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White House: Musk Is A "Special Government Employee"; Tariffs Spark Fears Across Auto Industry; New Orleans Kicks Off Super Bowl Week Celebration. Aired 5:30-6a ET
Aired February 04, 2025 - 05:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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[05:32:40]
KASIE HUNT, CNN ANCHOR: All right, it is 5:32 a.m. here on the East Coast. It is 2:32 a.m. out in Seattle, Washington. A beautiful shot of the skyline there.
Good morning, everyone. I'm Kasie Hunt. It's wonderful to have you with us.
We're going to turn now to the dismantling and restructuring of parts of the federal government courtesy of Elon Musk. Once at odds the world's richest man and President Trump are now the closest of allies after Musk spent more than $200 million on the 2024 election.
Now Musk is working under Trump as a special government employee. So that means he's not a volunteer and he's also not a full-time federal worker. Musk is not being paid, a source familiar with his employment says, but he does have a top secret security clearance, according to another official familiar with the matter.
Yesterday President Trump confirmed that Musk has access to a critical Treasury Department payment system that delivers the majority of the federal government's payments.
(BEGIN VIDEO CLIP)
DONALD TRUMP, (R) PRESIDENT OF THE UNITED STATES: He's got access only to letting people go that he thinks are no good if we agree with him, and it's only if we agree with him. He's a very talented guy from the standpoint of management and costs. Elon can't do and won't do anything without our approval, and we'll give him the approval where appropriate. Where not appropriate we won't.
(END VIDEO CLIP)
HUNT: Late Sunday night Musk also announced plans to shut down USAID. Democrats say Trump cannot unilaterally shutter a federal agency. He has to ask Congress to do that.
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REP. JIM MCGOVERN (D-MA): I'm sorry that you have to put up with this offensive bull (bleep) coming out of this White House.
SEN. CHRIS MURPHY (D-CT): This is a constitutional crisis that we are in.
REP. ILHAN OMAR (D-MN): That is how dictators are made.
SEN. BRIAN SCHATZ (D-HI): In the last 10 days Donald Trump has done more to destabilize things across the planet then perhaps any other president in recent memory.
REP. JAMIE RASKIN (D-MD): We don't have a fourth branch of government called Elon Musk.
(END VIDEO CLIP)
HUNT: All right, joining us now CNN senior political analyst Ron Brownstein. Ron, good morning. Always good to see you.
RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST, SENIOR EDITOR, THE ATLANTIC (via Webex by Cisco): Good morning.
[05:35:00]
HUNT: I want to dig into your piece on cnn.com in just a second, but I want to start with the Elon of it all because there are --
BROWNSTEIN: Yeah.
HUNT: -- all of these -- you know, we've seen and heard the reports he's going to shut down USAID. There's reporting this morning from The Wall Street Journal and The Washington Post about emerging plans to shutter the Department of Education, or at least --
BROWNSTEIN: Yeah.
HUNT: -- try to. He's got young aides who are moving sofa beds onto management floors in government offices.
What is the upshot of all of this?
BROWNSTEIN: Yeah. You know, certainly no one would deny that the federal government -- its information systems, its bureaucratic structures -- all of that can benefit from a fresh look and an attempt to apply kind of modern management and information management techniques. But that clearly is not what's happening here, or certainly not all that's happening here.
And what's basically happening is that under the guise of efficiency Trump and Musk are using this effort to kind of go after ideological targets -- longstanding ideological targets of the right -- foreign aid. As you say, USAID, the education department. I mean, a truly extraordinary idea to kind of hollow it out.
Not to mention the purges we are seeing at the same time with people -- January 6 rioters who violently attacked a police officer being let out of jail. Prosecutors and potentially FBI investigators who worked on holding them accountable are being dismissed.
What's really I think most striking to me about this is the passivity and the acceptance of Republican congressional leaders. I mean, I'm just trying to imagine Everett Dirksen or Bob Dole in a circumstance of an administration asserting the unilateral authority to shutter an agency that Congress has authorized.
And it just really underscores to me that you are not really going to see meaningful pushback from Republicans in Congress on a broad range of issue. I mean, Susan Collins saying she's going to vote for Tulsi Gabbard probably tells you all you need to know.
And that the real question -- I mean, the real arbiter -- the fulcrum of what America looks like after four years of this Trump presidency with Musk at his side is going to be the federal courts and, in particular, those six Republican-appointed justices on the U.S. Supreme Court. They're going to decide what our constitutional structure looks like with a Trump administration very clearly determined to push against all the traditional boundaries on the arbitrary exercise of presidential power.
HUNT: And, of course, this sort of overarching question here Ron I think for me, and this speaks to what you're writing about on our website, is the tension -- the inherent tension between a billionaire running all these government systems --
BROWNSTEIN: Yeah.
HUNT: -- potentially to his own interests, and the interests of millions of Americans, especially lower-income Americans who benefit from a lot of these programs, many of whom are Donald Trump supporters.
I mean, one of the big themes that came out of the results of the election was, of course, that the Republican Party has evolved into one that is a working class coalition. And that is, of course very different from what we saw in the 1990s where it was Bill Clinton as president --
BROWNSTEIN: Yeah.
HUNT: -- who stood in the way of Republicans trying to pair tax cuts and spending cuts -- which is, of course, what Republicans in Congress are going to try to do.
I want to play a little bit of what Clinton said. And he ultimately kind of came out on top in this fight. But let's watch what he said at the time and then we'll talk about your piece.
BROWNSTEIN: Yeah.
(BEGIN VIDEO CLIP)
BILL CLINTON, (D) THEN-PRESIDENT OF THE UNITED STATES: They are about to pass about $148 billion in taxes and fees on working families, elderly people, and low income Americans. And their budget slashes education and technology. It undercuts the environment. In other words, it balances the budget, but it still mortgages our future. That's the wrong way to go.
(END VIDEO CLIP)
HUNT: So can you talk a little bit about the lessons learned then and how they may apply now? And I do keep coming back to -- I don't think we've actually spent enough time talking about the ill-fated government spending freeze that they tried to --
BROWNSTEIN: Yeah.
HUNT: -- roll out early on here. Because what that would have done had it remained in effect -- and they're still trying to do some of it -- was -- deeply hurt many of these people on the WIC program, right? The program that gives formula --
BROWNSTEIN: Yeah.
HUNT: -- to millions of babies in the United States.
BROWNSTEIN: Yeah. As we've just been talking about there is an incredible amount of deeply consequential stuff going on in the first days of the Trump administration that is going to have long-term ramifications for the U.S. constitutional system and that is likely going to produce epic legal battles going all the way to the Supreme Court.
But if you're looking for the development that will, I think, have the biggest political impact in shaping the environment in 2026 and 2028, I think it is going to be this battle that's coming over taxes and spending that is being put on track by the demands for Republicans -- by conservatives in the House, in particular, for large spending cuts to be attached to the bill -- the reconciliation bill that will extend the Trump tax cuts from his first term.
[05:40:21]
And Kasie, that is a stark departure from the strategy Republicans used in the 2001, 2003 Bush tax cuts and the 2017 Trump tax cuts. All of those focus only on sugar -- no spinach. They did the tax cuts and they did not really connect them to large cuts in programs.
What the Republicans are being pushed toward by their conservative members in the House is a reprise of that '95-'96 fight when Republicans explicitly tied spending cuts to tax cuts in the same reconciliation bill in the fall of 1995. And ultimately, as you saw in that clip that you played, Bill Clinton vetoed it on the argument that Republicans were taxing -- were cutting programs that benefitted the middle and working class to fund tax cuts for the rich.
It was an extremely powerful argument for him. It turned around his presidency. He went from under 50 percent in approval to over 50 percent in approval during that fight and really never looked back.
And that -- I think in many ways Democrats are banking above all on a fight over priorities. And the question of whether Trump -- you know, making the argument that Trump ran on solving your problems. But he is really focused on enriching his rich buddies and the tax --
HUNT: Yeah.
BROWNSTEIN: -- and spending fight obviously will be kind of the cornerstone of that.
But a lot of what's happening with Musk in the federal government could also be kind of a supporting case -- part of that case.
HUNT: For sure.
All right, Ron Brownstein. Thank you so much for spending some time with us this morning. Always love having you.
BROWNSTEIN: Thanks for having me.
HUNT: All right. Coming up next here on CNN THIS MORNING, President Trump's trade wars. How they will impact Elon Musk, Tesla, and the future of electric vehicles.
Plus, Super Bowl week kicking off in New Orleans.
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CHRIS JONES, DEFENSIVE LINEMAN, KANSAS CITY CHIEFS: Kansas City! We're back in the Super Bowl, baby.
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[05:46:30]
(BEGIN VIDEO CLIP)
ELON MUSK, CEO, TESLA: I think the United States can actually -- absolutely can be competitive as a manufacturer in the United States.
REPORTER: And more American jobs is a very welcome thing.
MUSK: Oh, and I should point that people seem to have lost sight of the fact that the United States is still the biggest manufacturer in the world. People don't seem to realize this. I'm, like, always amazed that people think that everything's made in China. It's not.
REPORTER: Was it important for you personally to build this car that you conceptualized quite a long time ago in the United States?
MUSK: Uh, yeah, it is.
(END VIDEO CLIP)
HUNT: He doesn't sound -- not a lot of conviction there with that last answer. But that was nearly 15 years ago when Tesla CEO Elon Musk was first taking his company public. Now Musk's electric vehicle company may get caught up in President Donald Trump's tariff war, which has sparked fear across the auto industry.
Tesla shares dropping about five percent yesterday after Trump announced tariffs over the weekend on Mexico, Canada, and China where the company produces parts.
One Canadian politician even telling the Canadian press that the country should specifically target Tesla in the tariff fight saying, "We need to look through and say who is supporting Trump and how can we make them pay a price for a tariff attack on Canada?"
Musk's proximity to the president also prompting broader questions about how Trump will approach EVs in his second administration.
(BEGIN VIDEO CLIP)
TRUMP: And I'm for electric cars. I have to be, you know, because Elon endorsed me very strongly -- Elon -- so I have no choice.
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HUNT: All right, joining us now Wall Street Journal reporter Mike Colias. He's also the author of the new book "Inevitable: Inside the Messy, Unstoppable Transition to Electric Vehicles." Mike, good morning. Thanks so much for being on the show.
MIKE COLIAS, REPORTER, THE WALL STREET JOURNAL, AUTHOR, "INEVITABLE: INSIDE THE MESSY, UNSTOPPABLE TRANSITION TO ELECTRIC VEHICLES" (via Webex by Cisco): Yeah. Thanks for having me on.
HUNT: So let's -- all of this ties together, right -- the questions about tariffs. The kind of evolution -- the bumpy evolution of the American auto industry toward electric vehicles.
What in your view is going to be the ultimate impact of Donald Trump's presidency on the American transition to EVs?
COLIAS: Well, the U.S. has already had -- it's already a laggard right now. I mean, there's other parts of the world that this transition is happening a lot faster.
I think the Trump presidency and the hostility toward EVs, despite what he said in that clip, it's going to slow things down. I don't think it's going to derail it.
I think we are going to see a rollback in EPA regulations, which will allow companies to sell more gas and diesel engines -- engine cars than they could -- than they could now under the Biden rules, which were really ratcheted up. Those rules would require -- basically, you'd have to -- in order to hit those requirements you'd have to sell roughly half of your sales to be EV by early next decade. No one really thinks that's going to happen.
So the industry was already thinking there needed to be a rollback. It'll be interesting to see how much -- how far he goes with that.
The other big part of it is there's a lot of federal money that's going into EVs right now. A $7,500 tax credit for many people who buy EVs. That's all got to go through Congress. And I think there are certainly some GOP lawmakers who are ready to dunk on EVs and take away that credit. I think it could be a casualty here.
There's also a great big pot of money for battery production in the U.S. Automakers who are building these huge battery factories in, frankly, red states like Tennessee and Kentucky -- they can qualify for a lot of money under this federal program. And I think lawmakers in those states are going to be hard-pressed to vote for something when it's bringing -- vote against something when it's bringing tens of thousands of jobs into their districts, right?
[05:50:10]
HUNT: Yeah, for sure.
Mike, can you -- we're obviously seeing Elon Musk just get his hands into the federal government in a way that's gone -- it's been very fast. It's potentially very dramatic.
One of the things that has raised questions for some of is critics are his ties to China and how that may or may not influence what he is trying to do with our government here in the U.S.
Can you help us understand what are Elon Musk's business ties to China, and how do they pose a conflict of interest?
COLIAS: Well, yeah. I mean, we've -- at -- The Wall Street Journal has had some reporting about how Musk was really able to get into China and sort of convince some bending of the rules to establish the company there. It's a strong competitor there now.
But the Chinese automakers -- even Tesla -- has its hands full now. I mean, that market has flipped so fast in terms of the competition from the domestic players.
I think on the tariff front I think Tesla's actually probably in pretty good shape relative to the rest of industry right now. They tend to make cars where they sell them. For example, they're not shipping anything in from Mexico. He was thinking about putting a plant there and has held off in the last few years.
So I -- but yeah. I mean, China is very central to Tesla's -- to Tesla's future not only for selling electric cars but a lot of the technology in self-driving cars that Elon Musk sees as that company's future.
HUNT: All right, Mike Colias. Very grateful to have you on the show. I hope you'll come back. This is a topic of personal fascination to me although I admit I do -- I do have a very gas-guzzling Corvette. It'll get like 20 miles to the gallon in sixth. It was the first Corvette that had a sixth gear on the stick shift. But it's more like nine when you're down -- when you're actually driving it. COLIAS: Hey, there's a -- there's a hybrid -- there's a hybrid out there and an electric coming, so you're in -- you're in good shape.
HUNT: I have heard that. I remain skeptical. But you know what, I'm happy to try it out. See, there it is. It's from 1989, you know? Old school.
Anyway, remember to get your copy of "Inevitable." Mike's book is out now. I really appreciate your expertise, sir. Thanks very much for being here.
COLIAS: Thanks so much, Kasie.
HUNT: All right. Super Bowl week kicking off in New Orleans with officials stressing that the city is safe for the NFL's biggest game after the chaos and devastation of the New Year's Day terror attack on Bourbon Street.
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MAYOR LATOYA CANTRELL, NEW ORLEANS: The NFL was unshaken standing with the city of New Orleans after January 1. And the first comment made to me from the NFL was that they wanted to make sure that the soul and the spirit of New Orleans was unshaken. We are stronger and united in ensuring that Super Bowl LIX will be the best ever.
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HUNT: CNN's Coy Wire was on hand for opening night along with the players, coaches, and fans.
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COY WIRE, CNN SPORTS ANCHOR AND CORRESPONDENT: Welcome to opening night for Super Bowl LIX here in New Orleans -- a rematch from the Super Bowl two seasons ago between the Philadelphia Eagles and the Kansas City Chiefs. Can the Eagles be the team to finally take down the two-time defending champs?
JALEN HURTS, QUARTERBACK, PHILADELPHIA EAGLES: You know, you sacrifice a lot. You put a lot in and work really hard to have this opportunity. And so to do it and be back two times out of four years starting is very special. It's something -- you know, the goal is to finish.
SAQUON BARKLEY, RUNNING BACK, PHILADELPHIA EAGLES: You've just got to take it all in. This is part of it. You've got to enjoy it, so I'm happy to be here. Happy to have a conversation with you guys. At the same time, you know it's a business and you stay locked in, but today you enjoy.
WIRE: Or will Kansas City become the first team ever to win three Super Bowl titles in a row?
JONES: Kansas City! We're back in the Super Bowl, baby. TRAVIS KELCE, TIGHT END, KANSAS CITY CHIEFS: The biggest lesson I've learned is don't let the hype get to you. Don't let the magnitude of the game around you get to you. At the end of the day this is a -- you know, you got here for a reason. Your team got here for a reason. So lean on them and don't let the moment be too big for you.
PATRICK MAHOMES, QUARTERBACK, KANSAS CITY CHIEFS: It kind of brings you closer together when people are rooting against you. You just kind of -- you become a tighter brotherhood in that locker room. And you know that we're doing it the right way and we bring ourselves together and have Chiefs Kingdom with us and go out there and try to win the game against everybody.
WIRE: Super Bowl week has officially kicked off. We'll be here all week long bringing you the best sights and sounds.
[05:55:00]
Coy Wire, CNN, New Orleans.
(END VIDEOTAPE)
HUNT: All right, our thanks to Coy Wire for that. Go, Birds!
In the next hour of CNN THIS MORNING an extraordinary offer from El Salvador proposing to house violent U.S. criminals in its jails. Democratic Congressman Johnny O -- Johnny Olszewski here to discuss.
Plus, China looking to one-up the U.S., hitting back with new tariffs overnight as President Trump hits pause on this trade war with Mexico and Canada.
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JIMMY KIMMEL, HOST, ABC "JIMMY KIMMEL LIVE!": I didn't even know Canadians knew how to boo. He's been in office two weeks, and he's already made Canada angry. The nicest people in the world are pissed off at us.
(END VIDEO CLIP)
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HUNT: It's Tuesday, February 4. Right now on CNN THIS MORNING --
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TRUMP: A lot of people don't like to play the game because they don't have a threshold of pain.
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HUNT: A tit-for-tat trade war. New overnight, China fighting back, hitting the U.S. with retaliatory tariffs.