Return to Transcripts main page

CNN Newsroom

Supreme Court Weighs Biden's Student Loan Forgiveness Plan; Six GOP-Led State Sue To Block Biden's Student Loan Plan; Rep. Nick LaLota (R-NY) Discusses About U.S. Army Compared To China. Aired 3-3:30p ET

Aired February 28, 2023 - 15:00   ET

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

(END VIDEO CLIP)

OMAR JIMENEZ, CNN CORRESPONDENT: And that last voter is someone who's crucial in this, where he told me he was - he voted enthusiastically for Mayor Lori Lightfoot in 2019. This time around, he's changing his vote to another one of - who's seen as the major contenders, Jesus Chuy Garcia, who's a congressman that represents part of the Chicago area.

Paul Vallas, a former school CEO in Chicago and Philadelphia. He's also seen as one of the front runners endorsed by the police union here along with a Cook County commissioner endorsed by the teachers union. But, of course, today is the day we figure out who the top two will be.

GOLODRYGA: All right. Omar Jimenez, you will be following all this for us. Thank you.

VICTOR BLACKWELL, CNN HOST: Top of a brand new hour on CNN NEWSROOM, good to have you. I'm Victor Blackwell.

BIANNA GOLODRYGA, CNN SENIOR GLOBAL AFFAIRS ANALYST: And I'm Bianna Golodryga.

We begin this hour on Capitol Hill where the Supreme Court just finished hearing oral arguments in two cases challenging President Biden's student loan forgiveness plan. Now, their decision could affect 40 million borrowers. The program which would provide up to $20,000 in debt forgiveness has been on hold after a lower court blocked it back in November.

BLACKWELL: Conservatives challenging the program argue it will have widespread economic repercussions. Congressional Budget Office has estimated it will cost $400 billion over time. But Justice Ketanji Brown Jackson argued that one of the largest servicers of student loans, MOHELA, that's in Missouri, is not a government entity.

(BEGIN VIDEO CLIP)

JUSTICE KETANJI BROWN JACKSON, ASSOCIATE JUSTICE OF THE SUPREME COURT OF THE UNITED STATES: And in fact isn't that really, as you say, the most important thing if economic injury is the point?

ELIZABETH PRELOGAR, SOLICITOR GENERAL OF THE UNITED STATES: Yes.

JACKSON: And I understood that the injury that was being asserted here was an economic injury, but if we look at MOHELA and we see that its financial interests are totally disentangled from the state, it stands alone, it's incorporated separately. The state is not liable for anything that happens to MOHELA, I don't know how that could possibly be a reason to say that an injury to MOHELA should count as an injury to the state.

(END VIDEO CLIP)

BLACKWELL: All right. Let's bring in CNN Ariane de Vogue and Rene Marsh.

Listen, we're just thrown around an acronym here. MOHELA is the Missouri Higher Education Loan Authority for most people watching who've never heard of it.

Ariane, let's start with you, the key takeaways of today's arguments.

ARIANE DE VOGUE, CNN U.S. SUPREME COURT REPORTER: Right. Coming out of oral arguments that ended after more than three hours, it was clear to me that this is an uphill battle for Biden, because I counted at least five conservative justices who really seemed skeptical of whether or not this plan is legal. Most of their arguments were around whether or not something like this needed congressional authorization.

As Chief Justice John Roberts said, it has to do with a half trillion dollars, millions of Americans. He really suggested that. They also had concerns with, look, maybe in a time of emergency this was executive overreach. But also they had another point and they just really talked about basic fairness: What about people who paid their loans? What about people who didn't get loans, because they knew they couldn't pay for them?

Listen to conservative Justice Neil Gorsuch on that particular point.

(BEGIN VIDEO CLIP)

JUSTICE NEIL GORSUCH, ASSOCIATE JUSTICE OF THE SUPREME COURT OF THE UNITED STATES: What I think they are you that is missing is cost to other persons in terms of fairness, for example, people who've paid their loans, people who don't have planned their lives around not seeking loans, and people who are not eligible for loans in the first place, and that a half a trillion dollars is being diverted to one group of favored persons over others.

(END VIDEO CLIP)

DE VOGUE: But there was one other big question before the court and that goes to what you were saying about MOHELA. And the big question is whether or not the states in the first place can bring this challenge whether or not they can show that they have the injury.

The reason that's important is because if they can't show such an injury, then the case would get dismissed, and the plan would go into effect. That's why you saw Jackson pushing on some of their theories of standing.

But one thing she also really talked about is, look, we can't allow states every time they object to the policy of a president from a different party to be able to come in and bring a policy to a standstill. That was her concern.

She thought here that the states didn't have the right to be in court. But there did not seem like there were five justices behind her and the Liberals on this. We'll see, you never know after oral arguments, but that's where things stand.

And keep in mind, meanwhile, you've got millions of student borrowers who are just waiting here wondering if they're going to be able to get this kind of relief.

GOLODRYGA: And meantime, Renee, some of those people and students were outside the Supreme Court. You were covering some of the demonstrations there in response to this. What has been the reaction among some of those protesters?

RENE MARSH, CNN GOVERNMENT REGULATION CORRESPONDENT: Yes. They certainly do feel like they're in limbo as the arguments were going on inside outside where the people who are going to be he impacted in very real ways once the Supreme Court hands down its decision.

[15:05:05]

I mean, I spoke to a number of people in the crowd, people who are currently students, people who have graduated, people who have grandparents who are on fixed income and they have had their benefits garnished in order to pay loans that they've defaulted on, so it runs the gamut. It really is a multi generational issue here.

And not only people who have left college and have started to receive those bills before this pause went into play, but I even spoke with students who are first year college students already worrying about what they will do once they graduate, take a listen.

(BEGIN VIDEO CLIP)

GLEN LOPEZ, FRESHMAN AT MORGAN STATE UNIVERSITY: I'm kind of broke. I really got it on me like that. And honestly, the movement for this really supports people that are in the same financial situation as me. And that's really something that I want to support. Because I know I'm definitely not the only one that has that creeping type of feeling about who's going to pay my debts or where I got to get a loan or type of payment plan.

(END VIDEO CLIP)

MARSH: So obviously, we won't get a decision today. We're expecting that later, down in the year sometime this summer. But everyone out there really had a handle and grasp on the fact that this case isn't just about student loans. It really is about their financial future, their future financial freedom, and ultimately, the project - the trajectory of their lives for years to come. BLACKWELL: Rene Marsh, Ariane de Vogue, thank you for the reporting.

Let's bring in now Jessica Thompson. She's an attorney for the Pacific Legal Foundation, which opposes the President's debt relief plan here.

Jessie, good to have you. You say that this is just flat out unconstitutional. Tell us why.

JESSICA THOMPSON, ATTORNEY, PACIFIC LEGAL FOUNDATION: Thank you for having me.

So my colleagues at Pacific Legal and I believe that this is unconstitutional, because under our system of government, Congress is supposed to pass the laws and that didn't happen here. The presidential administration decided to unilaterally behind closed doors create this policy after Congress had already considered passing the policy and unsatisfied with the democratic process. The President issued this policy via press release and it'll cost nearly half a trillion dollars. And a policy of this political and economic magnitude should come from Congress.

GOLODRYGA: So the administration no surprise is arguing that you lack standing, and they point to a 2003 law, the HEROES Act that gives the education department the authority to wipe out debt. So how do you counter that as unconstitutional?

THOMPSON: Sure. And so that was some of the arguments that the Supreme Court wrestled with today. So with one thing, there has been a recent trend at the Supreme Court, particularly in the COVID-19 litigation, to employ what's called the major questions doctrine, which whenever an administrative agency creates a radical new policy, especially out of an older law, they require that Congress speaks specifically to the power that the executive branch is exercising, and defines that power.

And here, it is not a great fit. The HEROES Act was passed in 2003 to help service members who deployed to fight wars after 911. And here due to the COVID-19 emergency, the Department of Education is granting debt relief to 95 percent of all borrowers.

BLACKWELL: Okay. So you say the major questions philosophy that the court has engaged on older laws, this was passed in 2003, let me read a bit of the HEROES Act here that gives the Secretary of Education the power to waive or modify federal student program, a loan program to ensures that individuals "are not placed in a worse position financially, because of a war, other military operation or national emergency."

I want you to listen to the Secretary of Education on this, the COVID pandemic being that national emergency. Here he is.

(BEGIN VIDEO CLIP)

MIGUEL CARDONA, SECRETARY OF EDUCATION: Once in a hundred year pandemic that shut down our country for some time and to me that's a national emergency. I can't recall any other time as an educator where we have the impact in our schools or businesses. Look, let's face it, we've - the government has helped corporations in the past, we've provided funding for small businesses to help them get back on their feet after this pandemic. Why is it that people are fighting it and we're helping blue collar Americans, veterans like the one you saw get back on their feet?

(END VIDEO CLIP)

BLACKWELL: Justice Kagan says that they sometimes have to decipher maybe obscure laws that Congress spoke here. It is very clear. What's your reaction to what you're hearing from Secretary Cardona?

THOMPSON: So there were three interesting argument that the party opposed to the loan forgiveness program made in regards to the HEROES Act.

[15:10:06]

First that Congress knows how to forgive or dismiss loans. And they have done so through other programs such as the Public Service Loan Forgiveness or the income based repayment programs, which will discharge debt after a certain number of payments or even zeroed out payments.

Another thing is that not to be put into a worse situation, there are many borrowers who will be put into a better situation than they were before the COVID pandemic.

And finally, the emergency of COVID-19 by the time that this policy was implemented had very much been alleviated and even the President had declared that COVID was over. And so this emergency authorization based on COVID can only stretch so far and many justices seemed inclined to think that that had been stretched too far here.

GOLODRYGA: Yes, it appears that the least majority of the justices view it that way as we heard from our reporting there. We shall see what they ultimately decide. Jessica Thompson, very important issue one in five Americans hold student debt, thank you so much.

Today, a top Biden official told a House panel that "in many ways, China has been supporting Russia's war in Ukraine from the beginning, even if it hasn't provided lethal aid."

BLACKWELL: That candid assessment from the Undersecretary Alan Estevez highlights one of the many issues likely to take center stage at a primetime hearing tonight. A host Select Committee is holding a hearing on China amid growing tensions with the U.S.

CNN's Natasha Bertrand is with us now.

Tell us more about what to expect this evening.

NATASHA BERTRAND, CNN WHITE HOUSE REPORTER: Yes. So this is really the first primetime hearing that a GOP-led committee has had since the Republican Party took over the House in January. And they really want this to be a bipartisan look at the threats, they say, that China poses to the United States.

And it's really going to touch upon a broad range of topics, because, of course, we have seen a number of irritants in the U.S.-China relationship over the last several weeks, including, of course, the Chinese spy balloon that is definitely going to be a subject of discussion during this hearing, as well as China's ties to Russia. Of course, we have had senior U.S. officials warned repeatedly in recent weeks that China is considering providing legal aid to Russia for the war in Ukraine.

Just this week, President Biden issued a memorandum to federal agencies ordering them to ban the Chinese app Tiktok from federal devices within 30 days. And, of course, now just this week, as well, we learned that there are new questions about the origins of COVID-19 and where it actually began and how.

So of course, these are all things that are going to come up tonight in this hearing. But really the big picture is that this committee, this House Select Committee on China wants to take a bipartisan look at managing competition with China at focusing on its military rise and at trying to figure out how to decouple the United States' economy from the Chinese economy.

The top two members on that panel say that it has been a mistake essentially to bring China into the global economy the way that the United States and the West have done. And so this is going to be one of a series of hearings that this committee is going to hold over the next few years taking a serious look at what they say is the serious national security risk that China's rise poses to the United States, guys.

BLACKWELL: Natasha Bertrand, thanks so much.

GOLODRYGA: Congressman Nick LaLota is a Republican from New York and he serves on the House Armed Services and Homeland Security committees.

Congressman, thank you so much for joining us.

So over the weekend, we heard the CIA Director say in an interview that the Chinese President Xi has instructed his military to be prepared by 2027 to invade Taiwan. Now an ultimate decision has not been made. But having said that, I want you to listen to what the commanding general of the U.S. Army Pacific and the Army Secretary said about the state of the U.S. Military yesterday.

(BEGIN VIDEO CLIP)

ARMY GEN. CHARLES FLYNN, U.S. ARMY PACIFIC: The military arm that they have created is extraordinary. They are rehearsing, they are practicing, they are experimenting, and they are preparing those forces for something.

CHRISTINE WORMUTH, U.S. SECRETARY OF THE ARMY: I personally am not of the view that an amphibious invasion of Taiwan is imminent. But we have to obviously prepare, we've got to be prepared to fight and win that war and I think the best way we avoid fighting that war is by showing the PRC and countries in the region that we can actually win that war.

(END VIDEO CLIP)

GOLODRYGA: So there you heard a bit of a description of where Chinese - the military stands right now and where the U.S. military is. You served in the Pacific, you sit on the House Armed Services Committee. I'm just curious from your perspective is the U.S. military where it needs to be in order to be a strong enough deterrent to prevent China from invading Taiwan.

[15:15:05]

REP. NICK LALOTA (R-NY): Yes. So in 2006, as a young naval officer, I actually deployed to Taiwan where I started to understand the strategic importance of our alliances between the United States and Taiwan, specifically countering any sort of Chinese aggression, which has only gotten worse in the 15 or 16 years since I visited there last.

I think that the House Armed Services Committee, the Congress and the nation needs to continue to invest in our nation's military's fighting men and women so that we can either deter the next conflict or win it if God forbid we have to go to it.

GOLODRYGA: Are we ready to be that deterrent as of today?

LALOTA: Well, we can - we need to continue to work on it. Each day our nation's adversaries are innovating and preparing everyday to defeat us. They're closing the gap on technology especially. We need to provide a strong investment into our military every day.

Right now, the House Armed Services Committee is working on our NDAA, our nation's investment in our nation's military. That intends to be a robust investment to deter adversaries like China, like Iran to ensure that we protect Americans abroad and at home.

GOLODRYGA: Speaking of technologies, the U.S. has blacklisted today 12 Chinese entities for providing dual use technology for Russia. That obviously lays into this big question of whether or not China will indeed provide Russia with lethal aid despite the aid that they've already been providing Russia. What should the U.S. response be if that does, in fact, happen?

LALOTA: We wanted to deter conflict, first and foremost. And there's a number of ways to do that, economically is one way, diplomatically is another. The State Department has a lot of work to do to ensure that our nation's adversaries: China, Iran, Russia are taking America very seriously. When America speaks, they should take us seriously. When they see our ships stationed off of their coast, they should especially take us seriously as well.

The administration needs to do everything possible to ensure that Americans - America's adversaries take us quite seriously. GOLODRYGA: Adam Smith, the top Democrat on the House Armed Services Committee on which you sit said today that giving Ukraine F-16 fighter jets is currently "not a wise use of resources." Do you agree with him?

LALOTA: SO what I think needs to happen in Ukraine is a balanced investment of America's taxpayers' investment as well as the Europeans. Right now it's disproportionate. Public resources suggest that the United States has spent $30 billion there while our European partners have only spent 20 billion. That's a disproportion investment the administration needs to tackle right away.

This is a worldwide problem, but first and foremost ...

GOLODRYGA: Yes.

LALOTA: ... it's a European problem.

GOLODRYGA: But ...

LALOTA: The investment needs to be more balanced.

GOLODRYGA: But on the F-16s specifically, do you agree with him that now is not the time to provide Ukraine with them?

LALOTA: Yes. I need to talk with some more of the generals and admirals about the tactical situation on the ground there. I'm not ready to commit to a position on that.

GOLODRYGA: Let me return back to the issue of China, the chairman of the House Foreign Affairs Committee has introduced legislation that would ban TikTok. I know that you've supported that move in the past. You've said TikTok poses grave concerns to our national security.

Given the Committee's that you sit on and the information that you have access to, can you explain specifically how TikTok could pose a threat to the United States national security?

LALOTA: Yes. So we saw the Chinese spy balloon fly across the United States and we know the Chinese are spying us overtly. They're also doing it covertly through technology. They're also gobbling up tracts of lands across our nation.

We need to be vigilant, we need to be able to deter and dissuade and prevent the Chinese from being able to invade us in numerous different ways, invade our technology to harm our sovereignty. TikTok is just the tip of the iceberg on what China is trying to do to prevent and disrupt our national security.

GOLODRYGA: But have you been made privy to what exactly it is they're trying to do?

LALOTA: Yes. Yes, I have and it causes me great concern. It's one of the things that keeps me up at night. It's one of the reasons that ...

GOLODRYGA: Anything you can share with our viewers. As you know TikTok is very popular amongst millions of Americans.

LALOTA: Yes, I didn't mean to make the joke of this, but my 13 year old is upset with my position on TikTok, because like what you suggested, folks have learned to rely on it. But Americans should take it very seriously. There's hundreds of other apps that Americans should explore rather than the one promoted and maintained by the Chinese Communist Party. We should get off TikTok right away.

GOLODRYGA: So now information that you're willing to share with us today though?

LALOTA: No, not now.

GOLODRYGA: Okay. Let me finally ask you about more close to home politics and that relates to George Santos. You've been quite vocal about him and your view that he needs to resign. He's facing multiple investigations, as you know. You called him a sociopath. You're pushing now for his expulsion.

This week, you described him as Democrats' best friend and ally. And you went on to say what he has done is given the Democrats wind in their sails, have taken away our ability as Republicans to speak about our commitment to America and we're looking forward to him leaving the House.

[15:20:03]

Why isn't Kevin McCarthy echoing the same call that you are?

LALOTA: So I think there's a number of victims in George Santos' scam. First and foremost as the voters in his district, my fellow Long Islanders who have no decent representation here in the Congress, I think it's the people who he financially scammed to get contributions, but it's the entire Republican conference here in Congress who has been scammed as well, we don't get to come on programs and talk about our commitment to America. Instead, we're asked about this scan that he's pulled as well.

Leadership has made strides in this, first and foremost, Anthony D'Esposito and I were the first two to come out against George Santos. Those numbers grew to all five Republican freshmen from Long Island. Now they're about 10 House Republicans who have publicly called for his resignation.

A couple of weeks ago, when I approached leadership and a few of us - actually all five House Republican freshmen from Long Island - asked them to pay more attention to this. A couple days later, he was removed from committees. He said he did it voluntarily, but I credit leadership for being proactive and listening to us. I expect more of that going forward.

GOLODRYGA: Are you satisfied with leadership right now and that they're not calling for his removal?

LALOTA: Well, if you look at what Democrats are doing right now, Democrats have sponsored a bill to remove him and the five of us that said we would support that bill. But that bill only has 27 House Democrats supporting it. That's only 13 percent of the house Democrat Congress.

GOLODRYGA: Yes.

LALOTA: I think the better question is, why aren't the Democrats unify to remove George Santos? And answer is they know he is a distraction and I expect the ranks of Republicans to only grow the more time that goes by.

GOLODRYGA: All right. Congressman Nick LaLota, thank you for your time.

LALOTA: Thank you.

BLACKWELL: Let's go down to Virginia Beach. President Biden is giving a speech. He's talking about the debt ceiling now.

JOE BIDEN, PRESIDENT OF THE UNITED STATES: ... without preconditions without a crisis.

If they paid the American debt then, why in God's name are they threatening not to pay it now?

So, folks, it's not all the other team. I'm not saying everybody on the other team says that. But it's just politics. And we got no business playing politics with the lives of the American people and our nation's economy.

Folks - and, by the way you hear ads of "Big-Spending Joe Biden." In two years, I reduced the debt $1.7 billion, $1.7 billion. The largest deficit reduction in American history.

And I met with the new House Speaker - who's not a bad guy - about how we should proceed to settle our differences without jeopardizing the full faith and credit of the United States of America, which would be a disaster in terms of our economy.

Here's what he said - what I said to him, actually: Instead of making threats about default, which could be catastrophic even if doesn't happen, because the markets around the world begin to hedge against it and it affects the economies, let's take that off the table. And let's have a conversation about how we're going to grow the economy, lower the costs, and reduce the deficit, each of us.

I said: Let's lay out our respective budgets. On March the 9th, I'm going to lay down in detail every single thing - every tax that's out there that I'm proposing - and no one over 400 - making less than $400,000 is going to pay a penny more in taxes. But lay it out by March 9th, everything, and what we're going to cut, what we're going to spend, what we're going to. Just lay it on the table.

And I've invited them to - Republicans - that they should do the same thing: lay their proposal on the table. And we can sit down, and we can agree, disagree. We can fight it out. When I introduce my budget, you'll see that it's going to invest in America, lower health costs, and protect and strengthen Social Security and Medicare while cutting the deficit more than $2 trillion over the next 10 years.

But, by the way, I want to make it clear I'm going raise some taxes. Many of you are billionaires out there. You're going to stop paying at 3 percent. Not a joke.

The idea that a billionaire - we used to have 600 or so in the United States of America; now there's a thousand. The idea that they pay at a rate that is lower than the rate of a police officer, a schoolteacher, a nurse, is bizarre. You're going to see the people making less than $400,000, as I said from the very beginning, will not pay an additional single penny in any tax.

If I can hold a second. One of the reasons I was able to keep the debt down this time around - they're - the Fortune 500 companies, they're good companies. I - and, by the way, I come from the corporate capital of the world, Delaware.

[15:25:00]

More corporations are incorporated in the state of Delaware than every other state in America combined. I got elected 36 years' worth (inaudible). So I'm not anti-corporation, but I think everybody should pay a - take a fair shot, pay a fair share.

Now, look, here's the deal: The reason we - I was able to lower the deficit and still expand programs, like healthcare, was there were 55 corporations in 2020, when I came to office, who made $40 billion and didn't pay a single penny in tax - not one penny. Well, guess what? I did a terrible thing. I got passed, overwhelmingly, with just my team's vote - I got passed a 15 percent tax. My God, 15 percent.

Raise your hand if you'd accept a 15 percent tax? No, I'm not joking. Well, it raised enough money to allow me to do the things I've been able to do. Fifteen percent minimum tax.

Like I said, $40 billion in profit. That's just 55 corporations who paid zero.

As for my MAGA Republican friends, they say they want to reduce the deficit. Well, we did the math. Based on what we know so far - they could change their minds - their plans would explode the deficit, increasing it more than $3 trillion over the next 10 years.

Here's what they want to do: They want to cut taxes for the very wealthy, again. They want to cut taxes for large corporations. They want to take back the power we just gave Medicare and Medicaid to negotiate, which would raise prices. And they would have huge giveaway to Big Pharma and cost taxpayers billions of dollars.

And if they say they want to cut the deficit but their plans actually would explode the deficit, how are they going to make the numbers add up? What are they going to cut? That's the big question. For millions of Americans, healthcare hangs in the balance.

Will they continue to fight to cut the Affordable Care Act and make health insurance more expensive for millions of Americans?

Republicans have been trying to undo the Affordable Care Act since it passed 13 years ago.

They voted to change or repeal the act - this is a fact; it's on the record - more than 50 times in four years that it existed. Fifty times.

And they made repealing it part of virtually every Republican budget since the law was passed, from the Trump administration budgets to congressional budgets to their budget plans from just this past year.

So let's be clear about the consequences.

If you get rid of the Affordable Care Act, it would mean that more than 100 million Americans with pre-existing conditions would lose the critical protections they have now. The only reason people with preexisting conditions, who don't have private insurance, are able to pay is because they have the Affordable Care Act.

GOLODRYGA: We've just been listening to the president speaking in Virginia Beach there Virginia warning people about the consequences of not raising the debt ceiling, which he says has been done repeatedly in the past. He also said that he will be coming out with his budget ...

BLACKWELL: Yes.

GOLODRYGA: ... March 9th, that is next week and already warned that there would be some tax increases there. And now sort of putting the ball in Republicans court saying show us some of the details in your budget as well.

BLACKWELL: Yes, the Republicans obviously have said that in order to raise the debt ceiling, they want some cuts. The question is what will those cuts be and can Speaker McCarthy get a consensus around significant cuts from his slim majority they're in the House. So that's something to look forward to next week.

All right. For now, is it a book tour? Is it a 2024 campaign launch? Florida governor, Ron DeSantis has plans to stop in Iowa and other early voting states to promote his new book. Details ahead.

(COMMERCIAL BREAK)