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U.S. Economic Outlook; Congress Gets Briefing on Chinese Spy Balloon; Biden in Florida. Aired 1-1:30p ET

Aired February 09, 2023 - 13:00   ET

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

[13:00:30]

ABBY PHILLIP, CNN HOST: Hello. I'm Abby Phillip in Washington.

President Biden is taking the fight to Republicans in Florida. And that's a state that's been tilting more and more toward the GOP. It's also home to two of Biden's potential 2024 rivals, Donald Trump and Ron DeSantis, not to mention Biden's latest foil, Republican Senator Rick Scott.

It is Scott's recent proposal to sunset federal programs that Biden has been hammering all week. And, in a few minutes, he will try to keep the pressure on with remarks focused on bolstering Social Security and Medicare.

CNN's Priscilla Alvarez is there in Tampa ahead of the speech.

So, Priscilla, I don't think many people expected that Joe Biden and Rick Scott would be the first big political matchup of the year. But the White House is very much leaning into it.

PRISCILLA ALVAREZ, CNN WHITE HOUSE REPORTER: It is front and center, Abby.

Not only that, but this is the second stop that Biden is making after the State of the Union this week. As you mentioned, Biden is driving his message home here that he is trying to protect Social Security and Medicare. And that is one of the issues that drew the fiercest reaction during the State of the Union this week.

And he's doing it in the state where Rick Scott of Florida had proposed sunsetting federal legislation, including Social Security and Medicare, in five years. It's also, of course, a state that is home to two potential GOP challengers in 2024.

Now, it was abundantly clear to the audience that filled in behind me what the focus was going to be today and how aggressively the White House is leaning into this, with every one of the seats behind me had Scott's 12-point plan that included that proposal, as well as Biden's plan on this issue.

Now, of course, Senate Majority Leader Mitch McConnell has said that this was never going to gain traction. And this morning on CNN, Scott pushed back too, claiming that he had no intention of cutting Medicare and Social Security. Take a listen.

(BEGIN VIDEO CLIP)

SEN. RICK SCOTT (R-FL): He's a complete failure.

I mean, look at what the people -- people in my state care about. Inflation, he caused it. Gas prices, he caused it. And there is no transparency in his administration. So he's been a complete failure. And now he lies about what I want to get done. And I don't appreciate it.

(END VIDEO CLIP)

ALVAREZ: Now, it's clear, Abby, that the White House sees this as an opportunity on a key issue, and one where it may be able to gain ground with seniors in the state, again, a state where there could be potential GOP challengers in 2024 and as we await for President Biden to make his potential reelection bid -- Abby.

PHILLIP: Yes.

And, obviously, the president's potential running for reelection is really the thing that undergirds a lot of it. Are his White House aides acknowledging the 2024 overtones of this all and do they see this issue about Social Security and Medicare, these entitlements, as being perhaps the defining issue of this next campaign?

ALVAREZ: Well, it's certainly one of them.

And it is one that they clearly have a lot of confidence in, again, because of what happened during the State of the Union. Remember, there was cheers from Republicans, cheers from Democrats. It was a moment in the State of the Union and one they are capitalizing on as they do their circuit after the address this week and as they come here in Tampa.

So, expect to hear quite a bit soon from President Biden on this issue, going after Senator Scott and making clear that his message, should he campaign, will be that he is going to protect Social Security and Medicare.

PHILLIP: All right, Priscilla Alvarez, thank you very much for that.

And for more on all of this, let's bring in Democratic strategist Christy Setzer and CNN senior political commentator Scott Jennings.

Both of you, thanks for being here.

So, Christy, I want to start with you.

Look, the state of Florida is something that used to be -- it's a place that used to be very purple, and now seems to be really turning much more red in recent years. What's your sense of it? I mean, is the White House here making a play to put this state back on the board in 2024?

CHRISTY SETZER, DEMOCRATIC STRATEGIST: They're doing a couple things here.

Biden is accomplishing several goals simultaneously. First, and I think most importantly, he is extending the media moment that he had on Tuesday night, where I don't think they expected that the best and most interesting takeaway from the State of the Union was going to be this back-and-forth in which he put the Republicans on the defensive about Social Security and Medicare, but they are so glad that he did.

[13:05:02]

So, that's the first piece is, they get to continue to have this fight and they get to have it in the best possible place to have it, which is Florida, the home state of his 2024 rivals.

He's also showing that Democrats are not ceding Florida in 2024. I mean, electorally, no, we can't. But, also, I think that he truly believes that this is a state that is winnable, especially, again, if the message continues to be about Social Security and Medicare, and especially if he has that side-by-side with Ron DeSantis, where he gets to have DeSantis looking small and making petty culture wars on things like tracking little girl's menstrual cycles, while Biden remains above the fray talking about things that are really hard to disagree with.

PHILLIP: OK, Scott, so what do you think about that strategy, taking the fight to DeSantis, taking the fight to Trump, whose home is now Florida, and also Rick Scott?

SCOTT JENNINGS, CNN SENIOR POLITICAL COMMENTATOR: Yes, I don't think this has anything to do with DeSantis.

Joe Biden does not want any part of Ron DeSantis. If we nominate DeSantis, he will beat Joe Biden, and I don't think it'll be particularly close. This has everything to do with Rick Scott and Donald Trump. Biden needs Trump. He's trying to bait him into the race. They're like magnets for each other. And he knows that.

Number two, Rick Scott's a gadfly in our party who his ideas were rejected by the voters in the last cycle. We learned that in Senate races. He was then rejected by the Senate Republican Conference. And now Joe Biden wants us all to believe that we're following Rick Scott's ideas? It's just not true, particularly when you consider that, when Biden was a senator, he introduced legislation to sunset federal programs himself.

So this whole thing is really dishonest partisan politics. He cannot escape one fact. His own party doesn't want him to run again. He's trying to change the subject and talk about anything but the fact that Democrats want to get out of this, but they can't figure out how to do it.

PHILLIP: But, Scott, don't you think that Rick Scott has really walked into -- if this was a trap laid by the White House, walked into that trap?

He appeared on CNN this morning doubling down on this issue. Biden seems to be forcing Republicans to talk about something they don't want to talk about.

JENNINGS: Yes, Rick Scott's really smart. Just ask him. He will tell you all about it.

(LAUGHTER)

JENNINGS: I mean, the reality is, Mitch McConnell, Kevin McCarthy, virtually every other Republican in Congress, they don't want to do this plan.

And what Biden was saying in the State of the Union was dishonest. We're not doing a debt ceiling deal in exchange for this plan. That's not on the table. It's never been on the table. It is a straw man, dishonest argument being made by Joe Biden.

Every Republican is against this. There's not going to be any entitlement cuts. The American people should bank on that. But Joe Biden running against Rick Scott and trying to bait Donald Trump into this tells you that he doesn't want to take on honest Republicans. He wants to take on our gadflies.

And that's the only possible way he has back in the White House.

PHILLIP: OK. So, every Republican is obviously not against this plan. Some Republicans are. It's just not a majority. And Biden did say that in the State of the Union.

But, Christy, I got to ask you. I mean, Biden is in Florida. And it seems like the driving force for Republicans right now is on some of these culture war issues...

SETZER: Right.

PHILLIP: ... whether you're talking about trans kids or curriculum issues, Critical Race Theory, whatnot, immigration.

Do you expect Biden to address that at all today? Or will he stay focused on the pocketbook issues?

SETZER: I think it's secondary to him.

I think that he, first and foremost, is going to continue the sort of messages that he did in the State of the Union, which, again, overwhelmingly were the sorts of things where it's really impossible for the vast majority of Americans to disagree with, raising teacher pay, those sorts of things.

And I think that he embraces it because it makes Republicans look all the more fringe. Now, I really appreciate Scott's attempt to marginalize Rick Scott, to act as though he wasn't the head of the Senatorial Campaign Committee, as though he wasn't sort of putting out policy positions that he expected the rest of the Republican Caucus to adopt. That's really sweet. And it's really nice, sort of in retrospect, to try to take that position.

But, in fact, no, this is the position of the Republican Party that they have wanted to cut Social Security and Medicare. They have wanted to fight these culture wars and adopt these positions that very few mainstream Americans could possibly agree with.

So, it behooves Democrats to bring them out there. That said, I think that, if I were the Biden campaign, what I would want to do is spend about 70 percent of my time focused on pocketbook issues -- on pocketbook issues, and maybe 30 percent of the time getting into taking the fight to them on culture wars.

JENNINGS: I have to respond to that because she invoked me.

PHILLIP: Go ahead, Scott.

JENNINGS: Let me ask you a question. Does Joe Biden endorse defunding the police?

SETZER: He does not.

(CROSSTALK)

JENNINGS: OK.

PHILLIP: Actually, Scott, that's a really...

(CROSSTALK)

JENNINGS: But there are Democrats that do.

(CROSSTALK)

JENNINGS: Under your logic, Joe Biden wants to defund the police.

Under your logic, that's a true story.

(CROSSTALK)

PHILLIP: Scott, that's actually a really good point, because Republicans are crying foul for Biden painting them with this broad brush, when Republicans in the last midterm cycle did the very same thing on defund the police.

[13:10:04]

So, I just wonder, I mean, as a political tactic, is it really as outrageous as you're making it sound, considering that Republicans did the exact same thing on defund the police?

JENNINGS: I mean, I find it to be outrageous, because Joe Biden knows it's not true.

And yet, I mean, look, this is a tried-and-true Democrat tactic. There must be an election coming because they're attacking Republicans on Medicare and Social Security. The difference here is -- and Rick Scott has no leadership position in our party. I don't know if you caught the news. He ran for Republican leader and

got beat 37 to 10. This is a backbench gadfly idea. And the beef on the police, as far as I can tell, was more mainstream in the Democratic Party. But Joe Biden, to his credit, did reject it in the State of the Union.

So if you want to have a fair fight here about applying gadfly positions to our party's leaders, at least be honest about it.

PHILLIP: OK. Look, I don't know that you could describe Rick Scott, who was the leader of the Senate Republican Congressional Committee, as a gadfly figure at all.

But I want to move on to the budget really quickly.

Scott, I will start with you. Are Republicans going to say what they're willing to cut, if they have taken defense spending off the table, if they have taken Social Security and Medicare off the table?

JENNINGS: Yes, great question.

This is one of McCarthy's big challenges, because I actually think, inside the Republican Conference, there is some disagreement about how to trim the sails here. And so that's one of his first, I think, big leadership challenges is to get a unified message on where spending should be cut, what kind of budget caps should exist.

And so there is going to be some debate, I think, internally in our party about defense spending. Some Republicans don't want to do it. Some want caps. Some want cuts. So I think Kevin McCarthy has a real challenge on his hands.

But I have been surprised, pleasantly surprised, with how he's been able to unify people so far on various issues. So, I have some optimism that he can get us there on a unified plan, because it's hard to negotiate if you don't have a unified plan.

PHILLIP: And, Christy, we got to go.

But I want to ask you, I mean, Democrats, from a political perspective, should they come to the table on spending cuts this year?

SETZER: Look, I think that we're going to enjoy watching Republicans squirm and have no control over their caucus.

But, ultimately, there needs to be an honest conversation. We do need to actually pass things like the budget. So -- yes, so basically, we should be able to have a conversation about lots of things about the budget, so that we can get things done for the American people.

PHILLIP: All right, Scott Jennings and Christy Setzer, both of you, thank you for the lively conversation.

JENNINGS: Thank you.

PHILLIP: And we're following a number of new developments today about that Chinese spy balloon that was shot down by U.S. fighter jets over the weekend.

Lawmakers from both the House and the Senate have now attended classified briefings on it today. And sources tell CNN that several Republicans railed against the administration's delay in taking it down. Also new today, the State Department confirms that surveillance craft was capable of monitoring U.S. communications.

So let's bring in CNN's congressional correspondent, Jessica Dean, and senior justice correspondent Evan Perez.

Jessica, let's start with you.

What are you hearing from lawmakers as they came out of that briefing today?

JESSICA DEAN, CNN CONGRESSIONAL CORRESPONDENT: Well, the Senate briefing is the one that most recently ended, Abby.

And, of course, lawmakers on both sides and both in the House and the Senate had been asking for information this. They really wanted more information this. And we're now starting to see them get that and get their reaction.

As you would imagine, Republicans, some of whom, really in the House, and, in the case of the House were, we're told, railing against this, as you mentioned, were very critical of President Biden in the administration, but we're told the briefers really tried to outline the timeline to explain to them exactly what was done and why it was done.

And it should be noted it was really those hard-liner Republicans, people like Marjorie Taylor Greene. Over in the Senate, we also heard from some Senate Republicans who again disagreed with how the Biden administration handled things. But we did hear from Senator Mitt Romney, of course, a Republican from Utah, and he really broke with the rest of his party, saying that he emerged from this more confident that this was really held -- that this was really handled carefully and he said skillfully and with care.

Those were his words. So he emerged from this feeling very good about the decisions that had been made, admitting that it probably wasn't perfect, but that most things in life aren't perfect, but he felt great about it. We heard from Senator Chris Murphy, a Democrat from Connecticut. He was very pleased with how this went down.

We also talked to Senator Jon Tester, who's from Montana. Of course, he's up for reelection in 2024. And Montana played a big role in all of this. He went into the briefing saying that he really felt like the administration needed to justify its actions and he did want to hear more.

So, people have a lot of questions that they want answered. And, to that end, there have also been a handful of briefing -- or a handful of hearings, rather, here on the Hill throughout the day.

And I want to let you listen to the deputy secretary of state. Here's what she was telling lawmakers just a little bit ago.

(BEGIN VIDEO CLIP)

WENDY SHERMAN, U.S. DEPUTY SECRETARY OF STATE: We made clear to PRC officials that the presence of this surveillance balloon was unacceptable. And, along the way, we learned a thing or two, which you will hear in the classified briefing, about the PRC's use of the balloon.

[13:15:03]

This irresponsible act put on full display what we have long recognized, that the PRC has become more repressive at home and more aggressive abroad.

(END VIDEO CLIP)

DEAN: And, again, this is an issue that already had a lot of attention here on the Hill from both sides of the aisle, frankly, Abby.

And now, after this entire episode, that has just become more focused and more concentrated. And there are just simply a lot of questions and a lot of talk about how to deal with this moving forward -- Abby.

PHILLIP: Yes, absolutely.

And, Evan, my understanding, you just came out of an FBI briefing. They're charged with analyzing pieces of this balloon that came down in the Atlantic. What are you learning?

EVAN PEREZ, CNN SENIOR JUSTICE CORRESPONDENT: Yes, Abby.

So, the FBI has now in its hands the initial parts of this -- of this balloon and some of the equipment that was recovered from the top of the ocean. This is off the coast of South Carolina. There's a lot of the contents, the payload, so to speak, that remains underwater, under dozens of feet of water.

And that is work that is a little bit more complicated, especially because of the weather and because you have Navy and FBI divers who are going down there. We have some of the first pictures now that you see there on your screen from the FBI of some of the recovery efforts.

We also have pictures of the contents of the balloon that have now made their way to Quantico, which is the FBI lab that is going to be doing this analysis. They're hoping to learn a lot more about the signals intelligence collection, the communications collection that this balloon was doing.

We asked a question on the briefing that we had with senior FBI officials whether there was anything that has been recovered so far that indicates explosives or anything that could have harmed the public as this balloon made its way across the United States. We were told that, at this point, again, the limited amount that they have been able to recover, they see nothing that would have been of use to that.

So far, they have the balloon canopy, some wires, again, limited amounts of equipment. And one of the important things that we learned was that this is the first time that the FBI has actually been able to examine one of these.

Abby, you know, from the last few days, we have heard that there have been a number of these that have been tracked across the United States. This is the first time that the FBI and its lab are being able to do -- are able to do this kind of analysis on one of these. And so they expect to learn a lot more -- Abby.

PHILLIP: That's right.

Jessica Dean and Evan Perez, thank you both very much for those updates.

And let's continue this discussion. Joining us now is Shawn Turner, CNN national security analyst and former director of communications at the U.S. Office of National Intelligence. Also with us, CNN military analyst and retired Army Major General James "Spider" Marks.

Shawn, to you. This new CNN reporting that the balloon contains the sophisticated technology that allowed them to monitor U.S. communications seems very significant. The path that the balloon took, took it over several U.S. military bases. Was the objective here to collect intelligence, signals intelligence, on those bases?

SHAWN TURNER, CNN NATIONAL SECURITY ANALYST: Well, look, there's no doubt that the reason this balloon was in U.S. airspace was to collect intelligence.

We will learn more about the exact nature of the intelligence that they were trying to collect as we dive in more to what we find. But it's important for people to know that, even as this balloon traversed over the United States, our national security and intelligence officials weren't standing still.

There would have been a couple of things that would have been done that were very important. The first thing that we would have done is, we would have taken a hard look at the path that this balloon was moving over the United States, and looked at what was in that path. Everything that we could possibly do to prevent the collection of intelligence would have been done.

And so that's the first thing it's extremely important for people to understand. We simply did not allow this balloon to traverse and to collect intelligence without addressing that. The second thing we would have done, Abby, is, this balloon would have been monitored every second of every minute of every day.

And if we had seen any aggressive or offensive action, we would have been prepared to address that. So the answer is, yes, it was to collect intelligence. But we did our due diligence in preventing that. And in the end, we will know how successful they were. PHILLIP: And, General Marks, I mean, knowing -- knowing this, knowing

that this balloon had these sophisticated technologies to collect communications, do you think that the president should have ordered it to be shot down earlier?

BRIG. GEN. JAMES "SPIDER" MARKS (RET.), CNN MILITARY ANALYST: I do.

Look, we were tracking this as it approached the Aleutian Islands. That's American airspace as well. And I think this was an opportunity for diplomacy to really take center stage. The United States, this administration, could have gone to China and said, look, we're tracking your balloon. It's over the Aleutians.

[13:20:05]

It's coming into our airspace on the continental United States here shortly. We're going to do something with this unless you guys can turn this bad boy around. And there was the ability to do that. But, if not, we're going to take it down. We just wanted to you know we're either going to shoot it down or take it, but it will belong to us. And we will have a follow-on conversation.

In other words, not make this a big deal. And as Shawn just incredibly described wonderfully is the amount of legwork that needs to be done in order to track, completely surveil, try to do some mitigation efforts as this thing traversed across the United States. We should have taken it down early on. Would have avoided the narrative of danger close on the ground if we had shot it down over Montana or Idaho or elsewhere.

Would have been able to do some the identical collection we're doing now on the debris in the Atlantic Ocean, we could have done in the Pacific.

PHILLIP: Shawn, I mean, I think the counterpoint to what the general is saying would be that -- and this is the argument that the United States government is making -- is that they were able to observe it, they had an unprecedented ability to observe how it operated, what it was doing, what it was capable of.

Do you buy that argument? Do you think that that valuable intelligence was worth whatever risk they took by allowing it to make that path over the United States?

TURNER: Abby, part of this process is for the president to ask for options here.

And as he did, the president initially said, I want kinetic options. Inherent in that is doing an assessment. And one of the challenges that we have in the intelligence community and national security space is looking at those assessments and making decisions as to what the best course of action is.

And so on this question of whether or not it should have been shot down earlier or should have been shot down when it was shot down, I certainly take a look at the idea that the intelligence community is saying that the risk of people on the ground was higher than the risk of Chinese intelligence collection.

And I have to consider that. Now, I -- look, as the general said, if we looked at this assessment and we said, you know what, it makes sense to shoot this down over the Aleutian Islands, and we could still get the same information, we should have done that.

But, from my perspective, in terms of the argument, what we have to do is, we have to hear more from the administration. And I do think that's important. They have to explain more. But we need to let the intelligence assessment sort of drive us in terms of understanding what the right course of action was.

PHILLIP: All right, Shawn Turner and Retired General Spider Marks, both of you, thank you for joining us.

And Disney and Zoom just joined the job-cutting party. What that means for the wider economy is ahead.

Plus, time is running out for people still trapped in the mountains of earthquake debris in Turkey and Syria. But many are still making it out alive, miraculously. The race to save them before it's too late.

And it's not always in bad blood. Watch what happens when Republicans and Democrats come together to roast each other for fun.

(BEGIN VIDEO CLIP)

REP. NANCY MACE (R-SC): Who lies about being -- about playing college volleyball? If you're going to lie, at least make it about something big, like you actually won the 2020 presidential election.

SEN. RAPHAEL WARNOCK (D-GA): If you liked my remarks, my name is Raphael Warnock. If you didn't, I'm Senator Tim Scott. Good night, everybody.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

[13:27:49]

PHILLIP: And now to the American jobs picture.

The number of people filing for first-time unemployment rising last week to 196,000. That number is higher than expected, but still historically low. Still, more pain is coming for thousands of workers. Disney and Zoom are now both announcing layoffs.

CNN business and politics correspondent Vanessa Yurkevich joins us now.

Vanessa, what are we learning from these numbers?

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS REPORTER: Well, Abby, let's take a look. You mentioned it at the top. Weekly jobless claims last week, 196,000, that is up, but it's still historically low. It's a big dip from where we were at the height of the pandemic. So that's good to see. But, in the last couple of weeks, we have seen jobless claims come down.

What the Federal Reserve actually wants to see is this number continue to rise. That is because, when you compare it to the blockbuster January jobs report that we saw, 517,000 jobs added, absolutely smashing expectations, the Federal wants -- Reserve wants to see this number come down, because what this is showing right now, Abby, is still a very tight labor market.

And the Federal Reserve, when seeing these numbers together, it is signaling to them that they are going to still continue to increase interest rates in order to cool inflation and in order to get these numbers in a better place.

They want to see lower unemployment and fewer jobs added. That would be an indication that their medicine, these rising interest rates, is doing their job, Abby.

PHILLIP: Yes.

And I know that that's sometimes hard for people to stomach. The idea of people losing jobs is obviously not a good thing. But from the perspective of the economy, they want to see -- they want to see higher unemployment.

You're seeing a little bit of that happening in the tech sector, and now with Disney as well, so Zoom and Disney both announcing some layoffs. What are we talking about in terms of those layoffs?

YURKEVICH: Well, this is obviously hard, right? We're talking about people's actual jobs, people's actual livelihoods here.

But Disney is cutting 7,000 jobs. That's about 3 percent of the global work force, and a couple of reasons why that's happening. So, they're trying to find.