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Candidates Make Final Push for Votes Less Than Two Weeks to Election Day; U.S. Economy Grew 2.6 Percent in Third Quarter After Shrinking First Half of Year; Headquarters of Arizona Democratic Gubernatorial Candidate Burglarized. Aired 10-10:30a ET

Aired October 27, 2022 - 10:00   ET

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

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ERICA HILL, CNN ANCHOR: Top of the hour. I'm Erica Hill. Thanks for joining us on CNN.

This morning, some good news on the economy as, of course, we're counting down to the midterms. GDP numbers show that this quarter was the first to show positive growth this year. Democrats sure to tout those new numbers on the trail today as Republicans hammer those continuing concerns over inflation. How do those two square? We're going to have much more on that in just a moment.

Plus, happening right now, an investigation underway in Arizona after the Democratic candidate for governor Katie Hobbs said someone broke into her campaign headquarters.

CNN Senior National Correspondent Kyung Lah is following this for us in Phoenix. More on that break-in. And, Kyung, police say there were some items taken. What more are we learning about this break-in and also what was taken from the office?

KYUNG LAH, CNN SENIOR NATIONAL CORRESPONDENT: Well, the campaign is still trying to sort exactly what was taken. They have to inventory everything and figure out what sensitive material was or was not taken in this break-in. There has been a police report filed and they are looking for someone.

The campaign did manage to capture someone who they think did this on their security cameras. We were able to obtain these still images from that security footage, which has been handed over to police, as police try to figure out exactly who did this.

The campaign did say that they think, while not maybe directly responsible, they pointed the finger at the heated rhetoric in this race for governor and Republican nominee Kari Lake. Here is a statement from the campaign manager of the Katie Hobbs campaign, saying, quote Secretary Hobbs and her staff have faced hundreds of death threats and threats of violence over the course of this campaign. The threats against Arizonans attempting to exercise their constitutional rights and their attacks on elected officials are the direct result of a concerted campaign of lies and intimidation.

Well, Kari Lake responded to that statement. The statement does go on and she didn't take lightly to it. She had a fiery statement which essentially says that she thinks the Hobbs campaign might be making all of this up. Take a listen.

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GUBERNATORIAL CANDIDATE KARI LAKE (R-AZ): That is absolutely absurd. And are you guys buying that? Are you really buying that? Because this sounds like a Jesse Smollett part two. I can't believe that she would blame my amazing people, blame me for something like that. I don't even know where her campaign office is. I'm assuming it is in a basement somewhere, because that is where she's been campaigning.

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LAH: If you haven't been paying attention to the race for governor, it has been a pretty ugly campaign, Erica. Still 12 days left before Election Day. Erica?

HILL: Ugly is -- that was very diplomatic way to put it, Kyung. I appreciate it. Thank you very much.

A second woman has now come forward claiming that Georgia Republican Senate Candidate Herschel Walker pressured her into having an abortion. The unidentified woman claims the two had a romantic relationship and that the abortion happened 30 years ago.

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UNIDENTIFIED FEMALE: I went to a clinic in Dallas, but I simply couldn't go through with it. I left the place in tears. He was upset and said that he was going to go back to the clinic the next day for me to have the abortion. He then drove me to the clinic the following day and waited for hours in the parking lot until I came out.

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HILL: Walker, a staunch opponent of abortion rights, has denied this newest claim.

At Pennsylvania campaign rally, Democratic Senate Candidate John Fetterman hitting back at criticism of his debate performance, framing Tuesday night as a triumph.

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LT. GOV. JOHN FETTERMAN (D-PA): Doing that debate wasn't exactly easy, you know? I knew it wasn't going to be easy after having a stroke after five months.

I may not get every -- every word the right way, but I will always do the right thing in Washington, D.C.

(END VIDEO CLIP) HILL: Fetterman's campaign says it has now raised more than $2 million since the debate. And if you were waiting for them, they are here, new ads from supporters of both candidates in Pennsylvania. A Trump-affiliated PAC has started running ads directly targeting Fetterman's health while the Fetterman campaign has released its own commercial criticizing Mehmet Oz's comments that abortion should be a deceision between a woman, her doctor and local political leaders.

Former President Donald Trump has announced an election week rally in Miami, but perhaps more notable than who is attending, Senator Marco Rubio, is who is not, Florida Governor Ron DeSantis.

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The announcement about the November 6th rally comes as ties between Trump and DeSantis have frayed. Many expecting a possible presidential primary showdown between could be looming for 2024.

Well, there are not 35 Senate seats up for grabs across the country, as both Republicans and Democrats fight for majority of control. Only a handful, though, really have a chance of flipping and that is why you're hearing so much about them.

CNN Politics Reporter and Editor at Large Chris Cillizza following all of this for us. So, the Senate playing field, too, I know, Chris, you're saying is really kind of shrinking and one way to be really clear about that is to follow the money.

CHRIS CILLIZZA, CNN POLITICS REPORTER AND EDITOR AT LARGE: It is, Erica. And, look, this is natural. 35 races are up. The two national party committees and other outside groups don't spend in 35 races. That would be ridiculous. They spent in ten-ish, maybe a little smaller, and that number is getting smaller.

Let's first look at races that maybe we thought might happen and now look a little longer shots. And I want to start in New Hampshire. So, at the start of the election, Maggie Hassan, the Democratic nominee, was seen as one of the most vulnerable incumbents in the country. Her numbers were soft and Republicans thought they were going to get Chris Sununu, the sitting popular governor of the state, as the candidate. They didn't get him. He decided not to run. They wound out getting Don Bolduc, a retired brigadier general who has made a lot of comments about election denialism.

That race is now -- I don't want to say, out of hand, because, as you see, the average of the polls there, Hassan plus eight, but it is not where it should be and the Senate leadership fund, that's Mitch McConnell's super PAC pulled $5.6 million out of that race and put it in a place we're going to talk about in a minute, Pennsylvania, where we've been talking a lot about.

The other one there is Colorado. Again, it is a blue-ish state but not a blue state. Michael Bennet has a solid but not -- he's not up 16 points, he is up 6 points over Joe O'Dea, who has run as a moderate. So, those are two races that I think Republicans thought might come online that are struggling. But, again, things change. Let's go on the Democratic side, races that Democrats thought they might have a better chance in. Well, let's start in Florida. You mentioned Donald Trump is going to be doing an event down there for Marco Rubio. It looks like Rubio is okay. Val Demings has run a very solid campaign. She is a former police chief. She is a congresswoman right now. She has raised vast sums of money. But it looks like Rubio is going to be fine.

And then one that I'll say I certainly didn't think we would talking about, even at all, even as a sleeper race, is Iowa. Chuck Grassley has been in the Senate for 40 odd years. He's always won with 60-plus percent of the vote. But there is polling out there shows Mike Franken, the Democratic nominee, who has not gotten a lot of attention within three points of Chuck Grassley.

So, those four races, keep an eye on them, but it looks like they are starting to fade as we get into these final 12 days where decisions have to be made about where money goes and where it doesn't go.

HILL: In terms of where that money could be going, are we starting to see more of a push of where it is going to be spent?

CILLIZZA: Yes. Look, I think you're going to see the bulk of the money spent in these final two weeks, in the same places that we've seen the bulk of the money spent before, which is three races, Arizona -- excuse me Nevada, Pennsylvania and Georgia. I'll get to Arizona in a minute, Nevada, Pennsylvania and Georgia.

In two of those seats are Democrat seats. Catherine Cortez Masto in Nevada is running a solid campaign but the economy in Nevada is not in a great place, that's hurting her. Adam Laxalt, the Republican nominee, looks pretty strong.

The other Democratic race is the one that I think everyone knows about, Raphael Warnock, the incumbent, running against former NFL star Herschel Walker. Walker's campaign, as you just mentioned, has been hit by allegation after allegation. It is hard to say polling-wise how big of a difference that makes. You see there the average polling there is Warnock plus five but that is within the margin of error. There is now clear leader there. There's polling that shows it closer than that. There's polling that shows it wider than that.

And then I want to just talk about Ohio if I can for a minute, if we can just jump to Ohio. This is a race that is effectively tied. It is a race that is between Tim Ryan, the Democratic congressman, and Republican J.D. Vance. I don't think J.D. Vance or national Republicans thought we would be talking about this race when we are this late in the cycle. Mitch McConnell and the Senate leadership fund has spent almost $30 million in ads on the race, surprising that it is close. If Ohio turns out to be what it normally is at the federal level, Vance will win narrowly. But the fact that we're even talking about this close to the election speaks to the fact that it should be maybe included in those five or six or seven races where we're going to see the most spending, the most attention in these final days.

HILL: Chris Cillizza, always good to see you, my friend. Thank you. CILLIZZA: Thanks, Erica.

HILL: The U.S. economy getting some much needed good news this morning. The Bureau of Economic Analysis reporting U.S. GDP grew 2.6 percent in the third quarter. That beat economists' expectation. It also, as you can see there, makes Q3 the first period of positive growth for the year. So, what does it tell us about what is to come?

Let's discuss with Ken Rogoff. He's a professor of economics and public policy at Harvard and the former chief former economist of the IMF.

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It's good to see you this morning.

So, we look at that, that is good news, beating expectations by just a little bit, but there is also talk, one of our CNN business writers saying, could this be the bump before the slump. Are you concerned this is just a blip of good news?

KEN ROGOFF, PROFESSOR OF ECONOMICS AND PUBLIC POLICY, HARVARD UNIVERSITY: Well, let's start with it is good news. So, there have been people insisting we're already in recession, and we're not. But, yes, I think the odds that next year we get a recession are very high because inflation is still high, the Federal Reserve is still fighting inflation and also the whole world is going into a recession, even China in its own form. That is kind of hard for us to resist that.

HILL: When we look at inflation, I know it takes -- I think on average, correct me if I'm wrong, about six months for some of these interest rate hikes to really start to bake into where we're starting to see things. There is a growing push for the Fed to ease the pace of these rate hikes over concerns about what that could do in terms of a larger recession. Do you believe the Fed should, in fact, maybe pause a little bit?

ROGOFF: Well, I wouldn't say pause, but I do worry that having made a mistake in one direction, they waited too long to raise interest rates. They're now going to make a mistake in the other direction of moving too fast. And you're quite right, that the issues, that when they make their move, it could really be a year or two before it hits the economy. And so it is hard to calibrate.

And I think as interest rates gets towards 4.5 percent or 5 percent, for sure, they need to slow down, but maybe even the pace. I'm not saying they need to raise rates. We have to fight inflation. But having a massive recession right now after the pandemic, after the global financial crisis, I just can't imagine the political fallout from that, much less the economic fallout.

HILL: Right, and the personal fallout for folks at home, right, as they --

ROGOFF: Yes, indeed. HILL: By all accounts, most people far smarter than me who do this, like yourself, economists, even the heads of some of the largest banks, talking about that recession, but also in terms of it being perhaps not mild, not looking at 2008, which many people remember so well. Last week, there was talk about a 1990s-style recession, so slightly more mild. Is that what we should focus on?

ROGOFF: I don't think it is going to be like 2008. That would be really bad luck. Although, mind you, it is very difficult to predict. But actually I would point more to the early 1980s when we had the inflation in the '70s and then Chairman Paul Volcker, who I worked under, was fighting inflation and we had a very deep recession. There were a lot of parallels. I hope it won't be that bad. But if it is like just the early 1990s, that is good. But I think it could be worse than that but not as bad as 2008.

HILL: When we look at where we're at, I spoke with Heather Boushey from the Council of Economic Advisers at the White House this morning, asked specifically about whether there is recession planning happening in the White House, there wasn't a clear, real answer. I understand that the administration probably doesn't want to deal with the R-word right now, but wouldn't there have to be some planning happening? And if not, how concerning would that be to you?

ROGOFF: Well, they're clearly planning for the election right now and probably overjoyed that the GDP number came in well. But going forward, in terms of tax revenues, what they're plans are for dealing with the recession, I'm sure they're starting to think about it. I don't think it is going to be so easy to deal with, because unlike the last few episodes where we had big downturns, it is quite likely that interest rates are just going to land a lot higher and it is not going to be a free lunch that it was in order to fight the recession.

HILL: Yes, we've all been used to the low rates for so long. Tough to say goodbye to those. Ken, I appreciate it, thanks so much for your insight and your expertise this morning.

ROGOFF: Thank you.

HILL: Still to come here, two cases could change how college admissions are decided. Before the Supreme Court takes a look at affirmative action at next week, we're going to look at the history behind it and the case that started it all.

Plus, as Russia continues to bombard Ukrainian infrastructure, CNN has an exclusive look inside one power station that has been destroyed by Russian bombs.

And a bit later, the clock ticking for Elon Musk to seal the deal on buying Twitter. Will his antics though about in sync with the rest of the company? Oh, yes, we said, and, unfortunately, he did it. We'll discuss.

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[10:15:00] HILL: In a new joint filing, the Justice Department and lawyers for former President Donald Trump tell the special master in the Mar-a- Lago case they want to hash out several key areas of disagreement around materials which were seized in that search. They list three categories of legal questions, how documents are characterized under the Presidential Records Act, executive privilege and verification, so whether Trump should have to verify the inventory from the search. So, what does all this mean?

Jennifer Rodgers is a CNN Legal Analyst and former federal prosecutor. So, Jen, when we look at this and the way this is now hashing out, as I understand, the DOJ submits briefs on those questions, Trump's team responds, does this mean that once they hash all that out, we're going to sort of move forward?

JENNIFER RODGERS, CNN LEGAL ANALYST: Finally, yes. Actually, they're doing simultaneous briefing this time, which is unusual. They're both submitting their briefs at same time.

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But, really, what's been happening today is they've been kind of talking past each other. DOJ has been saying presidential records means they can't be personal, there's no executive privilege, and Trump's folks have been alleging that there are without any support. So, now, the judge is saying, put up or shut up, tell me why you think these things apply and then I'm going to decide. And once those are decided, they can actually start reviewing the documents and moving them through.

HILL: And just give me a sense. How quickly is all this going to happen?

RODGERS: Well, the briefing is, I think, mid-November is when the briefing will be finished. So, I except the judge will move swiftly after that. It's not as if he hasn't been thinking about it and looking into these issues already, so maybe by the end of the month.

HILL: So, I also want to get your take on -- so, Justice Kagan issued a temporary order, this is blocking requests from the January 6 committee. They wanted access to -- they had a subpoena rather for phone records for the chair of the Arizona Republican Party, Kelli Ward, and her husband, Michael Ward. Now, the reason they were important, in case people don't remember, right, they were fake electors. And also she reportedly spoke with Trump, members of his staff, about election certification in Arizona. Why was this temporary order issued?

RODGERS: So, what happens is when you seek an emergency order from the Supreme Court, it goes first to the justice that's in charge of the circuit that you're in. So, in the case when Justice Thomas just blocked the Lindsey Graham subpoena and it goes to the 11th circuit, Arizona goes to the ninth circuit justice, which is Justice Kagan.

So, what they have done is they could rule on it themselves and just reject out of hand. But if it is something important, something political, something involving a public figure, they're much more likely to refer it to the full court. And so that's why these stays were put in place, so that it can be referred to the full court. It doesn't mean that she is going to win. I think she's going to lose. But at least Justice Kagan isn't doing it on her own. The whole court will review it. But that's why the stay was put in place just for that little delay until the court decides.

HILL: I know that the justices don't like to admit or not all of them like to admit to any of this sort of falling under a political guise, but could part of it be to -- is this just, hey, this is standard operating procedure, this is how we do our job, or is it also, we want to speak with everybody so that it doesn't appear as if whether it's Justice Thomas or Justice Kagan, whether anybody is playing politics?

RODGERS: I think that is right. I mean, they don't always send it to the whole court. If it is something completely meritless involving not a public figure, they won't do that. But in a case like this, I think what they're saying is we do want to speak as a full court. It is not a hard question but it should be a question that we all decide together. So, that's what's happening.

HILL: And we know there is extra scrutiny these days on the Supreme Court and so many of the decisions that decisions that could such an important, long lasting impact. Jen, I appreciate it, thanks.

RODGERS: Thanks.

HILL: After two years of pandemic isolation sparked an early surge in RSV infections in young children this year. Flu infections are also on the rise. That was slightly expected but they're also now expected to accelerate. And all of this is happening as doctors in pediatric hospitals say they're starting to reach capacity.

CNN's Amara Walker joining us now live from Children's Healthcare of Atlanta. What is that hospital in particular seeing?

AMARA WALKER, CNN CORRESPONDENT: Well, Erica, just to paint a picture for you, the E.R. wait time here at CHOA, as it's also known, is still over three hours. That has been the case for the past several weeks, actually.

We're here, by the way, at the Scottish Right location, which is just north of the city of Atlanta. So, officials here have resorted to an overflow tent. They have placed it right outside the emergency department to deal with this surge that they are seeing in respiratory illnesses among children.

I do want to show you video of that search tent. To some, it might remind you of a military medical tent. It is not. It is actually a rapid deployable shelter system. We're told there are eight bays inside. It is staffed with doctors and nurses. But it is only for children to be treated for mild illnesses and injuries. And what we're being told is that these high surges that they're seeing is usually happening at night and that is when they are usually using this overflow tent. Erica, you also mentioned this early surge of RSV. It looks like, according to experts, that Atlanta and much of the southeast has peaked when it comes to RSV. And there are really two things that are catching the attention of the medical community here in Atlanta, number one, this unusual shift that we're seeing from RSV to flu so early in the season. Just this week, now about 75 percent of respiratory admissions are due to the flu. Compare to that to just last week when three quarters of respiratory admissions had to do with RSV.

Another thing they're paying attention to is this huge surge that we're seeing so early on just across the country with this confluence of flu, RSV and, of course, COVID-19. So, of course, experts, like Dr. Anthony Fauci, are saying that these three viruses are causing a perfect storm. Listen.

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DR. ANTHONY FAUCI, DIRECTOR, NATIONAL INSTITUTE OF ALLERGY AND INFECTIOUS DISEASES: We have good capabilities in this country. But when you, this early in the season, start to see 75, 78 percent of the beds occupied, you don't have a lot of wiggle room if you have a surge of cases.

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So that is one of the things that concerns us. That is not happened to us before.

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WALKER: So, a reminder, there is no vaccine for RSV but there is a vaccine for flu, there is the for COVID-19 and, of course, health experts are urging everyone, parents and children, to get vaccinated for at least two out of these three viruses. Erica?

HILL: Yes, absolutely a good reminder. Amara Walker, I appreciate it, thank you.

Up next here, CNN is on the ground in Ukraine, on the frontlines in the battle there against Russia.

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