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Blinken Postpones China Trip As Spy Balloon Flies Over U.S.; 55M People Under Wind Chill Alerts In Midwest, Northeast; Biden Hails His Economic Plan As Jan. Jobs Reports Smashes Forecasts. Aired 2- 2:30p ET

Aired February 03, 2023 - 14:00   ET

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

[14:00:00]

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VICTOR BLACKWELL, CNN HOST: Hello, I'm Victor Blackwell. Welcome to CNN NEWSROOM.

ALISYN CAMEROTA, CNN HOST: And I'm Alisyn Camerota.

There are mounting concerns today about that Chinese spy balloon floating over the United States. Secretary of State Tony Blinken just postponed his high-stakes trip to China hours before he was set to depart.

BLACKWELL: And moments ago, the Pentagon said this is a surveillance balloon and that it is maneuverable. This giant balloon, about the size of three buses, was spotted over Montana in recent days. The Pentagon says it's now over parts of the central part of the country moving at 60,000 feet over U.S. airspace.

Now, the Chinese are downplaying this discovery. They claim it's a weather balloon that blew off course. For now, President Biden is opting against the growing calls to shoot it down.

(BEGIN VIDEO CLIP)

GEN. PAT RYDER, PENTAGON PRESS SECRETARY: Considering the size of the payload on this, looking at the potential for debris and the impact on civilians on the ground or property damage. We assessed that it does not pose a risk to people on the ground as it currently is traversing the continental United States.

(END VIDEO CLIP)

BLACKWELL: CNN's Pentagon correspondent Natasha Bertrand is with us now. So, this balloon continues to move across the U.S., what happens now?

NATASHA BERTRAND, CNN WHITE HOUSE CORRESPONDENT: Great question, Victor. And according to our sources, look, the Pentagon, the Biden administration writ large, they're continuing to review options for what to do here because as you said, the Chinese are downplaying this. They are saying that it was an accident.

And actually, the Chinese Foreign Ministry did release a statement just this morning kind of driving all of this home. And they said look, 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 planned course. The Chinese side regrets the unintended entry of the airship into U.S. airspace due to force majeure. The Chinese side will continue communicating with the U.S. side and properly handle this unexpected situation caused by force majeure.

So, the Chinese really are trying to emphasize that they did not have control over where this balloon actually ended up, that it strayed far from its course, and that it was not on purpose. So, clearly trying to ease tensions here. But the U.S. is not necessarily buying that. And just a few minutes ago during a press briefing, the Pentagon press secretary said, look, we know that this balloon was not just for the weather and that it is actually for intelligence gathering purposes.

(BEGIN VIDEO CLIP)

RYDER: We are aware of the PRC's statement. However, the fact is, we know that it's a surveillance balloon. And I'm not going to be able to be more specific than that. We do know that the balloon has violated U.S. airspace and international law, which is unacceptable. And so, we've conveyed this directly to the PRC at multiple levels.

(END VIDEO CLIP)

BERTRAND: And that is key here that the U.S. has continued to keep these channels of communication open with the Chinese and remains unclear, however, whether the U.S. is still going to potentially keep that option on the table of taking it out by force of shutting it down. As we have seen, Republicans in Congress, they have been urging the Biden administration to take some kind of major kinetic action here and shoot the balloon down because they fear that it could be collecting intelligence about potentially very sensitive missile installations inside the United States, guys.

CAMEROTA: OK. Natasha, thank you for all of that. Let's bring in Pete Muntean. Pete, is this balloon impacting air travel at all?

PETE MUNTEAN, CNN AVIATION CORRESPONDENT: Well, this balloon is flying high, Alisyn, but not so high that it is not having an impact on commercial flights. What's also interesting is that we're now learning that the impact on commercial flights may have started as early as Wednesday, which is a day before the Pentagon first made this public. We're learning from the airport in Billings, Montana that a swath of airspace from Helena to Billings was close to flights for about two hours on Wednesday, from 1:30 p.m. to 3:30 p.m. This is a large swath of airspace. We're talking a couple of hundred miles long.

The good news is this only impacted a few flights because remember, it's the middle of the week. It's the middle of the wintertime. Not a lot of air traffic taking place in that area because it's typically not very busy this time of year. [14:05:02]

What is also interesting here though, is that this is having an impact because it is so high. The balloon is at 60,000 feet according to the Pentagon. Airliners just to put this into context, typically around 30,000 feet. The Pentagon says that this balloon is over the central part of the U.S., so the big question is, what happens if and when it does come down? Could this have more of an impact on commercial flights or the airspace in the U.S. in general?

The FAA jurisdiction essentially ended about 60,000 feet that's when controlled airspace ends. We'll see if they ultimately make a statement on this. So far, they've remained pretty mum on this.

CAMEROTA: What goes up must come down. So, I'm guessing at some point it will have an impact -- more of an impact on air travel. Pete, thank you very much. Keep us posted.

BLACKWELL: Well, a short time ago, the National Weather Service tweeted these images of what they say is a large balloon in the Kansas City area. Look closely. You can see it there in the center of the screen. Here's what they wrote.

We've had several reports across northwest Missouri of a large balloon visible on the horizon. It is now visible from our office in Pleasant Hill and the Kansas City Metro Area. We have confirmed that it is not a National Weather Service weather balloon.

CAMEROTA: The Pentagon says they are tracking the balloon but have not given a location of where it is right now. Let's bring in Kim Dozier, she's our CNN Global Affairs analyst, and David Sanger, he's a CNN political and national security analyst. Guys, it just gets curiouser and curiouser by the hour.

David, I'll start with you. Is it possible as the Chinese are saying that this was a mistake and that this has just flown off course, they -- it was not a spy balloon intended to hover over the United States?

DAVID SANGER, CNN POLITICAL & NATIONAL SECURITY ANALYST: Yes, it's certainly possible and things do go wrong, and balloons are hard to control, although these are high-tech balloons that should be a little bit easier to do so. What makes me doubt that, Alisyn, is if the United States really believed that this was a weather balloon and not a spy balloon, then I don't think that you would have seen Secretary Blinken necessarily cancel his trip. They clearly believe that it had other purposes.

And the Chinese have in the past told untruths about these issues before. They launched some hypersonic missiles that -- a few years ago not near American territory that they maintain were simply commercial or civilian rocket tests. Of course, they were not. I would think that if this was a civilian -- which appeared to be a civilian or meteorological balloon, the State Department would be less likely to have canceled such an important trip.

BLACKWELL: So, Kim, the Pentagon says that this is a surveillance balloon, and it is maneuverable. So, at the center of this, this is a foreign government's military asset floating above the U.S., violating the law, unencumbered and flagrantly. Because there are Chinese satellites that can pick up information, why the flagrancy -- is the flagrancy the point of this balloon?

KIMBERLY DOZIER, CNN GLOBAL AFFAIRS ANALYST: Well, look, the U.S. and China both have been experimenting with these high-altitude balloons. The advantage of having a balloon loiter overhead instead of a satellite is the satellite has to go around the globe, whereas that balloon just sitting there for hours, for days can monitor one site. When it was first spotted in Montana, it was within probably spying distance of where the U.S. Minuteman III nuclear missile silos are. And we know that China has been beefing up its own ballistic missile program, its own nuclear missile program, so it would want intelligence on how its opposition works.

But is this the kind of thing that China wanted spotted? I imagined that the Pentagon was watching it and intended to just keep studying its operation, try to see what kind of technology and advances are on it because we learn as much through counterintelligence sometimes as people do through the actual spying. But then it got spotted by commercial aircraft, and then the GOP responded forcefully. And I think that's why you've seen the Pentagon first acknowledge it, and then Secretary of State Blinken canceled his trip.

CAMEROTA: And to that point, Kim. David, here is what Senator Marco Rubio tweeted out about this. It was a mistake to not shoot down that Chinese spy balloon when it was over a sparsely populated area. This is not some hot air balloon. It has a large payload of sensors, roughly the size of two city buses, and the ability to maneuver independently.

Now, it's over -- well, it may -- there's something flying over Kansas that nobody can identify.

SANGER: Right.

CAMEROTA: And so, David, why didn't the Pentagon shut it down?

SANGER: Because when you shoot something down, you never nearly know what's going to -- where it's going to land and well, it probably would have worked out fine, you know, if it did land in a residential area, school, God forbid, did some damage or killed somebody you can imagine this would look very, very different.

[14:10:15]

You know, to Kim's very good point about having this loiter. It makes you wonder if indeed it really is a surveillance effort and I suspect it probably is, there's nothing that they would see from this balloon that couldn't see from the satellites. But there may be a lot of transmissions -- radio transmissions, that connections between the nuclear sites and so forth, that they might be trying to pick up that you could get in this 60,000 foot and above region that you couldn't get from a satellite. And so, one of the arguments for grabbing this thing or bringing it down is to figure out exactly what it is they were searching for. It's just a risk-reward thing. And I think the Pentagon understandably, didn't want to take that risk. And they took that to President Biden, I guess he didn't want to take it either.

BLACKWELL: Kim, so what now? I mean, the option to shoot it down is still on the table, although there is the concern of bringing this thing down into potentially a populated area. But what are the options to prevent the Chinese from using whatever they are collecting potentially?

DOZIER: Well, you heard Pentagon officials say that they had taken measures to prevent it from gathering anything basically useful. I'm sure it has been bombarded with electronic warfare and all sorts of other countermeasures to keep it from gathering up any sort of encrypted communications, etcetera. And at this point, the best they can do is watch it, maybe see if they can hack it and bring it down safely. But the problem is, as it -- if it gets shut down -- as it comes down, it can get buffeted by all sorts of different wind streams taking it hundreds, if not thousands of miles from where they hoped it would land.

BLACKWELL: Yes.

DOZIER: And that's the risk.

BLACKWELL: David, I got one more for you on the intersection of national security and politics.

SANGER: Sure.

BLACKWELL: We've heard this tweet from -- or Alisyn read the tweet from Marco Rubio. There's been one from Nikki Haley, from Mike Pompeo, from Mitt Romney. Is this thing now just going to be a floating commentary on what Republicans say is the president's relative weakness against China? They say that the PRESIDENT is not strong against Xi, this thing is floating across the country, and we'll continue to get alerts throughout what they say maybe the next few days of it just floating over the U.S.

SANGER: Well, remember, this is not a weapon, it's an act of surveillance. There's surveillance going on every single day from their satellites, and surveillance of them from our satellites. What's making this a big deal is, of course, people are seeing it, they're seeing it in the sky, they're seeing it from airplanes, and so forth. So, the question is, how much danger is there to us?

I'm not sure that it is any sign of weakness in any particular way. We do these kinds of things to the Chinese, not with balloons, but in other methods. We do them to North Korea. We do them to Iran. But I could see why Secretary Blinken did not want to appear to be showing up and having a nice conversation with President Xi Jinping while this has going on. And certainly, it's a violation of sovereignty. And I think that's sort of the nature of the protests. I -- you know, I hate to say it but this will blow over in one way or another, especially if (INAUDIBLE) --

BLACKWELL: Oh, boy.

SANGER: Sorry about that. But the fact of the matter is, I think at some point, they're going to want to figure out exactly what they were searching for. And maybe they take it down if it went out over the water. That might be their best shot.

CAMEROTA: OK. Kim Dozier, David Sanger, thank you both. And you complaining about a pawn, you're the one who just made a point that hot air balloons over Kansas.

SANGER: Yes.

BLACKWELL: Yes.

CAMEROTA: There's a history.

BLACKWELL: We've been here before.

CAMEROTA: There's a wicked witch.

BLACKWELL: There's a classic movie.

CAMEROTA: But there -- we know about this.

BLACKWELL: Yes.

CAMEROTA: We've seen this movie before. All right, thank you both very much.

OK, now to that deep freeze that's gripping the Midwest and the Northeast today, an estimated 55 million people are under wind chill alerts from Montana to Maine. Some of the coldest wind chills ever recorded are expected in parts of New England. Forecasters predict a wind chill of negative 100 at Mount Washington in New Hampshire.

BLACKWELL: Officials say treat this like a blizzard, stay inside, check on animals and pets. Some farms may even lose the entire harvest. Large cities are bracing for commuting problems. The temperatures in Boston are expected to bottom out at seven degrees below zero tonight. New York City will also drop into the single digits.

CNN has affiliate reporters stationed across the region. Here's what conditions are like in Portland, Maine.

[14:15:09]

(BEGIN VIDEOTAPE)

ADRIANA SANCHEZ, CNN AFFILIATE WMTW REPORTER: Throughout the morning, we saw temperatures dramatically decrease. By seven this morning, it felt like a negative one. And as you can tell right now, my scarf -- my hair, the winds here in Maine, at least in Southern Maine are really intense. And we did do a science experiment this morning. Let me show you.

We wear a pair of sweatpants that we found and let it took less than half an hour for them to get frozen like this. Really showing that if you get a piece of clothing like your gloves, your hat, pants, or a shirt wet, you need to go inside and change immediately. It could be really dangerous for you. You might get frostbite.

And by three o'clock here in Portland, wind gusts are going to get down to negative 30 to negative 50. So, make sure you are bundled up and wearing the appropriate clothing if you need to be outside. And if possible, stay inside.

I mean as you can tell I'm getting blown by the wind right now. And the wind, when it hits your face, it feels like needles. Your teeth hurt and your eyes hurt, so make sure to say inside this weekend, folks. In Maine, I'm Adriana Sanchez.

(END VIDEOTAPE)

CAMEROTA: I mean freezing your clothes, that does say at all, does it not?

BLACKWELL: Well, she found some sweatpants somewhere.

CAMEROTA: Where's the jogger?

JENNIFER GRAY, CNN METEOROLOGIST: Where did she find sweatpants?

BLACKWELL: I don't know.

CAMEROTA: I don't know what happened to the person wearing them, you know?

BLACKWELL: But I need them.

GRAY: Yes.

CAMEROTA: But anyway, let's bring in meteorologist Jennifer Gray. OK, Jennifer, how long do we have to stay indoors?

GRAY: Well, guys, the temperatures are going to be the coldest tomorrow morning then they'll slowly start to warm up. I say the word warm loosely. It's going to be very cold all weekend long across the Northeast and New England.

This is a very dramatic example. This is Mount Washington Observatory in New Hampshire. Right now, temperatures are 35 below zero feeling like 90 below zero. They are experiencing wind gusts of more than 100 miles per hour.

Now, no one lives up here permanently, but we do have scientists up here 24/7. So, there are people actually in the observatory right now experiencing that weather. The current wind chill, 14 below zero in Albany, feeling like zero in Boston, New York City feels like the single digits. It is a dangerous cold. We could have frostbite in as little as five minutes for the areas that get to that wind chill of 50 below, and 10 minutes for the areas that get to 30 below.

So, the Frostbite in minutes, here we go, we're going to see those temperatures really fall. Portland will feel like 42 below zero Saturday morning. This is the wee hours of the morning, so you could get frostbite settling in and as little as 10 minutes. Boston, 15 minutes during the overnight hours and that's really when we'll hit the coldest temperature. But you can see, still very cold by the time we get to Saturday midday with temperatures well below zero, 20 and 30 degrees below zero as far as that wind chill goes. So, the wind chill warnings wind chill advisories, no surprise, they're in effect and will stay that way.

And what happens is when you don't have wind, your body's ability to basically provide heat around it so it can warm you up. So, when it's windy, that warmth just blows away essentially and so you get cold much, much faster. And so that's what's going to happen over the weekend with the windy conditions. So, dropping temperatures 4:00 a.m. to now, you can see 29 to five in Portland. So, guys, significant cold across the Northeast.

CAMEROTA: Oh my gosh. Jennifer Gray, thank you. Everybody, be careful. Check on your neighbors, obviously.

OK. President Biden says the state of our economy is strong after a new jobs report smashes expectations. And that may sound like good news, but is that how the Fed sees it?

BLACKWELL: And has the mystery at the Dallas zoo been solved now? An arrest has been made in the case of those two missing monkeys.

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[14:22:31]

BLACKWELL: Economists are stunned by today's blockbuster jobs report. The U.S. economy added 517,000 jobs in January.

CAMEROTA: That is nearly triple what market watchers were forecasting. This morning, President Biden took a victory lap.

(BEGIN VIDEO CLIP)

JOE BIDEN, PRESIDENT OF THE UNITED STATES: And here's where we stand. The strongest job growth in history, the lowest unemployment rate in 54 years, manufacturing rebounding in a faster rate than in the last 40 years, inflation coming down, real races -- real wages going up, but moderately going up not going through the roof, the economy growing at a solid clip. To put it simply, I would argue the Biden economic plan is working.

(END VIDEO CLIP)

CAMEROTA: CNN's Matt Egan is here. So, Matt, President Biden is obviously thrilled about this. What is the Fed chair thinking?

MATT EGAN, CNN REPORTER: Well, Victor and Alisyn, he's got to be thinking what do I have to do to stop this runaway train, right? Because the Fed has raised interest rates eight times over the past year. I mean, that is the economic equivalent to slamming the brakes. And yet, the jobs market is speeding up, which is just incredible.

These 517,000 jobs added in January, that is not just more than double the estimate. It's actually 200,000 jobs stronger than even the most optimistic forecast. There, and you can see on the chart, it has -- hiring has clearly accelerated and unemployment rate down to 3.4 percent. You know, that spike there on the screen on the left that's in the spring of 202o, it was almost 15 percent.

This new number is not just a post-COVID low, it is the lowest since May of 1969, which is just before man first walked on the moon. It's pretty amazing. And so, you're probably wondering who's hiring. But just about everyone. I mean, there was widespread job growth. If you look, restaurants and bars added almost 100,000 jobs alone, government, health care, retail, construction, manufacturing, hotels, all of them adding jobs in January. So, by all accounts, this jobs market is still somehow on fire.

BLACKWELL: So, when I saw the number -- I was watching TV on mute this morning, and I saw the number and I thought, is that supposed to be 157 -- or 517, is that right? Are these numbers, are they really too good to be true? Because there are adjustments later, potentially.

EGAN: Yes. I mean, they're -- the numbers are so good that I think some economists are sort of wondering whether or not they overstate the strength of things. I talked to Moody's economist Mark Zandi, and he told me that he thinks that it's possible that some weather issues or COVID-related issues, or both have sort of exaggerated the strength here.

[14:25:04]

He thinks that maybe this is more like 300,000 jobs, not 500,000. But still, when you look at this report, when you think about the fact that jobless claims are really low, the job openings have increased, there's nothing about these jobs numbers that suggest that there's either an ongoing recession or one coming anytime soon.

BLACKWELL: All right. Matt Egan, thanks so much.

CAMEROTA: Come back.

EGAN: Thank you.

BLACKWELL: Let's discuss now with Rana Foroohar, a CNN global economic analyst and the global business columnist and associate editor for The Financial Times. Rana, good to see you again. I imagine that the president and the Fed Chair, Jerome Powell, both exhaled today, but with very different emotions and for very different reasons. How do you see these numbers?

RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: Boy, you know, if I'm Joe Biden, I am just loving this. This is a goldilocks economy again, you know. I mean, you get -- as he says, you've got a little bit of wage inflation, you've got a great job market, which if you're the president, that's exactly what you want to be telling voters. You have inflation -- non-labor inflation actually starting to go down a little bit.

So, you know, I think Jerome Powell, the Fed chair, is -- you know, he's concerned. But I think he's also got to be looking at this and saying -- maybe looking behind the shoulder and thinking, gosh, have we done it? Have we landed this plane softly? Because right now, this, I think, is pretty much where both of them would want to be.

CAMEROTA: And how do this jobs bonanza catch everybody by surprise? What signs are we not seeing in the wind?

FOROOHAR: Yes, it's a great question. I personally think and I -- you know, I don't have data to back this up. But just anecdotally, speaking to CEOs, speaking in market participants, I think American companies, which used to have a tendency to hire and fire very quickly, I think, given the labor issues, the shortages, and wage inflation in the last few years, they're starting to think a little bit more long term a little more strategically about labor. I think that they're keeping people on longer. I think that they're hiring, even if they're not completely sure what the year is going to hold because they don't want to be in addition -- a situation that they were in a couple of years ago, where you can't find anybody and your business is suffering, and then you really have to pay through the nose.

So, to me, this is actually a good thing. This is a healthy thing. I mean, I think part of the overall Biden economic agenda is to move to an American economy that is more about wage growth, and less about trying to create asset bubbles. And I -- and I think that this is all part of that.

BLACKWELL: How long until Jerome Powell can say that, yes, we have done it, we have landed this plane and accomplished this soft landing?

FOROOHAR: I think we're going to know a lot in the summer because, first of all, we're going to have a few more months, we're going to see if this was weather-related statistical issues. You know, January is always a tricky month, actually, historically, to look at jobs. So, we'll get a sense of what the trend is. We're all going to see at that point, where the U.S. consumer is.

Because, of course, there's -- the consumers have been patted with $2 trillion of fiscal spending over the last few years. That money is going to -- going to start running out in the summer. So, is that going to mean sharper declines in spending and maybe companies starting to slow down the job market? I think by then, we'll have a good sense of where we are.

CAMEROTA: OK. Rana Foroohar, thank you for explaining all this.

BLACKWELL: The weeks-long search for three missing Michigan rappers may have taken a tragic turn. We have new details for you.

CAMEROTA: And truth challenge. Congressman George Santos is now under federal investigation for allegedly stealing thousands of dollars from a dying dog's GoFundMe. We're going to speak to the dog's owner, a Navy vet, who says the FBI has now interviewed him about it.

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