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Texas School Massacre; Clinton Campaign Lawyer Michael Sussmann Acquitted; White House Pushing New Campaign to Tout Economic Wins. Aired 12-12:30p ET

Aired May 31, 2022 - 12:00   ET

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

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[12:00:21]

JOHN KING, CNN HOST: Hello. And welcome to INSIDE POLITICS. I'm John King in Washington. Thank you for sharing your day with us.

A frantic call from what appears to be a child shot in the Uvalde school massacre. As the community now buries the victims, more questions emerging about the timeline. And here in Washington what, if anything, can happen on gun reform?

(BEGIN VIDEO CLIP)

JOE BIDEN, PRESIDENT OF THE UNITED STATES: There's an awful lot of suffering. We've been -- I've been to more mass shooting aftermaths than I think any president in American history, unfortunately. And it's -- it's just so much of it is - much of it is preventable and the devastation is amazing.

(END VIDEO CLIP)

KING: Two big new economic indicators today. U.S. home prices continue to surge even as mortgage rates tick higher and consumer confidence dips. This, as the president defends his handling of the economy and meets with the fed chair this afternoon.

Plus, Russia now seeing the harshest punishment yet for its war in Ukraine. A partial ban on oil from the European Union.

We begin though in Uvalde with new sadness and new questions about the police response. Funeral services today for some of the 21 victims, including 48-year-old teacher Irma Garcia, ten-year-olds Nevaeh Alyssa Bravo and Jose Manuel Flores Jr.

One priest in Uvalde will lead 12 funeral masses in the coming days. Father Eduardo Morales says it's like quote, "one huge funeral that is not ending".

CNN has obtained new chilling video that includes an apparent radio call of a child saying they'd been shot.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Are you injured?

UNIDENTIFIED FEMALE: I got shot.

UNIDENTIFIED FEMALE: Where? Where?

UNIDENTIFIED MALE: A kid got shot?

UNIDENTIFIED MALE: A kid?

UNIDENTIFIED MALE: They shot a kid.

(END VIDEO CLIP)

KING: Now, it's not clear just who is talking here. The man who recorded that video says it came from a radio inside a Customs and Border Protection vehicle that was parked outside the school.

CNN's Shimon Prokupecz live for us on the ground in Uvalde. So Shimon -- you have that video there which again will go into the questions about the timeline of the police response. And there's also this obtained by ABC News, a police dispatch. Listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: We have a child online.

He is in the room full of victims. Full of victims at this moment.

(END VIDEO CLIP)

KING: The key here is piecing it all together to try to understand really the thing we cannot understand. Why the police waited so long to storm that classroom?

SHIMON PROKUPECZ, CNN CRIME AND JUSTICE CORRESPONDENT: Right. And that's the thing. And you know, that piece of video that ABC News obtained, I think it's pretty significant, John because it tells us that the 9-1-1 dispatchers that were receiving these calls from these kids trapped in this classroom with the gunman, they were relaying that information to the officers on the ground which indicates that the officers knew that there were people alive in that classroom, that they were still facing a threat from the gunman.

So again, it begs the question of why didn't the police, having that information from the 9-1-1 dispatchers, why did they not go in sooner?

You know, we've also been learning in talking to officials here and law enforcement officials that I've been talking to, say that those 19 officers that we learned about on Friday that were in the hallway, they were certainly armed with the right weaponry -- rifles, long guns, and body armor to go in to the classroom and face the gunman sooner.

So those kinds of questions obviously need to be answered as to what went into the decision where this chief and other senior law enforcement officials were on the scene. John, there were other police departments that were here that the local police department as well as senior officials from the state police. So there's still a lot of questions that need to be answered.

And also, you know, law enforcement officials say that one of the reasons that there was a lot of concern for these officers to go in was because they feared for their own life. That they were going to get shot which goes against everything that officers are trained to do, John, in these situations.

KING: Shimon Prokupecz, live on the ground for us. Shimon, appreciate the important reporting.

With me in studio to share their reporting and their insights CNN's Dana Bash, Zolan Kanno-Youngs of the "New York Times", Leigh Ann Caldwell of the "Washington Post".

You are just back -- to Shimon's point about the anger in the community, the questions about the police timeline. It is mixed with what is going to be a funeral week. Just incredible sadness mixed with all this anger.

DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: Funeral weeks.

KING: Right.

[12:04:51]

BASH: Because there are two funeral homes in this small town, and they're backed up because they have so many children to bury. And as horrible as that sounds, that's the reality that they're living in.

And what's also I think perhaps a little bit missed, understandably so because it is such a small town, is that the feelings are very complicated. Because just as everybody knows somebody, if they weren't directly impacted by loss, the people who were lost and the children who were lost in this town, they're either related to somebody or know somebody.

But same with law enforcement.

KING: Right.

BASH: I mean, there are a lot of local law enforcement officials. Some came in more broadly from the state, and so they're worried about those people and their guilt that they feel.

But the fact -- now we have the tape that you played of the -- what looked like and sounded like a child calling and saying there's a child shot and then, of course, the dispatcher.

That is really the heart of it which is you had all of these children, nine and ten-year-old children in the most terrifying of situations likely under their desks, following the protocols they were taught, calling from their cell phones, calling 9-1-1 over and over again, worried that even that could get them shot. and the grownups with the guns in the hallway, they were not following their protocols.

KING: The sadness is stunning. And so the conversation here turns to what should we do about it? And that's the conversation sadly we have had way, way, way, way, way too many times before with often little or nothing done.

The president was just meeting with the prime minister of New Zealand. She, of course, you know, had to deal with this in her home country. The president says he's willing to meet with members of Congress. The question is here's what the House is considering this week. The House of Representatives controlled by Democrats, they -- a number of proposals: to raise the age to buy a semi-automatic weapon from 18 to 21; to urge owners to surrender and to give them incentive to surrender large capacity magazines; strengthen trafficking laws to register existing bump stocks that modifies a gun to make it more deadly, you can fire more rapidly and more accurately.

That may well pass the House. It has about zero percent odds of passing the Senate. The question is what is the president willing to do to change -- can he do anything to change that zero?

ZOLAN KANNO-YOUNGS, WHITE HOUSE CORRESPONDENT, "NEW YORK TIMES": Well, let's remember that right now we have heard from some senators in the past couple of days expressing some optimism here. Expressing some optimism about these bipartisan negotiations that are still going on.

Running that up against the modern history thus far of any sort of momentum on gun control, there's -- it's understandable to have doubts that they're actually going to be able to produce anything.

You do have Senator Chris Murphy who has indicated that he is willing to move forward with some more incremental change here, and look for compromise, so we'll see if Republicans can back that.

As far as what the president can do here, one, what does he really mean by meeting with members of Congress? Are we going to see a similar kind of priority, a similar focus that we saw with something like the infrastructure package and Build Back Better where he is calling senators to the White House?

Would that actually be beneficial when you have a president with declining approval numbers? And weighing into already a really polarizing issue.

As far as what he can do in terms of executive action, I think you can look at his comments after another recent mass shooting in Buffalo when just before he boarded Air Force One, he told me as well as other reporters when he was asked, what can you really do here just on your own? He said look, I have limited options when it comes to executive action.

KING: And so the question is what might Congress get to the finish line? The house, again, may pass the proposal I just outlined. They may do more.

We're back in the 50/50 Senate. So pick your issue over the last couple of years. This is where we end up, even with 19 young kids and two of their teachers gunned down. Chris Murphy, as Zolan mentioned, is going to have another conversation today. Kyrsten Sinema on the Democratic side, John Cornyn and Thom Tillis on the Republican side -- they're going to have a Zoom meeting, they're all back home in their districts.

And Senator Murphy who has been at this for several years, obviously from Connecticut, Newtown happened there. "We need to show Republicans that they can strengthen the background check system in a meaningful way and get politically rewarded for it. That's why I'm willing to look at things that might be less than what I would like."

There is no gun control proposal, no change that's going to pass the senate, is there. At least on the table today, they wouldn't even raise the age from 18 to 21. Let alone bring back an assault weapons ban. They're talking about mental health, background checks, no gun proposal, right.

LEIGH ANN CALDWELL, "WASHINGTON POST": Yes. Perhaps red flag laws as well, strengthening those or even providing incentives for states to strengthen their red flag laws.

And so what the senate is talking about is really around the edges. Nothing directly as you mentioned that would impact the ability to purchase guns, what age to purchase guns.

And so that still is very limited, and Senator Murphy has been clear about this. He says I know that what we are going to do is not going to solve every problem or every potential mass shooting that happens in the future, but we need to show the American public that we are willing to try something and just to do something and so that people don't think that Congress is once again going to turn a blind eye.

[12:09:53]

KING: We'll see how that -- we'll follow those talks throughout the week.

Want to pause this conversation right now to get (INAUDIBLE) some important breaking news just in to CNN.

The Hillary Clinton campaign lawyer Michael Sussmann has been found not guilty of lying to the FBI. It's the first trial of special counsel John Durham's investigation. That verdict, a big defeat for Prosecutor Durham and his team.

They claim Sussmann lied during a 2016 meeting where he passed a tip to the FBI about Donald Trump, an alleged contact with a Russian bank.

Let's get straight to our senior justice correspondent, Evan Perez. Evan, tell us more.

EVAN PEREZ, CNN SENIOR JUSTICE CORRESPONDENT: Well, John, the jury took about seven hours to reach this verdict. And they reached a verdict of not guilty. Michael Sussmann was charged, as you pointed out, with lying to the FBI in this September 2016 meeting. According to John Durham's prosecutors, this was really an orchestrated effort on the part of Sussmann working with the Hillary Clinton campaign in 2016 to try to dirty up, to try to smear Donald Trump.

And they kept using over this 11 days of this trial that's been going on, they were using this essentially to put Hillary Clinton and her campaign on trial, even though obviously she's not charged. There is no -- there were no allegations of a conspiracy. That's what this -- dominated this trial here in D.C. court.

Sussmann has been arguing in response to this that he didn't lie, and even if he did lie, he's saying that it made no difference, that Donald Trump was already under investigation, his campaign was already under investigation by the time these allegations were made in September 2016.

Again, this is a big blow to John Durham who was hired who was appointed by Bill Barr under President Trump to try to get to the bottom of and try to find things that were done wrong as part of the Russia -- Trump-Russia investigation back in 2016-2017. And so now we'll see where this goes. We know that there's one more trial scheduled for October against a Russian analyst who helped collect some of the information that we now know went into the so-called dossier that was used to buy Hillary Clinton against Donald Trump.

So, again, big, big decision today on the part of this jury. Not guilty after about seven hours of deliberations, John.

KING: Evan Perez, appreciate the hustle outside the federal courthouse. Let's get some perspective now from Elie Honig. He's a CNN legal analyst, former U.S. attorney.

Elie, so a defeat for Mr. Durham. What do you see as the significance here?

ELIE HONIG, CNN LEGAL ANALYST: Hey, John. This is a stark rebuke to John Durham and his entire investigation which has now been going for more than three years. This case was really the centerpiece of what John Durham has done so far.

The jury rejected it. And it's worth noting John that the vast majority of federal cases, over 95 percent of all federal cases result in conviction, most of those are by guilty plea. But even those cases that go to trial, the vast majority end in conviction.

So the fact that this is a not guilty verdict is really a stark rebuke. The gist of the allegations here was that this lawyer Michael Sussmann lied to the FBI when he came in and gave information about purported links between the Trump organization and a Russian bank.

The problem, though, is the FBI lawyer testified in front of Congress two years after that he could not remember whether this lawyer lied about his connections to Hillary Clinton or not. This case was in trouble from the start and now we have this not guilty verdict. KING: And so the essence here, and you help me with the legal part,

here's the political part, Durham was alleging essentially this was a dirty trick. That Sussmann passed on the tip to the FBI and then you could call up a bunch of reporters and say, you should call the FBI, they're investigating Trump. It was September 2016, the meeting.

The idea was -- the Durham's case was that this was an attempt to get an October surprise. Headlines that Trump, Trump Organization under investigation right before the election. The jury says no. What happens to the rest of Durham's portfolio?

HONIG: Exactly. So John, that's the political side. The legal side here, the charge is making a false statement to the FBI. This lawyer goes in 2016, Michael Sussmann, the defendant in this case. He meets with the FBI general counsel Jim Baker, who I should note, former colleague of ours at CNN. The allegation is that when Sussmann went in there and met with the FBI, he said hey, I have news about this connection between the Trump organization and this Russian bank. But the allegation is he did not say, the lawyer did not say he was working for Hillary Clinton when he actually was.

The problem is the proof just wasn't there that the lawyer had withheld that fact. The proof showed that Jim Baker testified that he wasn't even sure if this lawyer had said he represented Hillary Clinton or not. And the proof showed that the FBI's own internal notes said they knew that this lawyer represented Hillary Clinton and the DNC.

So what does this do to John Durham's portfolio moving forward? Technically nothing. But I think it really undermines John Durham's credibility and I think it shows that what do we have after three years of investigation? More time, by the way, than Robert Mueller spent investigating. More than three years of investigation by John Durham and here, this is the biggest result so far, a not guilty verdict.

[12:15:03]

KING: Elie Honig, grateful for the hustle and the insights. Appreciate it. Thank you.

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KING: Up next, President Biden meeting today with the Federal Reserve chief and his mission over the next month, try to make the case to you that while inflation is hurting American families, the overall economy is humming.

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KING: President Biden is launching a new effort to talk up the economy even as he acknowledges high inflation is crowding out more favorable numbers.

The president meets later today with the chairman of the Federal Reserve. And what the White House says will be a month-long focus on the strength of the economy began with a newspaper essay from the president himself in which he calls the economy robust overall.

[12:19:54]

KING: But new data today could complicate the sales pitch. Fresh reports on consumer confidence and home prices.

Let's get to CNN's Matt Egan. He's got the latest on these data points. Matt, tell us more.

MATT EGAN, CNN BUSINESS REPORTER: Well John, the high cost of living continues to cast a shadow over this economy. New numbers out today show that consumer confidence fell in May. Didn't fall as much as feared but it's still well below pre-COVID levels and one in four consumers they expect economic conditions to get worse.

I think this is really about three things -- gas, food, and housing. For many families, these are the three most expensive items of their monthly budget. And all three continue to get more expensive.

On the housing front, new numbers out today show that home prices in the United States rose by a record 20.6 percent year over year in March. That means home prices are rising faster than they did even during the mid-2000 housing bubble, supply of homes just cannot keep up with demand.

Important to remember that this kind of cuts unevenly. If you own a home, you're wealthier, at least on paper. Maybe you're going to spend more because your home is worth more, but if you don't, this makes it that much harder to own a home which of course, is the ticket to accumulating wealth in the United States. You might have to rent instead. And that's going to push up rental rates for everyone, John.

KING: And Matt, the president meets later today with the Fed chairman Jerome Powell. Obviously the Fed has the biggest weapons to deploy against inflation. Does the president have an ask or is this just a meeting to say hey we're on top of this?

EGAN: Well, John, this is a meeting arguably with three of the most powerful people on the planet -- the Fed chairman, the president of the United States, and Treasury Secretary Janet Yellen, a former Fed chief herself. And this comes at a time when consumer prices are rising at the fastest pace in 40 years.

The Fed is promising to get inflation under control by rapidly raising interest rates. But not doing so much that it causes a recession.

I think we're going to hear three things from the White House on this. One, the president is going to promise not to mess with the Fed. Not to take the steps that his predecessor did and try to interfere and meddle with the actions of the Fed.

Two, confidence that his hand picked Fed leaders including Jerome Powell are going to be able to get this right.

And three, a not so subtle reminder that price stability is really the job not of the White House, but of the Fed. But John, we know that the president ultimately, he's the one who's going to be held accountable by voters at the ballot box.

KING: Right. He and his party in the midterm election year. Matt Egan, appreciate the important notice (ph).

Let's bring the conversation back in the room with our great reporters. And you know, as Matt just said the president will be held accountable at the ballot box, but Democrats in Congress are the ones -- or Democrats running for governor who are running out in the country, will pay the price.

The president says this in the "Wall Street Journal". "The job market is the strongest since the post World War II era with 8.3 million new jobs. The fastest decline in unemployment on record and millions of Americans getting jobs with better pay."

The headline of that is "Joe Biden, My Plan For Fighting Inflation". If you just read that paragraph, you would think ok, this isn't going to be as bad a year for the Democrats as it looks.

The problem is when people go to the grocery store or stop on the way to work to fill up the car, they don't think -- they don't process but there's 8.3 million new jobs.

CALDWELL: Right. And the president is not wrong that there are very good components to this economy. Another thing that he mentioned in that op ed that he wrote today, that the national debt is decreasing at a dramatic level, too.

And -- but we just came off Memorial Day weekend. People took three- day weekends. A lot of people drove, and people really, really felt it. We're at the unofficial start of summer where people are taking road trips and they're starting to feel this a lot more. And we're also getting deep into campaign season as the primaries are almost over, and this is going to impact like you mentioned, a lot of Democrats who are fighting for their political life this midterm season despite these pocketbook issues that are affecting Americans.

KING: And you mentioned the calendar, if you will. Memorial Day weekend gets you into summer. School is ending soon in most of the country. Parents -- can we afford to take a road trip? Can we afford to have summer vacation?

This is the national average in gas prices -- all records here. Regular gas $4.62, mid-grade gas $5.00 a gallon, premium gas $5.29 a gallon. That's the national average. If you live in California because of the state gas tax, you're looking at considerably higher.

It's just hard. You're right, if you go through the statistics the president cites in his op ed in the "Wall Street Journal" are all correct. The economy does have a lot of great strength under it. It's just people are getting hit in the head every day with this.

BASH: Right, which is why it would not be a surprise if you saw a move in the next, I don't know, couple of months as we get closer to election day for the administration to have what's called a national gas tax holiday which is $0.18 a gallon which is not nothing when you add it up. And then perhaps encourage states to do it along with them which would be even more depending on the state. I'm not sure California would do it.

[12:24:50]

BASH: But -- so it's not as if they don't have some things -- some more tools in their tool box. Not a lot, but they do have some, and it seems to me in talking to sources on the Hill and at the White House, that they're just trying to figure out when to actually use those tools.

KING: Well, the quick would be, you know, if you follow campaign history, then the recommendation would be quick in the sense that it gets really hard to change the numbers because of the psychology.

This is just -- Matt mentioned the confidence board -- consumer confidence survey, this is the Gallup poll, Americans confidence in the economy right now. The poor, 46 percent of Americans nearly half feel the economy is in poor shape despite all the strong statistics. That's because of inflation. That's because of the grocery store. Only 13 percent say it's good.

The election is closer than you think. And it's hard. It's hard even if you're perfect, even if the economy is perfect for you, it's hard to change those numbers.

KANNO-YOUNGS: The tricky thing too is with some of those tools as well that the White House can take, and has taken. They're not easily translatable to voters, to Americans as well when they're going to the grocery store and seeing high prices. When they're seeing supply chain shortages that can impact whether or not you can get baby formula right away.

You know, the president just took and he mentioned this as well, I believe, in his meeting this morning, he just took this trip to Korea as well as Tokyo to try -- one, to reassure allies there, but also to address some of the global supply chain shortages impacting the economy back home.

But is that easily digestible if you're an American right now that's struggling to get basic necessities and goods? So it's also the tools they're taking right now.

This could also factor into whether you do -- tap into a tool that could create some immediate relief, such as student loan relief as well. These issues are connected here.

But how something like student loan relief while it could give you an immediate benefit could impact inflation in the long run, that's also a debate going on in the White House right now.

KING: It's wildly complicated, the economics of it. And then you get into the election year calendar, it gets all the more so. Ahead for us, Russian forces now closing in on another key city in

Ukraine's Donbas region, the European Union adding new teeth to its list of Russia sanctions.

[12:27:03]

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