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Erin Burnett Outfront

Todd Blanche In Trouble; Revenge On Iran; Dow's Worst Day In A Year After Fed Keeps Rates Unchanged. Aired 7-8p ET

Aired July 29, 2026 - 19:00   ET

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

[19:00:22]

ERIN BURNETT, CNN HOST: OUTFRONT next:

Breaking news, Todd Blanche's nomination for attorney general in danger. A key Republican senator saying, no, threatening to sink Trump's pick.

Plus, more breaking news. Trump out for revenge after Iran's surprise attack last night. Trump saying, quote, "It's our turn."

And the Dow dives, today suffering its worst drop in more than a year. Einstein, Ives, the whiteboard are back.

Let's go OUTFRONT.

(MUSIC)

BURNETT: And good evening. I'm Erin Burnett.

OUTFRONT tonight, the breaking news, a major Republican stand-up to Trump. Todd Blanche's nomination for attorney general is indeed in deep trouble tonight, a top Republican threatening to sink Trump's pick for the job.

Now, the Senate Judiciary Committee was scheduled to vote. It was a key vote in just a few hours, but the way things were going, this was going to go through. Republicans were going to get on board, it was going to happen, but that is not what has happened, and it is no longer clear tonight if that vote will happen.

We'll see. I mean, at this hour, there's a flurry of activity, meetings behind closed doors between Republicans. Todd Blanche just left the Capitol. He refused to answer questions, so there's a lot of drama. He even went to the White House this afternoon.

So, here's what it comes down to. Republican Senator John Cornyn wants it in writing that Trump's $1.8 billion basically slush fund for his political allies is dead for good, is over, is not going to happen, not get resurrected. As of now, it does not appear Cornyn is getting the assurance he needs.

(BEGIN VIDEO CLIP)

MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDENT: You never heard from the DOJ at all, never responded to you after you sent that back to them?

SEN. JOHN CORNYN (R-TX): As I told you earlier, it was not responsive to my concerns. I mean, we've heard from them. It's just that they refused to commit to writing what he testified to under oath. And it's not a big ask.

REPORTER: Why don't you think Todd Blanche has met your demands around the 11th hour before his vote?

CORNYN: Well, I assume he's getting some pushback from the president's lawyers.

(END VIDEO CLIP)

BURNETT: Here's the thing. We know that this slush fund matters a lot to Trump, and that may be what this is all about. But Cornyn is correct that it is not a big ask. if you actually believe what people tell you under oath and if you believe that people are people of honor and when they say they're going to do something, they're going to do it.

I mean, Blanche, in his confirmation hearing, testified that the fund was dead. But then he admitted it could be brought back by Trump's lawyers.

(BEGIN VIDEO CLIP)

CORNYN: Just to be clear, the president of the United States, who was a plaintiff in this lawsuit, has not agreed in writing to delete the weaponization fund, and there's no guarantee that he or one of the other plaintiffs might raise that issue by way of a lawsuit and a breach of contract lawsuit in the future.

TODD BLANCHE, ACTING ATTORNEY GENERAL: I suppose they could bring a lawsuit and then we would litigate it.

(END VIDEO CLIP)

BURNETT: So Trump's lawyers could bring back the fund, which Trump calls a great idea. It is a fund that could be used to pay, for example, rioters who attacked the U.S. Capitol and police officers on January 6th. Now, times of the essence for the Justice Department here, because if this vote in committee does not happen, this could push Blanche's full confirmation vote into the fall, into September, after the August recess, right? So, this is a serious delay if it doesn't happen here.

The showdown comes 71 days, of course, after Trump refused to back Cornyn in that ugly Texas Senate runoff, instead backing his highly controversial and challenged challenger, Ken Paxton, a decision which brought an end to the senator's more than 20 years in Congress, and one that Trump speculates is the reason Cornyn is putting up such a fight about the fund now.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Maybe John Cornyn's upset with me because I didn't endorse him. I don't know what it is.

(END VIDEO CLIP)

BURNETT: Well, whatever it is, Cornyn admits he's now free to vote as he wishes, doesn't have to try to assuage and appease Trump. He can do what he wants, whether it makes Trump happy or not.

(BEGIN VIDEO CLIP)

RAJU: You would acknowledge, though, having not having to run for reelection anymore has freed you up to be more independent from the president. Would you acknowledge that?

CORNYN: Have you noticed?

RAJU: So when the president says that you're doing this as a political vendetta, what do you say?

CORNYN: That's a convenient excuse and it happens to be untrue.

(END VIDEO CLIP)

BURNETT: Manu Raju is OUTFRONT live from Capitol Hill.

Manu, we just saw you asking all those questions there and really fascinating to see what he was willing to say to you. I mean, where does Blanche's nomination stand right now? I understand there's all these kind of last-minute backdoor meetings going on.

[19:05:02]

Is it really in danger?

RAJU: Yeah, it is. And it's hanging by a thread.

And the senator, John Cornyn, has made his demands really crystal clear for weeks now. He was -- he was -- wanted these assurances in writing, wanted to make it clear that the $1.8 billion fund would not go through and that the president -- the efforts to try to get future presidents and the current president not to be subject to IRS tax enforcement, that that exemption would be essentially nullified.

He wanted that all in writing and said, if you give me those things in writing, I will vote yes. He has not gotten that in writing. He said he has gotten some proposal from the Justice Department, but he said he has sent that back with a bunch of red lines in that proposal and he has not heard back since then or anything that's responsive to his demands, which means this, Erin, that if he votes no tomorrow in that committee, there's not enough to advance Todd Blanche's nomination to the Senate floor, given how narrowly divided that Senate Judiciary Committee is.

And if it doesn't advance the Senate floor, it's effectively dead, which is why Chuck Grassley, the Senate Judiciary Committee chairman, has been working behind the scenes with the White House, trying to see if there's any accommodation whatsoever for Cornyn. And Grassley has refused to say if he plans to delay this vote tomorrow. In fact, he just told us just moments ago that he's checking with his staff about what the update is and will decide whether to provide an update.

But if he just delays this vote until next week because the senators are leaving town tomorrow, Erin, that means if he brought this back up next week, it would almost certainly push back the final confirmation vote until after Labor Day. And at that point, who knows what the political dynamic will be like as we get closer to the election? Will they actually resolve John Cornyn's concerns?

BURNETT: Yeah.

RAJU: Which is why there is a ton of pressure right now on Cornyn to break to align himself with the president. But as you heard from there right there, he told me that he is feeling very independent these days, particularly since he no longer has to run for reelection after losing to that Trump-backed challenger -- Erin.

BURNETT: Yeah, yeah, I mean, now can have his pride.

All right, Manu, thank you very much.

And just a note, when Manu says after Labor Day, Labor Day is late this year, right? So you'd be talking September 7, 8, 9 on the Labor Day week before you even got to this.

Everyone's here with me now.

So, Gretchen, John Cornyn -- okay, there were so many times when he would go along with Trump, and now he's saying, have you noticed? Have you noticed that I feel a freedom? Do you think he'll hold firm?

GRETCHEN CARLSON, FORMER FOX NEWS HOST: I do. I actually do.

First of all, we've learned that people's word cannot be trusted because the first thing that should be fire alarms for everyone is Todd Blanche sent under oath that it was dead, but it's apparently not because he won't sign the papers.

Number two, this is John Cornyn unleashed. Okay? John Cornyn believes that the slush fund is wrong, and there's no way in hell Grassley is calling this vote tomorrow if John Cornyn is a no. I've been before this Senate committee. They're not going to call a vote unless John Cornyn is a yes.

And by the way, Thom Tillis is not completely a yes set either. But what's more upsetting to me than even talking about the slush fund is, why are any of these senators saying it's okay to approve Todd Blanche simply because of the Epstein files? Like suddenly, that's all okay now the way that he handled that? This should be concerning, too, of these senators --

BURNETT: Among many things, the visit to Ghislaine Maxwell --

CARLSON: Among many other -- BURNETT: -- when she was suddenly moved and the fact that half the

documents still haven't been put out when they were said they were going to put them all out.

CARLSON: Exactly.

BURNETT: I mean, Ryan, what does it say to you again I guess back to the point of somebody being good for their word which now we live in a world where It sadly matters much less than it used to. But you go under oath, you say it's dead, then it may not be dead, and now you won't sign the paper. What does it say that he won't sign the paper?

RYAN GOODMAN, FORMER SPECIAL COUNSEL AT DEPARTMENT OF DEFENSE: It's astonishing. And the same thing has actually occurred not just in the Senate, but also in the courts. So, a federal judge said to Todd Blanche and the Justice Department, give me in writing what you committed to in Congress.

They said, no, his word in Congress should stand, which is just unbelievable. Why wouldn't you just put it in writing? The court is asking for that to guarantee that the case is truly over, and then the court can dismiss the case. And that's even putting himself and the Justice Department at risk because it's a judge who might sanction them for their behavior in the case that created the slush fund in the first place, yet he won't do it.

So, there's something that's really hanging them up, even as though -- as Senator Cornyn said, it should be an easy ask.

BURNETT: It should, because they said under oath -- he said under oath that it was dead, right? I'm just saying, hey, all you got to do is say that you said what you said, right?

I mean, Paul, it does come, though, in the form of John Cornyn, who maybe whatever it was I did I say 41 days ago, you might not have expected him to be the face of this. But let me just play some more of the very defiant messages that Cornyn is unafraid to send the White House today.

[19:10:01]

(BEGIN VIDEO CLIP)

CORNYN: Maybe they think I'm just going to give up or you know go along but they're mistaken.

RAJU: Why do you think they're not getting a message from you?

CORNYN: Maybe they think they can roll me.

RAJU: Can -- can they roll you?

CORNYN: No.

(END VIDEO CLIP) BURNETT: Do you think we'd be in this situation if Cornyn had won the primary and was running for the Senate seat instead of Ken Paxton in Texas?

PAUL RIECKHOFF, HOST OF THE INDEPENDENT AMERICANS PODCAST: I hope we would be, because integrity -- I hope we would be because integrity should still matter. And hooray for John Cornyn, right? Look what it's like to have a senator who's truly independent, who's willing to buck the president, who's willing to buck his own party, and a Republican senator at that.

It would be great maybe if all senators could vote like they didn't have to run for reelection, we'd have a totally different situation where people put integrity and honor and our national security ahead of all the other stuff.

And this weaponization fund is so deeply unpopular that to Gretchen's point, I'm surprised more Republicans haven't broken with him on this. And Epstein similarly, because the Republicans are in real trouble here as they continue to align with Trump as his popularity continues to plummet, especially with independents. I think it's at like 22 percent right now.

We need people who are willing to stand up and also send a message that you cannot pay people for attacking the government, which is what this weaponization fund is. It's not just about paying folks for what they've done. It's about giving people incentive for what they might do in the election upcoming.

It's always about the circuit breaker of our elections that Trump is trying to slow down, stop, meddle with because he knows that's the check on his power that could be looming.

BURNETT: So, Ryan, let's just play this out, okay? There could be a vote and Cornyn and caves and there's a vote tomorrow and there's, you know, some dancing that goes on. But if there isn't, okay, if this vote, the committee vote is delayed and the confirmation hearing on the floor goes all the way into the fall, right? We're talking about now, you know, maybe second week of September, if everything goes well in that case.

But Blanche is acting. attorney general right now. So what does that actually mean in practice if this is delayed?

GOODMAN: So I do know that there are some Senate Republicans who think it doesn't really matter if they confirm him because he'll otherwise be an acting attorney general or the confirmed attorney general. But it is very different if you're an acting attorney general, you don't have the same gravitas when they're inter -- in their exchanges with the other agencies, and especially with the courts as well as being Senate confirmed.

And I think not only would be an acting attorney general, be an acting attorney general who's not able to get through the Senate, which is a very different calculation. And I think that's important before the --

BURNETT: Which really makes you look weak, I guess.

GOODMAN: Makes you look weak and doesn't have the trust of the Senate behind it. And if the Senate is behind it, then he actually has congressional endorsement, I would say, for everything that he's been doing. So, the Republicans are lining up behind what Blanche has been doing with the Justice Department if they do confirm him. And that's a very different scenario.

Also between now and the fall, there are some court cases that bear down directly on him tomorrow. There was a court case in the Epstein Transparency Act in which the judge had already said that Blanche acted in defiance of the Transparency Act. And tomorrow they're supposed to give the judge the unredacted files that have been asked for.

And then there are other cases in D.C. Circuit for the criminal contempt. The criminal contempt in the whole thing about sending people to El Salvador, it's Todd Blanche who's like person number one that has liability there. That's overhanging. Maybe something there happens before the poll?

BURNETT: You know, it's interesting, Gretchen. This has now come down to the fund when it comes to Cornyn, right? So, you're either going to make this fund go away or you don't have my vote. But before there was the fund issue, right? It was there, but before it was the main issue. The actual issue was meeting with the Epstein survivors.

CARLSON: Yes.

BURNETT: Right? They had asked Blanche to do that, especially in the context of the meeting with Ghislaine Maxell that resulted in her being moved to that minimum security prison in an unprecedented way. OK, but so finally then he met with the Epstein survivors after that last meeting when there was like this or not. And he does a quick meeting with them. They've now spoken out, said he behaved with no integrity during that meeting.

Senator Tillis, who had said you don't have my vote unless you do that.

Here's what the some of the Epstein survivors are saying now about Blanche in the meeting.

(BEGIN VIDEO CLIP)

DANIELLE BENSKY, EPSTEIN SURVIVOR: The meeting was very condescending. I mean, he actually said the words get to the point to us where survivors who've been waiting to meet with him for nine months, eight months. We've been asking for meetings and he very much said, can you get to the point already? Like, what are you getting at, right?

(END VIDEO CLIP)

BURNETT: Our viewers know Danielle Bensky because she has been indefatigable and speaking out on this issue. So why are we not hearing Senator Tillis, who is not afraid of speaking out to Trump, continue to pound the table on this?

CARLSON: He's not. I was very disappointed that he simply made that request like Blanche meet with them and then you'll get my vote. Although he's still waiting on the slush one too, I think. but with regard to Epstein, that was very disappointing to me because shouldn't Todd Blanche have thought on his own to have a meeting a long time ago with the Epstein survivors? He didn't think of it on his own and then when he thought --

BURNETT: Well, I mean, he did. They'd been asking and he refused until Tillis said do it or you don't have my vote. I mean, it couldn't be more obvious.

[19:15:01]

CARLSON: It -- and so -- I mean -- it couldn't be more obvious and then he apparently wasn't nice in the particular meeting that he was basically told to have.

It brings me back to what I was saying earlier. Why is everyone else who's going to give a yes vote okay with how the Epstein files were handled.

I think, though, to Ryan's point, what's really interesting is the slush fund must be more important than all of those other court cases you talked about in Trump's mind, because this is what he is saying that he will not sign off on tonight. It has to be coming from Trump.

BURNETT: That's the person who ultimately controls this.

You know, Paul, in this issue where Trump wants this vote and he's not getting it from the Senate, he gets asked about the majority leader in the Senate, right, John Thune, who has done all these, you know, things for Trump, gotten things over the finish line. So Trump's asked about him and he says this.

(BEGIN VIDEO CLIP)

REPORTER: Do you think he's still a man for a job?

TRUMP: Well, we're going to find out and I'll let you know.

(END VIDEO CLIP)

BURNETT: So that's interesting, Paul. Trump saying we'll find out. I'll let you know, right? As if he's the one who makes the decision when Trump's approval rating is at a new low, 34 percent. Among Republicans, 19 percent say they're enthusiastic, 19 percent in his own party I'm thinking just making sure we don't have a typo there because that's -- that's pretty stunning, Paul. So does this embolden anyone other than John Cornyn?

RIECKHOFF: I do. I think it does, yeah. I mean, this is maybe the moment, the summer where so many Republicans are going to get a spine and stand up to him, but also see the radioactivity of the issues that surround him. And I think there are a couple that just keep coming back that Trump can't get rid of.

Iran is obviously one of them. It's become like a sucking chest wound for the entire party. And Epstein is the other one. They want to keep batting it down.

But within the Republican base, people are furious about the Iran war. They're furious about Epstein. They're also upset about tariffs, and all things are dragging down Trump's popularity.

Now, I don't think Trump cares about popularity ratings. I don't think he cares about approval ratings, but the Senate Republicans do, and especially down ballot Republicans. They're going to be fighting in primary states for independents, which are always the key group to keep focused on.

They do not like this, and I think you're going to see more and more Republicans push back. Murkowski also pushed back this week. Another sign of some hope, not just for Republicans and Democrats, but for all Americans. We want Republicans, especially this summer, to show some spine.

BURNETT: All right, thank you all very much.

Paul, I got to say 1 correction though, which is that he cares about approval ratings when they're good. When they're good, they're great. And he talks about them a lot, right? His poll numbers.

All right, thank you all. I appreciate you.

And next, a bitter showdown between Anthony Fauci and Republicans on Capitol Hill. This was really epic. An incredible moment. Fauci repeatedly pleading the Fifth. Could Fauci find himself in trouble after doing that again and again and again?

And breaking news, Elon Musk jumping into the midterms. New reporting from Axios this hour says the billionaire is about to sink a massive amount of money into the midterms to help Republicans.

And more breaking news this hour, the Middle East bracing for what Trump is now saying will be a massive hit on Iran after last night's surprise attack, as we have new reporting on the state of America's arsenal.

Seth Jones and Spider Marks are next.

(COMMERCIAL BREAK)

[19:22:47]

BURNETT: Breaking news, bracing for payback. President Trump is threatening to hit Iran hard after Iran launched what the Trump administration calls a surprise ballistic missile attack against U.S. forces in Jordan.

(BEGIN VIDEO CLIP) TRUMP: We're going to be hitting them very hard because it's our turn to hit them. They know it's coming, they're asking us not to do it, but they nevertheless took a shot, so it's our turn. We're going to hit them very hard.

(END VIDEO CLIP)

BURNETT: Which actually is very calm, composed, and diplomatic compared to what Trump had threatened just a few hours ago, telling Fox News, how am I even supposed to quote this without avoiding it? Well, we are going to beat the effing you know what out of them. We will be hitting them hard. They're going to get a beating. Like I said, it now sounds relatively composed.

So, Trump wants revenge. He's mad. And Iran is glad about it. Today, releasing a propaganda video showing what it claims was the attack. The missile, they say, was inscribed with a warning in blue ink that says, quote, "We are fighting until the full annihilation of the aggressor enemy. Taking revenge is a separate issue."

Now, Trump has again gone from going -- from talking about friendly negotiations to, quote, oh, I got to say it again. Beat the effing you know what out of them. And that has spooked investors. The price of oil jumped nearly 7 percent.

So, we're now $90 a barrel. It's back up there again, with one top analyst now predicting that Americans are, quote, "going to see new all-time records set for the highest August gas prices ever".

General Spider Marks and Seth Jones are both OUTFRONT.

And obviously August peak travel season.

Seth, I want to start with you because as Trump is out there, whether he's using expletives and sounding a bit out of control or sounding somewhat more composed, he is threatening Iran with more destruction.

You have some new numbers that are quite sobering and stunning on U.S. weapons stockpiles. What have you learned?

SETH JONES, PRESIDENT, DEFENSE & SECURITY DEPARTMENT, CENTER FOR STRATEGIC & INTERNATIONAL STUDIES: Well, Erin, the new data that CSI has put out this week, led by Mark Cancian and some of our great team, indicates that the U.S. has depleted over 30 percent of its stockpile of Patriot interceptors and nearly 60 percent of its stockpile of THAAD.

[19:25:03]

These are global stockpile of THAAD interceptors, which means we are very low on both Patriot and THAAD interceptors for war plans around the globe. And that is -- that is the reality of what Operation Epic Fury has done, Erin.

BURNETT: OK, as I said, General, stunning and sobering. OK, Defense Secretary Pete Hegseth last week blames Biden for ammunition shortages. Now, ammunition is obviously perhaps a specific word choice. We're talking here about missiles and interceptors, and these are going down in the Iran war, so there's someone to blame for that. That's not Joe Biden. But a month ago, Hegseth insisted that stockpiles are great and they're only getting stronger.

Now, if a 60 percent depletion in THAAD missile defense is great and only getting stronger, I don't want to know what bad is, to Pete Hegseth. What's going on here?

MAJ. GEN. JAMES "SPIDER" MARKS, U.S. ARMY (RET.): Well, I think clearly, as a result of what Epic Fury has been able to accomplish during the number of months it's been unfolding in front of us, clearly, those stockpiles have been depleted. I wouldn't know the numbers. Seth and CSIS has done a really good estimate on what that looks like.

And bear in mind, the actual figures are classified, so theirs is an estimation.

BURNETT: Yeah.

MARKS: But it appears to me that the global impact, again, as indicated, is what the primary concern is because all those other combatant commanders rely on those stockpiles.

BURNETT: Right.

MARKS: And they report every day in terms of their readiness to perform their tasks. And they have to rely on those stockpiles and they go back and say we're short.

So, I can't understand if you're going to blame somebody, first of all, let's not blame anybody. Let's rise above that and let's embrace the challenge. If the challenge is the stockpiles are short and if Hegseth thought they were short before and now we're building them up and making an effort to build those up, you've got a cycle of depletion and then how much time is it going to take for you to build them back up?

So, you have this kind of this Venn diagram.

BURNETT: But what do you make of a defense secretary who says they're great and they're only getting stronger, you know, when it just defies reality? What does that do in terms of the generals in the field, you know, belief or confidence in the defense secretary?

MARKS: The generals in the field, all those combatant commanders, those generals and admirals, they are out there. They see what's available. They know -- they have a finger on the pulse of what that looks like. They report back and they say, look, you've asked me to do X, Y, and Z, and all my other colleagues are doing A, B, and C, and we're relying on this.

If we are called, if the IndoPac and the European Command, as well as the Central Command, are now engaged simultaneously, we're going to have a legitimate problem. So, they're getting stronger, I guess, over the course of time, but not to address the immediate concern that we have right now.

BURNETT: Yeah, which is deeply concerning.

I mean, Seth, there's also this. Trump said the other day that the Chinese president assured him that China, quote, "would not, under any circumstances, give or sell weapons to Iran." I guess this is back to what we were talking about earlier in the show. People say whatever they want to say now. Words don't mean a whole lot.

And Trump said, "I take him at his word". Okay? So that was the back and forth.

But then Trump was asked today about new reporting that specifically contradicts this, right, about exactly how much China is sending to Iran. Let me play the exchange.

(BEGIN VIDEO CLIP)

REPORTER: There's a new report that Iran's about to get 400 rocket launchers from China going through Pakistan to Iran.

TRUMP: Well, that would be surprising. I mean, things like that happen, but that would be surprising. He told me very strongly he wouldn't partake, but he knows I'd be quite disappointed.

(END VIDEO CLIP)

BURNETT: Seth, what do you make of that response? And I mean, let's just be blunt here. What is China doing to help Iran, both when it comes to weapon shipments and also other things? For example, a lot of the targeting, the specific targeting of U.S. bases, which the reporting has been very clear that both Russia and China have helped with.

JONES: Yeah, Erin, the Chinese are clearly a problem right now. If this information is true and the Chinese are providing shoulder- launched weapon systems to the Iranians, these are largely air defense systems, but they could be used to shoot down a U.S. aircraft or pose a serious threat to the Israelis as well.

And when you lay on top of that, Erin, the Chinese aid, they've provided a range of components, rocket fuel for Iranian missiles, the intelligence from satellites, Chinese satellites that they have provided potentially for strikes in the Gulf, including against U.S. targets, this is a disturbing trend.

And, Erin, it's not dissimilar from what we've seen the Chinese do to the Russians in the Ukraine war, where they are now essentially bankrolling the Russian industrial base. So, the president really, I think, has to, you know, recognize that the Chinese are undermining both theaters right now.

[19:30:04]

BURNETT: Yeah, well, it's pretty incredible that China will go and tell him that they're not doing it. And he says, I take them at their word. They continue to do it. In a sense, it's a mockery of the U.S. president.

Thank you both very much. I appreciate it.

And next, Anthony Fauci pleading the Fifth. He was grilled by Republicans about the government handling of COVID.

(BEGIN VIDEO CLIP)

DR. ANTHONY FAUCI, FORMER NIAID DIRECTOR: I respectfully decline. I respectfully decline. I respectfully decline to answer based upon my rights under the Fifth Amendment to the Constitution.

(END VIDEO CLIP)

BURNETT: Could that backfire on Fauci?

And breaking news, a major economy in freefall, a stock market setting trillions of dollars in two days. Half of its value just wiped out a national emergency. Einstein and Ives are here.

(COMMERCIAL BREAK)

BURNETT: Breaking news on Capitol Hill tonight, Republican Senator Rand Paul says there will be a vote to hold Dr. Anthony Fauci in contempt of Congress after Fauci invoked the Fifth Amendment 112 times during his testimony about the COVID pandemic.

[19:35:11]

Yes, you heard me correctly there, 112 times.

He said the hearing was a perjury trap by Republicans who have openly said they want him behind bars. So, the hearing quickly turned into a dramatic spectacle. One GOP senator shouted at Fauci, "Who the F do you think you were?"

Lauren Fox is OUTFRONT, and I will note that we did not censor the vulgar language that senators chose to use today.

(BEGIN VIDEOTAPE)

LAUREN FOX, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Dr. Anthony Fauci facing a barrage of attacks from Republican senators.

SEN. BERNIE MORENO (R-OH): Do you feel like you're in deep shit?

FOX (voice-over): At one-point, Republican Senator Bernie Moreno lobbed an expletive at Fauci, recounting a story he said inspired him to run for office about an Ohio woman arrested at a school football game for not wearing a mask during the pandemic.

MORENO: Here I am sitting in front of you six years later saying who the fuck do you think you were for doing that?

FOX (voice-over): The contentious hearing didn't yield many, if any, answers. But Chairman Rand Paul accused Fauci of obstruction and said he'd hold a vote next week to hold Fauci in contempt of Congress.

SEN. RAND PAUL (R-KY), CHAIR, HOMELAND SECURITY COMMITTEE: All I can do is recommend prosecution. I can't initiate prosecution.

FOX (voice-over): Paul also took the unusual step Wednesday of kicking Fauci's lawyer out of the hearing.

PAUL: You are not recognized, Sir. Security, please remove him from the room.

FOX (voice-over): Fauci invoked his Fifth Amendment right against self-incrimination over 100 times.

FAUCI: Given Senator Paul's obvious obsession with calling for my prosecution, the sole reason he is calling me before this committee is to get me to say something, anything, that could vindicate his repeated public pledges that I end up, in his words, quote, "behind bars," unquote.

SEN. JOSH HAWLEY (R-MO): Well, nothing says honestly like taking the Fifth, huh, Doc?

FOX (voice-over): Republican lawmakers have repeatedly accused Fauci of concealing the origins of COVID. They've blamed him for his recommendations that led to lockdowns, school closures and mask and vaccine mandates. Paul's focus on whether Fauci should face criminal charges for his actions during the pandemic in part led to a sweeping pardon from President Joe Biden just before he left office.

PAUL: A pardon may protect a person from criminal prosecution doesn't rewrite history.

FOX (voice-over): Republican senators seized on the documents Paul released before the hearing. More than 1,000 pages of Fauci's personal diary that had been found on government servers.

HAWLEY: You called yourself the most famous scientist in the world. You've done more to harm science than anybody in my lifetime. And I hope you'll go home and write that in your diary.

FOX (voice-over): The diary painted a portrait of a government scientist whose overnight celebrity had caught even him by surprise.

"For better or for worse, I'm becoming an international celebrity. Calls from all over the world," Fauci wrote in March of 2020. He also chronicled a birthday message from the stars, an invitation to join the Kennedys at Hyannis Court for Fourth of July, relationships with members of the media, including CNN journalists, and repeated calls from Barbra Streisand, who sought personal medical advice from him. "It's always good to hear from her," Fauci wrote.

Democrats, meanwhile, used the hearing to celebrate Fauci's legacy and decry their GOP colleagues as having an agenda to embarrass the decades-long public servant.

SEN. RICHARD BLUMENTHAL (D-CT): I think that this proceeding smacks of a show trial, a vendetta, a continuing effort not only to discredit Dr. Fauci, but science, and medicine generally.

(END VIDEOTAPE)

FOX: Now, some Republicans on this committee including the chairman Rand Paul argued that Dr Fauci didn't have the right to plead the fit today given the fact that he had already been pardoned by the Biden administration. But even if the Homeland Security Committee is able to move forward with that contempt vote and it passes out of that committee with Republican support, it would still face a huge challenge on the Senate floor where it would need 60 votes. That means some Democrats would have to join Republicans and, Erin, that is extremely unlikely.

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

And Ryan Goodman is back with me.

So, Ryan, 112 times to invoke the Fifth Amendment. I mean you can't even string all that together that that that that obviously -- it sends a message will that strategy work because he says, well, I had to do that because you know they're looking for perjury traps or does that just make it worse and is he in real trouble?

GOODMAN: I think it makes it worse it's even a curious way in which you wonder what his legal advice was, why they decided to do that. Because he does not face criminal jeopardy for the pardon in all likelihood. He's pardoned for all actions before January 2025.

But that also means that you're forced to testify. That's how prosecutors use immunity or pardons, and they say, now you're forced to testify because you don't have any criminal liability, what we're going to ask you about.

So, then to plead the Fifth, he could then be held in contempt. There could be, theoretically at least, a Justice Department that goes after him for not answering when he is not really facing that criminal.

BURNETT: Yeah, and also when the reason put out his perjury traps, then of course, again, to the layperson, it's saying, well, why wouldn't you just say the truth? What would be the problem in that?

So, you know, I understand that's a layperson thing, but it doesn't sound good.

Trump has repeatedly dismissed Biden's pardons. When you talk about the pardon and everything before January of 2025, I'm sorry.

Let me just play Trump here.

(BEGIN VIDEO CLIP)

TRUMP: The signed pardons and all of the things that he signed with an autopen is disgraceful.

It looks to me like those pardons are worthless.

Those pardons that he gave are illegal.

All those pardons are void.

(END VIDEO CLIP)

BURNETT: So, okay, now he's also saying of Fauci later today, he said he was pardoned by Biden and I respect that. So, it's unclear where he'd really come out on all of this. But what does that rhetoric indicate?

GOODMAN: That's the strongest argument that Fauci's lawyers have. So Fauci's lawyers can try this one path and they can say, look, he can't testify today because the president himself has said all of these pardons are void.

And if they're void, then he really does have criminal liability. There's the prospect that the Justice Department does not respect the pardon. There's the prospect that this Justice Department, as it's shown in other politicized cases, does try to get an indictment, even though that indictment will not go anywhere because the pardon will stick.

But the president of the United States himself has repeatedly said the pardons are avoid and not effective because of auto pens or things like that.

BURNETT: There's been reporting on some of the cases Trump's pursued that he knew he wouldn't win.

GOODMAN: Yes.

BURNETT: The DOJ, but I want you just to make their lives miserable, right? I mean, that's all out there.

GOODMAN: That's right. And that's what the Fifth Amendment is in significant part trying to protect somebody against that kind of effect happening and so that's why he can invoke it for that prospect which the president himself has kind of laid that open for him as a place that the lawyers can take it.

BURNETT: All right. Ryan Goodman, thank you very much again.

And next, new reporting this hour on the world's richest man who's about to spend a lot of cash on the midterms.

And a brutal day on Wall Street. The Dow plunging more than 1,100 points after rare dissent on the Fed. Einstein and Ives, the whiteboard, are next.

(COMMERCIAL BREAK)

[19:46:39]

BURNETT: Breaking news, U.S. stocks plunging after the Federal Reserve kept interest rates steady, the Dow tumbling more than 1,100 points. That was its worst day, actually, in more than a year. President Trump blamed the decision on a, quote, political Fed board. And that's interesting, right, because he loves to slam the Fed, but he didn't, as he did with Jerome Powell, he didn't make it personal to the new chairman, Kevin Warsh.

(BEGIN VIDEO CLIP)

TRUMP: Kevin's got a board. He's fantastic. He's a brilliant guy, smart. I know he'd love to see lower interest rates, but he's got a board and it's a political board.

(END VIDEO CLIP)

BURNETT: OK, well, maybe what he's referring to is the fact that three Fed officials actually voted to raise interest rates by a quarter point. Now that is the largest number of dissenting votes on the Fed in nearly 10 years, so it's a big deal.

OUTFRONT now, Einstein, Ives and the whiteboard.

Then, it's interesting. Okay, interesting that Trump did not -- he didn't go there on Kevin Walsh. It was almost like he's a little afraid of Kevin Walsh, but we had a lot of dissenting votes. Three very serious people dissented, and that's pretty significant.

DAN IVES, GLOBAL HEAD OF TECHNOLOGY RESEARCH, WEDBUSH SECURITIES: And that's also why the market was down, because I think the view is if you start to have more and more dissenting members in terms of the Fed, that's something that ultimately you don't want to see because you want to see somewhere between the consensus to maybe one or two dissenting. I think this just shows he's trying to balance a very, very difficult balancing act between what we're seeing on inflation --

BURNETT: Kevin Warsh is.

IVES: In terms of Warsh, as well as what we're seeing relative to rates. and just some of the pressures, and I think the market's basically saying that the sending voters, that's going to further, further pressure. Is Warsh, is the Fed behind when it comes to inflation?

BURNETT: Right, right, and it's interesting, Trump spent a lot of time slamming Jerome Powell. It was personal, it was nasty, it was vindictive, and it was repeated.

Kevin Warsh has, that has not happened to him at this point, and Kevin Warsh has said he won't stand for it, I mean, listen to what he's just said repeatedly.

(BEGIN VIDEO CLIP)

KEVIN WARSH, FEDERAL RESERVE CHAIRMAN: The Fed independence means everything to me.

We're going to be an independent central bank.

The independence of the Federal Reserve is sacrosanct. (END VIDEO CLIP)

BURNETT: And by the way, that independence is one of the things holding this country together on the world stage. It really matters.

Do the markets have confidence that he can hold to that, given what we've seen Trump do with his predecessor?

PETER TUCHMAN, TRADER AT THE NEW YORK STOCK EXCHANGE: You know, that's a really hard question to answer because, you know, that was one, obviously, the biggest contention, point of contention between Jay Powell and the president. We saw that so many different times when they were wearing the hard hats that day, you know, and when he was going after Jay Powell every opportunity that he had.

And I think I was really impressed with his showing today. He showed himself as an independent person. And the way, you know, the press conference is the most important part.

BURNETT: Yeah.

TUCHMAN: If you notice the way the market reacted today, there was a very little muted, there was a muted reaction to the initial, we're not going to change rates here at all. But the minute the news conference started, the market with a rational enthusiasm started to go up and it went up aggressively. It really went from negative toward -- up into about upper 70, 80 points on this until he stopped talking.

And the minute he stopped talking, a little bit of technical.

BURNETT: Yeah.

[19:50:00]

TUCHMAN: -- reversal, but it reversed and went down 120 points on the SPY, which was significant.

BURNETT: Very significant.

Okay, now the context for all of this is just real fear about where the market and the economy is, right? We know that. Americans feel it, the affordability crisis. So, on this front, whiteboard's coming out and we're going around the world.

IVES: Drumroll.

BURNETT: We're digging a hole all the way to South Korea. OK, there's a shocking situation going on there. An absolute crash, emergency meeting by the government of South Korea to deal with this trading halted for two days. OK?

So, the South Korean market, OK, the Kospi, right, down 10 percent in one day on Monday, 10 percent in one day. OK, now over the past 40 days, 44 percent, 44 percent, $2 trillion, okay?

Holy cow, half of the value of -- and by the way, it had surged before that, right? It had gone from being one of the top stock markets --

(CROSSTALK)

TUCHMAN: Volatile times you've ever seen --

BURNETT: But a plunge like this, I mean what the heck is going on?

IVES: Yeah, look, the reality is, is that especially memory stocks, that that's really the golden child of the A.I. revolution are in Korea, in Kospi. When you look with SK and --

BURNETT: And the chips.

IVES: And these are really the brains behind the A.I. revolution. And that is what you've seen is that had parabolic run and then especially because some of the leverage in the system, the stocks have just taken a huge crush here. You've seen it felt in the U.S. market.

And look, the reality is that it's a gut check moment for the market. I continue to think we're very early in the A.I. revolution, but Korea is a good example of there are going to be white knuckle moments. And that's what we're seeing.

TUCHMAN: And also see individual stocks within the Kospi have had massive rallies as well. What we have to see is an interesting point that is happening in our market is we used that we had the Mag Seven and the Mag Seven started breaking down the big A.I., right.

But then, that -- that sector, the tech sector started to break down into software chips, memory compute, it suddenly created these sectors inside of sectors.

(CROSSTALK)

TUCHMAN: And within that, we saw SanDisk and some other stocks absolutely have massive parabolic runs.

IVES: Yeah.

TUCHMAN: So, we also have seen in US stocks where when you've got a pullback of 20 percent in a stock that is not that unusual, you have to notice that it just had a 40 percent round.

IVES: It's huge moves, but the reality is it's a gut check moment, but I continue to think A.I. revolution tech earnings this. Get the popcorn out, a huge, huge week.

BURNETT: All right, thank you both.

And next, brand-new reporting from "Axios" that Elon Musk is going to flood the midterms with cash for Republicans.

(COMMERCIAL BREAK)

[19:56:39] BURNETT: Breaking news, billionaire Elon Musk about to make a massive investment to boost Republican turnout for the midterms. It's a big bet, and "Axios" is breaking this news just now. Musk's representatives are declining to say just how much Musk is planning to spend, but they told Axios the number is expected to be high.

Now, obviously, Musk is the richest man in the world, so high could be absolutely anything, and just the only context we have is that he spent more than a quarter of a billion dollars in the 2024 election.

OUTFRONT now, Alex Isenstadt, the "Axios" White House senior political reporter who just broke this story.

So, Alex, you know, as I said, a quarter of a billion dollars last time, and this is a guy who's gotten a lot, lot, lot richer since then. I mean, that's pocket change for him. What's your sense of how much money Musk could be about to spend?

ALEX ISENSTADT, SENIOR POLITICAL REPORTER, AXIOS: Definitely in the tens of millions, if not hundreds of millions. This is going to be a very in-depth effort, and Elon Musk is going to be playing an incredibly central role now in the GOP's fall turnout efforts in basically spearheading door-knocking voter turnout efforts for the party.

So, he is now going to be a very key figure as Republicans try to maintain control of both chambers of Congress, which is not going to be necessarily easy to do.

BURNETT: Yeah, I mean, obviously, odds are if you look at it now that that that would not happen. But I know Speaker Johnson has indicated optimism.

I'm curious what your sense is from your reporting, Alex, that you know the specificity of this, that it's on voter turnout specifically, right? What is that -- what does that say to you in terms of where the Republican focus is that Musk would have that specificity?

ISENSTADT: Sure. So, Musk has been talking with the Trump team. This has been playing out in recent weeks and recent months. And what Musk wants to do is to focus on low-propensity voters, people who are, in other words, less likely to turn out to the polls, especially in a non-presidential election year, right?

So, some voters might be a little less motivated to turn out when a presidential election isn't on the ballot. And that's who Musk is going to be focused on.

BURNETT: So when you look at Musk, though, in general, right, you ask people what they think about him. Obviously, everyone knows who he is. His popularity numbers are bad. Only 34 percent of Americans view him favorably in the most recent poll from Reuters/Ipsos, which was in June.

I mean, do Republicans want him on the campaign trail the way he was the last time around? And when it even comes to his money, do they want anyone to know where it's coming from?

ISENSTADT: So this is -- this is really interesting. Your viewers will remember that back in 2024, Musk got behind Trump and actually became kind of a central figure in the 2024 campaign, going out on the campaign trail himself. He held events independently. He handed out million dollar checks to people, and he became a big figure in that race.

There is no indication so far that Musk is going to be playing as public a role this time around. He might be cutting big checks. He will definitely be cutting big checks. But he won't necessarily be going out to Pennsylvania or Ohio and having those big in front of the camera events that he had in 2024.

BURNETT: Yeah, those rallies when he himself was a rock star. Things have changed.

Alex, thank you so much for sharing all your new reporting with us.

ISENSTADT: Thanks, Erin.

BURNETT: I appreciate it.

ISENSTADT: Thank you.

BURNETT: And thanks so much to all of you for joining us as well.

"AC360" begins now.