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Crews Still Working to Clear Buffalo Roads; Flood Threats in Northeast; House Leadership Silent over Santos; Ringleader in Kidnapping Sentenced; Goldman Forecasts U.S. Likely to Avoid Recession; Doncic Makes NBA History. Aired 6:30-7a ET

Aired December 28, 2022 - 06:30   ET

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

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[06:34:00]

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UNIDENTIFIED MALE: This is ridiculous, you know. I feel like, yes, holiday travel is -- gets hectic, but cancelling flights for four days until the 1st for everybody, that's super -- I don't know, it's - it's really unfortunate.

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POPPY HARLOW, CNN ANCHOR: Unfortunate is an understatement.

Welcome back to CNN THIS MORNING this morning. We're glad you're with us.

Coming up, full fledge meltdown. That's a quote. And that is how one former high-ranking airline executive is describing Southwest Airlines' mass cancellations. What he thinks need to be done.

Plus, what to expect as another person involved in the plot to kidnap Michigan Governor Gretchen Whitmer prepares to be sentenced.

And my favorite story of the morning, how Dallas Mavericks Luka Doncic made history in a dominating win last night.

KAITLAN COLLINS, CNN ANCHOR: Also, the challenges are far from over this morning for the people who live in Buffalo, New York. The death toll has continued to climb as the authorities there are still checking on homes and cars for anyone who may have been stranded in the storm. At least 31 people have died in New York's Erie County as Buffalo itself is still digging out of the nearly 52 inches of snow that they saw and still learning the true extent of the loss and the damage.

[06:35:08]

CNN's Athena Jones is live in Buffalo this morning.

Athena, what are you seeing on the ground? I mean we see the snow behind you, but what are the authorities saying as they are trying to basically get out of that snow still?

ATHENA JONES, CNN NATIONAL CORRESPONDENT: Good morning, Kaitlan.

Well, the work is ahead -- a lot of work is ahead of this city to dig out from this storm. And that work is continuing already this -- early this morning. We've already seen three or four trucks roll by. One came coming right behind us to scoop part of the piles of snow you see behind us. But they did one pass. It's going to take several more passes. We're talking about, as you mentioned, more than four feet of snow piled up throughout this city.

And on the way in, one of the most remarkable and most frightening things we saw on our way in was some of these vehicles buried under several feet of snow. We know that some of those 31 deaths were in vehicles. People trapped in car. And so that's going to be the big concern going forward as the city continues to dig out.

I can tell you that officials have been focused, yes, on finding those people and on other lifesaving and life protecting measures. And so the big focus over the last two days and going forward has been to make sure that at least one lane of every single street in the city of Buffalo is cleared. And that will allow emergency operations to continue in a normal and a full way, also to allow supplies, you know, for grocery stores, drugstores and that sort of thing to be able to make it through the city.

One of the concern is about - about how warm it's going to be getting over the next few days. Right now it's above 32. That's freezing. I'm not the weather person, but I can tell you that the forecast shows that it's going to remain above freezing for the coming days. That should help with the cleanup. But there is some concern that with huge, huge amounts of snow piled up in certain areas, it could block drainage. So that's another one of the concerns.

But things look like they're going to begin to get back to normal here. We just saw a tweet from Buffalo's mayor saying that several bus lines in the city are going to be restored this morning and then, in a few hours, so will the rail lines. So they're going to be beginning to come back and dig out but we just don't know what is going to happen with that death toll and whether more people will be discovered, you know, buried under some of these mountains of snow we've been seeing, Kaitlan.

COLLINS: Yes, it's not going to be an easy recovery process.

Athena Jones, thank you for being there.

HARLOW: That is so terrifying.

This storm may be over, but you just heard Athena's reporting, because the question is, what is the death toll finally going to be, and also the snow is going to melt as it gets warmer and that could cause potential flooding in western New York.

Our meteorologist Chad Myers is with us.

You're from Buffalo, so you understand this better than anyone.

CHAD MYERS, AMS METEOROLOGIST: Yes.

HARLOW: You've got, what is it, 50 plus inches there.

MYERS: Yes.

HARLOW: And, when it melts, what's the flooding risk?

MYERS: Well, because the drains are clogged with the snow, all that water is going to end up in the street. And usually we see the freeze/thaw, freeze/thaw, where the streets just turn into a hockey rink. But we're not even going to get below 32 at night, so the freeze part is out of the question.

But all of this snow, from Ontario back to Watertown and Buffalo will all try to melt all at the same time. One more factor, the showers that you see here, Friday, Saturday, and again on Tuesday, there will be more rain on top of that snow trying to even wash it away rather quickly. And that's going to begin to raise the rivers and the creeks and the streams and, obviously, the streets as well.

A lot of rain coming down in parts of the west as well. Now, we really need it out here. Now, don't get me wrong, this is significant snow coming down here for the Rockies and also for the Sierra.

One of the computer models I looked at yesterday had over 300 inches of snow possible in the highest elevations around Yosemite. Now, I don't think we're going to get 300. That old thing, if a tree falls in the forest and nobody sees it, nobody hears it, did it really fall, did it many any noise? But will anybody see 300, no, because these have been in the extremely highest elevations. But you know what, Lake Mead, all those reservoirs, Orville (ph), all will take this runoff melt later in the spring.

HARLOW: Yes. Yes.

COLLINS: Yes.

HARLOW: They need it for sure.

MYERS: Yes. Absolutely.

HARLOW: Chad, thank you very much for the update.

MYERS: You're welcome.

HARLOW: Next, pretty much -- not total, but pretty much silence from House Republicans, it's certainly silence from House Republicans leadership, as outrage builds over the lies told by incoming New York Congressman George Santos.

COLLINS: And election denier Kari Lake has now been ordered by an Arizona judge to pay tens of thousands of dollars to the candidate who defeated her. We'll tell you why.

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[06:42:59]

COLLINS: It's been incredibly quiet at the top when it comes to House Republicans after Republican Congressman-elect George Santos admitted to a laundry list of falsehoods about his resume. At least two of his fellow incoming House Republicans are speaking out against him now as he is still vowing to be seated when Republicans take control of the House next week.

CNN's Eva McKend has been covering this story. She joins us now.

Eva, I imagine given the fact that we're not hearing a lot of criticism from top House Republicans means that he is likely not going to face any backlash from the leaders of his party over this litany of lies?

EVA MCKEND, CNN NATIONAL POLITICS REPORTER: Well, Kaitlan, there's certainly no indications that that is going to happen at this point. Two incoming Long Island House Republicans, though, have condemned the congressman-elect with one calling for a House Ethics Committee investigation and potentially a law enforcement probe too.

But, no, we're not hearing anything from House leadership. These lawmakers on Long Island speaking out because, you know, they'll represent districts in neighboring communities. One actually, in a neighboring district that includes West Bury, where I had the opportunity to travel to not long ago. And, you know, Kaitlan, I get the sense that they're speaking out because they're hearing from their constituents. Congressman-elect D'Esposito said neighbors across Long Island are deeply hurt and rightfully offended. Neither of them, though, notably are calling for him to step down. This scandal now entering its second week with just a steady drip of new revelations and the Republican leader, Kevin McCarthy, nothing to say. We also aren't hearing from other top House Republicans, like Steve Scalise or Elise Stefanik, who endorsed Santos.

Santos, of course, also under deep scrutiny for his comments about his alleged Jewish heritage. He was asked about this during a contentious Fox News interview last night.

Take a listen.

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GEORGE SANTOS (R), NEW YORK CONGRESSMAN-ELECT: My heritage is Jewish. I've always identified as Jewish. I was raised a practicing Catholic. I think I've gone through this. Even I've - not -- not being raised a practicing Jew, I've always joked with friends in circles, even with -- in the campaign I'd say, guys, I'm Jew-ish. Remember, I was raised Catholic.

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[06:45:09] MCKEND: So, the problem here is that his response on this has not been consistent. You know, he is now saying he's long maintained he is Jew- ish. But even the Republican Jewish Coalition says they were deceived and that he won't be welcome at any future events.

Kaitlan.

COLLINS: Yes, I'm going to guess part of the reason we have not heard from Kevin McCarthy is because he did previously say he would vote for Kevin McCarthy, and Kevin McCarthy needs every vote he can get when it comes to that speakership position.

Eva McKend, thank you so much.

HARLOW: Well, happening this morning, the final man convicted in the 2020 plot to kidnap Michigan's governor, Gretchen Whitmer, will be sentenced. A federal judge sentenced the architect of the plot, Adam Fox, to 16 years in prison on Tuesday.

Our Jean Casarez joins us now.

Good morning to you.

So, this -- this man we're talking about who's going to get sentenced this morning is Barry Croft, And I wonder what prosecutors are recommending.

JEAN CASAREZ, CNN CORRESPONDENT: Well, this is Barry Croft. So, we will see because they are very different and distinct. But Adam Fox was yesterday. This is who the government had said was the leader because he recruited, he sought out the vacation home of the governor, Gretchen Whitmer. He actually took measurements and raised the money. And he just furthered the whole plan. And remember, he was convicted, along with Barry Croft, of conspiracy to kidnap the governor of Michigan.

You know, the term of years was very, very wide and broad. The judge had a lot of discretion. Term of years versus life imprisonment. Of course, the government wanted life imprisonment.

One thing that helped them in theory was this leadership role because it allowed for more years. The fact that she was an official victim, the governor of Michigan, that helped them. And then also the fact that they were furthering terrorism gave them more years, 16 years.

We want to show others that have been convicted in all of this. Now, some of them are on the state level so you can't compare. But because of this leadership, one of the elements in criminal law and the federal level is that you have to have at least five followers. Well, these were all designated as followers yesterday in that courtroom to make Adam Fox the leader. But the government actually said there were about 13 followers in all.

The judge really spoke about why he made the decision he did. He didn't want the term of years too extreme. He wanted it necessary. One thing he said, and let's look at this, he said, quote, there is need for public understanding at the cost of this kind of wrongdoing and certainly for specific deterrents as well. And there is impact on our overall governmental system, not just the physical threat to our sitting governor, it's the emotional baggage that now our governor will have to carry.

And the defense in all this was saying that the childhood, the way he was raised, with no love, the mental issues, the substance abuse issues, that led to all this. And there were mitigating factors that actually helped him in this sentencing.

HARLOW: Well, that's - that's interesting.

Jean, thank you for laying this all out.

CASAREZ: Thank you.

HARLOW: We'll see what happens with that final sentencing this morning.

CASAREZ: Yes.

HARLOW: Ahead, why a major leading Wall Street bank says it's more likely we're going to avoid a recession in the United States next year.

COLLINS: Yes. News a lot of people want to hear.

Also this morning, CNN sitting down with parents who lost their son to fentanyl as they are turning their pain into action.

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UNIDENTIFIED MALE: What is it that goes through your mind before you step out onto the stage?

UNIDENTIFIED FEMALE: I hope we reach them. I see their faces. I just scan the room and they're listening and absorbing it. And I just think, God, please, let us reach them.

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[06:52:18]

HARLOW: Recession or not? That is the question. That's my Shakespearian twist.

COLLINS: Worst game ever.

HARLOW: Ha, it's the worst game ever.

After nearly a year of conflicting headlines about the economy, the question of whether the U.S. will enter a recession remains top of mind. We've heard warnings from experts and business leaders saying the worst is yet to come, but major Wall Street - a major Wall Street bank is now seeing things a little bit better. In a report this week Goldman Sachs writes, quote, our most out of consensus forecast for 2023 is our call that the U.S. will avoid a recession and instead continue progressing toward a soft landing.

I guarantee this is welcome news to the administration.

Our CNN business reporter Matt Egan joins us now.

So, I remember sitting down with David Solomon, the CEO of Goldman Sachs, what was it, like six months ago, who was pretty bearish. But now Goldman sees something better?

MATT EGAN, CNN REPORTER: Yes.

Well, Kaitlan and Poppy, it is so nice to be here with some positive news for a change after a pretty crazy year. I mean here we have the most powerful bank on Wall Street, right, Goldman Sachs. Their economics department coming out and taking a stand against this gloom and doom that we've been hearing. I mean we know that this economy has a problem, and that's high inflation. I mean it's like a disease. And we've had the Federal Reserve come in and they've been treating this disease with really heavy-duty medicine, right, interest rate hikes. And I think the concern all year has been that they're going to overmedicate the patient, right? They're going to pump it with so much medicine that it's going to collapse the economy into recession.

But Goldman Sachs is saying, you know, not so fast. They think the medicine is working, right? Inflation has come down. And they think that consumers are going to keep spending and the economy is going to actually avoid a recession. And there are some real positives in this economy, right? Inflation is cooling off. It's still high but it's cooling off. Gas prices are at 16-month lows. GDP is positive. And unemployment is really low.

You know, I looked up, just for you, Kaitlan, I looked up the unemployment rate in Alabama. So nationally -

HARLOW: Good job.

EGAN: Nationally it's 3.7 percent, which is low. Alabama, 2.7 percent. That's down from almost 14 percent in 2020. And, Poppy, in Minnesota, where you're from --

HARLOW: Oh, thanks for not leaving me out.

EGAN: I would never. It's 2.3 percent unemployment. That's tied for the second lowest in the country. So, these are really, really strong numbers.

COLLINS: So, when I was home for Christmas, I was telling Poppy, the main thing that I heard from family and friend was complaining about the price of eggs and how expensive things still are. You know, you were saying, inflation is still hot.

What are the other things that Goldman is looking at when they are predicting this? Is it supply chain recovery, inflation they think is going to ease up more? Like, what does that look like?

EGAN: Right. They think that the Fed's interest rate hikes are cooling inflation. They also talk about the supply chain improvements.

[06:55:00]

They just also think that wages are going to do better than people thought, right? Paychecks are starting to actually keep up with inflation, which is a big, important shift.

COLLINS: Yes.

EGAN: And so, in the future they think that people are going to actually going to continue to spend. We saw holiday shopping numbers that were just out showing that people are continuing to shop, right? You don't want to ever bet against the American consumers.

I do think that, you know, people need to be careful, right? I mean, you don't want to necessarily buy into all of the doom and gloom, but also you got to be careful, right? I mean this is probably not the best time to splurge on like a big purchase, on an appliance or a car that's out of your budget. It's never a good time to only make a minimum payment on your credit card. This is probably the worst time. Credit rates have never been higher, right?

HARLOW: Record, right?

EGAN: Right.

HARLOW: Yes.

EGAN: So, you do have to be careful. But I think there are some real reasons for optimism.

COLLINS: Yes.

HARLOW: I love this. Thanks for the -- can you come back daily with good news? We'll take it.

EGAN: I would love to.

COLLINS: That's what the audience is saying, too.

HARLOW: No, it's great. And this will be such welcome news to Powell and the administration. And I think maybe it will mean companies layoff less than they had been preparing for in 2023. It will be good.

EGAN: Right. Right. And I -- when I talk to White House officials, I mean they are preaching cautious optimism, right? I mean they don't think that there's going to be gangbusters growth next year -

HARLOW: Right.

EGAN: But they do think there's a real shot at a soft landing where recession doesn't happen and inflation does - does really come down.

HARLOW: Let's hope so.

Thank you, Matt.

EGAN: Thank you, guys.

HARLOW: Good to have you.

COLLINS: We'll see if they hit that soft landing.

HARLOW: We will see.

Preparations underway for New Year's Eve. You see many crystals there being installed on the Times Square New Year's Eve ball. Anderson and Andy are back for another global celebration. Join them "New Year's Eve Live" from Times Square starting 8:00 p.m. Eastern Saturday night right here on CNN. Don will join as well live from New Orleans.

OK, ahead, our coverage of Southwest Airlines meltdown continues. How cancellations are looking this morning. How officials plan to hold that airline accountable.

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HARLOW: Welcome back to CNN THIS MORNING.

In sports this morning, Mavericks' superstar Kuka Doncic leads a comeback for the ages. My favorite story of the morning. One of the greatest performances in NBA history.

Coy, the control room made sure that I knew how to pronounce Doncic. I'm married to a Serb. Of course I know how to pronounce Doncic.

COY WIRE, CNN SPORTS CORRESPONDENT: Of course you do.

HARLOW: And we're very happy in the Babcic household this morning about this.

WIRE: Oh, it's a great, great morning. Good to see both of you.

Christmas is over, but Luka Doncic is the gift that keeps on giving fans in Dallas. He became the first player in NBA history to record a 60 point, 20 rebound, 10 assist stat line in a game. The Mavs three- time all-star crushing the Knicks' hopes and dreams. The Mavs were down 9 with 33 seconds to go, but Doncic carries the team on his shoulder like Santa with a big bag of toys.

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He ties the game, watch this, by intentionally missing the free throw, grabbing his own rebound and getting the put back himself.