Return to Transcripts main page

CNN Newsroom

CNN International: Neither Side Budging in Borrowing Limit Standoff; Manhunt Hollywood Writers Go On Strike; U.S. Stocks Dip After JPMorgan Buys First Republic Assets; Manhunt Underway in Texas; Americans Fleeing Sudan Arrive In Jeddah, Saudi Arabia; Palestinian Hunger Striker Dies in Israeli Prison; DeSantis-Disney Feud Escalates Amid Competing Lawsuits. Aired 4-4:30a ET

Aired May 02, 2023 - 04:00   ET

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

[04:00:00]

MAX FOSTER, CNN ANCHOR: Hello and a warm welcome to our viewers joining us in the United States and all around the world. I'm Max Foster in London. Bianca is off for the day. But just ahead on CNN NEWSROOM.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: This is the first time we're seeing this scare happening in Washington.

UNIDENTIFIED MALE: When are lawmakers, the White House, both sides of Pennsylvania Avenue going to grasp the consequence of what is happening right now.

UNIDENTIFIED MALE: Stop playing games, stop blaming somebody else. Roll up your sleeves. We got 30 days to do it.

UNIDENTIFIED MALE: And a very simple request and conversation that clearly turned into a violent situation here in this neighborhood.

UNIDENTIFIED MALE: And we do not know where he is. We don't have any tips right now to where he may be.

UNIDENTIFIED MALE: Writers in Hollywood are underpaid right now. There's a tremendous amount of content, but they're not getting the compensation that they want for it.

UNIDENTIFIED MALE: They been gearing up, realizing that at some point they have to take a stand.

(END VIDEO CLIP)

ANNOUNCER: Live from London, this is CNN NEWSROOM with Max Foster and Bianca Nobilo.

FOSTER: It is Tuesday, May 2, 9:00 a.m. here in London, 4:00 a.m. in Washington where U.S. Treasury Secretary Janet Yellen is urging Congress to act and overt what could become a global financial catastrophe. In a letter to House Speaker Kevin McCarthy, Yellen now warns the U.S. could default on its debt by June 1. And she says the impact could not only wrong the American economy but the entire global financial system.

Quote: Waiting until the last minute to suspend or increase the debt limit can cause serious harm to business and consumer confidence, raise short-term borrowing costs for taxpayers and negatively impact the credit rating of the United States.

That warning is raising pressure on President Biden and McCarthy to reach some kind of deal. Mr. Biden is now calling a meeting with four top congressional leaders for next Tuesday. But the White House says we won't -- he won't back down on his insistence that Congress send him a debt ceiling raise without conditions.

On Capitol Hill, it's still all posturing. Republicans demanding budget cuts as a condition of raising the government's borrowing authority and Democrats accusing them of holding the economy hostage. CNN's Manu Raju has more from The Hill and talking to lawmakers there.

(BEGIN VIDEOTAPE)

MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDENT: In a stark warning to Capitol Hill the Treasury Secretary Janet Yellen sending a letter saying that the debt ceiling must be raised immediately. Warning that potential default, the first ever default in U.S. history, could occur as early as June 1 if the debt ceiling is not raised.

This of course has been an issue that the two sides have been squabbling about the better part of this year. The House Republicans insist that there must be some spending cuts attached to it given that the debt is more than $31 trillion. And they've already passed a bill. They did last week along straight party lines to include a slew of spending cuts and tied to raising the debt ceiling up through next March.

But the Senate Democrats and the White House say that is an absolute nonstarter. They say that there should be no negotiation over raising the debt ceiling given the potential calamitous impact of not raising the debt ceiling. Saying that it must be raised, no conditions whatsoever. But that is the position rejected by House Republicans.

And in a sign of how far apart the two sides are, two Senators today indicated how they believe it should be resolved. One Democrat up for re-election saying that there should not be spending cuts attached.

SEN. JON TESTER (D-MT): What they're saying is they're going to default on the debt.

RAJU: So, should you guys just find a middle ground between the two?

TESTER: What is the middle ground?

RAJU: A deal with some spending cuts tied to a debt ceiling increase.

TESTER: I think that's -- I think it's a big mistake. I think it's a big mistake. SEN. JOHN THUNE (R-SD): This deal has got to be between Biden and McCarthy, or their respective teams. Because there's no other way that something get 60 votes in the Senate. The pressure is mounting and intensifying, and it should.

RAJU: And that second, Senator John Thune, he's the number two Republican saying that the Senate GOP is simply not going to swoop in at the last moment here and try to cut a deal with Democrats saying that it simply will not work. Saying there must be explicit blessing Kevin McCarthy in order to move ahead here. Saying that without that there just would not be 60 votes, which is what is to be needed in the U.S. Senate. You need 51 Democrats, at least nine Republicans. He said that there is no formula in which it can happen without McCarthy's blessing which is why it is such a grim picture.

[04:05:02]

Perhaps the worst of the scenario of a potential default since 2011. At that point, the U.S. credit rating was downgraded as Washington drew closer and closer to that deadline. Ultimately a deal was reached to raise the debt ceiling. Will that happen here? That is anyone's guess.

Manu Raju, CNN, Capitol Hill.

(END VIDEOTAPE)

FOSTER: Kevin McCarthy has been speaking out on the U.S. debt crisis during his visit to Israel. Here he is with CNN's Jerusalem correspondent Hadas Gold.

(BEGIN VIDEOTAPE)

HADAS GOLD, CNN JERUSALEM CORRESPONDENT: Do you have any regrets about how the bill was written, considering we're hearing criticism from the V.A., and those that might threaten veterans' healthcare?

REP. KEVIN MCCARTHY (R-CA), U.S. HOUSE SPEAKER: Can you tell me where in the bill it cuts the V.A.? It doesn't. So, this is the damage that when people do not tell the truth about the bill. It actually goes to the funding where we were four months ago.

If you look at back to the Obama, Biden budget that they passed for the next ten years, this actually spends more than what they proposed at this time. And the work of Congress gets to decide where spending is just like every family household. I'm very sad that the Democrats would think about cutting the veterans because we would not.

(END VIDEOTAPE)

FOSTER: And McCarthy also says since President Biden hasn't invited Israeli Prime Minister Benjamin Netanyahu to the White House, he plans to invite him to address the U.S. Congress.

Well, U.S. television and film writers are going to strike. A move that will very likely shut down most productions in the U.S. for the foreseeable future. The strike was announced after the Writers Guild and studios failed to reach an agreement hours before a midnight deadline. About 11,000 writers are affected. They say their contracts need to be reworked in the era of streaming to make up for a loss of income due to a dramatic decrease in residuals from reruns. They want limits on the use of artificial intelligence in the industry. Monday night CBS late show host Stephen Colbert says he stands with the writers.

(BEGIN VIDEO CLIP)

STEPHEN COLBERT, HOST, "THE LATE SHOW WITH STEPHEN COLBERT": These are our writers. These people -- these are our writers and I'll stick myself in there because I am WGA too. And they are so important to our show. The writers' demands are not unreasonable. I'm a member of the Guild. I support collective bargaining. This nation owes so much to unions. Unions are the reason we have weekends and by extension why we have TGI Fridays. So, the next time you enjoy a whiskey glazed blaze burger, you thank a union.

(END VIDEO CLIP)

FOSTER: The studios say that they are hurting too and that falling stock prices are forcing deep cost-cutting and layoffs. The last writers' strike in 2007 lasted 100 days causing an estimated $2 billion in economic damage.

Now the Union representing American Airline pilots says it has overwhelmingly voted to authorize a strike and will begin picketing at major airports ahead of the busy summer travel season. The vote is largely symbolic so far, but signals pilots' frustration as they continue a year long fight with airline management for a new contract. American Airlines says neither picketing nor this latest vote will impact flights or operations and a strike will only happen if all collective bargaining steps are exhausted.

FOSTER: Workers at Morgan Stanley may be looking at pink slips in the months to come. A source familiar with the matter tells CNN the Wall Street bank is planning to cut about 3,000 jobs around the globe this quarter. That will be the second round of layoffs in the past six months. Investment banks have been hurt by a slum in demand for wealth management caused by the baking crisis and the U.S. Federal Reserve's war on inflation.

Meanwhile, investors are hoping the U.S. stock markets will rebound in the coming hours. You can see the Dow is down though Nasdaq up marginally. The markets closed lower on Monday following JPMorgan's purchase of failed First Republic Bank. The Dow, Nasdaq and S&P 500 were all down then. Under a federal deal JPMorgan will pay $10.6 billion to regulators for most of the failed bank assets. CNN's Matt Egan has more.

(BEGIN VIDEOTAPE)

MATT EGAN, CNN REPORTER: JPMorgan is coming to the rescue and that is a big relief to U.S. officials, investors and really everyone concerned about this banking crisis. Let me run you through some of the numbers here. JPMorgan is paying the FDIC $10.6 billion to take over most of First Republic.

But what does that actually mean? Well, JPMorgan is taking on $173 billion of loans that had been on First Republic's balance sheet. The key here is that JPMorgan is assuming all $92 billion of First Republic's deposits, including those above the $250,000 FDIC insurance limit. So that means if you've got money at First Republic, you're good. Your money is safe. It's just changing from one bank to another.

[04:10:00]

Now the government did have to sweeten the pot to get this deal done. The FDIC is covering a big chunk of potential loan losses here. Now all of this comes after another weekend scramble in Washington and on Wall Street to come up with a solution to this First Republic problem. A source tells CNN that Treasury Secretary Janet Yellen and other U.S. officials were in touch with regulators as First Republic has been teetering the past week or so. JPMorgan says that more than 800 of its employees participated in due diligence to do some homework into what is on First Republic's books.

Now ultimately, First Republic is going down in history as the second biggest U.S. bank failure ever. Second only to the 2008 implosion of Washington Mutual, which by the way was also acquired by JPMorgan from the FDIC.

But treasury officials are expressing relief over how this deal actually went down. Instead of the situation were the FDIC had to bail out uninsured depositors, we have the private sector leading.

JPMorgan CEO, Jamie Dimon, he said today, quote: Our government invited us and others to step up and we did.

And during a call with reporters, I asked Dimon if the First Republic failure raises his already existing concerns about a recession. And if the recession fears played a role at all in his decision to make a bid for First Republic. And he said it hasn't raised the odds of a recession. And in fact, he thinks JPMorgan's takeover should, quote, help stabilize the system. He also expressed confidence that we're getting near the end of the bank stress. Now, let's hope so because the longer this banking crisis goes on, the greater the risk to the economy. Back to you.

(END VIDEOTAPE)

FOSTER: Well, days after a shooting in Cleveland, Texas left five people dead, the shooting suspect still remains at large. More than 250 law enforcement officers are involved in the manhunt and an $80,000 reward is being offered for any information.

A source in U.S. Immigrations and Customs Enforcement tell CNN the suspect Francisco Oropesa has entered -- had entered the U.S. illegally and had been deported by immigration officials at least four times in the past. His current immigration status is unclear.

Meanwhile the families of the victims are grieving and want justice for their loved ones. CNN's Josh Campbell has more on the search for the suspect.

(BEGIN VIDEOTAPE)

JAMES SMITH, FBI SPECIAL AGENT IN CHARGE: He is a threat to the community. And we need the community's help.

JOSH CAMPBELL, CNN SECURITY CORRESPONDENT (voice-over): A massive manhunt in southeast Texas for a man law enforcement says gunned down five of his neighbors, including a nine-year-old boy.

Now, more than two days since the slayings, authorities acknowledge they have zero leads.

SMITH: We do not know where he is. We don't have any tips right now to where he may be.

CAMPBELL (voice-over): According to the San Jacinto County sheriff, the suspect identified as 35-year-old Francisco Oropesa, was shooting a rifle in his yard Friday when neighbors asked him to stop because a baby was trying to sleep. Video later captured Oropesa, approaching the neighbor's house, where the sheriff says he opened fire with 15 people inside, killing the victims, quote, almost execution style.

One of the survivors, Wilson Garcia, lost his wife and son in the horrific shooting. He says he miraculously escaped after a woman in the house helped him jump from a window.

WILSON GARCIA, WIFE AND SON KILLED IN SHOOTING (through translator): We lost my nine-year-old son and my wife as well. And two people who died were protecting my two and a half-year-old daughter, and my one- month-old son. They protected him with a bunch of clothing, so the murderer wouldn't kill him too. So just imagine what we're feeling now. It was horrible.

CAMPBELL (voice-over): Authorities tracked Oropesa's cell phone, but found it abandoned along with articles of clothing. Despite his unknown whereabouts, we are learning more about his background.

A neighbor tells CNN, Oropesa had a history of erratic behavior with firearms and liked to show them off. A Mexican national, he was also deported four times between 2009 and 2016. And served jail time in 2012 for a DUI conviction, a law enforcement source tells CNN.

An $80,000 reward is now being offered for any information leading to Oropesa's capture.

SHERIFF GREG CAPERS, SAN JACINTO COUNTY, TEXAS: Five people died in my county, and that is where my heart is, in my county, protecting my people to the best of our ability.

CAMPBELL (voice-over): Garcia says he is staying strong for his two surviving children, as his family endures unspeakable tragedy.

GARCIA (through translator): My daughter who more or less understands, it's really difficult when she comes in starts asking for her mama, and then for her brother. CAMPBELL: And as hundreds of law enforcement officers continue their search for the suspect northeast of Houston, I'm also told from sources that the U.S./Mexico border has also become a key focal point. The concern is that this suspect, a Mexican national, may try to flee back into Mexico.

[04:15:02]

Border patrol officers on both sides of the border have been briefed on the suspect. They have his photo. They are certainly on the lookout tonight.

I'm also told that the U.S. government is actively messaging to media outlets in Mexico about this $80,000 reward hoping that if someone knows the whereabouts of this suspect, they will pick up the phone and help bring him to justice.

Josh Campbell, CNN, Los Angeles.

(END VIDEOTAPE)

FOSTER: In Oklahoma, authorities have found seven bodies including two believed to be missing teenage girls. At the residence of a man who officials were seeking in the teens' disappearance. The sheriff says Jesse McFadden, a registered sex offender, was living at the property. A Highway Patrol advisory says the two teen girls were last seen on Monday morning and could have been traveling with McFadden. The sheriff says they couldn't immediately identify the seven bodies.

At least six people were killed when a dust storm caused dozens of vehicles to crash along a major highway in central Illinois. Police say more than 30 people were hospitalized with injuries on Monday ranging from minor to life threatening. The injured ranged in age from 2 to 80 years old. Authorities say at least 40 passenger cars and another 30 commercial vehicles crashed along Interstate 55 as dust from newly plowed fields took over the highway. Two semitrucks also caught on fire. Winds had been gusting up to 45 miles an hour.

The problem in Iowa is too much water. A record snowfall in the upper Midwest has produced flooding in towns all along the Mississippi River. In Davenport, the river crest on Monday ranked among the top ten of all-time. Flood warnings have been posted along the Mississippi River from St. Paul, Minnesota to just north of St. Louis, Missouri. But forecasters say that they don't expect major flooding for areas further south.

Now we're getting new reports of explosions around the Sudanese presidential palace in the capital as rival military factions once again violate the sixth attempt at a ceasefire in Sudan.

Heavy smoke rose north of Khartoum on Monday. The head of the rapid support forces told a Saudi news outlet, that he sees no reason to negotiate with Army leaders. Meanwhile, Sudan's health ministry says more than 500 people have been killed since the fighting began. So far, some 73,000 people have left Sudan for neighboring countries according to the U.N. Refugee Agency which warns that that figure could explode to more than 800,000.

And foreign governments like the U.S. are still working to evacuate their citizens. Let's bring in CNN senior Africa editor Stephanie Busari who is live in Lagos. And the massive problem is this, you know, lack of adherence to these ceasefires. So, people that live there don't know what's going on. People that want to get out are struggling.

STEPHANIE BUSARI, CNN SENIOR EDITOR, AFRICA: Yes, good morning, Max. The people of Sudan have now gotten used to waking up for the past two weeks to fire in the capital, have a fire and then violence escalating throughout the day. That's the pattern that we've been seeing here since this conflict started more than two weeks ago.

And each side promising a ceasefire that will allow them to get much needed supplies, that would allow a respite from the bombardment. But every time the cease-fire has been broken, hampering humanitarian efforts, hampering evacuation efforts. The U.K. was the latest country to get its citizens out Monday getting some 2,197 people out. And we're hearing that Russia is trying to evacuate some 200 citizens. But for the Sudanese, there is no evacuation and many of them are waiting to leave the country and are taking desperate measures in some cases. We spoke to one Sudanese American woman who is trying to leave the country and she shared her experiences. Take a listen to what she had to say -- Max.

(BEGIN VIDEO CLIP)

MOHAMED MADANY IBRAHIM, SUDANESE AMERICAN CITIZEN AWAITING EVACUATION: There is no information. The people around here are stuck. We are crowded. We have to buy food. We have to buy water ourselves. So, like five hours. So, there is no clear information. Nothing. They just tell you just wait, wait and be patient. But no information.

(END VIDEO CLIP)

BUSARI: So, the U.N. is saying that Sudan is facing a humanitarian crisis that is at a breaking point. And many of the aid agencies have no staff left in Sudan to help with these desperately needed humanitarian efforts -- Max.

FOSTER: OK, Stephanie Busari live in Lagos, thank you.

Still to come, U.S. officials are bracing for an influx of migrants at the southern border as the pandemic era policy nears its end. The details just ahead.

[04:20:00]

Plus, the battle between Ron DeSantis and Disney heats up yet again, now with dueling lawsuits being filed in Florida.

Also ahead, anger and mourning in the West Bank in Gaza after a prominent Islamic Jihad member died in an Israeli prison following a month's long hunger strike.

(COMMERCIAL BREAK)

FOSTER: There is growing anger in the West Bank and Gaza after the death of a prominent Islamic Jihad member in an Israeli prison. Israel says Khader Adnan was found dead in his cell early on Tuesday after an 87-day hunger strike. A general strike has been announced in the West Bank on Tuesday to mourn his death. And now more Palestinian detainees have announced their own hunger strikes. We're back to CNN's Hadas Gold in Jerusalem. And this one really is escalating, isn't it?

GOLD: Yes, Max, Khader Adnan had become really a symbol of Palestinian resistance and a symbol of Palestinian prisoners and Palestinian detainees. As you noted, he was found dead in his cell in an Israeli prison this morning after a more than 80-day hunger strike.

[04:25:00]

This had been -- he had once been a spokesperson for the militant group Islamic Jihad. And the Islamic Jihad announced that he had been promoted they say to a commander upon his death.

He had been in detention at least ten times since 2004. And he had gone on several other hunger strikes in the past. So, he was really a well-known and prominent figure. At the time of his death, he was being detained on what's called administrative detention. So, that means he was being detained before charges or trial. This is something that Israeli authorities say that they often do for security reasons.

Now the Israeli Prisoner Services said in a statement that the prisoner had they said refused medical treatment and was found unconscious in his cell this morning.

Now Khader Adnan's attorney had actually told Israeli army radio that they had been warning the prison service that's needed to be hospitalized and that paramedics of the prison services medical clinic, they said was not the same as a civilian hospital.

The reaction has been big and swift. Three rockets were actually fired from Gaza -- where Islamic Jihad is mostly located -- towards Israel. None of them were reported to cause any damage and no interceptors needed to be launched, the Israeli army said.

There has also been a general strike called in in both the West Bank and Gaza. That means everything from stores to schools have been shut down as a result. And also, as you noted, Palestinian prisoners in at least one Israeli prison have gone on strike and on their own hunger strike as a result of Khader Adnan's death.

Now the Palestinian Authority Prime Minister Mohammad Shtayyeh also released a statement saying, he called this a deliberate assassination, he said, by refusing Khader Adnan's request to release him. Saying they also neglect -- claiming they also neglected him medically. There are at least 1,000 other Palestinian prisoners who are also under administrative detention amongst a total of nearly 5,000 Palestinian prisoners. This, the Palestinian Prisoners Society say is the highest number of Palestinian prisoners in Israeli prisons since 2003 -- Max. FOSTER: OK, Hadas, thank you for joining us from Jerusalem.

In the coming hours we'll hear more testimony in civil battery and defamation trial against Donald Trump. A source says the legal team for E. Jean Carroll who is suing the former president and accusing him of sexual assaulting her in the 1990s, will call for -- call to the stand a friend who Carroll says she confided in immediately after the alleged rape. This will come one day after Trump's attorney concluded his cross-examination of Carroll which lasted more than seven hours across two days. Earlier on Monday the judge overseeing the trial denied Trump's motion for a mistrial.

An Arkansas judge is ordering President Biden's son to sit for a sworn deposition and answer written questions about his finances. Hunter Biden was in court on Monday looking to reduce the amount of child support he pays to the mother of his 4-year-old daughter. His attorney says Biden is currently paying $20,000 a month as agreed and he's not a dead-beat dad. And the judge warned Biden's legal team not to hide any financial information.

A pair of dueling lawsuits is putting the spotlight on the escalating feud between Florida Governor Ron DeSantis and Disney. The governor's allies are ratcheting up their fight against one of the largest employers. CNN's Brian Todd has more details.

(BEGIN VIDEOTAPE)

BRIAN TODD, CNN CORRESPONDENT (voice-over): Florida's Republican governor not backing down against an American entertainment giant. A special board handpicked by Ron DeSantis overseeing Disney's special taxing district voted on Monday to sue Disney.

GOV. RON DESANTIS (R), FLORIDA: No corporation is above the law and the people of this state.

TODD (voice-over): This comes just days after Disney filed its own lawsuit against DeSantis and his board.

MARC CAPUTO, NATIONAL POLITICAL REPORTER, THE MESSENGER: He's embroiled in this battle which a lot of people are snickering about because it's now Ron DeSantis versus Mickey Mouse.

TODD (voice-over): Disney has not responded to CNN's request for comment on the suit from DeSantis' board.

DeSantis in recent days has said Disney's lawsuit is political and doesn't have merit.

DESANTIS: They're upset because they're actually having to live by the same rules as everybody else. They don't want to have to pay the same taxes as everybody else.

TODD (voice-over): As he gears up for a likely run for president, DeSantis has been retaliating against Disney, after Disney thwarted DeSantis' attempt for the state to take overpower of Disney's special taxing district in that area of Florida. He recently threatened to raise Disney's taxes or build something right next to Disney's land near Orlando.

DESANTIS: Someone said maybe you need another state prison. Who knows? I mean, I just think that the possibilities are endless.

TODD (voice-over): DeSantis' aides say he was joking, according to journalist Marc Caputo.

Still --

TODD: Is he coming across as a bully or do you think this is working?

FRANCESCA CHAMBERS, WHITE HOUSE CORRESPONDENT, USA TODAY: For some Republicans who want to see a strong contender go up against Donald Trump, it might be something that they're into. They certainly say that if you're going to beat Donald Trump in a primary, you have to be forceful on the debate stage and not be afraid to back down.

TODD (voice-over): DeSantis' fight with Disney started last year when a Florida law was passed that he backed limiting instruction of sexual orientation and gender identity in schools. Disney spoke out against that bill.

Recently, DeSantis' prospective rivals for the Republican nomination for president, Donald Trump and Chris Christie, have slammed DeSantis' maneuvers against Disney. Trump saying on his social media website that DeSantis was being, quote, absolutely destroyed by Disney. Political analysts say this fight symbolizes DeSantis' willingness to put culture wars front and center on the Republican agenda and is a reflection of his swagger.

CAPUTO: He's grown into the office and the exercise of power, the likes of which we hadn't seen in a state. Not only did he take on Disney, which used to be kind of a sacred cow, you didn't really mess with Disney as a governor.

TODD: Another example of Ron DeSantis' growing ability to wield power in his state, Florida lawmakers have just passed a measure that allows him to run for president without quitting his job as governor. That changes the law in Florida which previously required candidates for higher office to give up their current posts. DeSantis is expected to officially declare that he's running for president in the coming days.

Brian Todd, CNN, Washington.

(END VIDEOTAPE)

[04:30:00]