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The Fed is Expected to Raise Interest Rates Today; Elizabeth Warren Wants Bank CEOs to Be Held Accountable for Failures; House Democrats Try Long-shot Effort to Force Vote on Debt Limit; Trump Might Skip One or More GOP Primary Debates; Poll: 58 Percent of GOP Primary Voters Choose Trump; Special Counsel Jack Smith in Room as Former VP Pence Testified to Federal Grand Jury Last Week; Biden's Former Executive Assistant Tells House Committee She Didn't Notice Classified Docs When Packing; Tucker Carlson Messaged, "I Found Myself Rooting for the Mob." Aired 12:30-1p ET
Aired May 03, 2023 - 12:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN KING, CNN ANCHOR: Today, in fact in about 90 minutes, a big Federal Reserve decision on interest rates. And it comes in a very volatile moment for the U.S. economy. The Fed is widely expected to raise interest rates. If so, that would be the tenth straight rate hike. But perhaps, as smart people say, the last uptick before a pause. Inflation is the Fed's target here, but the rate hikes are also a factor in the banking sector stress and of course, the debt ceiling showdown between the White House and House Republicans also looms large over any big economic policy decisions right now.
Jim Tankersley of "The New York Times" joins our conversation. There's been some pushback to the Fed plan, saying maybe not now because of the stress in regional stocks, because some recent reports have shown (inaudible) plan is working and the economy does seems to be cooling, yet the expectation is at least one more rate increase, right?
JIM TANKERSLEY, WHITE HOUSE CORRESPONDENT WITH FOCUS ON ECONOMIC POLICY, THE NEW YORK TIMES: Yeah, the expectation is probably a quarter percentage point rate increase today, then who knows, going forward, maybe a pause. But there's big pressure building from congressional Democrats, liberals like Elizabeth Warren, for the Fed to pause now because they are worried that more rate hikes could destabilize the banking system and cause a recession. KING: So, w can show you regional stocks, which as we were in the
break, at least they were up. We can show them again and see if that's still the case. Higher interest rates have been one of the pressures on these banks. I'm not excusing the management, I'm not excusing the regulators, but the higher interest rates have been one of things to put stress on the bank. And that's one of the reasons people like Mark Zandi at Moody's economics, very smart guy, says he think it's a mistake to raise them again.
Why would a rate increase potentially exacerbate the banking stress?
TANKERSLEY: Well, the problem is that a lot of these banks have sort of a portfolio that's kind of clawed out for interest rates. The things that they own aren't worth as much today as they would be if they hold them all the way to term. And so, they are basically exposed to these interest rate hikes and the more depositors get worried about that exposure, the more they could flee and that can create more stress like we saw with Silicon Valley Bank. KING: And so, as you watch this play out, as Jim just noted, Elizabeth
Warren is among those (inaudible) who are watching this closely, worried about the banks. She also thinks that JPMorgan comes in and buys one of the banks under stress, First Republic. She says that's a big bank, getting even bigger, and she thinks we have a lot of problems.
(BEGIN VIDEO CLIP)
SEN. ELIZABETH WARREN, (D) MASSACHUSETTS: We cannot be a country that just time after time rolls through another banking failure and nobody gets held accountable. Not the CEOs of these giant banks and not the people in government who were responsible overall for how the government supervised and regulated these banks.
(BEGIN VIDEO CLIP)
KING: Is she right? Is there any reason to believe, especially given the politics of divided government, that Congress will look at this in a, let's say, dispassionate way as opposed to Democrats have their hearings to air their issues, Republicans have their hearings maybe to air theirs, and nobody gets together?
LEIGH ANN CALDWELL, THE EARLY 202 CO-AUTHOR, THE WASHINGTON POST: That's how it continues to be. There was a big focus on this after SBA's collapse. And there's another hearing coming up about this too, but it's mostly really subsided. We haven't seen any legislation come forward, nothing has been fixed. Senator Sherrod Brown is obviously someone who has the same concerns as Elizabeth Warren. The Congress doesn't seem to be reacting.
KING: And --
ANN CALDWELL: It would be very interesting in that May 16 hearing (inaudible) banking where you do bring in the leaders of Silicon Valley Bank. This will be the first real major spotlight on these bank executives. And just politically speaking, the top Republican on the Banking Committee is Senator Tim Scott, who we know is doing a little exploring right now. And this could be a one policy area where he could make a national platform for himself.
KING: And so this is all happening before another showdown. So you have economic volatility before a showdown that could cause economic calamity. The question is, do politicians take any cues from that? Do they see what has happened in recent weeks and say, you know what, we should be adults here. Let's deal with the debt ceiling. The Democrats had this Plan B or Plan Z, I don't know what to call it, where they would use the discharge position, use the rules to try to sneak a clean debt ceiling limit, so you'd need a handful of Republicans though.
And among the Republicans you might look to, Don Bacon in Nebraska says no way, says no appetite for my way or the highway stance of Biden-Jeffries. In a divided government, people don't want to govern, sit down and find some middle ground. So, if the Democrats will still keep that Plan Z on the table, just in case, but what now? When? The president has the meeting next week with the leadership. Right now, they are all sticking to their positions pointing fingers.
ANN CALDWELL: I mean, look, I don't think any of us can really say where this is going to head next. At that meeting, the president is going to stick to his guns essentially. He's going to say that he wants a clean debt ceiling hike, separate from conversations about budget, about appropriations. The reality is, when you talk to some economists, they think ultimately this is going to end where even if there is a single debt ceiling hike passed, ultimately with some Republican votes, it's going to be followed closely behind or tethered to some type of spending cuts and deal with Speaker McCarthy.
The big thing though is whatever deal that Speaker McCarthy can get with President Biden, are there going to be enough House Republicans that are willing to vote for it and whether it's a discharge (ph) petition or not, is he going to have to turn to Democrats to help him get that passed.
KING: And so, as this plays out, we talk about the interest rate and its impact on everything. Americans pay more for the credit cards, pay more for mortgages, will it cause more stress to the banking crisis?
In terms of the potential, we have been here before and most people think, oh, right before they get to the cliff, they will figure it out. This is a different cast of people this time and I think there is more worries that maybe they won't. What are the risks?
TANKERSLEY: Well, it's a different cast of people and they have all taken very different lessons from the previous brushes with the debt limit, with default. And not in ways that maybe would argue for a more easy resolution this time. The president is really dug in on the idea that you can't negotiate with people who have held forfeiting credit of the United States hostage. And the Republicans are really dug in on the idea that they can get more than they got last time.
KING: And we will stay at an impasse until somebody has to (ph) blinks sometime or maybe not, maybe we have the calamity that people worry about. Jim, appreciate you coming.
And up next for us, debates played a huge role in Donald Trump's 2016 Republican rise, but his 2024 come-back script, at least for now, envision skipping this cycle's first debate and maybe more.
KING: Donald Trump it seems is not interested in debating, at least for now. Republican presidential hopefuls will gather for their first debate in August. But Trump, as of today, would be a no-show we are told. CNN has learned Trump is talking to allies about skipping one or perhaps both of the party's first planned primary debates. He's pointing to his growing lead in the polls and he also points to his grievances as reasons.
CNN's Kristen Holmes is here to join our conversation and share some reporting. He's the big front runner when you look at the polls. He's also someone who kind of likes attention.
KRISTEN HOLMES, CNN NATIONAL CORRESPONDENT: Right. Well, that's what his advisers say. And there's a caveat on this, as there always is, when it comes to the former president, which is this could change. We are still very early in 2024. We are three months out from that debate. And Ron DeSantis, who is seen as his largest rival or biggest competitor, hasn't entered the race yet. So, we're talking really early preliminary thoughts here.
But, what we are hearing from sources is that he's talking about how he doesn't want to participate. And a lot of that is based on the fact that he has this enormous lead at this time, saying it would stupid for us to go up there on the stage, but he's also airing some other grievances. One is that he says he doesn't want to debate this early. He says August is too early; his advisers told me that they told the RNC this before they made the announcement. RNC officials have pushed back on that, telling me that it's not true. That they had all of these conversations beforehand.
The other thing that he has talked about is the Ronald Reagan Library. He has a bone to pick with the Ronald Reagan Library because he has a lot of resent for the fact that they invited so many other Republican leaders to speak and not him. And that's something he has told a number of his allies and in reason why he doesn't want to appear at that debate, the second debate.
KING: I believe their answer is they invite leaders to speak about democracy and Trump did some, shall we say, anti-democratic things.
That's their argument. But, the former president is talking about this openly. This is him with conservative friends on Talk Radio in New York the other day saying, "Why should I?"
(BEGIN VIDEO CLIP)
DONALD TRUMP, (R) FORMER PRESIDENT OF THE UNITED STATES OF AMERICA: When you are way up -- Rita (ph), you know this very well. When you are way up, you don't do debates. If you're even or down, you do debates. But when you are way up, what's the purpose of doing the debate? Now, the debate of the other candidate, you do. You know, you have a Democrat, you have a Republican, you have really an obligation to do that.
(END VIDEO CLIP)
KING: If he's the nominee, we'll save that tape for the last part, obligation. HOLMES: Yeah.
KING: Because there's been a lot of tension between Republicans, including Trump, but the Republican (inaudible) and the debate commission -- we'll get to that in a minute. But Kristen mentioned the polls, let's just show them up. This is a new -- relatively new CBS poll. Trump, 58 percent; DeSantis 22 percent. Then Pence at 5 percent, Vivek Ramaswamy at 5 percent, Nikki Haley at 4 percent. So, if Trump is not there, the debate would be about what? Who is the best alternative to Trump, right? Because every one of the other campaigner says at some point, Trump is the front runner. Republican voters are going to have to think, whether it is in Iowa, New Hampshire or South Carolina, are we really going to do this? And when that moment comes, and we are really about to do this, again, you want to be the leading alternative. So, is that what the debate would become?
ANN CALDWELL: Well, let's look at what debates are for. There's a lot of criticism about the format of debates and debates in general, but the reality is that it does give people and all the candidates a platform to introduce themselves to the American public. There has been, polling goes up and down after debates regardless -- dependent on how they perform. And what Donald Trump is doing once again is rewriting the rules of how things should go for himself. And if he's not there, it does give the other candidates a huge opening.
KING: Right. And if you could put the polling numbers up again, I want it more for the other faces than the poll numbers, just the idea that if Trump is on the stage, number one, you can question his policies. Number two, you can question your Republican performance in 2018 when they lost in the congressional races in the midterms, 2020 when he lost the White House. But you can also see with Mike Pence there, you stood idly by while there was a crowd outside on January 6th chanting hang Mike Pence. You could if you're Nikki Haley maybe say, she has, it's time to have somebody who can win. What happened in 2018, 2020, and 2022? Does Donald Trump not want to be there for that?
LAURA BARRON-LOPEZ, WHITE HOUSE CORRESPONDENT, POLITICO: I mean, he -- Donald Trump tends to enjoy the fight. So you'd think eventually he wants to be there to be able to take them on and answer the -- and respond to them. I'm actually curious if any of them would do that on a debate stage. How aggressive will they be in those lines of attack that you just laid out, John, because of the fact that they want to win his base. And so far, no one seems to really be carving out a piece of that base other than a little bit of potentially Ron DeSantis.
But you just saw in that polling, DeSantis keeps slipping. And yes, we are far, far away, and a lot can happen. But right now, he even isn't key --
KING: I guess, that's the fascinating question because they are understandably afraid of Trump's voters. It's a loyal group. He's at 58 percent. It was a little below there to begin the year. But at the same time, don't they remember what Donald Trump did in 2016 when he used the debates to savage the other candidates, who had way more combined elected experience than he ever had and it was a hostile takeover of the Republican Party but he did it right before our eyes.
SEUNG MIN KIM, WHITE HOUSE REPORTER, ASSOCIATED PRESS: Right. Which is why I'm wondering strategically, like I understand what his advisers are saying and why he strategically thinks it would be smart for him to avoid the debates. But as Laura said, Donald Trump does relish a fight here. And also, if you look at Ron DeSantis as his primary rival, we see just over the last week on his trip abroad, how he withers over tough questioning. He had questions in Israel and Japan about political ambitions and some other issues. And you would think that Donald Trump would kind of relish the national stage to take down Ron DeSantis face to face. But, we're three months out and we'll see what the decision is from the former president.
HOLMES: I do want to add one thing here.
MIN KIM: Yeah.
HOLMES: -- which is that, the RNC members that I talked to, the Republican operatives that I talked to, all of them do not believe that Donald Trump is not going to debate.
HOLMES: I had one of them laugh when we were talking about it, saying you think he actually won't go up there and let DeSantis and Pence try to steal the spotlight? So, there's some of that going on right now too. And again, I know we've said it a million times, but it's so early. We're three months out, a lot could change.
KING: He could be working the rafts (ph), is that what you are trying to say?
Could be working the rafts, we shall see. Appreciate you're coming in. Everybody, appreciate your comments today (ph).
First on CNN next, the former Biden aid reveals details about the classified documents found at President Biden's private office and revealing, that's an understatement, new text message from Tucker Carlson and how it factors into Fox's decision to fire him.
KING: Want to bring you some exclusive new CNN reporting now on the special counsel investigation into the Former President Donald Trump. Let's get straight to CNN's Katelyn Polantz. Katelyn, tell us what you've learned.
KATELYN POLANTZ, CNN CRIME AND JUSTICE REPORTER: Well, the Special Counsel Jack Smith, the man himself, the Special Counsel overseeing investigations into the Mar-a-Lago documents and January 6th. He personally was sitting in the Grand Jury observing testimony from Former Vice President Mike Pence last Thursday when Pence was here testifying. John, that is a truly extraordinary thing.
Smith has many, many prosecutors working for him. We see them coming in and out of the courthouse, working with the Grand Jury regularly here. We have never seen Smith once and it is, as far as we know, the first time that Jack Smith himself would come here and observe those secret Grand Jury proceedings, that testimony from Mike Pence. One source is telling Kristen Holmes, Jamie Gangel and I, that the two men, Jack Smith the Special Counsel and Former Vice President Mike Pence, they had respectful interactions during that day of testimony.
And all of this, it just really underlines how extraordinary of a situation it is for a former vice president to be compelled into the Grand Jury to testify, so much so it brought the Special Counsel himself to the premises. John?
KING: Beyond remarkable. That Special Counsel getting closer to making some pretty momentous decisions. Katelyn Polantz, fabulous reporting from you and our other colleagues. We appreciate it very much. Thanks for bringing it to us.
Let's turn now to new developments in the classified documents investigation involving President Biden. CNN has now learned his former executive assistant testified that she did not know classified documents were among the papers she packed for then Vice President Biden as he was leaving office. That information coming from a transcribed interview with the House Oversight Committee, a transcript of that interview provided to CNN.
Remember back in January, Biden's lawyers found the documents in Biden's garage and his personal office at his Wilmington home and at a Washington, D.C. office that Biden used during the Trump presidency.
Up next for us, Tucker Carlson in his own very awful words.
ANNOUNCER: A CNN Republican Presidential Town Hall, next Wednesday at 8 p.m. Eastern Time.
KING: Now to a new must-read message from Tucker Carlson. The text sent from the now former Fox host triggered executives to eventually oust Carlson from his primetime perch. That according to "The New York Times." The words, you decide if they're simply misguided or something more sinister. These are Tucker Carlson's words. "A couple of weeks ago, I was watching video of people fighting on the street in Washington. A group of Trump guys surrounded an Antifa kid and started pounding the living out of him. It was three against one at least. Jumping a guy like that is dishonorable, obviously. It's not how white men fight. Yet suddenly, I found myself rooting for the mob against the man, hoping they'd hit him harder, kill him. I really wanted them to hurt the kid. I could taste it."
CNN's Oliver Darcy joins us now. Oliver, he went on to say that he probably shouldn't be thinking or texting such things. But he did.
OLIVER DARCY, CNN SENIOR MEDIA REPORTER: That's right, John. And it's disturbing but it shouldn't be surprising, particularly for those who spent time watching Tucker Carlson's show. You know, over the years, he has trafficked an anti-immigration rhetoric. He has promoted the white nationalist Great Replacement theory. And this shouldn't really have come as a surprise I think to Fox News executives.
Groups like the Anti-Defamation League have repeatedly raised the racist rhetoric that was on Tucker Carlson's show, really a hallmark of the show, to Fox executives, including Rupert Murdoch and his son Lachlan Murdoch. But the Murdochs, they stood by him for years. And so, now "The New York Times" is reporting that this particular message unnerved Fox executives. The only question I have is, where they not watching his show all this time?
KING: That's a great question. Why just this one? Why the straw that broke the camel's back, I guess? But Oliver Darcy, appreciate that important reporting. And thank you for your time today in "Inside Politics." We'll see you tomorrow.
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