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White House Pauses All Federal Grants and Loans; Trump Calls China's DeepSeek a Wakeup Call for U.S. Industries; Poll Shows One in Four Republican-Leaning Parents Report Skipping or Delaying Some Vaccines for Children. Aired 7-7:30a ET
Aired January 28, 2025 - 07:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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KATE BOLDUAN, CNN ANCHOR: Breaking overnight, an unprecedented memo with huge implications. The White House halts all federal grants and loans. Would that mean trillions of dollars on pause, setting off a constitutional standoff and maybe a struggle for those in need?
JOHN BERMAN, CNN ANCHOR: Right. The earthquake in the world of artificial intelligence, why tech stocks imploded and what's in store for today with just a short time until the opening bell.
And new footage out of California showing the moment a single spark could have triggered what would have become the second deadliest wildfire in state history.
Sara is out. I'm John Berman with Kate Bolduan. This is CNN News Central.
BOLDUAN: So, the White House has now ordered all federal grants and loans be put on hold, meaning trillions of dollars of financial assistance is facing an uncertain future at best right now. And while we are standing by this morning to learn the full scope of what this all impacts, a memo sent overnight did explain why they are making this move.
The acting director of the White House Office of Management and Budget instructed agencies to temporarily pause all activities related to obligations or disbursements of all federal financial assistance, so that they can, here's the quote, determine the best uses of the funding consistent with the law and the president's priorities.
This has sparked significant confusion throughout Washington and far beyond. The leader of the National Council of Nonprofits who gets a lot -- they get a lot of these nonprofits -- getting a lot of this financial assistance, they called it a potential five-alarm fire, saying from pausing research on cures for childhood cancer to halting food assistance, reducing safety from domestic violence and shutting down suicide hotlines. The impact of even a short pause in funding could be devastating and cost lives.
Top Democrats raising alarm as well, Senator Chuck Schumer warning that if this continues, the American people will pay an awful price. CNN's Alayna Treene is live at the White House. She's got much more from it just from the reaction, the flood of reaction coming in, you know, this is a big deal and there's going to be big implications and big questions going into today. What is going on here? What's the latest you're hearing from the White House?
ALAYNA TREENE, CNN WHITE HOUSE REPORTER: That's right. Well, just to break this down even further for you, Kate, because you're right, this is a massive deal. Starting today trillions of dollars in federal grants and loans to organizations will be halted due to this directive from the White House.
Now, this internal memo that was sent around yesterday by the acting director of the White House's budget office makes clear that beginning at 5:00 P.M. on Tuesday, that's 5:00 P.M. today, these different federal grants and loans will begin to be halted. So, one thing to keep in mind is what this affects. This affects, we're told trillions of dollars in grants and loans to research bodies, charities, universities and community projects.
And this is what we have in this internal memo from the acting director, Matthew Vaeth. This is what he said. He wrote, quote, the use of federal resources to advance Marx Marxist equity, transgenderism and Green New Deal social engineering policies is a waste of taxpayer dollars that does not improve the day to day lives of those we serve.
Now, as you mentioned, some of this is really getting into what we saw Donald Trump do last week with some of those first executive orders that he rolled out, really trying to minimize the type of diversity, equity inclusion in the government, different roles that he believes are wasteful. And that's where a lot of this gets into, I'm, told from some White House officials.
Now, one thing that this doesn't touch is Medicare, Social Security and, quote, payments to individuals will not be affected. But, again, we're still learning more of really the breadth of this directive from the White House.
Now, as you mentioned, we are hearing a lot of criticism from Democrats on Capitol Hill, also some Republicans. This is what we're Senate Minority Leader Chuck Schumer said on the issue. He said, quote, Congress approved these investments and they are not optional. They are the law. And this is really getting to this question of, is this legal?
Now, we did hear from some experts that argue Donald Trump, the president, may have some authority to pause funding like this temporarily.
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But this is likely something that we will see play out, whether it be in the courts or Congress really taking this up, because a lot of people believe, that this wasn't a move that Donald Trump should be able to authorize. Kate? BOLDUAN: How long the pause? What that means for the potential of the five-alarm fire that the head of the nonprofit organization was just talking about? There's a lot of questions that need to be sussed out today. Thank you so much, Alayna. I really appreciate it. John?
BERMAN: All right, happening now, new fallout over President Trump's move to fire at least a dozen Justice Department prosecutors who were involved in a special counsel investigation against him. The officials were told they were fired because they could not be, quote, trusted to faithfully execute the president's agenda.
Let's get right to CNN's Katelyn Polantz for the latest on this. Good morning, Katelyn.
KATELYN POLANTZ, CNN SENIOR CRIME AND JUSTICE CORRESPONDENT: Good morning, John. Career prosecutors fired for doing their job. If you were one of the people who were assigned at some point to work on the special counsel's investigation under Jack Smith, those two cases against Donald Trump over the past couple years in the Justice Department and then returned to your home office, a U.S. attorney's office, to work as a line prosecutor on the types of cases that normally are done by the department, you lost your job yesterday because you got a notice from the acting attorney general, James McHenry, saying you can't be trusted.
So, this is so extremely unusual. It is typical for people who are political appointees to end their careers in an administration whenever there's a changeover from one president to another, especially a difference in party. But this is Donald Trump remaking the Department of Justice with his top appointees, his acting attorney general, James McHenry, remaking the Department of Justice layers deep.
This affects about a dozen or more people who had remained at the Justice Department as career prosecutors, people in the D.C. U.S. Attorney's Office, the Maryland U.S. Attorney's Office, other places. And what the administration wrote to these people is that they believe the Biden administration had weaponized the Justice Department and thus that was the most obvious thing to Trump because of the prosecutions against him. That's the reasoning.
And they write, you played a significant role in prosecuting President Trump. I do not believe that the leadership of the department can trust you to assist in implementing the president's agenda faithfully. That is the acting attorney general's memo that went out to these people saying they were removed from federal service.
They can appeal it to a board called the Merit Systems Protection Board. That is outlined in this memo. But they are terminated effective immediately.
And, John, one more note, this did not happen after other special counsel's investigations, including the Mueller investigation. Those people worked on those investigations for those offices and then went back home to where they sat in the Justice Department. This is entirely different than what we have seen before. BERMAN: I'm so glad you're pointing out the context here, Katelyn. They are career prosecutors. That is such an important distinction.
Katelyn Polantz for us in Washington, thank you very much.
All right, stocks hoping to recover today after a Chinese A.I. company dropped the bomb on Silicon Valley. New details on the business model that rocked U.S. markets.
And, quote, we might start to see some of these vaccine preventable eradicated illnesses come back. Pediatricians sounding the alarm this morning as new data shows the number of unvaccinated children is growing.
And one Polish basketball coach managed to give birth while having the flu and then made it to the sidelines to coach a game all in one week. I did laundry and I was proud of myself.
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BOLDUAN: Markets are opening in just a few hours and we are standing by to see if there will be a rebound after yesterday's shockwave over China's new A.I. startup, DeepSeek, a startup that sent tech stocks plummeting. Not only does DeepSeek's A.I. model rival the abilities of chatbots from companies like OpenAI and Google, the company also is funded at a fraction of the price and uses fewer computer chips to train its systems, which then leads to this. American chipmaker NVidia saw more than half a trillion dollar loss, its single biggest loss on record.
President Trump sees all this and says it's a wakeup call.
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DONALD TRUMP, U.S. PRESIDENT: I've been reading about China and some of the companies in China, one in particular, coming up with a faster method of A.I. and much less expensive method. And that's good, because you don't have to spend this much money. I view that as a positive.
The release of DeepSeek A.I. from a Chinese company should be a wakeup call for our industries that we need to be laser-focused on competing to win.
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BOLDUAN: Competing to win. It got a lot more competitive just now.
CNN's Matt Egan has much more on this. You've been tracking this. What's the latest here?
MATT EGAN, CNN REPORTER: Yes. Kate, listen, it was a wakeup call. It really, really spooked investors, and it raises a lot of questions about the state of the A.I. arms race and how President Trump is going to respond.
Now, the fact that DeepSeek says that it trained its models on fewer chips at a fracture of the cost.
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That is what really alarmed investors. That's why we saw NVidia lose almost $600 billion, the most that any company has ever lost in a single day. And the entire market overall lost about a trillion dollars yesterday. That's according to Dow Jones. Because DeepSeek's rise suggests that maybe you don't need as many NVidia chips as we previously thought. And so this is raising some questions about those.
BOLDUAN: And this is a company that its stock was like unstoppable. I mean, this was something you and I've been talking about for a while.
EGAN: It was going straight up, but not anymore. Listen, it's still worth a lot of money.
BOLDUAN: They lost more than many companies would wish to have ever.
EGAN: And that's a good point. That's a really good point. We see futures are sort of mixed up, a lot calmer right now this morning, but not a big rebound after that big loss yesterday.
But the question now is what about those export controls that were supposed to prevent something like DeepSeek from ever happening in the first place, right? Because there's all these restrictions imposed by Washington that is supposed to limit the cutting edge chips, the A.I. software, the semi-equipment all aimed at slowing China's A.I. progress. And there's some that study this and say, look, these export controls, they backfired. They sort of put maximum incentive on Beijing to innovate around these export restrictions.
There's others who don't really believe what DeepSeek is selling here, right? They think that this company either stockpiled the high end chips ahead of the restrictions, or they bought a lot of them on the very active black market, or maybe both. Market Veteran Art Hogan, he told me that, yes. China says that they've come up with this silver bullet, but he said it could be like the guy in high school who says he has a girlfriend, but she's just at a different school.
And if that's the case, Kate, and we don't know that it is, but if that's the case, then that supports those who believe that these export restrictions actually need to be toughened here because there are these glaring loopholes that enforcement hasn't been as tough as it could be. And I talked to Ed Mills over at Raymond James, and he said, look, if you look at who President Trump has surrounded himself, with a lot of China hawks, Marco Rubio and others, that all points to more restrictions, that he's going to potentially double down on these export restrictions because of DeepSeek.
And I think when you put it all together, there's obviously a lot at stake here. We knew that the U.S. was locked in this A.I. arms race with China, but DeepSeek does suggest that that arms race is a little bit closer than we thought, and perhaps significantly cheaper, too. BOLDUAN: And an arms race heating up maybe sooner than people thought, right?
EGAN: Yes.
BOLDUAN: Something to watch. This is going to be important today. It's good to see you, Matt. Thank you for kicking us off with this today.
Coming up for us, a January 6th rioter pardoned by President Trump shot and killed during a traffic stop after getting into an altercation with police. We have more on that.
And an Apple watch now credited with saving several injured skiers after a 1,000-foot fall.
We'll be right back.
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BERMAN: All right. New this morning, a new survey finds that the number of parents that keep their children up to date on recommended vaccines is dropping. One out of every six parents is now reporting delaying or skipping some shots, and the share is even larger among those that lean Republican.
CNN's Meg Tirrell is with us this morning with the details. Good morning, Meg.
MEG TIRRELL, CNN MEDICAL CORRESPONDENT: Good morning, John. So this is new findings from January polling from the health research group KFF. And what they find is that an overwhelming majority of U.S. parents support vaccinating their kids. 82 percent of parents say that they normally keep their kids up to date with childhood vaccinations, like the MMR shot, that's measles, mumps and rubella.
But that number is down from about 90 percent in polling done from 2021 to 2023. And KFF finds that there are real partisan differences in how parents approach vaccinations for their kids. For example, among parents who say that they are Republican or Republican-leaning, 26 percent report that they have vaccine delays for their kids, either skipping doses or delaying doses for their kids. And that is up significantly, up from 12 percent in 2021.
And the polling also finds that this could be driven by misinformation. They find that parents who report believing false claims about vaccine safety are much more likely to have skipped some routine vaccinations. So, John, as there is all this talk about what's going to happen with vaccine policy under Robert F. Kennedy Jr., if he is confirmed as HHS secretary, there's a lot of concern about this.
But we should also note that a vast majority of parents in this poll, 83 percent, say that they do support public schools requiring some vaccines for entry. John? BERMAN: Interesting numbers, a big shift in just a few years there, Meg. You mentioned RFK Jr., whose confirmation hearings begin tomorrow. This poll's got some information on him too.
TIRRELL: Yes. And, of course, that also really splits down bipartisan lines as well. So, we're going to be watching RFK Jr. at the Senate Finance Committee tomorrow and at the Health, Education, Labor and Pensions Committee on Thursday.
And as we go into this, this poll tells us that among Republicans, there is much bigger trust in individuals like Robert F. Kennedy Jr. and President Trump when it comes to health information compared with government agencies. There's more than 80 percent support of trust in those individuals versus close to 40 percent for the CDC and 51 percent for the NIH among people who report being Republicans.
Among Democrats, it's pretty much the exact opposite. You see, only 7 percent have a great deal or a fair amount of trust in President Trump or RFK Jr. when it comes to health matters versus more than 80 percent trust in those institutions. And, John, for the Republican polls here they report a similar amount of trust in RFK Jr. and President Trump in health matters as in their own doctors. John?
BERMAN: Interesting numbers. Meg Terrell, thank you so much for this. Again, his confirmation hearing is tomorrow.
At 5:00 P.M. today, all federal grants and loans will be put on pause in President Trump's unprecedented move to shift control for federal spending, and it sets the stage for a constitutional standoff.
And a standing ovation for Tennessee basketball coach Kim Caldwell after she returned to the sideline just one week after giving birth.
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