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Key Inflation Measure Slows Slightly, Remains Uncomfortably High; Biden To Visit Saudi Arabia, After Previously Calling Kingdom A "Pariah"; Hunter Biden's Ex: Hunter Had Financial Control; Committee Members At Odds Potential Criminal Referral To DOJ. Aired 3-3:30p ET

Aired June 14, 2022 - 15:00   ET

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

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[15:01:17]

VICTOR BLACKWELL, CNN HOST: Top of the hour on CNN NEWSROOM. Good to be with you. I'm Victor Blackwell.

President Biden says that he has a plan to tackle the soaring inflation that is plaguing this country, but he says Republicans are getting in his way.

(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. Jobs are back, but prices are still too high. COVID is down, but gas prices are up. Our work isn't done.

(END VIDEO CLIP)

BLACKWELL: The President also warned that it's going to take time for prices to come down as Americans struggle to buy, well, everything: groceries, gas, cars. A key economic indicator shows that the pace of inflation lowered just slightly in May, but the Producer Price Index is still up above 10 percent.

This afternoon stocks are mixed, S&P 500 dipped into bear market territory yesterday and now everybody's watching the Federal Reserve because economists predict the central bank will raise interest rates. Again, CNN Business Reporter Matt Egan is with me now.

Matt, let's start with this inflation report. The President says he has a plan, it's going to take time. What do we do until then?

MATT EGAN, CNN REPORTER: Yes, until then, unfortunately, it looks like prices are going to stay pretty high. Today's report measured wholesale prices. This is prices for goods and services before they reach consumers. It's a good way to measure how much inflation is coming down the pipeline. And unfortunately, it looks like a lot more inflation can produce the prices up 10.8 percent year-over-year. The good news is that is that slight improvement from what we saw in

April and it is down from the record high in March but no one is going to be celebrating because this is still way too high. One way to think about it is before December, there was never a month where there was double digit increases for this index, which launched in 2010.

Now, we've had them six months in a row. This is going to keep pressure on the Federal Reserve to do something significant to try to get inflation under control.

BLACKWELL: And that 10th of a point slip, that's not enough to glean anything important from.

EGAN: I don't think so.

BLACKWELL: Yes. All right. Let's talk about what's coming tomorrow. This decision on the interest rate hike expected question is by how much?

EGAN: Well, all of a sudden in the last few days, because inflation has gotten so much hotter, now economists are expecting the Federal Reserve's going to do something that they haven't done since 1994, raise interest rates by three quarters of a percentage point.

BLACKWELL: Wow.

EGAN: And that is because they're trying to get inflation under control. They're trying to slow the economy down. Remember, the Fed moves the economy by either lowering interest rates when it wants to speed the economy up, making borrowing cheaper or raising them when they're trying to slow things down. They're going to be raising them again tomorrow and that's going to lift mortgage rates, credit card rates, student debt, everything. And the whole idea here is to try to tap the brakes on the economy.

The - what they wanted to do was to kind of move very gradually here, right? Only slowly increase interest rates, but they can't do that because inflation is so hot. The problem though is the harder they hit the brakes in the economy, the greater the chance of an accident that accidentally causes a recession.

BLACKWELL: All right. We'll see what the decision is. We'll know by this time tomorrow. Talk to me about crypto, what's going on here?

EGAN: The crypto is in a meltdown right now. I mean, the crypto market is pretty turbulent even during normal times. But given these recession fears, inflation fears, no one really wants to hold the volatile asset right now. So we've seen Bitcoin really crash below 23,000 AS you can see.

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Keep in mind it started this year at around 46,000, so down by 50 percent and we've seen these crypto exchanges have to take drastic actions. Celsius Network. Yesterday, they paused transactions, citing, "Extreme market conditions." Binance, the largest crypto network for a few hours also pause some of its transactions. I think it's just sort of another reminder of how, despite all of its promise, crypto is still a pretty new area. It's kind of untested and during scary times, you're going to see investors back away and prices go pretty wild.

BLACKWELL: All right. Matt Egan, thank you.

EGAN: Thank you, Victor.

BLACKWELL: All right. Let's discuss with the director of the National Economic Council, Brian Deese.

Brian, welcome back. So let's start here, 800 points off the Dow yesterday, S&P in bear market territory, consumer confidence at the lowest in 70 years, lower than the Great Recession, lower than the stock market crash of the '80s, lower than after 911. What can the White House do or will it do to instill some confidence in the American people in the economy?

BRIAN DEESE, DIRECTOR, NATIONAL ECONOMIC COUNCIL: Well, it's important that first level set on where we actually are economically. And we are in a transition, we are moving out of what has been the strongest economic recovery in modern American history, to what can be a more stable period of growth, where we don't have to sacrifice all of those economic gains.

And the key, I think, here is that we face real challenges and prices being first among them, but we also have real economic strengths. The strength of our labor market, the strength of household balance sheets where notwithstanding people are reporting low confidence. They are also reporting record highs in terms of financial stability, their own personal financial stability.

Look, these are unique times, but we have to figure out how we can build on those strengths as we drive this transition. There's lots of reason to believe that we can do that, but the single most important thing we can do is what the President laid out today, which is to focus on how we can bring down costs for families and bring down the federal deficit. That's what the president - the plan the President laid out today. That's every action that he is taking is consistent with that and that's what we're focused on.

BLACKWELL: Has he exhausted every option unilaterally?

DEESE: Well, what you can see in the President's approach is that wherever he has executive action, where he has tools that he can use, he is prepared to deploy that. He's done that by lowering the cost of internet bills for 50 million families. He's doing that by lowering the cost of housing by building more housing supply.

There's also places where he needs Congress' help. For example, we need to lower the cost of shipping goods. You've seen it, those ships that are waiting outside of our ports. Lower the cost of shipping of those goods so that they don't add to the cost that you pay at the grocery store or you pay at the department store.

He called on Congress to do that in the State of the Union. The House and the Senate have passed those bills. President's going to sign that into law. There's other places where we need Congress's help like lowering the cost of prescription drugs. But the President's basic approach is the same where he has tools, he will act. And where he needs Congress, he's going to say we need to make this priority number one.

BLACKWELL: Why are there still arrows in the quiver? I mean, you've been on, what, halftime - half a dozen times this year and we always talk about what options are still available and you say, well, those are still on the table. Why is anything unilaterally to bring down prices still sitting on the table?

DEESE: Well, as we respond to circumstances and circumstances change, we will consider all options. But I want to be very clear, this president has made history with historic uses of executive authority to go directly at the problems we're facing. So in the wake of Putin's invasion of Ukraine, the president rallied the world and announced and used executive authority to make the largest release from the Strategic Petroleum Reserve.

He has, again, used his executive authority in creative ways. And we're going to continue to look at all of those ways. But we're also going to evolve as circumstances evolve. So some of these issues that were not on the radar screen three months ago will come on the radar screen feed because things have changed.

I'll give you a concrete example. Right now, a lot of the retailers actually over ordered and rather than not having enough inventory, they actually have too much inventory and that's why some of them are beginning to discount things like electronics and apparel. That changes the calculus in terms of what we need to do in the supply chain. That's also good news for consumers because it means in those categories, they'll see some price reductions.

BLACKWELL: Let me talk about gas prices a new high, I believe it's $5.02 today per gallon for regular. I understand that you met with the CEOs of Exxon, Chevron, if not the CEOs, executives from those companies at their request. Why did they want to meet with you and what did you talking about?

DEESE: Well, we've been engaging with those CEOs and CEOs of other major oil and gas companies for months now, frankly, as Putin began amassing troops at the border to try to understand where they were and understand what it would take for them to increase production in the near term.

[15:10:02]

One of the real issues right now on the radar screen is refinery capacity, so not only how much oil we're producing but how we can turn that oil into gasoline and diesel and other outputs. We don't have enough refinery capacity right now. Those companies took about a million barrels today of that capacity offline during the pandemic before the President took office.

So part of the conversation has been about what they are going to do to actually bring that capacity online. And the President's been very clear, if there are concrete specific things that the federal government could do to help. We're prepared to consider those but we also need to see those companies who are right now, because of the war, recording record profits to invest to those resources, invest those resources and bringing that capacity back online.

BLACKWELL: All right. Brian Deese joining us from the White House. Thank you, Brian.

DEESE: Thank you.

BLACKWELL: President Biden will visit the Saudi Kingdom next month. The trip that officials say will include some form of engagement with the Crown Prince that then-candidate Biden blamed for the murder of Washington Post journalist Jamal Khashoggi. In fact, the intelligence community determined that he was responsible.

In 2019, a Democratic debate, President Biden, then-candidate was asked if he would punish senior Saudi leaders.

(BEGIN VIDEO CLIP)

BIDEN: I said at the time, Khashoggi was, in fact, murdered and dismembered and I believe in the order of the Crown Prince. And I would make it very clear, we were not going to, in fact, sell more weapons to them. We were going to, in fact, make them pay the price and make them, in fact, the pariah that they are. There's very little social redeeming value of the - in the president government in Saudi Arabia.

(END VIDEO CLIP)

BLACKWELL: Well, the news of this trip is creating some concerns within the President's own party, including Senate Majority Whip Dick Durbin.

(BEGIN VIDEO CLIP)

SEN. DICK DURBIN (D-IL): I know he has a tough job dealing with gasoline prices, trying to find ways to find new sources and supplies to bring down inflation and the energy sector and Saudi Arabia is a major player, full stop. So I have mixed feelings on this and if the President called me I'd say, "Mr. President, you can't trust these people. Their standards are not our standards. Their values are not ours."

(END VIDEO CLIP)

BLACKWELL: CNN's Kaitlan Collins is at the White House. Kaitlan, talk to me about what's behind this decision from the White House.

KAITLAN COLLINS, CNN CHIEF WHITE HOUSE CORRESPONDENT: I think it's pretty clear that you see what gas prices are now, over $5 on average across the United States. Oil prices, obviously, extremely high and this is something that has been an acute problem for this White House and one that has really consumed the President's domestic agenda. He's talked about how higher prices have been affecting that, a sapping strength for Americans.

And I think that is why you're seeing this change in this position that the President had had where he wanted to keep Saudi Arabia at an arm's length. He had made multiple promises on the campaign trail to make them a pariah state, accusing, of course, them of a flat out murder of the journalist Jamal Khashoggi who was killed and that is something that the CIA concluded was done with the approval of the Saudi Crown Prince and now he is preparing to go and meet with him next month.

And so it's raised a lot of questions for the White House, even some criticism from Democrats, people who are typically allies of this President raising questions about why to go and meet with this - and meet with the Saudis, meet with the Crown Prince while in Saudi Arabia.

And so also it's raised the question of whether or not President Biden is going to confront Saudi leaders over the death of the journalist Jamal Khashoggi. And this is what John Kirby who is a spokesman at the National Security Council said when he was on CNN earlier today and asked about bringing up Jamal Khashoggi murder, specifically.

(BEGIN VIDEO CLIP)

JOHN KIRBY, PENTAGON PRESS SECRETARY: The President obviously respects that there's different views about this trip and he understands that. But he also understands his responsibilities to the American people on a range of national security issues and we've already talked about several of them. That's what this trip is all about.

We always talk about human rights when we go and we visit counterparts around the world. It's a key component of the President's foreign policy. You can't have an effective foreign policy without it being rooted in values. And the President will obviously represent those values to all counterparts in all ME (ph).

(END VIDEO CLIP)

COLLINS: So the White House when faced with these questions about how the President could go from on the campaign trail, saying so clearly how he feels about Saudi Arabia to now going to meet with the Crown Prince in Saudi Arabia has said, it's more about just oil. It's about national security interests. They've pointed to the fact that other presidents have met with the Saudi leadership. That is true. But, of course, this president was so strong in his words about them on the campaign trail.

One thing I should note, they will not be meeting in the capital of Riyadh. They'll instead be meeting in a port city when he goes, Victor, just about a month from now.

BLACKWELL: All right. Kaitlan Collins with the latest from the White House. Thank you, Kaitlan.

It is Election Day in several states. We'll tell you how key races in Nevada are setting the stage for a battle to control Congress.

And as the Justice Department investigates Hunter Biden's financial dealings, we're hearing from his ex-wife, what she is revealing about the couple's finances, next.

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BLACKWELL: It's primary day for several states today including the battleground of Nevada. Now, President Biden won that state by fewer than three points and now former President Trump wants to flip it back to red, he's getting involved, backing candidates in the gubernatorial and Senate races, also as the Secretary of State campaign moves on that race features a supporter of Trump's baseless claims of 2020 election fraud.

CNN's Kyung Lah has been talking to voters in Las Vegas. What are they telling you?

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KYUNG LAH, CNN SENIOR U.S. CORRESPONDENT: Well, let's start with the U.S. Senate race, because that's really where we're going to see the stage set, Victor, for what it will look like in November for control of the U.S. Senate. This is essentially on the Republican side, because the incumbent here is unchallenged.

The Republican side is seeing a two-man race. The first is Adam Laxalt. He is the former attorney general. He has Trump's endorsement and he believes that he is going to be the candidate. He has been delivering a closing message of economics and saying that he is looking to the general end to attack the Democrat who is in office.

But he is seeing a challenger, a underdog, his name is Sam Brown. He is a retired Army captain. And Brown says that he has grassroots support and he is counting on dissatisfied Republicans who might push him over the line. Take a listen.

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KELLEY CARR, NEVADA REPUBLICAN VOTER: It's tough. Laxalt is - he's the favorite, I suppose. But I think I'm interested in seeing something new. I think most of us are just tired of the same people running over and over and/or the families of the same people running over and over. But at the same time, I like both of them for a lot of reasons, so I'm just really not sure.

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LAH: But what that voter does say and she is a registered Republican. She says that she is really very confident about what's going to happen here in the state of Nevada as she looks to the general election. And you are hearing that from a lot of Republicans and Democrats here who are heading to the polls at this particular polling place, Victor, Sen. Catherine Cortez Masto really one of the most endanger senators in the entire country. The race in November will be challenging for her, say, her supporters.

BLACKWELL: All right. Important day as we look ahead to November and the balance of power in Congress. Kyung Lah for us in Vegas. Thank you, Kyung.

Hunter Biden's ex-wife says that she buried her head in the sand when it came to the couple's finances. The president's son is the focus of a Justice Department investigation into his financial dealings. Kathleen Buhle spoke to ABC about their situation.

(BEGIN VIDEO CLIP)

AMY ROBACH, ABC NEWS: It was in 2003 when Hunter returned from rehab the first time and he tells you something about the tax situation. What did he tell you?

KATHLEEN BUHLE, HUNTER BIDEN'S EX-WIFE: That we owed money in taxes, but that he had set up a payment plan and he wasn't worried.

(END VIDEO CLIP)

BLACKWELL: CNN White House Correspondent Kate Bennett is live in Washington with more. Hello, Kate. What else did she say?

KATE BENNETT, CNN WHITE HOUSE CORRESPONDENT: Well, this is of course, interesting. It drags on this Hunter Biden scandal. Now, his ex wife, Kathleen Buhle, has written a memoir and she does talk a lot about just how in the dark she really was about Hunter's business dealings and most importantly their own marital situation, financially. Let's take a listen to what she said this morning.

(BEGIN VIDEO CLIP)

ROBACH: You say you weren't really involved in the finances at all.

BUHLE: This was one of the harder parts for me to write and to acknowledge. It's embarrassing to say that I seated all financial control to my husband.

ROBACH: Do you know why you did that?

BUHLE: I liked the nice thing is and I didn't want to think about the cost at which they were coming.

(END VIDEO CLIP)

BENNETT: Now, again, this is important because as you said this investigation by the DOJ is ongoing into Hunter's financial dealings, his business dealings, his taxes, understanding that better is part of this larger scope that sort of comes attached with President Biden all from the campaign till now.

Now, Kathleen Buhle also says that she is well aware through their marriage that Hunter Biden acknowledged he was from an important, prominent political family that he used that to his advantage. She didn't explicitly tie any of his business dealings to his relationship with his family or his father.

But she did say writing this book was cathartic. They were married for 24 years. He, of course, has acknowledged his addiction troubles and this is something that she wanted to get out and it's the next step on this Biden family saga, Victor.

BLACKWELL: One piece of a larger puzzle. Kate Bennett from Washington, thank you.

The House just passed a bill to extend security protection to Supreme Court justices and their families. Now this comes, of course, as we watch these protests at homes of several justices and after one man made threats against Brett Kavanaugh. The Senate already passed the bill and will now head to President Biden's desk. He is expected to sign it.

Well, is it a house divide, the top two members of the January 6 Committee give conflicting answers on whether they will criminally refer Donald Trump or anyone else to the DOJ.

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BLACKWELL: The House committee investigating the January 6th insurrection is now navigating its first public disagreement. This is over the potential of criminal referrals from its findings to the Justice Department. CNN Senior Legal Analyst Elie Honig joins me now, former state and federal prosecutor. He also wrote the book on Bill Barr, Hatchet Man: How Bill Barr Broke the Prosecutor's Code and Corrupted the Justice Department.

Elie, good to have you on this specifically. Let's start here with the conflict within the committee, what do you see?

ELIE HONIG, CNN SENIOR LEGAL ANALYST: Yes, a decidedly mixed message coming from the committee here. Now, Chairman Thompson was asked yesterday, will you be making a formal criminal referral over to the Justice Department. Here's his response. He said, "No, you know, we're going to tell the facts. If DOJ looks at it, and assumes that there's something that needs further review, I'm sure they'll do it." So he said no, no formal criminal referral.

And just after that, Rep. Cheney came out and said, "The January 6th Select Committee has not issued a conclusion regarding potential criminal referrals. We will announce a decision at an appropriate time."

Now, I want to say this, this is important, a criminal referral, and I'm using quotes here on purpose, has zero legal impact.

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Politically, maybe it has some effect, but DOJ does not need a formal criminal referral in order to do anything.