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Biden: Looking For Room For Compromise On Infrastructure; Colonial Pipeline Making "Progress" In Bringing System Back Online; Israel Sending Reinforcements To Tense Mixed Cities. Aired 12:30-1p ET

Aired May 12, 2021 - 12:30   ET

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

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[12:30:11]

JOHN KING, CNN HOST: Right now President Biden, Vice President Harris are meeting for the first time since taking office with the Capitol Hill's big four. That's the top two Democrats and the top two Republicans in Congress. Just before the meeting began, the President says I'm looking for compromise.

(BEGIN VIDEO CLIP)

JOE BIDEN, PRESIDENT OF THE UNITED STATES: The bottom line here is we're going to see whether we can reach some consensus on a compromise. And we look forward. We're going to talk a lot about infrastructure today, to see if there's any way we can reach a compromise.

UNIDENTIFIED MALE: How do you expect to do that, Sir? How do you expect --

BIDEN: Easy. Just snap, my fingers it will happen.

(END VIDEO CLIP)

KING: Just snap his fingers, he says. Compromise and common ground, that's the messaging you heard there from the President, but the fact the President waited 113 days to schedule this meeting should be proof enough he isn't expecting to find much common ground, at least on his domestic priorities.

The immediate test, both Republican leaders in the Oval Office right now are cool to the President's push for more than $4 trillion in infrastructure and other spending. Democrats also already had to go in alone on the nearly $2 trillion COVID relief package.

With me still Kaitlan Collins and Lauren Fox. Kaitlan let me start with you. This is the President's DNA. Let's try, let's try, let's try. He's facing all sorts of pressure from Democrats on Capitol Hill. Even Democrats on his staff say, Mr. President, don't let the Republicans run out the clock. So how does he balance? Are they serious? Or are they just here to talk? KAITLAN COLLINS, CNN CHIEF WHITE HOUSE CORRESPONDENT: Well, I think they're hoping that they're serious. But I think this will be a critical week about whether or not they're going to make any progress on securing these bipartisan deals that he talked about so much on the campaign trail.

And I think the desire is real, that the White House would like to have that, to tout that to say, look, we did work with them. And that's why they've been open privately to this idea of creating two separate infrastructure packages, one that could potentially do with this traditional infrastructure that you keep hearing Republicans like Mitch McConnell talk about.

But I think in reality, you also have to remember that before McConnell went to this meeting, you know, he had several criticisms of Biden's proposal saying it was a dizzying amount of spending. And so they've talked about some areas where there is compromise, the corporate tax rate, what that's actually going to look like.

But, you know, the White House has also said, you know, we're not compromising when it comes to the priorities that we have in here, the scope of this, and the idea that we do not want to tax people who are making less than $400,000 a year.

So it said on the schedule, they're talking about areas of mutual agreement. Those are few and far between. But we do know this meeting is still ongoing right now.

KING: Yes. I may find common ground on things like Russia, on things like China, on the foreign policy arena, there's some common ground out there. But on this domestic stuff, and you make a key point, because we know the House Republicans in this, you know, House Republicans say no, they're heading into the midterm elections, House districts are drawn in a way that if you're a Republican there -- I think there are only nine Republicans currently in the House, Biden carry the district.

So, most Republicans really don't, you know, have to worry so much back home about that. But McConnell does matter. So let's listen to a little bit of him heading into the meeting.

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SEN. MITCH MCCONNELL (R-KY): The last week's incredibly disappointing jobs report showed what happens when Washington taxes working people to pay other people more to stay home. I'm going to discuss these and other concerns with the President today. I hope today marks the start of a new course correction from this White House in a more successful dialogue across party lines.

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KING: This is the emerging Republican line. And I'm going to hold it up. It's not just in Washington. It's the Idaho Statesman. The state backing out of giving the bonus unemployment benefits, if you will, during COVID. That's one. Here's Iowa, I have more. I'll just do two. But you have Republican governors, you have Republican governor say, look, we're giving people too much in unemployment benefits, and they're not applying for jobs that are out there. You heard Senator McConnell. Republicans have already said we're not giving the tax increases you want Mr. President. Now they're saying you're spending too much money. And it's discouraging people from working. The economist can debate that. But that's the political challenge at the moment.

LAUREN FOX, CNN CONGRESSIONAL CORRESPONDENT: Well, that's exactly right. This was a key sticking point for Republicans and not the only reason but part of the reason that they didn't support the last COVID relief bill. They thought that the time was up for these expanded unemployment benefits, or at least the amount was too much money.

So now you have Republican governors saying you didn't listen to us. We'll just take action on our own. And I am beginning to see that fault line on Capitol Hill as well. I should also note that even if they could come to some kind of agreement on infrastructure on what the definition of infrastructure is roads, bridges, maybe broadband, deciding how to pay for it is just something that I have no idea how both sides come to a consensus on. Not one single Republican I talked to yesterday agreed with increasing the corporate tax rate, even a single point. They said they'd vote against that.

KING: Right. And so let's show you some Republicans that he's -- the President's meeting with tomorrow. He has the leadership in today but again, that he waited 113 days to meet with the Republican leaders tells you all you need to know. The President tried to do in and around. Shelley Moore Capito is among those will be there tomorrow, John Barrasso, Roy Blunt, Roger Wicker, Senator Crapo, and Senator Toomey.

[12:35:03]

The President is trying to see, you know, can I get a few of them to come my way, but they all answer to McConnell. They all, it's just like in the House, you have a 50-50 Senate. McConnell thinks he can get the leader job title back next year.

COLLINS: Yes. We have seen how the White House though is dealing with rank and file Republicans on this. That has kind of been their strategy. As you noted, you know, this is the first time congressional leadership has actually all come to the Oval Office. But when it comes to infrastructure, the highest number that we have heard from Republicans from Mitch McConnell was 800 billion.

And that was even like, wow, he said he would go up to 800 billion potentially. Obviously, President Biden is proposing 2.3 trillion. So the question, you know, about how do you pay for it. Also, how do you reconcile 2.3 trillion with 568 to potentially 800 billion? And I think that that is the math that even the White House is looking at.

And so it really remains to be seen. But I do think this will be a critical week to determine are we actually going to get there? Or is this going to be another route where Democrats just try to go it alone. KING: Right. And a lot of pressure on the President from rank and file Democrats saying, you want to turn on our voters next year? Go big and go bold. That's the way to do it. We'll watch as it plays out. Kaitlan, Lauren, grateful you're coming in for the reporting and insights today. We'll keep an eye on the meeting at the White House.

Up next, call this a cruel twist on crime and punishment. Cyber criminals attack a pipeline, and you pay for it at the pump.

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[12:40:47]

KING: The national average gas price hit $3 a gallon for the first time in nearly seven years today. That's according to AAA. The surge tied to both supply shortage and panic buying. Today the White House will brief a bipartisan group of lawmakers on that colonial pipeline cyber attack that is behind the supply shortage.

Now the company says it is making forward progress toward getting the pipeline system back online. Look here at the Dow, the pipeline issues, there are other factors as well, including a new inflation report, but the pipeline one of the reasons, pipeline attack one of the reasons the Dow down close to 500 points. You see it right there. CNN transportation correspondent Pete Muntean joins us now. Pete, three bucks a gallon consumers won't like that.

PETE MUNTEAN, CNN TRANSPORTATION CORRESPONDENT: Yes, that's right, John. And, you know, there's rush to buy gas is not necessarily about the pipeline itself, but it's more about the panic that it has caused. In fact, one gas expert tells me that that panic buying phenomenon has actually migrated a little bit was in Georgia and Tennessee. Now he says it's moving to North Carolina and Virginia.

GasBuddy says in Virginia about 17 percent of stations are now without gas, 28 percent in North Carolina also a growing number of stations are without premium. Now this pipeline outage is not necessarily causing a gas shortage. The White House is saying this is really more about a supply crunch. Here's what they just said.

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PETE BUTTIGIEG, TRANSPORTATION SECRETARY: Hoarding does not make things better. And under no circumstances should gasoline ever be put into anything but a vehicle directly or an approved container. And that of course remains true no matter what else is going on.

(END VIDEO CLIP)

MUNTEAN: Secretary Buttigieg is calling this a whole government approach. In fact the DOT has waved some rules to make it easier to transport gas by truck and by ship. Colonial says it can say today when the pipeline can be turned back on. But the Department of Energy says it could take a few days for the gas to actually make it to terminals and get delivered to gas stations, John.

KING: Pete Muntean, I'm glad you're on top of this for us, consumers care. We'll stay on top of it. I appreciate it very much.

And up next for us, rockets, death, and destruction, violence in Israel is escalating.

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[12:47:35]

KING: It is another tense day in Israel today. Reinforcements now heading to several cities that are home to both Israelis and Palestinians, this is rocket attacks and airstrikes continue. The current violence between Israelis and Palestinians among the worst in quite some time, recent decades, as the international community calls for deescalation. The death toll is rising. Palestinian authorities say more than 50 people have died in Gaza. That contrasts with Israeli reporting of just six deaths. Ben Wedeman joins us now live from Jerusalem with the latest. Ben?

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, John. Well, we've seen a rather large escalation just this evening. Now I think this video has been widely circulated of a building, the Sharok (ph) building in Gaza, which Israel brought down with an airstrike just about an hour ago. That is a building that houses a commercial and media offices, 14 stories.

What we saw was first one side of the building was brought down then another and then the middle. This seems to be a new tactic being used by the Israelis who have the technical ability, which I've seen many times in action, where they can literally say this office, 3A on the seventh floor, we're going to hit with a missile. And they do. In this case they're hitting, they're bringing down, this is the third in 24 hours, entire apartment blocks or buildings in what appears to be the Israeli version in Gaza of what the United States did in Baghdad in 2003 with shock and awe.

Now in this instance, like the other buildings that were brought down, there was this so called knock on the roof where there were warnings, there were small blasting explosives that are fired at the building, as well as in many cases phone calls to its occupants telling them to get out. So there's no indication of casualties in this rather massive collapse of the building. But of course, this does terrorize everybody in the immediate vicinity.

Now in response, the military wing of Hamas just a little while ago say they have fired 130 rockets at the Israeli towns, Sderot, Ashkelon, and Netivot. We don't have any indication at this point about casualties in this instance. Normally the Iron Dome system would stop those, most of those missiles from reaching their targets into Israel.

[12:50:05]

However, what we've seen recently is that there have been some technical difficulties with the Iron Dome. And at this point, they only been able to intercept about 90 percent of those missiles. But taken all together -- KING: Ben Wedeman, my apologies Ben. I need to interrupt our reporting to take you live outside the White House, the two Republican leaders after their meeting with the President.

MCCONNELL: Well, we have a good hour and a half meeting with the President, the Vice President and two Democratic leaders. Almost all of the discussion was about infrastructure. And I think I'm safe and saying there is certainly a bipartisan desire to get an outcome.

Clearly, Senate Republicans are not interested in revisiting the 2017 tax bill. I think the President and Vice President understand that. Beyond that, we're interested in trying to get an outcome. And I think the first step is, obviously, to define what infrastructure is, the definition of it.

And we all think all agreed to work on that together. My preference is to include the committees, there where they experts are. The Presidents actually been meeting with members of my conference, some are coming down here tomorrow, who know the most about this. And I don't favor having a top down dictation as to what this package looks like. But rather a consultative process in which everybody in my conference is involved in it.

REP. KEVIN MCCARTHY (R-CA): I felt our meeting was very strong. We talked about infrastructure. I think there's a place that we can find bipartisanship. And it's one thing I brought up to the President, we first have to start with the definition of what is infrastructure. That's not home health, that's roads, bridges, highways, airports, broadband, those are the places we could find common ground and work together.

The other thing I think America wants to know is that you're not going to wait a decade to build it, I brought up the president that we need NEPA reform. Most litigated legislation to find anywhere, we need to streamline not wait 10 years, on average, you're getting seven to 10 years. If we want to be competitive, we have to have things built now.

I also took the opportunity to talk to the President about my concerns about the rise in inflation, especially the numbers that we see today, the concern of what has happened where incentivizing people not to work in America, as I've traveled this country, the concern I find from a number of people can't get them back to work. We need to get people back to work, back to school, back to health, and back to normal.

I also raised the concern along the border that I want to talk to the President about having traveled there a few times of what I'm seeing there. Just if America was able to watch those young girls, one even 11 months old, that had a rancher not found them would they even be alive today. The sad part is, that's not the only story like that, it's day in and day out. And those are places we can work together and should work together to try to solve what is happening there.

I'm really concerned what I see from a future the economics of America. We have not seen the inflation month over month like this since the 1970s, the 1950s. We have not seen gasoline lines or what we're going to find rationing since Carter was president. Those are things that we should be looking forward, not backwards.

And the idea that spending more trillions of dollars into this economy when you have a supply constraint is actually the reverse that you want to do to keep America and make sure we don't have the inflation going. Yes? Yes --

UNIDENTIFIED FEMALE: (Inaudible).

MCCARTHY: Well, first of all, the conference will decide. But I don't think anybody is questioning the legitimacy of the presidential election. I think that is all over with. We're sitting here with the President today. So from that point of view, I don't think that's a problem.

UNIDENTIFIED MALE: -- for us, because the White House is talking about a $2 trillion package, give or take by raising corporate taxes? Republicans are talking about 5, $600 billion on infrastructure user fees. You don't want to raise corporate taxes. They don't want to user fees. There's a lot of zeros and commas in between. How do you come with some sort of meeting ground?

MCCARTHY: Not to negotiate here but you won't find any Republicans is going to go raise taxes. I think that's the worst thing you can do in this economy. When you watch inflation, your gas is going up. Remember gas price today, national gas price has not been this high since President Biden was Vice President. You're watching food costs go up, you're watching housing costs, lumber costs, there is inflation and everywhere, cars have not moved this high month over month to 10 percent.

So raising taxes would be the biggest mistake you could make. Remember the economy we had when we lower taxes, the 3.5 percent unemployment. You had everybody having opportunity regardless of where you are in America, some of the great, best employment we have. So that to us is a nonstarter.

[12:55:13]

What we walked into the room with, where can we find agreement. And I felt that was productive. I felt all of us as leader and the President, the Vice President, sitting down saying, let's first decide what is the definition of infrastructure. If we can all decide that, then we can work on what the need is, and how to -- and what we need to spend. That was productive, and I felt coming out, that's where we were ending up.

MCCONNELL: Yes. We're not interested in reopening the 2017 tax bill. We both made that clear to the President. That's our red line. We believe that in February of 2020, we had the best economy we've had in 50 years. We believe that was a major reason for it. And so from my perspective, this discussion about the way forward on infrastructure will not include revisiting the 2017 tax bill.

MCCARTHY: You know why you get the question, because you married a girl from Bakersfield, who was fabulous, by the way. Yes?

UNIDENTIFIED MALE: We know that --

MCCARTHY: You definitely married up, but go ahead.

UNIDENTIFIED MALE: I did, yes. We know that the President spent a lot of time on infrastructure with you guys today. Are you satisfied that he is spending enough time because we don't really hear him talking about the border crisis in the Middle East, the gas supply issues right now? Is he spending enough time to leading -- are you satisfied with the leadership --

MCCARTHY: Look, I thought the meeting today was productive. And I know he won't have the meeting on infrastructure. But I want to take the opportunity to talk about the concerns I'm hearing around the country. From affordability, the price of gas, the crisis at the border that's coming every single day, the ability to get people to go back to work, the incentive to keep back, you're not -- and the schools, the millions of kids who are not back at school, these are the concerns I'm hearing every day.

So I took the opportunity to raise those with the President. The President engaged on those topics. I would like to have more. I'd like to see some action on that. I'm very concerned with what's happening in Israel. The President, we did touch on that at the beginning, he brought that up. I commended the President for his comments yesterday, Israel's ability to defend themselves and they should be.

MCCONNELL: Let me add just one thing on the issue of inflation and getting people back to work. What I did last week was to have roundtables with businesses of all size, sizes, including hospitals, said, what's your biggest problem? Number one, I can't get people to come back to work. And number two, inflation, exactly the same thing that Kevin was hearing and others are hearing around the country.

I think that's a direct result of flooding the zone with an extraordinary amount of money. I will say this, there's great excitement at state government and local counties. They've never seen anything like what's headed their way with this mountain of money that's coming in. Hopefully, we can capture some of that to make this infrastructure package go forward in a way that everybody would like to see go forward.

UNIDENTIFIED FEMALE: What made you change your mind -- bottom line, based on what you've heard from the President today, are you more optimistic about the prospect of working with this White House, particularly on infrastructure or less?

MCCARTHY: No, I think there's an opportunity that we could work together on infrastructure. Now, let me preface that. We're not interested, as long as not anything about tax increases and dealing with infrastructure that we start with the concept what is the definition. And that we're able to make reforms so you can actually build the roads not decades away, that you modernize the law from the 1970s. So money, roads gets built, they get faster.

But what I really want to work on is making sure turning this economy around, getting people back to work, back to school, back to health and back to normal. I believe in the vaccine. That's what I'm not wearing a mask. I want people back in school. The other thing too, you have to understand those numbers we heard today on inflation, that should terrify every American. Because it's not a question of whether there's going to be a tax increase, you just had the biggest tax increase, you've had more than 10 years, and it hits you already.

And for those who have lower income is getting hit harder. That's why we got to incentivize people to get back to work. Get the economy moving again and stronger and stop this inflation and part of what Congress has recently done by spending those trillions of dollars is the wrong action to take in the economy we have the day that you could propel inflation even greater, make people's money worth less, the affordability is more difficult. Those are the things I want to discuss and correct and also look forward.

[13:00:07]