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Disappointing Report, U.S. Adds Just 194,000 Jobs in September; Crisis Averted For Now, Senate Extends Debt Limit Through December 3; Sources Say, Bannon, Meadows Respond to January 6 Committee Subpoena For Documents, Bannon Says He Will Not Cooperate. Aired 10-10:30a ET

Aired October 08, 2021 - 10:00   ET

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

[10:00:00]

ERICA HILL, CNN NEWSROOM: But, boy, this is not the way a lot of people wanted to go into the weekend.

The new U.S. jobs report out this morning falling far short of expectations for the second straight month, just 194,000 new jobs created. So, what is fueling this trend and just what is the administration's plan to turn it around? The U.S. Labor Secretary Marty Walsh will join us in just a few minutes from now to discuss, to give us some insight.

JIM SCIUTTO, CNN NEWSROOM: A lot of hard questions.

Feisty on the floor as well. Late last night, Senate Majority Leader Chuck Schumer blasted Republicans for playing games with the nation's debt ceiling. It came, however, right after 11 GOP members actually joined Democrats to approve a short-term extension. You can see Senator Joe Manchin's response behind Chuck Schumer there.

HILL: Yes. He was not the only one who was not happy with that response.

Before we get to that though, let's take a closer look at these job numbers we just got. CNN Reporter Matt Egan, I know you have been going through these since they were released this morning, disappointing at this point could be an understatement, not at all what was expected.

MATT EGAN, CNN REPORTER: Yes, Erica and Jim. This was a messy jobs report. And more evidence of all the distortions that COVID has caused for the economy. If you look at the big number, 194,000 jobs added in September, that is well less than half what economists had been expecting, the worst job gains of the entire year. And that means that the economy is still down 5 million jobs during the pandemic. It's recovered three quarters of the jobs but that last quarter is proving to be the most difficult. And at the current pace, it would take two years to get back to where we were on the job front.

SCIUTTO: Sorry. I was going to say, as you dig into the numbers, there were revisions upwards for July and August. But still this big drop-off, I think we can put those numbers up on screen, what does that show us?

EGAN: Right. So, there were some revisions. We saw July and August were revised higher. So, clearly, there was a hiring boom. When you look at those numbers, strong job gains over the summer, but that's also slowed down around the time that the delta variant came into play. We have to look at the sectors to see where the weakness was.

First, schools, local government education hiring, that actually dropped by 144,000 jobs. Hotels, they added back just 2,100 jobs. That's not what is needed because that sector was crushed by the pandemic, health care also down 17,500. It's more evidence of how uneven this recovery has been.

HILL: It's also interesting, and we talked about this a little bit earlier with Christine, and we were all talking about it in the break, sort of the way that this is measured and whether perhaps some of those tools need to change too. So it may be smaller businesses perhaps are starting to employ more people, but we don't always hear about those numbers in the same way.

EGAN: That's right. I think everyone is trying to adapt to this new reality, including the economists who have had a hard time modeling what this economic recovery would look like because there were some positives here. I mean, let's look at the unemployment rate. It dropped to a pandemic low of 4.8 percent. That's a big drop from 5.2 percent the month before.

Don't forget that back in April of 2020, the unemployment rate was nearly 15 percent. Look at that really sharp decline. The unemployment rate for black Americans, it's falling even faster in the last month. It dropped below 8 percent.

Another positive is wages. Americans are getting paid more. Wage growth accelerated. There's some question over whether or not wages are going to keep up with inflation. But, clearly, workers do have some more leverage in this economy.

SCIUTTO: There's still a mismatch though, is there not, right, in that there were jobs available, particularly in places that aren't frankly the best jobs, right? You're talking about some restaurant workers in terms of pay and benefits. Jobs available, but people aren't taking those jobs.

EGAN: That's right. And that is one of the reasons why we have seen wages really pick up because companies are desperate to hire. There's a record number of job openings right now. And I talked to CEOs, the number one thing they complain about is a lack of workers. And there's this mismatch where they need workers with certain skills and those workers may not be available right now.

HILL: Yes, or they're also holding out for more, right? I have definitely heard that in conversations with friends. They want more.

EGAN: Yes.

HILL: Matt, I appreciate it. Thank you. SCIUTTO: Thanks so much.

Well, joining us now to discuss is the U.S. labor secretary, Marty Walsh. Secretary Walsh, thanks so much for taking the time this morning.

MARTY WALSH, LABOR SECRETARY: Thank you, and I caught the last piece of the last segment, and I think we'll probably work off of that one today. So, thanks for having me.

SCIUTTO: But let me ask you, this is the second month in a row where it's not a good number for the country, for the administration. Why another miss here?

WALSH: Well, I think, first of all, this is a complex report. When you take a deep dive into this report, and we did it this morning, you look at areas like hospitality and retail where we gained 74,000 jobs. The expectation was much higher. But when we looked at the reason for that, the delta variant, the rise in the delta variant absolutely had an impact in the restaurant, leisure and hospitality area, both as hiring and in people going out to dinner using that.

The other area that I think is kind of baffling to a lot of people is the public sector education realm.

[10:05:03]

I think a lot of us with school opening across this country, most of it in-person learning, lots of people needed to work, teachers, aides and things like that in schools and school bus drivers, and we saw an issue there. And so we have to do a little more work in those sectors because we have an ability this next month to change that.

But I will just say this --

SCIUTTO: How do you have an ability to change that?

WALSH: Working with cities, working with states, working with training, job training, and making sure that the American rescue plan money that was allocated several months ago by Congress, making sure that money is being allocated, spent to bring people on.

SCIUTTO: Okay. There appears as well in the data, and this is not the first month that has shown this mismatch, as we were just discussing in this most recent segment, that you do have jobs available in many places. But people not taking those jobs, right? Either changing them, and there's some evidence of starting businesses, et cetera, but holding out for more. I wonder, are you concerned that that mismatch is a structural issue that will hold back the hope for recovery, the one you and others have been counting on?

WALSH: Well, I think all of us are living in a pandemic time. And we're trying to figure out what's happening here. And there's no roadmap like the 2016 great recession. It's a lot different than that. Two months ago, everyone is asking questions about the $300 keeping people out of work. The $300 now is gone. We didn't see growth there. What we're seeing, I think, in a lot of cases, one, is the pandemic is wreaking havoc and fear on people, as far as going back to work. I also think there are lots of families and people are looking at their work/life balance and they are changing careers or they want to change careers, and they're looking at that as well. That's another thing. And this isn't just an American issue. This is happening all over the world, quite, honestly.

SCIUTTO: On the pandemic, if the pandemic, as you say, is principally to blame for this, what is the Biden administration's plan to address that? Because to this point, it's been about making vaccines available, which has happened, and encouraging those who are hesitant to get them and also trying vaccine mandates, et cetera, but it did not prevent this surge. And you have a regional problem here where some parts of the country are just flat out avoiding vaccines, in general. What is the administration's plan to address that piece of this economic problem?

WALSH: Well, I think you just hit the nail on the head with certain parts of the country where we saw the highest numbers of delta variant, we saw the lowest number of vaccines, and we saw people not wearing masks. The president laid out a plan in January. He's sticking to that plan. We have added 5 million jobs to the economy. We have gotten about 70 percent of the American people vaccinated with each one host. We're working right now -- the Department of Labor is working on emergency temporary standard to have employers over 100 people to get people vaccinated or testing. What that will do is, again, bring more confidence back into the workplace for people to come back and to work.

We're also investing in job training and workforce development. We're doing all the things that we need to do. We're seeing there's some bright spots to this it report today. So, the women participation, unemployment number down to 2.4 percent, black women unemployment down to 7.2 percent. So, we are seeing good things. There are good signs. This isn't all doom and gloom here today. Certainly, we know -- I would love to be on the show saying we added 3 million jobs to the economy, and now let's go on to something else. But, unfortunately, we are not there yet.

SCIUTTO: Okay. I know a big part of the administration's plan for addressing these issues is the build back better plan. There's still disagreement within the Democratic Party as to the way forward. And you had this episode last night of getting a bit of a rescue on the debt ceiling, and then Chuck Schumer not only upsetting Republicans, but Joe Manchin as well, by laying into Republicans after that deal.

I wonder, do you think that that moment undercut the ongoing negotiations to get to that budget deal?

WALSH: I'm not going to comment too much on what happened inside the chamber there, but I will say this, that this report today reflects the need for build back better. This report today, one of the areas that isn't getting headlines is nursing homes and in the hospital industry. And we saw a loss in those regions. We saw losses on jobs in those areas, not gains, losses. And yet people in hospitals and people nursing homes, we see those numbers going up.

So, the build back better agenda focuses on our care economy. And I would hope that members of Congress and members of the Senate today look at the jobs report and see where the shortfalls are and understands that these investments that the president wants to make in these areas will have long-term, lasting, positive impacts on our economy moving forward.

SCIUTTO: I'm sure you're getting regular updates on the state of the negotiations there, because it's important to your portfolio. Where are they? And I'm talking about Democrats here. Are moderates and progressives closer to not just a figure but what goes into that figure to reach a deal?

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WALSH: The legislative process, it can be complicated sometimes. And I think that what we're going through right now is having those conversations between the moderates and the progressives and conservatives and Democrats and Republicans about how we move forward. And at the end of the day, I feel good about -- we'll be able to get hopefully two good pieces of legislation on the president's desk to sign so we can stop making investments that this country -- that we need to win the future.

SCIUTTO: Secretary Marty Walsh, thanks so much for taking the time this morning.

WALSH: Thank you for having me.

HILL: Well, speaking of moderates, moderate Senator Joe Manchin joining Republican senators in blasting Democratic Leader Chuck Schumer's floor speech after last night's vote on the debt ceiling.

SCIUTTO: CNN Congressional Correspondent Lauren Fox joins us now from Capitol Hill. I mean, it kind of looked like no one was happy for multiple reasons, you hear a lot of complaining. And, by the way, you hear a lot of complaining on the Hill all the time. I just wonder, was that moment last night potentially impactful, right, with sensitive negotiations to come?

LAUREN FOX, CNN CONGRESSIONAL CORRESPONDENT: Well, the tenseness of the Hill last night was something that was really palpable as I was leaving. One thing to point out here is that it wasn't just Republicans who thought Schumer's speech went too far. You also, of course, had Manchin saying that Schumer blasting Republicans for coming to the table very late and reversing course kind of rubbing it in that McConnell had changed his mind on his strategy didn't sit well with folks on Capitol Hill. And, in part, that was because this was a hard battle for Republicans to get the votes even for this procedural step.

We should note, Republicans ultimately didn't vote yes to pass the debt ceiling. They voted yes to ensure that that first step, a procedural step, didn't stop this process. So, they essentially just broke a filibuster on Capitol Hill yesterday, but it was a hard vote. And McConnell and his whip, John Thune, were standing by the table counting votes. And it took a long time to make sure that they got all the votes that they needed. So I think that was part of the reason that Republicans felt like Schumer's speech went too far.

There had been this 90-minute conference meeting where McConnell got an earful from Republican colleagues. Here's what two of them said a little bit about McConnell's decision to reverse course on the debt ceiling.

(BEGIN VIDEO CLIP)

REPORTER: Do you believe McConnell made a mistake in this deal?

SEN. LINDSEY GRAHAM (R-SC): Yes.

REPORTER: You do, why?

GRAHAM: We had a plan and we threw it over. We can't let the threat of changing the rules drive us very time.

SEN. TED CRUZ (R-TX): I think the Democratic threats to destroy the filibuster caused him to give in. I think that was a mistake, a serious mistake.

REPORTER: Were you surprised?

CRUZ: Yes.

(END VIDEO CLIP)

FOX: And this debt ceiling fight, it's coming back in two months. And there's a question now of will Republicans come along to help Democrats again. They are saying, no, they won't. Democrats saying they are not going to use a process to do this on their own. They think this is everyone's responsibility. So, up here on Capitol Hill, there's a stalemate. And even after a little bit of a blink from McConnell, you have Democrats digging in once again or at least Democratic leaders. That doesn't bode well for what things are going to happen in just a couple weeks.

SCIUTTO: Yes, a stalemate on Capitol Hill, we never hear that.

HILL: So rare, yes. Lauren, I appreciate it, thank you.

Up next, sources telling CNN Steve Bannon has told the January 6th committee he will not cooperate with their subpoena. So, will there be any repercussion?

Plus, the country's top doctor says, don't be surprised if schools require students to get their COVID-19 vaccine once the FDA authorizes those shots for younger children.

SCIUTTO: And senior members of the Biden administration are now in Mexico negotiating a new security deal. How will it affect those seeking refuge in the U.S.? The migrant situation at the border, that's still to come. (COMMERCIAL BREAK)

[10:15:00]

HILL: This just into CNN. At least two Trump associates have responded to subpoenas issued by the House select committee, which is investigating, of course, the January 6th insurrection. A source telling CNN Steve Bannon has informed the committee he will not cooperate, characterizing Bannon's response as he, quote, stands with Trump.

Sources also saying that former White House Chief of Staff Mark Meadows has responded to the committee. It's not clear whether he plans to comply. We are, of course, also waiting on word about two other Trump allies, Kash Patel and Dan Scavino, and whether they have responded.

SCIUTTO: Still, even with those road blocks, the investigation is moving forward. The committee has handed out two new subpoenas, this time to a pair of the so-called Stop the Steal leaders, Ali Alexander and Nathan Martin, who are both affiliated with planning of the January 6th rally that led up to the Capitol attack.

Let's speak more in detail with former Deputy Assistant Attorney -- U.S. Attorney Elliot Williams. Elliot, always good to have you on.

I mean, listen, we have seen this movie before, right? Subpoenas from Congress, subpoenas from a special counsel, et cetera, defied, delayed, challenged in court, drags it out. It took two years to get Don McGahn to testify, right, long after people forgot who he was. So, is that going to happen again here?

ELLIOT WILLIAMS, CNN LEGAL ANALYST: It looks like -- look, Jim, on what legal basis is the term stands with Trump? If Steve Bannon has a basis for blocking or challenging a subpoena, which every litigant or every individual who is subpoenaed has a right to do.

[10:20:02]

There's a process for doing that. You go to court and you move to quash the subpoena. But we have got to get off this idea that merely because you disagree with Congress, it's okay to just flout the subpoena. I worked on this on both sides, having worked for both Congress and the Justice Department. And at a certain point, the Justice Department needs to get aggressive with going after people who do not respect Congress as a party that can issue subpoenas.

HILL: So, what is that point?

WILLIAMS: I think it's now. Look, there are a couple different ways to do it. Congress can sue in federal court, essentially saying that the subpoena is itself valid. And Congress can go to the Justice Department and seek criminal penalties to hold someone in criminal contempt. They have that power.

And, look, they have been moving aggressively thus far if you look at the calendar. Every five days now, they have got someone either coming in for testimony or documents. They are trying it move here, and I would think they would probably be pretty aggressive.

SCIUTTO: I have heard from a number of Democrats frustration with Attorney General Merrick Garland's lack of urgency here on a question like this, right, how to enforce these things, how to seek to impose potential penalties here. Do you share that? Do you have a sense of why?

WILLIAMS: Yes. Well, it's a couple different questions, right? Is Merrick Garland being aggressive enough here? We don't know because it hasn't happened yet. Has Merrick Garland and the Justice Department been aggressive enough in charging people with respect to January 6th? Well, number one, 660 people have been charged, more than, I believe, 90 have pled guilty.

SCIUTTO: But not the ring leaders. The folks who saw that -- not the folks who encouraged them, shouted at them, told them that the election was stolen right up to the former president.

WILLIAMS: Yes. So, I think there's a couple different things here, right? If, in fact, they are to go after ring leaders, building big investigations takes a lot of time. And I think despite what we saw on television, building a two-year long RICO case to go after the Proud Boys or something, it might just take longer to happen.

But I think it's a fair criticism, Jim, that the Justice Department hasn't been aggressive enough. But I guess in pure investigation terms over the course of nine months with this many pleas and this charges, it's still a punch of people. But I think it's an entirely fair criticism is, yes.

HILL: Is there an added pressure to it? Look, I mean, I would think any case you bring a phenom lawyer in the room. But in any case you bring, you want to make sure you have a great case, right, before you get in there. But there's added pressure, I don't think we can deny, right, when you're looking at what's happening right now. How much do you think that may or may not be coming into play here?

WILLIAMS: Absolutely. Erica, it's undeniable. I wouldn't even say it's a suggestion. It's if you're going after a former president and a former White House chief of staff and others, you have to make sure your case is tight. Look, prosecutors are obligated to only bring charges that they know they can win and there's just an added political and social pressure, if you want to call it that, if you're bringing the president of the United States in.

Look, again, the conduct -- and I want to be clear -- is egregious all around on the part of the president, on the part of the White House chief of staff and so on. Now, the question of what you can charge criminally quickly is a far more complicated and bigger one that sometimes you just can't answer in a couple months, unfortunately.

HILL: Elliot Williams, I always appreciate your insight. Thanks for joining us this morning.

WILLIAMS: Thank you both. Yes.

SCIUTTO: Well, border security just one of the issues U.S. and Mexican officials are discussing right now in Mexico City. Our Matt Rivers is there.

(COMMERCIAL BREAK)

[10:25:00]

HILL: Today, key members of the Biden administration, including the secretary of state, attorney general and homeland security secretary meet their counterparts in Mexico to discuss the migrant situation at the border and a new security agreement.

SCIUTTO: That agreement could update or replace a 2008 initiative that was meant to fight drug trafficking and organized crime.

CNN International Correspondent Matt Rivers is in Mexico City ahead of the meeting. Matt, they are having breakfast together right now. Tell us how this would play out. What's in this agreement and how specifically does it address the surge at the border?

MATT RIVERS, CNN INTERNATIONAL CORRESPONDENT: Well, if you needed any clues as to how important this is to the Biden administration, just look at the fact there are three cabinet members here. And, as always, the U.S. is looking for Mexican cooperation on drug trafficking, especially fentanyl-laced drugs going north, also on controlling migrant flows up from Central America to the U.S. border.

But what they are talking about is maybe something that's either going to update or replace the (INAUDIBLE) initiative, which was back from 2008. Hundreds and hundreds of billions of dollars or millions of dollars rather from the U.S. down to Mexico, aiding in everything from cross border drug trafficking, also to criminal justice reform here in Mexico.

But, look, the agreement is 13 years old now. It does need updating. And so that's what officials are working on here in Mexico. The question though is what they are going to be able to get done because the relationship right now between the two countries, at least from the Mexico side of things, is not great. Mexican government officials have told us that they are frustrated with the U.S. on a number of levels. The U.S. talking about drugs going north, but what about the amount of guns coming from the United States south, say Mexican officials? They say it's a one-sided relationship.

They also feel a bit slighted over the fact that they are solving in their mind the U.S. immigration problems for them. They view migration as a U.S. problem, and yet it's Mexican security forces that are often tasked with trying to control those migrant flows.

[10:30:07]

And then also, crucially, recently, an arrest.