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Supreme Court to Hear Case on TikTok Ban; Federal Reserve Expected to Cut Interest Rates; Congress Votes to Release Ethics Report on Matt Gaetz. Aired 1-1:30p ET

Aired December 18, 2024 - 13:00   ET

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

[13:00:25]

BRIANNA KEILAR, CNN HOST: A secret vote to release what could be a bombshell of a report. Sources tell CNN the House Ethics Committee voted to release its report on Matt Gaetz, the former Florida congressman and one-time attorney general pick of Donald Trump. We will tell you how soon it could be made public.

And, meantime, no love lost on Capitol Hill, House Republicans investigating the January 6 insurrection, saying former Congresswoman Liz Cheney should be prosecuted for investigating the riot. What this could mean for her and the possibility that President Biden could thwart the process by pardoning her ahead of time.

BORIS SANCHEZ, CNN HOST: And you can call it the cheesiest joyride ever. A scientist teaching rats to drive tiny cars. And guess what? They apparently love it. We're going to have that researcher on to talk about the study and how these rodents can teach us all a few things about enjoying the rat race we call life.

Can you tell I love this story?

KEILAR: I know you do.

SANCHEZ: We're following these major developing stories and many more all coming in right here to CNN NEWS CENTRAL.

KEILAR: We begin with a different kind of rat race, that big reversal from the House Ethics Committee.

We have learned that the panel actually held a secret vote earlier this month, opting to release its report on former Republican Congressman Matt Gaetz. Those are findings that could be made public by the end of the year, possibly even in a matter of days.

SANCHEZ: But you might recall, just last month, the committee voted to shelve the results of the investigation back when Gaetz was being tapped to become president-elect Trump's attorney general.

The yearslong probe looked into various allegations, including sexual misconduct, illicit drug use and accepting a bribe, among other claims. Gaetz has denied all of the allegations, calling this probe a witch-hunt.

Let's get the latest from CNN chief congressional correspondent Manu Raju.

(BEGIN VIDEOTAPE)

MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDENT: This came as a major surprise, the decision by the House Ethics Committee to essentially reversed a decision it made in November to release the findings of this bipartisan yearslong investigation into allegations of misconduct involving Matt Gaetz, a former Florida congressman, someone who was picked as Donald Trump's choice initially to be attorney general of the United States.

When he was made -- when Trump made that selection, that's when Gaetz abruptly resigned from the House. And that put the committee in a bit of a pickle. What do they do with this investigation? Well, the speaker of the House had said -- he said that former members should not see Ethics reports released.

And that's one big reason why the House Ethics Committee back in November decided not to release this report. It said as a final -- he is no longer a member of Congress, they should let it go.

But there was a reversal that occurred. Perhaps one reason why, some of the members said the report at the time of November was not completely done yet. It was completed by the time they met in December and that's when they privately voted to release it.

And our reporting suggests that perhaps some Republicans supported this effort with Democrats to release this report. Now, in the aftermath of our breaking this news this morning, Matt Gaetz put out a statement saying that -- talking -- saying that he has been exonerated by the Justice Department, which had investigated some of these allegations as well, but also saying this.

He said: "My 30s were an era of working very hard and playing hard too. It's embarrassing, though not criminal, that I probably partied, womanized, drank, and smoked more than I should have earlier in life. I live a different life now."

He also went on to deny that he had any sexual encounters with anyone under the age of 18. We know that's been an issue which this committee has investigated. So, ultimately, we will get a sense of what this report is when it is released.

The timing is a bit unclear. What we know from our reporting is that they voted to release this after the final day of votes in this congressional session. It's unclear when that will be could be. Could be as early as tonight if they finish work in the House or maybe later in the week. That's something we will have to watch in the days ahead.

But one thing is clear. Matt Gaetz has long maintained icy relations with many Republicans on Capitol Hill, in large part stemming from his effort to oust Kevin McCarthy as speaker of the House, which was successful last year, which angered Republicans, sent them into a period of disarray, a lot of finger-pointing, a lot of anger directed back at Matt Gaetz. We will see ultimately if that was one of the reasons why for this

change of course, but a significant development, nonetheless, of a player in GOP politics and someone who still has the ear of Donald Trump.

(END VIDEOTAPE)

KEILAR: All right, Manu Raju, thank you for that.

Let's talk about this now with Meghan Hays, Democratic strategist and former Biden White House director of message planning, and Republican strategist and CNN political commentator Shermichael Singleton.

[13:05:09]

KEILAR: Yay transparency, guys. What do you think?

(LAUGHTER)

SHERMICHAEL SINGLETON, CNN POLITICAL COMMENTATOR: I mean, look, I'm not surprised.

I think Republicans did the right thing by showcasing respect to the president-elect by waiting when Mr. Gaetz was still the potential nominee to run the Department of Justice. However, this goes back to something that I said on the show with you guys, I think, Meghan, you were here at the time, that maintaining good relationships with your colleagues really, really matters.

And I think what we're watching play out in real time is that Mr. Gaetz just wasn't very effective in doing so. People still remember the debacle with Kevin McCarthy, and I think that had a lot to do it while they ultimately -- at least from Republicans' perspective, ultimately decided to move forward with releasing this.

MEGHAN HAYS, FORMER SPECIAL ASSISTANT TO PRESIDENT BIDEN: Yes, I think that this also shows that Republicans have a line here with president-elect, and they have reached the line, and Matt Gaetz was crossing it, and I think that is partly why this will be released.

It also -- I mean, somebody wants him out of politics and does not want him running for governor in Florida, and I think that's also why this could be.

SINGLETON: I wonder who that could be.

(LAUGHTER)

SANCHEZ: What do you make of Meghan's assessment that there's a line here among Republican lawmakers? Because for this report to come out, some House Republicans had to change their mind from where they were a few weeks ago, when they voted to hold this report back.

SINGLETON: Sure.

SANCHEZ: What does that tell you? SINGLETON: It tells me that Republicans want to maintain their

independence and their autonomy as a separate body from the executive branch.

And I would argue that the president-elect not as it pertains to this case specifically, but at least on the Senate side, has, for the most part, it appeared to be willing to respect that separation as it pertains to many of his nominees. He's allowing them to have that advice and consent authority there.

So I think this is a good thing for some Americans who may have wondered, well, will Congress maintain their actual job? They appear to be doing so, and I think we can expect that for the next four years.

KEILAR: Gaetz is responding at length here on X. Let's read this.

He says: "I was charged with nothing, fully exonerated, not even a campaign finance violation, and the people investigating me hated me. I have never -- I had no chance to ever confront any accusers. I have never been charged. I have never been sued. Instead, House Ethics will reportedly post a report online that I have no opportunity to debate or rebut as a former member of the body."

He went on to say what he did there about: "In my single days, I often sent funds to women I dated, even some I never dated, but who asked. I dated several of these women for years. I never had sexual contact with someone under 18. Any claim that I have would be destroyed in court, which is why no such claim was ever made in court. My 30s were an era of working hard and playing hard too."

A lawyer might pick some of this apart, but, Meghan, what do you think from a political perspective?

HAYS: Yes, I'm not sure why he's responding to this now. I mean, he has a -- he will have a chance to respond to the Ethics Committee report once it comes out. It seems like there are holes in this from what people have told us and what the -- some of these women's lawyers have said on air before.

So it's disconcerting, but I also am not sure why he is finding to report now. And also ethics violations are not legal violations. They are not the same thing. So I'm not -- it's disconcerting, but I'm sure he will respond again when it all comes out and we will talk about it more.

(LAUGHTER)

SINGLETON: I mean, look, he's right that the folks on that committee probably do really hate him. I'm pretty confident in that. And he's also right when he said that Justice Department did take a look at this. And for some different reasons, they decided not to move forward.

Now the public will have to decide the merits of that. But, ultimately, I'm not certain of this will have a significant impact on Mr. Gaetz's political future in the state of Florida.

I think a lot of Republicans there are pretty fond of him. And if you were to run for something, we will see what that support looks like. But it appears that president-elect Trump still favors him. And if that maintains, and if he runs for governor, he may get that endorsement.

SANCHEZ: We will see how that goes.

Speaking of a Republican that former President Trump does not favor, former House Congresswoman Liz Cheney, Trump at about 3:00 in the morning put it on social media saying that she should face prosecution for her involvement with the January 6 Committee.

I wonder what you make of that, because the allegation is that she's taken some actions that potentially are witness tampering. But there's no proof of that. Does that discourage lawmakers from potentially investigating a future administration?

SINGLETON: I would hope not. Congress should do its job. I think the president-elect is on a high run right now. He was just in France with Macron. He's at meetings with Justin Trudeau, who may or may not continue to be the P.M. of Canada. We will see where that goes.

And so I think right now world leaders are really coming to his corner to recognize his victory, and they want to figure out ways to work with him on an international stage. A lot of business leaders have flown down to Mar-a-Lago for lunch or dinner with the president-elect because they want to figure out a way to either rebuild or maintain relationships.

And so my advice to the president would be, hey, you're doing well right now. People are applauding you. Let's figure out a way to move forward with a conservative agenda for the American people. Allow Congress to figure out what they're going to or not going to investigate.

[13:10:06]

HAYS: I just think that this is going to pose a real problem heading into the midterms, because the last thing the Republican Party wants to do is remind people of January 6, and remind people that Donald Trump tried to overthrow the government and incite an insurrection.

So I just think that going into a midterms and going into 2028, this is not where they want to be, and I would just let things lie if I were him. I'd also recommend that he not use his Twitter account, or his TRUTH Social account during sleeping hours. I think it makes people think you're unhinged.

(CROSSTALK)

SINGLETON: Well, I don't you mind him using the account. Let's use the account to announce, hey, we're making some headwinds on immigration or the economy, or we're working with some business leaders to bring hundreds of thousands of jobs into America. (CROSSTALK)

KEILAR: Just leave it at 3:00 a.m. We have come so far since covfefe. I can say that.

(CROSSTALK)

SANCHEZ: Yes, covfefe. That's right.

(CROSSTALK)

SINGLETON: That went viral for a minute there, Brianna.

SANCHEZ: It shows what's going on in his mind at 3:00 a.m., that he's on social media attacking this person. Even though he won, he hasn't let this go.

SINGLETON: Yes, look, I do wonder Boris, how much of this is just the president-elect thinking aloud. And for the average person, do they look at it and say, OK, this is just sort of Trump thinking about his dislike of this individual, but he's not going to focus on this, because he really wants to govern, and see the results of governing well?

I think that's more of his priority, and I think that's what the American people can ultimately expect.

SANCHEZ: Shermichael, Meghan, appreciate the conversation, as always.

SINGLETON: Thanks, guys.

HAYS: Thank you.

SANCHEZ: Thank you both so much -- Brianna.

Still to come this hour, we're learning more about the troubled home life of a 15-year-old girl who opened fire at a Wisconsin school on Monday.

Also ahead in the next hour: The Federal Reserve expected to cut interest rates for the third time this year, but it could be the last cut for some time. What does this mean for the economy, for inflation, and for your wallet?

KEILAR: And later this hour: Where they're going, they don't need roads, for now. Scientists taught these little rats how to drive, and you know what? They loved it. Who doesn't love a good cruise? So many questions, and we have answers.

You're watching CNN NEWS CENTRAL, and we will be right back.

(COMMERCIAL BREAK)

[13:16:30]

SANCHEZ: In the next hour or so, we're going to find out if borrowing money is going to become a bit cheaper for Americans.

In less than an hour, the Federal Reserve is expected to cut interest rates for the third time this year.

KEILAR: So let's take a live look now at the Dow if we can, up 126 points, 125, making a liar of me there, as it does. Before today, though, the Dow closed lower for nine days in a row, it's worst losing streak in 46 years.

We have CNN's Matt Egan, who filed this report.

(BEGIN VIDEOTAPE)

MATT EGAN, CNN REPORTER: Boris and Brianna, another interest rate cut from the Fed looks imminent. The market is widely expecting a quarter- point cut today.

Now, this would be the third straight interest rate cut from the Fed. And it would mean that interest rates have come down by a full percentage point since September. The market is pricing this in at this point. So the Fed almost has to cut rates, because, if they don't, they would risk unnerving investors, and they don't want to do that.

Now, the fact that borrowing costs have come down, of course, is good news for consumers. Everyone who's trying to pay off credit card debt or get a mortgage or a car loan, they should catch a bit of a break. But the real key today is what the Fed signals about the road ahead, because officials are set to issue new projections.

And the thinking is that the Fed is going to signal fewer interest rate cuts in 2025. Now, back in September, the Fed was penciling in four rate cuts for next year. Now the Fed could be signaling three cuts or even two. And in some ways, it is an awkward time for the Fed to be cutting.

It's not like the economy needs to be rescued. The unemployment rate has come up, but it's still pretty low. Economy is growing at a solid pace. And the war on inflation has stalled a bit in recent months. There's also just so much uncertainty about the Trump agenda, whether or not tariffs will go sharply higher and other countries retaliate.

What will that do to prices? And whether or not there's going to be mass deportations. That could cause a shortage of workers and also lift prices. We have also heard from a number of former Fed officials in recent days, who've said that they don't think the Fed should be cutting right now.

So, for all those reasons, it is possible that today's very likely interest rate cut could be the last one we see for a bit.

(END VIDEOTAPE)

KEILAR: Our thanks to Matt Egan for filing that report.

And let's talk more about this now with Mark Zandi, chief economist for Moody's Analytics.

Mark, thanks for being with us.

The Fed expected -- and we should note, you're not on the phone talking to someone else. You're on the phone with us. This is how we're managing our audio situation right now. But the Fed is expected to cut rates again today just by a bit. What does that tell you? And what should people be reading into that about the economy and the jobs market?

SANCHEZ: I don't think that holding his phone has solved some of the audio issues that we're having.

KEILAR: It has not.

SANCHEZ: We're going to try to get this resolved.

Yes, clearly, it didn't work.

KEILAR: Dang it.

SANCHEZ: Plenty more news to come on CNN NEWS CENTRAL, including the Supreme Court, may potentially be throwing a lifeline to TikTok as it faces a ban in the United States.

We have details straight ahead.

(COMMERCIAL BREAK)

[13:24:25]

KEILAR: Let's turn back now to the Fed's expected decision next hour. We are back with Mark Zandi for real this time, we hope, lots of fingers crossed here.

(LAUGHTER)

KEILAR: He is -- he, of course -- that's a good sign. He's laughing. He's the chief economist for Moody's Analytics.

And, Mark, we're talking about what is looking like an expected small rate cut by the Fed today. What does this tell you about the economy and the jobs market?

MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: Well, the economy is very good, Brianna. We're creating a lot of jobs. Unemployment is very low.

But interest rates are still high, so the Federal Reserve is cutting rates to normalize those rates, to make them more consistent with the monetary policy neither supporting or restraining economic growth.

[13:25:06]

So, all is good. And with these rate cuts, I think prospects going into next year are good as well. SANCHEZ: So how does this third rate cut now in 2024 impact

Americans' pocketbooks?

ZANDI: Well, great question, Boris.

I mean, it should have an impact through lower credit card interest rates. If you want to get an auto loan, the rates on that should be lower. Home equity line of credit should be cheaper. Businesses, small businesses that borrow from their bank at the prime rate, that should be lower as well.

Rates are coming down, but they're coming in very, very slowly. So credit card interest rates, for example, remain extraordinarily high, 23, 24 percent. And so despite the Fed's actions, we haven't really seen a lot of relief for consumers yet.

I would expect that over time as we move into next year, but it's been painfully slow. Hopefully, we see more progress here in the next few months.

KEILAR: Yes. And people are certainly feeling that painful slowness there.

We have been watching the Dow on this losing streak here, closing down for nine straight days, Mark. And that hasn't happened since Jimmy Carter's presidency. Should people be worried about seeing that?

ZANDI: No, I don't think so, Brianna.

I mean, the Dow is a kind of a snapshot for just a handful of the companies, big companies, no doubt, but the stock market is a much bigger place than the Dow. So it's not very representative of what's going on in the broader market. And I think UnitedHealthcare, which is obviously in the news and under a lot of pressure, is the main contributor for the weakness in the Dow.

So I wouldn't read too much into it. I wouldn't read anything into it. I mean, if you look at the broader market indices, like the S&P 500 or certainly the Nasdaq, which is a window into what's going on for stocks for technology companies, all is good. The stock market's at a record high. And that's very consistent with this very good economy that we have here at the end of 2024.

SANCHEZ: And as we look to 2025, Mark, I wonder what your forecast is, especially as we prep for a new administration to take over that has expressed some desire to alter the way that the White House works with the Fed.

ZANDI: Yes, there's a number of policy changes dead ahead. I mean, tariffs are certainly on the agenda.

President Trump has talked about mass deportation. There's big tax cuts coming that may add to budget deficits. And, as you point out, there's a lot of concern in policy economic circles around the potential that President Trump may have greater influence on the conduct of monetary policy in the Federal Reserve. So, all those things, if you add them up, they make me a little a queasy. I'm not a fan of broad-based tariffs or mass deportation. And I'm certainly not a fan of anything that would impair the independence of the Central Bank, the Federal Reserve. So we have to watch those things carefully.

So, I suspect 2025 may be a more challenging year than 2024. But the good news is, we're going into 2025 in a really good place, at least in the aggregate. And that should help us navigate through a lot of storms, and even though there may be a few storms on the horizon.

KEILAR: Yes, that sounds like some good news there.

Mark Zandi, thank you for being with us. Thank you for hanging with us. We do appreciate it.

ZANDI: Yes. Thanks for being with me. Take care.

(CROSSTALK)

KEILAR: All right, next time, we will do it right. But that worked.

So, the Supreme Court has just added a major case to its docket this term, agreeing to hear arguments over that law that could ban TikTok. It's a law that seeks to force the sale of the platform by its Chinese parent company.

SANCHEZ: And the court is moving quickly here, expediting the case and scheduling arguments for January 10, just nine days before the law is set to take effect.

Let's bring in CNN's chief Supreme Court analyst, Joan Biskupic.

Joan, how do you read this move by the court?

JOAN BISKUPIC, CNN SENIOR SUPREME COURT ANALYST: You know, there seemed to be a certain inevitability here.

This is a law that's supposed to come into effect on January 19, major First Amendment challenge, 170 million users of TikTok in America, this popular app. The government, this all traces back to last April, when Congress passed and Joe Biden signed this law that would -- that said that TikTok would have to divest itself of its Chinese owner or be banned in the U.S., couldn't be accessed on any kind of apps or platforms here.

And let me tell you what TikTok said in its appeal of a lower court ruling that sided with the government. "Congress' unprecedented attempt to single out applicants" -- that's TikTok and a group of users -- "and bar them from operating one of the most significant speech platforms in the nation, presents grave constitutional problems that this court likely will not allow to stand."

Now, when they wrote that, they also asked the Supreme Court to postpone the January 19 deadline. But the court didn't. The court said, we're going to hear oral arguments and then maybe decide that.

KEILAR: The timeline here is pretty tight, though.