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Soon: Biden, Mccarthy To Meet Again With Fiscal Cliff Looming; Executives From Failed Banks Grilled In Senate Hearing; U.S. Assessing Potential Damage To Patriot Defense System; Senate Has First Hearing On Future Of Artificial Intelligence; NC Republicans Plan Vote Today To Override Abortion Ban Veto. Aired 3-3:30p ET

Aired May 17, 2023 - 15:00   ET

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

JIM SCIUTTO, CNN HOST: Showdown at the White House again, top lawmakers meeting this hour as the U.S. barrels towards what could be an economic disaster. Is either side ready to make a deal on the debt ceiling? Today could get ugly.

BORIS SANCHEZ, CNN HOST: Plus, Russian missiles targeting Kyiv, a horrifying attack overnight. But Ukraine claims it now is regaining ground from Russia. The battlefield is fast changing in this war and we are following the very latest.

BRIANNA KEILAR, CNN HOST: And just hours from now, North Carolina Republicans could override the governor's veto of an abortion ban. The governor pleading for at least one Republican to break ranks during today's vote. We're following these major developing stories and many more all coming in right here to CNN NEWS CENTRAL.

SCIUTTO: All right. So in just a few minutes, they're going to try again. President Biden, Speaker McCarthy will continue their debt stand stare down face-to-face at the White House. Biden is hosting McCarthy and three other congressional leaders to once again try to get closer at least to a deal to raise the debt ceiling as been done dozens of times.

They have just over two weeks now to do it before a potential U.S. default. Somehow it is looking like the two sides have dug in even more since last week's meeting.

CNN's Melanie Zanona, she's on Capitol Hill.

Melanie, so we've seen this before, right? Ah, we're making some progress. No, we're not making progress. I mean, it's sort of the definition of a game of chicken. The trouble is the economy stands - hangs in the balance here. What's really happening? Is there any real progress? Do we expect any real progress in the White House?

MELANIE ZANONA, CNN CAPITOL HILL REPORTER: Well, I will tell you, Jim, that staff have been working behind the scenes to come up with a potential menu of policy options for a potential deal. But there has been a central sticking point that has already emerged.

And that is whether to impose tougher work requirements on social safety net programs like Medicaid and food stamps. That was something that House Republicans included in their debt ceiling bill that they passed in the House.

And Speaker Kevin McCarthy said, it is a red line for him that it absolutely must be included in any deal that is negotiated with the White House. But Democrats say that's a nonstarter for them. Take a listen.

(BEGIN VIDEO CLIP)

REP. KEVIN MCCARTHY (R-CA): Evan data point shows that and it helps people move forward. So the public wants it. Both parties want it. The idea that they want to put us into a default because they will not work with on that is ludicrous to me.

SEN. ELIZABETH WARREN (D-MA): What the Republicans are engaged in is just a cynical game to see if by tying people up on one more requirement, and one more hurdle, and one more twist and one more turn that some people will walk away.

MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Are you worried that the White House may give in on this, though?

WARREN: They should not.

UNIDENTIFIED FEMALE: Would you not vote yes on a deal if it (inaudible) ...

WARREN: I cannot support a deal that is only about hurting people.

(END VIDEO CLIP)

ZANONA: So both sides really digging in there. And there are other sticking points we should mention as well. One of them is the length of spending caps. Democrats only want about two years worth of spending caps or as Republicans are pushing for as many as 10 years.

And then there's a question of how long the debt ceiling hike will last in any deal. Of course, the White House wants a longer hike, Republicans pushing for a shorter. So all that to say, Jim, the two sides are so very far apart.

So this meeting at the White House today is going to be critical to see whether they can break the impasse or not and whether they actually have a path forward with very little time left on the calendar.

SCIUTTO: Well, Elizabeth Warren's comments are interesting there because could the White House make a deal that does not actually have Democratic votes, we'll see a whole host of possibilities.

Melanie Zanona, thanks so much.

Jeremy Diamond, he's at the White House.

Jeremy, President Biden's supposed to leave for a G7 summit tomorrow in Japan, go on to Australia. This is a big trip possibility. He shortens that trip because of these ongoing negotiations. JEREMY DIAMOND, CNN WHITE HOUSE CORRESPONDENT: Yes, Jim. That appears to be exactly the case. I mean, look, the White House was very clear that the President is leaving tomorrow for Japan. He will be attending the G7 summit there. But the White House's national security spokesman, John Kirby, also saying that they are reevaluating the rest of the trip.

And he told me directly that a cancellation could happen of those last two stops, Papua New Guinea and Australia, where President Biden is set to meet with those quad members, a key issue as it relates to U.S. leadership in the Indo-Pacific. Listen to John Kirby moments ago.

(BEGIN VIDEO CLIP)

JOHN KIRBY, PENTAGON PRESS SECRETARY: We're reevaluating the rest of the trip right now. I can speak to Hiroshima, I can speak to the G7. We're evaluating the rest of the trip. And as you might expect, should there be changes made or need to be made to the rest of the trip, we will absolutely make proper notification.

And what's going on right now is we're hopping on Air Force One tomorrow and we're heading to Japan and we're going to have a good meeting at the G7 and we're going to evaluate the rest of the trip and we'll see what happens. We'll see where things go.

(END VIDEO CLIP)

DIAMOND: And those comments come as President Biden was just moments away from sitting down with congressional leaders here at the White House.

[15:05:02]

For only the second meeting between these leaders about a potential spending deal to avert a potential default, which could happen in just over two weeks. And amid that, the White House, as you saw there, as Melanie was reporting on, the White House is getting pressure from some Democrats not to cave too far on those work requirements.

The White House press secretary, Karine Jean-Pierre, leaving the door open to the President supporting strengthening of some work requirements, as the President did himself this weekend. But what she also said is that the President won't support anything that takes health care coverage away from people.

And that could certainly be an indication that work requirements on Medicaid could potentially be a red line. But I will tell you, Jim, one thing that is for sure is there is an acknowledgement in this White House that they are going to need to agree to some spending cuts here.

The length of time of that is one of the key sticking points. But all of that is said to be hammered out as the President sits down with these leaders right now at the White House.

SCIUTTO: Well, listen, that in itself is moving because initially the White House position was no negotiation whatsoever on these issues. But boy, deadlines getting close.

Jeremy Diamond at the White House, thanks so much. Boris?

SANCHEZ: Just plain stupid, that's the word from some lawmakers today on Capitol Hill as they grilled former executives behind some of the most colossal bank collapses in American history. The former CEOs of Silicon Valley Bank and Signature Bank took a barrage of questions from the Senate Banking Committee.

CNN's Matt Egan was watching that very closely.

And Matt, it's not just the bank executives that senators are watching closely, it's also the Fed and the FDIC.

MATT EGAN, CNN REPORTER: That's right, Boris. I mean, there's really more than enough blame to go around here, including for the regulators themselves. During a House hearing today, Michael Barr, the top banking regulator at the Federal Reserve, he admitted that bank supervisors, they failed to escalate problems that they identified at Silicon Valley Bank quickly enough or forcefully enough. And Barr said that he takes full responsibility for these failures at the Fed. But he declined to say whether anyone at the Fed would actually lose their jobs over this.

Now, during the separate Senate hearing today, bank executives, they apologize for the harm caused by their bank failures. But they also tried to kind of shift some of the blame elsewhere, including on the Federal Reserve's war on inflation.

Because remember, these bank failures, they happen after the Fed spiked interest rates. And as rates went up, the value of the bonds that banks were sitting on went down. And that caused massive losses, especially at Silicon Valley Bank.

Lawmakers, they blasted Silicon Valley Bank for failing to hedge against this risk and minimize losses. Listen to this exchange between Republican Senator John Kennedy and the CEO of Silicon Valley Bank.

(BEGIN VIDEO CLIP)

SEN. JOHN KENNEDY (R-LA): Mr. Becker, you made a really stupid bet that went bad, didn't you?

GREGORY BECKER, FORMER CEO OF SILICON VALLEY BANK: Senator ...

KENNEDY: And the taxpayers of America had to pick up the tab for your stupidity, didn't they?

BECKER: Senator, there were a series of events, unprecedented events that occurred that led us to where we are today.

KENNEDY: No. This wasn't unprecedented. This was bone deep, down to the marrow, stupid.

(END VIDEO CLIP) EGAN: Now, harsh words there, but really there was bipartisan condemnation of the bank CEOs at this hearing. We also learned more about the scale of the deposit runs that these banks were facing. Silicon Valley Bank's CEO, he said that customers yanked $42 billion from that bank in the span of just 10 hours.

He noted that amounted to a million dollars every second, just a staggering figure there that I think really puts an exclamation point here on just how fast these bank runs can happen in today's age of social media-fueled rumors and how easy it is to move money around on mobile banks and, of course, when the banks themselves are mismanaging the situation. Boris?

SANCHEZ: Yes, major concern as we look at these smaller and regional banks moving forward, even though there are assurances that these banks are now stable.

Matt Egan, thank you so much for that. Brianna?

KEILAR: Ukraine's military claims major gains to the north and south of Bakhmut. We're getting new video that shows intense fighting inside of the city. Here it is.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: (Foreign language).

(END VIDEO CLIP)

KEILAR: We're also learning more about the barrage of airstrikes on Kyiv overnight. Russia claims that it destroyed an American-made patriot air defense system. A U.S. official tells CNN it was not destroyed, but it was likely damaged.

CNN's Nic Robertson is in eastern Ukraine for us.

[15:10:03]

Nic, tell us the latest from where you are.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Well, the understanding at the moment is that the air defense system, the Patriot system is being analyzed to see if it can be repaired where it is, if the damages are just light or if it actually needs to be taken somewhere else to be repaired by U.S. technicians, so that's the question at the moment.

And the Ukrainian government just doesn't comment on this sort of thing at all. It won't comment on what it will do to replace this or if it can operate in part or what else it will bring in. And what we know is that Kyiv has been a hugely important target for Russia to hit with its missile systems, whatever they are, whether it's the drones or the cruise missiles or the Kinzhals that it fired there last night, the hypersonic missiles.

And so it's been a huge priority target and therefore a huge priority place for the Ukrainians to defend, which they've done effectively. They did it before the Patriot system came in. They moved their systems around the country, depending on where the biggest threat is to troops and what their military operations are going to be.

I don't think we're going to learn from the Ukrainians what their next move is if this equipment needs to be repaired. But the systems that they've got in place around the capital until now have only been getting better.

KEILAR: And Nic, the head of the pro-Russian Wagner paramilitary group is claiming that a U.S. citizen was killed while fighting in Bakhmut. What more can you tell us about that?

ROBERTSON: Prigozhin, there's always a lot of bluster. There's very little truth often. There's also a lot of propaganda in what he tries to do. It's not clear at the moment. Certainly, U.S. officials, government officials have not been able to determine if what Prigozhin is saying is true.

Of course, Bakhmut is hugely intensified at the moment, both for Russians and Ukrainians. They've lost a lot of men there. They have high numbers of casualties both sides. And we know that Bakhmut is a place that both American citizens and other international fighters who come in to support the Ukrainians have in fact gone to fight and some have been killed there before.

So Prigozhin may have indeed the body of an American citizen, but it isn't clear at the moment. He has said, however, he will treat this man with respect and return him to U.S. officials.

KEILAR: All right. Nic Robertson live for us in Eastern Ukraine. Thank you for the very latest on this war. Jim?

SCIUTTO: Tech executives at the world's leading artificial intelligence companies revealing their own biggest fears about their own products and actually asking lawmakers for them to be regulated.

And a whistleblower claims to have the information about the alleged mishandling of the Hunter Biden investigation. But now, the IRS employee has been reassigned.

Also, disturbing new details about that shooting in New Mexico, an 18 year old suspect fired randomly into homes and cars. What his family is now telling police just ahead.

(COMMERCIAL BREAK)

[15:17:15]

SANCHEZ: Just in to CNN, we are getting our first look at the Oval Office of the White House as top lawmakers meet negotiating the debt ceiling. Let's watch.

UNIDENTIFIED FEMALE: (Inaudible) ...

JOE BIDEN, PRESIDENT OF THE UNITED STATES: (Inaudible) ... UNIDENTIFIED FEMALE: (Inaudible) ...

BIDEN: Hello, folks. Get a good picture of all of us. We're having a wonderful time. Everything is going well. Anyway.

(Inaudible) I don't have any comment to make. We're just getting started and will be available at the sticks when this is over.

(CROSSTALK)

UNIDENTIFIED FEMALE: Thank you so much.

(CROSSTALK)

BIDEN: It's looking much better.

(CROSSTALK)

BIDEN: It's looking much better.

UNIDENTIFIED MALE: Getting much better?

(CROSSTALK)

BIDEN: Yeah, you see it.

(CROSSTALK)

UNIDENTIFIED FEMALE: Thank you so much. Thank you so much.

(CROSSTALK)

UNIDENTIFIED MALE: Does Texas get any credit for that?

BIDEN: Give me a break.

(CROSSTALK)

SANCHEZ: We are watching lawmakers meeting with President Biden at the White House. Top four congressional leaders there. And we just saw President Biden not saying much. He was asked a number of questions about the debt ceiling and other things. President saying the meeting hasn't started, so he doesn't have much to say.

He did comment that the border is doing much better since the expiration of Title 42. Obviously, the COVID era policy that allowed for quick deporting of migrants who cross the border. We're, of course, going to be monitoring the meeting at the White House and bring you the very latest, Brianna?

KEILAR: All right. So the tech chiefs behind some of the world's most advanced artificial intelligence products under oath. For the very first time, senators held a hearing about the rapidly growing technology and the fears that it could soon undermine our national security, job security and also elections.

[15:20:00]

(BEGIN VIDEO CLIP)

SEN. JOSH HAWLEY (R-MO): Should we be worried about this for our elections?

SAM ALTMAN, CEO, OPENAI: Yes. Thank you, Sen. Hawley, for the question. It's one of my areas of greatest concern, given that we're going to face an election next year and these models are getting better. I think this is a significant area of concern. I do think some regulation would be quite wise on this topic.

Someone mentioned earlier, it's something we really agree with. People need to know if they're talking to an AI, if content that they're looking at might be generated or might not. I think it's a great thing to do.

(END VIDEO CLIP)

KEILAR: That was Sam Altman. He is the CEO of OpenAI, the parent company of ChatGPT, which you've probably heard of can automatically generate text about pretty much anything that you ask it to. Our next guest said this about the moment that we are finding ourselves in when it comes to AI.

(BEGIN VIDEO CLIP)

KARA SWISHER, HOST, "ON WITH KARA SWISHER" PODCAST: I think the reason people are so worried - and I think it's a legitimate worry - is because the way the early Internet rolled out, it was "gee whiz" almost the whole time.

ALTMAN: Yes.

SWISHER: Almost, up into the right, "Gee whiz, look at these rich guys. Isn't this great? Doesn't this help you?" And they missed every single consequence, never thought of them. I remember seeing Facebook Live and I mentioned, I said, "Well, what about people who kill each other on it? What about murders? What about suicides? What about - and they called me a bummer.

(END VIDEO CLIP)

KEILAR: All right. That was podcast host Kara Swisher actually talking about social media and the Internet. And Kara, we're listening right now, so be the bummer on AI.

SWISHER: Yes. I think Sam did a good job being the bummer. I think you can't say he hasn't warned people or he isn't doing it. I think he's doing it - that was in an interview. We were talking about that issue. I've known him since the beginning of the Internet when he had a startup that didn't quite work out the right way.

But he's a very thoughtful and someone who's thinking about these issues and he's warning Congress right now as opposed to other Internet executives in the past who have sort of glossed over the real problems that could exist. So there's all kinds of bummers that could happen.

Anything you could imagine that's happened already sort of turbocharged. And that's how you have to think about it. It's probably an easy way to talk about it, but if you imagine that there was all kinds of misinformation, it's going to be even more misinformed, even more convincing to people.

It's going to also give a lot of bad players the chance to really take advantage of people and shift people's opinions with a lot of false information. There's things like - I mean, the worst thing, killer robots. I think that's what Greg - Geoffrey Hinton talked about who had just recently left Google, that these could be self-learning robots that are soldiers, essentially.

And so there's all kind - anything in your imagination that could happen could happen with this.

KEILAR: Killer robots. I mean, we think of some movies, right ...

SWISHER: Yes.

KEILAR: ... that we've seen almost as the reference point here.

SWISHER: Yes.

KEILAR: But it's no joke. Are there worst case scenarios that you think we can't even imagine?

SWISHER: No, the killer robots is pretty bad. I don't know. There's all kinds of things (inaudible) ...

KEILAR: Aside from (inaudible) ...

SWISHER: ... yes, aside from killer robots, I don't know. I just - I think what we have to do is look at what's happened. No one would have imagined that a lot of the misinformation helped radicalize a lot of people, whether it was about vaccines or about election fraud, et cetera, et cetera. That's on a basic level. This is on a quantum level of complexity and it also generates images. It generates whole texts, it can fake people.

I think one of the senators did a fake of himself. It's a bit of a stunt, but it can do that. It can do - it can fake you. It could fake me. Anybody that has enough audio, certainly that can happen with.

And so you can have people saying things they didn't say. And it'd be very convincing. And it's - again, it's like Photoshop on steroids. It's like the Internet on steroids. It's like Facebook on steroids. And that's how you have to think about it.

KEILAR: Yes. We heard Senator Blumenthal today, as you mentioned. And then it turned out that wasn't even Sen. Blumenthal. So you see how it would certainly ...

SWISHER: No.

KEILAR: ... be misused. We're hearing these AI companies.

SWISHER: Yes.

KEILAR: We're hearing Sam Altman. He's got these warnings out there. And these AI companies, these folks, they're endorsing this concept of regulation right now. But do you think that ultimately, they'll go the way of social media giants and resist it?

SWISHER: I don't think so. I think they're not protected by Section 230 and I think that's still being sorted out, but they're not protected. They have liability here. And so that's been something that's made it easy for the social media companies to behave the way they have.

In this case, there is not regulation necessarily protecting this stuff. And so it has liability, just like a carmaker might. And so that - there's that issue, but there needs to be a global body to talk about these issues, just the way there is on nuclear nonproliferation and things like that.

And there has - and the U.S. has to step up here. It can't just be the FTC. I just interviewed Lina Khan, who's the head of the FTC. They're trying to use current laws, but it's not enough.

[15:25:01]

And so we have to think about where it's going and maybe even contemplate a new department that looks at these digital issues much more strongly staffed with experts and see what we can do from there. It's not the worst idea in the world. I know Sam raised it today.

KEILAR: Yes. We'll see what Congress comes up with. I wonder if you think they're equipped to deal with it. Obviously, Chuck Schumer, we've learned, he talked to so many AI experts to try to figure out legislation. But can Congress do this? Are they equipped?

SWISHER: Well, Congress passes laws on banks, on cars, on planes, all kinds of things, pharmaceuticals. Maybe it's not perfect, but it's - they're certainly capable of doing it. Every now and then, like today, Lindsey Graham sounded typically Luddite-ish in his questions about trying to - and Sam was trying very hard to differentiate. But there's always one of those senators who does that.

But in general, I have found lots and lots of senators and Congress people, whether it's Ken Buck from Colorado or Mark Warner or all kinds of senators, Sen. Bennett from Colorado, Sen. Klobuchar, there's all kinds of people who really do know what they're talking about and are capable of making the legislation.

And then you hire people just like - that regulate - I mean, there's people in the FDA, there's people in the SEC and, again, not perfect, but they're there to protect consumers. And that should be, of course, the first order of business is protecting Americans of the possibilities, just like they do on other things.

KEILAR: That is especially encouraging to hear that coming from you. Kara Swisher, thank you so much for being with us.

SWISHER: Thank you.

KEILAR: Jim?

SCIUTTO: North Carolina Republicans could override the Democratic governor to implement a 12-week abortion ban in that state today. Republicans there have a one-vote super majority that need the support of every Republican lawmaker to override the governor's veto. Democratic governor, Roy Cooper, is pleading for a single Republican to join with him to stop it.

(BEGIN VIDEO CLIP)

GOV. ROY COOPER (D) NORTH CAROLINA: We're going to work hard up to the last minute to try and get one Republican to keep a promise, one Republican that has some courage, one Republican who's willing to stand up to his or her party and do the right thing here.

(END VIDEO CLIP)

SCIUTTO: CNN's Isabel Rosales joins us now.

And Isabel, I know that there are a handful of possibilities, including a current Republican who was a Democrat until a few weeks ago. What is it looking like now? Will the governor get that one Republican?

ISABEL ROSALES, CNN NATIONAL CORRESPONDENT: Well, Jim, I can tell you that Republican leadership in both chambers, the State House and the Senate, they say that they believe that they've got the votes to successfully override the governor's veto.

Now, conventional political wisdom here would dictate, and especially we're looking at the House here, this could all hinge at the House level. Wisdom would dictate that the Speaker of the House, he's not going to call for a vote if he doesn't believe that he's got the numbers here.

So this call for a vote that didn't need to happen today could be a sign of confidence that they've got those numbers. However, having said all that, all eyes are definitely on two House Republican members who have remained silent up until now about which way they're going to vote.

You mentioned Rep. Tricia Cotham. She did vote for Senate Bill 20, but she also has a lengthy history of here of advocating and campaigning for abortion access. She's the one that switched up until recently here from a Democrat over to Republican, gaining all those national headlines.

Then we've also got Rep. Ted Davis, who was absent and was the only House Republican who did not vote for Senate Bill 20.

Now we've pulled up some abortion numbers from the CDC, 94 percent of abortions in the state of North Carolina happened before 13 weeks of pregnancy. But the pushback here, Jim, on the bill goes beyond that. It goes to all of the paperwork and extra barriers that opponents say women and clinics will now be facing if this bill survives.

SCIUTTO: Quite a vote, hugely impactful in North Carolina and perhaps a bellwether.

Isabel Rosales, thanks so much. Boris?

SANCHEZ: Still ahead, a major shakeup in the IRS investigation of Hunter Biden, why a whistleblower who claims to have information about interference in that case has been removed.

And later, a dangerous bee attack caught on camera in California. How a volunteer police officer survived a swarm. Video you don't want to miss when we come back on CNN NEWS CENTRAL.

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