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Consequential Week For U.S. Economy Amid Recession Fears; Yellen Downplays Recession Risk As Economic Reports Loom; U.S. Inflation Hits 40-Year High Of 9.1 Percent In June; WH Doctor: Biden's Symptoms "Almost Completely Resolved"; New 1/6 Cmte Video Details Trump's Reluctance To Give Jan 7 Speech; Cheney: 1/6 Cmte May Contemplate Subpoena For Ginni Thomas; Luria: "Sure As Hell Hope" DOJ Has Criminal Probe Into Trump; Raging Wildfire Forces Thousands To Evacuate Near Yosemite. Aired 12-12:30p ET

Aired July 25, 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]

JOHN KING, CNN HOST: Hello, and welcome to Inside Politics. I'm John King in Washington. Thank you for sharing your day with us. It is a giant week for the American economy. We get new data on consumer confidence and on growth. The Biden White House waving off recession talk, but even as gas prices drop again, most Americans are feeling punished by inflation.

(BEGIN VIDEO CLIP)

JEAN VACCARINO, USES FOOD BANK: I will probably be homeless by next year because of the rent has tripled. I can't buy clothes. I can't buy for my grandchildren. We can't but anything.

(END VIDEO CLIP)

KING: Plus, the January 6 committee maps out its next stage and it releases new video, showing the depth of Donald Trump's hesitation to condemn the Capitol rioters, and a pair of new warnings about China. America's top general says, Beijing is growing more and more aggressive. The White House though worried about how Beijing will react if the Speaker of the House Nancy Pelosi goes ahead with a planned visit to Taiwan.

First for us, a huge week for the American economy. The Biden White House now forcefully disputing, those who believe we are tipping into recession. By week's end, we will have a better sense, a much better sense of who is right. And just what that means for your budget and for the president's political standing.

Several key indicators out just this week. Tomorrow, the latest consumer confidence index, the June report was dour. Wednesday, the Federal Reserve is expected to again raise interest rates, looking to tame soaring inflation. Then Thursday, the GDP for the second quarter, a glimpse at whether the economy grew some or contracted again. And then Friday, another measure of consumer sentiment.

Let's get to our CNN chief White House correspondent, Kaitlan Collins. Kaitlan, the White House is trying to say, we are not in a recession. What else?

KAITLAN COLLINS, CNN CHIEF WHITE HOUSE CORRESPONDENT: Yes. They're going to be watching these numbers closely, John, but they are downplaying them a bit of what they are going to show particularly that number on Thursday, when we get the measure of how much economic growth there was in the second quarter. And the White House is already trying to say, if it is negative, and if it is negative growth for the second time in a row, that does not necessarily mean the United States is in a recession.

That's the argument that's being made by Brian Dietz, who is President Biden's one of his top economic advisors who was on CNN earlier this morning previewing those numbers, as they are expected to come out, but the White House is watching them very closely. But they seem to be trying to preempt what those numbers are going to look like, John, because this week really is going to be a bit of a moment of truth for the White House on the economic front.

What they have been saying that they are seeing. And of course, the difference in what people are feeling, like that grandmother there was talking about how she couldn't buy toys for her grandchild. And so, what Brian Dietz was arguing today is that if those numbers are negative, they believe they are going to be in --I'm quoting him now, he said, "inherently backward looking."

And what they're pointing to in that period to make that argument, John, is the job growth that happened during the second quarter, that time period between April and June. And saying, look how strong that job growth was. That doesn't necessarily mean that we are going to be in a recession, if there is the negative growth.

And so that, of course, is something that they are going to be watching closely when those numbers come out on Thursday. Also, the inflation numbers on Friday is they've been trying to make this argument that the economy is in a better state than it is, though they say that there are things that obviously need to be done. And these numbers, including the high inflation numbers are troublesome. So, they will be watching them closely. But John, you are seeing a bit of pre-empting them on the White House front.

KING: Kaitlan, stay with us. I want to bring into our conversation to share her insights and her expertise, Rana Foroohar. She is the global business columnist and associate editor at the Financial Times. So, Rana, the Washington conversation is, will the GDP report say are we in recession?

Are we teetering on the edge of recession? Are we not in recession? That's the Washington conversation also, then you have the separate conversation about well, politically, that who benefits or hurts from that. Help us understand in real America? Are we in recession?

RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: Well, you know, I love the way you're teeing this up, because real America hasn't really felt a recovery. Many people in a decade, you know, I mean, we could go way back to the financial crisis. And, you know, a couple years after that, a lot of people felt like, hey, we're still in recession. We could be in a recession, in which you could still have unemployment rates being pretty low, but because prices are rising in all the things that make us feel middle class, heating our homes, driving a car, being able to afford decent food, education, shelter, you know, these things are rising. So, that feels pretty recessionary to a lot of people.

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KING: It does. And so, Kaitlan, one of the part of the challenges, the White House doesn't have a lot of levers that can pull. It we'll wait and see what the Fed does later this week. That's "independent of the White House." But listen to the treasury secretary yesterday. She seems to be arguing the definition, not the pain in American families.

(BEGIN VIDEO CLIP)

JANET YELLEN, TREASURY SECRETARY: This is not an economy that's in recession, but we're in a period of transition in which growth is slowing. And that's necessary and appropriate. We've got a very strong labor market. When you're creating almost 400,000 jobs a month, that is not a recession.

(END VIDEO CLIP)

KING: What is their take about trying to communicate through this? Who are they talking to? Are they trying to talk to financial markets? They're trying to talk to the American people. Who are they trying to talk to economists?

COLLINS: Well, this has been the struggle for them is that it's necessarily the messaging coming out of the White House hasn't always matched what people are feeling. And that's why, you know, despite what economists are saying, and who they're messaging to, you've seen the poll numbers to the president on the economy could be especially bad. And they get worse, actually over time is that has gone on as inflation has continued to rise.

And I think when it comes to the talk, and this question that has been facing them repeatedly, for the last several weeks of whether or not there is a recession, look back at what happened in 2008. And my colleague, Kevin Liptak, looked at this, this research and the National Bureau of Economic Research, it did not say until December of 2008, that the economy in the United States had been in a recession. And then I had been in a recession for a year at that point.

And so, it's not always necessarily declared formally that it is a recession, when it is a recession, oftentimes, that can be after the fact. And so, I think the struggle of the White House has been trying to kind of achieve the middle balance on is pointing to the good things, the good indicators in the economy, the hiring, and whatnot in jobs growth, but also trying to still empathize with people who are saying, well, this is not what we're feeling.

You know, gas prices are going down, but they're going down over the last 30 days or so it hasn't changed the family budget, but that much - that is kind of really the needle that they are trying to throw out here at the White House. And if you look at the poll numbers, not always successfully so.

KING: And right. And, again, Rana, it is incredibly complicated. We're coming out of the COVID pandemic. There are global factors on this. So, there's a lot of data that says, wow, that's great. And then there's a lot of other data says, oh, that's terrible. To Kaitlan, just note, if you just look at the national price of gas, something in American commuter deals with every day, a year ago was $3.16. A month ago, it was $4.91 a gallon on average. Now it's down to $4.36.

That's a trend that's good for the American consumer. It's also good for the American president because of the politics. But you look at this, eggs up 33 percent compared to a year ago, milk up 16 percent, coffee up 16 percent, shelter up nearly 6 percent. It's what are we going to learn this week? What are the American people going to learn this week from all these new data points we're going to get about tomorrow, next week and next month?

FOROOHAR: Yes. Well, I hope that they will learn two things. One, these are not trends that are the fault, really, of this White House. These are trends that have been building for some time. I think that the biggest factor right now, the two biggest factors, actually inflation are four years. The fact that we've had low interest rates and easy money, that's a Fed issue. And the Fed has limited tools.

It's not like they're trying to do anything wrong. They can only, you know, put money into the economy and raise asset prices. That doesn't change the story on the ground. It doesn't build a new factory. It doesn't create a new widget. It doesn't come up with a new idea that creates jobs.

The Biden White House has actually been trying to create some fiscal stimulus, which by the way, every Fed Chair since Ben Bernanke has said, we desperately need. We cannot do this alone. You know, all we can do is control interest rates, can't build a new factory, can't fix roads or improve the carrying economy.

This White House is trying to do those things. But it has its ability to maneuver has been affected by, A, gridlock in Washington, but also some really unexpected vectors like COVID, like the war in Ukraine, all of which have uncovered. It's almost like a scrim has been pulled back on problems and supply chains and problems and globalization that have been there for decades. But they're all hitting the fan at the same time. So, that's one thing we need to think about.

Second thing companies. You know, when you talk about shelter rising, you need to start talking about the fact that the large corporate owners are the biggest landlords in America now. And that's something I think the White House is going to be driving forward as well.

KING: We'll watch that play out again. We're going to learn a lot this week. Rana, thank you. And Kaitlan, before I let you go, we did get a letter. A new memo from the president's doctor just last hour. The president of course, on Friday diagnosed with COVID. Dr. O'Connor says, he's completed his fourth day of Paxlovid. What else in this letter from the White House?

COLLINS: Yes. This is from Dr. O'Connor, President Biden's physician. He says his symptoms from COVID-19 have so of course since he tested positive are almost completely resolved. He says he has a little bit of congestion and some hoarseness in his voice. But you're right. He has just finished that fourth day of Paxlovid.

And the doctor also noted in this letter that the president over the last several days has been trying to be extremely conscientious of those around him. Of course, he is the president. There is still a small staff around him. It's smaller than it typically would be if he did not have COVID-19, but till the staff around him.

[12:10:00]

And then he's been very aware of that because BA.5 the variants that they believe President Biden has, is so contagious that they are trying to be careful and to make sure it doesn't spread. I am told you that the president has been inside for a few days, and like many Americans who have had COVID-19 has been a little bit restless, John.

KING: I can only bet. I can only bet. Little hot to get out and take a walk around the grounds, but I think I would try to sneak one in. Kaitlan Collins, at the White House, appreciate it very much. Rana, thanks to you as well. Up next for us. A surprise in the January 6 committee. The panel puts out a new video, detailing how Donald Trump crossed out lines of his January 7 speech condemning the Capitol rioters.

(COMMERCIAL BREAK)

KING: Some new details today about the January 6 committee's next moves. The panel set to spend August working behind the scenes, putting new witnesses on the record including, former Trump cabinet members. Among the witnesses high on the committee's target list, Ginni Thomas, the wife of course of the Supreme Court Justice Clarence Thomas, and she was a "Stop the Steal" rally collaborative.

[12:15:00]

Today, the panel also making clear it has no intent of being quiet, while it does its work. This is a new video from the committee, showing how reluctant, how very reluctant Donald Trump was to speak out the day after the insurrection.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE (VOICEOVER): Do you recognize the handwriting?

IVANKA TRUMP, FORMER PRESIDENT DONALD TRUMP'S DAUGHTER (voiceover): It looks like my father's handwriting.

UNIDENTIFIED MALE (VOICEOVER): It looks like here that he crossed out that he was directing the Department of Justice to ensure all law breakers are prosecuted to the full extent of the law. We must send a clear message, not with mercy but with justice, legal consequences must be swept in firm. Do you know why he wanted that crossed out?

UNIDENTIFIED MALE: I don't know.

UNIDENTIFIED MALE: What's the implication that the president was in some ways reluctant to give that speech?

UNIDENTIFIED MALE: Yes.

(END VIDEOTAPE)

KING: Let's get straight up to Capitol, and CNN's Ryan Nobles. Ryan, now the committee they're saying we might be doing a lot of things behind the scene, but a little in your face to Donald Trump.

RYAN NOBLES, CNN CONGRESSIONAL CORRESPONDENT: Yes. And I think what this also demonstrates, John, is just how much they left on the table ahead of that hearing on Thursday. I'm told that their original plan, when they went through their first rehearsal. The hearing could have lasted as long as four hours and they knew that just wasn't palatable for primetime audience. So, they paired it back, cutting out almost half of what they had planned.

And that video that we saw this morning is a part of it. And it's important to point out, the point that they're trying to make here about Donald Trump's motivation on January 7, the day after the riot took place up here at the Capitol. Listen to what his counsel, the White House Counsel, Pat Cipollone, had to say about it.

(BEGIN VIDEO CLIP)

PAT CIPOLLONE, FORMER TRUMP WHITE HOUSE COUNSEL: He needed to express very clearly, that the people who made the violent acts, went into the Capitol, did what they did should be prosecuted, and should be arrested. That needed to be state (Inaudible). They did not represent him or his political views in any form or fashion.

(END VIDEO CLIP)

NOBLES: And so, the question now is where does the committee go next? They've hinted that they want to reach out to more of the members of the Trump cabinet, who were in and around the White House around January 6. What their motivations were, either for staying or going? We know that many of them did resign in the wake of January 6.

And then there is of course, the question of Ginni Thomas. We know that she was in contact with people like Mark Meadows and John Eastman, the conservative lawyer. What the committee is wrestling with right now is just how involved she actually was. And the attempts to stand in the way of the certification of the election. And then whether or not her husband was involved in that.

I think at this point, the committee is not ready to make that declaration, or take it that far. And they do have a whole host of other things that they're concerned about that maybe just a might a bit of a bigger priority than Ginni Thomas right now. But John, as we've seen from the very beginning of this investigation, they will go wherever it leads. If it ends up with Ginni Thomas, they are not afraid to go there.

KING: Ryan Nobles, live on Capitol Hill. Ryan, thank you so much. Let's bring the conversation in the room. With me to share their reporting and their insights, Seung Min Kim of the Associated Press, Marianna Sotomayor of The Washington Post, USA Today is Francesca Chambers, and the former federal prosecutor Elliot Williams.

Let's listen to the point about Ginni Thomas, a former Tea Party activist was deeply involved in organizing the "Stop the Steal" rally, of course, the wife of a sitting Supreme Court Justice Clarence Thomas. Liz Cheney, the Republican vice chair of the committee says, subpoena maybe.

(BEGIN VIDEO CLIP)

REP. LIZ CHENEY, (R) VICE CHAIR JANUARY 6TH COMMITTEE: We certainly hope that she will agree to come in voluntarily, but the committee is fully prepared to contemplate a subpoena. If she does not, it's very important for us to speak with her. And as I said, I hope she will agree to do so voluntarily. But I'm sure we will contemplate a subpoena if she won't.

(END VIDEO CLIP)

KING: What is their timetable? In the sense that the committee is taking August to do behind the scenes research. Would they do that, they can issue a subpoena on a public hearing. They could issue a subpoena. I asked him the question in the context of you have August, you have September, then we're getting close to an election. They can run through the end of the year, they can run through January, even if Republicans take control of the House. The question is, what is that - do they have a clear timetable?

MARIANNA SOTOMAYOR, CONGRESSIONAL REPORTER, THE WASHINGTON POST: Right. They know and they've known for a long time that they have an end date. And it is whenever speaker Kevin McCarthy takes his Republican majority, likely, potentially, maybe beginning of next year, but they are really running the traps. So, you have seen them, at least in the last couple months make the argument that maybe - they're not even maybe, that Trump made. He had some criminal intent here on January 6.

This next month is really going to be, like you said it's, they can issue subpoenas, they can put out statements. They're going to continue to ask people to come in. They have already said that there have been a number of people who have come forward since these hearings started. It's possible those could be potential new witnesses in September, which is when the next tranche of hearings are supposed to say.

[12:20:00]

KING: They know things, we don't know of course. So, we are operating a little bit blind here, but as a former prosecutor, you have to make decisions. You do have a calendar and you do have a ton of new witnesses. They say they're getting new evidence all the time. Does she strike you as a witness of such significant value you'd be willing to potentially have a subpoena fight?

ELLIOT WILLIAMS, CNN LEGAL ANALYST: Probably not. And you know, there's a couple of reasons why. Now look, most witnesses in Congress end up negotiating and coming in for some reason. Look at Pat Cipollone, who's the person, the White House Counsel former. The person who probably has more privileges than anybody else in America is a former lawyer, is a lawyer and senior White House. If he can come in, Ginni Thomas can.

Now the question is, is it worth the litigation fight and all the drama and the circus that would come around her? And it's probably not. As you saw with Cassidy Hutchinson and others, sometimes it's the junior folks in the room, who can provide the far more useful testimony when the boss isn't the one who's coming in. So maybe they can get somebody else to provide.

KING: Or if they do have a debate about a subpoena, then maybe they'll tell us why they think it's that important. Maybe again, maybe they know something we don't. One of the big questions from the beginning has been, will the committee send a formal referral to the justice department, saying we think you should charge Donald Trump or anybody else for that matter. Elaine Luria, who led the committee presentation the other night, says we don't have to send them a piece of paper, the attorney general should just pay attention.

(BEGIN VIDEO CLIP)

REP. ELAINE LURIA (D-VA): Sure, as hell hope. They have a criminal investigation at this point in the Donald Trump. I have no direct knowledge of the status of their investigations. But what I'd say is, I can tell the department justice is watching our hearings closely. Merrick Garland has already told us, he's listening. And if he's watching today, I tell him, he doesn't need to wait on us, because I think he has plenty to keep moving forward.

(END VIDEO CLIP)

KING: This has been a sort of a constant conversation debate among committee members, like how do you send a formal reporter. You just say, hey, Mr. Attorney General pay attention.

SEUNG MIN KIM, WHITE HOUSE REPORTER, ASSOCIATED PRESS: Right, right. Well, I think I'll let the lawyer at the table to talk about whether what an actual criminal referral to DOJ does. But it's pretty clear that everybody, including Merrick Garland, including Justice Department, lawyers are paying attention to these hearings.

And we can't underestimate the fact that after months of, sort of a lack of cooperation or lack of communication between the January 6 committee and the Justice Department, there have been more coordination or communication. These days, they are sharing transcripts, they are sharing notes.

And clearly, you know, Merrick Garland is seeing the hearings, like the rest of us. You know, you had the comments from Elaine Luria. I think Adam Kinzinger also said this morning that, you know, like now after a month of the Justice Department not doing anything, they're finally doing something. So, they are clearly watching things behind the scene.

KING: I want to come back to that legal question in a second. But one of the committee's clear goals. They say number one, we have to build the historical record, because that's important, and it is, it's critically important. But number two, maybe they bring evidence to the table. Number three, there is no question they want to disqualify Donald Trump. They want Republican voters to think no, I'm not going to do this again. I'm just not going to do this again. You do see.

These are some editorial headlines here from the New York Post in the Wall Street Journal, both newspapers owned by Rupert Murdoch, traditionally, a Trump friend, Trump's silence on January 6 is damning. The president who stood still on January 6, it is interesting to see that's the - Trump would call that the Republican establishment, but former friends turning into like, maybe we shouldn't do this again.

FRANCESCA CHAMBERS, WHITE HOUSE CORRESPONDENT, USA TODAY: But either way, it's going to come down to what the Republican voters and a Republican primary thing Donald Trump does decide to run again. And whether or not, they're the ones who are watching at January 6 hearing, if they're already in the Mac reverse (Ph) and behind Donald Trump. You know, those aren't the people who are typically watching these.

So, it's going to come down to them. But when it comes to the specific crimes that he may or may not have committed, we're talking about a potential criminal referral and also kick this to you also. But Liz Cheney has said that, you know, he was clear, he was derelict in his duty. It's clear that there was serious misconduct there. But lawmakers have yet to specify which exact crimes they be think he committed.

KING: So that helped me with this, help me with this because Simeon, the former department, justice prosecutor in the Enron case, told this to the New York Times. I say, I would think as a layman, while the January 6 committees do my homework for me. They're sending me these reams of on the record testimony, they're sending me these discs with all this videotape testimony.

Simeon says, there are almost certainly examples of the recordings of witnesses making statements that complicate their assertions, prosecutors want their witnesses testifying at trial for the first time. This is a problem. He says not a fatal problem, explain.

WILLIAMS: So, you see reams of testimony, as a former prosecutor, prosecutor would say, oh God, reams of former testimony. Wait a second. Number one, a lot of things in there you have to disclose to defendants by law. And if you disclose it to them, you're giving hundreds of thousands of pages to them. And they have to have time, months and months and months some time to review it. Number one.

And number two, they might conflict. They might say something that contradicts something that they could say in court. So, it actually, yes, they're providing a great public service, but kind of gumming things up for the Justice Department.

KING: All right. There you go. That's why we have the lawyers. When we come back. Millions of Americans facing severe heat alerts today. And out in California, fast moving wildfire grows more than a thousand acres overnight. We're live to Mariposa County, next.

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[12:25:00]

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KING: More than 60, more than 60 million Americans are facing scorching hot temperatures today. Several cities in the Northeast, including Boston breaking records with triple digit temperatures over the weekend. Out on the west coast, climate crisis of a different sort. You see it right there, a fast-moving California wildfire raging, Yosemite National Park. The oak fire erupted over the weekend has quickly grown to nearly 17,000 acres. The fire forcing thousands in that area to evacuate. CNN's Camila Bernal, live in Mariposa County with the latest. Getting better or getting worse?

CAMILA BERNAL, CNN NATIONAL CORRESPONDENT: Getting a little better, but still a lot of work to be done here because these flames are moving quickly, John. And authority say that part of the reason is the drought. This ongoing drought in the state of California. You can see it on the ground, and you can also see exactly where the flames came into this property.

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