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New Day

High-Stakes Showdown in Russia, China, Ukraine, North Korea; Sen. Joe Manchin (D-WV) Reverses, Agrees to Deal on Climate, Tax, Energy Bill; Ex-Trump White House Aide Cassidy Hutchinson Cooperating with DOJ Probe. Aired 7-7:30a ET

Aired July 28, 2022 - 07:00   ET





STEPHEN COLBERT, HOST, THE LATE SHOW WITH STEPHEN COLBERT: The debris in question comes from the 23-time Long March-5B, which delivered a module to the Chinese space station and is now in an uncontrolled descent, also the title of Rudy Giuliani's memoir.


JOHN BERMAN, CNN ANCHOR: Look, space junk is no laughing matter.

New Day continues right now.

BRIANNA KEILAR, CNN ANCHOR: Welcome to our viewers in the United States and all around the world. It is Thursday, July 28th. And I'm Brianna Keilar alongside John Berman this morning.

A series of high stakes interactions around the world, the Biden administration awaiting a response from Russia on its proposed prisoner swap of a convicted arms dealer nicknamed the Merchant of Death for detained Americans Brittney Griner and Paul Whelan.

BERMAN: The president expected to speak with his Chinese counterpart this morning as tensions boil over Taiwan and a potential trip by House Speaker Nancy Pelosi.

KEILAR: In Ukraine, the U.S. believes more than 75,000 Russians have either been killed or wounded since the start of an invasion and 80 percent of their land forces are bogged down.

BERMAN: And in North Korea overnight, a new warning from Kim Jong-un threatening to use nuclear weapons.

Let's get right to our reporters covering it all around the globe.

CLARE SEBASTIAN, CNN CORRESPONDENT: I'm Clare Sebastian in London. The U.S. has revealed it's ready to trade convicted Russian arms dealer Viktor Bout currently serving a 25-year sentence in the U.S. to secure the release of WNBA Star Brittney Griner and Paul Whelan, another U.S. citizen convicted of espionage in Russia, that's according to people briefed on the matter.

Now, despite the offer being on the table since June, a senior administration official subjected Russia has yet to officially respond. The U.S. secretary of state, Antony Blinken, says he expects to speak to Russian Foreign Minister Sergey Lavrov in the coming days to discuss the potential swap.


President Joe Biden and Chinese President Xi Jinping are having a phone call today as tensions are running high. Beijing is furious over a potential visit by House Speaker Nancy Pelosi to Taiwan. China has urged the U.S. to cancel her trip, threatening powerful retaliation.

This is a high stakes moment and the call is a chance for both sides to lower the temperature and manage the tensions. Pelosi's potential visit come comes just months before Xi Jinping is expected to seek an unprecedented third term. And the concern is that he will make a rash move in response to the visit since he cannot look weak at home.

KEILAR: Let's bring in CNN Senior Global Affairs Analyst Bianna Golodryga and CNN Anchor and Chief National Security Correspondent Jim Sciutto.

So, the U.S. projecting 75,000 injured or killed Russians in the conflict. I wonder if that number is what you expected and how significant that is, Bianna. But also does that put a lot of pressure on Vladimir Putin internally?

BIANNA GOLODRYGA, CNN SENIOR GLOBAL AFFAIRS ANALYST: Well, I was surprised by that number. That was the first time I have seen that number as high as it was, you've even this Ukrainians say that the Russians killed or injured in their estimation or injured, is about 40,000. And you just spoke with officials last week who indicated it ranged from a low level 15,000 up to 25,000.

So, this really ups the ante for Vladimir Putin if that is indeed the case, because, remember, they mobilized just about 150,000 troops at the start of the war. I don't know how many of those that are injured have now recovered and have been sent back into combat. That is a significant number, especially since Vladimir Putin hasn't officially called this a war so the draft isn't mandatory.

BERMAN: Jim, let me ask very quickly --

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Just last week, British officials were saying 60,000 killed and wounded, 75,000, so that's a jump. And the U.S. has tended to be more conservative in its estimates than the British. That's about half the invasion force, typically with military units, if a quarter of your forces are lost, killed or wounded, that unit becomes combat inoperative. So, this is half Russia's invasion force. It's a remarkable setback. And, by the way, it dwarfs what Russia lost in Afghanistan in the '80s in ten years, in six months' time.

GOLODRYGA: And Russia officially says that they have only lost about 1,500 troops and the last number they gave out was back in March. They try to keep a lid on this as well.

BERMAN: The major that we broke, CNN broke, Kylie Atwood and her team, that the United States has offered a prisoner swap with Russia for Brittney Griner and Paul Whelan, Viktor Bout, the Merchant of Death, the convicted arms dealer here. That's a significant concession. How important do you see this, Jim?

SCIUTTO: Well, listen, two Americans are coming home. If you are a member of their family, that's a good thing.

BERMAN: If, yes.

SCIUTTO: You're dealing here with an authoritarian nasty regime, right? It means you're going to -- there's pressure to make a dirty deal, right? It's not going to be a clean deal. But we shouldn't underestimate -- these two things don't go together, Brittney Griner, you know, who knows -- anyway, a minor crime compared to what this guy was convicted of, including killing Americans, right, supplying weapons to separatists in Colombia, and that's what he was sent to jail for.


So, he is a different category entirely.

And then the other worry is Russia, Iran, this is basically hostage- taking. They pick up Americans on made up charges or Trumped up charges and those are, therefore, bargaining chips that they could use for exchanges like this. And, of course, the worry is, okay, you make a deal here, who is the next one, right, who becomes a hostage? On the flipside this may be the only way to get those Americans home.

KEILAR: Sure. Does it encourage it? But are they going to play ball on particular case, do you think, ultimately?

GOLODRYGA: I mean, listen, if you ask me, I don't know why Russia would want this man back, but that having been said, they already exchanged another convict and also another arms smuggler just a few months ago for Trevor Reed. So, we have seen this pattern in Russia's behavior. They would like to drag this out as long as possible. Remember, Antony Blinken and Sergey Lavrov have not spoken since January before the war. So, this would be the first high level conversation between two counterparts.

I think, ultimately, they will go forward. It's a good deal on their end. They have got two Americans who don't have Russian blood on their hands but will hopefully be able to come home. And the only thing I would note is that the judge who convicted Viktor Bout also signed off on this deal and said, listen, he served 11 years, what have you, not a good guy, a bad guy, but would sign off on it. BERMAN: There's domestic politics at play here too. This is -- the Biden administration can point to this and say, hey, look, we've given a very good offer here. It's not that we are not doing anything to try to get these Americans home.

SCIUTTO: The political pressure was real, you heard it from the families too, and, understandably. The families were pushing and then saying they weren't getting enough attention for their family members.

So, from a domestic political angle, it makes sense. It's just we have got to remember who this guy is compared to who the Americans are who, if it goes through, are getting out.

GOLODRYGA: And, remember, the first approach didn't work. The first approach from the U.S. State Department had been to keep this hush, hush as much as possible, to not bring much attention to this, to Brittney Griner being in Russian custody, because they didn't want to elevate the status and get to this point. Obviously, talks were not going in the direction that the U.S. hoped they would and thus now we do have this offer which nobody likes to see happen, this guy has American blood on his hands, but we would like these Americans back home, especially their families.

KEILAR: They certainly would. Bianna and Jim, thank you so much for that. Of course, we are going to see you guys at 9:00 A.M. on CNN Newsroom.

BERMAN: So, a huge, new deal this morning and a surprise at that. This is between Senate Majority Leader Chuck Schumer and West Virginia Democratic Senator Joe Manchin. This is a major piece of legislation, one that they say would pay down the national debt, cut health care costs, fight climate change and battle inflation.

Joining us now is someone who may have been a key player in making this happen, according to The Washington Post, former treasury secretary under Bill Clinton Lawrence Summers. He also served as director of the White House National Economic Council in the Obama administration. Secretary, thanks so much for being with us this morning.

The Post reports you had a pretty important phone call with Joe Manchin. Talk to us about your role here.

LAWRENCE SUMMERS, FORMER DIRECTOR, OBAMA WHITE HOUSE NATIONAL ECONOMIC COUNCIL: Oh, I talked to officials from -- fairly frequently from time to time, but in order to do that, I never talk about the confidential conversations that I have.

But this is a good bill. This is an important step forward on inflation, which has been my preoccupation this last year, it's historic on the environment, it's going to make our society more fair and equal at long last, getting rid of the carried interest loophole. It's going to take important steps forward on access to health care and it's going to invest in the future of our country.

So, this is a very strong bill and I'm just delighted to see this agreement and I hope it all moves forward as expeditiously as possible.

BERMAN: I understand you don't want to tell us the details of your conversation with Joe Manchin. So, let's have a conversation between you and me. I'm John Berman, I'm asking you, Secretary Summers -- I'm concerned that this bill might be inflationary, that you're raising taxes on corporations, that you're spending money on climate change. How would you allay those concerns?

SUMMERS: So, John, first, this reduces budget deficits. And so by reducing budget deficit, it reduces the level of demand in the economy. Second, this reduces prices directly by going after prescription drugs and getting lower prices and a better deal for taxpayers when they purchase prescription drugs. Third, this increases supply by stimulating energy production and by subsidizing and supporting our energy transition to renewables.


So, less demand, more supply and direct better bargaining for lower prices, those are the things that are involved in reducing inflation.

BERMAN: And just to go back historically -- and thank you for role- playing there with me -- I imagine that was something along the lines of what a conversation with a senator like Joe Manchin who is concerned about inflation might go like.

When the $1.9 trillion stimulus bill first came up in the beginning of Biden administration, you called that historically irresponsible. I think that was the phrase that you used there. You see this as vastly different than that.

SUMMERS: I do, and there is a very good reason for it. The $1.9 trillion bill was unpaid for. This bill is more than paid for. I think if you use realistic revenue estimates and you assume that the huge progress on tax compliance, on collecting the money that's owed that now escapes taxation, trillions of dollars worth of it, if you use realistic revenue estimates, I think you're raising more than $2 in revenue for every dollar that you spend.

In that original bill that I criticized, you were raising no dollars of revenue for every dollar you spent and you were spending a vast sum of revenue, close to $2 trillion, and you were spending it all in one year. Here, we're spending it over many years and we're raising far more revenue.

BERMAN: So, just so put a fine point on it you see this -- they are advertising this as fighting inflation. You see this bill as fighting inflation?

SUMMERS: This bill is fighting inflation and it's got a whole set of collateral benefits as well, but it's fair to call it the Inflation Reduction Act because it's directly fighting the rate of inflation.

BERMAN: There are some Democratic senators from northeastern states who are disappointed that there aren't the issues with state and local taxes. They want deductions for state and local taxes in this bill. What would you say to them if they were to threaten to hold this bill up to get that back in?

SUMMERS: I would say we've got enough hostage-taking in this world and we have enough hostage-taking in the Senate and they would be hostage-taking America's prosperity and middle class families' chance of not paying higher prices with inflation if they were to interfere with this bill.

Look, I've been very lucky in life and I'm a high-income taxpayer and it would reduce my taxes a whole bunch if they put back deductibility. But that doesn't make it the right or the fair thing to do. Only 20 percent of people in our country even take itemized deductions. So, that's a bill that is -- that's a measure that is targeted towards those with the highest incomes and they are not the people who need most support in our society right now.

So, I understand how they feel. I understand the argument. Personally, it would mean a lot to me if they did it. But if you look at it from a point of view of the whole country, I think it's just not the right thing to do.

BERMAN: We are in the next hour and 17 minutes going to hear about GDP, about what the economy did in the last quarter. This prediction that I'm going to ask you to give, it won't stand for very long because we're going to find out the news in an hour, but what do you expect will happen? Do you think the economy grew or shrank the last quarter?

SUMMERS: I don't know. It will be on one side or the other side of zero. But if you look at a broader suite of indicators, which is what serious economists do, they don't just look at one statistic, I think it's pretty clear that, as of right now, the economy has been growing. I think it's pretty clear that things are in some jeopardy for the medium term.

But right now, however this particular number turns out, you don't have an economy that is currently in recession that's creating 350,000 jobs a month. You don't have an economy that's currently in recession where you have the kind of consumer spending figures that we've been seeing.

I do think because of a whole combination of factors and, frankly, mostly because we need to cool off an economy that got itself overstimulated by policy, I do fear that a recession sometime in the next year or two is very likely.


But I think we took a useful step in giving the Fed a little more running room with the legislation that Senators Schumer and Manchin have agreed on if that legislation can pass as expeditiously as possible.

BERMAN: Larry summers, you've been right in the middle of it. We really appreciate your time this morning. Thank you.

SUMMERS: Great to be with you. BERMAN: So, a lot of news this morning, including this deal between Joe Manchin and Chuck Schumer and the proposed prisoner swap with Russia. We are going to have White House Communications Director Kate Bedingfield in a few minutes to talk about it all.

KEILAR: And former Trump White House Aide Cassidy Hutchinson is now cooperating with the Justice Department in its criminal probe into January 6th. Who else is talking?


KEILAR: So, this morning former Trump White House Aide Cassidy Hutchinson now cooperating with the Justice Department's investigation into efforts to overturn the 2020 election and there may be others.


I want to bring in Katelyn Polantz on this reporting. What can you tell us, Katelyn?

KATELYN POLANTZ, CNN SENIOR CRIME AND JUSTICE REPORTER: Well, Brianna, Cassidy Hutchinson was such a significant witness in this House select committee investigation, separately the January 6th criminal investigation by the Justice Department is bringing her in, having her cooperate in some way. And the significance of that in that separate investigation aside from Capitol Hill by prosecutors is that it means now they are looking into the west wing. That was something we did not know that they were doing until we got this news this week.

So, former prosecutors for a long time were watching Cassidy Hutchinson speak publicly in that House select committee hearing, thinking, you know, it's only a matter of time until the Justice Department brings her in and replicates what she said. It does appear that that is what she may be doing, though I should say my colleagues who were reporting on this do not know the extent of her cooperation right now with the Justice Department. But, clearly, what is happening in this criminal probe of January 6 out of the D.C. U.S. Attorney's Office is that it is expanding, it is expansive, it is continuing and it is aggressive.

You mentioned that there are others that may be cooperating in addition to Cassidy Hutchinson. We also know this week that there are two top aides to Vice President Mike Pence who have gone into the grand jury in that investigation. We also just heard -- I believe it was an interview you may have done with Alyssa Farah, the communications director from the Trump White House, saying that there were others who had been contacted recently. And then on top of that, with that criminal investigation continuing on, the House select committee, they're continuing to get their own additional information.

The one thing we learned this week, yesterday as well from some of my colleagues on Capitol Hill is that they're now trying to talk to secretary of state -- former Secretary of State Mike Pompeo about what he knew was going on in the cabinet in the moments after January 6th where there was this fear of the democracy being at peril. And so we have learned now that Pompeo could be doing a closed-door interview with the House select committee.

So, they're continuing to investigate and, obviously, the Justice Department is continuing to investigate as well. Brianna?

KEILAR: Really interesting developments. Katelyn, thank you for the reporting.

BERMAN: So, with all of this, as the Justice Department does push forward with its criminal investigation into January 6th, what are the chances that former President Trump could actually face criminal charges?

John Avlon with a Reality Check.

JOHN AVLON, CNN SENIOR POLITICAL ANALYST: It appears that ex- President Donald Trump is under investigation for a pent load of potential crimes related to his attempt to overturn our election, but there is a lot of disagreement about which, if any, charges might stick.

And to be clear we are in unchartered waters, right, because no past president has tried to stop the peaceful transfer of power. The Department of Justice had been quietly and deliberately looking into Trump's actions when news of a grand jury broke this week.

In Georgia, prosecutors have been far more vocal about investigations into a fake elector scheme and Trump's infamous call trying to pressure Georgia's secretary of state.


DONALD TRUMP, FORMER U.S. PRESIDENT (voice over: All I want to do is this. I just want to find 11,780 votes, which is one more than we have, because we won the state.


AVLON: This is indelible evidence. It's such a brazen example of solicitation to commit election fraud that there's really no clear parallel in our recent history. And in the battle days of Tammany Hall, corrupt political bosses never got caught on tape but you still hear smart lawyers say Trump might never be held accountable for his actions, actions that is would probably land any other person in prison.

And the way we can say that is because smaller pols have gotten indicted and convicted for trying to manipulate vote totals to their advantage. For example, last month in Philadelphia, an infamous former congressman known as Ozzy Myers pled guilty to election fraud charges. Now, back in the late '70s, Myers was kicked out of Congress and locked up after he got caught taking bribes in the ABSCAM sting operation captured in the movie, American Hustle.

After prison, he tried to remake himself as a local kingmaker in two south Philly wards, but old habits are hard to break and he started bribing local election judges to throw fake votes to preferred candidates in 2014.

Now, in some ways, this is small ball stuff, right, as little as a few hundred bucks for Democratic votes in two precincts, but it was totally corrupt and Myers deserved to have the book thrown at him again.

Now, here is another case from North Carolina's 9th congressional district, where in 2018, the Republican nominee seemed to narrowly beat a Democrat by just 905 votes, but a judge declined to order the state board of election to certify the results because of a very credible fraud investigation.


It turned out a Republican political operative, Leslie McCrae Dowless, allegedly paid folks to collect absentee ballots and fill them out to favor Republicans. And the election had to be redone but the Republican candidate who denied knowledge of wrongdoing and was not charged didn't run again. Dowless died before he could face trial on the election fraud charges.

A final example, a case this year concerning a Compton California City councilman named Isaac Galvan, who seemed to win his seat by a single vote until it was found that he had gotten four folks from outside the district to help him get over the top.

This is frowned upon. In fact, it's illegal. And so the court declared his opponent the rightful winner while Galvan has pleaded not guilty to criminal charges. But on top of that, he is facing a possible quarter million dollar fine for alleged campaign finance violations.

Now, these cases rare, as former Romney Campaign Strategist Stuart Stevens told me, election fraud is as rare as (INAUDIBLE), but these folks were all accused of breaking the law, of scheming to undercut the integrity of our democracy for personal gain and all for a handful of fake votes.

In contrast Donald Trump, is on tape asking for 11,780 votes in a swing state. It wasn't some consultant or councilman. He was the president of the United States pressuring the lead election official from his own party to find just enough votes to win.

Now, he wasn't successful but attempted murder is still a crime and the larger principal is as big as it gets, equal justice under law. During Trump's administration many people felt constrained by a Watergate Justice Department draft legal opinion which said that a sitting president couldn't be indicted. His lawyers even argued in court that Trump could shoot someone on 5th Avenue and not be charged until he left office, but that logic has its limits, namely whether some version of presidential immunity can follow someone forever.

Now, I'm not hazarding a guess on how this will all turn out and the prospect of indicting an ex-president is too serious for anyone to wisely climb on to their partisan ramparts. The only thing more serious is an attempted coup and the need to strengthen our guardrails so that it doesn't happen again. And that's your Reality Check.

BERMAN: For sure, and not to make light of (INAUDIBLE). John Avalon, thank you very much for that.

So, what role did the president play in the surprising climate bill and a bill to lower drug prices on Capitol Hill, a bill that really shocked everyone? And does the White House have a response from Russia for the proposed prisoner exchange. The White House communications director joins us ahead.

KEILAR: Chris Rock is finally speaking out about that infamous Oscar slap by Will Smith. What's he saying?