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Netanyahu Softens Judicial Overhaul, Opposition Rejects Changes; Biden To Designate National Monuments Today In Nevada And Texas; Today: L.A. School Workers Union Begins Three-Day Strike. Aired 5:30-6a ET

Aired March 21, 2023 - 05:30   ET

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

[05:30:00]

CHRISTINE ROMANS, CNN ANCHOR: Opposition leaders rejected the changes.

Let's go to CNN's Hadas Gold live in Jerusalem. Hadas, where does this leave, I guess, chances for a compromise?

HADAS GOLD, CNN JERUSALEM CORRESPONDENT: Well, Christine, if you are optimistic you see it as the Israeli government with a coalition led by Benjamin Netanyahu as at least willing to budge a little bit, although none of this was done in consultation with the opposition. This was essentially the coalition -- the ruling government negotiating within themselves.

And the change that they made was to how the judges would be selected for the high court. When you talk to people in the government they say that this is the number one issue really for them over this judicial overhaul that they want to do. And the change that they made is that on this committee that would select judges, instead of the government- appointed members having the vast majority -- instead, they would have just a one-seat majority but still a majority.

And -- but this -- the opposition is rejecting this. They say that this does not go far enough. They say -- some of the protest leaders are even saying that it's not even a softening -- a declaration of war, they say.

Another element is actually, they have to agree to pause the rest of the reforms because this is a package of several bills until after the Passover recess at the end of April and opening the door up to negotiations. But we're not hearing from the opposition leaders that this is enough for them at all. The protest leaders are still planning to go out into the street.

Now there are some bigger questions coming out because another question is what will happen if the Israeli high court strikes down elements of these reforms that are trying to reform the high court. We are just hearing now reports in the Israeli media that the Ministry of Justice are saying they will not listen to the Supreme Court if they strike down these reforms.

We are heading into a potentially judicial crisis even bigger than what Israel is already facing as we're seeing so much divisiveness and hundreds of thousands of Israelis taking to the streets on a weekly basis.

ROMANS: All right, Hadas Gold. Thank you so much. Keep us posted there.

All right, quick hits around the globe right now.

India blocking internet access to about, oh, 27 million people in the state of Punjab for a fourth day as police hunt for a separatist. Officials justify the shutdown to keep the peace.

Angry protesters clashing with police in central Paris after the French government survived two no-confidence votes Monday allowing the controversial pension plan to advance.

American missionary aid worker Jeff Woodke, held hostage for six years in West Africa, has been freed. President Biden thanking the Niger government for helping with the release.

All right, coming up, workers at Los Angeles schools going on strike, shutting down classes. And for the second night in a row, a number-one seed goes down at March Madness.

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[05:36:46]

ROMANS: Here is today's fast-forward lookahead.

Presidents Xi and Putin hold another round of face-to-face talks on Ukraine, among other concerns, in Moscow today. Xi called Putin a dear friend during Monday's 4 1/2-hour opening discussions.

The Supreme Court hears arguments today in its first case involving a crypto-related company. Coinbase is asking the justices to order a pause on two class action suits. The company's user agreement mandates resolution through arbitration.

President Biden will dedicate national moments in southern Nevada and near El Paso, Texas today. Together, the monuments will protect more than half a million acres of public land.

All right. A major disruption for the second-largest school district in the country. Thousands of Los Angeles school workers go on strike today.

CNN's Camila Bernal has more.

(BEGIN VIDEOTAPE)

CAMILA BERNAL, CNN NATIONAL CORRESPONDENT (voice-over): The signs Jose Tovar is making will be used Tuesday when a three-day strike is expected to force school closures in the second-largest district in the nation.

JOSE TOVAR, CUSTODIAN, L.A. UNIFIED SCHOOL DISTRICT: We're not asking for the world but just -- you know, to live above water.

BERNAL (voice-over): Tovar, a custodian with a full-time at an early education center, says he makes about $25,000 a year.

TOVAR: I love my job, especially I do fire drills (PH) for your kids and make sure to keep it clean for them. Yes, (INAUDIBLE) appreciate it and I respect.

BERNAL (voice-over): And respect is what his union says this strike is about. While asking for more money some members have reported harassment for doing so.

MAX ARIAS, EXECUTIVE DIRECTOR, SEIU LOCAL 99: Some have been harassed to the point where they've lost their job, they've lost income, or they generally just get some are intimidated.

BERNAL (voice-over): SEIU Local 99 is a union representing thousands of cafeteria workers, bus drivers, custodians, and other school workers, but the teachers union is also joining the strike in solidarity.

ALBERTO CARVALHO, SUPERINTENDENT, L.A. UNIFIED SCHOOL DISTRICT: Let's go to the table.

BERNAL (voice-over): LAUSD's superintendent Alberto Carvalho is hopeful that the two sides will come to a monetary agreement and says harassment claims are being reviewed.

CARVALHO: We have not been presented with compelling evidence that there is widespread abuses. Are there issues? Yes. Each one of them is vigorously investigated and consequences are applied on the basis of the merit of the allegation.

BERNAL (voice-over): The union says avoiding a strike is unlikely. Instead, they want to shine a light on minorities and low-income workers who keep the schools running.

UNIDENTIFIED FEMALE: I like what you did.

BERNAL (voice-over): They see this as a wake-up call for other districts in the U.S. to fund education.

ARIAS: Elected officials throughout the country, federal and state, should see what's going on here and think this is happening in just about every district in this country.

BERNAL (voice-over): The superintendent also believes that when they come to an agreement the rest of the nation will use it as an example.

CARVALHO: I believe that it will be precedent-setting for the country and I will take pride in it, as will the union, for these are some of the lowest-wage earners in our community.

BERNAL (voice-over): Both sides worry about the students who may suffer greatly from school closures. CARVALHO: Once you are forced to shut down a school you eliminate some of the protections and rights that children have. The right to food. The right to health. The right to social and emotional support. The right to mental support. The right to have their disabilities addressed in an adequate way.

[05:40:09]

BERNAL (voice-over): But the union believes people like Jose Tovar need to make more money.

TOVAR: It's a struggle. It's hard. And sometimes my -- I'm thinking to myself Lord, am I going to make it another day, you know?

BERNAL (voice-over): Because in the end, they say higher salaries for school workers will lead to better schools and better education.

Camila Bernal, CNN, Los Angeles.

(END VIDEOTAPE)

ROMANS: All right, March Madness delivers again. Another number-one seed goes down this time in the final seconds.

Carolyn Manno has this morning's Bleacher Report. Hey, Carolyn.

CAROLYN MANNO, CNN SPORTS CORRESPONDENT: Hey, good morning.

This is going to go down as one of the wildest first weekends in March Madness on both sides, highlighted by the women's side. Ole Miss' stunning upset of one-seed Stanford who had everybody's jaws on the floor. And then Indiana trying to avoid that same fate against nine- seed Miami.

The Canes had the Big 10's regular season champs on the ropes all night. I.U. down three with 10 seconds to go. Yarden Garzon draining the step-back from deep to tie it up. The freshman from Israel sending Assembly Hall into a complete frenzy, but it wouldn't last.

Destiny Harden, a senior from Chicago, hitting a really tough bucket to retake the lead. Hoosiers hustling up court couldn't even get off a shot though.

Miami back in the Sweet Sixteen for the first time in 31 years, and it's the first time in 25 years that two one-seeds have lost before the Sweet Sixteen has even begun.

The second-seeded Huskies took care of Baylor last night, extending their own record of 16 straight Sweet Sixteen appearances. Star sophomore Azzi Fudd was unstoppable, outscoring Baylor all by herself in the third quarter. She put up 16 of her 22 points out of the break.

Things pick back up on Friday for the women in the Sweet Sixteen.

In the NBA, Julius Randle scored 57 points for the Knicks last night and it still was not enough to get a win. Less than a minute to go in the game, Randle forcing the steal, gets it back, and drives for the tough bucket here and the foul to pull New York within three. Randle needed to make one more play though and he just couldn't do it. Good defense -- he just wasn't able to pull down the rebound, giving the Timberwolves another chance to ice it, and they do.

Randle irate on the bench after this as you might imagine. He was slamming his hand on the scorer's table. Minnesota getting a crucial win. Some frustrations boiling over. They are one of nine teams separated by just four games in the Western Conference with less than a month until the playoffs begin.

The semifinal of the World Baseball Classic became an instant classic Monday night between Japan and Mexico. Japan coming into the ninth by one. Superstar Shohei Ohtani hitting a lead-off double to get the rally started, and then this.

(BEGIN VIDEO CLIP)

ANNOUNCERS: (Speaking foreign language).

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MANNO: So I'm not fluent, Christine, but loosely translated that means that they won. Japan walking it off. An incredible way to end this game, advancing to the final against a red-hot Team USA tonight in Miami. There has been record attendance this year at the WBC and then there's opening day next Thursday.

But this is the game that everybody has been waiting for -- USA, roster loaded, against Japan; Shohei Ohtani. What more could you want?

ROMANS: Awesome, awesome. All right, nice to see you. Thanks, Carolyn, for bringing that to us this morning.

All right, coming up on "CNN THIS MORNING" will Donald Trump be indicted? Big implications, of course, if he is.

And next right here, bank failures and the Federal Reserve. The new reality of its inflation-fighting strategy.

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[05:48:00]

ROMANS: All right, your Romans' Numeral this morning, 9,000. Amazon cutting 9,000 more jobs. The layoff announced yesterday will take place in the coming weeks mostly affecting workers in web services, H.R., advertising, and Twitch. It's part of a major cost-cutting effort. The company also announced 18,000 job cuts earlier this year.

All right, looking at markets around the world right now, Asian markets finished mixed. European markets are higher at this hour. Concerns about the global banking sector easing a bit following UBS's takeover of Credit Suisse. And on Wall Street, stock index futures right now also higher here. Look, it was a good day for markets yesterday in the U.S. Averages closed higher. Markets were up yesterday. You had the S&P and the Dow both higher.

Investors optimistic about regulators and their ability to try to contain this banking crisis. More than a one percent move for the Dow. The Dow up 380 points.

On inflation watch, gas prices steady overnight at $3.44 a gallon. But I've got to tell you, watch this space. They could keep going down. Crude oil prices have fallen below $70.00. It got down to $64.00 a barrel a few days ago after it hit 2021 lows.

All eyes are on Jerome Powell as the Federal Reserve kicks off its two-day policy meeting. The Federal Reserve will make its interest rate decision tomorrow, Wednesday.

And let's bring in Jay Bryson, managing director and the chief economist at Wells Fargo.

Boy, am I glad to have you here today because look, the economy has performed very strongly since the Fed last met. Taken in isolation, the Fed would be justified with another large rate hike to try to cool inflation. But you say look to the Fed to briefly pause its tightening. This bank drama has tied its hands?

JAY BRYSON, MANAGING DIRECTOR AND CHIEF ECONOMIST, WELLS FARGO (via Skype): Well, Christine, as you said, taken in isolation. I mean, the economy looks very, very good right now and yes, the Fed would probably be raising rates by 25 basis points without what's going on right now.

That said, what's going on right now is very unsettling. It makes the future very uncertain. And we've seen a tightening in the financial markets. And so, the Fed may decide to take a pause here just to see how things settle down.

[05:50:08]

ROMANS: Jay, explain to our viewers -- because I think a lot of people don't understand this -- that what's happening in the banking sector might actually, in a very disorganized and kind of dangerous way -- might be doing some of the Fed's work for it, right? I mean, there could be a tightening of conditions because of what's happening in banking.

BRYSON: Oh, that's absolutely right. And in real time when you look what's happening in the corporate bond markets, lending conditions there have gotten tighter. And so that means some of the largest corporations in the United States are going to find it more difficult to borrow and that obviously has an effect on economic growth.

And then I would expect that if you look at some of the -- you know, the regional banks have been having some of these problems. I would think you are going to see lending standards tighten there as well. So it will be more expensive for businesses and consumers to borrow and all of that exerts a slowing effect on the economy.

That's what the Fed was trying to do with these rate hikes. To cool inflation --

ROMANS: Yes.

BRYSON: -- they were trying to slow growth. And so some of this tightening that's happened recently is in some sense doing the Fed's work for it.

ROMANS: Yes. I've seen a lot of different estimates -- economists -- you know, back of the envelope -- trying to say is it -- is what's happening in banking 25 basis points of tightening conditions? Maybe 50 basis points of tightening conditions. It's interesting -- that math.

Meanwhile, Powell has been criticized for how he has handled the inflation fight. I want you to listen to Sen. Elizabeth Warren.

(BEGIN VIDEO CLIP)

SEN. ELIZABETH WARREN (D-MA): He's failing in both jobs, both as the oversight

CHUCK TODD, NBC MODERATOR, "MEET THE PRESS": Yes.

WARREN: -- manager of these big banks, which is his job, and also what he's doing with inflation. I don't think he should be chairman of the Federal Reserve.

(END VIDEO CLIP)

ROMANS: Ouch. Now, she has been a critic of the Fed, of course, but she's also talking about the supervision the Fed was supposed to provide for SVB -- that bank that went down.

How can the Fed, I guess, restore confidence here?

BRYSON: Well, I mean, I think what the -- what the authorities in general, whether it's the Fed, the FDIC, or the Treasury Department -- I mean, what they have done in the last week or so has been important, shoring up the financial market as well. And there very well could be more steps coming.

And if you think back to 2008 to 2009, and again during the pandemic, I would say the Fed or the authorities more, in general, are very adept at coming up with different sorts of programs to stabilize the situation. And so I don't know if the Fed is necessarily or the authorities, in general, are necessarily done at this point.

ROMANS: Yes.

BRYSON: We'll see how things continue to develop. And as I said earlier before, maybe taking a pause at this point and just seeing in terms of the rate hiking cycle -- and just wait -- letting -- see things calm down may help to restore some confidence. ROMANS: Just real quickly, have we seen the last of small bank failures in the U.S., do you think?

BRYSON: Well, Christine, I wish I could say for sure but that's happened -- you know, uncertainty is very high right now and we'll see how things play out.

ROMANS: Yes, two things can be true. You can have more banks in trouble but the overall system solid and sound. Both of those things can be true at the same time.

Nice to see you, Jay Bryson, Wells Fargo chief economist. Thank you so much.

BRYSON: Thank you, Christine.

ROMANS: All right, just into CNN, Chinese leader Xi Jinping just invited Russian President Vladimir Putin to visit China. That's according to Russian state media. No word if Putin will accept. The two leaders are about to hold a second day of talks at the Kremlin. More ahead on "CNN THIS MORNING."

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[05:58:00]

ROMANS: All right. Our top of the morning, the top states to retire in. Hitch up the U-Haul because here we go.

Number one, Virginia. WalletHub gives it decent scores for affordability, quality of life, and health care. Number two, Florida. Top 10 for affordability and near the top for quality of life, but Florida ranks in the bottom half for health care. Coming in at number three, Colorado. It ranks in the top five for health care.

Kentucky and New Jersey, if you're interested, are on the bottom of this list of best places to retire.

All right, storm-ravaged California facing yet another atmospheric river today. This powerful system is threatening more flooding and 80- mile-per-hour winds. Some residents are fleeing their homes as officials fear that roads could become impassable.

CNN's Chad Myers with the forecast. How much more can California take, Chad?

CHAD MYERS, AMS METEOROLOGIST: Another one-two here, Christine. This is just another in the series of storms. People have been adding them up and some to a dozen -- almost 12 of these so far this year.

There is the rain in Southern California. L.A., you are going to have very difficult travel this morning. The roads are going to be worse than ever. I mean, it's just going to be a nightmare out here. Also, airports are going to be very, very slow. You're going to see that flooding possibly from L.A. all the way down to San Diego along the coast. This is what I'm worried about though. That low right there to the

west of San Francisco. This storm is getting stronger, getting windier, and will stay there for a day or two. So, winds are going to be 60-70 miles per hour on top of land that's already saturated, into trees that are already weakened. Hundreds of thousands of people will be without power by the end of Wednesday because of this wind event.

And then the snow in the Rockies -- heavy, heavy snow coming in as well.

You're going to see wind gusts over 70 miles per hour. And, in fact, I could easily see a gust to hurricane force, no question.

If you have packages coming through the west expect delays if they're coming by ground. An awful lot of snow coming through the higher elevations. Some of those interstates will be slow to possibly even closed.

There is your winter weather advisories for today and the wind for tonight.

[06:00:00]

I know it's going to rain a lot, but I'm worried about this wind a lot.

[06:00:14]

ROMANS: Yes.

MYERS: Christine.

ROMANS: I am, too. All right. Chad Myers, thanks so much for that.

All right. Thanks for joining me. I'm Christine Romans. CNN THIS MORNING starts right now.