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Biden Urges Oil Companies to Work with the Administration; Fed Expected to Hike Rates; Hearings to Focus on Pressure Campaign; Republicans Close to Flipping House Seat. Aired 9-9:30a ET

Aired June 15, 2022 - 09:00   ET

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

[09:00:24]

ALEX MARQUARDT, CNN ANCHOR: Good morning. I'm Alex Marquardt, in today for Jim Sciutto.

POPPY HARLOW, CNN ANCHOR: And good morning, everyone.

Alex, we're so glad to have you.

I'm Poppy Harlow.

We have a packed show ahead. We are following a series of big stories this morning.

Hours from now, the Federal Reserve is set to potentially make its biggest interest rate hike in decades. Experts now -- pretty much there's a consensus that the Fed will hike rates three quarters of a percent, or 75 basis points, in an effort to tamp down the soaring price increases hitting consumers with inflation currently at 8.6 percent. Americans, you, we, are feeling this nearly everywhere. Nearly everything is more expensive, including namely the cost of gas, which remains at historic highs.

MARQUARDT: And the Biden administration is now taking new steps to lower those gas prices. This morning, President Biden calling on energy companies to do more, asking them to work with the administration on gas prices. We'll have more on that in just a moment.

But also this morning, the January 6th committee is teasing ahead to its next hearing, which will be tomorrow. It released a portion of a taped deposition with a former White House lawyer. Now the committee is saying that Thursday's hearing will focus on President Trump's effort to pressure then Vice President Mike Pence to block the certification of the election. We will have much more on that in just a moment.

But let's begin this morning with CNN White House correspondent Arlette Saenz.

Arlette, President Biden is making strong demands from oil companies this morning as he tries to do something about these soaring gas prices. ARLETTE SAENZ, CNN WHITE HOUSE CORRESPONDENT: Yes, Alex, President

Biden is really trying to ramp up the pressure on these oil companies, urging them to increase supply of gasoline, while also warning that the high profits that they have been seeing are simply unacceptable at a time when so many Americans are feeling the pain of soaring gas prices at the pump as they fill up their cars each day. The president, this morning, sending a letter to the CEOs of seven oil refining companies, including ExxonMobil, Shell, BP, and Marathon, just among the few. And in that letter, the president wrote, quote, your companies and others have an opportunity to take immediate action to increase the supply of gasoline, diesel and other refined products. He added, my administration is prepared to use all reasonable and appropriate federal government tools and emergency authorities to increase refinery capacity and output in the near term, and to ensure that every region of this country is appropriately supplied.

Now, a short while ago, Energy Secretary Jennifer Granholm was on our air talking about how the president is ready to use every tool at his disposal to try to produce more energy for Americans as they are seeing these soaring prices that is really hitting so many Americans pocketbooks at this moment.

Now, in recent weeks, you have really seen President Biden try to cast these high gas prices as not only being a result of Russian President Vladimir Putin's war against Ukraine, but he also has repeatedly been calling out oil companies for those high profits. And in that letter today, he really said that that is worsening the crisis for so many Americans.

Now, the White House, over the course of the past few weeks, has really tried to hone in on this issue of inflation, with the president insisting it is his top economic priority. And, of course, gas prices are one of those things that are extremely contributing to that high inflation. The president insisting that he's trying to do what he can, but there's little more that the White House can do at this moment. You know, they have pumped out more oil from the Strategic Petroleum Reserve, but they're really trying to put pressure on these oil companies.

Of course, next month, President Biden will also be traveling to energy-rich Saudi Arabia where energy production is expected to be part of the discussion. But certainly today, here at the White House, the president is trying to push -- put more emphasis on the oil companies working to ramp up supply and explain and provide some concrete ideas. There will be an emergency meeting at some point with Energy Secretary Jennifer Granholm, the president wrote in that letter as well.

HARLOW: Arlette Saenz, thank you so much for the reporting on all those fronts from the White House.

Let's bring in CNN's chief business correspondent Christine Romans and Jeanna Smialek, a Federal Reserve and economic reporter at "The New York Times."

Good morning. Thank you both very much for being here. Christine, let me begin with you.

So, I mean, pretty much the consensus is three quarters of a percent here, the Fed's going to hike.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Yes.

HARLOW: That's the most in decades. It was just May when Federal Reserve Chair Jerome Powell said, we have a good chance to have a soft or softish landing. That was then. What about now? The fear is you hike that much, we, you know, fall into a recession.

ROMANS: Yes, and the former Fed chief, Ben Bernanke, on our air this weekend, said there's still a chance of that softish landing, but the Fed's got to get more aggressive because these inflation numbers are just not showing signs of cooling off here.

[09:05:06]

So that's why you've got the Fed coming out aggressively.

And this is medicine for high inflation. Medicine that will have its own kind of painful taste for consumers, right, because it will hopefully slow the red hot housing market a little bit. But that means raising interest rates, raising the rates on all the debt you have. So consumers will feel this.

These years, Poppy, of cheap money, and an economy that favored borrowing money and not saving, there is a shift happening here now. And I think Americans need to be ready for that.

We're looking at an era of higher interest rates, which will make it more expensive for families and companies to borrow money. And that's on purpose, to slow down this overheating economy.

HARLOW: So, in terms of how quickly it can be slowed down here, Jeanna, I want your reaction to what Larry Summers, the former Treasury secretary, someone who's advised numerous Democratic administrations and who was, it turns out, quite right on inflation more than a year ago, what he said to Don Lemon last night.

Let's play it.

(BEGIN VIDEO CLIP)

LARRY SUMMERS, FORMER TREASURY SECRETARY: I'd be very surprised if we didn't still have inflation at a meaningful rate a year from now. It may well come down. I think it's probably likely to come down from the 8 plus percent range that it's been at. But, we're still going to have inflation for quite some time to come. And we're probably going to have a slowing economy as well. So, there's going to be an element of what people call stagflation in our situation.

(END VIDEO CLIP)

HARLOW: So that, Jeanna, might be a new word for folks already trying to live with this and grapple with and afford this high inflation. Can you explain if he's right on the stagflation front what that would mean for average folks and for how long?

JEANNA SMIALEK, FEDERAL RESERVE AND ECONOMICS REPORTER, "THE NEW YORK TIMES": Right. So, I think that it is clearly the case, and most economists think, that inflation is going to be high for a while, potentially well into next year.

The word stagflation traditionally is used to mean a situation where you have slow or negative growth and very high inflation. It's often implied to the 1970s when that was the case year after year.

I think many economists are hoping it won't be the case for years on end this time. It might be sort of a painful transition period, but hopefully that will be over, you know, fairly expeditiously.

I think the real question is what expeditiously means. You know, are we in for six months of adjustment, a year of adjustment, two years of adjustment, and I don't think we have a clear answer to that.

HARLOW: And to that point, Christine, you brought up Ben Bernanke, the former Fed chair, he wrote in "The New York Times" this week, the headline was, inflation isn't going to bring back the '70s. And his argument is essentially we, you know, politicians have learned from past administrations, like the Johnson and Nixon administration, the pressures put on the Fed, and from past bad policies, like wage and price setting. So those aspects of what led to the inflation crisis in the '70s won't happen now.

Can we be so sure?

ROMANS: Well, we can't be sure of anything because there's no playbook for any of this, right? I mean we thought that this was transitory inflation even six - eight months ago, and it isn't, right? We've never had this many cross currents at play in the economy in certainly in my lifetime.

Back when whip inflation now, those wind (ph) buttons in, you know, in the Gerald Ford days, that -- in the '70s, you had 12 percent inflation that went up to 14 something percent.

HARLOW: Yes.

ROMANS: We don't have that yet. And we also don't have very high unemployment, which is a key component of stagflation. The unemployment situation is still very good in this country.

HARLOW: Yes.

ROMANS: In fact, the Fed would like to have a little bit more joblessness to relieve the pressure on the economy for how high it is.

HARLOW: They'd want it - yes. I mean - yes, I think that's such an interesting and important point that, Jeanna, I think is very hard for many people to understand. You keep hearing the Biden administration touting this low unemployment, which, in a normal economy, is a great thing. However, if you want to get a handle on this inflation, that actually has to change.

SMIALEK: Yes, absolutely. And I think it's a surprise to many people. I was interviewing a librarian in Dallas yesterday and she said, aren't we already in a recession? You know, I think a lot of people think that we're in a pretty bad situation already. But really that's forward looking. You know, the unemployment rate is very low right now. It's probably going to get worse before it gets better, unfortunately.

HARLOW: Jeanna, thank you very much.

Christine, thank you both. Good to have you.

ROMANS: You're welcome.

HARLOW: We'll see what happens today at the Fed meeting, 2:00.

Alex.

MARQUARDT: A very big day.

But still to come, the January 6th committee has released a clip, teasing to its hearing tomorrow, where they will lay out what they say was a pressure campaign on former Vice President Mike Pence. We'll have those details next.

HARLOW: Also, primaries in several key states show some wins for Trump-backed candidates and some losses. We'll break down the results and the bigger picture ahead.

Also, two police officers responding to an incident at a motel outside of Los Angeles, killed in the line of duty. The latest on that investigation is ahead.

(COMMERCIAL BREAK)

[09:14:32]

HARLOW: The January 6th select committee has released a preview of its hearing tomorrow, which is expected to focus on the pressure that former President Trump and his allies placed on then Vice President Mike Pence to refuse to certify the election.

MARQUARDT: And ahead of tomorrow's hearings, the committee is teasing a video clip from the deposition of Trump campaign attorney Eric Herschmann. And in this clip he talks about a conversation that he had with right wing attorney John Eastman, who was then trying to help Trump block the 2020 election results.

[09:15:00]

Now listen to this clip of Herschmann talking about his phone call with Eastman about the efforts to appeal the election results in the state of Georgia.

(BEGIN VIDEO CLIP) ERIC HERSCHMANN, TRUMP CAMPAIGN ATTORNEY: He started to ask me about something dealing with Georgia, preserving something, potentially for appeal. And I said to him, are you out of your f-ing mind? And I said, I only want to hear two words coming out of your mouth from now on, orderly transition. Eventually he said, orderly transition. I said, good, John. Now I'm going to give you the best free legal advice you're ever getting in your life, get a great f-ing criminal defense lawyer. You're going to need it.

(END VIDEO CLIP)

MARQUARDT: Joining us now to discuss all this is CNN legal analyst Carrie Cordero.

Carrie, thanks so much for joining us today.

That is just an incredible clip, condescending perhaps, but incredible nonetheless. And it took place after the January 6th insurrection.

How important do you think it is for the committee, and for all of us, to hear from these legal insiders, lawyers inside the White House, inside the campaign, inside DOJ, to get a full picture of what was happening?

CARRIE CORDERO, CNN LEGAL ANALYST: Hi, Alex.

I think it's a really compelling piece of evidence. Probably the most compelling piece that the January 6th committee has put out yet. And that's because not only does it grab our attention, and the witness seems very open in his conversation that took place in the deposition with the committee, but also he was a Trump White House insider. And my understanding is that he was a counsel within the White House counsel's office, so he was there serving the president, in a government capacity, in a legal capacity. And his statement, as he relays it to Mr. Eastman, who was Trump's outside -- giving him outside legal advice, shows that people within the White House understood and appreciated their effort to be potentially illegal. That he was warning Mr. Eastman to get a lawyer indicates that he understood that there was legal culpability in the actions that they were undertaking.

HARLOW: And so significant to have the committee bring in legal insiders, as you know, Carrie, who were in the White House at the time.

On a separate note, the question is -- really still remains whether or not this committee will refer to the Department of Justice for any criminal charges. Adam Schiff was on CNN last night, and I want you to listen to what he said about why that may not matter in his opinion.

(BEGIN VIDEO CLIP)

REP. ADAM SCHIFF (D-CA): They shouldn't be weighted. And if they are, I don't understand why they're departing from what the Justice Department generally does.

I certainly believe there's enough evidence for them to open investigations of several people.

(END VIDEO CLIP)

HARLOW: He's basically saying, look, DOJ doesn't need a referral. Technically that's correct. We heard Merrick Garland saying this week, I'm watching these hearings. You can bet my staff is watching these hearings, that they will, quote, follow the facts wherever they lead.

Where do you think they're leading if you're sitting at the Department of Justice?

CORDERO: Yes, so I think there's a lot going on here.

So, first of all, Poppy, on the question of whether a criminal referral matters, so, yes, the Justice Department should be and we should expect that they are pursuing evidence that they are gathering through the robust investigative tools that they have available to them.

So, on one hand, yes, the Justice Department shouldn't need a criminal referral from Congress to pursue investigations. They go where the facts that they're developing takes them. On the other hand, I think there is some marginal benefit if the committee were to go forward with a criminal referral because then there might be an opportunity for them to actually get an answer back. So, in some of the contempt cases that Congress has sent over, they sent a referral and then either the Justice Department has pursued it or there was a circumstance where Justice Department sent a letter back and say, hey, we looked at it, but we're not going forward. And normally under a Justice Department investigation, you wouldn't get that response back.

So, I don't think it's required, but I think there is a marginal benefit if the committee were to do it. But there's also political risk. So if the committee were to send a referral, particularly against the former president, and the Justice Department declined to prosecute, then the considerations of the committee are purely political, how does that affect the strength of a future Donald Trump.

HARLOW: Right.

MARQUARDT: And, Carrie, we know that tomorrow much of the conversation is going to focus on this pressure on Vice President Mike Pence, which the vice chairwoman, Representative Cheney, has indicated that two federal statutes may have been broken as part of this pressure campaign. If they're going to make this case, what evidence are you going to be looking for tomorrow?

[09:20:02]

CORDERO: So the statutes that I believe the vice chair is looking at are these ones that were mentioned in a judicial opinion that were considering whether Mr. Eastman's communications could be turned over to the committee. And so they're looking at whether or not the activities were a conspiracy to defraud the United States, and also whether or not there was obstruction of Congress. So, with respect to that committee, the advisers to the vice

president, and the counselors to the vice president, obviously were intimately involved in giving the former vice president advice about whether or not he should participate in this activity to overturn the election. Their advice, what I expect to hear from them, is that they gave him very clear advice that he could not do that. That if he engaged in the surrounding conspiracy, that then he would be, number one, doing the wrong thing under the law, number two, violating his constitutional responsibilities, and, number three, potentially opening himself up to criminal exposure.

HARLOW: Carrie Cordero, thank you for making it understandable to all of us. We appreciate it.

CORDERO: OK. Thanks so much, Poppy.

HARLOW: Of course.

Still ahead, Republicans close to flipping the very first House seat since Democrats took hold of the chamber.

Plus, the results of key primaries across the country. What they tell us about the GOP's priorities in South Carolina, next.

(COMMERCIAL BREAK)

[09:26:09]

MARQUARDT: This morning, the results from several state primaries are coming in as we wait for final counts in some key races. Right now we're watching closely Texas' 34th congressional district where Democrat Dan Sanchez has conceded the race to Republican Mayra Flores.

HARLOW: A win for Flores will be a major victory for Republicans in the House. And it will be the first congressional flip for either party since 2020.

CNN's senior data reporter Harry Enten joins us.

Harry, good morning.

HARRY ENTEN, CNN SENIOR DATA REPORTER: Good morning.

HARLOW: Talk about the significant here, flipping a Democratic House district in south Texas. A big deal.

ENTEN: It's a huge deal. And, you know, we'll start right there. I know you pointed out the results there. I'm going to include all the candidates that were running in this race. And this, to me, is what's so impressive is that Flores gets that 51 percent. And she got to over 51 percent now with 97 percent of the estimated vote in. Despite the fact that there was another Republican running who got about 2 percent of the vote. So you add the Republicans together and you get to about 53 percent.

Now, why is this so impressive? Why is it so impressive that Republicans did so well in this district? Well, take a look at this vote history here. And basically you can say, OK, the Republican performances in Texas 34, Trump only got 38 percent of the vote in 2016, then in 2018 the Republican candidate for the House got 40 percent. Then Trump got up to -- look at that, 48 percent, and Flores now 51 percent. There has been strong movement among Hispanics in south Texas towards the Republican Party. And last night was just the latest example of that.

MARQUARDT: And, Harry, there were some other big races last night in swing states like South Carolina, Nevada. What else stood out?

ENTEN: Well, we'll go right to the great state of South Carolina. And I think this is really interesting because we had one incumbent, Nancy Mace, who survived a challenge from a Trump-backed Katie Arrington. Mace was very critical of Trump but did not vote to impeach him. Turns out you can be critical of Trump and still survive your primary challenge.

However, if you impeach Trump, as Tom Rice did, look at this, he only got 25 percent of the vote. The Trump-backed Russell Fry got 51 percent of the vote, my goodness gracious An incumbent getting just 25 percent of the vote.

Talking about Trump-backed candidates, let's go over to Nevada. Adam Laxalt getting 56 percent of the vote. He was, in fact, endorsed by Donald Trump. The Trump endorsement still meaning something in Republican primaries, especially when incumbents aren't running.

But here's the thing about Nevada that I think is so important. This is going to be a huge state in the fall. The general election senate. Currently controlled by the Democrats, Catherine Cortez Masto. The betting odd of who is going to win. Right now it's fairly close. But, look at that, Adam Laxalt with about a 63 percent chance of winning that race according to the betting market. So this is going to be a key race, not just last night, but going forward into the fall. If Republicans are able to win and flip Nevada, they may will - they probably will, in fact, flip the Senate chamber.

MARQUARDT: Harry, it's -

HARLOW: No one better to explain things, right, Alex? Sorry to step on -- no one better - no one better at drawing arrows in person (INAUDIBLE) on the Magic Wall.

ENTEN: I have horrible handwriting. That's the only thing that I will note. My handwriting is atrocious. But, fortunately, this technology is decent enough that I can make things relatively clear. And, of course, even if you can't read my writing, you can still read the nice block letters from the computers. Thank God for computers, otherwise I'd be screwed.

MARQUARDT: Yes, you're just -- you're just trying to take it all in. He's going so fast and just trying to -- trying to remember all this.

HARLOW: Can - can you - ENTEN: I'm trying to get in all these different races. I'm trying to inform the audience. Hopefully I went slow enough but fast enough so I was able to accomplish both tasks.

HARLOW: I'm looking over my shoulder because he's actually right there at the Magic Wall.

ENTEN: Oh, now, look, you're right over there. But, yes, I'm -- this is the magic of TV. You'd have no idea where I was. I could be in Antarctica for all you know.

HARLOW: OK, let's do that tomorrow.

ENTEN: Sounds good.

HARLOW: Thanks, Harry.

MARQUARDT: All right, Harry, thanks so much.

ENTEN: Bye.

MARQUARDT: Well, here to discuss all this is the senior columnist for "The Daily Beast," Matt Lewis, and national political correspondent for "Time" magazine, Molly Ball.

Thank you both so much for joining me this morning.

Matt, I want to start with you and where Harry left off in Nevada.

In terms of the integrity of the next elections, both the midterms coming up in the fall and 2024, you know, how they're conducted, so much of that is up to the secretaries of state.

[09:30:01]

And in Nevada there was a critical race, Jim Marchant, a former state lawmaker who has bought into the big lie.