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Interview With National Economic Council Director Brian Deese; President Biden Bans Imports of Russian Oil. Aired 1-1:30p ET

Aired March 08, 2022 - 13:00   ET

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

[13:00:29]

ANNOUNCER: This is CNN breaking news.

ANA CABRERA, CNN HOST: Hello, and welcome to our breaking news coverage. I'm Ana Cabrera in New York. Anderson Cooper is standing by in Lviv, Ukraine.

And Putin reportedly thought Ukraine would fall within days. Here we are nearly two weeks into this invasion, and President Zelenskyy is unrelenting in his fight for his country.

(BEGIN VIDEO CLIP)

VOLODYMYR ZELENSKYY, UKRAINIAN PRESIDENT (through translator): We will not give up, and we will not lose.

We will fight until the end at sea, in the air. We will continue fighting for our land, whatever the cost. Please make sure that you do what needs to be done and what is stipulated by the greatness of your country.

Best of all to Ukraine and to the United Kingdom.

(APPLAUSE)

(END VIDEO CLIP)

CABRERA: That historic address to the British Parliament moments ago receiving a standing ovation. It came hours after this: A hospital in Eastern Ukraine was shelled by Russian forces, and you can see what's left.

The deputy mayor says patients had to climb out of that mess, out of the rubble and all that twisted metal. And there's still no word on the number of casualties. In the northeastern city of Sumy, there was also a massacre. A Russian airstrike demolished a cluster of homes, killing at least 21 civilians, including at least two children. It was only after that atrocity that Russia agreed to a humanitarian corridor there, allowing hundreds to evacuate. Even then, one of the convoys of buses was delayed due to an outbreak of gunfire.

Also new today, President Biden announcing just about an hour ago a full ban on Russian energy, prohibiting U.S. imports of Russian oil, gas and coal. But President Zelenskyy reiterated he wants to see more action.

ANDERSON COOPER, CNN HOST: Here in Ukraine, more than two million refugees have now fled. Those who are still here are running out of water, have no heat, medicine in some areas, and are facing frigid temperatures.

Ukraine's foreign minister says in Mariupol 300,000 people are stranded. One of the stranded children died of dehydration.

We have got live coverage across Ukraine, of course, beginning with Alex Marquardt near Kyiv.

Alex, first of all, what do we know about this dire situation in Mariupol?

ALEX MARQUARDT, CNN SENIOR NATIONAL SECURITY CORRESPONDENT: Well, as you mentioned, Anderson, 300,000 people who, according to Ukraine's foreign minister, are being held hostage.

This is a critical city to watch. It is one that the Russian forces would certainly like to take. But the forces in Mariupol, the Ukrainian forces, are holding on. They have been able to keep the Russian forces at bay.

But it's clear that the people in Mariupol are suffering. They are without water. They are without power, as you mentioned, that child dying of dehydration.At this point, according to the Pentagon, it does not appear that Russian forces are anywhere inside the city, that they are, however, on both sides.

And this is one of the cities that we have been talking about all day, because the Russians had said that there would be a cease-fire around five Ukrainian cities, including this one, to allow people to get out through evacuation corridors.

But according to local authorities, the humanitarian aid convoy that was heading from Central Ukraine down to Mariupol was hit earlier today or at least was targeted earlier today, making it appear that that corridor at least was not functioning and people were not able to get out.

Mariupol, if it is taken, Anderson, by Russian forces would allow Russia to connect Crimea with Western Russia, to create a land bridge that we have been talking about to control at least that stretch of land and possibly to occupy it, and add it to what Putin believes is Russian land -- Anderson.

COOPER: We saw some of the images from the evacuation in Sumy. What more do we know?

MARQUARDT: Well, Sumy is one of the good news stories of today.

Sumy is one of those five cities that evacuation corridors have been setup from, and it's the only one that the Ukrainians recognized, because it allowed citizens to leave and go to Ukraine, as opposed to heading into Russia or heading into Belarus.

[13:05:13]

So we understand that now the evacuations are over for the day. But they did take place over much of the day. Around 700 people, according to the Russian Ministry of Defense, were able to evacuate. Many of them were foreigners, including hundreds of Indian students, heading about 100 miles south to another Ukrainian city. And from there, they would be able to travel west to try to get out of Ukraine to head into Europe.

So that was happening throughout the day. But, Anderson, it does come on the heels of some of this indiscriminate shelling, one of these indiscriminate attacks on civilians that we have been discussing. Sumy is right up against the border with Russia. It is very close, and it has been targeted and isolated by Russian forces.

Just last night, we understand, there was an attack on a residential building that resulted in the deaths of some 21 people, including two children. So while you have people who are able to get out today, it is paired with these ongoing indiscriminate attacks against civilians -- Anderson.

COOPER: Ukraine also claims that a Russian general has been killed in battle. What -- do we know more about that?

MARQUARDT: Yes, this is really interesting.

If this is confirmed -- and, again, this is the Ukrainians claiming this. If this is confirmed by the Russian side, this would be the highest-ranking Russian officer, Russian soldier to die in this conflict. His name is Major General Vitaly Gerasimov. He was killed, according to the Ukrainians, near Kharkiv in the northeast, that city that has seen a lot of fighting.

This was put out by the Ukrainians on Monday. Today is a holiday in Russia. They have not confirmed this. They have mentioned other soldiers who have been killed. It would be in keeping with how the Kremlin has been operating to not admit that one of these senior officers has been killed.

But Gerasimov, we understand, had served in Chechnya, as well as in Syria, which, of course, are two places that Russia went in with significant force in the -- in residential areas, laying waste to places where civilians live, and we're starting to see that happening here, of course. So the U.S., for its part, says it does not have any confirmation that

Gerasimov was killed. It does appear that Ukraine may have heard about this from the open source investigative outlet Bellingcat, which indicated that there were some open communications, some insecure communications that -- where they have heard that Gerasimov was killed.

In terms of overall death toll, if Gerasimov is part of that, the U.S. believes around 2,000 to 4,000 Russian soldiers have been killed so far in this campaign, in this war in Ukraine, but the U.S. intelligence community saying that assessment that is one that they make with low confidence -- Anderson.

COOPER: Alex Marquardt, appreciate the reporting. Thank you.

Tensions between the U.S. and Russia may be skyrocketing, but a new intelligence report is giving us some more information about Russia's intentions when it comes to the United States.

CNN's Katie Bo Lillis joins us now with details.

So, Katie, what are we learning from this intelligence report?

KATIE BO LILLIS, CNN REPORTER: Yes, Anderson, the U.S. intelligence community every year releases what it calls the worldwide threats assessment, which is this kind of round the world of how the intelligence community is looking at all the major threats to the United States in a given year.

And, of course, the timing of this year's report coincides with this sort of remarkable geopolitical moment that we are watching with the Russian invasion of Ukraine. So the U.S. public is really getting a pretty remarkable, almost real-time picture of how the U.S. is looking at Russia and at Putin specifically.

And among the key findings here is that the U.S. intelligence community assesses that Russia does not seek, does not, I emphasize, seek a direct conflict with the United States and, in fact, would rather avoid that.

Now, this is something that broadly correlates with what we have heard from our sources in the defense and intelligence community. But it's certainly a reassuring message in this moment, given that, over the past couple of weeks, Russian President Vladimir Putin has publicly invoked the specter of his nuclear forces, saying that he -- or ordering that he -- that his strategic forces should be placed on special alert status.

Director of National Intelligence Avril Haines addressed those public announcements directly in her testimony in front of the House Intelligence Committee just this morning.

(BEGIN VIDEO CLIP)

AVRIL HAINES, U.S. DIRECTOR OF NATIONAL INTELLIGENCE: But we do think, as I indicated, assess that he is effectively signaling, that he's attempting to deter, and that he has done that in other ways.

[13:10:07]

For example, having the strategic nuclear forces exercise that we indicated had been postponed until February begin then, as a method of effectively deterring, using his nuclear forces as a way to say, this could escalate, and, therefore, NATO should not get involved, and that that's been his main purpose in doing so.

(END VIDEO CLIP)

LILLIS: Despite that reassuring message, Haines also told the committee that Putin is likely to escalate in Ukraine, that setbacks, both militarily and economically, are unlikely to deter him, and that he's more likely to double down, because he views the conflict in Ukraine as a war that he can't afford to lose -- Anderson.

COOPER: Katie Bo Lillis, I appreciate the reporting. Thank you.

Ana, let's go back to you.

CABRERA: And let's bring in retired Army Major John Spencer. He's the chair of urban warfare studies with the Madison Policy Forum.

Good to see you again, Major Spencer.

Putin, it sure looks like, is targeting civilians. What does that tell you about Putin's strategy and how he views war?

COL. JOHN SPENCER (RET.), MODERN WAR INSTITUTE: Yes, I still think that shows to me that the strategy is what the -- this is a war about one battle, the battle of Kyiv.

He needs all these cities in order to make that happen. He will claim he's targeting enemy forces, people with weapons. But, luckily, the ICC is rapidly moving to investigate each strike, because he has the right to protect civilians.

I will say what's concerning me, though, this -- what we're seeing with this migration and the cease-fires in order to allow civilians does actually help Russia achieve its mission. We want that to happen, right? We want the civilians out of there, but it actually helps Russia.

And I think it is what militaries do and why militaries don't like to fight in cities/. The best way to do that is to empty it of civilians and say the only thing left or enemy, and then you can just flatten it.

CABRERA: And so, given that they're, you say, helping Putin achieve his objective by leaving, I mean, what are the alternatives here? How can you stop mass casualties?

SPENCER: Yes, I mean, in a lot of these cities, one, this is what to -- this is the right thing, halting the battle, so that civilians can flee. And, Ana, I think the whole free world needs to help in supporting the

countries that are receiving the refugees that will soon overreach even World War II migrations of civilians. One of the things, if they're trapped, they can do in any urban battle, and especially cities like Odessa, Kharkiv, Kyiv, they have massive underground networks.

And the underground has always been a refuge for civilians. You think about the 1940 Blitz of London. I mean, we're seeing almost iconic similar pictures of civilians underground.

CABRERA: Interesting.

I want to ask you about some of the exclusive reporting that we had from our Alex Marquardt. He spoke with folks involved in this Ukrainian hot line that Russian mothers are calling because they have lost contact with their sons on the battlefield. And Ukrainians were the ones to set up this hot line for those Russian families to try to get the truth out about what is happening.

What do you see as the impact of this?

SPENCER: That could have a strategic major effect. I wrote a book about.

This idea that soldiers go off to war, and we will hear from them when we're done, that's not today. Today, soldiers have access, and they will find a way, just because of what -- the way we are, to talk about home.

And the fact that it's Russian mothers, that's huge. Russia has a lot of experience with mothers bringing conflicts to -- basically to a halt or interfering. They marched at the Battle of Grozny, which everybody keeps talking about. A group of mothers marched to Grozny and camped there for a month until the Russian generals came out and talked to them about the reporting of casualties, care of the troops.

This could have a huge effect on Russia's ability to keep doing this, on the troops' ability to keep moving forward. Soldiers don't fight for dictators. Soldiers fight for a cause, they fight for their families, and they fight for each other. This is huge.

CABRERA: And now we're learning Russia is trying to supplement its forces with foreign fighters, including Syrians. If Russia had this under control, would they need to do that?

SPENCER: Absolutely not.

I mean, that's a clear show that they bit off more than they can chew. They don't have the manpower it takes to fight these urban battles. And this is pretty concerning for me. Those are hardened urban fighters that will fight viciously.

And I think that that's a really bad sign with military's requirements to protect civilians, the use of force, abiding by the laws of war. These fighters have shown that they don't do that. [13:15:08]

CABRERA: Retired Army Major John Spencer, thank you very much for joining us.

Hitting Putin where it hurts. The U.S. and the European union finally take direct aim at Russian energy exports. But will it change Putin's behavior? And will it lead to even more pain at the gas pump here at home?

We will discuss with President Biden's top economic adviser next.

(COMMERCIAL BREAK)

CABRERA: The U.S. unleashing another tactic to make Putin pay for the war in Ukraine.

President Biden just announced a ban on energy imports from Russia.

[13:20:00]

(BEGIN VIDEO CLIP)

BIDEN: That means Russian oil will no longer be acceptable at U.S. ports, and the American people will deal another powerful blow to Putin's war machine.

This is a move that has strong bipartisan support in Congress and I believe in the country. Americans have rallied support -- have rallied to support their Ukrainian people and made it clear we will not be part of subsidizing Putin's war.

(END VIDEO CLIP)

CABRERA: The move comes as gas prices here in the U.S. hit record levels. Prices have increased 10 cents just since yesterday.

The national average is now $4.17 a gallon. Again, that is an all-time record.

And joining us now is Brian Deese, director of the National Economic Council.

Thank you so much, Brian, for joining us.

Russian oil accounted for just 3 percent of U.S. crude imports last year. And in the last couple of weeks, at least the last two weeks of February, Russian oil imports actually dropped to zero here in the U.S. because of companies cutting ties.

So far, that hasn't changed Putin's behavior. So how does today's move by the U.S. have an impact?

BRIAN DEESE, DIRECTOR, NATIONAL ECONOMIC COUNCIL: Well, today's executive order that the president released is another significant step in a coordinated effort to try to impose maximum economic pain on Vladimir Putin and his regime.

And what you have seen is a historic and unprecedented effort of economic sanctions is having historic and unprecedented impact. If you look at the Russian economy, the ruble is down 50 percent. The stock market has now been closed in Russia for a record period of time. And most analysts are projecting record declines in economic growth in Russia as a result of these sanctions.

What the president has been clear from the beginning is that we will act in a way that uniting and united among our allies, and we will stay at this. We will stay at imposing the pressure because we know that that is what is necessary and also what is appropriate, given the horrific and horrendous acts that Putin is undertaking in Ukraine.

CABRERA: And I know this move to ban oil and energy imports from Russia here in the U.S. was something that lawmakers on both sides of the aisle were calling for as well. So it gets bipartisan support here at home.

But, again, going back to the impact that this could actually have on the invasion in Ukraine, if the U.S. is acting alone, that's one thing. We know Europe gets 27 percent of its oil and 40 percent of its natural gas from Russia. Germany gets a massive 50 percent of its natural gas from Russia. And the E.U. is not joining the U.S. and a total ban on Russian energy.

It does say it plans to slash Russian gas imports by two-thirds this year. But is that enough to stop Russia's invasion of Ukraine? Does Europe needs to do more?

DEESE: Well, you're raising a really important point, one that I want to underscore, which is that this action today was taken, in fact, in very close coordination with our allies.

President Biden held a two-hour conversation with European leaders yesterday morning discussing our respective steps and making sure that we remain coordinated, even as we respect and understand our respective differences. The United States is in a very different position. We're a net exporter of oil and gas. We have domestic production that our European counterparts don't.

But we are unified in an effort to reduce dependence on Russian oil and gas, and to do so in a way that imposes maximum pain on Putin. So, even as we take these steps, we're coordinating each step of the way and trying to send a signal to the market and to Putin that the West is unified in ratcheting up economic pain here.

CABRERA: And speaking of pain, a lot of Americans may be wondering, what does the president's announcement mean for pain at the pump and gas prices that are already going up here in the U.S.?

What do you say to them, the American people, right now?

DEESE: Well, your first point is right. We have already seen the cost of Putin's actions and Putin's war. The cost at the pump has gone up significantly since Putin began amassing troops on the Ukraine border. And the cost of these actions will be felt by Americans and around the world. The president has been very clear about that. He spoke again in very practical terms to the American people.These steps do have costs. The costs are disproportionately borne by the Russian economy. As I said, their economy is in complete freefall.

But what we're going to do is take every step that we can and put every step that we can on the table to try to mitigate those impacts. Already, the president has brought the world together, again, in a coordinated way to announce a historic release of oil from coordinated reserves around the world, the U.S. leading that effort with 30 million barrels.

CABRERA: Right.

DEESE: And we're in active conversation about doing more, working in concert with our allies.

CABRERA: But, Brian, if Russian oil only accounts for 3 percent of U.S. imports and, again, wasn't part of our imports in the last few weeks, why are gas prices high already, even before today's announcement?

[13:25:03]

DEESE: Well, the price of oil is set on the global market. And it's set based on the supply of oil being supplied to the global market, not in any individual market.

And so what the market is reacting to is, Putin unilaterally taking this action is reducing -- or risking that Russian oil and gas is pulled off of the global market. And that's driving prices up.

The steps today is to reinforce that the United States is not going to accept imports of Russian oil and gas. That will have an impact. So what we're focused on is trying to make sure that we can bring in the short term supply of oil and gas globally, do everything we can to ensure adequate supply, but also keep an eye on the long term, which is, this crisis should underscore how important it is for all of us to achieve true energy independence.

And that's about reducing our dependence on fossil fuels. So, over the long term, the kinds of steps we can take here domestically to be less reliant on oil and on gas are really important.

CABRERA: And the power of the oil companies. I mean, these companies made billions in profits last year, Exxon $23 billion, Chevron $16 billion, Shell $19 billion, BP $13 billion.

Brian, how much do these companies control the prices at the pump?

DEESE: Well, the prices are set in the market.

But what I would say is that the president was very clear that this is a precarious moment for the economy. And during this moment, it's important that nobody seek to gain advantage by either padding their profits or by engaging in market manipulation or price-gouging.

That's something we're going to look very carefully at.

(CROSSTALK)

CABRERA: Are those companies already doing that?

DEESE: We have our regulators looking closely at the markets for any signs of that. That's the appropriate thing to do. And we will continue to do that.

I would say, at the same time, we have seen companies across sectors, including in the oil and gas industry, step up to the plate and say they are going to stop doing business with Russia, they're going to pull back from the Russian economy. We're seeing that across the corporate sector, including in the oil and gas sector. That's something that...

CABRERA: Sure. Should they -- forgive me. I didn't mean interrupt.

But should they increase production here at home?

DEESE: Well, what we're seeing right now is production in the United States is increasing. It's increasing to record levels.

And you have heard the CEOs of the companies that you mentioned saying that they're doing everything they can to increase production in response to the price. So, in the short term, I we expected, we are seeing that production increase by about 700,000 barrels a day in the United States.

Over the long term, what we need to do is actually reduce our dependence on oil and gas altogether, so that we and our allies, like those in Europe, are not as susceptible to the -- to global commodity price moves like we're seeing now.

CABRERA: Brian Deese the head of the Economic Council for the White House, thank you so much for taking the time today. Appreciate it.

DEESE: Thank you.

CABRERA: They may not be in uniform on the front lines of this war, but they are still fighting.

Up next, Anderson speaks to the mothers, the wives and the daughters of Ukraine.

(BEGIN VIDEO CLIP)

COOPER: Does it help to work here, to stay busy?

UNIDENTIFIED FEMALE (through translator): We are doing what we can. We keep on praying. People ask how you're not crying.

But crying doesn't help.

(END VIDEO CLIP)

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