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Brian Deese, President, National Economic Council, Discusses U.S. Economy In 2021 Grew At Fastest Pace Since 1984; McConnell Reacts To Justice Breyer's Retirement; Avenatti Says He Needs Six Hours To Cross-Examine Stormy Daniels. Aired 1:30-2p ET

Aired January 27, 2022 - 13:30   ET

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

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[13:31:23]

ANA CABRERA, CNN HOST: The U.S. economy showing remarkable resilience. Bouncing back from the pandemic-fueled recession of 2020.

A new GDP report shows the economy grew 6.9 percent in the final quarter of 2021 compared to the year before.

Now for the full year, 2021, GDP grew at 5.7 percent. And that is the best full-year showing since 1984, Ronald Reagan's first term.

Let me jog your memory of that year, 1984. A rising star by the name of Prince topped the charts with "When Doves Cry," the game of Tetris first dropped. Wendy's taunted competition with the question, "Where's the beef?"

And joining us now, President Biden's top economic adviser, Brian Deese. He's the director of the National Economic Council.

Brian, great to have you here.

We can all celebrate the positive economic news that we got today. But still too many Americans are feeling really good about their personal financial situation.

What do you say to those Americans who are paying more for the basics, like gas and groceries, and are struggling to make ends meet right now? How should they manage their day-to-day?

BRIAN DEESE, PRESIDENT, NATIONAL ECONOMIC COUNCIL: Well, what I'd say is, first, it's important to reflect on the historic progress. As you just noted, strongest growth in nearly 40 years.

And in the fourth quarter, we saw some positive news of companies rebuilding inventories. which suggests progress in moving supplies through the supply chain.

And at the same time, we have a real challenge of getting prices, price increases down, and that's affecting families.

And so what we are focused on every day, the president is focused on is how do we build on this historic progress? Historic economic growth and job growth, wage growth for those at the bottom of the economy.

How do we build on that while also getting prices to normalize? And that's about getting our supply chains unstuck.

It's about lowering those kitchen-table costs that a typical family faces by providing some relief on childcare and health care and prescription drugs.

And creating a more competitive economy where we have more businesses competing, which actually helps reduce prices and increase options for consumers.

In all of those areas, the president is focused on trying to move the ball forward and trying to build on historic year of 2021 and keep this recovery going strong.

CABRERA: You don't get an "A" for effort, though, right? And that's not happening. You're not making the progress that is desired by the American people by the president and/or administration.

So when is that relief going to arrive?

DEESE: Well, we're making a lot of progress on all the areas that I suggested.

As you say, we are living through an extraordinary pandemic-induced economic recovery where there are fits and starts. It's not a direct line.

If you look at supply chains, we worried. And there was a lot of concern this holiday season people wouldn't be able to get the goods they wanted. We worked hard, working with the ports, truckers, shippers and that didn't happen.

As I said, we've seen in the latest data, both the prices data and the GDP data suggests that businesses are moving more inventory through the economy. That will position us well here going forward.

And we have legislation in front of Congress right now that would provide direct relief to American families. Lower the cost of childcare. Lower the cost of health care and prescription drugs, which is a core economic issue for our country right now.

So we're focused on those issues and focused on making progress where we can.

And I think what we're going to see is, as this economic growth continues, as this economy progresses, we'll see these prices normalize and people will see that in their pocketbooks as well.

[13:34:59]

CABRERA: A new Gallup survey shows nearly 80 percent of Americans worry inflation will get worse in the next six months, and 50 percent expect inflation will go up a lot.

Are they wrong?

DEESE: If you look at most professional forecasters, it's consistent with administration estimates. They are that the price increases will moderate over the course of 2022.

And that's because a lot of this is being driven by these supply chain challenges.

Take one example. About a third of the price increases, the entire price increase is due to the cost of cars. Used cars and new car prices are up significantly.

And we know why. It's because our auto companies can't build enough cars to meet demand because supply chain challenges have kept semiconductors from being produced in sufficient quantities.

We have a direct solution for how to solve that. We're working with Congress and hopeful the House will pass, move legislation to the floor next week that will help address that issue.

So we know that there are places that we can work to address these supply chain issues.

And, you know, our hope and certainly the expectation of most forecasters is that we will see moderation in those prices over the course of the year.

CABRERA: We can all appreciate the car example that you use, but not everybody is in the market for a new or used car. And, yes, that's an area where inflation has really, really been felt.

But we heard from the Fed. They're going to take action. We know that they're going to pivot on interest rates to address inflation.

Does the White House view that as a cure all?

DEESE: The Federal Reserve has an incredibly important role to play. And our view is that, number one, it's important that the Fed have the independence and the space to make these judgments.

Unlike prior administrations, the president is reinforcing the importance of the independence of that institution. They have really qualified people at the helm at the Fed.

The president has nominated five individuals of extraordinary breadth and credentials so we're hoping the Senate will move quickly to confirm them.

And certainly, the recalibration that the Fed is undertaking is appropriate given these circumstances.

And what we can do on our side as the Fed operates and makes those independent judgments is work to try to address these issues. Lowering the cost that families face. Unsticking these supply chain challenges.

And together, those two things will help provide the economy a clearer direction going forward.

CABRERA: You mentioned there's legislation before Congress. I assume you're talking about the Build Back Better Act, which we know became completely stuck with Senator Joe Manchin saying he does not support it, period.

The child tax credit was part of it. It cut the monthly child poverty rate by 30 percent. That's nearly four million children who were pulled out of poverty. And that credit ran out on January 1st.

The White House, will they make a push for a separate stand-alone extension of this? Is that a priority?

DEESE: Well, that extended child tax credit is still going to people. Monthly payments ended but those individuals who are eligible can actually get the remainder of their 2021 child tax credit by filing their tax returns right now.

But more generally, if your concern is prices in the economy right now, which is certainly a concern for the White House and this president, then the most immediate and direct action is to lower costs that families are facing, childcare, health care, prescription drugs.

And do that in a commonsense way that's fully paid for. Doesn't affect or put upward pressure on inflation.

That's what we're trying to work with Congress to do. And that's what is the economic need for the country.

We had about 10 CEOs here yesterday running America's largest companies, everything from General Motors to Cumins in the industrial Midwest.

And they all said that providing direct support to families to get more people working and to help lower those costs would be the most effective thing for the economy right now.

So this is an economic issue, an economic necessity. And if the concern is prices, that would be a direct answer to that concern.

CABRERA: Brian Deese, I appreciate your time. Thank you so much for joining us.

DEESE: Thanks for having me.

CABRERA: This just in. Senate Minority Leader Mitch McConnell just reacted to Supreme Court Justice Stephen Breyer's retirement announcement.

[13:39:05]

Why the leader who held up Merrick Garland's hearings and pushed through Amy Coney Barrett's confirmation says President Biden doesn't have the mandate to nominate anyone from the, quote, "radical left."

(COMMERCIAL BREAK) CABRERA: Supreme Court Justice Stephen Breyer has made it official. He is retiring. Last hour, Breyer appeared alongside President Biden for his announcement.

President Biden had these words.

(BEGIN VIDEO CLIP)

JOE BIDEN, PRESIDENT OF THE UNITED STATES: Justice Breyer has been everything his country could have asked of him.

And he's appeared before -- when he appeared before the Judiciary Committee almost three decades ago, we all had high hopes for the mark he would leave on the history, the law and the Constitution.

And he's exceeded those hopes in every possible way.

(END VIDEO CLIP)

CABRERA: The president is now set to fulfill a key campaign promise,, to select the nation's first black woman to serve on America's highest court.

Here's a look at the short list.

And while Biden has not selected a pick yet, he'll make a pick by the end of February.

Joining us now, CNN chief political analyst, Gloria Borger, CNN legal analyst and Supreme Court biographer, Joan Biskupic, and former federal prosecutor, Elliot Williams.

[13:45:04]

Gloria, big moment. Big day.

And listen to what Senate Minority Leader Mitch McConnell said about this vacancy a short time ago.

I quote, "The president must not outsource this important decision to the radical left. The American people deserve a nominee with demonstrated reverence for the written text of our laws and our Constitution."

We know both Biden and his chief of staff, Ron Klain, have decades of experience with the Supreme Court confirmation process.

Gloria, how does that impact their strategy.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Look, what Mitch McConnell is telling you is, this is going to be the line we're going to use in the midterm elections. That whoever is from that list -- and you showed the pictures -- is going to be a product of the radical left.

I mean, it's completely predictable. I think Mitch McConnell says it because he knows he has to say it. It's also very clear to me that Manchin and Sinema, the two people who

have given the Democrats heartburn over the Build Back Better proposals, are people who generally will support a president's nominee for the Supreme Court.

So I think the Democrats, rightly so, want to get this done pretty quickly. You heard the president himself today say about a month.

And Mitch McConnell will do what Mitch McConnell does. This is not a surprise. It's going to be the talking points. And then they'll move on.

CABRERA: Joan, the nation's first black woman on the court. There may not be an ideological shift with this, but this is a shift.

JOAN BISKUPIC, CNN LEGAL ANALYST: It really is, Ana. And it is quite an historic day, as you said at the outset.

We've had 115 justices in some 230 years, and never a black woman on the court. So just that is going to be so important to many people out there.

And Justice Ruth Bader Ginsburg used to say it was wonderful when schoolchildren could come into the courtroom and actually see two women sitting on the bench. Now there will be many more.

It's just because of the times now and that will be important to people looking at the court.

The other thing is there will be new youth. Justice Breyer is 83 years old. Presumably, the president will choose a woman who is in her 40s or 50s. So that will change.

And then, Ana, I know you've heard this many times over the last two days. There's a common adage that's attributed to the late Justice Byron White, you change one justice, you change the whole court.

And that is so true. That whoever comes on will cause the other justices to sort of reorient around each other.

And one thing that will change is that Justice Stephen Breyer is, right now, someone who wants to work the middle. He wants to find consensus at the middle.

And the only two who will be left who work that way are Chief Justice John Roberts and Justice Elena Kagan. Those two have tried to bring about more comprise.

And the question will be, will this new individual add to that sort of middle-seeking group or will it mean that the court becomes a much harder, very dominant six-member conservative court versus three liberals on the left.

CABRERA: Elliot, representation matters. Having diverse perspectives, diverse backgrounds and experiences, that can make a difference.

How do you see a black woman changing the dynamics behind the scenes, among the justices, to have a black woman's voice and perspective?

Whether it's the cases they choose to accept or how the court debates law surrounding those cases to how they ultimately rule?

ELLIOT WILIAMS, CNN LEGAL ANALYST: Look, the court will, number one, be more reflective of America. Not even close to being reflective of America, but much closer.

Beyond the fact, the glaring fact of a black woman being put on the court, something that President Biden has done in his entire time is diversify the backgrounds of people who end up being put on the bench.

For years, it was people like me, who were former federal prosecutors or law partners who were being in the court. Now you're seeing more federal public defenders, academics, and so on being named.

The short list of individuals involves state judges, federal judges, academics and so on, public defenders.

So a diversity of experience. And even that is itself a big change for the Supreme Court. Which tends to have justices of a certain mold. Not just frankly racially or as a matter of gender.

So that's a profound change that we just haven't seen yet.

CABRERA: And, Gloria, one could say this opportunity for the Biden administration to pick a Supreme Court justice, this could be a breath of fresh air for an administration that needs a win right now.

And we know how important black voters were to Biden's presidency, first getting the nomination, then the White House.

And he has some work to do with those voters now. According to Pew polling, among black voters, in April of 2021, he had 89 percent approval. Right now, it's dropped to 60 percent.

[13:50:06]

Do you think this could move the needle back up?

BORGER: Well, certainly among black leadership, who has really been pushing for this and pushed for this when he was a candidate. I think 60 percent is not bad.

And I think it will certainly - African-American voters looking at the first black woman on the court is an important historic moment.

But I think voters -- black voters like everyone else want but I think black voters want to feel good about the economy and what the if the has done for them, et cetera. So it's not just going to be this.

And also, don't forget, this is happening pretty early. It will happen, say, it will happen way before the midterm elections. The president wants to get it done quickly.

So really, it's hard to gauge at this point. But what I can say is it certainly doesn't hurt.

One more thing I want to point out, and Joan and Elliot can really talk about this, is that the three liberals on the court will now be women.

So they're going to have their little female caucus, the women's caucus, and maybe the justices won't mansplain them as much.

CABRERA: That feels like a good place to end.

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CABRERA: Gloria Borger, Joan Biskupic -- strong women's voice the last word.

WILLIAMS: I was tempted to say, well, actually, Gloria, but --

(LAUGHTER)

BORGER: You're good. You're good.

CABRERA: Oh, thank you all. Joan Biskupic, Elliot Williams, Gloria Borger, appreciate you all.

Six hours. That is how much time attorney-turned-defendant, Michael Avenatti, says he needs to cross-examine his former client, Stormy Daniels. Daniels is on the stand right now. We'll have details next.

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CABRERA: Happening right now, adult film actress, Stormy Daniels, who claims to have had an brief sexual affair with Donald Trump years before he was president, is on the witness stand right now as part of a criminal trial of her former lawyer.

[13:55:05]

Michael Avenatti represented Stormy Daniels in several matters involving the former president.

Now, Daniels claims Avenatti defrauded her, specifically hundreds of thousands of dollars she was owed in a book deal. And since Avenatti is now representing himself, he will soon have the chance to cross- examine.

Let's discuss with criminal defense attorney, Sara Azari.

Sara, Avenatti says he plans to cross-examine Daniels for six hours. How do you see this going down? Are you expecting fireworks?

SARA AZARI, CRIMINAL DEFENSE ATTORNEY: Ana, six hours? I mean, this is Michael Avenatti on full display, going for the jugular.

But he did spend two days to cross-examine a former employee in a similar case in California involving embezzlement from client funds. So I expect he's going to take the six hours. But you have to understand that, typically, even though we overestimate the time we need with witnesses -- and I'm the queen of that -- it really doesn't take that long. I mean, this is something that could be done in two or three hours. But of course, for him, it's six.

More importantly, I think, Ana, what this will be is the cross- examination is both awkward and very effective.

It's awkward because he's going up against a former client, and he's confronting and cross examining her.

But it's very effective because he has what most of us trial lawyers don't have, which is this intimate witness familiarity.

For over two years, they were partners in crime. They went up against Donald Trump for his hush money payments and campaign finance violations, and now they're adversaries.

And he knows better than anyone, even if he had a lawyer, that lawyer, what triggers her, how to poke and prod and elicit and trigger her in a way that potentially could make her testimony fall apart.

But again, it's a pretty easy case for the prosecutors in the Southern District of New York. They typically bring financial crime cases that they know will lead to a conviction.

And this is four transactions, $300,000. It's really not that complicated.

CABRERA: You talk about the history of these two, taking on then- President Trump. And you'll recall, Daniels has been dragged by Trump in the media for years.

How do you think that might impact the jury here?

AZARI: Well, I think there's been a lot of bias elimination that went on in the voir dire. The jurors were asked, for example, about how they feel or their attitudes towards an adult film star, you know, whether that would be used against or harm her credibility?

And much like that line of questioning, there has been questions about the political aspect of this, and you know, the jurors' political views and what Stormy Daniels meant to Donald Trump for so long.

So I'm pretty confident that both sides have had the ability to pick a jury that's fair and impartial to the best of their ability.

CABRERA: Do you think Avenatti will then testify in his own defense?

AZARI: That would be even more awkward, because that is when a pro se defendant is wearing two hats. He's answering questions, being cross- examined by the prosecutors.

But he's also wearing the hat of a lawyer on his own behalf, making the correct, hopefully, evidentiary objections and motions. So that, I think, will be most awkward.

And of course, this judge, Ana, has admonished him that he's not going to take a back doorway into taking the stand. Either he takes the stand or he evokes his Fifth and remains silent.

But he's not going to testify in the line of questioning that's directed at the multiple witnesses that he is going to cross-examine or even witnesses that he might put on direct.

CABRERA: Remind us of the charges that he is facing.

AZARI: He's facing fraud, basically, under federal law, and that involves embezzlement.

You know, four different transactions amounting to $300,000 where these funds allegedly were not -- they did not belong to him. They were Stormy's advance on a book deal.

And then he falsified a document, allegedly, to receive these funds into his client trust account.

Then he took the funds out of that account and put them in his personal and business accounts, paying for his Ferrari, his jet, et cetera, and I think back payroll.

But regardless, it's going to turn on the prosecution's ability to prove beyond a reasonable doubt that these funds did not belong to him.

That they were Daniels' funds, that he falsified this document and willfully misappropriated these funds for his own personal use and that it was without her knowledge and authorization.

That's why Daniels's testimony is important, because she's laying the foundation for her lack of knowledge and lack of authorization, making this embezzlement.

I think it's a fairly easy case to prove.

CABRERA: Just quickly then, what would be the punishment if convicted?

[13:59:51]

AZARI: If convicted, under the sentencing guidelines -- there's this report that half of those monies were actually eventually turned over to Daniels.

But under federal law, it's not about actual loss. It's about the amount diverted. So here we're dealing with $300,000, even if it was really $150,000 that he took.

CABRERA: Yes.

AZARI: So with the $300,000, you look at the sentencing guidelines, looking at two or three years, potentially more.