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Dangerous Scenario Unfolding in Southern California from Storm; Looking Ahead to Next Year's Top Political Stories; Tracking Budgets for the New Year. Aired 7-7:30a ET

Aired December 25, 2025 - 07:00   ET

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

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AUDIE CORNISH, CNN ANCHOR: Good morning and Merry Christmas to everyone who is celebrating today. I'm Audie Cornish.

And new this morning, much of California getting pounded by a powerful storm as heavy rain lashes the state. Officials are warning that a quote, dangerous scenario is unfolding in and around Los Angeles. Millions of residents across Southern California are under a state of emergency and the risk of life-threatening flashfloods along with mudslides and rockslides washing out roads and highways has actually triggered evacuation order.

CNN Meteorologist Allison Chinchar is actually tracking the latest on the storm for us. Allison, what can you tell?

ALLISON CHINCHAR, CNN METEOROLOGIST: All right. Good morning, Audie. We've got two more rounds of rain to get through very heavy rain before finally some folks will be able to see things drying out. You can see as we push through the radar here, the heaviest rain at the moment is actually across portions of Northern and Central California, but that next round is going to come through later on this evening bringing additional rainfall.

And this is the last thing people need. Look at some of these numbers. You've got several locations here of over half a foot of rain, some even inching literally closer to a foot of rain, and they likely will given the fact that we know we have two more rounds of rain to come.

So, here's a closer look into the northern and central portion of the state where, again, you can see some of those highlighted boxes there, the red and the black color. This indicating where we have some of those flashflood warnings in effect, meaning we've had a tremendous amount of rain in a very short period of time, and it doesn't really have much place to go. So, these are in and around the San Francisco area.

But farther down to the south, we also have some alerts as well. This is going to be just to the north and west of Los Angeles, where you have some heavy rain bands coming in. And the focus for today really is going to be across portions of Southern California where we do anticipate heavy rain, but also the concern for where those burn scar locations are.

Still some additional rain showers in the first half of the day on Friday. Some will linger into the evening, but the bulk of the heavy rain is really in the first half of the day. So, that's why we still have the potential for some flooding as we even go through the rest of the week.

Here's a look at what we talked about. That first round is going right on right now, and then as we transition into tonight, especially say after about 7:00 or 8:00 P.M. we get that next round that comes in for Northern and Central California through the overnight hours and into very early Friday.

Then you can start to see more of it begins to shift downward into portions of Southern California. That's when you're going to start to see that uptick in rainfall for a lot of those areas, as that continues into the evening hours as well.

So, again, two separate areas of concern that we're watching, but, finally, by late Friday, at least the northern half of the state starts to dry back out, and the southern half of the state will dry out as we head into the weekend.

But until that point, we still have more rain to come. You could be looking in an extra three to five inches widespread across many of these areas, but a few spots could still pick up maybe as much as six inches of rain. Keep in mind that is six inches on top of what they've already had, so it's going to be significant.

And then snowfall, we could still be looking at another three to five feet of snow coming down across the Sierras.

CORNISH: Okay. Allison Chinchar, thanks so much.

The Justice Department says it has found a million more documents potentially connected to the Jeffrey Epstein case. The DOJ in a post on X said it's, quote, working around the clock to review and make the legally required redactions to protect victims.

Now, while they're pledging to release the additional documents, it's expected to take several more weeks to get through them all. It's not immediately clear exactly how the documents were discovered or what is in them. CNN has reached out to the Justice Department for comment.

And a traffic stop outside Baltimore on Christmas Eve turned violent. ICE agents opened fire at a moving vehicle, they say, tried to run them over. Agents say they shot the man who was driving the van. A male passenger was injured when the vehicle crashed. ICE says both men are undocumented. The Department of Homeland Security said both are expected to recover.

A historic moment in the Vatican, Pope Leo just presided over his first Christmas mass at St. Peter's Basilica seven months after he was chosen to lead the world's 1.4 billion Catholics. He called for harmony and peace and denounced the suffering of the people in Gaza.

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POPE LEO: How then can we not think of the tents in Gaza exposed for weeks to rain, wind, and cold, of those so many other refugees and displaced persons on every continent, or of the makeshift shelters of thousands of homeless people in our own cities?

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CORNISH: Last hour, Pope Leo waved to a cheering crowd from the Pope Mobile in a packed St. Peter Square as he made his way to deliver the traditional Urbi et Orbi blessing.

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And the Christmas Eve jazz concert at the Kennedy Center was called off days after the center's board of trustees added President Trump's name to the iconic performing arts institution. The concert's longtime host musician, Chuck Red, says he canceled the annual concert once he saw the name change take place. It marks the latest backlash since the move to rename the facility.

And there's a winner, one single jackpot Powerball ticket was sold in Arkansas. The winner snagged the $1.8 billion prize with a cash option of nearly $835 million. This is actually the second largest U.S lottery ever. The winning numbers 4, 25, 31 52, and 59 with a Powerball of 19. John?

JOHN BERMAN, CNN ANCHOR: As we get ready to put a bow on 2025, sights turn to what will no doubt be an eventful 2026, especially in the world of politics. The upcoming November 2026 midterms could completely flip control in the House, maybe possibly the Senate, though less likely there, giving power to the Democrats, dictating what President Trump's final two years in office will ultimately look like and who will officially throw their hat into the ring in the 2028 race for the White House.

With us now, Democratic Strategist Meghan Hays and Republican strategist Melik Abdul. Let's talk about the 2026 midterms now 11 months away, Meghan Hays. Who feels best about the midterm elections?

MEGHAN HAYS, DEMOCRATIC STRATEGIST: I think that Democrats have a lot of positivity on their side. They have a lot of momentum heading into the midterms. I think it'll be really interesting to see if more Republicans do end up retiring, like it's been reported for the last month or so, because that really could change sort of the makeup and the structure.

But I do think that, you know, we saw a couple weeks ago the special election in Tennessee, where the gap between the plus 22 Trump district was really, it was down to single digits. And so it opens up a map for the Democrats that they were not expecting six months ago. So more of these districts are going to be more competitive. I think you'll start to see donors reengage in place for Democrats at least where they were not engaged after for the '24 campaign. So, I do think that Democrats are definitely on the offensive on this one.

BERMAN: What, Melik, if anything, can Republicans do to improve their situation?

MELIK ABDUL, REPUBLICAN STRATEGIST: Republicans have to talk about the -- they have to focus on the reason that Donald Trump was elected. A lot of that economic anxiety, he's done what he was supposed to do around immigration and some of those other things, but it's really those kitchen table issues that are going to be on the ballot.

And as it is in every election and in midterm election cycles, the party that's not in power typically has more momentum. So, we are expecting that Democrat -- well, at least historically, Democrats are supposed to retake maybe at least the House. I don't think they have much of room there in the Senate, but they're supposed to take the House. But by what margin is something that we have to continue to look at over and over again. But until the administration starts to focus on those things, and even his foreign policy successes, they won't be as important as what's happening with the economy. That's going to be the driver. And that momentum with Trump not being on the ballot, that is something that Republicans are going to have to be concerned about. So our get out the vote campaign is going to have to be rock solid.

BERMAN: Meghan, when will we know if this thing is cooked? You know, when will we know, you know, if basically the outcome is already determined?

HAYS: I don't think we know until Election Day, right? Each district is going to have their own challenges, what candidate, what Democratic candidate challengers are running, who wins in the primaries? There's a lot of things and unknowns that, you know, you never want to be too careful. But I do think that talking about the economy has been really beneficial for Democrats.

But separate from Congress, there are also about 36 governor's races that are going to be decided, and that those are also really impactful because those governors are going to decide some of Donald Trump's enforcement actions that he's going to try to do the last two years. They are -- really, they're ones who implement different things, and those are also going to be some of the candidates that are going to run in '28, especially on the Democratic side.

So, there's a lot of different campaigning. I think we're all going to be really tired of fundraising emails and campaign commercials and radio ads. So, it'll -- you know, I don't think we'll ever know when it's over until the actual Election Day, but it is going to be a wild ride for the next 11 months.

BERMAN: No one ever gets tired of campaign ads. Bring them on.

Melik, I will say when, earlier this month, we heard President Trump call affordability and he struggles to even say the word affordability a Democratic con job it. It made me wonder for Republicans, what do you do? What do you do if the leader of your party doesn't even like to talk about what people are saying is the most important issue right now?

ABDUL: So, we saw this in the Biden administration. They didn't want to talk early on about immigration, even though it was a crisis at the border. And even when it came to the economy, you know, it kind of had this, well, the fundamentals of the economy. Remember George W. Bush?

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The fundamentals of the economy are strong. Well, if people don't feel that, it doesn't matter what the larger macro number is.

So, Donald Trump is kind of going to be out on his wing. And I think that what Republicans should continue to do, and not just at the Congressional level, but around the country, I think there needs to be a larger focus on, because races are localized. I think a lot of focus needs to be happening on what these governors are doing around the country in these red states.

But at the end of the day, Donald Trump's popularity is still higher than the Democratic Party, the Republican Party in absolutely Congress. So, there is some room here, but we do have some concern -- we still need to be concerned about driving out our vote, because the suppressed vote will not be a benefit to Republicans.

BERMAN: It's only because everyone's popularity is so low. Everyone hates everyone right now, that it's hard to compare who's like --

ABDUL: Low bar.

BERMAN: -- both of you in a different way.

Meghan, so for Democrats, if you're running in 2026, you better off running to the left or running to the middle?

HAYS: I think it depends on your district, right? You kind of saw that in New York and New Jersey and in Virginia. They ran to their different constituents and what worked for them. So, Mamdani was really great in New York and that really felt moving far to the left was worked in New York City, but that wouldn't have worked in New Jersey and it wouldn't have worked in Virginia.

So, I think it's extremely localized. This is where the Democrats have always been sort of a grassroots party. And so our approval rating at the national level isn't great, but if you get down into these districts and you get down into these communities, Democrats do poll really high and are very favorable. So, it'll be interesting to see.

I personally am moderate, so I think more moderates are going to have a better opportunity, but that might not work for every district. So, it'll be interesting to see in some of these primary campaigns which ones come out ahead.

BERMAN: I will say for the Democrats in those races this past November, I found what was remarkable is where they were similar in how they ran. They were -- they talked about it in slightly different ways, but there was a common issue that they were talking about there.

Melik, similar question here, if you were running to be a Republican in Congress, are you better off trying to talk about how you're reaching across the aisle, running in the middle, or are you better off, you know, being to the right of Donald Trump?

ABDUL: Yes, well, being to the right of Donald Trump definitely will not work, and I think that Republicans really are learning a lesson here because it was this assumption that the 77 million people who voted for Donald Trump are all MAGA. I would say that MAGA probably represents maybe a third of that number. And now that we're seeing a bit of fracturing, MAGA is not dead, but we are seeing a bit of fracturing within MAGA that you have to move to the middle.

You have to talk about things like healthcare. You saw what happened with the vote on healthcare. Republicans have to talk about those sort of kitchen table issues. It can't just be, and I've said many times before, that we focus a lot on the wedge issues, but we have to talk about the things that bring people together. And that includes the majority of the 77 million people who supported Donald Trump in 2024 who won't all be out this time around.

BERMAN: Since you brought up the splintering of MAGA, it's a perfect segue to talk about not 2026, which is now within sight, but 2028. Let's talk about the next presidential election here. Melik, who's the front runner for Republicans?

ABDUL: Right now the frontrunner obviously is J.D. Vance. He's the vice president of the United States and is similar to how Kamala Harris was in this -- you know, the past election cycle in 2024. It doesn't mean that everybody is in love with J.D. Vance, though, and, again, something that we saw with Kamala Harris.

So, I would say that J.D. Vance is by far the frontrunner, but if I had my -- you know, if I had my choice for our 2028 nominee, it would by far be Marco Rubio. I'm not a J.D. Vance person. I'm going to be voting for -- if he runs, I'll be voting for Rubio in the primary, because I think that he has a greater chance of beating someone like Gavin Newsom,

BERMAN: And watching the potential posturing between those two inside the cabinet has been fascinating.

One curve ball here, Meghan, I'm a little bit obsessed with Florida Governor Ron DeSantis and his Twitter feed over the last six months. Because, look, he ran for president and did not do well, right? And I think a lot of people saw him as stiff, unapproachable, prickly.

So, on social media, the last several months he's tweeting about music. He's tweeting about sports. He's offering sort of unplugged commentary. I don't know if you've had a chance to see it, but it's the kind of stuff that makes you think either this guy has no Fs left to give, or he thinks I need to show a different side of myself if I'm going to have a future in politics.

HAYS: I mean, it could be both. Two things can be true here. I would assume that he wants people to see that he has a different side to him and that he's not so prickly and that he does have a real person behind his policies. I don't know if it will work for him.

[07:15:00] I think that he's been pretty baked in who he is, and I think the American people are -- at least his constituents definitely know. But it would not surprise me if he also threw his hat in the ring to run for president.

BERMAN: Melik nodding his head no.

Let's switch to the Democrats side since -- and, Meghan, I'll start with you. Melik threw out the name Gavin Newsom there. Name the top three. Who are the top three contenders as we sit here before, you know, not even 2026 yet, but who are the top three Democratic contenders?

HAYS: Oh, I mean, there's so many. You can -- I think they're all governors right now. I think you have Wes Moore, you have J.B. Pritzker, you have Gavin Newsom, you have Shapiro. I'm sorry, that's more than three. But there's a lot of governors that I think are going to run. The bench is pretty deep. It will be interesting to see how the primary shakes out. I wouldn't be surprised if we have 20, 25 candidates that enter the race.

BERMAN: That's a big CNN debate stage if we get 20, 25 candidates who --

HAYS: Many nights. It'll be many nights.

BERMAN: Melik, who do you think Republicans fear the most?

ABDUL: I think that Republicans, well, they -- who they should fear the most, I would argue, it's between Gavin Newsom. You remember the Fox News debate between Gavin Newsom. Gavin Newsom actually performed very well. And even though he's from California, he is very -- he looks the part. He's very stately and those type of things matter from an optics perspective, but also Shapiro being from a battleground state.

I think that is something that we also have to watch. I don't think that Wes Moore, he's the governor of Maryland. No one cares about the governor of Maryland. I don't think Pritzker. He has a lot of money. It won't matter. I think that the two standouts will be Gavin Newsom and Shapiro and notably, who we're not talking about, Kamala Harris.

BERMAN: Why aren't we talking about her, Meghan?

HAYS: You know, it's interesting. I just am not sure she -- I don't know that she's going to run. I know she talks about leaving the door open. But I think running, you have to have a base, you have to have -- be able to raise a lot of money. And I think there's a lot of people in the race and I'm not sure that's something -- a path she wants to take again. But, you know, again, there's probably going to be 20, 25 candidates. So, the water is warm.

BERMAN: What do you think, Meghan, will divide Democratic candidates for president? And it's relevant to ask now because we are going to start to see these candidates staking out ground, if we haven't already. HAYS: I think the affordability issue is one thing that's going to divide folks and the solutions around that. Everyone understands what you need to talk about, but how are you going to actually solve it? What are your solutions? I think people's past records are going to come into play here. But I do think it's -- you know, we talked about wedge issues earlier. I think it's going to be less about those wedge issues and cultural issues as it's been in the past. And it's really going to be more on how are you going to solve the affordability crisis and how are you going to bring our country together.

I think people are really tired of all the chaos in the division, and I think people just want to be able to wake up and have normalcy in their lives. And I think that that's what they're going to be looking for in '28.

BERMAN: Meghan Hays, Melik Abdul, happy holidays to both of you in an early Happy New Year. Thank you so much.

All right, ahead, after weeks of holiday spending, we're sharing some money saving tips and resolutions you can use to get your finances on track for the New Year.

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SARA SIDNER, CNN ANCHOR: A new year, new opportunities, as we get ready to ring in 2026. People across the country are gearing up for a fresh start with their New Year's resolutions. And while these goals will certainly look different for each person, countless Americans are looking for the best ways to ease the pain in their wallets.

Joining me now to discuss this, Axios Senior Markets Reporter Madison Mills and Rick Newman, author of the Rick Report Newsletter, and former columnist for Yahoo! Finance. Good to see you both.

Finance is always an emotional subject for a lot of people, especially when things are hard and many Americans are reporting things are hard financially for them right now.

So, Madison, I'll start with you. What advice would you give to someone who is struggling with the economy as it is right now?

MADISON MILLS, SENIOR MARKETS REPORTER, AXIOS: Well, I would say, Sara, the first thing is it makes sense that the vibes don't feel great right now, right? We have sticky inflation. Even though the rate has come down, things are still getting pricier all the time. You have a labor market that continues to have cracks. Even people who have jobs don't feel great about them. I mean, the word of the year for Glassdoor was fatigued. People are just really tired. So, it makes sense that people are feeling this way.

In terms of advice, you know, I cover the stock market and Wall Street, so one of the things I'm focused on is how people can make sure that they are optimizing the money that they do have. And over the past five years, a lot of the advice has centered on something like a high yield savings account. As interest rates were high, it made sense to have your money in there because interest rates helped you get a little bit more bang for your buck. Now, interest rates are coming down so that doesn't make as much sense anymore.

So, I'd encourage everyone to do their own research and see if a high yield savings account that they opened a few years ago. Maybe that doesn't make sense for them anymore. Maybe they want to invest in a portfolio of stocks and bonds that has a little bit more of a higher return, but still has some protection for their portfolios through that bond exposure as well.

SIDNER: Rick, as you sort of look at what is happening with Americans, there is almost schizophrenia in the markets because people are saying they're really struggling, but the stock market is going up, up, up. What is happening here? How do you explain that to people?

RICK NEWMAN, AUTHOR, THE RICK REPORTER NEWSLETTER: This is the K- shape economy. It's the shareholder class, if you will, is the upper slant on that K. And if you're not lucky enough to own stocks or to own some kind of assets, like a home, you just have a very -- having a very hard time building wealth.

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But I don't think it's hopeless. I don't want to say everybody's locked out. I would offer one tactical and one strategic thought for 2026. The tactical one is we're finally seeing rents that are flat- lining and home prices have actually started to decline. So, that might not help you in your monthly budget, but when your lease comes due, you might have some leverage for the first time in several years to say, hey, maybe, you know, to the landlord, you can give me a break on this. Maybe it's not going to go up 5 or 10 percent, like it did last year. You're going to have a little more bargaining room leverage there.

And at a strategic level, I think everybody really needs to be paying attention to artificial intelligence. This is a big investing theme. But more than that, I think this is really going to start having an effect on jobs, if you haven't seen it already on careers and on the types of jobs that are even available. So, I think what people can do to start, if you're not using some kind of A.I. tool, check it out, start using it, start asking yourself, can this give me financial advice? Can it help me with basic budgeting things? More than that, can it help me become more efficient in my job? Can it raise my value as a worker?

And not to make people paranoid, but you should also be asking, is A.I. going to replace me as a worker, because this is coming and you want to have A.I. working for you and not against you.

SIDNER: It's really good advice. I was just talking with a small business owner in New York who said that they've gone to A.I. for three or four jobs that they normally would have people doing because they simply can't afford to pay the staff. So, they figured out how to use A.I. And they struggle with this because they want to make sure that they're contributing and get to jobs. But on the other hand, this is how they're being able to keep (ph).

What did what do you think is the sort of the biggest story that we all financially that Americans dealt with in 2025? And do you think it will continue into 2026?

MILLS: I mean, this A.I. theme, we can't get away from it, right? It's defining everything from the economy, which you and Rick just laid out so well too, of course, the stock market. The stock market now is about -- 45 percent of it is driven by a handful of A.I. stocks. That's -- you know, the Wall Street word for that is concentration, which is obviously the opposite of diversification.

So, I guess if I had to say one word, I would say concentration. And, you know, it's not just happening in the stock market. The economy is increasingly being driven by consumer spending from the wealthiest people who are benefiting from the wealth effect. A lot of their money is in the market, so they're feeling richer because stocks are up 80 percent over the last three years. I mean, that's a huge windfall of folks.

And so in terms of portfolios for 2026, it's really important, and I hear from a lot of sources all the time that they're telling people, don't chase more returns in your portfolio. Chase protection. Because with concentration like that, there's also a lot more risk.

SIDNER: Oh, that is some good advice. Madison and Rick, I thank you both for taking the time to walk us through that as the New Year is ahead. We're close. Thank you both.

KATE BOLDUAN, CNN ANCHOR: Ahead, incredible video of a baby being rescued from a flipped over car. You see it there. We talk to the hero cops who jumped into action to save that child.

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