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CNN This Morning
Rep. Ro Khanna (D-CA) is Interviewed about the Debt Debate and Banking; Cross-Examination of E. Jean Carroll Concludes; Jeff Benedict is Interviewed on LeBron James and Steph Curry. Aired 6:30-7a ET
Aired May 02, 2023 - 06:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
POPPY HARLOW, CNN ANCHOR: Right, that said that that was excessive punishment, and what he just mentioned, a more recent decision, Louisiana versus - Kennedy versus Louisiana.
KAITLAN COLLINS, CNN ANCHOR: Yes, (INAUDIBLE).
HARLOW: But it's going to be one to watch for sure.
Congress is on a tight schedule to do something before the U.S. defaults on its debt in less than a month. What needs to be done before you are directly impacted? Congressman Ro Khanna here to discuss that in studio, next.
HARLOW: The clock is ticking, really ticking. Treasury Secretary Janet Yellen warns the United States could default on its debt as soon as June 1st. That is less than a month. In a letter to House Speaker Kevin McCarthy, Yellen writes, if Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position and raise questions about our ability to defend our national security interests. That severe hardship Yellen is talking about is increased borrowing costs, a jump in unemployment - we're talking about millions of jobs here -- your 401(k) could get hit really hard, federal benefits and salaries could be put in jeopardy.
The House and Senate are in a joint session for only eight more days before the 1st of June, that deadline. President Biden has invited Congress' top leaders to a meeting on Tuesday at the White House to talk about this, the debt ceiling and what they're going to do. Kevin McCarthy has accepted that decision.
So, let's bring in now Congressman Ro Khanna of California to talk about all of this. It's notable, too, we'll get to bank failures in a minute, but two of the big three bank failures we've seen since March are California banks.
So, thank you and good morning. Good to have you here.
REP. RO KHANNA (D-CA): Good to be here.
HARLOW: So, given this Yellen letter, I hope everyone reads every word and pays very close attention to it, especially the decision makers in Washington. Given that we're looking at June 1st for a possible default here if there's no deal, can you guarantee the American people we're not going to default?
KHANNA: Yes. I mean -
KHANNA: I mean, look, I don't think -- it would be so irresponsible. It would be a self-goal. I mean who doesn't pay their bills? We pay our bills as Americans. It's patriotic to pay our bills and I am confident that the president of the United States isn't going to let the country default. The Republicans are trying their best to make this an issue. I don't understand why they're acting the way they are. Just pay the bills and then we can discuss how to reduce the - the deficit.
HARLOW: Are there -- are there spending -- well, you know that's not what Republicans say they're willing to do. So, are you willing to agree to some spending cuts? McCarthy's proposal is rolling back a number of things to 2022 levels. Call it what you want, but it's a cut in what spending was going to be. Are you willing to agree to any of that to prevent a default?
KHANNA: I'm not willing to have a conversation under a hostage situation. When I was in Congress, and Donald Trump was president, I didn't disagree - I disagreed with a lot of his policies, but I voted to raise the debt ceiling. I voted to pay our bills. If Kevin McCarthy votes to pay our bills, then we can discuss how to have deficit reduction.
HARLOW: And you -
KHANNA: And in that we can discuss spending cuts, the biggest part being the defense budget. Almost a trillion dollars. Why aren't we talking about any cuts there?
HARLOW: Even Bernie Sanders told Dana Bash in their interview this weekend, I'm willing to look at other things. There's a lot of waste in government. You're telling me there is literally not a thing you would agree in in this Republican proposal to prevent a default for the American people? Not a thing?
KHANNA: Well - well, they're not connected. Of course there's a thing in --
HARLOW: Republicans are connecting them.
KHANNA: Well, they're doing it irresponsibly. It's never been done before. I mean, in Donald Trump, the Democrats voted again and again to raise the debt ceiling. It's like, if you have a credit card debt and, as a family, would you say, look, let's just not pay the debt, or would you say, let's pay the debt and then we can discuss what budget cuts we should make.
So, it's important to realize what they're doing. And they're doing it because they don't -- they want the president -- the economy to not do well. I mean people on record saying that.
HARLOW: I -- do you think that's fair, they want the economy to not do well?
KHANNA: Yes. Well - well, I don't understand why else they -- they're holding it hostage.
HARLOW: OK. I'm going to take that as a no, that you're - no -- zero agreement to any spending cuts even if we default. KHANNA: I'm open to spending cuts conversation after we pay our bills.
HARLOW: OK, so that's a -- let's move on to the banks, OK.
HARLOW: Because we just saw the three big U.S. banks fail since March. That is extraordinary. Do you expect more banks -- two of them in California. Do you expect more banks to fail this year?
KHANNA: I hope - hope not, but there I can't say with 100 percent confidence until, in my view, we have a guarantee on uninsured bank deposits. I mean I've been calling for that since March. We need to make sure that we have some guarantee on these deposits.
HARLOW: Well, let's explain to people why that matters. A lot of the money that was pulled out of First Republic, which failed over the weekend, is because a lot of the accounts had more than $250,000 in them, which is the threshold for FDIC insurance now, on paper at least. You're saying take the $8 trillion of uninsured deposit in this country and fully guarantee them, is that right?
KHANNA: I'm saying for the business accounts, not for the individual accounts. But for -- if you're a business and you have to make payroll, and you're uninsured, which is about $8 trillion, for them, make sure that you're guaranteed and charge them a fee on that account so that you don't have the situation, which is now happening where they're all going and putting their money in the big four banks in New York, as opposed to the regional banks.
HARLOW: Gary Cohn, who was the COO of Goldman Sachs, and then he was the top economic adviser to President Trump for a while, he disagrees with you, and here's why.
(BEGIN VIDEO CLIP)
GARY COHN, FORMER TRUMP ADMINISTRATION ECONOMIC ADVISER: I don't agree with Congressman Khanna that we want unlimited FDIC insurance. I think that, to me, is a bit of a race to the bottom.
MARGARET BRENNAN, CBS "FACE THE NATION": You had picked like 2 million, 5 million, 10 million. COHN: Yes. I mean there's got to be some limit. At some point you have
to limit because you don't want a total race to the bottom where, you know, the weakest bank with the weakest balance sheet in the world can offer you the highest rate of return on your deposits, and therefore you take your deposits there because, guess what, they're insured by the federal government.
COHEN: That's not what we want to see.
(END VIDEO CLIP)
HARLOW: Isn't that an important point, too?
KHANNA: Gary Cohn is thoughtful but he's wrong on this for two reasons. One, the FDIC itself has come out and said, let's look at having uninsured deposits insured in a major report just yesterday. Second, the shareholders are the ones that lose value. I mean no bank is going to be sitting there saying, yes, we should go and have shareholders wiped out to zero. Their incentive to make sure that they're responsible is the shareholders. They don't want to be wiped out. And, third, we need to increase oversight over these banks. If we had oversight and shareholders, you could have the banks still be responsible, like you have banks actually in New York that are responsible.
HARLOW: I want to ask you quickly about "The Wall Street Journal" editorial board this morning is calling out JPMorgan's acquisition of Silicon Valley Bank in terms of what the government has said and yet what the government has done and JPMorgan won this auction. They write, Jamie Dimon, the CEO, must be smiling at the political irony. The Biden administration, which claims to hate big banks - that's "The Wall Street Journal's" words, not the Biden administration's words -- signed off on Monday on a deal to let Mr. Dimon's JPMorgan Chase get bigger and even more profitable by taking over failing First Republic. But didn't the government need JP Morgan to do that?
KHANNA: It wasn't ideal. If we had guaranteed the deposits earlier, we couldn't have come to this. But by the time that this happened, we had no choice. The FDIC has a mandate to have the lowest cost resolution. And they have to look at private capital. That's what the law requires. And so, in these circumstances, they did the right thing.
Do I like it? No. Do I like the fact that regional banks are being bought up and consolidated? No. But in this situation, they did the right thing.
HARLOW: So, we're in a situation where the biggest banks are the only ones that can save us?
KHANNA: We're in a situation if we're not guaranteeing some of these deposits, that we're going to -- need private capital. And, of course, a lot of that private capital is in -- on Wall Street. HARLOW: You're here for some meetings with those big bankers. So, come
back and let us know how it all goes.
Ro Khanna, thank you.
KHANNA: Thank you.
HARLOW: Good to have you. Appreciate it.
KHANNA: Appreciate it.
COLLINS: Great to hear from him there.
Also a quick programming note, former President Trump is going to take questions from New Hampshire primary voters in an exclusive CNN town hall. I'll moderate that event on Wednesday, May 10th, at 9:00 p.m. Eastern.
Also this morning, on paper it should be about child support, but there appears to be a proxy battle playing out in Hunter Biden's paternity case. We have the details ahead.
HARLOW: Aerosmith says they're heading into retirement after 50 years. They'll perform one last farewell tour. Tickets on sale Friday. Aerosmith said in a statement, quote, it's not good-bye, it's peace out.
COLLINS: In a few hours, lawyers for E. Jean Carroll are expected to call two women to the stand in the former columnists battery and defamation trial against former President Trump. One of Carroll's friends is expected to testify because Carroll said that she confided in her immediately after the alleged rape that she says happened in the mid-1990s. Carroll's attorneys are also expected to call Jessica Leeds to the stand. She claims that Trump sexually assaulted her while sitting in first class on an airplane back in 1979. An accusation the former president has denied, I should note.
E. Jean Carroll is suing Trump, alleging that he raped her in a Bergdorf Goodman department store in the mid-90s. The former president has steadfastly denied it. His lawyer, Joe Tacopina, has just wrapped up a two-day cross-examination of Carroll. His line of questioning focused in part on Carroll's shopping trips, media interviewers, her book, and a 2012 episode of "Law and Order SVU".
Our CNN senior legal affairs correspondent Paula Reid has been tracking this trial and joins us now. What are we expecting to happen here and what have we seen playing
out, you know, not just in this cross-examination but now as they're trying to establish this pattern to back up her allegations?
PAULA REID, CNN SENIOR LEGAL AFFAIRS CORRESPONDENT: What was so interesting yesterday, when I was in court, is when last week was very emotional. At times she answered questions through tears. Yesterday was very technical. Joe Tacopina, what he was trying to do is present evidence to her to show a pattern of what he alleges are discrepancies between what she has said publicly and what she said in this courtroom.
For example, he threw up a Facebook post that she put up describing herself as a massive fan of "The Apprentice." Another Facebook post where she asked her followers if they would have sex with Donald Trump for $17,000. And she responded saying, look, yes, I like the show, and, yes, I made jokes about having sex with Donald Trump.
Then he went on to press an issue that he has pressed repeatedly here which is, look, you have an advice column where you advise women who have been assaulted to report their assault, but that's not what you did. And they presented different columns that she had written. And she said, quote, I would never call the police for something I was ashamed of.
And they also tried to draw discrepancies between how she describes her life in interviews as being, quote, fabulous, but then talked about how much she was suffering here in court. And she said, I don't want anybody to know that I suffer.
Now, arguably, the whole trial is riding on her testimony and Joe Tacopina's ability to undermine the credibility of her story.
HARLOW: You think we hear from Trump?
REID: It's unlikely. At this point he is not expected to testify. Though Carroll's attorneys have said they plan to use parts of his previous deposition in their case.
COLLINS: Totally separate, but in Arkansas what we're also seeing play out with Hunter Biden and his attorneys who have been in court -
COLLINS: They've been arguing that the way this is being portrayed in the media is wrong, saying he is paying the child support that he's supposed to.
COLLINS: This is - now they're saying he needs to sit for a sworn deposition to answer questions about his investments, his art sales, other financial transactions. All this is part of that paternity- related case. What is happening there?
REID: Sure. So, this has to do with his four-year-old daughter down in Arkansas. And this is a process that plays out in courtrooms across the country every day. He is currently paying child support. His lawyer disclosed in court yesterday he pays about $20,000 a month to this -- to the mother of his child. And they revealed that because they want to push back on the idea that he is a, quote, dead beat dad. But he wants to reduce that amount. And if you want to do that, there is a process. Again, it's done all across the country every day but it requires a lot of financial disclosures.
And here this dispute has become really a proxy battle for a lot of partisan battles that he is fighting. The mother of his child, she has a GOP attorney who is very public about aspects of this case. They're also trying to call as an expert witness, I mean, one of Hunter Biden's key political adversaries. This is a former Trump aide, Garrett Ziegler, who they accuse of leaking information. But the judge in this case said, there might be leaks, but I don't really have any proof of it.
But going forward, he will have to reveal more of his finances. The judge said you have to be more transparent. But even some Republicans on The Hill have said that they hope that this hearing reveals more details about his finances.
Now, if they can't come to an agreement, a private agreement about how to reduce this alimony, this case could go to trial in July. He is expected to sit for that deposition next month. Again, this is a common process, but because it's Hunter Biden and because Republicans are so interested in his finances, it takes on a national significance.
COLLINS: Yes. And Garrett Ziegler is that Trump aide who was accused of leaking the SARS (ph) treasury reports for Hunter Biden. A lot of things --
REID: Exactly, and now involved in a very sensitive family court matter.
COLLINS: Yes, a lot going on here. I know you'll keep tracking it and keep us updated. Thank you, Paula.
HARLOW: Thanks, Paula.
COLLINS: Also new this morning, the surgeon general for the U.S. has just released a framework to tackle the, quote, epidemic of loneliness, the impacts of loneliness across the country. We'll talk about that ahead.
HARLOW: It is a must-watch in the NBA playoffs. Lakers versus Warriors. LeBron versus Curry. A preview of this rare matchup, next.
(BEGIN VIDEO CLIP)
DRAYMOND GREEN, FORWARD, GOLDEN STATE WARRIORS: It's goose bumps, man. Like you - you -- this is what you prepare for, for these moments. And this series against the Lakers, it's going to be epic. (COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
LEBRON JAMES, NBA ALL-TIME LEADING SCORER: I have nothing but the utmost respect, you know, for Steph and everything he's been able to accomplish, not only on the floor but - not only on the floor, but also off the floor.
STEPHEN CURRY, FOUR-TIME NBA CHAMPION: We're blessed to be playing at this - at this level still. And excited about a new chapter.
(END VIDEO CLIP)
COLLINS: Some positive words there as LeBron James and Steph Curry are reigniting an old rivalry with some praise for each other. In San Francisco tonight, the Los Angeles Lakers and the Golden State Warriors will square off in a - for a spot in the western conference finals.
HARLOW: Now, the two NBA legends facing off in the playoffs for the fifth time after meeting in the NBA finals for four straight seasons between 2015 and 2018.
Let's bring in Jeff Benedict, author of "The New York Times" bestselling biography "LeBron." And it is a fantastic read.
Jeff, good to have you.
JEFF BENEDICT, AUTHOR, "LEBRON": Good morning.
HARLOW: Good morning.
So, big night tonight, obviously. It's not like it hasn't happened before, but I thought it was interesting that Warriors star Draymond Green described it, the series, not just tonight, as epic. And you've got two seasoned guys, still at the top of their game, but with that wisdom of experience.
BENEDICT: Yes, I think his word "epic" is a good word. I mean if you go -- we're going back almost a decade when Steph Curry and Draymond Green and Clay Thompson started playing against LeBron in the playoffs. Those were four of the most watched, most enjoyed NBA finals since the Michael Jordan era. I mean, four years in a row. And I think that that's -- the fact that here we are now in 2023 and those guys are coming back together is -- it doesn't get much better.
HARLOW: It doesn't get much better.
One - one thing that I was thinking that -- your book, obviously, is about LeBron. And we talked last time when we had you on about his relationship with his mother, particularly, and how much that drove him. But one thing I was reminded of thinking about tonight in this series is when the late Grant Wall, the phenomenal sports journalist, put him on the cover of "Sports Illustrated," right?
HARLOW: That -- in high school.
HARLOW: And the headline was "the chosen one."
HARLOW: And Wall famously said, I hope I didn't ruin this kid's life.
HARLOW: Well, clearly, he was the chosen one, and he didn't ruin his life.
HARLOW: But it just made me think about how his whole life has been preparing for a moment like this.
BENEDICT: Yes. I mean they also -- Grant Wall also called him the heir to Air Jordan, which was a lot of weight and expectations to put on the shoulders of a 16-year-old who was a junior in high school, not even a senior, a junior. And LeBron didn't shy away from that. He actually leaned into it. You know, he wore Michael's number. He really leaned into the moment.
I think what separated him from -- really from so many other athletes is that he's never shied away from those biggest moments. He's actually had his best performances in the biggest moments of his career. His signature play that he's going to be remembered for is a defensive block in the NBA finals against the Warriors, against this team. And so I'm expecting the next two weeks to be some of the best basketball that we've seen.
COLLINS: It kind of feels like we take it for granted to see two amazing talents -
COLLINS: I mean there are many on the teams, but to see these two guys go head to head. It feels like we're almost - this dream duel.
COLLINS: That like almost, you know, kind of forget sometimes just how magical it is to see two of these amazing athletes. This just doesn't happen every day.
BENEDICT: No. And it's funny to think of them as old guys and --
COLLINS: Right, 35 and 38 respectively.
BENEDICT: But, yes, in NBA years, they are older players. But when you watch them play, they're so cerebral in the way they go about the game because they've been doing it for so long.
The mind games that they play against their opponents.