Return to Transcripts main page
Quest Means Business
Biden's Budget: Higher Taxes For Wealthy, New Social Spending Part Of Plan; White House Budgets For Economic Weakness Ahead; Europe Joins US In Chipmaking War With China; Klarna Expects Profit In 2023; HIV Battle At A Crossroads; Call To Earth; Dash To The Bell. Aired 3-4p ET
Aired March 09, 2023 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: With one hour left of trading, Wall Street is sliding lower. Let's take a look.
Early gains have turned into some pretty solid red there. The Dow is off almost 400 points, let's call it 1.2 percent. Those are the markets and
these are the main events.
President Biden unveils his budget plan. It would raise taxes on the rich and slash the US deficit.
The Dutch introduce new restrictions on sending semiconductor technology to China.
And South Africa still grappling with HIV 20 years after a landmark relief program.
Live from New York, it is Thursday, March 9th. I'm Rahel Solomon, in for Richard Quest, and this is QUEST MEANS BUSINESS.
In the last hour, President Biden has unveiled a $6.8 trillion budget. It seeks to increase spending on the military and healthcare and reduce the
deficit. Now to do so, President Biden plans to increase taxes on the wealthy and businesses. You are looking at live pictures of President Biden
as he unveils this budget. This is in Philadelphia, Pennsylvania.
But with Republicans in control of the House, it has no chance of becoming law, but it does lay down the challenge to the President's political
opponents. It also draws the battle lines on issues like the debt ceiling and social spending. Take a listen.
(BEGIN VIDEO CLIP)
JOE BIDEN, PRESIDENT OF THE UNITED STATES: It is something we can do to lift the burden on hardworking Americans, and there is more than one way to
do that and that would bring us down to everyday cost. How much do things cost?
It's not just further decline, we brought down inflation seven months in a row, we're going to whip it. But in the meantime, there are other ways to
take what is inflation in your budget.
(END VIDEO CLIP)
SOLOMON: Now, here is a look at what's in President Biden's budget. An estimated $5 trillion tax increase on high earners and also large
corporations; $835 billion in Defense spending, and it also aims to cut the deficit by about $3 trillion over 10 years. America hit its debt limit of
$31.4 trillion in January.
CNN's chief White House correspondent, Phil Mattingly is with me now. Phil, look already critics have said this is purely aspirational. Others say, it
is dead on arrival. Help us understand what's the strategy here from the White House? What's the thinking of the White House?
PHIL MATTINGLY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Yes, I would say both of those frames are quite accurate. It is both dead on the rival and
it is very much aspiration. I think when you talk to White House officials, Rahel, they acknowledge that fact. But their view on this is twofold.
One they believe they actually have to put pen to paper, lay out their budget, lay out their proposal and to some degree, challenge Republicans to
put their own on the table, which House Republicans in the new majority haven't done so yet.
But the broader issue, I think you've got this in the lead in a really sharp manner, which is this is laying out the battle lines of what's next,
and what's next is a couple of different things, all of which are very high stakes.
The first and foremost, obviously, is that debt ceiling showdown. They have a deadline of this summer, there has been no real engagement. In fact,
White House officials say explicitly they will not negotiate on the debt ceiling. Republicans say that is a nonstarter. How does this end? Not
really sure at this point in time.
But this budget is a very key element of the White House effort to really ramp up pressure on Republicans. And then I think there's the longer term
element of this as well.
When you talk about the tax increases on corporations in the wealthy, when you talk about the investments the President is proposing, when you talk
about Medicare and Social Security and defending those programs trying to elongate the viability of Medicare based on what the President is laying
out, those are campaign items. Those are things the President wants to campaign on in 2024, if and when he launches a reelection campaign. Those
are the two critical elements here.
Policy certainly matters. Politics overhangs everything.
SOLOMON: It absolutely does. Phil, you mentioned there that the Republicans haven't laid out their plan yet. We do know that Republicans have been
quite vocal about the need for spending cuts. Is it clear yet from comments from prominent Republicans where they believe those cuts should come from?
MATTINGLY: No, it's not. And I think that one of the interesting elements and you're a watcher of this town, Rahel, so you understand this, is this
budget as much as it is a very significant and sweeping policy document, it is also bait.
White House officials are trying to lay this out to draw out a budget proposal from House Republicans because of two reasons. One, they don't
think that they can coalesce around anything given how fractious the House Republican conference is.
But the other one is, given the steep spending cuts that they have promised to go along with their promise not to touch entitlement programs, they
believe that anything that does come to the table would be so dramatic in terms of the cuts to healthcare, social safety net programs various
elements that it will be a political goldmine for White House officials to attack going forward.
So they want a Republican proposal. They haven't seen one yet. Republican leaders say they will put one on the table, we're going to likely have to
wait for a couple of months.
SOLOMON: Yes, the budget remains in focus for the next few months as that debt showdown remains.
Phil Mattingly, good to have you. Thank you.
And that budget is based on some pretty gloomy assumptions. So the White House thinks that the economy will grow just 2.5 percent. It expects the
jobless rate to jump to 4.3 percent from the current 3.4 percent in January.
And it looks like the fight against inflation will be slow. The Biden administration sees inflation cooling to 2.3 percent in 2023, down from an
average of eight percent in 2022.
Dana Peterson is the Chief Economist at The Conference Board, and she joins me from New York.
Dana, welcome to the program. Thank you.
DANA PETERSON, CHIEF ECONOMIST, THE CONFERENCE BOARD: Thank you.
SOLOMON: So I want to start with those economic projections in terms of unemployment. And of course, we will learn a lot more tomorrow when we get
the February jobs report.
A jump like that in unemployment almost always means a recession. Is this the White House essentially conceding in these projections that it is
expecting a recession?
PETERSON: Well, I don't really know what's on their minds, but certainly when we look at our own forecasts, we do have an increase in the
unemployment rate to around 4.4 percent by the end of this year, early next year, that is roughly a million jobs lost.
But if you look at that, that's really not that bad compared to the 13.5 percent increase in unemployment we saw during the pandemic and the 10
percent increase we saw during the financial crisis, and certainly a growth rate of two-and-a-half percent for GDP, that's actually much stronger than
what we're projecting.
We're thinking GDP certainly for this year, is probably going to be in the range of zero to one percent. And over the longer term, probably close to
1.8 percent or so.
SOLOMON: So gloomy, but relatively optimistic compared to other projections.
SOLOMON: Dana, you know, the last time we got a Biden budget, I think it was before we really fully embraced and appreciated how high inflation
would ultimately go, but also how sticky inflation would remain. Anything in this budget that stand out to you that will really help on the inflation
PETERSON: Well, certainly the fact that the budget calls for smaller deficits and debt over time. So for example, the CBO's estimate of Federal
budget debt as a share of GDP in 10 years is 118 percent. The administration's budget is 110 percent.
So that means that you have less spending somewhere potentially more revenue, and that you have less debt. And so that means less of a drag on
the economy, faster growth, and potentially some relief in inflation.
SOLOMON: You know, as we said, I'm not sure if you heard our conversation with Phil Mattingly, our chief White House correspondent, the plan from
Biden has already been slammed as purely aspirational. I'm wondering, though, do you see parts of this plan that you believe are actually
PETERSON: Well, certainly, every budget issued by either party is aspirational. That's what they'd like to do. But certainly there are many
elements of it that are going to be used for negotiation. Certainly, the fact that there is potentially an increase in the corporate tax rate from
21 to 20 percent, or even an increase in the buyback tax.
But certainly, that can be used as a negotiating point for avoiding a big fiscal cliff, if you will, or a really big jump for persons making under
$400,000.00 in their tax rates in 2026. So many of the elements in here, you know, are going to be used to negotiate with the other side upcoming.
SOLOMON: I see. So to be clear, you're not necessarily expecting that Biden actually accomplishes this goal of quadrupling the buybacks tax from one
percent to four percent, but perhaps it can be a negotiating tool for other areas of the budget.
SOLOMON: Dana, before I let you go, I do want to talk about the Jobs Report tomorrow. Of course, all eyes are on that key jobs report, especially after
January's blockbuster numbers, what are you expecting?
PETERSON: Well, I would expect that we are probably going to have to see another month of really outsized gains like that, like what we saw in
January. It was really unusual, even given the recovery that we've seen the rapid recovery that we've seen in employment.
And so I would expect some of that to be given back, maybe we even get, you know, a small number, and you just average it two months out, but certainly
there's a lot of risks there. And certainly we're understanding, from our understanding, businesses are still hiring, especially businesses that have
massive labor shortages, or they're holding on to their labor forces and their hording labor.
So there's still potential for a decent number, but potentially not as strong as what we saw which was really outsized in January.
SOLOMON: It really was, and before I let you go, and I only ask because the labor market is an area that I care about pretty closely. Did unemployment
claims today concern you at all? We know that they have been historically low and they've risen to levels we haven't seen in months. But is it still
just noise? Or is this sort of the first sign that things could be starting to take a downturn in terms of the labor market?
PETERSON: Well, it's hard to know, usually, I look at the four-month moving average, which kind of smooths out the weekly gyrations and so, we need a
few more weeks of data to see if this picks up, but we do know that there have been more announcements of job of layoffs and so that's going to
happen somewhere and the first sign of it is going to be certainly in those jobless claims.
But you know, jobless claims are still incredibly low and so most people are still working and most companies are not laying off. So we're going to
have to keep a close eye on these data to see which direction the labor market goes into.
SOLOMON: Absolutely. All eyes on that report tomorrow morning.
Dana Peterson, great to have you on the program today. Thank you.
PETERSON: Thank you.
SOLOMON: And The Netherlands is joining the US in restricting China's access to semiconductor technology. Europe's biggest tech firm, ASML
Holdings is based in The Netherlands and it builds the machines that produce computer chips. The new rules will limit which of those machines it
can sell to Chinese companies.
The Dutch government says that the export restrictions are a matter of National Security.
Anna Stewart joins me now from London.
So Anna, this comes of course, as relations continue to worsen between the US and China. Lay out for us the real goal or the aim of this policy.
ANNA STEWART, CNN REPORTER: When it comes in coordination, really with the US who introduced measures some months ago in October, and as it said there
in the letter to Parliament that the Trade Minister of The Netherlands said this is about National Security, they didn't actually mention China in the
letter, but clearly that is the focus here.
And we're looking at the very advanced end, in terms of microchip semiconductor technology, so these are used and are critical for numerous
sectors, but of course, particularly advanced military systems, weapon systems.
Now it is interesting, I think that ASML, the biggest chipmaker, or technology that supports chipmaking in Europe, has actually come out with a
statement. They weren't mentioned in the letter, either, but of course, they will be impacted, but perhaps not as much as you might expect.
It actually said, they think these measures won't have a material impact or their financial outlook for this year or for their longer term scenarios
and that might be because the measures introduced here by The Netherlands, which will take a few weeks before they're actually implemented are quite
niche. They're just limiting perhaps, the supply to China of the second most advanced machines that make semiconductor chips. Already ASML doesn't
actually supply their most advanced machinery.
So then you question how much bite does this measure have? I think given that you're looking at this measure from the Netherlands, plus the United
States and this sort of alliance of countries, that's possibly where the pressure will come. But it will only be as effective really, as however
many countries join the Alliance and also just how effective and significant the measures are. This one feels much weaker than what we saw
from the United States.
SOLOMON: Anna, let's stay there, because I think that's a perfect segue in terms of alliances, because we know it's not just the US. We know it's not
just the Netherlands that are placing these restrictions on China. Japan also reportedly considering updating its policies. What is China saying in
response to all of this?
STEWART: So China's outlook on all this is dim. And yes, despite not being mentioned in this letter to The Dutch parliament today, they were quick to
We had a spokesperson for China's Foreign Ministry, essentially saying they oppose these measures and are suggesting to The Netherlands that certain
countries have coerced it and that perhaps Netherlands should go away and reflect on that.
You're absolutely right, we do expect something similar from Japan. But listen, there are a lot of other markets around the world that are very
important to the sector, for instance, South Korea, and they're not only not supporting this, they've actually actively opposed the measures
introduced by the US and they're likely to oppose these measures from The Netherlands today.
And really, at this stage, I mean, given the measures that were introduced by the US, it could cause some pain for US chipmakers. It'll take quite a
lot of -- it'll take a lot of bravery for some countries to introduce measures like this that could hurt their own companies and also, of course,
provoke the ire of China.
SOLOMON: Look, I think it's a great point. I mean, National Security concerns being what they are, you have to wonder what the impact will be
ultimately, and could this backfire on American companies?
Anna Stewart, thank you. It's good to have you on the program.
And coming up, going from a $1 billion loss last year to profit in 2023. Can it be done? Swedish by now pay later giant, Klarna says that it can.
I'm speaking to the company CEO, coming up next.
SOLOMON: Welcome back.
To Tel Aviv now where three people have been wounded; one severely in a shooting. Police say that the suspect opened fire at pedestrians and was
shot and killed by police officers.
It comes as US Defense Secretary Lloyd Austin met with Israel's Prime Minister today while tens of thousands of Israelis rallied in the streets.
I want to take you now to live pictures of the shooting -- the meeting. This is the shooting here. It's about 10:15 in Tel Aviv right now. We'll
get more on that in just a moment.
But I want to tell you a bit more about that meeting taking place near the Tel Aviv Airport because protesters were blocking key roads in the city.
Those protesters upset over a proposed overhaul to the judiciary. They have been protesting for weeks now it seems, as well as the escalation of
violence in the West Bank.
Hadas Gold is live in Jerusalem with the latest.
Hadas, what more can you tell us about the shooting?
HADAS GOLD, CNN CORRESPONDENT: So what we understand from Israeli authorities, this took place, just about an hour, an hour-and-a-half ago on
what is really one of the main going out streets in Central Tel Aviv, Thursday night. It is essentially the same as Friday night in Israel,
elsewhere. So the street was likely packed with people going to bars and restaurants.
It's also not far at all from where a rather similar attack happened just about a year ago at another bar just about half a block from where this
shooting attack took place.
Authorities are calling in a suspected terror attack. They say that a gunman opened fire at pedestrians or people who were eating outside at
cafes, wounding three, all of them in their 20s. One of them was critically wounded before it seems off duty police officers who happened to be on the
scene shot and killed the suspected attacker.
We have no information yet on the identity of the attacker. Although, authorities are calling it a terrorist attack. We've also seen praise, but
no claims of responsibility from the militant groups like Hamas and Islamic Jihad.
We are seeing some celebrations in Palestinian cities such as Jenin, but no yet identification of the attacker or of claims of responsibility. But this
also was happening not far away at all from where protesters had continued to demonstrate after this whole day of disruption that had been planned.
These protests have been against Benjamin Netanyahu, the Prime Minister and his government's plan to essentially overhaul the judicial system in
Israel. This would essentially allow the Israeli Parliament to overturn Supreme Court decisions with a simple majority.
Today, as you noted, they took their protests to the airport. As you noted, that affected the US Secretary of Defense Lloyd Austin's visit. It caused
him to essentially have to keep all of his meetings within just around the airport complex and what's really interesting is that the Defense Secretary
even talked about these judicial reforms in his meetings and in his press conference standing alongside the Israeli Defense Minister essentially
reiterating what President Biden has said about how what's great about the Israeli and American democracies are part of it is just the independence of
That was a very clear message to the Israelis and an unusual run for the Secretary of Defense to get involved in sort of these internal Israeli
politics that goes to show you how seriously the Americans are taking all of this. But of course, a lot happening here today between the protests and
between, of course, now that this shooting happening just in the last two hours or so -- Rahel.
SOLOMON: And Hadas, any sense of what's ahead, because the independence of the Israeli judiciary at the heart of these protests for the last nine
weeks or so, I mean, what's the sense of what happens now moving forward?
GOLD: Yes. I mean, these protesters, they aren't backing down anytime soon. They plan to continue, you know, and even if there are terrorist attacks,
even if anything of the heavier police response to their demonstrations, they say that they plan to continue these regular protests, these regular
days of disruption, as they're calling them.
But tonight, we did hear an address from the Israeli President, Isaac Herzog, essentially, for the first time coming out against this
legislation. He is saying that it was -- he believes it is essentially dangerous, and saying that it's essentially a do or die situation.
Now, he has been calling for weeks and trying to have meetings with all of the potentially interested parties, from the government to the opposition
to sit down, come to the table, and to come to some sort of negotiation consensus on these reforms, because some people have been calling for
reforms of some kind to the judiciary for some years, and he has essentially been saying, listen, there are some reforms that can be made,
but the reforms currently being suggested, they just go too far and he is essentially saying that they are too dangerous to Israel's democracy.
SOLOMON: Hadas Gold live for us there in Jerusalem. Thank you, Hadas.
Georgia's opposition leaders are calling for more protests tonight. That's even after the ruling party said that it would withdraw a controversial
foreign agents bill. The proposed law has sparked mass demonstrations and the Georgian President today saying that she is proud of the protests.
(BEGIN VIDEO CLIP)
SALOME ZOURABICHVILI, GEORGIAN PRESIDENT (through translator): Greetings. First of all, I would like to congratulate our entire society on such an
I welcome the right decision made by the government to recall the law.
This will of the people was demonstrated wonderfully. This was shown not only in Georgia, but also abroad. All our partners saw this extraordinary
attitude and really the will of the people towards the European path of Georgia.
(END VIDEO CLIP)
SOLOMON: And CNN's Salma Abdelaziz has been following today's developments and has more.
SALMA ABDELAZIZ, CNN CORRESPONDENT: Opposition lawmakers in Georgia say it's simply not enough to just withdraw this controversial foreign agents
The opposition party wants to see the Georgian Dream Party, that's the ruling party that is pushing for this piece of legislation, they want to
see them cancel, formally cancel this bill completely.
The opposition has called for more demonstrations. We've already seen tens of thousands of people take to the streets across Georgia angry this bill
known as a foreign agents bill, it would require civil society groups, NGOs, media organizations to register with the government if they receive
20 percent or more of their funding from foreign sources, from abroad.
Now critics of this bill say it is Kremlin-like and it has been taken straight out of Russia's playbook for crushing dissent. Take a listen to
how one opposition representative explain the call for more demonstrations.
GIGA LEMONJALA, EXECUTIVE SECRETARY, DROA OPPOSITION PARTY: We're ready to go on with the protest, because it's not about particular organizations, it
is about Georgia and European and Euro-Atlantic aspiration. And we're not going to put that issue under question.
It's an irreversible way of Georgia. It's a choice of Georgia and people, Georgia should be a Member of the European Union and NATO.
ABDELAZIZ: The bill has been described as incompatible with the norms and values of the European Union. That's important because Georgia applied for
membership to the EU after the invasion of Ukraine by Russia.
So, this could potentially draw a wedge if this bill passed, it would draw a wedge between the EU and Georgia. There is also concern from the United
States, the US State Department releasing a statement saying that it stands with the people of Georgia. It goes on to say that this bill could
stigmatize and silence independent parties.
The United States saying that they are going to monitor these demonstrations very closely. But for now that victory, the bill withdrawn
from Parliament, but very much those taking to the streets want to see further actions.
Their fear is, their concern is that this bill could allow greater Russian influence in the country and worsen relations with the West.
Salma Abdelaziz, CNN, London.
SOLOMON: And I want to draw your attention now to the Dow. Let's take a look at the market. You can see the Dow is off 550 points, about 1.7
percent. Remember at the beginning of the program, I opened the program about 24 minutes ago with the Dow off about 300 points, I believe it was,
400 points at beginning of the show and it has since taken a turn lower.
It has been a volatile week for the markets. Taking a look at the S&P, also off almost two percent there. The NASDAQ off more than two percent.
Thinking about the week though, what a volatile week it has been. We have heard from Federal Reserve Chairman Jay Powell testifying on Capitol Hill
before the Senate and the House, making some hawkish comments that investors clearly did not like.
And of course, we all are anticipating the all-important February Jobs Report tomorrow. The expectation among economists is for an additional
200,000 jobs being added to the US economy. If in fact we do see levels like that, that would be the lowest level in two years, but I think a
welcome sign for financial investors considering the environment that we're in.
Again, I want to draw your attention to the Dow, off 550 point, 1.7 percent just about, taking a turn lower in the last 25 minutes. Not exactly sure
why it has taken a turn lower, much sharper, but worth noting nonetheless.
Klarna meantime says that it is on track to return to profit this year despite posting a record $1 billion loss in 2022. Once the most valuable
private company in Europe, Klarna saw its valuation plunge from $46 billion to $6.7 billion last year.
However, there are some optimistic signs. Growth is exceptionally strong in the US. Credit losses are improving and the customer default rate is low.
Sebastian Siemiatkowski is the CEO of Klarna and he joins me now from Sweden, from Stockholm, Sweden. Great to have you, Sebastian.
SEBASTIAN SIEMIATKOWSKI, CEO, KLARNA: Thank you for having me.
SOLOMON: So you've mentioned that credit defaults were low. Great news, encouraging news. Are you concerned about that changing at all?
SIEMIATKOWSKI: Well, not entirely, actually. Because if you look at it, I mean, what's very different about the credit model that we do, right, is it
is extremely short durations and very low average balances, right? So your average credit card balance might be about $6,000.00. Klarna's average
balance is about $100.00, right? So it makes a very big difference.
And the whole problem with credit cards really is that they're built up to make you borrow as much as money, right, as possible. So that's why they
gather all of your transactions on a monthly basis, and then say, please, please, please pay less than your full balance so that you start revolving
and build up a balance and they want you to max to make as much revenue as possible.
We only offer installments. They're short term. You know, they'd get paid on within eight weeks. It's fixed terms and it is small amounts. Right? So
those are important factors to keep in consideration when you move into a worsening economical environment like we are.
SOLOMON: Can you explain them who your demographic is, who your clients are? Because when you think about more traditional banking providers,
Citibank, for example, saying this week that it is actually seeing softening in terms of consumer debt, saying that people are taking longer
to pay back debt, people are sometimes unable to pay back debt. Is this just a totally different clientele?
SIEMIATKOWSKI: Well, partially it is, I think that the important factor here is that is that we -- if you look at it, we first and foremost, even
the markets that were very mature in so many European markets, it's the 80 percent of the population that uses us. It is basically everyone.
But what really sets our customer societies, that they're super tired of credit cards, they're super ties of products that are rigged against them
to try to make them borrow as much as possible. And instead, they want to go back to what some people still remember used to be the way cards used to
work, every time you made a purchase, you pressed one for debit, or two for credit.
So you have that optionality and this is exactly what we encourage people to do. Don't use credit for every purchase. Use debit occasionally, credit
So I think what we're seeing however, in the US right now, in the numbers reporting is also somewhat of an apples to bananas comparison, because what
COVID meant was that a lot of people got a check, people spent much less money and credit card debt, as you may remember, was dramatically down as a
consequence of the almost enforced savings programs that most of our consumers were at during the COVID times.
So what we're seeing now is slightly a reversal of that. And in general, then I think banks maybe have been a little bit too open and too desperate
to get more credit card balances back up, and maybe we're too relaxed in probably writing policies a year ago.
SOLOMON: Well, Sebastian, I think that's an interesting point, I think it would be helpful for you to explain to us how Klarna makes money, right?
Because part of the incentive for banks to encourage us, consumers to rack up debt is that the more debt we accumulate, the more interest that the
So help us understand how Klarna makes money?
SIEMIATKOWSKI: Sure, so I mean, the difference is, in two ways, right? But the most important one is that by offering people a healthier form of
credit, one that doesn't charge them, you know, 30 percent interest rate, one that doesn't encourage them to borrow more with the short-term
installments and zero interest. Consumers have availability and this drives merchants' ability, merchants see that they simply have more sales.
More people are making those purchases and that drives up sales. So merchants are simply interested in providing these payments products
because they see better conversion rate, because they see better results and so, we are more than your typical financial institution. We have a
higher proportion of our income coming from the merchants side and the kind of acquiring side of the product.
We are our own network.
So we're basically competing with Visa, (INAUDIBLE) and American Express in the sense that we are a full payment network with both debit and credit.
But we have direct access to our merchant base, which also give us a healthier. There is less middlemen in our model, which makes it possible
for us to earn more (INAUDIBLE).
SOLOMON: Well, Sebastian, there's so much more we could talk about but unfortunately we have run out of time. Great to have you on the program
today. Thank you.
SIEMIATKOWSKI: Thank you for having me.
SOLOMON: And coming up, it has been 20 years since the U.S. launched its global AIDS relief program. While PEPFAR has saved millions of lives so
far, the battle is far from over in South Africa. We will go live to Johannesburg next on QUEST MEANS BUSINESS.
SOLOMON: Welcome back. I'm Rahel Solomon. There is more QUEST MEANS BUSINESS in a moment. We will be in South Africa where the battle against
HIV and AIDS has come a long way but still faces big challenges.
Can you spot the difference between the loved one's voice and an AI imitation?
CNN's Donie O'Sullivan puts his own parents to the test.
But before that, the headlines this hour.
SOLOMAN (voice-over): The top Republican in the U.S. Senate is being treated for a concussion. Staffers say minority leader Mitch McConnell is
expected to remain in the hospital for a few days.
They say he tripped and fell during a dinner event on Wednesday at a Washington, D.C., hotel.
Nigeria postponed Saturday's governor and state elections for a week. This follows last month's controversial presidential vote.
SOLOMAN (voice-over): The electoral commission says it needs extra time to reset voting machines. Opposition candidates are disputing the
presidential vote, saying that it was rigged.
And Doctors without Borders has temporarily closed a hospital in the Haitian capital due to violent clashes. The nonprofit descriptions the
hospital neighborhood as a, quote, "war scene," too unsafe for its teams to work. In recent months parts of Haiti have faced widespread gang violence
and security in kidnappings.
SOLOMON: So 20 years ago, George W. Bush announced a plan to combat the ravages of the HIV/AIDS epidemic. No one could know just how dramatic an
impact the U.S. government's foreign aid program, known as PEPFAR, would have. At the time of its creation, an HIV diagnosis was a death sentence in
much of the world.
Over the last two decades, PEPFAR is credited with saving 25 million lives and providing vital medical treatment to 20 million people. But 42 years
after the first case was diagnosed, many people have mostly forgotten about HIV/AIDS, although not everyone has that luxury.
South Africa has one of the highest infection rates in the world with more than 5 million citizens affected. David McKenzie is in Johannesburg.
David, this is still one of the biggest challenges that South Africa faces.
DAVID MCKENZIE, CNN SENIOR INTERNATIONAL CORRESPONDENT: It certainly is a big challenge South Africa faces, Rahel, and many countries on the African
continent. It's still the epicenter of the AIDS epidemic. And that epidemic has not finished. It might have faded from public view.
If you cast your mind back 20 years ago, I remember, as a young reporter being in South Africa, documenting the funerals which happened every
weekend, the scores of people, millions of them, cut down in their prime.
There was a significant drop in life expectancy. Many children were born with AIDS. Many others did not even get born because of the ravages of this
disease. And from an unlikely source 20 years ago, there was this announcement of PEPFAR. And it has had an extraordinary impact.
MCKENZIE: You started taking the medication.
Did you start feeling better straightaway or it took a long time?
PHILISANDE DAYAMANI, HIV PATIENT: I felt better straightaway.
MCKENZIE (voice-over): It's an epidemic many have forgotten.
DAYAMANI: It wasn't easy for me to accept. Many people cry when they hear about this.
MCKENZIE (voice-over): Philisande's young life upended when she tested positive for HIV last year. Years ago, her mother died of suspected AIDS.
DAYAMANI: I first cried. I said, I cried. And it eventually happens, I knew I had to take my pills.
These are the most important ones.
MCKENZIE: Are they easy to take?
DAYAMANI: So easy. Nothing hard about taking pills.
MCKENZIE (voice-over): Life-saving antiretroviral drugs that she will take for a lifetime.
DAYAMANI: I've got a purpose.
MCKENZIE: How do you feel about that?
DAYAMANI: I feel normal. It's part of life.
MCKENZIE (voice-over): Part of life for nearly 6 million South Africans on treatment. The country still has the highest HIV burden in the world.
People, who could otherwise die, living normal lives. It's an extraordinary public health achievement.
GEORGE W. BUSH, 43RD PRESIDENT OF THE UNITED STATES: Many hospitals tell people, you've got AIDS. We can't help you. Go home and die. In an age of
miraculous medicines, no person should have to hear those words.
MCKENZIE (voice-over): Twenty years ago, President George W. Bush announced the Presidents' Emergency Plan for AIDS Relief or PEPFAR. The
region was in crisis. In the hardest hit areas, the virus was seen as a death sentence because it often was.
Life expectancy dropped by 20 years. Child deaths have tripled. Multiple generations were at risk.
BUSH: Seldom has history offered a greater opportunity to do so much for so many.
JOHN BLANDFORD, CENTERS FOR DISEASE CONTROL AFRICA: It was a complete surprise.
MCKENZIE (voice-over): John Blanchard, CDC's director in South Africa, has been HIV positive since the mid '80s; on antiretroviral pills since the
BLANDFORD: Despite the fact that we had highly effective therapies starting in 1996, that were largely available in Western Europe, in the
United States, the challenge was then getting the effective drugs, lifesaving drugs, to the places where they were needed most.
MCKENZIE (voice-over): In those regions, PEPFAR saved more than 25 million lives.
Like 64-year-old Julius Mleppe (ph) in Lesotho, who has been on treatment for 10 years.
"If you have faith in the pills, they will work for you," he says. "You will start to get sick if you skip the treatment."
But public health officials say that the AIDS epidemic is at a crossroads. Infection rates among men who have sex with men and young women remain
MCKENZIE (voice-over): These groups have been a special focus.
Globally, more than 600,000 people still die of AIDS, despite wide access to prevention and treatment, that could save their lives and stop the
spread of HIV.
UNIDENTIFIED MALE: A lot of the world has sort of forgotten about HIV. But we haven't forgotten.
MAKHETHA MOSHABESHA, KARABO EA BOPHELO: No, we haven't. We haven't forgot. We still have people who are dying of HIV in as bigger numbers than we've
seen it before. We still see HIV impacting lives of people in the household.
We see children who are still born with HIV. We still see young people still being exposed to HIV because of issues of availability (ph). So we
can't forget it.
DAYAMANI: It's a very big risk like for a person to take a medication if they are HIV positive and also not to be sure that they are not HIV
positive and they have to go test. It's a very risky thing.
MCKENZIE: Why is it risky?
DAYAMANI: Because a person can die without knowing what killed them.
MCKENZIE (voice-over): Philisande wants to become a doctor or a singer.
The burden she has to carry is one no child should carry.
MCKENZIE (voice-over): But in the next 20 years, with enough will, this virus can be beaten -- David McKenzie, CNN, Johannesburg.
MCKENZIE: Rahel, around 600,000 people a year die from AIDS across the globe. Most of the burden is in sub-Saharan Africa. That final milestone to
basically getting rid of this virus is reachable, say health experts.
The new drugs are so effective that they basically stop the chance of you passing on the virus even if you have the virus, if you take those pills.
It is just what is needed is continued impact of PEPFAR and other organizations to snuff this virus out.
It's going to be -- PEPFAR going up for reauthorization at the U.S. Congress. This has been a rare example of bipartisan success in U.S.
politics. The hope is they will continue that commitment. Rahel.
SOLOMON: Continued impact and continued support eventually out there. David McKenzie, thank you.
Coming up, a very unexpected outburst.
(BEGIN VIDEO CLIP)
AI ANDERSON COOPER: Donie O'Sullivan is a real piece of (INAUDIBLE).
DONIE O'SULLIVAN, CNN TECH CORRESPONDENT: That is AI.
HANY FARID, DIGITAL FORENSIC EXPERT AND PROFESSOR, UC BERKELEY SCHOOL OF INFORMATION: That is really -- that's good.
DONIE O'SULLIVAN: Yes, Anderson is really good.
SOLOMAN (voice-over): That is definitely AI. Anderson Cooper would never say such a thing, unless it was AI Anderson. We will explain on the other
side of the break.
(END VIDEO CLIP)
SOLOMON: The U.K.'s Chester Zoo is on its way to becoming a conservation powerhouse. Last year, it was able to devote $30 million toward
And it is paying off. As you will see in today's Call to Earth report, the zoo is in the midst of a baby boom, providing new hope for the preservation
of some of the world's rarest species.
UNIDENTIFIED FEMALE (voice-over): The small northern English city of Chester might seem like an unlikely place to find some of the world's most
endangered animals. But since the 1930s, Chester Zoo has grown a reputation as one of the best in the world for conservation, with the targeted aim of
preventing species extinction.
MARK BRAYSHAW, CURATOR OF MAMMALS, CHESTER ZOO (voice-over): There is a huge biodiversity crisis at the moment. We are losing species at a
phenomenal rate. Some of these species we aren't even aware of them. We don't know their role. So by taking species out here, we don't know the
UNIDENTIFIED FEMALE (voice-over): While the gold standard for Chester Zoo is to bring species to be reintroduced to their natural habitat, in many
cases now, the urgent focus is on creating a safety net population in captivity.
BRAYSHAW (voice-over): (INAUDIBLE) the zoo is acting as an art. And we might be in a situation where actually species' habitat is gone and they're
not going to go back into their natural habitat. So we have to look at other places we can put them back into and balance out any sort of impact
that that might have.
UNIDENTIFIED FEMALE (voice-over): Luckily for the preservation of some of these critically endangered species, the zoo is in the midst of a baby
A birth for the world's rarest chimpanzee, triplets for the Madagascan fossa, a greater one-horned rhino, Malayan tapir and finally, in addition
to the zoo's family of marsupials.
Increased mining and deforestation in Papua New Guinea have seen the world population of Goodfellow's tree kangaroos more than halved over the past 30
years. So the birth of a new joey in Chester provides a glimmer of hope for the future of the species.
DAVID WHITE, TEAM MANAGER, TWILIGHT SECTION, CHESTER ZOO: The first time we saw it, it was tiny. It was sort of just like a jelly bean. It was very
underdeveloped. To be honest, you wouldn't even realize it was a tree kangaroo.
But then subsequently, month after month after month, you could really plot that development; eyes appearing then, suddenly, it actually looks like a
tree kangaroo now.
UNIDENTIFIED FEMALE (voice-over): Much of Chester's success in breeding is a attributed to its onsite endocrinology lab.
KATIE EDWARDS, LEAD CONSERVATION SCIENTIST, CHESTER ZOO (voice-over): I oversee our conservation physiology and reproduction team and our wildlife
endocrinology lab, which is the only one of its kind a zoo in Europe.
That mostly means we measure hormones in animal dung. So for something like the tree kangaroo, we'll take samples every day. We will run them about
once a month so we can measure reproductive hormones in our female.
It helps us pair together the visual cues and behaviors that the team see with the physiologically of the animal and what's happening inside so that
we can make sure we are putting the male and female together at the best possible time to give us the best chances of a successful breeding.
UNIDENTIFIED FEMALE (voice-over): The lab is yielding such impressive results that zoos around Europe are sending in dung samples from their
animals for analysis at Chester. There is hope that Chester's conservation focus can be a model for other zoos to follow.
UNIDENTIFIED MALE (voice-over): Our scientists are just a new model for what a future zoo could look like. So we're incorporating all of these
facets and direct conservation, where the fundraising model can actually health and well-being of the visitors who visit.
So certainly, Chester Zoo is being so successful at what it does. And we share all of that information. We want all zoos to do the same.
SOLOMON: And for more Call to Earth stories on conservation projects around the world, go to cnn.com/CallToEarth.
(VIDEO AND AUDIO GAP)
(VIDEO AND AUDIO GAP)
SOLOMON: Welcome back. U.S. markets are sharper after an afternoon selloff. The Dow is about 530 points set to close lower for the third
straight day. Let's look at some of the components.
Intel is the only stock above water, up about 1.8 percent. Otherwise, though, as we can see, it's right across the board. Boeing is down about
2.5 percent. It is helping a start-up try to bring AI to military planes.
Disney is near the bottom, off by 3 points. Let's call it 2 percent. That's after CEO Bob Iger told an investment conference that streaming is going
through a tricky time. And JPMorgan set the bottom there, 5.4 percent, sharply lower.
That is QUEST MEANS BUSINESS. I'm Rahel Solomon. Thank you for watching. The bell is ringing on Wall Street. "THE LEAD WITH JAKE TAPPER" starts