he couldn't run as an independent because it was too hard to start at a party. So, he ran as a Democrat when he ran for president.

Yes, that for 2028, you're right. But will a party get set up for 2026 that's going to affect the election? I don't think so. I think he's going to give to super PACs, and that's what we're going to see.

FINNEY: And I think in 2026 people are going to be -- Democrats, hopefully will do their job of making it clear that Republicans are the ones who basically kick people off healthcare because that's part of what this bill will do, added $3.3, 2, take your pick trillion to the debt, right? That they're going to have to hold them accountable for that. And all the wheeling and dealing that we're going to hear about over the next 24 hours, they're all still going to vote for it.

DUBKE: And Republicans are talking about immigration tax cuts and the same. So, we're going to have a very similar debate, just in a much bigger stage.

TAPPER: Do you think the midterms are necessarily going to be favorable for the Democrats just because of --

FINNEY: If we do our work? I do not think -- I think, wrong-headedly, too many of my Democrats think, oh, we're golden.

TAPPER: Right.

FINNEY: No, there's a lot. I was there in 2006, and let me tell you, it took a lot of work to get where we were.

TAPPER: I agree. And your party's still not particularly popular. Just -- I hate to bring up on unpleasant things.

FINNEY: No, but my pink looks pretty.

TAPPER: But you look fantastic. Mike Dubke, Karen Finney --

DUBKE: Look that, look at that.

TAPPER: -- thanks to our lovely, lovely guests.

Coming up, outrage from the families of four college students who were murdered in Idaho.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We feel a little defeated. We feel betrayed.

We'll never see this as justice.

(END VIDEO CLIP)

TAPPER: What one father told CNN's Jim Sciutto about learning the suspected killer struck a plea deal. Stay with us

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[18:40:00]

TAPPER: Growing outrage to a story we told you about yesterday in our law and justice lead that surprised plea deal for Bryan Kohberger, the man charged with the quadruple murder of four University of Idaho students who were violently stabbed to death in their off-campus house nearly three years ago. Kohberger has reportedly agreed to plead guilty to four counts of murder. In exchange, prosecutors say they will not seek the death penalty.

But now the family of 21-year-old Kaylee Goncalves is slamming prosecutors for that deal just weeks before Kohberger's trial was set to begin. Kohberger also charged with the murders of three others, 21- year-old Madison Mogen, 20-year-old Xana Kernodle, and 20-year-old Ethan Chapin.

CNN's Julia Vargas Jones is in Moscow, Idaho. And, Julia, did the other families share the same outrage to this deal?

I'm not sure if Julia can hear us. Julia, did the other families share the outrage to the deal? It looks like she she's having trouble hearing us. So, let's take a quick break.

Our small business series rakes us to Oregon next where a leather goods company makes all of its products locally. So, why is it being hit with tariffs if they make all their products locally? And how is that impacting the bottom line? We'll find out next.

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[18:48:46]

TAPPER: Let's go back to Julia Vargas Jones now in Moscow, Idaho, who has more on how victims' families are reacting to the surprise plea deal for Bryan Kohberger, the man charged with quadruple murder of four University of Idaho students -- Julia.

JULIA VARGAS JONES, CNN CORRESPONDENT: Yeah, Jake. We are hearing now from the families of those victims. Some of them say that they are angry not just about the deal and what this means for the case, the loss of the death penalty, but also how this deal was made without their consultation, without their approval, and also the timing of it all, Jake, just weeks before this trial was set to begin. Our colleague Jim Sciutto spoke to the father of Kaylee Goncalves, who

says that they think that prosecutors are just not doing their jobs, and they're urging the judge to not take this plea deal. Take a listen.

(BEGIN VIDEO CLIP)

JIM SCIUTTO, CNN HOST: I just wonder how you -- how you're doing and how the rest of your family is doing through all this?

STEVE GONCALVES, FATHER OF KAYLEE GONCALVES: We're all destroyed. We're all let down. This isn't justice. This isn't right. This is -- this is a joke.

You don't give him vegan meals in a suit, put him on a platform, make him famous, tell everybody he's getting like, love letters and then say, oh, well, he's in prison. He'll be in prison for the rest of his life.

Well, there's a lot of teenage kids watching this, guys.

[18:50:01]

They're watching this right now, and they're watching you judge. They're watching you. They want to see a real man step up and put some skin in the game and not some cushy deal.

(END VIDEO CLIP)

VARGAS JONES: And, Jake, there is one outlier here, at least one family, the family of Madison Mogen, telling CBS News that there would actually be happy with the deal that puts Kohberger behind bars, and then they can move on with their life and just figuring out how to grieve the loss of their daughter, Maddie.

But I will say, and this is important to note, that this is not an automatic deal. Tomorrow's hearing is important because the judge still needs to accept this. And in order to accept this, he needs to be satisfied with this deal asking those questions from Kohberger, of whether or not he is aware of all of his rights. And that's when we'll hear from Bryan Kohberger again -- Jake.

TAPPER: All right. Julia Vargas Jones in Idaho, thanks so much.

In today's "Business Leaders", our series where we hear from small business owners from coast to coast about President Trump's tariffs. Some are in favor, some others not so much.

Today, we go to Portland, Oregon, for Orox Leather Company. It's a multigenerational business rooted in traditional Mexican leather craftsmanship. The family aims to create products that can last a lifetime right in Portland.

Co-founder Levi Martinez joins me now.

Levi, you create all your products right there in Portland, but you do source material from all over the world.

So how are tariffs impacting your business?

LEVI MARTINEZ, CO-FOUNDER, OROX LEATHER CO.: That's right. We hand- make every piece here in our shop in downtown Portland. I'm actually sitting in the shop right now. Half of it's the retail, half is our production here in -- here in Portland.

And we use a lot of materials. And some of them, we can source them here domestically so some of them we have to go down to South America to source them. And then we also source globally. So -- from Italy, leathers and leathers are a great quality in many different places.

TAPPER: Have you had to raise your prices?

MARTINEZ: We have not raised our prices due to the tariffs yet. We are uncertain about the tariffs. What's really hard to handle is just how much they're changing, the uncertainty of it. We can't plan our inventory, plan our costing strategy too far.

Unlike big companies, we don't even have the cash reserves to absorb sudden cost. And the reality is, is that if were forced to source everything domestically, U.S. dollar costs a lot more than what we paid internationally, and that will mean, yeah, maybe some price increases for our customers.

The same people that have supported our growth here in Portland, we're hoping it doesn't come to the to the cost of materials. You know, the -- undermines the support of our local products. People in Portland have always been, you know, always valued, handcrafted, locally sourced goods. That helps us in challenging economic times because Portland, you know, will seek out the locally made goods. Still.

TAPPER: Are you seeing in any way a shift in the way your customers are shopping? Because we've heard from people, especially restaurant owners, that the customers seem to be more reluctant to spend money the way they used to because of all the uncertainty. And then when the market was doing poorly back then as well.

MARTINEZ: Yes, we have seen it. We feel like that there's a lot of fear in buying, you know, with all the tariffs going up and down, our consumers are fearful of making big, big expenses. Be more careful about what (AUDIO GAP): They are seeing a little bit of drawback in the shopping, unlike other years.

TAPPER: What do you want lawmakers and the public to understand the most about how tariffs are impacting small businesses like yours right now? Well, first of all, to please remember that small businesses, all the small businesses, when you're making the economic policies, we need the support.

I will also encourage lawmakers to go to our website and visit the www.oroxleather.com and look through our collection of leather goods. Choose yourself a new wallet and a belt, and know that you're supporting a small businesses. You are making a difference. Remember the realities of running a small business. I encourage you

know all the Americans listening to take a look at their wardrobe, their everyday essentials. If you don't have at least three items that are locally made, you may not be supporting small businesses. You know. Better yet, if they're falling apart, then it may be time that you need a handcrafted American made leather item.

I live in Portland, a city which has a vibrant community -- community of diverse entrepreneurs who are thriving, and we are seeing real economic progress and Orox Leather exists because of the support community, the supportive community that we have here.

[18:55:04]

Portland is doing great and it will be horrible if this tariffs derail, derail any progress that were seeing in the city. For small businesses like ours. Yeah.

TAPPER: All right. One more time. The store is Orox Leather Company. You can find them in Portland, Oregon, or online.

Levi Martinez, thank you so much. And you can see its spelled O-R-O-X.

President Trump just made a big announcement about the Israel-Hamas war. That's next.

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TAPPER: President Trump just said that Israel has agreed to all the necessary conditions to finalize a 60-day ceasefire with Hamas.

The president writing, quote, "We will work with all parties to end the war. The Qataris and Egyptians who have worked very hard to help bring peace, will deliver this final proposal. I hope for the good of the Middle East that Hamas takes this deal because it will not get better." And then in all caps, he wrote, "It will only get worse."

It is not immediately clear whether Hamas would actually accept those terms.

"ERIN BURNETT OUTFRONT" starts right now.