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Rep. George Santos (R-NY) Stays Defiant as Calls Grow from Fellow Republicans to Resign; Ukraine Denies Russia's Claim it Captured Key Town of Soledar; COVID Loan Debt Coming Due as Small Businesses Struggle to Stay Afloat. Aired 10:30-11a ET

Aired January 13, 2023 - 10:30   ET

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

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[10:30:00]

JIM SCIUTTO, CNN ANCHOR: This morning, Republican Congressman George Santos is still defying calls from his own party to resign. Now, it is seven, that is seven GOP members of Congress calling for him to step down.

ERICA HILL, CNN ANCHOR: The latest coming from Ohio Republican Max Miller going after Santos for lying about his family's Jewish heritage, writing, it is not okay to fabricate or lie for a political gain. This is especially true when the lie seeks to benefit from the murder of millions of Jewish people.

CNN's Manu Raju live for us on Capitol Hill this hour. So, the pressure is building, but is it having any impact, Manu?

MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Well, the goal of both Santos and Kevin McCarthy, the House speaker, is to simply weather this storm and hope that it simply blows over and that these investigations don't yield any more damaging information that could potentially lead for him to resign or make things worse.

For McCarthy, the reason is very clear. This is a district that Democrats could very well pick up if Santos were to resign. It is one that Joe Biden carried by eight points. It could be a clear pick up opportunity and tighten McCarthy's margin in the House, and that is a key factor here.

Now for Santos himself, with the support of Republican leadership, indicating he is not going anywhere and the only recourse for the House Republicans and the House Democrats to kick him out is to expel him, something that would require two-thirds majority in the House and something that simply does not exist given the support of the Republican leadership.

Now, Kevin McCarthy's contention is that let the process play out, let the House Ethics Committee investigate, if they were to investigate, and then if issues come up, we will decide. Conference rules in the House, Republicans say that unless someone is indicted, they do not lose their committee assignments. So, that means that Santos very well could get committee assignments later next week when they name the rest of the committee assignments.

Now, Santos wanted a spot on a top committee, the House Financial Services Committee, that was not allowed but he could certainly get some other aspects here. So, even as some members are calling for him to resign, seven members right now, most of them are freshmen, five of them are from the New York delegation, two from other -- one from Ohio and another from South Carolina, most Republican members are keeping their powder dry, not saying a whole lot, aligning them self with the Republican leadership, hoping this goes away. But as you guys know, day after day, more revelations come out showing that Santos lied about his past and he's facing real legal problems both here and potentially abroad.

SCIUTTO: I mean, listen, these individual members, they can call for his resignation knowing that the GOP leaders not going to push him to resign given the political math and it is sort of a win-win for them, right? I took a stand but not knowing where it is all going to go.

HILL: Yes, it is a good point.

Also, as Manu pointed out, we know, the three of us certainly know, this is not going away. So, the questions are going to keep coming. We'll see. Manu, I appreciate it, good to see you, thanks.

RAJU: Thanks, guys.

HILL: First here on CNN, the top Republican on the House Foreign Affairs Committee is now investigating the United States' chaotic withdrawal from Afghanistan. On Thursday, Committee Chairman Michael McCaul requested the State Department hand over a vast number of documents related to the exit.

SCIUTTO: The agency now has less than two weeks to respond. If it does not comply, Congressman McCaul has threatened the power of the subpoena.

CNN National Security Correspondent Kylie Atwood is at the State Department this morning. And, listen, this has been expected and there are a lot of questions to be answered, frankly, about how this withdrawal came about. What do we know about the pace of this, when it starts, how long it will go and how far it will go?

KYLIE ATWOOD, CNN NATIONAL SECURITY CORRESPONDENT: Yes. Well, listen, if you look at this letter that was sent from this chairman of the House Republican committee, Congressman McCaul, to the secretary of state, it is clear that the committee wants to investigate essentially every aspect of the Biden administration's withdrawal from Afghanistan.

What they have requested from the department is a list of all of the planning, all of the meetings that went into the withdrawal from Afghanistan. They want a list of all of the U.S.-Taliban meetings during the Biden administration. And they also are making it very clear that they want to look at the after-effects of the withdrawal. So, they want a status update on those Afghans who have come here to the United States. They want to know what the future of U.S. security assistance, U.S. assistance generally to Afghanistan is going to look like. So, they're casting a broad stroke here in terms of what they want from the State Department, what they are looking into. This is a ten-page letter.

And as you said, Jim, this was expected. The State Department knew that Congressman McCaul was going to be launching this investigation.

[10:35:04]

They say that they look forward to engaging with Congress. They aren't definitely saying they're going to provide all of these documents. So, that is going to be what we're going to watch for here, how much does the State Department work with the chairman of the House Republican committee -- excuse me, the House Foreign Affairs Committee on this investigation.

SCIUTTO: Yes, it is going to dig deep. Kylie Atwood, thanks so much.

Well, intense deadly fighting raging right now just outside the eastern Ukrainian town of Soledar. It is not the main target, though, of Russian forces. We're going to have an update right from those frontlines.

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[10:40:00]

SCIUTTO: Well, this morning, Ukraine is defying Russia's claim its forces have taken the town of Soledar, this in the eastern part of the country where the fighting has been just bloody of late.

HILL: Yes, just horrific. Ukraine instead insisting it is holding the line there despite the intense attacks from Russian soldiers for weeks now.

CNN Senior International Correspondent Ben Wedeman is near the frontlines and just filed this report.

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BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: We're in a trench just about two and a half miles or four kilometers from the front -- from Soledar.

Now, the situation in Soledar at this point is not altogether clear. Ukrainian officials say they still hold part of it. Speaking to the soldiers, it is a mixed story. Some of them say it is either fallen or it is about to fall. Others say they still are making minor advances inside.

Now, what is interesting in these forward positions, we have spoken to many of the soldiers, they're fairly confident and morale seems surprisingly high given the situation. They're confident that they can hold these positions, rear position.

But what appears to be going on is an organized pullout from the town of Soledar. We've been watching as they've been firing mortars in the direction of Russian positions and rockets as well. You can hear, in fact, some of the thuds of some of that fire, some of it, of course, going towards Soledar, some in the direction of Bakhmut and, of course, there is fire coming the other direction.

I'm Ben Wedeman, CNN, outside of Soledar.

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HILL: Well, next hour, President Biden is set to welcome Japanese Prime Minister Fumio Kishida to the White House. The two expected to discuss climate change, technology and a newly strengthened military relationship.

SCIUTTO: This is a big deal because with the threat of China, the U.S. and Japan have been closer including in military ties.

CNN Senior White House Correspondent M.J. Lee, she is at the White House with more. M.J., what do we expect the leaders to be speaking about today and do we expect them to be explicit about the need to challenge China?

M.J. LEE, CNN SENIOR WHITE HOUSE CORRESPONDENT: Yes. Jim and Erica, keep in mind that this is not the first time that President Biden and Japanese Prime Minister Kishida are meeting. Over the last year, remember, they had a bilateral meeting in Tokyo, they also got some face-to-face time in Cambodia on the sidelines of a summit there and it is really coming at an interesting moment for Japan in terms of its security posture.

Remember that last month, Japan announced that it was going to be boosting its military as well as its defense spending, a change in posture that was really significant coming after a long time of operating a certain way, of course. And then U.S. and Japan recently also announced that it would be boosting and strengthening its joint military cooperation as well. And, of course, the important backdrop here is containing China and its own military buildup as well. So, yes, we absolutely expect that that will be an issue that the two leaders talk about quite explicitly.

And also when it comes to China, it isn't just about the military or security fronts, it also just has a lot to do with the economy. For example, we certainly expect the leaders will also talk about the issue of semiconductors. This is an issue that the two countries care a lot about and think that there is room cooperation there to generally try to contain China and its economic expansion in the region and trying to contain its chips manufacturing and its exports.

So, those are expected to be some of the main issues that they talk about in addition to, of course, the ongoing war in Ukraine, also North Korea and its continued saber-rattling. So, we are out here on the south lawn right now. Any minute now, we should see the motorcade actually drive into the south lawn. So, we will bring that to you when that happens. There is going to be a bilateral meeting followed by a working lunch here at the White House as well.

SCIUTTO: It is a big meeting at an important time. M.J. Lee, thanks so much.

We do have this additional news into CNN. The death toll in the deadly tornadoes that struck the southeast could increase from the six people so far in Alabama. This as the Autauga County coroner tells CNN authorities have been, quote, finding more bodies, sadly, during their search and recovery efforts.

HILL: We want to go back to our colleague, Ryan Young, who is in nearby Selma, Alabama. So, Ryan, what more are officials telling you about what they're finding?

RYAN YOUNG, CNN NATIONAL CORRESPONDENT: Yes. That coroner is Buster Barber. He tells CNN that they are finding more bodies.

[10:45:00]

They're not updating the numbers just yet, guys. We've been talking about this all morning long because, of course, we're an hour behind you. The light is just coming up here, so they're doing an assessment. In fact, just in the last ten minutes or so, there was a helicopter that was doing an assessment in the area where we are. So, there are a lot of people who still haven't been reached in their homes and we know trees are blocking some roadways. So, you get that terrifying news that they are finding more bodies. But they did not update the body count.

We do know that those six bodies were found earlier and those six people are confirmed dead. But we do not know the new number as they start doing this assessment across the state. So, with the emergency that has been put in place, with the power companies that are moving in and also the heavy machinery that's coming in, grimly and unfortunately, they may be finding more people over the next few hours.

Of course, we are doing our own assessments as we're driving around. But when you see that news and how devastating the storm has been, how powerful it was, you understand what is going on right now as they do these grim assessments.

HILL: Yes, grim is certainly the word for it, some heartbreaking news likely ahead. Ryan, thank you. I appreciate the update.

SCIUTTO: Coming up, COVID disaster loans were lifelines for millions of small businesses during the pandemic. But now, it is time to start paying those loans back and that could be real tough for some owners.

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HILL: Millions of small business owners have to start paying back those COVID disaster loans they took out during the pandemic to keep the doors open. Many will be required to make that first payment this month.

SCIUTTO: Some businesses say, however, they'll struggle to pay, higher inflation eating up a lot profit and they don't have the money right now to start repaying the debt.

CNN Correspondent Gabe Cohen joins us now. So, Gabe, you spoke to business owners and it is understandable, right? I mean, it takes a long time to get things back up to normal and they're telling you they are just not ready.

GABE COHEN, CNN CORRESPONDENT: Yes, Jim, that's right. So many of those businesses are still trying to claw their way back from COVID and about 4 million of them took out those loans from the federal government, these disaster relief loans. About $380 billion in all, and now, well, they have to start paying them back.

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COHEN (voice over): At Teddy and the Bully Bar near downtown D.C., business post-pandemic has never been the same.

ALAN POPOVSKY, FOUNDER AND OWNER, PRG HOSPITALITY: I'm still climbing the hill.

COHEN: COVID closed two of Alan Popovsky's four restaurants. Government loans saved the other two. But with city centers struggling to bring back traffic, his revenue is still down more than 45 percent from pre-pandemic and Alan says they're struggling to stay open and now it is time to pay back those loans.

POPOVSKY: It is very difficult. We just got over paying back the landlord. You're just a hamster spinning on a wheel.

COHEN: At the start of COVID with business stalled, nearly 4 million small business owners took out what are called economic injury disaster loans or EIDL loans from the federal government, on average, about $100,000, in many cases just to stay afloat, 30 years with a fixed interest rate of 3.75 percent. And unlike some other pandemic programs, EIDL loans were expected to be paid back down the road. Now, the first monthly payments are coming due. Most businesses will owe money by the end of January.

POPOVSKY: It is daunting.

COHEN: Alan said he owes more than $3,700 per month, roughly $780,000 in all, a lot of which he says he spent on rent and payroll.

POPOVSKY: We can't afford anything. But what we're doing is we're paying interest only right now.

COHEN: So you haven't made a dent on the actual loan?

POPOVSKY: Have not made a dent on the principal.

COHEN: A new survey from a leading small business association found only 36 percent of its members have reached their pre-pandemic sales levels amid staffing shortages, supply chain issues and inflation. Now add a possible looming recession just as these loans come due.

HOLLY WADE, EXECUTIVE DIRECTOR, NFIB RESEARCH CENTER: It is one more cost that they're going to have to deal with some small business owners unfortunately are going to struggle in kind of meeting those obligations.

COHEN: Lisa Klein says COVID is still keeping some clients away from her physical therapy practice, making it tough to pay off her EIDL loan, nearly $1,000 each month with $80,000 to go.

LISA KLEIN, OWNER, KLEIN INTEGRATIVE PHYSICAL THERAPY: All of the cost of everything have gone up. We can't pay the staff what we like to pay the staff. The whole business is still suffering and this is just kind of adding insult to injury.

COHEN: The Small Business Administration said struggling businesses can declare hardship and make small partial payments for six months. But interest keeps accruing, forcing owners like Lisa Klein to weigh short-term protection against a big bill down the line.

KLEIN: We have no choice, because if we don't keep paying it, it is going to accrue more interest.

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COHEN (on camera): And another survey from that same small business association found that business owners are feeling less and less optimistic about 2023 with that potential looming recession. So, Jim, all of those uncertainties about the future, that is just adding to the stress of paying back these loans at this moment.

SCIUTTO: No question. Gabe Cohen, thanks so much.

HILL: Still to come here, forget your Friday the 13th superstitions or maybe you think it is lucky number 13. I bet you are hoping it is because the mega-millions jackpot is now $1.35 billion. Stick around.

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[10:55:00]

SCIUTTO: All right. Today is Friday the 13th but it could be your or our lucky day. Tonight is the drawing for the second largest mega- millions jackpot in history, $1.35 billion. That would amount to roughly $707.9 million come out with the cash single payout option.

HILL: That will do.

SCIUTTO: It will do. I mean, you could say, I did some math during the break, Erica. $1.35 billion divided by two, that is you and me, is $675 million. I just want to say I'd be happy with that if you were to honor our agreement to split.

HILL: I'm good. I'm totally good with half of that $675 million. And, listen, I would recommend you cover your bases. We only have an agreement for the mega-millions. But those of us in the studio have also purchased the Powerball New York Lottery and a thousand dollars a day for Life Tickets.

[11:00:02]

So, we may or may not see you next week.

SCIUTTO: I claim half of those too, for the record.

HILL: Interesting, interesting claim.