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Trump Blames Biden as GDP Shrinks for First Time Since 2022; Court Considers Taxpayer-funded Religious Schools; Ukraine Minerals Deal Could Be Signed Today; Port of Los Angeles Bracing for 35 Percent Drop in Imports Next Week; Sen. Paul Says He Has the GOP Votes to Block Trump's Tariff Power. Aired 2-2:30p ET

Aired April 30, 2025 - 14:00   ET

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

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[14:00:33]

BRIANNA KEILAR, CNN CO-ANCHOR OF "CNN NEWS CENTRAL": The incredible shrinking American economy. On President Trump's 101st day in office, economists say we are seeing firsthand the impact of his trade war, the first drop in growth in three years. But the president is blaming his predecessor for the market slide today.

BORIS SANCHEZ, CNN CO-ANCHOR OF "CNN NEWS CENTRAL": Plus, one brick possibly removed from the wall between church and state. The Supreme Court may be ready to allow taxpayer money to fund religious schools, a decision with potentially major consequences. And a long awaited deal, Ukraine and the United States could finally sign a minerals deal after weeks of intense negotiations, but could last-minute changes potentially derail it. We are following these major developing stories and many more, all coming in right here to "CNN News Central."

KEILAR: Hello, I'm Brianna Keilar in Washington alongside Boris Sanchez. And today, President Trump made it clear the buck apparently does not stop with him. He repeatedly blamed President Biden for the worst economic quarter the U.S. has seen in years. He's brushing off economists who are largely blaming him, his tariffs in particular, and a reminder, economists have told CNN several times that by most gold standard measures, President Biden handed President Trump a booming economy.

SANCHEZ: Yeah. Today's report though shows a shrinking economy in the latest quarter. You see it there on your screen. The first time in three years, the U.S. economy has contracted and U.S. stocks today dipping on that news. Let's get you straight to the White House with CNN's Jeff Zeleny.

Jeff, the president during a cabinet meeting today said that not only is this quarter President Biden's, but the next one might be as well.

JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: Boris, pretty extraordinary. President Trump openly asking for more time to take the reins of the economy. But of course, as we begin the 101st day of his administration, he owns the economy. The economic policies are his. Yes, they are still taking effect. However, the president -- now, we've seen several examples of his obsession with his predecessor, Joe Biden. We saw it at his rally last night in Michigan when he was celebrating 100 days. He spent as much time looking backwards, I think, as looking forwards, but there was no doubt in the cabinet room as he was hearing, sort of, positive praise and reassurances from others, on the economy at least, he looked backwards.

(BEGIN VIDEO CLIP)

DONALD TRUMP, (R) PRESIDENT OF THE UNITED STATES OF AMERICA: This is Biden and you can even say the next quarter is sort of Biden because it doesn't just happen on a daily or an hourly basis, but we're turning it around. It's a big ship to turn around and we're going to have the greatest country financially in the history of the world, I believe. I think we're going to do things that, and we had to do it. We reset the table.

(END VIDEO CLIP)

ZELENY: Now, that is something we did not hear on the campaign trail when President Trump was running for office. It's a big ship. It takes a while. He said, in fact, on day one and shortly after, prices would lower. So, the reality here is the economic anxiety is out among normal Americans are clear. The metrics and the measurements of the economy are showing that. There is no doubt about it. I was just in Michigan yesterday, talking to many voters this week, and that is clear. The economic anxieties, no matter who they blame, are very real. But for the president at least, no interest in taking ownership of any of this, asking for more time and blaming once again, President Biden. Boris and Brianna?

SANCHEZ: Jeff Zeleny at the White House, thank you so much. As President Trump blames Biden for the poor economic report, at least one of his advisers is calling the report good news. Peter Navarro at the White House this morning argued that he has just one thing to say about this report. It is the best negative print I have ever seen in my life. Markets, he says, need to look beneath the surface of that.

To discuss, Aaron Klein is with us. He's the former Treasury Department Deputy Assistant Secretary under President Obama. He's now a Senior Fellow at the Brookings Institution. Aaron, always great to have you. I wonder what you make of Navarro's argument here. He's basing that view that this is good news on 22 percent domestic investment in the United States.

AARON KLEIN, FORMER TREASURY DEPARTMENT DEPUTY ASSISTANT SECRETARY UNDER PRESIDENT OBAMA: Yeah.

SANCHEZ: Which also was in this report.

KLEIN: So look, the economy that Trump inherited was growing and growing pretty well and he stalled it. Right? This is basically a zero reading. I know it's slightly negative. And the driver for this were people front running these tariffs, buying imported goods, bringing it in, people in businesses because they're afraid, because Trump -- who knows what's going on with these tariffs.

[14:05:00]

And so that's what dragged down the economy. There is a wave of hope in the underlying economic data that Navarro has a point. Consumption and investment we're strong in the first quarter, but that was when businesses thought that Trump meant tax cuts and de-regulation. And the tariffs were just campaign pledges that were going to be forgotten when he got into office. Like, remember when Trump said he was going to cap credit card interest rates at 10 percent? I do. He doesn't. And that doesn't seem to be occur (ph).

So that's what they thought. The tariff was just talked to get elected. Now that Trump's doing the tariffs and there's all this uncertainty, the question is what's going to happen with business investment next quarter? Because remember, this report ends March 31.

SANCHEZ: Yeah.

KLEIN: Right? So Navarro has a point and he's right, that can -- the underlying fundamentals of the economy are strong because that's what Trump inherited. And then we'll see what happens as people react to these tariffs and they change on a day-to-day basis. How can a business invest and plan in the future when it has no idea what the tariffs are going to be?

SANCHEZ: I guess if you were trying to see the world through the eyes of Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, even Peter Navarro, they would say that because U.S. trade -- because world trade has been rigged against the United States for decades now, the consequences of Trump readjusting that and the stock market responding with volatility really belongs to the previous administrations the way Trump is saying. But the face you're making tells me that you disagree with that notion.

KLEIN: I mean, that -- look, look, there's a credible argument to be said that the system that was put in place by both parties over many years didn't work for a lot of people. And we're going to readjust that system and that readjustment is going to take time and it's going to harm people. And Trump starts to admit some of that occasionally as comment, people, maybe you're going to have -- your kids will have fewer toys and they'll be more expensive.

SANCHEZ: Right.

KLEIN: Right? That's not politically popular, but that's economically and logically consistent. But keep in mind, who made some of these trade deals that Trump is trashing? Trump and Peter Navarro in 2017. It's not like this is the first time this guy's been in the White House. And so part of the problem here is, if you want to make the argument that Navarro seems more comfortable making, that we're going to transform the economy and it's going to hurt in the short term, but we have a longer term horizon, that's fine.

But that's completely inconsistent with blaming Biden and saying, oh, this was his stuff. And it's one or the other. You have to own it. You break it, you bought it. And Trump has been in the process of breaking this economy. Now, the new one that he comes out, if it's as glorious as he promises, hats off to them.

SANCHEZ: I do wonder what you make of, the Chair of the Council of Economic Advisers saying that consumer spending was weaker, especially in January because of a number of issues, high inflation, wildfires, bad weather. How much does that factor into what you're seeing in this report?

KLEIN: Yeah, so the weather stuff is difficult. There are lots of seasonal adjustments that go into the statistics, right? January is a very different month than December in terms of spending and things that count for that. There was unusual cold in the south of the U.S. that depressed some retail spending. So you can have these fluctuations, also as somebody who's been in this economic business game a long time, when we play back the tape of this interview, people may be surprised.

What do you mean the economy shrank? The number was revised slightly up, slightly down. When I was in -- walked into the Treasury Department in 2009, they said the last quarter of 2008, the economy had fallen 3 percent. That number turned out to be 6 percent when revisions were done. So I wouldn't read too much into this being -0.3 or +0.3. But, the core point is this economy stalled.

We were growing last year, this tariff and this uncertainty has happened, and the economy has stalled. And it wasn't like the greatest weather impact.

SANCHEZ: Sure.

KLEIN: There was some, and that'll get revised and moved around a little bit.

SANCHEZ: If you're looking at the crystal ball for the next quarter, if tariffs largely stay the same and no major trade deals are announced, what do you see happening?

KLEIN: Yeah, I think the economy's going to continue to struggle. I think this adjustment will be very deep and very painful. And as I'm looking forward, there's one more shoe to drop, which is what's the Federal Reserve going to do? The Federal Reserve is going to meet next week and going to do interest rates. You mentioned the stock market had fallen a bit today. Sometimes the stock market rises on bad growth numbers because they think the Fed is going to react by cutting interest rates, which is good for the stock market.

Now, the Fed has a struggle on its hand because tariffs slow the economy, but also raise prices. And the Fed is trying to keep people employed and keep prices down. And meanwhile, Trump is trashing Jay Powell on Twitter every so often. So, the Fed's reaction next week I think will be very telling, but I'm pessimistic for the economy going forward at this moment.

SANCHEZ: We will be watching that decision very closely. Aaron Klein, appreciate the perspective. Thanks for joining us.

KLEIN: Thanks. SANCHEZ: Brianna?

KEILAR: During an interview that aired last night, President Trump was asked about the impact that his tariffs could have on his supporters. Here's what he said.

[14:10:00]

(BEGIN VIDEO CLIP)

TERRY MORAN, SENIOR NATIONAL CORRESPONDENT, ABC NEWS: People are worried, even some people who voted for you, saying I didn't sign up for this. So how do you answer those concerns?

TRUMP: Well, they did sign up for it actually, and this is what I campaigned on.

(END VIDEO CLIP)

KEILAR: With us now is Marc Short. He served as the Director of White House Legislative Affairs under President Trump. He's also former Vice President Mike Pence's Chief of Staff. Marc, great to have you.

MARC SHORT, FORMER WHITE HOUSE LEGISLATIVE AFFAIRS DIRECTOR UNDER PRESIDENT TRUMP: Thanks you.

KEILAR: And you are hearing Trump over and over blaming President Biden, but we should also remember that he bragged about the economy that he inherited and he sort of was saying that it wasn't Biden giving him a great economy, he called it the Trump effect. He was saying that it was the markets and Americans excited that he was coming in. How long can this work for him or does it even work for him?

SHORT: Well, I think he's actually pretty good at being able to shift blame. I think the reality was that the markets rallied after his election lead into his inauguration day because they want to see a continuation of his first administration policies, which I think were really successful in deregulating the economy and cutting taxes.

I think today's economic reports and data are pretty devastating. And I think only Baghdad Bob and Peter Navarro could explain this as positive news. I think it's terrible to see not just the GDP declining, but prices are going up. You're seeing stagflation for the first time since the Jimmy Carter era. And so, I'm sure there's a desire in the administration to put this blame on somebody else. But I think that I think it's clearly a result of the trade policy. I think a lot of people want to see them go back to the first administration policies of deregulation and lower taxes.

KEILAR: Has he squandered his goodwill that he came in on?

SHORT: No, I think he has enormous goodwill. I think he has enormous loyalty and support among his followers. I think one of the challenges though, also Brianna, is like even if you agree with the trade agenda, I think it's been difficult to understand their simple explanation. Is this because of fentanyl? Is this because we're trying to lower trade barriers? Is this because we don't like trade deficits with other countries?

It seems like the narrative continues to shift is the explanation for this. And so, I think if there was a clear explanation say, here's the pain we're going to ask you to go through in order to get to this result, that people would stay with him longer. But I think he still has enormous loyalty among his supporters.

KEILAR: There has been a refrain that we've heard from some administration officials and now, it seems we're hearing it from Trump, like, you don't need these cheap Chinese goods. Right? He was asked about whether he'd spoken to President Xi, he dodged that, and he instead tried to stress economic difficulties that China's having because of the tariffs. And he said instead they have ships loaded up with stuff, much of which we don't need. Do you think Americans understand that actually if they look around their houses, maybe there's some wants there, but there's also a lot of needs that are coming from China?

SHORT: Yeah, I think it's a pretty elitist perspective. I think the reality is that Americans want to be able to purchase goods because we can afford to. It's a good thing that America is as wealthy as it is. It's easy in some ways to eliminate trade deficit if you drive the economy deep enough into a recession, and people can't afford to buy goods. So, we have this narrative constantly about what a trade deficit is and it only looks at one half the equation.

It doesn't look at the current account deficit in foreign investment into the United States. We have a trade deficit because Americans can purchase more things. And actually, last month, the trade deficit continued to balloon. And so, even with this administration policies, that's continuing to grow and that's in many cases because America can afford to

KEILAR: 35 percent drop in cargo arriving at the Port of Los Angeles expected next week. How much of an effect is that going to have politically?

SHORT: I think it's going to be a huge effect in a couple weeks. Brianna. I think that, right now you're hearing the numbers, you're seeing the numbers, you're seeing consumer confidence go down five months in a row. But if there's actually shortages of supply in grocery stores and other department stores, I think that will have a much different impact on voters.

KEILAR: So on the issue of immigration, which is something that should be very good for Trump, if you look at the border numbers, and this is something he really wants to emphasize, but at the same time, I wonder if you think there are some warning signs in the polls because his approval rating is dipping 52 percent, of those in this new CNN polling say Trump has gone too far in deporting undocumented immigrants. 56 percent say the Trump administration should work to bring Kilmar Abrego Garcia back.

SHORT: I think that sometimes polling is difficult to read in a vacuum and I think that there's a lot of stuff in involved in that. I think as the economy continues to weaken, it impacts your numbers across the board. I still think the president was voted into office in large part because of inflation and because of the border. And I think they're having much greater success in securing the border. I think the economic agenda is being driven now by those who really advance kind of a traditionally labor union protectionist policy that I think is more damaging and not consistent with his first administration policies.

KEILAR: What did you think, about what he said about his ability to get Abrego Garcia back and also, a lot of the headlines that we're seeing about mothers, children, American children of mothers who are in the country illegally, according to the Trump administration, being deported? What do you think about the effect of all of that?

[14:15:00]

SHORT: I think, it's a hard story to break through, but I think it is important to remember that those mothers select to choose to bring their children. They don't want to leave them behind. And so even though the narrative is they're being separated, in many cases --

KEILAR: No, and Marc, I completely understand that. But, in one case, you have a father who is still here and albeit he is still here illegally, as we understand it in the reporting, that's what has been reported. But there is a big disconnect as to what she actually wanted to do, what the father wanted to do, whether an aunt who is American could have taken the child, the child isn't American.

SHORT: Fair, but the child's American. But as I understand it, the mother selected to return the child with her. And so I think it these things --

KEILAR: I will just say, her attorneys say that that's not exactly the case. So, we -- it's --

SHORT: That is the case that I've heard.

(CROSSTALK)

KEILAR: We haven't -- we haven't had the chance to fully explore.

SHORT: Right. I mean, I think the reality is again, our border was being overrun. And I think that there's a lot of tolerance from American people to say, we want the president to clean up the border. And I think the challenge will become if they continue to do not follow direction of even court decisions that are made by his own appointees, I think you've seen there's been decisions made at the district level, the appeals court, and the Supreme Court, that they seem to be flouting. I think that's a different question.

KEILAR: Yeah. Lots of questions there. Marc, great to speak with you. Thank you so much, Marc Short. We appreciate it.

And still to come, we're awaiting a Senate vote to block President Trump's tariffs. It's being led by a Republican, plus a blockbuster case before the Supreme Court will have justices decide whether taxpayer money can be used to fund religious schools. Did today's arguments offer any clues into how the justices could rule. And later, we're learning a last-minute disagreement over paperwork could derail a U.S. minerals deal with Ukraine that was expected to be signed as soon as today. We have these important stories and more, all coming up this hour on "CNN News Central."

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[14:21:45]

SANCHEZ: Republican Senator Rand Paul says he expects to have enough votes to pass a bill that could block President Trump's tariff power. That vote is happening in just a few hours. And Republican moderates, Lisa Murkowski and Susan Collins say they will support the measure. Keep in mind, Senator Paul needs a total of four Republican Senators to back him. Even if it passes though, this effort likely will be dead on arrival in the House because Speaker Mike Johnson indicated he could leverage a new rule and a new change in the rules, I should say, to derail Senator Rand's resolution.

Let's discuss with newly elected Republican Congressman Randy Fine of Florida. A month ago, he won a special election for the seat previously held by National Security Adviser Mike Waltz. Congressman Fine, thank you so much for coming on. Congratulations on your win. I wonder if this bill passes in the Senate, should the resolution get a vote or at least debate in the House?

REP. RANDY FINE, (R-FL): No, absolutely not. Look, tariffs are apparently a great idea when other countries do them, but when President Trump wants to level the playing field by fighting back, everyone loses their courage. He's trying to create a fundamental reordering in how we think about trade policy in the world. I'm behind him a hundred percent. And this won't go anywhere in the House.

SANCHEZ: But if Republicans control both chambers of Congress and historically, the power to levy tariffs as broadly as President Trump has, has gone through some Congressional oversight, some Congressional review. Are you not confident that you could reach the same point by going about things the usual way?

FINE: I am. Look, he's doing things the new way. If Rand Paul wants to get together with Bernie Sanders to fight Donald Trump, well, that's on him. I know that I'm here to fight Democrats, not to work with Democrats to undermine what President Trump is trying to do. The fact of the matter is trade policy throughout the world has been unfair for decades. And I appreciate President Trump for standing up and fighting back. We've been waiting for this for decades. We finally have a president who will go and get the job done.

SANCHEZ: So a hundred days into his second term, President Biden is blaming recent volatility in the stock market on his predecessor, on Joe Biden. There were headlines right after his election where stocks soared. You see them here. We also have a chart tracking how the S&P has responded to decisions coming from the White House. And you can very clearly follow along, after new tariffs -- (LAUGH)

SANCHEZ: That was nice, I guess. But getting back to my point, on following the S&P, you can clearly track when tariff decisions have been made, there have been major drops in the stock market. So, I wonder what do you make of the trillions lost since Trump took office a second time?

FINE: Well, look, markets don't like uncertainty. And I think that's what we're seeing right now, is we're seeing things go up and we're saying things go down based on that. But I think as we work through these changes, as we get to the level playing field that President Trump is looking for, the markets are going to respond. And I think everything is going to be fine. But there is uncertainty. Look, we had a choice in this country, continue to lose as Joe Biden allowed us to lose day after day, week after week, month after month, or to stand up, fight for America and fight back.

[14:25:00]

And here's why this is so important. See if the playing field is level, America will win every single time. Joe Biden didn't like that. President Trump wants a level playing field, and we're going to get there.

SANCHEZ: It's interesting that you describe President Biden's policies as losing wherein the last quarter of his presidency, the economy grew 2.4 percent. In the first quarter of President Trump's, it contracted by 0.3 percent. How do you square that?

FINE: Well, there's absolutely no way you can blame the first quarter. Keep in mind, President Trump wasn't even president for the first third of that first quarter. So to say that on January 20th, he's responsible for the first 20 days and his economic policies are going to make some sort of magical difference for the next two months is a little bit crazy. Those numbers are lagging indicators, so it's just not true.

SANCHEZ: Tariffs -- installing tariffs unlike any we've seen since Smoot-Hawley, right before the Great Depression, is a tremendous change to the economy. You don't think there's any tie-in between tariffs and the economy reacting the way that it did?

FINE: Well, mathematically, it's impossible because President Trump put in those tariffs on April 2nd. The first quarter of this country ended on March 31st. So by definition, those tariffs couldn't have had any effect on those results. People have to look at facts. They have to look at numbers. They've got to move away from talking points. You can have concerns about tariffs. People are right to have concerns, but to create a fundamental change in the global order is going to take time. But what we do know is any tariff policy couldn't possibly have had an effect on the first quarter because they weren't in place.

SANCHEZ: He did install some tariffs before that date. Nevertheless, Congressman, I do want to ask you about the national debt. You have called it an existential threat, yet you also have backed permanent tax cuts for many Americans, which the administration claims will be covered by tariffs. We ran the numbers, and to offset the lost revenue that the administration and certain Republicans have floated in terms of permanent tax cuts, tariffs would need to reach a hundred percent for all imported goods. That doesn't seem tenable. How does that math make sense?

FINE: Well, look, you're right. We do have an existential threat and I appreciate you pointing that out. I want to solve that existential threat by cutting costs. Here's an interesting statistic for people to look at. There are now more people on Medicaid that aren't in poverty than those who are. Federal programs have grown like crazy. Federal spending has grown like crazy. And so, I don't think the solution to the problem is by taxing people more. I believe the solution to the problem is by cutting what we spend, and that's certainly what I'm going to be working on here. But I agree with you on this, it is an existential problem that we have to deal with.

SANCHEZ: You say that you're looking to make substantial cuts. You specifically mentioned entitlements. Let's talk about the $880 billion that's been outlined for energy and commerce, that committee to cut. They oversee Medicaid. Some Republicans have floated a number, something like $500 billion that they say could be eliminated through cutting waste and fraud. That still leaves you with $300 plus billion to cut from entitlements, which President Trump has vowed not to touch. So, how does that math then work? You're going to have to cut entitlements. You're going to have to cut some beneficiary programs that people know.

FINE: Well, look, I was on the education workforce markup yesterday. We were tasked with finding $330 billion in cuts. We not only found that $330 billion, we put another $20 billion into the pot coming out at over $350 billion. And we do that while making education better and more accessible for people. I've just seen in my month here, the amount of waste that takes place in our government is extraordinary. And to be fair, this is liberal's fault and it's conservative's fault that we have gotten here.

But I'm not willing to saddle Americans with higher taxes to solve that problem. We have to do what American families do every day. We have to live within our means. And the way that we do that is cutting spending. And I'm confident that we're going to get it done under Speaker Johnson and President Trump.

SANCHEZ: So, I didn't hear you say specifically that you wouldn't go into these programs. Your district has the second highest number of Social Security beneficiaries and senior citizen beneficiaries in all of Florida, based on the latest data that we could find. Can you guaranty your constituents that they're not going to lose their benefits?

FINE: I would never cut Social Security for those people that are on it. I have a 76-year-old blind father who is dependent on his Social Security and Medicare. And he reminded me when I ran for office that I was not too old for him to go find the belt in his closet if I was going to mess with his Social Security. We are not going to mess with anyone's Social Security. They worked for those programs, they worked for those benefits and they deserve it. But there's a lot of spending that goes on in the federal government that isn't about the monthly check that our retirees get. And to say that we can't tackle that problem because of what we have in Social Security is just not true. But people --