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U.S. Set To Announce $1.2 Billion Aid Package To Ukraine; Today: Biden And McCarthy Hold Talks At White House; Biden Proposes Compensation For Flight Delays And Cancellations. Aired 5:30-6a ET
Aired May 09, 2023 - 05:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CHRISTINE ROMANS, CNN ANCHOR: CNN's Nic Robertson live this morning for us in Eastern Ukraine. Nic, when is Ukraine expected to launch this counteroffensive?
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yes, best kept secret. Commanders here not saying and troops on the ground don't know. Certainly, you do see a fair amount of movement of military equipment around here but is it more or less than normal and what does it mean? Part of the psychology in the buildup to the counteroffensive is to keep the Russians guessing. They've got a lot of extra troops in the front line.
After all, today is the Victory Day parade in Moscow. Nothing more than Putin would like to gain another bit of territory on the ground here that has been so unable to do so far. And a lot of that focus was on Bakhmut, which wasn't far from here, so Ukraine and Russia watching both -- watching each other very, very closely.
But I think when you try to analyze when and where that counteroffensive comes, from the Ukrainian perspective they're really going to see what Russia will have done over the past couple of days just before the Victory Day parade when it's so important for Russia -- their next moves -- and then perhaps Ukrainians can take a look -- an assessment.
But as long the Russians are guessing what Ukraine's next move is -- as long as they've got lots of troops in the front line stretching their supply lines and sapping troop morale -- those troops not knowing when that counteroffensive is going to come -- that is to the Ukrainians' advantage and they can play that out for as long as they feel it takes to find the best place to attack the Russians.
And I think today is kind of one of those many inflection points -- Victory Day parade. Russia wanted to get some gains. It doesn't appear that they've got them on the ground. So the next gameplan is really in Ukraine's hands now. Russia's had its move if you will.
And this is how it looks around here. Perhaps an uptick. Aircraft overhead here today, bombs dropping, shelling on the front line. A bit more than normal? Does it make a difference? You know, military keep this all very close to their chest but they're watching, for sure, for that opportunity of when and where to go.
All right, Nic Robertson. Stay safe. Thank you for your great reporting there. Thanks, Nic.
Quick hits around the globe right now.
Wildfires have forced the evacuation of more than 29,000 people in Alberta, Canada. Gas production is being curtailed by the wildfires as well. Alberta is Canada's main oil-producing province.
Thousands of protesters rallied outside of Serbia's legislature on Monday. The protesters were demanding new laws on gun ownership after two mass shootings occurred over the last week.
This is the moment when Australian police rescued a woman who was missing for five days in the bushland. The woman said she survived by drinking a bottle of wine she had in her car and eating snack food, like lollipops.
Just ahead, sentencing today for a convicted -- a convict killed who could end up getting pardoned -- a convicted killer who could end up getting pardoned. And why people are heading back to the buffet after the pandemic.
ROMANS: Here is today's fast-forward lookahead.
Later today, President Biden will host congressional leaders to discuss the debt ceiling. The U.S. Treasury says its cash reserves will dry up by early next month.
A jury will begin deliberating E. Jean Carroll's battery and defamation case against former President Donald Trump. Trump denies that he raped Carroll in a department store dressing room in the 1990s.
A sentencing hearing today for Daniel Perry. Perry was convicted of a murder charge in the 2020 shooting death of a protester at a racial justice rally in Austin. Texas Gov. Greg Abbott already said he'd pardon him.
Kroger is ditching its long-running weekly newspaper ad circulars. The largest grocery chain in the U.S. announcing it is moving its specials online.
CNN Business reporter Nathaniel Meyersohn joins me. This is happening as grocery prices are rising. Are they related?
NATHANIEL MEYERSOHN, CNN BUSINESS REPORTER: So, Kroger is really trying to cut costs here. Newspaper circulation is down so they're moving it online. They can also gather more data on customers online than they can in print newspaper. And this change isn't just going to impact Kroger. It's also the brands that it owns -- Fred Meyer, King Soopers, Ralphs. It's the largest grocery chain in the company (sic) and it's going to have an impact.
ROMANS: Not everybody is happy about it. I mean, I -- just close your eyes and imagine your last grocery store experience. You saw somebody with the -- with the -- with the circular in their hand looking for the best cut -- cheapest cut of meat.
Who is this going to affect?
MEYERSOHN: So it's going to impact newspapers because it means they're going to get less revenue, but it's going to particularly impact seniors and low-income customers who don't have access to a smartphone and don't use the computer. And those are the folks that rely on these print coupons to stretch their dollars the furthest. And so, this change is going to -- going to hit them hard.
ROMANS: Yes, it will be a -- definitely a lifestyle change for a lot of people there.
And tell me about this. The all-you-can-eat buffet -- wait a minute. People are standing in line again for buffets?
MEYERSOHN: Buffets are actually back, believe it or not, Christine. So you think back to early in the pandemic it just crushed buffets. There was a string of bankruptcies. Nobody wanted to share food or serving spoons. But now they've made a comeback.
Visits to Golden Corral, Cici's, and Pizza Ranch -- three of the largest buffet chains -- up 124 percent in March from January -- the January 2021 baseline. So we're starting to see the buffet line crowded again.
ROMANS: I bet that's a value play, too. People pinched by inflation. That's a big value play.
MEYERSOHN: That's exactly right. Restaurant prices up 8.5 percent in April from a year ago. People looking to save money. And the typical customer at these buffet chains are lower-income, middle-income shoppers, and those are the folks that have been squeezed the hardest --
ROMANS: All right.
MEYERSOHN: -- by inflation.
ROMANS: Nathaniel Meyersohn, as always, nice to see you -- thanks.
All right, to sports now.
The Lakers pushing the Warriors to the brink of elimination with a win in game four thanks to an unlikely hero.
Andy Scholes has this morning's Bleacher Report. Good morning, Andy.
ANDY SCHOLES, CNN SPORTS CORRESPONDENT: Yes, good morning, Christine.
So we have so much star power in this series -- LeBron, Anthony Davis, Steph Curry, Klay Thompson. But Lakers fans are going to forever remember last night as the Lonnie Walker game.
So, Walker -- he wasn't even in the Lakers' rotation to end the season and barely played against the Grizzlies in the first round, but he came through big-time in game four. The 24-year-old scoring all 15 of his points in the fourth quarter. He made six shots, which is as many as the entire Warriors team in the quarter.
Now, Steph Curry had a 31-point triple-double and had multiple chances in the closing seconds to give the Warriors the lead, but A.D. just playing incredible defense. Steph missed both chances.
The Lakers hold on to win 104-101 to take a 3-1 lead in the series.
(BEGIN VIDEO CLIP)
LEBRON JAMES, LOS ANGELES LAKERS FORWARD: We're just a resilient bunch. They hit us with haymaker after haymaker after haymaker trying to get us to fall but we just stayed in the fight. We just stayed in the fight, you know. If it's a 48-minute game or if it's a 12-round boxing match, we stayed in there for 12 rounds, man, and was able to pull it through.
(END VIDEO CLIP)
SCHOLES: All right, teams that go up 3-1 in the best-of-seven series in the NBA win more than 95 percent of the time, so that's bad news for the Warriors and the Knicks.
Jimmy Butler and the eight-seed Heat just keep on winning. They beat New York 109-101 last night to go up 3-1 in that series. Butler had 27 points. Game five is tomorrow night in New York.
You've got a double-header of game fives on our sister channel TNT tonight starting with the Sixers taking on the Celtics at 7:30 eastern. Then you got Nikola Jokic and the Nuggets facing off against the Suns at 10:00. Both of those series tied at two.
All right, the Chicago Blackhawks, meanwhile, will own the number-one pick in next month's NHL draft. Chicago winning the draft lottery last night despite having just the third-best odds of 11.5 percent. The Anaheim Ducks, who were the favorite with a 25 1/2 percent chance, ended up falling to second.
The Blackhawks have picked first overall just once in franchise history, selecting Patrick Kane back in 2007.
This year they're expected to take 17-year-old phenom, Connor Bedard. He just finished up one of the greatest junior hockey seasons of all time scoring 94 goals with 100 assists in just 78 total games played. All right, and finally, dozens of student-athletes at Iowa and Iowa State are under investigation for breaking NCAA rules by gambling on sporting events. It's not known yet if any of the athletes are suspected of betting on games in which they participated.
The University of Iowa released a statement saying it is fully cooperating with the Iowa Racing and Gaming Commission investigation.
CNN has reached out to Iowa State and the NCAA for comment but have not yet heard back.
And this comes less than a week after Alabama fired its baseball coach Brad Bohannon following a report of suspicious bets made at an Ohio casino involving his team, Christine. So who knows if these two stories are just the start of something big, but it's not good. It's illegal for college athletes to bet on any kind of sporting event more or less, so we'll see what comes from this.
ROMANS: Wow. All right, we'll watch this space.
Nice to see you. Thanks, Andy.
SCHOLES: All right.
ROMANS: Coming up on "CNN THIS MORNING" Vladimir Putin celebrates yesterday's victories as his forces struggle to defeat Ukraine.
And next, right here, the White House meeting today with time running out for a U.S. default.
ROMANS: Your Romans' Numeral this morning, 20. Congress has modified the debt limit 20 times since 2002. It last increased the debt limit to $31.4 trillion back in December 2021. Once again, the White House is in a standoff with House Republicans, trying to force spending cuts before raising it again. The U.S. could default on its obligations as early as June first.
Looking at markets around the world, Asian markets finished mixed. The Hang Seng falling more than two percent after data showed China's export growth slowed in April. European markets slightly lower this morning.
And on Wall Street, stock index futures at this hour are also leaning down. Markets finished mixed after a pair of Fed surveys showed more lenders have toughened up -- stiffened their standards. The S&P 500 finished higher after coming off its worst week in nearly two months.
On earnings watch, Nintendo, Airbnb, and Fox Corp. are all set to report today. On inflation watch, gas prices fell a penny overnight to $3.53 a gallon.
All eyes will be on Washington though as President Biden addresses the debt ceiling crisis with party leaders. That happens later this afternoon -- gearing up for this high-profile, high-stakes meeting at the White House to negotiate raising that debt limit. If Biden and McCarthy do not come to an agreement the effects on the U.S. economy and the American people would be brutal.
Let's bring in Seema Shah, senior global investment strategist at Principal Global Investors. First thing, Seema, nice to see you.
Today is this pivotal meeting at the White House. How do you think this is going to play out in terms of investors and the public?
SEEMA SHAH, SENIOR GLOBAL INVESTMENT STRATEGIST, PRINCIPAL GLOBAL INVESTORS (via Skype): Well look, I think the next few weeks are clearly going to be very rocky -- significant volatility for markets.
The two sides are so polarized and there's such significant conflict between the two that I don't think you can dismiss the risk of default, but it does seem somewhat unlikely. It's neither sides -- it would not be good -- positive for either side, of course, if there were to be a default.
So we do think they'll come to an agreement but you almost need to have more volatility and more pain to come in order to bring them right to that agreement. So I think it's going to be a difficult couple of weeks but we are hopeful, of course, that this will pass without too much concern.
ROMANS: Yes. That's -- I mean, the S&P 500 is up eight percent so far this year, so for stock investors there hasn't been pressure yet about this. I worry a little bit that congressional leaders and Washington doesn't get the memo of how important this is until you have some sort of big decline in the stock market.
We have seen some action in the Treasury market, though, right? There are -- there are flashing signals in debt markets, right, that they're concerned?
SHAH: Yes, absolutely. If you look at the yield curve you can see that there are clear signals right at the front of the curve in terms of bills which would have to be paid back within the very, very near future -- within one month. There's little -- very little demand for that because of the concerns around the debt ceiling. So it is starting to peg through.
But as you said, as long the equity market is coming across pretty firm there is very little pressure on Congress to come to some agreement. So you do need almost panic stations to arise in order to push them over that line.
ROMANS: Yes, which is what happened -- which has happened before. We have -- that has happened in 2011 and 2013. We saw that happen.
We know that Treasury Sec. Janet Yellen is making calls to CEOs and business leaders to discuss the consequences of -- you know, brinksmanship around the debt ceiling.
The White House has released this report saying a default -- a true default could cost eight million jobs and cut the stock market in half. I mean, those are really big danger signs.
What's your biggest concern here if they get this wrong?
SHAH: You know, I mean, I think I -- look, that does sound fairly drastic but I don't think it would be completely out of the world for this to happen. I mean, there are several people out there who are believing that if that were to happen -- if there were to be a default we would be looking at a financial crisis of the size of 2008.
Now, I have to say here that the economy is looking fairly strong today so it doesn't seem that 2008 would be a fair comparison. But I think it goes to show that the impact on market volatility at a time when it is already vulnerable -- it cannot be exaggerated. It is quite a dangerous situation, especially when we think that there is a risk, of course, that the U.S. economy could be approaching a recession. So at this stage, the U.S. economy does not need any further upsets.
ROMANS: You know, just quickly, finish this sentence. The U.S. economy is "X". I mean, jobs are strong. I mean, the economy is still growing. I mean, how do you characterize this economy right now?
SHAH: Absolutely. I mean, just look at the jobs report from last Friday and the U.S. labor market is incredibly strong. Unemployment rate at multi-decade lows of 3.4 percent is still very, very strong.
Unfortunately, though, with that strength comes along strong wage growth, which is something that the Federal Reserve is trying to compress. So as long as the labor market stays so strong it's very unlikely that the Fed will cut interest rates. So it looks strong today but the pressures are growing because of Fed tightening. So as long as the Fed keeps rates on hold at such high levels, the pressures will grow for the U.S. economy.
And that is the main reason why many --
SHAH: -- people are expecting a recession later this year for the U.S.
ROMANS: All right, Seema Shah, Principal Global Investors. Always nice to have you. Thank you so much.
OK. Just two days from now, Title 42 border rules run out. The new migrant enforcement operation starting today, next. And new details about the suspect and the victims of the Texas mall shooting.
ROMANS: Welcome back. President Biden is pushing airlines to offer more generous passenger compensation for flight cancellations and delays after widespread disruptions this past winter, but the new rule may not be ready ahead of the busy summer travel season.
CNN's Brian Todd has more.
BRIAN TODD, CNN CORRESPONDENT (voice-over): It was only a few months ago that the Southwest Airlines cancellation meltdown over the holidays left millions of travelers stranded and miserable.
PAM SHELBY, STRANDED SOUTHWEST CUSTOMER: I wanted to visit my family but there's nothing I can do about it.
TODD (voice-over): Now we're on the brink of a busy summer travel season, which analysts and officials acknowledge could be messy for the airlines, like last summer was.
PETE BUTTIGIEG, TRANSPORTATION SECRETARY: Summer travel is going to put enormous pressure on the system.
TODD (voice-over): The Biden administration now proposing a new rule to compensate passengers who experience delays and cancellations that are the fault of the airlines themselves.
Right now, 10 U.S.-based air carriers cover the cost of meals for passengers when a delay or cancellation is the airline's fault. Nine of them cover the cost of hotel accommodations. But the airlines are doing that voluntarily and could roll back those policies any time.
The president and his team want to change that with the new rule.
JOE BIDEN, PRESIDENT OF THE UNITED STATES: I will make it mandatory -- not voluntary, but mandatory for all U.S. airlines to compensate you with meals, hotels, taxis, rideshares, and rebooking fees -- and cash miles and/or travel vouchers.
TODD (voice-over): But the president's proposal for this won't come until later this year and there are no specifics yet on exactly how much the airlines would have to pay in each circumstance.
Why is the Biden team announcing this now?
DAVID SLOTNICK, SENIOR AVIATION BUSINESS REPORTER, "THE POINTS GUY": He is doing this now partly as a perception thing. They want to be seen as taking action on the airlines. There have been multiple travesties in a row now of just these really prolific delays, cancellations -- issues like that.
TODD (voice-over): The trade group representing the airlines is responding to the Biden proposal with a statement saying, "U.S. airlines have no incentive to delay or cancel a flight and do everything in their control to ensure flights depart and arrive on time -- but safety is always the top priority." The airlines also say, quote, "Carriers have taken responsibility for challenges within their control."
Analysts point out that delays caused by weather and air traffic controller shortages, which the FAA has already warned could cause problems, wouldn't be seen as being the airlines' fault, so passengers wouldn't be eligible for compensation in those situations.
Still, some passengers say they'll take relief anywhere they can get it.
BA PHO, DELAYED PASSENGER AT REAGAN NATIONAL AIRPORT: I do think they should pay for it only because when it's a delay like this it makes the travel schedule all messed up.
UNIDENTIFIED FEMALE: I think it will make a difference. I think it motivates the airlines to do better by the consumer, so I'm in favor of it.
TODD (on camera): What can passengers do this summer to prepare for delays and cancellations?
Analyst David Slotnick says there's no reason to avoid air travel, but he says you should in buffers of time at your destination. If you have a time-sensitive meeting or event, fly early to that city. Don't book the very last flight out.
Brian Todd, CNN, at Reagan National Airport.
ROMANS: Yes -- bottom line, this summer is going to be pretty busy at the airports, no question.
All right, thanks, Brian for that.
Thanks for joining me. I'm Christine Romans. "CNN THIS MORNING" starts right now.