Return to Transcripts main page

Early Start with John Berman and Zoraida Sambolin

Biden Invites Congressional Leaders to Meet Next Week; Treasury Secretary Warns of Government Default As Soon as June 1; Sale of First Republic Leaves Concerns About Consumer Confidence; Six Killed in Illinois 72-Vehicle Crash Caused by Dust Storm; Hollywood Writers' Strike Begins After Negotiations Fail. Aired 5-5:30a ET

Aired May 02, 2023 - 05:00   ET




Debt limit showdown. President Biden ready to talk after a dire new warning about when the U.S. could default.

Plus, highway horror. Six people killed as dozens of cars pile up in a crash caused in part by dust and strong winds.

And no script for this -- Hollywood writers now on strike, bringing production to many shows to a sudden halt.


ROMANS: All right. Welcome to our viewers in the United States and around the world. I'm Christine Romans this Tuesday morning.

President Biden calling the top four congressional leaders, including House Speaker Kevin McCarthy, to the White House a week from today, to talk about raising the debt ceiling.

Treasury Secretary Janet Yellen said Monday the federal government faces a catastrophic default as soon as June 1st if Congress doesn't act. The money runs out June 1st.

In a letter, Yellen writes, after reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all the government's obligations by early June and potentially as early as June 1.

CNN's Jasmine Wright live in Washington.

This is earlier than some of us had thought here, but it gives us a so-called X date. This isn't all the bills can be paid, Jasmine. The White House says it will not negotiate in raising the debt ceiling. So, what does Biden want to talk about next week?

JASMINE WRIGHT, CNN WHITE HOUSE REPORTER: Yes. Well, the president is looking to shake up the state of conversations, or non-conversations, frankly. The Republicans in the White House have basically been staring each other down, waiting for the other two to blink when it comes to these negotiations. Well, in fact, it was Treasury Secretary Janet Yellen that blinked first, with these very sobering letters, saying as soon as June 1st, the country could not be able to pay its debt.

Now it provided a reality check, underlying the urgency of the moment that these two parties really had to come together, bridge that gap and avoid catastrophe. But it is still a very big gap. Until yesterday, President Biden made no effort to even contact the House Speaker Kevin McCarthy over this, as Republicans maintained that they would not pass a clean debt bill. Instead, they want to do attach budget cuts onto, it's something the president said he won't do.

Listen to this clip of President Biden and Senate Republican Mitt Romney describe just how far apart these two are when it comes to just having a conversation.


JOE BIDEN, PRESIDENT OF THE UNITED STATES: America is not a deadbeat nation. We have never, ever failed to meet the debt.

Now, as a result, one of the most respected nations in the world, we pay our bills. We should do so without reckless hostage taking from some of the MAGA Republicans in Congress.

SEN. MITT ROMNEY (R-UT): You are going to have to have two people come together and meet somewhere in the middle. And that hasn't happened yet. There's been a stonewalling on part of the White House, and we're just not talk about this.

Guys, you have to talk about this, so much depends on getting a deal done.


WRIGHT: So, there we heard from those two men. Obviously, this letter from Janet Yellen changes things.

Now, according to a White House official, the White House has been clear that they will not move off of their demand for a clean debt ceiling bill. Instead though, the president will initiate a separate process to address a budget in the fiscal year 2024, appropriations, according to that same official.

Now, this is not a drastic change from the president's position. He always maintained that he wants to pass a clean bill, but then we'll also talk about budget cuts, where Republicans feel appropriate to do so.

So this is really in line, what they're trying to start a conversation about what that process could look like. But still, according to Republicans, this is not what they want. We know they already passed a bill in the House, outlining where they want to see some of the more major, drastic budget cuts inside the bill for 2024. And obviously, Republicans are not going to want to pass a clean that

bill. So, it remains an open question to see how this can actually work out. But, it is still extremely urgent moment, really emphasized by that letter by Treasury Secretary Janet Yellen -- Christine.

ROMANS: Yeah. I mean, the deadline was passed, it was January 19th, right? So, everything happening right now is after the fact. And it is sleep walking towards a real catastrophe for American living standards if they don't do something quickly.

Jasmine, thank you so much. Nice to see you this morning.

All right. The Federal Deposit Insurance Corporation, the FDIC, is calling for increase in the insurance deposit limit for some kinds of accounts in the wake of three recent bank failures. Just yesterday, First Republic Bank collapsed, was sold by the FDIC to JPMorgan Chase.


Right now, the FDIC insures up to $250,000 per depositor, per bank. But businesses, business accounts, they often have far more than that on a single, in a single bank account, more than that limit on deposits for the sake of convenience. That can lead to a bank run on those big accounts if the bank seems shaky, which in turn leads to a bank failure, which is what happened to First Republic, to Signature Valley Bank and -- to Silicon Valley Bank, rather, and Signature Bank.

The FDIC has not said what it thinks that new insurance limit for business payment accounts should be.

In the meantime, President Biden says federal government's seizure and sale of first republic will keep the banking system, quote, safe and sound. He also called on Congress to hold banks accountable going forward.


BIDEN: I have called on Congress to give regulators the tools to hold bank executives accountable, and I called on regulators to strengthen regulations and supervision of large and regional banks. And folks, we had to make sure that we are not back in this position again.


ROMANS: CNN's Chris Nguyen has more from Washington.


CHRIS NGUYEN, CNN NATIONAL CORRESPONDENT: Selling the First Republic to JPMorgan Chase was a dramatic move by the FDIC, all aimed at curbing a crisis that has been playing out over the past two months. But now, many questions remain over consumer confidence.

(voice-over): First Republic Bank branches open their doors Monday morning under new management following the collapse of their regional lender. GREG MCBRIDE, CHIEF FINANCIAL ANALYST, BANKRATE: The First Republic

failure is was more of traditional bank run. That money starting to flow out fast.

NGUYEN: Federal regulators seized control of the bank and its nearly $230 billion worth of assets before JPMorgan stepped in as a buyer.

CEO Jamie Dimon expressing confidence on an investor call Monday morning.

JAMIE DIMON, JPMORGAN CHASE CEO: Hopefully, this will stabilize everything. The American banking system is extraordinarily challenged.

NGUYEN: This is the second largest bank failure in U.S. history, and the third U.S. banks to fail since March.

MCBRIDE: Interest rates have gone up at the fastest pace in 40 years. The economy is slowing. We're going to see more bank failures. But this system is proving to be remarkably resilient.

NGUYEN: JPMorgan Chase was already the largest bank in the United States before the buyout. Now, new concerns.

MCBRIDE: Any time there's a consolidation of market share, prices tend to go up.

NGUYEN: Financial analyst Greg McBride says consumers should constantly be evaluating their banking options.

MCBRIDE: We see with checking accounts over the course of many years, monthly fees and balance requirements have gone through the stratosphere. But yet, nearly 40 percent offer free checking accounts on a stand-alone basis. So there are alternatives out there.


NGUYEN (on camera): Officials say it will take some time for systems to completely change over. But customers to have immediate access to their money and should continue using their existing branch.

Reporting from the nation's capital, I'm Chris Nguyen, back to you.

ROMANS: All right. More layoffs in Morgan Stanley. A source tells CNN the Wall Street will cut another 3,000 jobs globally, the second round of layoffs in the past six months. Investment banks have been hurt by a slump in deal-making caused by the Federal Reserve's war on inflation, and that many banking crisis.

At least six people are dead after a huge dust storm triggered a 72- vehicle highway pileup in central Illinois. Officials say 37 other people hospitalized. Victims' ages range from two years old to 80. Emergency officials say that the blowing deaths made a tough scene for first responders.

(BEGIN VIDEO CLIP) KEVIN SCHOTT, EMS DIRECTOR, MONTGOMERY COUNTY, ILLINOIS: This is a difficult scene, something that is very hard to train for, something that we really haven't experienced locally.


ROMANS: Police say the heavy dust was caused by 45 mile per hour winds, blowing across newly plowed sporting fields.

All right, the accused gunman wanted for killing five of his neighbors in rural Texas had entered the U.S. illegally. He had been deported at least four times.

CNN's Ed Lavandera has the latest on that mass shooting, and the manhunt from Cleveland, Texas.


ED LAVANDERA, CNN SENIOR NATIONAL CORRESPONDENT (voice-over): According to law enforcement investigators, at 11:31 Friday night, 911 received multiple calls about gunshots, someone shooting in a nearby yard. The local sheriff said the suspect had been drinking before the violence on Friday began, and that neighbors approached his property to ask him to stop shooting.

SHERIFF GREG CAPERS, SAN JACINTO COUNTY, TEXAS: The victims, they came over to the fence and said, do you mind not shooting out in the yard? We have a young baby, trying to go to sleep.

LAVANDERA: Wilson Garcia, whose wife and nine-year-old son were shot and killed, says they called 911 five times that night. They asked the government to shoot away from his property.

He said: Instead, the gunmen came to their home, 10 to 20 minutes later and started shooting inside the house, where 15 people, including at least four children were present. Only ten survived.

Those killed were nine-year-old Daniel Enrique Laso-Guzman, his mother Sonia Argentina Guzman, Diana Velazquez Alvarado, Julisa Molina Rivera, and Jose Jonathan Casarez.

CAPERS: Everybody that was shot was shot from the neck up, almost execution style.

LAVANDERA: Multiple people were found dead in different rooms. Authorities say they believe two women died shielding children. There is an $80,000 reward for information leading investigators to the suspect, who the FBI calls armed and dangerous, while officers search door to door in neighborhoods north of Houston.

JAMES SMITH, FBI HOUSTON SPECIAL AGENT IN CHARGE: Well, what we need from the public is any type of information, because right now, we're just -- we're running into dead ends.

LAVANDERA: An FBI agent was seen entering the suspect's home Monday afternoon, and also searched through various vehicles on the property. FBI officials would only say the agents are, quote, following all investigative leads.

Texas Governor Greg Abbott unleashed a firestorm of criticism after the shootings when he tweeted, I've announced a $50,000 reward for info on the criminal who killed five illegal immigrants Friday. He later stepped that back in a statement, the spokeswoman says: At least one of the victims may have been in the United States legally. We regret if the information was incorrect and detracted from the important goal of finding and arresting the criminal.

But not before an emotional reaction from the local sheriff.

CAPERS: My heart -- is with this little eight-year-old boy. I don't care if he was here legally. Five people died in my county, and that's where my heart is.


LAVANDERA (on camera): A U.S. Immigration and Customs Enforcement source says that Francisco Oropeza has been deported at least four times from the United States, between 2009 and 2016. But at this point, none of that matters, as a massive manhunt continues for the suspected killer.

Ed Lavandera, CNN, Cleveland, Texas.

ROMANS: Just an awful story.

All right. U.S. officials say that they will keep running convoys to help Americans escape the growing civil war in Sudan. The State Department announcing Monday, a third U.S. organized convoy had arrived in Port Sudan, the more aggressive effort by the U.S., follows some intense criticism by some Americans who said they felt their government had abandoned them.


ANTONY BLINKEN, SECRETARY OF STATE: Yes, as long as there are American citizens in Sudan who are seeking our assistance leaving Sudan, we will continue to do this. We have been working very hard to make sure that our embassy personnel was able to get to safety and that American citizens, with who we were in contact, and asked persistence, or able to get to safety.


ROMANS: CNN's Stephanie Busari is following events, joining us live from Lagos, Nigeria.

Stephanie, what do you know about this most recent convoy, and what's happening to Americans once they get to the Port Sudan?

STEPHANIE BUSARI, CNN SENIOR EDITOR, AFRICA: Christine, we are hearing that some 700 people have been assisted as part of these three convoys but we started on Saturday, and it was the first U.S.-led evacuation efforts to get private U.S. citizens out of Sudan. So we do not know what the breakdown of the nationalities is, but some -- of those 700 people, there are a number of U.S. citizens there.

And once they get to Port Sudan, which is on the Red Sea, they are processed by U.S. consular officers, the State Department says, for an onward journey to Jeddah, in Saudi Arabia. We are learning the U.S. is using one of its first, one of its naval assets for the first time in his evacuation.

The USNS Brunswick will be part of getting people from Port Sudan to Jeddah. We have been speaking to some Sudanese Americans who were waiting to be evacuated. They are sharing their experiences.

Take a listen.


MOHAMED MADANY IBRAHIM, SUDANESE-AMERICAN CITIZEN AWAITING EVACUATION: There is no information, the people around here are stuck, they are crowded. You have to buy food. You have to buy water ourselves.

So like, five hours, there's no clue information. Nothing. They just tell you, wait and be patient. But, no information.


BUSARI: This conflict is entering its third week, Christine, and there are real fears that the lack of a ceasefire will lead to this conflict escalating into an outright civil war. And it is also coinciding with the 20 year, the start of the 20-year anniversary of the Darfur genocide.

Which you will remember, some 200,000 people died, and millions of people were displaced. There are real fears that the country is heading to this direction again -- Christine.


ROMANS: That's awful.

All right. Stephanie Busari, keep us posted. Thank you so much.

All right, while you're sleeping, Hollywood rioters went on strike. What does that mean for TV shows today?

Plus, a brand new bride, killed in a senseless tragedy, just minutes after taking her vows.

And, Midwest roads turned to rivers as the Mighty Mississippi swells over her banks.


ROMANS: More than 11,000 Hollywood writers are now on strike after negotiations failed with studios. The studios releasing a statement saying they remain united in their desire to reach a deal that's beneficial to rioters, and the health and longevity of the industry. So, how do you see this first? Well, suspension of late night shows.

Stephen Colbert stood with the writers of his own show during the taped program last night.


STEPHEN COLBERT, HOST OF "THE LATE SHOW WITH STEPHEN COLBERT": If the deal has not been reached, the union could go on strike tomorrow, which means that rioters might have to do something totally against their nature, go outside.


If these people right here, these, hello. These -- these -- these are our writers, these people, these are our writers, and I'll stick myself in there because I'm WGA, too, and they're so important to our show.


ROMANS: All right. Let's bring in CNN media analyst and media reporter at "Axios", Sara Fischer.

Nice to see you this morning, Sara.

So, the first place that the consumer of this will see this is the late night shows. How else will this ripple through here?

SARA FISCHER, CNN MEDIA ANALYST: So, it's going to have enormous effects. So, you're going to see it not just in the late night shows, but in all of your favorite daytime shows, daytime dramas, et cetera. But also, if this were to continue for, you know, 100 days, even longer, that's how long the last one of these strikes was, this could eat into the 2023, 2024 production season for a whole slew of shows.

And it's not just broadcast. While streamers tend to be a little bit less impacted by this, you could expect some of your favorite streaming shows to also potentially see delays. Those shows tend to be a little bit shorter, you know, maybe 12 episodes of season instead of 22.

ROMANS: Right.

FISCHER: But if the writers are out, they're still going to be delayed.

ROMANS: So regulating artificial intelligence is a key issue here in this negotiation. You think about it last time when they were on strike, 15 years ago -- I mean, that wasn't even a thought. I mean, this was still when streaming was Netflix sending DVDs in the mail, right? So many things have changed.

What do you think the compromise will look like as writers are threatened by A.I. generated content and the change, the accelerating speed the technology is moving in this industry? FISCHER: It's a great question. I think one of the big sticking

points in the WGA, the writers guild, could have a back and forth between themselves and the associations representing the studios to describe this, it's the duration of work. How long a minimum contract needs to be.

I think a lot of riders feel as though with A.I. coming in, they might get really, really small gigs, and so they want to make sure that they have a minimum duration of work, and minimum pay guarantee. But another point to bring up is that the last time we had a strike like this, in 2007, 2008, social media wasn't a big thing.

I'm already on my Twitter, and on my Instagram, and I'm seeing rioters, I'm seeing celebrities posed about this strike. expect there'll be a lot more activism this time around.

ROMANS: Absolutely. All right, any sense that they're making progress there, do we know?

FISCHER: No, no sense of progress whatsoever. The picketing has already begun. And now, typically, like I said, the last time we saw, this it was around 100 days. I would expect this one to hopefully get results sooner than that, but it's good to remember the timing, Christine.

We are in between major broadcast seasons right now. So, there's a little bit less pressure on some of the studios than if we were midway through a studio, or midway through a broadcast season. The only thing that might be letting a little fire underneath them is next week, all of the major entertainment companies are set to debut all of the shows or advertisers at the annual Uupfront presentation.

It's a little bit hard to sell your odds ahead of time for programming that might be delayed because of a strike.

ROMANS: Yeah, upfront with writers who aren't working. That's an interesting combo.

All right. Nice to see you, Sara Fischer of "Axios", thank you.

All right. Quick hits across America now:

Seven bodies found in her property in Henryetta, Oklahoma. Investigators believe two of them are a pair of missing teenage girls. The property belong to a convicted sex offender who authorities think was traveling with the two teens.

A newlywed bride in South Carolina killed just hours after her wedding. Samantha Miller was writing in a golf cart with her new husband, when a drunk driver slammed into them.

Iowa residents are dealing with yet another flood, a slow-moving crest, is working its way down the Mississippi River this week, causing floodwaters to spill onto streets. Flood warnings continue along a large stretch of the Mississippi.

Just ahead, disaster at sea, a tanker in truck trouble as fire breaks out onboard.

Weeks later, people in France are still really mad about the pension plan.



ROMANS: Happening now, Germany and the United Arab Emirates hosting a major climate conference in Berlin, a city that's seeing weeks of climate protests. Just Friday, activists blocked roads during rush hour. Some people glued themselves to the pavement.

CNN's Frederik Pleitgen live in Berlin with more for us.

And, Fred, what's taking place at the conference right now?


Well, first of all, those climate activists, they were out in the streets this morning again here in Berlin. There were people who glued themselves to the street. Germans by the way called them Klima-Kleber, which means climate-gluers.

And it is something that is becoming a thing here in this country, because people are demanding that there be real action against climate change. And they want that on a global scale. That's obviously what this conference here is about.

You're absolutely right, it's hosted here in Germany, but the UAE is currently the head of the COP28, which is going to be held in the UAE later this year. And we are able to hear from the German foreign minister just a little earlier. She came out and she said that, essentially, they're several points that are key on the agenda today.

On the one hand, it's the rich nations of the world, making real pledges to help poor nations deal with climate change. That's not even preventing climate change. It's dealing with the fallout of climate change.

And then, of course, when it comes to preventing climate change itself, she says that what the rich nations especially need to commit to is to help the entire world.