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Trump Lawyer Claimed No Classified Material at Mar-a-Lago; Suspect in Jerusalem Attack Turns Himself in to Police; Drought Severely Impacting California Water Supply. Aired 4-5a ET

Aired August 14, 2022 - 04:00   ET

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

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[04:00:00]

KIM BRUNHUBER, CNN ANCHOR: Hello and welcome to all of you watching us here in the United States, Canada and all around the world. I'm Kim Brunhuber.

Ahead on CNN Newsroom, damage assessment, that is what high ranking Democrats are asking for from intelligence officials after the FBI seized classified documents from Donald Trump's home. We'll look at the fallout from the search.

Plus, a suspected terror attack in Jerusalem, a gunman opens fire leaving people wounded, including American tourist. We're live in Jerusalem.

And we'll take a look at the droughts across the U.S. and Europe with live reports from Madrid and the CNN Weather Center.

And we begin with more fallout from the FBI search at Donald Trump's Florida estate. Sources now telling CNN that one of the former president's lawyers signed a letter back in June saying there were no more classified information stored at Mar-a-Lago. But, of course, we learned earlier this week that federal agents recovered 11 sets of classified documents during their search, including several marked top secret.

Meanwhile, two high ranking House Democrats are now asking intelligence officials for a damage assessment of seized documents. The chairs of the House Intelligence and Oversight Committees writing that, quote, former President Trump's conduct has potentially put our national security at grave risk.

And all this comes as the FBI is dealing with what it says is an unprecedented number of threats against the bureau in the wake of that Mar-a-Lago search.

CNN's Katelyn Polantz is in Washington with the latest on the Justice Department's investigation.

KATELYN POLANTZ, CNN SENIOR CRIME AND JUSTICE REPORTER: Two months before the FBI search of Mar-a-Lago, a lawyer for Donald Trump attested in a letter to the Justice Department there were no classified records to be found on the property, CNN learned on Saturday. But despite this claim, when investigators seized the boxes this past Monday in this criminal investigation, they found in 11 different places records still marked as classified. That included records at three levels of classification, even ones labeled TSSCI. Those are types of records that would require the most strenuous provisions for secrecy around them in federal government, like being kept only in secured facilities.

These new details now flesh out the timeline that was leading up to the FBI's search of Mar-a-Lago. We learned just earlier this week of a meeting Trump's attorneys had in June and a subpoena for the return of the records before the search. But this letter from Trump's lawyer also adds to our understanding of why federal prosecutors may have seen no other way to re-secure the records than go to the beach club grounds for themselves on Monday. They weren't going to be given back by the president's team. That much is clear.

Now, Donald Trump and some of his advisers have claimed he declassified all the records he had at Mar-a-Lago when he was president, but when you look at what is being investigated here, obstruction of justice, criminal mishandling of government records, the Espionage Act, the classification status of these records at this time might be immaterial. What matters, as the Justice Department investigators continue their work, is how potentially harmful it was to have these documents out of the control of the federal government for the last year-and-a-half.

All of what happens in June with this letter from the lawyer subpoenas it's all likely to become important facts if criminal charges were to materialize here and as investigators try to narrow down who exactly had their hands on these documents.

Katelyn Polantz, CNN, Washington.

BRUNHUBER: Earlier, I spoke with a Political Analyst Michael Genovese about just how unprecedented these developments are. Here he is.

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MICHAEL GENOVESE, POLITICAL ANALYST: Before and after the Presidential Records Act of 1978, the post-Watergate reform, presidents and also members of their family have been accused of taking things that they weren't supposed to take out of the White House when they left office. The normal process is that the Archives, the National Archives, will say, where is this, we need that, we'd take a look at that, and there is a process of negotiation, a back- and-forth discussion and they reach an accommodation. That has always been the case until now.

This is different in kind and in nature. The Archives have tried and tried, they've even subpoenaed and they can't get the materials back that Donald Trump took with him. The question is what did he take them for?

[04:05:01] What is he going to use them for? This is highly unusual.

(END VIDEO CLIP)

BRUNHUBER: And we'll have more of my discussion with Michael Genovese coming up in our next hour.

Salman Rushdie's agent tells the New York Times that the author started to speak Saturday, a day after he was stabbed during a New York book event. While Rushdie remains in hospital Saturday, the suspect appeared in court pleading not guilty to attempted second- degree murder and other charges is being held without bond and will be back in court next Friday.

Now, according to prosecutors, Rushdie was stabbed three times in the neck and four times in the stomach. He also has puncture wounds in his right eye and chest.

And condemnation of the assault is still pouring in from the global community, but in Iran where an edict calling for Rushdie's assassination was issued decades ago, some are celebrating the attack.

We have more now from CNN's Jomana Karedsheh.

JOMANA KARADSHEH, CNN CORRESPONDENT: All eyes have been on Tehran to see if there is any sort official reaction from the Iranian government to the attack on Salman Rushdie in the United States on Friday. But, so far, there has been no official reaction.

We have heard from the Israeli prime minister, Yair Lapid, who tweeted his country's condemnation Saturday evening and he also blamed Iran, saying it was the incitement that has been led by what he described as the extremist regime into Tehran for decades that has led to this attack.

Of course, it was back in 1989 that the Iranian supreme leader, Ayatollah Khomeini, at the time who issued a fatwa, this religious edict, calling for the killing of Salman Rushdie, following the publication of his book, The Satanic Verses, that was seen as blasphemous, sacrilegious and extremely insulting for some Muslims, an attack on their prophet and their religion.

Now, in the '90s, it did appear that the elected Iranian government at the time was softening its position, that it might be backtracking on that fatwa, but in recent years, as recent as 2017, we've seen the current supreme leader, Ayatollah Khomeini, saying that that fatwa still stands, that it is still valid.

And while we've not had any official government reaction so far, we have seen reaction on social media, as well as hard-line conservative publications in Iran, one newspaper on Saturday publishing this column in which they praised the attacker who they described as a warrior, saying that he deserved thousands bravos, hundreds of God blesses, that the hands of this warrior, as they described him, should be kissed for attacking Rushdie, who they described as an apostate. Another newspaper also with a very disturbing headline, the devil on the pathway to hell, a headline they had along with the picture of Salman Rushdie on a stretcher.

Now, there has been also some speculation and questions about whether this suspect in the United States has any links to Iranian-backed groups or extremist groups in Iran or elsewhere in the region. Lebanese media were reporting that Hadi Matar also is a Lebanese citizen, that he is eligible to vote in the country, something that CNN has not been able to independently verify, but CNN reached out to the Iranian-backed Lebanese Hezbollah Group asking them if they knew anything about the attacker or this attack. And one official saying that all they know about this attack is what they have seen in the media, that they know nothing about it and that they know nothing about the suspect.

Jomana Karedsheh, CNN, Amman.

BRUNHUBER: In Jerusalem, the gunman who carried out a suspected terror attack wounding eight people on Sunday has turned himself into police. At least four U.S. nationals are among those wounded, according to Israeli media.

CNN's Hadas Gold joins me now live from Jerusalem. So, Hadas, what more can you tell us on the attack and the victims, including those Americans?

HADAS GOLD, CNN CORRESPONDENT: So, Kim, we just got confirmation from the U.S. embassy here in Jerusalem that American citizens were among those wounded in this attack overnight. Now, the American embassy is not commenting further on the specifics, the number of those who were Americans or their names, saying citing privacy reasons, that saying that they're gathering more information. But the U.S. embassy did say that they are shocked and saddened by the attack, saying that they condemned all acts of terrorism and actions that exacerbate tensions.

Now, what we know what happened, is at around 1:30 A.M. local, overnight, this shooting started taking place at a bus stop/parking lot right outside of the old city walls, near one of the main entrances that people use especially to get to the western wall compound.

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This is -- to the western wall and also to the al-Aqsa Mosque compound. All of the holiest sites of Jerusalem are right through here, as well as King David's tomb. And it is a very big area for -- a big popular area, not only for religious pilgrimages but also for tourists.

Now, we know that the shooter began shooting at a bus where as people were boarding and getting off before he fled on foot. We understand that there were eight victims. At least two of them are still listed as in serious condition, including a pregnant woman who had to undergo an emergency C-section because of her condition. As far as we know, both she and the baby are in serious condition but stable. Now, as we noted, the Israeli media is reporting that at least four Americans are among those injured, but the U.S. embassy is not confirming on the exact amount of -- the exact number of Americans injured citing privacy concerns.

Now, in the last few hours, the suspect has turned himself into police and police say that they do have the weapon as well. And a security source tells CNN that the suspect is a Palestinian from East Jerusalem who holds Israeli citizenship.

Now, this, of course, is coming less than a week after those hostilities between Israel and the Palestine Islamic Jihad, militants in Gaza, and with that, left dozens of Palestinian's dead, some more than a thousand rockets fired towards Israel. But, so far, we have no indication that this suspect has any connection to any militant groups. Kim?

BRUNHUBER: Alright. I really appreciate the update. Hadas Gold, thanks so much.

More support is being lined up for a proposal to demilitarized Ukraine's Zaporizhzhia nuclear plant. Still ahead, another powerful voice calling for Russian groups to get out of the facility. We will have live report from Kyiv.

Plus, it's been smooth sailing so far for grain ships leaving Ukraine, but there are potential obstacles looming. We'll have a guest, we will talk about that.

Stay with us.

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BRUNHUBER: A diplomatic push to demilitarize Ukraine's Zaporizhzhia nuclear plant is picking up steam. The grounds of the facility came under artillery fire this week prompting calls for the demilitarization from the U.N. secretary-general, as well as the U.S. Now, the European Union is getting behind the idea. Its foreign policy chief, Josep Borrell, tweeted, the plant must not be used as part of any military operation.

Kyiv and Moscow are trading blame for the attacks. Ukrainian President Zelenskyy says the strikes will backfire on Russians, including those who are directly involved. Here he is.

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VOLODYMYR ZELENSKYY, UKRAINIAN PRESIDENT: Of course, there must be a strong reaction. Ukrainian diplomats and representatives of partner states will do everything to make sure that new sanctions against Russia will necessarily block the Russian nuclear industry. And, absolutely, all officials of a terrorist state as well as those who help them in this blackmail operation with a nuclear power plant must answer in an international court. This is bound to happen and every Russian military officer who either shoots at the plant or shoots under the cover of the plant must understand that he becomes a special target for our intelligence, for our special services, for our army.

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BRUNHUBER: For more on all this, David McKenzie joins us from Kyiv. And, David, so, let's start there with the threat to the nuclear power plant. What is the latest?

DAVID MCKENZIE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, the latest is this diplomatic push that you are describing, Kim. And the European chief is the latest to weigh in on this. I have to say, though, the reality on the ground, it doesn't lend itself to a diplomatic solution at this point, because that nuclear power plant is right close to several frontlines to the north towards the town of Zaporizhzhia, to the west and north across the river Dnipro to those Ukrainian positions. So, this a very active frontline.

And, of course, over the last week or so, we've been hearing from both sides that there have been strikes close or near to those nuclear reactors, which raises the prospect of the power being cut off or even a strike directly on one of those reactors.

And the push from the U.S., the European Union, of course, the Ukrainians, is getting louder, but there hasn't been much response from the Russian side at this point. And given the military importance of that zone, that is why the Russians took it over in early March, it appears that there is no movement towards lessening the threat to that side, which could, of course, threaten this country and the wider region. Kim?

BRUNHUBER: Alright. Now, I'm looking at the wider conflict here. This has become a war of attrition in recent months. Where do you see the key developments?

MCKENZIE: Well, the Russian leadership had called for rapid advance, of course, particularly in the east, but you've had this grinding conflict going on since the beginning. And let's look first in the southern theater. I think this is important to illustrate. You have the Ukrainians claiming overnight that they have struck and destroyed or at least damaged the supply lines across the river Dnipro to those Russian forces that have occupied Kherson.

Why is this important? Well, it potentially could mean those forces cannot get resupplied, unless it is through floating options across that river, and it gives the Ukrainians the opportunity to have this counteroffensive that they have been talking about for many weeks now. If they are able to push the Russians out of Kherson, this will be a major victory for Ukraine. At this point, it's too early to tell. But by striking those supply lines, they can cut off Russians from behind those frontline positions.

And in the east of the country, where it is a critical frontline that maybe hasn't been talked about as much lately, you've had both Russia and Ukraine claiming that made gains to the west of the city of Donetsk. Well, why is this important?

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Well, Donetsk is the area that Russia took over early in the conflict. If they can push west and north of that city, then they may have the opportunity to take the whole of Donetsk region, one of the key objectives that the Kremlin announced at the beginning of this war.

But right now, you have Ukrainians putting up a very strong defense, according to a military expert, and the Russians haven't been able to inch forward there. So, it points to a much longer grinding out situation in this conflict. Kim?

BRUNHUBER: Yes, absolutely. I appreciate the analysis. David McKenzie in Kyiv, thanks so much.

Well, there's one bright spot in Ukraine that is offering hope for millions of people who are going hungry because of the war. President Zelenskyy says 16 grain ships have left Ukraine since grain exports resumed earlier this month, and that includes this vessel that made a delivery to Italy. And on Friday, Reuters says the first ship that will bring food to Africa arrived in Ukraine.

The grain exports were resumed after Ukraine and Russia signed an agreement last month in Turkey. This is hoped this will help an estimated 47 million worldwide who the World Food Programs say are having trouble putting food on the table because of the war.

For more, we're joined by Elena Neroba, a business development manager at Maxigrain, that's a brokerage involved in the international grain trade, and she is in London. Thanks so much for being here with us.

I mean, it must be just a huge relief to have seen that first ship pulling out of the port in Odessa.

ELENA NEROBA, BUSINESS DEVELOPMENT MANAGER, MAXIGRAIN: Hello, everyone. Yes, as you mentioned for today, 16 vessels, including one new coming left Ukrainian port, and now, the first vessel we suite, loading in Ukrainian port as well, so it will be really great relief for people who are starving all over the world. Because as war began, Ukraine can't supply around 25 million tons of different grains, so it pushed prices higher, which means that people in poor countries, like Afghanistan, Syria, North Africa, almost all African countries can't pay extra money for each slice of bread.

So, since last month after signing agreement between Ukraine, Turkey and United Nations and separate agreement between Russia, Turkey and the United Nations, we hope that supply of Ukrainian grain will increase up to 3 million tons per month. And the most optimistic, of course, are up to 5 million tons per month, which means that around 20 million tons which stuck in Ukraine from the previous crop and around 45 million tons of new crop will be shipped to Ukrainian buyers all over the world.

BRUNHUBER: Yes. And, I mean, the consequences of this, as you say, can't be overstated. You talk about that grain that still is sort of stuck there. I imagine speed is of essence, otherwise, it could basically rot where it is. I imagine that is one of the obstacles that they still have to overcome.

NEROBA: Yes. The main obstacles is that ship owners still are not sure about safety of the vessels, which they direct to Ukraine. It means that insurance level for these vessels will be higher than for other destinations. It is like an extra war insurance in Ukraine (ph). And it became more that it leads to increase in cost of freight.

But if we compare what Ukrainian farmers face today for delivery of Ukrainian grains to European port, still, it will be much cheaper. Because for today, for example, to deliver grain from central part of Ukraine to port of Constanta in Romania, costs around $200 per metric ton, which means that it's even higher than a cost of grain by itself. And, for example, if we compare to how much it costs for farmers to deliver grain to Odessa ports, it is five times longer.

BRUNHUBER: What is the main threat here? Is it the threats of attack or of the mines that might still be there?

NEROBA: Both of them, but mostly, yes, it is floating mines.

BRUNHUBER: Okay. Now, there is still the matter of actually getting the grain to ports that the farmers have to deal with so many obstacles. You know, we're still obviously in a war. I mean, how difficult is actually getting the grain to port?

NEROBA: Firstly, farmers have to harvest these grain and now it is harvesting time for early crops, like wheat, barley and grape seeds, which is almost done for today. And farmers harvest directly in a -- literally, I mean, in a helmets and in safety jackets, then they have to clean these grains to deliver it to silos.

[04:25:10]

And from silo, you have to deliver it by rails or by trucks to port, which is not the biggest problem. The biggest problem is that Russia daily attack railways or important infrastructure facilities. But the main target for them are because it is civilians, people's -- its sea cost received, like they daily attack Mykolaiv. And you remember that the day after signing agreement, they attack Odessa port. So, this is the main obstacle in delivery.

BRUNHUBER: Yes. And then one of the other challenges -- I mean, this is a good news story, but we've also seen, unfortunately, reports of plenty of grain being stolen. How big of a concern is that?

NEROBA: Usually, before the war, grain storage all over the country, year and year, since the war began, we lost control of around 25 percent of the Ukrainian territory, which means that we lost control on Ukrainian fields and silos, which kept around 25 percent of our stocks. And this number which I mentioned around 20 million tons, which we have for export from previous season, they exclude this grain.

And we still don't understand, did Russia stole it or they kept on this territory because we lost any connection with occupied territories. All we know is that we see daily some vessels which load grain in occupied ports mostly in Crimea. And we have such a satellite images of how much trucks go from occupied territories, like Kherson or Zaporizhzhia region, to occupied ports, and around 87 vessels already involved in delivering stolen grain to mostly -- to Syria.

BRUNHUBER: Yes, that is a lot. But still, as I say, this is a positive development and certainly a source of hope for millions of people around the world as that grain starts to move.

NEROBA: Absolutely.

BRUNHUBER: So, we'll keep an eye on that. I really appreciate your analysis of this important story. Elena Neroba, thank you so much.

NEROBA: Thank you.

BRUNHUBER: Alright. Coming up, California faces a stunning drain on its water supply. We'll have details on the governor's multibillion dollar plan to fix it.

Plus, Western Europe experiencing above average heat and drought, details on that ahead.

Stay with us.

[04:30:00]

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BRUNHUBER: Welcome back to all of you watching us here in the United States, Canada and around the world. I'm Kim Brunhuber. This is CNN Newsroom.

This summer's unprecedented heat has affected millions all across the U.S., particularly in California where experts say the state could lose 10 percent of its water in the next two decades.

CNN's Mike Valerio is in Los Angeles with details on the governor's plan to preserves the state's diminishing water supply.

MIKE VALERIO, CNN NATIONAL CORRESPONDENT: Well, a big part of the Newsom plan is to build storage space, space to hold water when it falls here in California in the winter months and it doesn't go anywhere. And, you know, that is pretty of the opposite of what we see here, this backdrop. This is the Los Angeles River designed to channel water from the city about 32 kilometers away from here southbound into the Pacific Ocean.

So, again, what Governor Newsom is trying to say here, is that we don't need to channel water out anymore. We need to build more infrastructure to keep our water supply, hold it during the winter months.

So, the four main parameters that we have of his plan right here, building 4 million acre-feet of storage space. So, you think cisterns, reservoirs, storage tanks. He also is saying that waste water, water that goes into neighborhood drains, which would normally travel into channels, like where we are standing now into the Pacific Ocean, that water can be recycled as well.

The final point, desalination, taking saltwater out of ocean water, what Israel, for example, does so well, out of water from the San Francisco Bay, and using it for drinking water.

Take a listen to what Newsom said on that point.

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GOV. GAVIN NEWSOM (D-CA): This technology is much older than I. It is much older than each and every one of you. And the reality is we need to be more creative and we need to be more aggressive in terms of not just promoting this technology but delivering on its promise, moreover, delivering on its potential.

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VALERIO: So, again, creating new water supplies, preserving the water for storage when it falls in the winter months, because just take a look at this, we only have a few centimeters of water in the water, the riverbed right now. In the winter months the water level is several meters high, higher than my head. So, of course, the name of the game, according to the governor, new infrastructure to keep that water that falls in the winter months.

Mike Valerio, CNN, Los Angeles.

BRUNHUBER: All right, let's talk more about this with CNN Meteorologist Karen Maginnis. So, Karen, what's going on in California? The drought there, I mean, we're seeing that in other places as well across the U.S.

KAREN MAGINNIS, CNN METEOROLOGIST: Yes, we are. It isn't exclusive to California and these drought seasons are very typical, but what we've seen at least in recent times is that they occur earlier, they are much more widespread and it takes a lot more to recover from them.

So, these drought these drought areas, it is not going to be one or two rain events, it is not going to be one or two snowfall events in the wintertime that will alleviate the situation, it's going to be much more long-term than that.

All right, it will be typically hot across the south central United States, but for Californians, the interior valleys, this is where it is going to be excessively hot. Temperatures here are going to be in the triple digits, but not just 100, 102 degrees, we're looking at 108 degrees. Sacramento, it is going to be excruciatingly hot. And we're also looking at just the humidity that will be very dry.

So, you get a combination like that, and then we look at that fire danger, which has been so critical here over the past decade or so, Palm Springs, a temperature up to 110 degrees.

[04:35:01]

Phoenix is going to be typically hot. The average high is 105. It will be within a few degrees of that. And look at Redding. Now, we sometimes see Redding pop up as one of those cities that is so hot. But even the next several days, 111 degrees, that is excessively hot.

We are seeing this monsoonal moisture across the interior west. And in Tooele County, that was in Utah, we've seen lots of rainfall there. They are brief but they're heavy and they can produce these debris flows.

Take around Phoenix coming up in a forecast, some scattered showers and storms, flood watches out for these interior areas. They will continue or that will continue as we go through the workweek, as we've got a ridge of high pressure across the west and the east. So, in between this monsoon moisture comes up from the south, and not going to get much heat relief. But maybe as far as some of these isolated areas and drought, that will be of some minor help. Kim, back to you.

BRUNHUBER: All right. Thanks so much, Karen Maginnis, I appreciate it.

Well, Europe is suffering through its fourth heat wave since June. Drought conditions are affecting water supplies across the U.K., France and Germany. The starting point of London's iconic River Thames has dried up and moved five miles downstream, while the Rhine in Germany is at exceptionally low levels.

Portugal's worst wildfire in five years is now under control but not before burning through a vast area of UNESCO-designated geological park. Meanwhile, firefighters from across Europe are joining forces to help battle multiple fires in France.

Al Goodman joins now from Madrid. And, Al, let's start there with the fires. What is the latest on the efforts to contain them?

AL GOODMAN, JOURNALIST: The main fire is Gironde department around Bordeaux. And officials say it is not advancing. There are signs it might be stabilized. But the worry this day is dry thunderstorms here, Sunday, in that area which could produce lightning, which could reignite parts of that fire or could spark new fire. About 1,000 French forest fighters are on the scene, and they have been joined recently by 360 firefighters from Germany, Poland, Austria and Romania along with their equipment. It is not the only fire, Kim, burning in France, or others including a big one near Brittany.

Now, there is a department in the French Alps has banned the use of fireworks until September, hoping that no one will accidentally start a fire. With fireworks in France, 20 times more land has burned this summer than just a year ago due to these conditions.

In Portugal, that fire you mentioned that was just gone down, the Portugal is the European Union nation with the most land burned as a percentage of its entire territory this summer.

In Spain, right here, there have been forest fires or wildfires burning practically every day for a month. The military's unit that has these water bombers to go out and help local officials deployed their planes late Saturday night. they announced to two new fires, one in the north and one in the east. It has basically been months of low rainfall here in Western Europe. Kim?

BRUNHUBER: Yes, let's touch more on that and the drought that is really hitting hard across Western Europe.

GOODMAN: And I can't emphasize enough how much the farmers in Northern Italy are suffering along the Po River in danger of losing up to 80 percent of their crops according to officials that includes soya, parmesan. It has been low rainfall there not just for several months but since last December.

In the Rhine River that you mentioned, that is a key artery to move grain and chemicals and coal. Because the water levels are low, though shippers can still move but the rules say that they have to lighten their load. So, that increases the cost and reduces the amount of goods that are getting to where they are going, a supply chain interruption.

Now, the kinds of things we're seeing the U.K. having its hottest July in 80 years, Spain right here having its hottest July in 60 years, all of these affects, the fires, the drought a result of that. Kim?

BRUNHUBER: Yes, absolutely. All right, thanks so much, Al Goodman in Madrid. Thanks so much.

A tropical storm has been lashing part of Japan, bringing heavy rain and powerful winds after making landfall Saturday in Central Japan. More than more 40,000 are under evacuation orders. Officials are urging people to be on alert for possible landslides, flooding of high waves.

A new video into CNN captured a loud boom in Utah on Saturday. The state's governor and the National Weather Service say it was likely caused by a meteor hitting the atmosphere. One video from the snow base and ski resort's web camera captured meteor apparently responsible streaking across the sky. You can see it highlighted there. Incredible.

[04:40:00]

Alright, still ahead, sweeping changes are on the way for Medicare. We'll have a look at what is in the landmark bill now headed for President Biden's desk.

Stay with us.

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BRUNHUBER: The U.S. is just a pen-stroke away from some of the biggest changes to Medicare in nearly two decades.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA): The motion is adopted.

(END VIDEO CLIP)

BRUNHUBER: The changes are part of the landmark climate tax and health care bill that the House of Representatives passed on Friday and it's now headed for President Joe Biden's desk. Health provisions in the bill will allow Medicare to negotiate the price of certain prescription drugs for the first time. It also limits the growth of drug costs and caps how much Medicare and release have to pay for certain medications, including insulin. And the White House economic adviser says those changes could also help tackle inflation. Listen to this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Reducing costs in Medicare is one of the ways that this bill actually reduces the federal deficit. And when we reduce a deficit, we are helping on the inflation front as well because that's complementary to what the Fed is trying to get done.

So, in addition to lower costs for consumers, we're also lowering the costs to the federal balance sheet. Both of those are important at this moment.

(END VIDEO CLIP)

BRUNHUBER: While the bill marks a landmark achievement for Democrats, it is much narrower than some had hoped. The changes only help some seniors and people with disabilities enrolled in Medicare. And fewer drugs are subject to negotiation than Democrats had hope, also caps on price growth in insulin costs only apply to Medicare and not to private insurance, and that is due to rules Democrats had to rely on to get the bill passed in the Senate.

Joining me now is Alice Chen, an Associate Professor and Vice Dean for Research at the USC Sol Price of Public Policy and Leonard D. Schaeffer Center for Health Policy and Economics.

[04:45:01]

She joins me now from Los Angeles. Thanks so much for being here with us.

So, President Biden called this game-changing for ordinary folks. Is he right or do we have any way of actually knowing that yet?

ALICE CHEN, ASSOCIATE PROFESSOR AND VICE DEAN, USC SOL PRICE OF PUBLIC POLICY AND LEONARD D. SCHAEFFER CENTER FOR HEALTH POLICY AND ECONOMICS: Well you know, the policy does help cap out of pocket spending in many areas, especially for Medicare patients. There is the cap on insulin, there is the cap on, you know, out of pocket spending at $2,000. So for sure there will be some positive effects that come from the bill. Game-changing, that I don't know quite yet.

BRUNHUBER: So we've gone through the general highlights of this here, but from your perspective, who exactly will benefit most from this and how?

CHEN: You know, there are a lot of different players involved here. The hope I think is that we'll have drug-spending reductions and that will benefit the public. Though there is a lot of downstream effects that are not yet known. For example, we might even have higher drug prices come out of this sort of as an incentive from this policy that I can talk more about. So I think that the overall effects are really quite mixed at this point in time.

BRUNHUBER: But maybe, you know, certainly older people perhaps who are on very expensive medications, you know, like for M.S. or cancer medications, things like that, will that be certainly helping them a lot here?

CHEN: You know, it is a great point. I think the out of pocket cap will definitely help those patients. Those patients have a lot of drug spending. And so it will help them with their costs and access to medications.

In terms of overall drug spending though and innovation in particular which I think is the big issue here, how is that going to affect future drugs for patients, that is I think a big question to be answered.

BRUNHUBER: Yes. And we keep talking about the caps and certainly one of the most significant ones is capping the amount of diabetics enrolled in Medicare will spend on insulin at $35 a month. So that is significant. But with diabetes such a huge and growing problem here in the U.S., Democrats had really helped to do more on that front to extend it to everybody, not just people on Medicare. How big a missed opportunity was that?

CHEN: You know, negotiating prices beyond the public sector has historically been very difficult. So certainly reducing prices across the board is a missed opportunity. But it is something historically that we don't do very much of.

BRUNHUBER: Yes. Well, certainly not with Republicans so recalcitrant on this and not voting at all for this. Now, this is meant to help curb inflation, though if it does so, it would only do it I guess indirectly and likely only years from now. In the meantime health care costs which unlike many other costs that we've seen, groceries and everything else, energy, you know, health care costs haven't really been skyrocketing due to inflation, but they could soon be set to go up later this year. So patients could see big price increases due to inflation coming up. How big a worry is that?

CHEN: You know, at an area that I don't really know too much about in terms of the relationship between inflation and health care costs. It is difficult to predict. We have seen health care spending rising over time. There have been new technologies being developed, new drugs being developed that have improved the way that we treat patients and are able to treat diseases, so that certainly contributes to that increasing health care spending, the aging population, all these things I think are bigger factors potentially than inflation itself. BRUNHUBER: Interesting. And certainly this will have impacts going on for years to come. Is it going to take that long for people to sort of realize the benefits for this in their pocketbooks?

CHEN: You know, some of these benefits will be immediate. And for certain patients, for a certain subset of patients. But, Kim, I think the really important thing to just keep in mind here is there is this longer term consequence of how does this affect drug innovation and incentives we have given innovators to develop new drugs.

In some sense, we will. If when you reduce revenues for drug innovators, there's going to be fewer drugs that are being developed undoubtedly. And the question is how many fewer life-saving drugs are we going to be seeing for sort of the level of expenditure, drug expenditure reduction that we'll be experiencing.

So really is a double-edged sword here that we're trying to balance between reducing costs for patients while also making sure that drug innovation continues to develop.

BRUNHUBER: Yes, absolutely. Listen, really appreciate your insights on this, Alice Chen, thanks so much.

CHEN: Thank you.

BRUNHUBER: We'll be right back.

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BRUNHUBER: The Pakistani National Anthem being played to mark the country's independence from British rule 75 years a ago. Pakistan along with neighboring India were both founded in 1947 when Britain abruptly ended its colonial rule and divided subcontinent into two sovereign nations.

The partition as it was called led to one of the largest and deadliest mass migrations in modern times. Scholars estimate up to 2 million people may have lost their lives during that turbulent time.

Rena Varama, was just a teenager when her family up rooted and fled to India in 1947. Last month Pakistan finally allowed her to visit her childhood home for the first time. CNN's Michael Holmes has her story.

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MICHAEL HOLMES, CNN ANCHOR: Her hair is white. She walks assisted now. Not the 14-year-old who left this neighborhood in Rawalpindi, 75 years ago. Still 90-year-old Rena says this is her childhood home, she says she vividly remembers the two storey home where her family once lived and why they had to leave.

[04:55:00]

UNIDENTIFIED FEMALE: I'm feeling very happy about coming to my home after such a long time. A very old dream of mine has come true.

HOLMES: Rena and her family were part of one of the greatest migrations in history, 75 years ago the British partitioned colonial India into two independent nations. One mostly Hindu, the other mainly Muslim, which it became Pakistan.

The divide triggered a mass movement across the sub continent, some 15 million people moving from one side of the border to the other, mainly along religious lines.

And between 500,000 and 2 million people were killed in the violence that accompanied that tumultuous time. It is animosity that has shaped relations between Pakistan and India to this day.

But for Rena whose family moved to the city of Pune in India shortly before the partition, she is greeted like family back in Rawalpindi. She says it took decades for her to get a visa to return to Pakistan. Her parents and siblings didn't live long enough to make the journey, but it is something she says, she hopes more people can do.

UNIDENTIFIED FEMALE: It has been 75 years since the partition and a new generation has grown up. We are neighbor countries. Our cultures and so many other things are the same. So we should live and love in harmony.

HOLMES: Words of wisdom and message of hope from someone whose heart lies in both countries. Michael Holmes, CNN.

BRUNHUBER: That wraps this hour of CNN Newsroom. I'm Kim Brunhuber. I'll be back in just a moment with more news. Please do stay with us.

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