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Federal Reserve Chairman to Give Speech on Inflation in U.S. Economy; Judge Releases Redacted Affidavit of Search Warrant for FBI Search of Former President Trump's Residence at Mar-a-Lago for Missing Documents; Biden Struggled with Student Loan Debt Forgiveness Decision. Aired 8-8:30a ET

Aired August 26, 2022 - 08:00   ET

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

[08:00:00]

CHRISTINE ROMANS, CNN ANCHOR, EARLY START: Prices and about whether inflation is peaking, that's critical. But I think we shouldn't put too much on what he says today. And this is counterintuitive. Here's why. A lot can change between now and the next September meeting, and they have said they will be nimble. They have to be nimble. They have to keep an open mind about just how much they're going to keep raising interest rates and how aggressively and for how long.

RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: A lot of these datapoints, too, are backwards looking. So in some ways they're always scrambling to keep up with the data which is changing in real time. There's also a lot of trust building, I think, that has to go on here. The Fed has been behind inflation for a while now. I've argued, Christine knows this, that they should have raised rates far earlier. Then we had the pandemic. Then it was hard. They're struggling to catch up, and they have to rebuild people's trust in the institution itself.

KAITLAN COLLINS, CNN CHIEF WHITE HOUSE CORRESPONDENT: How do you do that?

FOROOHAR: Great question. I think by being honest. Honestly, Christine's right, the two of us have never seen an economy that is this complicated. I've been doing this 32 years. It never has been this complicated. There are geopolitical factors in play. There are technological factors in play, demographic factors, the pandemic through a hammer in everything. So I think if they say, look, here's what we know, here's what we don't know, and we're doing the best we can, I think that that's trust building.

ROMANS: You've heard me say this before. Any one of the cross currents in the global economy right now would be newsworthy and unsettling, and there are a dozen happening all at the same time.

FOROOHAR: Climate, we haven't talked about that.

ROMANS: And coming out of this pandemic, we try to measure the economy, is it recession, maybe it's not a recession. We're just trying to get back to normal at this point. We're still reacting to a pandemic and trying to figure out where we go from here.

JOHN BERMAN, CNN ANCHOR: A fair question about what would be normal in 2022 and going forward, because I think another thing he has to address, Rana, and you talk about this, it's possible we're just in a different era, that the U.S. economy and the world economy is moving to a new place where we can't expect 30 years of low, really low interest rates.

FOROOHAR: I totally agree with that. I've been writing that for some time. I actually have a new book coming out in October that's looking at that topic. We've had 30 years where we've gotten used to easy money, and many of us have been the beneficiaries of that. If you have stocks, if you have a home, you've done pretty well. If you're a younger person, if you're a minority, you haven't done as well.

And people are starting to realize there's only so much that central bankers can do, right? They can jack up asset prices, they can make money flow through the economy, but they can't build a new factory. They can't retrain workers for jobs. They can't reform education. We need politicians to do that, and we need business to step up.

ROMANS: I think in the simplest terms, what today really means and what is happening in the economy right now means is inflation hurts, every budget feels it. It's really something everyone knows. Fixing that is something else that hurts. It's raising borrowing costs so that all of your debt and borrowing money to grow and expand costs more. So the medicine doesn't taste so good, and we need to know how does the Fed feel about how much more medicine is coming and what's it going to do to the patient.

BERMAN: Christine Romans, Rana Foroohar, great to have you here this morning. Thanks both so much.

COLLINS: Noon eastern, not that far from now, is the deadline for the Justice Department to release a redacted version of the affidavit that was behind the FBI search of former President Trump's home at Mar-a- Lago. A federal judge has ordered the document to be unsealed, which means allowed in public view. But he did agree with the Justice Department that some parts of it should be blacked out, meaning you won't be able to see what it says, to protect witnesses and others.

CNN's Katelyn Polantz joins us live from Washington with more. Katelyn, this judge moved really quickly once the DOJ had submitted what they thought to be kept out of this document, and now we've got this noon deadline. We're not far from it. And what are you expecting in this document? What should people be looking for when it comes out?

KATELYN POLANTZ, CNN CRIME AND JUSTICE REPORTER: There's a lot of things here. Kaitlan, John, this is a really pivotal day for what we may know about Donald Trump's post presidency, and especially about that unprecedented search of Mar-a-Lago almost three weeks ago. So what is coming today is, it's going to be a filing that is submitted in court, and that filing is what the Justice Department proposed yesterday to the judge, and the judge accepted. Essentially it is a version of their affidavit, they had written a lot narrative about their investigation as well as detailing why they had probable cause to go into Mar-a-Lago and seize those 33 items, including classified documents out of there a couple of weeks ago.

They had written that to the judge, and this is a blacked-out version, a redacted version. We don't know how much of it is going to be redacted. That is a really key question here. We do know there are going to be a lot of things we won't be able to see in this because the judge did agree that the Justice Department can redact a laundry list, really -- identities of witnesses, the identities of law enforcement agents, uncharged parties, so people who may be under investigation here, we don't know if it is Trump himself, that is a possibility. Also they can redact investigation strategy, direction, scope, sources, methods, grand jury information, a lot of stuff there.

[08:05:04]

But there could still be things that are not redacted, and that is really what we are looking for here, because this affidavit not only will lay out all of those investigative steps, it also lays out why the Justice Department believed they could go to Mar-a-Lago and would find evidence of three crimes -- espionage act, criminal records mishandling, and obstruction of justice. So we really are trying to see exactly what we can learn about that investigation and also how far along this investigation is, are we close to an indictment.

COLLINS: Yes. And the Trump team will be learning just along with the rest of us because they have not actually seen this affidavit either. Katelyn Polantz, thank you, and we'll be waiting for that deadline.

BERMAN: So with us now is one of Donald Trump's defense lawyers during his second impeachment trial, David Schoen. He's also an attorney for Steve Bannon. Counselor, thank you so much for coming in. Nice to see you on set.

DAVID SCHOEN, TRUMP'S DEFENSE LAWYER DURING SECOND IMPEACHMENT TRIAL: Thank you.

BERMAN: What are your expectations for what we might see, what might be revealed today?

SCHOEN: Not high. I don't think you'll see much. I think you'll see the word "affidavit," but I'm not sure how much beyond that. And I think that was clear from the pushback that we got from the Justice Department to Judge Reinhart on today's filing, that is even filing publicly the redacted version. I've had a case with Judge Reinhart, by the way, and he's a pretty good judge.

BERMAN: The judge said to the DOJ, though, you've got to come back with something. And the DOJ did, and the judge seemed to approve it very quickly.

SCHOEN: Yes, no, I think that's right. I think he's probably -- again, I'm speculating. I think he's probably been convinced that the redactions they have made are appropriate redactions based on the criteria that he set out in his motion to unseal and ordered to unseal. But I don't think that will satisfy -- wouldn't satisfy any defense lawyer, I'm sure.

BERMAN: Most defense lawyers, almost any defense lawyer would not want the affidavit released necessarily, correct?

SCHOEN: I think in this case, any defense lawyer should want it released, frankly. What we have to know -- again, we can't look at this in a vacuum. We've had some experience with affidavits in the past and representations. But the reason -- the affidavit is currency to a defense lawyer. It shows whether they can make the argument that material facts were omitted or misrepresented. It may go to -- once they know who the sources are, then they would know information about the credibility of those sources, or baggage those sources have, were those things revealed to the judge.

BERMAN: Let me ask you this, then. If you think it is so useful, and you're correct, it could provide a roadmap for a defense. Do you think that the Trump legal team should have affirmatively argued in court for the release of the affidavit?

SCHOEN: Do I think so? Yes, I do.

BERMAN: And they did not?

SCHOEN: They did not. And I think they waited a long time to even ask for the special master during the case. But again, it is very easy to Monday morning quarterback. I can tell you how I would have approached it.

BERMAN: You think they waited too long?

SCHOEN: Hopefully not too long so that it is fatal to their position. I think they waited longer than they should have waited.

BERMAN: There has been criticism of the Trump defense and there has been criticism of what some of the allies have done outside of his actual attorneys here, in some cases talking about letters that went back and forth with the archives. Conservative attorney Andrew McCarthy worked here in the Southern District. He wrote this op-ed in "The National Review" that came out yesterday, which was really critical of what Trump allies are doing here, and he thinks in some ways it has backfired. Let me read you a bit of what he said. He says, "For those of us who remain skeptical about whether the drastic measure of a search warrant was really necessary, these revelations require grappling with a hard question. Given that the former president was not responsibly securing the government's most closely held intelligence, that he was trying to prevent the FBI from examining what he returned, that his lawyers were either misinformed about or lying about the classified information still retained at Mar- a-Lago, and that even the issuance of a grand jury subpoena with potential criminal penalties for noncompliance had not succeeded in getting Trump to hand over the remaining classified information, what option short of a search warrant would have sufficed?"

SCHOEN: First of all, I don't think that Andrew McCarthy knows all of the fact. I think the lawyers on site will tell you they felt it was properly secured. But I do think there were alternatives to a search warrant. I think, for example, they could have done a joint inspection with the lawyers present. They could have relocated the materials off site, and still done some inspection in which a Trump representative could have at least been a part of that process.

That's why I think, by the way, the special master process, and more important than the taint team or filter team, and I think courts have said this, it's important for the person whose materials have been seized to have some input into privileged questions and that sort of thing.

BERMAN: But you do concede that the Archives tried to get these documents for a long time.

SCHOEN: I think that's right. I think there were communications certainly going on for quite a while, months at least.

BERMAN: And there was a subpoena.

SCHOEN: Yes, there was a subpoena.

BERMAN: And ultimately DOJ and the FBI was not satisfied with what was turned over in the subpoena.

SCHOEN: Right. But I don't use them as the control factor. Whether they're satisfied or not, I think they have a political agenda also. And an agenda. I think it's political in this case also.

BERMAN: Let me ask you for help on legal terms. What does "Mens Rea" mean?

SCHOEN: The mental state required for, in this case, a crime, but it means the mental state.

[08:10:00]

So the statutes involved here, for example, they charge either -- they would charge either willfully, intentionally, or knowingly. There are three different standards in the three statutes that have mentioned so far in this case.

BERMAN: It's important in this case because of that?

SCHOEN: Yes.

BERMAN: At what point during this process is it reasonable to expect that Donald Trump had mens rea?

SCHOEN: I don't think that they will ever determine he had the proper mens rea to have committed a crime in this case. You raised one other time the idea of knowingly. Knowingly is the closest one could come, that is because there has been some evidence that he was told about the documents that were there. But from all of the information we have so far, he believed that he had a right to have those documents, he believed -- this issue has been raised now about the Presidential Records Act. And there's a dichotomy between personal records and presidential records. The president, former president expressly has a role under that act.

BERMAN: Look, he greeted the investigators when they came. So he knew there was an investigation.

SCHOEN: Yes.

BERMAN: There was a letter from the Archives saying we need the FBI to come look at these. So he had knowledge that there were questions about the legality of the presence there. What level of knowledge would he need to have to have mens rea? Are you suggesting that he literally would have had to say I know I'm committing a crime to have mens rea?

SCHOEN: Certainly for willful, he certainly would have believed or known he was doing something wrong.

BERMAN: They told him, though. They told his counsel.

SCHOEN: Right, but that doesn't mean that they're right. In other words, he's entitled to have a belief, a reasonable belief that other people supported, that his lawyers supported, that he was entitled to have those documents. You have this anecdotal information. He said they were his. I believe firmly knowing him as I do, and I know him pretty well now, that he believed he did nothing wrong. You may say that was wrong -- that's simply --

BERMAN: No, no. Look, I'm saying he was told it was wrong. I'm saying if he was told it was wrong, and it was a reasonable thing to tell him over time, does that not put him in legal jeopardy?

SCHOEN: I don't think so. It certainly raises that issue, however --

BERMAN: Are you saying he should not have known?

SCHOEN: I'm saying he may have well had the complete opposite belief, that they were simply wrong in telling him that, he believes they were politically motivated in telling him that, and he had a right to these documents.

BERMAN: Based on what you know of the law surrounding this, is there any reason -- is there any reason for someone to think you have a right to hang on to sensitive compartmented documents?

SCHOEN: First of all, I don't know that we know what documents were there. And we don't know what he knew about the documents were there. We know about conversations he had. But yes, I think, again, knowing Donald Trump, I believe that he had -- he believed he had reason to believe, and he's been told by other people that he had a right to those documents. There is a new piece out on CNN did today, by the way, that Tom Fitton had advised him.

BERMAN: But if there are other people telling him, no -- look, I get what you're saying here. Thank you, these are important questions going forward. We're going to learn a lot more in this affidavit today, counselor. Nice to see you.

SCHOEN: Thank you very much.

BERMAN: So tortured, that's how one Democrat describes the White House decision process on student loan forgiveness. The new CNN reporting this morning.

COLLINS: And President Biden making a fiery return to the campaign trail and calling out what he calls semi-fascism in the Republican Party.

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[08:16:52]

JOHN BERMAN, CNN ANCHOR: This morning, we have new CNN reporting that says President Biden was indecisive about forgiving up to $20,000 in student loan debt. One Democrat describes the president's struggle to make up his mind as tortured. He did get there.

CNN's Phil Mattingly live at the White House with how all this came to pass -- Phil.

PHIL MATTINGLY, CNN SENIOR WHITE HOUSE CORRESPONDENT: You know, John, I think the most important thing to think about when you start this process, and it has been a very lengthy and complex process, White House officials acknowledge, is that the president just simply wasn't aware a lot of the progressive part of his party was on this issue. Yes. during the campaign, he pledged to wipe away $10,000 in student debt but he had very real questions about the legality of the process, perhaps more importantly about the fairness of doing so.

Questions that really pushed this away from his plate several times over the course of the last 18 or 19 months. The administration early in the White House when they're dealing with a myriad of major crises kind of did a Washington way of putting things aside. They called for a legal review by the Department of Education, the Department of Justice. Every time they were asked about it, that review was still ongoing, or there were no updates about that review.

One official who was supportive of the idea of wiping away student debt said that there was some thought inside the administration that that review was being done solely just to bury the issue and it may never end. But it was completed. And over the course of the last several months, amidst intensive lobbying from some of those powerful Democrats on Capitol Hill, and some on his staff who believed that this was the right way to go, the president eventually got to a place where he was willing to pull the trigger.

And still the idea of how it would be structured, the legal basis for it and most importantly whether or not it would be targeted towards the lower and middle class remained major issues throughout this entire process. As you noted, the president eventually got there. Those income caps, $125,000 for individuals, $250,000 for households, and really focusing it as well on Pell Grants recipients who've taken out student loans, trying to hit that kind of key sweet spot the president identified about the fairness issue, about ensuring that people who didn't need the debt relief were actually going to get it.

Obviously not everybody is happy. It's kind of a Goldilocks scenario here, no one really feels like they got everything they wanted, but Biden eventually landed on a decision that he and his team feel like was the best one given all of those complex dynamics.

KAITLAN COLLINS, CNN ANCHOR: And Phil, I know the White House have kind of been struggling to say exactly how much this was going to cost. They really didn't want to get into the specifics until last night. And what are they saying now about that?

MATTINGLY: Yes, it's been a really interesting answer. You know, we know that this, the White House has made clear, they believe this will apply to about 43 million borrowers. They believe if there is uptake from everybody, it could wipe away debt, all the debt from more than 20 million borrowers. But the uptake is key. They don't know how many people are actually going to sign up from the program.

We heard from Karine Jean-Pierre last night that they have some analysis around $24 billion, $25 billion range based on what they've been looking at right now.

And Kaitlan, as you know better than anybody, the White House Economic Team has been modelling this out, trying to ensure particularly because of inflation concerns that things wouldn't be too exasperatory if these were to actually be put into place. But there's also the reality of effective. They just don't know how many people from that 43 million will apply for the loan forgiveness.

What they do know is about eight million they think will get it automatically based on what they have filed already inside the loan system.

[08:20:06]

But for those other individuals, it's very much dependent on how many people actually sign up. It could, according to outside analysts, as much as $500 billion to $600 billion. It could fall far below that as well.

BERMAN: All right, Phil Mattingly, thank you so much for sharing your reporting with us this morning.

COLLINS: So joining us now to talk about this decision is CNN political commentator Van Jones.

Van, you know, Phil is right that it is a bit of a Goldilocks situation in a sense that more progressive Democrats are criticizing it, Republicans are criticizing it, but in the middle, that's a really big space if people -- this makes a life changing difference for.

VAN JONES, CNN POLITICAL COMMENTATOR: Forty million people this Friday are better off than they were last Friday. It's very rare you can say that. More than half the borrowers have had more than half the debt wiped off the books. That's a big deal. And I think people don't understand, look, I'm from a generation, we just had to pay it. We just had to pay it and we struggled. I was in my 40s before I paid my student loans off. It was not a lot of fun.

But this generation, the one coming up behind us, it's literally trillion dollar plus on the back of one generation and they are just -- they can't get their lives started. I think this thing was targeted. It is classic Biden. You got the left screaming over here, the right screaming over here and here is Biden in the middle saying we're going to target this thing to middle class, working class folks.

If you're poor, you get twice as much help and that's what we're going to do. And so the fact that both sides are mad lets you know this is Biden politics.

COLLINS: It's a very good point.

BERMAN: And look, you know, we just had Phil doing the reporting for our White House team on. It took a while for Biden to get here and he can be indecisive. And that has been reported out before. In this case, though, by waiting, it was announced at a time where his political fortunes are a little better than they had been.

JONES: He's catching an upswing now.

BERMAN: Before. Right?

JONES: Yes.

BERMAN: And he may have landed on something, the Goldilocks scenario, where he may have actually found a little bit of a compromise.

JONES: Listen. This say big deal. I just want to say, look, we can parse it politically and we have to do that because, you know, that's what we do here. But I just want to say, for regular folks who are looking down the barrel of all this inflation and all this economic pain, the idea that you're going to have $10,000 of relief right now, the idea that if you got a Pell Grant, which means you were very poor, you can have $20,000 of relief?

BERMAN: It's real.

JONES: That's real. It gives you a gasp for air. It gives you a bit of hope, it gives you the sense that maybe I can buy a house or maybe I can deal with this medical debt that I've got to deal with on the other side. And, listen, you vote for presidents hoping they're going to do something, Biden is starting to do something for a lot of people and I think it's a big deal.

COLLINS: And I also think, you know, we've seen criticism, a lot of thinking that, well, you shouldn't have taken out this amount of loans if you couldn't afford to pay them back. But, you know, people of my generation, we graduated, a lot of people graduated college, they took out these loans thinking I'm going to get a job, I'm going to work to pay them off, and they came into a disastrous labor market where they could not get a job. They could not put that degree that they just took out loans for to work.

JONES: It turns out when you're 18 years old and you sign some paper, you may not understand all the macroeconomics, you may not understand all the --

COLLINS: Exactly. JONES: Everybody is telling you, you got to go to college to have a

life, you sign that piece of paper, you destroy your life. You need some help, you just got some.

BERMAN: And again, I don't want to make this all about politics, but I expect you will hear from a lot more young people for whom this is a big deal in the next couple of months heading up to the midterms. We did hear from someone who graduated college a long time ago, Joe Biden, last night. The president of the United States who gave what sort of was his kickoff campaign speech for the midterms. Let's listen to a little bit of what he said.

(BEGIN VIDEO CLIP)

JOE BIDEN, PRESIDENT OF THE UNITED STATES: Your right to choose is on the ballot this year. The Social Security you paid for from the time you had a job is on the ballot. The safety of your kids from gun violence is on the ballot. And it is not hyperbole, the very survival of our planet is on the ballot. Your right to vote is on the ballot. Even the democracy. Are you ready to fight for these things now?

(END VIDEO CLIP)

BERMAN: And Van, you talk to a lot of people across the Democratic spectrum. OK. Why the smile?

JONES: Because that's Joe Biden. I mean, that's him. I mean, it's like, that, you can feel the passion, the love he has for ordinary people. I mean, you got to love him. And listen, you may not agree with Joe Biden. He's hard not to like. This guy cares about the country. And he's out there. This is what he was born to do in his mind, to get out there and fight for the American people and you get the White House to do it.

I'm smiling because I love the guy. I'm sorry.

(LAUGHTER)

COLLINS: He's in Montgomery County, Maryland, last night, where he gave this speech. Obviously he and Vice President Harris took about 78 percent of the vote, I believe, in that county. But is that a message that will be successful in swing states, in other areas where he's going, and do you think given the recent upswing that you mentioned that Democrats who are in vulnerable positions for the midterms are going to be more likely to embrace him than they were maybe a month and a half ago.

JONES: Listen, your poll numbers go up, you're going to get hugged and kissed, so your poll numbers go down, nobody knows your name.

[08:25:04]

That's the politics. I think he's on an upswing. And I think there was a sense of the season of shame that we were in. The Afghanistan thing was messy, we couldn't get anything passed, we're tripping over our own feet, and it was almost -- you're almost kind of disappointed to be a Democrat. Now people are determined. Like we're getting stuff done. This guy is passing bills. We're talking about gun reform, whether you're talking about the CHIPS act, whether you're talking about climate. This guy is getting stuff done. And so he's got a little swagger with him.

Now I think the party got a little swagger with him. You'll see people even in some of these swing places, as he rises, people will want to grab on to him.

BERMAN: During a closed door part of the events yesterday to Democratic donors, he described MAGA Republicans, some of them, as semi-fascist. How do you feel about that use of language because there are some suggestions it could backfire on him?

JONES: Well, I mean, I wouldn't use that kind of language because I think by the time you say MAGA Republicans, everybody knows what you're talking about. You know, you have Republicans like you -- people remember from the good old days of Jack Kemp, those kind of people, the Paul Ryans, the people that you may disagree with, but you know that they're not out there trafficking in white supremacy and white nationalism and don't believe in democracy.

And now you got some other kind of Republicans which people call MAGA Republicans, you already know. When you're talking about insurrection, you're talking about maybe trying to steal elections, that's not American democracy, that's not the party of Lincoln. And I don't know if you got to go as far as he did to describe it, but I think what he's trying to say is we are in danger when it comes to our democracy. And the polls are showing that people believe we're in danger. And that's going to do some of the turnout.

COLLINS: We'll wait to see. And, you know, it is also notable that he made that comment behind closed doors, but he is someone who's been criticized for working with Republicans and so that's another factor into the context. Van Jones --

JONES: Yes. Well, I'm proud of Joe Biden today.

COLLINS: Always great to see you. We're proud to have you on set with us. Thanks for joining us and talking about all this important stuff with us.

Up next, Russian forces at the Zaporizhzhia nuclear plant are a, quote, "constant trigger" of a possible nuclear disaster. That's according to Ukrainian officials. We'll have the latest on the threat ahead.

BERMAN: And Wolf Blitzer, this is special, takes us inside the U.S. Holocaust Memorial Museum in a new CNN Special Report. Wolf will join us live with a preview.

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