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Justice Department Examining Trump's Role in January 6?; Interview With Council of Economic Advisers Chair Cecilia Rouse; Federal Reserve Set to Raise Interest Rates. Aired 1-1:30p ET
Aired July 27, 2022 - 13:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: The next trial date, by the way, John, is going to be on August 2.
JOHN KING, CNN HOST: What an update from Fred Pleitgen.
Fred, thanks so much. We will stay on top of that case as it develops.
This quick programming note. Join CNN this weekend as we explore the extremes of Patagonia's far south, where the land is a wind-blasted tundra, but the sea is teeming with life. "Patagonia: Life on the Edge of the World" Sunday 9:00 p.m. Eastern and Pacific right here on CNN.
Thanks for your time today on INSIDE POLITICS. We will see you back here tomorrow.
Ana Cabrera picks up our coverage right now.
ANA CABRERA, CNN HOST: Hello, and thank you so much for joining us. I'm Ana Cabrera in New York.
Next hour, a critical moment, as the Fed waives its next rate hike. What it decides will impact the way you spend, borrow and save your money. What you need to know
Plus, Brittney Griner behind bars and testifying for the first time in Russian court, her message to the judge.
And he's negative, President Biden out of isolation and stepping in front of the cameras, as brand-new polling finds most Democrats want someone else to run in 2024. More on all of that later this hour.
But, first, the critical decision set to drop soon from the Federal Reserve.
And CNN business correspondent Rahel Solomon is here with us.
OK, Rahel, walk us through what's to come in the next hour or so and why it really matters.
RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: So the expectation is that Chairman Powell will raise rates about three-quarters-of-a-percent. We know that's not one to one in terms of borrowing costs, right,? We're not going to see borrowing costs increase 75 basis points, or three-quarters-of-a-percent, but it does influence largely all of these categories. So, borrowing costs overall will be going up and continue to.
CABRERA: OK, I really want our viewers to better understand what this really means for them, for their wallets.
And I know you have pulled a few examples. So what do you got?
SOLOMON: Yes, I have been working the phones all day.
So let's start with credit cards, right? So we have already seen credit card rates accelerate quite rapidly this year. So, right now, the average credit card rate is about 17.5 percent. According to Bankrate, if you are holding a $5,000 balance, which is the national average, by the way, you have a current APR of 17.25 of a percent.
If you make the minimum payments, it's going to take you about 15.5 years to pay off. Let's just say, hypothetically, that this goes up three-quarters-of-a-percent to 18 percent. It's now taking you 16 years, and it adds almost $300 of interest to your balance.
So you see it there.
CABRERA: That's significant, yes.
Let's talk about mortgages. I mean, we have already seen mortgage rates accelerate quite significantly this year. They have actually come down from 6 percent peak, but they started at about 3 percent at the beginning of the year. And this is because of what the Fed's been doing.
I should say, however, that the chief economist of the Mortgage Bankers Association told me, just a prediction, but he thinks that we have reached our peak, that 5.5 might be where mortgage rates go toward the end of the year. But we have already seen the impact in that. And that, of course, has led to mortgage demand really fall off a cliff, at 22-year lows, according to the Mortgage Bankers Association.
So what do you do with all of this information? Well, for one, if you have a credit card, pay it off, if you can. If you can't, perhaps consider transferring high balances to a zero rate balance transfer card, try to lock that in, right, or consider a lower fixed-rate personal loan, because, as we know, that credit cards are already expensive.
The interest rate is already high, but it is going higher. So that's one thing to consider. If you're in the market for a home right now, we're starting to see some cooling. But if you're still going to buy, lock in a lower rate as soon as you can, because overall prices are going up and borrowing costs are going up. CABRERA: All right, thanks so much for all that good information,
Rahel. People are really feeling this.
A key economic adviser from the White House is going to join us in just a moment.
But, first, let's look at the very real struggle for millions of Americans as prices keep rising.
Natasha Chen reports from Los Angeles.
ANA DURON, STRUGGLING TO PAY BILLS: I was not expecting this.
NATASHA CHEN, CNN NATIONAL CORRESPONDENT (voice-over): An unexpected car accident, an unexpected loss of her full-time job just before an unexpected rise in food and gas prices have all created an entirely different life than what Ana Duron was used to.
She now turns in recycling for cash.
DURON: You get $1.37 a pound.
CHEN: And works part-time as a caretaker for a resident of a senior senator to add to her unemployment check. But that barely covers the bills.
DURON: This is my mortgage, $825.24. And this is my car payment of $482.99.
CHEN: And those are just some of the fixed costs. She lives in Riverside County, where the metro area's annual inflation rate in June was likely around 10 percent, higher than the national average.
That's because people moved to the relatively more affordable Inland Empire during the pandemic, driving up population and demand for goods and services.
LEO FELER, UCLA ANDERSON FORECAST: Not only have prices gone up, but folks in the Inland Empire can't really shift to saying, well, I guess I will be able to work from home a little more in response to higher gas prices, right?
They are the types of workers that generally have to actually commute into their workplaces.
CHEN: And Duron needs to drive for her work as a caretaker. Filling up her car a month ago cost her $94. And groceries?
DURON: I don't buy meat anymore. I just eat tuna.
CHEN: She had to take out money from her 401(k) to cover credit card debt and sold jewelry that she bought for herself when times were better.
DURON: I don't want to go bankrupt. I don't want to lose my house. I don't want to lose my independence or the little moral or spirit that I have to make my own payments.
CHEN: But it's hard to keep up good spirits when she has to rely on weekly charity.
DURON: Normally, I tend to get here in like 20 minutes until 7:00, so that, this way, I can be in line.
CHEN: Duron is not the only one trying new things to make ends meet. The CEO of Feeding America's Riverside-San Bernardino branch, which supplies most of this food, knows that high prices may affect donors ability to give over the next year.
So the organization has moved up the start of its gleaning project.
ANNISSA FITCH, FEEDING AMERICA: Today, we are picking beets, onions, carrots.
CHEN: To pick produce from a local urban farm and from neighbors' back yards.
FITCH: And then there are some babies.
Gleaning does provide a relief for our organization and for recipients that do depend on just receiving access to produce.
CHEN: Shoppers are also finding new ways to get deals in the grocery store. Riverside resident Lily Yu is a brand ambassador for Flashfood, an app that lists discounted grocery items nearing their sell by date.
LILY YU, BRAND AMBASSADOR, FLASHFOOD: Hummus.
CHEN: With a sign language interpreter, Yu showed us how much she saves.
YU: I got some mangoes, an apple. And all of this fruit was $5. It also helps reduce food waste. So I'm able to help like with the climate, which was wonderful, as well as save money.
CHEN: For now, Yu have to drive an hour to certain Vallarta supermarkets where Flashfood is available. But the CEO says they're aggressively trying to reach more parts of California.
While Yu is happy to drive her hybrid car, Duron has to stay close to Riverside because of fuel costs. She's applying for jobs that don't require a long commute and that would allow her to still look after her 82-year-old mother at home.
DURON: I still have to be strong enough for my mom, my girls, and the person that I take care of.
CABRERA: That was Natasha Chen reporting.
And with us now from the White House is Cecilia Rouse. She's chair of the Council of Economic Advisers.
Cecilia, thanks for taking the time.
We just heard from Ana Duron, who's collecting plastic, she's selling precious jewelry, no longer buying meat, only eating tuna, just to make ends meet every month. And she's not the only one.
Talk to her and millions of Americans waiting to feel relief. Realistically, when is that relief coming?
CECILIA ROUSE, CHAIR, COUNCIL OF ECONOMIC ADVISERS: Look, there's no question that inflation is the biggest challenge in our economy right now.
Despite the very strong labor market and other signs that we're -- there is continued economic activity and some underlying strength as we go into the headwinds posed by the pandemic and the war of Russia against Ukraine, we know that we have got elevated prices.
And so that is why the Federal Reserve, which has the dual mandate of containing inflation, while maintaining maximum employment, is working so aggressively to address inflation. You noted that they will be making an announcement today.
And Chairman Powell has indicated that he is steel-eyed on this and is going to do what it takes to bring inflation under control.
CABRERA: And so are you worried, though, that raising interest rates by another three-quarters-of-a-point -- there's talk of it may be going up a whole point -- are you worried about how that is impacting consumers?
ROUSE: Well, look, I worry about the economic situation all the time. It's why I went into economics. I was mostly concerned about those who have the least.
So there's no question that our -- the current economy, and especially the current inflation, is hardest for those with the least. So, yes, I'm worried, but I will say this, which is that given the record growth we had last year, which was largely due to the efforts of the federal government and the Federal Reserve to get us through the pandemic, capped off by the American Rescue Plan that was signed by President Biden, we come into these headwinds from a position of strength.
Never before have we seen the Federal Reserve increasing interest rates when we have such a strong labor market. So am I concerned? Absolutely. But we -- at the same time, we have somewhat of a buffer for the Fed to address inflation without causing an out-and-out recession.
CABRERA: But, if I recall, the Federal Reserve didn't expect inflation to get this bad to begin with. We heard from former IMF chief economist Ken Rogoff just today on CNN.
Listen to something he had to say.
(BEGIN VIDEO CLIP)
KENNETH ROGOFF, FORMER CHIEF ECONOMIST, INTERNATIONAL MONETARY FUND: It's really unusual when they raise interest rates buy this much of this fast.
And it tells you that they think they got behind the curve and they're trying to catch up. They're trying to bring down inflation, which has gone over 9 percent.
(END VIDEO CLIP)
CABRERA: Cecilia was the Fed behind the curve and why should Americans have confidence that the Fed is on track right now?
ROUSE: So I'm not going to comment on Federal Reserve policy. That is the independence that we here at the White House have from the Federal Reserve.
But I will say that the inflation we're facing right now is due to the pandemic, which was 100 -- that once-in-a-100-year catastrophe, which affected the entire world. It's why we see inflation afflicting -- it's a global problem.
It's been exacerbated by Russia's unprovoked war against Ukraine. So the Federal Reserve has been trying -- has been looking at the data from a position where our economy is very unusual, because we just haven't been here before.
But they are focused on trying to address this. Yes, it's not a given that they will be able to pull this off without causing -- without causing a recession. But because of the buffer that was generated by the historic growth we had last year, the very strong labor market that we have got, there is a path by which we can -- the Fed could generate what Alan Blinder, my -- a colleague of mine at Princeton.
I'm a professor at Princeton, and -- when I'm not on leave here at the White House -- has called a softish landing. So there is a path. Not to say it's going to be easy, but that is what they are attempting to do.
CABRERA: I know there's only so much in the president's control. We do know President Biden's going to speak with Chinese leader Xi Jinping tomorrow for the first time since March.
Some experts have suggested lifting tariffs on Chinese imports could help lower prices for the average American. Will the president bring up lifting some of these tariffs on this call?
ROUSE: Well, I'm not going to speak to what the president is going to cover during the call. But what -- I will say this, is that the president is focused on
trying to address inflation. He has been primarily focused on reducing the cost at the pumps. So, for example, he's generated a historic release from our Strategic Petroleum Reserve. He's working with our partners and allies for them to do the same.
It's why he's called on Congress to put in place a federal gas tax holiday and calling on states to do the same. It's also why his economic policy has been so foundational to expanding economic growth. Even if we look at the bipartisan infrastructure law, we are currently putting in place and making investments that will reduce broadband costs, that will improve supply chains, which are part of the inflation challenge.
That's what we're doing right now. And I will say that Congress can sign and send to the president -- or they can pass and send to the president right now a bill to reduce prescription drug costs for Americans, improve health care access, and to improve our supply chains through the CHIPS bill.
CABRERA: OK, so coming back to the tariffs, though, I understand you don't want to get ahead of the president, but you're his economic adviser.
Should he ease back on those tariffs? What would you advise him?
ROUSE: So, the tariffs -- we understand that there are many economic impacts of those tariffs.
And it's not a secret that many people have estimated that rolling back those tariffs could have some impact on the price level. But at the same time, the president has to make these decisions in a very much larger context. He is studying the problem. He's studying the issue, and will be making a decision in the coming days, weeks.
He will make a decision after he's fully and thoroughly considered the -- his options.
CABRERA: You have expressed confidence in the feds. You say inflation is one of the president's biggest priorities right now in terms of improving the economy.
And we know it's already at 9 percent right now, these nearly historic levels, at least most recent history. And so if the goal is to get back to 2 percent, I'm going to come back to my first question, which is, when can Americans see that?
I know it takes time, but let's just say even getting to 4 percent inflation, instead of 9 percent, when can we expect that? Are we talking later this year? Are we talking 2023, 2024?
ROUSE: So, the 9 percent inflation number that you're citing includes energy and fuel, which can be quite volatile. Even since those data were collected, gas prices have fallen by 14 percent.
And so, for next month, we expect that headline inflation will reflect that decrease. Commodities, in terms of food, which is the other part of headline inflation, have also been coming down. So that's volatile month to month.
We know supply chains are easing. We know the Federal Reserve is doing what it can to ease up and to cool the economy. So we are -- I am confident that, over time, we will see inflation come down. Given the war in Ukraine, it's hard to really predict exactly when, but we do know over the coming next couple of weeks, we expect gas prices to continue to fall, which should generate some relief for American families.
But it's hard to get much further than that, again, given the unprecedented challenges that we're facing globally.
CABRERA: Cecilia Rouse, I really appreciate your time. Thank you very much for joining us.
ROUSE: You're welcome. Thank you.
CABRERA: New developments today in the Justice Department's January 6 criminal probe. We will take a closer look at what or who the DOJ is investigating for possibly trying to overturn the last presidential election. And one name that keeps popping up, Donald Trump.
Plus, WNBA star Brittney Griner back in court and speaking to the judge. What Griner said about what happened in the hours after her arrest on drug charges.
And, later, is House Speaker Nancy Pelosi Taiwan-bound? Some national security officials hope not. Details this hour. Stay right there.
CABRERA: There are new major developments in the Justice Department's criminal investigation of the January 6 attack on the Capitol.
And there's new reporting that federal investigators are asking questions about former President Trump and his efforts to subvert the election.
Keep in mind, until now, there's been almost no sign that investigators were looking directly at the actions of Trump himself.
Now, according to "The Washington Post," prosecutors have asked hours of detailed questions about meetings Trump led in December 2020 and January 2021, his pressure campaign on Pence to overturn the election and what instructions Trump gave his lawyers and advisers about fake electors and sending electors back to the states.
In addition, Justice Department investigators in April received phone records of key officials and aides in the Trump administration, including his former Chief of Staff Mark Meadows. Meantime, "The New York Times" is reporting on previously undisclosed
e-mails among Trump advisers. They were discussing their scheme of fake electors, and they actually used the word fake.
So there's a lot to digest here. Let's break it all down.
And joining us now is Norm Eisen. He was counsel to the House Democrats during Donald Trump's first impeachment trial. He was also the Obama White House ethics czar. And Elie Honig is a CNN senior analyst and former federal prosecutor.
Guys, it's always great to have both of you, especially together.
Norm, let me start with you, since you're right next to me.
When you take a look at all this new reporting, what does it tell you about the focus of the DOJ investigation right now?
NORMAN EISEN, CNN LEGAL ANALYST: Well, Ana, clearly the fake electors scheme is at the center of the web of activities that they're looking at, because, come on, you can't -- these are official government documents.
You can't falsify or forge or counterfeit an official government document.
CABRERA: It's hard evidence too.
EISEN: It is. It's a smoking gun.
So -- and then we have these e-mails where even the people who are organizing it are calling them fake electors. And we have the evidence from the 1/6 Committee that Donald Trump was personally involved, that video, for example, from the chair of the RNC saying he asked her for her help in getting the fake electors together.
And now we know from "The Washington Post" that these kinds of questions are being asked about Trump's involvement, as well as Mike Pence. He comes into this scheme because Trump wanted Pence, apparently, to use these phony certificates to blow up the January 6 meeting of Congress and block the genuine electors.
So the strands of the story are starting to come together. That's what their interested in.
CABRERA: And, yesterday, we reported how it was Pence's chief of staff, as well as another Pence aide who had testified before the DOJ.
Today, we're getting word that other White House officials have also been contacted by the DOJ.
But, Elie, even if the Justice Department is asking detailed questions about the former president's actions or about conversations with the former president, which "The Washington Post" is reporting, you say that doesn't necessarily mean Trump is a target, right?
ELIE HONIG, CNN LEGAL ANALYST: Correct, Ana.
So think of it as sort of different steps in the chain here. The first step is, are they asking questions about you? And I think what's really interesting about the new reporting is who is going into the grand jury.
The fact that it's Marc Short and Greg Jacob, they are far closer, far more insiders than anyone who we know of who Donald Trump -- who DOJ has spoken to so far And, of course, this morning, Alyssa Farah said on "NEW DAY" that other White House officials are in contact with DOJ too. That's crucial.
But you start with asking questions. If the investigation progresses to a certain point, then a person can become a target, meaning somebody who prosecutors believe is reasonably likely to be charged. Then you move on to an indictment.
And then, of course, the biggest challenge of all is converting an indictment into a conviction. So this is important, but it is very, very preliminary.
CABRERA: But what would indicate then that Trump is a target? What are you watching?
HONIG: Yes, so it could be a couple things.
DOJ sometimes sends people target letter, saying, dear Donald Trump, we now consider you to be a target. There's some discretion in that. DOJ doesn't always do that. But that could be something that happens. We also need to watch who else goes in to testify in the grand jury. I'm sure we will have more reporting in the coming weeks about who that is, what types of questions they're asking, perhaps.
So it's sort of a holistic evaluation. There won't necessarily be any specific moment in time, other than if there's a target letter between now and what might be -- we don't know -- but what could be an indictment.
CABRERA: Attorney General Merrick Garland keeps getting asked about indictments. He was just asked about a possible indictment of a former president or even a candidate for president. Take a listen.
(BEGIN VIDEO CLIP)
MERRICK GARLAND, U.S. ATTORNEY GENERAL NOMINEE: We pursue justice without fear or favor. We intend to hold everyone, anyone who was criminally responsible for the events surrounding January 6, for any attempt to interfere with the lawful transfer of power from one administration to another accountable.
(END VIDEO CLIP)
CABRERA: So, I hear that then I feel like that's just become his sort of go-to response. But, Norm, I know you know Garland. You have known him for some 30
years. You say you hear a level of specificity in that answer.
EISEN: I do want, Ana, the lawful transfer of power.
When he says he's going after anyone who interferes with the lawful transfer of power, we haven't heard those magic words before. Elie is right. It's a mosaic of evidence.
But another way to think of that is like a jigsaw puzzle, you know, when you're putting the jigsaw puzzle and the images start to emerge? All of this evidence, including Garland using these words for the first time, suggests to me there's one person who was, we know, in charge of attempting to interfere with that lawful transfer of power.
It's the person who's most responsible under our Constitution and laws for the lawful transfer of power. We have never seen a person in this office do this before in the history of the United States. That's the president of the United States, the ex-President Donald Trump.
So I think those were sharper words than we have heard before pointing at Trump. of course, Elie is right. We have to see where we go from here. But I think the indicators are really pointing at severe legal peril for Donald Trump.
CABRERA: But what about timing here, Norm? Because, obviously, this stuff always takes time.
There's another election right around the corner, and Merrick Garland seemed to indicate that there was no time frame that he was going to have to be pigeonholed to. But is there a time crunch?
EISEN: Well, there's a pincers movement on Donald Trump. And the two pincers are moving at different paces.
The federal investigation, I feel confident we're not going to see charges, if there are any against Trump, in 2022, because of the pendency of the political season. In Georgia, though, talk about target letters. We have a prosecutor, the DA, Fani Willis, who's doing a parallel investigation because of the alleged wrongs in Georgia.
They were severe. And that prosecutor has already issued 16 target letters to fake electors. That suggests she's moving more quickly. She said she'd like to wrap up this year. We may see something faster on the state level.
CABRERA: Let me bring this question to you, Elie, because between the DOJ investigation and that investigation in Georgia in Fulton County, who do you think is better situated legally to criminally charge a former president, if that were to happen?
HONIG: That's a job for DOJ, in my view, both politically, practically and legally.
And let me explain why. First of all, DOJ has vastly superior resources and expertise. DOJ has over 10,000 federal prosecutors, the entire FBI and other federal law enforcement apparatus. The Fulton County DA, I admire the effort, but they have a grand total of about 50 attorneys. They do not specialize in complex fraud cases.
But, also, there's a really important legal wrinkle here. If a county DA, the Fulton County DA or any other DA, tries to indict a former president, the first move that former president will make is to go to the federal courts and say, no, no, no, you cannot do that under our Constitution. You can't have elected partisan local county level DAs indicting people for anything that touches on the presidency.
Now, I know Norm is going to say, yes, but that argument doesn't fly here. However, we don't know because it's never been raised. No one's ever tried to indict a former president. And beyond dispute, that's an argument that can only be made against a county level DA. It's not an argument that can be made about -- against DOJ.
And that's why, in my view, DOJ is really uniquely situated. Only they have the institutional ballast, credibility and I think legal standing to make this kind of case.
CABRERA: Norm, he teed it up for you. I will give you the final thought.
EISEN: Elie, if DOJ has superior resources, why is Fani Willis so far ahead of them, including with those 16 target letters?
The reason Elie knows what I'm going to say about his legal wrinkle is because he and I have often discussed that off-camera. There is no federal immunity for a purely political attempt to interfere with an election.
And you're left out an important point, my friend.
And Elie is my very good friend. We consider ourselves the general counsel department for -Ana.
CABRERA: It's true.
EISEN: On the political front, a prosecutor in Atlanta is much further away from Joe Biden. Merrick Garland and DOJ are in more proximity. He, after all, is the A.G. of Donald Trump's opponent.
So there's a political advantage to moving in Georgia. She's a very determined, effective prosecutor. She's brought the cases like this before with the Atlanta teachers cheating scandal. I think she can do the job. And I think she will do it first.
CABRERA: I got to leave it there, guys. We will continue the conversation another day.
And you're right. You are like general counsel for me, because I rely on you as a resource so often to really understand all of these intense stories that we have been covering over the years now.
Thank you so much, Norm Eisen, Elie Honig. It's great to have you both with us. HONIG: Thanks, Ana.
EISEN: Thanks, Ana.
CABRERA: Still ahead: Brittney Griner makes her case. The WNBA star is on trial in Russia and testified in her own defense just hours ago.