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President Trump Expands Federal Powers of Elon Musk; Inflation Rising; Putin and Trump Speak. Aired 1-1:30p ET

Aired February 12, 2025 - 13:00   ET

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

[13:00:32]

BORIS SANCHEZ, CNN HOST: Breaking news to CNN: President Trump wrapping up what he calls a productive phone call with Russian President Vladimir Putin, discussing the war in Ukraine and agreeing to visit each other's nations. We have much more on their conversation and the implications of it coming up.

BRIANNA KEILAR, CNN HOST: Plus, stocks rocked on new prices going up, investors on edge after a new report shows inflation increased last month. Ahead, what this all means for you.

And, also, they're holding the line and they're under attack. President Trump taking aim at the judges pausing or blocking his government overhaul.

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

We are following breaking news, President Trump saying that he just held a -- quote -- "lengthy and highly productive call" with Vladimir Putin, the leader of Russia. And he says negotiations to end the conflict in Ukraine will be starting immediately.

An official says President Trump has also spoken with Ukraine's President Volodymyr Zelenskyy.

SANCHEZ: We're also learning that U.S. special envoy to the Middle East Steve Witkoff met privately with Putin while in Moscow on Tuesday.

We have team coverage of these developments. CNN's Natasha Bertrand is live in Brussels at a NATO conference. And Fred Pleitgen is in Moscow, both following this story for us.

Natasha, let's start with you. Walk us through the details of this call.

NATASHA BERTRAND, CNN NATIONAL SECURITY AND POLITICS CORRESPONDENT: Well, President Trump issued a very detailed statement on TRUTH Social, a social media platform, outlining this call that he had with Vladimir Putin.

And he said that they discussed a range of issues. Notably, he said that they agreed to visit one another's nations, indicating that President Trump might at some point actually go to Russia to visit with Vladimir Putin in person. And he also said, importantly, that he has instructed his team, including his CIA director, his national security adviser, secretary of state, and Middle East envoy, Steve Witkoff, to begin negotiations immediately to end the war between Ukraine and Russia.

Now, notably absent from that list of emissaries is Trump's actual envoy to Ukraine and Russia, General Keith Kellogg. So it's unclear if he's been sidelined or if Trump simply forgot to mention him. But this is a very significant call, apparently 90-minute call, that he had with Vladimir Putin.

And immediately after that call, he had a discussion with Ukrainian President Volodymyr Zelenskyy. We are still awaiting the readout of that call. But it is safe to say that the Ukrainians are not necessarily going to be thrilled about this conversation that President Trump had with President Putin, because they want to be involved in every conversation that involves them, especially when it comes to the war.

Now, all of this is coming as Secretary of Defense Pete Hegseth, he was here at NATO headquarters in Brussels today meeting with NATO and European allies talking about this very thing, talking about U.S. support, or lack thereof for the moment, for Ukraine and the future of it.

Essentially, his message was, look, European allies, NATO needs to step up even more. They need to carry the bulk of the burden in supporting the Ukrainians, and the U.S. is going to step back here. Here's a little bit of what he said earlier today.

(BEGIN VIDEO CLIP)

PETE HEGSETH, U.S. DEFENSE SECRETARY NOMINEE: The United States remains committed to the NATO alliance and to the defense partnership with Europe, full stop. But the United States will no longer tolerate an unbalanced relationship, which encourages dependency. Rather, our relationship will prioritize empowering Europe to own responsibility for its own security.

(END VIDEO CLIP)

BERTRAND: One of the other most notable comments that he made earlier today is that the U.S. does not believe that Ukraine's membership in NATO is a realistic objective of an ultimate negotiated peace settlement between Ukraine and Russia, something that, of course, the previous administration had never said previously.

KEILAR: Yes, big news here, Natasha. Thank you.

And, Fred, I mean, and what we're hearing from the U.S. side of things is Putin's coming to the U.S. and Trump is going to Russia? I mean, what's Russia saying about this phone call?

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, it certainly seems to be in the realm of the possible, Brianna. [13:05:01]

And one of the things that we can definitely ascertain is that the Russians are pretty happy with the way this call between Vladimir Putin and the U.S. president went down. In fact, the spokesman for the Kremlin texted me after they had a conference call with journalists to sort of give the readout from the Russian side, and said that the conversation, as he put it, was quite positive and constructive, so clearly the Russians quite happy with the way that things happened.

Now, when we delve into that readout, it certainly seems that both the White House and the Kremlin pretty much are saying the same things, but the Russians seem to have a different emphasis on certain things. One of the things that really stood out to us is that the Russians are saying -- I'm quoting here -- "The topic of settlement in Ukraine was also discussed President Trump's spoken favor of an early end to hostilities and a peaceful solution to the problem."

And here's the interesting part, I think, is: "President Trump in turn mentioned the need to eliminate the root causes of the conflict and agreed with Trump that a long-term settlement can be achieved through peaceful negotiations."

And that certainly is something that the Russians have been indicating really over the past couple of days that we have been here is that, after President Trump had indicated that he wants to end the war in Ukraine very quickly, the Russians are saying, look, it's not going to be that easy.

When they speak about the root causes, they are saying that they do have certain red lines. They believe that the conflict is a lot deeper than the war that's going on right now, and there's certainly things that they believe still need to be discussed, of course, first and foremost, the territorial questions and with the situation the battlefield, the Russians obviously holding some territory in Ukraine, the Ukrainians holding some in Russia, and then that question of potential NATO membership for Ukraine in the future obviously something as well.

But the Russians also confirming that Vladimir Putin did invite President Trump to come here to Moscow. They also say that the two leaders agreed to try and solve problems together, to work in a constructive way together, also apparently touching on the Middle East, on technological issues as well, in total, the Kremlin saying that this conversation lasted upward of 90 minutes.

And, again, they seem pretty happy by the outcome and how things went down on that phone call, guys.

SANCHEZ: Yes, a significant moment for this conflict between Russia and Ukraine.

Fred Pleitgen live from Moscow, thank you so much.

We're following even more breaking news into CNN. Just moments ago, the State Department announced a group of prisoners being released from a prison in Belarus, one of them an American citizen.

KEILAR: CNN chief national security correspondent Alex Marquardt is here with some details.

What do we know?

ALEX MARQUARDT, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Well, this is day two of and releases, this remarkable flurry of people being released by both Russia and Belarus coming back to the United States, yesterday with Marc Fogel, the American who was released by the Russians.

Today, we have just learned three people released from Belarusian captivity, one of whom is American. And this is very much playing into everything else that we have been talking about, which is the potential negotiations between Russia and Ukraine, the Trump administration seeing this as a good-faith effort by Russia to -- that will play into those negotiations.

Today, American officials saying that Belarus is releasing these other three unilaterally, essentially agreeing with the President Trump's position of peace through strength. But make no mistake, Belarus, Russia trying to curry favor with the Trump administration here.

I want to play a little bit of what two U.S. officials had to say after the release of these three individuals in Belarus. Take a listen.

(BEGIN VIDEO CLIP)

CHRIS SMITH, U.S. DEPUTY ASSISTANT SECRETARY OF STATE: This was a unilateral gesture by the Lukashenko authorities. They made this gesture because they are responding through what Adam pointed out, which is the president's peace through strength agenda. They're responding to strength. They're looking to improve ties. This was a gesture on their side.

KARA MCDONALD, U.S. AMBASSADOR TO LITHUANIA: It's important to note here that this is four releases we have had in less than a month of the administration. It's quite extraordinary. It's really a very rare thing. We work sometimes for years to get people out. I have personally worked on one of these cases for a number of years.

And so to see this person come out of Belarusian prison is quite extraordinary.

(END VIDEO CLIP)

MARQUARDT: So those are two senior officials in the State Department, career officials, I should note.

And I think we need to push back a little bit on this claim that is a unilateral move by Belarus. What is going on here is, Belarus is very much acting as a vassal state of Russia. Russia is trying to curry favor with President Trump ahead of these negotiations with Ukraine. And what we're hearing is a lot of wins for Vladimir Putin today. You

have President Trump cozying up to him in this phone call, but you also have Pete Hegseth, the secretary of defense, essentially giving Russia a lot of what it wants to hear, which is no NATO membership for Ukraine, the fact that Ukraine will not get back the territory that it had back in 2014, no U.S. soldiers being -- going on the ground as peacekeeping forces.

[13:10:14]

So if you're in Kyiv right now, you are likely quite upset about what you are hearing today. A lot of Democrats are going to be angry about the Trump administration giving over this notion of no NATO membership, essentially without getting anything back from the Russians.

I heard from a European official who said like, this is like the Super Bowl, starting with a score of 35-0 before kickoff in favor of Russia.

KEILAR: That is sort of how the Super Bowl went.

(LAUGHTER)

KEILAR: We saw how it ended.

Alex Marquardt, thank you so much.

In the meantime, the first inflation report of the year is out, and it shows prices are higher across the board, inflation hitting 3 percent for the first time since June. Economists were not expecting that. They thought that this was going to be slightly lower, today's report an unwelcome surprise at a time when the Federal Reserve wants inflation slowing and as uncertainty is growing over President Trump's tariff plan.

Joining us now is CNN global economic analyst Rana Foroohar.

Rana, as you look at this, we should note -- and I want to know what stands out to you, but also what you're expecting, as, before this report came out, President Trump was saying, hey, interest rates need to be lower.

RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: Yes, for sure.

I mean, the president is doing a lot to try and politicize what the Fed's job is, but ultimately the Fed's job is to look at the data. And that's what Jerome Powell has been saying. I think that what this means is they're going to go very slowly in terms of thinking about lowering interest rates.

What stands out to me in terms of inflation right now in this report is that it's taking into account some of the moves that the president has made, tariff wars, inflationary, cracking down on undocumented immigrants also inflationary. You can like that or not from a policy standpoint, but the fact is that more migration into the U.S. has been one of the leading reasons why you haven't seen more wage inflation. So that crackdown is potentially inflationary. And then at the same

time, you have got the tax cuts potentially coming down the pike that would then add more fuel to an economy that's pretty -- growing pretty well, was growing pretty well before the president took over.

So all of that together is, for sure, inflationary. And so the Fed is not going to be looking to lower rates in advance of that kind of report.

KEILAR: Yes, because what would happen if they did lower rates? And also he's saying that lowering of the rates should go hand in hand with tariffs. Is that how economists -- that's how Trump is saying it. Is that how economists see this? How does the Fed see this?

FOROOHAR: No, in fact, it's diametrically opposite to what an economist would say.

Economists would say the tariffs are going to be inflationary. Again, you can -- you can argue for them. There are some reasons why you might want tariffs, but they are going to be inflationary in the short term, very likely. And so that means that the Fed would be looking to keep rates where they are, not to add more fuel to the economy by lowering them.

Now, the president would like them to be lowered, because he wants to offset any kind of inflationary impact from those tariffs, so he can say to the American people, look, there's not going to be pain here for you. We will keep the easy money going. We will keep loans low and everything's going to be fine.

But, ultimately, that's not how the Fed works. They're going to be looking at data. And barring -- barring anything dramatic, I do not think that Jerome Powell is going to change directions here.

KEILAR: National Economic Council Director Kevin Hassett was on CNN earlier today. He says it's still possible to deliver lower interest rates for Americans by cutting back on federal government spending, drilling more oil, cutting taxes and clawing back regulation.

I think I know how you're going to fact-check that. But fact-check that. Is he right?

FOROOHAR: I got to say no, Brianna.

I mean, if you look -- let's just take the federal spending and government efficiency question. Look, there's a lot of reasons to want to make the government more efficient. But when you look at where spending really lives, it lives in entitlements, it lives in defense, and it's also about interest rates on the existing debt.

Now, of course, lowering interest rates, which would make the existing debt cheaper, is another reason that Trump and the administration in general might want lower rates. But I just don't think that, even if DOGE were actually going after efficiency, which I'm not convinced that they are based on what I have seen so far, I think without cutting those major entitlements and defense, it would be very, very hard to get to a situation in which that kind of cutting is going to make a real difference.

KEILAR: All right, Rana Foroohar, thank you so much for that. We do appreciate the reality check.

[13:15:02]

In the meantime, we're awaiting on this quite consequential day the White House press briefing. You can see the White House press corps is gathered there as we're waiting for the press secretary to come out.

Alex Marquardt back here with us.

And no doubt there are going to be a lot of questions about the conversation Trump had with Putin about what is happening right now as they are kind of, I think the White House, the administration, Alex, trying to spin this as Belarus, Russia just sort of respecting the position that President Trump is taking.

There's going to be a lot of questions about what has happened today, what Belarus may have gotten in all of this, and what is certainly good news, that Americans are being released.

MARQUARDT: I think we really need to look at Belarus as an extension of Russia here, and that President Lukashenko is doing this because President Putin almost certainly asked him to.

The U.S. also exchanged a prisoner, we should note, a guy named Alexander Vinnik, a Russian who was extradited here to the United States a few years ago. He is a convicted money launderer, so he got sent back to Russia. This was a prisoner exchange.

But before all this news came about these prisoner releases, we were already trying to set the stage of what was going to happen for Ukraine this week. This is a monumental week for Ukraine, in particular because we are leading into the Munich Security Conference, which is an annual event, where a lot of leaders, particularly European leaders, gather.

President Zelenskyy is going to be there, but J.D. Vance is going to be there, Secretary of State Marco Rubio and others from the Trump administration. And we have been trying to figure out generally the contours of what a peace deal might look like.

And one of the new elements that has really been infused into this and really taken it over is this notion that President Trump really wants to get paid back for all the American support. And what he's been pushing is, Ukraine needs to pay us back with rare earth minerals. And so now the secretary -- the Treasury secretary is going to Ukraine this week, and that really tells us a lot.

SANCHEZ: Let's interrupt and actually jump into the briefing as it starts. Let's listen.

(JOINED IN PROGRESS)

KAROLINE LEAVITT, WHITE HOUSE PRESS SECRETARY: I can also confirm that the president just recently got off the phone with President Zelenskyy of Ukraine.

His TRUTH is as follows: "I just spoke to President Zelenskyy of Ukraine. The conversation went very well. He, like President Putin, wants to make peace. We discussed a variety of topics having to do with the war, but mostly the meeting that is being set up on Friday in Munich, where Vice President J.D. Vance and Secretary of State Marco Rubio will lead the delegation.

"I am hopeful that the results of that meeting will be positive. It is time to stop this ridiculous war, where there has been massive and totally unnecessary death and destruction. God bless the people of Russia and Ukraine."

I myself just spoke to the president about these calls, and he told me to tell all of you they were very good calls. They were very positive, and the administration is wholeheartedly committed to a peace deal to end, once and for all, the Russia-Ukraine war. More on that later. I'm sure you will have more questions to ask.

This week, the president has continued to deliver on his promises to the American people. According to new polling that was released at the beginning of this week by CBS News, an overwhelming 70 percent of Americans said that President Trump is following through on what he pledged to do during his historic campaign.

The poll also revealed that Americans see President Trump as a tough, energetic, focused, and effective leader fighting hard to improve their lives and our country. And yesterday in particular was a truly special day for the United States of America.

Thanks to the great leadership of President Trump and the strong and tough leadership of President Trump, Marc Fogel, an American teacher detained by Russia, was returned to American soil and met with the president here at the White House last night.

Special envoy Steve Witkoff and the rest of President Trump's incredible national security team helped to negotiate the exchange that secured Marc Fogel's release. This event shows a good-faith effort from Russia, and it's a sign, as I just said, that we are moving in the right direction to end this brutal war.

Malphine Fogel, Marc's 95-year-old mother, was understandably very worried that she would never see her son again after his arrest in 2021. Mrs. Fogel was actually slated to join President Trump on stage at the July 13 Butler, Pennsylvania, rally to speak out for Marc, and then the infamous assassination attempt against President Trump took place.

But that day, before the rally, President Trump promised Marc's mother that, when he returns to the White House, he would bring her son home. God saved President Trump's life on that day in Butler, Pennsylvania, and now Marc Fogel is back home safely with his family as a result. God is good.

The president also continues to bring back common sense to our government. This week, he signed an E.O. to end the procurement and forced use of paper straws. Taxpayer dollars were wasted on these nonfunctional and massively unpopular products for no other reason then it made radical activists feel good about themselves.

[13:20:14]

And on trade, President Trump continues to take bold action to protect...

KEILAR: All right, we will continue to monitor the White House briefing here.

We did just hear -- all right, we're going to continue to monitor the White House briefing here. We did just hear from the press secretary, saying that this prisoner release is a good-faith effort from Russia. Of course, Russia has made a habit of detaining people wrongfully that it can use as currency in situations like this.

We will continue to discuss that ahead. We're going to get in a quick break.

We will be right back with more breaking news.

(COMMERCIAL BREAK)

[13:25:13]

KEILAR: This week, federal judges across the nation have issued rulings blocking or slowing President Trump's agenda as he works with Elon Musk to remake the federal government.

Federal judges have halted plans to put thousands of USAID workers on leave. They have limited DOGE's access to the Treasury Department's payment system, blocked Trump's order ending birthright citizenship, and ordered the administration to unfreeze grant and loan payments twice.

And despite all that, President Trump is expanding Musk's powers with a new executive order, telling agency leaders across the federal government to work with DOGE to prepare for large-scale layoffs.

Let's go to CNN's Jeff Zeleny at the White House.

Jeff, what do we know about Trump's new order that's telling federal agencies to start planning for these big layoffs?

JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: Well, Brianna, in a series of executive orders that really have defined the first opening weeks of the Trump presidency, this is one yesterday.

Yes, the conversation with Elon Musk sort of overtook the actual executive order, but this has authority and it's really sending some shockwaves across the federal government. And this is what it basically says. It's essentially putting into effect the DOGE practices.

And on hiring specifically, for every one new hire, there have to be four people who leave. And every new hire has to be approved, I'm told, by someone on this DOGE task force. So this is not allowing agencies to bring on people that they believe need to come on, even to do a fill-up in positions. Every hire has to be approved.

So this is very much a centralizing unlike most agencies have seen before. So certainly it is going to sort of instill this idea of shrinking the work force. But also, Brianna, we are getting new signs that this showdown between the White House and judges across the country is really heating up and intensifying.

Just a moment ago, at the White House briefing, which we are monitoring, the White House's press secretary called these judges judicial activists. So a question here is, even though the president yesterday said, "I always abide by judges' rulings, I will appeal if necessary," the rhetoric and language about these jurists is definitely intensifying, even as more courts are weighing in really from all corners of the country about some of these executive actions and the executive authorities.

KEILAR: Yes, certainly.

Jeff Zeleny live for us at the White House, thank you -- Boris.

SANCHEZ: Let's get some perspective now with Marc Short, former chief of staff to Vice President Mike Pence.

Marc, great to see you.

You chuckled a bit when we went through the bullet points of what was in this new executive order. Why?

MARC SHORT, FORMER CHIEF OF STAFF TO FORMER VICE PRESIDENT MIKE PENCE: Well, look, of course, I think that the concern is, we're celebrating actually cutting government. I think, for so long, Republicans have talked about it and not been successful.

And so I think there's excitement of actually being able to burrow into the federal government and take some of these actions. I think it paints Democrats in a tough spot, too, because they don't want to be, I don't think they want to be sitting there advocating that pottery classes in Morocco is good use of our dollars, or LGBT theater in Guatemala.

But I do think that, for Republicans as well, if we really believe in these things, we should have them legislated. If the notion is the executive branch can do this unilaterally, what happens when a Democrat president comes in and says, you know what, I'm ordering all CBP officers to stand down, I'm telling CBP officers not to show up to work?

If we believe that that's what the executive branch can do unilaterally, it'll have negative consequences next time there's a Democrat president. So if we really advocate for these things, they need to be legislated in the law.

SANCHEZ: Were you cheating and reading off my questions when Brianna was speaking? I had a question specifically about that, this hypothetical. What if a Democratic president installs this super governmental agency and puts at the head of it someone who there isn't really that much transparency into their finances and they unilaterally make these decisions about government agencies?

To that point, are you comfortable that we know enough about Elon Musk's financial dealings, not just within the United States, his deals with the Pentagon, but also overseas, his financial dealings with the Chinese, to essentially hand him the keys to these sensitive government programs and to allow him essentially to cut spending this way?

SHORT: I actually -- Boris, I don't have as much concern about that. I think the reality is that most American view Elon Musk as a successful businessman, and basically streamlining government is a good thing.

Again, I think it's good for him to make recommendations of where we should be cutting, but, ultimately, Congress has the power of the purse and Congress is the one that needs to zero out these programs.

And I think, in many cases, the Trump administration is showcasing why there are misallocation of dollars. And I think that builds a case for it. But, again, if you take the next step and say that you can unilaterally do this, then you have got to live with the consequences when a Democrat president unilaterally gets rid of Republican programs or conservative programs that we like, like Border Patrol.

SANCHEZ: But the thing is, he's just not giving advice. He's actually doing it.

[13:30:00]