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Economic Pessimism is Growing; Biden Sends Weapons to Ukraine; Kristi Raik is Interviewed about Ukraine; Supreme Court Blocks Social Media Law. Aired 9:30-10a

Aired June 01, 2022 - 09:30   ET

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

[09:30:00]

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: He said however this could be the outlier event or they could manage to orchestrate what we call a soft landing. So it would be a shallow and narrow recession. And it wouldn't last very long. And he said he doesn't foresee the kind of recession, no matter what it looks like, that is a double-digit unemployment rate.

JIM SCIUTTO, CNN ANCHOR: Yes.

ROMANS: So, a lot of caveats there.

He also said, kind of graciously, I would say, that Janet Yellen got it wrong this time as what the consensus got it wrong in terms of inflation. And he did say he's gotten it wrong a whole lot of times too.

You know, it reminds me of back in 2008 when we kept hearing -- even before that, 2006 or 2008 when they kept saying, oh, the subprime mortgage market, it's not going to hurt real estate overall and it certainly won't hurt the financial system.

POPPY HARLOW, CNN ANCHOR: Right.

ROMANS: The consensus was wrong then too. So, you know, we're -- every time it's a little different. We're fighting a different kind of battle and we get some stuff wrong.

HARLOW: Christine Romans, thank you so much.

Well, we do have new polling that shows Americans view on the economy remains deeply pessimistic. A Gallup poll just out yesterday shows us 14 percent - only 14 percent of U.S. adults rate economic conditions as excellent or good. The vast majority instead call them only fair or poor.

SCIUTTO: CNN's senior data reporter Harry Enten joins us now with more.

I mean, Harry, it's remarkable because, listen, inflation's bad, right? Unemployment, though, fantastic. That means so many inputs to this but these are the worst numbers in more than ten years? HARRY ENTEN, CNN SENIOR DATA REPORTER: Yes, that's the worst number in

over a decade according to Gallup. And it's not just about how they feel about the economy right now, it's how they feel about it going forward. Do you think the economy is getting better or worse? And look here, only 20 percent say better, 77 percent say worse. That's the worst spread again in over a decade.

And, you know, it's not just about views of the economy overall, it's views about how you're changing your own habits, right? How is inflation impacting Americans? Change grocery purchases, 63 percent. Cut back on extras, 63 percent. Cut back on driving, 54 percent. So they're seeing it bad nationally and they're feeling it in their pockets as well.

HARLOW: Last night on CNN, Paul Begala was saying something interesting, that, yes, you've got like 160, 159 days until the midterms, but really only have like 30 to 60 days politically to really turn around stuff on the economy, this inflation narrative, et cetera.

I mean what does it mean when you have the most -- almost 60 percent of people polled said the economy is their number one issue, right? So, what does this mean for Biden and the Democrats?

ENTEN: Nothing good. Nothing good. It's bad. I mean, look, if you ask folks, what's the most important problem, which is what Quinnipiac did a few weeks ago, what do you see?

HARLOW: Yes.

ENTEN: You essentially see that inflation far and away the most urgent issue facing America, well above abortion. Three times as high at 33 percent. And, you know, they're blaming Biden. That's, I think, the key thing I take away from all this. You know, essentially what's President Biden's job performance on inflation. Just 28 percent approve -- just 28 percent -- 68 percent disapprove. And inflation, of course, impacts the use of the economy at large. So you look at the net economic approval rating that Biden has currently, look at this, minus 26 points, minus 26, that's tied with Jimmy Carter for the worst in the last 40 plus years. It's awful. Folks do not like the shape of the economy and they're blaming Democrats.

HARLOW: Yes.

SCIUTTO: You know what's notable on that list is how far down immigration was on the list of number one issues, note, because that was going to be the story of this election for Republicans. Now you understand why inflation is the consistent message there.

Harry Enten, thanks so much.

ENTEN: Thank you, Jim.

SCIUTTO: Still ahead, President Biden has signed off on sending the most powerful U.S. weapons yet sent to Ukraine. This as the Ukrainian president says he is losing -- and these are staggering losses, as many as 100 soldiers, Ukrainian soldiers, every single day. What is this new weaponry mean for the battle? We'll have more coming up.

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[09:38:23]

HARLOW: New this morning, the White House is announcing details of the new $700 million package of security assistance to Ukraine. President Biden explained much more of this in a new op-ed this morning in "The New York Times" that reads in part, quote, we have moved quickly to send Ukraine a significant amount of weaponry and ammunition so it can fight on the battlefield and be in the strongest possible position at the negotiating table. That's why I've decided that we will provide the Ukrainians with more advanced rocket systems and munitions that will enable them to more precisely strike key target on the battlefield in Ukraine.

CNN was the first to report that the U.S. would provide these weapons. Our Natasha Bertrand joins us.

Natasha, so what more does this package mean? I thought it was interesting that the Biden op-ed was sort of titled, what the U.S. will do and won't do when it comes to Ukraine.

NATASHA BERTRAND, CNN WHITE HOUSE REPORTER: Yes, Poppy, so they're really trying to strike this balance here between providing Ukraine the equipment that it needs to fend off the Russians, but also prevent Russia from feeling provoked and like it will retaliate against the west. So, what the president said in that op-ed was that he is going to be sending these advanced rocket systems, which will, according to senior administration officials who spoke to reporters last night, be able to launch munitions about 80 kilometers or about 49 miles.

And that is a far greater range than anything the U.S. has sent to date. That is why the Russians have been very, you know, angry about the possibility that the U.S. is going to be sending this equipment. They have called it a red line. The Kremlin spokesman this morning said that it was adding fuel to the fire of the conflict.

But in addition to this -- to these rocket systems, of course, the U.S. is going to continue to send other equipment that it has been sending already, including javelin anti-tank missiles, including helicopters, tactical vehicles, and spare parts so that the Ukrainians can actually maintain the equipment that the United States and the west is sending to them.

[09:40:14]

Now the Kremlin, as I said, is not reacting particularly well this morning to the Biden administration's announcement. They say that the U.S. is only seeking to prolong the conflict and that they are doing so purposefully. But the White House is pushing back on that. And this morning the deputy national security adviser, Jon Finer, he said that the U.S. does not negotiate its packages, its weapons packages, with the Kremlin and that essentially the U.S. won't be bullied out of providing Ukraine with the equipment that it needs.

Take a listen.

(BEGIN VIDEO CLIP)

JONATHAN FINER, DEPUTY NATIONAL SECURITY ADVISER: We don't negotiate our security assistance packages to Ukraine while with the Kremlin. They have not been pleased by the amount of security assistance we've been providing to the Ukrainians, frankly, since far before this most recent phase of the conflict began. But I will also say that President Biden warned President Putin directly, and we said so publicly as well, that if Russia launched a new, a renewed invasion of Ukraine, the United States would increase the amount of security assistance we were providing, including new and advanced systems.

(END VIDEO CLIP)

BERTRAND: So, importantly, Poppy, Biden also noted in his op-ed that the United States, while, of course, detesting Vladimir Putin's behavior and his role, is not seeking his ouster. So, again, an attempt to reassure the Russians here that the U.S. is not going to get directly engaged in this conflict by getting in conflict with Russian forces.

HARLOW: Natasha Bertrand, thanks so much for the reporting.

Jim.

SCIUTTO: Let's speak now to the director of the Estonian Foreign Policy Institute, Kristi Raik.

Christie, thanks so much for joining us this morning.

KRISTI RAIK, DIRECTOR, ESTONIA FOREIGN POLICY INSTITUTE: Thank you for inviting.

SCIUTTO: So, let's talk first, if we can, about this MLRS system, multiple launch rocket system. The U.S. has limited the range of it. It could go as far as perhaps 200 miles. These still go 50 miles, far longer than systems Ukraine has already.

Does this kind of weapon change the balance of power on the battlefield?

RAIK: Well, no doubt this is a very important news at a crucial time. And clearly additional military aid to Ukraine is now what is needed. And this is really the way to get us closer to peace negotiations since the only way to reach endurable peace in Ukraine is to push back Russian forces and to make sure that Ukraine will regain control over its territory.

So, the news about new, more efficient rocket systems and other military assistance is really now promising to change the situation on the battlefield.

SCIUTTO: The sad fact is, Russia has shown no interest in peace negotiations. In fact, it's stepped up its aggression, its attacks in the east. The Ukrainian president says that Ukrainian forces are now being killed at the alarming rate of 50 to 100 per day, some 500 injured per day. You know better than me that it's extremely difficult for any military to sustain those losses. How long can the Ukrainian military withstand this? And is it in danger of losing in the east now?

RAIK: Well, the question of how long Ukraine can sustain has to be really addressed to the Ukrainians. But as far as I know, their determination to continue fighting is very strong. And they know very well that this is an existential fight for Ukraine's future freedom. And, on the other hand, we also have to ask how long Russia can sustain the fighting. So, from Ukraine and from the western viewpoint, to what we have to do now is to weaken Russia and to push back Russia in order to reach a more favorable situation on the battleground for Ukraine and for future peace talks.

SCIUTTO: You recently tweeted that you, quote, don't share the view that no western leader should ever talk to Putin. But the way Macron of France and Scholz of Germany are doing it is just not unhelpful, it's deeply counterproductive.

Under what circumstances should western leaders in Ukraine speak to Russia? Do you share the view that Russia, in effect, has to lose in order to make peace here?

RAIK: Well, the strategic aim of the west really has to be defeat of Russia and defeat in the sense that Russia is forced to give up its imperialist and revisionist ambitions, not only with Ukraine, but also regarding the whole European security order. The fight really is about much bigger issues than just the territory and the future of Ukraine.

[09:45:00]

And what has been the problem with the French and German efforts at this point to engage with Russia is that it has not been clear what the purpose and aim of these discussions has been. And they have come together with signals from these European countries that they would like to see a rapid end of fighting, rapid cease-fire. But the problem with that goal is that this might actually lead to prolonging the war. Let's imagine if a cease-fire were established tomorrow, which is not likely to happen, but it would mean that the Russian forces would stay on the territories that they have occupied by now, then they would replenish their forces and gather strength, and they would attack again at some point.

SCIUTTO: Yes.

RAIK: So, reaching the rapid cease-fire now certainly is not a way to get a quick peace.

SCIUTTO: Kristi Raik, Estonia knows Russia's capabilities very well having been attacked before itself. Thanks so much for joining us.

RAIK: Thank you.

HARLOW: Coming up, an unusual agreement inside the nation's highest court. Up next, which justices sided with big tech to temporary block restrictions on social media companies, next.

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[09:50:50]

HARLOW: A really interesting development out of the Supreme Court. Liberal and conservative Supreme Court justices joined together in a 5-4 vote to temporarily block a Texas social media law from taking effect.

SCIUTTO: So the law, originally passed last September, restricts the ability of Facebook, Twitter and YouTube to moderate or remove content on their platforms based on viewpoint. Two, tech industry groups sued to block the law claiming it could allow hateful content to run rampant online.

Joining us now to discuss, CNN chief media correspondent Brian Stelter, CNN legal analyst Joan Biskupic.

Brian, first, tell us more about this legislation. It's known as HB- 20. What exactly does it prevent social media companies from doing, and what was the political background to this?

BRIAN STELTER, CNN CHIEF MEDIA CORRESPONDENT: Yes, it's wildly vague and it could rewrite the rules of the web. That's why it's so important for the courts now to be examining this. This originally passed last year in Texas. Here's a description of the law. It applies to companies that have more than 50 million or more U.S. monthly users. In other words, Facebook, Twitter, Google. It makes it illegal to, quote, block, ban, remove, de-platform, de-monetize, de-boost, restrict, deny equal access or visibility to anyone's post, anyone's post on these sites.

And the law, because it's wildly broad, theoretically it would stop the likes of Facebook, Twitter and others from moderating any content at all.

Remember, in Buffalo, the suspect in the supermarket attack, filmed himself attacking people in that store. That video was taken down by the likes of Twitter. But theoretically, under this law, that video might have to stay online. The most vile forms of posts and videos might have to stay online because of this Texas law.

However, conservatives, like Governor Greg Abbott in Texas, say this is important because users are being discriminated against. The idea that conservatives are being censored online is one of the animating forces of the GOP, even though experts who study it say there's very little systemic evidence that's the case. It is an incredibly popular belief among conservatives. That's why this law in Texas was passed. That's why a similar law in Florida was passed. And now the consequences are really up in the air.

SCIUTTO: Yes.

HARLOW: So, Joan, I mean let's talk about this because this is not the final word from the Supreme Court. Justice Alito wrote in this decision, this is so consequential and novel we're going to have to take this up fully as a court at some point.

But the key question here is, you know, are social media companies like newspapers and make editorial decisions and therefore our First Amendment, you know, right applies, or are they like common carriers of the past, like telecoms?

JOAN BISKUPIC, CNN LEGAL ANALYST AND SUPREME COURT BIOGRAPHER: That's right, Poppy. And I think that's why you saw this unusual 5-4 split with Justice Elina Kagan, a liberal over with the conservative justices.

HARLOW: Yes.

BISKUPIC: It's both - I think this reflects that this is such a preliminary stage at this point and it's such a big question. It goes right down to what kind of First Amendment protection applies to these large social media companies. Are they like common carriers? Is Texas comparing the media companies to telegraph, telephone, some cable operators who wouldn't have the full, robust First Amendment protection that a newspaper or other entity that would be making editorial and content choices would be.

Now, I'm sure that both sides thought this was, you know, too early to sort of even hint at where they would go at this, but they took different positions about how to handle it at this point. The majority clearly saying, put this on hold. We don't even want to see it tested in any way. Whereas the dissenters who wrote, and I should make clear to our viewers that Justices Sam Alito, Neil Gorsuch and Clarence Thomas all said that they would want to see this law take effect so they could see how it would play out and they were sympathetic to the Texas argument that the media companies are more like common carriers, whereas Elena Kagan did not join that and I think she just wanted to separate herself from that position there.

Poppy.

SCIUTTO: You know it's notable, the court put this on hold while they consider the larger issue. They did not put the Texas abortion law on hold while they considered the larger issue. Is there an inconsistency there?

[09:55:02]

BISKUPIC: Well, I guess that's in the eyes of the beholder, Jim.

Yes, you know, like -- look at what's happened in Texas. Boy, Texas is the scene of so much, isn't it.

SCIUTTO: Yes.

BISKUPIC: And, you know, women and privacy rights have been completely rewritten in Texas because that law has gone forward. This law had not even, you know, been tested yet, but, yes, that's an interesting comparison and one that shows you kind of where the court is at these days, very much controlled by conservatives.

HARLOW: Joan, thank you so much. Joan Biskupic.

Brian Stelter, we appreciate it.

Ahead, a CNN exclusive as we ask the Uvalde school district police chief about reports that he has failed to respond to Texas DPS request for a follow-up interview on the school shooting.

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