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U.S. Adds 528,000 New Jobs In July, Unemployment Dips To 3.5 Percent; Massive Jobs RPT Surprise As Fed Considers 5th Rate Hike Of 2022; Biden Scores Victory As Sinema Agrees To Sweeping Economic Bill; Senate Dems Strike Sweeping Economic & Climate Deal; Hickenlooper: Democrats Health, Climate Deal "Breathtaking"; Dems Vow To Fight For Abortion Rights Amid GOP Opposition; Trump Lawyers In Talks With DOJ About Jan 6 Criminal Probe; Sources: Trump's Legal Team Warned Him Indictments Are Possible. Aired 12-12:30p ET
Aired August 05, 2022 - 12:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN KING, CNN HOST, INSIDE POLITICS: Hello, and welcome to Inside Politics. I'm John King in Washington. Thank you for sharing an incredibly busy news day with us. Beyond blockbuster jobs report, despite Federal Reserve efforts to slow the economy, hundreds of thousands of more hirings last month. The unemployment rate, it's a 50-year low.
Plus, a green light for big pieces of the Biden agenda. Kyrsten Sinema says, yes, to a big healthcare and climate package. A Senate colleague key to that compromise, takes us inside the negotiations. And this CNN exclusive, sources say Donald Trump's legal team is now talking to the Justice Department. It signals there's a big and ugly fight coming over what the former president can shield from federal investigators.
But we begin the hour with a wow. The July jobs report gives President Biden important economic momentum, unemployment hitting a 50-year low, 500,000 plus more Americans hired just last month. So, forget recession talk, at least in the short term. Yes, inflation is high, but the recovery is still humming.
The economic news caps the giant week for the Biden presidency, bipartisan wins on manufacturing, on help for veterans and a strike to take a top terrorists off the battlefield. And now, a leap forward for the Democratic agenda. Arizona Senator Kyrsten Sinema, the lone remaining democratic holdout on a massive deal to invest in healthcare and climate is today a, yes.
But we start on the stunning and surprise jobs numbers. CNN's Matt Egan joins us now. Matt, tell us more.
MATT EGAN, CNN BUSINESS REPORTER: John, this is a blockbuster number. Here is the best part. No one saw it coming, 528,000 jobs added in July, the consensus among economists was less than half of that. And there was whisper numbers on Wall Street for basically no growth at all. Instead, we get strong hiring across the board.
And this blockbuster jobs growth has lowered the unemployment rate to 3.5 percent. If you want a lower figure, you've got to go back to 1969 under Richard Nixon. So, today's report should quiet the talk of an ongoing recession. Yes, GDP contracted and back-to-back quarters, but economies that are in recession, they don't add half a million jobs in a single month.
But remember, the American economy, it doesn't have a jobs problem. It has an inflation problem. And the Federal Reserve has been trying, trying pretty hard to get inflation under control by cooling off the jobs market. They say that these kinds of numbers are just not consistent with healthy inflation.
So instead of cooling off the jobs market, we saw both hiring and importantly, wages accelerate. And that is exactly the opposite of what the Federal Reserve wanted. John, I think that today's numbers suggest that the Fed has its work cut out for it. They may be trying to cool off this jobs market. But for now, the jobs market is not listening.
KING: No, not listening at all. Matt Egan, appreciate you're kicking us off. Let's dig deeper now and go inside the numbers. Peggy Collins is Bloomberg Washington bureau chief. Great to have you here. Let's just start there, 528,000 jobs edit. The unemployment rate at a 50- year low, 3.5 percent. That's wow. That is just wow, both for the American people who can find a job and probably negotiate a raise. And you would think for a president to his three months from a midterm election year.
PEGGY COLLINS, WASHINGTON BUREAU CHIEF, BLOOMBERG: That's right, John. I mean, we said, wow, in the newsroom this morning, when it came in basically double what people thought it was going to happen this morning. And it does show that the economy is in a strong place. And that employers are still hiring.
When we dug into the numbers, a couple of things stuck out though, it's the hiring was strongest in areas like accommodations, food services, leisure, a lot of the areas that got hit hardest in the pandemic, but it also showed that wages are accelerating. And that's where people who are thinking about the Fed and where the markets are going to go are zeroing in because that's inflationary.
KING: Right. So, let's walk through this. If you go back to March 2020, I just want to show in the graphic here. You see, that's the COVID collapse, right? The economy just collapsed from COVID. And you see the slow and steady growth back as it goes. The economy now is back at or even above where it was before COVID.
If you're President Biden, that's one of the things you ran on. But to your point, the private sector jobs that were lost, are all back into the economy. And yet, it creates this strange idea that great news can somehow be in some ways troubling news.
COLLINS: That's right, because the July report is backward looking, right. And it's certainly good news for the economy and for lots of families all around the country. But what we are trying to think about now is, how does the Fed try to dial down this hot economy, and in doing that, they're going to have to raise interest rates potentially even faster than people thought.
So, the question is, can they do that and what people are calling a soft landing? Or will they crash us into a recession, where some people will then lose their jobs?
KING: And that's what gets so tricky for people out there, who might think, I can get a job. This is a great economy, but I'm paying, you know, gas prices down 52 days in a row, I think. But otherwise, you're paying still a lot at the grocery store like.
But you mentioned the Fed tried to tap the brakes on the economy once, twice, three times and four times. The economy essentially said go away, and a couple of those rate increases were the big rate increases. So, it's the only weapon the Fed really has, what now?
COLLINS: That's right. Well, people think they'll raise interest rates 75 basis points, which is another big one. They did it in June and July. And the question really is, will that start to seep into the economy? We've already seen the housing market start to slow because of these interest rate hikes. Will we see businesses start to slow down in terms of hiring or even, you know, building out because it's going to be more expensive for them potentially to take out loans. Those are some of the things that people are looking for.
KING: So next week, we get CPI, Consumer Price Index, that's the inflation number. It's hard when you look at an unemployment report. And your big question is, you know, obviously, it's about jobs. It's about employment. We're trying to figure out, is there anything in here that tells me inflation is going to get better? Or is it going to keep getting worse? When will we know that?
COLLINS: That's right. So, the next CPI report comes out on Wednesday, so we don't have long to wait. The wages are a big thing, that certainly adds to the inflation numbers. Certainly, it's a good thing if your wages are going up. But if they're not keeping up with inflation, with those food prices, the gas prices, that's a problem.
We are expecting the food and gas prices to come off a little bit. The other thing to watch out for though our rents. People haven't seen big numbers on their rent increases and that adds to inflation and those numbers that we're expected to see on Wednesday.
KING: Complicated time to say the least the economy. Peggy Collins, it's grateful. Thank you for coming in to help us understand it. Now, let's move to the Biden agenda. And all systems go on a massive package of investments in climate and healthcare. The Democratic leadership today get this, says its goal is to get this measure to the president's desk sometime next week.
The big breakthrough, Arizona's Kyrsten Sinema says, she is ready now to move forward on the deal. Getting Sinema to yes, required stripping out a tax provision that would hit hedge fund and private equity managers. But the final math is what matters, 19 months now into the Biden presidency. And after multiple failed attempts that collapsed because Democrats could not resolve family differences. The president finally looking at a no doubt about it victory on some, emphasis some of his core campaign promises, get up to Capitol Hill. CNN's Melanie Zanona. Melanie, how this happened?
MELANIE ZANONA, CNN CAPITOL HILL REPORTER: At first you don't succeed, try, try again. So, after 19 months of work and multiple failed attempts, they finally were able to come together on the package. The big breakthrough, as you mentioned was Senator Kyrsten Sinema. The last remaining holdout agreed to get on board with this package. After they offered her a number of concessions, including removing the carried interest provision, and also adding some drought funding.
And so, with that, the final package has taken shape, and it includes nearly $370 billion for climate and any energy provisions, allowing Medicare to negotiate drug prices, capping out of pocket prescription drug costs at $2,000. Extending Obamacare subsidies, which were set to expire, a 15 percent corporate minimum tax and a newly added 1 percent excise tax on stock buybacks.
And Senator Chuck Schumer says, with that all 50 Senate Democrats he believes will vote for this bill. But there is one last remaining puzzle piece that needs to fall into place, and that is the Senate parliamentarian. That will make a determination about whether this package complies with special budget rules that are required to use this party line process.
We are expecting a ruling potentially as early as today. But regardless, Schumer has set a vote beginning tomorrow at noon. A procedural vote that will then require a max of 20 hours debate, followed by a vote-a-rama, and then final passage. Of course, the House also needs to come back and pass this. But theoretically, if everything goes to plan, this could be on Biden's desk by the end of next week, John?
KING: August weekend vote-a-rama, what more could we ask for now. Melanie Zanona, live on Capitol Hill. Melanie, thank you, very important news there. Up next. We'll go inside these high stakes' negotiations. The Senator credited with helping strike a key final compromise on that budget reconciliation bill, joins us right here next.
KING: So, just how does Senate Democrats finally get to 50 votes on this big new climate and healthcare package. Democratic Senator John Hickenlooper, Colorado is here with us. If you believe your colleagues, sir, you were instrumental in this that Senator Sinema one of your colleagues wanted to remove one of the taxing provisions. And you came up with an alternative say, you know, what she wants. Here's a way to make up the money, is that true? SEN. JOHN HICKENLOOPER (D-CO): Well, I was talking with Mark Warner and myself, and Michael Bennet was talking to Senator Schumer about a different part of the initiative. And it became clear that Senator Sinema was going to need some - she was going to create some need for adjustments.
So, I suggested that, you know, some sort of an excise tax on the stock buybacks, which had been in play before, but then it disappeared. I never - it wasn't one of those things that I'd heard Joe Manchin vociferously claim, complain about oral care, so I just suggested that, well, this is something and maybe go to half of what it had been, it had been a 2 percent excise, maybe make it 1 percent to make it more, you know, more bearable.
KING: And so, I want you to talk what you can about the significant substance. I'm going to get to the politics of the substance first. These are landmark investments in the climate. These are healthcare changes that Democrats have long wanted to do. What do you believe is the most important and how's it going to change the lives of people out there?
HICKENLOOPER: Well, I think it's breathtaking. And this will be the largest investment in climate rescue in the history of the planet. No other country has ever had an initiative of this level. And what it's going to do is drive change and accelerate our ability to come up to scale on wind, solar, maybe clean nuclear, or maybe green hydrogen.
I mean, we are focusing on all of the above to make sure that we can get to - I mean, we think we can get to, you know, President Biden made that during his campaign, he was going to reduce emissions in the United States by 50 percent by 2030. Well, this gets us to a 40 percent reduction, that's 80 percent of President Biden's campaign promise. That's remarkable.
And then you look at for decades working on trying to rein in prescription drug costs and the inflation and prescription drugs. Now Medicare is going to get to negotiate it. We're going to put caps for senior citizens. We're going to have the subsidies for people getting their insurance through the exchanges, that's going to extend that and expand that savings for, you know, millions of American people. This is a pretty powerful package.
KING: You say powerful package. As you know, you're not on the ballot this year. But we're in an election year, we're less than three months from that election. This is what your colleague, the Republican colleague, Rick Scott, who happens to run the Republican Senatorial Committee. So, he's raising money to help Republicans to try to take back the Senate. Senate Democrats are using the inflation crisis, they helped Joe Biden create with reckless government spending to justify even more reckless government spending. This makes no sense. Answer, Senator Scott?
HICKENLOOPER: Well, I think Senator Scott needs only to look down the coast of Florida and the devastation that these more frequent and more intense hurricanes have caused to Florida and all around the Gulf Coast, all around the world, the wildfires. I worried that we can't call the drought in the southwest anymore, because it is so prevalent, and it seems to be growing and continuing much longer than a traditional drought. This might be desertification. Some people call it our ratification.
But you know, we're going to have less water. The cost of that did not address that is, is the type of definition of insanity that the cost of not addressing it now, far, far, far will outweigh what we're spending to get clean, wind clean energy and clean air.
KING: So, let me ask you the political question then. Democrats have made this a priority. You mentioned President Biden campaigned on this as the climate and the healthcare investments had been on the Democratic wish list for quite some time. Why did it take 19 months? I know it's 50-50s hard Senate math. But you were a mayor, a governor, and a businessman before you came to Washington.
Why couldn't the Democrats figure out what do we need to strip away? Why can't we just get, at least pieces of this done and get to 50 a lot sooner than 19 months and a lot sooner than three months before the election where maybe people don't see the results in time to give you credit?
HICKENLOOPER: Well, I think President Biden deserves credit for taking the time. Again, I have a tremendous sense of urgency around climate change. I mean, this effort to climate rescue is long overdue. That said, he got it done, and no one else has ever been able to get it done. And in a 50-50 Senate to look at, if you look at all the things he's done, the bipartisan infrastructure bill, the PACT Act just got passed this past week.
You go down all these major initiatives, some bipartisan, some not, but most of them bipartisan. This is in the first few years with the 50-50 majority, the people is sort of like the economy. We have the greatest job numbers and the lowest unemployment in 50 years, and people are - the markets going down and before, you know, wringing their hands. People look at President Biden and say, well, why haven't you done this faster?
KING: Well, on that point that what happened there? The president has record low job approval numbers right now. You just went through an impressive list, and you're right. There is no disputing what has been done. And yet, the president's approval rate laid in the lower than where Barack Obama was at this point, lower than where Donald Trump at this point. Barack Obama lost 63 seats in the House; Donald Trump lost 40 plus in the House. Is this Joe Biden's fault? Is just a failure to communicate? Or is it just the thick climate out there because of COVID and inflation and everything else, or both. Or what?
HICKENLOOPER: Well, I don't think the communications out of the White House have been perfect. In other words, when they first got COVID under control, they said COVID is gone. And then we got a second wave. When they were first talking about the break down in the supply chain that cause, really caused gas prices, oil, crude oil to go up so high. They said, well, this is going to be transitory. I would have urged more, not that anyone ever asked me, but I would have urged that they'd be more cautious in their projections of good news. But that being said, they were coming out of the worst pandemic in the last century, in 100 years that disrupted supply chains and we're down. Our economy now is just in time. So, no one has inventories to buffer against these kinds of disruptions. This the first time we ever shut down and we really shut down the entire global economy.
My gosh, of course, we're going to have serious challenges. We bounce back better than most people. If you go back to what people were thinking back then, most people say, if they could have seen where we are right now in August of 2022, they would have gone, oh, my God, what a recovery. And yet, you're right. He gets no credit. A little bit poor communications and I think people are digesting this. Again, they went through the pandemic.
KING: The great state of Colorado has to its east the great state of Kansas. Common sense conservatives in Kansas center pretty loud message on abortion this week, where you had an overwhelming vote to not amend the state constitution, not opened up essentially for the legislature to pass a ban or severe restrictions on abortion. A, what is that message? And B, from your perspective, what the Democrats need to do in the wake of Roe being wiped out, and Dobbs now being the law of the land.
HICKENLOOPER: Well, I don't think we should over emphasize the political nature of this. Democrats have always stood for making civil rights of all people a priority. That's a basic fundamental component of a foundation of everything that Democrats believe. And a woman's right to control her own healthcare and her own body is a principal part of that. But I don't think people judge elections and we've seen many, many Democrats by only talking about, you know, the right to an abortion. We've seen many Democrats lose, because, you know, it's about inflation.
Right now, people are worried about their jobs, and is their pay going to keep up with inflation. These are real household concerns, kitchen table concerns. But what we saw in Kansas, definitely demonstrates that women are going to come out in numbers, and this is going to be a primary issue for them. If they don't want to have their right to control their own bodies taken away.
KING: You have no doubt, just say yes or no, because we're out of time. You have no doubt, now that you have 50 votes, you're going to pass this deal. The president will get it by next week.
HICKENLOOPER: You can never say never, but I have microscopically small doubts.
KING: Senator, thanks for coming in and we'll continue the conversation. Appreciate it very much. Ahead for us some exclusive CNN reporting, important CNN reporting into the Justice Department's January 6 probe. Former President Trump's legal team is now in direct communication with DOJ officials.
KING: New science today the Justice Department's criminal probe into January 6 is moving ever closer to Donald Trump. Some new CNN exclusive reporting, Trump's legal team is now in direct communication with the Department of Justice. Sources tell CNN these discussions right now, focus mostly on whether communications between Trump West Wing staff and the former president can be shielded from the investigation if Trump claims executive privilege.
With me to share their reporting and their insights, CNN's Manu Raju, Jackie Kucinich of The Daily Beast, Laura Barron-Lopez the PBS NewsHour, and CNN legal analyst Carrie Cordero. Let me start with you, counselor. If the former president's lawyers are in direct communication with senior attorneys at the Justice Department, that tells you what?
CARRIE CORDERO, CNN LEGAL & NATIONAL SECURITY ANALYST: It tells me that they are looking for information. They by going in and engaging in a dialogue with the Justice Department, they're there, I think, in part to be able to by asking questions, find out as much as they possibly can about the scope of the investigation, about whether former Chief of Staff Mark Meadows is going to be charged about how close the investigation is coming to the former president.
So, while they can engage in conversation about executive privilege and attorney client privilege, as it relates to the former president, I think the most they have to gain through these meetings is what they can glean from them.
KING: It's a fascinating moment, the timing, because we know we can put up on the screen. We know the federal grand jury looking into this. The fake electors plot should be seized voting machines. It's not just about the violence of the Capitol on January 6, includes a who's who of the Trump administration and the president's outside circle.
People who fought the plan and people who were involved in the plan to top aides to Mike Pence, the White House Counsel and his deputy in the middle of your screen there, to the right of your screen people who were trying to help Trump, both inside the Justice Department and its Attorney John Eastman. You look at that group. If you were Donald Trump's lawyers to Carrie's point, you'd want to know, what are they saying?
JACKIE KUCINICH, CNN POLITICAL ANALYST: Well, right. And that's one of the reasons, they're trying to determine what is executive, what falls under executive privilege. But I think, you know, the one of the things in the report that really got me, was the fact that Trump still has skepticism that he's going to be indicted, he's not convinced, and there isn't any indication, you know, one way or the other. But I think that speaks to how he really hasn't been held accountable for many things in his life, both inside and outside of office. So, why should this be any different? It seems to be kind of where his head is.
KING: And in this statement from a spokesman for the former president, the spokesman will not put a name on the statement, which to me is odd. I'll just leave it at that. But how can any future president ever have private conversations with his attorneys, counselors, and other senior advisors if any such advisor is forced, either during or after the presidency, in front of how they take a shot at the select committee?
It's a select committee up in Congress, thank you very much. Or other entity and forced to reveal those privileged confidential discussions. It's a political statement as much as a legal statement, they go attacking the Congress there.
LAURA BARRON-LOPEZ, WHITE HOUSE CORRESPONDENT, PBS NEWSHOUR: Yes. And it's also because ultimately, what the DOJ is trying to determine is whether or not the president committed any crimes, whether it was defrauding the U.S. and the electoral system, whether it was objecting to, you know, obstructing, excuse me, a congressional proceeding. And so, ultimately, yes, the president has executive privilege and can have private conversations with his lawyers. But if a law was broken, then that's a different story.
KING: The conversation about this is so different than it was a couple of weeks ago, where we didn't know as much about what the grand jury was doing, number one. We didn't know that Mike Pence's attorney and his chief of staff had been, and we didn't know that they were trying to get Pat Cipollone and his deputy, Mr. Philbin into the grand jury. So, now people say, wow. OK. The Justice Department is actually doing some serious business.
Among those saying, wow, is Liz Cheney, of course, the top Republican on the committee in Congress. There have been some criticism on Capitol Hill saying, why isn't the justice department doing more? Now, she says, maybe I should trust this.