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High-Stakes Hearing On Abortion Pill Case; Tx Judge May Rule To Ban Medication Abortion Nationwide; More Than Half Of Abortions In U.S. By Medication; U.S. Markets Down Amid Turmoil In Banking Industry; As Key Inflation Measure Drops, Red Rate Decision Looms; Officials: U.S. Erased Sensitive Data From Drone Before It Crashed. Aired 12-12:30p ET

Aired March 15, 2023 - 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. Today an abortion case with implications everywhere. A Texas, Trump appointed judge will decide if pills to terminate pregnancies should be pulled off the shelf from coast to coast.

Plus, more economic turbulence today. As American markets tumble on fears a big global bank might go over the edge. And wrong, disturb, the Neville Chamberlain approach. Senate Republicans in Washington say the Florida Governor Ron DeSantis is way off target to suggest the United States to forget about Ukraine.

Up first for us this hour though, a Texas courtroom clash over abortion that may echo in women's lives no matter where in this country you live. The case, the alliance of Hippocratic medicine versus the FDA. The plaintiffs are an amalgamation of five out of state anti-abortion groups.

Their argument that the FDA put politics ahead of science two decades ago, ignoring they say evidence and safety rules when it approved, mifepristone, excuse me, to go on the market. Mifepristone is one of two drugs used to terminate pregnancies. The venue here is as important perhaps even more important than the specific legal arguments.

Today's hearing happening in Amarillo, Texas, where the federal bench is occupied by Judge Matthew Kacsmaryk. He is a Trump appointee, cited by many court watchers as perhaps the most reliable anti Biden's judge on the federal bench.

We start in Texas, with CNN's Rosa Flores. Rosa, walk us through the arguments here.

ROSA FLORES, CNN CORRESPONDENT: Well, CNN producer Ashley Killough, literally just walked out of court and she briefed me, John, she says that the plaintiffs are the only ones who have argued so far. And they've argued on the merits and standing. The judges asked them a lot of questions. But the judge doesn't appear to be questioning with much skepticism. But we do know that the sharpest question that this judge has asked so far of the plaintiffs, as he's asking the plaintiffs to point to another case, where a judge has been asked to do what this judge has been asked to do. In this case, this judge has been asked to block the FDA approval of this abortion drug. And the plaintiffs have not been able to point to a case. That is why this case is so unprecedented.

And so important, because the plaintiffs can't point to another instance, in which a judge has ordered the FDA to remove another drug from the shelf. Now, what the plaintiffs have been able to do is point to other instances in which the FDA has suspended approvals on its own.

And again, this is the FDA doing it on its own. That's what the plaintiffs are using to argue here. But the big stakes, of course, that we're talking about here are unprecedented because in this case, the plaintiffs which are a coalition of anti-abortion groups are asking a judge to do the scientist's job. What the FDA does, they study this. They have protocols and procedures to approve drugs for use for the American people.

And the plaintiffs in this case, in this injunction hearing, they're asking the judge to circumvent all that. The judge is not a subject matter expert in this case. But they're asking him to overrun the scientist, John, that's what's so unprecedented. And I should add that the FDA has not been able to argue just yet, but the hearing is ongoing in the building that you see behind me. John?

KING: Fascinating case. Rosa, appreciate you're kicking us off. Anything significant happens during the hour, please come back and let us know. Turning our conversation now for important insights is our CNN's senior legal analyst, former federal prosecutor Elie Honig.

Elie, you have one federal judge, a trial level judge in West Texas, who has the authority or at least the case asked him to exercise the authority to take this medication off the shelf nationwide. Walk us through sort of the big legal questions?

ELIE HONIG, CNN SENIOR LEGAL ANALYST: Well, John, there's been a vexing problem that's really popped up in recent years of, can a single district court judge, that's a federal trial court level judge like this Judge Kacsmaryk issue a nationwide injunction. There are 94 geographical federal districts in this country. And so, I think you can fairly obviously see the problem with one of those judges in one of those districts blocking something for the entire country.

This is something that never used to happen, or very, very rarely, it started happening more during the Obama administration, when primarily conservative judges started blocking administrative action. It happened quite a bit, dozens of times during the Trump administration really in the opposite circumstances. And now, it's happening again, and the courts don't really know how to deal with this problem, John.

[12:05:00]

KING: This judge has passed, is not guarantee what he will decide in this case or any case in the future. But the reason a lot of people are watching closely, even more closely here, it's national significance anyway but it's because of Judge Matthew Kacsmaryk. He was confirmed to the federal bench and 2019 appointed by Trump. He was a former attorney for a Christian Law Firm, actually worked with some anti-abortion groups.

He has issued a number of rulings, contrary to the Biden administration's positions, including Texas versus Biden, which is an immigration remain in Mexico policy. In a case against the Department of Health and Human Services evolve birth control. You see the anti LGBTQ discrimination case there.

Again, past does not guarantee future. When you hear Rosa saying, our producer in the courts say, the judge is asking the plaintiffs. Has there any other judge done what you're asking me to do? Does that give you any hints?

HONIG: Well, I think his past definitely gives us a hint and then some. I mean, he is as staunchly anti-abortion really based on his prior work and his work on the bench. As anyone who you'll see and there's really an element here of judge shopping. Whenever you're a plaintiff, you want to land in front of a favorable judge.

Usually, if you go to certain districts, they will randomly assign the case to any judge. You might get a conservative judge, you might get a liberal judge, you might get a centrist judge. The weird thing here is in this particular vicinage, in Texas, this Judge Kacsmaryk is the only judge.

And so, we've seen a lot of people challenging Biden administration policies, by trying to find some way some hook to go into this district because they know they're going to this judge who, as you say, has a history of ruling against Biden administration policies.

KING: And so, the law evolves. But in your view, looking at the precedent, is there a case or is this, you mentioned the judge shopping case. Is this in your view, an idea where you go to this judge, and then the Circuit Court of Appeals if that, let's say the judge issued a decision that the FDA didn't like, the government didn't like. It goes to the Circuit Court of Appeals, one of the most conservative circuits in the country, and then we'll go to the Supreme Court. Is that the path you see here?

HONIG: It is. And look, the deck is stacked for the plaintiffs here. For the anti-abortion group, they've chosen, I guess wisely. If we're looking at this strategically, they know they're going to get this Judge Kacsmaryk, who may well issue a nationwide injunction.

The next step for the defendants for the FDA and the government is to go up to the court of appeals. This is the Fifth Circuit Court of Appeals. This is largely seen as the most conservative court of appeals in the country.

And then the next step, of course, is the U.S. Supreme Court. They can't force them to take the case, but it's up to the Supreme Court. And of course, there's a six to three conservative majority in this court as well. This is the same court that overturned Roe versus Wade. So yes, the deck is really stacked in favor of the plaintiffs here judicially.

KING: We watches the case plays out and where it goes from there. Elie Honig, appreciate your insights on this important day. Let's continue this conversation. With me in studio to share their reporting and their insights, CNN's Lauren Fox, CNN's Jeff Zeleny, and Tia Mitchell of The Atlanta Journal-Constitution.

And it's just striking that we're looking now at a federal courthouse in West Texas, Amarillo, Texas. Washington is essentially a bystander in the abortion debate now because of what the Supreme Court did in the Dobbs' decision overturning Roe v. Wade. The impact here could be giant.

Look at the statistics, this is from the CDC, more than half of women got an abortion using pills in 2020, of all abortions nationally was 51 percent, of abortions before 10 weeks, it was 64 percent. So, this one judge in West Texas, again, there would be appeals and everything, but has the ability to have another earthquake, just like the Dobbs' decision.

TIA MITCHELL, WASHINGTON CORRESPONDENT, ATLANTA JOURNAL-CONSTITUTION: Yes. And you know, right now, Washington is out of the discussion, but it doesn't have to be. You know, Congress could intervene and create some laws that clarify access to abortion, clarify whatever limitations or medications or clarify the FDA's role in that. But we know that there's gridlock in Congress on this issue. We know that Republicans in the House are likely to block any progress on this issue.

And now we're leaving it up to the courts. And again, as it has been laid out right now, this particular lawsuit is on a trajectory that keeps it within courts that have a conservative bent, and it means that there is really risk to access to abortion on a national level.

KING: And the access question and the uncertainty is what makes the case so fascinating. People watching at home, everybody has their views on this issue. It's a very polarizing issue. For some it's a very personal law issue of faith. But the decisions already after Roe v. Wade, we've seen the disruptions and you know, it's largely along the coasts where abortion access in the blue states, still largely guaranteed, in the middle of the country, less and less.

So, Ashley Brink the clinic director Wichita, Kansas told this to the New York Times. If our clinic has to switched to doing procedures only, we simply will not be able to meet the demand. We could pivot and stretch ourselves, but you cannot make up 300 patients worth of appointments and procedures over the same amount of time. And making the point essentially, that if you take away the abortion by medication option, even more stress on the system.

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LAUREN FOX, CNN CONGRESSIONAL CORRESPONDENT: Yes. And you have to remember that the effort by anti-abortion activists for a very long time in this country was restricting abortions in states by making it more difficult to get appointments to go to clinics to make those clinics more sparsely populated in those states. And so, I think that one of the issues you're going to run into is the backlog issue.

And it is something that, you know, Congress could step in, and Congress could have a voice in this issue, and they likely won't for many reasons, one of them the Republicans in the House of Representatives. But also, the fact that you have Republican senators as well. And you have a filibuster in the Senate who believe in this issue of restricting abortion access.

KING: And the Trump appointees to the bench, Biden just trying to catch up with the Trump appointees to the bench, especially at the Supreme Court, but now in West Texas have a huge impact on this debate. But this is from the Guttmacher Institute, which is a pro- choice organization, but which was a very good job tracking the impact across the country.

Says, the states that would be hit hardest here. If there's a ban on abortion pills, you see in Colorado, Georgia, Indiana, Iowa, Maine, Montana, New Mexico, Pennsylvania, Vermont, and Washington. Iowa on that list, Jeff Zeleny, the vice president United States, you're part of the reporting going to make her first trip to Iowa during the administration of political trip to talk about this specific issue, reproductive rights.

Democrats believe it helps them at the ballot box. At the moment, though, because of the divided government here in Washington because of the close margins in both the House and the Senate, there's no legislative solution in sight. Is this a campaign issue?

JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: It is a campaign issue. And you know, there's no question if you talk to anyone who covered the midterm elections, as we all did. Republicans and Democrats this definitely benefited the Democratic Party in terms of motivating younger voters, and particularly look at Michigan Exhibit A winning both chambers of the legislature.

So, this is something politically speaking Democrats believe is a good issue for them. Down the road, this is something that is also as you said, a seismic a potential shock. I'm told Vice President Harris, who's going to Iowa on Thursday to put some Democratic ideas in the air. There's been a lot of Republicans there, of course, Donald Trump, but Ron DeSantis, others, so she's going to try and balance some things, but this has been front and center for her abortion rights access.

And we should point out, there are majorities of Americans in both parties overall, who support the idea of this medication for abortion. So, it's not, you know, certainly divided on partisan lines. But this is, you know, it's a judge shopping as Elie said without question, and this is one of the fallouts for a while elections matter, and these Trump judges are still very much important. So, Democrats will use this no doubt.

KING: At the time, just the timing this case playing out as we get closer and closer to the 2024 cycle of appeals and like the politics and the legal intersecting more on this case as we learn more. Right now, though, move on global market turmoil because of jitters about yes, another bank. Those worries at the moment. See the market down, overshadowing a new report showing inflation is actually easing.

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KING: Financial markets are down today in the United States and globally. It is because of fresh uncertainty about the banking industry, stirred overseas today by the struggling Credit Suisse. And we now just got word of another ground rate - downgrade in a U.S. banks credit rating.

CNN's Matt Egan joins us now live. Matt, you can see the big board number down 630 plus there, banking fears at home and abroad. Walk through what's going on here.

MATT EGAN, CNN BUSINESS REPORTER: Yes, John. All eyes are on the global banking industry. That shocking collapse of Silicon Valley Bank has really shaken confidence clearly. Now regional banks, they are under renewed selling pressure today after both S&P and Fitch downgraded the credit ratings of First Republic Bank. You can see that stock is down 18 percent as we speak.

And Fitch also placed on watch for downgrade, another regional bank that's PacWest Bancorp. Now, this is on top of concerns that we've seen about Credit Suisse that European bank is down 24 percent as we speak, it's down at record lows. Now turmoil at Credit Suisse is nothing new. They've been in trouble for years.

What is new, though, is that their biggest backer, a Saudi bank has signaled that they are not going to add any new funding here. And also, just in the last few minutes, we got word from the Treasury Department, the Treasury Department's spokesperson saying that Treasury is monitoring the situation at Credit Suisse and has been in touch with global counterparts. No word on what those discussions are like. But you got to think regulators are interested in how much exposure U.S. banks have to Credit Suisse.

KING: And so, Matt, we're watching the banking turmoil is hurting the markets right now. But also, some new data this morning on inflation and the overall state of the U.S. economy. If not for the banking questions, we might be having a different conversation.

EGAN: Yes, exactly. You know, we got some good news on the inflation front, which normally would overshadow anything going on in the banking industry, producer prices, that's wholesale inflation, that declined unexpectedly between January and February. That's good news for consumers.

Year-over-year, this inflation gauge clocked in at 4.6 percent. Some context that is eight straight months of cooling inflation. You can see it on that chart 4.6 percent, that is miles away from the nearly 12 percent peak that we saw early last year. So that all is very encouraging. Less encouraging, though, is that consumer spending also cooled off in February, retail sales, they dropped. But as you can see on your chart, that's after a big spike in January.

So now, the question is what does the Federal Reserve do about this situation? In just a week, they have to decide whether or not to raise interest rates. And I just looked, right now the markets don't know what the Fed is going to do. It's basically split 50-50 between either the Fed hold steady or raises interest rates by a quarter point. John, this is shaping up to be a very suspenseful meeting and one with a lot at stake for the economy.

[12:20:00]

KING: A lot at stake in several days of additional data the Fed will get before it has to make that decision. Matt Egan, appreciate the important updates there. Let's get some important perspective. Now joining us to share his reporting and his insights, the Wall Street Journal's chief national economics correspondent Nick Timiraos.

Nick, thank you. Grateful for your time today. Let's start, with yesterday there was stability in the financial markets. A lot of people thought OK, well maybe this is going to be contained. Today you have the Credit Suisse development, and more volatility and turmoil in the markets. Is this a case where there are five or six banks that are a little wobbly? And we need to get through that question, or is this a case of confidence is dropping, and we have a longer-term problem?

NICK TIMIRAOS, CHIEF NATIONAL ECONOMICS CORRESPONDENT, THE WALL STREET JOURNAL: Well, it could be both, John. We don't quite know the answer that question yet. And it's an important question. You know, people are asking why the government acted on Sunday to basically bail out the uninsured depositors of these two banks. And I think we're seeing right now, why they did act that way.

The concern on Sunday was that if you make people who have large, uninsured deposits, that includes companies that are making payroll, if they're worried about those deposits, this was the bank, Silicon Valley Bank, a week ago, you know, there were some problems known, but people thought it was generally a strong franchise. And if the bank fails two days later, and still nobody has emerged as a acquirer of the bank, that causes a loss of confidence.

And so, the worry was on Sunday, if you don't do something to backstop these uninsured deposits, what is to stop other people with large deposits at similarly situated banks from taking their money on Monday morning, and saying, you know what, I'm going to put it at Chase or a Citi or Wells Fargo, because I won't get in trouble if, you know, if the bank I have the money in right now goes down. That's why the government did what they did.

KING: And so, Nick, Matt Egan just teed up the question for the Fed next week. What do you think will be the most important data point for the Fed in these days where we have at least before us today, sort of conflicting data? Number one, don't raise rates right now. Don't put any more pressure strain on the banking industry. Number two, while inflation is maybe cooling somebody in a normal world, absent the banking issue, you would raise interest rates a little bit more. How does the Fed sort this out?

TIMIRAOS: Credit is the lifeblood of our economy. And so, the Feds first priority here is going to be to make sure that there isn't a bigger financial crisis. They are in a place right now that they really have tried to stay away from for the last year. They do not want to have to be fighting a pretty serious inflation problem, at the same time that they're dealing with financial instability. And that's what they've got. And so, they have to figure out which one to focus on more.

If the banking problems somehow get resolved, which you know, what's happening this morning with Credit Suisse markets now see that as much less likely that this gets resolved. It makes it harder for the Fed to raise interest rates next week. And already we're seeing investors betting on an interest rate cuts later this year, John.

So, it's a difficult position for them to be in. But they're going to have to do something on financial stability and the stability of the banking system. If that gets worse, then you know, interest rate increases are harder to move ahead with.

KING: Fascinating few days and I suspect few months ahead. Nick Timiraos, grateful for your important insights on this day. Appreciate it very much. Up next for us, stay with us. We have some important breaking news regarding that U.S. drone knocked out of the sky by a Russian fighter jet. We are now learning the Pentagon deleting sensitive software before that drone crashed.

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KING: Now some important breaking news, brand new information just into CNN about that American drone forced out of the sky by a Russian fighter jet over the Black Sea. Let's get straight to CNN's Oren Liebermann at the Pentagon. Oren, what do we know?

OREN LIEBERMANN, CNN PENTAGON CORRESPONDENT: John, we now have a far better sense of the steps the U.S. took to make sure there was no sensitive information on that drone that the Russians might be able to try to recover from the Black Sea. Yesterday, John Kirby, the strategic coordinator for the National Security Council said, the U.S. had taken steps to protect its equities but wouldn't go into further detail.

We now know from two U.S. officials familiar with the incident, that step that was taken was erasing or wiping the software from the drone. The sensitive software that runs the drone and is in charge of collecting the intelligence, collecting the signals that the drone uses and then passes on to the U.S. upon its landing.

Remotely the operators of the drone were able to wipe the drone and erase that software such that it wouldn't fall into Russian hands or frankly, other hands after the U.S. brought it down in the Black Sea. A senior Russian official said on Russian state TV that the Russians would try to recover the drone.

It's not the aircraft itself, the hardware, if you will, that's the sensitive part. It is the software and that's the step the U.S. went to protect by erasing it and wiping it remotely from the drone before it crashed into the Black Sea.

The U.S. doesn't have naval assets or ships in the Black Sea that would be able to expeditiously carry out a recovery effort. So, this John, is now we know the steps the U.S. took to make sure sensitive information intelligence didn't fall into the wrong hands.

KING: Oren Liebermann, live for us at the Pentagon with the breaking news. Oren, thank you. Let's get some insights now from retired Air Force Colonel, Cedric Leighton. Colonel, grateful to see you today. Let me just pop up some video of this drone as it plays out. Is this standard operating procedure?

You have an asset like this in the sky, it comes under attack or some interference in the like. If the operator is everyone trying to get it to safety, but number two prepared to delete any sensitive information if you can.

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