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Early Start with John Berman and Zoraida Sambolin

Biden Criticizes Trump's MAGA Philosophy As "Semi-Fascism"; Today: Investors Bracing For Fed Chair Powell's Speech; Student Loan Forgiveness: How Biden Finally Made Up His Mind. Aired 5:30-6a ET

Aired August 26, 2022 - 05:30   ET

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

(COMMERCIAL BREAK)

[05:30:47]

CHRISTINE ROMANS, CNN ANCHOR: President Biden hitting the campaign trail with a fiery speech labeling former President Trump's MAGA slogan as semi-fascism threatening the country.

(BEGIN VIDEO CLIP)

JOE BIDEN, PRESIDENT OF THE UNITED STATES: Those of you who love this country -- Democrats, Independents, mainstream Republicans -- we must be stronger, more determined, and more committed to saving America than the MAGA Republicans are destroying America.

(END VIDEO CLIP)

ROMANS: In campaign mode there, right? Ahead of the rally, the president told a group of Democratic donors in a private home in Maryland -- what we're seeing now is either the beginning of the death -- or the death knell of an extreme MAGA philosophy. It's not just Trump, it's the entire philosophy that underpins the -- I'm going to say something. It's like semi-fascism. That's what he said.

Let's bring in Republican strategist and CNN political commentator Alice Stewart.

You could see him, Alice, taking his coat off before that speech. I mean, he was fired up and in rally mode. He's been very, kind of, buttoned up as president but that looked like a campaigning Joe Biden. Democrats are looking to Biden to keep this type of energy up as we head into the midterms.

Do you think his voters are going to be more motivated by him touting his accomplishments or highlighting these dangers of the MAGA Republicans?

ALICE STEWART, CNN POLITICAL COMMENTATOR, REPUBLICAN STRATEGIST (via Webex by Cisco): Clearly, to motivate the base, the best way to do so is what he did last night -- is really tout his accomplishments. I think like you said, he was very enthusiastic and energetic and riled up his base, which was good, touting the Inflation Reduction Act, as well as several accomplishments that Democrats have had in Congress recently.

The problem is when he went negative, and I've heard even many Democrats have concerns about this. Look, I share his concerns about those who question the integrity of our elections. That's frustrating to me. But to refer to Republicans as fascists is a bridge too far.

Clearly, what he's doing -- the new strategy -- is to make the new deplorables, referring to them as MAGA Republicans or extra-MAGA Republicans -- and now, even fascists. And I don't think that's a positive way to move forward. There are plenty of contrasts between the Democrats and Republicans that he can and should make, but using such a divisive rhetoric I think is just too much.

ROMANS: And Alice, I was wondering though, is he making a distinction between Republicans and MAGA Republicans? You said Republicans Democrats. I feel like I'm hearing him talk about Republicans and then MAGA Republicans.

OMAR JIMENEZ, CNN ANCHOR: Republicans -- he's trying to grab --

ROMANS: Right.

JIMENEZ: -- in making that distinction.

ROMANS: I don't know.

STEWART: He was parsing his words somewhat, giving a nod to Republicans such as Larry Hogan, governor of Maryland, who was there. That is one good way to do so. But the takeaway and the headlines today are the fact that the President of the United States referred to virtually half of the country as fascist or semi-fascist and that's really not a good takeaway.

But again, to -- the mission accomplished last night for Joe Biden is touting his accomplishments and firing up the base, which is a great way to kick off this final stretch --

ROMANS: Yes.

STEWART: -- as we head to the midterms.

JIMENEZ: And Alice, you bring up a good point -- if that rhetoric could end up backfiring by motivating people on the Republican side.

Now, I want to play a little bit of what the president said regarding MAGA Republicans and Roe v. Wade.

(BEGIN VIDEO CLIP)

BIDEN: Just take a look what happened since the Supreme Court overturned Roe v. Wade. In red states after red state, there's a race to pass the most restrictive abortion limitations imaginable, even without exception for rape or incest. But these MAGA Republicans won't stop there. They want a national ban. If the MAGA Republicans win control of the Congress it won't matter where you live. Women won't have the right to choose anywhere -- anywhere. (END VIDEO CLIP)

JIMENEZ: Now, the president says MAGA Republicans, to use his words, don't have a clue about the power of women. We've seen abortion galvanize voters in Kansas and New York's --

ROMANS: Yes.

JIMENEZ: -- 19th district just recently. But I think a lot of Democrats are looking for -- at that issue to at least, in part, propel them over the finish line.

What impact do you think this will actually have on voters come November?

[05:35:00]

STEWART: Well, Omar, you gave two very great examples of how this has been successful and motivating for Democrats and those who are pro- choice.

The race we had this week in the 19th Congressional District in New York was a real bellwether race pitting a Democrat versus a Republican in that special election. The Democrat ran on the abortion issue. And as soon as Roe was overturned he put out ads on that issue and it really galvanized voters. Women voter registration has gone up significantly and they are turning out in record numbers. That is a good sign for Democrats and clearly, that is a message to take into the midterm elections.

But also, Republicans can't rest on our laurels. This has been an issue that has really turned out social conservatives in the pro-life movement and we have to now see that this is turning out Democrats.

What I do expect to see -- and I am talking with a lot of social evangelical groups, bus tours, Get Out the Vote efforts, volunteers' efforts are really going to get out there to help the pro-life community. And those who want to enact more pro-life legislation at the state level -- they need to get out there and match what the Democrats have done already to date in the short-term since Roe has been overturned.

ROMANS: Back to Biden. He's touting the recent string of major wins legislatively. Gas prices have been coming down now for 72-73 days in a row. But a CNN poll of polls shows the Biden approval rating at 40 percent. Obviously, Democrats need that number to keep climbing as soon as possible.

What -- how does that happen, especially since the lower the poll numbers, all the way back to the Afghanistan withdrawal, right?

STEWART: Right, and they were much slower starting with that.

And what we are seeing is the trend of his approval numbers are ticking upward, which is the direction that you want to go at, but when you're around 40 or 44 percent in job approval ratings that is extremely low. Not to mention the fact a recent CNN poll of Democrats saying that 75 percent of them would rather see someone else on the ticket for 2024.

That being said, as we get closer to the midterm elections there is a tremendous opportunity for him to tout his accomplishments. If gas prices continue to go down, that is something that is favorable to him.

But right now, Republicans and Independents are looking at historic inflation. We're looking at recession numbers. Seeing, still, high grocery prices, home prices, and rising crime across the country.

A lot can happen between now and November, so we're going to watch these economic indicators --

ROMANS: Sure.

STEWART: -- which are a big motivating factor for voters.

JIMENEZ: A lot of factors at play that we're going to see how it ends up playing out through the eyes of the voters very, very soon. I feel like it gets sooner. Oh my gosh, it's going to happen very, very quickly -- sorry.

Alice Stewart, thank you so much. Good to see you.

ROMANS: All right, not --

STEWART: Thanks. Have a good day.

ROMANS: Nice to see you, Alice.

All right, not Wall Street, not Washington, but Wyoming is the power center in the global economy, at least for the next couple of days. Fed chief Jerome Powell gives an annual speech in a Fed symposium in Jackson Hole.

It was in Wyoming exactly a year ago the Fed chief said this about inflation.

(BEGIN VIDEO CLIP)

JEROME POWELL, FEDERAL RESERVE CHAIR: The spike in inflation is, so far, largely the product of a relatively narrow group of goods and services that have been directly affected by the pandemic and the reopening of the economy. And from long experience, we expect the inflation effects of these increases to be transitory.

(END VIDEO CLIP)

ROMANS: Transitory -- remember transitory -- transitory inflation? It turns out that was dead wrong.

The big question now is how behind is the Fed on fighting inflation and how aggressive will it be in raising interest rates for the rest of the year. I want to bring in Morning Consult chief economist John Leer. Good morning, John. Nice to see you.

You know, we had to roll the tape here because it was a year ago that we were -- the conventional wisdom was that inflation would not reach 8 1/2 percent and wouldn't last for the whole year, but that's where we are. And Powell now has a fine line to walk here. He's got to crush that inflation but not cause a recession.

What are you expecting to hear from him today?

JOHN LEER, CHIEF ECONOMIST, MORNING CONSULT (via Webex by Cisco): Yes, thanks for having me.

You know, Chairman Powell is in a very tough position because, on the one hand, he's trying to provide this forward guidance. He's trying to essentially communicate to markets what the Fed is planning on doing. And yet, at the same time, he wants to preserve that sort of flexibility to be data-dependent. And I think that's the sort of tension right now that makes it very, very difficult to interpret exactly how we should interpret his comments.

You say that with the clip you just played. There was another clip -- I think not that long ago -- where he mentioned something like not only are we not thinking about raising interest rates by 75 basis points, we're not even thinking about thinking about raising interest rates by 75 basis points. And then, in fact, inflation numbers came in much hotter than he had anticipated and they raised interest rates by 75 basis points.

So again, I think that's really where the -- there's this tension because it's very difficult right now to say anything meaningful given the volatility in the numbers.

[05:40:04]

JIMENEZ: Well -- and John, it's one thing to look how the economy appears on paper but also about how it feels to the people that are powering --

ROMANS: Sure.

JIMENEZ: -- this economy. A new Gallup poll shows that just 31 percent of Americans are satisfied with Biden's handling of the economy despite an improving economic situation.

So, why do you think so many people are unhappy with his handling -- at least, so far?

LEER: Well, inflation has been at record highs. Gas prices, of course, have been really, really elevated. That's something that voters and consumers see and feel on a daily basis.

We continue to see that consumers have grown significantly more confident in the economy and in their personal finances over the past few weeks. I think that there are approval ratings probably closer to 35-38 percent right now. And so, I'm not sure that the situation is quite as bad. On top of that, we do see that Biden's approval rating has improved over the past few weeks.

So there are some tailwinds right now but certainly, inflation is elevated and those -- that's really starting to hit, particularly, middle- and low-income consumers and voters.

ROMANS: You know, I think -- I think it's really important to point out that the economy is just a hot mess, and it's a hot mess because we're coming out of an unprecedented public health crisis. We don't know what normal is here. We're trying to -- there's all this recession guessing. But it's a period of transition, right? For every negative number, you've got a positive number.

I mean, I was saying to -- the other day, Party City is hiring 20,000 people for Halloween because they know this country is about to explode with people wanting to go out and do stuff, right?

So, what does normal --

LEER: Yes.

ROMANS: -- look like to you? I mean, this -- there's nothing is normal in this economy.

LEER: Nothing is normal. We're certainly still in a period of transition. I think it will take some time for us to really know how the dust will settle.

One of the things that I'm looking at really closely is looking at sort of where the jobs are. We've seen in transportation, warehousing this sort of -- I mean, that's an industry that's a clear winner post- pandemic. Something like leisure and hospitality -- there are still 1.2 million workers short of where they were pre-pandemic.

Those transitions are really dramatic. They have a dramatic impact on how people live, where they work, and where the money is flowing. And so I think it's going to take some time.

On top of that, I would say while things in the U.S. look reasonably stable, the world, right now, is going through an extremely tumultuous time with Europe, I think, in a recession already and China showing signs of significant weaknesses, particularly in the real estate sector.

And so --

ROMANS: Yes.

LEER: -- it's hard for me to say for sure that the U.S. is going to emerge from this unscathed.

ROMANS: John Leer, always nice to see you. Thank you. Have a great weekend and a great rest of your day.

LEER: My pleasure. Thank you. ROMANS: All right, more on CNN Business this morning.

Looking at markets around the world, let's check how Asia closed for the week -- mixed -- although Hong Kong up and Tokyo up as well. Europe has opened narrowly mixed here.

And on Wall Street, stock index futures leaning down just a little bit, although U.S. stocks closed higher Thursday -- two days in a row. Investors are -- appear to be waiting for guidance on future interest rate hikes from Powell's Jackson Hole speech. That's at 10 am eastern today.

Still, markets are on pace for a losing week. All major indexes currently down more than one percent.

Gas prices ticking down overnight, now $3.87 a gallon. Oil prices, however, watching those. They're rising a bit in global markets as OPEC members weigh cutting oil production.

All right. It wasn't easy for President Biden to settle on his student loan debt forgiveness plan. We have new CNN reporting on how he made up his mind.

JIMENEZ: And a college graduate thousands of dollars in debt is speaking on the president's student debt plan. Was it enough? He joins us live.

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[05:47:50]

JIMENEZ: It was a controversial campaign promise but this week President Biden finally delivered it, announcing a plan to cancel up to $10,000 in student loan debt and as much as $20,000 for those receiving Pell Grants. And we're learning more about how it all came about -- a process one Democrat describes as torture. It seems like par for the course in D.C. these days.

CNN's Kevin Liptak joins us with details. So, Kevin, what have you learned about how the president finally made up his mind?

KEVIN LIPTAK, CNN WHITE HOUSE REPORTER: Well, Omar, I think there was really a recognition in the White House that this decision had to come. And, of course, President Biden has always had this reputation for taking his time with big decisions. It's earned him this reputation for indecisiveness and I think that this was probably the best example of that of his presidency so far.

And what we've learned is that the contours of this plan were actually in place in April and White House officials had actually begun initial discussions of unveiling it during some commencement addresses back then. But the president just wasn't ready. He still had to make up his mind.

And there were really kind of three areas where the president was hung up on some of these things. One was, was this legal? And the president was a skeptic initially

that he had the legal authority to just wipe out debt in the way that he did. Eventually, White House lawyers did come up with a rationale based on a 2003 law. But that was something that the president was sort of weighing throughout this whole process.

The other question was would it contribute to inflation? Of course, you hear the White House now very adamantly say that this won't be inflationary. But that was quite an intensive internal debate between the president, his advisers -- his economic advisers, of course, as inflation became that hot political topic over the last year.

And third, which I think was probably the most important for President Biden, was would this be fair? And he was adamant that he did not want this to appear like a handout for wealthy Americans. He didn't want it to seem like this was all going to borrowers who did have the means to pay back their debt or borrowers who went to elite institutions.

[05:50:00]

And so, these were all contributing to the president's decision-making but ultimately, there was a recognition that they did need to make this decision by August 31. Even in the days leading up to that announcement, the president was hearing from Democrats on Capitol Hill lobbying him to go a little bit further.

Of course, that announcement did come but what the White House said was that they acknowledged -- they didn't necessarily think that everyone would be satisfied, and that has certainly been true in the aftermath, Omar.

JIMENEZ: Well, that's right, Kevin. So that internal debate really translated to not everyone being happy with this plan -- even some Democrats. But the White House is hitting back at Republican critics of the student loan forgiveness plan, right?

LIPTAK: Yes. And Omar, normally, the White House Twitter is a pretty staid affair -- not much exciting going on there. But last night the White House Twitter did start hitting back at some of these Republicans who are critical of this plan, saying that loans have to be paid back. That it's not fair to see your loans forgiven.

And so, what the White House did was they found these Republican lawmakers who had received those paycheck protection loans from the COVID pandemic -- those had been forgiven by the government -- and essentially accused them of hypocrisy. Among them, Marjorie Taylor Greene, Matt Gaetz. Marjorie Taylor Greene had almost $184,000 forgiven in her loan. Matt Gaetz, $482,000.

So the White House really trying to hit back against this idea that this is some sort of unprecedented step by the White House.

I think this is something that you're going to hear on the campaign trail in the weeks and months ahead because even though some Democrats do oppose this plan, the White House certainly believes that it could be a boon for President Biden and Democrats among younger voters, Omar.

JIMENEZ: Yes. And those specific Twitter mentions -- I don't think I've seen that from, at least, the White House Twitter account in this administration.

Kevin, thank you. Good to see you.

LIPTAK: All right.

ROMANS: Usually, they just don't even acknowledge the bit players who are the provocateurs.

JIMENEZ: Yes.

ROMANS: Maybe they are trying to make a point there.

JIMENEZ: Just sub-tweeting.

ROMANS: All right, let's talk about somebody who knows this firsthand. After getting his bachelor's and master's degrees, our next guest graduated with more than $65,000 in student loan debt.

I want to bring in Jayson Douglas joining us from Commerce, Texas. Jason, good morning. Thank you for getting up with us.

So, $10,000 will be wiped off your loans and you'll have to start paying your minimum monthly payments again come January, but that will be capped at five percent of your take-home pay. What's your reaction?

JAYSON DOUGLAS, GRADUATED WITH OVER $65,000 IN STUDENT LOANS (via Webex by Cisco): Absolutely. So, I really think that this higher education in itself, let's be clear, wasn't designed for people who look like me. And while I think that President Biden's deal is a step in the right direction, I think it's simply not enough. I think that we need to keep leaning and keep figuring out how we get back to the table to figure out how we can relieve borrowers from owing more money and expense.

JIMENEZ: Well -- and Jayson, it's not just payments -- you know, the principal amount that you're dealing with. You're also dealing with interest on top of that.

Is there an amount of money that would have been enough to you? Was this even the right approach in your eyes? Have you heard from anyone who thinks that $10,000 was the right amount?

DOUGLAS: No. I think that we really were leaning on cancellation. I think that was definitely part of the conversation and it's something that we were looking for. The economy in which we borrowed is not the economy that we are in today. And the economy seems much more punitive to those borrowers today.

I was somebody who -- my loans were $65,000 and now it's upwards of almost $90,000.

ROMANS: Wow. But there are those folks who say -- and I'm sure you've heard them --

that they think it's unfair -- that forgiveness is unfair. Because they paid off their loans already or they went to a community college and didn't get a second degree because they couldn't afford it.

What do you say to the people who say at some point it's buyer beware in higher education?

DOUGLAS: Absolutely. Well, I also think just like you previously alluded to, those people -- those elected officials who are elected, selected, and/or appointed who decided to take advantage of the payroll protections program who then were able to scapegoat themselves from those loans or those loans were then forgiven for them.

What about those people who are most marginalized who couldn't afford education and wanted to strive towards an undergraduate or master's specialist or terminal degree who are still left with these loans? At the end of the day, that's not fair for them and their families.

ROMANS: Well, thank you for coming on and talking to us about it. And we hope the $10,000 at least helps you start moving in the right direction on getting that loan debt down. Jayson, nice to see you. Jayson Douglas in Commerce, Texas.

JIMENEZ: More news coming up.

DOUGLAS: Thank you.

JIMENEZ: We'll be right back.

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[05:58:25]

ROMANS: So, two minutes to the top of the hour. It is Friday and this is Omar's first week anchoring at CNN.

JIMENEZ: Yes.

ROMANS: And you did a great job.

JIMENEZ: It was so much fun. Honestly, at the top of my list was not sleep through any alarms.

ROMANS: OK.

JIMENEZ: So we did that. Five for five there.

ROMANS: A success.

JIMENEZ: Two was to keep up with you, Christine Romans. I mean, like, this is -- this is cream of the crop right here.

ROMANS: Tell me more. Tell me more.

JIMENEZ: And this is my first time ever anchoring on CNN. You know what they say -- you never forget your first.

ROMANS: That's so cool. So I am your first and favorite CNN co-anchor so far --

JIMENEZ: Of course. Of course.

ROMANS: -- so far. It's been great having you here.

JIMENEZ: Always.

ROMANS: It's been great having you here. You do really great work. In front of the camera or out in the field, you're great on everything.

Thanks for joining us. I'm Christine Romans.

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

JOHN BERMAN, CNN ANCHOR: This is no breezy summer Friday. There is a ton going on. Big developments in the search of Mar-a-Lago. A huge temperature check on the economy. And a speech from President Biden where he really kicked off the midterm campaign season.

I'm John Berman. Brianna is off. CNN chief White House correspondent Kaitlan Collins here.

KAITLAN COLLINS, CNN ANCHOR: You know, I'm starting to not believe that August is slow anymore. Everyone always says it's a slow news month -- nothing happens. For the last several Augusts we have been very busy.

BERMAN: So busy. And what's going on today is really important and the outcomes indeterminate at this point.

COLLINS: Yes.

BERMAN: Look, first, a federal judge ordered the Justice Department to release a redacted version of the affidavit used to justify the FBI's search of Mar-a-Lago. The department has until noon today to release it. The affidavit lays out why investigators believed there was.