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CNN This Morning
Man Arrested and Charged after Driving U-Haul into Barrier Near White House; President Biden and House Speaker McCarthy Continue Negotiations over Raising Debt Ceiling; President of Minneapolis Federal Reserve Neel Kashkari Interviewed about Possible Pause in Fed Rate Hikes and Too Big to Fail Banks; Anti-Putin Russian Nationals Based in Ukraine Cross Border into Russia to Carry out Attack; Prosecutors in Mar-a-Lago Documents Case Subpoena Trump Organization for Information about Business Deals with Foreign Companies. Aired 8- 8:30a ET
Aired May 23, 2023 - 08:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
POPPY HARLOW, CNN ANCHOR: Good morning, everyone. We're glad you are with us. Sara is by my side today, Sara Sidner. So glad to have you. And the Denver Nuggets making history, heading to the NBA Finals for the first time ever after sweeping the Lakers. And now LeBron James is hinting at a possible retirement.
SARA SIDNER, CNN NATIONAL CORRESPONDENT: Also, major developments in the Mar-a-Lago classified documents case. A source telling CNN the special counsel is looking into Donald Trump's business deals in foreign countries that might be interested in those top-secret records. We'll tell you how the Trump Organization is responding this morning.
HARLOW: And a stark new warning for all parents. Listen up. If you are making your kids breakfast right now, this matters to them and you. The U.S. surgeon general is now labeling social media a, quote, profound risk of harm for kids.
This hour of CNN THIS MORNING starts right now.
SIDNER: Developing overnight, a security scare near the White House. Police say a man in a U-Haul truck, seen there, intentionally rammed a barrier. You see that happen. But could not get through. He has been charged with threatening to kill, kidnap, or harm the president, vice president, or members of their family. Video at the scene shows investigators inspecting. Once that all stopped, a Nazi flag, a black backpack, a roll of duct tape, a notebook with writing in it, and other items the suspect apparently had with him. The Secret Service evacuated a nearby hotel as bomb technicians searched the truck to make sure there weren't any explosives inside.
CNN senior justice correspondent Evan Perez is outside the White House there live on the scene. Is there any sense of the motive here? Obviously, if there was a threat to the president, the vice president, but you also see this Nazi flag in his things. EVAN PEREZ, CNN SENIOR JUSTICE CORRESPONDENT: Right. That's among the
things that I think we are puzzled about at this moment, Sara. The suspect is facing multiple chargers. We are expecting to see that later this morning.
But here's what went down about 10:00 p.m. just outside the White House, this is Lafayette Square here, just a few hundred meters from the White House. Behind me here you can see some of the tire tracks of this U-Haul truck that the authorities say the driver was brought onto the sidewalk, rammed that security barrier behind me a couple of times before police took him into custody.
Now, for a while there was a big concern, of course, because it is a truck that there might be explosives onboard. This is something that the FBI came and checked the U-Haul. They found nothing. But for a time, they did evacuate the Hay-Adams Hotel which is right in front of me here on the other side of the street.
Now, at this point he is facing a number of charges. One of them is threatening to kill or kidnap a president, the assault with a dangerous weapon, destruction of federal property, trespassing. A number of other charges are also pending. We are expecting to see the charges this morning from the U.S. attorney here in Washington. What we're told from the White House point of view, though, is that there was never any danger to the president. There were no injuries here. This is usually an area bustling with tourists, even late into the evening. Thankfully, nobody was hurt. Sara?
SIDNER: All right, thank you so much, Evan Perez there reporting outside of the White House, appreciate it. Poppy?
HARLOW: This morning President Biden and House Speaker Kevin McCarthy say yesterday's debt ceiling meeting was productive. So that's good. But they still don't have a deal to raise the debt ceiling. We are nine days away, folks, from a potentially catastrophic default. The two sides remain at odds over issues such as introducing caps on future spending and imposing tougher work requirements for federal aid programs, right, like Medicaid and food stamps, et cetera.
Joining us now, happy to have in studio, the president of the Minneapolis Federal Reserve, Neel Kashkari. He is one of 12 Fed officials with a vote this year on interest rates. We will get to that in a moment as well. Your next meeting on that is just weeks from today. It's good to have you. Thank you for coming back.
NEEL KASHKARI, PRESIDENT, MINNEAPOLIS FEDERAL RESERVE: Good to see you.
HARLOW: We will get to Fed rates, because you made some news on that this week in a moment. But just please take us inside the Fed, if you could. What are the conversations you guys are having on a possible U.S. default?
KASHKARI: It's very concerning. We have a mission to try to achieve two inflation and maximum employment. We have a mission to try to preserve financial stability. But we do not have the ability to protect the U.S. economy against the downside of a default. A default would be a message to investors all around the world of eroding confidence in America. We can't do anything about that.
HARLOW: You are saying the Fed, there is no break glass scenario, the Fed can't do anything?
KASHKARI: The Fed cannot fix this. Only Congress and the executive branch can fix this.
HARLOW: It was striking to hear President Biden over the weekend at the G7 said he cannot guarantee that the U.S. will not default. Can you guarantee the American people that the U.S. will not default this summer?
KASHKARI: I can hope, like all other Americans, that our political leaders come together. But this is literally up to Congress and the executive branch to resolve. We do not have the ability at the Fed to address it.
HARLOW: Are you worried now more than ever before? You were one of the lead voices in TARP, right, in the 2008 financial crisis. And we remember what happened, what the market did when Congress failed to reach a deal on the Troubled Asset Relief Program. Then they got it together after the market tanked. Are you as worried now as you've ever been about a possible default?
KASHKARI: Look, I am an optimist and I hope -- I think our political leaders on both sides of the aisle understand what's at stake. So I am cautiously optimistic they will reach an agreement in the timeframe that Secretary Yellen has laid that out. But I can't game that out any better than you can.
HARLOW: Several prominent lawmakers and business leaders are saying that's it, we're done. Abolish the debt limit. Get rid of the debt ceiling. Pointless to take us to the brink. This is self-inflicted. Do you think that's a good idea?
KASHKARI: I think that's true. So Congress decides how much to spend, and then treasury has to follow their guidance and go and spend it. And so I do think it's odd -- from what I understand we are the only democracy that has this second layer --
HARLOW: That's right, none of the other G7 leaders in their countries have it.
KASHKARI: But ultimately, it's up to Congress to decide what to do there.
HARLOW: Do you think -- would that be prudent at this point?
KASHKARI: I think would be prudent once we get through the scenario to figure out why do we do this to ourselves and can we come up with a more rational approach in the future. HARLOW: So let's talk about rate hikes and what the Fed is going to
do in three weeks because you said this week you are open to the idea of pausing interest rate hikes for now, but not ending them. And that made me immediately think of the stop and go rate hikes in the 70s. And economists broadly agree that that was not good, that continued the pain. Why wouldn't it do the same this time?
KASHKARI: We need more information, and we need to get information about the underlying inflationary dynamics, and we need to get information about the health of the banking sector. Actually, you and I are saying the same thing. What I don't want to do is announce we are done raising rates, have inflation pick back up again, and then we have to reverse ourselves and start raising again. I would rather signal if we take June as a skip, we're going to get more information and we're leaving July alive and future meetings alive so we can get more information. It's precisely to avoid that back and forth that we experienced in the 1970s.
HARLOW: The Fed's own staff economist are predicting a mild recession. I know Jay Powell doesn't exactly see it that way. But should we be concerned that if they are right about that, the Fed's ability to rescue the economy from a recession, however mild it may be, is just significantly limited by high inflation?
KASHKARI: Well, it's a challenge because we have to get inflation down. And so it's possible if there were a mild recession, that that would bring inflation down for us and we wouldn't have to use monetary policy. But if inflation is entrenched and inflation is high, then we may have to do more with monetary policy, which means that we may not be in a position to step in as quickly as we otherwise would.
HARLOW: So yes?
KASHKARI: So yes.
HARLOW: Just to put it clearly for people at 8:00 in the morning. On the banking crisis, this was also interesting. We always like interviewing you because you answer the questions. And you said on another network it is far too soon to declare all clear on banking problems. Is the worst of this banking crisis over?
KASHKARI: I hope so. But it really -- in my view, it really is going to be determined by inflation. If inflation stays high, if inflation is more entrenched than we realized, then we're going to have to keep interest rates high for longer, and that's going to increase the pressures on the banking sector. If the markets are right that inflation is going to fall quickly the second half of the year, then monetary policy could normalize sooner and the banking stress should be relieved. So it really, to my view, really comes down to what's happening in inflation, how long is it going to be high.
HARLOW: Because Secretary Yellen said, and our Matt Egan had this great reporting last Thursday from her meeting with CEOs, that she thinks more bank mergers essentially, or takeovers, may be in the cards for the future. We saw Jamie Dimon of JPMorgan swoop in and buy up the assets of failing First Republic Bank. Was that a good thing? Because you talk about banks being too big. Or does it concern does it concern you that JPMorgan, America's biggest bank, just got bigger?
KASHKARI: It concerns me. We faced the same awful choice in 2008 where we had to allow big banks to get bigger to preserve near term financial stability knowing that it made the problem worse in the long term. So we're right back where we were. It's different, but we're in a similar situation than we were in 08.
HARLOW: I hear you, but Katie Porter, obviously is a leading Democratic voice in Congress, have looked at the best option we had. And here is how Jamie Dimon defended it just about a week ago. Here he was.
(BEGIN VIDEO TAPE)
JAMIE DIMON, JPMORGAN CHASE CEO: Most of our size accrues to our clients. So if you look at, we do, most large -- small banks can't do what we do, like banking large corporations in 50 countries around the world and move $10 trillion a day. It's hard.
So these are big complex things. We are not as big and complex because we want to be. We're big and complex because the people we serve are big and complex.
(END VIDEO CLIP)
HARLOW: The reporter said, are you too big to fail? And he said to her before that answer, essentially, I don't even know what this means any more.
KASHKARI: Yes. I know what that means. Yes, they're too big to fail. And this has created a systemic risk in the banking sector because customers know that essentially the biggest banks in America have unlimited deposit insurance. So if you are a customer, you're an industrial company with a midsized bank and you are getting a little bit nervous, why wouldn't you just move all your money to the biggest banks?
HARLOW: I understand that thinking. I am just wondering what would you do about it? Like would you have sold First Republic to PNC instead? You can't really --
KASHKARI: No, no. In the middle of crisis you have to take the best you deal with. But now why do we make sure that the biggest banks in America actually have enough of their own capital? So JPMorgan has lower levels of capital than many community banks in America.
HARLOW: I've heard you say that before. You are asking for like 40 percent?
KASHKARI: In the 20s. In the 20s. They could then actually protect the U.S. economy from when big banks inevitably long-term make mistakes.
HARLOW: I have to ask you one final question.
HARLOW: I know we have to go, but Michael Barr, the Fed's vice chair for supervision, wrote a report last month that clearly lays out missteps in the Fed when it comes to not protecting against these bank collapses that we saw. But I am yet, and all of us are yet to hear any changes to ensure history doesn't repeat itself. Why is that?
KASHKARI: I think it's soon. I think the crisis is still, hopefully, behind us. But we'll see. And I think changes need to come. That's why I just put out an essay saying these are the types of changes we need to make.
HARLOW: But within the Fed, you guys, yourselves?
KASHKARI: I understand. Trust me, I am with you 100 percent. And these policies are set by folks in Washington, D.C. Those of us at the regional banks can try to have influence suggesting points of direction. But ultimately, it's driven by White House.
HARLOW: You think some at the Fed should some accountability, make changes?
KASHKARI: I think we have to make changes, absolutely.
HARLOW: I appreciate having you, Neel. Thank you very, very much. Sara?
SIDNER: New developments now in Russia's war on Ukraine. The governor of Russia's Belgorod region says eight people are injured after a group of anti-Putin Russian nationals based in Ukraine crossed the border to carry out an attack. This video just coming into CNN appears to show unidentifiable vehicles and people at a border crossing in Belgorod region. CNN cannot independently verify the date this video was filmed. CNN's Fred Pleitgen is live for us in Kyiv this morning, the capital. What do you know about the situation now in Belgorod?
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes. Hi there, Sara. It's so interest that we have that video now coming into us of what appears to be that border crossing, because we also just got information from the Russian defense ministry a couple minutes ago, and they now claim that they have pushed all the remaining cross border attackers, as they put it, back into Ukrainian territory. So they say that this is essentially done with as far as the Russian military is concerned. It's quite interesting, because in their statement the Russians call these people Ukrainian ultranationalists. Obviously, the Ukrainians say and these groups themselves say that these are, indeed, Russians who here in Ukraine are fighting on the side of Ukraine, but when they are in Russia are fighting against Vladimir Putin.
And the Kremlin came out earlier today and said they were extremely concerned about the situation down there in Belgorod, but they also claimed that this was an attack from Ukraine and used that to justify Vladimir Putin's war on Ukraine, which, obviously, has been ongoing for such a long time.
It's quite interesting, because a couple of minutes ago I was able to speak to the national security advisor of Ukraine, and he once again said that Ukraine has nothing to do with this attack, that this is a problem for Russians within Russia, that the Ukrainians may have these folks on their territory fighting against Russia when they are here in Ukraine. However, when they move into Russia, they do that at their own peril, and they do that on their own.
In any case, Sara, this is something that was extremely embarrassing for the Kremlin, obviously talking about how strong their security forces are. nevertheless, this incident has been ongoing now for more than 24 hours, and residents of that area still are not able to return to their homes, Sara.
SIDNER: Fred Pleitgen, thank you for that reporting. Stay safe there in Kyiv.
HARLOW: Big new movement on Mar-a-Lago classified documents case against former President Trump. Sources tell CNN prosecutors have subpoenaed the Trump Organization for information about business deals with foreign companies, specifically companies in countries that may have been interested in the types classified materials recovered from the former president. The Trump Organization has just released a statement, writing in part, "We made a strict pledge not to enter into any new foreign deals white President Trump was in office, a commitment that the company fully complied with."
CNN's Kara Scannell is following all of this very closely. Is that right/ Did that happen, Trump Org didn't make any deals with any companies?
KARA SCANNELL, CNN REPORTER: Yes, they have not announced any deals while Trump was in office with any foreign governments --
HARLOW: Be this is after he was in office, right?
SCANNELL: Well, this subpoena is the New York Times put the timing as since 2017. So, the period that Trump was in office, and then, you know, continuing into now. And we do know that they did strike one deal with Oman, in which they're building a Trump branded golf course there. That is one of the countries that according to the Times is on this subpoena.
You know, so, our sources are saying this appears that the Special Counsel is looking to see if any countries that may have been interested in classified documents were involved in any business dealings with the Trump Organization. You know, what we're talking about, though, is the completed deals we don't know if there were any conversations or discussions. So, the subpoena would capture any information like that, but certainly it shows the thoroughness of the special counsel investigation and that is far from over. SIDNER: We'll move to another case now, he -- Donald Trump is set to be in a Manhattan court facing 34 charges in relation to the Stormy Daniels case. There is some video now, we have it of him. OK. Oh, he's going to -- oh, sorry, he's going to be via video. My producer is just trying to correct me because it happens at this hour.
HARLOW: Thank goodness for our producer --
SIDNER: He will not be in court.
SIDNER: He -- it will be via court.
SIDNER: He did not show up for the E. Jean Carroll case. But he'll be in court for this part of this case. What are we expecting to see and hear?
SCANNELL: Yes, so he's going to appear virtually, they kind of arranged this so wouldn't be create the kind of, you know, security havoc that it would have the Former President appearing. But the point of this hearing is for the judge to explain to Trump, this protective order he put in place earlier this month and that basically means what he can and cannot say about the case. The judge has been clear, this is not a gag order, Trump can still defend himself, he's going to be out on the campaign trail. But he's saying that, you know, it's part of this order, you can't take information that the prosecutors turn it over to you and post it on social media.
You can't, you know, try to expose information that you're receiving as part of this, you know, discovery process, which is grand jury material that's all secretive. You know, trying to, you know, create, I guess, the rules of the road. And the prosecutors asked for this hearing, they wanted the judge to speak to Trump directly, you know, they said because of his, you know, extensive history of posting things on social media and times inflammatory statements about individuals. So, any individual that's potentially a witness in this case. So, the judge is going to explain this to Trump and also, you know, explain what the consequences are that he could be held in contempt if he violates this court order.
HARLOW: Now, thank you, on both friends.
SCANNELL: Thank you.
SIDNER: A stark warning from the Surgeon General on the mental health impact of social media on children. We'll break down the findings and what parents need to know.
HARLOW: And a teenage suffering. A teenage surfer, I'm sorry, recovering after a possible shark attack at the Jersey Shore. It comes after two bites in Florida in a single week, that's ahead, terrifying.
[08:20:00] (COMMERCIAL BREAK)
SIDNER: A new urgent warning from the U.S. Surgeon General, regarding children's social media presents a profound risk for their mental health. He says the new advisory lays out how online time impacts children with almost all kids ages 13 to 70 using social media. The social media use side effects include increased risk of depression and anxiety, poor sleep, and low self-esteem. Let's break it down with Dr. Rebecca Berry, she's a clinical psychologist at the Department of Child and Adolescent Psychiatry here at NYU. All right, what should parents know about how social media is impacting their children that they don't already see?
DR. REBECCA BERRY, CLINICAL PSYCHOLOGIST: Right, I think, you know, there's a lot that happens on a screen that parents may not be aware because many of our youth are reporting increased usage. I mean, the numbers are quite phenomenal and that could be for adults as well. But it's important for parents to really understand about, how much time their child is really on their device and how they're engaging with social media, what programs they're on?
So, we -- when we think about some of the impacts that the time and the way that youth are engaging on their growing minds. We really can see the profound increase in anxiety, depression, low self-esteem and for some, and a reduction in their body image and some distortion in their body image as well. That's been a prevalence that we've seen growing as well.
HARLOW: Our colleagues Sanjay Gupta, wrote a great piece this weekend and has a great episode of his podcast about this because he has teenage girls. And he wrote this essay on CNN.com. And he says, it's so important to start having conversations with your kids. But how do you start the conversation? Take a look at what he wrote, he said that "Conversation means sitting down, unhurried, undistracted and having an in-depth discussion with them, your kids. Without scolding, without judgment. I did that with each of my girls and learned a lot. Trying to discover how and how often they use their screens. Which social media platforms they're on, what to expect to get from their interactions and those interactions. How do they make them feel." So thoughtful.
BERRY: That's really wonderful advice. And I would really add on to that, in addition to understanding what platforms they're on and how they're using social media. But maybe see if you can go a little bit deeper into, how is social media functioning for these youth? Meaning, are they already feeling some loneliness, isolation, low self-esteem, anxiety, depression and social media could be serving as a way to play OK, or to cope with those feelings preexisting, right? So, can you figure out, are there other things happening that this may be functioning for, right? Social media may be using form.
SIDNER: We talk a lot about, you know, what we do and how we're watched by children. It's on us too, right?
SIDNER: I mean, we're all a little addicted as well.
BERRY: Right. It's important, when possible, for parents and caregivers to really model how they would like their children to utilize social media? And how often they are really kind of, you know, stuck with their screen? And I think that the report that we saw really mentioned having some, you know, phone free times or phone free zones within the household, such as the kitchen table, or let's say, a living room where you can really encourage open conversation, eye contact, and connection. It's not always easy because we are in a very busy time. Everyone has so many things to do, and we're always constantly connected for some reason. And perhaps, it's worth us really taking a look at how we're investing our time and really utilizing this medium.
SIDNER: Dr. Rebecca Berry, thank you so much for coming on and explaining all that.
BERRY: Thank you, you both.
HARLOW: Appreciate it.
HARLOW: Well, this morning, a 15-year-old girl is recovering after what appears to be a shark attack in New Jersey over the weekend. Maggie Drozdowski was surfing with her friend and her brother when she felt something bite her leg.
(BEGIN VIDEO CLIP)
MAGGIE DROZDOWSKI, SURFER: My whole foot was like in its mouth. And I was shaking my foot as hard as I could. It was hard, it was like, really heavy. I immediately felt the pain in my foot, and I looked at the back of my leg and there was a big chunk of skin missing from the back of my leg.
(END VIDEO CLIP)
HARLOW: Scary, she says she never actually saw what bit her, but officials say her injuries appear consistent with a shark bite.
SIDNER: We're seeing these more often, and I swear, in Florida --
SIDNER: -- there were two reported incidents of shark bites last week on Friday. A 35-year-old fisherman was hospitalized, after he hooked a shark and was bitten in the foot, and the day before a 20-year-old man was bitten by a bull shark while spearfishing.
HARLOW: Well, airlines canceled 55,000 flights last summer. How are they going to do this? Summer travel season, we have the perfect guest, the CEO of United Airlines, joins us.