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Kel McClanahan is Interviewed about Musk Reshaping Government; Storm Impacting Midwest. Aired 9:30-10a ET

Aired February 05, 2025 - 09:30   ET

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

[09:30:00]

PETER NAVARRO, TRUMP ADMINISTRATION SENIOR COUNSELOR FOR TRADE AND MANUFACTURING: Both in Mexico and Canada, come across their border and kill Americans. So, that's what we're trying to do with President Trump on this. It's a drug war. Everybody wants to make it a trade war, but this is a drug war. And we're just trying to stop the carnage.

So, I think it's important to put - put this in perspective.

KATE BOLDUAN, CNN ANCHOR: With that perspective. I'll say, I am hearing from some of these American companies who say - they say it is - they've sent me their duty invoices from CBP to show that they say China is not paying for this. It is American companies who pay the tariffs to the United States government.

If the U.S. government is taxing American companies more across the board, how will that not lead to higher prices for their customers?

NAVARRO: It's misdirection. It's a shell game what they're describing to you. The reality is, when the negotiations are made with China to export things here, what happens when the tariffs go in place is that the Chinese companies are forced to lower their prices.

The thing about trade, the thing that we have to understand is that America is the largest market by far in the world, and that many of the countries which we run trade deficits with are heavily export dependent. So, we can't - when we put the tariffs on, they can't just go somewhere else. They have to still come here. And so, we get the price cuts from them.

The bigger issue, though, Kate, we always got to go back to why. Why are we doing these things? And this is a fentanyl problem. It's a drug war. It's - if you go to Canada, we also have terrorists coming in on the - on the terrorist watch list that are coming into this country. And then, of course, the broader border invasion that - that we've had over the last four years of an unprecedented amount of people, like 3 million illegal immigrants a year, 3 million people. That's the population in the state of Connecticut or Utah. I mean it's - these are big numbers.

So, the president was elected on a promise of stopping the death of Americans from fentanyl and closing the border. And that's what this is about. It's a drug war, not a trade war. BOLDUAN: The why matters. And the cause and effect matter to just so

American people know what's coming at them. The president also was elected on, as he had said over and over again, inflation will vanish completely, meaning prices will be coming down. He said immediately when he comes in. In terms of the cause and effect, can you assure that tariffs imposed now are not going to push up prices for American consumers?

NAVARRO: Here's important to put the economic policy in its broader context. Yes, we have the trade policies going on, but if we can move from $75 a barrel oil that we've had during the Biden years back to $50, where we had it during the Trump years, that alone is a tremendous deflationary effect. If we can do what we did in the first term, Kate, which is to substantially reduce regulatory costs on small businesses and reduce the size of government, that will also be deflationary.

What I can assure the American public is that we will have price stability, like we had in the first term. You have to remember here, Kate, back in - and CNN did a lot of reporting on this. It's like back during the first term, when we put the historic China tariffs in, the steel and aluminum tariffs in, solar tariffs, dishwasher tariffs, all of this special interest came out and the media would amplify that, saying there's going to be inflation and recession. All we had was price stability and robust growth and rising real wages.

So, let's see what happens. That's what the boss loves to say.

BOLDUAN: Right.

NAVARRO: But we have experience now on our side. We didn't have that back in 2018. But now we do. We succeeded back in the first term. We'll succeed again for the American people.

And by the way, the American people want their loved ones to stop dying from fentanyl. I don't think there's a single person in America right now that doesn't know someone who knows someone who knows someone that died from fentanyl.

BOLDUAN: Yes.

NAVARRO: The six degrees of separation now -

BOLDUAN: I can hear you - I can agree - I can - I can definitely hear you on that. I've done a lot of reporting on how there's really not an American who's not impacted by the fentanyl crisis.

NAVARRO: Yes. Yes.

BOLDUAN: In the here and now, though, on this, one thing people know about you, Peter, is, you are not quiet to call out BS when you hear it or see it or feel it. So, when I'm asking you if you can assure Americans that they're not going to see their prices go up, I am struck by - you're saying, let's see.

[09:35:04] NAVARRO: Well, all I can tell you is we have experience on our side and we have the analytics. Let me work you through the analytics of what happens when a tariff goes into effect. The first impact, and we have experience on this, is that the exporting country absorbs much of the initial impact. The next thing that happens is supply chains move, which help moderate any type of inflationary impact. And the next thing that happens is that investment comes here and we produce things here, which helps. And over time - I mean President Trump has said this early and often, if people don't want to pay the tariffs out there, then they should come here.

Remember, the broader perspective and context here, of course, Kate, is, this country has the lowest tariffs in the world, the lowest non- tariff barriers, and $1 trillion - $1 trillion trade deficit every year. What $1 trillion trade deficit does is ship - ship our factories -

BOLDUAN: Right. That's what I'm just saying, if prices are going to go up because tariffs are going to go up to balance that trade deficit, just tell Americans.

NAVARRO: Say - say that again.

BOLDUAN: I'm just saying, if - if it is what you're saying, if you're balancing out the trade deficit - the deficit here and you're kind of leveling the playing field, if that means even for a time that prices are going to go up, shouldn't you level with Americans about it?

NAVARRO: But - but see, I'm leveling with Americans. I'm giving them the adjustment process.

But what you just said is really important. When our trade deficit comes down, the dollar strengthens. When the dollar strengthens, imports are cheaper. So, all of these macro adjustments are on our side. What I'm saying to you is, we didn't have inflation the first time. I'm describing to you all the reasons why we didn't have inflation the first time. And I'm saying we are unlikely to have inflation the next time, particularly because we're doing all these other things for bringing down the price level.

I mean, at the end of the day, we had price stability and high tariffs. Biden had unprecedented inflation since the 1970s because of how he mismanaged. So, I'm - I'm very comfortable with - with how we are moving forward on trade policy because we have experience on our side. And again, what we're trying to do is save jobs, factories and lives. That's Trump trade policy.

BOLDUAN: Well, I - well, let's end with Trump's own words, let us see.

It's good to see you, Peter. Thank you very much for coming in.

NAVARRO: All right. Nice to see you, Kate, and thanks for the interview.

BOLDUAN: Thank you. NAVARRO: Take care.

BOLDUAN: John.

JOHN BERMAN, CNN ANCHOR: A new poll reveals what Americans say is the highest issue on their list for government leaders to address in health care.

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[09:42:29]

SARA SIDNER, CNN ANCHOR: President Trump's so-called special government employee, Elon Musk, along with his DOGE agency, promised to completely upend the United States government. And it seems to be happening. Here's what has happened since arrival in the nation's capital just two weeks ago.

Under his direction as a special government employee, Musk and his team have gained access to the Treasury payment system, threatened to shut down USAID, offered federal employees a so-called buyout, and removed civil servants at the Office of Personnel Management.

Now people are suing Musk and DOGE over these unprecedented actions.

Joining me now is one of those folks suing, the executive director of the nonprofit National Security Counselors, Kel McClanahan.

Thank you so much for joining us.

Your organization, as we mentioned, filing lawsuits. There are two so far against DOGE. What are you alleging that DOGE is doing?

KEL MCCLANAHAN, EXECUTIVE DIRECTOR, NATIONAL SECURITY COUNSELORS: Well, there - there are two lawsuits but only one is directly against DOGE. And that is a lawsuit that we filed on Inauguration Day saying that it was set up as an illegal advisory committee and not acting according to the rules set forth in the Federal Advisory Committee Act, saying that they have to be balanced, they have to be transparent, they have to be accountable, all those things that people generally like to have when people are being given access to the secrets of the government.

The second is a case against the Office of Personnel Management for setting up that server in the chief's office, presumably at the behest of DOGE, to email all the federal employees with all of these emails about the deferred resignation program and, you know, tests and everything else that circumvented all the security protocols, set off all sorts of phishing alarms, and basically put all the data of millions of people at risk.

SIDNER: Yes, many, many, many Americans information, personal information, private information is held there.

Let me ask you about this designation and what it all means. He's been designated, Elon Musk, this special government employee. MCCLANAHAN: Yes.

SIDNER: And basically means he's - he's exempt from some of the - of the rules, including financial disclosures and conflicts of interest, of which he may have many because there are issues with his companies versus the government regulations.

What does this mean? I mean, does this change anything?

[09:45:00]

MCCLANAHAN: As far as the lawsuit goes, it does not, because the White House has been very, very careful in what they say about DOGE and what they say about Musk. In order to be completely exempt from the lawsuit and make the lawsuit arguably go away, they would have to say that the United States DOGE service, the thing that they set up by executive order on day one, is the same as all the people running around calling themselves DOGE before the inauguration. And they have not done that. They would also have to say not only that Elon Musk is a special government employee, but that he is the United States DOGE administrator, who is the head of the U.S. DOGE service. They have not said that.

In fact, CNN reported yesterday that they have been asked, is he the U.S. DOGE administrator, and the White House won't respond. So, as far as we can tell, it has no effect because he's still running around calling himself DOGE when nobody will say that he's affiliated with the only office that could legally operate.

SIDNER: Is that because he would then have to operate under certain rules? He can skirt those now if they sort of keep this kind of very muddy.

MCCLANAHAN: Well, some of the rules, yes. But other rules apply regardless. For instance, even if he works for the White House as the U.S. DOGE administrator, the Privacy Act says that he can't be given access to all of the OPM records. There are things called routine uses that are set forward in the Privacy Act that say, data can only be given to certain people for certain things, and the White House is very rarely one of those things. But if he's an outsider, they definitely can't give it to him, and he definitely can't have access to this information.

SIDNER: I'm just curious, you know, from an overall standpoint, both as a citizen whose information the government certainly has and as an attorney who's looking at all that is happening, how concerned are you about the fact that Elon Musk and DOGE, whoever that is, however many people that is, have access to so much of Americans' private information and the levers of government that pay out these important checks to people that - that sustain, literally sustain life?

MCCLANAHAN: There are rules for accessing every piece of information in the government. And the reason for that is, as you say, the government has tons and tons and tons of information about you, me, Elon, everybody. And they have to in order to make the society function. You don't want government overreach. You don't want government to be able to do whatever they want with the information they have on you. That's why these rules are in place.

People should be freaking out at the idea that someone who has a profit motive to do most of what he does is being given access to whether or not you get paid, or you get your check, or your hospital gets a check, or your information about the background investigation that you had ten years ago when you were in (INAUDIBLE) gets a check. This is a big five alarm fire.

SIDNER: Kel McClanahan, thank you so much for joining us and sort of walking us through a lot of complications that are involved here when it comes to DOGE, Elon Musk and sort of the power of that agency, if you will. Thank you so much. Appreciate it.

John.

BERMAN: All right, just in, brand new reaction from displaced Palestinians inside Gaza to President Trump's plan to kick them out and take it over. Why they say they will not go easily.

And thousands now under winter storm warnings this morning. Freezing rain about to cause huge headaches and dangerous conditions.

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[09:53:27]

BERMAN: All right, happening now, a dangerous ice storm headed to the northeast. A number of cities already under winter weather advisories.

Let's get right to CNN meteorologist Allison Chinchar.

I will almost certainly be late to work tomorrow based on what we're seeing here, Allison.

ALLISON CHINCHAR, CNN METEOROLOGIST: I was going to say, mother nature is clearly making it aware - all of us aware that it is still winter time out there because we have not only the snow component, but also some ice. And that's what's really going to be hazardous for some of these locations, especially from Chicago, all the way back over to portions of Pennsylvania.

You've got all of those alerts out, not just winter weather advisories, but also some ice storm warnings in there, indicating how much ice is expected to come down. Now, we don't have much out here yet. That's because this system really isn't expected to ramp up until late this afternoon and really into the evening hours. And it's that overnight timeline that's going to cause some of the impacts because those temperatures will drop back. That will allow a lot of this to change over into that wintry mix and ice for Chicago, Cleveland, Detroit. And then finally, by the time we get to Thursday morning, it now becomes an issue for Washington, D.C., Philadelphia, stretching into portions of upstate New York and even into Vermont and New Hampshire.

The only good news here is that it's pretty quick. So, by the time we get to late Thursday overnight, and especially by Friday morning, that system has finally pushed out of the area. But in the short term, you're still looking at some pretty impactful ice widespread. Most of these areas up to about a 10th of an inch of ice. But it's not out of the question for some of these areas to pick up a quarter of an inch, maybe as much as half an inch of ice, especially this portion here of southern Pennsylvania, portions of Maryland, and maybe that northeastern tip of West Virginia.

Otherwise, south, you're looking at mostly light rain. Most of these areas picking up up to an inch at best.

[09:55:03]

Snow is going to be heaviest the farther north. Interior portions of New England, especially the Green and White Mountains, where they could end up picking up at least six inches of snow before all of this finally exits the area.

BERMAN: And I'm asking this, Allison, because it is National Meteorologist Day, and I feel like it will be - you'll be extra honest here. I mean, should I take the day off? Is it going to be too hard for me to get into work tomorrow?

CHINCHAR: You know, it could be dicey. I think the key thing here is making sure they treat the roads, as they should. But ice is a hard component because even as good as they can treat the roads, ice is just very slick, especially on those bridges and the overpasses. But if you're just looking for an excuse, I give you full permission to just not come into work tomorrow.

SIDNER: Allison, all you had to say was yes. That - that's all he was looking for.

BERMAN: Yes.

SIDNER: He was just looking for one answer. Your permission to be off, and so the boss is like, oh, yes, it was going to - Allison said it's so dangerous.

CHINCHAR: Allison said so. There you go. That's all you needed.

SIDNER: That's what he was looking for.

BERMAN: Allison Chinchar, thank you very much, really, for all of that.

BOLDUAN: For putting up with him. Well, we'll just go with that.

SIDNER: Good times.

BOLDUAN: Thank you so much for joining us today. This is CNN NEWS CENTRAL. "CNN NEWSROOM" is up next.

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