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Biden to Meet with McCarthy to Hammer Out Debt-Ceiling Deal; Russia's Wagner Chief Says Bakhmut is Captured, Zelenskyy Denies Claim; GOP Senator Tim Scott Expected to Announce Presidential Run. Aired 6-6:30a ET

Aired May 22, 2023 - 06:00   ET

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

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: That's the "Super Mario Brothers" movie.

[06:00:04]

All right. Thanks for joining me this Monday morning, everybody, I'm Christine Romans. Have a great day. CNN THIS MORNING starts right now.

POPPY HARLOW, CNN THIS MORNING HOST: Monday morning always comes faster than we expect.

SARA SIDNER, CNN THIS MORNING HOST: Way too fast.

HARLOW: I'm so glad you're here. I said to Sara in hair and makeup this morning, I said, welcome to the best shift on earth.

SIDNER: I was shocked. Because it's too early.

HARLOW: Amen. Three a.m. wake-up to start your week. I'm glad you're here. I'm really glad you're here.

SIDNER: Glad I could help you.

HARLOW: Kaitlan is off today. She'll be back a little bit later this week. We're lucky to have the brilliant and beautiful Sara Sidner with us. So let's get started with "Five Things to Know" this Monday, May 22.

Ten days left, that's it, on the clock, and the debt ceiling negotiations are deadlocked, I'm sad to report. The president and the House speaker set to meet just hours from now, as the U.S. inches closer to default.

SIDNER: The Republican 2024 field is expanding. Senator Tim Scott is expected to formally announce his White House bid today. Governor Ron DeSantis is ready to jump in, a bit later this week.

And a CNN exclusive. Paul Whelan, whom the U.S. says is wrongfully imprisoned in Russia, calls CNN from behind bars. His message: he's confident the wheels are turning towards his release.

HARLOW: A man accused murdering four University of Idaho students will appear in court today. That is Bryan Kohberger. He faces four counts of murder and one count of burglary.

SIDNER: And we have liftoff. A SpaceX rocket commanded by a woman is set to dock at the International Space Station this morning. It's only the second private mission ever. But NASA hopes this is just the beginning.

CNN THIS MORNING starts right now.

HARLOW: All right. Here's where we begin this morning. President Biden overnight racing back to Washington for debt-limit negotiations. Just hours from now, he is set to once again meet with House Speaker Kevin McCarthy at the White House.

There is less than ten days left now to reach a deal and prevent a catastrophic default.

House Republicans are demanding huge spending cuts. Before the president left Japan, he told reporters the latest proposal from the Republicans was, quote, "unacceptable."

(BEGIN VIDEO CLIP)

JOE BIDEN, PRESIDENT OF THE UNITED STATES: I can't guarantee that they wouldn't force a default by doing something outrageous. I can't guarantee that. I think there are some MAGA Republicans in the House who know the damage it would do to the economy. And because I am president, and presidents are responsible for everything, Biden would take the blame, and that's the one way to make sure Biden is not re- elected.

(END VIDEO CLIP)

HARLOW: Biden and McCarthy spoke while the president was flying home on Air Force One. And McCarthy called that talk productive.

We're covering all angles. Let's begin with Lauren Fox, tracking developments on Capitol Hill, and Arlette Saenz at the White House.

Arlette, to you, the president cut his trip short, cut off two important legs of the trip so he could be in Washington for what is going to happen today. What do we expect?

ARLETTE SAENZ, CNN WHITE HOUSE CORRESPONDENT: Well, Poppy, President Biden returned to Washington the same way that he left it, without any clear resolution in sight to avert a default.

But a bit later today, President Biden and Kevin McCarthy will sit down for another high-stakes meeting, really highlighting the urgency of this moment.

The two of them spoke by the phone yesterday as the president traveled back on Air Force One. And that led to negotiators from both sides coming to the negotiating table last night on Capitol Hill.

The two sides met for about 2 1/2 hours. They looked to work through some of the very vast differences that remain when it comes to trying to reach a budget agreement.

And one of those key sticking points has been around spending levels, as the White House wants to keep spending at the current year's levels while Republicans want to see it cut back and reverted back to fiscal year 2022.

But the president over the weekend really highlighted that he believes that the Republicans' proposals recently -- that were recently put forth over the weekend, and that they amount to extreme positions.

And it is the White House's belief that Republicans need to realize that this needs to be a bipartisan deal, which will require compromise and some movement from GOP positions.

But bottom line here, the president, Speaker McCarthy are facing very serious time constraints. Yesterday, we heard Treasury Secretary Janet Yellen once again reaffirm that she believes the U.S. could default on its debt as early as June 1. Really highlighting the urgency, the fact that this is a very fast-moving situation, and really that the leaders -- that President Biden and Speaker McCarthy need to act very quickly in order to avert a default.

[06:05:10]

But for the time being, it still remains -- it still appears to be that the differences are vast.

SIDNER: Let's go to Lauren now. Earlier, Poppy mentioned McCarthy has a very narrow majority in the House. How does this impact his strategy as he goes into this meeting? We are at crunch time now.

LAUREN FOX, CNN CONGRESSIONAL CORRESPONDENT: Yes, Sara. He doesn't have the kind of negotiating room that he would have if he had a larger Republican majority.

In the back of his mind, has to be this reality that he is going to lose conservative votes. If he actually makes a bipartisan deal with President Joe Biden.

And that calculus, whether or not he is going to be willing to potentially put his speakership on the line for that deal is something that is looming large in these negotiations.

Also looming large is the reality that these two men have a very untested relationship. They really haven't spent that much one-on-one time together. They never spent that much time in the previous two years, when Biden was president and you had McCarthy, who was in the minority at that point.

So there is a huge question mark right now, whether or not their relationship really can get this deal over the finish line. Like Arlette mentioned, the negotiations over the weekend happened in fits

and starts.

With both sides trading back and forth proposals that the other side argued were unreasonable, I talked to one Republican last night who told me that they feel like right now, this deal is just hanging by a thread.

Whether or not they can actually find a way forward is a major question mark. And like you noted, time is running short. To move this through the House of Representatives would take several days, at least 72 hours for members to look at a plan and then vote on it.

In the Senate, it could take even longer. Now, that's always possible that they could move more expeditiously. But as Kevin McCarthy noted over the weekend, he has been planning for potentially the Senate to need seven days. Maybe they need less than that. But that just gives you a sense of how short we are running on time.

SIDNER: Wow.

HARLOW: Seven days. So ten minus seven is three. So that means, Lauren, they've three days to figure this out.

FOX: Well, that's the big question right now. And I think it's always possible. Things move much more quickly in the Senate when they need to. But McCarthy's been arguing he thought they may need a whole week.

HARLOW: Thank you both.

SIDNER: I can't believe you're doing math at this hour. But that's -- that's really good.

HARLOW: I mean --

SIDNER: That's why we have Christine Romans here for.

HARLOW: Thank goodness for her.

ROMANS: Deep sighs over here.

SIDNER: You have been, you know, talking about this ad nauseam over and over and over again. You said something that really sent shivers down my spine. You said that, if we didn't pass the debt limit, that we would see our living standards go back in time.

ROMANS: Yes.

SIDNER: This is for every American.

ROMANS: Yes. This is -- this is incredibly dangerous, what's happening here right now and how close we're -- We have $56 billion in the bank this morning, and we have a bunch of bills are going to be coming due next month. There will be money coming in from, you know, state tax receipts and the like.

But to be playing it this close is just really, really dangerous for the American economy.

So what do I mean about living standards going back in time? You could have a tenth of economic activity just stop the minute that they -- that they do this.

Tenth of -- so you have the Treasury Department that will be having a "Hunger Games" of sorts of which bills to pay.

So you're talking about IOUs for service members. That's one option. You could have delays in Social Security checks.

So think about the senior who relies on the Social Security check who then can't go to the bodega to buy the milk and the bread for the week, who then, the bodega then doesn't have that income. I mean, it just starts to all go down the food chain. And it's very dangerous.

To say nothing of what it means for financial security. Remember, the entire global financial system is built on the American treasury bond. And this is something that the world hungers for. They go and they buy as safety, our bonds.

It's not a sign of weakness, everybody. It's a sign of strength in America that the security is so sought after around the world. You start to undermine the underpinning of that. You heard the dollar, instability of the dollar is very good for America's competitors, like China.

I mean, the whole thing is just a real hot mess.

HARLOW: There are -- former colleague Linnea DePhillips (ph), who's now at "The New York Times," I thought, wrote a great piece over the weekend about, you know, essentially, you're talking about our creditors. And if they see us default on our payments to our service members, elderly Americans on Social Security, they've got to be thinking we're next. And so that upends the whole system of the full faith and credit of the U.S. government and that the dollar should be the reserve currency, right?

ROMANS: Exactly. And that's how that plays into China's hands or plays into the hands of competitors who would like to see a world that's not based on the dollar, where the U.S. Treasury isn't -- isn't the king of the hill. And it is the king of the hill. You know?

And the U.S. will pay interest on its debt. I'm sure. The debt holders -- I mean, that would just be devastating if they defaulted on those allegations.

[06:10:04]

But to do that, you have to make big cuts and sacrifices elsewhere. It just is a sign of weakness, a sign of poor planning. There is a serious discussion about America's national debt --

SIDNER: Yes.

ROMANS: -- growing so large that chokes our country in the decades in the future. That serious conversation is now had around the debt ceiling drama. It's had serious bipartisan discussions in the budgeting process. So we're not doing that right now. And I think that there are some

Republicans and there are some Democrats who think that's what we're having the conversation -- we're having a conversation about spending priorities. This is money that's already been spent. Right?

The spending priority of the conversation has to happen in a much more meaningful way than this. This is distraction. This is not discipline. This is distraction. This is drama. This is not discipline, what you're seeing here.

SIDNER: I'm old enough to remember the deficit clock ticking down.

HARLOW: You were in front of it this weekend.

ROMANS: I went this weekend, too. I saw the show on Broadway in the theater district. They have it there. And it's just stuck right at $31.4 trillion.

But you're right, I remember when it was going down, too. Now it is stuck at $31.4 trillion. And needs to be raised or all of us are going to have -- all of us are going to feel it, you know, either in your stock investments or your senior citizens.

HARLOW: Seniors, Pell grants, so much.

ROMANS: All of it.

SIDNER: Christine Romans, thank you so much.

ROMANS: So this morning the Russian mercenary Wagner Group is claiming to have fully captured Ukraine's Bakhmut after the longest, bloodiest battle of this war in Ukraine.

Ukraine's President Zelenskyy is denying those claims by the Wagner Group. Speaking of the G-7 summit, Zelenskyy said Russia destroyed almost all of the Eastern city, though.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Mr. President, is Bakhmut still in Ukraine's hands? The Russians say they have taken Bakhmut.

VOLODYMYR ZELENSKYY, UKRAINIAN PRESIDENT: I think no. But you have to transcend that there is nothing. They destroyed everything. There are no buildings. It's a pity; it's a tragedy. But for today, Bakhmut is only in our hearts.

(END VIDEO CLIP)

HARLOW: CNN's Clare Sebastian joins us live in London with more. Really stirring words there: Bakhmut is only in our -- in our hearts. And we were looking last week at these drone aerial images, side by side, of what it was a year ago and what it is now. And complete devastation.

Do we know, is Bakhmut captured by the Russians? CLARE SEBASTIAN, CNN INTERNATIONAL CORRESPONDENT: Yes, Poppy. It's

really murky, because of course, we've got the Ukrainian side of the story, then Russian side and then in the mix, also Wagner. So a lot of competing versions of events.

What we know as of this morning from the Russian side, Russian-backed official in the region is saying that they have started demining operations in the city, trying to make a show of some kind of post- liberation cleanup there.

The Wagner chief, Yevgeny Prigozhin, is saying that they are putting up defense lines on the Western edge of the city. And he is preparing to leave, he says, with his forces starting on Thursday.

Perhaps that and other challenge to the Russian ministry of defense. The infighting that we've seen in recent weeks.

As for the Ukrainian side, we've just had an update with the deputy defense minister, with a completely different version. As we've seen, she said that fighting continues, Ukraine continues to advance, albeit with a lower intensity, on the flanks.

We know that some of the gains they've made recently, most of them, in fact, have been on Northwest and the Southwest of the city, perhaps an attempt to try to encircle that city.

And she also said that they retained control of certain industrial facilities and private houses, although Ukrainian officials do acknowledge that any lands they control within the town itself is extremely limited. We've known that now for several weeks.

So, clearly, this has huge propaganda value for Russia. We've seen that flag show up multiple times on the state media, Ukraine likely unwilling to hand them that propaganda victory.

HARLOW: Right. And not as much strategically critical but certainly, it's a huge win, propaganda-wise, as you said, for Russia if that's the case.

Clare, we appreciate your reporting from London. Thank you.

SIDNER: Ahead, another Republican is set to officially announce he's challenging Donald Trump for the Republican presidential nomination. And he already has some big-name endorsements.

HARLOW: Also, Paul Whelan calling CNN from inside the Russian prison camp where he's being held. What he said in that exclusive interview. That's ahead.

(BEGIN VIDEO CLIP)

PAUL WHELAN, WRONGFULLY IMPRISONED IN RUSSIA (via phone): I feel that my life shouldn't be considered less valuable or important than others who have been previously traded.

(END VIDEO CLIP) (COMMERCIAL BREAK)

[06:18:03]

SIDNER: Just hours from now, we're expecting another GOP candidate to officially jump into the 2024 presidential race.

South Carolina Senator Tim Scott's team is teasing a major announcement today at Charleston Southern University. He filed the official paperwork to run on Friday.

He's been testing the waters for months now, hitting early voting states like Iowa, New Hampshire, and his home state of South Carolina.

CNN'S Eva McKend is live in Charleston this morning.

Eva, Nikki Haley also hailing from South Carolina. Now Scott, looked like he's going to enter the race, which means two Republicans from South Carolina battling it out. What do you expect to hear today?

EVA MCKEND, CNN CORRESPONDENT: Yes, Sara. Senior campaign officials tell us that hallmark of Senator Scott's campaign will be faith and optimism. He has spent the past several weeks speaking to voters in the critical states of Iowa and New Hampshire. And he has now returned to his hometown of South Carolina to formally launch his bid for the White House.

(BEGIN VIDEOTAPE)

MCKEND (voice-over): He's the only black Republican in the United States Senate.

SEN. TIM SCOTT (R-SC): The story of America is not defined by our original sin. The story of America is defined by our redemption.

MCKEND (voice-over): South Carolina's Tim Scott --

SCOTT: Good to see you, sir. How you doing?

MCKEND (voice-over): -- now has his sights set on the White House.

Leaning on his compelling personal story and conservative policy credentials, Scott joins a growing Republican primary field, currently led by former President Donald Trump.

SCOTT: When you adhere to the principles in the gospel, human flourishing cannot be stopped, period.

MCKEND (voice-over): Advisors say Scott will make his faith a cornerstone of his presidential campaign.

SCOTT (voice-over): See, I was raised by a single mother in poverty. The spoons in our apartment were plastic, not silver. But we had faith. We put in the work, and we had an unwavering belief that we, too, could live the American dream.

[06:20:07]

MCKEND (voice-over): First elected to Congress in 2010, Scott was appointed to the Senate in 2012. By then, Governor Nikki Haley, who launched her own presidential bid in February.

SCOTT: I think fresh faces and authenticity goes a long way in the political process.

MCKEND (voice-over): So far, Scott is sticking to the message of hope over hostility that has defined his career.

SCOTT: I'm looking forward to optimistic, positive leadership that is anchored in conservative principles.

MCKEND (voice-over): Back at the senator's home church near Charleston, there are hundreds of worshippers that see him most weekends.

GREG SURRATT, PASTOR, SEACOAST CHURCH: He has a commitment to be in church 40 weekends out of the year.

MCKEND (voice-over): Including his long-time pastor and friend, Greg Surratt.

SURRATT: I think a misconception that people might have about him is that his niceness, his humility translates as weakness. And they don't know the Tim Scott that I know. I would like to -- I like to kind of see it as an iron fist in a velvet glove.

MCKEND: Did he talk to you about running for president?

SURRATT: Sure.

MCKEND: And did you give him any advice?

SURRATT: I said as an American citizen, I would be excited to see Tim Scott as president of the United States. As your friend, I can't think of a reason why you'd want that job. And, so, that was my advice to him.

(END VIDEOTAPE)

MCKEND (on camera): So Senator Scott did have an early stumble out of the gate. And that is on this question of abortion. Not committing to a federal abortion ban or not giving a clear answer to that question.

Curious to see how he addresses this in his formal launch. This is going to be a central issue in this Republican primary -- Sara.

SIDNER: All right. Eva McKend, thank you so much there from Charleston, South Carolina.

HARLOW: Great reporting from Eva. Let's talk more about this with CNN senior political analyst John Avlon and national political correspondent for "The New York Times" Shane Goldmacher. Good morning.

JOHN AVLON, CNN SENIOR POLITICAL ANALYST: Good morning.

HARLOW: Good to have you. Also, an interesting fact that I learned over the weekend, the only black person who served in both chambers of Congress, as well.

John, I believe you were the first to write a column back in the day saying Nikki Haley, the then-governor of South Carolina, should put Tim Scott in Jim DeMint's seat that he was leaving.

JOHN AVLON, CNN SENIOR POLITICAL ANALYST: I think back in the day, maybe from the national press. But sure, as a former South Carolina --

HARLOW: And they're running.

AVLON: Now they're both running. South Carolina, the eyes of the nation turn to you.

My folks moved to South Carolina 30 years ago, so I know South Carolina politics. And I think the fact that Nikki Haley and Tim Scott, you know, are both running speaks to, I think, the deeper diversity of the Republican bench in the South than people sometimes think.

And I think both are going to be very -- play significant roles. Not only because they stand out from the pack in obvious ways. The only African-American in the Senate.

But because Tim Scott's message, he's going to be selling something that traditionally, people who run for president sell. That, you know, no one in the era of Trump seems to be doing, which is doubling down on the defiant optimism, right?

He's saying the mess of this country is opportunity, not oppression. That could sell very well to a national audience, as well as a Republican primary.

HARLOW: Look at his story. I mean --

AVLON: Exactly right.

HARLOW: -- his story exemplifies that.

AVLON: And the way in which he says, look, my faith journey --

HARLOW: Yes.

AVLON: -- the conservative Christian principles are what led me to --

HARLOW: That's right.

AVLON: -- this pinnacle of a place in the U.S. Senate. And that can be a very compelling message. And you see already, you know, with CNN reporting John Thune, the No. 2 person in the Republican Senate, backing him for president. That speaks to the fact that he is respected among his peers, something that other frontrunners can't necessarily say. SIDNER: I read that when it comes to Nikki Haley, who is also from

South Carolina, governor, is also running. That one of her friends from high school had to have a very uncomfortable conversation with her, saying, "I'm going to back Tim Scott."

I think the question to you, Shane, is this optimism that he's had, he hasn't had the thing that she's had, which is really tough races where it's between him and someone else and it's a battle. What does that tell you? Is he battle-tested enough?

SHANE GOLDMACHER, "NEW YORK TIMES": It's easy to be optimistic when you're not in the middle of a dog fight. And Tim Scott has not been in the middle of a dog fight.

He was appointed to this Senate seat by Nikki Haley. He won a Republican primary to become a House member. But at the national stage, he hasn't gotten into a tussle yet.

And look, he does have an optimistic message. And when you're in crowds, Republican crowds really like that message. But when you talk to Republican primary voters, and when you talk to Republican political strategists, the mood of the Republican electorate is dour. And they're not necessarily looking for optimism. They're looking for fighters.

[06:25:07]

This is why, when Ron DeSantis is talking about what he wants to do, he's talking about fighting. When Trump is talking about what he wants to do, it's fighting.

So Tim Scott, he's bringing a completely different approach, and it's one of the reasons that almost everyone running for president has Tim Scott on their list of people who they might want to be their running mate. Because he brings a different balance to a ticket.

AVLON: But I don't think we should, you know, dismiss a Nikki Haley or Tim Scott, not that you were doing that, saying that they're running for vice president. That's clearly not their --

HARLOW: Nikki Haley said, "I don't run for No. 2."

AVLON: Yes.

HARLOW: Said that last week.

AVLON: But I want to offer -- I want to offer a counter point to that. I mean, you can make the strong case that Tim Scott's rise was a dog fight.

HARLOW: Yes.

AVLON: You know, Charleston City Council, Congress. You know, from being a -- the son of a single mother. That was a dog fight.

The fair criticism, I think, is that he hasn't had executive experience. And the presidency is an executive job. Whereas Nikki Haley has. And I think we often overlook that.

But -- but he could make a really major impact on this race in a positive way, not only for the Republican Party but for the republic.

HARLOW: I am really struck by his story. I think everyone who reads it will be, if they're not already. But especially this point that he has made throughout his political career about victim mentality. That's the word that he uses.

And that's what he ascribes his policy beliefs to. Shane, if you could just speak to that a bit and how it sets him apart from others in the field at this point.

GOLDMACHER: I mean, part of his identity is that he's one of the only leading black Republicans in the country. And when you've -- I've read his most recent book. It is a really compelling story. His life story is an incredible story, and it's why, when he gave the State of the Union response, he saw an outpouring of online donations organically. This is kind of thing most Republicans don't get. And so -- but the base of the Republican Party remains mostly white voters.

And so his message is really also appealing to those white voters, saying, look, I got ahead. I'm where I am, and you don't have to embrace larger Democratic-backed governmental programs to advance black people in America. You can you there the way I did, too.

And it really hit that message. It does appeal to the white base of the Republican Party.

SIDNER: Shane, John, thank you guys so much.

AVLON: Thanks, guys. Good morning.

HARLOW: A man facing a manslaughter charge over the chokehold death of Jordan Neely on a New York City subway is speaking. What he says he would do if he were in that situation again.

SIDNER: And new this morning, Meta has been slapped with a $1.3 billion fine by European regulators. Why they claim -- what they claim the company actually did. That's coming up.

(COMMERCIAL BREAK)