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Biden Warns Democracy at Stake in Next Week's Midterms; More Volatility After Fed Raises Key Interest Rate Again; Sources Say, Trump Aide Kash Patel Given Immunity, Ordered to Testify Before Grand Jury About Mar-a-Lago Docs. Aired 10-10:30a ET

Aired November 03, 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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[10:00:00]

JIM SCIUTTO, CNN ANCHOR: Top of the hour. I'm Jim Sciutto.

Crucial midterm elections less than a week away now and President Biden sounding the alarm, warning that democracy itself is on the ballot next week, highlighting the threat from election deniers. Today, Biden made two notable appearances, campaigning in New Mexico and California.

Other big names on the trail, Vice President Kamala Harris and former President Donald Trump. He' i stumping across several states in the final days of the race hitting Iowa, Ohio and Florida.

However, it is Pennsylvania that is gaining a lot of attention from several surrogates. A hotly contested race there could determine the balance of power in the Senate, a once healthy lead for the Democrat, John Fetterman, has now significantly narrowed with polls showing just a slight edge over the Republican, Mehmet Oz.

Our reporters and correspondents are at the White House this morning, also on the trail ahead of the midterms.

Let's begin, though, at the White House with CNN Correspondent M.J. Lee. M.J., this has been billed as something of a closing message by President Biden ahead of the midterms. It was a disturbing one. He's sounding alarm here about the very democracy, democratic system. Tell us what he said last night and what the intention was.

M.J. LEE, CNN WHITE HOUSE CORRESPONDENT: Yes, Jim. Definitely a closing message of sorts from the president last night, and obviously very familiar themes from this president on protecting democracy and the pillars of democracy, including the integrity of our elections system.

Importantly, though, he did kick off his speech by talking about the recent violent attack on Paul Pelosi, which, of course, now authorities have said they believe was politically motivated. And he said that attack was probably no different from what we saw happen on January 6 when the mob breached into Capitol Hill. Now, you also heard him condemn using very stark language, election deniers, candidates who are on ballot next week who said that may not necessarily accept the results of the election next week and any threats of violence, he said, whatever happens next week, will really set the course for the future of the country's democracy. Take a listen.

(BEGIN VIDEO CLIP)

JOE BIDEN, U.S. PRESIDENT: You can't love your country only when you win. This is no ordinary year. So, we're asking to think long and hard about the moment we're in. In a typical year, we're often not faced with questions of whether the vote we cast will preserve democracy or put us at risk. But this year, we are. This year, I hope you'll make the future of our democracy an important part of your decision to vote and how you vote.

(END VIDEO CLIP)

LEE: And this speech coming as polls show that there is no issue that is still more important for voters right now than the economy and inflation. And later today, Jim, the president will head back out west where he will go to New Mexico to campaign for the Democratic governor there. He will also give a speech on student loans, obviously an important issue for Democrats, as they try to galvanize voters. He will also make a stop in California to try to campaign for a vulnerable House candidate, so really pulling out a number of stops to try to help his fellow candidates across the country. Jim?

SCIUTTO: Yes. You can see where their worries are based on where they visit often. M.J. Lee at the White House, thanks so much.

Well, one of the most crucial tightest races in the country is getting even tighter with control of the Senate potentially hanging in the balance, the Pennsylvania Senate race, where Democrat John Fetterman maintained a healthy lead for most of the campaign, that lead now down to a slight edge. The widely talked about debate may not have been the deciding factor many thought it might.

CNN's Jessica Dean, he is on the trail in Pennsylvania. She joins me now. Why are folks thinking that right now? Because, certainly, the attention leading to the up debate and following it, there was an enormous amount of focus.

JESSICA DEAN, CNN CONGRESSIONAL CORRESPONDENT: There was so much focus on it, Jim, and a lot of attention. But, listen, when you talk to voters here, as I have been, they are very focused on issues and thinking kind of beyond the debate as a data point for them, but they have so many other things that they've been focused on, the economy, crime, abortion rights. These are the things that come up again and again.

And we do have some new polling from a Fox News poll that was taken after that debate that kind of gives us, again, additional data points in this ever-tightening race that is so critical in this midterm election. [10:05:10]

So, let's take a look at what they found. They asked voters if the debate was a factor in their decision. 51 percent of those polled said, yes, 47 percent saying, no, it's not a facto. So, that is one data point we have. Let's look again at kind of a head-to-head matchup. That shows no clear leader but it shows Fetterman with 45 percent of the vote and Oz with 42 percent. And I say, no clear leader, because that is within the poll's margin of error. So, that is always important to take into account when you're looking at this poling.

And then I think the point to kind of take in to account is our CNN poll of polls. That's where we take all of the polling and average it out. That's showing Fetterman at in the margin of error. And then I think the third point to take into account is our CNN poll, where we take all of the polling and average it out, showing Fetterman at 50 percent to Oz's 46 percent.

So, again, those numbers giving you a snapshot of where we are as we close in on the final days of this race. Oz and Fetterman kind of cross-crossing the commonwealth of Pennsylvania here today. We've seen them both here in Montgomery County, in the collar counties, where I am right now. These are some rich with swing and independent voters, which a lot people believe will play a very critical role in the outcome of this race.

In fact, Jm, I talked to somebody yesterday who told me they voted for Obama, Obama, Trump, Biden. And now they were trying to decide how they would vote in this. So, again, just a perfect example of the swing voters in these counties that they're trying to target.

SCIUTTO: No question, yet again, the spotlight on Pennsylvania. Jessica Dean, thanks so much.

Another big state, candidates in Wisconsin's races for Senate and governor have new T.V. ads making last final appeals to voters and the contrast is stark. Democratic Governor Tony Evers was on the attack against his GOP challenger, Tim Michels, dido in the Senate race with Democratic Nominee Mandela Barnes blasting the Republican incumbent senator, Ron Johnson. But neither GOP candidate is mentioning their opponents in their ads.

CNN Correspondent Omar Jimenez, he joins us now live from Wisconsin. Omar, so, quite different messages, tell us what they're saying.

OMAR JIMENEZ, CNN CORRESPONDENT: They really are, Jim. All of these candidates are really trying to paint a final message with just a few days to the election here in Wisconsin and across the country, in the Senate race, Lieutenant Governor Mandela Barnes is clearly trying to bring the fight to Senator Ron Johnson, saying that he is someone who is only in it for himself and not for Wisconsinites.

Senator Ron Johnson, on the other hand, has said -- or he's trying to paint himself, I should say, as someone who wants to unite Wisconsin, even trying to recruit some Democrats in the process. But despite that, Johnson has described him opponent Barnes as someone who hates America. So, I asked him, point blank, how does that square with this latest message of so-called unity? Take a listen.

(BEGIN VIDEO CLIP)

JIMENEZ: We're just at sort of stand and what you're saying.

SEN. RON JOHNSON (R-WI): That is the truth. So, you do have to convey the truth to people. You have to be clear in the election (ph). I mean, the election is a choice between two people. And, unfortunately, the truth is that the left are the ones that are dividing this nation. It's the left that is angry.

SENATE CANDIDATE MANDELA BARNES (D-WI): It's right out of the playbook of Joe McCarthy, and Ron Johnson is the worst senator we've had since Joe McCarthy. In the whole campaign, it's just been lies and distraction because he has no record to defend. It's been 12 years of nothing, 12 years of serving himself as wealthy donors and turning his back on the people of the state of Wisconsin.

(END VIDEO CLIP)

JIMENEZ: And Barnes has obviously said he doesn't hate America.

But it's been a similar feel in the governor's race as well between the incumbent, Tony Evers, and the Republican, Trump-backed Tim Michels. Evers has tried to point toward a future of bipartisanship and say that Michels would just be a puppet for President Trump. Michels has tried to point to a new direction for Wisconsin, including trying to keep Wisconsinites safe, and polls have shown no clear leader in any of these races for months now.

And we've been all over this state, and every stop, there is a joke about how Wisconsin elections are always close and I have a feeling that is what we're going to see this time as well.

SCIUTTO: No, question, certainly in 2020. Omar Jimenez, thanks so much.

All right, joining us now to talk about all of this, and it's a lot of it, CNN Chief Political Correspondent Dana Bash and CNN Political Analyst and White House Correspondent for PBS Newshour Laura Barron- Lopez. Lots to discuss.

Dana, first, the president's closing message. We're hearing a lot of candidates at state level, national level make their closing message. His was very focused on democracy under threat. I wonder, was that the right closing message from folks you spoke to?

DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: Well, I'll tell you, the people who I'm talking to who helped to craft this and decide about the idea of this message argue the following. They argue that it is the right message, not necessarily for a Tim Ryan or a Mandela Barnes or anybody who is actually out there running for office, but it is a right message for this president at this time. He's on the ballot metaphorically. He's not actually on the ballot. And they felt that this is kind of the time and he is the messenger to give this message kind of big picture for the Democratic Party but also for the country, especially the part of it that maybe got a little bit overlooked about kind of the warnings of -- or the call for patience, I should say, when some of votes come in early, some votes come in late, saying don't worry, things will work out, the votes will happen.

[10:10:25]

Having said that all that, it was very political. Over at the White House, at the DNC, campaign strategists across the board say that even though this is not going to be a determinative issue, we know the economy is, it could help get some voters who voted for Joe Biden in 2020, who might be sitting out in the midterms to say, okay, fine, I'll go and vote.

SCIUTTO: This is why I voted from last time, I get it. And, clearly, my impression was he clearly feels it. He feels the need for it, particularly post-Pelosi attack.

Not everyone feeling it, though. As I listen to Hillary Clinton's interview this morning on CNN This Morning, seemed to be some not so veiled criticism to overall Democratic Party messaging. Have a listen for a moment.

(BEGIN VIDEO CLIP)

HILLARY CLINTON, FORMER SECRETARY OF STATE: What I wish we could convey more effectively is that if you look at what has been accomplished in the first two years of the Biden presidency with the Congress working hand-in-hand.

In fact, the work that has been done by the Democrats in helping the economy and helping people deal with what is global inflation, not just American inflation, is truly impressive and we got to get that message across more effectively.

(END VIDEO CLIP)

SCIUTTO: Laura, she seems to saying they're not getting that message across effectively.

LAURA BARRON-LOPEZ, CNN POLITICAL ANALYST: Yes. And I think she's not the only Democrat that feels that way. We've heard a lot of that from California Governor Gavin Newsom, as well as a number of other Democrats down ballot, particularly in vulnerable races who are trying to really strike this balance.

I think Elaine Luria in Virginia, not far from here, is a good example. She has been focusing on democracy. She has been hammering her opponent about election denialism, but she also is trying to talk about the economy and what Democrats so far have done and what they could potentially do if they keep it. Again, the one issue on the economy and the big bills that were passed under Biden's agenda, like prescription drug reform, is that they take a while to take effect. And so voters don't necessarily feel it immediately. And I think that sometimes voters don't totally -- I was just talking to some who don't totally look at it as a global inflation issue, even though it is.

And so in the final days, it is very clear that Biden, to your point, Dana, is making this democracy push. I think he, very much, as you said, Jim, he really feels this. The historians that I've talked to that consult with the White House, Biden thinks that this is a moment for him to insert himself because he sees that, in the past, other presidents have inserted themselves at inflection points like this, like Lincoln, like FDR. And so he's really looking at that as a potential model.

BASH: Can I just add one thing to that? It is that voters, maybe even if they understand this is a global problem, they don't care. And I don't mean that as a knock on these voters. What they care about is the fact that their income stayed the same but the price for things that they need to buy are much higher, which means they are struggling That is what matters. And they have an outlet, which is the polls and the election, and they might want to go use it.

And Elaine Luria, I totally agree with you. I was down in Virginia. I heard her. She is trying to strike the message that Hillary Clinton says they need to strike. I was with the Democratic candidate in Arizona and elsewhere. They're trying. it is just not necessarily being heard over the struggle that people feel and the fact the Republicans are amplifying it.

SCIUTTO: Well, listen, those local candidates, they're the ones talking to voters every day, more so than -- so just very quickly, are you surprised that abortion has fallen off a major voting issue, as least as it a compares to economic issues?

BARRON-LOPEZ: Yes. I mean, according to polling, that's what we see, right? But we were just talking about this. The voters I talk to, abortion is still front and center. I was just in Michigan and every single woman that I talked, they mentioned abortion and democracy. These were Democratic voters but, it's what is motivating them

I was talking 'to this voter in Pennsylvania. She voted Trump in 2016, Biden in 2020. She is voting based on abortion because of her granddaughter and she said that she knows more than eight other women that are going to vote for Democrats based on abortion and not tell their spouses. So, I think there is this privacy element to that vote because it is a very private issue.

SCIUTTO: Listen, and it's -- we often talk about how pollsters miss Republican voters on issues. Is there a case where pollsters are missing women voters who -- this is very central to their decision. Well, we're going to know on Tuesday.

Laura, Dana, thanks so much.

BASH: Or later in the week.

SCIUTTO: Or maybe later in the week. That's right. Listen to --

BASH: When the votes are counted.

SCIUTTO: Exactly. Thank so much.

Still to come this hour, Wall Street is still reacting this morning to the Feds' fourth straight, super sized rate hike, about down where it was an hour ago or so.

[10:15:07]

This as concerns about a recession grow. When could families like you see some relief?

Plus, CNN has learned that Trump top aide Kash Patel has been ordered to testify before a grand jury investigating the handling of classified documents at Mar-a-Lago.

And later, a little piece of World Series history made in Philadelphia as four Astross pitchers helped to even out the series with a joint no-hitter against the Phillies.

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SCIUTTO: Well, the Fed has announced yet another aggressive rate hike and Chairman Jerome Powell is making it clear there are more to come.

(BEGIN VIDEO CLIP)

JEROME POWELL, CHAIR, FEDERAL RESERVE: I don't have any sense that we've overtightened or moved too fast. I think it has been good and a successful program that we have gotten this far this fast. Remember, though, that we still think there is a need for ongoing rate increases and we have some ground left to cover here, and cover it we will.

(END VIDEO CLIP)

SCIUTTO: Well, let's see how the markets think about all of this, right now down just under 200 points. It had been down more in the last hour. We'll continue to watch it.

For more on this, we're going to speak to Jeanna Smialek, she's a Federal Reserve and Economy Reporter for The New York Times.

Jeanna, it is interesting to hear those words from the Fed chairman. It has been good and successful so far. I haven't heard that from a lot of folks, frankly, on either side given that inflation has stayed remarkably high even with four straight three quarter percent interest rate hikes. Is there a disconnect there?

JEANNA SMIALEK, FEDERAL RESERVE AND ECONOMY REPORTER, THE NEW YORK TIMES: I imagine what Chair Powell meant by that statement, is that the Fed has successfully managed to raise rates really a lot this year. They've really had the fastest tightening campaign since the 1980s. And they've done that without really setting off any kind of massive alarm bells in markets, any kind of meltdown, the kinds of really bad disruptions that you can have when you adjust policy this quickly.

And the reason I think that the Fed would probably view that as a success is with rates at these levels, they should start to weigh on the economy, they should start to bring down inflation. We're getting to that point where, hopefully, this will have some sort of effect and if managed to get to that place relatively quickly.

SCIUTTO: The other part of his comments that struck a lot commentators, myself as well, was that he said that the path to a soft landing, in other words, lowering inflation without sparking a recession, has narrowed. And it seemed to be, and, again, some of this is reading tea leaves, which people always do with the Fed and the Fed chairman and their comments, was that he's comfortable with that, right? He's comfortable with a greater risk of a hard landing here. I mean, is that how you read those comments? And how are the markets likely to respond to that?

SMIALEK: I think that probably is the right way to read those comments. And I think that you have to sort of take a step back and think about the situation we're here in. We've had very fast inflation for 18 months now. It doesn't seem to be going anywhere. It's really proving very stubborn, very sticky, very problematic. And I think that from the Fed's perspective, the greater sin here is not potentially causing a recession, it is allowing that inflation to remain and not getting it under control. And so while it is not a guarantee we're going to have a recession, it is a possibility.

SCIUTTO: So, is there evidence? I mean, every month, we, you, others watch these inflation figures as they come in. And there was some sort of false signs -- I don't know if alarm is the right word -- but false signs of hope, oh, it seems like it is leveling out, but, heck, I watched those numbers and I was like, that looks pretty much like last month's number. I mean, is there any evidence that this is starting to work or it's starting to bring down or at least stop the rise in the rate of inflation?

SMIALKE: I would say there are really good reasons to hope that inflation is going to moderate sort of by March of next year. We're seeing rents come down across a lot of big cities in America. And that is good news because that is feeding into inflation slowly but it does feed into inflation quite a bit when it does. So, that should be a positive.

That said, I think at every stage of this inflation saga, we've had a good reason why inflation should start to come down in two to three months and at every stage of the last 18 months. Those good reasons have not played out or they've been swamped by a bad development. So, I think there is a lot of reason for humility at this stage.

SCIUTTO: All right. We'll keep watching. We know you will. Jeanna Smialek, thanks so much. Well, right now, former President Trump's legal team is trying to throw a wrench into the New York attorney general's financial fraud lawsuit against the Trump Organization. We're going to be live outside the courthouse.

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[10:25:00]

SCIUTTO: CNN has learned that a top aide to former President Trump, Kash Patel, has been granted immunity while being ordered to testify before a grand jury investigating the handling of federal record at Mar-a-Lago. Patel, a key Trump ally, has previously claimed in right- wing media interviews that he personally witnessed Trump declassifying records before he left the presidency.

CNN Senior Legal Affairs Correspondent Paula Reid joining us now. So, unclear if Kash himself as a target in the DOJ's probe, is there interest here purely about the former precedent or could it be more broad?

PAULA REID, CNN SENIOR LEGAL AFFAIRS CORRESPONDENT: Well, just last month, he refused to answer any questions before the grand jury. He invoked his Fifth Amendment right. He's one of a small group of advisers who could potentially have legal exposure in this Mar-a-Lago investigation. Prosecutors clearly believe he has valuable information. Now he has immunity and he is expected to answer questions. And now he cannot be prosecuted for any truthful information that he provides.

[10:30:00]

And, Jim, look, there is a lot to ask him about. Not only is he a former Trump administration national security and defense official.