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Debt Stalemate At Home Looms Over Biden G7 Talks Abroad; Prosecutors: Teixeira Was Warned About Classified Docs; Ukraine: 29 Out OF 30 Russian Cruise Missiles Intercepted. Aired 2-2:30p ET

Aired May 18, 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]

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BRIANNA KEILAR, CNN ANCHOR: President Biden flexing abroad and fighting Republicans back home. Critical U.S. debt talks hanging over his trip overseas and forcing the president to cut short his time on the world stage.

BORIS SANCHEZ, CNN ANCHOR: And he was warned. New details about the man accused of leaking classified documents on Discord. Prosecutors say that Jack Teixeira was flagged for mishandling information. So, we got to ask, why did he still have access to those documents? We're live at the Pentagon for the very latest.

JIM SCIUTTO, CNN ANCHOR: And the umpire strikes back. Verbal abuse, physical fights, and not for those reps to say we are the ones who are out. Now, parents are stepping up. We are following these stories and many more all coming in right here to CNN NEWS CENTRAL.

KEILAR: Right now, President Biden is juggling a looming debt crisis at home and fragile alliances abroad. He landed in Japan today meeting with the prime minister ahead of the G7 summit in Hiroshima. And on Biden's agenda during this overseas trip countering China, of course, aiding Ukraine, and reassuring allies that the U.S. will not default on its debt triggering a global response. That last bit will depend, of course on talks here in Washington. And today with two weeks to go before that potential ex-state, lawmakers from both parties are indicating that there has been progress.

We have CNN's Marc Stewart who is live for us from Japan. So, Marc, one of those moments when the president's role as head of state and head of the executive branch is really on full display.

MARC STEWART, CNN CORRESPONDENT: Very significant, Brianna. Because not only is the president having to answer to the American people and answer questions from Americans, he's also having to respond to world leaders and the global stage. I think a lot of people may have a hard time understanding why the debt ceiling issue with the United States impacts the rest of the world. It is a bit complicated.

But if the U.S. defaults, it could impact the value of the U.S. dollar. It could impact the U.S. stock market, the bond market. It really could create a financial tsunami that would wrap around the entire world and put many G7 nations into recessions of their own, essentially create a global recession. So that's why it's such a concern.

Now, as far as where the president will go from here. He obviously is dealing with Washington but here at Hiroshima, he's dealing with all of these G7 leaders, Italy, Great Britain, Germany, all of these nations that have had some economic struggles of their own. It will be interesting tomorrow to see when everyone meets -- or I should say this morning here in Japan when everyone meets exactly what kind of questions the president will face. As we have been reporting, the president is expected to face some questions and answers if you will, some unexpected agenda items about the risk the world now faces.

KEILAR: Yes. You are up very early, I should say, but amazingly not looking bleary-eyed. Is there any sense, Marc, that the U.S. leadership abroad has taken any hit?

STEWART: Well, if you look at the G7 nations, all of them historically have had some hiccups if you will in leadership and political decision-making. I mean, I think the Australian Prime Minister put it best. He understands why the president canceled the second part of this trip, almost expressing some empathy. But it does take the focus away from some very important tasks.

As you mentioned, at the beginning of the show, the war in Ukraine, how will that be handled? What will the roadmap for the future be there? And then, of course, China. All of these nations want to try to agree on some kind of position statement.

But this is a distraction. I think the White House certainly hopes that once these conversations happened on the debt ceiling, a broader conversation to really G7-specific issues will take place. But we'll see.

KEILAR: We will. Marc, thank you so much for that. Jim?

SCIUTTO: All right. Speaking of crucial meetings, any minute now, Treasury Secretary Janet Yellen will sit down with CEOs of some of the nation's biggest banks to discuss the fast-approaching debt cliff and the ongoing uncertainty in the banking sector as well. CNN's Matt Egan is following all this. Matt, beyond delivering I imagine some concern warnings. What do they hope to accomplish in this meeting today?

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MATT EGAN, CNN REPORTER: Well, Jim, this meeting really features some of the most powerful people in the world, and you better believe the debt ceiling is going to be front and center. And the bank CEOs -- I mean, they know the stakes here. They know that this has to get resolved very soon. And I would imagine Treasury Secretary Janet Yellen, she would appreciate some help from the bank CEOs to pressure Congress, specifically, House Republicans to defuse this ticking time bomb before it does real damage.

Now, this meeting is really the who's who of powerful figures in finance. We've confirmed that Jane Fraser, the CEO of Citigroup is going to be there. Bank of America CEO Brian Moynihan, and Jamie Dimon, the JPMorgan CEO. And Dimon you know, he has not been shy about warning what will happen if there's an actual default. Listen to what he told Bloomberg last week.

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JAMIE DIMON, CEO, JPMORGAN CHASE: Everyone -- anyone's ever knows that such catastrophic. And I don't think it's going to happen because it gets catastrophic. And the closer you get to it, you will have panic and so, the closer you get, you have markets get volatile, maybe the stock market go down, the Treasury markets will have their own problems.

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EGAN: No, it's warnings just like that, that I think really help U.S. officials, including Treasury Secretary Janet Yellen make the case to Congress to get this done as soon as possible.

SCIUTTO: Yes. Hasn't worked yet though, we should -- we should note. Politics seem to be ruling the day. I mean, in terms of procedural stuff, banking, financial moves, is there anything banks can do to blunt the potential impact of a default or not really?

EGAN: Not really, Jim. I mean, we know that banks, some of them are trying to prepare. Jamie Dimon, he's actually talked about how his bank has a war room set up where they try to game out what they can do here. But the reality is that the consequences are just so great that the damage would be so vast that there's really no escaping it.

SCIUTTO: Yes.

EGAN: I mean, the White House has projected that more than eight million jobs would be lost if there was a prolonged default, and the stock market would be cut in half. It's pretty hard to avoid those kinds of consequences and the repercussions here.

SCIUTTO: Yes.

EGAN: But, Jim, I think the good news, though, is that we are hearing some more positive signals from officials in Washington. President Biden today and yesterday talking about how there won't be a default, how the talks have been productive. And even for the first time, House Speaker Kevin McCarthy, telling our colleague Manu Raju that he is starting to see a path here.

SCIUTTO: Yes.

EGAN: So, hopefully, Jim, they get this resolved before actual -- it does actual damage to the economy.

SCIUTTO: Well, no bigger bank than the U.S. government. And if the U.S. government can't handle it, potentially, not much even those other big bank banks can do. Matt Egan, thanks so much. Boris.

SANCHEZ: Today, new details about how the alleged Pentagon document leaker's superiors warned him repeatedly about his handling of classified documents. Federal prosecutors claimed that Jack Teixeira's misconduct was documented on three separate occasions, months before he was arrested for posting a trove of classified information online. He's also accused of acknowledging in an online community popular with video gamers, that the material was not meant to be public and that he should not have been sharing it.

Let's take you now live at the Pentagon and CNN Natasha Bertrand. Natasha, how did this guy continue to have access to this information if there were so many red flags?

NATASHA BERTRAND, CNN NATIONAL SECURITY REPORTER: Well, I can tell you, Boris, that that is the big question really facing the Pentagon today. And that is also a question that the inspector general of the Air Force is looking into right this moment. Of course, the investigation will bear that out a little bit more.

But just to remind our viewers here of what prosecutors laid out in a court filing, arguing for why Teixeira should continue to be detained before trial. Teixeira apparently was worn three separate times beginning in September of 2022 not to be looking at the classified information that he was apparently accessing on a pretty regular basis. In September, his superiors actually caught him taking detailed notes of classified intelligence and then stuffing those notes into his pocket.

And now, that is really significant because of course, according to prosecutors, those notes are exactly what Teixeira started posting online verbatim in a way, of course, that was inappropriate. So, they caught him doing that in September. In October, he attended a classified briefing, according to prosecutors, where he asked very detailed and probing questions about classified intelligence that really had nothing to do with his day job. And so, he was told by his superiors to really focus on his day-to-day duties which involved IT, nothing really to do with the content of the classified information itself.

We'll fast forward to January 2023, and his superiors again caught him looking at classified intelligence, really again, had nothing to do with his job. And a note was made that he was doing that but he was not reprimanded for it and his access to this intelligence was not curtailed. So, a lot of questions here about what occurred.

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We should also note that prosecutors say he was bragging to his friends in this Discord group chat about the fact that you know this information that he had was not supposed to be public and his friends were telling him to be careful. But prosecutors are saying all of this really creates a pattern and demonstrates a pattern of Teixeira's really you know willful disregard of the sensitivity of the national security information that he was entrusted with as a member of the U.S. military, Boris.

SANCHEZ: Now, we'll have to see how his defense attorneys explain what appears to be intent to ignore the direction of his superiors. Natasha Bertrand, thank you so much for the reporting. Jim.

SCIUTTO: Officials in Kyiv called Russia's air attack on the Capitol today unprecedented. We're going to be live in Ukraine with the latest in just a moment.

British officials say Ukraine has now used the long-range Storm Shadow missiles the Ukraine -- UK sent to them successfully. My interview with Britain's Defense Secretary about that and other things just ahead.

And later, it feels like he's been holding his hat forever. Is Ron DeSantis finally going to toss it into the 2024 ring next week? What sources are telling CNN? You're watching CNN NEWS CENTRAL.

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[14:15:06]

KEILAR: Ukraine says its defenses managed to shoot down 29 out of 30 missiles fired in an overnight country-wide bombardment. Here you see one of those intercepted missiles. This is one that was targeting the capital of Kyiv. Ukraine's military says one civilian was killed by fragments of a missile that was shot down and two other civilians were injured.

CNN's Sam Kiley is in Southeastern Ukraine for us. So, Sam, Russia has claimed that it struck a Ukrainian arms depo. Is there any truth to that?

SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: There may be. We wouldn't be allowed to report it if it was. We -- I will frankly be honest, we simply don't know.

There have been Russian airstrikes that have been successful in attacking logistics nodes of the Ukrainian Armed Forces in the past. But the Ukrainians insist that only one of those 30 missiles fired in its territory got through. One person was killed in a desert, we believe by the descent of wreckage. So, there is one missile unaccounted for and we don't know where it went. =But this is part of the Ukrainians' effort to try to make sure that the Russians don't manage to adjust their fire and targeting based on the information that they may get from us or from social network bloggers and others.

More widely, I think, Brianna, the really key issue here is the relentless pace of these terror attacks. We're now seeing them on a scale that a few months ago, we'd see perhaps weekly, perhaps every 10 days. Now we're seeing them on a very significant scale nearly every night, particularly large numbers of cruise missiles being fired, some 30 last night, fewer of these Shahed low-level or low-tech drones manufactured in Iran.

But all clearly focused on trying to overwhelm obviously the air defenses here and soak up the ability of the Ukrainians to defend themselves I think ahead of what the Ukrainians are saying, as a coming summer offensive. In short, the Russians want to be able to safely get into the air and support their troops when it comes to an increase -- an increase in the pace and violence of the ground war, which, of course, is continuing, particularly around the city of Bakhmut.

KEILAR: All right. Sam Kiley, live for us in Southeastern Ukraine, thank you for the latest in -- on the war. We appreciate it. Jim?

SCIUTTO: For the first time, we are learning that Ukraine has fired the long-range Storm Shadow missiles successfully at Russian targets. The UK provided the cruise missile ahead of Ukraine's highly anticipated counteroffensive. A short time ago, I spoke with the UK Secretary of State for Defence, Ben Wallace, and here's our conversation beginning with those missiles.

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BEN WALLACE, BRITISH DEFENSE SECRETARY: When I got -- we just got informed by the Ukrainians that they had successfully used them. I presume by that it has been successful. I don't know the full details.

We obviously, like the other allies are not involved in such detailed use of our gifting. We are -- we just make sure that they are gifted what they request. And we do it within the boundaries of whether it's obviously in accordance to helping Ukraine defend itself and making sure that it's a calibrated response.

So, all I can confirm is that it has been used successfully. That is the information I received from the Ukrainians. And I'm pleased that it is helping them to defend their country.

SCIUTTO: Looking ahead, this is of course, central. This is one of many weapons systems considered central to the highly-anticipated Ukrainian counteroffensive. In your view, does Ukraine have all it needs to order the start of that offensive when they are ready?

WALLACE: It definitely has a significant part of what it needs to start an offensive when the time is judged right by their military commanders and their political leaders. And you know, the West, the United States, the United Kingdom, and the rest of many of the powers in Europe have donated significant amounts. We've also accompanied that with training to make sure that they are not only basically trained, but also trained to a more advanced level to deliver some combined arms.

But you know, it's easy for me to say thousands of miles away and anyone else, you know, everyone should get on with it. It's not going to be me that's fixing a bayonet and walking towards a machine gun and all the difficult tasks that Ukrainian leaders are going to have to task. But I think -- I think we are -- you know, over a year on, we're in a position where the Ukrainians now have in many areas, some advantages over the Russians, and should they seek to try and push them back, you know. It is clear they could be able to do that.

But of course, you know, we'll see. War is unpredictable. We -- when I was serving the armed forces, we used to say no plan survives contact with the enemy.

SCIUTTO: Yes.

WALLACE: And we'll see how it goes. But Storm Shadow, just like the U.S. gifting HIMARS are very, very important component of allowing Ukraine to be successful.

SCIUTTO: If Ukraine chooses to attempt to take back Russian territory in Crimea, as well as the eastern parts of the country, would the UK support that if that's their decision to do so?

[14:20:10]

WALLACE" Look. It's their sovereign soil. It's a bit like you asking me if you know, the U.S. were choosing to take back parts of Texas from an enemy that had invaded it. You know, you wouldn't -- you wouldn't take anyone else from abroad telling you what you can and can't take back. It is -- it is Ukrainian soil. It is their sovereign territory. It has been invaded. They've lost thousands of lives as a result of that invasion. And I think ultimately, it'll be Ukraine's decision.

Under international law, they have every right to do that, in accordance of self-defense. Britain isn't going to stand in the way of that. But I think you know we are a long way from that.

We're in a position where at the moment, the Russians have lost considerable amounts of land that they took in February last year, but they still hold on to significant amounts. And it will be for Ukraine to decide what access -- what advance they make and where they do it within their country.

SCIUTTO: As you know, U.S. officials have publicly warned China from supplying arms to Russia for the war in Ukraine. Has China to date heeded those warnings? Is there any evidence that it has supplied lethal military aid?

WALLACE: And I think one of the most disappointing things for Russia throughout this process is that China has hardly been a full-throated supporter of Russia. We've seen in the UN, China has consistently abstained. It hasn't voted in favor.

In fact, we saw I think, recently a vote in another UN body where effectively China went against Russia. And we haven't seen to date any more than words and a bit of support. That could change. And I think that's why the United States issued that warning that could change.

But for now, I think Russia has demonstrated to China that this war was a bad choice by Russia. I think China recognizes that it also has a friendship with Ukraine, that this is bad for business, it's bad for you know instability, it's bad for China, and therefore, I don't think it's in China's interest to fuel a disastrous war with more weapons.

So, I think for now, the person most disappointed by China will be Russia, that for all of the talk, Russia's friend hasn't come to the rescue. And secondly, Ukraine is making advances. The global community has a role to play here in saying to Putin, these things are unacceptable. And that includes China and India. We did see that publicly. If you remember, last year, China and India did say to Putin, that would be unacceptable. I haven't seen anything change from that posture. And this is why the international community is so important in messaging to President Putin that his decision was wrong. He's broken international law. He should stop his invasion. He should reverse it. And he doesn't have any friends. I mean, that's the key.

You know, you don't find China a full-throated supporter, you don't find, you know, even his central Asian traditional allies, and I criticizing him for it. He's pretty much on his own. And I think when everyone else has left the party, he should reconsider.

SCIUTTO: I know the UK and a number of others have expressed concern about allies who might pressure Ukraine at some point to give up territory in exchange for a ceasefire. And I personally have heard from Western leaders, particularly in the eastern part of Europe, concerned that there are some in Europe who might apply that pressure to Ukraine.

Are you aware of any such pressure? And what would the UK response be if Zelenskyy or others were told, hinted in some way, listen, you got to make a deal?

WALLACE: When I've worked with Ukrainians on and off for nearly the last seven years, first of all, the Ukrainians are tough and pressure will just fall off the moon a sense of any one nation rang up and said, we think you should do something, and they don't want to do it. They won't be pressurized. And that's one of the lessons of the last 18 months nearly of the invasion is that everyone has underestimated that determination.

But you know, I was in Berlin yesterday. I saw a very strong result from the German government to stand by Ukraine to make sure that they can defend themselves and defend not only the same freedoms that you and I enjoy but also that they should be allowed to enjoy. You know, if you look at the statements from President Macron after President Zelenskyy's visit, that's getting tougher towards Russia not a watering down.

But the direction of travel with international communities is actually stronger than it's ever been. The type of Western systems being gifted is another sign of a strong determination to make sure Russia gets the message that we aren't going anywhere.

SCIUTTO: Understood. Well, Mr. Minister, thanks so much for taking the time. We appreciate the conversation.

WALLACE: OK. Thank you, Jim. Thank you.

(END VIDEOTAPE)

SCIUTTO: The UK has also joined the U.S. in warning about the rising threat from China in Asia. And, Boris, I asked the defense minister there if President Biden's cutting short his trip to Asia, would it send any sort of signal of weakness to China. And he said in his view, no. That actions speak louder than words out there, particularly the joint U.S. Australian UK Defense Treaty.

[14:25:02]

SANCHEZ: Yes, I would not be surprised though, if the Chinese tried to play it up and projected it as some kind of failure by the United States.

SCIUTTO: Yes.

SANCHEZ: A great conversation there, Jim.

Still ahead this afternoon. While campaigning in the critical state of Iowa, Republican presidential candidate Nikki Haley claimed that some states "bent the rules during the 2020 election." The latest on the Republican primary race.

And parents listen up. Uber says it's now going to allow you to put your teenagers in rides alone. Details on that change straight ahead.

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SANCHEZ: Ready to launch. Florida Governor Ron DeSantis is expected to officially enter the 2024 GOP presidential race next week.