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Pentagon: "Reviewing Options" On How To Deal With Chinese Balloon; Pentagon: Chinese Balloon At 60,000 Ft, Has Ability To Maneuver; Report: Unemployment Rate Drops To 3. 4 Percent, Lowest Since 1969; From MAGA Flamethrower To Powerful Chair: GOP Rep. Jim Jordan Attempts To Rebrand. Aired 12:30-1p ET

Aired February 03, 2023 - 12:30   ET



JOHN KING, CNN HOST: Can they answer the question why and why now?

KYLIE ATWOOD, CNN NATIONAL SECURITY CORRESPONDENT: Well, that is the problem here. They can't really answer exactly, you know, why this is over the U.S. And a lot of the specific questions as to, you know, what the next few days here look like. We heard just from the Pentagon that this balloon is expected to be over the United States fora few days, and that is significant.

But when it comes to the Secretary of State's trip to China, that was expected to be just over the weekend, it's been pulled down just hours before he was supposed to get on that plane, John. He made a phone call to his Chinese counterpart this morning saying that the U.S. had assessed that conditions weren't really in a good spot right now for him to be making that trip, calling it unacceptable that this balloon is over U.S. airspace, saying it violates U.S. sovereignty.

Now the question is, when will they be able to reschedule this trip? Because they're saying that it's being, you know, delayed right now, but they aren't giving us a date for when they're actually going to have this visit back on the board. And I asked the Senior State Department official, you know, what conditions have to be met for this trip to actually be rescheduled? They don't have an answer to that.

And, you know, one thing heading into this trip, as you said, they wanted to talk about a lot of different things. But a State Department official said that this balloon being over the United States, would have severely limited what they were able to cover in that meeting, making it simply unproductive. John?

KING: A remarkable moment. Kylie Atwood, appreciate the important reporting there.

Let's get some insight and expertise now from a man with an unrivaled resume, the former Defense Secretary, former CIA Director, former White House Chief of Staff Leon Panetta. Leon, grateful for your time on this day. I want to start with some of the capability questions. Then we'll pull out and get to the big picture of maybe why or what this is about. In terms of capability, based on your experience at the CIA and at the Pentagon, does the United States, first and foremost, have any military capability to get up to 60,000 feet and capture this balloon? I assume that would be the primary wish. Can we get it? Can we see it? Can we judge the capabilities inside it?

LEON PANETTA, FORMER DEFENSE SECRETARY UNDER PRESIDENT OBAMA: Well, I'd be very surprised if we didn't have that capability at 60,000 feet, it is our airspace that we have to protect. So I suspect that there are ways to be able to go after this balloon, whether to shoot it down or whether to intercept it in some way or whether to interfere with what the maneuverability of the balloon, which obviously is of concern.

But there are ways, I am absolutely sure, of being able to, in one way or another, not just track the balloon, but be able to maintain some element of control over where it goes.

KING: I assume if you were the Secretary of Defense or the CIA Director or the White House Chief of Staff at this moment, your advice to the President of the United States was, whatever our capabilities, under no circumstances, let this get outside of the United States airspace now that it's in it, without capturing it or taking it down, right?

PANETTA: No, I think that's correct. You cannot allow a balloon -- I mean, there are two important points here that were made at the briefing that are of concern. One is that it's a surveillance balloon. So it's doing more than just checking the weather. It's obviously doing surveillance, and that means it's gathering intelligence.

The second thing is that it is maneuverable. So it isn't just a balloon that's gone astray. It's being handled deliberately. And for that reason, I think it's pretty clear that we cannot allow this balloon to simply keep going in space and ultimately return to China. That's not going to happen.

So I'm hoping that the Pentagon will continue to monitor it and that it will keep all options on the table in order to try to make sure that ultimately we're able not only to know where this balloon is, but to be able to control what happens to it. That's very important.

KING: U.S. officials have said, they're not attaching their names to this, that they do not believe that the Chinese have any capability in a balloon that they don't also have in a satellite in space. Mark me down as skeptical, because why then would the Chinese spy a balloon over the continental United States? What do we know about the intelligence gathering capabilities of these Chinese spy balloons?

PANETTA: Well, it's a good question because, you know, from my perspective, they have the capability using satellites, and they do, as a matter of fact, gather intelligence through some pretty sophisticated satellites that move over our country. In addition to that, they obviously have drone capability as well.

So the question then becomes, why a balloon? And, you know, it's tough to answer that question. Is it a sophisticated camera of some sort that is able to pick up more sensitive information? We don't know the answer to that.


And so, I think we have to take a strong position here that it has invaded our airspace, that it's a surveillance -- an intelligence surveillance balloon, and that the Chinese can maneuver this balloon, which means that we cannot allow it to get back in Chinese hands.

KING: And so then let's pull out then to the bigger picture. That the China challenge has been a dilemma for U.S. officials, including all of your time in government. They're just front and center now for President Biden, whether it's about technology, whether it's about the expansion of U.S. military capabilities now with bases in the Philippines, it is economic, it is geopolitical, it is military.

At a moment when the Chinese say, we would like things to be normal, that's what they keep saying publicly. We would like things to be more normal again. Xi Jinping decided to send a spy balloon over the continental United States. Why?

PANETTA: Well, you know, look, there's no question. This is a tense relationship, particularly at this point in time. And there are a lot of moving parts here, not only this balloon, but also the fact that the United States has moved forward, establishing access to bases in the Philippines, building up our base in Guam, building up our base in Okinawa as well.

So both sides are moving chess pieces at this point in order to try to establish leverage over the other. That's what's going on. And at the same time, there was obviously, this trip that was planned by the Secretary of State. I think he was right to cancel it because there's so much attention is focused on this balloon that it would undermine his ability to have any effective dialogue.

But also, I guess we hope that ultimately things will settle down and they'll be able to get back to negotiating table. But right now, it's a very tense situation between the United States and China.

KING: But before we go, to that point about who talks to whom, when, is it fair to assume that, first, the United States either captures or shoots down the balloon, takes a look at what's in it, and then the President of the United States picks up the phone to his Chinese counterpart and says, what the hell is going on?

PANETTA: I think there will be a point in time when, one way or another, the United States is going to have to take action against this balloon, and they'll inform the PRC about what they're doing. You know, to have this balloon at 60,000 feet, that's one thing.

But the reality is it could pose very much a hazard, not only in terms of our intelligence, but also a hazard in terms of our airspace. And for that reason, I think we have to ultimately control this situation.

KING: It's a fascinating few days ahead and then weeks and months after that. Leon Panetta, grateful for your time on this important day, sir. Thank you.

PANETTA: Good to be with you, John.

KING: Thank you.

Up next for us, a simply gangbusters job report.



KING: The January jobs report out today, and it is leaving economists speechless. The United States adding a staggering 517,000 jobs last month, more than doubling what forecasters anticipated. And it's a giant jump from the 260,000 jobs. That's a robust number in and of itself gained in December.

Plus, the unemployment rate dropping to 3.4 percent, the lowest since 1969. That's the year Lyndon Johnson left office and Neil Armstrong walked on the moon. President Biden taking a victory lap earlier this morning.


JOE BIDEN, PRESIDENT OF THE UNITED STATES: Next week, I'll be reporting on the State of the Union. But today, today, I'm happy to report that the State of the Union and the state of our economy is strong. We created 12 million, 12 million jobs since I took office. Put simply, I would argue the Biden economic plan is working.


KING: With us to break down these numbers, share their reporting and their insights, Bloomberg's Peggy Collins and CNN's Matt Egan. Matt, to you first. It's a wow number. Break it down, 517,000 is the big headline, but even when you go through it, it's all a lot of little wows, too.

MATT EGAN, CNN BUSINESS REPORTER: John, it really is. I mean, this is another reminder that we are living through history. We've never seen an economy quite like this in the jobs market. It is so hot that it is breaking economic models.

We went back and looked. And the most optimistic economist was expecting 305,000 jobs to be added. So today's number is literally off the charts. And when you dig in, there was across the board strength. I mean, bars and restaurants added almost 100,000 jobs. Government, healthcare, retail, construction, manufacturing, hotels, all of them adding jobs. There's almost no weakness here.

And when I'm talking to economists today, I'm hearing two things. One, disbelief. Mark Zandi from Moody's, he told me that this number is so strong that it probably overstates things a bit. I mean, the economy is strong, but maybe not half a million jobs strong. He's wondering whether COVID and weather maybe inflated these numbers a bit. But I'm also hearing a sense that a recession is probably not imminent. Mark Zandi said that there's nothing about today's report that suggests an ongoing recession or one that's coming soon. And even some people in the recession camp are changing their tune a bit.

Ethan Harris at Bank of America, he told me he doesn't think that the 2023 recession that he's been calling for has been canceled, but he wonders whether it's been delayed. And even he concedes that the soft landing that once looked improbable, it is growing more likely.

KING: Matt, stay with us. And so Peggy, 517,000 after eight interest rate hikes by the Federal Reserve, which are meant to cool the job market and slow the overall economy. A lot of people are having the conversations, well, is it possible to tame inflation, have a soft landing, meaning we don't tip into recession, and still keep this overwhelming?

Now 517,000 every month, but 200,000 plus a month job growth. People thought that was impossible. Do we need to rethink the question?


PEGGY COLLINS, WASHINGTON BUREAU CHIEF, BLOOMBERG: I think we do. I think the key thing here is the big job gains without big pay gains, right? And that's where we're getting the good mix for the economy. People are getting more paychecks, but the paychecks aren't getting bigger. And prices, therefore, are not necessarily going to rise as much as as we saw last year.

So I think that gives the Fed a little bit of room. But certainly, this gigantic number today that was very surprising keeps pressure on the Fed to see if they have to raise interest rates at a higher clip or for longer than people expected.

KING: And yet, if you look, let me just show you a Fox News poll. Are you dissatisfied with the direction of the company -- country? That's usually based on the economy a year ago. And now, Republicans dissatisfied. Majority Democrats dissatisfied. People don't feel it.

We're just saying, hey, America, half million jobs more than that last month. They revised upward the last month's numbers. Even in the rear- view mirror, the numbers are going up. What's the disconnect? All the talk of a potential recession or inflation?

COLLINS: I think that's part of it. But also, you know, we've written more at Bloomberg about egg prices than I ever expected to. So I think people are seeing it in the grocery store as well. But when they actually go home, I think two things are happening. They are still getting paychecks, and people want to go out and spend and do things because we went through the pandemic, so the demand is still there.

KING: It is a remarkable new moment, you might say. Peggy Collins, Matt Egan, appreciate it. We'll stay on top of it. We'll see if next month is anywhere close to this month.

Up next for us, back to politics and a new Jim Jordan. Some brand-new CNN reporting on how Chairman Jordan wants to be more factual, less firebrand. His many critics are skeptical.



KING: Jim Jordan is attempting a rebrand. CNN has some brand-new reporting on how the Ohio Republican is promising a more meticulous and a more cautious approach as he now leads key GOP investigations on Capitol Hill, even giving members binders of reading materials and vowing to follow the facts.

The House GOP Conference Chair Elise Stefanik telling CNN this, "It's important to be methodical. Jim knows the different levers to use." Now, Democrats say they would welcome a change, but they are quite skeptical because of years of this guy.


REP. JIM JORDAN (R), OHIO: Calling an attack is like saying this guy's blue. Of course, it was an attack.

You never met the president?


JORDAN: Yes. Three meetings again with Zelenskyy and didn't come up.

TAYLOR: And two of those they had never heard about, as far as I know.

JORDAN: And President --

TAYLOR: There was no reason for it to come out.

JORDAN: And President Zelenskyy never made an announcement. This is what I can't believe, and you're their star witness.

I just want to know, when do Americans get their First Amendment liberties back?


JORDAN: It's not a personal thing.

FAUCI: No, you are.


KING: With me to share this new reporting, CNN's Alayna Treene and CNN's Sara Murray. So everybody's entitled to second chances in life. It would be great to see if they actually had oversight, not just aggressive politics, but really Jim Jordan. Explain how he thinks he can be anew, fair, cautious, meticulous, but still tough.

SARA MURRAY, CNN POLITICAL CORRESPONDENT: Well, look, I think, as he pointed out, he's seen as a deeply partisan person. Someone who chases conspiracies, someone who's, you know, in recent years made a career out of, you know, providing cover for Donald Trump.

Now he wants to be someone who's a little bit more meticulous. He wants to take it slower when it comes to his investigation into the Justice Department and try to build his facts behind the scenes in the hopes of getting more out of DOJ. You know, he sort of deferred to James Comer, who's the Oversight Chair, to really take the lead on the Hunter Biden investigation and really be hammering, you know, all different agencies across government about this Biden documents thing.

And Jordan is happy to sort of try to bide his time. He wants to be viewed as a serious chairman of this powerful committee. Now, we also talked to a lot of Democrats who are very skeptical of his ability to try to pull something like this off.

KING: Right. So one of those Democrats is the veteran Gerry Connolly of Virginia says, "If he wants to turn a new leaf and be critical -- credible and methodical and try to get the facts as opposed to wacko conspiracy theories, that would be welcome. I'm just shaking in anticipation to see it." You get the sarcasm at the end there.

ALAYNA TREENE, CNN REPORTER: Oh, yes. He was very. I spoke for a long while with Gerry Connolly about this, and I should say he has recently been appointed to the Weaponization Subcommittee, the, you know, so- called weaponization of the federal government that Jim Jordan is also chairing. So he'll be one of the Democrats pushing against that.

But a lot of Democrats are very skeptical because we talked to Jerry Nadler, same -- he was like, I'm skeptical. I'm not sure if this can actually be pulled off by him. But Jim Jordan really wants this investigation and the series of things that they look into to be seen as credible, particularly when it gets into looking at the potential or the alleged politicization of the FBI.

He knows he's going to have to work with the DOJ. He knows he may have to work with the special counsel and some of the -- special counsel, excuse me -- on some of the classified documents. And so he wants to be seen, as Sara said, as more methodical and more serious.

KING: And it is. The list of issues is very important. We'll see where it goes. We'll see whether it's fair and meticulous fact based or whether it's political. But the southern border, here's what Judiciary Committee wants to look at the Weaponization, as they call it, of the FBI. The special counsel investigation of Biden. The question is, will they also take a look at, say, Trump? That's one of the questions. Will it be fair?

MURRAY: Yes, I think that that is a question. Look, if he wants anyone to take these investigations seriously, particularly this DOJ, FBI, one that's so important to him, particularly anything related to the documents, you do have to try to get at least a little bit of buy in across the aisle.

[12:55:05] You know, one of the things that was interesting is they interviewed a former FBI official behind closed doors this week. And I think a lot of people who on the other side of the aisle who were waiting on that interview thought it was just going to be a nightmare, a total spectacle.

When I talked to people familiar with that interview, they said it was actually pretty professional. We didn't see Jim Jordan come out afterwards filleting this former official who was meeting with them behind closed doors, and it kind of surprised them. Again, they're saying, is this what we're going to see from Jim Jordan going forward? We're going to wait and see.

KING: Well, we'll take it one day at a time, right?

TREENE: Yes, we will.

KING: We'll be open to facts as we go forward and we'll watch him. Thank you both for coming and appreciate it.

And thanks for your time today in Inside Politics. Busy day of breaking news. Kasie Hunt picks up after a quick break. Have a good weekend.