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U.S. Economy Expected to have Added 1 Million Jobs in April of 2021; Threat of Inflation in Current U.S. Economy Examined; Former U.S. Defense Secretary Chuck Hagel Interviewed on Current State of Republican Party and U.S. Foreign Policy; School District Regrets "White Student Support Circle" After Verdict; Texas County Democratic Chair Apologizes For Calling GOP's Tim Scott "Oreo". Aired 8-8:30a ET

Aired May 07, 2021 - 08:00   ET

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

[08:00:00]

RICHARD HOLTOFR, COLORADO STATE REPRESENTATIVE: If I have offended anybody in any way, it is not my intent.

(END VIDEO CLIP)

JOHN BERMAN, CNN ANCHOR: Very quickly, did that cut it for you.

LESLIE HEROD, COLORADO STATE REPRESENTATIVE: Absolutely not. I think to continue to excuse racist behavior behaviors instead of calling it what it is and apologizing is never going to be enough. And saying that he's sorry if he offended, or whatnot, it doesn't do it. And quite frankly, he hasn't approached me to apologize personally at all.

And so, again, this is not the first time. The last time something happened that involved him and racism, he committed to having a conversation with the Black Caucus, which, quite frankly, at the time was all we were asking for. He committed to doing that and then he did not do it. And now he's backing out of that. And so I don't really believe that he wants to lead the charge to address these issues. In fact, I think he just wants to get out of a very sticky situation that he put himself in.

BERMAN: Leslie Herod, I'm sorry you had to hear that. Thank you for joining us.

HEROD: Thank you.

BERMAN: Thank you, Representative.

NEW DAY continues right now.

I'm John Berman with Brianna Keilar. On this NEW DAY, America's recovery full throttle. Shoppers spending, stocks soaring, bosses hiring, with a new jobs report now just minutes away.

Plus, the risk of the Biden boom. Higher prices for everything from a tank of gas to toilet paper, what happens if they are here to stay? BRIANNA KEILAR, CNN ANCHOR: And backlash after a California school

offers a support circle for white students after Derek Chauvin's murder conviction.

And must-see TV, what happens when a controversial billionaire who builds rockets and Teslas tries to host a late-night comedy show?

BERMAN: Good morning to viewers here in the United States and around the world. It is Friday, May 7th. Thirty minutes from now the April jobs report will be released. It is expected to show an undeniable comeback for the U.S. economy. Analysts forecasting 1 million jobs created in the past month.

Wall Street staged a rally ahead of today's report. The Dow just coming off a new record high and stock futures pointing higher now ahead of today's trade.

KEILAR: President Biden will deliver remarks about the economic resurgence later this morning. The president is calling for tax hikes on corporations and the wealthiest Americans to pay for infrastructure projects across the country. He says he's ready to reach a deal with Republicans.

(BEGIN VIDEO CLIP)

JOE BIDEN, (D) PRESIDENT OF THE UNITED STATES: I'm willing to hear ideas from both sides. I'm meeting with my Republican friends up in the Congress to see, number one, how much they are willing to go for, what they think are the priorities, and what compromises we can make. I'm ready to compromise. What I'm not ready to do, I'm not ready to do nothing. I'm not ready to have another period where America has another infrastructure month and doesn't change a damn thing.

(END VIDEO CLIP)

KEILAR: Now with all the good economic news, a debate erupted this week over the risk of inflation in the U.S. Treasury Secretary Janet Yellen downplaying those risks, saying that interest rates may have to rise a bit to keep the economy from overheating. For some context, here is a NEW DAY explainer from Christine Romans on why you're starting to see prices of products rising.

(BEGIN VIDEO CLIP)

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Call it the big "i," inflation, the downside of a hot economy. The pandemic disrupted supply chains and consumer behavior. Working out kinks in distribution is causing shortages and price spikes from lumber to steel to rental cars. Add in the historic stimulus to keep the coronavirus recession from becoming a depression, more people have more money in their pockets and they're chasing after higher prices as the economy reopens.

If you haven't felt it yet, it's coming. You can expect higher prices for toilet paper, diapers, soft drinks, plane tickets, a tank full of gas. Whirlpool is rising prices of some of its appliances by up to 12 percent. Now a shortage of lumber is adding about $36,000 to the cost of building a typical single family home. Rental car prices incredibly high if you can find one. There are chlorine shortages for pools. The global chip shortage is halting car assembly lines. Even ketchup packets are in short supply.

The Oracle of Omaha, Warren Buffett, said he sees substantial inflation, 85 percent of the economy, he says, is in super high gear right now. Fed officials are reluctant to raise interest rates before main street is truly recovered. The Fed Chief Jerome Powell said while there's been progress, there's still work to do.

JEROME POWELL, CHAIR, FEDERAL RESERVE: The downturn has not fallen equally on Americans, and those least able to shoulder the burden have been the most affected.

[08:05:01]

ROMANS: Only time will tell how long these higher prices will last, but the practical effect of inflation on your budget, every dollar you have buys a little bit less.

(END VIDEO CLIP)

BERMAN: I want to bring in Douglas Holtz-Eakin, American Action Forum president and former Congressional Budget Office director. Doug, very nice to see you. We're going to talk about inflation in a minute. I think the headline today, though, is where the economy is right now and what a different place it is in than it was six months ago. So finish this statement for me -- the state of the American economy is --

DOUGLAS HOLTZ-EAKIN, PRESIDENT, AMERICAN ACTION FORUM: It's very good. It's a solid recovery. We're going to expect a million jobs or more in the report that comes out at 8:30. Remember, though, that will still leave us about 7.5 million fewer jobs than we had in February of 2020. So there's a long way to go until everyone is back fully employed.

And progress will depend entirely on the virus. The progress from six months ago has everything to do with the vaccination and the ability to control the coronavirus. If we continue to be successful, there's a lot of cash out there. What we need is for people to come back to work. And the things that are stopping people from coming back to work are childcare, schools being closed, and in some cases the pandemic insurance. And if we get rid of those supply blockages, there's every reason to believe we can replace those jobs.

BERMAN: Actually, talk to me a little bit more about that. You say the economic recovery is completely due to the progress against the virus, vaccinations. Talk a little bit more about that, because it's a connection that for a long time wasn't being made. It was an either/or. It was either fight the pandemic or bring the economy back. But that sort of changed a little bit, to be honest, on January 20th. So how effective has that been?

HOLTZ-EAKIN: This has been an enormous improvement. So this -- it's important to remember this is an unusual recession, unlike anything we've ever had before. Income continued to rise during this recession. Overall aggregate income has risen pretty sharply. Wealth continues to rise. We've seen the stock market, housing prices are up, all of that is all good news. People just couldn't spend. You couldn't go to a restaurant and have a meal. You couldn't go to a concert, couldn't get on a plane. And that's the virus. And with the recession and fears about the virus, people are now going out. They have the wherewithal to spend, they can spend, and that's driving the recovery. It's entirely about progress against the COVID-19.

BERMAN: What stops -- in addition to if we have some kind of slip back on the pandemic, which God forbid, let's hope we don't, but besides that, what are you worried about going forward?

HOLTZ-EAKIN: Well, I think going forward there's real risks of inflation. The only question is what kind and how long will it last? The American Rescue Plan, the $1.9 trillion bill passed in March, was too much. I don't think there's any question about that. And so we've already seen prices rise in assets. So people had the cash. They stuck it in the stock market, homes, commodities, those are up. Construction costs are up. Everywhere in the supply chain we've seen pressure on prices. The only place it hasn't shown up yet is in core nonfood, nonenergy consumer prices. But that's probably in the future. The question is how big will it be, and how long will it last?

BERMAN: The job plans, the American jobs plan which focuses a lot on infrastructure, how much of that do you think would help continue the progress?

HOLTZ-EAKIN: I think it's a mixed bag, to be honest. There's some core infrastructure in there that I don't think there's any real disagreement about. It would be extremely valuable for the U.S. economy. There are other things in there that have nothing to do with core infrastructure, and so, we're going to pay a higher tax price. That's a headwind. A negative. The only question is how big. And it will be offset to some extent by the quality of the spending that we get in there. So time will tell, and we really haven't seen enough rede tails in a bill in Congress to know for sure.

BERMAN: But basically, you're feeling pretty good?

HOLTZ-EAKIN: I am optimistic. I am always optimistic. But there's some risks to this recovery. We're not out of the woods entirely. Those risks are still virus related, and also having to do with volatility of the financial markets from a lot of cash sloshing around, and consumer prices. But there's reason to be hopeful on the jobs front, no question.

BERMAN: Douglas Holtz-Eakin, appreciate talking to you this morning. Very interest, thank you.

HOLTZ-EAKIN: Thank you.

KEILAR: Republican lawmakers poised to replace their number three leader in the House, Congresswoman Liz Cheney next week. Her offense, refusing to co-sign the big lie pushed by former President Trump and his allies, falsely claiming that President Biden's 2020 win was fraudulent.

Joining us now to weigh in on that and other topics, we have former U.S. defense secretary under President Obama and former Republican U.S. senator from Nebraska, Chuck Hagel, with us. Sir, thank you so much for being with us this morning. I know that you as so many others are watching what is happening really to the Republican Party, but specifically in the House of Representatives, with Liz Cheney expected to get the boot from leadership, and, of course, her position in Congress is also in danger. What do you make of the state of the GOP right now?

[08:10:12]

CHUCK HAGEL, FORMER U.S. DEFENSE SECRETARY: Well, thanks, Brianna. Nice to see you again. I think the state of the GOP today is divided, is polarized. It's going to continue to be divided and polarized going into the election next year. You can't have a defeated president who, by the way, during his four years, the Republicans lost both the House and the Senate, he was defeated for reelection, and have that candidate and that former president claim that he is still leader of the party and the party must be loyal to him.

The party is always bigger than an individual, I don't care who the president is. And he's not accepting -- Mr. Trump is not accepting that. And that is going to continue to divide the party, and divide the party in a very corrosive way because it is about truth. It is about being honest. It is about the core values of our country, of what a party should represent. So I think it's a pretty tough future the Republicans have, especially if they vote out Liz Cheney.

KEILAR: What do you think of how they are treating her?

HAGEL: Well, politics is a tough business. And you don't have the highest expectations, but you do have expectations for just common decency, for a sense of morality, for a sense of responsibility. These are leaders elected by people all over the country to lead this country, not just on issues, on taxes, foreign policy, but on moral issues. No, they're not preachers, I get that, but leadership starts with character. It starts with honesty. It starts with decency. And if you don't have that at the base, then everything else is going to get wobbly, and it will end not well.

KEILAR: Do you still consider yourself a Republican?

HAGEL: I do, whatever that is today. But I know what a Republican is as far as why I joined the Republican Party. I know what the Republican Party stood for, I think still does in many ways. But it isn't the party that I joined. It's not the party that I served in, in the United States Senate, where, interestingly enough, fiscal responsibility was one of the main points, one of the main platforms, engagement, free trade, a competent government, national security. Most of those tenets have gone out the window.

And I think the Republican Party today is leaderless. I think they are confused. I think they don't know what they stand for or who they are. And when you have got a situation like that, it's like in life or anything, when you are confused and you don't know who you are, it's probably not going to end well until you can get straightened out. I think the Republican Party will get straightened out. There are emerging young leaders across this country, in the Congress, Republicans, who know better. They are embarrassed by what they've seen the last few years, and I think they'll straighten it out. But I think it's going to be a tough ride for the Republicans the next few years.

KEILAR: Certainly. And I wanted to talk to you about President Biden's Afghanistan withdrawal. You served as defense secretary during the war, and finally we're seeing a complete withdrawal of U.S. troops out of Afghanistan by September 11th. You had said previously that Trump's goal of May 1st was unachievable. Is September 11th achievable, and is it a good idea to have that be the date?

HAGEL: Well, first of all, I think we recognize the fact this is a very difficult situation. I think everybody appreciates that. After 20 years, over $2 trillion, thousands of men and women died there, Americans, wounded there, and still Afghanistan is in terrible shape. As a matter of fact, the Taliban are stronger today than probably they've ever been, control more country, more of the process than ever before.

So at some point, a president has to decide, OK, what's the future? The future can't be the status quo, can't be the last 20 years. Nothing in life stands still. Threats change. Things are not the same now, today, 2021, as they were 2001, whether it's Afghanistan, the Middle East, wherever. Different threats emerge.

But I think one of the things that we have always -- when I say always, recent history is overlooked, whether it's Vietnam, whether it's Iraq or Afghanistan, it's up to the people. You can't impose democracy on countries.

[08:15:00]

I mean, that doesn't mean a country like Afghanistan can't have a thriving democracy, not at all, but it's up to the people. That's not going to be a military solution that decides that. The military is part of it, but it's got to be diplomatic. It's got to be the people.

And I think Biden has made the decision, based on his own experience and people around him, and I know he's talked to a lot of people about this. This is -- this is the time that we're going to have to start to move away.

Are there risks? Yes. Uncertainties? Yes. But there are certainly risks and uncertainties with staying where we are. And continuing to pour money in there and continuing the Taliban get stronger and stronger.

At some point, you've got to say, the country has to rely on itself, its own people, its own systems. And I am concerned like anybody else. But I think President Biden's decision was a responsible decision.

BRIANNA KEILAR, CNN ANCHOR: Former Defense Secretary Chuck Hagel, thank you so much for joining us this morning. It's great to see you.

HAGEL: Thanks, Brianna.

KEILAR: Up next, the school that offered a support group for white kids after Derek Chauvin was convicted of murdering George Floyd.

JOHN BERMAN, CNN ANCHOR: Plus, the Democrat in hot water for what he said about America's only black Republican senator.

(COMMERCIAL BREKAK)

BERMAN: A school district across the bay from San Francisco forced to apologize after it offered a support circle for white students after former Officer Derek Chauvin was convicted of murdering George Floyd.

[08:20:04]

School officials in Piedmont blaming the whole thing on a poor choice of words.

CNN "EARLY START" anchor Laura Jarrett joins us with that.

Laura, was it that simple?

LAURA JARRETT, CNN EARLY START ANCHOR: All right. So, John, a poor choice of words is one thing but you have to remember the timing. This is the day after Chauvin's convicted. Emotions are running high and the assistant superintendent Cheryl Wozniak, who is white, decided to offer support to students in the community. But her district-wide note has the headline, white student support circle.

And she offered the white students time to discuss how the trial, verdict and experience related to the George Floyd murder are impacting you. The problem is she's talking about a session to, quote, process, share and listen and the black students wouldn't be there.

Wozniak's offer backfired, obviously, with some students posting TikTok videos baffled and upset at the idea. Separate support circles were also held for black students and other people of color but after all the uproar, the white session was canceled.

The assistant superintendent who sent the original email promptly apologized and the district superintendent did as well saying in a statement, quote: the intent was to provide white students with an opportunity to talk about how to be an ally. He went on to say they are planning to offer more support circles open to everyone.

John, the part I find so interesting here is it is the students who were the ones to flag this issue. The ones to say something is a little off here.

BERMAN: That is really interesting. Laura Jarrett, thank you so much for that. You know what we need. We need an anchor support circle.

For that, let's bring in Don Lemon, the host of "CNN TONIGHT" and author of "This is the Fire: What I Say to My Friends About Racism." It's great to see you.

DON LEMON, CNN HOST, CNN TONIGHT WITH DON LEMON: I wouldn't be much help in the support circle. I'd need lots of hugs.

BERMAN: We're both sitting here listening to that story and sort of paying close attention. What do you make of it?

LEMON: I don't really know. A support circle for what? I mean, for reality? For what's happening in the world?

I mean, these are college students. And those are supposed to be the years that you tough it up. So I think we could all use a little toughening up in this moment.

And we, again, as I write in the book and talk about all the time, we must hold people to account, but I think we all need to be a little bit tough in these moments and also there should be a lot of grace going on as well.

KEILAR: Don, I want to know what you think about this Democratic Party chair in Texas County said, and let's keep in mind he apologized for this, but he called Republican Senator Tim Scott, who is black, and did the rebuttal to Joe Biden's joint address to Congress, he called him an "Oreo". This is the Democratic Party chair. What did you think about that?

LEMON: God, it's early for these. I mean, do we --

KEILAR: You think it's early? Come on.

LEMON: No, I think it's -- obviously, you don't need the name calling. Any time you call someone a name, you don't want to become them. You stoop to their level. You give your competitors ammunition and you give them a talking point and you become them.

So I don't think it's helpful to call anyone names. There are ways that you can hold people to account that you can call people out by not using names. I do it all the time.

KEILAR: Can I ask you about that, though? This idea, larger than that, is when I see those comments from the Democratic Party chair, it's almost as if he's saying, if you are black, you should be a Democrat, right? He's sort of saying that --

LEMON: I don't think that's what he's saying.

KEILAR: What do you think he's saying?

LEMON: I think that's a Republican talking point when people say if you are -- if you are black, you should be a Democrat.

KEILAR: No, explain, you know, what Oreo means.

LEMON: Oreo is that he's black on the outside, and he's white on the inside. So I think that has to do with how you stand on social issues, issues that affect African-Americans, if you are voting against your own interests. If you are upholding a party that has really been not even -- trafficking -- has been trafficking in racism and insurrectionist party, a party that's trying to restrict the voting rights for people who look like you.

So African-Americans understand what he's saying. I don't think that they would agree that he should be saying it that way, especially publicly. Now, I'm going to be honest. If you're sitting around the kitchen table and you're black and with other black people, they may say the same thing. What is wrong with, you know what, the term he used. But I don't think it should be used publicly.

I think it is damaging to Democrats, if they are trying to do that, and it gives Republicans talking points.

Tim Scott should be held accountable for what he is doing and if he is voting against the interests of his own people.

[08:25:05]

That is something that's valid and should be talked about. The name- calling is something different. It should be kept out of the public sphere.

BERMAN: So, we have you here three reasons. One, we like to see you in the morning. Two, to have these serious discussions, and we do appreciate it, even in early in the morning.

But, three, because you have this amazing CNN documentary coming up about Marvin Gaye and the album "What's Going On." And I want to play a short clip of that.

LEMON: All right.

(BEGIN VIDEO CLIP)

MARVIN GAYE, SINGER: I think it was around 1969, or 1970, about that period, at Motown Records, when I stopped thinking so much about my erotic fantasies and started thinking about the war in Vietnam and my brother who would tell -- write a response in pretty horrible stories.

UNIDENTIFIED MALE: Also, if you're living in Detroit in 1968, '69, '70, you're seeing the turmoil on the streets.

UNIDENTIFIED MALE: The country was full of turmoil. The country was full of fear. The country was full of anger.

(END VIDEO CLIP)

BERMAN: Okay. I can watch this on a nonstop loop for like days on end.

LEMON: It's so beautiful.

BERMAN: Talk to me. What's going on here?

LEMON: It is -- it is one of the most beautiful things I've ever done since I've been at CNN. This is just a beautiful documentary.

It is about his life, but we do a deep dive into the album, "What's Going On." The 50th anniversary of the album, the number one album of all time by "Rolling Stone". "Rolling Stone" named it the number one album of all time.

The layering he does with his voice, the autonomy with his voice that ended up giving other artists the same autonomy. How he fought against public perception and what people wanted around him, they wanted him to remain this doo-wop singer. He fought against that and created the number one album according to "Rolling Stone", according to many people, of all time. It's an exceptional, beautiful piece of work. You have to watch it.

BERMAN: And the question itself, I mean, just the question of the song itself, just so incredibly profound and poignant.

LEMON: But, John, it's not just about what's going on when you talk about the question itself. He was writing -- this album came out in 1971. He was writing about the environment. He was writing about children. He was writing about drug abuse.

He was about what's happening in the cities. He was writing about police brutality. He was writing about racism.

In all of those songs, there's a gospel song on the album. It's just an incredible piece of work. When you hear it you go I've heard that song. I've heard that song. The one thing -- one song goes straight into the other. There's no break between songs. So when you -- it creates a mood, and it's -- it entices you and pulls you in.

BERMAN: Look, you had me at hello. You had me at hello. Don Lemon --

KEILAR: Also, I would just say that I love that you're placing this in the historical context. I am so looking forward to that element of the things that shaped Marvin Gaye. I know it's going to be wonderful, Don. Thank you so much.

LEMON: Yeah, thank you.

BERMAN: Don's CNN special "What's Going On: Marvin Gaye's Anthem for the Ages" premieres Sunday at 8:00 p.m.

So, just in to CNN, a highly anticipated new read on the U.S. recovery. Did hiring in the U.S. reach new pandemic heights?

KEILAR: Plus, Times Square ready to bounce back. We are live in the middle of the original epicenter of the crisis.

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