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Pentagon Tracking Chinese Spy Balloon Over U.S.; U.S. Economy Added Astonishing 517K Jobs In January As Hiring Surged; Arctic Blast To Bring Life-Threatening Cold To North-East. 10-10:30a ET

Aired February 03, 2023 - 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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JIM SCIUTTO, CNN ANCHOR: Good Friday morning to you. They always seem to be busy news mornings. I'm Jim Sciutto.

BIANNA GOLODRYGA, CNN ANCHOR: And I'm Bianna Golodryga. We're following as Jim said several developing stories for you on this busy Friday morning. First, the latest on the Chinese spy balloon hovering over the Western US. Sources tell CNN that China cannot manually control the balloon's movements, but it can control the balloon to a certain extent like turning its surveillance gear on and off.

What China is saying about it this morning, we'll tell you in just a moment.

SCIUTTO: Yes, lots of hard questions. Plus just moments from now President Biden will speak following a new jobs report that boy, smashed expectations. 517,000 jobs added in January, nearly three times the forecast. We're going to bring you reaction live.

And a life threatening Deep Freeze heading to the northeast, millions are bracing for once in a generation sub-zero temperatures. We do begin though this morning. China now confirming the balloon is seen floating over the western U.S. is theirs. They are claiming however it's not a surveillance or spy balloon as the Pentagon believes but 'a civilian airship used for research.'

Those are the words of the Chinese foreign ministry. It is said to be the size of three buses. China says it accidentally drifted off course, of course. Sources do say China cannot manually control it. But how did it get there in the first place? The continent of U.S. is a big target.

GOLODRYGA: Yes, what happens next? Also a big question. While the Pentagon spokesperson says it is not a military or physical threat to the people on the ground, it still isn't clear why it has been there. CNN Pentagon Correspondent Oren Liebermann is here with more on what U.S. officials plan to do about the balloon.

Oren, do we even know how long the balloon has been in the United States? OREN LIEBERMANN, CNN PENTAGON CORRESPONDENT: So the Pentagon has been tracking it for several days. How much of that was over the U.S., it's a little unclear because it came in over Canada and NORAD, which includes both the U.S. and Canada has been tracking it for several days. So it's unclear exactly where it crossed the international border there. But this is something the Pentagon and the U.S. and Canada, as we've learned have been watching very closely because the Pentagon has said it traveled over a number of sensitive sites.

They wouldn't say what those sites were, were but we know what's in Montana, there's an Air Force base there. That's home to some of the U.S.'s ballistic missile fields. So that may be the reason the U.S. was concerned about this and has been tracking it very closely. So far, though the U.S. has made the decision not to shoot this down partially because of a risk to people and facilities on the ground.

Here's what we know so far. Military options were on the table, President Joe Biden asked for those options. But in the end, the decision was made based on high level Pentagon recommendations, including from General Mark Milley, the Chairman of the Joint Chiefs not to shoot this balloon down. Though the Pentagon and senior deficient defense officials have said they could take that option if they decide that the risk increases with his balloon.

In a rare Friday night statement China took - took responsibility for this balloon, although they offered a very different explanation and then what the U.S. believes. Here's the statement from the Chinese foreign ministry. I'll read this to you. The statement says, "It is a civilian airship used for research mainly meteorological purposes. Affected by the Westerlies and with limited self-steering capability. The airship deviated far from its plan course. The Chinese side regrets the unintended entry of the airship into U.S. airspace due to force majeure."

Does the Pentagon accept that explanation? Does the White House accept that explanation that remains to be seen? Beijing says it will work through this through the diplomatic channels to handle this and maybe take a little bit of the edge off the tensions that are very high right now between Beijing and Washington, especially with Secretary of State Antony Blinken scheduled to travel to Beijing in what will be the first visit of the top U.S. diplomat to Beijing in some six years.

How does this balloon affect that? We are eager to find out we will certainly keep you posted. Jim and Bianna.

GOLODRYGA: Yes, their - their explanation is quite questionable there. Oren Liebermann, thank you. Well, news of the balloon comes just days before as we mentioned as Secretary of State Antony Blinken heads to Beijing for critical talks with China.

SCIUTTO: Now those talks were already expected to be tense because of U.S. moves in the region taken to bolster for instance, Taiwan's defense. Joining us now to discuss CNN National Security Analyst, James Clapper. He is also the former Director of National Intelligence. Director Clapper, good to have you on this morning.

JAMES CLAPPER, CNN NATIONAL SECURITY ANALYST: Thanks.

SCIUTTO: U.S. officials have made the point to me that Chinese surveillance satellites which fly over the U.S. every 90 minutes already have capabilities, at least at par with something like this. And they describe this less as significance in terms of spying than just the audacity of this move. And now we have open discussions apparently of shooting it down. I wonder how tense do you describe this moment between the U.S. and China?

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CLAPPER: Well, it's potentially tense if we let it get out of hand. For a change, I am kind of prepared to accept the Chinese explanation for this balloon. I've had some personal experience with using balloons as reconnaissance devices and they're not very efficient, subject to the vagaries of weather fog mist, and especially wind.

So I don't think the Chinese would expend the political capital here for an intelligence purpose in the face of and in contrast to their very capable overhead reconnaissance satellite program, which gives them all the intelligence that they need.

So I think we ought to put this in context. I certainly think Secretary Blinken should go ahead with his trip, certainly bring it up. But I don't think this - this issue is - should be allowed to get out of hand.

GOLODRYGA: So Director Clapper, the question now becomes what - what to do with the balloon. The balloon is still there. China says they don't have control over it. So what should U.S. military officials do in terms of possibly bringing it down at some point? I know they don't want you right now in fear of harming civilians on the ground.

CLAPPER: Well, Bianna, I think, as the Pentagon I said, they are going to watch it, if it does pose some sort of a threat and I think the, the more likely one would be a threat to navigation, aerial navigation that then I think they'll have to discuss on a contingency basis, how to take it down. And I think you know, that would - they should consult with the Chinese and, and tell them and keep them fully informed. Be transparent about it.

But in the meantime, since it doesn't pose a direct threat, and it doesn't pose apparently a hazard to navigation, just watch it and see where it goes.

SCIUTTO: According to the Pentagon, this is not the first time a balloon like this is come over U.S. territory, previous sightings over Hawaii, and Guam, where of course, there were also military installations. I wonder we had the former Defense Secretary Mark Esper on CNN earlier today who said, don't shoot it down, figure out a way to take it down so that you can assess its capabilities. Is that too risky in your view? Would that have value?

CLAPPER: Well, I heard former Secretary Esper's commentary, and I certainly acknowledge his point about this being a brazen affront to our sovereignty. Well, how high does sovereignty go? If you want to use that rationale in overhead reconnaissance satellites operated by the Chinese and the Russians, are potentially an affront to our sovereignty.

So I think we need to take all these factors into consideration. And again, as loathe as I am, to accept what the Chinese say publicly, I have a tendency to accept their explanation this time.

GOLODRYGA: You say this shouldn't be a priority for Secretary Blinken's trip and his meeting to China this weekend. What issue should be his top priority? Is it Ukraine? Is it is it Taiwan? Is it the South China Sea? I mean, you name it, there are so many to go through?

CLAPPER: Well, I think the overarching issue is to try to arrive at some form of a partnership, at least for comm - communications purposes. And there are many sub issues Bianna, as you mentioned. Most notably, I think, right now, Taiwan. And I would hope that the Secretary wouldn't cancel the trip because of the balloon because I think there are some big issues at stake here that need face to face discussion.

SCIUTTO: There was a U.S. Air Force General who caused a stir, we could go by releasing a really an exhortation to people under his command to prepare for the prospect of war with China in two years, in the year 2025. I know, that's not the Pentagon's assessment, but he's quite a high ranking general. He came from Indo Pacific Command. Is that an alarmist point of view?

CLAPPER: Well, it could be but, you know, in General Minihan has a reputation for being outspoken and frank, and he certainly was here. From a military preparation standpoint, I don't think it hurts to alert your troops that the possibility for such combat is real. And it could be sooner than many people think.

Now, you can debate about the politics and the PR impact and all that but I don't think you can fault him for warning his - the troops under his command to be prepared.

GOLODRYGA: It is frightening to hear that especially since we're having economic tensions at an all-time high with China as well. James Clapper, thank you as always for your expertise. We appreciate it.

CLAPPER: Thank you.

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SCIUTTO: New this morning that January jobs report defied all expectations. The U.S. adding a whopping 570,000 jobs just last month, half a million, more than doubling estimates. It sent the unemployment rate down to 3.4 percent. That is the lowest since 1969 when humans first set foot on the moon, I'm joined now by Labor Secretary, Marty Walsh.

Mary Walsh, Secretary, I imagine you're quite happy with these numbers this morning and what's behind them? I'm guessing they were even ahead of your expectations. MARTY WALSH, LABOR SECRETARY: Yes, they certainly were ahead of our expectations. And seeing these numbers, just shows that when the President laid out a plan at the beginning of his term and continues through today, that plan is working.

I mean, what we saw this month in this report, a couple of really strong areas. That was business development, business, hospitality, leisure was really strong month, certainly in medical as well. And in education, private education, government education a little bit there. So we've seen some good growth, we've seen some increase in labor participation rate.

Certainly we want to continue because there's job openings in America so we want to see that number go up. And one of the number that was a good number to see was in the black unemployment rate in the country is 5.4 percent. The second lowest, since we started collecting that data in the 70s.

SCIUTTO: Let me ask you this, because we have seen and granted these might get outside headlines considering their overall percentage of the job market, but big layoffs in tech and media over the last several weeks. Some have made the point that some of those folks might still be getting severance pay, so they won't show up in these latest figures.

Can we expect a jump in job - job losses in coming job reports? Is that something you're bracing yourself?

WALSH: I'm not. I can't speak for the media piece of it. But - but the tech sector, a lot of those folks have already got jobs. And there's a lot of jobs out there. I think that we have to monitor this obviously that that could be a reality. We don't know that yet. We'll know in the next in the next couple of jobs reports but something that we are monitoring.

But I know in the tech sector, a lot of companies were looking for tech support. But these bigger companies were hiring all these folks.

SCIUTTO: A new Gallup poll shows that a majority of Americans have a positive view of the job market. 64 percent, two thirds think it's a good time to find a job. I wonder, as you know, you can see almost the reverse of that when folks talk about where the country is going, right track, wrong track. And I wonder why you believe there's that disconnect.

WALSH: Honestly, I think it's what we - what we've - what we've been dealing with in the country for the last four or five years I mean, with uncertainty in governments in the last administration, but also, more importantly, I think COVID-19 has really, you know, changed the way people think. And, you know, when COVID began, I was the mayor and even - even the disruptions that we had in our own city, and then you feel it in the federal government, across the board.

I think COVID has really put a lot of constrain in people's minds. And it's still lingering there. And then the divisiveness. After the initial days of COVID, when we kind of were rallying together as a country and supporting each other. And then, you know, we started complaining about vaccines and testing and division there. So I think it'll take a little time to move forward.

I think the President's message of unity is really important and fighting for the soul of our nation is really important. But people feeling good about the job market, that's a positive sign. We just need to continue to build on that.

SCIUTTO: Now, I don't - I know you don't like to comment on interest rates, but interest rates have an effect on the economy, and they certainly have an effect on the job market or that appears to be part of the intent of the Fed here is to cool everything down, to help bring prices down and wages down.

They did trim the size of their rate increase to a quarter point in the most recent move. But are you concerned that the Fed may go too far and push the economy into a recession unnecessarily?

WALSH: I mean, for the last six months, you know, the Fed has been - has been looking at their policy. We've been working on our side and on the - on the White House side and the government side. And we're starting to see, you know, the inflation numbers come down a bit, not quite as fast as we'd like to see. We've seen wage growth continue to stay steady 4.4 percent. And what we want to do is, was close that gap eventually. I mean, that gap is closing. It's not closing as fast as we would like for people but - but we're starting to see that happen.

So I think right now again, it's a kind of a month by month approach to see how we can continue to bring inflationary pressures down and allow people the opportunity to get into good paying jobs.

SCIUTTO: Quickly, as you know, your name has been mentioned as a possible new head of the NHL Players Association. You're going to be leaving for that job anytime soon.

WALSH: Yes, I'm not going to make any personal news today. You know, I've been working for the President and the American people for the last two years and, and I'm going to continue to do my job and no personal news today.

SCIUTTO: All right, at least not today. We'll keep asking. Marty Walsh, thanks so much.

WALSH: Thank you.

SCIUTTO: Well, President Biden is expected to speak any moment on that jobs report. There's the podium. We'll bring you those comments live.

GOLODRYGA: Speaking of jobs, Jim, it was only fair for you to ask him about his future. Still to come GOP contenders for the 2024 election are starting to lay out their plans as former President Donald Trump begins lashing out at his potential rivals. We've heard this before.

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GOLODRYGA: Plus an arctic blast slamming the Northeast. It could get so cold that some weather officials are calling this deep freeze, a generational event. We'll have more for you up next.

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GOLODRYGA: Very soon the FBI is expected to search former Vice President Mike Pence's Indiana home and his Washington office for more classified materials. Sources say representatives for Pence have been in talks with the Justice Department and that they want to completely cooperate.

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SCIUTTO: Last hour I spoke to Democratic Congressman Mike Quigley and Republican Congressman Darren LaHood. Lawmakers are exploring tougher civil penalties for those founded have mishandled classified documents, listen to what they had to say.

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REP. MIKE QUIGLEY (D-IL): I don't think anyone's above the law. But the problem here is it's first of all, this is a bipartisan problem so requires a bipartisan solution. The problem is the criminal threshold is apparently too high. So there has to be - this is serious, and there has to be some accountability. If that's civil in nature, so be it. At least it will work to disincentivize those who are being sloppy with absolutely critical documents. There's no excuse for this kind of behavior.

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SCIUTTO: Now, they're talking about big penalties, including million dollar fines, losing security clearances. With us now, Francesca Chambers, White House correspondent for USA Today. And Molly Ball, National Political Correspondent for Time. Good to have you both on this morning. Francesca, I want to, if I could begin with you. This is a bipartisan legislation that's been introduced.

They're trying to address an issue that we're living through every day here. Right? Which is that either inadvertently or deliberately, perhaps you have very senior government officials leaving office with classified materials. Does this have legs on Capitol Hill, legislation like this?

FRANCESCA CHAMBERS, WHITE HOUSE CORRESPONDENT, USA TODAY: Well, lawmakers have told me on both sides of the aisle that there certainly need to be reforms. Now, whether those come at the congressional level and what they are versus whether it is that the laws that already exists just need to be enforced. That is something that there is not widespread agreement on.

But they do agree that there do need to be reforms and it's certainly something that lawmakers in both chambers both the House and the Senate are looking at.

GOLODRYGA: And Molly, both congressmen, Republican and Democrat made clear to Jim earlier that no one is above a law in terms who this can apply to. I'm just curious, do you think there could be reverberations felt even in Trump circles or Biden, perhaps given that both, well, we know Trump said that he's going to run for election again, but President Biden's expect to do the same?

MOLLY BALL, NATIONAL POLITICAL CORRESPONDENT, TIME: Yes, I think both of them are going to have to eventually explain what happened here. In both cases, there are obviously differences in all of these cases. But the overarching theme is this sloppiness that the congressman is talking about and potentially the problem's with the classification system writ large.

This has been a topic of debate and potential reform in the intelligence community for a long time. The national security community talking about issues of over classification and whether our current classification system actually meets the needs of information sharing as well as information secrecy.

So I think it being a bipartisan problem means that it is possible that that you could see meaningful reform although as Francesca says, it's not clear if that will come from the current congressional level.

SCIUTTO: Molly, Francesca, do you stand by we do have some breaking news just into CNN. And that breaking news regarding the trip by Secretary Blinken to China, planned trip. Our Alexander Marquardt is at the State Department now. The trips now off?

ALEX MARQUARDT, CNN SENIOR NATIONAL SECURITY CORRESPONDENT: Good morning, Jim, Bianna Yes, we understand from two U.S. officials that this trip to China by Secretary of State Antony Blinken has been postponed. Obviously, this comes amid this revelation of this really audacious sending of this Chinese spy balloon across the border into the United States.

Blinken had been slated to be the highest ranking Biden administration official to visit China since President Biden took office. President Biden himself, he met with Xi Jinping last November on the sidelines of the G20. And this was meant to be a follow on meeting to that meeting between the two presidents.

Now we understand from these two U.S. officials that it has been postponed. Now the Chinese earlier today did try to settle the or calm the temperature a little bit by putting out a statement saying that this was a civilian airship, it was something that was primarily used to study meteorological conditions, that it was not under the control of the Chinese government because it did depend on the winds.

That appears to not have had its intended effect because now we understand that Blinken will no longer be going. This does, of course, come at a very tense time between the Chinese and the U.S. governments. Just this week, we have heard that the US will be opening new military bases in the Philippines. There has been, we saw a U.S. Air Force General predict that there could be war with China in 2025.

So this just ratchets up the tension, Jim and Bianna between China and the US. We know that the State Department has summoned the Chinese Charge D'Affaires here at the State Department to deliver a very clear and stark message we're told and a similar message was also delivered to Beijing by the U.S. Embassy there, Jim.

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GOLODRYGA: Yes. And we know that the Canadian, the Canadians had also summoned to their ambassador from China as well. Alex, do we know specifically any response on the U.S. side to the explanation delivered by China for the balloon, here?

MARQUARDT: We are expecting one Bianna, we're expecting to hear from the State Department shortly, an explanation for this postponement of Secretary Blinken trip. So far, we're just hearing this on background from two U.S. officials. It is not something that is really all that surprising considering the fact that this is a surveillance balloon that is intended to gather intelligence, that was floating over sensitive sites in Montana, where the U.S. has more than one 100 nuclear ballistic missiles base.

Now, what is interesting, though, is that this is something according to the Pentagon that has happened in the past. These Chinese balloons have flown over American territory in the past. How this is different? Well, it's coming right before this planned meeting with Secretary Blinken, that was due to take place next week.

One day that they had been eyeing was February 6, so that - so that's on Monday, so they would have been leaving very soon. What's also different we're told by the Pentagon is that this this spy balloon was really loitering longer than balloons had in past instances.

It was spending more time hovering, we understand that doesn't necessarily mean that it's able to gather more intelligence than say, a Chinese spy satellite. But what it - what it does indicate is that it is a very blatant attempt by the Chinese, the U.S. believes to gather intelligence above U.S. territory. Jim, Bianna?

SCIUTTO: And Chinese spy satellites are flown over the U.S. every 90 minutes on orbit. Something to watch closely. Alex Marquardt, thanks so much. We're going to bring back Molly Ball, and Francesca Chambers. Molly Ball, meetings like this, at this senior level require a lot of advance work. There are a lot of expectations attached to them, particularly given the already tense relationships between the U.S. and China.

This is a postponement. It's not a cancellation, but still significant. I wonder where this leaves things between the U.S. and China right now?

BALL: Yes, I do, too. I mean, I think you know, as Alexander was just saying, we don't fully have an explanation from the State Department yet. But we do know that a lot of what alarmed U.S. officials about the presence of this balloon was the timing, coming right before that scheduled trip by Secretary Blinken.

And so I think, you know, there's clearly a desire to get more context, get more explanation about whether this was some kind of intentional provocation or whether the Chinese explanation that it was essentially a mistake is to be believed. And clearly, the American government is still trying to gather that information and make its assessment. And so you know, I'm speculating here since we don't have a full explanation from the State Department. But I would guess that they just want to have a clearer picture and have it fully in context so that a production - a productive discussion can be had by the Secretary without this hanging over it, quite literally, in the case of the balloon and becoming a distraction.

SCIUTTO: Exactly. I was going to stretch the metaphor there, but I'm going to leave it. Molly Ball, Francesca Chambers, thanks so much to both of you.

GOLODRYGA: Well, millions in the Northeast are on alert for dangerously cold wind chill. Just how low could temperatures drop this weekend? We'll tell you after the break.

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