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White House Claims Powell Mismanaging Fed, Cites Renovations; New Audio of Dispatch Calls as Deadly Texas Flooding Began; State Department Notifies Staff It Will Begin Firing Personnel Soon. Aired 7-7:30a ET

Aired July 11, 2025 - 07:00   ET

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

[07:00:00]

JOHN BERMAN, CNN ANCHOR: All right. Breaking overnight, a brand new 35 percent tariff on Canada soon, maybe, and a brand new attack on the Fed chair and his physical office. Is this about a difference in decorating taste or something much bigger?

KATE BOLDUAN, CNN ANCHOR: The president this morning is headed to Texas to see the devastation there firsthand, just as CNN Obtains New dispatch, audio revealing urgent calls for emergency alerts to be sent out, only to wait hours for that to happen.

SARA SIDNER, CNN ANCHOR: And a stunning upset at Wimbledon, the American tennis player beating the number one ranked player in the world, how she pulled it off, and who she now faces in the final.

I'm Sara Sidner with John Berman and Kate Bolduan. This is CNN News Central.

BERMAN: All right. Breaking overnight a new twist in the trade war and a new attack on the Fed chair and his actual headquarters. The president announced he would place a new 35 percent tariff on Canadian goods on August 1st. As we have seen before, there are exemptions and questions about if it will actually go into effect as U.S. and Canadian officials negotiate.

But as the president's uncertain tariffs and economic uncertainty in general, that has led Fed Chair Jerome Powell to hold back on dropping interest rates. This has infuriated the president who has attacked Powell in all kinds of different ways, but now there's a brand new one, the likes of which we just haven't seen before.

The White House budget director wrote a new letter to Powell claiming that Powell is now $700 million overbudget on the Fed's $2.5 billion office renovation. OMB Director Russ Vought called it ostentatious and compared it to upgrading the Palace of Versailles. He told Powell, quote, the president is extremely troubled by your mismanagement of the Fed.

Let's get to CNN's Betsy Klein at the White House. And, Betsy, I have to say, just the other day the president was talking about gold leaf on the ceiling, yet now there are concerns about the ostentatious, redecoration of the Fed. What's going on here?

BETSY KLEIN, CNN SENIOR REPORTER AND WRITER: Yes, it's a sharp turn John. But President Trump has long held contentious views on Federal Reserve Chair Jerome Powell. He says he's not doing enough, fast enough to lower interest rates. But this letter from the OMB really marks a significant intensification of this feud. This letter is essentially accusing Powell of breaking the law because of that planned office renovation here in Washington.

And our colleague Kristen Holmes reports the president has replaced three members of what's really a central planning commission for the federal government. Essentially, this oversees these kinds of renovations. He has installed three top loyalists, and they are now ratcheting up that scrutiny on Powell.

But here is how Powell defended those renovations just last month.

(BEGIN VIDEO CLIP)

JEROME POWELL, FEDERAL RESERVE CHAIRMAN: There's no VPI dining room. There's no new marble. We took down the old marble while putting it back up.

There are no new water features. There's no beehives and there's no roof terrace gardens, other than that, you know, so all of the sort of inflammatory things that the media carried are either not in the current plan or just inaccurate.

(END VIDEO CLIP)

KLEIN: Now Powell's term ends in May of 2026, and there are major questions about whether the president can fire Powell, really major legal questions there. But all of this letter could signal that the administration is laying the groundwork to remove Powell, but a White House official tells CNN they're not aware of any broader scheme to do so.

Now, the president has floated replacements for Powell, including his treasury secretary, as well as top economic adviser Kevin Hassett. Here's what Kevin Hassett said just yesterday when asked about all this.

(BEGIN VIDEO CLIP)

KAITLAN COLLINS, CNN ANCHOR AND CHIEF WHITE HOUSE CORRESPONDENT: As the president having aids lay the groundwork to fire the Fed chair, Jay Powell, with the questions about the building renovations?

UNIDENTIFIED MALE: I'm sorry, I don't have comments to that.

COLLINS: Have you been interviewed for the Fed chair job?

(END VIDEO CLIP)

KLEIN: Of course. We will be watching market reaction to all of this in just a couple of hours. John? BERMAN: That was some pretty remarkable silence right there from Kevin Hassett to Kaitlan there. But you're right, Betsy, it does raise questions about whether the White House is laying groundwork for cause here.

[07:05:03]

Thanks so much for your reporting. We'll talk to you again soon. Kate?

BOLDUAN: An important morning in Texas. This morning, President Trump is traveling there to survey the damage from those catastrophic floods. Those massive flash floods hit one week ago today. He'll meet with victims and first responders and also get a briefing with local officials. And the numbers sadly continue to rise, at least 121 people had been killed. At least 160 people are still missing one week later.

And this morning, CNN has obtained dispatch audio detailing -- really detailing the tragedy as it unfolded. Like this call will play for you from a firefighter at 3:37 A.M., a half hour before the first emergency warning was issued.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Yes, ma'am. Just for your 43, Guadalupe River is tarting to come up. And Schumacher is no longer passable at this time.

(END VIDEO CLIP)

BOLDUAN: He's describing the Guadalupe River rising and flooding one of the main streets there, and it also and only got worse from there as we well know, and as you can see, as more 911 calls came in.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Respond to 2029 Highway 39, 2-0-2- 9, Highway 39. It's going to be for a water rescue. House caller's house flooded. We're getting multiple calls off of 39. People are stating their houses are flooding. We're trying to advise them to get to higher area.

(END VIDEO CLIP)

BOLDUAN: This next call reports of children in danger.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: We received a phone call at our fire station. We have a lady. She's frantic, she's at Casa Bonita one 17 Corto Way or Casa Bonita Lodges. And she said her children are on top of one of the cabanas and they're trapped.

(END VIDEO CLIP)

BOLDUAN: And, of course, as we all now know, there were many children's camps in the path, sleep-away camps in the path of the flashfloods. We're going to show you an image from a boys camp in Hunt, Texas, showing the campers clinging to, as you can, very well see, sitting on and clinging to the rafters of their cabin. The mother of one of them says a counselor help the kids climb up onto those beams once the water had reached the top bunks.

And we're going to show you another image. This is Camp Mystic, the all-girls camp that was so devastated by the storm, showing part of the evacuation effort there. Just look at those little girls. At least 27 campers and counselors were killed there.

CNN's Julia Vargas Jones is in Kerrville this morning. So, the president is headed there today. Set the scene for us. What's going to happen?

JULIA VARGAS JONES, CNN CORRESPONDENT: Well, Kate, I just have to say, it's just so difficult every time to hear and watch those scenes, those pictures, and think about all of those children. Where we are now, I am between the river and Route 39 that's mentioned in that call. It would have been impossible to be standing here exactly one week ago, right?

We are in a site where this restaurant owner lost not only a lot of her revenue, she had an R.V. park here, but also one of her employees, a father who worked here, who's now gone.

This is also the site where we have been seeing this morning already. It's only. 6:00 A.M. here. We've been seeing firefighters. We've been seeing response teams with just flashlights looking around. You know, there's miles and miles of river that still need to be searched, dug through.

That's what the president will be seeing when he gets here later today with the first lady. As you mentioned, he will be meeting with local officials. He will be hearing from some families who have lost loved ones, some of those 121 people who are dead. And it will also be an opportunity for the president to try to push back on some of the criticism of the response to this tragedy, both at a federal level as well as the local level.

You know, we've heard about now reports from local officials here from back in October that the systems, the alert systems needed improvement, Kate. All of this later today, we're hoping to get some more answers as this unfolds.

Of course, the first priority here is still to look for those people who are missing.

BOLDUAN: Absolutely. Julia, thank you very much. We're going to follow that as the president's going to be leaving this morning. Sara?

SIDNER: All right. New this morning, a dramatic standoff between federal immigration agents and protestors outside of Cannabis Farm in California. The raid in Ventura County sparked an intense scene. Video shows agents deploying what appears to be tear gas canisters into the crowd. The fire department said it received calls for people having trouble breathing.

One person told CNN his eyes burned from the tear gas.

[07:10:02]

A DHS spokesperson told CNN that the agents were exacting, quote, criminal warrants at the marijuana facility. White House Border Czar Tom Homan told a reporter that people can protest all they want, but they crossed the line -- if they crossed that line, they are going to be arrested.

All right, ahead, a new report this morning says the FBI is using lie detector tests on some of its senior officials, asking questions as specific as if they have said anything negative about FBI Director Kash Patel. What the FBI is saying about this morning.

Also, online searches for information on Jeffrey Epstein are up 900 percent from just earlier this year. Why the betting markets think the Epstein files will never be released. We are running the numbers for you.

And rescued from a claw machine? Video shows the moment a child climbs inside a stuffed animal claw machine and how police manage to free him. Those stories are more ahead.

(COMMERCIAL BREAK)

[07:15:00]

SIDNER: This morning, employees at the State Department are bracing for mass firings that could begin today. A senior department official notified staff that layoffs were imminent.

The cuts are part of a major overhaul that Secretary of State, Marco Rubio unveiled this spring. Rubio, who's in Asia right now, has called the department bloated.

CNN's, Jennifer Hansler is at the State Department for us this morning. What are you learning? I'm sure there is a lot of consternation inside the State Department this morning as well.

JENNIFER HANSLER, CNN STATE DEPARMENT REPORTER: That's absolutely right, Sara. An email went out from the top official for management here at the department, Michael Rigas, telling people that soon the department will be communicating to those who are going to be impacted by this reduction in force. In other words, they are going to tell people soon whether or not they are fired.

Now, this is part of a dramatic overhaul of the State Department in an effort to shrink the federal government. The agency told Congress back in May that this would impact 300 bureaus and offices here in the Washington, D.C., headquarters. They also said they plan to fire up to 1,873 people who are based here in Washington, D.C., and that they also had an additional 1,575 people indicating they would voluntarily depart. This is out of a workforce of about 18,730 people here in Washington.

Now, these firings are going to affect both members of the civil service as well as the foreign service. And foreign service officers, these are folks who are highly specialized, they speak multiple languages, and they are the ones who are serving overseas in embassies and consulates around the world.

Now, officials say for the time being, these cuts are only focused in Washington, D.C., and not based abroad, but opponents of the cuts are saying, this comes at a time when diplomacy and experts in foreign affairs are as important as ever given the crises around the world that the Trump administration is trying to solve.

I spoke with Tom Yazdgerdi, who's the president of the American Foreign Service Association earlier this week, and he told me that there are horrible things that are happening in the world that require a tried and true diplomatic workforce that's able to address that, the ability to maintain a presence in the areas of the world that are incredibly important, dealing with issues like Ukraine, like Gaza, and like Iran right now.

Now, Secretary of State, Marco Rubio defended the cuts and the overhaul when he was asked about it yesterday, and he described it as having been done in a very deliberate way. Take a listen to what he said.

(BEGIN VIDEO CLIP)

MARCO RUBIO, SECRETARY OF STATE: We went very specifically through and reorganize the State Department. And when you reorganize the State Department, there were certain bureaus we wanted to empower, the regional bureaus, and there were certain bureaus, these functional bureaus that were closed. Our intent is to move forward with the plans that we've notified Congress of weeks ago, and that we took months to design.

(END VIDEO CLIP)

HANSLER: Now these cuts have been looming over the State Department for weeks. People are incredibly demoralized and they may learn the fate of the careers that they've dedicated years, if not decades, of their lives to as soon as today. Sara?

SIDNER: All right. Jennifer Hansler, thank you so much for that reporting. Kate?

BOLDUAN: Still ahead for us, President Trump's moved and birthright citizenship blocked again. How the federal judge this time got around the recent Supreme Court decision.

And we have new images of the sun from closer than humans have ever seen it before.

(COMMERCIAL BREAK)

[07:20:00]

BERMAN: All right. We are standing by to see an actual American man play in the Wimbledon semifinals. That's a rarity. And an American woman is headed to the finals in dramatic fashion.

CNN's Don Riddell is with us now. Good morning to you, sir.

DON RIDDELL, CNN SPORTS ANCHOR: Hey, John, that is absolutely right. Aryna Sabalenka has now lost to a different American player in all three major tournaments this year. The world number one was beaten by Madison Keys in the Australian Open final. Coco Gauff beat her in the French Open final. And now Amanda Anisimova beat her in the Wimbledon semifinal.

And Anisimova now has a chance to complete the most extraordinary comeback. The 23-year-old has always been highly regarded, but in 2023, she took a long break from the game to focus on her mental health. She became an artist for a while. She was criticized for it, but she's had the last laugh now making it to her first major final.

(BEGIN VIDEO CLIP)

AMANDA ANISIMOVA, 23-YEAR-OLD AMERICAN INTO FIRST GRAND SLAM FINAL: When I took my break, a lot of people told me that you would never make it to the top again if you take so much time away from the game. And that was a little hard to digest because I did want to come back and still achieve a lot and, you know, win a grand slam one day. So, just me being able to prove that, you know, you can get back to the top if you prioritize yourself.

(END VIDEO CLIP)

RIDDELL: Meanwhile, the number one pick in the NBA draft, Cooper Flagg, made his summer league debut for the Dallas Mavericks Thursday against Bronny James and the L.A. Lakers. It was rough going though for Flagg missing 16 of his 21 shot attempts and all five of his three pointers. He finished with just ten points, but impacted the game in other ways, adding six rebounds, four assists, three steals, and a block.

Now, Bronny had a chance to win the game at the buzzer, but he missed it, making it a winning debut for Flagg, but he still called it, quote, one of the worst games of my life.

And check this out in baseball, the New York Yankees had quite the comeback against Seattle. The Mariners pitcher, Brian Wu, was on a no- hitter going into the eighth, but Jazz Chisholm put an end to that with a lead-off single.

Now at that point in the game, New York were down by five runs to nothing, but they stormed all the way back to tie it on Austin Wells, two out two run single in the bottom of the ninth. And then in the tenth, Aaron Judge hit a sack fly, which brought Anthony Volpe home for the walk off win. And that was an absolutely incredible slide to elude the tag, New York winning by 6-5, the sweep, the Mariners.

Exciting for the Yankees, John, even though I'm not -- I know you're not always a fan of walk-offs at Yankee Stadium, and just for you, I wore my own pinstripes to tell the story.

[07:25:05]

BERMAN: I appreciate that. I think it's important to know no one actually likes the Yankees.

Don Riddell, thank you very much for that.

The Red Sox have won seven in a row. Let's not mention that, but the Yankees win one, you know, late at night, ha, you know, we pro.

BOLDUAN: I mean, that was -- you have to hand it to him. That was a nice slide.

BERMAN: I mean, sure.

BOLDUAN: Come on.

BERMAN: Whatever.

BOLDUAN: You're so biased.

BERMAN: Yes. Yes, and?

BOLDUAN: You should never trust him.

BERMAN: Yes, and?

BOLDUAN: You should never trust him.

BERMAN: No one likes the Yankees.

BOLDUAN: Oh, come on guys, just calm down. Stop feeding him. Come on.

Okay, moving on. Please leave. So, we got -- I love this position. I want this to be my always position, just like creeping up behind you.

New this morning, we have new reporting on how the FBI is using lie detector tests to check for loyalty now to the FBI director, Kash Patel.

And also new numbers this morning, showing online searches for information on the so-called Epstein files surging. The context, the controversy, we're running the numbers.

(COMMERCIAL BREAK)

[07:30:00]