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Erin Burnett Outfront

Jan 6 Committee Seeks McCarthy's Cooperation, Wants To Ask About Trump's State Of Mind Before, During, After Capitol Riot; WH Touts COVID Treatments But Some Not Available For Months; Prices Rise At Fastest Pace In 40 Years; Biden: "More Work To Do;" "It's Ridiculous": COVID Surge Intensifies Grocery Store Shortages; Russia Talks Produce No Breakthrough; Djokovic Admits To "Error Of Judgment." Aired 7-8p ET

Aired January 12, 2022 - 19:00   ET


WOLF BLITZER, CNN HOST: I think you're right. Salma Abdelaziz in London for us, thank you very much.

And to our viewers, thanks very much for watching. I'm Wolf Blitzer in THE SITUATION ROOM.

Erin Burnett OUTFRONT starts right now.

ERIN BURNETT, CNN HOST: OUTFRONT next breaking news, the January 6 Select Committee tonight asking to speak with House Minority Leader Kevin McCarthy, the man who spoke to Trump on the day of the insurrection. Will the man who once claimed he had nothing to hide cooperate fully?

Plus, it's been called a game changer for treating people with COVID, but will it be months before more anti-viral pills are delivered? We'll tell you why. Dr. Sanjay Gupta reports.

At any moment now, Australia could decide whether Novak Djokovic will be allowed to stay in the country and compete in the Australian Open. Let's go OUTFRONT.

And good evening. I'm Erin Burnett.

OUTFRONT tonight, the January 6 Select Committee raising the stakes, asking the House Minority Leader to meet with them, offering up to specific dates for his testimony. And here's their letter tonight to the House Minority Leader Kevin McCarthy. They write, we request - "We write to request your voluntary cooperation on a range of critical topics, including your conversations with President Trump."

So it's about five and a quarter pages here. And the Committee lays out in excruciating detail McCarthy's central role in their investigation.

Here on page four, the letter notes that the Committee has obtained "contemporaneous text messages from multiple witnesses identifying significant concerns following January 6th held by White House staff regarding President Trump's state of mind and his ongoing conduct." And the letter says it appears that McCarthy and Trump during that

time had one or more conversations, one of which they say in here, again, on page four was an hour long, during which McCarthy, their words implored Trump to accept defeat and move on. The letter says McCarthy may have talked to Trump about the possibility that Trump could be removed from office by the 25th Amendment. And it goes on to say that McCarthy may have laid out the possibility of Trump actually resigning. Look, it is clear from these pages that McCarthy talked to Trump a lot before, during and after the insurrection.

On January 6th itself, the letter details how McCarthy was talking with Trump as rioters ransack the Capitol, laying out how Republican Congressman Jaime Herrera Beutler says McCarthy told her he tried to get Trump to realize the severity of the riot and to call it off. When Trump replied to McCarthy that the rioters were antifa, McCarthy told Trump the rioters were his supporters and begged Trump to call them off. To which Trump responded, "Well, Kevin, I guess these people are more upset about the election than you are."

McCarthy talk to Trump often, plenty. And not just to Trump as the Minority Leader, also as the leader of the voting bloc against certifying the election results. And in both of those capacities, McCarthy was the recipient and sender of many messages that day before and after. He was at the epicenter.

And so more than maybe anyone he knows Trump's state of mind. I mean, an hour long phone call, yelling, imploring. Before, during and after the insurrection, McCarthy was central and now he has a big decision to make, will he stand by these words?


MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Would you be willing to testify about your conversation with Donald Trump on January 6, if you were asked by an outside commission?

REP. KEVIN MCCARTHY (R-CA): Sure. Next question.

RAJU: You would?


BURNETT: Sure. Just wants to quickly say sure, absolutely, black and white. Now, McCarthy did, of course, block an independent commission, but the January 6th committee is a bipartisan group of lawmakers and Republicans who have appeared before it tell me that the group is professional, prepared and have done deep and serious homework.

But McCarthy's outrage on January 6th, when he was imploring, he was so upset, fizzled fast. Remember how he flew to Mar-A-Lago in the weeks following the insurrection? Let me just remind you, here is Kevin McCarthy before that trip and here he is after that trip.


MCCARTHY: The President bears responsibility for Wednesday's attack on Congress by mob rioters. He should have immediately denounced the mob when he saw what was unfolding.

I was the first person to contact him when the riots was going on, he didn't see it. What he ended the call was saying, telling me he'll put something out to make sure to stop this and that's what he did, he put a video out later.


BURNETT: Yes, later. Hours later. McCarthy buried the history that he lived, that he spoke out about, that he was outraged about, that he called an attack and then did everything he could to stop the January sixth commission from being formed in the first place. Sort of hard to understand how those are both coming from the same person.

But now here he is in the crosshairs, in the epicenter, will he make good on his word and cooperate and appear in a couple of weeks as the Committee has specifically requested tonight.


Ryan Nobles is OUTFRONT live on Capitol Hill. So Ryan what options does the Committee have to go after McCarthy if he refuses to cooperate? I mean, reading here, they are very clear, we want to work with you, here's the dates. Does this date work? Does that date work? They lay it all out.

RYAN NOBLES, CNN CONGRESSIONAL CORRESPONDENT: Yeah. That's right, Erin. The Committee does want to make it as easy as possible on Kevin McCarthy to come before them and provide them the information that they're looking for. But slowly over time McCarthy's begun to hedge his bets in terms of cooperation.

Sure, he answered Manu about an independent commission back in May by saying, sure, I'll come before the Committee. But local TV station asked him about a month ago if he'd be willing to come before the Select Committee and he said that he has nothing to hide, but he also has nothing to offer. So it's clear that there's going to be some roadblock put in the way of the Committee.

So the option that they do have at their disposal is to subpoena him, that would mean a legal request that he come before this congressional committee, that is within the authority of the Select Committee. The problem that the Committee may run into, though, is the enforcement of that subpoena. With people that aren't members of Congress, they've been able to go down the road of referring them for criminal contempt to the Department of Justice for prosecution.

It may not be as cut and dry with members of Congress, because they may be playing by different set of rules by the House of Representatives, so it could mean going before the ethics committee or something along those lines. There is another option at their disposal as well, Erin, they could just schedule a public hearing and invite Kevin McCarthy and these other members of Congress to come before them, and dare them not to show, that's also a possibility.

It's not something the Committee has said publicly that they're willing to do, but these are all options on the table as they try to get someone like Kevin McCarthy to come before them and talk to them about what he knows.

Meanwhile, Erin, while Kevin McCarthy or these other members of Congress may be resisting conversations, we do know that there are members of Trump's inner circle that have been willing to talk to the Committee.

Today, Kayleigh McEnany, the former White House Press Secretary, someone that was very close with President Trump right through the end of his presidency was there after the election through January 6th, also served as a spokesperson for his campaign. She talked to the Committee today. We don't have a readout of that meeting, but we know that she did it willingly after the subpoena was issued to her.

So the Committee may not be getting answers from members of Congress, but they are getting it from other people close to the former President. Erin?

BURNETT: All right. Thank you very much, Ryan.

And I want to go now to Shan Wu, former federal prosecutor, Abby Phillip, our Senior Political Correspondent and Anchor of INSIDE POLITICS SUNDAY, and Jonathan Martin, national political correspondent for The New York Times. Thanks to all.

So Shan, let me start with you. The Committee goes through in this letter, lays out McCarthy's interactions with Trump in great detail and they put it together based off reports and interviews. But they lay out a very clear and compelling narrative of how central he is on the day of the insurrection, in the days before, in the days and months after. So how important is his testimony in addition to all of this information that they have to the Committee, Shan?

SHAN WU, CNN LEGAL ANALYST: Oh, I think it's really important. There's no substitute for the opportunity to talk to him live and have a conversation about this, having to answer questions about Trump's state of mind. And it's not just the state of mind on how he felt during the insurrection going on, it's how he might have felt before and after.

And if some of the reports we're hearing are correct, that McCarthy among others was telling Trump, there is no path out of here. This claim that the election was improper is a lie is not going to work. That really goes to the possibility of Trump having the criminal intent to obstruct the congressional process and to possibly be part of this insurrection.

BURNETT: So Jonathan, your reporting is cited in the letter. So in the letter it says the Committee is also interested in McCarthy's communications with the president after January 6th, so they quote and they say, "It appears that you may also have discussed with President Trump the potential that he would face a censure resolution, impeachment or removal under the 25th Amendment. It also appears that you," referring to McCarthy, "may have identified other possible options, including President Trump's immediate resignation from office."

The footnote there points to an article that you wrote with three Republican sources told you McCarthy asked other Republicans whether he should call on Trump to resign. A very significant thing. How much does McCarthy now?

JONATHAN MARTIN, CNN POLITICAL ANALYST: Well, he was in frequent contact with former President Trump, not just on January 6th, Erin, but in the days immediately after January 6th. He talked to the President repeatedly and I think he was trying to figure out what was at stake here. And I think in real time he was trying to absorb the impact on a lot of levels of the capitol riot and grappling with what to do.


And I think McCarthy was, I think in some ways, trying to find a way out with President Trump. And clearly President Trump was not going to resign. That became a thing evident pretty quickly. But I think those hours and days after January 6th, I think Kevin McCarthy, frankly, like a lot of people in the Republican caucus were trying to grapple with how to approach this president who they had courted and stayed close with for four years but now were starting to wonder is he going to be a real anchor on us politically going forward. And I think for a time, that was an open question.

Now, as you pointed out by the end of the month, he was down at Mar-A- Lago and they were smoking a peace pipe down there and we know the rest of the story since then. But those hours and days after are crucial.

BURNETT: Well, they're crucial, because obviously in that moment, he thought what he thought, it was an attack. It was Trump's responsibility. He talked to, as you point out, multiple Republicans about whether you should tell Trump to resign. It wasn't that it was private and secret in his heart, he was sharing it.

And Abby, in May and this is after the visit to Mar-A-Lago when he went down to kiss the ring, McCarthy did tell Manu, sure, he'd be willing to testify about his conversations with Trump. Of course, he did so in a really dismissive way and referring to an outside commission, which McCarthy then subsequently blocked from actually forming.

So here's what McCarthy has said about the bipartisan committee that ended up forming. Here he is.


MCCARTHY: I think it's very clear to the American public, this is a sham.


BURNETT: Now, Abby, I feel like I have to emphasize. Republicans I've talked to who have appeared before that committee say the exact opposite. They say that it's fair, and smart, and well-researched and substantive. But when it comes to McCarthy, Abby, is there any chance he talks to the Committee willingly?

ABBY PHILLIP, CNN SENIOR POLITICAL CORRESPONDENT: Yes. I think it's very unlikely. I mean, you'll probably see him take a similar tact as Congressman Jim Jordan and issue a statement that basically says, I've got nothing for you. And you heard Ryan Nobles talking about that as well.

Because they know that even though that is effectively sort of defying the subpoena, the enforcement mechanism is a lot less clear for the Committee whether or not they can or would be willing to pursue this even further down the road. So he could simply try to say, while everything that you need to know is out there in the public domain, that's obviously not going to satisfy the Committee, but it might stall it enough that he doesn't actually have to provide information and faces very few consequences.

What you're seeing with McCarthy is like with a lot of other Republican allies at that time on the day of January 6th and afterwards, they were panicked. They believed that this was catastrophic for President Trump. But that all changed as the days and weeks went on and they realize that Trump's base did not, in fact, abandon him after January 6th.

So he is going to really struggle if he does ever come before the Committee to explain the discrepancy between his thinking on January 6th and what came after the answer for the discrepancy, obviously, as we all know is politics.

MARTIN: I'd be surprise, Erin ...

BURNETT: So Shan, the Committee does go through in this - yes, go ahead, Jonathan.

MARTIN: ... if he does cooperate.

BURNETT: You (inaudible) ...

MARTIN: No, I was going say I'd be very surprised if McCarthy cooperates at any level, especially given the fact that Jim Jordan has made very clear, Jim Jordan, of course, is the hard line Trump ally from Ohio, Jordan has made clear he's not going to cooperate. Now, if McCarthy was to say that he would corporate at any level and create daylight between himself and Jordan, that would be duly noted by one Donald J. Trump of Palm Beach, Florida. And I think that would create real challenges for Kevin McCarthy if he was to be in line for the speakership this time next year, because his big impediment to being speaker could be Donald Trump and Jim Jordan. So I think for that reason alone, McCarthy is unwilling to cooperate with the Committee.

BURNETT: So Shan, one other point here, there's a question about, obviously, McCarthy voted to not certify the election and that vote did not happen until after the insurrection, because the insurrection paused. It didn't happen till that night. So the Committee says they want to know whether Trump's team talked to

McCarthy between the insurrection and the vote. They say, "Your public statements regarding January 6th have changed markedly since you met with Trump. At that meeting, or any other time, did President Trump or his representatives discuss or suggest what you should say publicly, during the impeachment trial, if called as a witness, or in any later investigation about your conversations with him on January 6th."

So referring to the vote and also obviously to the trial that came after anything else was their coaching. So do you think it's possible that there was coaching and if so, what's the significance legally?

WU: Oh, I have no doubt there was coaching. The significance legally - I mean, arguably it's kind of an obstruction issue.


I mean the impeachment wasn't a court trial, but that kind of coaching really again reveals what's really going on with what Trump's trying to do then. If he's telling him say these things, because we can still stop the election results, that really is part of the conspiracy to obstruct Congress and to have this insurrection.

And going to the point that Ryan made about the enforcement issue, it is hard for Congress to take the step for them to enforce it against them, because it's kind of unprecedented. And I think the real question is going to be the 800-pound gorilla in the room is where is the Justice Department on this, because they would have methods of enforcement, particularly if they issued grand jury subpoenas.

BURNETT: All right. Shan, Abby, Jonathan, thank you all very much.

MARTIN: Thanks, Erin.

BURNETT: And next, it is a groundbreaking COVID treatment that could prevent more than a million hospitalizations we're told, but most of the doses aren't coming for months - months, why? Dr. Sanjay Gupta reports.

Plus, the White House trying to downplay the striking 7 percent increase in consumer prices over the past year. How bad can inflation get once it gets started?

A new information tonight from Bob Saget's family after the actor's surprising and sudden death.



BURNETT: Tonight, the Biden ministration announcing it's ordering another half million courses of AstraZeneca's COVID treatment. They say the U.S. has more treatments available than at any other point during the pandemic.

[19:20:00] (BEGIN VIDEO CLIP)

JEFFREY ZIENTS, COUNSELOR TO THE PRESIDENT: Our nation's medicine cabinet has never been more stocked, with 4 million effective treatments available in January alone.


BURNETT: Okay. But there's also this truth, millions of doses of Pfizer's antiviral pill are not set to be delivered, ready, till the end of June. And healthcare workers say that they need them now. Dr. Sanjay Gupta is OUTFRONT.



CLAY BYINGTON, COVID-19 PATIENT: I could feel like the mucus buildup in my lungs.


SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT (voice over): Like millions of other Americans, 26-year-old Clay Byington tested positive for COVID 19 after gathering with friends and family over the holidays.


BYINGTON: When the coughs came, it definitely sent the aches down the body.

GUPTA (on camera): Were you quite worried about how sick you were getting?

BYINGTON: I was pretty worried. I see a lot of stories about how people's health has declined very fast in a matter of days. I know that me being overweight just kind of worried me.


GUPTA (voice over): Despite being boosted, Clay's BMI of 35 placed him at higher risk, so Clay's doctor prescribed him Paxlovid, an anti- viral that has been shown to reduce hospitalizations by nearly 90 percent among those at highest risk for developing severe disease.


JOE BIDEN, PRESIDENT OF THE UNITED STATES: They're a game changer and have the potential to dramatically alter the impact of COVID-19.


GUPTA (voice over): Paxlovid is a combination of oral pills that work by interfering with the virus' ability to replicate. Based on Paxlovid's high efficacy, the 20 million courses bought by the Biden administration could eventually prevent more than a million hospitalizations based on CNN's calculations. But the problem is this, the majority of those doses won't arrive for months.


DR. ERIC TOPOL, EXECUTIVE VICE PRESIDENT FOR RESEARCH, SCRIPPS: There's hardly any of these pill packs around.


GUPTA (voice over): Dr. Eric Topol is Executive Vice President for Research at Scripps in San Diego. He believes the Biden administration should have invested in Paxlovid months ago.


TOPOL: Have we had hundreds of millions of blister packs of packs of it right now, we'd be able so much better to fend against Omicron.

GUPTA (on camera): Several months before the vaccines were authorized, there were at risk investments being made, many bets being made on various vaccines and those were gambles. Were those same sorts of gambles made on therapeutics?

TOPOL: The fact that this was the first medication that was designed specifically against this virus, that I think was worth a shot. It was worth an investment, but there was none.


GUPTA (voice over): So far, just 160,000 courses have been delivered around the country. And with more people currently hospitalized with COVID-19 than at any other time during the pandemic. These pills will soon be in short supply, they will need to be rationed.

Leaving doctors like Shireesha Dhanireddy at the University of Washington's Harborview Medical Center with some tough decisions.


DR. SHIREESHA DHANIREDDY, MEDICAL DIR., INFECTIOUS DISEASE CLINIC, HARBORVIEW MEDICAL CENTER: We're using these medications judiciously and really giving them to the people that would most benefit from these therapeutics. If we open it up to vaccinated individuals, we would not have enough therapy.

GUPTA (on camera): Should a vaccinated person get it versus and unvaccinated or should it only be for unvaccinated? I mean, it's going to raise all kinds of ethical and medical sort of questions.

TOPOL: The availability is so limited and more people who are unvaccinated are going to wind up in need.


GUPTA (voice over): The National Institutes of Health guidance prioritizes treatment for those at highest risk, the immunocompromised, the elderly, and yes, the unvaccinated.


DHANIREDDY: Many of the people who are seeking this therapy may not need this therapy to recover from COVID-19 and it's particularly if you're vaccinated, boosted.


GUPTA (voice over): There are other treatments available, but remdesivir, an anti-viral, and sotrovimab, a monoclonal antibody, both require infusions and molnupiravir, another oral pill is the last line option being recommended. None of them as effective as Paxlovid.


BYINGTON: Yesterday, my cold isn't as worse and today I'm feeling a lot better.


GUPTA (voice over): Clay was one of the lucky few, getting both physical relief as well as mental relief from the drug.


BYINGTON: Once you're sick and you're feeling the symptoms and you're kind of like, oh, my goodness, is this going to get worse, so that kind of the medication helped alleviate that stress and anxiety.



GUPTA (on camera): Erin, I think fundamentally, there was a lot of energy put around vaccines, understandably. But as a result, I think what we're seeing is that there was less put around testing around even masks and therapeutics, as you just saw there and I think we're seeing some of the ramifications of that.

The White House has said, they've responded saying, look, we're working with Pfizer last year to try and speed up clinical trials, to try and accelerate the program.


But here's where we are, a very, very effective oral therapeutic that can be very effective right now. But the vast majority of the doses aren't going to arrive to the summer when we know the numbers, Erin, are going to be much lower.

BURNETT: Yes. All right. Thank you very much, Sanjay.

And next, it's becoming a common occurrence at grocery stores across this country, shelves empty, so what is behind the shortage of food and supplies? And Russia, refusing to back down after NATO talks aimed at preventing

an invasion of Ukraine, so what is Putin's end game?



BURNETT: New tonight, President Biden conceding his administration has 'more work to do', as a new report shows inflation rose 7 percent over the past year for consumer prices. That is stunning, it's, yes, the highest in nearly four decades. The Fed signals it could respond by raising interest rates several times this year, which would send up borrowing costs for everything, credit cards, mortgages among them.

And just consider this, just to give you the scope context here, right now the average mortgage rate in the United States is at 3.22 percent for a 30-year.


It was 16 percent the last time inflation was this high, in 1982. That's terrifying. And Americans are already seeing all of this eat away at their earnings, right? The price of used cars and trucks, 37 percent higher than a year ago. Gasoline, 49. Clothes, up nearly 6 percent. Food costs -- food costs -- up more than 6 percent.

And the fear of further price increases appears to be part of the reason that people are clearing out the shelves of grocery stores across the country.

Gabe Cohen is OUTFRONT.


GABE COHEN, CNN CORRESPONDENT (voice-over): It's a disconcerting deja vu. Empty shelves at grocery stores like the early days of the pandemic.

UNIDENTIFIED FEMALE: This is ridiculous.

COHEN: Kennet Washington (ph) went to three D.C. stores to find food for her kids.

UNIDENTIFIED FEMALE: It is getting a little hard but I just have to do what I got to do.

COHEN: The cause? A perfect storm. The entire food supply chain, farms, warehouses, trucking, grocery stores, were already facing a worker shortage. Now, omicron is intensifying it.

UNIDENTIFIED MALE: They are seeing empty shelves when they go to the supermarket, that's why labor shortage.

COHEN: At Stu Leonard's in the Northeast, 8 percent were isolating last week. Some other stores have less than half their staff.

UNIDENTIFIED MALE: It's a challenge.

COHEN: And with people stuck at home and inflation at its highest point in 40 years, families are cooking more meals, and demand for groceries is spiking. Now, throw in winter weather. This blast in the Northeast shut down I-95 in Virginia -- a critical trucking route for more than a day. Leaving stores across the region with little inventory.

UNIDENTIFIED FEMALE: I turned out. There is like nothing for me to buy.

MATT AMBROGI, SHOPPER: Already took time out of my day to go to the store. So definitely little frustrating.

COHEN: The northwest and Midwest saw similar issues, amid extreme weather. While shelves are mostly stocked again, winter is just underway. And omicron is still spreading with the supply chain stretched thin.

GREG FERRARA, PRESIDENT & CEO, NATIONAL GROCERS ASSOCIATION: I expect in the coming weeks, we'll continue to face supply challenges. Those challenges will be sporadic and it will impact different areas at different times.

COHEN: At Dawson's market in D.C., the owner Bart Yablonsky got word from his distributor that they could only deliver 70 percent of his orders in the coming weeks.

BART YABLONSKY, OWNER, DAWSON'S MARKET: It's not the product is not in the warehouse, it's because they don't have enough people to pick the product. That, also, creates a situation where we have to pivot, again, and try to find alternative suppliers for some of the key items.

COHEN: Are you concerned that there could be shortages on the shelves here?

YABLONSKY: Absolutely. So I am definitely concerned it is going to be shortages.

COHEN: Experts say there should be enough food at stores, but in some cases, there will be fewer options. The National Grocers' Association is now asking the Biden administration to prioritize tests for grocery workers across the supply chain and limit mandates to help keep their workforce intact.

FERRARA: We know that there are workers who will leave, as opposed to getting vaccinated or even having to deal with testing on a weekly basis.

COHEN: Starting February 1st, unvaccinated workers at Stu Leonard's will no longer be paid if they have to quarantine.

UNIDENTIFIED MALE: I think that's fair.

COHEN: Many owners have already raised wages to keep staff. With operation costs rising, families should expect more price hikes at the market in the months ahead.

UNIDENTIFIED FEMALE: It's going to be very concerned.

COHEN: Kennet Washington (ph) like so many is struggling to eat those costs, as a grocery store cashier.

UNIDENTIFIED FEMALE: Bring up the pay rate. That's all I ask. Bring up the pay rate.


COHEN: And tonight, experts are urging people not to go out and panic-buy groceries. But they say, certain products at certain times may be tough to find in the weeks ahead -- Erin.

BURNETT: All right. Gabe, thank you very much.

All right. Now, Larry Summers. He was treasury secretary for former President Bill Clinton and director of the National Economic Council under President Obama.

So, Secretary Summers, we are at 7 percent inflation and obviously it is a nearly 40-year high. And you know, you heard that woman there, right? Wage increases to make up for the price increases. The problem is when one starts to follow the other.

And you have been really worried about inflation for a long time. How serious are price increases like the ones we are seeing?

LARRY SUMMERS, FORMER DIRECTOR, NATIONAL ECONOMIC COUNCIL UNDER PRESIDENT OBAMA: Look, we have a real problem. I think it was a foreseeable problem a year ago, given the amount of money that was infused into the economy. But it took seven years after the Vietnam War started to get inflation up to this level.

Inflation's now 50 percent higher than it was when Richard Nixon imposed price controls to stop what was seen as a terrible inflation at that time. I don't think there's much question that we have an inflation problem that's not usually thought of as simply a transitory issue.


The real concern is that we are going to get a wage price spiral in which higher wages lead to higher prices, and higher prices lead to higher wages. And we're off to the races. And that is still a substantial risk starting from where we are. I can't conceive that we are going to see the kind of 16 percent mortgage rates that you referred to from the early '80s, Erin. But I sure do think that interest rates are going to have to rise significantly from where they are.

And we're going to have to get used to the fact that our problem is not that our economy is too weak. Our problem is that our economy is too strong. There's too much demand, relative to the supply capacity of our economy. There is not a lot we can do to change the supply capacity in the short run.


SUMMERS: And that means we don't want to have just rising inflation. We are going to have to limit demand.

BURNETT: So -- so, let me ask you, because -- okay -- you know, look. When you adjust, um, wages for inflation, right now, you actually -- the problem actually looks, in a sense, even worse. Even though inflation was slightly less of a problem coming month to month in December than it was from a year ago but adjusted for inflation wages were down about 2 1/2 percent, and that's part of the reason that the fed has this fear, right, what are they going to do, right? Raising interest rates when real wages are dropping is really awful for -- for a lot of people.

And the Fed Chairman Jerome Powell, who you have been calling on to deal with this for at least a year, is still only talking about if he needs to raise interest rates. Here he is today.


JEROME POWELL, FEDERAL RESERVE CHAIRMAN : In a way, high inflation is -- is a -- is a severe threat to the achievement of maximum employment and achieving a long expansion that can give us that. If we have to raise interest rates more over time, we will.



SUMMERS: Look, nobody knows the future with certainty but I think there is every reason to expect that interest rate increases are going to be necessary. I think it's hard to believe that, given that we've got 7 percent inflation, raising rates from zero to 1 or even from zero to 2 is going to be sufficient to contain the inflation. The main scenario where you wouldn't have to raise interest rates is one that nobody wants, where we start to see our financial institutions and our asset prices implode.

If you saw a sudden decline in stock prices, for example, then you wouldn't want to be raising increase -- interest rates but that's hardly an outcome that would suggest economic stability or economic health. So, I think we are looking at a situation right now that is fundamentally unsustainable.

And the question is going to be can we achieve a gradual breaking of the economy that permits this over heeding to ease and inflation to come down. I sure hope we can and I got a lot of respect for Jay Powell. But by continuing to believe this narrative of transitory inflation and it's all going to be okay, we've gotten ourselves way behind where it's much harder to deal with than it would have been if we had understood more fully what our problem was six months ago.

BURNETT: All right. Well, Larry, I really appreciate your time. And I thank you. SUMMERS: Thank you.

BURNETT: Next topic, of course, is interest rates go up when your debt is greater than the entire size of your economy, then your cost of borrowing is going up and up for our entire country. There are very serious questions to consider for all Americans.

And next, what is Putin's move? Russia refusing to back down as the U.S. steps up pressure on Moscow to pull troops away from the border with Ukraine.

Plus, Novak Djokovic now admitting he knew he had COVID-19 during that December photoshoot where he was maskless. Hear his explanation as he waits for a decision on whether he can stay and compete in Australia.



BURNETT: Tonight, no deal. A second round of talks ending without any commitment from Putin to pull roughly 100,000 troops back from the Ukrainian border amid growing fears of an invasion. This as Russia warns it is ready to take military action if it doesn't get what it wants as the U.S. is finalizing new sanctions that it says it will impose if Putin does invade Ukraine.

Deputy Secretary of State Wendy Sherman, sending this warning to Putin.


WENDY SHERMAN, DEPUTY SECRETARY OF STATE: If he invades, subverts, or coerces Ukraine in any way, he is going to face very difficult, tough economic sanctions and other actions.

It is very provocative. It is very escalatory. It is very concerning. It could, indeed, lead to conflict and I certainly hope that President Putin makes the smart choice.


BURNETT: OUTFRONT now, Fiona Hill, former senior director for European and Russian affairs on the National Security Council and the author of "There is Nothing for You Here: Finding Opportunity in the 21st Century."

So, Fiona, I really appreciate your time.

Of course, you know more about the -- the actors here and what is at stake than anyone. So, you know, when someone puts 100,000 troops -- more than 100,000 troops along a border, you know, they don't just do it for -- for fun. And obviously, it's cold now and as it gets warmer, it gets muddier and harder to do something so there is a window of time that Putin is facing.

How likely is it that he actually does invade Ukraine? [19:45:04]

FIONA HILL, FORMER WHITE HOUSE ADVISER ON RUSSIA UNDER TRUMP: Well, that is a big question that everyone is trying to resolve right now, Erin. Basically, what Putin is trying to see is what we have an offer for him as a result of this kind of maximal gunboat diplomacy that he has put in place. And when I say gunboat diplomacy, it's clear that he has these troops on the border with Ukraine to hold Ukraine hostage, partly, because of Russia's own ambitions toward Ukraine and, you know, reincorporating in some fashion into Russia's sphere of influence.

But also, to put us on notice as we have seen. He's been demanding that NATO pull back from the positions NATO's held since the late 1990s. That the United States, in fact, pull back in some fashion from Europe, maybe, even withdrawing completely. And also, that NATO then actually refuses to take onboard Ukraine, Georgia, and any other former-soviet states and on top of that, there is all kinds of other demands and a really heightened rhetoric in Moscow about the seriousness of this issue and, I know, how antagonistic the Russians see themselves towards the United States at this point.

So, as Wendy Sherman's laid out, this isn't looking -- and Putin has clearly given himself the option of moving into Ukraine, again. I mean, he's already done it with the annexation of Crimea --


HILL: -- and moving into the Donbass since sparking up a war there.

So we have to remember, this is, you know, phase three in many respects of -- of, you know, the pressure that Putin's been putting on Ukraine since 2014.

BURNETT: And as you say since 2014, of course at the time then- President Obama put sanctions on sort of lower-level players. Now, President Biden, who was then the vice president, who pushed for tougher sanctions which is what they are putting on the table here if Putin goes ahead.

And it is sort of a part of a trend, Fiona, because obviously as both candidate and as president, Joe Biden talked a much tougher game against Putin than Donald Trump ever did.

Here are some examples.


JOE BIDEN, PRESIDENT OF THE UNITED STATES: I don't believe we are a nation that bows down to Vladimir Putin. I will not.

DONALD TRUMP, FORMER PRESIDENT: I think Putin's been a very strong leader for Russia. I think he's been a lot stronger than our leader.

GEORGE STEPHANOPOULOS, ABC ANCHOR: So, you know Vladimir Putin. You think he is a killer? BIDEN: Uh-huh. I do.

BILL O'REILLY, TV HOST: Putin's a killer.

TRUMP: Lot of killers. We got a lot of killers.


BURNETT: But the thing is, Fiona, you know, Putin didn't do this while Trump was president, right? He had the -- the -- obviously, Crimea. And then, there was Trump. There was that sort of break.

And then, he is now got 100,000 troops on the border. Why do you think he feels emboldened now when he is up against a president who has talked a lot tougher?

HILL: Well, look, there are actually things that Putin did do during the Trump administration. You know, there was the poisoning of Sergei Skripal, you know, the former Russian spy and his daughter in the United Kingdom. There were all kinds of assassination attempts and there were Russian paramilitaries that shot down Special Forces in Syria in 2018, and a host of other things.

But you are absolutely right. This is a big change when it comes to Ukraine and part of the reason there is because the Biden administration looks more serious about support for Ukraine than Trump personally did. I mean, many of the other things that President Trump said was what is the United States got to do with Ukraine? And in fact, unfortunately, we saw that President Trump was more interested in kind of privatizing the relationship, you know, with Ukraine, with the infamous phone call with President Zelensky asking to do him a favor.

So, what the Russians don't like and Putin doesn't like is kind of a back to the U.S., business as usual on the national security/foreign policy front, and looking about more exercises with Ukraine, perhaps bringing Ukraine closer to NATO. And so, there is a reaction to that.

And then, there's also -- look, this is the 30th anniversary since the dissolution of the Soviet Union, and at that point, you know, 30 years ago, Putin saw Russia getting pushed out of Europe.

And he thinks that we're weak now -- the United States. He looks at, you know, inflation. He looks at the withdrawal from Afghanistan. He looks at all of the domestic problems that President Biden has.

He looks at disarray in Europe. He looks at fractions and frictions in NATO and he thinks this is my moment. And as you said earlier, there is also a military moment. He can't keep forces in the field without invading because of the weather and all kind of other issues and so he feels that he has to make a move now.

And if it is not going to be another invasion, it's going to be a really concerted effort to put our feet to the fire, to come through with some of the things that he is demanding.

BURNETT: All right. Fiona, thank you so much for your -- your perspective and -- and nuance. I appreciate it. Thank you.

HILL: Thanks, Erin.

BURNETT: And next, tennis star Novak Djokovic waiting to find out if he will be allowed to stay and compete in Australia, and he admits -- admits that he tested positive for COVID and knew it when he went and did a interview and photo shoot last month.

Plus, Bob Saget's family on the actor and comedian's sudden death.



BURNETT: So tonight, Australia's immigration minister could decide any moment whether Novak Djokovic will be allowed to stay in the country and play in the Australian Open. This decision comes after Djokovic was forced to admit that he did an interview and photo shoot, knowing that he had COVID.

Paula Hancocks is OUTFRONT.


PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: Novak Djokovic knew he had COVID-19 during this December photo shoot. The photographer did not.

The tennis star did an interview and shoot with a two-person team from French sports magazine "L'Equipe", despite his infection saying: I did not want to let the journalist down.

In a statement Wednesday, he adds, on reflection, this was an error of judgment.

Looking at the timeline provided by Djokovic, he says he attended a basketball game in Serbia's capital Belgrade on December 14th, after which many tested positive.

December 16th, he took a rapid-antigen test, which he says was negative. Then, a PCR test.

December 17th, another negative rapid test. Then, he attended public events seen maskless in photos.

Djokovic says the positive result came after those events -- the next day, he did the interview.

BEN ROTHENBERG, RACQUET MAGAZINE: This is incredibly poor, selfish judgment in this pandemic, which we all know at this point when you find out you are positive, you should self-isolate. There is laws about this in Serbia and other countries.

HANCOCKS: Djokovic also admitted to an error on his travel declaration, considered a serious offense in Australia, saying his support team filled it in for him. When asked if he was traveling in the 14 days before his arrival, the

no box was ticked. There is evidence he was in, both, Spain and Serbia during that time. He called it human error, and certainly not deliberate.

As Djokovic trains for next week's Australian Open, hoping the statement clears up what he calls misinformation, the Australian border force is expanding its investigation into him according to a source close to the investigation. Looking at possible inconsistencies related to his PCR results, and his movements after testing positive.

CNN is also seeking clarification from Serbian health authorities. Immigration minister Alex Hawk still has the right to personally intervene and revoke his visa at any time.

The official draw for the men's single's tournament is in a few hours. Djokovic is the number one seed but his attendance is still not guaranteed. For now, Djokovic continues to train as he waits to hear his fate.

ROTHENBERG: It also makes a question of how viable his travel will be going to further countries in the future. More and more countries are putting strict rules on vaccination, around migration laws and borders. And if Djokovic continues to stay unvaccinated, it can really jeopardize his -- his viability as a globe-trotting tennis player.


HANCOCKS: The International Tennis Group has issued a statement about Djokovic doing that interview while knowing he was COVID-19 positive, saying it is deeply concerning, pointing out that journalists have to follow the COVID-19 rules and protocols. And they expect players to do the same, pointing out that all of the journalists here are vaccinated -- Erin.

BURNETT: All right. Thank you very much, Paula.

And next, an update on Bob Saget's death.


BURNETT: New information from Bob Saget's family tonight. His loved ones say they are waiting for the results of his autopsy report. Not currently offering any theories about his cause of death, two sources close to the comedian tell CNN.

The 65-year-old Saget was found dead in a Florida hotel room on Sunday. He had COVID in December, according to a source, called any link to Saget's death quote speculative. A source also says Saget seemed healthy, wouldn't have traveled to Florida if he actually had felt sick.

Thanks so much for joining us.

"AC360" starts now.