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President Biden Delivers Remarks on Economy; Justice Department Asks Trump to Return All Classified Documents; Labor Market Robust Despite Recession Fears; Uvalde School District Suspends Police Department. Aired 1-1:30p ET

Aired October 07, 2022 - 13:00   ET

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

[13:00:00]

JOHN KING, CNN HOST: The former President Donald Trump finally digging into his wallet of political campaign cash.

The new Trump-aligned Super PAC MAGA Inc. just placed its first TV ad buys. It is spending $1.3 million on ads to support Republican Senate candidate J.D. Vance in Ohio and nearly $900,000 on the Republican candidate Mehmet Oz in Pennsylvania, that according to AdImpact.

The former president has been under pressure from Republicans to support and spend money on candidates he backed in the primaries.

Thanks for your time this week on INSIDE POLITICS. Hope to see you Monday. Have a peaceful weekend.

Ana Cabrera picks up our coverage right now.

ANNOUNCER: This is CNN breaking news.

ANA CABRERA, CNN HOST: Hello. I'm Ana Cabrera in New York. Thank you for being with us.

We have breaking news out of Uvalde, Texas, suspensions and a major shakeup for the officers who responded to the Robb Elementary School shooting in Uvalde in May. The community appears to be cleaning house.

I want to bring in CNN's Shimon Prokupecz, who broke this story.

Shimon, you have been doing a lot of reporting on this. What is the latest?

SHIMON PROKUPECZ, CNN CRIME AND JUSTICE CORRESPONDENT: Well, certainly, a significant, significant development here, something that the families have been wanting, and this is the most important thing really in this story, this community, the parents here wanting.

They have suspended -- the school district just now moments ago in a press release announcing that they are suspending their police department. This is the school police department. This is not the local police department. So it's several officers at this police department. Of course, they have faced an enormous amount of scrutiny over their response on the day of the Robb Elementary School really for taking no action at all.

They were there. They had all sorts of knowledge of the school, and they essentially just stood around and did nothing. So, now comes word that this is something that families have wanted.

Also significant, because of our reporting, we discovered they are announcing that they are placing the lieutenant, Miguel Hernandez -- he is the lieutenant. He was the commander of this police department after they fired the former chief, Pete Arredondo.

What's important about Miguel Hernandez is that he was responsible for vetting Officer Elizondo. He's the man, the lieutenant...

CABRERA: And Officer Elizondo, remind our viewers...

PROKUPECZ: Right.

CABRERA: ... is this woman who came from the Department of Public Safety, was hired after there had been an investigation and -- open investigation into her actions on the day of the shooting.

PROKUPECZ: Right.

CABRERA: And she was hired by the school district police force.

PROKUPECZ: Right.

She's the former State Trooper who worked for the Department of Public Safety who was under investigation for her response to the school shooting. She arrived within minutes. There are some questions regarding her response, her tactics, what she was wearing.

You see her there in the video, and, of course, the school hiring her despite, despite knowing that she was under this investigation. And so this lieutenant, Miguel Hernandez, they are now saying that they have placed him on administrative leave, because, clearly, something went wrong. We don't know what went wrong.

And so they are now placing him on administrative leave. Also significant is a man by the name of Ken Miller. He was head of student services. We actually spoke to Ken Miller. We tried to question him at the school that on the day we were there, asking questions of Elizondo, trying to get her to respond to our reporting.

He ignored our questions. He slammed the door, his car door, in our face. We don't really understand why he was suspended, but -- actually, why he was placed on administrative leave, they say, and then he has chosen to resign. He has chosen to resign from the school district.

He was sort of the number three guy there at the school. He was in charge of student services. So, he...

CABRERA: So, in total, how many people are suspended, how many people have been fired or resigned? PROKUPECZ: So, right now, all we know is that it's the entire school police force, which is probably about four or five officers.

The lieutenant is separate because he's placed on administrative leave. And now Ken Miller, who was the number three at the school district, who's head of student services, he was placed on administrative leave, but he chose to resign. So we don't know what the relationship is with this individual.

Mr. Miller is an individual that I have interacted with before during the time when I tried to question the former chief, Arredondo. He was standing behind Chief Arredondo as I was trying to question him and opened the door and kind of brushed us aside and got the chief into the administrative building.

So I have interacted with Mr. Miller before. I know him well. The parents were very unhappy with Mr. Miller. A parent, specifically a guardian of one of the victims, Uziyah Garcia, who died there at the school, Brett Cross, has been literally standing outside the administration building with other family members for the past week, to mandate for officers to be suspended, to mandate for more accountability.

CABRERA: Right.

PROKUPECZ: And he had some interactions with this Mr. Miller that were certainly very concerning.

[13:05:00]

And so perhaps that could be one of the reasons that went into this decision for the school to place Mr. Miller on administrative leave.

CABRERA: And I know you will be working to get responses from the police department...

PROKUPECZ: Yes. Yes.

CABRERA: ... from these officers who may be implicated here.

But I just want to ask you, Shimon, because I know this is something that the families, many of the families of victims involved in this shooting, have been calling for, the accountability piece.

At the same time, when you're talking about this, I can't help but wonder, what does this mean now for the safety and security of the community if these law enforcement officers are no longer responding to emergencies?

PROKUPECZ: Yes. So, they -- what the city has done and what the town has done is, they have put the Department of Public Safety in charge of school security.

Now, they were there already as extra reinforcement. So now they will take over security at the school. This is something that the parents are concerned about, certainly, but this is something that they wanted. They did not want to school police force any longer in their schools. They didn't trust them. They had issues with them.

But understand something, and I think this is very important. This is a big shakeup for this community. These school administrators have been there for years. You're talking about a superintendent who sort of -- whose father was the former superintendent. This is a small community. These are people that everyone knows.

So this is a major shakeup for this community. But, again, the problem with all this is that we're nearly five months into this, five months after the deaths of those kids, and all of this is just happening now. This is something that should have been happening months ago, so that these families didn't have to deal with this.

And the fact that they went and hired this former officer, Crimson Elizondo, didn't tell anyone about her background, didn't tell anyone who she was, where she came from, parents were asking, this community was asking, and it took our reporting and really just great parents who brought the attention of her to us, to say, listen, we feel something is not right here.

We looked into it. And it took that, it took that for the school to finally, finally do what the parents have been asking them to do.

CABRERA: So is this the end of it?

PROKUPECZ: No, there's a lot more.

Now, for the school, no, because you have administrators that the families want gone. And you know what it is also, Ana? It's just the disrespect, the continued disrespect by the leaders of the school district towards the parents. I have been to every school board meeting, and the way that the families have been treated by the school board, by the administrators, it's insulting.

They have been so upset by the way that they have been treated. But, finally, I have been talking to the family members. They're starting to get that accountability. For them, this is a victory. And this is going to be a day that they're certainly going to enjoy as much as they can, dealing with all the pain. But they're going to have to remember their kids.

And that community is reeling every day, because...

CABRERA: Yes.

PROKUPECZ: ... when they try to put this aside, we have this information. New information comes out. And it just hurts them so much.

And that's why, for the authorities there, they need to come out and give up all the information they have and share with the parents, because this is going to go on and on and on for months.

CABRERA: Shimon Prokupecz, keep doing the work. Keep seeking answers and keep reporting out these new developments. That community has been through so much, but information hopefully brings them a sense of power in all of this.

Thank you.

OK, it's a crucial moment for the U.S. economy, with Wall Street and the Federal Reserve basically staring each other down right now. Today, we have the latest jobs report; 263,000 jobs were added in September. Now that's a slight slowdown, but in this topsy-turvy economy, slow is good, because, in the battle to tame inflation, the Fed's secret weapon is a cooling labor market.

The key question now, has job growth slowed enough to stave off further interest rate hikes? Wall Street thinks the answer is no. You can see Dow is down more than 600 points right now. The markets are continuing to slide, as investors brace for the Fed's next move.

And minutes from now, we will hear from President Biden's and his response to this new jobs report and to OPEC's recent slash in oil output, that big announcement. We will bring the president's remarks to you live.

But let's dig into these new economic numbers with CNN's Matt Egan.

OK, Matt, where do things stand right now?

MATT EGAN, CNN REPORTER: Well, Ana, the jobs market is cooling off, but it remains way too hot; 263,000 jobs added last month, during normal times, these would be blockbuster numbers, but we're not normal times.

We saw these huge spikes in hiring late last year and early this year. This was unsustainable, and this was actually fueling inflation. Clearly, it has slowed down. This is where we are right now. But it's not much of a slowdown. These really are baby steps.

The unemployment rate is down to 3.5 percent. This is tied for the lowest level in half-a-century. And, remember, it got to nearly 15 percent back in the spring of 2020.

[13:10:00]

I think, when you take a step back and you look at this overall picture, the good news is that nothing about today's report suggests an ongoing or imminent recession. Hiring is strong. If you need a job, you want a job, now's a good time to look.

I think the bad news is, this does not -- is not going to deter the Federal Reserve from slamming the brakes on the economy. And that's what's unnerving investors right now, U.S. stocks at basically session lows, down 600 points, around 2 percent. The big fear remains that the Fed is going to overdo it, slam the brakes so hard that it ends up causing a recession.

CABRERA: Just going back to the numbers, what are the sectors adding jobs right now?

EGAN: Well, we have really seen strength across the board here. Leisure and hospitality, these jobs, restaurants, hotels, they got

crushed during COVID. They're bouncing back in a big way. Health care jobs actually back to pre-COVID levels. Professional business services, these are white-collar, generally higher-paying jobs. They're also going up. Factory jobs, they keep going up. Manufacturers can't find enough workers.

We have really seen strong demand for workers across the board.

CABRERA: What about wage growth?

EGAN: Wages, that is the big one, because the problem is that, inflation is so hot, that when you adjust paychecks for the cost of living, they're actually getting smaller.

So if you look at this green line, this is inflation. Blue line here is wages. And, as you can see, wages are high. They have come down just a bit at 5 percent. That is still very high. The problem is that inflation is even higher. Now, this gap here is why people are hurting, because they're working just as hard as they have been, but they can't keep up.

The tricky part here is that, in a perfect world, both of these numbers would come down to more sustainable levels. That's what the Federal Reserve wants to see happen, because the fear is that, if they don't, if wages just stay really high, then it's going to fuel inflation, right?

People see high prices, they demand more wages, that causes companies to raise prices. It becomes a vicious cycle. So that's what we want to avoid. Until this gap closes, though, people are going to be hurting.

CABRERA: OK, Matt Egan, thank you very much for your reporting.

EGAN: Thank you, Ana.

CABRERA: More on this now with professor of economics and public policy at the University of Michigan Justin Wolfers

Professor, job growth is slowing, but the unemployment rate also dropped. What does all that say about the overall health of the economy? How do you interpret these mixed signals?

JUSTIN WOLFERS, UNIVERSITY OF MICHIGAN: I think, when you look at things, there's a lot of good news here for families.

Unemployment is at a 50-year low. What a great -- what a great opportunity and a great time for people to find work or to find a better job. Employment growth is still really strong. So we're in a good spot, and things are getting better.

And then the final thing is, while employment growth is positive, it's a little less positive than it was. And this has been a key goal of the Federal Reserve. They are worried that the economy was running too hot. They wanted a so-called soft landing. Well, if you wanted to tell the first chapter of that soft landing story, it would be pretty much the set of numbers we saw this morning.

CABRERA: So are you saying no recession in sight?

WOLFERS: Right now, employment is growing over the past three months at a faster rate than it has ever grown in the entire pre-pandemic 2000s.

I'm not making promises there won't be a recession in the future. But anyone who thinks we're currently in a recession, people have been moaning about this for months, and they have been wrong month after month after month. The economy's in a good spot and it's improving.

The thing that's hurting people, of course, is inflation.

CABRERA: Right.

But just on the recession front for a moment, we just reported this week that 91 percent of some 400 CEOs say a recession is coming, and it's not going to be a mild one. Why do you see it so differently?

WOLFERS: Absolutely.

Ana, so here's the thing. You and I are talking about a recession right now. Why are we talking about it? We're talking about it because everyone else is talking about it. Why are they talking about it? Because everyone else is talking about it.

(LAUGHTER)

(CROSSTALK)

CABRERA: Is it the chicken or the egg?

WOLFERS: Take a step back. Look at the numbers.

Unemployment is at a 50-year low. Employment is growing at a faster -- the sort of rate that, in any other year, people would have said, what an amazing achievement. I hear the pain. I feel the pain. I think some people are confused. A recession is not inflation.

Inflation is painful. Inflation is high. Inflation is a problem. But the economy is not in a recession. There's not a number that looks that way. And we see that people believe it's easier to get jobs out there and people are getting jobs out there. That ain't a recession.

CABRERA: So, based on today's report, do you expect another big interest rate hike?

WOLFERS: I think the Fed has pretty much locked in what's happening over the next few months. So they're probably looking at three- quarters-of-a-percentage point at the next meeting, maybe at half-a- percentage point.

All of that is pretty much locked in. So the real interest is, what happens after the Fed does the set of rate hikes that it's pretty much promised? It for feels a bit strange to see the Fed raising rates. But the thing all of us need to remember is, interest rates just a couple of months ago were awfully close to zero.

[13:15:08]

Zero is an historically unprecedented low number. What the Fed is doing right now is not crashing the economy, but trying to move rates back to something pretty normal.

And so, in order to do that, it has to raise rates.

CABRERA: So if the biggest problem is inflation, does anything you see in today's report, suggest prices will start falling?

WOLFERS: Not that prices will start falling, but they will start rising at a lower rate. That's what inflation -- reducing inflation is all about.

And, actually, there's -- there's actually some quite good news. So the most important is, the most important cost for businesses is the wages they pay workers. And one of the biggest fears people have had is, if wages rise, then prices will rise, and we will get into a wage- price spiral.

But it turns out that these numbers suggest that there's not much evidence of that right now. So, once we get past the current post- COVID moment of supply chain disruptions and disruptions from Ukraine and other things like that, it looks like the underlying rate of wage growth suggests that the underlying rate of inflation is going to be a whole lot happier in the future, which is why most economists grimace when we look at today's inflation numbers, but are still forecasting that, at the end of next year, inflation might be 2-point-something or 3-point-something, the sort of rate you barely notice.

CABRERA: But the inflation and wage growth aren't matching up. As Matt just showed us, wage growth is still way below what the inflation rate is right now, right?

WOLFERS: Absolutely.

And so that's good news for the future of inflation. If wages were racing ahead, that would be another way of saying business costs are rising, they're going to have to raise their prices. So workers are going to be suffering in the short term right now, but that's one of the key ways that inflation is going to remain low.

Look, I have got some good news for you viewers. I feel the pain right now that prices are rising faster than your wages. But I have studied these data across dozens of countries across many, many decades, and it's always true that, eventually, wages catch up to prices.

So when prices get ahead, wages catch up. The pain we're feeling right now is temporary and transitory because that process takes a while.

CABRERA: I like ending the good news.

Professor Justin Wolfers, happy Friday. Thanks for being there for us.

WOLFERS: To you too, Ana.

CABRERA: After all the asking and searching, the Justice Department believes former President Donald Trump still has classified documents in his possession.

The DOJ is again asking Trump's lawyers to return everything. I want to emphasize this is after the FBI already retrieved thousands of documents from Mar-a-Lago back in August with their search. They had more than 100 marked classified in that seizure.

And so here to discuss this and more is former federal prosecutor Elliot Williams.

Elliot, do you think the DOJ would be asking this if they didn't know for sure that Trump still had classified documents in his possession?

ELLIOT WILLIAMS, CNN LEGAL ANALYST: Right.

No, that's exactly right, Ana. And look, it does a few things, asking him. Number one, it puts the former president and his team on notice that they are still investigating. Number two, it speaks to intent. If they actually ended up going to charging an offense here, they can say that we put the defendant at that point on notice that the crime was still ongoing and we believed that he hadn't complied.

And then, number three, it allows you to bring him into court at some point, make a motion to the court to have him say on the record under oath that -- or file a document under oath that says that they did or didn't return all the documents.

So it's actually kind of strategic on the part of the Justice Department to be asking these questions, because it can help them down the road.

CABRERA: Could we be looking at another unannounced search anytime soon?

WILLIAMS: You absolutely could, because what you're seeing here is, if in fact they believe that there is still evidence of a crime there, and they can establish to a judge that they believe there's still evidence of a crime there, then certainly that sets the basis for another search warrant execution.

This is kind of what happens, though, in law enforcement generally. First, you try to ask nicely, as we saw this for several months with the former president before. And if you don't get the answers there, then go to a court and seek legal measures for getting the evidence or information.

CABRERA: Let's switch gears to the investigation in Georgia, because sources are telling CNN indictments concerning the investigation into efforts by Trump and his allies to overturn the 2020 election could be issued as early as December, as in two months from now. And I want to remind our viewers this probe began with that January 2021 phone call from Trump to Georgia Secretary of State Brad Raffensperger, asking him to find enough votes to overturn Joe Biden's win.

Now, we know it has expanded since then to include the fake electors plot and more.

[13:20:03]

Elliot, what do you make of the timing for possible indictments? And who do you see as being in the hottest water here?

(LAUGHTER)

WILLIAMS: That's a couple complicated questions.

So, what about the timing? Look, they're very close. If they think they're going to be able to file major charges against a very high- profile defendants only two months from now, they're pretty confident now as to what they're going to proceed with.

And what reporting has indicated that, number one, it might be campaign finance charges related to specifically trying to tinker with the outcomes of elections, but also RICO, racketeering, cases, where almost an allegation that the president and his supporters or organization were a criminal enterprise engaged in a number of acts.

So it seems like, if this reporting is accurate, they're very, very close to something. Now as to the whom, obviously, the former president, but any number of aides around him who had -- could have helped facilitate any wrongdoing could also be charged with crimes here.

CABRERA: And, of course, we have the midterm election coming up next month, which would also perhaps explain timing being after that, so as not to have any kind of political interference, so to speak.

Elliot Williams, good to have you here. Thank you very much for joining us.

WILLIAMS: Thanks, Ana.

CABRERA: A terrifying warning delivered behind closed doors, President Biden telling people at a fund-raiser that the prospect of nuclear Armageddon is now the highest it has been in 60 years. But senior U.S. officials aren't exactly sure why he said that.

Plus, New York City now declaring a state of emergency over a surge in asylum seekers. What happens now?

And thousands of people with pot convictions breathing a little easier right now. What we're learning about the president's marijuana pardons.

(COMMERCIAL BREAK) [13:26:06]

CABRERA: I want to go right now to President Biden delivering remarks on the economy.

Let's listen.

(JOINED IN PROGRESS)

JOE BIDEN, PRESIDENT OF THE UNITED STATES: I want to thank you, Sam, for that introduction. Thank you, Mayor Keller, for welcoming us to your city and for getting your two kids to got to get dressed on a Friday to come and see me.

(LAUGHTER)

BIDEN: I don't -- I hope they will forgive me for that.

(LAUGHTER)

BIDEN: And it's great to be here with Congressman David Trone, who's always, always, always working for the work of people of this district on mental health and addiction and support of our veterans, and modernizing our infrastructure, like expanding I-81, which is going to be expanded because of him.

(CHEERING AND APPLAUSE)

BIDEN: I want to commend the terrific leaders who couldn't be here today, Steny Hoyer, who leads the Democrats in the House, and Senators Cardin and Van Hollen, who are close and dear friends.

And, look, I want to thank Donna Edwards of Maryland's State Federation of Labor and all the proud members of the United Auto Workers here today.

This is National Manufacturing Day. And it's starting to mean something again, National Manufacturing Day, when we celebrate workers, who are the backbone of the economy of this country. Not a joke.

Where's it written that it says America can't be the leading manufacturer in the world again? Where is that written?

I'm here at this Volvo plant to thank the workers and management for building heavy-duty engines, transmissions, axles for trucks and buses and parts of electric vehicles of the future, and like the United Steelworkers at the cement plant here in Hagerstown who are manufacturing cleaner cement for our nation's roads and highways.

People don't even realize how much cement, the ordinary way it's made causes environmental problems. The older, dirtiest cement accounts for 7 percent of global emissions. Well, guess what? Clean cement makes a gigantic difference.

And like all the workers I met yesterday at the IBM plant in Poughkeepsie, New York, where they're investing $20 billion in manufacturing advanced quantum computers here in the United States again, here in the United States. And workers in Syracuse, where the company Micron is investing $100 billion to manufacture computer chips, the biggest investment of its kind in America, biggest investment ever in the world.

And we all know it's been four or five years in this country, the last four or five, a lot of things have been tough for people. A lot of things have been tough. And they're still tough for many. But there's also a bright spot, where America is reasserting its power, where America's reasserting, Americans are reasserting themselves.

Where is it written, as I said, that American can't lead the world in manufacturing again? We already created -- we already created over 628 -- or 38,000 manufacturing jobs since I have been president, because we're making it happen right here in America.

Companies are investing in America. And we're all making sure government delivers. The infrastructure law, the CHIPS and Science Act, I don't know about you, but, as my dad used to say, people just are worrying about getting -- putting three squares on the table every day, and not having to deal with all the politics going on, and all the -- all -- so who should know the names of these pieces of legislation.

But we have made historic government investment in America, spurring incredible private sector investment in America.

If I could divert for just a second, we had a piece of legislation that -- led by your congressman that, in fact, says that we're going to invest $368 billion in dealing with the environment. Well, a major article in a major -- major publication yesterday of the -- from industry, that's generated $1.7 billion in investment, because guess what?

We give a tax credit to somebody, and guess what? Companies want to build that product.