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Renting Crisis?; President Biden Set to Sign Inflation Reduction Act Into Law; Liz Cheney Facing Potential Primary Defeat; DOJ Seeks to Block Release of Mar-a-Lago Affidavit. Aired 1-1:30p ET

Aired August 16, 2022 - 13:00   ET

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

[13:00:24]

ALEX MARQUARDT, CNN HOST: Hello. I'm Alex Marquardt in Washington, D.C. Ana Cabrera is taking some well-deserved time off. Thank you so much for joining me today.

Under seal and under pressure. The Justice Department is not budging, as calls mount to release more information the FBI search at Mar-a- Lago. Now a federal judge is set to hold a hearing on the media's request for the affidavit, which has been sealed. The DOJ says that that document lays out a road map to its investigation, the arguments made to search Donald Trump's Florida property, and it warns that releasing this affidavit would compromise the ongoing criminal investigation.

Now, it has been eight days since that unprecedented FBI action. And we know that DOJ filter teams, as they're known, have combed through at least some of the contents retrieved from Trump's home. We know this because DOJ returned Trump's passports, three of them, in fact, that were found among the materials that were taken away by the FBI.

CNN's Katelyn Polantz has been tracking all of this for the past week.

Katelyn, what can we expect to happen at this hearing on Thursday that has been called by that Florida judge?

KATELYN POLANTZ, CNN SENIOR CRIME AND JUSTICE REPORTER: Well, Alex, this hearing is going to be all about secrecy, and especially the arguments that the Justice Department is going to make to keep secret this very important document that backed up that search of Mar-a-Lago last Monday.

Remember, that document, it's an affidavit. So it's written by the Justice Department. It has only really been seen by the judge so far outside of prosecutors and investigators. And it's a narrative that would detail everything that has happened in this investigation that gives them probable cause to need to go seize evidence at Mar-a-Lago in this investigation.

So, so far, the Justice Department has not revealed much. They don't want to reveal much more. But they did say in a court filing yesterday arguing for secrecy that there are serious reasons why they need to keep these things confidential that they have said so far to the court. That includes the fact that they have interviewed witnesses so far,

the fact that they believe there will be future witnesses that they don't want to chill the testimony of if they were to bring them in for interviews or put them before grand jury.

We also know they are acknowledging the president of grand jury proceedings here. So that would be a group of a jury of peers that would vote to approve or deny an indictment, if there were to be one that comes to this.

And then, finally, I want to read a statement that the Justice Department prosecutors wrote in this court filing explaining why they can't have this affidavit out there, or they don't want it to be.

They said: "If disclosed, the affidavit would serve as a road map to the government's ongoing investigation, providing specific details about its direction and likely course in a manner that is highly likely to compromise future investigative steps."

So, Alex, we have -- will have to wait to see what the judge does, and also what the Justice Department might be willing to say in court to continue to argue for secrecy here.

MARQUARDT: But, Katelyn, they have indicated there might be a little bit of wiggle room in terms that they might be willing to reveal a few more details from this affidavit, right?

POLANTZ: That's right.

So, one of the things that they said is, if you do want to redact a lot of this affidavit, we could make some arguments around that. They have told the judge that already, although they did say in their filing that, if they redacted, it might render everything meaningless to the public to look at that affidavit, because there would need to be so many things blacked out to protect their investigation.

They have also said that there are a couple other filings in the court record they would be willing to make public at this time. It's the procedural steps, essentially. When they went to the court initially with that search warrant and with the affidavit, they had to ask to keep things secret. There would have been a back-and-forth between the Justice Department and the judge.

Of course, as a court reporter, we are always looking for droplets of information in the court record. And so the media is asking to unseal any documents that we can in this case. It is possible some of those other pieces of paper will be unsealed. But that hearing tomorrow really is about the narrative of this investigation so far, the affidavit.

MARQUARDT: Yes, always looking for those tiny little nuggets, those crumbs.

And no one does it better than Katelyn Polantz.

Thank you so much for your time today. POLANTZ: Thanks, Alex.

MARQUARDT: All right, now let's bring in CNN legal and national security analyst Carrie Cordero.

Carrie, we have been saying for a week now this is not a standard investigation. This is unique in so many ways. There are enormous political consequences.

But I want to take -- I want to look at what Katelyn just said. And part of DOJ's argument against unsealing this affidavit, they say, is that it would likely chill future cooperation by witnesses whose assistance may be sought as this investigation progresses, as well as in other high-profile investigations.

[13:05:14]

What do you make of that argument from DOJ?

CARRIE CORDERO, CNN LEGAL ANALYST: Well, the interesting thing about that argument, Alex, is that it shows that this investigation is not at its end stage.

So one of the questions I had when the search was executed was, was this execution of the search warrant at Mar-a-Lago the final step or nearly the final step in an investigation, which is sometimes what happens?

And the attorney general, he mentioned the other day in his public remarks that the Justice Department usually tries to use the -- what's called the least intrusive means first, which is sort of the least intrusive into privacy, the least level of scrutiny in terms of making a probable cause finding before they take the next investigative step.

But what this filing, I think, indicates is that they still have a lot of investigation still to go, and it may be related to the former president himself, or it could be related to other individuals who were involved in the what appears to be serious mishandling of classified information.

MARQUARDT: And this reference to witnesses whose assistance may be sought, should that worry Trump that people around him are talking?

CORDERO: Well, there are a number of witnesses who potentially could be close to the president.

Obviously, this was a search of his residence. And so there are individuals who have been involved in either the moving of those -- the documents that were removed from the White House to his residence, his close advisers, who maybe have knowledge of it.

So, certainly, there probably are individuals who are close to him who have cooperated or provided information pursuant to legal process, if required by the Justice Department or demanded by the Justice Department under legal process, who have provided information. And if the Justice Department wants to call those individuals later

into, for example, a grand jury or seek more information for them, it would be contrary to the interests of the investigation to have the names of those individuals publicly known.

MARQUARDT: I want to move on to this case in Georgia and the fact that Rudy Giuliani, who had been subpoenaed in Fulton County, is now being told that he is a target of this Georgia probe.

Now, he is going to be testifying before a special grand jury tomorrow. But this move to tell him that he's a target, how serious is that for him? Does that mean that he's likely to get indicted?

CORDERO: Well, it also -- I think what it mostly indicates is, it's going to give him more information, in consultation with his own counsel, to decide how he's going to answer questions, because if he is being informed that he is a target, that means that he has substantial legal exposure in the state of Georgia.

And so that may very well determine whether he thinks it's in his interest to answer questions or to take advantage of his constitutional rights not to answer questions.

MARQUARDT: And, Carrie, I want to get to Eric Herschmann as well. He, of course, is that former White House lawyer, Trump White House lawyer, who has been really prominent in the congressional January 6 investigation.

We now understand he's been subpoenaed by a grand jury for the federal investigation. I want to remind our viewers some of what he said during his testimony to the January 6 Committee. Take a listen.

(BEGIN VIDEO CLIP)

ERIC HERSCHMANN, FORMER WHITE HOUSE ATTORNEY: I said: "I don't want to hear any other effing words coming out of your mouth, no matter what, other than orderly transition. Repeat those words to me."

(CROSSTALK)

QUESTION: What did he say?

HERSCHMANN: Eventually, he said: "Orderly transition."

I said: "Good, John. Now I'm going to give you the best free legal advice you're ever getting in your life. Get a great effing criminal defense lawyer. You're going to need it."

And then I hung up on him.

(END VIDEO CLIP)

MARQUARDT: So, the John that Herschmann is referring to is John Eastman, who was trying to convince Trump that the election had in fact been stolen.

But the fact that Herschmann has been subpoenaed in the federal investigation, what does that tell us about where it stands?

CORDERO: Well, it's obviously ongoing.

The Justice Department continues to conduct an investigation into not only the violence that occurred on January 6, but the effort to overturn the election. And Eric Herschmann in his position as counsel was obviously, we know from his January 6, committee testimony, aware and involved in many conversations with the lawyers, like John Eastman, who were advising the former president about how to overturn the election through specious legal arguments.

And so now that he has been compelled, that gives the Justice Department a way to compel his testimony. And he was a very candid witness to the January 6 Committee. So I will be interested to learn, to the extent we learn what takes place through reporting, of the grand jury what he ends up testifying to.

[13:10:02]

MARQUARDT: All right, Carrie Cordero, thank you so much for breaking that all down for us.

CORDERO: Thanks.

MARQUARDT: All right, well, new today, top House Democrats are saying that the Trump-appointed homeland security inspector general is obstructing their congressional investigations.

They're referring to Secret Service text messages from around the time of the January 6 insurrection.

CNN justice correspondent Jessica Schneider has more details.

Jessica, the Democratic chairs of these two committees, they're calling this unacceptable.

JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: Yes.

And, Alex, this is just the latest escalation in this constant battle between these two top Democrats. It's Bennie Thompson and Carolyn Maloney, them vs. the DHS I.G., Joseph Cuffari. So they're now lashing out at the I.G., and this time accusing him of obstruction.

And, as you mentioned, really, this all goes back to the I.G.'s alleged failure to notify Congress for what they say is 14 months after the Secret Service had wiped its phones of all those text messages surrounding January 6. Secret Service had said it was part of a phone replacement program.

So after this was finally revealed, they say too late, to Thompson and Maloney, they demanded that the I.G. recuse himself from any investigation into Secret Service. They said they lost confidence in him. But now here they're taking it a step further. They're saying he has not cooperated with them in the past several weeks.

So they sent this letter, which was obtained by our Annie Grayer, a little bit -- a little while ago. They say: "In response to the committee's requests, you have refused to produce responsive documents and blocked employees in your office from appearing for transcribed interviews. Your obstruction of the committee's investigations is unacceptable. And your justifications for this noncompliance appear to reflect a fundamental misunderstanding of Congress' authority and your duties as an inspector general."

So this is a long letter, eight pages. It does reveal that the I.G. Here wrote these two members on August 8. They say he explained that he wasn't sharing information so he could protect the independence of his office. They also say that he said he had shared what he needed to.

But, Alex, Thompson, Maloney, they're saying that's just not how it works. Congress has oversight on this. And they're accusing him of what they're saying hiding evidence from Congress of your misconduct and mismanagement.

Now, we have reached out to the I.G.'s office, Joseph Cuffari. There is no response so far. But this is all just part of this escalation as this investigation continues into these missing Secret Service texts. And the two members of Congress here are really saying that the I.G. just hasn't been forthright with them or sharing what he's supposed to -- Alex.

MARQUARDT: Yes, some very strong language in that letter, because those texts could be critical to that investigation, to understanding what happened on that day.

Jessica Schneider here in Washington, thank you very much.

Now, turning to the campaign trail, I want to head to Wyoming and a day of reckoning, really, for Congresswoman Liz Cheney. Of course, she has been a Trump nemesis, her primary goal, she says, to make sure that Trump does not get back to the White House. And she has been front and center as vice chairwoman of the January 6 Select Committee.

Now, that has opened a major opening for her Trump-backed opponent, Harriet Hageman.

CNN's Jeff Zeleny is live outside of a polling station in Cheney's hometown.

Jeff, one of her last-ditch efforts as the polls widened between these two candidates was to try to convince registered Democrats to reregister as Republicans to vote in today's primary.

So how are things shaping up as Wyoming voters are heading to the polls?

JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: Well, Alex, that is one of the strategies the Cheney campaign has been employing, but we're also finding it's actually happening organically.

We have talked to many Democratic voters who say that they had never expected to vote for someone named Cheney, but they were drawn to do that because they really respect and support what she's been doing on the January 6 Committee.

We have also talked to Republicans who say that they respect how she has stood up to the party. But we are near Jackson Hole, Wyoming, a very blue part of a deeply red state. So, certainly, this is not representative of what we have seen across the state over the last several days. Many Republican voters here are furious at Congresswoman Cheney because they believe she has abandoned former President Donald Trump.

Of course, you will remember, back in 2016, Liz Cheney and Donald Trump were elected on the same day. Things have changed dramatically since then. But, again, back to those Democratic voters.

We talked to Libbe Burchfield, who voted here this morning, and she offered this reason why.

(BEGIN VIDEO CLIP)

LIBBE BURCHFIELD, WYOMING VOTER: I have been a Democrat almost all my life. And, with Liz Cheney, I decided we're going to get a Republican in Wyoming. I'd rather have her than Hageman.

I don't agree with any of her politics, none. But what I have seen her do on the committee, I think, is very rewarding. I think she's done a hell of a job.

(END VIDEO CLIP)

ZELENY: So again, mathematically speaking, there really aren't enough Democrats or independents to overcome the Republicans who have said they are frustrated and fed up with Liz Cheney, but several more hours of voting here in Wyoming.

[13:15:05]

We will see how the rest of the day goes here, Alex.

MARQUARDT: Yes, a big day in Wyoming.

Jeff Zeleny, thank you so much.

Now, moments from now, President Joe Biden is set to sign the bill that almost didn't happen, $750 billion. The Inflation Reduction Act, it's called. How and when it could impact you.

Plus, the CDC just unveiled new details about the first U.S. case of polio in a decade, and they say it likely resulted from community spread.

And then a 10-year-old boy loses part of his leg after a bull shark bit him. How quick thinking and a nurse on a boat helped him survive.

Stay with us.

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[13:20:08]

MARQUARDT: Just about two hours from now, President Joe Biden will be putting the finishing touches on another major legislative win.

He is set to sign the Inflation Reduction Act into law. It's, of course, the $750 billion bill that checks quite a few legislative boxes, from big changes to health care and prescription drugs to the largest climate investment in U.S. history, and reducing the deficit.

CNN chief White House correspondent Kaitlan Collins joins us now.

Kaitlan, the challenge now, it would seem, for the Biden administration is getting voters to feel the effects of this bill, or at least believe that it's going to be helping them.

KAITLAN COLLINS, CNN CHIEF WHITE HOUSE CORRESPONDENT: Yes, initially, the challenge was actually getting this bill passed.

And now the White House is going to turn to focus their efforts on making sure voters know what exactly they passed and how it benefits them. This bill passed the House on Friday. Of course, that was after the Senate had passed it following that surprise announcement from Senator Manchin and Senator Schumer.

And this is a bill, it's called the Inflation Reduction Act, but, really, it addresses some of the core priorities that Democrats had, at a time when they really didn't think, Alex, they were going to get anything passed for about eight months. It seemed like this had really reached a dead end.

And now they have passed this bill that is going to extend those subsidies from the Affordable Care Act. It is also going to let Medicare for the first time negotiate prescription drug prices. That's a big deal. It's also got establishing this corporate minimum tax as to how they're going to pay for it. And, of course, one of the key priorities that Democrats have also had is when it comes to climate.

And this bill also has a lot of money in it for climate investments and for energy reform. And so that is going to be what the White House is focused on selling, making sure that voters know this. I think one question will be about the name of this bill, in and of itself, because it did go from being called the Build Back Better act to now as the Inflation Reduction Act, even though the nonpartisan Congressional Budget Office has said it's not going to have a real substantial effect on inflation, certainly not in the immediate future.

But you will see President Biden on the road selling this. He's going to sign it into law today. But he will have a more formal celebration ceremony here at the White House on September the 6th. You're also going to see dozens of Cabinet members out on the roads over the next two weeks talking about this, going to certain areas and telling voters how it will affect them, Alex.

MARQUARDT: And, of course, the White House hoping that this will also give a boost to Democrats in the midterm elections.

Kaitlan Collins on the North Lawn of the White House, thanks very much.

Now, while the White House tries to fight soaring costs, Americans who are renting their homes are fighting to just keep the roof over their heads. Freddie Mac found that nearly two-thirds of renters are worried because they won't be able to pay for their housing within the next year.

CNN's Matt Egan joins us now.

Matt, how much have rents really gone up?

MATT EGAN, CNN REPORTER: Yes, Alex, unfortunately, sticker shock is all too real for millions of Americans who are renting.

The median rent in June was $1,876 a month. For context, that's up 25 percent from March 2021, when COVID turned the world upside down. And this is a big deal, because, for many Americans, housing is the biggest monthly expense.

And this is not just a problem for renters, because look at home prices. We know they have exploded during COVID. The median home price hit a record $416,000 in June, up 48 percent since March 2020. That is quite the move.

Now, the Federal Reserve is trying to cool off the housing market, trying to fight inflation by raising interest rates rapidly. And, by definition, that is increasing the cost to borrow the cost to get a mortgage. And that's a big deal, because, the higher mortgage rates go, the less home you can afford.

Let me show you what I mean. If you're in the market for a mortgage on a $250,000 home, you're paying $222 more per month than you were in March 2020, simply because mortgage rates have gone up, on a half-a- million dollar home, $444 more per month.

And, again, that money isn't going to get you an extra bedroom or a bigger backyard. That is all going to the bank. And the fact that mortgage rates have gone up and that home prices have gone up, that is forcing more people to rent instead, pushing up rental rates.

MARQUARDT: Yes, those are some really scary numbers.

Matt, we are also hearing from two large retailers who are giving some details about the state of the economy. What are they showing?

EGAN: Yes, Alex less scary numbers from Walmart and Home Depot. Now, we know there's a lot of recession fears right now, concerns about what's going on in the housing market.

But don't tell that to Home Depot. Home Depot reported quarterly sales of $44 billion. That is not just up 6.5 percent from a year ago. That is a record. And Home Depot says they're continuing to see strong demand for home improvement projects. Walmart also reported better- than-feared results this morning. Now, Walmart has been forced to cut prices to help people deal with high -- with high food and fuel costs.

[13:25:00]

But that strategy is working. Walmart did say that there's been some evidence of shoppers shifting their behavior. People are staying away from higher-priced deli meat and turning to canned tuna, hot dogs and chicken.

But what is important here, Alex, is that neither Walmart nor Home Depot talked about Americans cutting their spending. And that's a big deal, because consumer spending remains the biggest driver of the economy. And so, as long as people keep spending, we can see this -- the economy continue to grow.

MARQUARDT: All right, Matt Egan, thank you for explaining all that. Appreciate it.

Now, the CDC is just giving us more information on the polio case that was confirmed in New York. Why the agency says this is not an isolated case.

And a scary recall for a popular kids drink. Why? There could be cleaning fluid mixed in. We will have more coming up.

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