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Inside First Lady Jill Biden's Emotionally Draining Summer; Sinema Eyes Changes To Democrats' Deal, Raising Concerns Over Taxes; NFL Pushing For Harsher Punishment For Browns QB Watson. Aired 7:30-8a ET
Aired August 04, 2022 - 07:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN AVLON, CNN ANCHOR: It's not a place the first lady wanted to be -- at home in Delaware with the cat, but without her husband -- but that's the reality for Dr. Jill Biden right now. The president's lingering battle with COVID, along with his political struggles and a myriad of domestic and international challenges, are making this one draining summer for his wife.
CNN's Kate Bennett joins us now with her new reporting this morning.
KATE BENNETT, CNN WHITE HOUSE CORRESPONDENT: Good morning.
Look I would say that she probably does like being with the cat. Willow the cat is often with the first lady wherever she goes. So although she's not with the president -- you know, this is a couple that's been married for 45 years. Being apart for this long -- they haven't seen each other since July 20 -- is just something that's unusual for them and it's probably one of their longest breaks from each other.
And I will say, as you just said, the first lady -- and first ladies, in general, often a great barometer for the mood of the president and how things are going and it has been, with the exception of some very recent wins this last week, sort of a difficult summer with poll numbers, and I think the first lady has reflected that.
She was supposed to go on a trip to Africa in late July. I spoke with several people who said that she pulled the trip down just thinking the timing wasn't right -- the policy wasn't right to go there -- sticking closer to home. I will say she's been to 40 states, though, so it's not like she's not traveling.
But I think this is a first couple that really feeds off each other. Their moods are similar. When he feels dark, when he feels challenged, she does too. And certainly, she's thinking about 2024 and what's ahead. And it's difficult, again, for a first lady to be the hype woman for the president -- for her husband -- but also a very, very strong protector knowing what this campaign may be like knowing what it was like before. AVLON: So just to be clear, they haven't seen each other since July 20. That's a long time for any married couple.
BENNETT: Completely. Since the president tested positive, the first lady has stayed in Delaware. A little bit of pet fun facts. She was initially with both Commander the dog and Willow the cat, but Commander went back to the White House to keep the president company. And I'm sure the first lady will be there as soon as he tests positive. But this is -- for a couple that really bonds together and feeds off each other, as I said, this is a long time to be apart and it's affecting them for sure.
AVLON: I noted the cat and dog division. Very clear in that.
BRIANNA KEILAR, CNN ANCHOR: Everyone needs a pet, though. You need a pet.
BENNETT: Right, yes -- especially when you're sick.
All right, Kate, thank you.
AVLON: Thanks, Kate.
BENNETT: Thank you.
KEILAR: So, Republicans claim the Inflation Reduction Act negotiated by Sens. Joe Manchin and Chuck Schumer will increase taxes on the middle class. So is this true?
Joining us now to fact-check this, we have CNN senior writer Tami Luhby. Tell us, is it true?
TAMI LUHBY, CNN SENIOR WRITER: Well, Republicans and big corporations are desperate to kill this bill, so they're seizing upon a Joint Committee on Taxation report that shows that federal taxes would rise for every income level on this -- under this bill, including those making less than $400,000 a year. And remember, that's the group that President Biden and the Democrats have repeatedly promised to protect.
Now, the JCT report shows that federal taxes would rise $16.7 billion for those making less than $200,000 a year; $14.1 billion for those making between $200,000 and $500,000 a year; and $23.5 billion for those making over $500,000 a year.
But it's not a direct tax increase on lower-income and middle-class Americans. Rather, the analysis takes into account a provision in the bill that would impose a 15 percent minimum tax on big corporations. And economists, including those at the JCT, assume that these big companies would pass along part of the tax increase to their workers by lowering their wages. And also, shareholders would take a hit because the value of their stockholdings would decline. Now, a senior fellow at the Tax Policy Center, a nonpartisan Tax Policy Center, calls the Republican claims a bogus argument. He calls it a gotcha kind of political thing because President Biden and the Democrats have said that they would not directly raise taxes on middle-class Americans.
AVLON: Tami, just a clarification here.
AVLON: Is it usual to argue that price increases as a result of policy changes should be called taxes because they're not.
LUHBY: That price increases should be called taxes?
AVLON: Yes. If a price -- if taxes are raised on corporations, they pass on the costs or look for savings either by reducing workers' wages or raising prices. Those are economic impacts downstream --
AVLON: -- but they're not literally taxes, right?
LUHBY: No. I mean, well, people would argue that there is an economic effect that would affect more people -- you know, particularly on the workers and the shareholders' side. And so, that's one of the arguments.
LUHBY: But generally, the president is talking about a direct tax increase.
AVLON: Fair enough. An important clarification.
KEILAR: All right. Tami, thank you so much for that.
AVLON: Thank you.
LUHBY: Thank you.
AVLON: All right.
And Sen. Krysten Sinema eyeing changes to her party's massive climate and health deal. She's raised concerns, in particular, about a 15 percent minimum tax on corporations and other tax provisions before promising her key vote.
Joining us now are former Congressional Budget Officer director Douglas Holtz-Eakin. He's president of the American Action Forum. And CNN economics commentator Catherine Rampell. It's great to have you both here. We've got a left-right split -- disagreements on the virtues and values of this bill.
Let me start with you, Catherine. What do you make of Krysten Sinema's holdout to date -- her concerns about carried interest? And also, the data Tami just laid out, which this could end up impacting workers and average folks in unintended ways.
CATHERINE RAMPELL, CNN ECONOMICS COMMENTATOR: So, Sen. Sinema has kept her cards pretty close to the chest. We don't actually know what demands she's going to make in terms of changes to the bill.
Based on things she had said to some of her colleagues last year, it looks like she wants to kill the carried interest loophole provision, which basically says that if you are a private equity fund manager or other kinds of investment managers, you can pay much lower tax rates --
RAMPELL: -- on a large portion of your income than the typical worker working off of the sweat of their brow.
My view on this is it's not really defensible to keep this in the tax code. I don't know what public policy purpose it serves. But it's a relatively little, small -- little amount of money at stake. It's like $14 billion.
RAMPELL: If they sacrifice this provision, it's not going to kill the whole bill. So if they want to give it to her, fine.
The corporate -- the book corporate minimum tax -- that's a lot more complicated, it's a lot more money, and I do think there are problems with it, to be clear. If I were a tax law dictator I would do something different to raise revenue, including from corporations. It's like maybe the 10th best policy available, but the 10th best is still a solution and I think it is good enough, is the way I would put it. I know it's faint praise but I think it's good enough in terms of achieving the goals necessary and raising revenue so that we can get these important climate investments through.
AVLON: All right. Doug, I know I speak from all of us when I say we're glad the tax law dictator is a position that does not exist. But, Doug, what is your -- what is --
DOUGLAS HOLTZ-EAKIN, PRESIDENT, AMERICAN ACTION FORUM, FORMER DIRECTOR OF CONGRESSIONAL BUDGET OFFICE: I was just going to nominate Catherine.
RAMPELL: Thank you. I appreciate it.
AVLON: See, that's the bringing together of people we like to have here on NEW DAY.
Doug, what's your take on this bill? I know you're not a big fan top- line, but what about carried interest, in particular?
HOLTZ-EAKIN: I think carried interest is really a complicated tax question, literally. What is the appropriate tax treatment of this? Should it be taxed at the point when you grant it to the private equity manager or at the point when they realize it? Is it ordinary income or capital gains?
The reality is, as Catherine said, this is not a lot of money. This is $14 billion in this bill. It's not the sort of crucial piece of financing.
And we have been having this same debate since 2009. And so, it's no longer a loophole. The Congress has decided that this is how we're going to treat this income, and that's that. It's like saying the mortgage interest deduction is a loophole. So whether you like it or not, it is how we've decided to treat this income and I don't see it as a crucial discussion here.
I think Catherine's right that the book income tax -- this minimum tax -- is something you should be very, very worried about. The U.S. tried this in the 1980s and quickly gave it up because it does two things.
One, it damages the financial reporting. You're now reporting your financial income for tax purposes and that starts shading things to try to lower your taxes.
And the second thing it does is it really harms the firms you really don't want to tax. If you've got taxable income of zero but you've got high book income, that means you're taking advantage of expensing investments, research and development credits -- the things Congress wants you to do.
So this is most likely to fall on our most successful and fastest- growing firms. That doesn't make sense right now.
All right. Catherine, let's just talk about the stakes here for Democrats. And you're saying basically, like if Krysten Sinema wants to protect carried interest for whatever reason --
RAMPELL: It's not defensible in my view, but I can live with it.
AVLON: All right. What are the economic impacts around inflation?
Doug has said in a blog post, which I thought was very funny, that calling this the Inflation Reduction Act is like calling his Twizzlers dope, by which I think he's saying that look, it's not really about inflation.
But Joe Manchin and other folks point to the fact that, for example, prescription drugs -- that's lowering costs on real people in real time.
What's your take?
RAMPELL: So, if you look at an analysis from the Penn Wharton Budget Model, which is one of these nonpartisan research groups at the University of Pennsylvania, they basically say it's going to have a negligible effect on inflation either way. Over the long run, yes, it will probably be disinflationary. It will
probably bring down costs a little bit.
RAMPELL: In the near term, maybe the opposite. But either way, it's not going to have a huge effect.
I get why they're trying to sell it that way. Inflation is the number one top-of-mind issue for voters. I don't really care either way if it's going to affect inflation. I think there are other things that should be done on that front.
RAMPELL: But I care a lot more about the climate investments.
AVLON: So --
RAMPELL: I care a lot more about the health care provisions. So if that's how they want to market it, fine, but what matters more is saving the planet, frankly.
AVLON: I --
RAMPELL: That's why I'm saying like even if this tax provision is not perfect, it's good enough because it will help us get to the point --
RAMPELL: -- of a major investment in climate and lowering -- or making more affordable health coverage for Americans.
AVLON: Doug, to that point -- final point -- your former boss, John McCain, conservative on a lot of things. But he was very early a leader on trying to deal with climate change.
AVLON: And I wonder, looking at things through that prism, do you think that climate change and this kind of an approach is something that Congress should be dealing with, especially given that this is a bill that, net, raises more money than it spends?
HOLTZ-EAKIN: Absolutely, Congress should be dealing with it. But I'm not a big fan of this climate strategy, which is tied to going sector- by-sector and telling companies what to do. I'd be a much bigger supporter of an economy-wide carbon tax -- something that is the intellectual cousin of cap and trade that John McCain proposed.
HOTLZ-EAKIN: Getting every business in America to care about reducing emissions will solve the problem. If it's in the business community's interest to solve climate, we'll solve it. And this doesn't do it. This dictates to people what they should do. It's modest from the
standards of what we need to do in the climate and I don't like the financing. So, yes, for climate change policy but let's get real about it. This isn't real.
AVLON: Hmm, not real. Well, it is the bill that's on the floor to date, but we will see whether Krysten Sinema joins the Democrat coalition to pass it.
Doug Holtz-Eakin, Catherine Rampell, great conversation. Great to see you both. Take care.
HOLTZ-EAKIN: Thank you.
AVLON: All right.
Could quarterback Deshaun Watson face a longer suspension? The legendary Bob Ley joins us next on the showdown with the NFL.
KEILAR: And China has officially started military drills around Taiwan -- quite close to Taiwan -- in response to Speaker Nancy Pelosi's visit.
KEILAR: The NFL thinks that six games without Deshaun Watson is just not enough. The league formally appealing the 6-game suspension given to Watson for violating the NFL's personal conduct policy, instead pushing for a harsher, full-season suspension.
Joining us now is executive founder of the Seton Hall University Center for Sports Media, and former ESPN anchor, Bob Ley. Bob, thank you so much for being with us because what do you make of this, and maybe the time that is now for a reckoning in the NFL when it comes to its conduct policy?
BOB LEY, EXECUTIVE FOUNDER, SETON HALL UNIVERSITY CENTER FOR SPORTS MEDIA, FORMER ESPN ANCHOR (via Skype): Well, I don't think we're going to be at a time for a reckoning. This is a mess. This is an absolute mess. The Players Union has the wrong client.
The federal judge basically said he did all of these things. He dissembled and lied about it. This is the first case under the new NFL discipline policy with a -- an independent judge and, in fact, a former federal judge.
But he's going to get a longer suspension. What's going to happen now is that the NFL has said we are appealing this and that this goes to Roger Goodell. The union will respond. It's up to Roger Goodell. He could possibly be the appellate officer -- he probably will not be.
There were settlement talks. They couldn't get together on how long this would. But if you're asking whether at the end of the day this is going to
settle something, I don't believe so. It's a lot of sound and fury. I think it could possibly be going to federal court if the -- if the final appellate decision is more than 10 games. But if they can find a sweet spot, which is a horrible thing to say about this case, around 10 games, then all parties will go home happy.
But the National Football League would also like to take some money out of Watson's pocket --
LEY: -- at the same time.
AVLON: So what --
AVLON: -- do you think? I mean, with Roger Goodell playing the heavy here, what do you think would be the equitable outcome?
LEY: That's a loaded question. I mean, if you're asking me, the equitable outcome would be an indefinite suspension of at least a season given what the federal judge said he did.
AVLON: That's what I think.
LEY: But -- exactly. And if you take the 10 or 15 minutes to read the judge's decision, which a lot of people around the Browns have not even apparently done, you would see that's the case.
But there is so much cynicism around this whole case. There is the way that his contract was structured so that Watson, in this particular season, would only have a million-dollar salary but he could draw upon the prorated portion of his $45 million signing bonus. And the NFL signed off on this contract so everybody's hair is on fire about the look of this. But all parties knew about this.
So, at the end of the day, I mean, truly, the NFL is like a wall of lava in our culture. You're not going to stop it. It's a financial success. It's an economic success. The average franchise is worth $4 billion. The average franchise increased 18 percent in value over the past year.
So, the Watson thing is horrible to the senses. And if you read the particulars of the case, it's abhorrent what he has alleged to have done and which is, according to the federal judge, he did do.
But at the end of the day, people just want their football. You read some of the comments from fans yesterday at Browns practice, they have their quarterback. They have their -- they may have to wait a little bit for their franchise quarterback, but they will wait for him.
KEILAR: Yes. And we should mention he's expressed no wrongdoing. Just a reminder -- nope. So many -- so many allegations --
KEILAR: -- so many settlements. He has not said that he has done anything wrong.
KEILAR: Bob Ley, we -- I'm sorry.
LEY: I was going to say, except that the team says he's expressed remorse and he feels remorseful. Remorseful for what?
AVLON: Yes. Folks who have smoked marijuana have gotten far stiffer sentences than this.
All right, Bob.
LEY: Or bet on games, which are illegal --
LEY: -- if you're a player -- yes.
KEILAR: Or hurt animals, you know? It's just -- the list goes on and on.
Bob Ley, thank you so, so much.
AVLON: Thank you.
LEY: Good to talk to you. Good morning.
KEILAR: All right. We have some big baby news.
KEILAR: Big baby news this morning -- huge. No, seriously, huge. The Cincinnati Zoo --
AVLON: No, really -- it's very large.
KEILAR: -- home of the international celebrity Fiona the hippo -- Fiona -- you know Fiona.
AVLON: I mean, look, this baby hippo news is big in my household.
KEILAR: Well, they just welcomed another star.
AVLON: Oh, how about that?
KEILAR: Looky there. Is that it? Is that the baby --
AVLON: Is that -- KEILAR: -- or is that mommy? That -- it's hard to tell.
AVLON: I think that's mom. But baby hippos are adorable. Also -- fun fact -- hippos also known as river horses.
KEILAR: Oh, nice.
AVLON: You're welcome.
All right. Plus, speaking of stars, Chris Wallace joining us live on the primaries, the Biden presidency, and the surreal twist in the Alex Jones trial.
AVLON: She's become a global celebrity and just this morning, at the Cincinnati Zoo, Fiona the hippo has a baby sibling. Fiona went viral a few years ago when she was born six weeks premature. And last night, around 10:00 pm, her mother Bibi gave birth to a healthy baby hippo calf.
And joining us now live from the hippo habitat at the Cincinnati Zoo is Jenna Wingate, senior zookeeper for the Cincinnati Zoo's Africa Team. Jenna, congratulations from all of us to all of you. How is the baby doing?
JENNA WINGATE, SENIOR ZOOKEEPER, CINCINNATI ZOO'S AFRICA TEAM (via Skype): Hi. Thank you so much.
Oh, we are so happy to say that the baby is strong and looking really comfy, so far, and we have really good feelings about it.
KEILAR: What's the name game here? Is there a name? When will there be a name?
WINGATE: That's a great question that we haven't decided quite yet. So there's no name yet and I think that's something we will be discussing today. We've had our focus on just having this healthy calf come out into the world and keeping our focus on Bibi and baby. So hopefully, a name will come soon though.
AVLON: All right, but do we -- do we have any photos of the baby at this point?
WINGATE: Yes, we do have a few photos we'll be sharing today, definitely.
AVLON: OK, awesome.
KEILAR: So this baby, it's very cute. What has baby been --
AVLON: And hippos are cute.
KEILAR: -- up to, so far? And also -- look, we have to note, I think, this was sort of a lot of apprehension about this because you wanted to make sure, like you said, you did have a healthy baby hippo. Because Fiona, this hippo's sister, was so tiny when she was born.
WINGATE: Yes. We were definitely a little cautiously optimistic because of Fiona's -- her time coming into the world was a little early. And this one we knew was going to be full-term. But we were a little hesitant and just trying to make sure we were really prepared for anything. And this calf seems to be really healthy.
You know, Fiona was 29 pounds. We haven't got a weight on this one yet but we are estimating it to be over 50 pounds for sure. And usually, they're about 50 to 100 pounds. So we're excited to get a weight on it and overall, it's looking great and doing really well.
AVLON: Well, I hope you crowdsource the name. I'll put in Petunia as a possible choice.
Jenna Wingate --
WINGATE: Petunia? All right.
AVLON: -- thank you very much. Congratulations.
KEILAR: I'm going -- I'm going for Chomp.
AVLON: Chomp is good. I like Chomp.
KEILAR: Chomp. That's my vote.
AVLON: It's what they do to those watermelons -- they chomp.
KEILAR: Exactly -- chomp.
AVLON: All right. NEW DAY continues right now.
KEILAR: Good morning to viewers here in the U.S. and around the world. It's Thursday, August 4. I'm Brianna Keilar with John Avlon. John Berman is off this morning.
China has officially started military drills around Taiwan, making good on a threat that Taipei will pay a price for hosting House Speaker Nancy Pelosi. Taiwan's Defense Ministry says China fired multiple missiles toward waters near the northeastern and southwestern parts of the island.