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Trump To Meet With Venezuelan Opposition Leader Thursday; DOJ Opens Criminal Investigation Into Fed Chair Jerome Powell; Warren Warns Democrats: Stop Cozying Up To Wealthy Donors; The People And Programs Hit By Trump's Government Overhaul. Aired 12:30-1p ET

Aired January 12, 2026 - 12:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[12:30:00]

ALAYNA TREENE, CNN WHITE HOUSE REPORTER: And so that was astonishing to a lot of people, including a lot of Republicans who have been having a lot of conversations with the president about this and the lead up to that.

The other thing is what we actually heard from Machado last week was what, that she had -- said she hadn't talked -- she hadn't spoken with Trump, she told this to Fox News, since October. That was so remarkable to me, particularly given --

DANA BASH, CNN ANCHOR: Yes.

TREENE: -- all of the work that went into this. Of course, the other thing we have to keep in mind is that she is the winner of the 2025 Nobel Peace Prize.

BASH: Yes.

TREENE: She's expect, there have been rumors that she's going to bring it. She dedicated already to Trump, but she might bring it to the White House. So that could be quite interesting indeed.

TOLUSE OLORUNNIPA, STAFF WRITER, THE ATLANTIC: And the president said he would be honored to receive it from her --

TREENE: Yes.

OLORUNNIPA: And she has said that she's willing to share it with him. And so that is (INAUDIBLE).

BASH: Which apparently not allowed, but anyway, go ahead.

OLORUNNIPA: That's another part of his visit. Another reason the president is going to be meeting with her, discussing with her the next steps in Venezuela, but also discussing with her what it's going to happen with the Nobel Peace Prize. And so I think you have to put in the context of the president craving the Nobel Peace Prize, talking about it constantly, saying that he deserves it, feeling aggrieved it was not given to him, and also having a little bit of jealousy that she got it instead. And so all of that is playing against the geopolitical background of what's happening in Venezuela and oil and all of these other things. And so this is a very complex situation that she's going to be walking into.

BASH: Yes, no question. And the promise by Rubio and others that there will ultimately be free and fair elections in Venezuela, and she and the people who support her will be a big part of that.

Up next, Senator Elizabeth Warren will be here on what she says Democrats need to do, who they need to disavow to win in November and beyond.

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[12:36:15]

BASH: We're now in an election year, the first since Democrats' loss in 2024 thrust the party into an identity crisis. Today, Democratic Senator Elizabeth Warren laid out her prescription for a Democratic comeback, saying the party has a critical choice to make.

(BEGIN VIDEO CLIP)

SEN. ELIZABETH WARREN (D-MA): Americans are stretched to the breaking point financially, and they will vote for candidates who name what is wrong and who credibly demonstrate that they will take on a rigged system in order to fix it. Revising our economic agenda to tiptoe around that conclusion might appeal to the wealthy, but it will not help Democrats build a bigger tent, and it definitely will not help Democrats win elections.

(END VIDEO CLIP)

BASH: And Senator Warren is here with me now live. Good to see you. Thank you so much for coming in.

WARREN: Good to see you.

BASH: I want to talk about your speech and your message --

WARREN: Sure.

BASH: -- going forward, but I have to ask you about what's going on with the Fed and the administration. Just the fact that there is a federal investigation into the Fed Chair Jerome Powell and the extraordinary video that he released.

WARREN: So this is really stunning. And if I can, let me just back up for like two seconds to say --

BASH: Sure.

WARREN: -- Fed independence, you may hear those words a lot, but what it's really about and has been in place for decades and decades, Democrats and Republicans, saying that we count on the Fed to make monetary policy decisions, meaning interest rates up, interest rates down, based on their best interpretation of the data.

Now, you can argue whether they get it right or get it wrong, but insulated from political pressure. And that's why they get these long terms. That's why their budget doesn't go through Congress or the president. Donald Trump has been trying virtually from the day he got into the White House to get control of the Fed so that he can make the decisions about monetary policy.

And what's the risk associated with that? Any president who can do that will want to lower those interest rates, juice the American economy in the short term, even though the long term consequences of that will be more inflation, bad for the economy overall.

Donald Trump has made multiple plays to get control. He's tried firing -- or claimed he was going to fire Jerome Powell, tried to fire Lisa Cook. He has pushed back on the Fed at every opportunity trying to seize control of the Fed. And this latest is weaponizing the Department of Justice as a way to try to bring Jerome Powell to his knees. If that happens, it is bad for the American economy. It is bad for the American consumer.

BASH: And you're not exactly the biggest fan of Jerome Powell --

WARREN: No.

BASH: -- to say the least. You have said that he took a flamethrower to banking regulations, that he's putting jobs at risk, that he increased costs for families, allowed a culture of corruption to fester in the Fed. And the fact that you're now, I guess, maybe, you tell me, you're not necessarily defending him, you're defending the process.

WARREN: I'm defending the process. Because understand, I have argued with Jerome Powell about what the data show and what the right response to those data are. We have walked horns over this multiple times. But I have never said that it should be up to the president to fire him, to be able to get rid of him.

And here's the thing. Donald Trump has already said repeatedly, publicly, that anyone he appoints to be chair of the Fed will be somebody who agrees with Donald Trump all the time.

[12:40:01]

In other words, Donald Trump has publicly announced he wants a sock puppet running the Fed and that he will be the one who will be setting the dials on inflation and on other issues.

BASH: Let's talk about your speech.

WARREN: You bet.

BASH: Because the core argument, we heard a little bit of it, is that there are two kinds of Democrats. On the one hand, Democrats fighting to throw out what you call a rigged system, who want to fight corporate power and billionaires. And on the other hand, Democrats who, quote, "politely nibble around the edges of change." Explain more.

WARREN: So look, the Democrats need to build a bigger tent in order to win in 2026, 2028, and beyond. So the question is, how do we do that? Partly, Donald Trump already told us. Remember, he said for an entire year before the '24 election, he would lower costs on day one. He gets elected, and the first interview he gives, he's asked, why did you win? And he said, because I said I would lower costs on day one.

So here we are, a year in, cost of housing is up, cost of health care is up, cost of utilities is up, cost of groceries is up for families. So Democrats have to hold Donald Trump accountable, but we have a real choice to make about how we're going to move forward on our agenda. We can either say we are all in for American families and lay out in concrete terms, here's how we're going to lower costs.

Or we can say, we're going to moderate that, we're going to nibble around the edges in order to be more attractive to billionaire donors who might help fund Democratic campaigns. My view is, I get it, I get why everybody wants the money. I don't believe in unilateral disarmament against the Republicans.

But at the end of the day, the money is not worth it if it causes us to narrow up our agenda. We've got to prove that we've got good ideas and we are in the fight to deliver.

BASH: You just said unilaterally disarmed, that was kind of what I was going to go to next --

WARREN: Sure.

BASH: -- because you say -- you're talking about people who -- extremely wealthy people, because you talk a lot in your speech, you talked about the fact that it's not just billionaires. There are a lot more just regular, very wealthy people who try to influence policy. They are certainly not MAGA Republicans. They're also not interested in changing an economic game that is already rigged in their favor.

Some people in your party will, in your party, will hear that and say, what do you want to do here? You just want to take your ball and go home? Then you're not going to be part of the system and the process that is kind of reality right now.

WARREN: No, what I want to do is win. I want to win in November of 2026. Read the room. If you're looking at a room of anything other than very wealthy donors, what the American people are telling us over and over and over is I'm voting for the candidate who credibly says that they will lower costs for me.

Look at what James Carville said. I don't always agree with James Carville, but James Carville said it was clear, even to him, that Democrats need to run the most populous campaign since the Great Depression if we want to win in 2026.

BASH: Your prescription focuses on the economic agenda, understandable in a lot of ways, given that --

WARREN: Yes.

BASH: -- you're Elizabeth Warren. What you don't mention are some cultural issues that have made voters who are historically Democrats leave your party. People, just frankly, in your party, maybe who are more in the middle of the country, think that it's now more and more being run by coastal elites, feel ostracized, belittled if they don't use the right pronouns. Just one example. How do you get them back?

WARREN: So look, I see this as we get them back by talking about the thing that they tell us is most important to them.

BASH: So stop talking about those issues?

WARREN: My view is let's put forward an agenda from Democrats that will really deliver for working families. Let's get out there and talk credibly about what it is we are willing to fight for. Are we willing to fight to increase housing supply? Are we willing to fight to get corporations out of the business of buying up those houses in America, even if it annoys, irritates, pisses off a bunch of billionaire donors who are making money off the system as it is?

BASH: Sounds like you learned lessons among other -- just like other candidates did from, like, your presidential run --

WARREN: Yes.

BASH: -- in the 2020 campaign, where there was a lot of talk about social and cultural issues, that in the primary was used to try to win, but that turned off general election voters in the future.

[12:45:07]

WARREN: The lesson I learned both from the 2020 election, but also the 2024 election, and frankly, elections reaching back a long time, is that people across this country are in worse and worse and worse financial shape. And one year of Donald Trump has made that even worse.

I don't know if you've seen the latest data. Home mortgage foreclosures are up 21 percent since Donald Trump was elected to office. And you can just go category by category. So the real question is, how do we deliver on that? For me, that's what this is all about.

People are asking us, folks in Washington, folks in the Statehouse, what are you going to do to unrig this system and make it work for me? If Democrats shift our agenda, narrow down our agenda in order to attract billionaire donors, we're going to lose. We're going to lose in 2026, 2028.

But if we go back to our roots -- remember, we're the party that delivered Social Security.

BASH: Yes.

WARREN: We're the party that delivered Medicare. We're the party that delivered healthcare for Americans all across this country. We go back to our roots and credibly put on the table concrete proposals to lower costs and then show we're willing to fight for them. That's how Democrats will win.

BASH: Senator Elizabeth Warren, thank you so much for being here. Appreciate it.

WARREN: Thank you for having me.

BASH: And coming up, a quiet catastrophe. You're going to hear about the people and crucial missions behind the Trump administration budget cuts over the past year. That's next.

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[12:51:19]

BASH: In a news cycle where weeks age like decades, you're likely not thinking about the beginning of the second Trump term when then- president and his then-billionaire bestie took a chainsaw to the federal government. Approximately 300,000 people were fired, forced out, or decided to leave the federal workforce.

And as Franklin Foer details in his new Atlantic piece, we're just starting to feel the toll of that purge. And Frank is back here, along with our White House Correspondent Alayna Treene. I'm just going to kind of lay down some of the facts that you delve into in this really great piece.

The gutted departments by the Trump administration, obviously starting with USAID, we know 100 percent. The Institute of Museum and Library Services, also 100 percent. Consumer Federal Protection Bureau, the Agency for Global Media, AmeriCorps, Planning and Development at HUD. The Small Business Administration was cut almost by half. And then, of course, the Education Department by a third.

You spoke to some of the key federal workers who are not boldface names --

FRANKLIN FOER, STAFF WRITER, THE ATLANTIC: Yes.

BASH: -- but have such an impact on the way that the government works or doesn't work with regard to people's lives. We're talking about Corina Allen, was the Tsunami Program Manager at NOAA. Eric Green, the Director of National Human Genome Research Institute, NIH. David Boucher, who was the Director of Infectious Disease Preparedness. And then Micaela White, Senior Humanitarian Adviser at USAID.

FOER: Right. Our government is so vast, it's so hard to wrap your mind around the fact that there are 300,000 fewer people working for the government. These jobs have been lost across the board, across agencies, across hierarchies. But one of the places that's been impacted the most are people who are the most experienced government operators.

Because if you're good at your job, if you're a world-leading expert and you just don't really want to work in these circumstances, and somebody offers you a voluntary resignation package that's relatively comfortable, you're going to leave because you're going to be able to sell your skills on the open market.

And those people were just incredibly important to the way that the government works, not just now, but over time. Because government is complicated. There is no instruction manual for doing most of the things that the government does so well.

So if you're preparing for the next infectious disease outbreak, I mean, there really isn't a place -- there's not a file you can pull from a drawer that tells you how to do this. It helps if you've been around the block a couple times. And those people who've been around a couple blocks a couple times are able to bring up the next generations of people who do the job. So when they leave, the effects just continue to ripple.

BASH: And this is just to that point, a quote from your piece, "His administration isn't simply committed to shrinking government. It sees career officials as the enemy within an entrenched elite exploiting its power and imposing its ideology on the nation. Its demise is not collateral damage, but the imperative. What took generations to build is being dismantled in months, and with it goes not just expertise but what remains of the shared American faith and expertise itself."

I mean, bottom line is, based on what has happened even in the past, excuse me, the first year --

FOER: Yes.

BASH: -- if the next president comes in and wants to reverse it, it ain't going to be easy.

FOER: There's no going back.

BASH: There's no going back.

FOER: Yes. There's a rational way that one could have gone through this whole process. There's fat, there's their paper pushers, the people who are mediocrities. And if DOGE had gone in and set about eliminating that group of people, they could have actually made the government more efficient, but they didn't.

[12:55:03]

What they did is they went in with a sledgehammer and they just tried to destroy as much as they could as quickly as they could. And, you know, we don't -- we live in Washington. So again, it's like we have this very narrow view of what the government is, but the government is vast. It's out there, it's hospitals, it's parks, it's the defense department.

It's -- I talked to a guy who works for this geodetic (ph) survey. GPS is set by a guy -- by guys who were able to go out and compensate for the fact that the earth wobbles, that when there are storms, you know, things get shifted around.

BASH: Is that guy gone?

FOER: That guy is gone. We don't have -- we're losing capability in all of these places.

BASH: You have nobody to tell us that the earth is wobbling?

FOER: Yes, exactly.

BASH: I mean, it sounds --

FOER: No, no, no, no --

BASH: I'm sort of, you know --

FOER: Ships will run aground eventually --

BASH: Making a joke out of it but it's not funny.

FOER: -- because that happened.

BASH: Yes.

TREENE: That's what I thought was so good about your piece too, is that I remember everyone covering this so closely, particularly obviously in those early months of the second term when Elon Musk was still very much a huge presence in the Trump administration, is so many people would think about the government, as you just said, as, you know, Washington, D.C.

I think your piece did a really good job of looking at the people who are also, you know, in Republican states out in Alaska or in, you know, middle America and rural America that were so crucial to the government that were feeling the effects of that. That was some of the things that I found in my reporting around DOGE and the cuts they're making too --

BASH: Yes.

TREENE: -- that people -- that the, you know, the president, many of his supporters, were people who were getting impacted by this.

FOER: Yes.

TREENE: And so --

BASH: Your new piece is called "The Purged." It is a great piece. It is in the Atlantic, and I hope everybody goes and reads it because it's very important.

Thank you --

FOER: Thank you.

BASH: -- very much. Thanks to you both. Thank you for joining Inside Politics. CNN News Central starts after a quick break.

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