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The Lead with Jake Tapper
DOJ Says It Found 1M-Plus More Docs Potentially Related To Epstein; Tariffs And Immigration Policies Impacting Travel Patterns; Ukrainian Teen Who Fled War Thrives In Philadelphia; Affordability Crisis Persists As Midterm Election Year Begins. Aired 5-6p ET
Aired December 26, 2025 - 17:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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SARA SIDNER, CNN HOSt: Thank you to my excellent panel here. Phil Mattingly, I'm watching you. Standing by for "The Lead." Take it away.
PHIL MATTINGLY, CNN HOST: It's so good to see you, Sara Sidner, a merry belated Christmas to you. See you soon. We'll look for much more next week in "The Arena."
[17:00:35]
Tens of thousands of documents dumped so far. Apparently more than 1 million to go. The Lead starts right now.
One week after what was mandated to be the total release of the Epstein files, we are now learning the task is proving far more ambitious by the day. A Christmas scramble for extra help at DOJ, continued questions over what's been redacted and what hasn't. One of the earliest Epstein victims to speak out joins us in moments.
Plus, a major foreign policy initiative moves forward. A Mar-a-Lago meeting between President Trump and Ukrainian President Zelenskyy reportedly set for Sunday. Can they agree on a peace plan Vladimir Putin will also sign on to? This while the U.S. strikes terrorist targets in Africa, though, some question President Trump's stated reason for the action.
And serious weather woes on both coasts as California gets a break from the relentless rains and flooding. Parts of the Northeast are about to get walloped by old man winter, including New York City's biggest snow forecast in several years.
Welcome to The Lead. I'm Phil Mattingly in for Jake Tapper. We start with our law and justice lead. More than 1 million files, more files potentially related to dead pedophile Jeffrey Epstein have just surfaced, according to the Justice Department. They say the new trove originating from the U.S. attorney for the Southern District of New York and the FBI may take, quote, "a few more weeks to comb through and release to the public as the department scrambles to find more volunteer prosecutors over the holidays to help redact the newly discovered files." Now, remember, by law, the Justice Department was supposed to release everything it had a week ago today. So far, we've seen tens of thousands of documents over a few sporadic releases, including pictures of former President Bill Clinton, e-mails that mention Donald Trump's -- President Donald Trump's name on the Epstein jet flight log, and an FBI e-mail exchange that indicates there are 10 other conspirators.
President Trump weighed in with a rather stim winding Christmas tirade, saying he, quote, "was actually the only one who did drop Epstein and long before it became fashionable to do so." Trump added, the Democrats and some Republicans who push for the release will see their, quote, "friends, mostly innocent, will be badly hurt and reputationally tarnished." He then signed off with, "Enjoy what may be your last Merry Christmas."
Starting off. Sorry, that's just a very interesting way to end that. CNN Crime and Justice Correspondent Katelyn Polantz, who I won't ask to explain that last line, but I will ask to explain why didn't the SDNY and FBI alert the Justice Department before now about these documents?
KATELYN POLANTZ, CNN CRIME AND JUSTICE REPORTER: Phil, there are a lot of questions around this statement from the Justice Department that we don't fully know the answer to what we do know. The Justice Department has been very clear since a week ago Friday that they weren't going to get through it all and that at that time they said there are several hundred thousand more documents we still have to work through and redact to get out there to comply with the transparency law from Congress.
Now they're saying there are a million more from the FBI and the Southern District of New York prosecutor's office. That's because very likely in 2019, that's when the -- when Epstein was charged again in the Southern District of New York and there was a massive amount of information in that prosecution and then in the prosecution after his death of his conspirator Ghislaine Maxwell, who was convicted at trial.
From July 2025, the FBI was quite clear that they had essentially a mind boggling amount of data. They said they had 300 gigabytes from the various investigations of Epstein over the years in the hands of the federal government. That's -- that would take hours, days, weeks to go through if it's all paper. On top of that, they were saying at that time something that hasn't changed at all, that there's no client list and no one that the FBI and the Justice Department believe they should further investigate or would need to charge outside of the world of Ghislaine Maxwell and Epstein who had both been charged. Now we're seeing this new information.
[17:05:01]
How new it actually is remains to be seen because there are prosecutors and investigators in New York that would have had these documents somewhere in a system --
MATTINGLY: Right.
POLANTZ: -- and would have been able to go through them in preparation of that trial. But it really is a question now of how long it's going to take to redact these things for public release, how many attorneys they need. We know the Justice Department's even trying to enlist additional attorneys now after the deadline to get through everything else.
MATTINGLY: Yes, that was your reporting, I think, yesterday or the day before, which was not the e-mail. I don't think any attorney probably wanted to get ahead of the holidays. But I think it underscores what you guys have been reporting for so long about the scale of what's gone into this scale, the effort that's underway and now apparently has a million more documents to deal with.
As always, great reporting. Katelyn Polantz, thanks so much.
Well, joining us now, Gloria Allred, victims' rights attorney and partner at All Red Morocco and Goldberg and Alicia Arden, an Epstein survivor whom Gloria is representing. I want to thank you both for taking the time.
Alicia, just to start with you here, the Justice Department's admission that there are more than a million more files yet to be released that they're going through right now, this whole process, how are you feeling as this has rolled out, as it has?
ALICIA ARDEN, EPSTEIN SURVIVOR: It still continues to be extremely upsetting. And I, like, have chills in my body thinking, like, are they ever going to get it all out? And I just say -- I mean, good Lord, why can they not get it all going? A million more files. They said it was going to come out on the 19th.
It has to come out. All of it. We have to -- and I feel like I have to since filing my police report, I'm here to protect the future victims or maybe the future pedophiles. It has to all come out, like, immediately. And I don't want to hear in a few weeks, oh, they're all out, but there's like 100 million more.
It's not going to come out until, like, 2017 and we have to redact all these things and they keep talking and ongoing about it. It's just so exhausting and relentless to me as a victim. And I'm just trying every day just to carry on, which I am, and just here for the other victims just to really protect, I hope there won't be future victims and future pedophiles, but there could be.
MATTINGLY: Yes. And to put folks like yourself through this, after everything you all have done to reach this point is, I think, one of the most disturbing elements about how these releases have gone.
You know, Gloria, you said you're on a Justice Department list that alerts you when new information is coming out involving your clients. Have you heard from the Justice Department? What's kind of the communication process been like through this sporadic release effort?
GLORIA ALLRED, VICTIMS' RIGHT ATTORNEY: Well, I certainly have not heard anything about the million more files that they have discovered that may come out. But what I'm most interested in, Phil, is, of course, truth, transparency and accountability. And I'm interested in who the co-conspirators are or will be or should have been. In other words, we know that in 2007 that a federal prosecutor listed a number of individuals as co-conspirators. But we never saw her memo.
We never saw the charging document because Alex Acosta, then U.S. attorney, decided it should be a state prosecution and Epstein got a sweetheart deal. Now we see there are 10 potential co-conspirators listed from 2019. We don't know those names. We just know that grand jury subpoenas were being served on some of them by the FBI, and they were successful in serving some, but not all of them. Who were those potential co-conspirators?
We don't know. We don't know if they'll ever be charged. We don't have many of the FBI 302s, the victim statements in which some of the victims may have named them. Of course, even if they're named, it doesn't mean they should be charged, doesn't mean they committed a crime. But nonetheless, we need to know who they are.
Are we going to know? Are we going to find that out at any point? Are we going to see those FBI interviews of victims who named them? And or are they going to say these are pending investigations and therefore we can't release that, we have to redact their names in order to conduct an investigation. Will Congress ask, well, who are those names?
Are you legitimately redacting them? So many more questions for the future.
[17:10:00]
MATTINGLY: Oh, absolutely so, and especially I think a lot of lawmakers would say if that's how they're trying to treat these files or not allowing the 302s to come out, not allowing some of the victim statements to come out, not allowing some of the Acosta era DPA related files to come out, then that's running contrary to what the law actually says that President Trump signed, which will be interesting to see how lawmakers kind of handle that.
Alicia, kind of to that point, you were the first survivor to file a police report against Epstein nearly 30 years ago. Do you have faith, especially at the early stages of this process, that this will be a new era of accountability? Do you think that that is an outcome that will be reached as this continues?
ARDEN: I hope so. And I pray and try to have faith every day that it will be. And with my police report that I got away from being attacked by Jeffrey Epstein in the hotel room in 1997, I got away and went to file it, but it was heavily redacted. And I to this day am upset about that because I'm, like I said, everything, the truth. And why wouldn't -- why would the police department redact it -- redact it.
Just like it is today, it's all being redacted. And I know that there's young children or things in there that I don't want to come out and to see for the victims, because I was just one person that was in his hotel room. And find -- but thought that I definitely had to get out because I was being attacked and my clothes were coming off and he was wanting to manhandle me. So maybe they redacted that word, I don't know. But I just -- I hope that all of it continues to come out for myself and for the other victims.
And I'm so happy that I did get there to file the police report, because I really feel if they would have followed him and paid more attention to what I did in 1997, I really felt to this day I could have saved many of the girls.
MATTINGLY: Quickly, Gloria, what did you make of President Trump's Christmas post saying that he dropped Epstein before it was, quote, "fashionable to do so?" ALLRED: Well, I've heard different explanations from the White House
about why he dropped them. One explanation was that he was a pervert, Jeffrey Epstein. But if he was a pervert, in the view of the president, not the president at the time, then why did he believe he was a pervert? And what -- was he -- did he investigate? Did he look into what actions or misconduct?
He knew that perhaps Jeffrey Epstein was inflicting on underage girls, children or adults. Another explanation is that Jeffrey Epstein was bidding against Mr. Trump for a certain property in Palm Beach that then a Mr. Trump wanted. I don't know who was successful in that, but apparently there was a lot of bad will between Mr. Epstein and Mr. Trump over that property. So we don't know whether what's the truth. We'll just have to wait and see why he and Jeffrey Epstein were no longer friends.
We'll look at the all the files when they're released to see when the last communications may have existed between the two of them. But right now we are, and I am very victim survivor oriented, I want to know who helped to conspire to sex traffic underage girls and adult women, who assisted, who enabled, who supported Jeffrey Epstein in this effort. We're going to have to also follow the money, which may be the most important trail that we have to journey upon in order to find out how this, I think, worldwide sex trafficking method and project was conducted.
MATTINGLY: Yes, it's the victims and what they went through and the justice they're looking for that forever is the most important thing that people need to keep in mind. Gloria Allred and Alicia Arden, I really appreciate your time. Thank you so much.
ALLRED: Thank you.
ARDEN: Thank you.
[17:14:24]
MATTINGLY: Well, breaking today, a big ruling from a judge after a California mother accused of killing her nine-year-old daughter makes for a first court appearance. Why it may be tough to learn new details about the case. But first, President Trump offering new details on those U.S. strikes against ISIS in Nigeria when they were originally planned and why Trump says he changed the date. That's next. (COMMERCIAL BREAK)
MATTINGLY: In our world lead, the U.S. launched a series of Christmas Day strikes in northwestern Nigeria. President Trump says these strikes targeted ISIS terrorists he accused of slaughtering Christians. CNN's Kylie Atwood is following this story for us.
And Kylie, the defense secretary Pete Hegseth teasing that more strikes could actually be coming here.
KYLIE ATWOOD, CNN NATIONAL SECURITY CORRESPONDENT: Yes, more to come dot to dot from the secretary of Defense. We got a little bit more detail on that from President Trump in his Truth Social post, who said that there would be more terrorists who would be killed if the slaughter of Christians continues. Now, this is an issue that has emanated Republicans for quite some time now. They have told the Trump administration they want more pressure on Nigeria to be going after ISIS, who they say is specifically targeting Christians in Nigeria. Some have even said that this is, you know, such a problem that these strikes should have occurred.
The Trump administration is clearly now focused on this and they are going after these ISIS targets. We'll watch and see if there are actually more strikes to come in the coming days. We know, according to a U.S. official, that there were two ISIS camps that were targeted as part of these strikes yesterday. There were multiple terrorist deaths, according to AFRICOM, though so far the eyewitness accounts on the ground haven't seen any deaths. We'll watch for more details on that.
But the Nigerian government said that this was -- these were strikes that were carried out in conjunction with the Nigerians, that the secretary of state, Marco Rubio spoke with the foreign minister before these strikes occurred, that the Nigerian president gave the go ahead for these strikes. But where they disagree is what ISIS is actually doing in terms of the violence that they are inflicting. The Nigerians say that the violence in northwest Nigeria is impacting everyone there. It's the Christians, it's the Muslims, it's the farmers. There's gang violence up there.
[17:20:17]
There's just a lot going on in that region. The Trump administration is specifically saying that ISIS is going after the Christian population specifically. There's not really agreement, but what they do agree is that they should be going after terrorists. They're going to do that jointly. So this is an area for us to continue watching because the Nigerians are clearly wanting to work with the Trump administration on this.
MATTINGLY: Yes, the cooperation very notable. We'll see what else happens from here. Kylie, thanks so much. Good reporting.
Well, as millions get set to travel home from the Christmas holidays, we're looking ahead to the New Year. How big a role will artificial intelligence play in air travel? Including how much you pay for tickets? That's next.
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MATTINGLY: In our law and justice lead, Ashlee Buzzard, the mother of nine-year-old Melode Buzzard, made her first appearance in court today to face first degree murder charges. She entered a plea of not guilty. Buzzard's accused of killing her daughter. Police found nine-year-old melody dead in a rural area of Utah after a two month long multi state search. I want to bring in CNN Senior Correspondent Josh Campbell for the latest on this.
Josh, what are we learning about?
[17:25:00]
JOSH CAMPBELL, CNN SENIOR CORRESPONDENT: Well, once that not guilty plea was announced there in court, you could hear murmurs across the courtroom. At one point court security had to tell members of the audience to keep quiet. Again, she stands accused of the brutal murder of her daughter, Melodee Buzzard. CNN is attempting to contact Ashlee Buzzard's attorney for comment on this case.
Of course, people remember this all started in October. It was the young girl's school who contacted police because they had not seen her for quite some time. Authorities launched an investigation. They found that both the mother and daughter had gone on this multi-state road trip seen on CCTV footage at times donning this clumsy disguise with a wig. They say the license plates on the car, they were swapped out.
The mother in the vehicle returned to California, the young girl was not with her. Authorities said it was earlier this month when a couple in rural part of Utah found the remains. She died of gunshot wounds. Now, despite the nature of the offense here, the prosecutors today in court said that they would not be seeking the death penalty.
One of our affiliates caught up with the Melodee Buzzard's uncle outside court who took issue with that. Have a listen.
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MARVIN MEZA, MELODEE BUZZARD'S PATERNAL UNCLE: Be the prosecution stating that they're not going to seek the death penalty, I don't understand why. I think -- I mean, they're going to seek life in prison, that's fine. But I think for what she's -- what she did, it should be a lot worse.
(END VIDEO CLIP)
CAMPBELL: Now, there's still no word on motive and we likely won't hear that from investigators. That's because today the judge in this case issued a temporary gag order against the sheriff's department requests of the defense saying that they can't speak about this case anymore. Up until the trial, the judge didn't indicate why. But all you have to do is look at the press conference that the sheriff had just a few days ago. He very forcefully, likely unapologetically called this a heinous crime. In his own words, Phil, he called this calculated, heartless and ruthless, cold blooded murder. Judges can be conservative. They don't want to publicly, you know, influence a case before a jury is selected. They want to find a group of jurors that can come in with an open mind. So again, until this trial begins, the sheriff's department is no longer allowed to speak publicly about the case.
MATTINGLY: Yes. And at a moment where there are still just so many unanswered questions about what exactly happened here. Josh Campbell, great reporting as always, my friend. Thank you.
CAMPBELL: Thank you.
MATTINGLY: Well, also in our national lead, you're looking at a road in San Bernardino, California that was wiped away after torrential rains triggered flash floods and mudslides in the state. At least four people have died since the storms began in California last weekend.
Meantime, preparations are underway in the Northeast, where more than 23 million people are under winter storm warnings and are bracing for a post-Christmas storm that's expected to deliver heavy snow and ice to parts of New York, New Jersey and Connecticut. As for New York City specifically could see its biggest snowfall since 2022.
Now, those two major weather events are already impacting the return trip home for some of the record 122.4 million Americans the Triple A says traveled for the holiday. And as 2025 travel comes to an end, we wanted to take a look at some of the travel trends shaping where Americans may be planning to go in 2026. So joining me is the managing editor of The Points Guy, Clint Henderson.
Clint, always appreciate your time and perspective. Just to start off, you know, there's a lot of Americans that don't feel great about the economy right now, despite strong top line consumer spending. Does that mean that uncertainty for Americans is they're probably going to travel less in the New Year?
CLINT HENDERSON, MANAGING EDITOR AT THE POINTS GUY: So it's really interesting. We have seen some softening, especially at the lower end of the travel market. We did a poll with YouGov at the Points Guy found about 39 percent of consumers who are planning to travel said they're going to travel or spend slightly less next year. But we're not really seeing that bearing out in the numbers. We are seeing a huge hit to the inbound U.S. travel industry.
But so far, American travel demand has held up remarkably well. I feel like that's continuing into 2026. We're not hearing a lot from the airlines about weakness like we did at the very beginning of the year and in the beginning of the tariff uncertainty. So for now, it's full steam ahead. You know, of course, if we end up in a recession or something, that could change.
But for now, travel has been the one area consumers are really still willing to splurge on.
MATTINGLY: Yes, it's been remarkably durable over the course of the last year. One of the big questions that I've had is related to a recent survey by Guides Geek, which said more than one in five said they have used artificial intelligence to plan or assist with travel. How is AI changing travel right now, including maybe how much we pay for plane tickets?
HENDERSON: So it's really interesting. You know, a year ago we tried to have AI plan some trips for us. It did not do a very good job, but in the last few months or so, that has changed. And now AI is much better at setting up itineraries for you. It's still not great at booking trips, so we're not there yet with consumers using AI.
[17:30:01]
What I'm hopeful is as consumers get better at using A.I., the travel companies will also get better. It's sort of like an arms race to see who's going to figure out how to work the system better using artificial intelligence. But I will say the airlines have woken up to this.
They are starting to use A.I. in big ways. And I think we're really going to see this trend emerge in 2026. Delta has said it wants A.I. to help price 20 percent of their flights this year. So that's really interesting. It's not that they're targeting you for individual price fluctuations, but they're just getting better at using the computer to set prices on a constant basis. So they're always trying to maximize revenue. Eventually that will lead to higher prices overall for plane tickets, I believe in the future.
MATTINGLY: Yes, that's what I was going to ask. As this arms race plays out between travel companies and consumers, you hope that perhaps that would lead to some type of pressure downward on prices. But if the airlines are coming in over the top to participate in their own version of the arms race, does that mean the net outcome here is going to be higher prices?
HENDERSON: I think slightly higher prices. So already towards the end of this year, we saw prices year over year about up about 1 to 4 percent. That's the sort of price increases we're talking about here. But remember, profits are so small on airline tickets that any kind of maneuvering they can get on the end is great for them. So yes, you're going to see small increases, but there will be chances for consumers to also use A.I. pricing tools to get better deals. So the consumer is just going to have to get savvier as time goes on as these tools roll out.
MATTINGLY: It's like a just a constant battle, but an interesting one, especially with A.I. in the mix. Clint Henderson, I always appreciate your time, my friend. Thanks so much.
HENDERSON: Thank you. Happy New Year.
MATTINGLY: Well, what President Trump says he wants to see from Ukrainian President Volodymyr Zelenskyy ahead of their upcoming Sunday meeting at Mar-a-Lago and what it could mean for efforts to end the nearly four-year-long war with Russia. That's next.
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[17:36:15]
MATTINGLY: Topping our World Lead, Ukrainian President Volodymyr Zelenskyy is ready to make a major leap to end the nearly four-year- long war with Russia. Zelenskyy says he's meeting with President Trump on Sunday to, "finalize details of the 90 percent ready peace plan." Now, Trump gave an interview to "Politico" today where he signaled it would be a productive meeting, but added, "He doesn't have anything until I approve it. So we'll see what he's got."
Now, in the past few days, Zelenskyy has offered key compromises on some of the thorniest issues of the U.S.-mediated peace process with Russia. Zelenskyy also spoke about a nationwide referendum that would let the Ukrainian people formalize the end of the war.
Well, as the fighting has raged for nearly four years, life for some of the thousands who fled Ukraine at the start of the war has changed dramatically. CNN's Danny Freeman introduces us to a young woman in Philadelphia who came to the U.S. as a timid teenager, but is achieving great success despite the adversity in her homeland.
(BEGIN VIDEOTAPE)
DANNY FREEMAN, CNN CORRESPONDENT (voice-over): On a recent chilly morning in northeast Philadelphia.
BILLY MARCHIO, HIGH SCHOOL ENGLISH TEACHER: Who is the real Othello?
FREEMAN (voice-over): An advanced English class read Shakespeare.
MARCHIO: It's act five, scene two.
FREEMAN (voice-over): Acting out a tragedy about unjust violence.
KATE SOBOLEVSKA, FLED WAR IN UKRAINE IN 2022: Then Lord, have mercy on me.
FREEMAN (voice-over): But in this class, 18-year-old senior, Kate Sobolevska, is herself a symbol of resilience in the face of tragedy. Because before she was Kate from Philadelphia --
SOBOLEVSKA: I feel like it's easier to say Kate.
FREEMAN (voice-over): She was Kateryna from Ukraine.
SOBOLEVSKA: I'm from Lviv, not exactly the city, the smaller city in Lviv region.
FREEMAN (voice-over): Just a few years ago, Kateryna was living happily in her peaceful community.
SOBOLEVSKA: It's very cozy. It's very, very small. I can cross the whole city in like a day.
FREEMAN (voice-over): A big sister with a loving family. President of her student government, who loved handball and ballroom dancing.
FREEMAN: Like waltz.
SOBOLEVSKA: Yes. Cha, cha, cha, cha. Yes.
FREEMAN: Really?
SOBOLEVSKA: Yes.
FREEMAN: You did all of that in Ukraine when you're small.
SOBOLEVSKA: Slick hair and heels.
FREEMAN: Do you remember when it all changed?
SOBOLEVSKA: I do.
FREEMAN (voice-over): In February 2022, Russia invaded Ukraine. Kate, her mom and her little brother quickly decided they had to leave the country.
FREEMAN: What went through your mind when you heard that news that you were leaving your home?
SOBOLEVSKA: It was really stressful, but I believed it would be for like two weeks, then a month, then two months.
FREEMAN (voice-over): And men between the ages of 18 and 60 were banned initially from leaving the country. So her father had to stay behind.
SOBOLEVSKA: I talk with him every single day. He's my main support. And he's really proud. And I just wish he could see me grow up. And just understanding that last time he saw me was when I was 14 is really hard.
FREEMAN (voice-over): Kate's family traveled through Europe and passed through New York before settling in Philadelphia, where she started attending George Washington High School.
FREEMAN: How would you describe yourself when you first got here?
SOBOLEVSKA: Very lost. The school was very big. And also, again, language barrier. I wasn't really confident in speaking. And I was also really shy. And I didn't know anyone.
GIANNA LOZZI, HIGH SCHOOL ENGLISH TEACHER: She's very quiet, very reserved.
FREEMAN (voice-over): But then South Philly English teacher Gianna Lozzi started to read Kate's work.
LOZZI: There's something about being an English teacher and getting that first paper from a kid and being like, oh, OK, like you could write.
FREEMAN (voice-over): But she had no idea about Kate's journey.
LOZZI: She would start to come for lunch and, you know, sit closer to me and we would talk a lot. And that's when she opened up about, you know, all the things that she's been through, what brought her here.
FREEMAN (voice-over): English teacher Billy Marchio runs the school's honors program.
MARCHIO: I said, you know, what can you tell me about Kate? And they said, oh, you know, the levels are off the charts. So I took Kate in.
[17:40:08]
FREEMAN: And it sounds like she rose to the occasion.
MARCHIO: She did.
FREEMAN (voice-over): While frequently translating for her family at home and helping take care of her younger brother since arriving in 2022, Kate has simultaneously risen to the top of her class, become a member of the National Honor Society, and even got into a summer journalism program at Princeton.
MARCHIO: We're academics first and artists after.
FREEMAN (voice-over): This past fall, Mr. Marchio nominated Kate to be Senior of the Month across the entire Philadelphia School District, and she got it.
MARCHIO: Not many people can, you know, do calculus and do these chemical equations with all of that weighing in their mind.
LOZZI: I think that her classmates are very, you know, inspired by her. We have a lot of, you know, Ukrainian refugees here, and I think it's going to be so encouraging and a hopeful scenario for them.
FREEMAN (voice-over): And Kate, from Ukraine, understands the responsibility.
SOBOLEVSKA: There are kids in Ukraine who don't have ability to go to school or go to school, and they have to go to bomb shelter every single day. I feel like I just have to be grateful for what I have. And that's the best thing I could do.
FREEMAN (voice-over): Danny Freeman, CNN, Philadelphia.
(END VIDEOTAPE)
MATTINGLY: That was a great story. Our thanks to Danny Freeman for that piece.
Well, President Trump insists the economy is great and the prices are down. His Vice President, other top officials say, well, maybe not right now, but just wait until 2026. So what's the real story for your wallet? We'll explain next.
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[17:45:51]
MATTINGLY: In our Money Lead, it was possibly the word of the year in Washington and across America. Affordability. And now the question is, will affordability continue to drive the conversation in 2026? Or will prices come down for Americans? My panel joins me now, and it is a very, very good panel of two very smart people on the economy. So I'm thrilled that you guys are here. Thank you very much.
Just to start top line, for people who have been going to grocery stores and trying to compare what they see maybe in the aisles with what the President has been saying or what lawmakers have been saying, Jim, is it going to get cheaper for Americans in 2026?
JAMES PETHOKOUKIS, AMERICAN ENTERPRISE INSTITUTE ECONOMIC ANALYST: If what you mean is that the rate of inflation will go up more slowly, it might. It went up about close to 3 percent this year. Next year, fingers crossed, it'll be like 2 percent.
But to most people, like, we remember what prices kind of were five years ago, and prices overall are up about 25 percent. So it's still going to seem like things are really expensive. And it's going to take a long time for people to sort of internalize, like, that big number.
So until we get, like, several years of real wage growth, you know, faster than inflation, things are going to seem very unaffordable.
MATTINGLY: I think, so Jim gets something that I've been kind of, we probably talked about this, I think, actually, during your White House days in the Biden years, where the baseline shift, especially post- COVID for people who were going in, and they're -- they haven't necessarily linked their brains up with the fact that, like, things, yes, they are more expensive, but everything's more expensive right now.
People were making more money, but wage growth hasn't necessarily matched up. When does that kind of convergence affect people in a positive way?
HEATHER BOUSHEY, FORMER MEMBER, BIDEN WHITE HOUSE COUNCIL OF ECONOMIC ADVISERS: Well, I think that, you know, Jim hit the nail on the head when he started talking about wage growth, right? So families are, they're looking at things, they are more expensive, and they're feeling strapped, though, because now incomes aren't growing as fast, particularly for workers at the lower half of the wage distribution.
We're starting to see the return of this K-shaped recovery, or a K- shaped economy, where, you know, people aren't doing as well, where there's a lot more anxiety about the labor market, and that's making those prices feel all that more pressing, especially when the big- ticket items, the things that are really hard to afford, like health care or buying a home or even your rent or child care, these items are things that are becoming even more expensive and harder for families to afford. So, you know, it's true that what we want to see as economists is that the rate of prices are not going up as fast, but what families want to see is that they can afford things, and that is that combination of that good job that gives them that living wage and being able to afford the things that matter.
PETHOKOUKIS: I mean, the risk for the President, all of a sudden we get 2 percent inflation. That's the Fed's target. The war on inflation is over. It's success. And people are going to say, like, yes, but, like, coffee went up by 20 percent over the past year. It seems like inflation is still really bad. So there's going to be a differential in perceptions there.
BOUSHEY: Especially if the labor market continues to soften, as it has been in recent months. So -- and especially if you continue to see the wages for workers, for those in the bottom half of the distribution, not growing as fast as wages overall. That's going to add to that anxiety for folks around the country.
MATTINGLY: Housing issues. You mentioned it. It's one of the biggest ticket items. It's one of the stickiest items when you look at prices, kind of, in any report that we look at this point in time. The President has made clear, Q1, we are going to address housing. We are going to get at this housing issue. I think I've heard that from several presidents over the course of the last couple of decades. How feasible is a fix there that has a tangible effect, Heather?
BOUSHEY: Well, the President, he's got a number of problems with housing. But let's just focus on a couple. So, one, he's putting a lot of pressure on the Federal Reserve to lower interest rates. So maybe he's thinking, well, in Q1, I'm going to get that Fed chair that I've always wanted, and interest rates are going to come down and everything's going to be hunky-dory, right? Maybe that's what he's thinking. I can't read anybody's mind.
But the other problem he has is that, is a housing supply, right? We need to build more housing. And he's actively making that so much more difficult. His immigration policy, his tariff policy, the lack of investment that he's making, is making it harder for all of those construction companies to do all the things that they need to do.
[17:50:03]
And families, when they say, they report to pollsters, hey, you know, we don't have a lot of confidence in the economy, some of that filters out into how they feel about whether or not they want to buy a new home, or whether or not they want to take that risk. And if they're locked into a lower rate, maybe they're not going to sell, which doesn't open up supply for everyone else.
So everything he is doing on the economy is going to make it harder for that increase in housing supply to show up. So I don't have a lot of confidence that he's going to solve that in Q1, even if interest rates come down.
PETHOKOUKIS: Yes. I think, right. So we don't want to screw up this Fed pick, right? Because if it's a Fed chairman that the market does not take seriously and business does not take seriously, that's going to make inflation worse. It's going to make interest rates worse. But the big problem for the President is that you cannot sign an executive order to lower housing prices.
This is primarily a state issue, a city issue, and the President just can't do a whole lot. You can try to maybe create some incentives to change zoning and land use policy on a local level, but it's not really a national issue. The good news is I think more and more politicians across the aisle understand that housing is really like the everything problem. It impacts, you know, you know how far your money goes. It impacts productivity, innovation all across the spectrum.
And I hope that sort of broad realization parties at all levels. I think we might get some results from that, but that's going to take time.
MATTINGLY: Yes, I do think the bottom up recognition from policymakers from local to state and above coalescing around the recognition of this has been, I think, really fascinating and positive to see over the course of the last couple of years. You're saying a 50 year mortgage and IPO in the GSE is not going to be the answer here.
PETHOKOUKIS: No.
MATTINGLY: You bring up probably one of the most important points of Q1 next year. Fed chair, can the President screw up the Fed chair pick with the three kind of that he's looking at the Kevins?
PETHOKOUKIS: The presidents has done it before -- a president has done it before in American history. And the problem is that no matter who the President picks, they're going to they're going to take this job under a certain like, you know, Paul. People aren't going to trust them. So they're going to have to, I think, to some degree, persuade markets that they're not at the beck and call of the President, that they're their own person. And that's that may be a little bit of a rough, choppy period.
MATTINGLY: The people that are out there right now, I mean, obviously, Kevin Walsh, Kevin Hassett, probably the primary two.
BOUSHEY: Well, I mean, I think no matter what happens, it's it is going to be hard for markets to see this as an independent Fed with either of those picks. I think, you know, just given everything that the president said, all the pressure that he has been putting on the Federal Reserve, all of the comments that he keeps making and what we really need is to be able to know that economic policy is being made based on data and evidence and that it's sensible and there's very little that the President has done that has been pushing in that direction.
MATTINGLY: Such a weird way to think about things.
PETHOKOUKIS: Someone called Greenspan.
MATTINGLY: I really appreciate you guys coming in. Thank you very much.
PETHOKOUKIS: Thank you.
BOUSHEY: Thank you.
[17:53:01]
MATTINGLY: Well, he's a member of the original cast of Saturday Live and the star of comedy classics like "Caddyshack" and "Vacation" and now a new CNN film, "I'm Chevy Chase and you're not" looks back at his incredible career. We have a preview. That's next.
(COMMERCIAL BREAK)
MATTINGLY: A new CNN film explores the life and career of actor and comedy legend Chevy Chase. CNN's Stephanie Elam spoke with the film's director and Chase's wife to discuss Chevy's career and what to expect when you tune in.
(BEGIN VIDEOTAPE)
STEPHANIE ELAM, CNN CORRESPONDENT (voice-over): From "Fletch" in 1985 and --
CROWD: The "Three Amigos."
ELAM (voice-over): -- to "National Lampoon's Christmas Vacation."
CHEVY CHASE, ACTOR: Hallelujah! Holy --. Where's the Tylenol?
ELAM (voice-over): Chevy Chase, the charismatic comedian, ruled the bar.
UNIDENTIFIED MALE: He was the one that people went nuts over. Two years after a premiere of a show where no one knows him, and he's now co-starring with Goldie Hawn.
GOLDIE HAWN, ACTRESS: They opened the door and there comes this six- foot-four guy. He's got presence, I mean, aside from being funny, but I mean, he really was kind of adorable.
ELAM (voice-over): "Saturday Night Live" was the perfect showcase for Chase's talent.
C. CHASE: Live from New York, it's Saturday Night.
ELAM (voice-over): Chase's signature weekend update intro.
C. CHASE: I'm Chevy Chase and you're not.
ELAM (voice-over): Is also the name of a new documentary debuting on CNN about Chase's life and career. But while cracking up crowds, Chase gained a reputation for being --
C. CHASE: Basically an asshole, if you're part of the expression. MARINA ZENOVICH, DIRECTOR, "I'M CHEVY CHASE AND YOU'RE NOT": There's his family and his friends who adore him and are so protective of him. Then there's Hollywood, and I would say just doesn't really like him. And then you have his fans. They just adore him.
C. CHASE: Thank you.
ELAM (voice-over): An improv master who knows how to use his stature to his comedic advantage, Chase is always after the laugh.
C. CHASE: It's the laugh that means everything to them and to me. Because it's as if I'm being told I'm loved, you know, as a child.
ELAM (voice-over): This from a man who had a less than loving childhood.
ZENOVICH: Chevy had a lot of pain, and he still carries around a lot of trauma to this day. His way of dealing with it was being funny.
ELAM (voice-over): His wife of more than four decades says it was time to set the record straight for Chevy and their three daughters.
JAYNI CHASE, WIFE OF CHEVY CHASE AND ENVIRONMENTAL EDUCATION AMBASSADOR: It's been very hard and hurtful. We've been in love and we've been through some rough stuff.
ELAM (voice-over): The rough stuff includes addiction and depression. The 82-year-old's more recent health battles also spurred the desire to open up.
J. CHASE: We almost lost him to heart failure in February of '21. He was in the hospital for six weeks. He was on life support. Zenovich hopes the film gives both his fans and haters perspective.
ZENOVICH: I think people will walk away from this and go like, you know, wow, he's been through a lot. Maybe he's a bit of an asshole, but I understand why.
ELAM (voice-over): But Jayni Chase believes her husband is chronically misunderstood.
J. CHASE: If Chevy says something and you feel offended, it's a little more on you than him. He takes risks. You can't get where he got without being a risk taker. So dial it back. Get a sense of humor. He's not an asshole and neither are you.
[18:00:19]
ELAM (voice-over): Stephanie Elam, CNN.
(END VIDEOTAPE)
MATTINGLY: Our thanks to Stephanie Elam. And be sure to tune in. The new CNN film "I'm Chevy Chase and you're not" airs New Year's Day at 8:00 p.m. Eastern here on CNN.
