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War Brews Within GOP Pitting Moderates Against Trump Allies; Biden Says Now Is Time to Act on COVID Relief; Rep. Sheila Jackson Lee (D-TX), Bipartisanship Passing of The Stimulus Bill; McConnell Says Reliance on Executive Orders at Odds with Biden Promises; Stock App Under Fire for Raising $1 Billion While Restricting Trades of GameStop. Aired 3:30-4p ET

Aired January 29, 2021 - 15:30   ET

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

[15:30:00]

BROOKE BALDWIN, CNN HOST: Charlie, they knew this was coming. And still she is a member.

CHARLIE DENT, CHARLIE DENT, CNN POLITICAL COMMENTATOR, FORMER Republican CONGRESSMAN OF PENNSYLVANIA: Of course, they knew, they had a dumpster full of opposition research on her that was horrible, and because of these extreme elements, whether it's Marjorie Taylor Greene or the Arizona State GOP that's out there censuring honorable Republicans, what they are doing is shrinking the Republican Party.

The Republican Party is going to have a diminished base. Yes, it will be more committed to these types of extreme views, but a lot of very sensible normal people are going to re-register as independents or perhaps Democrats, and then -- then the party will just not have the ability to win national elections.

And it's just a very sorry place for the party to be. So I'm of the opinion, I'm all for the big tent too but I always thought the idea of the big tent was to try to kind of move a little bit towards the center, not to move towards the fringes. That's a danger zone.

You've got to stay -- you've got to stay in the lanes and not get out in the shoulders of the road and that's where I'm afraid the party is moving in too many cases.

BALDWIN: Charlie Dent, Bill Kristol, guys, thank you so much. Good to have you both on.

The White House continues to call for the quick action on the COVID stimulus bill, but so -- even though Democrats are in the majority, why are they having such a tough time getting this thing done?

(COMMERCIAL BREAK)

[15:35:00] BALDWIN: The White House is insisting President Biden's COVID relief package is gaining momentum on Capitol Hill, but Republicans are pushing back against its $1.9 trillion price tag.

CNN Congressional correspondent Jessica Dean is live at the Capitol. And Jessica, we keep know -- we keep hearing from the White House and from the press secretary, you know, this should be bipartisan, right. They want bipartisan support. Will Democrats have to go this alone?

JESSICA DEAN, CNN WASHINGTON CORRESPONDENT: Well, that's the big question, Brooke, that's floating through the halls here at the Capitol. Now Democrats are going to need 60 votes to get this thing through in the Senate. Remember, it's an even 50/50 split so that means in order to do this the traditional way they have got to pick up Republican support so to that end we know there was a bipartisan call with eight Senators, GOP Senators, eight Democratic Senators with the White House on Sunday.

I talked to some of those Republican Senators who were on that call. They said, look, we support some things in this bill like vaccine distribution and vaccine production. Where things get hairy and they do not support parts of the bill are things like raising the minimum wage to $15. They want to target these direct payments or maybe cap them. So there's a long way to go, a long gap to bridge, if you will.

Now, for their part Democrats really see this as their chance to go big. They do, after all, have the technical majority here in the Senate, and they want to make good on some of these promises. So if they did that, could they move forward using something called reconciliation which they can do along party lines. It's this old arcane budget process. Here's what President Biden said about reconciliation if he's willing to go forward that way earlier today. Take a listen.

(BEGIN VIDEO CLIP)

JOE BIDEN, PRESIDENT OF THE UNITED STATES: I support COVID relief with support from the Republicans if we can get it but the COVID relief has to pass. There's no ifs, ands or buts.

(END VIDEO CLIP)

DEAN: So you heard President Biden there say no ifs, ands or buts so that's the message here. To Capitol Hill it sounds like he's saying he wants this to get through no matter what. He's often said that he wants bipartisan support but if he can't get it, he's telegraphing to Democrats go ahead and Democrats could move forward with reconciliation, Brooke, beginning that process as early as next week.

For their part Republicans that I've talked to say that they really want to have their input on this bill. One Republican telling CNN that this would be like starting a war if they were to move ahead without bipartisan support.

So we're going to see what happens next week but a lot of moving parts here to see if Democrats will go at this alone or if Republicans will be joining them -- Brooke.

BALDWIN: Like starting a war from one Republican. Jessica Dean, thank you very much.

Let's continue this conversation. With me now Democratic Congresswoman Sheila Jackson Lee. Thank you so much, Congresswoman Lee, for being with me. Welcome.

REP. SHEILA JACKSON LEE (D-TX): Well thank you, Brooke. It's good to be you. Good to be back.

BALDWIN: Good to have you back. President Biden, he just said, you know, the time to act on a relief bill is now, that there is no time for any delay. Of course, your party controls Congress by slim margins, and the White House. Why can't Chuck Schumer get this bill through? Like who is the real leader of the Democratic party here?

LEE: Well you know, isn't it interesting that all of us as Democrats welcome bipartisanship. We are engaged with bipartisanship. In fact, the no-name caucus, the moderate caucus was real initiated by Democrats in the House, they reached across to the United States Senate. They reach across to Republicans, and we have benefitted from their presence, but I believe that this is a test of who cares more for the American people.

Can you tell me that you do not want to do a big COVID-19 bill as evidenced by the very words of the secretary of the treasury, someone who knows numbers and knows what the economy is about to face again.

[15:40:00]

They said go big, and does that mean you don't want to do a massive federally nationalized vaccination program that's going to reach all Americans? You don't want to see all schools open and childcare centers open and teachers vaccinated and everyone else that's in the school system? You don't want to see people getting a leg up with a $15 an hour increase or minimum wage or the stimulus? All of that generated an enormous opportunity for the American people.

BALDWIN: It's an enormous opportunity, if I may -- it's an enormous opportunity, but think a lot of Republicans are looking at this number of $1.9 trillion. They would agree with you on all these things but it's a lot of money and they are thinking, you know, -- I don't know if they thought too much about it since the last couple of years, in terms of a deficit you bring up schools.

We know that, you know, one of the promises from President Biden -- then President-elect Biden, was, you know, he wants to reopen schools, reopen schools, first 100 days in office and now the White House says that is in jeopardy if this COVID bill doesn't get through.

You know, they need the money to do this. How do you respond to your constituents if this major campaign promise falters?

LEE: We can't let it falter, Brooke, absolutely not, and my message to my constituents is that we will take the lead from the president of the United States. He wants it done. He wants it done legally. He wants it done bipartisan. He wants it done where he collaborates as Americans, but frankly it has to get done.

I walk the streets of my district and listen to other members whose districts are completely different from mine. People are hurting all over America. They are hurting with different economic levels. People who have fancy cars are in food lines desperate for some relief. People are still hanging on to an eviction moratorium. Businesses are looking for a moratorium on being foreclosed on.

So here's my response. Let's do it in a bipartisan manner, but let's start up for the American people, I'm on the budget committee recently appointed by the speaker. I would be engaged in reconciliation.

Do I want to use that tactic? Of course not, but I think I can convince the American people that what we're doing will either increase revenues or it will decrease spending and we won't touch social security.

Republicans have to understand that elections have consequences. They said it to us, and for now more than a decade Senator McConnell has blocked important measures needed for the American people that have been offered by Democrats.

We now look to work with him, but if we can't work with him, we've got to go forward. The people are hurting, and I'm prepared to work with our leadership to do what is best for this country.

BALDWIN: Let's talk about tactics though. Because President Biden and his aides are bristling over the growing scrutiny that they have been facing over his heavy reliance on the executive orders just in the first couple days he's been in office, 42 executive orders to be precise.

And, yes, they are taking time to roll back a lot of what, you know, former President Trump did. Yes, they are working hard to get this American rescue plan passed through legislation, but do you support, Congresswoman Lee, all of these three dozen EOs he is signing?

LEE: Well, you have to look at what the intent is and what the message is, and the impact is. Frankly, I believe that both the vice president and the president in this instance are legislators, patriots and people who want only the best for America.

They have issued these executive orders, a lot of them as you said are rollbacks, but they are not prohibiting Congress from moving forward, and moving forward on legislation and ensuring that what he has implemented become laws.

BALDWIN: But you have -- forgive me, but you have Senate Republican leader Mitch McConnell saying yesterday that his, you know, early, early reliance on all these EOs is really at odds with the Democrat's pledge as a candidate to be this consensus builder and even "The New York Times" editorial board ran an opinion piece in a headline, "Ease up on the Executive Actions, Joe." LEE: Well, I think that if they might allow me to call him Joe, the president is eager to set America back on her legs. She's been knocked down. She's been knocked by a president who promoted insurrection. I call him the insurrectionist president. Been knocked down between contentiousness between the House and the Senate and particularly with Republicans blocking important legislation, 400 plus bills languished on the desk of Mitch McConnell.

So he's ready to go and I would use that distraction by majority leader. The majority leader should give his agenda and indicate to the president here's how we can work together. I can assure you Joe Biden would be at the table but right now I support the president's executive orders.

But I think we as members of Congress must do our work, and there are a number of them that should actually be implemented by law, such as racial justice, racial equity, legislation like HR-40 the commission the study and develop reparation proposals and actions dealing with labor laws. Actions dealing with --

[15:45:00]

BALDWIN: Understand. Understand.

LEE: -- all of that, the environment, the climate change. But let's try to work together, Brooke, but let's not use the distraction such as we're not bipartisan or we're not transparent. We're an open book. We're ready to work with Republicans but need to get the job done.

BALDWIN: Congresswoman Sheila Jackson Lee, thank you.

LEE: Thank you for having me.

BALDWIN: Thank you.

Looks like GameStop will not stop as that army of Reddit investors refuses to surrender and the stock trading at Robinhood makes a huge reversal. That is next.

(COMMERCIAL BREAK)

[15:50:00]

BALDWIN: A new twist in the Reddit-fueled stock rollercoaster taking the world by storm, GameStop is soaring again today after the stock trading app Robinhood reversed course and lifted restrictions it put on a number of stocks, including GameStop.

Robinhood put those restrictions in place yesterday after these stocks were in the middle of this massive rally fueled by the Reddit forum WallStreetBets.

Remember WallStreetBets was calling on people to buy shares of GameStop and others to put a check on the hedge funds that were betting against or known as shorting these companies. And Robinhood's reversal comes after investors and lawmakers and

others accused the platform of looking out for its own interests and siding with Wall Street heavyweights over the retail investors and the Redditors who were participating in the market for the very first time. Of course, making a little bit of money in the process.

To make matters worse for Robinhood the company raised $1 billion from investors yesterday as it was preventing a lot of retail investors or the little guys from trading GameStop. Robinhood CEO told CNN the company was just trying to comply with regulators.

(BEGIN VIDEO CLIP)

VLADIMIR TENEV, ROBINHOOD CEO: We're in a historic situation where there's a lot of activity and a lot of buying concentrated in a relatively small number of symbols that are going viral on social media. So we haven't really seen anything like this before. And to prudently manage the risk and the deposit requirements, we had to restrict buying in these 13 stocks.

(END VIDEO CLIP)

BALDWIN: Now, critics aren't so sure, and the S.E.C. is looking into it as well as the Texas Attorney General, among others.

So let's talk about all of this with Amy Lynch. She is former S.E.C. regulator and the founder of Frontline Compliance. So Amy, nice to have you on. Welcome.

AMY LYNCH, FOUNDER, FRONTLINE COMPLIANCE: Thank you for having me on the show, Brooke.

BALDWIN: You just heard the CEO of Robinhood. Do you believe his explanation for restricting these trades yesterday while also raising $1 billion from investors?

LYNCH: Well, it could very well be the case, because broker dealers need to maintain a certain amount of net capital and have cash on hand in order to cover their transactions. So it is very possible with the increased volatility and the amount of trading going on on their platform, especially trading happening on margin, in these very specific names.

So if those trades were to fail, they would be left on the hook. So the DTCC came to them and said you need to put up more cash to cover these accounts. So in order to do that, they had to raise capital.

BALDWIN: If you are investigating this whole thing, what are you looking for?

LYNCH: If I were still at the S.E.C., I would be looking at who was doing this trading? Because we know the trades first started in order to squeeze out the shorts. The big hedge funds were out there, shorting these pandemic-type names, and these traders came into these chat rooms and decided, hey, let's get rid of these guys. Let's trade up the volume, pump up the stock to an amount, to a level

that it makes those short trades unpalatable for those hedge funds and squeezes them out of the trade.

So if this is just a bunch of, you know, retail traders in those chat rooms, hanging out and conducting this activity on their own, then there's not much the S.E.C. can actually do about that.

BALDWIN: I was talking -- go ahead, go ahead, go ahead.

LYNCH: But if these transactions are being conducted by any professional players in the market. In other words if there are other hedge funders doing this, or other professional traders then the S.E.C. and FINRA have jurisdiction over those players and can definitely prosecute them for wrongdoing.

BALDWIN: Right. That's the question. If they were involved in this whole thing from the get. Amy Lynch, we're going leave it. We'll keep following it. It's just an extraordinary story this week. Thank you so much.

LYNCH: It is. You're welcome, thank you.

BALDWIN: Breaking news coverage continues with questions about Johnson & Johnson's COVID vaccine. What you need to know about the only single-dose shot in the game show far.

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[15:55:00]

BALDWIN: President Biden today stepping away from the White House this afternoon to visit wounded military personnel at Walter Reed Medical Center. It is his first trip there since taking office and for the president it has special meaning. It is where his late son Beau was treated for brain cancer and where he spent his final days.

(BEGIN VIDEO CLIP)

BIDEN: You guys have been as Meghan will tell you, have done a great deal for my family. You saved my son, Beau, after a year in Iraq, came back with stage four neuroblastoma. You took care of him in his final days with great grace and dignity.

(END VIDEO CLIP)

BALDWIN: President Biden also got a tour of the hospital's COVID vaccine site while he was there.

Republican Congressman and fierce Trump defender Jim Jordan has announced that he will not run for the U.S. Senate in Ohio next year to replace retiring Republican Senator Rob Portman. The spokesman for Jim Jordan says the Congressman will instead run for re-election for his own House seat. His decision leaves no clear front-runner in what is suspected to be a very crowded field of GOP candidates for the Ohio primary next year. I'm Brooke Baldwin here in New York, thank you so much for being with

me.