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Biden and McCarthy Expected to Finalize in Principle Debt Deal Today; House to Vote on Debt Ceiling Bill on Wednesday; Scary Moments as Bus Driver and Passenger Get into Shootout; Erdogan Wins Historic Turkish Runoff Election; Erdogan Declared Winner Of Historic Turkish Runoff Election; CA Desert Could Hold Key To Powering America's Electric Cars; Toxic Lake Has Enough Lithium To Supply U.S. EV Market For Decades; Rising Prices Put The Squeeze On Holiday BBQ Staples; CEO Gives 2,500 UMass Grads $1,000 Each, Asks Them To Give Back. Aired 4- 5p ET

Aired May 28, 2023 - 16:00   ET

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

[16:00:00]

RICHARD QUEST, CNN BUSINESS EDITOR AT LARGE: NATO over Ukraine. President Erdogan has been forceful against President Biden in this regard, and now the two leaders will have to find some sort of way forward, some sort of negotiation if you can. But here you have President Erdogan with a third term, powerful in terms of geopolitics, an economy that's in trouble, but certainly giving no quarter.

FREDRICKA WHITFIELD, CNN ANCHOR: All right, Richard Quest, thank you so much in Turkey.

All right, hello again, everyone. Thank you so much for joining me. I'm Fredricka Whitfield.

And after weeks of negotiations, a deal to avoid a U.S. debt default is about to be revealed. Today President Biden and House Speaker Kevin McCarthy are finalizing the bipartisan agreement to raise the nation's debt limit. The text is expected to release at any moment.

President Biden saying this earlier today.

(BEGIN VIDEO CLIP)

JOE BIDEN, PRESIDENT OF THE UNITED STATES: I'm about to go in and call McCarthy now at 3:00, make sure all the T's are crossed and the I's are dotted. I think we're in good shape.

(END VIDEO CLIP)

WHITFIELD: House leaders expect the bill to be voted on as soon as Wednesday. Speaker McCarthy is confident the deal will pass.

(BEGIN VIDEO CLIP)

REP. KEVIN MCCARTHY (R-CA): Just to take you back to where we were all started, back to February 1st, sat down with the president. I said let's work together to be able to raise the debt ceiling but curb the amount of spending, to let America be able to work again, cut red tape, get some work requirements to help people get back into work.

I think this agreement frames all that from limit, save, grow. It doesn't get everything everybody wanted. But that's in divided government. That's where we end up. I think it's a very positive day. We did a conference call with our conference and over 95 percent were overwhelmingly excited about what they see. They're getting a text today in the process.

Look, in every negotiation when it comes to debt ceiling and others, you get both sides of the party voting to pass the bill, and I expect the same thing happening.

(END VIDEO CLIP)

WHITFIELD: All right. We've got teams covering all the latest developments. Let's first go to the White House and CNN's Priscilla Alvarez.

Priscilla, the president seems to be pretty happy with the outcome, right?

PRISCILLA ALVAREZ, CNN WHITE HOUSE CORRESPONDENT: He's optimistic, that is the message that he was sending this morning when he arrived here at the White House saying that the deal was in good shape.

Now we have not yet received confirmation of that call between President Biden and House Speaker McCarthy being underway. Recall that he said that that was a call where they were going to dot the I's and cross the T's. But yes, generally there is optimism about this deal, which was agreed to in principle yesterday during a separate call between President Biden and House Speaker Kevin McCarthy.

But there's no doubt that the last 48 hours have been significant in these talks. We knew Friday that they were close to a deal. That was what President Biden was saying on his way to Camp David. Then White House negotiators and Hill negotiators working around the clock yesterday and come to an agreement and learning about the outlines of that agreement which again was reached in principle during a call yesterday afternoon between Biden and McCarthy.

But of course this is only one step to what is still a very long process, and part of that will be racing to get support among Democrats and Republicans. Now for the White House, they have been on the phone with Democratic leaders, including President Biden speaking with Senate majority leader Schumer yesterday and House minority leader Jeffries yesterday as well, and they have been talking to Democrats on the Hill around the clock to get them in on this deal, to tell them about it and try to slowly coalesce that support.

Because again, it wasn't just about getting to a deal, but then it's also getting the text out, which we still haven't seen, getting the votes on the House floor and later getting that through the Senate. Now when the president was asked about this today, he said that he anticipated and he was confident it was going to get to his desk. And then when asked about any sticking point he said none. So the bottom line here is the White House seems to be pretty happy

about where things are. But again we haven't received any confirmation about that call between Biden and McCarthy just yet. So there is still a bit of a road ahead.

WHITFIELD: All right. Priscilla, thank you so much.

Eva McKend, you're also following the latest. So does it look like this is going to be a tough one to get past?

EVA MCKEND, CNN NATIONAL POLITICS CORRESPONDENT: It sure does because there is a lot of skepticism right now. What we're seeing is some positive spin on this from both leadership teams. But really, this is going to come down to the rank-and-file members. And what we're hearing from them is we want to read some bill passed. But you hear the House speaker saying more than 90 percent of his caucus is on board, and then you hear the minority leader, Hakeem Jeffries, indicating that eventually he believes enough Democrats will get there.

Let's take a listen.

(BEGIN VIDEO CLIP)

REP. HAKEEM JEFFRIES (D-NY): Well, I do expect that there will be Democratic support. Once we have the ability to actually be fully briefed by the White House, but I'm not going to predict what those numbers may ultimately look like.

[16:05:07]

We have to go through a process consistent with respecting every single member of the House of Representatives and their ability to fully understand the resolution that has been reached.

(END VIDEO CLIP)

MCKEND: So, Fred, let me walk you through what is actually in this framework. What we understand thus far without having the opportunity to read the text itself. Most consequentially it raises the debt ceiling for the next two years. It caps federal spending for this year and next year. There are no cuts to military or veterans spending. That of course is unpopular on both sides of the aisle.

It reduces new IRS funding. It calls back unused COVID funds. And then this is probably the most controversial part. There are tougher work requirements for food stamps in limited cases. I can tell you from hearing from sources this morning, so staff members who work for progressives in Congress, this is a source of real contention. They did not think that this matter of work requirements was even on the table.

So this is an area where the White House is going to have to work hard to convince members of the left to ultimately support this deal with these expanded work requirements in place.

WHITFIELD: All right. Eva McKend, Priscilla Alvarez, thanks to both of you. Appreciate it.

All right. So one of the top Republican negotiators is praising the deal saying it includes fiscal conservative values. He's spoke about it today on CNN's "STATE OF THE UNION" with Jake Tapper. Listen.

(BEGIN VIDEO CLIP)

JAKE TAPPER, CNN ANCHOR: Why was it so important for House Republicans to have this work requirement for able-bodied food stamp recipients who don't have dependents but not important to get corporations to at least pay some taxes if they make a profit?

REP. DUSTY JOHNSON (R-SC): Well, we raised taxes -- certainly not me, but Joe Biden and Democrats raised taxes on corporations by $700 billion last year. There was not, frankly, an appetite among Republicans to allow Democrats to do that again. What there is an appetite for is making sure that we're helping people find that pathway out of poverty.

I grew up in a family of modest means. I saw my parents busting their butts every single day. And I know it was those efforts that helped me escape poverty. You cannot escape poverty without work. You just can't. It's got to be a part of the solution. These requirements are not mean. They're not onerous.

It's 20 hours a week work training, education, or volunteering at a local food bank for people who are able-bodied, not pregnant, don't have kids at home, live in an area where there are jobs. We know they work. These requirements have been in place since 1996, when Bill Clinton signed them into law.

(END VIDEO CLIP)

WHITFIELD: All right. Here with us now David Swerdlick. He is a senior staff editor for "The New York Times" opinion.

David, good to see you. So Republicans who negotiated this bill say, you know, they're pretty happy with the outcome but others in the party not so much. Here are some of them. Congressman Ken Buck called it a debt ceiling surrender, while Congressman Ralph Norman said the deal is insanity, and Congressman Bob Good said that no one claiming to be a conservative could justify a yes vote.

So should the GOP leadership be worried that this might be representative of a minority but, you know, should McCarthy and others be worried?

DAVID SWERDLICK, SENIOR STAFF EDITOR, THE NEW YORK TIMES OPINION: Happy Memorial Day weekend, Fred. Thanks for having me.

Look, I think this is the first big test for Speaker McCarthy. I remain skeptical. But if you go back to November, he told your colleague Melanie Zanona that he would not risk a default. And if he gets this deal, if he has counted the votes up correctly, and he whips this correctly and gets the agreement with the White House approved by the Congress, he will have shown that he had that commitment to not risking a default.

Remember, before you talk about whether it's a surrender or whether it's sufficiently faithful to Republican principles, the question is, if you take the full faith and credit of the United States hostage, do you shoot the hostage, and what McCarthy is signaling right now is no, you do not. That we are the world's reserve currency, that we have -- that we are the country that can borrow to pay its already incurred expenses, and you don't want to risk that and risk economic collapse, even if you're a Republican who wants concessions for the Democrats.

So let's see if he has the votes. Let's see if he can whip the votes as well as Speaker Pelosi could, and then we'll know if McCarthy passed this first big test.

WHITFIELD: Yes. And so while he made that statement and this is potentially his follow through, I mean, there is a lot of at stake for him, right, particularly if he's not able to corral that caucus.

SWERDLICK: Right. You're going to have some Republicans as Eva was just reporting on one side who are not happy with the spending cuts.

[16:10:02]

There are domestic caps, there are work requirements for SNAP and TANF benefits, and then you're going to have Democrats who are like, whoa, whoa, whoa, we didn't sign on for any of this. But it seems we'll wait until the actual deal sheet comes out. It seems like the line in the sand for Republicans was we want work requirements on these SNAP and TANF beneficiaries, and if there are no work requirements for Medicaid recipients, my sense will be that that was the line in the sand for Democrats, that we were going to not impose additional requirements for Medicaid.

The less of the spending caps are things that you could probably predict in any divided government situation where the White House is controlled by Democrats and the House is controlled by Republicans.

WHITFIELD: President Biden, you know, seems to think the bill is in good shape, as does House minority leader Jeffries. But today Progressive Caucus chair Pramila Jayapal was not as confident. Listen to what she had to say.

(BEGIN VIDEO CLIP)

REP. PRAMILA JAYAPAL (D-WA): I don't like frameworks. I think they are really problematic in terms of being able to make a decision. It's fine to say we've reached an agreement in principle, but all of the text matters, and there are so many pieces of this that we need to look at in terms of what the spending is exactly like.

TAPPER: Do they still have to worry about the Progressive Caucus and whether or not your caucus will support?

JAYAPAL: Yes.

TAPPER: Yes, they do. OK. Congresswoman Jayapal, thank you so much. JAYAPAL: Yes, they have to worry.

(END VIDEO CLIP)

WHITFIELD: All right. That has to be unsettling if you're President Biden.

SWERDLICK: It has to be unsettling but, look, if you're Congresswoman Jayapal or one of the far-left Democrats in the House, there was an earlier stage where more pressure needed to be put on the White House to message better on this idea that if a debt limit deal is not reached, that Republicans -- this would be the Democratic voting. Republicans would be at fault for risking our status as the world's reserve economy and for tanking the current U.S. economy.

The White House has done some messaging on that, Fred, but they haven't consistently hammered that home since the beginning of the year. And let's remember, at the end of the last Congress, Democrats didn't push forcefully to raise the debt ceiling then. So now you're at a point where the White House has some leverage but not as much leverage as it wants.

Speaker McCarthy has some leverage but not as much as he would want. And they are trying to come to this what they see, maybe Congresswoman Jayapal doesn't see it, maybe far-right Republicans don't see it that way, as the compromised deal in a divided government, and that the ultimate goal is to move us forward.

We have been at this now since 2011 and 2013 with these debt ceiling crises in the Obama era and then briefly in Trump, and now in the Biden era, where we've governed with essentially the debt ceiling as a hostage being taken. One day we may break out of that cycle but in the current situation, this seems like a deal that both sides are going to live with, even if behind the scenes you have people on the far-left and the far-right grumbling about it.

WHITFIELD: All right. David Swerdlick, thank you so much. Great to see you.

SWERDLICK: Thanks, Fred. You, too.

WHITFIELD: All right. Straight ahead, shocking video showing a shoot- out between a North Carolina city bus driver and a passenger while the bus was in motion. Details on the terrifying incident next.

(COMMERCIAL BREAK)

[16:17:39]

WHITFIELD: All right. Disturbing new video out of North Carolina showing the terrifying moments a bus driver and a passenger got into a shoot-out while the bus was still moving. Investigators say there was an exchange between the two men before the incident. Both were injured.

CNN's Isabel Rosales joining me now with more on this. So walk us through how in the world did this happen?

ISABEL ROSALES, CNN CORRESPONDENT: Right. And it's a pretty shocking video. It all happened so quick. So we heard from the interim CEO of CATS, that is the Charlotte Area Transit System, who said that the driver and a passenger were arguing for about two minutes before the shooting happen because the passenger wanted to get off of the bus in an area that was not approved for that route.

So the driver told them you're going to have to wait. That is when the passenger, Mario Tobias, pulled out a gun. When the driver seized the gun, that driver, David Fullard, he pulls out his own gun and then a shoot-out happens. Watch.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: (EXPLETIVE DELETED).

(GUNSHOTS)

(END VIDEO CLIP)

ROSALES: Yes, it's incredible that nobody was seriously injured here. Both of them did get shot. The driver got shot in the arm, the suspect there, Tobias, got shot in the abdomen. You can see the driver stopping the bus. He moves and follows Tobias crawling to the back of the exit. There's two bystanders in that bus who were miraculous not harmed in this process. Tobias does manage to get outside of the bus and the driver David Fullard follows after him, shooting several rounds again.

Now listen to the interim CEO for CATS, what he had to say about this incident.

(BEGIN VIDEO CLIP)

BRENT CAGLE, INTERIM CEO, CHARLOTTE AREA TRANSIT SYSTEM: I understand everyone's need to protect themselves. I also believe that this incident may have been avoided.

(END VIDEO CLIP)

ROSALES: Yes, the passenger there, Tobias, is facing several charges. Police have not said if the driver will also face charges. The CEO of CATS said that the driver did not follow de-escalating procedures.

[16:20:03]

And this would have been a reasonable moment for him to just stop the bus and let that passenger off of it. That driver hired by a third- party contractor. It's in their policy that they can't have weapons, and that's grounds for immediate dismissal. And that is what happened in this situation, that driver was terminated.

We did, rather a CNN affiliate WSOC spoke with that driver's attorney who said that the fact that he had a gun speaks to the level of concern that these drivers have about their personal safety. He's been on that job working for the city for 19 years.

(BEGIN VIDEO CLIP)

KEN HARRIS, ATTORNEY FOR DRIVER: Anyone in the workplace who is consistently confronted with dangerous scenarios could reasonably be expected to find a way to protect themselves so that they can get home safely.

(END VIDEO CLIP)

ROSALES: Yes, and the CATS leader also pointed to three safety mechanisms that these drivers have in case something goes wrong, including a radio where they can call for help and then two silent alarms, one that automatically allows employees to listen to what's going on in the bus and another that puts a message on the outside of the bus there indicating that someone should call for help. The CEO, interim CEO said that none of these mechanisms were used by the driver.

Meanwhile, he's also announcing some changes that are coming including more training for these drivers on de-escalating procedures. And also they've got a new contract with a security company where they will include armed and unarmed security at random routes.

WHITFIELD: Wow. All right. That was quite extraordinary. And there was the partition there. You did see the partition but that's --

ROSALES: It's not bullet-proofed.

WHITFIELD: There you go. I was going to say clearly they didn't feel like that was going to be protection.

ROSALES: Yes, and the CEO spoke to that and he said that they have to weigh whether it's worth it or not because bullet-proof shields weigh so much that in the case of an accident, which is more likely that could become a flying projectile which could harm the driver or even kill passengers as well.

WHITFIELD: Pretty extraordinary. All right. Isabel, thank you so much.

ROSALES: Thank you.

WHITFIELD: Appreciate that.

All right. Coming up, President Erdogan is declared the victor in today's historic runoff election in Turkey. The latest next.

(COMMERCIAL BREAK)

[16:26:42]

WHITFIELD: Turkey's incumbent President Erdogan has been declared winner of Turkey's runoff election.

(BEGIN VIDEO CLIP) PRES. RECEP TAYYIP ERDOGAN (through translator): I would like to thank each and every member of our nation who has once again given us the responsibility of governing the country for the next five years with the choice that they have made.

(END VIDEO CLIP)

WHITFIELD: All right. The announcement made a short time ago will extend Erdogan's rule into a third decade. The election was triggered two weeks ago when neither main candidate got more than 50 percent of the initial vote. Erdogan's grip on power was challenged by a coalition of groups from the left.

The biggest issues in the campaign may sound familiar to American voters. Turkey is facing soaring inflation and growing questions over its immigration policies.

Let's bring in now Aaron David Miller, he is a former State Department Middle East negotiator.

Good to see you. So how was Erdogan able to pull off yet another victory?

AARON DAVID MILLER, FORMER STATE DEPARTMENT MIDDLE EAST NEGOTIATOR: Two quick takeaways on this, Fred. It's really hard once an authoritarian becomes entrenched in power in order for an opposition candidate to win. Erdogan controlled the press, he packed his -- the Supreme Election Committee with his appointees. He's imprisoned opposition members and he's been in power either as prime minister or president since 2003. So that's 20 plus years of learning how to manipulate the system.

The other reason, I think, attach to your point about inflation and the economy. The reality is identity in this election mattered more than pocketbook issues. Some of the worst hit areas of the recent earthquake which claimed over 50,000 lives in Syria and Turkey were among the most avid supporters of the president. So he plays to identity, he plays to Islam, he plays to the nation, the nationalism, and he tries to paint Turkey as a victim, a victim of LGBTQ, a victim of Western imperialists, mainly the United States, and he's tried to link his opponent and the nation alliance of the six parties that he formed to Kurdish terrorism.

So it's identity on one hand and it's just being a smart authoritarian on the other. It's a lesson, cautionary tale frankly for all of us.

WHITFIELD: Is Turkey's proximity another way in which Erdogan is able to kind of wield, you know, power? You know, Turkey's neighbor's include Iran, Iraq, Russia and Europe, and, you know, that he's had, what, two decades experience leading that country. Is that also how he kind of leveraged a win?

MILLER: You know, I think you're right here. Geography and the nearest explanation is destiny. And Turkey straddles east and west on one hand. It's a member of NATO, even while Erdogan must for economic and political reasons maintain very close ties to Vladimir Putin. So, yes, I think he has a very problematic relationship with the United States, even though he's a member of NATO, and other than Ukraine probably the most powerful military in the alliance.

[16:30:00]

So yes, he's traded on his foreign policy expertise and his capacity to play any number of different angles. Very good relationship these days with the Israelis as a way to endear himself to the American. So, yes, he's cagey and he's good at keeping his seat for it.

FREDRICKA WHITFIELD, CNN HOST: So good relationship with Israelis, but not such a great relationship with the Biden administration. Now what?

MILLER: Well, that's a very good question. Then we'll see what the next five years brings. But I think he wants to improve relations with Washington. The Russians sold him a very sophisticated air defense system, which caused the Biden administration. They can afford to suspend his Turkey's participation in the F-35 program.

But I think he does want to amend relations with Washington. Now, what price he's going to have to pay to do that is unclear. But Turkey is a player and Erdogan, as I mentioned, has proven remarkably adept, even though, this election really did challenge his power base.

Turkey is still a very divided nation. And at the head, since a man who's determined to maintain its authoritarian character, maintain its relevance in the region and maintain his personal rule, and it is the call to personality, Fred, that I think helped him win this latest round.

WHITFIELD: All right. Aaron David Miller, great to see you this weekend. Thank you so much.

MILLER: Thank you, Fred.

WHITFIELD: All right, coming up, can a California sea power the future? How a dying Hollywood hideaway is churning with a mineral essential for electric vehicles?

(COMMERCIAL BREAK)

[16:35:59]

WHITFIELD: All right. It could be considered California's new gold rush. Lithium., a crucial element in electric car batteries is set to be extracted from underneath California's Salton Sea. As demand skyrockets for electric vehicles, there's new hope that a new massive supply of lithium could supercharge the EV industry and save the dying Salton Sea.

CNN's Mike Valerio is joining me right now with more on this. Mike, how fascinating -- I mean, how would this potentially affect the American auto industry?

MIKE VALERIO, CNN NEWSOURCE NATIONAL CORRESPONDENT: Well, the future of how we drive is electric, and that is powered by EV batteries. Those batteries need lithium. And right now, China dominates lithium processing. But the hope is to start tapping into more American sources of lithium like the one under California's Salton Sea.

(BEGIN VIDEOTAPE)

VALERIO (voice-over): It looks like a shimmering sea that was once called a miracle in the desert.

UNIDENTIFIED MALE: The Salton Riviera beside the blue Salton Sea is a place for you to take charge of your future.

VALERIO (voice-over): A Hollywood hideaway three hours from Los Angeles where Sinatra and the Rat Pack played. But now, after decades of drought and farm run off raising the water's salinity, the Salton Sea today is surrounded by dust and decay.

PROF. MICHAEL MCKIBBEN, UNIVERSITY OF CALIFORNIA, RIVERSIDE: The hope is that the chronic unemployment and poverty down here can be alleviated by the development of the Lithium Valley.

VALERIO (voice-over): This gurgling and sputtering from underground gases potentially heralds a new beginning, a transformation from languishing vistas to Lithium Valley.

MCKIBBEN: These are called on mud volcanoes when they're above ground.

VALERIO (voice-over): Geologists Michael McKibben explains deep underneath us where two tectonic plates are pushing past each other, magma heats ground water. And within that salty water called brine, minerals dissolve including the valuable metal, lithium.

(on-camera): This is the gold right here.

MIKE GARSKA, SENIOR PROCESS ENGINEER, ENERGYSOURCE MINERALS: Yes.

VALERIO (voice-over): Solid lithium is essential for electric vehicle batteries. Right now, most lithium battery production is in China. But experts say the Salton Sea region could provide enough lithium to move the U.S. toward lithium independence supercharging our EV transition.

ERIC SPOMER, CEO, ENERGYSOURCE MINERALS: Our intention is to be in construction this year and be in operation in 2025.

VALERIO (voice-over): Eric Spomer is CEO of EnergySource Minerals, one of three companies planning to draw lithium from the underground hot brine.

(on-camera): This is where the separation begins.

DANIEL ALEXANDER, OWNER'S REPRESENTATIVE, HUDSON RANCH POWER: Yes. this is where the high temperature, high pressure fluids coming up into our high-pressure separator.

VALERIO (voice-over): Boiling brine already fuels 11 Salton Sea geothermal power plants. Among them, Hudson Ranch 1. The brine steam spins its turbines and that creates clean energy. The plan now is to extract dissolved lithium from that same brine.

SPOMER: We developed a technology that is incredibly efficient at extracting lithium from brine and rejecting impurities.

VALERIO (on-camera): One of the hopes with lithium extraction is that it could bring vitality back to the Salton Sea and so much of what we're looking at all around us. Fewer than 10 years ago, this was underwater and people who live in and around the area hope that with more money into the economy, at least a fraction of the Salton Sea can be restored to its former glory.

(voice-over): Simply put, Ruben Hernandez, owner of the nearby Buckshot Deli and Diner hopes a lithium boom leads to a boom in customers and a flood of tax revenue for a better future.

"My grandchildren will grow up here", he tells us. "I hope they will have good services and a good quality of life. That is if lithium leads to a second miracle in the desert, one for our time and for the road ahead."

(END VIDEOTAPE)

WHITFIELD: Wow, this is amazing. Mike, I knew nothing about this, so you have just so enlightened me and I know a lot of other people too. But are there, you know, environmental concerns to talk about, because when we hear, you know, extracting lithium, I mean, how might that impact the environment?

[16:40:09]

VALERIO: We're asked that all the time, Fred. I'm so glad you bring that up. Well, the governor of California's office says this is a much more environmentally friendly way to extract lithium because across the world, lithium is mined from open pits.

So that scars the landscape, damages the geology, but around the Salton Sea boiling hot water with dissolved lithium in it is already pumped above ground into clean energy power plants. The hot water steam powers those geothermal energy plants. And lithium is taken out to the boiling water before it is safely pumped back into the ground again.

So taken out of the water versus blasted out of a mine, that is the environmental contrast that we are talking about here.

WHITFIELD: That is amazing.

All right --

VALERIO: Yes.

WHITFIELD: -- Mike Valerio, good to see you. Thanks so much.

VALERIO: Thank you.

WHITFIELD: Still to come, putting the squeeze on your Memorial Day barbecue. The costly condiments that could have you seen red.

(COMMERCIAL BREAK)

[16:45:34]

WHITFIELD: All right, many Memorial Day celebrations include the traditional backyard barbecue. And this year, the prices on some cookout essentials may have shoppers seeing red. Take the classic ketchup, for example. The average price for a 32 ounce bottle jumped to $5.22, nearly 28 percent more than last year.

With me now to discuss is Stew Leonard Jr., the President and CEO of Stew Leonard's grocery stores. We love visiting your grocery store anytime of the year. Stew, so great to see with you.

STEW LEONARD JR., PRESIDENT AND CEO OF STEW LEONARD'S GROCERY: Hey, well, I love being with you. I enjoyed this today. Thank you.

WHITFIELD: Awesome. Thank you so much. So what are you hearing from shoppers? I mean, obviously, they are there. Are they stunned by these prices?

LEONARD: You know what, we're actually this year for the more they were seeing the easing in the markets right now. You know, Fredricka, I really feel this is the peak of food inflation as everybody's been talking about. We're seeing fish prices come down. We're seeing a lot of fruits and vegetable prices come down right now.

The only thing we're seeing is like these guys, which still are selling like crazy, but these are all the different burgers that you can do on the grill this year. And stuff like this, you know, this is that great --

WHITFIELD: Oh my god, humdinger. Good golly, that's the Flintstone kind of stuff.

LEONARD: It's, Fred, Flintstone. And when the ranchers come back from Kansas, this is what they all want, these big robots.

WHITFIELD: Oh my God.

LEONARD: But, you know, you're seeing things like that which are $20 a pound right now. Last year, there were probably like 18 but, you know, other things you have is some app deals like here's a porterhouse steak, OK?

WHITFIELD: Yes.

LEONARD: So you can get a deal on a porterhouse steak, which is half that price right now. But you still saw me prices creep up because of a herd sizes, you know --

WHITFIELD: Yes.

LEONARD: -- are smaller than this Memorial Day than last. WHITFIELD: Well, you always have the most amazing cuts. I've never seen cuts of meat like what you, you know, bring to our viewers. So that's pretty extraordinary.

LEONARD: Well, you -- yes. Well, tomorrow my in-laws are from France. So, you know, obviously, I don't celebrate Memorial Day, so I'm doing a really traditional Memorial Day barbecue for them with burgers and I got macaroni salad and guacamole with dips and a little --

WHITFIELD: Wow.

LEONARD: I'm going to --

WHITFIELD: You're doing it out.

LEONARD: -- treat the French to -- yes, real American style.

WHITFIELD: Well, I'm sure they will say may wheat --

LEONARD: American cheese.

WHITFIELD: Yes. And American cheese. Of course. They'll say, may wheat, but maybe no, no to the American Cheese.

OK, so let me ask you this. You know, there's recent data from the Bureau of Labor Statistics showing that condiment prices have risen more than grocery store prices overall, why is that, you think?

LEONARD: You know what, it baffles us sometimes also because a lot of these big consumer product companies, I don't know why they're raising their prices like they are, but we're sort of squeezed a little bit. I mean, we're not -- and even though we have seven stores around the metro New York area, we're not considered that big on, you know, to a large consumer package goods company.

But we've noticed increases in just about everything. And sometimes, what can you say? You can't negotiate really that tough with a big company.

WHITFIELD: Yes. And those are real necessities, especially if you've got all that meat like that. You need your barbecue sauce, you need your, you know, ketchup and all that good stuff that go with it.

LEONARD: Well, you know, Fredricka, I think it's a decision everybody has, you know, how much do you raise your price? Obviously, labor's gone up. A lot of feed prices has gone up. A lot of ingredients, packaging, transportation, you know, a lot of costs have gone up, but you just don't know how much of that they're passing on to the consumer or even more.

WHITFIELD: Yes. Hey, do you have any --

LEONARD: I've --

WHITFIELD: Go ahead. LEONARD: Yes, go ahead. No, I was just saying, you got -- what we decided to do is really do a 50-50 split, you know? We're passing on half of the cost to the customers. And we're eating half of it food this year.

WHITFIELD: Oh, OK. All right. Well that answers my question. I was asking, you know, about some tips on how you, you know, how shoppers kind of shop smart. You nailed it for us. You're also giving folks little leeway.

LEONARD: Well, one thing I would say to shop smart, look at these app deals because everybody's pushing apps right now.

WHITFIELD: Yes.

[16:50:06]

LEONARD: Because, you know, the nice thing about using your app, we can collect data on the customers, you know, what you're buying in the store. So we can know how many people buy certain cuts of meat, whether people maybe are vegan and they don't buy, you know, meat at all.

So we can then tailor our emails to the customer more. So, we are encouraging customers to use the app because of the data. So a lot of companies are putting deals out there --

WHITFIELD: Yes.

LEONARD: -- like these porterhouse steaks right now, you know, the -- at 10 bucks a pound, these are at cost right now. And we're doing it only if you use the app because we're really in a way of --

WHITFIELD: That's nice.

LEONARD: -- getting data from it.

WHITFIELD: OK. That's so generous of you, always thinking about the customers. Thank you, Stew, for that.

Hey, while I have you, I also want to ask you, you know, this weekend is really kind of the official start of summer and so people are getting to the pools.

LEONARD: Yes.

WHITFIELD: They're going to the beaches. And you're mindful of that and you're also wanting to promote safety for kids at the waterways.

LEONARD: Yes.

WHITFIELD: Tell us what you're doing and why that is so near and dear to you.

LEONARD: Well, Fredricka, as we've talked about in the past, you know, my wife and I had a little two-year-old boy that drowned in a pool. And for the last 30 years, we've been preaching especially for the moms and dads and grandparents listening right now. Watch your kids --

WHITFIELD: Yes.

LEONARD: -- 100 percent of the time. I thought my wife was watching my son. She thought I was watching my son. A little two minute gap in communication and it resulted in our son drowned. So, the first thing I can say to everybody, please, put your cell phones down. Watch your kids. It's a beautiful weekend. Your kids love the water. Enjoy it. Have fun. But watch your kid.

The nice thing this coming week, we're opening a swim school, our family is. My wife and I been my dream of my life. And we're going to teach kids to swim and then we're taking all the profits. We're going to donate them back to a lot of the YMCAs and boys and girls clubs around New York. For kids, needy kids that can't afford swim lessons.

WHITFIELD: Oh, that's so sweet.

LEONARD: So we're hopefully going to be able -- we'll be able to generate an extra 10,000 free lessons a year from the swim school. So I'm like super pumped for this week right now.

WILLIAMS: I am too for you. Thank you so much. Always so generous.

LEONARD: OK.

WHITFIELD: Stew Leonard, thank you so much. And have a great week with your new venture.

LEONARD: Thanks, Fredricka.

WHITFIELD: Appreciate it.

LEONARD: OK, au revoir.

WHITFIELD: Au revoir. That's right. Allons-y. OK. Bye-bye.

All right. And now, meet this week's CNN Hero, Adam Pearce.

(BEGIN VIDEO CLIP)

ADAM PEARCE, THE LOVEYOURBRAIN FOUNDATION'S CO-FOUNDER AND EXECUTIVE DIRECTOR: I think people feel isolated after brain injury because they don't feel able.

UNIDENTIFIED MALE: It's hard. I've lost my identity.

PEARCE: And when we allow people to be vulnerable and who they are, there is a deep connection form because there is so much common understanding of the challenges that go on with brain injury.

The changes I see most after people with TBI practice yoga are probably a deeper connection to self. Helping them cultivate greater awareness and self-compassion allows them to meet the constant changes so much more.

(END VIDEO CLIP)

WHITFIELD: To get an inside look, go to cnnheroes.com. And while you're there, nominate your hero.

(COMMERCIAL BREAK)

[16:58:09]

WHITFIELD: All right, talk about a great graduation gift. One commencement speaker is spreading his knowledge and his wealth to a lucky class of 2023. Robert Hale is a billionaire and CEO of a communications company in Massachusetts. And during his commencement address, he surprised each of the 2,500 UMass Boston grads with an exciting gift.

(BEGIN VIDEO CLIP)

ROBERT HALE, BILLIONAIRE CEO, GRANITE TELECOMMUNICATIONS: Each of you is getting $1,000 cash right now.

(END VIDEO CLIP)

WHITFIELD: Hale talked about the importance of giving back to the community. And of course, he was challenging all the graduates to do the same. Donate half of that unexpected windfall to charity or to someone that they believe is deserving and can use that money. A very special graduate received a well-deserved diploma from Seton Hall as well.

(BEGIN VIDEO CLIP)

(CHEERING & APPLAUSE)

(END VIDEO CLIP)

WHITFIELD: Oh my gosh, so sweet. Justin, a six-year-old service dog for graduating student Grace Mariani, earned every bit of that diploma right there. Attending every single one of Mariani's Seaton Hall classes. The Labrador Golden Retriever Mix is headed back to the classroom. Mariani earned a degree in education and planned on being a teacher with Justin by her side.

All right. Congratulations to all of the class of 2023 graduates.

And thanks for joining me today. I'm Frederica Whitfield. The CNN Newsroom continues with Jim Acosta.