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Inflation Surged 9.1 Percent; Trump Tried To Call Witness; Biden Arrives In Israel; Bruce Riedel Is Interviewed About Biden's Trip. Aired 9:00-9:30a ET

Aired July 13, 2022 - 09:00   ET

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

[09:00:32]

POPPY HARLOW, CNN ANCHOR: Good morning, everyone. I'm Poppy Harlow.

JIM SCIUTTO, CNN ANCHOR: And I'm Jim Sciutto.

This just in to CNN. New numbers from the Consumer Price Index last hour show inflation surged 9.1 percent year over year in June, pushed up, in part, by high gas prices.

HARLOW: And these new numbers not only mark an inflation high in the pandemic, it's the highest inflation we've seen since 1981. It is also higher than experts had been forecasting as recently as just yesterday.

Our Matt Egan is with us.

This is bad. This is bad - It's bad. It's worse than the White House thought and there's no way - I mean every American is suffering so much.

MATT EGAN, CNN BUSINESS REPORTER: Yes, absolutely. I mean, Poppy, we were bracing for a bad number, but this is way worse than we even anticipated. I mean we haven't seen 9 percent inflation since the 1980s.

And this means that, you know, the cost of living is going up, right? Paychecks are not going as far because prices keep go higher.

And this is happening across the board, right? Gasoline prices, obviously, 60 percent more expensive to fill up your car than a year ago, according to this inflation report.

HARLOW: Yes.

EGAN: Food prices up by 10 percent, the most since 1981. Shelter, rent, home prices have gone up.

And, you know, this is not just a problem for main street, right? This is not sitting well with Wall Street. We saw the moment these numbers came out,

Dow futures went down. The Dow is on track to open down by more than 300 points. Nasdaq figures down by 2 percent. Investors are worried that the Federal Reserve is going to have to go big again -

HARLOW: Another big cut.

EGAN: By raising interest rate hikes, not just at the meeting in late July, but also perhaps another really big rate hike in September. And the problem, of course, is that the more the Fed does, the greater the risk that they overdo it and cause a recession.

HARLOW: Yes. Yes.

SCIUTTO: So, Matt, we've been hearing from administration officials for some time that at some point this is going to peak. You know, it's just around the bend.

And we have, to be fair, we had the numbers up there, seeing gas prices come down for the last month fairly significantly. Do the numbers show, do the economists you speak to, look at this as a peak moment or do they just not know?

EGAN: They don't really know. I think that's the honest answer. I mean we've had so many false starts here where we expected inflation was going to peak and then it didn't, in part because of the war in Ukraine.

But the good news is that gasoline prices have come down. And that is not captured in today's report, right? The national average is now $4.63 a gallon for regular gas. That's not cheap.

But, as you can see, it is down significantly, off by more than 30 cents over the past month. So that's going to help. And, again, that is not captured in today's report.

So, who knows, maybe we're going to look back and say the June 2022 inflation report was the worst of this inflation crisis. I don't know. But certainly we hope that for families the cost of living starts to go down, because it's just way too high right now.

HARLOW: It's way, way too high.

Matt, thanks very much for breaking down those new numbers, that just came in, for us.

Meantime, the January 6th committee is now working on a more collaborative relationship it appears with the Justice Department.

Chairman of that committee, Bennie Thompson, says the panel will likely share evidence once those hearings are completed after the committee initially rejected the DOJ request for witness deposition transcripts to come immediately.

SCIUTTO: Yes, there have been times throughout this where it looks like the committee is ahead of where the DOJ is. This comes as Vice Chair Liz Cheney says the committee has informed the DOJ that former President Trump tried to contact a witness. (BEGIN VIDEO CLIP)

REP. LIZ CHENEY (R-WY): After our last hearing, President Trump tried to call a witness in our investigation. A witness you have not yet seen in these hearings.

That person declined to answer or respond to President Trump's call, and instead alerted their lawyer to the call. Their lawyers alerted us. And this committee has supplied that information to the Department of Justice.

(END VIDEO CLIP)

SCIUTTO: CNN justice correspondent Jessica Schneider joins us now.

Jessica, it's not the first time there's been an allegation of Trump attempting to tamper potentially with witnesses. What more did we learn?

JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: Yes, that's right, the vice chair talked about it when Cassidy Hutchinson testified. And we don't - we have not heard any response yet from the Justice Department.

But in addition, we did hear later on from Chairman Bennie Thompson saying that the committee is finally handing over information to DOJ based on their hundreds of interviews they have done, just as the federal investigation, the criminal investigation, is really ramping up.

[09:05:02]

So what the committee did yesterday, they're continuing to build on their theme that Trump has repeatedly told his claims of election fraud were baseless and that it was Trump who encouraged the violence at the Capitol.

So we saw the committee present never before seen texts in a draft tweet that indicates the march to the Capitol was, in fact, pre- planned despite Trump's repeated insistence he was not in control of the crowd and that it was just a spontaneous protest.

So, there's this one. The committee obtained this draft tweet from the National Archives where Trump really planned to blast out the instructions to march to the Capitol after that rally.

The tweet was actually never sent, but it's this message from one of the rally organizers on January 6th that does raise some question about possible coordination with Trump or officials to inspire this violence.

So, this is from Kylie Kremer (ph). And the text said, POTUS is going to have us march there, the Capitol. And then she continues that Trump is going to just call for it unexpectedly.

And we even saw in some of these texts how Trump's former campaign manager, Brad Parscale, he blamed Trump for the deadly violence that ensued. He wrote this text to Trump's former spokeswoman saying, a sitting president asking for civil war.

I have lots of faith. He said that Trump's rhetoric killed someone, and that likely making reference to Ashley Babbitt, who was fatally shot by a Capitol Police officer when she tried to breach the chamber.

So, all of this new evidence coming out. As we also heard behind the scenes details about a heated White House meeting more than six hours long where White House officials tried to tamp down on the conspiracy theories that were pedaled and pushed by people like Sidney Powell and Michael Flynn.

Here it is.

(BEGIN VIDEO CLIP)

PAT CIPOLLONE, FORMER TRUMP WHITE HOUSE COUNSEL: I saw General Flynn. I saw Sidney Powell sitting there. I was not happy to see the people in the Oval Office.

UNIDENTIFIED MALE: Explain why.

CIPOLLONE: I don't think - I don't think any of these people were providing the president with good advice. And so I didn't understand how they had gotten in.

SIDNEY POWELL, FORMER TRUMP CAMPAIGN ATTORNEY: Cipollone and Hershman and whoever the other guy was showed nothing but contempt and disdain of the president.

CIPOLLONE: And they were asking one simple question, as a general matter, where is the evidence? So --

UNIDENTIFIED MALE: What response did you get when you asked Ms. Powell and her colleagues, where is the evidence?

CIPOLLONE: A variety of responses based on my current recollection, including, you know, can't believe you would say something - you know, things like this.

Like, what do you mean where's the evidence? You should know. Yes, and things like that. Or, you know, a disregard, I would say, a general disregard for the importance of actually backing up what you say with facts.

(END VIDEO CLIP)

SCHNEIDER: And this is actually the first time that we've heard from Pat Cipollone, from his taped testimony. Jim and Poppy, we know he finally sat down with the committee on Friday.

And there's going to be a lot more that's going to come out from him in the hearing next week. The committee sort of previewed to that. At lot more from his perspective inside the White House pushing back against these conspiracy claims. Guys.

HARLOW: Jessica Schneider, thank you very much.

Joining us now to talk about what we saw in this hearing yesterday, Harry Litman, former U.S. attorney and current legal affairs columnist for "The Los Angeles Times," and Doug Heye, a Republican strategist, former communications director for the RNC.

Good to have you both.

Harry, what do you think? I mean what -- how direct or not direct enough legally speaking were the links made between these extremist groups and former President Trump yesterday?

HARRY LITMAN, FORMER U.S. ATTORNEY: It's getting pretty direct, Poppy. So, first, that extraordinary meeting that goes six hours from 6:00 p.m. to midnight shows that Cipollone there is the sort of grown-up in the room and all the grown-ups in the room have been completely sidelined in favor of this motley crowd of Sidney Powell and the like.

Just after the meeting end is when Trump sends out that tweet. So he fastens on his strategy, his sort of one remaining maybe only superpower of calling out the cavalry. And it has an immediate impact.

And we now see much better why, in the previous hearing, he was to irate, even desperate, not to be permitted to go to the Capitol.

It had been part of the plan. It already was communicated somehow -- through whom we have to find out - a couple days in advance that this was going to happen and he, obviously, envisioned himself at the head of a frothing mob marching on the Capitol itself.

So that plan was formed in the complete absence of any sort of grown- up intervention and the mover here is plainly Donald Trump.

SCIUTTO: Doug Heye, Republican strategist, you speak to Republicans frequently, voters and officials. Is this wounding the former president's political prospects for 2024?

[09:10:06]

DOUG HEYE, REPUBLICAN STRATEGIST: It is. And we know that it is because we see angry responses from Trump, angry statements from Trump. Certainly with the hearings last week, when he responded, I never even met this woman, barely knew her, things like this, we know that he's angry about it. We know that it's having an effect.

It's not having a dramatic effect political in the polls. But what we're seeing is an erosion, a slow erosion of support, that also gives a lot of Republican candidates, potential candidates, who are looking to run in 2024, more of a lane, more of an avenue to do so. And that's because of his weakened status right now.

Look, he's still the alpha dog in the Republican Party, he's just less of an alpha dog today than he was three or four weeks ago. HARLOW: But, Doug, let me just ask you, I mean, you wrote a really

fascinating opinion piece a few days ago about this basically saying, now is the time for Republican lawmakers to dump Trump, your words.

But isn't, even beyond Trump, the - one of the real issue here for the Republican Party and our democracy what people believe is truth in fact? I mean you're still confronting our latest polling, 70 percent of Republicans in your party that do not think Biden was legitimately elected.

SCIUTTO: Yes.

HARLOW: And this Monmouth poll that shows, you know, in -- a few months ago 33 percent of Republicans in June -- a year ago, I should say, thought that they - this was an insurrection, right?

HEYE: Yes.

HARLOW: Thirty-three percent. And now just 13 percent of Republicans do. So, even through these hearings less Republicans believe what we all saw with our own eyes happening on TV on, you know, January 6th.

HEYE: Yes, it's a real problem. And I wish I could tell you I'm smart enough to identify what the solutions are. It's easy to identify the problems, as you've just laid out.

The Republican Party has a real problem here moving forward. Not politically. You know, the elections still look to be, by and large, positive for Republicans. The new inflation numbers will certainly add to that.

But there's a core of something rotten at my party, and it's the willingness to either believe a lie or, worse sometimes, know that it's a lie and continue to proceed and go down that avenue.

SCIUTTO: Yes.

So, Harry Litman, intent, speaking to Doug's point there, intent is essential to establishing seditious conspiracy.

Is convincing himself, I'm speaking of Trump here, over the objections of his senior advisers, Bill Barr, Cipollone and others, and without any evidence, right, is that enough to clear him of intent?

I mean because theoretically you could convince yourself of anything, right, especially if it serves your interests.

LITMAN: You could, but it won't fly here for a number of reasons. First, of course, a jury could just disbelieve him. Everyone is saying one thing, any responsible voice, and he chooses to not even believe but pursue the other.

But, remember, the intent here, Jim, is to do the illegal act. The illegal act is interfering with the proceedings or is to forcibly try to prevent them from happening. You can't do that even if you believe you won. If you won - if you believe that, you go to court, as he did 60 times,

unsuccessfully. The bar on intent has long since been passed.

Now, that view that he has might have some political force, but as I say, I think a jury and prosecutor could conclude it doesn't fly. But it's really not the intent in question.

The intent in question we have a-plenty, which is his knowing what he's - what you're not allowed to just go in and break up a congressional proceeding.

SCIUTTO: Yes. Yes, you'd like to think that.

Harry Litman, Doug Heye, thanks so much to both of you.

HEYE: Thank you.

LITMAN: Thanks, Jim. Thanks, Poppy.

HARLOW: Thanks, gentlemen.

Still to come - of course.

Still to come for us right now, President Biden has just landed last hour in Israel, kicking off a critical first trip of his presidency to the Middle East. He will soon sit down with Israel's defense minister. We'll take you live to Jerusalem.

SCIUTTO: And disturbing, just damning surveillance video shows Uvalde officers retreating from gunfire. Even at one point taking time to use hand sanitizer.

This as they waited for more than an hour in the hallway outside the classrooms where 19 children and two teachers were murdered. Just amazing to see this.

(COMMERCIAL BREAK)

[09:18:28]

HARLOW: Welcome back.

So, right now, President Biden is on the ground in Israel. This is his first trip to the Middle East as president. He just finished speaking at the arrival ceremony there in Tel Aviv. He was greeted by the new prime minister, Yair Lapid.

Listen to a bit of what he had to say.

(BEGIN VIDEO CLIP)

JOE BIDEN, PRESIDENT OF THE UNITED STATES: I am proud to say that our relationship with the state of Israel is deeper and stronger in my view than it's ever been. And with this visit, we're strengthening our connections even further. We have reaffirmed the unshakable commitment of the United States to

Israel's security, including partnering with Israel on the most cutting-edge defense systems in the world.

(END VIDEO CLIP)

SCIUTTO: This is a critical foreign trip for Biden. His four-day visit includes stops in Israel, the West Bank, and also crucially Saudi Arabia.

Our Wolf Blitzer is in Jerusalem covering the president's visit there.

And, Wolf, you heard President Biden there say the U.S.-Israel relationship is stronger than it's ever been. I wonder, is that true? And what does the president hope to accomplish on this visit?

WOLF BLITZER, CNN ANCHOR: Well, certainly on a military to military relationship, it's stronger than it's ever been before. The countries are deeply, deeply connected, and now Israel has been brought into the U.S. military's central command that also involves all of the Arab countries in the Middle East. So that relationship is indeed stronger than it's ever been.

The key right now is what is President Biden going to achieve in his talks with the Israelis. Then he's going to meet with the Palestinian leadership and the West Bank, President Mahmoud Abbas.

[09:20:02]

He'll be going to Ramallah and Bethlehem to meet with Palestinians.

And I thought it was significant, Jim, and I think you will agree, that the president went out of his way in his opening remarks, when he landed at Ben Gurion Airport, was to underscore his still commitment to what's called a two-state solution.

Israel, alongside a new state of Palestine. He thinks that's the best solution for the Israelis and the Palestinians. And he made it clear, that's what he's attempting to achieve.

Although I'm not sure he's going to do what earlier administrations have done and worked diligently in trying to re-establish those peace talks between the Israelis and the Palestinians.

But he made it clear, the U.S. would support the creation of a new, independent Palestinian state living alongside Israel. And he underscored the deep commitment the U.S. has to Israel as an independent Jewish state and a democratic state. And -- but I thought it was significant he underscored the need for a two-state solution.

What's also going to be critical is what does he achieve, if anything, when he's in Saudi Arabia. I know he would like to see the Saudis increase oil production to reduce the price of gas. That's a significant development.

He, earlier, as all of our viewers remember, he said that he would continue to see the Saudis as a pariah state because of the Saudi leadership's involvement in the murder of the journalist, Jamal Khashoggi. And so we'll see how that unfolds.

But I know one of his top goal right now, I've heard this from his top U.S. officials, national security officials, diplomatic officials, is he wants to see if he can normalize the relationship between the Israelis and the Saudis along the lines of the normalization of relations that Israel has achieved with the United Arab Emirates, with Bahrain and Morocco.

He'd like to bring the Saudis into that arrangement. If he can do that, that would be a major, significant achievement on this visit. We'll see if he - if he - if the Saudis are willing to play ball. The Israelis certainly would like that to happen. We'll see if the Saudis are ready.

SCIUTTO: That would be momentous. No question.

Wolf Blitzer, good to have you there in Jerusalem.

Please stay with us.

We're also going to bring in Bruce Riedel. He's a senior fellow in the Center for Middle East Policy at the Brookings Institute, also served as senior advisor on south Asia and the Middle East for four presidents.

Bruce, good to have you on this morning.

BRUCE RIEDEL, SENIOR FELLOW IN CENTER FOR MIDDLE EAST POLICY, BROOKINGS INSTITUTION: Good to be with you, Jim.

SCIUTTO: Speaking about the onward trip to Saudi Arabia, you've called his visit to Jetta there completely unnecessary. Why?

Bruce, you hear - you hear --

RIEDEL: To show that's -

SCIUTTO: Just one more time checking, can you hear - can you hear me? It's Jim Sciutto.

RIEDEL: I can hear you fine.

SCIUTTO: Beautiful. OK.

I was saying regarding the president's visit to Saudi Arabia, you've called that visit to Jetta completely unnecessary. And I wonder why you believe that.

RIEDEL: Because most of the things he wants to accomplish in Saudi Arabia can easily be done by secretary of state and secretary of defense.

He's already down-playing expectations for what's going to come out of the Saudi visit. His advisers are saying the Israelis - the Saudis are not going to recognize Israel.

That that's going to be a long and difficult process. We might make some small movement in the direction of more overflights from Asia to Israel through Saudi air space. But that's not a real break-through in the relationship.

The other focus that they've talked about is getting oil prices down. The Saudis don't have that much excess production right now to actually impact the world oil market.

SCIUTTO: Yes.

RIEDEL: And as demand keeps rising around the world, as we receding from Covid, it's very, very difficult to see oil prices significantly going down over the course of the next few months.

SCIUTTO: As you know, Bruce, the backdrop to all of this is, obviously, the consistent human rights abuses by the Saudi regime, the murder of journal Jamal Khashoggi.

Fred Ryan, the publisher of "The Washington Post," who Khashoggi wrote for, wrote this really compelling op-ed this week saying Biden's trip to Saudi Arabia rose our moral authority.

And what struck me from it is that he said, OK, if Biden is going to have this meeting with Mohammed bin Salman, he should make some asks. He should send over a list of political prisoners to be released as a precondition of the encounter. He said that he should insist on meeting face to face with Saudi dissidents.

I mean Fred Ryan is saying, if you're going to bring attention to this country, if you're going to have this inevitable photo-op with MBS, the CIA assessed ordered the murder of Khashoggi, at least have these demands. So far we haven't seen those demands from the White House. Is that a mistake?

RIEDEL: I think it is a mistake. We should be putting more pressure on the Saudis on these human rights issues. Let's face it, the Saudis need us now, much more than we need them.

[09:25:02]

They face a region in turmoil. The one place in addition where I think the president could make some real accomplishments on this trip is securing the cease-fire in Yemen.

The seven year old war in Yemen has been one of the most bloody wars we've seen in Middle East history, with literally tens of thousands of young children starving to death because of the Saudi blockade of Houthi controlled northern Yemen.

I think one of the things the president should shoot for on this trip is to make the cease fire permanent and to lift the blockade totally of Yemen to allow food, medicine and other critical supplies to flow into what is the poorest country in the Middle East. Jamal Khashoggi's last op-ed for "The Washington Post" was about the

war in Yemen. The president wants to do something to remember (ph) Jamal Khashoggi's legacy, do it on Yemen.

SCIUTTO: Let's talk about Israel, the president's arriving there in the midst of a presidential campaign, an election campaign there, the fifth for Israel, fifth elections in just four years' time.

Lurking in the background, Netanyahu may be able to stage a comeback. He deliberately aligned himself and his country with the Republican Party. You've got a Democratic president here.

What are the potential consequences of this election for the relationship?

RIEDEL: They're very big. Return to Netanyahu as prime minister I think will really put a damper on the relationship.

At least the political relationship. The military to military relationship is insulated from these political forces.

One thing the president is not doing is he is not actually showing any effort to achieve the two-state solution which he called for. I think that's a mistake. I think we ought to be trying to get some kind of political process going between Israelis and Palestinians.

I successfully predicted in advance the -- second intifada (ph), and I see the same conditions developing in Israel today. Severe unhappiness among the Palestinian population. Tension and violence rising.

The political process is unlikely to achieve a settlement anytime in the near future. We all know that.

SCIUTTO: Yes.

RIEDEL: But at least having a process allows some steam to escape out of the building of tensions. With no process between Israel and the Palestinians, in addition, that means he's not going to get the Saudis on board.

The Saudis have said from the beginning they will support the so- called Abraham Accords if there is progress on the Palestinian front. Well, if the Americans aren't even trying on the Palestinian front, you're not going to get Riyadh on board.

SCIUTTO: Yes.

HARLOW: Bruce Riedel, thanks very much.

The administration is saying, look, other administrations have gotten into trouble with their promise the moon on this and not been able to deliver, but this is a change in tactic for sure.

Thanks, Brice, very much.

Still ahead, video that you have to see, and it breaks your heart, and it leaves you speechless.

We're going to take you to Uvalde, Texas, where families are reacting to this surveillance video that has been released by the newspaper there of the response or lack thereof inside of Robb Elementary during that mass shooting.

It shows officers retreating when they hear gunfire and waiting more than an hour to confront the gunman.

SCIUTTO: Yes, as children were dying in that classroom.

We are moments away from the opening bell on Wall Street. Futures pointing down this morning. This as markets react to that latest inflation report out last hour. Numbers showing the consumer price index, a new 40 year high, 9.1 percent year over year in June. Investors anticipating, though, that June could be the peak for inflation.

Stay with us.

(COMMERCIAL BREAK)