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Biden Wants Title 42 Ended but Not Yet; Migrants Undeterred by Uncertainty; Impact on Holiday Shopping; Probe into U.S. Technology found in Iranian-Made Drones. Aired 9:30-10a ET

Aired December 21, 2022 - 09:30   ET

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

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[09:33:16]

JIM SCIUTTO, CNN ANCHOR: The Biden administration wants the Supreme Court to allow a policy restricting migrants from entering the U.S. due to Covid concerns to end, but not for at least another week. It was the Trump administration that originally put Title 42 into place because of the pandemic. That policy was set to end today until Chief Justice John Roberts hit a pause on that deadline. The administration says it needs more time due to ongoing preparations for an influx of migrants in the upcoming days.

During this limbo, migrants are facing new uncertainty, as well as freezing temperatures in the days ahead.

For more, CNN, again, on both sides of the border. In the south, David Culver in Ciudad Juarez, Mexico. Rosa Flores in Brownsville, Texas.

Rosa, I wonder what the preparations look like now as this influx may have had delayed but it's still expected.

ROSA FLORES, CNN CORRESPONDENT: You know, well, let me set the scene for you. I'm in Brownsville, Texas. This, what you see here, is the border wall. And I want you to look through this border wall because that is Matamoras, Mexico. And that is where migrants were hoping to turn themselves in today. The scheduled day that Title 42 was to end.

Now, I want to give you a bird's eye view because we have a mass (ph) cam by CNN engineer Michael Humphrey (ph). And the reason why I want to give you this bigger picture is because you're able to see the Rio Grande and this bridge. This is where migrants were hoping and expecting to be lining up today, the day that Title 42 was scheduled to lift. They were hoping to turn themselves in to border authorities because that's how they see that they can come to the United States legally. But, instead, they are yards away.

[09:35:00]

Let's please take the drone shot from our CNN drone pilot Al Meshberg. He is just yards from where we are and he has eyes in the sky in Matamoros, Mexico. That what you're seeing is a migrant camp. There are thousands of migrants that are sleeping under tents, or under tarps. I've been in contact with migrants there. They are tired. They are hungry. They are cold. And the anticipation and the anxiety is building because they are still there waiting. So much so they have been purchasing inflatable rafts to cross the river.

I want to show you this video now that we've obtained from a migrant there at that camp that shows migrants are losing patience. They are getting more anxious. And they are actually crossing the river. That's what that video shows.

And if you look closely you'll see that there's a group of individuals gathered on the Mexican side and they're actually providing commentary. You can hear them say that they're tired, that the process is too long. And then they point to the other side of the river, on the U.S. side, and they say, look, U.S. immigration authorities are watching all of this happen.

And, Jim, if you look at that video, I mean, this is in broad daylight. That is what is happening right now.

And, again, this is the buildup and the anticipation that migrants on that side of the border are feeling right now because of this limbo. They're hoping to enter the United States legally, but they're losing their patience.

Jim.

SCIUTTO: Rosa Flores, understandably, thanks so much.

CNN's David Culver, he's on the Mexican side of the border in Ciudad Juarez.

David, you've been speaking to migrants there as well. Do they tell you what exactly they're seeking in the U.S. and what is their case for asylum?

DAVID CULVER, CNN CORRESPONDENT: A better life is what most will tell you here. And they are -- having come from many miles away, from many countries away, Jim, and having made a trek that was many months long, going through jungles, gang infested countries. And so for them to see barbed wire and a few National Guardsmen blocking, well, it's not going to dissuade them from that entrance. They're going to find another one. Because there's a determination and a desperation that Rosa spoke to that is certainly evident here.

Now, just in the past few hours, overnight, we saw some major changes here at this portion. What you see behind me are hundreds of migrants who are lined up. That is the U.S. side. So they have already crossed illegally over the Rio Grande, but they're hoping to turn themselves in to then begin the processing.

But this is different from where the Texas National Guards members, as well as the Texas state troopers, were set up with that barricade that rolled out just yesterday.

Let me show you some of this video that one of our colleagues here captured overnight. And you're going to see a rush of migrants who are leaving that barricaded area and they are rushing about a mile to this direction.

Now, why are they doing that? It seems that Customs and Border Patrol were having conversations, and they really have been the only agency to have that comfortable dialogue with the migrants over the barricade and said, come to this gate and we'll begin the processing. And little by little you've seen groups of five to ten people being allowed in to then start the processing. Those who are staying out are trying to keep warm in these freezing really very difficult conditions and they're hoping that that will continue through the next few hours and days and that they'll be able to seek their case for asylum, Jim.

SCIUTTO: In the many weeks, months, perhaps years before those cases are adjudicated.

David Culver, in Ciudad Juarez, thanks so much.

Still ahead, as Americans rush, myself included, to buy those final holiday gifts, data shows generosity not immune to inflation. The changes in spending this year, that's coming up.

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[09:43:08]

SCIUTTO: This may be the most wonderful time of the year, but, boy, is it expensive this time around. Hanukkah already here. Christmas just a few days away. With rampant inflation and a tough economic outlook for 2023, some families aren't spending like they did in years past.

Joining me now is Kayla Bruun, she's an economic analyst for Morning Consult.

Kayla, good to have you on this morning.

Listen, we've been covering inflation for some time. This is a time of year when people like to spend, right? They want to do nice things for the family and friends. Are we seeing inflation impacting the way people are spending these holidays?

KAYLA BRUUN, ECONOMIC ANALYST, MORNING CONSULT: Good morning.

And, yes, we absolutely are. I think the biggest evidence we've seen so far was in last week's retail sales report where we saw that spending declined compared to October in both real and nominal terms. And I think really what we're seeing is that inflation is putting a lot more pressure on consumer budgets, making them a lot more price sensitive, maybe looking for more discounts and the ability to trade down, and that's really -- having this high inflation has just sort of eaten away at purchasing power and made it harder for consumers to spend as much as they'd like to around the holidays.

SCIUTTO: Sure.

All right, let's look to next year.

We've seen the pace of inflation slow. Prices still going up but at a slower rate month to month in recent months. And we've seen the Fed at least ratchet down the size of their interest rate increases from 75 basis points to 50 basis points.

Where do economic analysts, yourself included, see next year going in terms of the chance of a soft landing or the risk of a hard landing and a recession?

BRUUN: There's a lot of uncertainty and there's a lot of room for error in both directions. I do still see a path towards potentially a softer landing. And the reason I say that is just because a lot of sectors of the economy really have held up to date pretty well, specifically the labor market.

[09:45:02]

It has really been a source of stability and strength despite the very large increases we've seen already in interest rates. We haven't had a huge uptick in unemployment. We've had sort of these high-profile layoffs, but not necessarily high impact at the aggregate level for unemployment.

SCIUTTO: Yes.

BRUUN: So, if the labor market continues to hold up, that could really help support spending and enable this softer landing.

SCIUTTO: Yes. So we just put up a graph there, I want to put up again, which is wage increases versus price increases. And the directions are good there in that -- if we could put it up on the screen again. You do see the CPI coming down and average earnings going up just a little bit. You want those to meet, right? You want - you want the dark line to cross the green line. Is that where it's going, where pay increases will outpace price increases?

BRUUN: It's a good question and -- especially after what we've seen all year. Wage growth, it doesn't account for all income, but it's a pretty good proxy for income. And the fact that for 2022 it has not been keeping up with price growth. That basically equates to declining purchasing power all year. So that's - that's really what's gotten us to where we are.

Inflation slowing is a very good sign and definitely essential for us to avoid any really major crisis next year. So, absolutely, inflation does seem to be heading in the right direction and there's reasons to think that will continue. Wage growth, though, with - as the -- if unemployment does pick up, which is likely with more rate increases, wage growth could be likely to slow as well. So, it's a bit of a question how much that gap will narrow and how quickly.

SCIUTTO: Yes. Yes. Lots of uncertainty. Some hopeful signs, but still lots of uncertainty.

Kayla Bruun, thanks so much.

BRUUN: Thank you. SCIUTTO: All right, so, the latest, Elon Musk says he will step down

as Twitter's CEO with a catch. Musk says he first needs to find his successor, or, as he put it, someone foolish enough to take the job. Quite an advertisement. The announcement is the result, he says, of a Twitter poll he created where 57 percent of more than 17 million users who took part voted for him to resign.

Musk also tweeted that he will continue to run Twitter's software and server teams. By the way, he'll still own the company. Since acquiring Twitter less than two months ago, Musk has faced backlash over a few things, mass layoffs, the suspension of journalists, and a variety of unpopular policy changes.

Still ahead, a CNN exclusive on a Biden administration investigation. How did U.S. components get into Iranian drones that Russia is now firing at Ukraine? That report coming up.

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[09:52:13]

SCIUTTO: In the latest brutal crackdown on the rights of Afghan women, the Taliban have now suspended university education for all female students in Afghanistan. The U.S. special envoy for Afghan women said this week the Taliban are, quote, reverting to extreme policies of the '90s. Girls were barred from secondary schools back in March. Women there can also no longer work in most sectors, and they've been ordered to cover their faces in public. Turning back the clock.

Now to a CNN exclusive.

The Biden administration is taking a, quote, all-hands on deck approach to finding out just how western technology is making its way into Iranian made drones. This includes components made here in the USA. The drones, like the ones we see in this demonstration video here, are now being used by Russia to devastating effect on Ukraine. They're launching them by the hundreds into the country according to officials.

CNN's Natasha Bertrand is here with more reporting.

I mean, Natasha, how is this happening? Does the White House know or is this, I imagine, one of the things they're trying to figure out?

NATASHA BERTRAND, CNN CORRESPONDENT: Exactly right.

SCIUTTO: Yes.

BERTRAND: So, this is really an all-hands-on-deck effort by the administration. They have really tasked this massive task force with -- across the administration, agencies across the administration, from the Pentagon, the State Department, to Treasury and Commerce, to - trying to figure out how these U.S. components of ending up in these Iranian-made drones. And really what they've been doing over the last several months to begin with is just notifying all of the American companies that they're products are being found in these drones because, of course, those drones are being shot down by Ukrainian forces, who are then dismantling them, examining them.

SCIUTTO: Yes.

BERTRAND: And they are finding that things like processors, microchips that are made in the U.S. and other western countries are actually being used as part of these Iranian drones. And it's important to know that the U.S. has actually, of course, imposed very tough sanctions on Iranian firms who are believed to be involved in manufacturing these drones and they have also, you know, sanctioned Russian entities who are purchasing them. But, ultimately, it is just so easy to get these kinds of components that these American manufacturers are making that it is very difficult for these American companies to track down every single middle man and distributor who may be giving them to bad entities.

SCIUTTO: And is that the focus here of the administration's perspective, it's not that the U.S. manufacturers are selling this stuff directly to Iran, it's more that they're selling it to the open market and somehow a middle man gets them to Iran.

BERTRAND: Exactly right. There's no evidence that these companies are deliberately selling their products to Russia and Iran, right. And, actually, one of the companies whose products have been found in the drones, Texas Instruments has said specifically, we are not selling to Belarus, Iran, Russian, any of these bad entities that are making these drones.

But the problem again is the supply chain, right, and that is what critics are saying, these companies need to have a better eye on, better control over.

SCIUTTO: Right.

[09:55:02]

BERTRAND: That's what the administration is focusing on.

SCIUTTO: You also have new reporting on a new designation that Congress is weighing when it comes to Russia. What is that exactly?

BERTRAND: Yes, so really interesting. So, the administration has been working with Congress to try to draft this proposal that would designate Russia as an aggressor state. Now, this is kind of a step down from that state sponsored terrorism designation that Ukrainians had been wanting for Russia.

SCIUTTO: Yes.

BERTRAND: It does allow the president to impose new sanctions on senior Russian officials, but it also, according to critics, could be easier to rescind than a state sponsor designation - a state sponsor of terror designation.

So, it's a very interesting dynamic at play here, but ultimately, we're waiting to see whether Ukrainian President Zelenskyy, when he is in Congress tonight, endorses this idea because, of course, they are willing to really endorse any idea that holds Russia accountable at this point.

SCIUTTO: Understood.

Natasha Bertrand, thanks so much.

All right, still ahead, the immense preparations for Ukrainian President Volodymyr Zelenskyy's surprise visit here to Washington. He's landing in just a few short hours. We're going to be live at the White House with details.

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