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Trump Cancels Witkoff, Kushner Iran Peace Talk Trip; Trump To Attend First White House Correspondents' Dinner As President; Violent EF-4 Tornado Hits Oklahoma Ahead Of More Severe Storms; Spirit Airlines, White House Close To A $500M Bailout; Mamdani, Hochul Announce Pied-A-Terre Tax On Second Homes. Aired 5-6p ET

Aired April 25, 2026 - 17:00   ET

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

(COMMERCIAL BREAK)

[17:00:36]

JESSICA DEAN, CNN ANCHOR: You're in the CNN NEWSROOM. Hi, everyone. I'm Jessica Dean in Washington.

And breaking tonight, President Donald Trump saying he's canceled a U.S. delegation's trip to Islamabad, Pakistan, where they were set to take part in talks aimed at eventually ending the U.S. war with Iran.

However, the president telling Axios reporter and CNN contributor Barak Ravid the trip's cancellation does not signal a return to fighting. Trump's message about calling off the trip, coming just hours after Iran's foreign minister departed Islamabad following meetings with Pakistan's top leadership to discuss a potential truce with the U.S.

Let's bring in CNN's Julia Benbrook, who is live at the White House this evening. Julia, what more have we heard from the president on this -- these new developments?

JULIA BENBROOK, CNN CORRESPONDENT: -- to Pakistan for talks with Iran this weekend. He said too much time wasted on traveling, too much work.

Now, he said that he did not want to see his team on a plane for 16-17 hours at a time if he did not think that they were going to be able to get something done.

He also, speaking with reporters just a little while ago now, said that he got a new and better offer from Iran after he canceled these talks. Take a listen.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: They gave us a paper that should have been better. And interestingly, immediately when I canceled it, within ten minutes, we got a new paper that was much better.

(END VIDEO CLIP) BENBROOK: And when Trump did say that he was not going to be sending this team, he blamed infighting in Iran for that cancellation.

I want to pull up part of his Truth Social post for you now in this, he said quote, "There is tremendous infighting and confusion within their leadership. Nobody knows who is in charge, including them. Also, we have all the cards. They have none. If they want to talk, all they have to do is call."

So even as Trump signals that a phone call could be a next step, he's also making it clear that he doesn't know exactly who that phone call would be with, who is in charge for Iran right now. And there are a lot of questions about what's next.

In an interview with Axios, he signaled that this decision to cancel these potential talks did not mean that the fighting would start again. In fact, he said something along the lines of, we haven't even thought about that yet.

And then as I'm speaking, Jessica, we do believe Trump is arriving back here at the White House now. And of course, he's going to be speaking at the White House Correspondents' Dinner in just a little while.

A huge topic will be top of mind as he takes that stage, and it will be interesting to see what tone that takes.

And then just highlighting how much has changed just in recent hours. On Friday, just yesterday, press secretary Karoline Leavitt was speaking with reporters here at the White House, and she said that they had seen some progress from the Iranian side. And that's why this delegation was being sent to hear them out. Those talks are now canceled.

DEAN: Ok. Julia Benbrook, with the latest from the White House. And as you mentioned, we are going to be bringing the White House Correspondents' Dinner live to everyone a little bit later tonight, starting at 8:00 p.m.

Let's go now to CNN international diplomatic editor Nic Robertson, who can report now from Islamabad, Nic.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Sources here have described the past 24 hours here as hectic. They also say that they remain hopeful.

It's not quite clear at the moment on what basis they remain hopeful. We know that the Iranian foreign minister left here and went to Muscat in Oman, where he's been photographed meeting with the foreign minister in Oman.

Remembering before the war began, Oman was the interlocutor trying to bring an agreement between the United States and Iran. Of course, that fell apart at the beginning of March, end of February.

So what did the foreign minister achieve here? Well, he said that it had a fruitful visit, that he had shared workable ideas for a framework. He didn't say anything more than the framework.

[17:04:46]

ROBERTSON: But I think the kicker in the tale from the Iranian foreign minister, who by the way, when he was coming here, said that he wasn't ever going to have, on this visit at least, face-to-face meetings with U.S. representatives. He said that wasn't going to happen. He had said that he was coming here and then going into Muscat, which is done, and then going to Moscow, which hasn't happened yet; not sure if it will.

But I think the real kicker from the Iranian foreign minister here in his tweet, as soon as he landed in Muscat, was yet to see if the United States is serious about diplomacy. This really plays into the view that Iran has of the situation, that they actually do have the cards, that President Trump doesn't have the time that they are willing to keep pursuing what they want the sticking points, the issues around the Strait of Hormuz, the blockade, and also the nuclear enrichment issue.

So where things go from here really isn't clear. I come back to what sources here say that they remain optimistic. Leastways, they haven't given up yet.

I guess there's one other point just to add into that, to give a little bit of extra clarity, the lockdown around the zone where the talks were due to take place, that's been locked down for over a week now.

The government here finally lifted that lockdown. They could put it back in place, but that's a clue to where things are at the moment.

DEAN: All right. Nic Robertson from Islamabad, thank you for that reporting.

And joining us now, CNN national security analyst and former Pentagon official Alex Plitsas. He's currently the director for the counterterrorism program at the Atlantic Council.

Alex, good to see you.

Let's start first by talking about this -- this latest news. President Trump canceling this trip by the U.S. delegation to Pakistan.

What is your assessment of where these talks stand at this point?

ALEX PLITSAS, CNN NATIONAL SECURITY ANALYST: Sure. I've spoken to a few parties so to mediators in the region, to U.S. officials and to some Iranian back-channel folks. And a picture started to emerge over the last few days or so as to what was transpiring.

So it appears there had been some mediated discussions in the background that weren't public between the U.S. and Iran, not directly, but through mediators. And it appeared that there may be some movement on some positions that the Iranians hadn't previously been willing to give in on, which Karoline Leavitt mentioned at the podium when she said that, you know, looked like there was some progress.

So at that point, President Trump was considering sending Steve Witkoff and Jared Kushner to Pakistan, potentially to meet with the Iranian foreign minister, who was, as was publicly stated, really there to engage in talks about talks with the Pakistanis.

Finally on, you know, earlier this week, the president said, hey, the ceasefire expired, but I'm going to give the Iranians a little more time to get it together internally, because there -- there's disagreement.

So they were supposed to present their position to the Pakistanis. And based on what came back to the U.S., it would be a decision as to whether or not they were going to negotiate. It appears that they haven't moved far enough yet to enable talks.

DEAN: And so with that being the state of play right now, what are you hearing about where the other Gulf countries' stand right now and how this continues to impact the broader region?

PLITSAS: So the broader Gulf countries and those that have been asked to mediate have basically said the same message back to the Iranians and in some cases, very forcefully behind closed doors, that the attacks on the GCC states need to stop altogether before they'd be willing to directly mediate.

Although they are playing roles in the background through different parties. And it's been, you know, it's been hostile with the Iranians in some cases, just based on the actions in terms of attacking the Gulf States recently.

So they're still not going to play a direct role in mediation. Pakistan is still the lead mediator here, although given the relationship historically between the countries, there's still consultations going on.

In particular, we just saw the foreign minister had stopped in Oman. It's important for a few reasons. One, the Omani foreign minister had played the mediator previously at Iran's request. That ended in the current conflict, when it didn't result in an agreement. And they're also in control of the other side of the Strait of Hormuz.

So that was a very important visit for a couple of reasons. Other than that, there hasn't really been much discussion sort of back and forth between the Iranians and the Gulf partners.

DEAN: Yes. And so knowing all of this, I'm curious what you think. I think to a lot of people, they kind of look at this and it's just like, is this just a stalemate?

Like what -- what is this? Are we actually making progress toward an actual deal? Are we headed back toward more fighting? What would you say to that?

PLITSAS: Potentially yes to all the questions, just sort of take them one by one there. So if we're headed back towards conflict, potentially if this fails

and additional pressure is needed, that's possible. Additionally, what became clear in discussions with U.S. officials and folks in the region is that there was, in fact, a split inside of Iran where the elements of the IRGC, particularly its Commander Vahidi, who's been cited a lot, you know, was forcefully opposed to some of the terms of the agreement, wanted to maintain the pressure on the Strait of Hormuz, and in particular, to apply some leverage over the civilian government. So they didn't coalesce around a position there.

So if they do not get there, there's a chance that there could be strikes against additional officials who are standing in the way of talks.

Also, the U.S. could end up striking infrastructure around the Gulf that could be used for offensive operations against shipping that's there, which would be quite the operation.

[17:09:48]

PLITSAS: We now have a third aircraft carrier on station, the George H.W. Bush has showed up. It's supposed to relieve the carrier, the Ford, which will be the longest deployment for the Ford, that is, since Vietnam for any aircraft carrier.

But there will be some overlap, so provides a lot of firepower for a short period.

However, the president said, you know, it doesn't mean an immediate return to war. So we're told they were making some progress in the background. But the president's been clear that he doesn't think domestic enrichment is appropriate.

There's been talk about a 20-year moratorium on that and not an overall moratorium, you know, in perpetuity. And then there could be on the back end of that a potential for some domestic enrichment. That's kind of all been up for discussion.

And then there's obviously the 440 kilograms of highly-enriched uranium at 60 percent that was on its way towards weaponization that President Trump has made clear he wants out of the country. But the Iranians have said that they weren't willing to give it up yet.

So those were the two major sticking points that couldn't be breached before the conflict started that brought us here. If we can get some movement, perhaps we prevent it. If not, you know, we could end up back in a fresh round of fighting.

DEAN: Yes. And that kind of -- I mean, that -- there it is right there.

I do want to ask you, before I let you go. In weeks past, we talked about your friend Shelly Kittleson, who had been kidnaped in Iraq. She is now free. She has written an incredible piece about her experience.

I just want to get an update from you about how her case is going, how she's doing, and just what your thoughts are now that she's safely out of there.

PLITSASA: She is, you know, remarkably resilient, wonderful human being. I got to see her overseas after she had left the region, after she had been evacuated by U.S. officials. She's, you know, trying to recover. You know, she did sustain some injuries, some fractured ribs, a number of them.

She was brutally assaulted on the first day that she was taken. She mentioned that on the air, so I'm not revealing something confidential. She's talked about that now.

And then, you know, she did endure some horrific captivity there, but she is remarkably resilient. She's doing well.

She's actually in Washington. Shell be at the correspondents dinner tonight and we'll be seeing her throughout the weekend.

So really happy and thankful that she's back. So grateful to all the U.S. officials who worked very hard. And to all of our colleagues across the media who kept the case fresh, front and center and ensured that she was released.

DEAN: We're so glad that she is safely back. That is just excellent news, Alex. And I know you had a heavy hand in that as well.

Thank you so much for being with us. We appreciate it.

PLITSAS: Thank you. Thank you.

DEAN: And still ahead, it's the annual White House Correspondents' Dinner. President Trump will be making his first appearance ever as sitting president.

And the big question is what is it going to be like in there, considering his years' long conflicts with the media.

Plus devastating destruction after tornadoes ripped through the central U.S. Now that area facing more severe weather threats, including tornado watches that are in effect as we speak. More on that when we come back.

You're in the CNN NEWSROOM.

[17:12:32]

(COMMERCIAL BREAK)

DEAN: Tonight, President Trump will appear with the press at the White House Correspondents' Dinner. A lot of people wondering what he's going to say when he delivers the keynote speech.

This annual dinner celebrates the First Amendment. It honors the press. It's an institution the president has often attacked, sued, insulted.

He's boycotted the event every year he's been in the Oval Office, breaking a presidential tradition that began back in 1924.

The last time he attended the dinner was 2011, when the world knew him only as a real estate mogul, the host of "The Apprentice". You'll also remember it was when then-President Obama and comedian Seth Meyers joked about President Trump -- now President Trump -- running for the White House.

(BEGIN VIDEO CLIP)

BARACK OBAMA, FORMER PRESIDENT OF THE UNITED STATES: Say what you will about Mr. Trump. He certainly would bring some change to the White House. Let's see what we've got up there.

SETH MEYERS, COMEDIAN: Donald Trump has been saying that he will run for president as a Republican, which is surprising since I just assumed he was running as a joke.

(END VIDEO CLIP)

DEAN: All right.

CNN's Sara Sidner is there on the Red Carpet, joining us from the White House Correspondents' Dinner.

Sara, ok, we just set the stage for what is a really unique situation. Obviously, with presidents and press, there is always some tension. But what President Trump has with the press is so different and so -- more exaggerated, again, with the lawsuits and the insults, all of it.

What are we expecting tonight?

SARA SIDNER, CNN SENIOR NATIONAL CORRESPONDENT: Look, it's more combative. It's more nasty -- the relationship. And the president has brought a lot of that to the fore the way he talks about female correspondents in particular. We saw some of the words he used against female correspondents. So the tension is real.

But this is also a celebration. It is a celebration of the First Amendment. There is a reason why it's a First Amendment, you know, it was thought to be one of the most important things about our country that needed to be stated, needed to be put down as part of our constitutional right. And that is the freedom of the press, free speech.

And so what you have here is kind of a confluence of those who are here who are here celebrating free speech, the freedom of the press. And it's a hard job as despite what people may think, there is a lot that goes into it.

[17:19:44]

SIDNER: The White House Correspondents Corps, you know, here inviting President Trump. That caused a bit of controversy, as you well know. There are some who have decided not to attend this particular White House Correspondents' Dinner because of the way in which the president has come after the press. However, this is supposed to be a celebration. Things are a little bit

different this year.

You are seeing some of the same scenes, though. You're seeing behind me the Red Carpet. I'm just going to turn around real quick to see who we got standing there.

It looks like a lot of young people who are here, but there are all sorts of manners of people who will be coming through here, and we'll bring that to you throughout the evening.

But we are going to see something a little different. Usually there is a comedian and that comedian usually roasts the heck out of the president and the press. No one is spared.

This time a bit different. There's a mentalist. And I don't know if you've seen this gentleman, but he is incredible. He gets into your mind. So I'll be curious what he does with President Trump and the press when he performs his thing.

But yes, there's a little bit of tension, of course. People here wondering exactly what they're going to hear when the president himself speaks and what they're going to hear from others who stand up and speak, because there are those lawsuits that have been brought against many of the different -- especially when it comes to the television news folks.

But at this point in time, there is still a sense of celebration here, because this is a tradition here in Washington. And people are here for the tradition of honoring the First Amendment.

DEAN: Certainly.

And I met Oz Pearlman last night. And yes, the whole time I was thinking, is he in my head? Does he know what I'm thinking? I'm not sure.

But it will be so interesting to see what happens tonight. He was kind of previewing his -- what his performance will be like. So that will be a lot of dynamics at play.

Sara Sidner from the Red Carpet, thank you so much for that.

SIDNER: Yes.

DEAN: And joining us now Tia Mitchell, the Washington bureau chief for the Atlanta Journal-Constitution. Tia it's great to see you. Thanks for being here with us.

Sara just laid out so much of what everyone's walking into tonight at this event. The president obviously deciding to attend after years of having not attended as president.

What are -- what do you know about that decision and what are they hoping to achieve by him going tonight? TIA MITCHELL, WASHINGTON BUREAU CHIEF, ATLANTA JOURNAL-CONSTITUTION:

Yes, I think it is an interesting decision this year for the president to come.

And I think, you know, based on what we've heard and based on what we've seen from him in recent days, I think he wants to go almost to prove to the world that he's not scared. And to put on this, you know, air of I'm the leader, I'm the president, I'm in command. I've got this.

And I think he's going to try his best to portray that both in his presence at the White House Correspondents Association dinner and perhaps in his remarks.

So, you know, we'll be listening to see. Of course, the president normally pokes fun at the press, but it's usually, you know, jokes that people can laugh at and move on the next day.

We'll see how biting his commentary is toward the press as they're in the room.

And if, you know, the other thing is usually by the end of the president's remarks, they get serious and they talk about, you know, the press playing a role in our democracy and their respect for the press and their respect for the people who kind of do this work for the greater good.

We'll see if there are any types of those remarks from the president. If he gives the press, you know, any nod of respect or if it's all kind of combative and showing the press who's the boss?

DEAN: Yes. I mean, it is -- that's just a big question I think, for everyone. And what happens is members of the White House Press Corps are awarded awards for their reporting throughout the year. And typically, the president presents those awards. And these are often people he has berated or said things about or represent news organizations that he's sued or said things about.

And so that is going to be just -- you know, again, I can't underscore enough -- there's a big question mark around how that's all going to play out in that room.

MITCHELL: Right. And I mean, I think what people who may not watch this closely. Yes, the president is normally there. Yes, there's usually a comedian that pokes fun at the president and the press.

But in addition to the awards, there are also scholarship recipients --

DEAN: Right.

MITCHELL: -- dozens of them that are recognized and they get to attend the dinner. Of course, the leaders of the White House Correspondents Association get to give remarks and talk about the year they've had leading the White House Press Corps. So usually the focus is not so much on even the president's

attendance. Yes, his remarks always are newsworthy because he's the president.

[17:24:47]

MITCHELL: But the fact that the president is there to celebrate with the media usually is not like the biggest thing of the night, particularly for the journalists in the room.

Of course, usually there are celebrities and other things like that, but the dynamics are just so different this year.

Last year, I would say the dynamics were different because the president wasn't there, but he had been so combative with the media and instituted all these changes that really hindered the role or hindered us journalists from doing our job.

So now it's that same climate, but with President Trump in the room. And I think it is going to be really interesting to see how -- if he tries to take all that, suck all the attention out of the room, or if he decides to kind of play along with kind of the -- the usual way things go at the White House Correspondents' Dinner.

DEAN: Yes, it is just going to be quite interesting. And look as Sara and you have both noted, there's also really serious things. I mean, we're at -- we're at war.

Well, there's a ceasefire, but we're at war with Iran. There are rising gas prices. There are a lot of issues that are very serious that are happening right now as well.

So also, we'll see if he speaks on any of that. We just don't know. We're going to find out.

MITCHELL: Yes. I mean, I think one of the biggest things that people are looking to see is his balance between the serious and the humorous.

And when he does decide to poke fun or give digs, how cutting is he? How personal is he about individual journalists in the room?

And again, is the tone all in fun? Or, you know, there are concerns that he's going to try to humiliate and berate the journalists in the room. You know, we don't know which approach he will take.

And I think there's so much, so much attention on his remarks that there's going to be a lot of, you know armchair quarterbacking after the fact, depending on which approach the president takes.

DEAN: All right. Tia Mitchell, it is always great to have you. Thank you so much.

MITCHELL: Thanks having me.

DEAN: And you can watch the "WHITE HOUSE CORRESPONDENTS' DINNER" special right here on CNN. It starts at 8:00 p.m. -- our coverage does. And then we will bring you those remarks.

We'll be right back.

[17:27:14]

(COMMERCIAL BREAK)

[17:31:43]

DEAN: The central United States is in the midst of several days of severe storms, multiple tornadoes, including a violent EF-4, and heavy rain hitting that region. A massive cleanup is underway in Enid, Oklahoma, where those EF-4 winds severely damaged structures and overturned cars, as you see there.

Authorities say some areas are flattened, and it could take years to fully build back. Smaller storms and tennis ball sized hail causing significant damage to the southern part of the state. Multiple people were injured, but state officials say it is a miracle that so far, no deaths have been reported.

So, take a look at where the storm is right now, a level four of five. severe thunderstorm risk in place for southeastern Oklahoma. The governor there has declared a disaster emergency for Garfield and Kay Counties, as Sunday and Monday could be the most potent days of severe weather.

Let's bring in the mayor of Tulsa, Oklahoma, Monroe Nichols. He joins us now.

Mayor, thank you so much for being here with us. Obviously, Tulsa is a highly populated city there in Oklahoma, which makes these even scarier, because they can do even more damage. How are things right now?

MONROE NICHOLS, MAYOR OF TULSA, OKLAHOMA: Things are great right now. Thank you for having us on covering this. Our thoughts and prayers are our friends in Enid, Oklahoma and Ponca City and McAllister who really bore the brunt of the storms, just yesterday.

But things are going well now. We are getting ready to stand up our Emergency Operations Center. The Southern tip of Tulsa County is now under a tornado watch, but we are -- we are -- we are going to be, you know, prepared for what comes next, and just really hoping one that the weather is not as severe as we think, but if it is, the citizens here, we are ready to hunker down and make sure we can weather through the storm.

DEAN: Yes, one of the unique things about this is that it's not just one line of storms. It's that you are having multiple days of this. People can get, you know, first of all, you are -- you can get multiple hits from in places. But also, people can get fatigued from, you know, taking these warnings and watches seriously. What are you guys trying to do to make sure that everybody is, you know, takes this seriously throughout this entire span? NICHOLS: Yes, it's absolutely true. I mean, the culture in Oklahoma is when you get tornado watches and warnings, it's, you know, it's something that you kind of get all the time. But I think the videos and what we have seen in Enid have been proof positive that you got to take these things seriously.

And so, what we are telling citizens is that, you know, when you get these warnings, when these storms are coming through, we got to take them seriously. I am just really grateful that we haven't had a loss of life in the state with the storms the other day. I think anybody who saw the video and the pictures from the tornado yesterday, you would be surprised by that, right?

And so, it's really critical that people do take the necessary precautions. We are watching it closely. Obviously, we have the best professionals in Tulsa. We have averaged a major disaster once a year for the last decade. So, it's nothing new for us. So, preparedness is a big part of it, but the other big part is making sure our citizens heed those warnings when they come out.

DEAN: Yes, and what about the coordination between, as you mentioned, you know, city officials, county officials, state officials, even the federal government, where they can step in and help if they need to. What's that been like?

[17:35:04]

NICHOLS: Yes, it's been great. I mean, we have a great relationship with Tulsa County. We have had a great relationship with the state. In fact, when we had the tornado blow through earlier this year, the state emergency management director was here on site. And so, we work together.

The one thing about Oklahoma, as I said, we are not -- we are not new to this. We understand it. And no matter what's going on in the political landscape, we come together during storms. And I think our state is better prepared than probably most, because we get them so often.

So, the coordination is key. The coordination is strong, and we all prioritize the safety of our residents here in the State of Oklahoma. And Tulsa County, we are ready for it, but we certainly want to make sure the first line of defense is people taking the necessary precautions when they get the warnings.

DEAN: Absolutely. And hopefully they do that.

Mayor Monroe Nichols, thanks for your time. Good luck. Stay safe. Thank you.

NICHOLS: Absolutely. Thank you.

DEAN: And still to come, President Trump says he is considering a bailout for Spirit Airlines, if it's at the right price. What that could mean for consumers regardless of which airline you fly. That's just ahead in CNN NEWSROOM. Plus, from encouraging the prosecution of his political opponents to launching a war unilaterally, President Trump has pushed the bounds of presidential authority, but he's hardly the first president to do so, and tomorrow night, tune in for a brand-new CNN special, in which Fareed Zakaria examines how presidents on both sides of the aisle laid the groundwork for today's modern imperial presidency. Here is a preview.

(BEGIN VIDEOTAPE)

FAREED ZAKARIA, CNN HOST: Not so long ago, it was the Republican Party that was rising up in protest over a president they said was acting like a king.

WOLF BLITZER, CNN HOST: The imperial president, the autocratic leader --

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Some Republicans call him the imperial president that he is using executive powers to go beyond his true authority.

ZAKARIA (voice over): The imperial president they were talking about, Barack Obama.

And in a way, the Republicans had a point.

BARACK OBAMA, 44TH PRESIDENT OF THE UNITED STATES: We can't wait for an increasingly dysfunctional Congress to do its job. Where they won't act, I will.

There we go.

ZAKARIA (voice over): President Obama was transforming the country, often with the stroke of a pen and without Congress.

OBAMA: Thank you.

ZAKARIA (voice over): It was a shocking turnaround for the former constitutional law professor, who on the campaign trail, had blasted George W. Bush's aggressive use of executive power.

OBAMA: We have paid a heavy price for having a president whose priority is expanding his own power. The constitution is treated like a nuisance.

(END VIDEOTAPE)

DEAN: "THE IMPERIAL PRESIDENCY: A FAREED ZAKARIA SPECIAL" airs tomorrow night at 8:00 p.m. Eastern, only here on CNN. You can stream the next day on our CNN app.

(COMMERCIAL BREAK)

[17:42:37]

DEAN: Jet fuel prices are soaring due to the war in Iran. It could ultimately ground Spirit Airlines for good. The ultra-low fare carrier, now turning to the Trump administration for help.

Spirit is currently in bankruptcy protection for the second time in as many years. And on Thursday, attorneys for the struggling airline told a judge, they are close to getting a bailout from the federal government, a deal that could give them $500 million to stay afloat. But the government taking a state -- a stake in Spirit.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I think we just buy it. We would be getting it virtually debt free. They have some good aircraft, have good assets, and when the price of oil goes down, we'll sell it for a profit.

(END VIDEO CLIP)

DEAN: Joining us now, professor of business, economics and public policy at the Wharton School of the University of Pennsylvania, Kent Smetters. He is also a faculty research fellow at the National Bureau of Economic Research, and a former Deputy Assistant Secretary for Economic Policy at the Treasury Department.

Thank you so much for being here with us. What do you think about this idea --

(CROSSTALK)

KENT SMETTERS, PROFESSOR, BUSINESS ECONOMICS AND PUBLIC POLICY, PENN WHARTON SCHOOL: Good to be here.

DEAN: Yes, it's nice to have you. To bail out Spirit Airlines and what the president just laid out there. How likely is that?

SMETTERS: Yes, the government's proposal right now is to give Spirit Airlines about $500 million for a 90 percent ownership share. But the problem is that Spirit Airlines shortfalls are really large. They have about $6 billion in assets, $8 billion dollars in liabilities.

And given where the price of gasoline is right now, given where their other costs are, this $500 million may keep them alive for another five months or so. That would be on the high end. And so, it's not going to keep them alive for very long.

DEAN: Yes. And how much of a responsibility is it of the American governments to keep a private company like Spirit afloat?

SMETTERS: Yes, it's a great question. I mean, the fact to the matter is discount airlines are barely profitable to begin with. I mean, there is a reason for that. They are easy to come and go that's been throughout history.

Now, Spirit Airlines could argue that, listen, their potential buyout by JetBlue during the Biden administration was blocked.

[17:45:00] It was the first time, it was that anything was blocked, and the airlines used an antitrust law, usual -- usually, other mergers in the past skirted the whole issue by giving up stuff. But Spirit Airlines was kind of too small to even give up stuff to make the merger happen.

And so, they could argue, listen, the government kind of screwed us over this way. And so, now, it's their job to kind of bail us out.

Having said this, the fact of the matter remains that low budget airlines are very unprofitable to begin with, because they are very easy to come and go. And then, Spirit Airlines did make some choices that really inflated their costs. Supposed to be a low-cost airline, and they didn't always act that way in terms of their operations.

DEAN: And the government has ended up profiting from some of its bailouts. Many banks, Fannie, Mae, Freddie Mac. It also lost about $12 billion bailing out G.M. and Chrysler.

SMETTERS: Right.

DEAN: Either way, like, the American taxpayer isn't getting money, per se, in their -- in their wallet, but it is certainly tax dollars that are being spent on these sorts of things.

Do you see an airline bailout being profitable in the end? It sounds like based on what you are talking about, it could be really tricky.

SMETTERS: Right. And I don't see, at least, the current offer and the current restructuring idea being profitable to the U.S. taxpayer.

Just to put this in context, in terms of the actual aircraft that Spirit actually owns, not things that they are leasing, that amounts to only about $500 million of aircraft. They only have about 20 that they actually own. And most of that is already serving as collateral for debt.

So, it's not as easy as might seem, just to get rid of that stuff.

And so, it would have to be a dramatic turnaround. And on top of that, pretty hard to keep sustainable, given that all the other airlines have gone and offering low-cost tickets as well.

It's very different than some of the bails that happened the financial crisis, where a lot of those firms still had pretty large remotes, pretty large gates -- barriers to entry for competition. And so, almost certainly, this type of bailout is not going to make the government or the taxpayer money.

DEAN: All right, interesting stuff. Kent Smetters, thanks for your expertise there. We appreciate it.

SMETTERS: Pleasure.

DEAN: Thanks.

Still ahead, the billionaire backlash over New York City Mayor Zohran Mamdani's plan to tax the ultra-wealthy. You are in the CNN NEWSROOM,

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[17:52:15]

DEAN: New York City Mayor Zohran Mamdani is moving forward with his plans to tax the rich. Recently releasing a video promoting his and Governor Kathy Hochul's new tax proposal, aimed at taxing luxury second homes. But in that video, he singled out Citadel CEO Ken Griffin's $238 million penthouse.

In an e-mail sent to employees Thursday, Griffin COO called Mamdani's reference shameful, and implied Griffin's hedge fund firm might consider pulling the plug on a $6 billion Midtown construction project.

Let's bring in CNN's Gloria Pazmino now.

Gloria, this was a very pointed standing in front of someone's home, singling them out. What else are you learning about all of this?

GLORIA PAZMINO, CNN NEWSOURCE NATIONAL CORRESPONDENT: Yes, Jessica. And I actually think this moment sort of lays out the very delicate balance that this mayor and this governor have to strike as they pursue tax increases on the wealthy, and we are seeing this very strong response, not just from one very specific wealthy person, but also a larger business community that is saying they are very concerned about this and even threatening to take action and essentially take their business elsewhere.

So, let's start at the beginning. It started with the social media video that the mayor, Zohran Mamdani made, as you said, outside the home of Ken Griffin, talking about Kathy Hochul's proposal for a pied- a-terre tax, that is a tax on ultra wealthy, expensive second homes here in New York City.

And Ken Griffin actually made history. He broke a world record back in 2019, when he purchased that home at $238 million at the time, it was the most expensive home sale in U.S. history.

And so, Mamdani stood outside of his apartment to make a point about people like Griffin, who can afford to have these types of second and even third homes in some instances, but they do not have to pay additional taxes.

Now, as you remember, Mamdani campaigned on a promise to raise taxes on the wealthy, but the very important detail is that he doesn't actually have the power to do that. It's the governor and the state legislature who can raise taxes on New Yorkers, and the governor has been opposed to taxing the wealthy.

So, she is thrown out this other option, taxing these ultra luxury properties as a way to raise revenue for the city, which is facing a $5 billion deficit. Now, that got the attention of Citadel, which is a major hedge fund here in the United States, and this is part of what they said in a letter to employees. "The mayor has once again manifested the ignorance and disdain of the elite political class towards those who have been consistently committed to building one of the greatest cities in the world."

[17:55:10]

And in that same letter, Citadel, suggested that they might give a second thought to a construction project that would bring thousands of jobs and. millions of dollars in investment to New York City. Here is how the mayor responded.

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ZOHRAN MAMDANI, MAYOR OF NEW YORK CITY: As mayor, I will continue to work with business leaders, including Mr. Griffin, as partners in building a city that continues to be the economic engine, not just of this state, but also of this country. And none of that negates the fact that we have a tax system that is fundamentally broken, and one that is part of the reason why we live in both the wealthiest city and the wealthiest country in the history of the world, and also a city where one in four New Yorkers are living in poverty.

(END VIDEO CLIP)

PAZMINO: Now, Jessica, part of what Citadel and others in the business community have been saying is we do other things, in their view, to support the health and the economy of the city. And in their view, they do believe that they are contributing. This is, of course, far from being over. The pied-a-terre tax is still being negotiated and the state budget has not yet been finalized. Jessica?

DEAN: All right. Gloria Pazmino, thank you for that.

President Trump tells Iran, the U.S. is one call away, after pulling the plug on peace talks in Pakistan. What we know about the new paper, he says the Iranians have since proposed. You are in the CNN NEWSROOM.

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