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The Lead with Jake Tapper

FBI Emails From 2019 Refer To Epstein's Ten Co-Conspirators; Trump Suspends All Large Offshore Wind Farms Under Construction; Evacuations Planned In Southern California Amid Widespread Flood Risk; Supreme Court Blocks Trump From Deploying National Guard To Chicago; Economy Grew At Strong 4.3 Percent Pace In Third Quarter. Aired 6-7p ET

Aired December 23, 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]

PHIL MATTINGLY, CNN ANCHOR: Welcome to the Lead. I'm Phil Mattingly in for Jake Tapper.

This hour, a look at significant revelations in the latest batch of the Epstein files just released by the Department of Justice. And while most of the files were released without context, let's just say the Justice Department today has been rather quick to provide comment around the ones mentioning President Donald Trump.

Plus, a terrible holiday forecast for Southern California as a dangerous storm is set to bring widespread flooding and mudslides, the latest evacuation warnings there.

Also, at least five people were killed when a plane carrying medical patients crashed in the waters of Galveston Bay, Texas. But one woman was rescued thanks to a local boat captain who jumped in before first responders arrived. That boat captain will join us on The Lead.

The Lead tonight, new revelations from another round of Epstein documents the Justice Department dropped overnight. Our CNN team is reviewing the files and is bringing you the latest updates as we get them tonight references to ten of Jeffrey Epstein's co-conspirators with an FBI communications are raising questions about the Justice Department's redactions and past comments on the Epstein case at large. Plus, the back and forth on a letter to sex offender Larry Nassar signed J. Epstein, but the Justice Department now says explicitly it's a fake.

There's a lot in these 30,000 documents to unpack. I want to bring in CNN's Katelyn Polantz, who is unpacking them for us. What are we learning here, Katelyn?

KATELYN POLANTZ, CNN SENIOR CRIME AND JUSTICE CORRESPONDENT: Well, Phil, it is more questions than answers because these documents, as they're coming out, many of them today, in nearly 30,000 new documents released by the Justice Department of the Epstein files, they do contain mentions of Donald Trump, the president, but they also appear without further context, unless, of course, the Justice Department decides they want to provide some more, which they have done already today on at least one document that's out there.

But as far as this idea of co-conspirators, one of the questions that has plagued the Justice Department is if they did enough to investigate over the years, did they do enough in the early investigation of Epstein 20 so years ago? And also when they prosecuted his co-conspirator in Epstein, in New York, in this filing, this is a standalone filing among the Epstein files, it is a person in the FBI's New York Field Office asking others who -- if they could say if there's a status update on ten co-conspirators, as the work was taking place, taking Epstein potentially to trial, as well as Ghislaine Maxwell, who ultimately was convicted of sex trafficking minors.

Now, this obscures the names of the co-conspirators in this email and co-conspirators used by the FBI, these aren't prosecutors writing, so it may not actually be a legal term there, but ultimately we know of one co-conspirator who was taken to trial, Ghislaine Maxwell, and we know from that trial that the beneficiary of much of the sex trafficking of minors crime was Epstein himself.

And so what happened after this? Were people pursued or investigated as co-conspirators? There are questions still about that. But this is just a blip among many, many new filings today, including many others that are noteworthy as well.

Another one, Phil, that we noticed earlier was the prosecutors working on the case against Ghislaine Maxwell letting their superiors know apparently that flight records contain Donald Trump's name. We'd known about the existence of those flight records, but it is illuminating to see prosecutors in January of 2020 writing, we didn't want any of this to be a surprise down the road and that they had not been aware before January of 2020 that Donald Trump had traveled on the private plane with Epstein on flights between 1993 and 1996. Phil?

MATTINGLY: Katelyn, you alluded to this. We haven't heard a ton from the Justice Department. I think victims, their lawyers, have also similarly been a little bit in the dark over the course of the last couple of days. They weighed in very definitively on one issue specifically today. What was it and why?

POLANTZ: Yes. This one really blew up today in a way that was, you know, put context around one of these documents that caught a lot of people's attention early this morning.

[18:05:05]

It's a handwritten note, a photocopy of it, and the envelope, apparently. And it is a note that appears to be from a J. Epstein in the Manhattan Correctional Facility in New York. That is the jail where Epstein was detained after he was arrested and charged with federal crimes and where he died on August 10th of 2019.

This letter postmarked three days after that date, and it was apparently sent to another person in the federal detention system, Larry Nassar, another convicted sex offender who was serving time in Arizona. It alleged that Donald Trump liked underage girls. That's what it said, or girls, generally, Trump has said that is not the case. And the Justice Department came out ultimately in a public statement saying that the FBI had looked into this alleged letter from a J. Epstein and they believe that it is fake. The FBI believed that and the Justice Department believed that because there is no inmate name accompanied by a number, which is required for outgoing mail and that the writing doesn't appear to match Epstein's, among other things, that this document, it is not one that Jeff Epstein himself had written. Phil?

MATTINGLY: A very definitive statement.

Katelyn Polantz, thank you, as always, my friend.

I want to bring in Liz Stein. She's an anti-trafficking advocate who is a survivor of Jeffrey Epstein's abuse. And, Liz, just to start with the way this rollout has transpired over the course of the last several days, how are you doing with all this?

LIZ STEIN, EPSTEIN SURVIVOR: Thanks for asking that. It has been incredibly difficult for us and really just exhausting to have to go through this. We're combing through this, trying to look for anything that will, you know, validate what our own personal experiences were, but we're also looking at this collectively to see what patterns, you know, we're going to see in these documents, who's being named and what the potential implications are of the people who could be named.

MATTINGLY: Have you seen any patterns that really stand out to you? And I think one of the illuminating things for me was talking to victims last week or the week before when some of the estate files were released, the photos and realizing that victims were seeing things in these photos that everyone else was overlooking in terms of the rooms or the people or kind of what was happening in the photos that triggered very real experiences for them where they were able to connect specific things together in these documents. Have you seen anything like that?

STEIN: I have personally, and I'll tell you that last Friday when I was going through the images, I was kind of sitting there and just clicking through and thinking like, oh, this is just a picture of the HVAC system. This is a picture of a storage shed. And then I clicked on something that was really triggering for me and just brought me back.

And so I haven't been able to look at anything since then. And I think that one of the things that we feel is really important is the fact that this is being released without context. And to your point, we're able to offer some context as to what people may be looking at in these photographs.

But, you know, we're just really, I guess, frustrated in the fact that the Department of Justice is releasing all of this information. We are seeing it when everyone else is seeing it. And, you know, we would have hoped that there would've been some consideration for us since we are the victims of this crime.

MATTINGLY: To that point, has there been communication, has there been outreach, has there been any effort from the Justice Department as these releases have occurred?

STEIN: No, there has not, none whatsoever.

MATTINGLY: What would you like them to know as they continue to release in the days ahead?

STEIN: I think that, you know, there's definitely context that we can give to some of this, but I think we would have hoped that they would've been more intentional about what they're releasing and more thoughtful. And, you know, we're sifting through this and there are no dates, there's no locations. And so it's just a really laborious process for us.

MATTINGLY: Today, we saw the release of a document that mentions ten co-conspirators of Jeffrey Epstein, several redactions all throughout those FBI communications. Another one of the survivors who is known only as Jane Doe publicly says her name is still not entirely redacted from these files. What -- I guess I'm trying to figure out like the best way to get the idea of this seems very haphazard, ad hoc, not very well thought out, and I'm trying to figure out how you guys are kind of consuming all this.

STEIN: Well, you know, we are seeing some documents that are completely overredacted, documents that are completely blacked out, and that's really an exaggeration of what we're looking for.

[18:10:09]

We are looking for our names and our personal identifying information to be redacted, and that's all. But I will tell you that our names don't take up a hundred and some page document. And so we're really concerned about, you know, what is being redacted and what is not.

And to your point survivor's names have been exposed in this. And it doesn't matter if someone's name is exposed and the Justice Department corrects that. Their name is still out there. And we are -- you know, we are dealing with being re-traumatized constantly. And it's just a really difficult place to be in.

However, despite the discomfort that we're feeling, we feel very strongly that all of this information needs to come out so we can find the truth. We are victims of a crime and I think that that's really getting lost in this discussion. It's really turned into a discussion about politics when it's not. You know, this is a crime and it's a crime of sex trafficking. And we, as victims of this crime, deserve the Department of Justice to seek justice for us.

MATTINGLY: It's an incredibly important point. I think a failure on everybody's part when they forget that that is at the core of all of this and people like you and the strength you and others have shown to reach this point is remarkable in and of itself.

Liz Stein, I really appreciate your time. Thank you so much.

STEIN: Thanks, Phil. MATTINGLY: Well, the U.S. Supreme Court has just handed President Trump a rare loss. What it means for Trump's request to deploy National Guard troops to Chicago.

Plus, with widespread flooding predicted for Southern California, the National Weather Service there has issued a dire warning, anyone traveling on Christmas Eve or Christmas Day will need to exercise extreme caution.

The latest forecast just ahead.

(COMMERCIAL BREAK)

[18:15:00]

MATTINGLY: We're back with our Law and Justice Lead. New and disturbing materials released by the Justice Department today related to the case against convicted sex predator Jeffrey Epstein. Some of the documents named President Trump and other high-profile individuals.

Let's discuss with Skye Perryman President and CEO of Democracy Forward. Skye, just to start, the Justice Department is receiving some criticism for the number of redactions they've made in these documents. Are there specific redactions or specific areas where you feel like they have fallen short of what is statutorily required?

SKYE PERRYMAN, PRESIDENT, DEMOCRACY FORWARD: Yes. I mean, it's very clear that they're continuing to engage in a cover-up. You see page after page of redactions that go far beyond the survivor's identities or redactions that are aimed to protect survivors. You see, you know, documents going up on the website and then coming back down off the website. And so we believe, you know, it's clear the American people are watching this, but it's also clear that the Department of Justice is not being transparent as the law requires.

MATTINGLY: What specifically stands out to you from this latest batch of release files?

PERRYMAN: You know, I think a few things. One is just the defensive nature of the Department of Justice. And I just want to commend Liz, who you just had on, for her bravery and for everything that she and other survivors are going through, and what she said was right. This is not a political issue. This is an issue about law enforcement and justice, but yet you have the Department of Justice issuing statements trying to -- you know, trying to be defensive about documents that are being released. So, that really stood out to us as we were looking at this today.

The number of redactions, the fact that, you know, many of these documents didn't come out in the first tranche, some of them named the president. So, I think we're all trying to get to the bottom of it. But it's clear that this is not a Department of Justice that is operating in a transparent manner and it is a Department of Justice that seems to be putting politics right above truth and Justice in this instance, MATTINGLY: One of the things that's been striking, I think, having covered a lot of different lawsuits, some of which your group is involved in over the course of this first year, is the familiarity of using deliberative elements or privilege elements to explain or get the rationale for these redactions. Is there recourse if you feel like that does not actually apply here?

PERRYMAN: There is. And these are all things that I think will be challenged in court. But the other recourse that is important, I think, for everyone to bear in mind is what we've seen. I mean, the American people are watching this and the American people are not stupid. They know when they're looking at something that's transparent or not transparent. And what we've continued to see is a cover-up.

As you know, at Democracy Forward, we filed a federal lawsuit seeking communications between the Department of Justice, the White House, the FBI, to understand what has been involved in this cover-up. So, I think you'll see recourse, I think you'll see people pushing in the courts. Congress, of course, has made it clear that it that it will continue to push. But the American people are watching and pushing as well.

MATTINGLY: There are a lot of foil lawsuits that we have some very interesting documents depending on how things play out from this first year in office for the second Trump administration.

Skye Perryman, I appreciate your time, as always. Thanks so much.

PERRYMAN: Thank you.

MATTINGLY: Well, the Trump administration announced its suspending federal leases for all large offshore wind projects currently under construction. I'll ask the governor of Connecticut how this could impact jobs and energy prices in his state, next.

(COMMERCIAL BREAK)

[18:20:00]

MATTINGLY: In our Politics Lead, the Trump administration is suspending the federal releases for all large offshore wind projects that are currently under construction. The reason given, unspecified national security risks.

It's just the latest blow to offshore wind and in energy and industry that President Trump has long railed against. The move could have major implications, starting billions of dollars of investment install nearly six gigawatts of new electricity that was set to come online in the next several years.

My next guest is one of four northeast governors who are vowing to fight back against this suspension. Democratic Governor of Connecticut Ned Lamont joins me now. Governor, I really appreciate your time.

Just to start with, what is the plan to fight this? You guys have already been in court in past administrative actions related to these projects. This is new. This seems largely as surprise. What's the plan now?

GOV. NED LAMONT (D-CT): It's new but we've seen this movie before. Right before Labor Day, the Trump administration issued a stop work order for our Revolution Wind, and also the other one's in New England laying off a 500 people for Labor Day, Happy Labor Day. Now, it's the same thing again, just a few days before Christmas, Merry Christmas.

What we're going to do is what we did last time. Last time, we went to court, and within a couple of weeks, a judge had very strong ruling, arbitrary and capricious, start rebuilding the wind farms. We really need this. It's about jobs. It's about bringing down the price of electricity. And, you know, we've got $5 billion invested. It's almost done here in Connecticut and Rhode Island.

MATTINGLY: The secretary of the interior was on Fox Business defending the decision. I want you to listen to this.

(BEGIN VIDEO CLIP)

DOUG BURGUM, INTERIOR SECRETARY: So, these things are moving in 150 miles an hour. Our ground base radar is designed to pick up movement. If you wanted to attack a population center on the East Coast of our country, you would send a swarm of drones right through one of these wind farms.

(END VIDEO CLIP)

MATTINGLY: Have you been presented any evidence of a national security issue or specifics that the secretary is referring to?

[18:25:01]

LAMONT: No. This has been through more military clearances over the last five years and just last year in Congress on a bipartisan vote. I know Doug Burgum pretty well. He's put in a tough situation. I think the president hates wind power, and he said do whatever they can to stop it.

MATTINGLY: The national security piece of this, what's interesting about it is national security issues in court sometimes get a lot more deference from an Article 2 perspective. Does that concern you at all despite the victories in the first cases?

LAMONT: I'll leave that to the judges. What I can tell you is we have discussed this at length with the Trump administration. It was the first Trump administration that gave us the original leases to put this wind power in place. I've had ongoing conversations with the secretary of interior and the secretary of energy. This never came up until about five days ago.

MATTINGLY: The financial impact here, you mentioned, you know, at a time when electricity bills are going up, this seems to be an odd move to make from an administration perspective, but also just for the state of Connecticut. Do you have a sense of what the impact would be on your state? LAMONT: Yes, we need this power. It's a shortage of power, a shortage generation spikes up the price of electricity, especially during the cold winter months when the wind turbines turn the fastest. So, this is going to jack up the price of electricity, which runs counter to everything the president told me he wants to accomplish.

MATTINGLY: Just to go back one second, you mentioned that you had conversations with cabinet officials, with the secretary of the interior. Your sense of things was they had no idea that this was coming.

LAMONT: I won't say that. I will tell you that just two weeks ago, I had all the New England governors on with Secretary Wright and Secretary Burgum. You know, we were talking about other sources of generation, including nuclear power and natural gas. This never came up. There was never any warning clouds at all. This is a sudden change, of course. I don't know where it came from. I hope that courts stand tall and stand on behalf of the consumers.

And, by the way, as a business guy, this is the most anti-business administration. You can't stop and start herky-jerky. You have no idea who you're doing business with.

MATTINGLY: Yes. It certainly doesn't make forecasting or, fiscally, you're planning that easy, I think, from a business perspective.

Last one, before I let you go, just big picture, politics-wise, Democrats plotting the path to win back the House next year, I'm interested in kind of your perspective on what the path forward for the party should be.

LAMONT: Well, first of all, I'd say stop the chaos. Do no harm, Hippocratic Oath. You know, secondly, in cases like this, I want Congress to stand tall. And you just can't have a rogue agency turning things on and turning off. But this is sort of typical of this administration, tariffs on, tariffs off, SNAP benefits on, SNAP benefits off. I think the Democratic Congress will provide a little consistency to what's coming out of Washington. This is really tough time to govern for Republican and Democratic governors alike.

MATTINGLY: Governor Ned Lamont, I really appreciate your time, sir. Thanks so much.

LAMONT: Nice to see you, Phil.

MATTINGLY: Well, at least five people died when a plane crashed into the waters of Galveston Bay. But one local boat captain launched his own rescue before divers could get to the scene. He joins The Lead next.

(COMMERCIAL BREAK)

[18:30:00]

MATTINGLY: In our National Lead, holiday travel in Southern California could be a serious danger, as the region braces for a storm that's set to deliver months worth of rain and winds. This could lead to widespread flooding and mudslides. Evacuation orders and warnings now in effect, including areas in and around burn scars in the greater Los Angeles area.

Meteorologist Derek Van Dam has a look at the forecast. Derek?

DEREK VAN DAM, CNN METEOROLOGIST: Phil, for residents of California, today is the day to travel to family and friends for the Christmas holiday because tomorrow in a 24-hour period, things are going to change dramatically, and this is all because of a very powerful atmospheric river that is going to center itself across the southern portions of the state, really statewide will be feeling the impacts of this.

The Weather Prediction Center has issued a very rare level four, that's their highest threat level, in terms of excessive rain that could lead to flash flooding. And we're honing in on this area because it encompasses roughly 6 million people. And it also covers some of the recent burn scars from earlier this year's fires.

Remember the Eaton, Palisades and Hughes Fires? Well, these areas are particularly susceptible to the heavy rain that will fall in these mountains. And that means debris flows, mudslides, landslides, they're all on the table with this latest round of heavy rain that will move in the atmospheric river, still developing off the shoreline of California over the Eastern Pacific by 7:00 A.M. local time in Los Angeles.

It is going to be a completely different story than what we're experiencing now. Heavy rain will over spread the region. We're talking one to 1.5 inches of rain per hour, not to mention the feet of snow that will blanket the Sierra Nevada mountain range, making travel virtually impossible.

So, let's get specific. How much rain will fall? Six to ten inches. Heads up Interstate 5 -- Interstate 405 in and around the Los Angeles area that will cause flooding, ten inches or more, potentially across the transverse mountain ranges here. Remember, the trajectory of this rain coming off of the southern shoreline of California means that it will ring out all the available moisture and it will produce that heavy rainfall in the mountains and that streams towards the valleys and the coastal communities below.

Three feet or more across the Sierra Nevada Mountain Ranges even higher elevations up to eight feet. That means travel will be virtually impossible, plenty of snow and energy with this system as well, and that means down power lines and down trees as well. Phil?

MATTINGLY: Well, also in our National Lead, a miraculous rescue caught on camera after a Mexican Navy plane carrying medical patients crashed into the waters of Galveston Bay in Texas on Monday afternoon, killing at least five people.

[18:35:08]

Sky Decker, a professional yacht captain who lives about a mile from the crash site, jumped into action. Decker was able to rescue a woman trapped below the plane debris before first responders and divers arrived on the scene.

Joining me now, Sky Decker. Sky, first off, it was an awful tragedy. You rescued one woman. You were able to pull the body of another man who had sadly passed away. Just to start, how are you doing after all this?

SKY DECKER, RESCUED WOMAN AFTER MEXICAN NAVY PLANE CRASH: It just doesn't seem real, but it's -- oddly, it's almost seems like it fits in with my life in some strange way. I'm a plane crash survivor myself. And there were a lot of strange things, for example, the name of the plane was Marina Plan. My mother's name was Marina. And it's just -- it's kind of surreal.

When we arrived on scene, it's hard to believe that there could any possibility that anybody could be alive in that wreckage. When I got in there and saw her in that small pocket of air that she had, it was just unbelievable. It was like something out of a movie.

MATTINGLY: What went through your head? Walk us through the moment, especially as somebody who, as you noted, was a survivor of a plane crash, when you saw this happen, kind of from that moment to actually rescuing this woman?

DECKER: I really don't think I thought about it much. I just went into action and just knowing that there was someone alive inside of that plane, I wanted to do anything that I could to try to get them out there. And I was able to recover the woman alive and sadly recovered a man's body that he had already passed away.

MATTINGLY: The woman you rescued was badly injured, you said you just noted she had about three inches of air gap to breathe and was really fighting for her life. Have you been able to get in touch with her family? Do you know how she's doing at all?

DECKER: Yes, she's doing much better. I spoke with her sister. And I hope to meet with her at some point. I hope I can console her in some way. This whole thing is just so crazy. I'm a man of God and I think that has really helped me through this.

MATTINGLY: Yes, it's hard not to think faith plays a role when something like this happens, especially given kind of your past and the overlaps there. How did you find out -- did you see the crash? How did you find out about it?

DECKER: No. We had just gotten back to my house from a boat ride and we heard there was a crash very nearby, and so we just -- we went out to see if we could help in some way, and, thankfully, we did.

MATTINGLY: Can you explain just the -- you had been in a plane crash before. Can --

DECKER: Yes. Back when I was ten years old, my father had a plane and we had a crash. And it had a huge impact on me. In fact, I dreamed about planes crash and for that following 20 years, I mean, it was -- for me it was very traumatic in some way. And that's why to come up on this scene of that plane and then have to go into a crashed plane again, it was really bizarre to me.

MATTINGLY: Was that in your mind?

DECKER: No, not at the time. When I woke up this morning reflecting on everything and kind of all of the parallels with the name of the plane, my mother was from Mexico, the plane was from Mexico. I was the only one on scene that spoke Spanish, and so I was able to console the woman somewhat by speaking Spanish to her. It was just an unbelievable scene.

MATTINGLY: I can't even imagine, you know, there's moments where you think you're in the right place at the right time for the right reason. And this certainly seems like one of those moments.

Sky Decker, I really appreciate your time and your willingness to share your story. Thanks so much.

DECKER: You're welcome.

MATTINGLY: Well, the U.S. Supreme Court has just handed President Trump a rare loss. The details just ahead.

(COMMERCIAL BREAK)

[18:40:00]

MATTINGLY: Back in our Politics Lead today, the U.S. Supreme Court dealt a major blow to the Trump administration blocking President Trump from deploying the National Guard to Chicago to protect ICE agents. In an unsigned order, the court says, quote, the government has failed to identify a source of authority that would allow the military to execute the laws in Illinois. Conservative Justices Samuel Alito, Clarence Thomas and Neil Gorsuch all dissented from the opinion.

Here now our panel to discuss, Joe Moreno, I want to start with you on this. As somebody with legal expertise, the Supreme Court has cited at least in the emergency decisions that they've had over the course of the last year with the administration on its major priorities more often than not, I think more often than a lot of people expected at this point, what does it tell you that they didn't hear?

JOSEPH MORENO, FORMER GOP STRATEGIST: Well, I think, first off, I think good on them. I think the Trump administration was really approaching the line here with its use of the National Guard. And I was fully supportive when it was California. So, I think they had a very defined mission, a very defined use there. That mission, that rationale for deploying the Guard was slipping. First in Washington, D.C., and then in Illinois, they really didn't have a defined mission.

And as a person who served in the military, I can tell you we have military police officers and they're very good, but we're not a domestic police force. It's really not what the Army or the National Guard is meant for. So, I'm glad the Supreme Court stood up here because it's one thing to give the commander-in-chief some wide latitude under Article 2, but that latitude is not unlimited. There are laws, and I'm glad the Supreme Court held the administration to it.

MATTINGLY: You know, Karen, that's a really good point, because I think there's been a lot of Democrats who have been very frustrated with the ability of the administration, the solicitor general, to bring emergency requests to the Supreme Court and win, or at least win until cert is actually given in the future at some point.

[18:45:01]

What do you make of this?

KAREN FINNEY, CNN POLITICAL COMMENTATOR: You know, look, I think it reaffirms that this is a pattern that many have been pointing out over and over again where this president has tried -- has certainly overreached in his authority. And finally, we see the Supreme Court, you know, kind of smacking them on hand again, because we saw this also with Los Angeles.

So -- but it also, I think highlights the political challenge because the courts move slower than politics, obviously. And so, while, you know, we think about when we were talking about what was happening in Chicago and the violence that we saw in neighborhoods throughout, not necessarily with the National Guard, but with Border Patrol agents there and the frustration that people felt -- you know, when you say to folks, there's a legal case that is making its way, that's important for the facts, but it is frustrating for the politics.

And so that's a -- that's a dynamic that certainly Democrats are having to manage while a number of cases make their way through the courts.

MATTINGLY: Yeah. And also, administration officials very keenly aware of that pace as well. And their ability to front run it in many cases.

All right. Finney, spin this news. GDP today came in just blew out expectations. Definitely much higher than forecast. Surged by 4.3 percent in the third quarter, fastest pace in two years.

President Trump quick to take credit as one would expect, posting, quote, "The tariffs are responsible for the great USA economic numbers just announced and they will only get better. Also, no inflation and great national security. Pray for the Supreme Court." That's about the tariff case at the Supreme Court.

I mean, what's -- what's the president have to be concerned about with this GDP number?

FINNEY: Well, gee, didn't I just see a story that Jim Beam, if you're -- if you're -- if you're a bourbon drinker is saying they're having to close a factory down because of tariffs. And what's happening with Canada? Didn't we just see Tyson Foods had to close a plant down, in part

because of tariffs, which meant jobs. So, sure, it is great to see GDP numbers so high. And I hope that those numbers remain steady at the same time as Joe Biden himself learned, if people don't feel it in their everyday lives, it kind of doesn't matter, because if people still feel like when they go to the grocery store, when they fill up their cars, things are too expensive.

And certainly coming off of Christmas, where we see a number of reports that people are running up credit card debt, those bills are going to come due next year. And so, it really -- it's about main street, not just Wall Street.

MATTINGLY: Yeah. The number of Biden administration officials I had this fight with over four years, but also who in the last four or five months have been like, man, this feels like Groundhog Day. Watching the Trump administration do this, it's -- you can count them on more than two hands.

Joe, to that point, you know, this is a difficult kind of cross cutting element of things where the macro numbers might look good, look great. If you look at this GDP number. But underneath the hood, people aren't necessarily feeling, at least according to data.

JOSEPH MORENO, FORMER GOP STRATEGIST: The numbers are in president Trump's favor. The question is are they still good enough? Inflation is down to about 3 percent, but the target is two, right? Wages that were down about $3,000 per American household under Biden are up $1,000, but there's still $2,000 in the hole, which means that prices are still exceeding wages, right. The president's tariffs are making things like more expensive -- rents, electricity, right? They're still up.

Heavy immigration policies are causing shortages. And the trucking and construction industries.

So, the question is, is the administration going to meet the expectations, which were very high, that President Trump met? And will they meet them quickly enough to really impact the midterms next year?

MATTINGLY: Yeah. No, it's a really -- it's a really great point. The baseline shift over the years has been fascinating to watch, especially post-COVID.

Karen, why are people optimistic as the president kind of underneath the hood kind of, to Joe's point, kind of laying out the baseline shift. But also, do you feel like Democrats will be able to actually capitalize on this as we move into a midterm year?

FINNEY: Sure. Because they'll talk -- well, we will talk about how we're -- how we can lower health care costs. I mean, it's great to see the president trying to do something, for example, on weight loss drugs and prescription medicines. But that doesn't fundamentally lower costs that are about to go up in just a week and a half, basically.

And so, throughout the year, the conversation will be who has got a better plan and who's got more credibility on the issue of affordability, I think the challenge for Trump is going to be, A, it's very hard for him to stay focused. He thinks, you know, he has been pretty good. And not saying it's a hoax. But he likes tariffs and he likes to talk about tariffs. And increasingly we see in polls people believe that the tariffs are harming their pocketbooks.

So that balance I think is going to be the key for Democrats to navigate.

MATTINGLY: Yeah. And to connect all the dots. Supreme Court tariffs. Boy, that's going to be a thing here, in short order.

Today, Joe, President Trump accused "The New York Times" of, quote, endangering national security. In a post on social media. He wrote, "Their radical, left unhinged behavior, writing fake articles and opinions in a never-ending way must be dealt with and stopped.

[18:50:05]

They are the true enemy of the people."

The president doesn't refer to a particular article. It should go without saying, obviously not the enemy of the people, but the impact of the attacks. What do you make of them?

MORENO: I kind of wish he wouldn't do them. I mean, I get President Trump's perception that he is mistreated by the media. Now, whether that's based on something or not. That's -- he believes that he said that for a decade.

Lashing out at the media, specifically when it's not focused on one particular thing, its just these broadside attacks on major journalistic institutions. Look, he's not really gaining any credibility by doing things like that. And if anything, it's got a chilling effect.

So, he can be -- he can be aggravated. And if he wants to bring up specific instances where he feels he's been wronged or defamed, go for it. But generalized attacks, I don't know, really makes me, even as a conservative, pretty uncomfortable.

MATTINGLY: Yeah, you're not alone. I think most conservatives actually feel that way when they're being candidate.

Karen, last word to you.

FINNEY: Let me just say, every president, Republican or Democrat, feels like the media isn't fair to them. Obviously, Trump has taken it to a new level, but I can cite many stories of presidents -- you know, how they're being mistreated by the media. As you know, Phil.

MATTINGLY: Yes, yes, actually, I've heard personally from several of them about that issue. This is a little bit of a different level, though, to say the least.

Appreciate you guys very much. Thanks so much. FINNEY: Thanks.

MATTINGLY: Well, anyone who has been holiday shopping knows it seems like you can't throw a stone without hitting a business that is raising prices. I'll speak to one small business owner who says tariffs are to blame. That's next.

(COMMERCIAL BREAK)

[18:55:51]

MATTINGLY: We're back with breaking news on our national lead. Several people are hurt after a fire and explosion today at a nursing home outside Philadelphia. Police officials say they're not aware that any of the injuries are critical, but add that its not clear everyone at the nursing home has been accounted for. Bucks County officials say a portion of the facility may have collapsed. Authorities tell "The Associated Press" the explosion appears to be gas-related.

Well, we're back now with our business leaders series, where we hear from small business owners from coast to coast about the impact of President Trump's tariffs. Haus of Trade is a retail store in San Clemente, California. Visitors won't find any mass produced goods there. The shop works directly with local creators to curate a collection of products made only in South Orange County. Founder Jannet Garibay is here with me now.

Jannet, I really appreciate your time.

Just to start with, you work with more than 30 brands through Haus of Trade. How have tariffs impacted you and the creators you've worked with?

JANNET GARIBAY, OWNER, HAUS OF TRADE, THE CO-OP: Sure. Well, just as you mentioned, we are business essentially is a unique model in the sense that it is a cooperative. There's 30 small businesses. We started with the idea that we wanted to make things local, promote local, and especially the handmade trade. Essentially between, you know, community sourced goods, if you will.

So that was the idea that we founded the business on. And over the last, we're going on to our third year of our brick and mortar. And we quickly realized that there is -- especially this year, we've seen there is a challenge in terms of supply chain. We've had numerous supply chain issues, even when our makers are making the products, which I would say is about a 70, 70 percent are sustainable, handmade, and 30 percent are imports from various countries, where Spain, Mexico, Europe, China, Brazil, Vietnam.

We have different we import products from different places of the world, and it's significantly even impacted the small maker who is making the handmade jewelry because of the cost of raw materials going up essentially across the board for anything and everything, all of the supplies needed in order to make most goods are going up. And so we're seeing that shift this year that is having an impact on all ends from the supply chain to the end consumer, which is really the retail stores such as ours.

MATTINGLY: Have you had to raise prices as a result?

GARIBAY: We have. We've -- although we share a lot of our as I mentioned, our unique -- our business model is unique. So, we do share all of the costs so that we price things fairly and we have a fair price that's advertised to the consumer. But we have had to raise them on average, about anywhere between 10 to 20 percent. And what we're seeing across the board in retail is about 30 percent.

So, we've tried to really be conservative in that manner and absorb a lot of the costs. But it's this year, we have also held back, scaled back on hiring additional help, especially during the holiday. So, I find myself here working at the store all week -- you know, and it's getting quite -- it's quite, quite crazy obviously as we near Christmas.

MATTINGLY: I bet. Before I let you go, if you had a message for policymakers at this point, what would it be?

GARIBAY: That message would essentially be to, the idea. I love the idea of, you know, promoting local. I love the idea of made in the USA. However, we are faced with the reality that a supply chain issue is prevalent across retail, not just -- and even for someone such as ourselves in this business that we really focus on sustainable handmade goods raw material costs have been going up.

And so, my advice or word of caution to them would be to definitely consider what it's like boots on the ground, so to speak, for the small businesses speaking to communities more not just big chain stores, but small boutiques such as ours that really focus on bringing a community impact.

MATTINGLY: Yeah, it's a critical message. The shop is Haus of Trade, located in San Clemente, California.

Jannet Garibay, really appreciate your time. Thanks so much.

GARIBAY: Thank you so much.

MATTINGLY: "ERIN BURNETT OUTFRONT" starts now.