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Interview With Former U.S. Attorney General Alberto Gonzales; Inflation Rising. Aired 2-2:30p ET
Aired June 14, 2022 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
VICTOR BLACKWELL, CNN HOST: Hello. I'm Victor Blackwell. Welcome to CNN NEWSROOM. Alisyn is off.
So, President Biden says that he has a plan to fix the soaring inflation that's gripped this country, but he warns it's going to take time. Prices are still very high for people across this country. The Producer Price Index -- this is a key inflation indicator -- it lowered slightly in May, but it's still more than 10 percent higher than it was 12 months ago.
One positive sign in the report, wholesale food prices showed no month-over-month increase. So that's good. This afternoon, stocks, they're mixed, after the S&P 500 dipped into bear market territory yesterday. Economists predict the Fed will raise interest rates again in another attempt to battle rising inflation.
CNN business correspondent Rahel Solomon is here now with me.
So this PPI report, why should people at home care about this? What's it matter for us?
RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: Well, it's interesting, because PPI doesn't get as much attention as the Consumer Price Index, which we talked about on Friday.
But it's really important because it's factory level inflation, right, what producers are experiencing. And we know what companies are feeling we will likely see a few months down the line in terms of consumer prices.
BLACKWELL: Yes. Yes.
SOLOMON: So even though we did see some slight moderation in categories like food, the top-line number is really troubling here, because we already know, after Friday's report, that there were no signs of moderation, that there were signs actually of acceleration in inflation.
And what we have now with this report is a sign perhaps of more pain to come down the road.
BLACKWELL: OK. So now, tomorrow, we're expecting this big announcement on how much -- by how much the Fed will raise interest rates, maybe three-quarters- of-a-percent?
What are we expecting?
SOLOMON: So, before the last 48 hours, half-a-percent was largely the expectation. And even that is more than the Fed traditionally does.
They usually raise rates in a more gradual fashion by about a quarter- of-a-percent. So now we're hearing from different reporting that 75 basis points or three-quarters-of-a-percent is on the table. And what that means for U.S. consumers and businesses, to be honest, is that the cost of borrowing for pretty much everything is going up or is about to go up.
Think student loans, credit cards, auto loans, home mortgages. I mean, if you are in the market for home right now, it is hard not to notice how much mortgage rates have spiked, certainly this year, but even in the last week. So that's what that means for us consumers.
What it means in terms of the Fed and what that could be signaling, there is a feeling that the Fed realizes that inflation is proving to be much more stubborn and much more persistent than they had hoped.
The last time we heard from Jay Powell, well, he said 50 basis points or half-a-percent. And so the fact that we're now getting this messaging that three-quarters-of-a-percent is now what they feel like is necessary really means there's some concern that inflation is proving to be quite sticky.
BLACKWELL: All right, we will know by this time tomorrow?
BLACKWELL: All right, Rahel Solomon, thank you very much.
President Biden addressed the economy and rising inflation at a union convention in Philadelphia this morning. He spent a significant portion, though, of that speech attacking Republicans.
Let's go now to CNN White House correspondent M.J. Lee.
M.J., the president says he has a plan. What's his message?
M.J. LEE, CNN WHITE HOUSE CORRESPONDENT: Well, Victor, we are now well into year two of the Biden presidency. And it is very clear that inflation is not going away anytime soon.
And we are seeing this play out in all the ways that you guys just talked about in terms of gas prices, consumer goods cost, and also the stock market now veering into bear market territory because the investors are so freaked out about inflation concerns.
And what we saw the president do today is travel down to Philadelphia and try to emphasize once again to the American people that bringing down inflation is his top domestic priority. And, as we have seen him do in the past, he talked about some of the actions that he has taken to try to address this issue, like releasing oil from the Strategic Reserves.
But he was also pretty honest that it is just going to take more time for inflation to actually come down. You were just talking about how stubborn this issue is. Now, the other thing that we saw from the president when he spoke in Philadelphia was, he sort of highlighted some factors that he said were not in his control that were sort of to blame, right?
So he talked about the war in Ukraine. Of course, that has had a big effect in bringing up gas prices. He also put a lot of blame on Republicans in Congress, who he said has been standing in the way of his legislative agenda.
Here's what he said.
(BEGIN VIDEO CLIP)
JOE BIDEN, PRESIDENT OF THE UNITED STATES: The problem is, Republicans in Congress are doing everything they can to stop my plans to bring down costs on ordinary families. That's why my plan is not finished and why the results aren't finished either.
The fact is, Republicans in Congress are still in the grip of the ultra MAGA agenda.
(END VIDEO CLIP)
LEE: Now, one of the clearest indications that we have seen from the White House that inflation is such an urgent issue is, just this morning, the White House officially announcing that the president is going to be traveling to the Middle East next month.
And, as a part of that trip, he is going to be traveling to Saudi Arabia and will be meeting in some form with the Saudi crown prince. Now, this is, of course, a really stunning development, because, remember, Saudi Arabia is a country that the president in the past has said he wants to make a pariah. He really wants the country and the crown prince to pay a price for its human rights abuses, including, of course, for the killing of journalist Jamal Khashoggi.
So this trip and the announcement of this meeting really raising a lot of questions, getting the White House a lot of criticism for now trying to do a reset with a country that clearly the White House no longer wants to make a pariah. It is very dependent on this country because it is one of the biggest oil producers in the world, Victor.
BLACKWELL: Yes, we will see how the White House navigates that exchange.
M.J. Lee for us at the White House, thank you very much. Joining us now is Betsey Stevenson. She is a former member of
President Obama's White House Council of Economic Advisers, and she's a former chief economist for the Labor Department. Also with us is Michelle Singletary, syndicated personal finance columnist for "The Washington Post" and author of "What To Do With Your Money When Crisis Hits: A Survival Guide."
We need the guide now. Michelle, Betsey, good to see both of you.
Betsey, let me start with you.
And, last month, Jay Powell said that 75 basis points, increasing the interest rates by three-quarters-of-a-percent was not something that was actively considered. What's your expectation now? And would that be enough to slow inflation?
BETSEY STEVENSON, FORMER COUNCIL OF ECONOMIC ADVISERS MEMBER: Well, I think what Jay Powell has said is that he's going to read the data, and that they are going to react to the news they get. And they did get some news that inflation was much higher than I think people expected in this latest read.
A lot of people have talked about inflation being stubborn or not going away, I think the real concern is that it's actually spilling into services, which has really so far not had the higher inflation that we have mostly seen in things like energy and durable goods.
And when you start to see this spillover, the rising prices -- and we saw veterinary services up nearly 8 percent. Of course, we saw airline tickets rising in the double digits in a single month. So we see these -- these start to -- these price increases start, and I think the Fed's going to have take that information very seriously.
I think that's why that it's reasonable to think that they might come out a little bit stronger tomorrow with that 75-basis-point rise. I think, though, to put it in perspective, we knew over the next several months they were going to be raising rates by way more than 50 basis points, right? We expect them to raise rates multiple times.
STEVENSON: I think what we're now thinking is, they're going to go a little bit faster tomorrow.
And then we will have to, again, keep reading that data and see where we are, in order for them to figure out where they need to go from there. I think the biggest risk the Fed is facing right now is that people are pulling back.
STEVENSON: And if people stop buying, that's exactly what the Fed needs them to do. But if they really pull back really hard, then the Fed needs to raise rates less.
And so the whole reason of proceeding in this sort of stepwise, raise rates, look at the data, make a new decision about raising rates again, is so that they can react to the data that's coming in.
STEVENSON: So, of course, they're going to react to what we just saw this week. That's why I think we will see that 75 basis points tomorrow.
But I don't think that that's really a big difference from what they're planning over the next year.
BLACKWELL: All right, Michelle, so with potentially this significant rate increase, if I'm not buying a house, right, I'm not applying for a mortgage, how does this impact me? And then what do I do about it?
MICHELLE SINGLETARY, PERSONAL FINANCE COLUMNIST, "THE WASHINGTON POST": So, if you are carrying credit card debt, you need to get rid of that debt now, really, like yesterday.
I was talking to an expert at Lending Tree, and he expects the average rate for new credit card to go up to 20 percent. And so if you're carrying that debt month to month, it's going to cost you a whole bunch of money accumulative over these next several months. So get out of that debt as soon as you can.
If you have got any variable rate debt, you have got to do the best that you can to pay it down. Some people, things are good, and now we're picking up, we're vacationing, we're doing some things. But if you don't have an emergency fund, if you're sort of living paycheck to paycheck, and you're putting those things on credit cards, I need you to stop now.
BLACKWELL: So what do I do instead? Like, you should get a six-month emergency fund, stop putting things on credit cards. But I have a finite amount of money. The income is fixed. How do I get to the point where I'm paying off credit cards, Michelle?
SINGLETARY: Well, one thing is, unemployment is really low. I mean, you walk past any stores, if you have gone shopping, you see there's all kinds of signs for, we need to hire people. So get a second job. Get into the gig economy.
Even if you don't need all that money right now, you're like, I'm limping, but I'm OK, get it now, especially before there's a recession or anything go -- things turns really south.
So I would suggest income. And you know where I'm going, Victor. You know. You know you hate me to tell you, but I'm going to tell you anyway.
BLACKWELL: Yes. Go ahead. Go ahead.
SINGLETARY: And I will tell you anyway. No, listen, housing is the biggest part of people's budget. So if you can live with someone, if you can move back home, move back home. We have -- my husband and I have all three of our young adult children living with us. And one of them just graduated. She's going to be a teacher. So proud of her. She wants to get her own apartment.
And I'm like, no. Stay home.
BLACKWELL: Yes, keep them at home.
Listen, I tried to live with somebody in a different context. That didn't work out either.
Betsey, let me come to you on this trip to Saudi Arabia. What is the best-case realistic outcome of that meeting with the Saudis? And how would that impact, how great would the impact be on U.S. gas prices?
STEVENSON: I mean, the biggest problem that the country has faced this year is when Putin invaded Ukraine. We have got a war in oil- producing countries. And it has been an incredible shock to global energy prices and to global food prices.
And I think what President Biden and other leaders around the world are trying to do is say, like, we need to relieve the pressure on fuel prices. We need to see an increase in supply that can bring some of these prices down.
And I think it's not just the United States that needs that. I mean, obviously, since Putin's invaded the Ukraine, prices at the pump have gone up by over $1.50. People are really feeling the pinch of that. But around the globe, fertilizer prices are going up, and there are low -- low-income countries where people are risking starvation.
So we need some sort of concerted global effort to try to increase the supply of energy and fuel in order to offset that the decrease in supply that's been caused by Putin.
BLACKWELL: All right, we will see the case that the president makes when he travels to Saudi Arabia next month.
Betsey Stevenson and Michelle Singletary, thank you very much.
All right, January 6 Committee Chairman Bennie Thompson says the panel's purpose is not to make criminal referrals to the Justice Department. But several committee members disagree. There is now some confusion about what could come next.
We will speak with a former attorney general about it next.
BLACKWELL: The House committee investigating the January 6 insurrection has postponed its hearings scheduled for tomorrow. One member said that the delay is due to technical issues.
The next hearing will be on Thursday. Members say this one will focus on Donald Trump's efforts to pressure then-Vice President Mike Pence into refusing to certify Joe Biden's win.
There's also now a rift in the committee playing out publicly. The Democratic chairman of the panel said that they will not make a criminal referral to the Justice Department, while the Republican vice chair said that the decision is still TBD.
Just last hour, fellow committee member Congresswoman Elaine Luria said it is still up in the air.
(BEGIN VIDEO CLIP)
REP. ELAINE LURIA (D-VA): We're continuing to have discussions within the committee. And I would say that this is something that is a very important topic for us to decide and decide as a whole committee.
And we will make that decision and that announcement about that decision at the appropriate time.
I think we have a responsibility. We have a responsibility to the American people when we, as Congress, in this or any other investigation, if we determine there's criminal activity, that we refer that to the appropriate authorities.
(END VIDEO CLIP)
BLACKWELL: CNN's Ryan Nobles is with me now from Capitol Hill.
Ryan, let's first start with this postponement. What are you learning about tomorrow's hearing, why it was delayed?
RYAN NOBLES, CNN CONGRESSIONAL CORRESPONDENT: Yes, the committee not providing a lot of specifics for this schedule change, other than to say there were some technical issues having to do with their multimedia presentation, and also some scheduling conflicts with some of the members and witnesses.
They have said though, Victor, that the information that they plan to touch on Wednesday will just come at a later date. They're just shuffling the schedule as of right now. And the Thursday hearing, which is scheduled for 1:00 Eastern time, is still a go. So, we should still expect that to happen.
BLACKWELL: Yes, let's talk now about this what I described as a rift.
The committee up to this point has been speaking with one voice on all of these major issues. Tell us now who's saying what about a potential criminal referral.
NOBLES: Yes, they're trying to speak as one voice again, Victor, after everything that happened last night.
And it started when the chairman of the committee, Bennie Thompson, told reporters that, in his mind, that committee had decided that they were not going to issue a formal criminal referral to the Department of Justice. And after that information was put out, after we reported it, several members of the committee pushed back, saying that was not their understanding.
Congressman Adam Schiff of California said he felt differently. And then Liz Cheney, who is the vice chair, and her voice carries a lot of weight, tweeted the following. She said: "The January 6 Select Committee has not issued a conclusion regarding potential criminal referrals. We will announce a decision that at the appropriate time."
And then, later, committee staffers did send us a statement to that effect, that the committee has not settled on this decision, that it is still an ongoing process.
But, to your point, Victor, this is not something we normally see from this committee. Usually, they are all speaking from the same set of talking points. So the fact that we had a divide between different members on a topic is crucial as this one over shows that this is probably a pretty intense debate behind closed doors.
BLACKWELL: Yes, let's see if they get back on the same page.
Last one for you here now. The Capitol Police, they made a statement today about a congressman who was accused of possibly helping Trump supporters on January 5, 2021. Tell us about that.
And this, of course, became an issue because the January 6 Select Committee asked this congressman, Barry Loudermilk, for more information about this meeting he had with a group of constituents on January 5, and Loudermilk has pushed back very vigorously against the claim that he was doing anything other than meeting with his constituents on that day.
Now, the committee has not come right out and said that the purpose of this meeting was to offer up what some members of Congress have called reconnaissance tours on the day before January 6, but they have said that there is something that they find concerning about this meeting and they want to talk to Loudermilk about it.
Now, Loudermilk asked the Capitol Police to clarify what they have seen on videotape of his visit with his constituents on this day. And they did clarify. They put out a statement from the police chief, Tom Manger, that said -- quote -- "There is no evidence that Representative Loudermilk entered the U.S. Capitol with this group on January 5, 2021."
Now, that is clarifying in some respects. Now, the committee never said that they saw him take those individuals into the Capitol itself. It was just more about what they were doing in the Capitol Complex on that day. Victor, the committee has said they have more evidence to this effect
that they will reveal at some point, the committee not responding, though, to this letter from the police chief today -- Victor.
BLACKWELL: Ryan Nobles with the latest for us from Capitol Hill.
Thank you very much, Ryan.
Joining me now is former Attorney General and former White House counsel Alberto Gonzales, currently dean of Belmont University College of law.
Judge Gonzales, good to have you with me.
Let's start here with this disagreement over a potential criminal referral. In this case, considering DOJ is conducting its own investigation, is a criminal referral crucial for DOJ?
ALBERTO GONZALES, FORMER U.S. ATTORNEY GENERAL: No, not at all.
Obviously, DOJ has the authority, the attorney general has the authority to make the decision to go forward with a criminal prosecution with or without a referral.
My own sense is that the chairman probably spoke out of turn, prematurely, given the fact that, why would you make this -- such a statement or announce such a decision, when all the evidence has not been presented, all the information has not been presented to the American people?
And so I -- my own sense is, it's probably simply a misstatement. And that's why I think you see some of the confusion. But getting back to your initial question, absolutely not. Merrick Garland is going to take all of the evidence, including the evidence that is compiled by the commission, and make a decision as to whether or not criminal charges should be -- should be prosecuted.
BLACKWELL: Yes, the A.G. will make that decision.
But what is the influence, if any, of a criminal referral from this committee about this investigation?
GONZALES: Yes, I think some would say that it probably has a negative impact. It may create in the minds of certain Americans the notion that this has become politicized, since the Democrats control Congress, they have a majority within the -- this committee, and this is simply an attempt to embarrass or to hurt the former president.
On the other hand, it does give some weight in the event that the Department of Justice decides to move forward with a criminal prosecution. But, as I said earlier, they don't need this. The investigation by the department is already ongoing. And so it actually may be more harmful in this case than normally.
Let's listen to the attorney general, Merrick Garland here, his remarks after the most recent hearing. Let's watch.
(BEGIN VIDEO CLIP)
MERRICK GARLAND, U.S. ATTORNEY GENERAL: I am watching and I will be watching all the hearings, although I may not be able to watch all of it live.
But I will be sure that I will be watching all of it. And I can assure you that the January 6 prosecutors are watching all the hearings as well.
(END VIDEO CLIP)
BLACKWELL: Have you seen thus far -- and, again, we are through just a portion of the hearings that will present the information -- evidence of a crime enough to file some federal charges?
GONZALES: No. No, I haven't, which isn't to say that there -- the evidence is not there, and that the evidence will not be discovered or presented in a court of law by the Department of Justice.
But you have to remember this is not a regular criminal trial. This is one-sided. This is one side presenting information that they have gathered, but there's no cross-examination by the defense attorney. And so -- and the rules of evidence don't apply here.
And so, I mean, obviously, if you watch this carefully, it does -- it certainly paints a damning picture of an individual who did things that, if in fact are true and accurate, fully accurate, I think sends a very poor portrait of Donald Trump.
But, again, we're talking about a one-sided picture here. And this is what the attorney general has to weigh. Which part of this information or how much of this information am I going to be able to get admitted into a court of law in the event that I decide to move forward with the prosecution?
Let's talk about another former attorney general, Bill Barr. And we heard a lot from him during these first two hearings.
I first want to read, though, what he wrote when he resigned at the end of 2020, when he wrote this in his resignation letter to the president: "I appreciate the opportunity to update you this afternoon on the department's review of voter fraud allegations in the 2020 election and how these allegations will continue to be pursued. At a time when the country is so deeply divided, it is incumbent on all levels of government and all agencies acting within their purview to do all we can to assure the integrity of elections and promote public confidence in their outcome."
That was his depiction of these claims in 2020. Here's what he told the investigators with the 1/6 Committee about some of those claims. (BEGIN VIDEO CLIP)
WILLIAM BARR, FORMER U.S. ATTORNEY GENERAL: I thought, boy, if he really believes this stuff, he has lost contact with -- he has become detached from reality, if he really believes this stuff.
On the other hand, when I went into this and would tell him how crazy some of these allegations were, there was never -- there was never an indication of interest in what the actual facts were.
My opinion then and my opinion now is that the election was not stolen by fraud.
(END VIDEO CLIP)
BLACKWELL: Do you think the former A.G. should have been more transparent in 2020 when he formed those opinions?
GONZALES: You know, I'm not going to criticize the attorney general for what he wrote in 2020.
Oftentimes, you try to be magnanimous in a letter where you're announcing your departure. After all, Donald Trump gave Bill Barr a once-in-a-life -- well, twice-in-a-lifetime opportunity to be attorney general of the United States.
And so the fact that he wasn't more accusatory in that letter, to me, is nothing to be critical about. Obviously, what he said in his testimony is really quite remarkable with respect to his views about the mental capacity, the mental state of Donald Trump.
And it's something that, certainly, I think the American people should be very, very sensitive to. Obviously, Congress is going to be looking at that very closely, as will the Department of Justice.
Of course, we saw some other Cabinet members who -- I'm thinking of General Mattis -- who were a little more transparent about their feelings at the time when they resigned.
Former Attorney General Alberto Gonzales, thank you so much for being with me, sir.
GONZALES: Thanks, Victor.
BLACKWELL: All right, it's Election Day in four states. There are two key races in South Carolina, where two GOP lawmakers are fighting to win, despite defying former President Trump.
And look at this. A house collapses into the river. Record flooding hits Yellowstone National Park.