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Gov. Asa Hutchinson (R-AK) Discusses Upcoming Midterm Elections; IRS: Inflation Adjustments Could Lead To Lower Taxes In 2023; Biden To Release More U.S. Oil Reserves To Keep Gas Prices Down. Aired 7:30-8a ET

Aired October 19, 2022 - 07:30   ET

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

[07:30:00]

GOV. ASA HUTCHINSON (R-AK) (via Skype): Take what happened in the past and say that's going to define his future. I think the people of Georgia will look more deeply than that into him and make a judgment on it.

BRIANNA KEILAR, CNN ANCHOR: So, I mean, I just want to be clear here. It sounds like you may -- so when you're talking about what's happened in his past, are you leaving an open the possibility that this report is true, but that you're saying that it's in the past?

HUTCHINSON: Look, there's two things.

First of all, I don't know the specifics of the facts. I don't know the back and forth. I haven't talked to any of the witnesses. I don't know those level of details. I don't know that anybody knows that.

Secondly, Herschel does indicate that he's a different man than he was in the past. That he's learned from a lot of mistakes.

And so, people evaluate your heart -- your character based upon what people are saying but also what he's saying and how he's saying it, and the level of credibility and trust. Elections are about trust, and who are they going to trust to represent Georgia is going to be the current senator who is going to join in taking the country left or is going to look at Herschel Walker and say that he's the right one to lead our country and make a difference in the Senate.

And so, I give him the benefit of the doubt. Let's see on Election Day as to whether the voters do.

KEILAR: So, Governor, as you mentioned, you are hosting this summit there in Arkansas. It's the America Leads summit. It's like a conservative idea summit. And you have Condoleezza Rice who is the keynote today, an ardent supporter of Ukraine and America's support for Ukraine.

This is coming as Kevin McCarthy, who could be Speaker of the House if Republicans are to win the House, has thrown into doubt whether a Republican House majority would continue to fund military aid to Ukraine.

What do you think about that? Do you think that's a mistake that he is saying that -- that he is raising that?

HUTCHINSON: Well, Kevin McCarthy is reflecting some of the discussions among the Republican members of Congress. I think that would be a mistake to withdraw funding for Ukraine in this extraordinary fight against Russia and Russia's aggression against the sovereign territory of Ukraine.

I'm very much supportive of Ukraine. I believe that they're fighting a battle that helps reflect a free Europe, and that's the reason that NATO and the European countries are united together in opposition and in support of Ukraine.

Today, we're going to hear from not just Condoleezza Rice who is a supporter, as you said, of Ukraine, but we're also going to have a national security panel that's going to look at this more deeply and our relationship to China. And what happens in Ukraine against Russia impacts our relationship across the globe in terms of whether the United States is going to be in the leadership position that we usually are and where it can make a difference for the free people of Ukraine.

KEILAR: Governor, thank you so much for taking time to speak with us this morning. We really appreciate it.

HUTCHINSON: Thank you. Great to be with you.

KEILAR: Governor Asa Hutchinson with us this morning.

U.K. Prime Minister Liz Truss apologizing for the mistakes that she has made in the first few weeks in power. Now she is facing her critics in Parliament.

JOHN BERMAN, CNN ANCHOR: The FDA and the Justice Department suing six vaping companies for ignoring warnings that some of their products are illegal. Dr. Sanjay Gupta joins us next.

(COMMERCIAL)

[07:37:58]

BERMAN: So, millions of Americans could be in line for some big tax savings next year. The IRS plans to make its largest adjustment to deductions in 37 years. This is because of inflation. The highest inflation in 40 years will mean big changes at tax time.

The IRS making the largest change to deductions since it began cost of living adjustments during the Reagan administration. This means lower tax rates for some in 2023.

The standard deduction for married couples filing rises to $27,700. For single taxpayers and married individuals, it is $13,850.

And the IRS will adjust income levels for the seven tax brackets, raising from 10 to 37 percent. The top income tax rate of 37 percent will apply to individual income above $578,000 and $693,000 for married couples. The IRS raising the maximum contribution of flexible spending accounts

by $200 and also raising the estate tax and annual gift tax limits.

I see Christine Romans standing there --

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT, ANCHOR, "EARLY START": Hi.

BERMAN: -- and she can maybe help explain this a little bit more. Basically, what's happening here is that the amount that you will be taxed up and down the tax rate --

ROMANS: That's right.

BERMAN: -- you're going to get to keep some more of your money because costs are going up in other areas.

ROMANS: That's right, this is all about inflation. And these tax -- taxes are based on -- there's a cost of living adjustment. And so, they are going to change these thresholds for your tax -- all seven tax brackets. And also, they're going to raise the standard deduction.

And so, especially at the top end of the food chain, that's going to mean, for example, the top tax bracket -- it's about $40,000 of income that will be taxed at a lower rate -- at 35 percent instead of 37 percent. So that will save some money up there.

But also, how much money you can give away for gifts. And the state tax also. Those will be adjusted as well because, again, inflation has just been so rampant and so meaningful to so many family budgets. Your tax -- at tax time there will be some changes there, John.

[07:40:02]

BERMAN: Yes. You'll get to keep a little bit more of your money --

ROMANS: Yes.

BERMAN: -- but you're going to need it for how much the costs are going up.

Christine Romans, you have no idea how excited I was to see you just now. Thank you very much for being here.

Vladimir Putin meeting with his security council this morning. This as Russian officials announce setbacks in a key city they've occupied since the very beginning of the invasion.

KEILAR: And President Biden tapping oil reserves as he takes aim at gas prices. We're going to speak to an administration official next.

(COMMERCIAL)

BERMAN: Today, President Biden is expected to announce the sale of 15 million barrels of oil from the Strategic Petroleum Reserve. That is in addition to the 165 million barrels released since March. The sale of oil from the reserve is part of the White House plan to lower gas prices, which have become a major concern for many Americans just weeks before the upcoming midterm elections.

[07:45:06]

With us now is Amos Hochstein, senior adviser for global energy security. Thank you so much for being with us this morning from the White House, Amos.

I understand this 15 million barrels is part of the initial tranche that was announced, but in this announcement you are also saying it's possible there could be an even further release later on down the line.

What will the metric be to determine whether to release even more?

AMOS HOCHSTEIN, SENIOR ADVISER FOR GLOBAL ENERGY SECURITY, U.S. STATE DEPARTMENT: Well, good morning. It's good to be back with you.

Yes, the president has been committed since the beginning of the war in Ukraine -- since Russia invaded Ukraine and caused a continued spike in energy prices -- to bring down prices, specifically for consumers at home and around the world, and to strengthen the American economy. And to that end, the actions that he's taken over the summer took us from a peak of over $120 for oil. And today we're down at about $83.00 -- so almost $40.00 over the last period of months.

And most importantly, gasoline prices in the United States peaked over $5.00 a gallon and today they're back down. We now are seeing, again, declines down to just over $3.50.

So we're going to continue taking those steps. The steps today the president is announcing is 15 more million barrels released. And if necessary -- look, the Russians have clearly stated that we can't -- we can't be sure what they're going to do next and we have some measures that are coming into place in Europe over the next several months.

So, the president is going to keep a careful eye and announcing today that whatever we're doing today could continue and see additional SPR releases if necessary.

BERMAN: What I'm trying to figure out is what would make it necessary. Is it gas rising above $4.00 a gallon? Is it oil prices rising above $120? I mean, what can you tell us there?

HOCHSTEIN: Well, you make a good point. It's a -- it's a combination of things. Of when we -- if there are international actions that are taken that cause a spike in oil prices, which translate into gasoline and diesel, and heating oil prices right away, that's what we're trying to stave off. And that would be the metric.

I can't -- I can't tell you --

BERMAN: OK --

HOCHSTEIN: -- hypothetically what's going to happen.

But I think most importantly what we want to see happen -- the president is announcing more than just a release from SPR today. The president's also going to be announcing that we are going to replenish the SPR. We're going to buy back the oil that we sold at about $100 and buy back when prices go down to about $70.00. And that's critical because that's what the industry in the United States needs to know to -- in order to invest today in increasing production.

BERMAN: Yes.

HOCHSTEIN: So we want to see is companies actually increasing production today.

BERMAN: But when will that -- but when will that happen? I mean, you say $67.00 to $72.00 a barrel is the target.

HOCHSTEIN: Yes.

BERMAN: What if it doesn't get to that point? I mean, this is not a bottomless pit for the Strategic Petroleum Reserve. What if prices don't go there in the next six months and you keep drawing down?

HOCHSTEIN: So what we're asking the industry to do is not wait until the prices go there. We're asking the industry today-tomorrow to start increasing production. To start investing.

Look, they've made an enormous amount of profits -- which we're not against profits but they've made a lot of profits over the last several years -- several months. And what we're asking for is that they increase production now because the SPR -- as you said, we still have a lot there. We have over 400 million barrels. That's a lot of barrels and we're going to use them if we need to.

But we want the industry to increase production right now so that their barrels -- the private sector barrels can come into the market. That's not necessarily the role of the SPR.

BERMAN: So --

HOCHSTEIN: So we're building this timeline.

But the price doesn't have to go down. By telling the industry we're going to buy it at $70.00 or so, that means that they are guaranteed that their investments will be still profitable no matter what.

BERMAN: Understood.

HOCHSTEIN: So we're putting that floor on that price for them to invest today.

BERMAN: So in terms of production, when you're talking about increased domestic production you're also talking about increased refinery capacity. And I'm bringing that up because you've been very critical of Saudi Arabia and OPEC+ for announcing the cuts in production, which has helped drive up the price of oil and gas, and everything.

The Saudi Minister of State said don't look at us. This is what he's saying. He's saying it's not our fault that your gas prices are rising. This is what he blames -- listen.

(BEGIN VIDEO CLIP)

ADEL AL-JUBIER, MINISTER OF STATE, SAUDI ARABIA: The idea that Saudi Arabia would do -- would do this to harm the U.S. or to be in any way politically involved is absolutely not correct at all. With due respect, the reason you have high prices in the United States is because you have a refining shortage that has been in existence for more than 20 years. You haven't built refineries in decades.

(END VIDEO CLIP)

BERMAN: I saw you laughing as that was being introduced. Why?

HOCHSTEIN: Well, you know, I think they did just announce a two million barrel cut.

[07:50:01]

Look, this is not -- I'm not here to talk about what they are doing. We're here to talk about what we're going to do to strengthen the American economy and to continue to bring down prices for consumers.

The reality is when oil prices go up, prices for gasoline goes up. When oil prices go down, the price of gasoline goes down.

There's no doubt, though, that he does have a point about refineries in the United States. We've had a couple of refineries that had some accidents in them and they were down, which caused some prices to go up in certain parts of the country. We're follow -- we follow these things very carefully and we want to make sure consumers have lower prices.

But you have to understand that today, the difference between the price at the pump for a regular American trying to fill up their car is too high. The retail -- the gasoline price for those who sell the gasoline for the retailers -- that gap between what they -- what their profit gap for gasoline -- from what consumers pay is too high. It's higher than the norm historic average.

We want the companies -- energy companies to bring those prices down. We think they can bring them down now, already, based on where the price of oil is and based on what the wholesale price of gasoline is.

So, I think that we should see prices come down for consumers. They're already coming down over the last several days. The president wants those prices to come down even further and faster.

And he's going to take whatever action necessary in order to make sure the consumers don't have to pay the price for wars that are happening in Europe -- for Russia's and Putin's actions in Ukraine should affect consumers here. And he is going to work together with the industry to make sure that they -- that they do what they need to do and increase production, and prices come down for consumers.

BERMAN: Amos Hochstein, thank you for being with us this morning. Appreciate your time.

HOCHSTEIN: Of course.

BERMAN: Lawyers for the family of George Floyd drafting a cease and desist letter to the artist formerly known as Kanye West. We'll tell you why next.

Also this.

(BEGIN VIDEO CLIP)

NANCY PELOSI (D-CA): I ought to come down there and punch him out.

UNIDENTIFIED FEMALE: How I would pay to see that.

PELOSI: We're waiting for this -- for trespassing on the Capitol grounds. I want to punch him out, and I'm going to go to jail, and I'm going to be happy.

(END VIDEO CLIP)

KEILAR: That, of course, was January 6, 2021, before the Capitol riot. Why Nancy Pelosi says she stands by those words ahead.

(COMMERCIAL)

[07:56:27]

BERMAN: This morning, lawyers for Roxie Washington, the mother of George Floyd's only daughter, Gianna, are drafting a cease and desist letter to Kanye West who now goes by Ye. West claimed on a podcast that George Floyd was killed by a fentanyl overdose despite the medical examiner ruling that Floyd's death was caused by Derek Chauvin kneeling on Floyd's neck for more than eight minutes. The podcast episode has been taken down.

Floyd's brother also tried to pursue a defamation suit against West but that's not legally possible because Floyd is deceased. However, the attorneys say they do intend to file a $250 million lawsuit claiming intentional infliction of emotional distress.

KEILAR: The mayor of El Paso, Texas, Oscar Leeser, says the White House asked him not to declare a state of emergency over the influx of migrants at the border. He added he didn't think it was necessary himself at the time. The city has seen a spike in border crossers in recent months.

And joining us now on this story is CNN reporter Priscilla Alvarez. Priscilla, what can -- what have you learned here?

PRISCILLA ALVAREZ, CNN REPORTER: What this boils down to is the federal government telling the city of El Paso at a time of a spike in border crossings that they were going to continue to provide federal funds when the city was considering a state of emergency.

Now, late last month, the mayor said in a public meeting that the White House had asked him not to declare a state of emergency and he said, himself, that he agreed with that and didn't recommend it at the time. We asked the White House about that. They confirmed that there were discussions. They said there was no request but that they would stand by El Paso.

Brianna, we should note these conversations happen often between the federal government and border cities, especially in moments when they are seeing an influx. And that has been the case in El Paso where thousands of Venezuelan migrants have crossed into that city, straining their resources.

Now, the mayor said in a statement to us that he does not, quote, "bow to pressure." And he went on to say that it is, quote, "critical to work not only with the federal government but with regional elected leaders and multiple partners when facing a humanitarian crisis of this level." He also added the federal government has worked closely with him on issues and as he's raised these challenges.

Now, we should also note that the administration, last week, announced that they're going to start turning Venezuelan migrants back into Mexico. They expect that's going to drive down numbers. And at this point, the city says, they've noticed numbers have subsided and they don't intend on declaring an emergency at this point.

KEILAR: Critics are going to say look, that's the White House not wanting bad press and saying this to a mayor.

Are you hearing this from other mayors? Is this weird that the White House would say this to a mayor or is this actually -- is there something normal about this? What have you learned?

ALVAREZ: It is pretty common, again, for these conversations to happen. The government is providing federal funds to these cities. And so, there is often a dialogue about whether a city is going to announce a state of emergency so that they can shore up their own resources within their cities and counties.

And we've seen in the past a lot of these counties issue disaster declarations, state of emergencies. Just this month, New York City Mayor Eric Adams announced a state of emergency because of the influx of asylum seekers in his city.

So it is common for us to see this. Those conversations are always happening. But at this point, there is nothing unusual about the White House having discussed this and their federal support with El Paso.

KEILAR: All right, Priscilla. Thank you so much for that report.

And NEW DAY continues right now.

Hello, I'm Brianna Keilar with John Berman on this new day.

With just three weeks left until the midterm elections, Democrats and Republicans are still trying to get their messaging right. So where do things stand right now?

And a CNN exclusive. Legendary journalist Bob Woodward will be releasing eight hours of his raw interviews with former President Trump in a new audiobook.

[08:00:00]