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U.S. Federal Government Deficit Remains Large; Tropical Storm Threatening Parts of Texas; Extreme Heat Affecting New Mexico; Republican House Freedom Caucus Chair Bob Good May Lose Primary after Donald Trump Endorsed His Opponent; Israeli Prime Minister Benjamin Netanyahu Releases Video Accusing U.S. of Withholding Weapons from Israel; AXIOS: White House Cancels Meeting with Israel After Netanyahu Video; Kim Jong-un Hails New Alliance with Russia Amid Putin Visit. Aired 8-8:30a ET

Aired June 19, 2024 - 08:00   ET

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

[08:00:00]

MATT EGAN, CNN REPORTER: Remember, the deficit is the difference between how much the government bring in in revenue and how much it spends. A few major drivers here. The biggest is about $145 billion in spending related to student debt relief, also FDIC deposit insurance related to the bank failures of last year, discretionary spending increases, Medicaid spending.

No matter the driver, what's concerning here is the trend. When we look back to fiscal 2016, the deficit was about $600 billion, all the way on the left side of that chart. That is nothing to sneeze at, but that looks downright tiny compared to right now. We'd kill for a number like that. You'd have the deficit hawks dancing in the streets.

So what happened? Well, COVID right. The deficit spiked around $3 trillion a year during COVID. We had bailouts and stimulus checks, small business loans. All of that was deemed necessary, but it was expensive. What's concerning here, though, is of course COVID is over. Deficits are still very high. They're actually going even higher. And it's unusual because normally that's something you see when the economy is in trouble, when unemployment is high. Right now, we have low unemployment and high deficits. It's very hard to make sense of this.

Listen, this is a bipartisan problem, right? Both parties are to blame here. I think the good news is everyone agrees this is not sustainable. The bad news is it's going to take some bipartisan compromises to fix it, and we're nowhere near that right now, Sara.

SARA SIDNER, CNN ANCHOR: I remember, I'm old enough to remember when there was a deficit clock and it got to zero during the Clinton era. Bery, very troubling news that. Thank you so much, Matt.

EGAN: Thank you, Sara.

SIDNER: A new hour of CNN NEWS CENTRAL starts right now. JOHN BERMAN, CNN ANCHOR: This morning wildfires raging, now deadly

and on the move. Thousands of buildings burned. CNN is right in the middle of the smoke.

And they are still counting, the conservative congressman who trails his primary by just a few hundred votes. Did endorsing someone besides Donald Trump potentially cost him his seat?

And then breaking overnight, a new agreement between Russia and North Korea, the treaty of that Vladimir Putin says will take the country's partnership to a new level.

Kate is out today. I'm John Berman with Sara Sidner, and this is CNN NEWS CENTRAL.

SIDNER: All right, happening now, a triple threat in the United States. Dangerous weather in the form of fires, heat, and a potential tropical storm are right now impacting million since of Americans. These are three separate events. But happening at the same exact time, one turning deadly overnight. In New Mexico, at least one person has now died as raging wildfires have now burned thousands of homes and businesses there. A state of emergency is in effect as entire neighborhoods have been forced to rush to escape the flames.

Also right now, the entire coastline of Texas under a tropical storm warning. Coastal flooding and strong winds already beginning to be felt as we stand by to see if the storm will become the first named storm of this hurricane season.

We have crews closely covering the fires and the tropics this hour. We begin though with Rosa Flores. She is in Corpus Christi, Texas. Rosa, now you are on the coast there. We see the winds whipping up the water, and this storm isn't even right on top at this point of Texas.

ROSA FLORES, CNN CORRESPONDENT: You know, you're absolutely right. This storm is hundreds of miles from where I'm standing, and we're already getting some of the winds. Take a look behind me because this is Corpus Christi Bay. But you can see that the water is crashing onto these parking meters, so it looks more like the ocean.

And as Sara mentioned, this is impacting the entire gulf coast of Texas. A lot of the area along the gulf coast looking very similar to what you're looking at behind me. There is already ponding. There is already some coastal flooding. Officials here in Corpus Christi do not seem very concerned about this storm per say, again, because its hundreds of miles away. But they say that they always prepare for the worst. They have assets strategically placed around the city to make sure that they can respond with high water vehicles and barricades if needed.

Again, just in case these officials know this area very well, they know the areas where the tributaries and streams and rivers flow. And so they know that a lot of those usually swell. You can see around me that there is some ponding, but take a look here. You can see the water level, Sara. It has already receded a little bit. You can see it here by some of the debris. And so we're just going to have to wait and see the impact here in

Corpus. As of now, you can see it's not raining, but we are seeing some of the winds.

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Sara, back to you.

SIDNER: It is weird, Rosa, to see the parking meters there where cars would be with the waves splashing onto them. Thank you so much for that. And the potential tropical storm is pretty far away. So the effects being felt anyway.

Let's go now to another very dangerous situation which is in New Mexico were fires have been raging. That is where we find our Ed Lavandera and his crew. And Ed this morning, I see you are surrounded by smoke. It's hard to see, it's so dense.

ED LAVANDERA, CNN SENIOR NATIONAL CORRESPONDENT: Yes, the visibility has really been cut down here in Ruidoso, New Mexico, where more than 8,000 people have evacuated in the last several days because of two massive wildfires that have really exploded into size, combined for about 20,000 acres. And it's kind of surrounding this entire mountain community.

Many of the roads blocked off. This road takes you out to the northern edge of ria Ruidoso where most of the fire damage in this particular area is expected to have been affected. Residents still can't get back in there. But if you look around here in this city, it's a ghost town at this moment. There are very few people around. The majority of the cars that we see are law enforcement vehicles, first responders, firefighters, that have descended on this area.

Sara, as you mentioned, one person has died. Many of the people here have evacuated, gone off to communities several hours drive away to wait out this wildfire as the crews continue to do the work here. But you can see, just look around us here, just the intensity of the smoke that is kind of blowing off the fire areas that aren't too far away from where we are.

There is a sliver of good news expected later today, where weather forecasts showed that it could start raining after 3:00 mountain time here and into tomorrow as well. So if that does happen, it would bring much needed relief and hopes of being able to extinguish these wildfires much faster, because right now, I believe the latest information we have is that much of it is still not fully contained in any kind of way. So these wildfires, intense, very mountainous region, difficult terrain for these fire crews to work through as well. Obviously, just a very dangerous situation is still unfolding here, Sara.

SIDNER: We see it where you are. We're seeing these pictures brought in from Pamela L. Bonner who was showing these massive plumes of smoke and a sky that looks like it is on fire. Incredible pictures, a dangerous situation there. Keep yourself and your crew safe. Ed Lavandera, thank you so much for your reporting. And coming up, we're going to be speaking with a man who rushed to

escape the flames with his family, and you're seeing just how dangerous they are looking at these intense pictures. John?

BERMAN: That was some shot that they just had right. Some situation on the ground. We'll get back to Ed Lavandera right in the middle of that smoke in New Mexico.

So this morning the Virginia congressman who helped oust former House Speaker Kevin McCarthy could be on the verge of losing his own seat. House Freedom Caucus Chair Bob Good, he's less than a point behind his challenger, State Senator John McGuire. If I can see that right, that's like 342 votes. And forget the point, 342 votes. That is remarkable.

Here now, CNN senior political analyst Mark Preston. There's still a lot of votes be counted here, Mark. What's going on in this race?

MARK PRESTON, CNN SENIOR POLITICAL ANALYST: Well, John, we always talk about your vote really counts. Make sure you get out there and vote. This is a perfect example, what we're seeing right now. As you noted, we have just a few hundred votes that separate these two Republicans who fought in this incredibly expensive primary race that pitted Donald Trump against the incumbent Bob Good. In fact, Donald Trump went out and not only did campaign events for John McGuire, but he got his allies to do things as well. Kevin McCarthy allied himself with Donald Trump because, as you noted, Bob Good, tried to knock him out and was successful, helped lead the effort to knock them out as speaker.

So as we speak right now, we're still waiting to see when the votes come in, John. If you had postmarked your vote, you lived in this congressional district, you postmarked your vote by Election Day. If it arrives by Friday, is going to be counted. So I don't think we're going to get any resolution in this race anytime soon.

BERMAN: Yes. No, they're going to still be counting votes for some time, just 342 separating them. And Mark, the lesson here is what? I mean, Bob Good, Freedom Caucus chair. Yes, there's the McCarthy thing. But really for Donald Trump, it was the fact that Good endorsed Ron DeSantis for a minute, right? After DeSantis dropped out, Bob Good could not have done more to be supportive of Donald Trump.

PRESTON: Yes. And Bob Good came out and said that the reason he had endorsed Ron DeSantis is that he wanted a president for two terms. But that wasn't enough for Donald Trump.

Donald Trump endorsed Bob Good when he first ran a couple of years ago, showed his support for him. It just goes to show you that the Republican Party, as we've talked about how it has changed, it has become more of the MAGA party, this is a perfect example of this happening right now.

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Bob Good, who is incredibly conservative, represents a very conservative part of the state, should have easily walked to this primary win. Now, there's a very good chance he's going to lose. And it just goes to show, John, that you need to show fealty to Donald Trump. If not, then you're out.

BERMAN: Mark Preston, great to see you this morning. Thank you very much.

Sara?

SIDNER: All right, just ahead, the White House cancels a high level meeting with Israel because of a video released by Prime Minister Benjamin Netanyahu.

The world is remembering and honoring an icon this morning. Willie Mays, one of the most important baseball players in history, passed away at the age of 93. And tributes are, of course, pouring in. We'll remember him coming up.

And a huge school district just banned cell phones from classroom. How tough is that going to be for half-a-million screen addicted students? And how will they enforce it? That's next.

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SIDNER: Breaking overnight, the White House canceled a high level meeting with Israel about Iran after Prime Minister Benjamin Netanyahu claimed the U.S. was withholding military aid in this new video. That reporting comes from "Axios" and CNN contributor Barak Ravid. With us now, CNN White House correspondent Arlette Saenz from Rehoboth Beach, Delaware. Arlette, what are you hearing? Is the White House commenting on this this morning?

ARLETTE SAENZ, CNN WHITE HOUSE CORRESPONDENT: Well, Sara, this just appears to be the latest tension point between the U.S. and Israel, all over Israeli Prime Minister Benjamin Netanyahu's video yesterday where he said it was inconceivable that the U.S. would withhold weapons from Israel. That is something that the White House yesterday said they had no idea what he was talking about. And in Barak Ravid's reporting for "Axios," he is a CNN contributor, he also said that Amos Hochstein in a meeting with Netanyahu yesterday, told him that those comments were inaccurate and also out of line.

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Now, it is unclear what exactly Netanyahu was talking about here. He said in that video that he had spoken with Blinken about this, and that Blinken had offered him assurances that they were trying to remove some of these bottlenecks for aid.

But so far what we know is that in early May, the US had put a pause on the shipment of some heavy bombs to Israel out of concern about how they could be potentially used in an Israeli operation into Rafah.

Yesterday, Secretary of State Antony Blinken said that that shipment is still under review while also saying he won't comment on his diplomatic conversations with Netanyahu. Take a listen.

(BEGIN VIDEO CLIP)

ANTONY BLINKEN, US SECRETARY OF STATE: We, as you know, are continuing to review one shipment that President Biden has talked about with regard to 2,000-pound bombs because of our concerns about their use in a densely populated area, like Rafah, that remains under review, but everything else is moving as it normally would move.

KARINE JEAN-PIERRE, WHITE HOUSE PRESS SECRETARY: We generally do not know what he is talking about. We just don't.

(END VIDEO CLIP)

SAENZ: And so, it is also worth noting as AXIOS reported that there was one the high-level meeting with the Israelis that was canceled, but there will actually be other meetings later in the week, including one he said between National Security adviser Jake Sullivan and his counterpart. So we will see what more the White House has to say about this, especially in the wake of those comments from Netanyahu just yesterday.

SIDNER: All right, Arlette Saenz for us there in Rehoboth Beach, Delaware. Appreciate you.

All right, the investigation into allegations of sexual misconduct and drug use by Representative Matt Gaetz moving forward on Capitol Hill. That story, and a lot more coming up.

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BERMAN: All right, we have breaking news. A new agreement between Russia and North Korea. Russian President Vladimir Putin and North Korea's Kim Jong-un just signed this paper in Pyongyang, they are pledging to help each other if their countries are attacked, and you could see, Putin's greeting there in Pyongyang over the last day or so, met with thousands of cheering fans and signs that say, "Welcome Putin."

With us now, CNN contributor, former Moscow bureau chief and adjunct professor at Georgetown University, Jill Dougherty and CNN national security analyst and former CIA chief of Russia operations, Steve Hall.

Jill, first to you.

Youve been not only in Russia, but North Korea as well. What's important here? This document, the language in the agreement or more of the show surrounding it? Vladimir Putin and Kim Jong-un trying to show they could not possibly be closer.

JILL DOUGHERTY, CNN RUSSIAN AFFAIRS CONTRIBUTOR: I think it is both. There is no question. I mean, we have to look at the fine print. As far as I can see right

now, they are saying mutual aid in case of aggression against one of the parties. So what does mutual aid mean? Does that mean that let's say North Korea fires a missile against the United States and then the United States retaliates in some fashion and Russia attacks the United States? What specifically is Putin's argument there?

In some cases, he doesn't want to define it publicly because that implicit, and actually explicit, but implicit threat is out there and that does what Putin wants to do.

But then this big show. I mean, I am really, I guess astounded by the fact that Putin is beginning to sound like Kim Jong-un. He is using some of the same rhetoric, this hegemonic imperialist west, a lot of this is about the United States and the big focus is Ukraine, the utter transformation of Russia due to this war that Putin started and you're seeing the results here.

BERMAN: Yes, and Steve, to that point, there are some people who look at this, Putin going to North Korea prove maybe a bit of the supplicant here. It is a sign of weakness, some say. What do you see?

STEVE HALL, CNN NATIONAL SECURITY ANALYST: I share Jill's complete astonishment that we've gotten to the point now where a former superpower like Russia used to be a huge geopolitical issue when it was the Soviet Union is actually now much more -- it looks much more similar to North Korea than it does say to China, which is actually a world power these days with the size of its economy and its long-term interests.

So yes, going hat in hand to the North Koreans so that they can get better weaponry to try to fight this war that they have started with Ukraine is indeed amazing.

The other thing that is amazing is that both of these countries say that they've signed this agreement out of self-defense. I mean, last time I checked, when has either North Korea or Russia been attacked? It has actually been, certainly in the case of Russia, the other way around where they've been attacking their neighbors, whether it is Ukraine or whether it is Georgia in the past or any other of their military actions.

So it is a bit rich that both of them are saying we are so concerned about our defensive posture that we have to have some sort of treaty, it is really interesting.

BERMAN: And Jill, whether or not this is about weakness, how much weakness or strength here. How does the US navigate this picture we are seeing right here of the two men?

DOUGHERTY: Oh, I think the most important thing will be to see what is behind-the-scenes, so what are they going to agree upon? Because obviously we know what Putin wants, which is ammunition, missiles, et cetera for Ukraine. But what is really concerning, I think for the United States is what does North Korea want from Russia? And we know it is definitely high-tech and it would be used for

military purposes in the air, on the land, and in the sea and that has to be concerning to the United States, there is no question.

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And so what they are trying to figure out is, how far does this is go? What will Putin give to North Korea that could threaten the United States? Not to mention Asia.

BERMAN: Yes, because, Steve people may not remember at this point, for a long time, Russia was kind of on board with trying to keep North Korea from becoming a nuclear power. All of those international agreements to sort of limit them, Russia was part of. That doesn't seem like it is going to be very operative going forward.

DOUGHERTY: Oh, totally. I mean, this is another --

HALL: No, not --

BERMAN: I'm sorry, Steve.

HALL: Sorry, Jill. Yes, No. With the signing of this agreement, it entirely changes the relationship there regionally and certainly with Russia, but it is also an interesting opportunity, I think, because China provides the vast majority, I think the number is 90 percent of North Korea's needs.

North Korea has now put itself in the position of providing what it Russia needs to win. In other words, ammunition for the war against Ukraine.

So China is in this position where they can actually exert significant leverage over both Russia and North Korea, which is something that I think the West is probably going to be looking at because China of course, has much larger goals, some of which depend on solid market relationships, at least economic relationships with the United States and with Europe.

So it could be the United States and Europe might go to China and say, look, you've got to weigh in here because these guys are -- it is looking a little bit strange.

BERMAN: Jill?

DOUGHERTY: Yes, I think, if you look at this relationship, one of the really important parts of this is Russia looking at North Korea, which is a rogue state.

But in the context of other countries that they can leverage, they've got Iran through here, China over here. Although I would argue China is different, a more sophisticated relationship, but definitely Iran, North Korea -- all of the -- to coin a phrase, no good knicks in the world, they will leverage to make difficulties for the United States.

And if they can do that, individually, they are not that powerful, but combined, they could create a lot of mischief for the United States, and this is one of the problems.

I think again, we go back to Ukraine. I believe that Putin is doing this because he is infuriated by the United States allowing Ukraine to use weapons to hit the Russian mainland. He said, I am going to retaliate and I think were watching it right now.

BERMAN: Look, and I think the international diplomatic game board right now is getting shuffled in ways that we just haven't seen in a long, long time.

Jill Dougherty, Steve Hall, great to have you both here this morning. Thanks for explaining it so well.

So there is no going back right now. Thousands of families left to wonder if they will have a home to return to as wildfires are on the move and we have new reports this morning of the first fatalities.

And what happens when one of the largest school districts in the country bans cell phones for students? Well, we are about to find out.

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