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Two Dead and Two Alive Among Missing Americans in Mexico; Fed Chair Powell Testifying Before Senate Banking Committee; Biden Op-Ed: New Budget Will Strengthen Medicare Protection; Biden Attempting to Affect Economic Change by Using Federal Authority; Interview with The Washington Post Global Economics Correspondent David Lynch; Critics: Mississippi Republicans Pushing "Takeover" of City of Jackson. Aired 10:30-11a ET

Aired March 07, 2023 - 10:30   ET

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

[10:30:00]

ERICA HILL, CNN ANCHOR AND NATIONAL CORRESPONDENT: That's a part of that. How they can be held countable will be determining too. How and when all of this unfolded as you point out, Josh.

Dianne Gallagher, I know you're still with us. As I understand it, there is expected to be a briefing later in the afternoon. Has there been any indication, at this point, of who will be speaking at that briefing of what we're expected to learn?

DIANNE GALLAGHER, CNN U.S. NATIONAL CORRESPONDENT: So, I am still looking through this, at this point, on how we're expecting this to come. But we do anticipate we'll hear from the governor there in Mexico so we can, perhaps, get some additional details. Again, he is the one who broke that information, even though it was during a press conference with the president. It was through that governor, sort of breaking that information to the president about the fact that two of the Americans had been found, and that two of them were dead.

We anticipate within, at least, the next hour or so learning additional information from the authorities down there. And I do think it is important to emphasize as we have here that at this point, investigators do believe that this is a case of very unfortunate mistaken identity. That these were a group of four friends who were down there for a medical procedure.

And the belief is that investigators maybe mistook them for Haitian smugglers, something like that. But that is not the case in this situation. That the families all here in South Carolina have said that this was just a friends' trip, it was a medical procedure. They were down there not anticipating this to, of course, go anything like this, but they were there to support their friend who was having a procedure at this point.

This is not believed -- they have nothing involved with anything. This was just a very, very unfortunate and tragic case of mistaken identity according to authorities so far.

JIM SCIUTTO, CNN NEWS ANCHOR: Andrew McCabe, Former Deputy Director of the FBI still here. You do hear of -- parts of the country being considered right now, failed state, right, in terms of law enforcement control there. I just wonder -- and there's been years of cooperation between U.S. and Mexican authorities. Are they making any progress in terms of handling, putting gangs like under control?

ANDREW MCCABE, CNN SENIOR LAW ENFORCEMENT ANALYST AND FORMER FBI DEPUTY DIRECTOR: You know, it's really hard to say from our perspective outside of government now, Jim. But -- and I'll -- I will say that the -- in a place like Mexico where you have such an established organized crime community, really with of warring drug Cartels, violence like this can be completely indiscriminate. You'll remember several years ago there was a conflict between warring Cartel factions at a casino and they simply locked the doors and set the casino on fire, killing a host of civilians along with the folks they were looking for.

Those sorts of things happen in Mexico, that's why the warns about travel to certain parts of the country. I think on any given case, there is the opportunity for success and productive collaboration between the U.S. and Mexican colleagues. But to look back at the entirety of all the business and the interactions that we have on law enforcement and intelligence matters and, kind of, grade them as better or worse is -- can be very challenging at any moment, because there are so many things going on and there are so many opportunities for success or failure.

HILL: You know, to that end, how could a case like this impact those relationships?

MCCABE: Well, it absolutely will. You -- and you know, you've been hearing it recently discussed on the Hill and in other places. Talking about really, kind of, cracking down on Mexico because of their failure to stem the tide of illicit narcotics into the United States, particularly now we're very concerned about fentanyl, which is really driving deaths from opioids and other materials.

But that's -- this is the potential downside of making those really bold symbolic gestures of, you know, sanctioning Mexico or putting them on some of the list that could bring that sort of negative economic attention. You run the risk of -- then when you have Americans in trouble or kidnapped or detained in Mexico, losing those contacts to be able to work with them in moments like this to get the citizens back.

So, all of those broad diplomatic brushes can really impact how business is done on the ground. So, it's a very delicate move that the State Department and the Department of Justice are constantly trying to regulate that relationship.

SCIUTTO: Well, Andrew McCabe, thanks so much. And again, just updating if you have just joined us, but sad news from Mexico, those four missing Americans, they have now been found. Sadly, Mexican governor, also U.S. officials telling CNN, two of them found dead, two others alive, but one of those critically wounded. We'll continue to update you as we hear more information. But right now, the --

HILL: We should also --

SCIUTTO: Sorry, go ahead.

HILL: -- to add to that information, we are also waiting on that 2:00 briefing.

SCIUTTO: Uh-huh.

HILL: So, we'll keep an eye on that as well.

SCIUTTO: Right now, the chairman of the Federal Reserve testifying in Capitol Hill as another rate hike looms. What we're looking from his comments about inflation coming up.

[10:35:00]

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SCIUTTO: Happening now, the Federal Reserve Chair, Jerome Powell, you see him there.

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SCIUTTO: Testifying before the Senate Banking Committee, Housing and Urban Affairs Committee, I should say he's expected to fend how the Fed has tried to temp down on inflation. I'm sure there's going to be a lot of questions about where it's going from here too.

[10:40:00]

HILL: I would think so. CNN's Matt Egan is following it all closely for us. So, this is also -- it's not just today. This is a pretty important week in terms of economic indicators data that we're going to get. What has we heard from Powell so far?

SCIUTTO: Yes.

MATT EGAN, CNN BUSINESS REPORTER: Well, Jim and Erica, Jerome Powell, he does not sounds satisfied with the path of inflation. Now, remember, Powell and the Fed, they have been slamming the brakes on this economy, trying to get the prices under control. But kind of like a stubborn toddler, this economy just does not seem to want to slowdown. Americans are shopping, businesses are hiring aggressively, and inflation remains very high. And so, that suggests that perhaps the Fed has more work to do here. Perhaps has to hit the brakes even harder. Listen to what Powell just said on this topic.

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JEROME POWELL, FEDERAL RESERVE CHAIRMAN: The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated. If the totality of the data were to indicate that faster tightening is warranted, we'd be prepared to increase the pace of rate hikes.

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EGAN: And Powell called out the fact that some of these inflation numbers have come in stronger are coming in stronger than a Fed officials expected just a month ago. So, that is leading investors to predict that the Fed is going to have to raise interest rates not just this month, but probably in May, possibly in June, maybe through the summer and into fall. And that is a big deal because, of course, it means higher borrowing costs for everyone, right? Mortgages, credit cards, car loans, all of those loans have gotten more expensive.

But the more the Fed has to do here, the greater the risk that they do too much and they slow the economy right into recession. Jim and Erica, we're going to hear a lot of pressure on Powell today from both sides. Some who think he's doing too much, others who think he hasn't done enough.

HILL: Matt Egan, appreciate the update. We know you'll stay on it as well for us throughout the day. Thanks.

New this morning, President Biden releasing an op-ed in "The New York Times" detailing his plans to protect Medicare as he prepares to release a full budget on Thursday. His administration has already shown, of course, won't shy away from using federal power to reshape the economy.

SCIUTTO: The president has been putting pressure on the car companies to slash emissions, putting pressure drunk companies to lower insulin prices, urging airlines as well to cut their junk fees. He's been getting some results. "Washington Post" global economics correspondent, David Lynch, wrote about this, policy and strategy in his latest piece. He joins us now live.

David, good morning. Good to have you on.

DAVID LYNCH, GLOBAL ECONOMICS CORRESPONDENT, THE WASHINGTON POST: Good morning.

SCIUTTO: When you look at his approach as you describe them, two pillars of the approach, boosting chips, manufacturing, also repairing infrastructure, they actually have bipartisan support. They got bipartisan votes in Congress. Is this a shift when it comes to industrial policy that is likely to survive a change if it happens in party power. I mean, is it a long-lasting shift?

LYNCH: It certainly seems to be and it's a -- it represents a pretty dramatic shift from the path that both parties have pursued for the last several decades, at least since the Reagan era, of relying on the market to really make all the decisions, the major decisions for the U.S. economy.

What the president is trying to do now is shape specific characteristics of the economy, promote specific industries in a way that we have not seen in decades. And if his plans work, we'll be producing more of the semiconductors that we need here at home, we'll develop renewable energy resources, and we'll be better positioned for the competition with China. If things don't work, we will end up wasting taxpayer money and perhaps micromanaging businesses in unnecessary ways.

HILL: How much of this shift, I guess, in terms the of the approach by President Biden, by his administration, how much of this, in your view, is part of him doing everything he can to achieve his agenda versus a reaction to an economy that at this point, no one can really define or predict. It is not following a well-known playbook.

LYNCH: It is a very uncertain time. And I think that the president is trying to accomplish multiple objectives. The administration sees areas of what's known as market failure where the market is not specifically meeting the needs in the long term of the economy. And so, for instance just relying on cost and market factors, you -- we've ended up in a situation where something like 90 percent of the key computer chips are manufactured in one location, Taiwan, which is obviously geopolitically vulnerable.

So, the government wants to promote a more diverse array of supplies, so we are less vulnerable to the sort of disruptions that we saw in the pandemic.

[10:45:00]

The president is also taking advantage of some of this legislation to achieve unrelated goals, like promoting broader availability of childcare.

SCIUTTO: OK. Let's talk about Biden's op-ed today. His Medicare plan, basically, his plan here, raise taxes on those making above $400,000 a year. Also, reduce the price paid for certain medications. Does the math add up in terms of addressing what are really long-term problems with the Medicare, particularly, as the population ages?

LYNCH: Well, they are long term problems and there is going to be accounting disputes from both sides of the spectrum on this. But I think, the element that we looked at in our piece was the president's use of what's known as the bully pulpit. The rhetorical power of the presidency to promote objectives to lean on the companies to make changes in the prices of specific goods so that the consumers see specific goods today and don't have to wait for the long run to come around. And you've seen with Eli Lilly's decision last week to cut the cost of insulin, internet access, airline so-called junk fees. So, this is another front that the president has been pushing out on.

HILL: David Lynch, thanks for taking the time to join us this morning.

SCIUTTO: Yes.

HILL: Still ahead here, we are live in Mississippi where the lawmakers are considering a bill that would create what critics call a takeover of the predominantly black city.

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SCIUTTO: The Mississippi State legislature is considering a bill that would create an unelected state appointed court system for the City of Jackson.

HILL: That measure, critics say, would put white conservative state officials in control much of the criminal justice system for a city that is predominantly black. CNN's Omar Jimenez is following the story for us.

So, Omar, I know that you've been talking with officials, you've been talking with resident. I think there are a lot of people watching now, they're trying to understand what is behind this move in the first place?

OMAR JIMENEZ, CNN CORRESPONDENT: Well, all of this is in an attempt to introduced to try and get the public safety situation under control. You have seen a spike in violence here Jackson like many cities over the past few years. And at the core of this debate right now is representation, because as you alluded to coming to me, this is a majority black city, the legislature is majority white, and what is being proposed would take governing power away from the city and give more to the state. And that -- therein, I should say, lies the debate.

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JIMENEZ: Whether it is the poverty or the violence, you don't think that the process is playing out right now is going to solve that?

JARVIS DORTCH, EXECUTIVE DIRECTOR, MISSISSIPPI ACLU: No. They have the ability to invest in programs and interventions that could reduce crime and reduce poverty in this city, that has to be a part of the situation.

JIMENEZ (voiceover): A plan to reshape Jackson, Mississippi's criminal justice system has been on a legislative journey. It was introduced in Mississippi's House of Representatives, that initial version singled out a section of the city that was disproportionately white to be under the jurisdiction of the state-run capital police. The Senate version scraps the single district aspect of this and expands it citywide.

But both plans would put the selection of judges and prosecutors in the hands of the majority white legislature rather than the hands of the residents in a city that's over 80 percent black. Taking governing power away from local elected leaders, and critics say, disenfranchising voters.

MAYOR CHOKWE ANTAR LUMUMBA (D), JACKSON, MISSISSIPPI: Even with the changes, it is still an attack on black leadership. It's still is a trojan horse cloaked in the notion of public safety where it is not in evidence-based.

JIMENEZ (voiceover): Legal leaders in Jackson believe there are better ways to address concerns that the current elected judiciary isn't able to keep up with the pace of cases.

GAIL LOWERY, HINDS COUNTY PUBLIC DEFENDER: Both the House bill and the Senate proposal severely missed the mark. The real problem is that for decades, Hinds County has needed at least two or more elected permanent judges.

JIMENEZ (voiceover): Over the last few years, Jackson has seen a spike in violence. In 2021, one of the highest murder rates in the country. Supporters of this bill including its Republican sponsor have argued it would provide valuable reinforcements to public safety ecosystem.

REP. TREY LAMAR (R-MS): This bill is designed to assist the court system of Hinds County, not to hinder it.

JIMENEZ (voiceover): The Senate version of the bill would also expand the jurisdiction of the capital police force citywide with the intention of them striking an agreement with the local police on how to police, in theory together. But any dispute related to the law enforcement functions of the office of capital police within the boundaries of the City of Jackson, Mississippi shall be resolved in favor of the Commissioner of the Department of Public Safety. The mayor says he would not sign it.

But some residents are concerned, state officers would not be held to the same accountability as local ones. And the prospect of adding capital police has specific fears for some. 25-year-old Jaylen Lewis was shot and killed by a capital police officer last year after an attempted traffic stop.

ARKELA LEWIS, MOTHER OF JAYLEN LEWIS: I am here today because there are bills that this legislature has introduced that will expand capital police authority --

[10:55:00]

-- possibly to the entire city of Jackson and that terrifies me.

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JIMENEZ (on camera): Now, that shooting is still under investigation. But I think the attitude of critics of this bill is embodied by some of the shirts we've been seeing walking around here that say, "Jackson versus everybody". That really feels like the sentiment here for a lot of these folks.

Now, the bill is on the agenda when the Senate gets back into session a little bit later this morning. Even if it passes the Senate, it might still need to be hammered out a little bit but obviously the debate to continues.

SCIUTTO: Omar Jimenez, good to have you there. Thank you.

HILL: Thanks to all of you for joining us today in the "CNN Newsroom". I'm Erica Hill.

SCIUTTO: And I'm Jim Sciutto. "At This Hour with Kate Bolduan" starts right after a short break.

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