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CNN This Morning
DOGE Team Gains Access to Treasury; Mark McKinnon is Interviewed about Trump's Executive Power; Jason Furman is Interviewed about Tariffs; Democrats Struggle with Messaging. Aired 6:30-7a ET
Aired February 03, 2025 - 06:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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[06:31:15]
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE (October 27, 2024): We set up DOGE.
ELON MUSK (October 27, 2024): Yes.
UNIDENTIFIED MALE: How much do you think we can rip out of this wasted $6.5 trillion Harris-Biden budget?
MUSK: Well, I think we can do at least $2 trillion.
UNIDENTIFIED MALE: Yes.
MUSK: Your money is being wasted and the Department of Government Efficiency is going to fix that.
(END VIDEO CLIP)
KASIE HUNT, CNN ANCHOR: A war is underway inside the federal government. On the one side you have Elon Musk, of course, the head of the Department of Government Efficiency, or DOGE, tasked with eliminating trillions in government spending.
On the other side, you have career civil servants standing at times quite literally in his way. And they're paying the price. One senior Treasury official suddenly resigning on Friday after DOGE members tried to get access to the Treasury Department's payment system. With that official out of the way, Elon Musk and DOGE now have access to that system.
What does that system do? It handles the sensitive information of - it's your sensitive information. American taxpayer's sensitive information. And it conducts payments, cuts the government's checks, for $5 trillion every year. That's Medicare payments, tax refunds, Social Security checks, all of it.
And then there was another showdown taking place on Saturday night, typically not a hotbed of activity for the government. Two top security officials at the U.S. Agency for International Development are now on leave because they attempted to block DOGE officials from gaining access to restricted systems. Sources telling CNN that DOGE officials went to the USAID headquarters. They were trying to access security systems and personnel files. Two of their sources also confirming to CNN, DOGE officials also wanted access to classified information. The members of DOGE threatened to call the U.S. Marshals. And they were eventually able to access USAID headquarters. The agency delivers billions of dollars in international humanitarian aid annually. It's been around for more than 60 years. Originally created by former President John F. Kennedy.
Over the weekend, President Donald Trump blasted the organization.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: It's been run by a bunch of radical lunatics. And we're getting them out. USAID, run by radical lunatics, and we're getting them out. And then we'll make a decision.
(END VIDEO CLIP)
HUNT: And last night, overnight, really, Elon Musk went a step further. He shared on X that the president has apparently agreed that the organization should be shut down.
(BEGIN VIDEO CLIP)
ELON MUSK, TECH MOGUL: What we have here is - is not an apple with a worm in it, but we have actually just a bowl of worms. If you've got an apple that's got a worm in it, I mean you can take the worm out. But if you've got actually just a bowl of worms, it's hopeless. And USAID is a bowl of worms. There - there is no apple. And when there is no apple, this - this - you've just got to basically get rid of the whole thing.
(END VIDEO CLIP)
HUNT: All right. Our panel is back.
Stephen Collinson, big picture here. These scenes, right, of these government officials trying to follow the law as it is currently written, stand - trying to stand in the way, clearly losing these fights. What are the implications? I mean this Treasury system, it's banal, but it includes the information of anyone that interacts with the federal government. Certainly they've got my Social Security Number.
STEPHEN COLLINSON, CNN POLITICS SENIOR REPORTER: Well, we found out last week what happens when you do a radical reform, (INAUDIBLE), to the federal government with that freeze in spending, which caused absolute chaos.
[06:35:12]
And at times like this you see what exactly the federal government does. Of course, there are also ethical questions, because Elon Musk is the recipient of billions of dollars in contracts with the United States government. So -
HUNT: And so are his competitors.
COLLINSON: Right. So, you know, it doesn't seem that ethics are a huge priority of this administration.
But what you're seeing is the stripping away, as Donald Trump promises, of vast layers at the top of all these bureaucracies because he believes, as you were saying with regard to the FBI, that the government was an impediment to his agenda in the first term. How much of this is legal, how much of it is fair enough because he won an election, I think we're going to see what the dividing line is there.
ALEX THOMPSON, CNN POLITICAL ANALYST: The Trump White House's view is that the executive branch essentially is a business where he should be able to hire and fire whoever he wants. That is like their view, and you - there are obviously laws that contradict that. And they're going to challenge those in court. And you can expect it to go all the way up to the Supreme Court to see, they're going to try to expand as much of that ability to hire and fire people as possible.
The only other little thing I noticed in there, little tension between Elon Musk and Donald Trump. Elon saying, it's over. He's already agreed to shut it down. Trump saying, well, we're going to get the top people out and then we'll make a decision.
HUNT: Yes.
Matt Gorman, can you explain why Elon Musk is so focused on USAID?
MATT GORMAN, FORMER TIM SCOTT PRESIDENTIAL CAMPAIGN SENIOR ADVISER AND REPUBLICAN STRATEGIST: I - not in - in USAID in and of itself. Look, and I will say this, Trump, in his first term, fired the head of USAID, the temporary one, Bonnie Glick (Ph), at that point. And so he's - he's had machinations around this before.
I don't - when it comes to USAID, I don't exactly know. It might be more the foreign aid question specifically than anything else, to Stephen's point, right, that was the before.
Look, I think the Trump administration believes, and I think to this extent rightly, is that Congress cannot part - make an agency. No matter how independent it actually is, a part of the executive branch can't (ph) exempt it from executive branch control.
Now, to Alex's point, defining control. Exactly is it the top people, as, Kasie, you point out too the - with the FBI, political appointees, top officials, or, again, both Elon Musk and these people at USAID are both unelected, but only one of them, Musk and DOGE, is empowered to actually make these changes. So, if you're somebody who's working at USAID or any agency, that's fine. You can disagree. You can, you know, stand athwart in the doorway here, but you don't have the right to disobey essentially, the head of the executive branch, which, again, whether you like it or not, it is Donald Trump. And I think that is the question here these folks will answer, and it certainly will be a question for the courts. MEGHAN HAYS, FORMER BIDEN WHITE HOUSE DIRECTOR OF MESSAGE PLANNING AND
DEMOCRATIC STRATEGIST: But I think were missing here a bigger picture of what some of these agencies do and the impact that they have. USAID spends $2 billion on food in the United States. They buy food from farmers. That is going to greatly impact small farms. They spend over $1 billion in small businesses here in the United States that they then distribute. Also, they don't move money without the approval of Congress. So, it's just - it's - there is a lot of people who are impacted here in a lot of ways being - that are going to ripple out here for what. Like, what is the purpose of doing this? I guess that like -
GORMAN: No matter - no matter how altruistic the - the objective is, it doesn't change the organizational fact that it is still under the executive branch control. And you're absolutely right, Congress appropriates the money, but the executive branch does actually determine how to spend it. And that also includes the people, the organization HR, for better - for lack of a better term.
HAYS: Totally - I totally hear what you're saying. I guess I just don't understand why we are trying to impact all of these Americans and all of these different people's lives. For what? What is the point here? So, Elon Musk can take out someone that he doesn't like, or that they can have - say that they're getting rid of spending? USAID -
GORMAN: I think it's exactly the last part, yes.
HAYS: But USAID's budget is 0.7 percent. Like, that is not going to solve any budget woes here.
GORMAN: But I think that's not the point, right? It's whether it's 0.7 percent or 700 percent or whatever, right, it's the - it's the acumen of itself.
THOMPSON: But to Meghan's point, there are going to be real human costs to this 90 day pause in spending abroad. A lot of these programs need constant funding. And you could see some humanitarian, you know, mini crises, if that, you know, if the money doesn't start back.
HUNT: Well, we're not even - we haven't even touched on the national security implications around American soft power being projected in the world. And we can obviously argue if they're doing it effectively. But that's kind of the point, right? I mean that's why - part of why Kennedy put the USAID into existence in the first place.
All right, let's turn now to this.
Over the first weeks of Donald Trump's second presidency, Democrats have been responding to his executive actions, often with something along these lines.
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SEN. CHUCK SCHUMER (D-NY): It's illegal. It's unconstitutional.
UNIDENTIFIED MALE: It's grossly unconstitutional. UNIDENTIFIED MALE: What Donald Trump tried to do in the last 24 hours
is illegal.
(END VIDEO CLIP)
HUNT: Birthright citizenship, freeze federal funds, fire inspectors general. Trump is testing the courts with his rapid-fire executive orders. One legal expert telling "The New York Times" this, quote, "this seems designed to invite courts to push back. The overall message is a boundless view of executive power. They are clearly setting up test cases."
[06:40:06]
And as he's looking to reshape the federal government, Trump's White House is continuing to insist on his claims of sweeping presidential power.
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KAROLINE LEAVITT, WHITE HOUSE PRESS SECRETARY: He is the executive of the executive branch, and therefore he has the power to fire anyone within the executive branch that he wishes to.
(END VIDEO CLIP)
HUNT: All right, joining us now, former adviser to George W. Bush and John McCain, Mark McKinnon. He is also the creator of Paramount's "The Circus."
Mark, good morning. Always wonderful to see you.
MARK MCKINNON, CREATOR, "THE CIRCUS": Good morning.
HUNT: We've been talking about this here all morning. Whether it's the FBI, the Treasury Department, the USAID. Musk's people are in the federal government in ways that I suppose they told us they were going to do, but seeing it is quite a different matter.
What do you think is going on here? And if you're a Democrat, if you think it's illegal, is there any way to stop it?
MCKINNON: Well, I - the blizzard is so strong, Kasie, that it seems to me that we need to just mandate that - that President Trump take a day off a week because it's just hard to keep up with everything. There's the - all the controversies that are going on.
But clearly, Trump is doing what he started to do in the first term, which is to test the limits of executive authority. And in his mind there is no limit. He's trying to push it as far as he can absolutely go, to the point where you really ask the question, what do we need Congress for? And at a certain point, Congress is going to stand up and say, well, now wait a minute, we have a role here. And I think that's going to include Republicans as well.
But, you know, there's so much criticism about Democrats having no message. At a certain point it becomes easier for them because they're just going to say, well, we're not those guys. And the other interesting thing I think that's happening is that, it is making clear what government does, right? When we freeze funds, suddenly we have all these reports about, oh, this is happening and this is happening. And - and in the USAID, same thing. We - Americans don't really have a sense of what that money does or what it's being spent for. But in a way, this is redounding to Democrats' benefit because it's saying, well, here's where the money's going and here's what it does. And I think at a certain point people will say, well, now wait a minute, that's - that's a pretty good expenditure of funds. And the interesting thing I think about Canada is, everybody's going to be asking the question, including and especially Canada, wait a minute, we're like your - we're - we're supposed to be like, you know, the - the - the favorite aunt next door. What did we ever do? And there's a guy named Mark Dubowitz, who's a - a national security expert. I think he nailed it when he said, sometimes you kill a chicken to scare the monkeys. And this may be an example of Trump taking on, you know, a benign - a benign actor, but the point of it is not to really punish that benign actor, it's to send a message to everybody else around the world that here's what we can do.
HUNT: It does - I - I - I absolutely take your point, although it seems like a risky strategy.
MCKINNON: Yes.
HUNT: To put it - to put it mildly.
MCKINNON: Very risky.
HUNT: So, one thing, Mark, this just crossed here. We're learning at CNN that USAID workers who are based at the Washington headquarters were told to stay home today, not come to work today, Monday, in this unexpected early morning email. And it says here, quote, "at the direction of agency leadership, the USAID headquarters at the Ronald Reagan Building in Washington, D.C., will be closed to agency personnel on Monday, February 3, 2025. Agency personnel normally assigned to work at headquarters will work remotely tomorrow, with the exception of personnel with essential on-site and building maintenance functions individually contacted by senior leadership."
Can we talk about the impact on - on foreign aid here? And, you know, there's something I want to ask you about that's - it's not part of USAID. It's - it's underneath the State Department. But it is - has been in the news because of this federal funding freeze on foreign aid. And that's PEPFAR, which I know President George W. Bush took incredibly great takes, incredibly great pride in. It's a program that pays for HIV life-saving medication across the world for millions of people. It saved millions of lives, potentially. Can you talk a little bit about what that program has stood for, for Republicans in the past and - and what the overall impact of all of this is?
MCKINNON: Yes, Kasie, I mean, I remember working very closely with people like Bono to - to make this happen, and very conservative senators that - that recognized the human tragedy in places like Africa where millions of lives are being lost. And there's - there's no question, I think, and more broadly in the historical sense, that George W. Bush's PEPFAR policy will be his most lasting, impactful legacy. It saved tens and 20 - or 20 millions of lives in Africa and continues to do so.
[06:45:07]
And it's really one of the most important health public policy initiatives in the world ever. And - and it's a great example of what I would call compassionate conservatism.
And the problem is with what Trump is doing in - in his new exertion of this sort of policy is he's eliminating compassion from conservatism. And that's what drew a lot of people across the bridge, like me, from being a former Democrat to being a Republican, was this idea of embracing a compassionate notion of conservatism. You take that away, you're going to lose a lot of people.
HUNT: Mark, overall, I mean, what do you think of all of the things this blizzard, as you described it, that have unfolded here in the first couple of weeks, what is still going to matter in two years when we head to the midterm elections? What's going to matter in four years?
MCKINNON: Well, I think what's going to matter is that, again, I think in an ironic way, what Trump has done - you know, Republicans, for years, have just been sort of a campaigning on this notion that we're going to - we're going to tear down government. We're going to stop - basically stop government. And they've made government this big boogeyman of - of - of, you know, that's affecting American lives and is the problem.
Well, now they've caught the car and they've got to do something about it. And in - and in trying to do something about it, give people like Elon Musk, who, by the way, is flying so close to the sun I can - I can smell the wax melting on his wings, to give, you know, unelected people this - this ability to go into the Treasury Department and find out your private information. People. I think, in a couple of years are - by then are going to say, well, wait a minute, we - this is not the mandate that we gave. And, by the way, now we have a better recognition of what government does, what it means and why we've got it.
HUNT: All right, Mark McKinnon, always grateful to have you on the show, sir. Thank you so much for being here. See you soon.
MCKINNON: Thanks, Kasie.
HUNT: All right, still ahead here on CNN THIS MORNING, President Trump set to launch the first tariffs in a growing trade war. How the president's new taxes on imports could ultimately hit your wallet.
Plus, as Democrats elect a new DNC chair, the debate rages on about how to emerge from the political wilderness with voters.
(BEGIN VIDEO CLIP)
JAKE TAPPER, CNN ANCHOR: Why is your party so staggeringly unpopular with the public?
SEN. TIM KAINE (D-VA): The American public looks at standard campaigns. They don't see Democrats advertising on the economy, which is their principal concern, and so they have wonders about us. Let's return to the bread and butter basics that people want to really focus on and -
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[06:50:48]
HUNT: President Trump's tariffs on Canada, Mexico and China set to go into effect tomorrow barring a last second change of heart. All those countries now vowing to fight back. Canada announcing retaliatory tariffs of 25 percent on $30 billion worth of U.S. goods. In three weeks, another $125 billion could be added. Mexico plans on announcing what they'll do in a few hours. China promising corresponding countermeasures. Canada also going a step further by taking some U.S. products off store shelves and vowing to boycott other products.
(BEGIN VIDEO CLIP)
JUSTIN TRUDEAU, CANADIAN PRIME MINISTER: There are many ways for you to do your part. It might mean checking the labels at the supermarket and picking Canadian-made products. It might mean opting for Canadian rye over Kentucky bourbon, or forgoing Florida orange juice altogether.
(END VIDEO CLIP)
HUNT: Forgoing Florida orange juice.
Joining us now to discuss, Jason Furman, former chairman of the Council of Economic Advisers.
Sir, good morning to you. Thanks so much for being here.
JASON FURMAN, PROFESSOR OF PRACTICE, HARVARD KENNEDY SCHOOL: Good morning.
HUNT: Let's just start with the impact of this. I mean, we've been watching Dow futures, for example, all morning down around 500 points. Now it's 600 points. There you can see the other markets, the S&P 500, and the Nasdaq. As we anticipate, you know, the U.S. absorbing what we learned from the president over the weekend. What's the impact?
FURMAN: Yes, so, first of all, most markets are down. So, Americans are losing retirement savings. And by the way, the markets are not fully pricing in these tariffs. They still think they might go away. They might go away quickly. If they last, it's going to be even more. The one market that's gone up is oil prices. They're up enough that they're going to make it cost you an extra $0.80 to fill the tank of your car. And again, that could go higher. HUNT: So, what impact does this have and what's the difference between
- and maybe you can help us understand why Canada is facing 25 percent, whereas China, the tariff is 10 percent. Obviously, an adversary versus an ally.
FURMAN: Yes, I - I don't think anyone can help you with that question. I mean it just boggles the mind. You know, you say it's fentanyl - you know, they say it's fentanyl. Forty pounds came over the border from Canada to the United States. A bunch of fentanyl went from the United States to Canada, by the way. Those are tiny numbers compared to what you're seeing on the Mexican border. Canada's an incredibly close ally. And it's not just that products are going to become more expensive, it's going to be really hard, for example, for American auto companies to keep their plants open if this trade war continues and escalates.
HUNT: Jason, tariffs have been used by both Democratic and Republican administrations in recent years. I mean President Biden did not undo some of the tariffs that Donald Trump had put into place. This is a tool that, in a post-NAFTA America, and the resulting - the populism that has resulted from that is not necessarily always unpopular with American consumers. Is there a role for tariffs, and, if so, what do you think that is?
FURMAN: Yes. So, this is just at a completely different scale. President Biden added tariffs on $18 billion of stuff. This is $1.4 trillion of stuff. So, this is about 100 times more extensive than the tariffs that President Biden did.
And it is true that you couldn't quite see the price increases from the Trump tariffs. The Biden ones, even less, because many of them weren't on consumer goods or were delayed. Here, people will see it. People are already getting notices from some of the businesses they deal business with that their prices are going up because of these tariffs. You're going to see job loss if these tariffs continue. I think this is going to be the moment when people figure out that a globally integrated economy is good for them, both as consumers and as workers.
HUNT: All right, Jason Furman, formerly of the National Council of Economic Advisors.
[06:55:02]
Sir, very grateful for your time. Thanks very much for being here today.
FURMAN: Thank you.
HUNT: All right, and as President Donald Trump tests the limits of his presidential powers following that bruising election cycle, Democrats have been trying to pick and choose their battles. "The New York Times" reports this, quote, "as Democrats face the reality of President Trump's second term, they share a fundamental belief this moment calls for an inspirational message from their party. They just cannot decide what exactly that should be. They disagree over how often and how stridently to oppose Mr. Trump. They have no shared understanding of why they lost the election, never mind how they can win in the future."
Virginia Senator Tim Kaine offering this advice to his fellow Democrats.
(BEGIN VIDEO CLIP)
SEN. TIM KAINE (D-VA): I think sometimes national Democrats don't. We focus on competent government and running the economy in a great way that focuses on innovation and advancing. We call - we have what we call a make, build, grow agenda. While the Republicans are talking about cutting taxes and cutting regulation, and most people understand that tax cutting is just for the wealthiest, on the Democratic side, in Virginia, and I think we can do this nationally.
(END VIDEO CLIP)
HUNT: All right, our panel's back.
Meghan Hays, is that a fair assessment from "The New York Times" of where Democrats are right now?
HAYS: Yes, I think that there is a big divide still of what - what the messaging should be. I think you have a lot of people who want to move back to the middle and talk about the economy and talk about how to, you know, build back up the middle class from the bottom up. And then you have a lot of people who are still in the identity politics and still want to move further to the left. So, I do think that the Democratic Party is going to have to figure out where they are, or they will continue to lose.
THOMPSON: Yes, I mean, it's like an anvil fell (ph) on the entire party's head and they're very stunned and they can't decide whether or not it's a communications problem or an agenda problem. You saw like what Tim Kaine just said there, that's more of saying it's a messaging problem. Our agenda is fine.
And you have people out there like Rahm Emanuel, and then also even some other Democrats that are saying, we have to move to the right on issues like immigration, the border, crime. We have to meet voters where they are, and we haven't yet. And that debate isn't going to be solved in the immediate future.
COLLINSON: I don't think this is going to get solved until there is a candidate. I think an inspirational messenger is as important as an inspirational message. And that will galvanize - when that person or people emerge, that will galvanize the party to have a message to come back. All of this stuff is great, but there's no one with the authority to rest the party one way or the other and leave it behind them.
GORMAN: A good candidate can solve a lot of ills. And the messaging, when Ken Martin talked about this, the new DNC chair, it's such a cop out, right? Like it's, you know, putting lipstick on a pig so to speak, right? HAYS: Yes.
GORMAN: And I think it's - it's not just about the economy, it's not just about identity issues, right? I think it's oversimplifying to say we want it just solely based on prices or just solely based on this. It was a question of priorities. We talked ad nauseam about that infamous Kamala ad about priorities, which really blended the two. It was about what the priorities were. And I think, again, it's meeting folks where they are and not just saying it was a messaging problem. It was so much more than that.
THOMPSON: But there are some Democrats that don't want to overreact to the results of the election.
GORMAN: Yes.
THOMPSON: I mean, at the end of the day, they - you know, they won competitive Senate seats in places where Trump won. Kamala Harris, the margin of the Electoral College was only 250,000 votes and she had 107 day campaign. You know, I think there are some people that don't want to overreact and to what - what was actually a fairly close loss.
HAYS: But Democrats are nowhere near where the rest of the country is. And like, we are very much aligned where the coast is, but we are not where the moderate Democrats are.
GORMAN: No. No.
HAYS: We are not where the battleground states are. Like, as a member of the Democratic Party, we are just not there. And I think that we need to decide whether we're going to move there or we're just going to shake it out until the country moves to where we are. And I just don't think they're going to move to where we are.
HUNT: Really fascinating. Great way to end it.
All right, let's leave - I'll leave you with this today. The Grammy's last night in Los Angeles, crowning a couple of big winners.
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UNIDENTIFIED FEMALE: The Grammy goes to "Cowboy Carter," Beyonce. Beyonce.
(END VIDEO CLIP)
HUNT: Los Angeles fire officials reading the winner for album of the year. Beyonce taking home the win with "Cowboy Carter." Her first win ever in this category after four previous nominations.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Kendrick Lamar, "Not Like Us."
(END VIDEO CLIP) HUNT: And another big night for Kendrick Lamar winning song of the year and record of the year for his diss track, "Not Like Us." That's just the start of a big week for the rapper who's going to be performing at the Super Bowl in just six days.
And yes, we here at CNN even got a moment in the lime green light.
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JAMIE GANGEL, CNN SPECIAL CORRESPONDENT: Quote, brat. You're just that girl who is a little messy and likes to party and maybe says some dumb things sometimes, " end quote.
UNIDENTIFIED FEMALE: Oh, God. Yes, 360.
(END VIDEO CLIP)
HUNT: That is, of course, Charli XCX reacting to our very own Jake Tapper and Jamie Gangel, who explains to people like me and others out there exactly what brat meant when we were all talking about that.
[07:00:09]
The pop star also took home the first of three Grammys of her career last night.
Thank you.
Did you guys know what brat was before this summer?
THOMPSON: No.
GORMAN: No.
COLLINSON: Still don't know the idea (ph).
GORMAN: Still don't.
COLLINSON: Yes.
THOMPSON: I'm a Washington dork (ph). I don't know.
GORMAN: Yes. And (INAUDIBLE) brat. Yes. Yes.
THOMPSON: I think you're a brat.
GORMAN: OK, good. Kendrick Lamar, Jamie Gangel, Taylor Swift, it's all the same.
HAYS: Wow. OK.
HUNT: I don't know. Well, I - we'll leave it there. Jamie, we love you.
Thanks to our panel. Thanks to all of you for joining us. I'm Kasie Hunt. Don't go anywhere. "CNN NEWS CENTRAL" starts right now.