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Consequential Week for U.S. Economy, GDP, Rate Hike, Key Reports; Biden's Condition Improves, But His Docs Still Not Facing Media; Conservative Outlets Turn on Trump After January 6th Revelations. Aired 7-7:30a ET

Aired July 25, 2022 - 07:00   ET

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

[07:00:00]

JOHN BERMAN, CNN ANCHOR: Good morning here to our viewers here in the United States and all around the world. It is Monday, 9July 25th. I'm John Berman with Brianna Keilar.

A huge week for the fate of the U.S. economy, new data that may tell us whether the U.S. is heading into a recession.

BRIANNA KEILAR, CNN ANCHOR: Consumer confidence numbers, which are currently very weak, hit tomorrow, the Federal Reserve also meeting tomorrow and Wednesday as investors brace for an aggressive rate hike for the second month in a row. And then second quarter GDP comes out Thursday, it's widely expected to be negative. Two negative quarters in a row could be viewed as a sign of recession.

And on Friday, new numbers on the country's historically high inflation will be released.

BERMAN: All right. With me now, Early Start Anchor and CNN Chief Business Correspondent Christine Romans.

Romans, you look at this week and say it is a moment of truth.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: It really is because we've got all of these road signs about the economy that are pointing in opposite directions. We want to crystallize where we're coming from and where we're going in the economy. And this week, we're going to get all kinds of amazing data to help us do that, incredibly important for policymakers and for Washington.

Look, we've got consumer confidence numbers tomorrow, I mean, they could be really rotten. We know that people feel terrible about where the economy is going, a lot of people feel like they are already in a recession already. Just terrible consumer confidence. So, we will get those numbers.

On Wednesday, we have got a Federal Reserve interest rate hike that's expected. We are expecting another 75 basis points. That's big. I mean, we saw that in June, 75 basis points, that was the biggest move since 1994. We're expecting that again. Why? Because the Fed is trying to tamp town on inflation. So, that's going to be incredibly important to watch.

And we're going to get the first reading on second quarter GDP, that comes Thursday, and that's expected to be negative again. And that would mean, as you guys just said, two quarters in a row of negative growth. That's a big slowdown from where we saw at the end of last year, 6.9 percent.

But GDP alone is not the only gauge of whether we are in a recession. And as the treasury secretary, Janet Yellen, said this weekend, jobs numbers are still very, very strong. She says we are not an economy that is in recession right now.

BERMAN: Can you talk a little bit more about that? Because I think people have become accustomed to hearing that two quarters of negative growth in a row does mean it's a recession, but Janet Yellen is saying, no, no, no, no, no, there's a lot of other stuff clear here. Larry Summers is saying, yes, yes, yes, we are headed into a recession. What does this all mean?

ROMANS: Well, look, I mean, I guess, technically, they both could eventually be right that we are not in a recession now but that maybe a really aggressive Fed will push us into a recession down the road. There's been an obsession with whether we are in a recession. But I just -- look, at all these states with a jobless rate below 3 percent.

Recessions really feel terrible because recessions usually mean a lot of job loss. And so people personally suffer from job loss. We are just not seeing that right now. We're coming from a position of great strength in the labor market, more than 11 million open jobs right now. So, that's one of these -- again, I'm talking about these guide posts in the economy that are pointing in opposite directions. That's why it's so baffling what's happening next.

BERMAN: This is extraordinary. These are states with unemployment rates lower than 3 percent, which is really, really low, and you are talking about all this conflicting economic data. Consumer confidence is really low.

ROMANS: It's really low.

BERMAN: But gas prices are really dropping.

ROMANS: And they have been now for six weeks heading into seven weeks. Look, still -- here is what people feel. They know today they're paying more to fill up than they were a year ago but these numbers have been trending lower.

And it's interesting as well, The Wall Street Journal yesterday with a really interesting point saying that there are signs inflation may have peaked but will it come down fast enough for consumers to start to feel better? I'm not sure. There is a real malaise in consumer sentiment right now and I even think a few pennies a gallon on the gas tank is not really going to fix that malaise for now.

Look, we have had a pandemic for two years, right? People really feel kind of rotten. That's a problem for the democrats Heading into, of course, the midterms, but it's also a problem for the self-fulfilling, you know, nature of a recession. If people feel really lousy for long enough, I mean, a recession could be inevitable.

BERMAN: Malaise is such a dirty word for a White House, right? I mean, it's a word that even though Jimmy Carter didn't say, it helped drag down his presidency, the Biden administration certainly doesn't want to be associated with that.

Christine Romans, thank you for laying out where things stand this morning.

ROMANS: Big week

BERMAN: A huge week.

Ahead, we are going to be joined by the director of White House National Economic Council, Brian Deese.

KEILAR: President Biden is making progress over the weekend in his COVID recovery but his doctor still hasn't publicly answered questions about the president's condition.

CNN's Jeremy Diamond is at the White House with the latest. Jeremy?

JEREMY DIAMOND, CNN WHITE HOUSE CORRESPONDENT: Good morning, Brianna. President Biden waking up today on day four of his COVID isolation, but according to his doctor, Dr. Kevin O'Connor, in a letter that published yesterday by the White House, the president's symptoms continue to, quote, improve significantly.

Dr. O'Connor writing that the president's primary symptom is now a sore throat but his other symptoms, including runny nose, body aches and a cough have all improved over the weekend.

[07:05:02]

The president is continuing to take that treatment -- that antiviral treatment, Paxlovid, to treat his coronavirus. He completed his third full day of Paxlovid on Saturday, his fourth full day just yesterday. And he's also still taking some Tylenol as well as the occasional use of an albuterol inhaler.

Now, Dr. O'Connor has yet to answer questions directly from the press but he has been releasing these daily letters via the White House press shop. We are expecting another update today from the White House press secretary, as well as Dr. Ashish Jha, the White House's coronavirus coordinator, who has been answering questions on camera nearly every day that President Biden has had this illness.

Dr. Jha said that the president did get some rest over the weekend and he also pledged to be transparent about the possibility that President Biden could display some long COVID symptoms over time.

But today, President Biden continuing with that fourth day of isolation, he will be appearing virtually, however. He was scheduled to go to Orlando to address this conference of black law enforcement executives, he will instead do that virtually, but we do expect to see the president on camera with that. Brianna, John?

KEILAR: All right. we will be watching. Jeremy Diamond live at the White House, thank you.

BERMAN: So, this morning monkeypox now a global health emergency, as declared by the World Health Organization over the weekend, but the White House says officials are still deciding whether the virus is a public health emergency in the United States.

CNN's Elizabeth Cohen with us now. What's the difference, Elizabeth?

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: John, the difference is one thing that the WHO has done for the world but the U.S. has not declared a public health emergency for this country. It will be interesting to see what they do.

The upside of declaring a public health emergency in the U.S. is it frees up some funding, it cuts down on some bureaucracy, it makes it easier for the CDC to kind of demand or request certain things of state departments of health.

The downside to doing it is will it sound alarmist? Is it not big enough yet? We have declared public health emergencies, of course, we are still in one, for COVID, also in the past for Zika, in 2009 for H1N1 flu.

So, let's take a look at where we're at with monkeypox. If we look, worldwide what we see is nearly 17,000 cases, in the U.S., nearly 3,000. In the U.S., and this number is very important, 99 percent of them have been reported among men with male-to-male sexual contact.

Now, those two numbers that you see up there, it is probably way higher than that, but that is the actual official numbers.

Now, when we say sexual contact, you don't have to have sex in order to get monkeypox. It can be very close, prolonged skin-to-skin contact, but what they're finding is that 99 percent of these cases have had sexual contact male-to-male.

Now, let's take a little bit of a look at the vaccine. This is, in general, a group that has been very enthusiastic about vaccination, the problem is there aren't enough. 300,000 doses have been distributed by the federal government of the vaccine, but 1.5 million people are eligible, meaning, for example, that they have had multiple partners and they live in places where monkeypox is spreading, and each person needs two doses. So, you can just do the math really simply there and you can see there isn't enough to go around.

But there really is hope that those numbers are going to be climbing. The testing numbers, the capacity has been climbing dramatically. It is possible, we're told, to get this under control, but the testing numbers need to stay high, those vaccination numbers really do need to come up. Brianna, John?

BERMAN: All right. Elizabeth Cohen, thank you very much for that.

COHEN: Thanks.

KEILAR: Turning on Trump, the editorial boards of two newspapers now both of them owned by former President Trump media ally Rupert Murdoch, are condemning the former president for his inaction on January 6th. The New York Post editorial board's headline reading this, Trump's silence on January 6 is damning. The Wall Street Journal's headline read, the president who stood still on January 6th.

Vice chair of the House select committee on January 6th, Liz Cheney, pointing this out during an interview on Murdoch-owned Fox News.

(BEGIN VIDEO CLIP)

REP. LIZ CHENEY (R-WY): Look, it's not just me that is saying that Donald Trump is unfit for office, it's other entities owned by Rupert Murdoch, it's the New York Post in their editorial on Friday, it's The Wall Street Journal said the same thing after our hearing on Thursday night.

(END VIDEO CLIP)

KEILAR: Joining us now, CNN Senior Political Analyst John Avlon, CNN Political Commentator Ana Navarro and former Republican Congressman and former Presidential Candidate Joe Walsh.

It's interesting to hear her say that, but I wonder, do you think it matters if Fox News isn't saying it?

ANA NAVARRO, CNN POLITICAL COMMENTATOR: Well, she's saying it on Fox News, so I think that matters. And, look, you know, first, I -- my admiration for Liz Cheney just grows by the day, right? This woman will follow Donald Trump to the gates of hell, if she has to. And she will make it her life's purpose to make sure that he is not president of the United States again.

Look, I think people are coming, Republicans even, conservative Republicans, Trump-supporting conservative Republicans are coming to the realization this man has a ton of baggage. It is undeniable. And that has been a feat and a task that's been achieved by the January 6th committees and there are others who don't have that level of baggage. There are others who are not going to go down in history as complicit in promoting an insurrection and a coup against the United States.

JOE WALSH (R), FORMER PRESIDENTIAL CANDIDATE: My respect for Liz Cheney equals that, but Liz Cheney is going to lose in a month, and she's probably going to lose overwhelmingly. If Sean Hannity comes out and says what The Wall Street Journal said, Donald Trump is unfit and he shouldn't run again, then I will pay attention. The Wall Street Journal isn't where Republican base voters are right now. This is still Trump's party. I think we all need to slow down.

JOHN AVLON, CNN SENIOR POLITICAL ANALYST: Yes. But, look, I think people who wondered at the beginning will these hearings have any impact? Are there people who are persuaded? The answer is yes. And the fact that the editorial boards move of the New York Post and The Wall Street Journal is an indication of that.

I agree with you, this has maximum impact when that jumps over to Fox News, but the fact that the New York Post is saying he is unfit to be president again, that's stark language. The fact that the Republicans who have testified under oath at the committee have moved the ball -- moved this bar in terms of people saying, you know, Donald Trump is not fit because his actions are the worst nightmare of the founding fathers.

NAVARRO: By the way, I agree with you. Listen, I live in Florida. And as popular as Ron DeSantis is with the Republicans in Florida, I think if it was a head-to-head between Ron DeSantis and Donald Trump who, by the way is also from Florida, where every nutcase has gone to live in the last few years -- but, anyways, I digress, I think in a head to head, Donald Trump would probably still beat DeSantis even though he is incredibly well-liked.

WALSH: This isn't surprising. I mean, Republican insiders don't want Trump to run, donors don't want Trump to run, my former colleagues don't want Trump to run, The Wall Street Journal, much of conservative media doesn't want Trump to run. But until voters say that and I don't see that happening. He's going to announce in a month.

NAVARRO: And in 2016, none of those people wanted Trump to run either.

WALSH: Exactly.

AVLON: The difference is, Joe, that a lot of those colleagues you speak off and the donors had been silent about it because they're scared, because there's still a great deal of fear of Donald Trump because of the base. And what's significant about the editorial board speaking up very clearly is they are clearly not scared anymore.

BERMAN: We have a little more of Liz Cheney talking to Jake Tapper. Let's listen.

(BEGIN VIDEO CLIP)

CHENEY: I'm fighting hard. No matter what happens on August 16, I'm going to wake up on August 17 and continue to fight hard to ensure Donald Trump is never anywhere close to the Oval Office ever again.

JAKE TAPPER, CNN ANCHOR: If you end up losing your job in Congress because of your work on this committee, it will have been worth it to you?

CHENEY: There is no question, I believed that my work on this committee is the single most important thing I have ever done professionally.

(END VIDEO CLIP)

BERMAN: So, that's Liz Cheney talking about what you were just talking about, Joe, the very real possibility that she might lose in this primary in just a few weeks, and she might and she still thinks it's worth it.

My question is which gets to what we were talking about beforehand, do you think Donald Trump entering the presidential race freezes the race, keeps other candidates out, because people are running now?

I mean, Mike Pence is running, hasn't announced yet, I'm not making an announcement on behalf of Mike Pence for an committee, but he's doing what you need to do to run for president now. Ron DeSantis is sort of doing what he needs to do to run for president right now. There are other Republicans doing the same. Does he freeze the field, Trump, when he gets in.

AVLON: Not entirely.

BERMAN: That's a change.

AVLON: It is a change. But, look, this has all been happening in slow motion but it's been an open secret, right? People are saying, look, I'm going to start building my committee but, hopefully, Donald Trump doesn't get in. Some of them are past the point of no return because they are never going to get in good graces, and that's what some of them have been hoping for. If I build something and he doesn't get in, maybe I will get his support. That's a fool's errand from the beginning. But you will see some folks get in and there is a whole bunch more waiting in the wings. It's one of the open secrets --

NAVARRO: Well, I absolutely think Ron DeSantis gets in whether Trump runs or not. I think there is a strange frostiness that's developed between the two of them. It's going to be very interesting to see how it plays out during DeSantis's reelection campaign, which is this year. I'm looking to see if Donald Trump, at some point, comes out and says he's being disrespectful to your president. Are you going to vote for a man who hasn't committed to endorse your president if I decide to run? And I don't know what that's going to mean in Florida. We saw what Trump's words meant in Georgia when it came to, you know, those Senate races.

So, I think that's going to play out.

[07:15:00]

I think Ron DeSantis is, as you say, far too gone, he's built up a team. If he wins decisively in Florida this year, I think Ron DeSantis is running regardless of what Trump does or doesn't do.

WALSH: Call me crazy, I think Trump clears the field. This is still his party. John, you're right, everybody is positioning themselves, but, man, he still owns the voters right now. And once he is out there doing his thing and he's criticizing these people, it's -- slow down. Slow down.

NAVARRO: Mike pence, who is he positioning himself with? I mean, look, people like me are going to see him as a complicit coward who did nothing but lick Trump's boots for four years and people who love Trump are always going to see him as complicit with what they see as a rigged election. BERMAN: Is that not an endorsement? You didn't endorse Mike Pence. Just to be clear, that wasn't a Trump-Pence endorsement.

NAVARRO: I have to tell you I find Mike Pence saying that we have to look forward and not look back, in other words, move on from January 6, so offensive after we heard his Secret Service calling their families to say goodbye on January 6. If nothing else, if nothing else, he owes that detail that risked their lives to save him much more respect.

WALSH: There's no Trump-Pence split in the party. Pence has no constituency among Republican voters.

NAVARRO: I think his family will still vote for him.

KEILAR: To that point, I mean, Pence has a big appearance in D.C. today, Trump has one tomorrow, and then this comes on the heels of appearances they made recently in Arizona where they have endorsed different gubernatorial candidates and there is a bit of a proxy war that's playing out. But you say -- you say, no, there isn't, apparently, this is a one-sided war.

WALSH: Pence may not be chummy with Trump anymore but there is no split in the party. Mike Pence has no constituency among Republican voters, none.

AVLON: I just think, clearly, he's hoping for evangelicals who will say, look, you get Trumpism without Trump. But if people are buying what he's selling, that is far from clear. There are still many more people who apparently were willing to kill for Mike Pence than they're willing to vote for Mike Pence. That's a problem.

NAVARRO: That big puppy figurine over there is more likely to get more Republican voters.

AVLON: Don't encourage him. Don't encourage him.

BERMAN: This is a left over from a previous segment. It still doesn't mean you guys can play with it.

Marco Rubio --

WALSH: Coward.

BERMAN: Okay.

KEILAR: He didn't ask the question yet.

AVLON: This is word association.

BERMAN: Let me get the question in and then weigh in. So, Marco Rubio was talking about the House vote to basically codify same-sex marriage to make it a federal right as passed by Congress. And what Marco Rubio initially said, what a stupid waste of time, was what he said.

So, over the weekend, Pete Buttigieg, secretary of transportation, who is married to a man responded to that and then Rubio responded to that. So, I think we have the sequence here of how this played out. Let's listen.

(BEGIN VIDEO CLIP)

PETE BUTTIGIEG, TRANSPORTATION SECRETARY: If he's got time to fight against Disney, I don't know why he wouldn't have time to safeguard marriages like mine.

Our marriage deserves to be treated equally. And I don't know why this would be hard for a senator or a congressman. I don't understand how such a majority of House Republicans voted no on our marriage, as recently as Tuesday, hours after I was in a room with a lot of them talking about transportation policy having what I thought were perfectly normal conversations with many of them on that subject only for them to go around the corner and a say that my marriage doesn't deserve to continue.

SEN. MARCO RUBIO (R-FL): The Disney fight was a state fight because our legislature rightfully passed a law that said we don't want our public schools indoctrinating six and seven year olds in the transgender agenda, and I supported that law. But what I focus on at the federal level in the Senate are federal problems that matter to real people, real problems.

(END VIDEO CLIP)

BERMAN: Now, Joe, now that you've heard it.

WALSH: He doesn't want to cross his base. 96, what, percent of Republicans voted against same-sex marriage in the House. He doesn't want to cross his base. He knows that is where they are. He can care about gas prices and same-sex marriage at the same time. He is the United States senator but he can't say that.

NAVARRO: Well, listen, he also has got one of the worst voting records in the U.S. Senate. So, I think a lot of Floridians, me included, would wonder if he is not a stupid waste of a seat. It would be nice if he showed up to vote. Maybe if he is there to vote that day, he can then call it a waste of time.

It was also, I thought, incredibly not collegial and disrespectful. He said this in an elevator while in there with Tammy Baldwin, another senator who happens to be gay. And so I thought that was just ridiculous for somebody who likes to tweet out bible verses about compassion and love on a daily basis.

AVLON: Yes. Look, he also took a shot in that clip earlier about federal versus state issues.

[07:20:00]

Buttigieg doesn't understand the difference, real issues that affect real people. Marriage is a real issue that affects real people and it's a federal issue, not just a state issue, pretty self-evidently. That's the issue at stake and he's willfully ignoring it. NAVARRO: And, the three -- listen, I wanted to say, the three Congress -- Republican Congress people from South Florida where Marco lives, where I live, Mario Diaz-Balart, Carlos Jimenez, Maria Elvira Salazar, all voted in favor of codifying marriage equality.

BERMAN: 47 Republicans did.

AVLON: Yes.

NAVARRO: Including those from South Florida.

And it's not just about gay marriage, and we shouldn't say that, it's also about interracial marriage and interethnic marriage, international -- you know, marriage between a different nationality, things that affect a hell of a lot of Floridians.

KEILAR: You guys, thank you so much. It's so wonderful to have all of you here this morning.

So, during that CNN interview that you saw there with Jake Tapper, Liz Cheney also revealed the committee may subpoena or is at least thinking about subpoenaing the wife of Supreme Court Justice Clarence Thomas, Ginni Thomas.

And the FBI investigated Chinese-made equipment near military bases and its ability to disrupt nuclear arsenal communications. New exclusive and CNN reporting you have got to hear, next.

BERMAN: And this is like an episode of Black Mirror. I had to read this to make sure it was real. A chess-playing robot broke a little boy's finger during a match. What on earth happened here?

(COMMERCIAL BREAK)

[07:25:00]

KEILAR: Parts of Southern Japan are on high alert after a volcano erupted on the island of Kyushu, spewing lava and hot ash into the air and forcing evacuations in the area.

CNN's Blake Essig has more on this.

BLAKE ESSIG, CNN CORRESPONDENT: I'm Blake Essig in Tokyo. An evacuation shelter has been set up and dozens have been urged to evacuate after Mount Sakurajima, a volcano in Southern Japan, started erupting over the weekend. The volcano had been sending up smoke for about a week, but starting last night, things escalated. Cameras captured the volcano sending dark plumes of ash and large, red, hot cedar blocks known as ballistic volcanic bombs flying through the air. At least one volcanic bomb traveled a mile-and-a-half which prompted the Japan Meteorological Agency to raise its alert level to a five out of five, the agency's highest possible alert level.

BERMAN: Amazing pictures there.

We have a CNN exclusive this morning about concerns over Chinese espionage. The FBI determined that equipment made by the Chinese tech giant, Huawei, could capture and disrupt some Defense Department communications here in the United States, including those involving the nation's nuclear weapons.

CNN's Katie Bo Lillis broke this story, joins us now with the reporting. Katie Bo, what have you learned here?

KATIE BO LILLIS, CNN REPORTER: John, this all started with this big FBI counterintelligence investigation that was ultimately briefed up to the Trump White House in 2019. The FBI knew that these small, rural telecommunications carriers in the Midwest were using Chinese-made Huawei equipment on top of their cell towers in places like Colorado and Nebraska that are close to a lot of sensitive U.S. military installations, including U.S. nuclear missile silos.

Now, companies say that they were using this equipment because it was cheap, it was reliable, but the FBI, in the course of its investigation, was able to determine that the equipment had the capability, although they couldn't prove that it was actually being done, had the capability to recognize, intercept and potentially even disrupt restricted Defense Department communications.

This was obviously offered China a potentially very dangerous window into the command and control for the U.S. nuclear arsenal and was, as one counterintelligence official familiar with the investigation described it to us, goes into the BFD category.

Now, China denies that it uses this equipment to spy on the United States and Huawei denies that its equipment could even be used in this fashion, but this comes at a moment in which U.S. counterintelligence officials are increasingly concerned, John, about what many described to us as a dramatic escalation of Chinese espionage on U.S. soil over the past decade and perhaps most alarmingly to some of the current and former officials familiar with this probe who spoke to us for this story. This equipment remains in place nearly three years later largely because of funding shortfalls.

BERMAN: Well, that's what I was going to get at, Katie Bo. And to be clear, every word of what you just said seems like a BFD, as one of the officials there just told you.

So, what is the United States doing to counter this, to deal with what could be a serious issue?

LILLIS: So, in 2019, the FCC issued a rule that mandated that had all of these carriers had to remove Huawei and ZTE, another Chinese-made telecom company, had to remove that equipment from the top of their towers. They could no longer use it. The program is called rip and replace. Congress appropriated about $2 billion to reimburse these companies to get the job done.

The problem is that the FCC is now saying that that's about $3 billion short of what it's actually going to take to reimburse all of the companies that have been approved for this program to actually remove this equipment and start all over again. So, here we are three years on from when the FCC issued its rule and three years on from when the FBI actually briefed up this investigation and the equipment is still sitting there.

BERMAN: Again, Katie Bo Lillis, you do such great reporting, thank you so much for bringing this. We know you are going to stay on it. It raises so many questions.

LILLIS: Thanks, John.

KEILAR: And joining us now is former Defense Secretary under President Trump Mark Esper, who is pretty fresh off of a trip to Taiwan as well. But I want to ask you, sir, about this exclusive reporting that we've seen there. Has China effectively built a network of Trojan horses using telecom in the U.S., as you see it?

MARK ESPER, FORMER DEFENSE SECRETARY UNDER PRESIDENT TRUMP: Well, good morning. It's fair to say that China's espionage in the United States is rampant. It's in infrastructure around the country, and as FBI Director Chris Wray has said, he's opening up a counterespionage investigation nearly every 12 hours.

[07:30:07]