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CNN This Morning

Turkey and Syria Continue Recovery and Rescue Efforts after Devastating Earthquake; President Biden Preparing to Deliver State of the Union Address to Split Congress; North Dakota City Council Votes against Chinese Company Building Corn Mill; LeBron James on Brink of Breaking NBA's All Time Scoring Record; Yellen: No Recession When Unemployment This Low, 500k Jobs Added; Yellen: Failure To Raise Debt Ceiling Would Lead To "Catastrophe"; Biden To Focus On Economic Outlook At State Of The Union. Aired 8-8:30a ET

Aired February 07, 2023 - 08:00   ET

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

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DON LEMON, CNN ANCHOR: Good morning. Time is running out to find survivors in the rubble of a deadly quake, the one that's taken nearly 5,000 lives so far in Turkey and Syria. CNN is there.

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UNIDENTIFIED MALE: Madam Speaker, the president of the United States.

(APPLAUSE)

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KAITLAN COLLINS, CNN ANCHOR: We're live on Capitol Hill where tonight President Biden will deliver his State of the Union address. What he'll focus on and who will be in attendance.

HARLOW: One topic the president will likely address, the spy balloon from China. New CNN reporting reveals why the Trump administration apparently did not notice spy balloons over the United States during their term.

LEMON: New this morning, Ukraine hints at the ability to strike Russian territory, another significant escalation in the nearly year- old war.

COLLINS: Also here on Capitol Hill today, a hearing into the nationwide travel issues, including the near miss between a FedEx plane and a Southwest flight that came within 100 feet of disaster.

CNN THIS MORNING starts right now.

LEMON: But we are going to begin in Turkey and Syria where countless people are still trapped beneath the mountains of rubble.

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(SHOUTING)

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LEMON: Dramatic video shows rescuers pulling a boy out of a collapsed building by his feet. That's in Syria. The Syrian White Helmets say hundreds of families are still buried under debris from yesterday's catastrophic quake. The death toll has now topped 5,000 people. Search and rescue teams have a colossal task in front of them. There are thousands upon thousands of collapsed buildings like these to dig through. Freezing temperatures, powerful aftershocks have slowed down rescue efforts and made the situation even more dire.

Straight now to CNN's Nick Paton Walsh live for us on the ground in Turkey near the disaster zone. Nick, what's the latest?

NICK PATON WALSH, CNN INTERNATIONAL SECURITY EDITOR: Yes, you can see, Don, the sign for Kahramanmaras behind me, the town hit closest to the epicenter of this startling tragedy. Turkey is simply just getting its head around it at the moment. Now, this is one the major problem about getting aid. The road ahead of us, part of its road missing because the damage done by the quake, and that's causing a delay in getting urgent aid, urgently getting people out, frankly, of some of the areas. We have seen the road here jammed with people getting out. in fact, on the sides of it, because of the appalling weather, people have been in car accidents.

But startling numbers here. We have gone from 24 hours ago a few hundred to now over 5,000 deaths, over 20,000 injured. As I say, the weather, a real problem here. Now, to be clear, we have had intermittent horizontal snowstorms coming at us here. And you can hear sirens now on the road. We have seen three, four ambulances rushing past. We think that's from the epicenter town impacted that we are not far from. But this is across the border of Turkey with Syria, a consistent disaster. The town of Atey (ph) significantly hit further east as well, Diavaclir (ph) hit too. And that is inside Turkey which has declared a state of emergency for three months in the areas worst hit.

But it's across the border in Syria, you do have to remember that they don't have the same infrastructure, the same rescue resources here. They have been beleaguered by years of war. And now the U.N. is saying they're going to have to slow down or halt temporarily the supply of food aid. You see a constant stream of excavators trying to get people out. Another ambulance here coming behind me, part of this effort wherever you look, frankly. You see the insurgency to push through traffic.

This is the problem, really, because it's the delay, it's the damage done, it's the weather which is making it hard for Turkey, reasonably well versed, prepared for something like this, to be able to get the people that it needs out of the rubble fast enough. They have a small urgent window here, particularly for children, particularly for more fragile caught under the rubble. The thousands of collapsed house that Turkey is just beginning to get an idea of now, that will get smaller and smaller, and the temperatures are far from a friend here, the bitter enemy they are fighting. Don? LEMON: Nick Paton Walsh live on the scene for us in Turkey. Thank you, Nick, I appreciate that.

[08:05:01]

COLLINS: And as we continue to monitor that, tonight President Biden is set to deliver his second State of the Union address, his first, though, with a GOP House majority. The president is expected to focus on his accomplishments and the path ahead before a divided Congress and a Republican House speaker who is going to be sitting over his left shoulder that is determined to block his agenda. The White House communications director Kate Bedingfield previewed the speech earlier last hour with Don.

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KATE BEDINGFIELD, WHITE HOUSE COMMUNICATIONS DIRECTOR: We are going to hear from him tonight about the things we have accomplished in the first two years that are making a difference in people's lives, 12 million jobs created during President Biden's first two years in office, historic low unemployment, wages going up, investments in our infrastructure, our roads and bridges, historic gun safety legislation. So, yes, the American people are going to hear directly from the president tonight about what we have accomplished in the first two years, but also about the path forward.

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COLLINS: And Kate Bedingfield said we should expect President Biden to also address police reform along with domestic terrorism, the rise of hate in America. Don and Poppy, often the State of the Union is one of the largest audiences that a president gets when they are in office. It's a moment for them to really talk about what they have accomplished. And we were talking about that ABC poll recently, that ABC-"Washington Post" poll says a lot of Americans don't feel that Biden has accomplished that much. The White House will be trying to change that tonight. You can kind of see their priorities reflected in who the guests that they're bringing are going to be. Don, as you mentioned earlier, the family of Tyre Nichols is going to be there, the Ukrainian ambassador to the U.S., Brandon Tsay, who disarmed the shooter in Monterey Park, Paul Pelosi among those notable names you will be sitting there.

HARLOW: And on the China front in that Zoom with Brian Deese yesterday at the White House, I was told you can expect him to speak very clearly on China, because, Kaitlan, I asked the White House after the balloon incident, has his position on China and any economic policies, et cetera, changed, and they were very clear how firm the president will be. So we'll see if they have updated that in the drafts.

LEMON: It's interesting to see how much influence that balloon has had on the culture and on politics --

HARLOW: I know.

LEMON: -- just over the last couple days.

HARLOW: James Comer told you, Kaitlan, it's what everyone's talking about.

LEMON: Also, Kaitlin, the families who were impacted by police violence are invited to the State of the Union as well. They were invited by the Congressional Black Caucus. So this is going to be probably more topics than in recent history to be handled by a sitting president who, quite frankly, doesn't have a very good approval rating, especially when it comes to the economy right now.

And we'll see how there is a balancing act between you talk about police reform. He wants to probably keep the police unions happy. People who are at home are concerned about crime but also people who want police reform. So that's going to be a delicate dance that he is walking tonight, among other things.

COLLINS: Yes, and also you see by the end of the speech they mention a lot of topics, because they want to make sure they get everything in. Of course, we're going to be watching it all here, we'll all be here on Capitol Hill tomorrow, and Anderson Cooper and Jake Tapper are going to be hosting live coverage tonight of President Biden's State of the Union address. That starts at 8:00 p.m. eastern.

HARLOW: New this morning, residents of Grand Forks, North Dakota, are worried, very worried, about Chinese spying, and they cheer a vote by their city council. Watch.

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UNIDENTIFIED MALE: All those in favor signify by saying aye.

CROWD: Aye.

UNIDENTIFIED MALE: Opposed, same sign. Motion carries unanimously.

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CROWD: USA! USA! USA!

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HARLOW: That was a unanimous vote by that city council to pull the plug on plans by Fufeng, a Chinese company, to build a corn mill in the city. The battle between residents and local officials raging for more than a year. Some were concerned about deepening economic ties with China. Many others speculated the facility could be used for spying on an Air force base less than 15 miles away. Last month a top Air Force official weighed in on the residents side, calling the Fufeng project, quote, "a significant threat to national security." The city council vote coming right on the heels of that suspected Chinese spy balloon shot down by the U.S. Air Force.

LEMON: Tonight, NBA fans are eagerly awaiting the Lakers game against the Oklahoma City Thunder, hoping to see thunder from LeBron James because he might make history tonight. LeBron is only 36 points away from becoming the NBA's all-time leading scorer.

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LEBRON JAMES, LOS ANGELES LAKERS FORWARD: That's insane for one individual to be on the brink of all-time scoring in NBA history and also top five all-time in assists, and he is not a point guard. It's truly remarkable for that to be accomplished. But it makes it weird for me when I think that it's actually me who is doing it. That makes it weird on me.

UNIDENTIFIED MALE: Has this been stressful at all, the chase?

[08:10:00]

JAMES: No. Because it was never a goal. It was never a journey. The stressful part for me is competing every single day to try to bring home the Larry O'Brien Trophy.

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LEMON: There you go. CNN's Omar Jimenez live in Los Angeles very early this morning, especially in the west. Omar, good morning to you. Listen, we don't want to get ahead of ourselves, we don't want to jinx anything, so fingers crossed, but you know as well as anyone, 36 points, that's, in game for LeBron, he can do it.

OMAR JIMENEZ, CNN CORRESPONDENT: Yes, look, for someone like me, I would be lucky to have 36 career points in the NBA. For LeBron, this is something he has done before. He is averaging 30 a game. He went for 46 last month. So anything is possible here.

But this is one of those once-in-a-generation milestones if they even come at all. LeBron wasn't even born the last time this record was set by Kareem Abdul-Jabbar, and he has even said, LeBron has even said that this is one of those records you don't think or believe will ever be broken, yet here he is. And for good reason. We are talking more than 38,000 career points at the highest level of basketball, over 20 seasons in the NBA. And a lot of people think it is going to happen tonight. Take a look at the ticket prices. Tickets are going for, or reselling for hundreds of dollars in the way, way back. And if you want to sit courtside, we are talking tens of thousands of dollars, up to $75,000 just for the chance to see LeBron make history against a non-playoff team at this point. So people are coming to see the king again potentially make history.

LEMON: All right, Omar, we'll be there watching. Poppy will be watching.

HARLOW: I love that he got that assignment. Omar, thank you.

Coming up, after a blockbuster jobs report, should be worried about a recession? And does it mean the Fed is going to need to hike interest rates even more than expected. Next, we are joined by one of the Fed presidents who gets to make that call. Neel Kashkari is here.

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JANET YELLEN, U.S., SECRETARY TREASURY: You don't have a recession when you have 500,000 jobs and the lowest unemployment rate in more than 50 years. So, what I see is a path in which inflation is declining significantly, and the economy is remaining strong.

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POPPY HARLOW, CNN ANCHOR: What recession? That was Treasury Secretary Janet Yellen saying the probability of a U.S. recession is low this year after the U.S. economy added more than half a million jobs in January. It shocked pretty much everyone including our next guest. So, does that blockbuster jobs report mean the Fed needs to hike interest rates more? Let's ask someone in charge of that. President of the Minneapolis Federal Reserve, Neel Kashkari, one of the Fed officials who gets to make that call. Good morning,

NEEL KASHKARI, FORMER INTERIM ASSISTANT SECRETARY OF THE TREASURY FOR FINANCIAL STABILITY: Good morning.

HARLOW: So, does it mean that? Does it mean you're going to have to hike more aggressively, maybe longer?

KASHKARI: It tells me that we still have more work to do. We're not seeing much of an impact of the hikes that we've done over the last year, yet showing up in the job market. We want Americans to find work, we want their wages to be strong. But right now, the labor market, the job market is actually too hot, that's going to make it harder to bring inflation back down.

HARLOW: More work to do, translate that to Main Street means. More rate hikes than you thought?

KASHKARI: More rate hikes or at least holding them at a higher level for longer.

HARLOW: How high?

KASHKARI: Well, I've penciled in going as high as 5.4 percent. I'm a little bit on the higher end than some of my colleagues. Ultimately the committee will deliberate, look at the data and make the call, but somewhere above five percent.

HARLOW: 5.4 percent, that's where you're at?

KASHKARI: That's where I have -- that's where I --

HARLOW: OK, so, the Biden administration, Biden will no doubt in the State of the Union tonight tout, lower inflation. A lot of your colleagues at the Fed see it that way. You don't see it as optimistically. Is the Biden administration wrong? KASHKARI: No, no question. Headline inflation is down. That's the prices we pay for food, for gasoline.

HARLOW: But wage growth.

KASHKARI: But wage -- if you strip it along, there are different components of inflation. There's some good signs like if the prices you buy for goods are coming down, which is also good news. But the wage growth and the services part of the economy is still very, very strong, very hot. You know, you -- I got an airplane yesterday to fly from Minneapolis here to New York. Guess what? The planes are all full.

HARLOW: I know.

KASHKARI: Like the service as part of the economy --

HARLOW: Yes.

KASHKARI: -- is really tight right now.

HARLOW: OK, let's talk about inflation with this. We brought props.

KASHKARI: OK.

HARLOW: Thanks for our team who went to Whole Foods. This is how you think about inflation. This is lasagna. It's not the Stouffer's that you have.

KASHKARI: Not the -- it's not the Stouffer.

HARLOW: This is like a fancy real lasagna.

KASHKARI: Yes, that's true.

HARLOW: But talk to me about shopping for lasagna, and what it tells you about inflation.

KASHKARI: Well, I do the shopping. When the pandemic hit, I started doing all the shopping for my family to keep my family safe.

HARLOW: Yes.

KASHKARI: I would mask up and go out and have continued doing the shopping. So, I pay attention to grocery prices. And so, there's this large tray of lasagna that I used to buy that used to cost $16.00, now it's around $21.00. That's my own little measuring stick of how inflation is going. I love to see the prices of the food that we buy everyday --

HARLOW: Right.

KASKARI -- come back down.

HARLOW: An eggs and orange --

KASHKARI: An eggs.

HARLOW: -- juice. And we're not peaked yet?

KASHKARI: Well, it depends. Some of the -- some of the prices have come down, eggs has some unique things --

HARLOW: Yes.

KASHKARI: -- right on in the egg -- in the egg market. But the prices are still very high. The prices of fruit, the prices of vegetables, the prices of meats, they're not as high as they were.

HARLOW: Recession. Not only did Janet Yellen, the Treasury Secretary, sound very optimistic. The head of the IMF told 60 minutes on Sunday night, Kristalina Georgieva, they're -- the IMF now doesn't think the U.S. is going to fall into recession. Do you think the U.S. is going to fall into a recession?

KASHKARI: I'm not forecasting a recession. And here's the thing, the job market is stronger than I expected. Which means, it's less likely that we're going to be in recession. But it also means it's less likely that inflation is simply going to fall back down to two percent the way we need it to. And so, it's a little bit of a mixed signal.

HARLOW: That's kind of a weird way to live, isn't it? I mean, we haven't had something like that before. Is it possible that we could get inflation down without a significantly cooling labor market, or is that impossible?

KASHKARI: I wouldn't say it's impossible. I think we want to achieve what we call a soft landing, which is a gradual return to two percent inflation, where the labor market cools a little bit, but we avoid a recession. There's not -- but to be honest with you, there's not a great track record of pulling that off.

HARLOW: No.

KASHKARI: And that's what we're nervous about.

HARLOW: We also haven't had an economic situation like this before. A lot of it caused by a pandemic we haven't seen before. So, it is sort of all new uncharted territory.

KASHKARI: That's exactly right.

HARLOW: OK, let's talk debt ceiling. Right, not a fun topic, but a really necessary one. No doubt it'll come up tonight in the State of the Union. Secretary Yellen has, again, really warned about this, writing that letter to Speaker McCarthy a few weeks ago essentially saying, Congress do your job, and raise the debt ceiling. She says if they don't, there will be economic and financial catastrophe. How concerned are you, level one to 10, 10 being the most extreme of a -- of a default in June?

[08:20:19] KASHKARI: Well, a default would be a catastrophe. So, I absolutely agree with Secretary Yellen. I'm hopeful that the political leaders in Washington, the White House, the Treasury Secretary, Congress will come together, and come up with a solution. It's not for the Federal Reserve, we have no ability to affect this.

HARLOW: Right.

KASHKARI: It's up to the elected leaders to come together and reach an agreement and they need to.

HARLOW: Brian Moynihan, the CEO of Bank of America, told me yesterday on this program, Bank of America is, and I think every, you know, CEO is preparing contingency plans for potential default. Do you think it's more likely this time around than 2011, 2013?

KASHKARI: You know? I don't know. It's hard for me to gauge (INAUDIBLE)

HARLOW: You're not more worried given this situation in Congress?

KASHKARI: 2011 was also quite fraught. I think, politically, and I just I'm not a -- I can't read the political signs well enough to know, is this more dicey than it was in 2011.

HARLOW: Yes.

KASHKARI: But the stakes are -- the stakes are what Secretary Yellen said.

HARLOW: That high. Let's end on this. There's a lot of debate over whether it actually makes sense, even though Congress has the purse strings, for Congress to control this. Do you think the debt ceiling with Congress controlling it should still exist?

KASHKARI: Well, again, that's for the elected leaders and the voters to decide. Congress decides how much they want the executive branch to spend. And so, it's a little bit unusual that they would tell them to go spend this money, and then not give them the tools, but that ultimately is for the elected leaders to reach an agreement on.

HARLOW: Minneapolis Fed President Neel Kashkari, thank you.

KASHKARI: Thanks for having me.

HARLOW: I'll let you can take the lasagna. (INAUDIBLE) It's frozen, it'll last.

KASHKARI: Yes, hopefully, I can take it on the plane.

HARLOW: You can, thank you very much. We appreciate it. Don?

DON LEMON, CNN ANCHOR: Thank you, both. President Biden defending the decision to shoot down the Chinese spy balloon he has been facing criticism for his response from lawmakers on both sides of the aisle. Senator Tim Kaine joins us live with his take. That's next. [08:25:00]

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PRESIDENT JOE BIDEN, U.S. PRESIDENT: We did the right thing. And this is not a question of weakening or strengthening, it's just the reality.

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KAITLAN COLLINS, CNN ANCHOR: President Biden says the U.S. did the right thing in shooting down the Chinese suspected surveillance balloon. He maintained he always wanted to bring it down as soon as it was appropriate. Joining us now to talk about this is Democratic Senator Tim Kaine of Virginia, who is a member of the Foreign Relations Committee. And has just announced he is running for reelection in 2024. We'll talk politics in a moment. But I know there is that all senators classified briefing on this surveillance balloon on Thursday. What questions do you still have?

SEN. TIM KAINE (D-VA): Well, I think, finding out what China is up to the earlier instances of balloons over the United States during the last administration. How we put the dots together to figure this one out? What intelligence we collected from the balloon, because once the Biden administration realized it was there, we did things both to block it from gaining access to our information, but also to try to gather some intelligence from the balloon to figure out what China is up to. And then, obviously, anything that was recovered or has been recovered. What does that tell us about Chinese plans?

COLLINS: The President says he doesn't worry that this weakens U.S.- China relations. Do you think it does, though?

KAINE: Well, it shows the strain in their relations. I mean, look, it was incompetent, inexcusable, but very poorly timed, because China, by all accounts, was really looking forward to the Secretary Blinken visit. They have significant economic challenges. They want to maybe do a little bit of a reset in their relationship with the United States. And then this incompetent, you know, bungled effort kind of blew up in their face, and it shows the strains in the relationship. But look, the U.S.-China relationship is probably the most important bilateral relationship in the world for the next half-century or longer. And we want to figure out, we're going to be competitors and adversaries in some spaces, but are their areas where we can cooperate? We have to have communication to figure that out.

COLLINS: And we know President Biden will be speaking about China tonight in his State of the Union Address that he's giving here on Capitol Hill. It's a very important address for any president. It's one of the biggest T.V. audiences that they get. What do you think is important for him to say tonight?

KAINE: Well, I think it's important for him to just demonstrate American strength. And I think that it's not just words, the actions of the last year. Remember last year, the State of the Union happened just a few days after Russia invaded Ukraine. And what President Biden has done is assembled a global coalition of democracies willing to stand for Ukrainian democracy against an illegal invasion by a dictator. The message of that is not lost on Xi Jinping. The democracies of this world are not bystanders, they're not on their back foot, they're able to link arms against dictators, and certainly against dictators that are contemplating invasions. And I think President Biden needs to demonstrate the resolve of the United States, but also our ability to forge alliances that are strong.

COLLINS: One thing the White House also wants you to talk about are their legislative accomplishments. And they certainly have had some, but a new Washington Post-ABC poll showed that a majority of Americans don't believe he's achieved much since taking office. Why is that?

KAINE: You know, Kaitlan, I think there's still a COVID hangover. I mean, a million people died. And in that same time, we've had economic challenges. We've had an attack on the Capitol, we've had two impeachment trials, we've had racial justice protests, driven by really horrible instances of violence against folks by police. And just it's been a very, very difficult time. In my experience, I'm almost 65, is that during challenging times, people are a little bit wary about letting their hopes come up. And they're a little bit slow because in a time like this, they don't want to have their hopes dashed.

But what you've seen as President Biden, not only achieved legislative victories, but victories that are making a difference, prescription drug costs coming down for seniors, job growth, it's at record levels, record low unemployment, manufacturing back and booming. I see this all around Virginia, and a commitment to American infrastructure and research that's been unparalleled probably since the Eisenhower administration. So, I think as I go around Virginia, I think people are starting to get the hang of it. They don't yet.