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Next Hour: Biden, McCarthy To Meet Again On Debt Ceiling; CEO: Some Artificial Intelligence Regulation "Would Be Wise"; Rep. Santos Refuses To Answer Questions About GOP Criticism. Aired 2-2:30p ET

Aired May 16, 2023 - 14:00   ET

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

[14:00:00]

BRIANNA KEILAR, CNN ANCHOR: A high stakes Oval Office meeting to raise the debt ceiling. Will the months-long game of chicken finally end, or will the U.S. keep flirting with disaster while the politics play out? We are live at the White House.

BORIS SANCHEZ, CNN ANCHOR: Plus, the risk is real, but will they regulate? Lawmakers are grilling tech executives about artificial intelligence as it rapidly spreads across industries and online. We'll tell you why the man behind ChatGPT calls this a "printing press moment."

JIM SCIUTTO, CNN ANCHOR: And researchers working on Alzheimer's say they just got a big clue as to how to protect people from the disease could come down to a genetic mutation. We are following these major developing stories and many more all coming in right here to CNN NEWS CENTRAL.

KEILAR: One hour from now, President Biden will again host the four top members of Congress. Washington, one week closer now to the nation's potential June first default date, but apparently no closer to a deal to avoid that catastrophic outcome. Speaker McCarthy is sticking to the Republican plan to tie the debt ceiling to spending cuts and to work requirements.

Biden is still calling for the debt ceiling to be raised without conditions. And if you go by what the two sides have been saying in the past couple of hours, well, the forecast for this afternoon is pretty gloomy.

CNN's Arlette Saenz live for us at the White House. Arlette, at some point, someone's going to have to give up something. Could we find out what those potential concessions are today?

ARLETTE SAENZ, CNN WHITE HOUSE CORRESPONDENT: Well, Brianna, in just about an hour, we should be getting a glimpse at where these discussions are heading as President Biden is set to once again host House Speaker Kevin McCarthy and other Congressional leaders here at the White House for a meeting. But heading into this meeting, the expectations are low that they will come out with a concrete agreement for averting a default. You've heard pessimism from House Speaker Kevin McCarthy earlier today who said that there still needs to be some serious movement in order to be able to avert a default, and he said that he simply hasn't seen that from the discussions.

Of course, President Biden just a few days ago, was painting a bit of a rosier picture as he expressed optimism, saying that he believed that there was a desire to get an agreement on both sides. Now, initially, this meeting was supposed to take place on Friday. They delayed that meeting so that the staff level of discussions could continue.

And sources have said that those talks did continue in earnest even if they'd have been slow. And to not yet produce an agreement at this moment. Now, there are several items on the table, and still several sticking points for both sides.

Some of the things being considered are permitting reform, also clawing back unspent COVID relief funds. But then some of the sticking points are around spending caps and how long those should last as well as work requirements from staff -- for some social safety net programs. That is something that has really rumored -- emerged today as a key sticking point for both Democrats and Republicans.

House Speaker Kevin McCarthy has said work requirements are a red line for him, while on the Democratic side and the White House has said that the president will not be open to programs that would take away healthcare or push Americans into poverty. So, that issue of work requirements is expected to come up in this meeting in just about an hour.

KEILAR: The president has a big trip coming up. He's actually set to leave for Japan tomorrow. Could anything shift there?

SAENZ: Well, they're -- certainly are facing a huge time constraint of both with that June first X dates, as well as this upcoming trip from President Biden. He is set to leave tomorrow for the G7 summit in Japan. After that, he is supposed to go to Papa New Guinea and also to Australia for a QUAD leader Summit.

But the White House has said that they did not want to see this trip canceled or postponed as it's also a very key priority as top issues like Russia and Ukraine and China are all expected to be discussed at that G7 summit. The White House has said the president can be president from anywhere and that they would expect those ongoing talks on the staff level to continue while President Biden is gone. So at this moment, no exact change to the president's schedule and he is set to depart tomorrow for Japan for that G7 summit.

KEILAR: All right. Arlette Saenz at the White House, thank you. Jim?

SCIUTTO: Well, today, Ukraine's military is claiming some major gains in the eastern part of that country, declaring it has liberated large areas to the north and south of Bakhmut. It comes as we are getting new dramatic video showing heavy fighting inside that city that's now largely destroyed. Have a look.

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(END VIDEO CLIP) SCIUTTO: Enormous costs for both sides in that battle. We are also learning more about the large-scale wave of air attacks on Kyiv by Russia overnight. Russia is claiming that it destroyed one of these, an American-made Patriot air defense system. A U.S. official set -- tells CNN it was not destroyed but was likely damaged.

[14:05:11]

The U.S. is still assessing. It comes as a Western official and others tell me that Ukrainian forces have begun using long-range Storm Shadow cruise missiles, those provided by the British, to strike Russian targets. You may remember we were the first to report last week that the UK had delivered multiple Storm Shadows to Ukraine, giving its forces a new long-range strike capability.

CNN's Sam Kiley, he's in southern -- South-Eastern Ukraine. Sam, first to these Russian claims that a Patriot missile system has been successfully struck. Where and do we know how this happened?

SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: The short answer to that, Jim, is no. And as far as the Ukrainians are concerned, we will never know. They are extremely careful to keep the locations of their air defenses, in particular, a very closely guarded secret. And top of their secret list will be the Patriot missile system.

They have refused to comment one way or another as we would have anticipated and whether or not it was even hit. They're quite aggressive about making sure that the media, for example, don't reveal battle damage assessment, don't provide a running tally of what has and has not been successfully hit to Russian targets as who might be looking at it.

But the concentrated attack over Kyiv that involve the Patriot missile that the Ukrainians say involve them being able to shoot down another six hypersonic Russian missiles alongside 13 or 12 or so other missiles that were fired in this very focused attack on Kyiv is a new tactic being used, I think, by Russia to try to overwhelm the air defense batteries not just Patriot, but the large number of other defenses that they've had from a number of NATO allies. And we've seen in the past these mass attacks but spread over a sustained period of time. These were much, much more tightly focused, Jim.

SCIUTTO: Yes. Notable that they're happening as well as Ukrainians are attacking more targets further into Russian territory than we've seen in the past. Another story we're following here that the head of a pro-Russian Wagner and paramilitary group claims that a U.S. citizen was killed in fighting in the east. What do we know, and can we take these claims as credible?

KILEY: Well, Yevgeny Prigozhin, the leader of the Wagner mercenary group, which is rapidly being added to or their plan to be added to lists for the French and the British and others as a terrorist organization, is -- has recently posted on May the 16th, a video which purportedly shows him in Bakhmut and he enters a building under fire to some extent. And on the floor of the building in the rubble is a dead man. And he then produces identification documents, which he says indicate that this man is a foreign fighter -- a foreign volunteer fighting on the side of the Ukrainians.

He then goes on to say that the man fought long and hard and needed to be treated with respect in death and that he would be draped in his national flag and eventually returned to his home country that he's saying is American. We -- the State Department have yet to confirm his nationality and name, Jim.

SCIUTTO: And we do know that Americans have volunteered to fight there as have other nationalities. Sam Kiley, Southeastern Ukraine, thanks so much. Boris.

SANCHEZ: Now, to something you don't see often, an anomaly on Capitol Hill. Private tech CEOs asking for more government regulation. It's usually the other way around. For the very first time, senators held a hearing about the latest artificial intelligence tools. And Sam Altman, the man who runs ChatGPT said there is still so much we simply do not know about the risks that these products could pose. Listen.

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SAM ALTMAN, CEO, OPENAI: I'm nervous about it. I think people are able to adapt quite quickly when Photoshop came onto the scene a long time ago. You know, for a while, people were really quite fooled by photoshopped images and then pretty quickly developed an understanding that images might be photoshopped.

This will be like that, but on steroids. And the interactivity, the ability to really model and predict humans well, as you talked about, I think is going to require a combination of companies doing the right thing, regulation, and public education.

(END VIDEO CLIP)

SANCHEZ: CNN's Jon Sarlin joins us now. And, Jon, in this hearing, Senator Dick Durbin remarked how uncommon this was to have somebody in the private sector come forward and say that their industry should have more regulation.

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JON SARLIN, CNN DIGITAL PRODUCER: A watershed moment as there was bipartisan consensus that something needs to be done with AI. The hearing began in a way that no hearing has ever been done with Richard Blumenthal using AI to make a sharp point.

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SEN. RICHARD BLUMENTHAL (D-CT): And now, for some introductory remarks. Too often, we have seen what happens when technology outpaces regulation. The unbridled exploitation of personal data, the proliferation of disinformation, and the deepening of societal inequalities.

If you were listening from home, you might have thought that voice was mine and the words from me, but in fact, that voice was not mine. The words were not mine. (END VIDEO CLIP)

SARLIN: So, there you see the -- Richard Blumenthal using open AI as a demonstration of just how powerful this technology is. Those were not his words, that was not his voice. And you saw Sam Altman, the CEO of OpenAI, the most powerful and -- ChatGPT's most powerful AI in the market right now, calling for his own industry to be regulated.

SANCHEZ: And Altman also said that his biggest fear with AI moving forward is the potential for disinformation and the manipulation of voters as soon as the 2024 election. Notably, Jon, while we have you, I want to ask you about this piece in The New York Times. It says that researchers at Microsoft are claiming that AI is starting to show signs of human reasoning. That is terrifying.

SARLIN: Right. This is exactly why we're having these hearings. So, there is something called AGI which is this theoretical concept of artificial general intelligence, which is when AI will supersede human intelligence, right when it will become smarter than humans. Now, Microsoft is claiming in a new research paper that ChatGPT-Four which is created by OpenAI, which is in partnership with Microsoft AI is approaching that.

But some people are cautious of this, right? Because it's very difficult to discern when an AI is self-aware, or whether it's just pretending to be self-aware, right? These are black box technologies. We know what goes in them and we know what comes out. But we really don't know how they work inside, which is just another reason why people like Sam Altman, the CEO of the company behind ChatGPT is calling on Congress to regulate his own industry.

SANCHEZ: Yes. And those inner workings, that is where the fear lies. Jon Sarlin, thank you so much for the reporting. Appreciate it. Brianna.

KEILAR: All right. We do have some breaking news. On Capitol Hill, a vote to force people on the record on the expulsion of New York Congressman George Santos is not expected to pass. This is really a message vote.

Let's get to CNN Chief Congressional Correspondent Manu Raju, who is live for us on this. Manu, this is significant even if it isn't going to pass because you have the House Speaker who has been standing behind George Santos.

MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Yes. And this is meant to put Republicans in a spot that's being offered by a Democratic member, Congressman Robert Garcia, a freshman from California offering this resolution that essentially force a vote and put the onus on the Republican leadership. They can make a decision. They could vote to expel George Santos or they could vote to table the resolution, which is a procedural vote that essentially means to kill the resolution.

Now, in order to expel a member of Congress, you need to have a two- thirds majority in the House of Representatives to do that. They don't have a two-thirds majority to expel him unless the Republican leadership decided to change course and decided it was time to kick George Santos out of Congress. But to table the resolution, that means that almost all Republicans, all but four Republicans would have to vote to kill this resolution, which put -- could put some members in a difficult spot given that there are a number of Republicans who believe that George Santos should not be a member of Congress, given his widespread fabrications about his past.

The fact that he's facing multiple felony counts and a federal criminal indictment. He's also under a House ethics investigation about a whole wide range of issues from his past. So, Republicans may have to decide whether or not to side with George Santos or suggest that he should be given some time to fight these charges.

So, all that is still playing out. But at the moment, that was an announcement just made by this freshman Democratic Congressman Garcia to force this vote on the House floor. We'll see when it happens, but they would -- the way the nature of this is proposed, they can't block the resolution from coming up. They'll actually have to be a vote, a procedural vote, or vote on its merits. We'll see how it shakes out in the days ahead, Brianna.

KEILAR: OK. So, can you explain this to us a little bit Manu if, let's say, entirely possible that you have more than four Republicans who are not going to stick their neck out for George Santos but I would say not enough, obviously, to help Democrats expel him, then how do you sort of clear this off the House floor? How does that work?

[14:15:09]

RAJU: Yes, it's a great question because let's just say that plays out that the Republicans -- there are not enough Republicans to table this measure, to kill this measure. If more than four decide that they don't want to kill this measure, then they would have to vote on the underlying merits of the resolution, meaning the expulsion resolution, and that's what the two-thirds majority would come to. It would require a two-thirds majority to expel him from Congress. So, it would essentially force Republicans and Democrats to take another vote on George Santos.

Only the Republican leadership does not want to do at all. So, there are some questions about the exact timing of all of this as a belief that perhaps later in the week, that's when this would all play out. But the votes just ended here. A number of members just filing out or trying to get a sense of the timing of all this.

I did try to ask George Santos about the criticism from some members of his own party that he should not be a member of Congress anymore. Santos did not respond to those questions and walked into the Capitol, Brianna.

KEILAR: Yes, look, if it weren't for that slim majority, I don't think the speaker would be standing necessarily behind George Santos. But with that slim majority comes this tricky situation as well. Manu Raju live was on the Hill with his breaking news, thank you. Jim. SCIUTTO: All right. So, some more confusing drama on Capitol Hill. The deadline for a debt deal is getting close. A deadline we warned about months ago. So, how did we get here? We're going to have more on that next.

Later, Home Depot lowers its yearly outlook as consumers are pulling back on spending. Why the company is one to watch as an economic bellwether? You're watching CNN NEWS CENTRAL, and we'll be right back.

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SANCHEZ: In just over two weeks, the U.S. could run out of cash to pay its bills causing a default that could lead to a global economic meltdown. The president is set to meet with top lawmakers in less than an hour to try and avoid that outcome. But how do we get this close to calamity in the first place? Well, it's been months in the making.

Treasury first warned about a looming default way back in January. That's when the White House called on Congress to raise the debt ceiling without conditions, something Congress has done dozens of times before. Not this time, though.

This time, Republicans are playing hardball. They want to pair the increase with spending cuts. So, when Biden and Speaker McCarthy first met on the issue on February first, there wasn't much common ground to find.

For months, the president has refused to negotiate on the debt limit so McCarthy and House Republicans decided to go it alone. And late April, the House passed the GOP bill that paired a debt ceiling raised with hefty spending cuts. It was a nonstarter for the White House.

A few days later, Treasury Secretary Janet Yellen said the U.S. could default as soon as June first, but that did not compel either side to budge. Then on May 9, President Biden hosted McCarthy and the three other top Congressional leaders for debt ceiling talks. Still no movement, which now brings us to today and the vastly divergent outlooks about what to expect at this afternoon's meeting.

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REP. KEVIN MCCARTHY (R-CA): I appreciate the president finally willing to talk after 97 days, but there is no movement. We're only a couple of weeks away. If you look at the timeline to pass something in the House and pass something in the Senate, you got to have something done by this weekend, and we are nowhere near any of that.

JOE BIDEN, PRESIDENT OF THE UNITED STATES: I remain optimistic because I'm a congenital optimist. But I really think there's a desire on their party as well as ours to this agreement. I think we'll be able to do it.

(END VIDEO CLIP) SANCHEZ: Let's discuss these critical negotiations with the former Deputy Chief of Staff for Senator Mitch McConnell, Rohit Kumar. He's a co-leader of PwC's Washington National Tax Office. Also with us, former Deputy Director of the National Economic Council under President Biden, Seth Harris. He's now a senior fellow at the Burnes Center for Social Change.

Rohit, let's start with you because you were here last week on CNN NEWS CENTRAL, saying that you had a good feeling about the first meeting between President Biden and these other Congressional leaders. Since then, you heard the divergent viewpoints and a meeting that got canceled on Friday. How are you feeling now?

ROHIT KUMAR, FORMER DEPUTY CHIEF OF STAFF FOR SEN. MCCONNELL: Look, I feel -- still feel pretty good that they're going to get a deal and they'll get it by June one or whenever the state ends up being. As I said last week, I expected further communication from the Treasury Secretary as to the X-date. We got that, although we didn't get really updated information, she still says could be as early as June one, but might be a little bit later.

I still think that we need a real deadline, like hard and fast. Like this is it. We go over the cliff on this day, a kind of deadline to force action. But I still feel like look, they're making progress.

I understand why Speaker McCarthy is saying what he's saying, right? He needs to set expectations appropriately. This is going to be hard. We're not going to get everything we want. It's really challenging so that when he does get a deal, it feels like a victory as opposed to something like we were always going to get that and people start reading into it more than it's actually going to be available.

SANCHEZ: And they think perhaps you didn't fight hard enough.

KUMAR: Right.

SANCHEZ: So, Seth, from your perspective, what are you looking for out of today's meeting that gives you an indication that there's reason for optimism?

SETH HARRIS, FORMER DEPUTY DIRECTOR, WHITE HOUSE NATIONAL ECONOMIC COUNCIL: Well, you'd like to see some language from Speaker McCarthy that he is moving towards the White House position on some of the issues that they're discussing. You'll also want to see some signal from the House Republican caucus that he's going to be able to deliver the votes. He's got a very serious problem inside the House Republican Conference.

He's got an Extreme Ultra MAGA right-wing group that probably isn't going to vote for anything. Then he's got some frontline members who are in Biden districts who are going to find it extraordinarily difficult to vote for things like work requirements on some of our social safety net programs. So, we'd like to see that Speaker McCarthy can make a deal that he can actually live up to.

But I think that the ability -- I agree that we can get to a deal between the parties. The issues have been narrowed. We pretty much know what the range of agreement is right now. It's just a matter of whether or not Speaker McCarthy can deliver.

SANCHEZ: Yes. And we saw those riffs exposed during the process of him becoming a speaker. It was a very difficult challenge. Rohit, you've spoken out about your desire to see the room shrink, meaning that this should be a negotiation between very specific parties. Who do you think needs to be out of the room today in the White House?

[14:25:00]

KUMAR: Yes, look. A room that has five parties in it, the four Congressional leaders plus the White House, is not a room where a deal gets done. The deal gets done between two parties. And in this case, those parties are the White House, President Biden, and Speaker McCarthy.

Senator McConnell has made it clear that House Republicans have his proxy or (AUDIO GAP) Republicans. And let's face it, whether they like it or not, congressional Democrats are to some degree, a wholly owned subsidiary of the White House. Now, they won't see it that way, right?

They will disagree with that. But the truth of the matter is, when the president is of your party and the president agrees to something, it's more than just do I like it or not like it, it becomes almost if you vote no, it's like a vote of no confidence in the administration. So, it takes on a much bigger field and just like do I like this or not like this?

That doesn't mean they're going to bat a thousand, they're going to get every House Democrat, every Senate Democrat to vote for it, but they're going to get the overwhelming majority of Democrats to vote for it. And they need to be able to do a deal with McCarthy that includes some things that House and the Senate Democrats aren't going to love. They're going to have to ask for forgiveness, not permission.

But that's a really hard thing to do if they're sitting in the room watching you do the thing that they don't want you to do like that can complicate the variable. So, these deals get done, in my experience, having done several of these actually with then Vice President Biden. These skills -- deals get done between two parties, not five parties.

SANCHEZ: And, Seth, would you be confident with President Biden alone in a room with Kevin McCarthy to get all the things that Democrats want?

HARRIS: Yes. President Biden is one of the great legislative dealmakers in our history. He's got a long history with Leader McConnell. So, I'm confident that they can make a deal.

I worry about the House Republican Conference and Speaker McCarthy. But I think we have to focus on how critically important it is that we get a deal because if there's a default, that will be absolutely catastrophic for our economy. We're going to see millions of people out of work, businesses failing, banks failing, and we're going to see interest rates go through the roof We can't allow this to happen. We shouldn't be playing Russian

roulette with our American economy. So, my hope is that today will be another step on the path to getting a deal although I'd be surprised if we got one today.

SANCHEZ: Yes. There's disagreement about the path there but I think everybody agrees this is something we have to avoid. Seth, Rohit, thank you so much. Appreciate your perspectives.

KUMAR: Thanks, Boris.

HARRIS: Thank you.

SANCHEZ: Brianna, over to you.

KEILAR: Researchers say they just got a major clue that could help protect people from Alzheimer's disease. Ahead, we'll tell you how one man who defied the odds for decades may have cracked the gene code. Dr. Sanjay Gupta will be joining us next to explain. Stay with us.

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