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Inside Politics

The White House's Sales Pitch to Uncertain Democrats; The Economic Numbers and The Proposed Taxes; An Allegation Against Gaetz Surfaced; One Lone Republican in Texas' 6th Congressional District is Fighting Against Trumpism. Aired 12:30-1p ET

Aired April 30, 2021 - 12:30   ET

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

[12:30:00]

JOHN KING, CNN HOST: Seung Min Kim, White House Correspondent for "The Washington Post" joins me now. Seung Min, it's great to see you. This is a fascinating sales test for the president and his team. No votes to spare really, a handful in the House, no votes to spare in the Senate. There's this talk of bipartisanship, but I'm convinced that the main goal here is actually to keep Democrats from getting scared.

Republicans are starting to say you're raising taxes we're going to use against us in the mid-term. So not only is the president giving interviews, not only is the president, the vice president, members of the cabinet traveling - listen here, in key states in 2022, there will also be key states in 2024, they're going on T.V. already.

(BEGIN VIDEO CLIP)

UNKNOWN: He's just getting started. With a new plan to create millions of good jobs, putting Americans to work, you won't hear him yelling or sending angry tweets because for Joe Biden actions speak louder.

(END VIDEO CLIP)

KING: Prove to me they understand how hard the politics are here.

SEUNG MIN KIM, WHITE HOUSE CORRESPONDENT, "THE WASHINGTON POST": Definitely, and you're certainly right that, you know, both the White House and Democratic leaders are taking no Democratic vote for granted because some of the concerns that President Biden is already trying to allay in some of those interviews, and especially with the ad campaign, are some concerns from Democrats, particularly about the tax increases that the White House has laid out in order to finance his two next major big proposals, both classic infrastructure piece, a $ $2.25 trillion package, and this so called families plan that the White House rolled out this week that's at a cost of $1.8 trillion.

So Biden is really trying to make the case here that the economic turnaround, the good news that we've seen this week, particularly with the GDP numbers that were rolled out yesterday, he's trying to make the case that more of that is needed right now. You need to continue to spend, there needs to continue to be

government assistance in order to pull the economy back out, and just really trying to calm the nerves of some Democrats who are a little bit skeptical about that pitch right now.

KING: And a lot of that attention about the nervous Democrats focuses on more conservative or more moderate Senate Democrats, but you have some great reporting today that the president, you know, and the Democrats have been with him so far, so this is not to overstate a problem, but there are certainly Democrats who want more, liberal democrats who want more than their president has proposed so far.

You're right, congressional Democrats are planning to pursue a massive expansion of Medicare, as part of President Biden's new $1.8 trillion economic relief package, defying the White House after it opted against including major health overhaul as part of that plan. So some progressives are going to say, all right, Mr. President, you didn't send it to us or you're not going to send it to us, but we're going to try anyway?

MIN KIM: Precisely. And recall, this happened the last time around when that child tax credit was actually not initially in the White House's proposal, but then it got written in to the COVID relief package and obviously was signed into law by the president.

But this is an interesting calculation because the White House was lobbied furiously before the plan came out by the likes of Bernie Sanders and Nancy Pelosi about including these various healthcare provisions in the Families Plan, for example expanding Medicare eligibility, which is a big priority for Bernie Sanders and a lot on the left.

There were more than 100 Democratic lawmakers who had urged the White House to include that in the package, as well as allowing the government to negotiate prescription drug prices, which was something that was a - is a high priority for Nancy Pelosi.

So right now, Democrats are going to write those provisions into legislation when they put the American Families Plan together. But as we've noted earlier, there is no room for -- there's no margin for error for - in the Senate, and I talked to Senator Joe Manchin about this earlier this week, asked him about Sanders - Bernie Sanders' plans to expand Medicare eligibility as part of this plan.

And Manchin was pretty clear, he said, no, I am not for that, period. So there's going to be a lot of work ahead for the White House and for Democratic leaders to try to get everybody on board. And healthcare, as you know, is an issue that has very much divided the Democratic Party in the past.

KING: We'll just see the president - what's - president's plan is. Let's debate all this during the process, as long as in the end we get to a deal. We'll see if that works out. Seung Min Kim, grateful for the reporting and insights. Let's get some more insights now from Mark Sandy, he's Chief Economist for Moody's analytics. Mark, it's great to see you. I want to start with just the economic snapshot at the moment because

if you look at these numbers. the president says the economy is back, in part, because of me. He says it's his stimulus program is one of the big reasons that you have right now GDP up 6.4 percent at an annual rate, first quarter numbers, record monthly number, personal income up 21 percent, a record monthly number, disposable income of 24 percent, consumer spending up 4.2 percent in March.

That offers you hope that the economy is starting to come back. Is the president right that he deserves credit?

MARK ZANDI, MOODY'S CHIEF ECONOMIST: Sure does. The economy is booming. You've mentioned a few statistics, and John, I mean, just every single statistic I've been looking at over the last four, six weeks, saying same - the same thing, the economy is off and running.

And I think prospects are really very good. I think - you know, I've been a professional economist for, I don't know, 30 years, and I can't remember a time when I'm as optimistic about the economy's prospects, at least for the next 12, 18 months, as I am now.

[12:35:00]

And a large part of that, obviously, is getting shots into people's arms, and I think the administration has done a marvelous job at doing that. And even more importantly is the American Rescue Plan, that's that $1.9 trillion package of support, that's getting into the economy very quickly and really juicing up growth and getting the economy moving, creating a lot of jobs, and getting unemployment down. So yes, I think he deserves a lot of credit.

KING: So I just want to go through some of your recent analysis, and we'll start with the Biden Jobs Plan. 13.5 million jobs is what you estimate with the Jobs Plan passed, 11.4 million without it, so certainly the Biden plan, the math is quite simple and obvious there, it is more jobs.

Now let's look at the president's American Families Plan, you think of another 820,000 jobs would be added, some of that's down the road a bit, it's a long-term plan, by 2030, over 15 years, and it pays for itself.

If you listen to Republicans though, Mark, you lay out there, and if you're an American watching at home, you think okay, good for the economy today, good for the economy tomorrow, I'm going to be for this, but listen to Mitch McConnell, Mitch McConnell says no, no, no, higher taxes will smother the economy.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY): The so-called Jobs Plan, packed with punitive tax hikes, at exactly the time our nation needs a recovery. I mean, the experts say it would actually leave American workers with lower wages at the end of the day.

(END VIDEO CLIP) KING: Is there evidence to support that?

ZANDI: No, that's just wrong. I mean, the tax increases are on very large multi-national corporations in the well to do, very high income households, high net worth households. It's largely rolling back the tax cuts that Trump put into place back a couple years ago.

There's no evidence that those tax cuts helped to support growth, so it's hard to conclude, impossible to conclude, that rolling those tax cuts back is going to have a significant negative impact on the economy.

Maybe on the margin, but these are very large, wealthy companies, and individuals that have tremendous financial resources. They've navigated through the pandemic very, very well. I don't think they're going to change their hiring, their investing, their saving, their spending behavior because of the increase in taxes that the president has in mind here to pay for all of the other things that go to lower and middle income households.

So no, I just don't think that's going to have a major net - significant negative impact.

KING: Mark Zandi, Chief Economist at Moody's, appreciate your time today. And we will circle back as this debate and conversation continues in the months ahead. Mark, thanks so much.

Coming up for us, a bombshell letter with a disturbing allegation surfacing now against Republican Congressman Matt Gaetz.

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[12:40:00]

KING: New evidence today in the case against Congressman Matt Gaetz. The Daily Beast obtaining a letter from a friend of the congressman saying that he and Gaetz paid for sex with women, including a 17-year- old girl. The letter reportedly part of Gaetz associate Joel Greenberg, you see him on the right of your screen there, his attempt to get a pardon from then President Trump with the help of another man you see there, Roger Stone.

CNN has not seen this letter and cannot independently confirm the Daily Beast report. We have reached out to Greenberg's attorney. He declined to comment. A Gaetz spokesperson says the congressman "never paid for sex nor has he had sex with a 17-year-old as an adult." Joining me now is CNN's Senior Legal Affairs Correspondent Paula Reid. Paula, what else do we know?

PAULA REID, CNN SENIOR LEGAL AFFAIRS CORRESPONDENT: Well, John, Greenberg reportedly wrote this letter admitting that he and Gaetz paid for sex with multiple women, including a minor who was just 17 at the time. The letter was drafted after Greenberg asked Roger Stone, a close ally and friend of former President Trump, for help obtaining a pardon in the final months of the Trump administration. In an earlier draft of the letter obtained by the Daily Beast,

Greenberg claims he and Gaetz thought this woman was 19, but later learned she was underage. Greenberg reported the claims that when he learned of this, he immediately called the congressman and warned him.

CNN has not seen this letter and cannot verify the Daily Beast's story, but we have spoken to several women who were involved with these two men, and we've reported Greenberg paid women on behalf of Gaetz after some sexual encounters. CNN's own Chris Cuomo spoke to Roger Stone last night. Stone says he doesn't recall any letter.

He says he never heard Greenberg implicating Gaetz, and that he never tried to get Greenberg a pardon. And Stone told the Daily Beast he never asked nor received any money from Greenberg.

A spokesman for the congressman responded with a statement saying, in part "Congressman Gaetz has never paid for sex, nor has he had sex with a 17 year old as an adult. The story goes some way to showing how Representative Gaetz was long out of touch with Mr. Greenberg, and had no interest in involving himself in Mr. Greenberg's affairs."

But John, Mr. Greenberg is very much involved in Mr. Gaetz' affairs. Greenberg is currently in jail. He's facing 33 federal charges, including sex trafficking. Sources tell CNN Greenberg has been cooperating with federal investigators since last year, and he has shared with them information about encounters he and the congressman had with women who were then given cash, or gifts, in exchange for sex, and he's expected to finalize a plea deal in the coming weeks.

KING: We'll certainly keep an eye on that as it plays out. Paula Reid, grateful for the important reporting and context there, appreciate it very much. When we come back, the president claims progress at the U.S.-Mexico border. We'll check the numbers next.

[12:45:00]

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KING: President Biden says the situation at the U.S.-Mexico border is now under control. He doesn't like the term border crisis, and he blames problems on a rocky transition and on poor planning by the Trump administration. In any event, Mr. Biden says things are better.

(BEGIN VIDEO CLIP)

CRAIG MELVIN, NBC NEWS ANCHOR: Is what's happening at the southern border, is it a crisis?

[12:50:00]

JOSEPH BIDEN, PRESIDENT OF THE UNITED STATES: It is getting urgent action now. For example, a month ago, we had thousands of young kids in custody in places they shouldn't be, and controlled by the border patrol.

We have now cut that down dramatically. It's way down now. We've now gotten control. Do not send your kids, period. They're most - they're in jeopardy going - making that thousand mile trek.

(END VIDEO CLIP)

KING: With us to share her latest reporting, our Immigration Politics and Policy Reporter Priscilla Alvarez, is the president right, are the numbers under control?

PRISCILLA ALVAREZ, CNN IMMIGRATION POLITICS AND POLICY REPORTER: The Biden administration has a better handle over the situation of the unaccompanied minors who are arriving at the U.S.-Mexico border, so he's right. Last month, we were reporting about the thousands of children in Border Patrol custody. That number has dropped considerably.

But this has been a steep challenge from the beginning. If you look back at January and February and March, the numbers were really starting to climb. And what we noticed was it was going into the more than 100,000 migrants encountered at the border. Now the administration was still leaning on a Trump era policy, so many of these migrants were being turned away from the border, but minors who were crossing the U.S.-Mexico border alone were not, and that is where the administration hit its problem.

So thousands were coming into custody in March alone, more than 18,000 unaccompanied children came into the custody of Border Patrol. And what happened then was that the administration just couldn't keep up. There wasn't enough shelter capacity to put them in.

And so the consequence was children languishing in Border Patrol facilities that we've talked about, they're jail-like facilities and often overcrowded facilities because they're just not intended to take care of children. Now on March 28th, at its peak, there were nearly 6,000 children in Border Patrol custody. That number this week, less than a thousand.

Now there's - a White House official tells me, there's about 954 unaccompanied children in Border Patrol custody. That's a considerable difference and progress on behalf of the administration. And the reason they've been able to do that is because they've opened up temporary facilities. So the health and human services department, which is prepared to take care of these children, has opened up facilities across the country, and by our count now 15 of those facilities.

And they've leaned on convention centers, military bases to start to accommodate these kids until they can reunite them with family in the United States. So the president is right, that they have been able to move kids out, but now it's sustaining that as they move forward.

KING: And I'm sure you'll stay on top it. Come back. Keep on tracking the numbers. A lot of talk about this issue from both sides, so we'll track the numbers. Priscilla, grateful for your time today.

Up next for us, Donald Trump looms large in a special congressional election this weekend in Texas.

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[12:55:00]

KING: Texas offers a colorful test case of the Trump effect on Republican politics. There's a special election this weekend to replace a Republican congressman who died of COVID. Most of the GOP candidates are emphasizing their allegiance to the former president, one, for example, uses a version of Trump's tagline, two more are touting their Trump administration work, one actually has the former president's endorsement.

Only one of the republicans says the party must reject Trump, and reject Trumpism. CNN's Donie O'Sullivan is just back from visiting the 6th congressional district in North Texas. Donie, what did you learn?

DONIE O'SULLIVAN, CNN CORRESPONDENT: Hey John. Yes, this is a really interesting race. It's essentially a preview of what next year's midterms might be like, and of course next year's possible Republican primaries.

One interesting candidate here is Michael Wood. He is a veteran who actually voted for former President Trump back in November, but he says on the 6th of January everything changed for him. Have a listen.

(BEGIN VIDEO CLIP)

MICHAEL WOOD, CANDIDATE FOR TEXAS 6TH CONGRESSIONAL SEAT: They were told by the President of the United States that they were about to live under an illegitimate government, that everything that Vladimir Putin had said about us was true, that we're corrupt, that American elections are fraudulent, that they're tawdry, that they're illegitimate.

And the American president was buying in -- was telling people to buy into that. And as a result, they attacked the Capitol. It was the most disgusting - one of the most disgusting things I've ever seen.

(END VIDEO CLIP)

O'SULLIVAN: Now Wood, with that message, might actually have little hope of success in Texas's six congressional district, but he has got the backing of the most prominent anti-Trump critic in Congress, Representative Adam Kinzinger, but what this race I think will show and what his candidacy might show is a blueprint for anti-Trump Republican candidates who want to run in 2022.

And quite interesting luck, actually we were outside a early voting location last weekend, and we met a swing voter. Now she said she most recently has voted Democrat, but is a swing voter, a black woman, and she said she voted for Wood because she liked the anti-Trump message.

She said she would be more open to voting Republican if Republicans moved on from Trump. So I think that is a very important message for candidates and type of campaign, I guess, that Adam Kinzinger wants to see candidates run next year. John? KING: It is a fascinating test, and we don't take sides in politics, but I will applaud Mr. Wood for his courage in speaking up. You mention that's a tough district, North Texas, Republican district. Good for him to have the courage to speak up and say I was for you until that.

Donie, grateful for the reporting, appreciate you getting out there on the road for us, and grateful for your time too today and throughout this challenging week. Hope to see you Monday. Come back here, we have a surprise for you on Monday. Have a great weekend, stay safe.

Ana Cabrera picks up our coverage right now.

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