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Russia Ready to Discuss Prisoner Swap; Trump Lawyers Talking With DOJ About January 6; Interview With National Economic Council Director Brian Deese; Democrats Moving Forward on Inflation Reduction Act; China Continues Response to Taiwan Visit; Huge July Jobs Report. Aired 2-2:30p ET
Aired August 05, 2022 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DANA BASH, CNN HOST: Hello. I'm Dana Bash. Happy Friday. Welcome to the CNN NEWSROOM. Victor and Alisyn are off today.
We begin with a stellar jobs report, that coming out this morning, revealing 528,000 jobs were added in July. That's more than doubling economists' expectations. The unemployment rate now stands at pre- pandemic levels of 3.5 percent.
President Biden celebrated the strong report last hour.
(BEGIN VIDEO CLIP)
JOE BIDEN, PRESIDENT OF THE UNITED STATES: We have now nearly doubled what we were at. We're at almost 10 million jobs, almost at 10 million jobs since I took office.
That's the fastest job growth in history. Today, there are more people working in America than before the pandemic began. In fact, there are more people working in America than at any point in American history.
(END VIDEO CLIP)
BASH: CNN business correspondent Rahel Solomon joins me now.
So, Rahel, put this into context. What do these numbers actually mean?
RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: Hi, Dana.
Well, not only did these numbers surprise to the upside, but it was base-based across the economy. When you look at the report, line after line, industry after industry saw a positive job growth, leisure and hospitality the strongest, with 96,000 jobs added for the month of July, but, look, professional services, health care and government all adding jobs.
And again, it was throughout the economy. Wages increased about 5.2 percent over the last year. And those wage gains is something that the Fed is going to be watching very closely as it tries to fight inflation. More on that in just a moment, and, as you pointed out, Dana, the unemployment rate now ticking lower to 3.5 percent, which is practically a 50-year low.
We have now tied a 50-year low. How you read this really depends on who you are. If you are a job seeker, well, this is looking pretty good for you, right? I mean, there is still very strong demand for workers right now, 1.8 open jobs for every one person looking.
If you're a policymaker, if you're a business leader, trying to make decisions, well, you're getting conflicting reports. And so a report like this, certainly for policymakers, makes the job of the Fed a lot harder to fight inflation.
BASH: Yes. Well, you mentioned one of them. And you're talking about the Fed just now.
They have been trying to cool the jobs market by raising interest rates. What do you think this will do to those calculations inside the Fed?
SOLOMON: Well, we're already hearing, Dana, from banks who are updating their forecasts for the Fed September meeting.
This increases the likelihood of another three-quarters-of-a-percent rate hike. And maybe that's feeling normal, because we have seen that the last few meetings, but that is a massive rate hike. Before the last two, the last time we saw a rate hike of that magnitude was 1994.
And the reason why this is concerning to some is because, the more aggressive the Fed has to be, the more likely it is for the Fed to make a misstep and for the Fed to trigger a recession. So that's the concern there.
BASH: Sure is. Not easy in any sense. But if you give it that context, back in 1994, that was the last time they did something that big, that really puts it in perspective. Thank you so much, Rahel.
And on Capitol Hill, Democratic Senator Kyrsten Sinema offered critical support for President Biden's long debated and delayed economic agenda after intense negotiations. She says she will move forward on the bill that would be the largest investment in energy and climate programs in U.S. history.
That means Democrats will likely have the 50 votes to push this bill through the Senate by the end of the week.
Let's go straight to CNN's chief congressional correspondent, Manu Raju, who is on Capitol Hill.
So, Manu, big, big deal for the Biden agenda. What are you hearing right now about how they're going to work this through as they go through the weekend?
MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: This is going to be a long couple of days to get this over the finish line here in the Senate.
This is going to be an action-packed weekend. And Republicans are hoping to try to amend this bill, change this bill. They have ample opportunity to do that once the voting starts as soon as tomorrow afternoon. But they will have to convince at least one Democratic senator to join them to try to change elements of this bill and, in their view, hopefully derail this bill.
But, at the moment, Democrats are united in the aftermath of Kyrsten Sinema's deal with Chuck Schumer, which was announced last night. Now, that deal was significant because Sinema had concerns about the tax provisions in this proposal, one of which was the so-called carried interest loophole.
That's a tax that affects hedge funds and private equity. She wanted that out of the bill. Now, she -- she succeeded in doing that. She also raised concerns about a tax, a corporate minimum tax of 15 percent and how companies could deduct assets, how they would be treated, the deduction of assets, of depreciated assets. She wanted a change in that after hearing concerns from manufacturers.
And as a result, to make up for the last revenue, Democrats added a 1 percent excise tax on stock buybacks. But, earlier today, Chuck Schumer made clear that he wanted to include that tax on hedge funds and private equity, but it was Sinema who insisted on taking it out.
(BEGIN VIDEO CLIP)
SEN. CHUCK SCHUMER (D-NY): But I pushed for it to be in this bill. Senator Sinema said she would not vote for the bill, not even move to proceed, unless we took it out. So we had no choice.
(END VIDEO CLIP)
RAJU: But because of the budget process that they are using to try to pass this bill along straight party lines, again, it opens up a process, what's known on Capitol Hill is the vote-a-rama, because any number of senators can offer any amendments that they want for as long as they want.
And what Republicans are planning is a grueling series of amendments. As Lindsey Graham said, it could be hell.
(BEGIN VIDEO CLIP)
SEN. LINDSEY GRAHAM (R-SC): So what will vote-a-rama be like? It will be like hell. They deserve this. As much as I admire Joe Manchin and Sinema for standing up to the radical left at times, they're empowering legislation that will make the average person's life more difficult.
(END VIDEO CLIP)
RAJU: But what Democrats need to do is stay united in order to pass this bill.
Schumer is confident that will happen, Dana. And if they do, they could succeed in finally passing this bill. After more than a year of intraparty fighting and debating, this bill could pass the Senate this week. And the House just announced that they will return next Friday to give final passage to the Senate bill, sending it to the president's desk by next week -- Dana.
BASH: Manu, I would say you should roll a cot in there this weekend. But I spent a lot of time in the office where you work now, and there isn't room for it. So good luck.
RAJU: That's true.
BASH: Thanks so much, Manu.
BASH: President Biden credited his policies for the -- quote -- "significant progress" we're seeing today in that jobs report.
I want to discuss this with the director of the National Economic Council, Brian Deese.
Thank you so much for joining me, Brian.
So these are great numbers for the president, for Americans when it comes to jobs, surpassing expectations, you can tell me, even within the White House.
What does this jobs report tell you more broadly about where the economy is right now?
BRIAN DEESE, DIRECTOR, NATIONAL ECONOMIC COUNCIL: Well, thanks, Dana. It's great to be here.
I think this is a great jobs report. And it's a great sign for the American economy. And I think it underscores the strength and the resilience of our recovery and the policy choices that helped to drive us here.
We haven't had 3.5 percent unemployment in this country. That's tied for the lowest rate in 50 years, as you noted. But if you look across the report and across the economy, what you see is a breadth of a recovery as well. Look at manufacturing. Many people said that American manufacturing just couldn't come back at the rate that we have seen, almost 640,000 new manufacturing jobs.
And we're seeing now businesses continuing to decide at greater clips to invest in the United States. And that's a really important sign and a sign for our industrial strength, a sign for our economic future...
DEESE: ... and something that the piece of legislation that we're talking about here would make a big difference on in sustaining and continuing as well. BASH: And those numbers are all good. I mean, they just are, and
that's important to say.
But there are -- I don't want to be Debbie Downer here, but I just want to point out what people who are watching and saying, wait a minute, look at my grocery bill, might be saying. There are other economic indicators people deal with in their everyday lives, making it hard to pay their bills, like I mentioned, the grocery bill.
Inflation is still high on food prices, on housing and energy. Consumer confidence is near an all-time low. So, you know this better than I. You're an economist. How people feel about the economy factors into how it does overall. How do you change that?
DEESE: Well, absolutely.
Look, prices are too high. And you heard the president today reiterate that this is his top priority, precisely because this is the lived experience of so many American families.
I would say a couple of points on that. First is, we have seen really good news on gas prices, which is an important cost for families around the country, declining for more than 50 days, down almost $1 from its peak. That's providing real tangible relief.
But it's also why we need to move this legislation that's in front of Congress, because, at its core, what it would do is, it would lower costs for items that typical families deal with on a monthly basis, their prescription drug costs, their health care premiums, the utility bills that they pay. These are all practical things in people's lives.
And we can do that in a way that would actually help reduce inflation across the economy as well.
BASH: Yes, and I want talk to you about that legislation in a second.
But just in terms of the economic indicators that we're seeing today, how worried are you that the Fed will still have to cool the economy by raising interest rates, and that might -- maybe not force a recession in 2022, but in 2023?
DEESE: Look, there's no question we're continuing to deal with very globally uncertain and unique economic times right now. And that's the reality of where we are.
But I also think that this jobs report and the strength and the resilience that we're seeing in our labor market should also give the American people confidence that we are uniquely well-positioned, the United States is uniquely well-positioned as a country to be resilient through this transition, and bring prices down without having to give up all these extraordinary economic gains.
And so that, I think, is one of the takeaways from today's report, and should reinforce for policymakers the urgency and the opportunity here to take steps that would actually help to move us in that direction.
BASH: So let's talk about the Inflation Reduction Act. It's good marketing. We know why it's called that.
But you talked a little bit about the substance. If it is passed, assuming it will pass, how long will it be for Americans to feel the benefits that you just talked about a minute ago?
DEESE: Well, let's talk about some of the practical things, as you say.
One, this is going to reduce health care premiums. So, as of this fall, in just a couple of months, there are about 13 million Americans who, if we don't take action, are going to see their health care premiums go up. We pass this bill, they will see a savings of about $800 a year for those families.
Second, on prescription drug costs, in addition to empowering Medicare to negotiate for better prices, which will help purchasers of prescription drugs across the board, this bill would cap out-of-pocket costs at $2,000 for seniors and those with chronic conditions, again, practical impact that people will see.
And, third, the investments in clean energy and energy security, creating more energy supply, and combating the climate crisis, we had an executive from a utility company here yesterday meeting with the president who explained the economics of this, when we pass these kinds of long-term tax credits, they pass those savings directly onto consumers.
So, if you're a consumer with a utility bill, this piece of legislation is going to allow your utility to move to cleaner energy while passing that savings directly on to you and your bill.
BASH: Yes. And we're going to definitely be following up on that. That's a really good point, to make sure that they actually do that.
Before I let you go, the president has -- you look at the totality of this week, things that have happened, the jobs report we have been talking about, the so-called reconciliation package, the economic legislation that's moving through Congress, he ordered a strike killing an al Qaeda leader, al-Zawahiri.
So these are all events that are important, that are sort of good news for the president. How do you get these to penetrate the minds of voters this November who are, as we talked about, still paying a lot for food, for housing, for gas?
DEESE: Well, I think the most important thing for American families is that they actually can see concrete action that will affect their lives.
But if you step back and you look at what this president has done, he's had a consistent vision of trying to move the economy in a way that works better for working-class families. And whether it's the most significant economic rescue package since
FDR, the most significant infrastructure package since Eisenhower, now the most significant investment in our industrial base with the CHIPS bill probably ever, and now this reconciliation bill that would lower costs for families, what you see is a president who can work across the aisle, and in a bipartisan way, but also do what's necessary when it's necessary to provide working families not just relief right now -- and that's critically important, and we're doing it -- but also a pathway to have longer-term economic security and an economy that works more durably for middle-class families.
And I think you can see that in the actions. But we're going to keep our head down and keep knowing that, at the end of the day, delivering for the American people is what's going to be most important.
BASH: Brian Deese, thank you so much. Appreciate it.
DEESE: Thank you.
BASH: Lawyers for former President Trump are talking with the Justice Department. Officials there are having a dialogue about investigating the insurrection. So what are they actually discussing? And how could it impact the former president?
We're going to talk about that next.
And fallout continues from House Speaker Nancy Pelosi's trip to Taiwan. China continues to launch ballistic missiles around the island. How the White House is responding, that's also ahead.
BASH: Now to a CNN exclusive former.
President Donald Trump's legal team is having direct talks with top Justice Department officials investigating the Capitol insurrection. The talks are focused on whether Trump can shield presidential conversations with staff in the West Wing from federal investigators using executive privilege claims.
CNN's Katelyn Polantz joins me now.
So, Katelyn, you are part of the rock star team that broke this reporting. What have you discovered and what could it mean, would it tell us about where the DOJ investigation is going?
KATELYN POLANTZ, CNN CRIME AND JUSTICE REPORTER: Well, Dana, we are at a pretty significant point here.
Our sources are telling us that there are direct conversations between Justice Department prosecutors looking at January 6 and Trump's lawyers. And it's about whether a grand jury can get access to Trump's conversations in the White House. So there's been this steady progression of grand jury activity in D.C.
that we have been following, where prosecutors are bringing in witnesses from the vice president's office and from the White House Counsel's Office to testify.
But we know those witnesses aren't able to share everything they know. And that's because Donald Trump still wants to try to claim executive privilege. So there's four people on our reporting team, all women. We asked Trump's spokesman for a response yesterday.
And instead of discussing these talks, the statement he gave is a window into some of the Trump team's legal arguments here.
It says: "How can any future president ever have private conversations with his attorneys, counselors and other senior advisers if any such adviser is forced, either during or after the presidency, to reveal those privileged, confidential discussions?"
That's very likely what Trump's team is telling prosecutors too. And, of course, officials in the government feel very confident they will be able to win any fight with Trump over executive privilege.
Dana, the law here does seem to be on the government's side.
BASH: Katelyn Polantz, thank you so much. Appreciate it.
And Russia says it's ready to discuss a prisoner swap with the U.S. just a day after WNBA star Brittney Griner was sentenced to nine years in jail. President Biden just weighed in. And we're going to have the latest on the negotiations after a short break.
BASH: New today, Taiwan reports almost 50 Chinese warplanes entered its air defense space. This has been almost a daily ritual in response to House Speaker Nancy Pelosi's visit to the island this week.
China's ambassador is rejecting U.S. condemnation of its military actions, saying in a statement: "The only way out of this crisis is that the U.S. side must rectify its mistakes and eliminate the grave impact of Pelosi's visit."
CNN White House correspondent Natasha Bertrand joins me now.
So, Natasha, when we hear the Chinese saying rectify its mistakes, what do we think that means?
NATASHA BERTRAND, CNN WHITE HOUSE REPORTER: It's a great question, Dana. And I'm not sure that the Chinese have even really explained that to the United States, because, of course, the Chinese have actually been only increasing their provocations against Taiwan in recent days, and so much so that the White House actually did summon the Chinese ambassador to the U.S., to the White House in order to give him essentially a dressing down over those military provocations, which are really unprecedented in recent memory.
And that's been the message that the White House has been trying to send to China in recent days in numerous conversations between senior U.S. and Chinese officials, namely, that Pelosi's trip here is not what's unprecedented. What is unprecedented are these Chinese military activities just right off the coast of Taiwan there.
Now, Nancy Pelosi actually responded to all of this just last night, and she is not backing down here, saying that she is not going to let China isolate Taiwan from the rest of the world.
(BEGIN VIDEO CLIP)
REP. NANCY PELOSI (D-CA): They may try to keep Taiwan from visiting or participating in other places, but they will not isolate Taiwan by preventing us to travel there.
We have had high-level visits, senators in the spring, a bipartisan way, continuing visits. And we will not allow them to isolate Taiwan. They are not doing our travel schedule.
(END VIDEO CLIP)
BERTRAND: Now, in terms of rectifying this, the White House has repeatedly made clear to China that nothing has changed about U.S. policy toward Taiwan.
The U.S. does not support Taiwan's independence, and still supports the One China policy, which says that Taiwan is a part of China.
But China right now, it really is overreacting, in the minds of White House officials, to this visit. And particularly alarming is that they have canceled a number of conversations upcoming between U.S. and Chinese military leaders, which is increasing the risk, according to the National Security Council, of a potential miscalculation in the region, Dana.
BASH: Yes, they're overreacting, in the eyes of White House officials, or using this as an excuse. It's probably two sides to the same coin.
Natasha, thank you so much for that reporting.
And channels are open to discuss a prisoner swap between the U.S. and Russia one day after basketball star Brittney Griner was sentenced to nine years in prison for smuggling cannabis oil. Secretary of State Antony Blinken confirmed the U.S. will pursue a deal.
Now, back home, a moment of silence before last night's WNBA game. Griner's team, the Phoenix Mercury, linked arms in solidarity with members of the opposing team before the crowd began chanting: "Bring her home. Bring her home."
CNN's Kylie Atwood is following the story.
So, Kylie, what are you hearing from your sources about where these negotiations stand right now?
KYLIE ATWOOD, CNN NATIONAL SECURITY CORRESPONDENT: Yes.
Well, so, Dana, what we're watching for right now is these ongoing talks to transfer to this framework that President Biden and President Putin agreed to when they met during a summit last year.
And what's different about that framework is, it now appears to have the boost, the public boost of the Russians behind it, with Russian Foreign Minister Lavrov saying that they are ready to discuss this issue of prisoner swaps, whereas, previously, when the Biden administration went to Russia with this proposed deal back in June, they didn't have that public pronouncement of support coming from the Russian side.
The other thing that is different right now, of course, is that Brittney Griner has this harsh nine-year sentence.