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Democrats Scramble To Reach Budget Deal Before Biden Heads To Europe; U.N. Warns The World Is Falling Short On Climate Promises; NBA Star Enes Kanter Doubles Down On Criticism Of China. Aired 5:30-6a ET
Aired October 27, 2021 - 05:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LAURA JARRETT, CNN ANCHOR: Good morning, everyone. This is EARLY START. I'm Laura Jarrett. It's about 30 minutes past the hour here in New York.
So, will Democrats tax the rich? As Democrats inch closer to a deal on President Biden's social spending plan it appears lawmakers finally have a way to pay for it.
Senate Democrats are proposing a new corporate minimum tax rate. It would apply to about 200 companies that report over $1 billion a year in profits to shareholders. This minimum tax on profits would be 15 percent and would have some carveouts to preserve business credits for things like research and development, clean energy, and housing.
But maybe the most important thing, the White House and two key votes here, Sens. Joe Manchin and Kyrsten Sinema, are all on board. But, of course, there are some issues here to still resolve. Medicare and Medicaid, paid family leave, immigration, and taxes, and the exact timing of this vote. So, can it all get done possibly through to a vote before President Biden heads to Europe tomorrow?
Joining me is CNN politics senior writer Zach Wolf. He's the author of the daily "What Matters" newsletter that tries to make sense of all of this for you -- all of your top stories. Zach, good morning.
Let's start here with how lawmakers are proposing are to pay for the Build Back Better plan. One part of the potential options would be this so-called billionaire's tax -- essentially, having 10 billionaires -- people like Elon Musk, Jeff Bezos -- cover the bulk of the Democratic social safety net plan.
Are Democrats framing this the right way politically, in your view?
ZACHARY WOLF, CNN POLITICS SENIOR WRITER (via Webex by Cisco): I think so from a political standpoint. The billionaires have the money. I think that there is -- there is -- there is support in the country for having them pay more in taxes. We know that they have used these personal loans on their vast wealth to avoid paying income taxes, so the idea that you're closing a loophole here -- I think that's a valid one.
But what's interesting is that we weren't talking about this a week ago. Usually, financial policy is something that kind of grows up over the course of years. And while people in the fringes of the parties have been talking about wealth tax for a long time, we're talking about going from zero to 60 from basically not having to talk about this a week ago to maybe it being law in the next couple of weeks. It's like they're building the aircraft while we're in the air to try to figure out how to pay for this expansion of the safety net.
JARRETT: Yes, the timing on this is really interesting.
Also, speaking of things that are popular, one would be paid family leave -- paid maternity leave. Only eight countries in the world do not have it, the United States being one of them.
Shouldn't this be a layup for the president? Why isn't this resonating more?
WOLF: You'd think it was. I'm not sure that it's not resonating. It all comes down to whether they can get the votes for it. And if Joe Manchin in West Virginia is not a fan -- if he doesn't think it's necessary, if he doesn't want to put the mandate on businesses, or if he thinks it's too expensive, they can't do it.
So, you have very popular measures -- expanding Medicare, family leave, free college tuition for community colleges. These are things that a lot of Americans -- maybe -- probably most Americans would like to see, but you have to just get that 50th vote. And so -- and so, that's where the hiccup is.
JARRETT: Well, another hiccup is all of the haggling over the votes and the deadlines among Democrats. And we went through this essentially a month ago and now we're doing it all over again, only this time the implications are pretty immediate, and you've got an election in Virginia that's less than a week away. Meanwhile, the Republican nominee in Virginia seems more interested in banning "Beloved."
Are Democrats cued in enough on some of these social wedge issues?
WOLF: You know, you make a good point there. I don't think we should view how Democrats are dealing with the social spending plan and the Virginia race completely together. It's not like they have a strategic guideline (ph). For somebody like Bernie Sanders, this is his one shot to try to expand Medicare, so he's going to do everything he can and he's not really paying attention to Virginia quite as much, I don't think.
But as far as like the social wedge issues, this was a strange moment where the Youngkin campaign, which had been very sort of metered in trying to appear palatable to suburban voters, made this ad that essentially suggested banning this Pulitzer Prize-winning book "Beloved" that's about slavery. It was -- it was kind of a strange moment I think, and it could ultimately have -- it could backfire by motivating a lot of people who had gotten OK with Glenn Youngkin to maybe get a little bit more concerned with him.
It sort of proves the point that he's trying to make these dog whistle, as they say, moments. I'm not sure I get it.
JARRETT: Well, it also might just suggest the race is tight, right? That he's trying to pull out all the stops and if he thinks this might be one of the things that can push over a mom that's worried that her teenager is having nightmares from reading about slavery, I guess she'll do it.
All right, Zach.
JARRETT: Appreciate you getting up to talk with me this morning. Thank you.
All right. So, as we've been discussing all morning, President Biden is hoping to wrap up a congressional deal on this economic agenda before he heads overseas for the U.N. Climate Conference in Glasgow, Scotland. Ahead of the trip, dire warnings from the U.N. that the countries around the world have failed to keep their own climate promises -- the U.S. among them.
CNN's Nina dos Santos is live in London. Nina, tell us about these warnings from the U.N.
NINA DOS SANTOS, CNN EUROPE EDITOR: Good morning to you, Laura.
Well, they're really dire warnings and very sobering reading ahead of this crucial summit that's probably going to be the most important climate change summit since the Paris climate change accords was dropped back in 2015.
You'll remember, the target of those accords was to limit global warming to around about 1.5 percent above pre-industrialized levels. This report says that the planet has already warmed 1.2 percent and that it's on track for warming 2.7 percent by end of this decade based on the current pledges that only some countries have made heading into this COP26 summit.
There's 197 countries that signed up to the Paris climate change accords but not all of them have explained exactly how they're going to be limiting their emissions and putting their money where their mouth is, explaining the actual difficulties and logistics of trying to cut back on, say, hydrocarbon use.
So, this report also says that greenhouse gases are likely, at the current levels, to soar by 16 percent. And it also goes on to say that it's, as we expect, the big producers of hydrocarbons around the world and the big consumers of hydrocarbons around the world that are the serial offenders.
Now, you'll remember that earlier on this week countries like Saudi Arabia made a big thing of saying that they were going to become climate neutral or reach net zero by 2060, Laura. China says that it's going to try and adhere to the same sort of target. But that is way, way, way in the future based on the more urgent climate change action that this report says is needed.
Now, where does this leave us from here? Well, in the wake of all of this the Secretary-General of the United Nations Antonio Guterres has said that this summit really risks being a failure. Boris Johnson, the prime minister who is hosting all of these world leaders in Glasgow over the weekend, says that it is touch-and-go as to whether or not they're going to be able to get people to commit.
One big barometer of how things are going to go at COP26 will be the G20 that takes place in Rome just ahead of it. Eighty percent of the world's emissions come from 20 of the biggest industrialized nations and not all of them have signed on to these climate change pledges, Laura. And obviously, if they do, that will be a good indicator of how things will go in Glasgow later on -- Laura.
JARRETT: Yes, that will be key. All right, Nina, thank you for your reporting.
Queen Elizabeth will not be attending next week's climate conference in Glasgow. Max Foster joins us live from London now. Max, good morning.
The queen spent the night in a hospital last week. Do we know if this decision to skip the conference is related? It has to be.
MAX FOSTER, CNN ANCHOR AND CORRESPONDENT: Yes. So, there's been a series of events. She canceled a trip to Northern Ireland last week. Then we found out after the event that she had been taken to hospital and spent the night there.
But she has been carrying out light duties. So here, we see her involved in a virtual meeting, for example, and that was this week. But now we're told she's not going to go to the COP conference, which is a big deal because this is the queen hosting one of the largest gatherings of heads of state ever in the U.K. It certainly was a priority.
But the doctors are basically telling here effectively, she's overdone it. She is working too hard. She's tired. I don't get the impression that she's very ill but there is a concern that she is overdoing it, so she won't be attending.
And you'll see here -- this was really the latest round of speculation starting when we saw her using a cane for the first time at a public engagement as well. But she is 95 years old. I think what we're seeing here is perhaps a reality check for the queen. She can't keep doing as much as she's doing.
So I think we will see -- be seeing her involved in events still. She's never going to abdicate but we're going to see her doing it a bit more virtually I think, Laura.
JARRETT: All right, Max. We know you'll be watching that closely. Thank you.
We'll be right back.
JARRETT: Welcome back.
Families across America are paying more for basically everything right now and part of the reason is the supply chain bottlenecks. It means it costs more to get goods where they need to go. Now, some prominent economic voices worry this could go on for a while.
So let's bring in CNN economics commentator Catherine Rampell to help me break it all down. Catherine, inflation is really ramping up at the worst possible time with the holidays on the way. You've got Thanksgiving turkeys; you've got Christmas trees -- everything is just going to be more expensive.
So how should families prepare for these price hikes?
CATHERINE RAMPELL, CNN ECONOMICS COMMENTATOR, OPINION COLUMNIST, THE WASHINGTON POST (via Webex by Cisco): I think they need to manage expectations and figure out what they can and cannot do without and on what timeframe, right? Some families I've heard of are already beginning their shopping for Christmas gifts so that they don't have to worry about last-minute stockouts for little Jimmy's favorite toy come early December.
And thinking creatively about what kind of substitutions they might need to use, even when preparing something like a Thanksgiving dinner. Well, we can't find the ideal ingredient for this pie -- let's try something else.
We're not at crisis mode yet. It's just a matter of being practical, being flexible, and managing expectations.
JARRETT: Well, it's interesting because obviously, inflation is one of those things that affects everybody's pocketbook -- some obviously more than others.
The Treasury Sec. Janet Yellen told CNN a few days ago she thinks we'll see quote "acceptable" levels of inflation in the second half of 2022, but not everyone agrees with here. Listen to a former top economic official for former President Obama. Listen to this.
(BEGIN VIDEO CLIP)
MOHAMED EL-ERIAN, CHIEF ECONOMIC ADVISER, ALLIANZ, FORMER OBAMA ECONOMIC CHIEF: It will go higher, and the Fed has misread the inflation dynamics in a big way and is still hostage to this notion that it's transitory. But the first thing you should do is stop injecting $120 billion every month. You should stop that. Do we really need the Fed to buy $40 billion of mortgages and push House prices even higher? No!
(END VIDEO CLIP)
JARRETT: Is he right about that?
RAMPELL: I think it is fair to worry that the -- what we -- what we -- what had been described as transitory shocks seem to be having extra-long transition. That is, it looked like there had been a very temporary price spike earlier this year that would result from the pains associated with reopening -- supply chains coming back online, transportation and warehousing sort of waking up from a long-term coma.
And, of course, we're still having problems. We're still having labor shortages. We're still having trouble moving goods around the world. And in that sense, yes, a lot of us got it wrong earlier this year.
This real question is can some of those bottlenecks unwind themselves in the near future? It looks like it's going to take a lot longer than expected. And then, the secondary question is even if these are shocks caused by temporary transitory effects -- things like COVID -- does -- do they start to change expectations? And that's where it starts to get really, really worrisome.
If, in fact, everybody looks around and says hey, my neighbors are raising prices, my suppliers are raising prices. I better, just in case, raise prices, too. That's where you get more self-sustaining inflation and that's where it's much more dangerous.
That's where you need the Fed to step in to start trying to change those expectations through rhetoric, through policy. They've already start -- said -- indicated that they will begin tapering probably pretty soon to Mohamed El-Erian's specific criticism.
But yes, I think you will start to see Fed policymakers changing how they look at this problem if it looks like it's more self-sustaining -- if it looks like expectations have changed.
JARRETT: Before I let you go, I also want to get your reaction to Democrats' proposal that they put out here of how they want to pay for the Biden agenda, right? So you've got this minimum corporate tax. But then you also have this tax on billionaires -- tax the rich, essentially. But you think that may not work as well as Democrats are hoping. Why?
RAMPELL: I think the problem for Democrats is that while they say they want to tax the rich and tax corporations, when the rubber meets the road, they keep on excluding the most obvious possible ways to raise revenue from those two sources.
They have said OK, we can't raise corporate tax rates. We can't raise personal income tax rates. We can't get rid of the carried interest loophole or the stepped-up basis, which is a loophole that primarily benefits very rich people when they die. So, they've ruled out all of the key measures. They're scrounging
around for other possibilities. This billionaire's tax sounds like it could be fine. Billionaires can certainly afford to pay much more in taxes.
But there's very little detail at the moment about how this would work, including what do you do if a billionaire loses money from one year to the other? Does Uncle Sam have to cut Mark Zuckerberg a check? I don't know how politically that would fly.
How do you evaluate the wealth of something that's harder to value, like an art collection or a closely-held business? If you're just taxing somebody's stock portfolio, that's pretty easy. But some of these other things are more challenging.
And then there are the constitutional questions involved as well. It may be constitutional but with this Supreme Court, I would bet for sure that they will find that this tax holds up.
So, you know, there are a lot of I think more straightforward ways to tax very high-income people, including billionaires, that Democrats have gotten cold feet on. But they're trying this. It seems like it might politically satisfy a lot of their goals. The question is will it actually work in practice.
JARRETT: Well, and as you point out, the devil will be in the details on all of this. A lot to be worked out for sure.
Catherine Rampell, CNN economics commentator. Thank you so much, Catherine.
RAMPELL: Thank you.
JARRETT: All right, now to this. NBA star Enes Kanter not backing down from his criticism of China. The Boston Celtics center is issuing a personal challenge to the founder and longtime head of Nike for staying silent about oppression in China against Uyghur minorities.
Let's go live to Beijing and bring in CNN's Steven Jiang. Steven, he's not backing down at all. Other players have done this but he's taking a hard stance.
STEVEN JIANG, CNN BEIJING BUREAU CHIEF: That's right. In this latest video message not only he had mentioned Phil Knight, the longtime head of Nike, but also NBA legends and Nike ambassadors LeBron James and Michael Jordan, challenging all of them to go to China in person to check out under what conditions Nike shoes are being made.
Now, Kanter, of course, is trying to shine a spotlight on this issue we have been covering for a long time. That is allegations of widespread abuse and ill-treatment of the Uyghurs and other Muslim minorities in Western China, including allegations of forced labor, with the U.S. government actually assessing up to two million of them having been sent to internment camps in this country. Now, Beijing has always denied those allegations. But one of Kanter's hashtags this time was #hyprocriteNike. That really illustrates this growing situation of a growing number of western multinational companies and institutions finding themselves caught between upholding values that it claimed to hold dear at home and not to run afoul of the Chinese government and its increasingly nationalistic consumers in a very lucrative market.
Now, of course, the NBA has gotten into this kind of trouble before. Just two years ago, the Houston Rockets' general manager, remember, tweeted in support of Hong Kong's pro-democracy protesters. Shortly after that, the games being blacked out, sponsors pulling out.
And this time, the Celtics game also being pulled from livestreaming platforms. But the official response more muted, Laura, probably because the Olympics -- the Winter Olympics is coming in 100 days. So, officials here are very much aware the whole world is watching how they handle the fallout when sports and politics clash -- Laura.
JARRETT: Yes, the timing of all of this, so important. Steven, thank you -- appreciate it.
The Atlanta Braves take down the Houston Astros in game one of the World Series, but the victory comes at a steep price.
Coy Wire has this morning's Bleacher Report. Hi, Coy.
COY WIRE, CNN SPORTS CORRESPONDENT: Hey, good morning, Laura.
The Atlanta Braves are trying to pull off one of the greatest runs in the history of baseball. They lost their best player to injury in July and didn't have a winning record until August sixth, but here they are starting with a bang in their first World Series since 1999.
And with the very first swing of this World Series, Jorge Soler making history -- the first batter ever to lead off a World Series with a home run. And from there, the hits and runs kept on coming. The Braves opened up a 5-0 lead in the first three innings. They'd go on to win it 6-2.
But unfortunately, it wasn't all good news for Atlanta. Starting pitcher Charlie Morton was hit in the leg in the second inning on a comebacker from Yuli Gurriel. He tried to pitch through the pain but just couldn't manage any longer. The Braves later announced that x- rays revealed a broken right leg that will end his World Series.
(BEGIN VIDEO CLIP)
A.J. MINTER, PITCHER, ATLANTA BRAVES: It hurts losing Charlie. I mean, what he's been to this team all year -- I mean -- I mean, everyone knows Charlie. His career -- he's a hero in the post-season.
So, it's definitely a blow losing him in game one but if you've been watching us all year -- I mean, we've just been answering the bell and overcoming adversity all year. So, we're just going to treat it the same way -- next guy up. BRIAN SNITKER, MANAGER, ATLANTA BRAVES: I really hate it for him because I know he's really looking forward to this run with us. And so, we'll move on.
(END VIDEO CLIP)
WIRE: Game two is set for later tonight in Houston, then the series shifts to Atlanta this weekend for games three, four, and five.
Let's go to the NFL where Commissioner Roger Goodell says the league will not release a report on its investigation into allegations of harassment and abuse by the Washington Football Team. Goodell told reporters yesterday that the NFL wanted to shield the identities of the former employees who spoke to investigators on the condition of anonymity.
(BEGIN VIDEO CLIP)
ROGER GOODELL, NFL COMMISSIONER: We're very conscious of making sure that we're protecting those that came forward. They were incredibly brave and incredibly open and we respect the pain that they probably went through all over again to come forward. And so, that was a very high priority for us.
(END VIDEO CLIP)
WIRE: Goodell also said he believes that Washington owner Daniel Snyder has been quote "held accountable," noting that Snyder has not been involved with the organization's day-to-day operations since July.
Laura, back to you.
JARRETT: All right, Coy Wire. Thank you so much for that.
Finally, this morning, before there was Rosa Parks there was Claudette Colvin. The civil rights pioneer was 15 years old when she was arrested back in 1955 for refusing to give up her seat to a white person on a bus in Alabama. Now 82, Colvin is seeking to have a juvenile court in Montgomery County clear her record.
(BEGIN VIDEO CLIP)
CLAUDETTE COLVIN, CIVIL RIGHTS PIONEER: I'm 82 years old and what it means is that I guess you could say that now I'm no longer -- I'm no longer a juvenile delinquent.
(END VIDEO CLIP)
JARRETT: Fully overturned on appeal and the Montgomery County D.A. said he agreed with the request to clear her record.
Thanks for -- so much for joining me today. I'm Laura Jarrett. Christine is back tomorrow. "NEW DAY" is next.
BRIANNA KEILAR, CNN ANCHOR: Good morning to viewers here in the United States and around the world. It is Wednesday, October 27th, and I am Brianna Keilar with John Berman.