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Report: U.S. Economy Grew At 1.1 Percent Over First Quarter; McCarthy Pressures WH To Negotiate After Passing Debt Limit; Debt Ceiling Fight Threatens To Push U.S. Into Financial Run; Biden, South Korean President Celebrate 70-Year Alliance; Now: Cross Examination Of E. Jean Carroll In Trump Trial; Trump Loses Appeal To Block Pence Testimony In 1/6 Probe; Hunter Biden's Lawyers Met With Justice Dept Officials; Trump's First TV Ad Mocks DeSantis; DeSantis: Disney Lawsuit Is "Political". Aired 12-12:30p ET

Aired April 27, 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. Closer but to a deal or to a default, Kevin McCarthy hurts a debt ceiling bill through the House. It is guaranteed though to go nowhere in the United States Senate, and it is far from certain to break the White House is no negotiating promise.

Plus, quote, I am here because Donald Trump raped me. E. Jean Carroll is back on the witness stand today after detailing an alleged attack by the former president nearly two decades ago in a New York City dressing room. And the mouse strikes back. Disney makes Ron DeSantis a defendant, as the Florida Governor finds the polling gap between him and Trump getting wider.

Up first for us though, a new measure of the American economy that comes at a crossroads moment, both for President Biden and House Republicans. Today, a new number says the country is growing more slowly, but not so slow as to dive at least right now into recession.

1.1 percent, that's how fast the government says the U.S. economy expanded in the first quarter. It falls off as you see the breakneck pace from the end of 2022. But the good from the report is very good. Consumers are not holding on to their cash, they are spending it and in a big way.

The second quarter growth number, of course will tell us a lot more about the economy's resilience and whether it will be a headwind or a tailwind for the president's reelection campaign. Between now and that next quarterly report, a moment of giant political and economic consequence. Will the United States default on its debt? Or will the president and Republicans somehow come to an agreement before we reach that cliff?

A closer look at the new numbers first with the help of CNN's Rahel Solomon. Rahel, glass half -- empty glass half full TBD.

RAHEL SOLOMON, CNN CORRESPONDENT: TBD, John. Yes. Look, it's certainly a sign that the U.S. economy is still growing but slowing here, John. I just want to put that 1.1 annualized rate in a bit of context. Economists were expecting much closer to 2 percent. And as you pointed out, this is certainly cooler than the previous few quarters or so.

John, this is the broadest measure of U.S. economic growth. And what it showed us is that consumers really continue to spend on everything from goods, services, even durable goods, which of course is more expensive thing, things like appliances, electronics, we saw positive contributions there. We saw net exports, that was a positive contribution. We also saw government spending at every level, federal state local, that was also a positive contribution.

Now, on the flip side, business spending really slowed that really cooled, the change in private inventories. So, think inventories for everything from wholesale to retail, manufacturing, that cooled and that was the biggest drag to the downside.

So, John, how do you square both of these things? You have a consumer that's still spending, you have businesses that are really pulling back? Well, I asked Mark Zandi, the chief economist of Moody's at a short time ago, and this is what he told me.

He said, look, so usually, it's the consumer that pulls back and the businesses respond. This go around, the thing that feels a little uncomfortable, is if we go into a recession, it will probably be businesses pulling back and forcing consumers to follow i.e., businesses pulled back. They pull back on hiring, they start to lay off workers, and then that causes a recession.

So not typically how we see things. But John, as you know, nothing has been typical about this economy in the last few years.

KING: Nothing, absolutely nothing. Rahel Solomon, excellent point there at the end. Appreciate that important update. Now let's factor in how these new numbers impact the debt showdown and this important marker. The House speaker cleared a critical hurdle yesterday. 217 to 215, that the final tally of a Wednesday vote on a $1.5 trillion debt limit raise.

Now give speaker McCarthy his due. He kept his unruly caucus together, and he won, just barely but he won passage of his negotiating blueprint. But now, the job gets harder. The White House says their calculus does not change and that any Republican push for spending cuts must be dealt with after the debt limit is raised without any conditions.

With me in studio to share their reporting and their insights, Seung Min Kim of the Associated Press, Tia Mitchell at the Atlanta Journal- Constitution, and USA Today's Francesca Chambers. So, let's start with the speaker.

Again, this plan goes nowhere. The Democratic Senate won't pass it. The Democratic president won't sign it. But it is a negotiating blueprint. And it was a big test of loyalty within the Republican family to the speaker. He says, I win, it's up to you, Mr. President.

(BEGIN VIDEO CLIP)

REP. KEVIN MCCARTHY (R-CA): You said at the very beginning, we had to show you a plan, even though the Democrats have shown no plan. Not only did we show you a plan, we're the only ones to pass a plan. So, I think it's up to you now, whether the economy goes in any trouble it's you, because the Republicans raised the debt limit, you have not.

(END VIDEO CLIP)

[12:05:00]

KING: Right there the blame game. If the economy goes into any trouble, it's on you. We have a long way to go, although maybe not a lot of time to get there. The government, the treasury now says sometime in early June probably. It's a big win for the speaker politically. But does it make it harder or easier to get to the finish line, now that you have the Republican saying, take our plan and the president saying go away?

TIA MITCHELL, WASHINGTON CORRESPONDENT, THE ATLANTA JOURNAL- CONSTITUTION: I think it makes it harder in some standpoints because the plan that Republicans have passed is really not palatable in the Democratic Senate. As you noted, it's definitely not something the White House is going to support. So, I think now Chuck Schumer and the Senate are probably going to try to put their heads together, of course, working with Republicans to see what they can pass in that chamber, but it's going to look very different than what the House passed.

And therefore, whatever comes out of the Senate is going to have a hard time getting approval in the House. So, you are kind of still at a stalemate, even though the House Republicans have passed some version of lifting the debt limit.

KING: And so, one of the challenges here is can the president keep Senate Democrats unified. Kevin McCarthy did his job just barely, but he did his job. He kept the Republican family together. Now it goes to the Senate. You have a number of Senate Democrats from red states, from Trump states on the ballot next year. Mitch Landrieu who speaks to the president on issues like this, the economy and infrastructure says, we're not going to negotiate.

(BEGIN VIDEO CLIP)

MITCH LANDRIEU, SENIOR BIDEN WHITE HOUSE ADVISER: We will not negotiate about throwing the American economy off of a cliff.

WOLF BLITZER, CNN ANCHOR, THE SITUATION ROOM: At what point Mitch does the president refusal to negotiate with the House leadership become unsustainable?

LANDRIEU: Well, again, what the president has said is he is happy to negotiate over the budget and the vision of the country. But this is really not a complicated issue. They ought to just pass a clean debt bill and get past that.

(END VIDEO CLIP)

KING: In his view, it's not complicated. House Republicans say, we're not going to do that. What now?

FRANCESCA CHAMBERS, WHITE HOUSE CORRESPONDENT, USA TODAY: The White House has tried to present this as some fringe and extremist Republicans wanting to pursue this route. But we heard last night, Mitt Romney say, and he's certainly, you know, he certainly know extremist Republican, say that he thinks that there needs to be a compromise on this issue. And that's what you're hearing from the centrists?

You know, you have someone you were mentioning, Democrats, you have Joe Manchin, who could be someone that you would want to look at in this conversation as well. The president has made it clear that if they want to get rid of things that he did in the Inflation Reduction Act, or anything that's on his agenda, that those things are off the table, he's not going to revisit that. So, I think to Tia's point, then, all right, what else are you willing to compromise?

KING: And so, we're at this moment where this has been done in the White House position, you get it historically say, this has always been done, no strings attached. And then we talk about spending cuts in the budget conversations happened. 78 separate times since 1960, 49 times under Republican presidents, 29 times under Democratic presidents.

But here's the issue. As Rahel just said the economy is not behaving, performing as it normally does. There are surprises all the time. Why should our politics be the same? Or should they be the same? The White House position as they should be the same.

Listen to this from Ken Rogoff, a very noted economist. It affects everyone getting Social Security checks, debt holders. I don't even know where to stop. You can get hyperbolic about how bad it will be. I would just say, I don't want to find out.

So, you have a -- he's a Democratic president. He's a president up for reelection. The U.S. economy is at risk here. The global economy is at risk here. And I would argue his reelection campaign also risky, even though he's insisted and they believe, they can get Republicans to take the blame. So, do we do this differently this time? Or do we stay locked into this? You go next?

SEUNG MIN KIM, WHITE HOUSE REPORTER, ASSOCIATED PRESS: It really depends. I do think it becomes unsustainable, fairly at some point in time for the White House to keep its position because you're going to have senators in the middles, such as Joe Manchin saying, President Biden, there's a deficiency of leadership here and your refusal to talk with Republicans.

Well, we can also take lessons of the last really nasty debt limit fight in 2011. We did not breach the limit then. But it got kind of chaotic, close to the deadline. You know, you had the first credit downgrade in history, it did rock the stock markets, obviously, things turned out OK at the end. And Democrats took the lessons from that debt limit fight and not wanting to negotiate, which is why you see the hardline stance that you see coming now from Democrats in Congress and the White House. But Republicans take the lesson that well, President Obama negotiated with House Republicans then, so we need to do it now because we control the House, and we're going to say too.

KING: So, let's stared down for at least a short period of time, and then we'll see someone maybe will blink at some point. I'm moving on to a big event today. And last night, the president of South Korea just wrapping up and address to a joint session of Congress, that a very formal event. Last night, President Yoon let his hair down at the White House state dinner.

There is a hoopoe of Washington dignitaries. Hollywood attended the lavish affair including, the Secretary of State Antony Blinken, the actress, human rights activist Angelina Jolie and her son Maddox, and a cherished member of our inside politics family. That is Seung Min Kim right here at the table and her mother who's right here in the studio with us today. That is it all, President Biden as part of that also setting up the South Korean president for a grant finale.

[12:10:00]

(BEGIN VIDEO CLIP)

JOE BIDEN, 46TH U.S. PRESIDENT: We know this is one of your favorite songs, American Pie.

PRES. YOON SUK YEOL, SOUTH KOREA: A long, long time ago, the music.

(END VIDEO CLIP)

KING: That was awesome. The president gave him a guitar signed by Don McLean. Obviously, that had to be pretty cool. And I got to meet your mom very briefly earlier. That must be pretty awesome.

KIM: Opportunity of a lifetime. It was just a great honor. And I have to say the South Korean president did not do too much convincing to take the mic and sing American Pie. You can tell, he's sung that before in front of a public trial.

KING: Can you play?

KIM: I actually don't know. But you know, he's going to take that home and practice and struggle a little bit. So, it's a pretty cool gift from the president of United States there.

KING: That is a pretty cool gift. Well, we got to pay tribute to you and more importantly, mom's, the most important people in the world. So ahead for us, Hunter Biden's lawyers meet with Justice Department officials amid a very long running investigation, of course into the president's son. And another legal blow to Donald Trump. Court clearing the way for Mike Pence to testify in the special counsel investigation of the former president's efforts to overturn the 2020 election. (COMMERCIAL BREAK)

[12:15:00]

(COMMERCIAL BREAK)

KING: Right now, Donald Trump's attorneys are cross examining E. Jean Carroll. The writer is suing the former president for battery and for defamation alleging in chilling detail. He raped her in a Manhattan dressing room in 1996 and has been smearing her character since she came forward in 2019. CNN's Kara Scannell, live for us outside the courthouse in New York City. Kara, what have we learned today?

KARA SCANNELL, CNN CORRESPONDENT: Well, John, so the cross examination has been underway for about 30 minutes and Trump's attorney Joe Tacopina is taking some of Carroll's own words and asking her what she meant by them.

One of the things that he brought up to her was he was saying that she, in fact, wrote at one point that certain parts of her story, this story, this allegation that Trump had raped her are difficult to conceive of. And she agreed, yes, that she said that, but she said that it did occur. And she's not backing down from that story.

I mean, he also has been suggesting that she was motivated by politics, showing the jury an email that she had with one of her friends and one of the women who backs up her story, who says that Carroll contacted her at the time in the mid-90s, and told her about the alleged assault. You know, saying that they were scheming and that they -- and he's trying to suggest that this was about former President Trump just having been elected, and then wanting him out of office.

So, he's trying to put this position here and backup their allegations that she's motivated by politics. You know, we're only about 30 minutes into this, we expect this to go all day long. You know, they're just getting started here. I'm looking to attack her credibility. This allegations because Trump has said that this rate never occurred. But they're just kind of getting underway here starting to scratch the surface.

She did have a little bit more of direct examination. I was questioning by her own attorneys this morning. And there she's asserted, you know, that this was a serious case that this -- she said that she did -- she denied that she was lying about any of this. And she said that rape was a serious matter, one of the most violent and horrible things that can happen to a man or woman.

You know, we do expect this cross examination to continue again for the rest of the day, and possibly into next week. The trial does not sit tomorrow, but we'll keep you posted on any other developments as the cross examination gets underway. John?

KING: Kara Scannell, live for us outside the courtroom, a critical reporting. Appreciate it. Kara, thank you. Let's bring the conversation in the room. With me to share his insights is the former federal prosecutor, Elliot Williams.

Help me through this one as an attorney. Everybody's entitled to an attorney. Donald Trump is entitled through attorney. The question is in a case where she provided such a chilling and horrific account yesterday. Her recollection of what happened in that dressing room.

Joe Tacopina, the president's lawyer is known as a very aggressive lawyer. It sounds like so far, this is a pretty standard fare, questioning credibility, reading back prior emails, trying to cast doubt on the witness, which is his job.

Donald Trump on Truth Social has done something quite different. He has continued his attacks on her character, calling her Miss Bergdorf Goodman made up scam, fraudulent a false story, witch hunt. Can the lawyer do that in a civil trial? Or is that a giant risk to be too aggressive?

ELLIOT WILLIAMS, FORMER FEDERAL PROSECUTOR: It is always a risk to be too aggressive and more than anything else, John, it's a risk to get under the judge's skin. And as Judge Kaplan -- Lewis Kaplan, the judge there has already warned and sort of shown some leg on this point a little bit that he is getting frustrated, certainly with the former president, not as much with Mr. Tacopina.

Now, the likelihood of a serious warning or sanctions being put against president, we're not there yet. But certainly, it is clear that if it keeps up number one, the judge considers putting a gag order or something on, number two, seriously warning the former president and most importantly, number three, just trying to get them -- to just stop them.

KING: Let's move on to some other big legal stories, including Donald Trump losing another round in court, and a judge saying, Mike Pence not only should testify before the special counsel grand jury. But that Mike Pence should answer questions about direct conversations with the president United States. That's a huge deal.

WILLIAMS: It is a huge deal. Now take set aside that it's Mike Pence and Donald Trump. And at the end of the day, this is an incredibly simple legal matter, which is that as a vice president of United States, the vice president is an officer of Congress. And some of the statements he makes or would be asked to make are going to be protected.

You know, like, if asked about his direct duties that he engaged in on January 6, he doesn't have to talk about those, but private conversations with the president, conversations in which crimes may have been discussed or criminal behavior or potential evidence might have been discussed. Of course, he ought to talk about that. And there's really not much context to that. I think we've gotten wrapped up in the fact that it's these two outsized political personalities, but no one should be surprised that Mike Pence is telling.

[12:20:00]

KING: We talked many times in recent months about the idea that you need to prove Donald Trump's knowledge that he actually lost, his intent to defraud the government, to steal the election, essentially defraud the government. So, Pence obviously could be critical to that someone so close to him.

WILLIAMS: Right. Number one, did they talk about the election, which is clearly in the bounds of what Pence could be asked about. Number two, Pence's knowledge that Trump might have lost. Number three, any words of threats to Mike Pence, which themselves might be actionable as maybe obstruction of justice or something like that. So, Pence can be an incredibly valuable witness even setting aside some of the things that he can't talk about.

KING: Your former job. You worked at the Justice Department. Hunter Biden's lawyers were there yesterday to meet with the team that's investigating the president's son. This is a team led by a Trump hold over the Delaware U.S. attorney held over on purpose. So, you'd have a Trump nominee -- Trump appointee, looking at the Hunter Biden. Is that unusual for the Hunter Biden's lawyers to get to sit down with the IRS and the Justice Department lawyers to where are we.

WILLIAMS: It's not unusual at all. Number one, John, it's not an accident that it's a holdover from the Trump administration. Number two, the head of the tax division that one of the questions being brought up here where there are tax violations is also a career appointing, not a political appointee. I think the Justice Department is taking pains to try to at least give the impression that this isn't a political investigation or anything like that.

But look, defendants who are or people who are being investigated, sit down with the Justice Department all that time to sort of talk through how they can maybe make the case go away or at least plead their case to have things lowered and be less serious that took any charges that are brought against him.

KING: Does it surprise you? This has been -- these facts are not new facts. So, this has been on the vine a long time.

WILLIAMS: My brother (Ph), my longtime they're not new facts. They're also not really serious crimes in the grand scheme of things that people are investigated for by the Justice Department. And I don't want to minimize the seriousness of anything, but you're talking about a misdemeanor tax filing charge, a tax evasion charge, of course that serious, a false statement in the context of a firearm, it's just not something that should have taken multiple years to work up. This is just really aren't complicated charts. They're serious, not complicated, let me say that.

KING: I'll figure out what's at play there. Again, in the meeting we'll see if anything comes up. Elliot Williams, thank you so much. Still ahead for us. The president says, he is confident his job and his campaign performance will answer any worries about his age. Plus, an inside look at Donald Trump's threat to skip GOP debates. And the Florida Governor Ron DeSantis, now squaring off with Disney in court, many new 2024 campaign wrinkles. That's next.

(COMMERCIAL BREAK) [12:25:00]

(COMMERCIAL BREAK)

KING: Tonight, Donald Trump is in New Hampshire, looking to cement his Republican frontrunner status by courting voters in what on the Republican calendar is still the first in the nation primary state. New campaign TV ad spending shares that same goal, the sharp attack on Trump's closest campaign rival.

(PLAYING VIDEO)

Our great reporters back to the table with us. Trump has a formidable lead. If you look at the latest Fox poll, it's even going up. He was at 43 percent in February, he's at 53 percent now. DeSantis goes from 28 to 21. Everybody else's way down. And yet, they've decided that's Trump campaign money, it's not Super PAC money, to essentially try to push DeSantis even more, why?

KIM: Right. Because they feel that he is their most formidable threat in a Republican primary, which is why they're going after him so aggressively. I mean, you've talked, there's been, you know, months ago, when we sort of started to talk about the 2024 conversation. People characterize Ron DeSantis as sort of the Trumpiness without the Trump chaos.

So of course, he was starting to become a viable alternative to the former president. The former president's team recognize it and are trying to bludgeon him as much as possible, even before he makes the decision to formally run, which we expect to happen sometime next month.

And the problem for DeSantis right now is that you can't really fight back, you know, he is not an official candidate, he does. There is an affiliate of Super PAC defending him and promoting him but that's not a campaign operation.

So perhaps, if and when it becomes a candidate, the numbers do change a little. He is able to fight back, but he hasn't. No one has really taken the opportunity to bludgeon Trump because are all afraid of the Trump voters, afraid of angering the base.

KING: That is the key point. If you're trying to be Trump without the drama, which is the DeSantis MO in this campaign, attacking Trump might cost you more votes than it gets you which is why it's hard. He's also in this big fight with Disney. He's trying to take away essentially government autonomy Disney has over its land, that's a bit of an overstatement, but its relative autonomy.

Disney has oversight. DeSantis says, it shouldn't exist anymore because he doesn't like some of Disney's policies. He calls them to wow. Disney is now suing the governor. Governor DeSantis is in Israel today part of an international tour and he says the suit is bogus.

(BEGIN VIDEO CLIP) GOV. RON DESANTIS, (R) FLORIDA: I don't think the suit has merit. I think it's political. They're upset because they're actually having to live by the same rules as everybody else. The idea that somehow being pro-business means, giving companies their own governments. That is not what a free market is all about.

(END VIDEO CLIP)

KING: That is a response to a lot of the conservative criticism who said, why governor? Are you trying to use the power of the government against this private business? There at least is an attempt at an answer.

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