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253,000 Jobs Added In April, Showing Labor Market Heated Back Up; Poll: Nearly Half Of Americans Worried About Money In Banks; Poll: Blame For Possible Default Split Between Biden, House GOP; Jobs Report: Hiring In Biden Economy Remains Resilient; President Biden Speaks After Release Of New Jobs Report; Biden Assails GOP Budget Ahead Of Debt Limit Talks; Biden: "We're Not A Deadbeat Nation"; Biden To House GOP: We Can't Negotiate Under Threat Of Default; Biden: U.S. Doesn't Need "Manufactured Crisis" Created By "MAGA Republicans". Aired 12-12:30p ET

Aired May 05, 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, INSIDE POLITICS: Hello, and welcome to INSIDE POLITICS. I'm John King in Washington. Thank you for sharing your day with us. We're standing by any moment now to hear from the president United States about what in any other economy would read as a simply blockbuster jobs report. 253,000 jobs added last month, beating out expectations by 70 plus thousands.

Unemployment at a 50-year low. Look at that, 3.4 percent, black unemployment a lowest ever level of 4.7 percent, job gains in healthcare, in the restaurant industry, in construction, wages climbing, the superlatives are plenty resilient, durable, historic, but yes also disruptive.

The Fed suggesting this week it might be done with interest rate hikes, but these jobs numbers spiking after a downward trend in the past three months, again, underlines the Fed struggled to cool the economy just enough to tame starboard inflation. As we wait for the president. Let's get straight to New York with CNN's Matt Egan. Matt, walk us through the big numbers? And forgive me if I have to interrupt.

MATT EGAN, CNN BUSINESS REPORTER: Well, John, these historic jobs boom continues, despite everything going on right now, despite the Fed slamming the brakes on the economy, despite the worst banking crisis since 2008, and despite the wave of tech layoffs that we keep hearing about. A lot of people thought that hiring would slow down in April, instead it accelerated 253,000 jobs added, unemployment rate 3.4 percent.

You know, to get a lower number than this, you have to go back to 1953 under Dwight Eisenhower, and really, we saw across the board solid numbers here. Professional services, healthcare, leisure and hospitality, all of them adding tens of thousands of jobs. RSM chief economist Joe Brusuelas, I think he summed it up best he said, quote, "the American labor market right now is simply unstoppable." Now, there were negative revisions to February and March that showed fewer jobs added. And we could say that hiring has slowed down, but not by that much. All of this, of course, is great news for everyone who's worried about a recession. There's nothing about today's report that screams an ongoing or an imminent recession.

But here's the problem for the Federal Reserve. Inflation is still more than double what is considered healthy. That is the green line on the screen. And wages, the blue line, they are still well above what is considered normal, what you need to get to get inflation back to 2 percent.

So, this does suggest that the Fed may have more work to do. In fact, John, after today's report, investors on Wall Street, they started to dial back their expectations of interest rate cuts later this summer. These numbers are all going to change next week when we get a very important inflation report.

KING: So, we wait. We wait for another report to follow up to this report as the uncertainty continues, but your point about resilience is while taking. Matt Egan, thanks for kicking us off. Let's continue the conversation. With me in studio to share their reporting and their insights, CNN's Melanie Zanona, Toluse Olorunnipa of The Washington Post, Julie Hirschfeld Davis of The New York Times, and Bloomberg's Peggy Collins.

Peggy, let me start with you. And it just showed this chart. Joe Biden has been president during the pandemic recovery, if you will. Jobs in the American economy, now exceeding where they were pre pandemic. 253,000 jobs, historically low unemployment rate, black unemployment lowest ever. We could go on and on. And yet, there's this concern that what, it's a little too strong and the Fed has to keep going.

PEGGY COLLINS, WASHINGTON BUREAU CHIEF, BLOOMBERG: That's right. I think the question mark is, what will the Fed do with this because it was such a strong number on so many fronts, even labor participation over 80 percent. Such a strong number showing that people who want jobs in this economy are still getting them.

Also, interesting that the numbers came out amid the banking turmoil. This captures April. So, showing that some businesses are not cutting back per se, even though there's some volatility out there. I think what Powell is going to have to deal with is, can we pause in June and give the economy a little bit of time to catch up to the rising interest rates? Or do we have to raise again?

KING: And so, as this plays out to the president United States, you're a couple of weeks after your official announcement, you're running for reelection. You get another what would be a gangbusters jobs report, proof of the strength of the American economy. And yet, to Peggy's point, in addition to worries about inflation.

Now, are you worried about the safety of the money you have in banks, not worrying 48 percent -- worried 48 percent, I'm sorry, not worried 50 percent. So, half of the country is saying now they're worried about their money in the bank. At the White House, they get the idea of like, can we catch a break here, but the fundamental numbers are pretty strong.

TOLUSE OLORUNNIPA, WHITE HOUSE BUREAU CHIEF, THE WASHINGTON POST: They do have a lot to be proud of. They have a lot to be happy about with these numbers and with this report, even though there's a lot of uncertainty within the economy. And some of that uncertainty is based on what's happening right here in Washington D.C., not only the banking crisis and how the federal regulators are making, trying to make sure that the banks are secure.

[12:05:00]

But also, what's happening in Congress. We're trying to make sure that the U.S. government pays the debts that it has and make sure that we don't go over the debt ceiling and that's a big challenge, a big risk that is opposing itself to the economy that is strong at this point.

But if we get to a point where we're over the debt ceiling, all of those numbers, all of that strength of the economy could be blown up. And so, President Biden is really looking at June 1, which is the potential X date as a potential moment where this economy could be put on its heels very quickly.

KING: And so, you can all start laughing at me, as I get into the sentence, I'm about to speak. If we worked in a town where everybody agreed before they were a Democratic Republican, they were a public servant. And if you agreed that the debt crisis has the potential to damage the American economy and the global economy, and you see this report, and you know, you have the bank eternal, you would think it's time to sit down like adults and figure this out, which is why it's not going to happen, right?

JULIE HIRSCHFELD DAVIS, CONGRESSIONAL EDITOR, THE NEW YORK TIMES: Yes. Well, there might have been a time when that would be the case. But clearly, there is not a political consensus here about what needs to happen. Not only do you have a substantial number of Republicans who just don't want to raise the debt ceiling under any circumstances, you actually also have a subset of those people who don't even think that defaulting would be a problem.

Clearly, you know, what we're hearing from market experts and economists and the White House and Democrats, and many Republicans is we can't default at any cost. But there is a group of Republicans that doesn't even believe that. And because there is so little political consensus, there's very -- it's the path to getting to the negotiating table for anything substantive.

Now, obviously, Kevin McCarthy and President Biden are going to meet next week. They will talk, but there's no sign yet that there is a substantial negotiation that's going on either in public or behind the scenes to get this done.

KING: So, let me come back, if it would be a problem, correct? For those who say, oh, we can default, they're making this up, it would not be a big deal. They are wrong, correct?

COLLINS: It would be a problem. I think it would be a huge problem for markets. It would be a huge problem globally, in terms of people's faith in our ability to have, you know, several decisions around our ability to pay bills. As Powell said this week, you know, there's not a scenario where the Fed can come in and save the economy if the U.S. government cannot pay its bills.

KING: And yet, as you have this showdown coming again, the president could say, look, we've got a good economy here, let's not mess it up. So, Republicans are thinking, well, he's running for reelection next year, easy for him to say. If you say if you ask people now, ask today, we'll see as we get near the end of the month, we get into the deadline and the negotiations and all of that.

We ask people to say who would you blame? Who would have the main blame for default? 39 percent say Republicans in Congress, 36 percent say the president, 16 percent say both. I'm going to posit that Republicans actually think that's not a bad number for them, because it's split pretty evenly right now. So, let's try to see if the president will blink.

MELANIE ZANONA, CNN CAPITOL HILL REPORTER: And at the end of the day, Biden heading into his reelection wants the strongest economy possible. So even if Republicans get more of the blame, there's a chance he's going to get some of the blowback as well. And talking to Republicans, they are doing polling in their own districts, and they say the public is on their side in terms of demanding spending cuts in exchange for raising the debt ceiling.

So that is really what's driving both sides. That's why they're so dug in right now. One potential off ramp is that they could do a short- term patch. That's something that the White House left the door open to yesterday. But the question is whether Republicans would agree to that.

In my sense is that they would not agree to that unless there is some serious commitment from the White House that they are willing to negotiate on spending cuts. And even then, they still have to agree on something like the date, whether they do add anything, right down. So, it's just -- it's very complicated. And at this point, it's just no clear path forward.

KING: And so, because it's very complicated, if you're the president to Lou (Ph), or if you're the people at the Biden campaign, you have more of a leash, if you will, to be political and think about the reelection. You have, you know, manufacturing jobs are up, construction jobs are up. The president has a story to tell with some of the numbers. And yet, you have this nagging psychological impact of inflation. And now the worries about the bank.

How do you try to message this from a campaign standpoint, knowing that you've got a couple of crossroads ahead, you're not sure which way it's going to go?

OLORUNNIPA: One of the things they're trying to do is show that what they have done with all of the spending, with all of the stimulus is working. They're saying, look at these numbers, look at 12.7 million jobs since President Biden was elected. And yes, we spent a lot of money to pull the country out of the pandemic, but they're trying to say that that's working, and don't allow Republicans to start slashing the budget and cutting all of these important programs, repealing some of the laws that were passed under President Biden's first two years, because that would reverse some of the progress.

And we've started starting to see that messaging ramp up, saying that all of the bills Republicans have passed recently out of the House, including their debt ceiling bill would reverse some of this project progress halted in its tracks and not allow the economy to strengthen and get to what the White House calls stable and steady growth. And so, that is what we're seeing in terms of the messaging. It remains to be seen, as you saw in that chart, how strong that messaging will be.

KING: And in terms of the debt ceiling negotiations end of the month. In the meantime, we get another inflation report next week. So, if the Fed will take this new jobs' report, next week's inflation report and then decide, do we pause or do we spike up a little more?

COLLINS: That's right, John. They have their next meeting in June the 13th and the 14th. And so, they will get some more data inputs before then. The main one being as you said the CPI report next week, but also job openings, job cuts will come in again, jobless claims they'll be watching. So, I think that will, they'll continue to watch the data, but today's jobs report was big.

[12:10:00]

KING: It is big, 253,000 in this environment. All right, we'll continue the conversation again. We're still waiting for the president United States. But next, a threat that could reshape the Ukraine battlefield. The head of Russia's mercenary Wagner Group says, he will pull his forces from Bakhmut because the Kremlin he says can't get him enough ammunition.

(COMMERCIAL BREAK)

KING: We'll take you live to the White House, the president United States meeting with economic advisors talking about the new jobs report.

JOE BIDEN, 46TH U.S. PRESIDENT: To discuss what progress we're making, this the second of those meetings. They've been working straight through, and about what we're -- how we're growing the economy and from the middle out in the bottom up.

And so, this morning, we got some good news from the jobs report. We added 250,000 jobs last month. That's on top of the 12 million jobs, we've already added to since we came in office of over two years ago. Unemployment rate is at 3.4 percent, which is the lowest in 50 years, black unemployment has hit a record low.

And the really good news is working age Americans are participating in the labor force with the highest rate in 15 years, not just since the pandemic in 15 years. And the working age women are participated the highest rate in 75 years. Inflation is now down 40 percent since last summer, it's come down in the last nine months in a row.

We obviously have more work to do, but we're trending in the right direction. And I think we're making real progress. And we're doing it basically, which was the theme of everything we're internally working on by investing in America. Say it again, investing in America.

Matter of fact, the secretary and I were just talking about a project that was taking place in another state. And the reason that we're having a significant investment in America, they said, well, we can't build this unless we go ahead and contract out for a lot of work. He said, no, I'm not going to do that way.

Well, guess what? I figured out how to do it in America, at the right price, at the right time, at the right state. And so, we got a lot more work to do to make, but we're making real progress. We've already attracted $470 billion in private sector commitments in manufacturing and clean energy technology. And, and we're bringing back the supply chain to the United States.

I don't ever want to be in a position again, where a major initiative that we have in a major element of our economy is dependent on a supply chain somewhere else in the world, particularly if it's not, particularly friendly. And we're doing all this for having reduced that having already in the first two years, reduced the deficit by $1.7 trillion, that's occurred, that's happened is done. And the budget I proposed that we're going to propose back on March 9, I think it was the first couple weeks of March.

[12:15:00]

That budget, if we were to be passed would cut the deficit another $3 trillion, $3 trillion over the next 10 years. Unfortunately, I won't say Republican because I think they're not pretty well divided. But my MAGA Republicans in Congress are threatened and do all this progress by letting us quote, "default on the debt unless we agree to their demands."

The two are totally unrelated. Whether you pay the debt or not, doesn't have a damn thing to do with what your budget is, what your budget is? Where are you going to spend money? How are you going to raise the money? What are you going to cut? What are you going -- that's the -- there are two separate issues, two. And let's get it straight. We're trying to hold the debt hostage to us to agree to some draconian cuts magnificently difficult and damaging cuts. But I'll get into that in a little bit.

But unfortunately, they're threatening to undo all this progress by readiness to fall. And their budget that they promote that was attached to their debt ceiling increase, but they tied together now. And I want to make that clear, you all know this, I know. But for the listeners, they've tied it together. They say, we're not going to -- we're not going to increase the debt that every president has done for the last 6 million years.

However, they never hadn't done anything about that unless you pass our budget as we're proposing. Now, their budget would put 21 million people at risk of losing Medicaid. They would cut federal law enforcement by 28,000 personnel, 28,000 FBI, DEA, etc. It would cut 100,000 teachers and support staff. It would cut 30 million, 30 million veterans healthcare visits.

And I increased the VA budget because the veterans were in such difficult shape, having so much trouble, getting appointments in the life. According to Moody's, not the Democratic Party, according to Moody's, their budget plan would eliminate 780,000 jobs. Say it again, would eliminate 780,000 jobs, according to Moody's.

And America's debt is accumulated over 200 years. And my predecessor in the four years he was president increased to that total debt by 40 percent. Four years, four years must be cut. And by the way, even during that period, all the Republicans voted -- the Republican Party voted to increase the debt limit. Like you're the only responsible thing you could do.

Anyway, let's be clear. This is no small part about paying our bills, that we accumulate -- that were accumulate not by me, not by administration, but by former presidents and previous congresses. I was in the Congress, so I voted for some of them as well. But I wasn't president.

We're not a deadbeat nation, we pay our bills. And some of you cover a lot of foreign policy in other countries, you know, this isn't becoming an issue in other countries. What's the United States going to do? Are they really fooling around with not paying their debts? And so, look, next week, I'm going to reiterate to congressional leaders, that they should do what every other Congress has done. That is past the debt limit, avoid default.

And as I've said, all along, we can debate where to cut, how much to spend, how to finally move the tax system where everybody has to pay their fair share or continue the route they're on. But not under the threat of default. Let's have the normal arguments.

That's why we have a budget process to debate in open, so you all can see it and know exactly what it is that they want to spend the money on, what they want to cut it on, who pays taxes, who doesn't pay taxes, and us as well. We're ready for that debate. We're ready for that debate.

We've made enormous progress over the past two years. And again, just today reporting 250,000 new jobs. Just this last report. The last thing is country needs, after all we've been through is a manufactured crisis. And that's what this is a manufactured crisis. And that's what it is from beginning to end. It's a manufactured crisis driven by the MAGA Republicans in the Congress.

[12:20:00]

Look, instead, we should be debating a vision of our country's future, their vision versus our vision. Totally legitimate. Totally legitimate. That's legitimate the American people said, we like their vision better than ours, but to bake the vision and whether or not we're going to take our country backward and certainly not whether or not we're going to default on our debt.

I'll remind you, and under the previously presidents, Republicans voted three times to increase the debt limit. Three times. No one's ever not voted to increase the debt limit. There's a lot to discuss today about our vision for the country. And then investing in America is the core of what we're all about, to build our economy from the middle out in the bottom up.

And I know it's not very appropriate friend of mine, for many of our friends on the other side of the aisle, but to sign what's a fair tax system. It's an awful thing to do it. I don't really mean it. But I'd ask the question, the reason anybody pays the tax system, America's fair. OK. And maybe you don't like the way who we tax, how we tax. But this is about everybody beginning to pay their fair share, from our standpoint.

I understand Republican position. This about cutting taxes, more taxes for the wealthy, I guess. But we should have the debate in the open, not behind whether or not we're not going to discuss it, because if we do, we're not going to have the debt limit to the past.

And so, you know, I think we've got a lot of work to do. And I'm doing a major press conference this afternoon. So, I love you all. But I'd like to ask at least when you get down to business.

(CROSSTALK)

PRES. BIDEN: I'll be happy to talk to you about that, but not now.

UNIDENTIFIED MALE: Mr. President, yesterday (crosstalk) you were talking about the dangers of AI. What are the dangers you see, sir? And did you hear anything from the executives, that's what your concerns.

PRES. BIDEN: You're right, dangers, we'll get a chance to talk about all those things, I promise you.

(CROSSTALK)

KING: Reporters trying to sneak in some questions as they're escorted out of the room at the White House president United States saying, and this is news to us that you have a press conference later today and ask some more questions. We'll get you more information on that as we get it. But what you did hear from the president, there underscores the complexity of the moment.

He started off by celebrating what is the very strong jobs report, more than 250,000 jobs created, unemployment rate at a 50 year low, black unemployment at a historic low. And yet the president then quickly shifting to the big crossroads just ahead.

His meeting next week at the congressional leadership to discuss, he says he's not negotiating to discuss raising the debt limit. The president says, we should do that, then discuss potential budget cuts or spending priorities. Republicans want to do it all at once. Our great reporters are back at the table with us. And again, you know, you would like to if you're the president, and you're heading into the reelection campaign season to just talk the good stuff, but he can't because of this uncertainty ahead.

DAVIS: Of course, and he has to, you know, prepare for the possibility that this is going to get worse either, you know, independent of the debt ceiling, but also knowing that there is going to be a confrontation coming and a possible default, if things don't change in these negotiations. What's striking to me listening to him just now, and he's been doing this for months.

And you hear Democrats on the Hill doing the same thing is how determined he is to keep these two conversations separate, the conversation about raising the debt limit, and the conversation about potential spending cuts, deficit reduction, and all the rest.

It's becoming harder and harder for him to do that as the x-state gets closer and closer, and he wants to show and that he's willing to talk to Republicans and that he's not being unreasonable. Republicans are really trying to drive that wedge. They obviously want to connect these things together. That's how -- that's the only way they have any leverage in this discussion.

And I think it's going to become more difficult, you know, starting on Tuesday, when they sit down for the White House and for the president to keep those two things apart. Obviously, there's a reason he's arguing that, and they want to have the question in a vacuum, should we default, or should we not? Because the answer seems pretty obvious, I think, to most people in the public. But it's going to be very hard to keep the conversation just focused around that given the stakes.

KING: Right. And it's fascinating, the sense that he kept saying, I'm talking to the listeners, talking to the American people, essentially saying we're not a deadbeat nation. You all know you have to pay your credit card bills, even if you got to pay your bills this month. Even if you have to have a conversation to the kitchen table about should we be spending less, can we buy more? Can we take that vacation?

The president says that's how normal people do it. But we're not in a normal Washington right now, with the House Republicans writ large, but also a smaller group within saying no, we're not going to blink here.

ZANONA: Yes. And when there has been unified control of Washington, it's barely taken them lifting a finger to raise the debt ceiling. When it is divided, as we saw back in 2011, Republicans are going to use their leverage and they realize that this is their opportunity to get what they've been demanding in terms of spending cuts. They also want some energy permitting reform.

[12:25:00]

But there's some risks for them as well. I mean, you heard Biden laying out -- their plan that they need to be clear. The plan that the Republicans passed in the House was pretty vague. They just had spending levels. They didn't specify what cuts they wanted to make terms that was by design.

But in the absence of that, you have Democrats in the White House, filling in the blanks for them and trying to make them really where those cuts, which is can be difficult for some of the moderate Republicans. But we're really watching those moderate Republicans in Biden won districts to see if there's any signs of them breaking from the party. So far, we haven't seen that.

KING: So far not. And so, Mel, put it just right. The Republicans were vague. So, the Democrats are saying, well, if you cut spending by that much, if you want to go back to the spending levels of three or four years ago, that means Medicare cuts, that means the FBI, that means the DEA, that means teachers, that that means more.

The question is we watched the Republicans from Biden district. We watch vulnerable Republicans, but the president also has to keep his eye on vulnerable Democrats. You've already seen Joe Manchin, Jon Tester, or some others in the Senate who face tough races next year, potentially saying, maybe we should just all stop pointing and start talking.

OLORUNNIPA: Yes. There have been a number of Democrats who have broken ranks away from the very unified Democratic stance that we're not going to negotiate over the debt ceiling, need to pass a clean bill. But there are a number of Democrats who are worried about default, they're worried about the fact that Republicans are having a pretty unified---

ZANONA: Worried about their own reelections in some cases.

OLORUNNIPA: They're worried about 2024, and essentially saying, you know, the more reasonable position for voters out there that aren't watching the ins and outs of this debates, is that we should negotiate. We should talk about spending, we should talk about taxes, we should talk about what we need to do to avoid another potential debt default in the future.

And so, there is a little bit of division within the Democratic Party, even though the party at large is all, you know, largely unified on this. There's some division and the President Biden has to deal with that as well.

KING: And if you could tell that event there was part of the positioning, trying to pour a little cement in his position before the big meeting next week. We will see as it goes. When we come back, a potential turning point in Russia's war in Ukraine. Why the head of Russia's Wagner mercenary group says, he will pull his forces out of the Ukrainian city of Bakhmut.

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