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Biden: Jobs Are Back But Prices Are Still Too High; Stocks Enter Bear Market Amid Fears Of Interest Rate Hike; Poll: 59 Percent Of Americans think economic issue are most important; White House confirms Biden will meet will Saudi crown prince; Lofgren: "The Big Lie" was also "The Big Rip-Off. Aired 12-12:30p ET

Aired June 14, 2022 - 12:00   ET

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

[12:00:00]

ERICA HILL, CNN ANCHOR: Inside Politics with John King starts right now.

JOHN KING, CNN HOST: Hello, and welcome to Inside Politics. I'm John King in Washington. Thank you for sharing your day with us. Top priority, today President Biden travels to the largest union group in the country. His mission to convince voters. He can steer the country through decades, deep economic pain driven of course by inflation.

Plus, we are not looking to rupture relationships. That's what the White House says to explain why it is rewarding Saudi Arabia, labeled a pariah by candidate Biden with a presidential visit. And postpone, the January 6 committee delays and scheduled hearing tomorrow. Day two of the panels' public were did pull back the curtain on what Trump's innermost circle thought of his election fraud lies, detached from reality was the polite way of putting it.

President Biden just moments ago wrapping up a speech in Philadelphia to the AFL-CIO convention. That's the largest union group in the country. The president's argument, yes, times are tough, but he should be trusted to get us through the economic pain being felt across the country. And the president that sharply political saying a Republican wave in November would bring a renewed attack on two sources of security in the middle of an economic crisis.

The president says Republicans would put programs like Medicare and social security at risk. CNN White House correspondent John Harwood is traveling with the president. Now in Philadelphia, John, the president was relaxed because he was among friends talked about the economics, but he also talked politics.

JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: He absolutely did. Look, this was a president, John, who was reveling in the applause of his friends in the union movement. He's always said from the beginning of his presidential campaign that he's a union guy. So, he talked about the positive aspects of his economic record, the job creation, the low unemployment rate.

He also showed his irritation with the fact that he believes he's gotten more flak on inflation than he deserves. He talked about it as a global problem. He also went hard at Republicans. You mentioned Medicare and social security. They also said, they'd been thwarting his efforts on the build back better agenda, trying to lower costs for Americans through things like lower prescription drug costs and childcare. Take a listen to the president.

(BEGIN VIDEO CLIP)

JOE BIDEN, UNITED STATES OF AMERICA PRESIDENT: The problem is, Republicans in Congress are doing everything they can. So, stop my plans to bring down costs on ordinary families. That's why my plan is not finished. And why the results aren't finished either. Jobs are back, but prices are still too high. COVID is down, but gas prices are up. Our work isn't done.

(END VIDEO CLIP)

HARWOOD: And of course, part of that work that's left to be done for the president is that upcoming trip to the Middle East. And he has decided that it's worth swallowing those statements he made about Saudi Arabia as a pariah on the international stage for the possibility of getting an increase in oil production that would help bring gas prices down.

The presidency often is a place where you get only bad choices, and he's decided the least bad choice in this case, is to meet with MBS and other Saudi leaders and try to get gas prices down. That's why he says inflation is his top priority, John?

KING: Those choices are all ranged from bad to awful, probably why we're so happy to be among friends today in Philadelphia. John Harwood, live for us there. John, thank you. Let's discuss this further now. With me now is Jeanna Smialek. She's the Federal Reserve and economy reporter at The New York Times. Jeanna, grateful for your time.

The president laying out his case today, trust me, but a lot of this is out of his control. And the Fed will meet tomorrow and has a very big decision on this. But I just want to show you, just the markets. This is just the financial markets in the past year. The Dow Jones one year, you just look at the radio screen.

You don't even need to see the numbers, just look from left to right and drop. And then you look at the S&P 500. It's about the same. And trends left to right and plunge at the bottom. Those markets are in that plunge at the moment, Jeanna Smialek, because a lot of investors are worried, the Fed might do something that triggers a recession. Where's the sweet spot?

JEANNA SMIALEK, FEDERAL RESERVE AND ECONOMIC REPORTER, THE NEW YORK TIMES: I think the sweet spot is incredibly hard to find right now, to be honest with you. What we know is that inflation has been a real problem in the country, and it is proving to be stickier and more stubborn than officials had hoped, which increases the chances that Fed officials are going to have to take pretty extreme action to get it under control and increases the chances that we have a pretty significant recession as a result. And so, I think that's really what we're seeing reflected in those prices you just pointed out.

KING: So, let's walk through that and take it away from economists talk or Washington talk to Main Street America and talk in the sense that we're now in a bear market. A lot of people say what is that? What does that mean? The Fed is looking at, it used to be a quarter point, would it be a half point. Some people are saying maybe 0.75. They do three quarters of a point to raise interest rates to slow and overheating economy. What is that going to mean for average Americans?

[12:05:00]

SMIALEK: I think what it's going to mean for average Americans is that the economy is going to slow a lot more abruptly than we previously thought it was going to. And so, if you are thinking about that from your typical households' point of view, it means that money pretty quickly becomes a lot more expensive to borrow. We've already seen mortgage prices move up a lot. It's harder to buy a house, that means more people are renting. So, rent prices may go up for a while.

And for a period during this transition, the labor market might slow, and wage growth might cool down before inflation actually falls. So, we could be in for a couple of pretty tough months or quarters, even maybe a year or two as we get through this adjustment process. And so, it's a pretty bleak outlook ahead I think for consumers.

KING: Jeanna Smialek, at the New York Times, thank you so much for putting that into American English. Sometimes it does get lost in this, it's important economic talked about. Thank you so much for that. Helped me understand it better with me in studio here to share their reporting and their insights, Jackie Kucinich of The Daily Beast, The Washington Post, Seung Min Kim, and NPR's Ayesha Rascoe.

So, you just listen Ayesha at the end of what Jeanna was talking about there. The Fed is trying to do what it believes is the right thing. It's a very difficult environment. But if it raises interest rates, that could mean the job growth slows down. Interest rates go up. A few tough months or quarters, she said, at a time, Joe Biden - or years, at a time Joe Biden is trying to convince the American people, I know it's tough, I got this. Don't abandon me and don't abandon Democrats in Congress.

AYESHA RASCOE, WHITE HOUSE CORRESPONDENT, NPR: The problem for President Biden, and you know, I listened to that speech to the AFL- CIO, and you know, I heard him saying, you know, things are better now than they were at the height of the pandemic. But I think the problem for this White House is people don't want things to be better than they were in 2020. They want them to be as good as they were before the pandemic. They don't want to go, like, and that's the problem, they want things to be good.

And when you're going to the grocery store, and you're having to pay $50 more or $100 more, paying $5 at the gas pump. Americans really truly believe like that low fuel prices is their God given right, and someone has to deliver it to him. Like that's just the fact, environmentalists don't like it, but that is the way Americans feels. KING: Right. And there's only so much a president can do. And that's part of the challenge too, as your president in tough times. I've been through this through several presidencies where the Democratic Republican, there's only so much you can do. Here's the question, though, which voters are asked, what's the most important issue to the country today? Six and 10 Americans say economic issues, everything else falls way far behind it.

And so, the president is trying to convince people, we're on top of this at a time, everywhere they look. I used to just mention gas prices, you go to the grocery store. If you take the risk after the last few days to take a look at your 401(k), this is what you're going to see. And this is before.

This goes back to from the end of 2021 to the first quarter of 2022. It does not include the last couple of weeks in the markets, which have been tough, but your IRA is down 6 percent, your 401(k) is down 7 percent on average, your 403(b), if that's how you have an investment plan, down 6 percent on average, ouch.

JACKIE KUCINICH, WASHINGTON BUREAU CHIEF, THE DAILY BEAST: Just don't look at it honestly, at this point, is that that's a better plan. But I think the other thing I heard during that speech, he was talking a lot about where things were and what he inherited when he came into office. And that doesn't fill your gas tank, though. And they are really trying to show Biden's been on the road more. They've been trying to show that they're working.

He's going to Saudi Arabia. They're saying that has nothing to do with fuel, with gasoline. But if there is an open question of whether he would be going if we were in this position, with gas prices, if we were not in this position with gas prices, there's another as a Gallup report today, that shows these key indicators going into the midterm elections, presidential approval rating, congressional approval rating, and where things are in the U.S. Right now, they're 10 points down from where they are on average. So, it's not only could it be a tough couple months for the country, could be a real tough couple of months for Democrats in Congress.

KING: Which is why part of the president's challenge is saying, OK, you might be mad at me, or you might be frustrated with your government. He's trying to make the case, while Republicans will make it worse and he's at the AFL-CIO convention. Unions aren't as powerful as they used to be, but they can be powerful in terms of supporting Democratic candidates financially, in terms of shoe leather on the ground and key races to get them out.

He's in Pennsylvania. He said he spoke by zoom with John Fetterman, the lieutenant governor and Senate candidate who has been sidelined by some heart issues. He also said please work with Stacey Abrams. She's running for governor of Georgia. And the president did get more political in this speech than most of his remarks about the economy. Listen?

(BEGIN VIDEO CLIP) PRES. BIDEN: I believe him bipartisanship. But I have no illusions about this Republican Party, the MAGA party. I've been able to bring some Republicans along on parts of my plan. But the fact is Republicans in Congress are still in the grip of the ultra-MAGA agenda. They still refuse to consider changing any part of the Trump tax cuts, which delivered massive windfalls to billionaires and others.

(END VIDEOTAPE)

[12:10:00]

KING: It's a giant political challenge, not just for the president, but for everybody in the party just because their midterm elections tends to be a referendum on those in power. He's trying to, you know, it's always a choice in an election, but if people are really frustrated with all that built up anxiety, I used to talk about. It's hard to get them to look at the other side when they're mad at you.

SEUNG MIN KIM, WHITE HOUSE REPORTER, THE WASHINGTON POST: Exactly. And I think the rhetoric and the tone and the energy that we saw from President Biden this morning was kind of what Democrats had wanted to hear. They know that things are bad. They know that the administration is trying to explain away and try and explain their accomplishments. But again, that doesn't matter when you're paying more at the grocery store and at the gas tank.

So, they want more of that contrast. They want more talk about Rick Scott. They want more to talk about what the Republican plans to fight inflation are, which they say is nothing. But at the end of the day, is that enough to convince midterm voters that that Democrats should still remain in power. And I thought is talking about, you know, what Harwood said earlier about, just the interesting choices that our president had to make.

I thought the backdrop of the labor, of the union hall and talking to that union crowd was really interesting, because remember, he's deciding whether to lift some of the tariffs on China. And that is creating a significant political challenge. The unions are against it. But this is another potentially pragmatic move he may have to take to reduce costs for consumers. And that's a really - that's a decision I think we're all watching.

KING: Another one of those difficult choices. Up next. We continue this conversation pariah no more. The White House confirms the president will visit Saudi Arabia next month, and he will meet with the crown prince he vowed to hold accountable for murder.

[12:15:00]

(COMMERCIAL BREAK)

KING: It is official now, the White House this morning confirming President Biden's controversial trip to Saudi Arabia. Besides Saudi Arabia, the president will also make stops in Israel and significantly in the West Bank. The White House confirms there will be some kind of meeting with the Saudi Crown Prince Mohammed bin Salman. That despite strong condemnation from Biden as a candidate for president and despite a U.S. intelligence conclusion, publicly released early in the Biden administration, that the crown prince ordered the brutal murder of The Washington Post journalist Jamal Khashoggi.

(BEGIN VIDEO CLIP)

JOHN KIRBY, NATIONAL SECURITY COUNCIL COORDINATOR FOR STRATEGIC COMMUNICATIONS: Will talk with nine heads of state. There'll be lots of bilateral discussions. And yes, that will certainly include King Salman and his leadership team, and we would expect that the crown prince will be part of those discussions. We're not shying away from that.

(END VIDEO CLIP)

KING: He says we're not shying away from that. Joe Biden, candidate Biden used the term pariah. That's why it makes it so controversial, not the first won't be the last candidate to say something, they then have to swallow as president. But that's what makes this hard for them to explain.

RASCOE: I mean, it's very hard to explain, but it is a time-honored tradition for U.S. presidents to go to Saudi Arabia, because they are such an important partner, you know, for geopolitical reasons. And also, obviously, because Saudi Arabia is one of the few countries in the world that has this, you know, ability to turn on the taps and actually produce more oil.

And in the world that we live in, the price of oil is set on the global market, it doesn't matter if the U.S. can make more, you know, produce more oil. But obviously, you need other producers, you need a large producer, like Saudi Arabia. And so, that's why you have President Biden swallowing his words and going over there, kind of hat in hand like that's, I mean, that's just the fact.

KING: Also, why you have many congressional Democrats, you know, the last thing they want to do is say anything nice about the Saudis, because the Saudis committed a brutal murder, the intelligence report lays it out. And that's not the only bad act by the way. It's not one thing. The Saudis have a heinous record when it comes to human rights. So, listen to Senator Dick Durbin, top Democrat in the Senate, friend to the president, listen?

(BEGIN VIDEO CLIP)

SEN. DICK DURBIN (D-IL): I know he is a tough job, dealing with gasoline prices, trying to find ways to find new sources and supplies to bring down inflation in the energy sector. And Saudi Arabia is a major player, full stop. So, I have mixed feelings on this. And if the president called me, and I'd say, Mr. President, you can't trust these people. Their standards are not our standards, their values are not ours.

(END VIDEO CLIP)

KING: My translation, you can't trust them, Mr. President, but I sure hope this works out and you get more oil in the system.

KIM: Right. Part of all these like juggling act, difficult decisions that we discussed earlier. And also shows just a little bit easier to be a senator rather than a president when, A, because it's not just Durbin this morning.

KING: Joe Biden feels the same way.

KIM: Right. You know, it's not Dick Durbin, it's Ron Wyden and Ben Cardin, all allies of the president in so many ways, who are encouraging, you know, who aren't - who are feeling very uneasy about this presidential trip to Saudi Arabia. But clearly, again, the White House has made a calculation that this is what they need right now. And we'll see what happens when they come back.

KING: And it puts the press secretary, relatively new at her job, but apart from that press are going have to live through this too. The idea of being the president is on the record saying, the crown prince is a murderer. The intelligence community is on the record saying the crown prince orchestrated a murder, and you say.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: President Biden believe that Crown Prince Mohammed bin Salman was responsible for Jamal Khashoggi.

KARINE JEAN-PIERRE, WHITE HOUSE PRESS SECRETARY: I mean, we've spoken to this before. The president is focused on getting things done for the American people.

UNIDENTIFIED FEMALE: And the question that I asked, though, does he believe that MBS was responsible for Khashoggi's death?

JEAN-PIERRE: The president has spoken to this before and I'm going to just let his word stand. I've already answered the questions.

(END VIDEOTAPE)

KING: Look, it's a really tough job, especially when your president does it about face on you or major shift on you. I give her points for calmness.

KUCINICH: Right. But I mean, she can't say well, being a candidate is one thing and being governing is a whole another ballgame. But that's what's happening here. And she did deflect but the president, I mean, when the president says two different things on something, I mean, which words are we talking about, which stand this time, seems like the ones right now.

[12:20:00]

KING: But the press secretary's job is to not make it a bigger deal and that was pretty good. Coming up. The January 6 committee postpones tomorrow's hearing after the first two, though, a compelling pile of new evidence and a new rift among committee members.

(COMMERCIAL BREAK)

KING: A stone, that word today from the January 6 committee saying, tomorrow's hearing is now off delayed. The committee says because of technical issues, putting together the video evidence. The delay also comes amid apparent committee confusion over the panel's plans. The chairman Democratic Bennie Thompson of Mississippi, says the panel's purpose is not to make criminal referrals to the Justice Department, "that's not our job" Chairman Thompson says.

[12:25:00]

But several committee members disagree, including the Vice Chair, Wyoming Republican Liz Cheney, who says the panel has not decided what to do once it gets to the conclusion of its work. Day two of the committee's public hearings brought a slew of new revelations, among them that a drunk Rudy Giuliani urged Donald Trump on election night to ignore the results and declare victory.

And the Trump White House fractured into team crazy versus team normal is one of Trumps strategies put it over his baseless election lies. The former federal prosecutor, CNN legal analyst Elliot Williams joins our conversation. I'll come back to the postponement in a moment. But let's start with the evidence. The evidence on day two was from election night on, remember election night, November 3. January 6 is the insurrection on, team Trump saying, Mr. President, you lost.

(BEGIN VIDEOTAPE)

BILL STEPIEN, FORMER WHITE HOUSE POLITICAL DIRECTOR (voiceover): Very, very, very bleak. You know, we told him, the group that went over there outlined, you know, my belief and chances for success at this point, and then we pegged it out at, you know, five, maybe 10 percent.

ERIC HERSCHMAN, FORMER WHITE HOUSE LAWYER: I never saw any evidence whatsoever to sustain those allegations. What they were proposing, I thought was nuts. You know, the theory was also completely nuts.

BILL BARR, FORMER UNITED STATES ATTORNEY GENERAL: The claims of fraud were bullshit, completely bogus and silly.

RICHARD DONOGHUE, FORMER U.S. ATTORNEY (voiceover): The major allegations are not supported by the evidence developed. We've looked at Georgia, Pennsylvania, Michigan, Nevada. We're doing our job. Much of the info you're getting is false.

(END VIDEOTAPE)

KING: So, the then president continues to push the big lie, continues to push whether it's state officials, whether it's members of Congress, whether it's the vice presidents, whether it's Justice Department to do his bidding, as corrupt. Is it criminal? Does it cross the line?

ELLIOT WILLIAMS, FORMER FEDERAL PROSECUTOR: Well, here's the thing because of the fact that it goes to the fact that he knew he had lost, which is the central point that the Justice Department anybody would have to prove. It's very significant. Look, there's a video clip that we didn't have of Richard Donoghue, the Deputy Attorney General saying, I told him flat out.

So, he's gotten advice from government attorneys, campaign staff and campaign attorneys, private attorneys and law firms, all saying that you lost the election. So, he was getting legal advice, but still acting. And it really speaks to his intent that he knew that what he was doing was illegal.

KING: And what's compelling about this, as you know, you live in a polarized environment. You know, Trump continues to repeat the big lie, that the committee is not saying, I believe, I believe, they are using it. To you hearing the story from, you're hearing it from Trump's son-in-law, Trump's daughter, Trump's attorney general, Trump's White House council members, Trump's campaign team.

KUCINICH: And they're all saying the same thing except for team crazy as they were referred to yesterday. Listen, he was listening to people who he wanted to listen to, who were saying, what he wanted to hear. He didn't want to be told that he lost, and but it's very clear that he knew that, and he was going to try to fake it till we made it. I mean, it's oversimplification, but that seems to be what he was saying, whether or not he believed it. We don't know. But he certainly had a lot of evidence to the contrary and chose a different path.

KING: I don't know if this is the goal, but members of the committee it started with the Republican Vice Chair Liz Cheney at the first hearing, Zoe Lofgren, democratic California yesterday. They seem to be trying to crack the spell, if you will, and reach out to Trump voters. This is Zoe Lofgren yesterday saying, look, the president not only was lying about the election, he was asking you to send him money. And he was not using that money to fight the elections, he was using it to put in his political conference. Listen?

(BEGIN VIDEO CLIP)

REP. ZOE LOFGREN (D-CA): Will also show that the Trump campaign use these false claims of election fraud to raise hundreds of millions of dollars from supporters who were told their donations are for the legal fight in the courts. But the Trump campaign didn't use the money for that. The big lie was also a big rip off.

(END VIDEO CLIP)

KING: One of the examples she cited was Kimberly Guilfoyle, of course, Donald Trump Jr's. They married, fiance, married partner, $60,000, she got paid $60,000 to give a 2.5-minute speech at the January 6 rally on the list. I assume that's the family and friends' discount.

KIM: Right, right. I mean, they're methodically, I mean, they're trying to show a lot of things but one of them is to try to tell Trump voters who are very beholden to this - beholden to these false claims that they're ripping you off, they're profiting off you. This person who talked for a couple of minutes to introduce, you know, her boyfriend or whoever was she was introducing at the time, and she made a lot of money from that. And I think, especially, how they've tried to really tie back what Trump all the lies that President Trump was saying back to what the Trump voters were echoing that day at the Capitol, I thought was compelling. They closed out yesterday's or they closed out the first hearing with that. You know, they played clips of people who were participating in the insurrection at the Capitol.

[12:30:00]