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Biden Announces Plan For Student Loan Relief; Pell Grants; Extreme Rain Extends Dangerous Flood Threat In Southeast; L.A. Voters To Decide If Hotels Should Give Rooms To Homeless. Aired 5:30-6a ET

Aired August 25, 2022 - 05:30   ET



DANIELLA DIAZ, CNN REPORTER: And as a result, now it's left that scramble of who is going to replace her on that committee.

Several Democrats have come forward, Christine, putting their names out there hoping to take that spot, one of them being, of course, Jamie Raskin. If you remember, he's actually serving on that investigation of the January 6 riot. Lots of links between what the House Oversight Committee is doing, as well as what the investigation for the January 6 riot is doing -- that House Select Committee also.

Also, Gerry Connolly of Virginia has put his name forward for that spot, as well as Stephen Lynch of Massachusetts.

So, of course, remember this is important, Christine because that committee is going to be incredibly important. That spot -- that top Democratic sport will be incredibly important should Republicans take the majority in the November -- the 2022 midterms. That would mean that it would be a top Republican on that spot. So, Democrats would not have subpoena power but would be the top messenger for that committee with whatever investigations Republicans proceed with should they take the majority in the November 2022 midterms, Christine.

So that is why this committee is so important and why it's going to be interesting to see who takes that spot. But, of course, I really want to emphasize still a lot of time until that next Congress begins -- Christine.

CHRISTINE ROMANS, CNN ANCHOR: Yes, for sure. All right, Daniella Diaz. Nice to see you this morning. Thank you.

OMAR JIMENEZ, CNN ANCHOR: President Biden fulfilling a campaign promise spelling relief for millions of Americans burdened with student loan debt.

The president's sweeping plan calls for forgiving $10,000 in federal loans for those who didn't receive Pell Grants. Borrowers who did receive Pell Grants are eligible for up to $20,000 in student loan relief. It applies only to those earning less than $125,000 a year.

Also, the freeze on student loan payments was extended one final time through the end of the year. Borrowers will have to begin making payments again in January.

ROMANS: The Biden plan drawing criticism from Republicans and some Democrats. The president responding to questions about whether the forgiveness plan is fair.


REPORTER: Is this unfair to people who paid their student loans or chose not to take out loans?

JOE BIDEN, PRESIDENT OF THE UNITED STATES: Is it fair to people who, in fact, do not own multi-billion-dollar businesses if they see one of these guys getting all the tax breaks? Is that fair? What do you think?


ROMANS: Let's bring in CNN White House correspondent John Harwood. Hi, John.

JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: Good morning, Christine. President Biden was bristling there, wasn't he?

ROMANS: He sure was. He sure was. He gave it right back at them.

Look, to that criticism in a moment. But first, this -- bottom line, this is a promise kept from Joe Biden.

HARWOOD: Joe Biden had a bunch of conflicting pressures Christine, as you know, in trying to fulfill this promise.

Of course, his number one political problem right now is inflation. Economists -- for some of the reasons that you mentioned -- generally speaking, Democrats and Republicans don't like this plan because they say, among other things, that it would tend to be -- not hugely, but intend to be inflationary over time. So it cuts against Biden's attempts to solve that problem.

On the other hand, the Democratic coalition, right now, is chock full of young people, college graduates, middle-class people, African Americans. And representatives of all of those groups -- progressive -- have been pushing very hard for more fulsome relief of student debt obligations. The president was trying to balance those things.

Some people wanted him to wipe out $50,000 --


HARWOOD: -- in debt. The president decided he wasn't or couldn't do that. But this is a pretty expansive plan nevertheless.

JIMENEZ: Well, and John, obviously, not everybody was on President Biden's side here. Senate minority leader Mitch McConnell says it's just not fair -- listen.

(BEGIN VIDEO CLIP) SEN. MITCH MCCONNELL (R-KY): I think it's a bad idea. An awful lot of Americans choose not to go to college, And then there are those Americans who borrowed money to pay for school and paid it back. In what way is it fair to those taxpayers?


JIMENEZ: And Democrat Tim Ryan says that loan forgiveness sends the wrong message.

So this is all coming at a critical midterm for Democrats. So, mainly, the question is that I'm sure is on everyone's mind is how is this going to play out politically?

HARWOOD: Well, I think Democrats are counting on the idea that the people who are gratified and pleased by having their debt wiped out -- and millions and millions of people had less than $10,000 in debt and they were qualified by income. And so, many people will no longer have to write those checks. Those people may be more motivated rather than the people who are angry about it. You know, people who say well, I took out a loan. I paid my loan back, or I didn't go to college.

Those are all valid points. The question is what does it translate into in terms of political energy?


And I think Biden was doing two things. One, he thinks on net (PH) he's going to come out ahead as Democrats look to this midterm -- very challenging, trying to hold the Congress. But he's also making a larger point about many things in the society and in the tax code that may not be fair. And so, economists may look at this and say well, it rewards too many people at too high of an income level.


HARWOOD: And Biden says well, you may not like it but there's a whole lot in our tax code, including breaks for wealthy people and corporations, that I don't like either. So come at me with the fairness argument.

ROMANS: Yes. You know, when he made this promise we had, basically, inflation that was nil, too. So he's -- you know, the inflation part of that argument -- when he made this promise we didn't have an inflation problem.

Also, John --

HARWOOD: That's right.

ROMANS: -- this does not address the high cost of college. This doesn't fix what is a really terrible higher education situation. Tuition inflation is insane. This doesn't -- this doesn't fix that. It's taxpayers here, not the colleges, that are held accountable. So that -- that's one problem. And then there's this. The CEO of the NAACP says that canceling $10,000 is like pouring a bucket of ice water on a -- on a forest fire. And that Biden must recognize and disregard -- and regard, rather, student debt as a racial and economic justice issue.

Is that a valid criticism, do you think?

HARWOOD: Well, sure, they're both valid criticisms and that's why it's such a difficult --


HARWOOD: -- problem.

Tremendous cross-pressures on the White House here. You've got a strong constituency saying we need more help, and then you've got these larger economic concerns, as you said. The inflation ground has moved under the feet of the administration since the beginning of Joe Biden's term in office. Now, the inflation problem seems to be getting a little bit better now -- it may have peaked -- but it's still a concern. And that's the basis of a lot of the criticism from Republicans as well as some Democratic economists like Larry Summers, as you know.

ROMANS: You know, I would -- I would just caution young people -- and this is -- I don't think you'll ever see this again -- this student loan debt wiped out like this. It's amazing. It'll be a game changer for so many families. But, you know, anybody sending a kid to college right now, we still have to keep telling people you've got to really be careful on how much you borrow and where you go to school because the whole system is just rigged to keep you in debt, it feels like, John.

HARWOOD: Well, and Christine, that whole issue of moral hazard, which those of us who follow economics are familiar with, is the idea that the fact that this has taken place might encourage other people to pay more debt in the belief that down the road they may get some kind of relief of this magnitude. That may not happen. So, it's a very dicey issue.

And tuition has skyrocketed as public support for higher education has diminished over the last couple of decades. So, certainly, the financing of education is a systemic problem that is much deeper than anything that could be addressed by loan relief.

ROMANS: Yes, John Harwood. Nice to see you, John. Thank you.

HARWOOD: You bet.

JIMENEZ: First lady Jill Biden testing positive for a rebound case of COVID. She's currently in Rehoboth Beach, Delaware -- not a bad place to quarantine for a bit. Dr. Biden doesn't have any symptoms and a small number of recent close contacts have been notified.

The first lady originally tested positive 10 days ago while vacationing in South Carolina. She was prescribed the antiviral drug Paxlovid, which can trigger a rebound case of COVID several days after a negative test result.

She's isolating, but not alone, tweeting she is grateful to have her cat Willow at her side during her recovery.

ROMANS: All right. Yes, we wish her well.

All right, several high-water rescues in Mississippi as record rainfall creates life-threatening flash flooding. More than 100 children had to be rescued from rising floodwaters at a daycare center Wednesday -- terrifying. Thirty-one people had to be evacuated from a nursing home and school buses as up to three feet of water rushed through that facility.

The rising waters have also washed away roads, they derailed a train, and caused widespread damage to many homes and businesses.

JIMENEZ: And the southeast is just not done being hammered by relentless rain. More storms are expected today, creating a very dangerous flood threat.

Meteorologist Pedram Javaheri joins us live. It feels like deja vu every time I come to you. We're talking about more flooding, more rain pounding the southeast and creating these dangerous conditions.

PEDRAM JAVAHERI, AMS METEOROLOGIST: Yes, I think that there's some light at the end of the tunnel here, Omar, at least going into Friday -- possibly getting a break across this region.

And we're talking about the wetting single day on record and having the wettest month on record across Jackson, Mississippi -- all of it culminating here in the past couple of days. And you see the damage left behind across central portions of Mississippi as well. Rainfall amounts as much as six, even 10 inches in a few spots scattered about this region. And the concern is that moving forward again, additional thunderstorms later on this afternoon could bring in heavy rainfall.

You notice the widespread coverage of what we saw here the last couple of days when it comes to the heavy rains. Around the southern tier of the United States, the frontal boundary in place there that's prompted all this wet weather -- it's still there. It's weakening rather quickly here as we go into this afternoon. And then, yes, we expect the flood coverage to really diminish as well.


Right now, we're seeing some heavy storms pop up around central portions and the southern areas of Georgia, eventually making its way across north Georgia as well, and crossing into the Carolinas. But notice back around the areas that are hardest hit there, across Mississippi into Louisiana and Texas, conditions are generally quiet right now.

Now, you take a look -- the forecast does bring in heavy rains across this region into the afternoon hours as well. And the flood alerts, again, are in place here for another possibly two to four inches before it's all said and done, Omar. JIMENEZ: Pedram Javaheri, thank you so much.

Coming up, a controversial plan to address the homeless crisis in Los Angeles. Will hotels be forced to offer vacant rooms to those living on the street?

ROMANS: And this mega yacht once owned by a Russian oligarch, the first to be sold off due to Western sanctions over the invasion of Ukraine.



JIMENEZ: Los Angeles is now debating whether to begin requiring hotels to offer rooms to the homeless. The controversial initiative is being backed by a hospitality worker union and will go before voters in 2024. But local and national hotel and tourism leaders say the measure could put hotel workers and guests in danger.

CNN's Nick Watt has more.


NICK WATT, CNN CORRESPONDENT (voice-over): In Los Angeles County, more than 60,000 people are homeless on the average night, and more than 20,000 hotel rooms lie empty on the average night. See where this might be going?

STUART WALDMAN, PRESIDENT, VALLEY INDUSTRY & COMMERCE ASSOCIATION: It's insane. It isn't going to solve the problem.

KURT PETERSEN, CO-PRESIDENT, UNITE HERE LOCAL 11: We think this is one part of the solution. By no means do we think this solves the homelessness crisis. But do hotels have a role to play? Of course, they do.

WATT (voice-over): So, the union he leads, which reps hotel workers, gathered enough signatures, and Angelinos will vote on a bill that would force every hotel in town to report vacancies at 2 pm every day, then welcome homeless people into those vacant rooms.

MANOJ PATEL, MANAGER, MOTEL 6: Honestly, would you check into a hotel knowing that the chance of your neighbor to the left or right is a homeless individual?

WATT (voice-over): Manoj Patel voluntarily rents some rooms to homeless people who are vetted and paid for by a local church, but he's against this bill that would make that mandatory.

PATEL: We barely are surviving, number one. Number two, we have to think of the safety of our staff. And number three, we're not professionally or any other way equipped with any of the supporting mechanisms that the homeless guest would require.

WATT (voice-over): What services would be provided remains unclear. Also unclear, the funding. And hotels would be paid fair market rate.

PETERSEN: It's up the city. I mean, they did it during Project Room Key.

WATT (voice-over): The pandemic-era program now winding down that inspired this bill by placing more than 10,000 people in hotels that volunteered -- Shawn Bigdeli among them.

SHAWN BIGDELI, RECIPIENT, PROJECT ROOMKEY: Well, first of all, it's a blessing. It's a -- it's a great room. The technology is not up to par but what technology did you have in a tent?

WATT (voice-over): This bill would also force developers to replace housing demolished to make way for new hotels and hotel permits would be introduced, as well as making every hotel from a Super 8 to the Biltmore accept homeless people as guests.

BIGDELI: I don't think that's a good idea.

WATT (on camera): Why not?

BIGDELI: Maybe for some, but there's a lot of people with untreated mental health and some people do some damage to these poor buildings, man.

WATT (voice-over): This happened in Manoj Patel's hotel.

PATEL: And she marked all walls. Curtain, she burnt. Thank God there was no fire. Even marked the ceiling.

WATT (voice-over): Opponents of housing the homeless in hotels fear this and fear tourists could be put off from even coming to L.A.

WALDMAN: I wouldn't want my kids around people that I'm not sure about. I wouldn't want to be in an elevator with somebody who is clearly having a mental break. The idea that you can intermingle homeless folks with paying, normal guests -- it just doesn't work out.

PETERSEN: We don't want to head backwards into the segregated south, but that's kind of the language that they're talking about. There's a certain class of people less than humans -- animals, they almost describe them as, to be honest with you. They don't seem to understand who the unhoused are. We're talking about seniors, students, working people. That's who the voucher program would benefit the most.


ROMANS: All right, Nick Watt. Thank you so much for that reporting.

Let's get a check on CNN Business this Thursday morning.

Looking at markets around the world, you can see Asian shares have closed higher. Europe has opened -- I'd call that mixed. And on Wall Street, stock index futures are leaning up just a little bit after stocks closed higher on Wednesday after a 3-day slide. Investors appear to be in a holding pattern waiting for Fed chief Jerome Powell's speech tomorrow morning in Wyoming. Other potential market movers -- jobless claims are due out today. A key inflation gauge for the Fed. Something called the Personal Consumption Expenditures Price Index -- that comes out tomorrow.

More fodder due soon for the recession guessing game. A second-quarter GDP revision due out later this morning. This could update -- this update could either tamp down or ramp up fears of a recession.

Look, the economic picture is complicated. The economy is showing huge improvement following the COVID-19 economic downturn. The job market is strong. Payrolls have returned to their February 2020 levels. The jobless rate is at levels not seen in five decades. And the American consumer is showing resilience in the face of months of biting inflation.

And gas prices still sliding, down sharply from the record set in June -- down again overnight.

But around every corner, danger. We've seen two quarters of negative GDP growth. The housing market -- it's turning lousy, actually, as mortgage rates rise and demand plummets. Those interest rate hikes are now becoming routine as the Fed tries to cool runaway inflation.


Further clarity comes Friday when Fed chair Jerome Powell speaks in Jackson Hole, Wyoming.

All right, Peloton has a new partnership with Amazon. The company is now selling a selection of its connected fitness equipment and accessories on Amazon's website in the U.S. Peloton is trying to broaden its customer base and win back investor confidence. Its revenue growth has slowed dramatically from pandemic highs. Investors like the deal. Peloton stock rallied to end the day up more than 20 percent.

And this -- a $75 million superyacht once owned by a Russian oligarch auctioned this week in Gibraltar. The Axioma was seized in March after JPMorgan said its owner defaulted on the terms of a $20 million loan. He was sanctioned by Britain and the European Union following Russia's invasion of Ukraine.

Other superyachts owned by Russian oligarchs have been detained under the sanctions but this one, the Axioma, the first one to be sold off.

The financial screws -- putting the financial screws to the Russian economy.

JIMENEZ: I was going to say --

ROMANS: At least the richest in the Russian economy.

JIMENEZ: Well, I was going to say you only said $75 million, right? That's a -- ROMANS: Seventy-five million.

JIMENEZ: OK. So, on sale?

ROMANS: We could -- we could go together.

JIMENEZ: Yes, we could combine -- we could combine everything.

ROMANS: Yes, OK, -- sure.

JIMENEZ: Cool -- amazing.

Well, people who look alike -- sorry, that's not us -- often share DNA. The new study that says you might be distantly related to your doppelganger, next.

And --


TAYLOR SWIFT, SINGER-SONGWRITER: Singing "I Bet You Think About Me."


ROMANS: Some Texas college students are about to have the chance to study Taylor Swift. What's included in this new class, ahead.


SWIFT: Singing "I Bet You Think About Me."




ROMANS: All right, folks, your doppelganger is out there. People who look just like each other but aren't directly related -- they still seem to have genetic similarities. That's according to this really cool new study.

Researchers in Spain recruited 32 people with doppelgangers or lookalikes and asked them to take DNA tests and answer questions about their lives. Facial recognition software tests were also done and 16 pairs -- half had outcomes similar to actual identical twins. So you might actually be related to your lookalike.


UNIDENTIFIED MALE: Because over the years we've been mistaken for each other all over the place -- all over Atlanta. And there's been some really interesting situations that have come out just because people thought we were the other person.

And so, for us, it's just been a lot of fun and another way since we're already good friends -- another way for us to be even better friends and to bond more. We've got this thing between us that not everybody else has. I mean, everybody has a doppelganger, probably, but we actually know ours.


ROMANS: Wow, those guys look exactly alike --

JIMENEZ: That's so weird.

ROMANS: -- and not -- and they're related.

Do you have a doppelganger?

JIMENEZ: Well, not specifically, but I feel like when I was playing basketball at Northwestern, everybody sent me this screenshot of me standing next to one of the referees and said hey, here's your long- lost brother. And I was like, you know, I could -- I could kind of see it but I think it hits other people's eyes differently than me. It's not exact but, you know, there's something there.

ROMANS: Close enough.


ROMANS: Close enough.

JIMENEZ: Yes. What about you? Anybody?

ROMANS: I don't know. I mean, sometimes when I'm in an airport people will say oh, yes, Savannah Guthrie. I'm like, I'm not -- no. She's -- we're not the same person. Sometimes people mistake me for her but not very often. We'll see.

JIMENEZ: Well, your doppelganger is out there somewhere. If you -- if you guys think of anyone send it to her. Tweet it to her.

ROMANS: Yes. If you think I look like someone.

JIMENEZ: We're going to find your doppelganger. That's so cool.

Well, Tiger Woods and Rory McIlroy are teaming up to launch a new tech-infused golf league.

Andy Scholes has this morning's Bleacher Report. A lot of -- a lot of golf leagues being talked about these days.

ANDY SCHOLES, CNN SPORTS CORRESPONDENT: Yes, a lot -- a lot of new ones coming up these days, right? Omar, good morning to you.

But this one sounds pretty cool. Think of the best players in the world playing in a top golf-like arena. Now, this new league, called TGL, is going to feature 2-hour, 18-hole matches on a virtual course with players hitting into a simulator before putting on an actual green. The players will compete on six 3-man teams. Now, there's going to be 15 regular season matches on Monday nights in primetime and then a playoff. It's all going to get started in January of 2024.

And this is going to be for PGA Tour players only. It's a further incentive to those guys to not leave for the Saudi-backed LIV Golf series.

Tiger Woods saying in a statement, "Embracing technology to create this unique environment gives us the ability to move our sport into prime time on a consistent basis alongside so many of sport's biggest events."

All right, Ukraine's top soccer league, meanwhile, was back on the pits yesterday. All of the games are being played behind closed doors and stadiums have bunkers in case of air raids. And yesterday's match in the western city of Lviv played on Ukraine's Independence Day -- it was stopped four times after those sirens sounded. Because of those delays, the match lasted nearly 4 1/2 hours instead of the normal 90 minutes. Thankfully, there were no strikes reported in the area.

All right, and finally, linebacker Shaquem Griffin officially announcing his retirement from the NFL. Griffin was the first player ever to be drafted to the league with just one hand. He had to have his left hand amputated at age four because of a rare birth defect. Griffin played three seasons with the Seahawks.

He said, guys, he's now on to plan A because football was always plan B. And Omar, the Seahawks and the NFL both saying Griffin, a true inspiration. He certainly was and is.

JIMENEZ: What a legend. What a legend. Griffin and to you, as well, Andy Scholes. Thanks for being with us.

SCHOLES: All right.

ROMANS: All right, to another legend. This fall, students at the University of Texas at Austin getting the chance to take a course on pop songstress Taylor Swift.

You're listening to Taylor Swift. This course is called Literary Contests and Contexts -- the Taylor Swift songbook.


ROMANS: Yes, you get college credit for listening to Taylor Swift. This course is called Literary Contests and Contexts. The Taylor Swift Songbook, the school says it'll use her songs to introduce literary critical reading and research methods.

JIMENEZ: If I took that class, I'll be a better man.

ROMANS: All right. Thanks for joining us. I'm Christine Romans.

JIMENEZ: And I'm Omar Jimenez. "NEW DAY" starts right now.