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Today: Biden, McCarthy Meet To Resume Debt Negotiations; Goldman Sachs: Treasury Funds To Dip Below Minimum Level By June Nine; Man Accused Of Killing Four University OF Idaho Students Declines To Enter Plea. Aired 2-2:30p ET
Aired May 22, 2023 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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BORIS SANCHEZ, CNN ANCHOR: We're only 10 days out from a potential U.S. default and there is still no deal on the debt ceiling. That's only step one. Keep in mind, it still has to clear Congress quickly. Another critical meeting between the president and House Speaker just hours away. We're going to take you live at the White House and Capitol Hill.
JIM SCIUTTO, CNN ANCHOR: Also, ahead. The NAACP issued a travel advisory for Florida, accusing the state of being openly hostile towards African Americans. Details on the driving force behind that warning and how Governor Ron DeSantis is responding. Just ahead.
BRIANNA KEILAR, CNN ANCHOR: And instead of walking across the stage to get her diploma, a transgender teen opts out of commencement after the school said she had to wear pants. We're following these major developing stories and many more all coming in right here to CNN NEWS CENTRAL.
SANCHEZ: The federal government is running out of money and DC is running out of time to get America's accounts in order. Later this afternoon, President Biden and Speaker McCarthy will meet again. And all they have to do is something Washington has done many, many times before without controversy, raise the debt ceiling. But this time politics are taking us right to the brink. In just 10 days the U.S. could run out of cash to pay its bills. That means Social Security, Medicare, federal paychecks, all of it is on the line.
CNN's Jeremy Diamond is live for us at the White House. And, Jeremy, today staffers from both sides had the meeting before the meeting. What are you hearing from sources about expectations for later today?
JEREMY DIAMOND, CNN WHITE HOUSE CORRESPONDENT: Well, listen, Boris, the president's lead negotiators and Kevin McCarthy's lead negotiators sat down for about three hours today, which in and of itself is progress after over the weekend, we saw a pretty tumultuous weekend of negotiations starting and stopping and fits and starts since Friday. President Biden and Speaker McCarthy also had what both sides characterize as a productive and positive conversation on Sunday as President Biden was making his way back here on Air Force One from that G7 Summit in Japan.
But this meeting this afternoon, Boris, is going to be critical because heading into this meeting, these two sides remain very far apart. Not only on some of the policy sticking points of -- excuse me, what exactly would go into this deal in terms of work requirements, for example, which has been one of the areas of contention, but also if you just look at the broader top-line spending number where exactly to cap spending and for how long. The two sides still remaining very far apart on that notion.
And so today, President Biden and Speaker McCarthy sitting down one on one, not that big congressional leaders' meeting that you've seen in recent weeks, which was also a notable change, just signaling the extent to which this deal is going to come down to these two men and their ability to bring along their various sides.
That's one thing that these two sides acknowledged last week, this is going to need to be a bipartisan deal, which means that you need to get enough House Republicans but you're also probably going to need some House Democratic votes. And that is the balance that these two sides are trying to strike. A very tricky balance at that. We will see if they can get any closer later today, as you said earlier, just 10 days away from that potential default,
SANCHEZ: A balancing act with the world economy potentially on the line. Jeremy Diamond from the White House, thank you. Jim.
SCIUTTO: Yes, and it's getting really close. We should say that out loud. Let's get a view now from the Capitol. CNN's Manu Raju here.
And, Manu, I'm not going to ask you where did the talk stand question because I feel like we asked you that every day and it changes by the day. Do folks on the Hill, Democrats, and Republicans, speak openly and honestly about the possibility of going over the cliff here that that may become a reality, or do they treat that AS Oh, that's not really going to happen, we're going to get to some sort of deal before that?
MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Another fears are real this time, Jim. There's a hope that there can be -- get a -- there's a deal within reach by the moment a deal is not within reach. There's a hope that they can avoid falling off the cliff but it's deeply uncertain whether they can avoid such an economic disaster at the moment.
The negotiations are still ongoing. I just spoke to the Speaker himself about where things are. He told the group of us that things are at a sensitive point. He said that is a decision time. Time for them to make some key decisions.
And earlier today, when I asked him about this key issue, spending levels. He has been demanding spending levels to come down to the levels -- he wants the White House to come down to the levels that he has been asking for. And he has indicated that they have not so far. We can try to -- see with the Speaker's walking right over here right now.
SCIUTTO: Go for it.
RAJU: Speaker McCarthy -- Speaker McCarthy, Speaker McCarthy, when you spoke that you've had -- you've had discussions with the White House today, your negotiating team has, have you made any progress and coming closer to the deal? Have they moved closer to your demands?
REP. KEVIN MCCARTHY (R-CA): I think the discussions today we're understanding both sides, further discussing the areas where we have differences of opinion so they can brief the president as well. And I'll have a meeting with the president later today at 5:30.
RAJU: I mean, you have been very specific about the levels of spending, you're spending levels that you're asking for. Have they come to that level yet? Are you still -- are they have they made any progress in your view?
MCCARTHY: You're very good at reporting and asking questions, but we're not going to negotiate with you. I'm sitting down with the president. I've been very clear from February first when I first met with the president, we never wanted to be at this date. But for almost 100 days, the president ignored it.
I know the president's now back in the country. So, what we would like to do is sit down. We have to spend less than we spent last year. And you got to know why.
The Democrats spent $6 trillion. They brought us inflation, more dependent on China. We've had three of the biggest four bank failures just in the last couple of months. So, what we want to do is limit the amount of spending that we could do in the future to about one percent.
That is -- that is an idea by Joe Manchin. Get our supply chain working again, so work requirements are for only able-bodied people with no dependents. We've so proven again when Senator Biden voted for that and President Clinton signed it into law, that put a lot of people gave them jobs, and we're going to get people working again.
RAJU: But, Mr. Speaker, is it really worth potentially going off the cliff here if you're not able to get all the demands that you have laid out here?
MCCARTHY: That's a great question. And the reason why Republicans and we sat down on February first, we didn't want to be here. We didn't want to go over the cliff. And that's why we passed the bill in April.
The difficulty of why we're here today is people not wanting to talk and the Senate not doing anything. You know -- you know the way our founders devise this tremendous government that we have, right? The House passes the bill, the Senate passes the bill and you go to conference.
The difficulty is the House is the only one to take an action. But that should give you protection. And the idea that if you got to that point, we would never have to go over the cliff because the Senate could pass --
RAJU: But do you need to have a deal tonight to avoid a default?
MCCARTHY: I thought it would be better to have a deal sooner. I think we could -- we can get a deal tonight, we get to deal tomorrow, but you got to get something done this week to be able to pass it and move it to the Senate.
UNIDENTIFIED MALE: Do you think if it's done on June one, is it possible to get the thing -- (INAUDIBLE)
MCCARTHY: I think it's still possible if it's done on June one.
UNIDENTIFIED FEMALE: Do you think there's a wiggle room on that June first date?
MCCARTHY: Look. That's up to Janet Yellen. That's probably -- they decide when that date is. The president may have more information on that. But she has been very clear that June first.
That's why we took action all the way back in April, even before she said it was June first. We thought it was in July. We don't want to be in this last moment. I think that's a terrible way to go. That's what's wrong.
RAJU: But you're saying this week, you need to have the deal in cut this way.
MCCARTHY: He had to --
RAJU: And then when does the bill need to be on the floor in order to avoid default?
MCCARTHY: Well, if you walk backwards, if you come to an agreement, it takes time to write it. In the House, we changed the rules here. We make sure you get 72 hours so everybody can read it, then you pass it in the House and you send it to the Senate.
I think the Senate could probably act faster than I thought in the past. But we're going to need a couple of days to write it and to make sure that everyone's able to read it and vote on it.
RAJU: What's the guarantee that folks on your right flank may not rebel -- revolt on any deal you cut, may even try to push you from the speakership. Are you concerned about that as you weigh this? And can you keep your conference in line?
MCCARTHY: Look. If you look at who's serving in Washington today, it's only the House that have united together to raise the debt limit, grow our economy, curb inflation, make us less dependent on China. The House Republicans have done that.
You may think back, oh, it took you a long time to be a speaker, but we dealt with the border, we could parents Bill of Rights, we stopped Washington, DC from decriminalizing all the way down to crime. We had been one of the most productive Congress around.
The difficulty is you need somebody on the other side to work too, and the Senate has done nothing. That's the difficulty.
UNIDENTIFIED MALE: You don't need Democrats to help get any bill across the line.
MCCARTHY: Look, I think at any time you come to an agreement that you're negotiating with the president, Democrats and Republicans are both going to vote for it. It was no different when Trump was president and Nancy Pelosi were negotiating a debt deal. So, it happens every single time. That's what divided government had us.
RAJU: But you need a majority -- but you need a majority of the House Republican conference to vote for it, is that right?
MCCARTHY: Look. I firmly believe what we're negotiating right now, the majority of Republicans will see that it is the right place to put us on the right path.
RAJU: Are work requirements also still part of this, or so -- you're just talking about spending levels right now, just agreeing on the spending levels. Are work requirements on social safety net programs to be part of your -- (INAUDIBLE)
MCCARTHY: Look. When you talk about work requirements, wherever -- we want to take people from poverty to jobs. We want to take -- it's only for people who are able-bodied with no dependents.
I don't think it's right that we borrow money from China to pay somebody that has no dependents able-bodied to sit on a couch. What we find is people become more productive --
RAJU: So, that's your -- is that still a red line for you?
MCCARTHY: Every study has shown it helps the economy, helps people, and it helps our supply chain, make us less dependent upon China. Look, there is another --
RAJU: But is that -- is that a red line?
RAJU: You had said that's a red line.
MCCARTHY: There's a number of places that we had been discussing. There's a number of places the president had discussed. That's why we're going to get together. We're not going to cut the deal here, which I would have loved to be able to do. But we're going to work together to solve this problem and make America stronger.
Look. For the last time the Democrats have been in power, they have just done discretionary spending increased by more than 20 percent. They -- every single year, they think you have to spend more. They think it's draconian to pull back money that we appropriated for COVID even though the pandemic is over and the money was never spent. I think we should save the taxpayer money, borrow less, and make our economy -- (INAUDIBLE)
RAJU: And is the president give on any of that? When you -- you spoke to him last night, the negotiators, has he given any way on the issue of rolling back domestic spending levels like you've been asking?
MCCARTHY: Look. We have -- with nothing agreed to, we've had very good discussions, very professional going through. I have the highest respect for the individuals he has down here working on it. People do have differences of opinion, just like in the country, but you have differences of opinion in your own household.
But if you were to give your child a credit card and they charged up the limit, and you just raised the limit year after year after year to lose a credit card, you owe so much on it -- that you owe more than you could actually make in a year because that's where we are. Our credit card -- our debt limit, we have charged so much up that it's bigger than our economy. And would you just raise that debt limit or would you look at ways to do something different? Did you mean -- we're working on that right now.
UNIDENTIFIED FEMALE: Have you asked for additional cuts to snap?
MCCARTHY: Look, what we have talked about going through if you look at our bill, ways that we can help people get jobs, that we can spend less money than we spent before. Well, the really difficult part here is because everybody has spent so much money put us into inflation that caused these problems. 17 cents out of every dollar that comes in is going to go to interest.
RAJU: There were -- there were three -- there were three times under Trump. There were three --
UNIDENTIFIED FEMALE: (INAUDIBLE) What you asking for more on defense -- what are you asking for more on defense, Sir?
RAJU: There were three times under Trump where the Republicans and Democrats agreed to suspend the debt limit. There was hardly an outcry about cutting spending then.
RAJU: How come guys didn't make a big stink about it then?
MCCARTHY: There was an outcry but the outcry was the speaker was different. It was Speaker Nancy Pelosi. And you could mean --
RAJU: But you had leverage in the Senate, you had leverage here?
MCCARTHY: You could read her quote. What did she say? She simply said no debt limit will get increased without first negotiating to spend more money.
The difference then is what the Democrats always say. The Democrats think you should spend more money. We have spent too much.
And in that place where President Trump had negotiated with Speaker Pelosi and they spent more money, we voted to make sure to make it happen.
UNIDENTIFIED MALE: How many years do you -- how many year budgets did you want?
RAJU: So, there you have the speaker -- there you have the speaker making it some news there. He says he needs to have a deal this week. It needs to be there in order to pass to avoid default.
Sounding -- not saying whether or not the president is moved any closer to his demand, but really indicating the amount of issues that they still need to go through. So, you're getting a sense of the real challenge in trying to avoid default here. The speaker making clear they have a lot of work to do, and they meet in the White House in just a few hours, Jim.
SCIUTTO: Well, and clearly no movement to his demands, right?
SCIUTTO: Both on work requirements making the case there for things like Medicaid but also on the spending limits. But well cited by you, Manu, that it happened three times in the Trump administration, but different calculation now, Manu Raju on the Hill. Brianna, a little live interview on CNN NEWS CENTRAL with the House Speaker there.
KEILAR: Yes, making news and really by acknowledging some reality here right, Jim? Because there may be some wiggle room on Treasury Secretary Janet Yellen's June first prediction for when the government runs out of cash to pay its bills, but not much. And that's really what you heard the speaker speaking to there.
This is according to economists at Goldman Sachs in a report to clients on Friday. The banking giant warned it expects the Treasury to run low on cash by June eighth or ninth. CNN's Matt Egan is joining us now.
Matt, just how low does Goldman Sachs thinks -- think cash levels could get? And also, what we really have to acknowledge here is you can't run right up to the first, right you do need a little bit of wiggle room because even with an agreement, there needs to be time to hash something out and get it passed through Congress.
MATT EGAN, CNN REPORTER: That's absolutely right, Brianna. Listen, Goldman Sachs does see cash levels getting dangerously low. I mean, we have to remember that the federal government regularly spends more money than it brings in revenue. That's why they have to borrow. But they haven't been able to borrow because they've run up into the debt ceiling and Congress hasn't addressed it yet.
And so yes, they can buy time with accounting gimmicks, which is what they've been doing. But eventually, that runs out. And so, in the meantime, cash levels have really plunged at Treasury.
As of Thursday's close of business, the Treasury had about $57 billion in cash. You can see on the chart. That is down sharply from more than $200 billion dollars just two weeks ago.
And now, Goldman Sachs is saying that by June 8 or June 9, they think the cash levels are going to get down to $30 billion -- below $30 billion. And that is seen as a key level. It's kind of seen as the bare minimum that the government can operate with.
And in the past, Treasury has used $30 billion as the threshold for when the debt ceiling deadline is going to be. Goldman Sachs says that once $30 billion has hit its 50-50 that the government is going to run out of cash. So, yes, it does seem like maybe Treasury can go a little bit beyond June first, but not much beyond. And, Brianna, the closer they get to that deadline, the greater the risk of an accident here.
KEILAR: An accident, right? And you have to plan for that. And this is really playing with fire. Matt, thank you very much. Boris.
SANCHEZ: After issuing a travel advisory for Florida, the NAACP president says "beware, your life is not valued." Details on why, straight ahead.
Also, U.S. Border Patrol is reviewing certain medical cases after an eight-year-old girl died in their custody. And the man accused of murdering four University of Idaho students was back in court today. Details on that hearing when we come back. You're watching CNN NEWS CENTRAL.
KEILAR: The man accused of killing four University of Idaho students was in court today facing murder charges that could send him to death row. But when it was time for Bryan Kohberger to enter a plea, neither he nor his attorney would do it. Instead, Kohberger's attorney rose and said "Your Honor, we are standing silent".
Areva Martin is a Civil Rights Attorney and Legal Affairs Commentator. OK, Areva, this was a very interesting moment. Walk us through what happened, what this means.
AREVA MARTIN, ATTORNEY & LEGAL AFFAIRS COMMENTATOR: Well, essentially, Brianna, what we saw was we saw Bryan Kohberger enter the courtroom to enter a plea. And rather than enter a not-guilty plea, he refused to have anything to say his lawyer stood up and said, "Your Honor, he is remaining silent." By his silence, essentially, that is a not-guilty plea. And the judge essentially entered the plea on his behalf.
We've seen some pretty erratic behavior from Kohberger since this -- since he was arrested for these four murders. We know that he has some previous emotional issues, some mental health issues. His friends said that he had pretty much turned it around as he entered this graduate program in a university, but he had altercations at that university with a professor and female students. And this behavior seems to be more akin to some of the behavior we're hearing about from some of his friends who were at that college with him.
KEILAR: Because it's so unusual that someone would not enter a plea and that the judge would then have to go ahead and do it. At this point now, prosecutors have 60 days to decide if they're going to seek the death penalty. What more can you tell us about how they would go through that decision-making process?
MARTIN: Yes. Brianna, one of the things they're going to be looking for aggravating circumstances. And in Idaho, one of those aggravating circumstances can be the killing of multiple people at the same time. We know in this case, there were four college students who were actually killed in that apartment that was near this college, and that Kohberger is being charged with four counts of murder as well as burglary. So, there is enough in terms of aggravating circumstances already for the prosecutors if they choose to seek the death penalty.
And even if they decide not to pursue the death penalty, I can't imagine that if he is convicted that he would face anything other than life in prison without parole. Very gruesome circumstances. Four college students murdered, two were able to be spared in what appeared to be is a very horrific attack on this college apartment-- in the student's apartment.
And took investigators a long -- awhile, Brianna, before they were able to link Kohberger to these killings. They were able to do so, as a result of DNA evidence, as well as cell phone evidence, and some surveillance video that tied his car to a car that was seen near the apartment.
KEILAR: Areva, other proceedings today that have to do with his gag order that has been in place since January. How unusual is a gag order this sweeping and is it warranted in your opinion?
MARTIN: I think it is. I think the investigators, in this case, want to make sure that they have a very solid case, that when the case actually gets before a jury, we know a trial date has already been set in October, that none of the evidence and none of the witness -- witnesses have been compromised. We were expecting, Brianna, this very sweeping arraignment hearing where we would have been able to hear more of the evidence that the prosecutors and law enforcement agents had been able to put together.
But by there being a grand jury indictment, that superseded this lengthy arraignment hearing that we were expecting. So far, all of the reports that have come out don't give us very much information about a motive. Why was Kohberger at this apartment? Why did he kill these four individuals? Was he targeting them? Did he have any prior connection to any of the victims? All of that information has yet to been -- to be disclosed.
KEILAR: All right. Well, we will wait to see what comes out of these proceedings today and what prosecutors decide they're going to do as it relates to the death penalty. Areva, as always, thank you for your legal expertise. Jim?
SCIUTTO: (AUDIO GAP) from inside a Russian prison camp. We're going to tell you why he believes he's confident the wheels are turning toward his release.
SCIUTTO: U.S. Customs and Border Patrol is now vowing to review all cases of migrants deemed "medically fragile, who are in their custody." This comes after an eight-year-old girl with underlying health conditions died last week.
CNN's Rosa Flores, she joins us now with details. Rosa, do we know the circumstances under which she died? How long she was there? Was there any awareness of her condition?
ROSE FLORES, CNN CORRESPONDENT: You know, she was in detention for eight days. And that, of course, raises a lot of questions, Jim. The Honduran Foreign Ministry has identified this eight-year-old as Anadith Danay Reyes Alvarez.