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The Situation Room

Biden's Critical New Test On World Stage Under Way; Biden Admits To Macron, Clumsy U.S. Move Led To Rift; Biden Gets Personal With Pope Francis In Wonderful Talks; Interview With U.S. Treasury Secretary Janet Yellen; "Rust" Armorer Speaks Out, Slams "Unsafe" Set, Cost-Cutting. Aired 6-7p ET

Aired October 29, 2021 - 18:00   ET



JAKE TAPPER, CNN HOST: You can tweet the show @theleadcnn. You can also catch our show on our own podcast. Our coverage now continues with one Mr. Wolf Blitzer live from Rome. See you soon.

WOLF BLITZER, CNN HOST: Happening now, President Biden's critical new test on the world stage is under way here in Rome. As he kicked things off, he made a striking admission to the French president of a, quote, clumsy move by the United States. Was it enough to heal their diplomatic rift? I'll ask the French ambassador to the United States who was in the room.

The president also had deeply personal talks with Pope Francis, the two most powerful Catholics in the world bonding over their shared faith and discussing some of the world's greatest challenges right now.

Welcome to our viewers in the United States and around the world. I'm Wolf Blitzer reporting live from the Vatican, and you're in The Situation Room.

It's been a remarkable day here at the Vatican and in Rome for President Biden and all of us covering his visit. It is a little after midnight local time. The president is just hours away from the opening session of the G20 summit. He's been warming up with some very high- stakes diplomacy and amending fences with a crucial ally, we're talking about France.

Our Senior White Correspondent Phil Mattingly is joining us from Rome right now. Phil, we saw different sides of President Biden today as he met with the French president, Emmanuel Macron, and with the pope, Pope Francis.

PHIL MATTINGLY, CNN SENIOR WHITE HOUSE CORRESPONDENT: That is exactly right, Wolf. The president's closest advisers talked often about how much he relishes the personal element of politics of his job and how effective he thinks those personal interactions are. And in his first full day in Rome, he had an opportunity to put that on display, in one meeting deeply personal trying to build on a relationship, in the other just trying to salvage one.


JOE BIDEN, U.S. PRESIDENT: Thank you, thank you, thank you.

MATTINGLY (voice over): Tonight, for President Biden, a day of the deeply personal.

BIDEN: My son would want me to give this to you.

MATTINGLY: And the candidly diplomatic.

BIDEN: What we did was clumsy. It was not done with a lot of grace.

MATTINGLY: Day one of Biden's high-stakes foreign trip bookended by two closely watched meeting with Pope Francis and French president Emmanuel Macron, a trip to the Vatican to meet with the pope with a shared faith and in Biden's view philosophy.

BIDEN: You are the most significant warrior for peace I've ever met.

MATTINGLY: The force meeting between the two, but at 90 minutes, the longest and most in depth by far, officials said, coming as a fierce debate plays out between U.S. Catholics about Biden and abortion.

REPORTER: Mr. President, did the issue of abortion come up at all?

BIDEN: No, it didn't. It came up, we just talked about the fact that he was happy that I was a good Catholic and I should keep receiving communion.

REPORTER: He said that you should keep receiving communion?


MATTINGLY: Biden appearing playful at points.

BIDEN: How old would you be if you didn't know how old you were?

MATTINGLY: Handing the pope a challenge coin and detailed the unofficial military ritual.

BIDEN: The tradition is -- I'm only kidding about this, next time I see you, you don't have it, then you have to buy the drinks.

MATTINGLY: The meeting with Macron marked by a significantly more turbulent back drop.

UNIDENTIFIED FEMALE: First and foremost this matter of breaking the trust between allies.

MATTINGLY: Just weeks after a U.S. agreement with Australia led the country to dump billions worth of French submarine contracts, a move that blindsided the French, something Biden candidly acknowledged caught him off guard as well.

BIDEN: I was under the impression that France had been informed long before that (INAUDIBLE). MATTINGLY: Biden's top national security officials for weeks scrambling to repair the rift, Biden now publicly doing the same.

BIDEN: There is too much we have done together, suffered together and celebrated together.

MATTINGLY: Macron making clear there is still work to do.

EMMANUEL MACRON, FRENCH PRESIDENT: Now, what's important is to be sure that such a situation will not be possible for our future.

MATTINGLY: Biden's real meetings marking a sharp turn from another missed deadline on his domestic agenda.

REP. NANCY PELOSI (D-CA): Let's not just keep having postponements and leaving any doubt as to when this will happen.

MATTINGLY: With White House officials moving quickly to underscore progress and continue to press for an outcome.

KATE BEDINGFIELD, WHITE HOUSE COMMUNICATIONS DIRECTOR: We're going to get it done and the president is pushing it forward.



MATTINGLY (on camera): And, Wolf, a senior administration official acknowledged that through the months of September and October, there were some, quote, hard discussions between U.S. and French officials. But those discussions that officials said helped lay the groundwork for what they thought was a positive path forward.

Both leaders acknowledging today this needs to be about the future and there is a good reason why. Take a look at the president's schedule tomorrow, one of the most important meetings on that schedule, a meeting on Iran's nuclear program, a trilateral meeting. One of the other leaders, the French president Emmanuel Macron, Wolf.

BLITZER: Yes, very significant, indeed. Phil Mattingly here in Rome with us, Phil, thank you very, very much.

Let's bring in our Chief National Security Correspondent Jim Sciutto and our Vatican Correspondent Delia Gallagher.

Jim, the president landed here in Italy at head winds, on domestic issues and global issues, day one, how did he do?

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Listen, he has short and long-term problems to address. For instance, with France, short-term, he can show that the U.S. and France are still close allies. He can paper over the differences over that Australian nuclear deal. Longer-term, France, like many allies, has questions about U.S. leadership, are they going to be in the same position as they were in the past. That's something that's going to only stand the test of time. It won't be addressed this weekend. Similarly, on climate change, that is, of course, a long-term problem, that the president has in the framework deal back home in the U.S., a commitment to climate measures. One, does he get those through when he goes home, but also do they last beyond this administration?

These are the longer-term issues that you hear when I speak to diplomats with even some of America's closest allies, is the new America one where one administration makes one promise, the next administration makes another promise, and that relates to climate change, also to the Iran nuclear deal. That is the longer term challenge. That's something that Biden cannot solve this weekend.

BLITZER: That's an important point. Delia, 90 minutes the president spent with Pope Francis, and the emotional bond clearly was apparent.

DELIA GALLGHER, CNN VATICAN CORRESPONDENT: Yes. Already, the 90 minutes tells you that this is a different kind of meeting. That is not standard for the Pope Francis and a head of state. We saw President Biden very at ease with the pope, joking with him, giving him that very personal command coin. That was a poignant moment for the president.

But the really interesting key about what we know about this meeting was what the president told reporters afterwards, that the Pope Francis said to him, I am happy that you are a good catholic, continue to receive communion. That is important for two reasons. One, is obviously the message it sends to those U.S. bishops that wanted to add in a phrase about, you know, catholic politicians who support abortion rights shouldn't receive communion.

But the way that the pope did that is by showing himself to be the priest with the person involved. By putting himself in the position, which he has said to the bishops, what they should do is make that decision individually with the person involved, with their parishioner, okay? It is a question of conscience.

So, Pope Francis, instead of coming out and saying something about it, gives that example and he accomplishes two things. He tells the bishops what his message is. But he also, and it's an amazing to see a pope do that with a U.S. president. He said, I know your character. You're a good catholic. That is a huge statement on a very personal level coming from the Pope Francis.

BLITZER: President Biden goes to church almost every single weekend, either Saturday or Sunday, and he's been doing it basically I think his whole life.

He did, the president, acknowledge, and he used the word clumsy in the way that the U.S. dealt with its closest, longest ally, France.

SCIUTTO: He seemed as well to blame his own senior advisers to some degree. He communicated I thought that France had been warned of this, right, which is to establish some sort of responsibility for not telegraphing the move that the U.S. was going to make.

That is important for France. I've been speaking to French diplomats the last couple of weeks and not being warned in advance that the U.S. was going to make what is a consequential move, strategically maybe the right move in terms of Australia aligning itself with the U.S. in the Pacific in terms of rising to the China challenge but France is a close ally. If you're going to make that kind of move and France is dependent on its defense contracts, as many other countries are, if you're going to make that move, you want to let that close ally know it is going to happen.

It seems that the president acknowledged we didn't let them know. We don't know what promises he made to France going forward that are substantial. I know you're going to speak to the French ambassador. But I think those words were important to the French. Because when I've been speaking to them, they felt disrespected here. So to hear the president taking some responsibility has some weight.

BLITZER: Yes, it certainly does. Delia, the president and the pope also spoke about global issues, like the coronavirus pandemic, that was an important subject, and climate change, an important subject especially for the pope and the president.


GALLAGHER: Well, of course. I mean, Francis has really spent a large part of his pontificate and his whole message on the question of the environment, on the question of a preference for the poor, in which all of these issues converge. And, of course, the timing of this meeting is such that with the G20 and with COP26, you know, the pope has spoken out so many times, so many times, in every occasion with great, you know, emphasis.

He did it just a few weeks ago saying, in the name of God, I call on pharmaceutical companies to release their patents, very, very emphatic. And so this is his chance to meet with a president, a U.S. president, who could try and get people on board and who could get his own country on board with the practical measures that are needed for those.

BLITZER: Yes. I suspect the president was very pleased with both meetings with the French president and with Pope Francis. Guys, thank you very, very much, Delia and Jim. I appreciate it.

Just ahead, a surprise announcement for one of the few congressional Republicans trying to hold former President Trump accountable for the January 6th insurrection.

You're watching The Situation Room and we're live from Vatican City.



BLITZER: We're live here in Vatican City tonight following President Biden's high-stakes trip to Europe. He's meet with the French president, Emmanuel Macron, today and Pope Francis. And hours from now, he will face G20 allies.

Back in Washington, a surprise announcement from one of the few congressional Republican critics of the former president, Trump.

CNN's Brian Todd is joining us. He's got details. Brian Republican Representative Adam Kinzinger announced he will not seek re-election. Update our viewers.

BRIAN TODD, CNN CORRESPONDENT: Congressman Kinzinger did make that dramatic announcement today, Wolf, and tonight, the former president is crowing that one of his top Republican adversaries is quitting Congress.


TODD (voice over): Republican Congressman Adam Kinzinger of Illinois announcing he's leaving the house after six terms in a farewell video, seemingly taking a shot at Donald Trump without naming him.

REP. ADAM KINZINGER (R-IL): We have allowed leaders to reach power selling the false premise that strength comes from degrading others and dehumanizing those that look, act or think differently than we do.

TODD: Almost from the moment Trump took office, Adam Kinzinger was one of his top Republican antagonists.

KINZINGER: Our party has been hijacked.

TODD: Kinzinger is one of just two Republican members serving in the House select committee investigating the January 6 attack on the Capitol. The day after the riot, Kinzinger called for President Trump to be relieved under the 25th Amendment, which can be invoked if the president is unfit to serve.

KINZINGER: Here's the truth, the president caused this. The president is unfit and the president is unwell.

TODD: Trump has happily traded insults, at times calling the 43-year- old congressman crying Adam Kinzinger and vowing to help unseat him.

DONALD TRUMP, FORMER U.S. PRESIDENT: Adam Kinzinger. Get rid of them all.

TODD: One possible reason for Kinzinger's decision, his Illinois district is being redrawn, which could have pitted him against a Trump ally in his primary. But there are other factors at play. Kinzinger is one of ten Republican House members who voted to impeach Trump during his second impeachment earlier this year. Trump has turned on all of them.

Kinzinger and Ohio Congressman Anthony Gonzalez are declining to seek re-election. Other eight face primary challenges. Trump today issued a state saying two down, eight to go.

ZOLAN KANNO-YOUNGS, CNN POLITICAL ANALYST: You step forward and are open with your criticism against the former president, you are exposing yourself to either former President Trump, openly criticizing him and using his base as well to possibly turn against you.


TODD (on camera): Adam Kinzinger is leaving open the possibility of running for office again, saying in his parting statement today, that this isn't the end of his political future but the beginning. Speculation ranges as to what kind of office he might seek in the future, but either way, it looks like Adam Kinzinger and Donald Trump have not heard the last of each other. Wolf?

BLITZER: All right. Brian, thank you very much, Brian Todd reporting for us.

Let's discuss what is going on, dig a little bit deeper with our Chief Political Analyst Gloria Borger and CNN Senior Commentator, the former Ohio governor, John Kasich.

Gloria, what does Kinzinger's decision to step down say about the Republican Party today?

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Well, it says that the Republican Party today belongs to Donald Trump. He was facing a tough primary, as Brian pointed out, because of redistricting, against a pro-Trump person. And that would have been really difficult for him. It says that the Republican party has decided that in order to win and in order to keep control of the House, you have to buy into Donald Trump's lies and everything else about him.

And what makes me sort of sad is that pre-Trump, Adam Kinzinger was the kind of candidate, and I think John Kasich might agree with this, he was the future of the Republican Party. He is conservative, an Air Force veteran and served in Iraq, an expert in foreign policy and national security and on and on, with a great resume. He's going to stay in the party, he says he's going to seek office but not in the House of Representatives right now.

And I think, you know, you look back and you say, Adam Kinzinger was the perfect recruit. He served six terms, but not anymore.


BLITZER: Governor Kasich, you're a Republican. The former president, Trump, responded, as we saw two down eight to go, in apparent reference to the ten Republicans who voted to impeach him. I don't think it was apparent. What do you make of the former president taunting Republicans he's trying to force out in the party?

JOHN KASICH, CNN SENIOR COMMENTATOR: Well, I think -- first of all, I think Gloria said a lot here that I agree with. I will say, however, I've been through redistricting myself. And when they dump Kinzinger into the other congressman's district and forces them to compete, probably the Trump base made it hard for Kinzinger. Could he win? It depends how much of his old district is in the new district. We don't know that. I haven't seen the numbers yet. And that probably created a big problem.

What I will say, however, is we have got a candidate for governor in Virginia who basically played rope-a-dope. He stayed away from Trump, like Ali stayed away from Frazier. And the fact is that he stands a very good chance to win the election on Tuesday, which shows you that it is not necessarily the party of Trump, that there is a way to manage this and maneuver this without angering the Trump base but at the same time to be independent. It is something that we have to keep our eye on.

BLITZER: Gloria, Congressman Kinzinger is one of only two Republicans on the January 6 select committee. Is the Republican Party being purged of members willing to hold Donald Trump accountable?

BORGER: Well, they certainly don't like them. I mean, look at who the leader of the Republican Party in the House is, Kevin McCarthy. Kevin McCarthy started out saying Donald Trump is responsible. Mitch McConnell started saying out Donald Trump provoked the insurrection.

Now, Mitch McConnell is supporting Herschel Walker for the Senate and McCarthy is going down to Mar-a-Lago to make sure he stays on the good side of Donald Trump and he's trying to make sure that these candidates don't raise a lot of money if they're running for re- election.

One thing I should point out is that a lot of these candidates who are standing for re-election are raising a lot of money. The question is whether that money is coming from in state or out of state. And they could remain competitive, but it is an uphill battle when you have Donald Trump on your back right now.

BLITZER: It certainly is. Governor Kasich, is there still a place where someone like Adam Kinzinger in the Republican Party?

KASICH: Well, I think there really is, Wolf. And, again, I hate to keep going back to Virginia here, but this guy who is the candidate facing former Governor McAuliffe has an excellent chance to win. Some people are saying he's got the thing won. I think it is too close to say that.

But what's been interesting is he has not really associated himself with Trump. He's pushed him away. And he's run a different kind of a campaign where he basically -- they made it clear to the Trump people, we don't want to want you in there.

So, Trump will make calls into Virginia, but, frankly, he doesn't have any presence there. And when they asked him about bringing Trump in, the Republican candidate, Youngkin, I think is what he'd say his name, he has said, hi, I'm running my own race, I'm doing it myself. So, he's weary of Trump but he hasn't kowtowed to Trump, which gives all of us hope that in the Republican Party that we'll come to our senses, at least I hope so.

BORGER: Well, let's just say Virginia is a blue state though, and so it may be because of Biden being unpopular --

KASICH: Yes, I agree with, Gloria.

BORGER: Rather than anything else. Yes.

KASICH: Yes. I think that is right. It is going to be one that we have to watch though right before --

BLITZER: We're going to have more on the Virginia race coming up later this hour, the Virginia race this coming Tuesday. Thanks very much.

Coming up, we're going to take you inside President Biden's efforts to make up with the French president, Emmanuel Macron. Did his explanation of, quote, clumsy diplomacy reduced tensions? The French ambassador to the United States who was inside of the meeting here in Rome, he will join us next.

And we're live, I should say, here at the Vatican and you're in The Situation Room.



BLITZER: We're back with our live coverage of the first full day of President Biden's overseas trip, including his very important talks with the pope here at the Vatican. He also met with the president of France and that presented some diplomatic challenges. Listen to President Biden discussing the submarine deal that caused a rift between the two countries and admitting that the United States did not handle it well.


BIDEN: What we did was clumsy. It was not done with a lot of grace.

I was under the impression that France had been informed long before that the deal would not go through. Honest to God, I did not know you had not been.


BLITZER: Let's discuss what happened. The French ambassador to the United States, Philippe Etienne, is here with me in Rome. Mr. Ambassador, thank you so much for joining us. I know you had a very busy day.

So, you heard President Biden admit that the way the U.S. handled all of this, in his words, was clumsy. Do you accept the explanation that the president made that he simply didn't realize that France hadn't been informed about what was going on?

PHILIPPE ETIENNE, FRENCH AMBASSADOR TO THE U.S.: No. I think what he said this time like on the first phone call with President Macron after the incident, it does matter and it is well received in my country.


It is also important because it is a lesson for all of us for the future. The lesson is that we need consultations, in depth, close consultations between allies about our issues which are important for our national security and for our national interest. And this meeting today was very much also forward-looking and has ended with the adaptation of a very substantial joint statement.

BLITZER: Did President Macron get an apology from President Biden?

ETIENNE: Well, you have heard what he said, and which is also what he had said on the 22nd of September, which probably or more than probably we will have benefited from more consultations. Again, this is an important message.

BLITZER: So, clearly, President Biden was suggesting someone in his national security foreign policy team screwed up, made a major blunder by not consulting and briefing America's longest ally, France?

ETIENNE: Yes, we are the oldest allies but we are also very close allies. We are together in the Indo-Pacific. France is an Indo-Pacific nation. Yes, indeed, we must consult. And it is true for everybody and it is something we will, I think, use positively in our future relations.

So, the past is the past and now we have defined -- the two countries have defined a roadmap, a very substantial roadmap to work based on this principle of close consultation and even closer consultations than we did before.

As we remember, your government was so upset that you, as the French ambassador of the United States, was recalled for, quote, consultations. I think that is the first time that that happened in U.S./French relations. And you had to go back to Paris and eventually came back to Washington.

President macron said this, and let me quote him. He said trust is like love. Declarations are good but proofs are better. So, do you have proof now that the president of the United States is willing to move forward and strengthen the relationship with your country?

ETIENNE: Yes, we have. We have a roadmap. We have much to do together. The two presidents have defined a set of priorities. But on some of those priorities, we have already decisions. The best example for this is the increase already decided by the U.S. of its support to our fight against terrorist groups in Africa on the side of the Africans and the Sahelian government and people. This is already something very concrete. But we have a lot of other very, very important substantial decisions which the two presidents have taken today.

BLITZER: Well, we'll see what happens. Trust is like love, declarations are good but proofs are better. That's what your president said. We'll see what happens.

Mr. Ambassador, I'll see you back in Washington. Thank you so much for joining us.

ETIENNE: Thank you very much.

BLITZER: The French ambassador to the United States here in Rome with me.

Just ahead, the candidates in the heating Virginia governor's race are making their final pitches with only four days to go. And with President Biden and former President Trump casting shadows over the election.

The Situation Room live from Rome continues in a moment.



BLITZER: We're live here at the Vatican. We're covering President Biden's overseas trip. We're watching it closely.

Meanwhile, back in the United States, the closely watched Virginia governor's race is neck-and-neck in these closing days of the campaign.

CNN's Arlette Saenz has our election countdown.


ARLETTE SAENZ, CNN WHITE HOUSE CORRESPONDENT: With four days to go, the race for Virginia's next governor is entering its final sprint.

GLENN YOUNGKIN (R), VIRGINIA GOVERNOR CANDIDATE: This race is going to be decided about who works the hardest, who plays the hardest, who leaves nothing undone over the next four days.

SAENZ (voice over): Democrat Terry McAuliffe leaning on big names, like Vice President Kamala Harris and Virginia native Pharrell Williams in Norfolk tonight, hoping to get Democrats happy and to the polls.

TERRY MCAULIFFE (D), VIRGINIA GOVERNOR CANDIDATE: Big, big plans to take Virginia. None of this happens if you don't vote.

SAENZ: While Republican Glenn Youngkin is rolling through on a bus tour ahead of Tuesday's election.

YOUNGKIN: Polls don't elect governors. Voters do. Voters do. And so now it is time for all of us to go to work.

SAENZ: Nearly 1 million Virginians have already cast their ballots with most polls showing the candidates running neck-and-neck just one year after President Biden beat Donald Trump in the commonwealth by ten points.

For months, Democrats have tried to tie Youngkin to former President Trump.

BIDEN: Just remember this, I ran against Donald Trump. And Terry is running against an accolade of Donald Trump.

SAENZ: But Youngkin has tried to walk a Trump tight rope, even as the former president plans to call into a conservative radio host tele- rally on election eve.

YOUNGKIN: Well, he's not coming and, in fact, we're campaigning as Virginians in Virginia, with Virginians.

SAENZ: As he seeks a second act as governor, McAuliffe is heading into election day without a much hope for a Democratic win on Capitol Hill with President Biden's economic agenda still tangled in division among Democrats.

MCAULIFFE: They just need to do their job and quit prancing around.


Get in a room. Get this passed. We need help here in the states.

SAENZ: The stakes are high for both parties as they have their eyes on 2022 when Democrats will defend their narrow majorities in Congress.

MCAULIFFE: This is real. This is not only the future of Virginia, this is who we are as a country.


SAENZ (on camera): Now, Vice President Kamala Harris wrapped up the event with Terry McAuliffe just a short while ago, where he talked about the national implications of this race saying, that the Virginia governor's race is a bellwether for the rest of the country and very well may determine the future of 2022, 2024 and beyond.

Now, this all comes as both Youngkin and McAuliffe are planning to barnstorm the state over the course of the weekend, each candidate holding ten events as they are looking to drive up turnout among their base heading into Tuesday. Wolf?

BLITZER: Arlette Saenz in Norfolk, Virginia, Arlette, thank you very, very much.

Coming up, Americans are paying more for almost everything right now. So, how long will this inflation last? I'll ask the U.S. treasury secretary, Janet Yellen. We're going to go one-on-one. That is coming up next. She's here in Rome for the G20 summit and we're live in Vatican City tonight.



BLITZER: We're live here in Vatican City tonight covering President Biden's very high-stakes trip to Europe.

We're also following a key new development in the fight against the COVID-19 pandemic; 28 million American children are one step closer tonight to being eligible for a vaccine. The Food and Drug Administration has granted emergency use authorization for the Pfizer vaccine for children ages 5 to 11. CDC advisers will take up the matter on Tuesday.

Earlier, I spoke with the Treasury Secretary, Janet Yellen, about the economic impact of COVID. She's here in Rome for the G20 summit.

We started our interview by talking about President Biden's struggle to get his two sweeping spending bills through Congress.


JANET YELLEN, U.S. TREASURY SECRETARY: Well, I'm very hopeful and I fully expect that Congress will pass both packages.

And these will be historic wins for the president and for the American people. They will contain truly fantastic investments in people, in infrastructure, in climate change mitigation, reduce home health care costs, support two additional years of early childhood education, really benefit all of America's families.

BLITZER: Yes, I know that he clearly was disappointed that the Democrats in the House of Representatives couldn't get it done before he left.

The president, as you know, Madam Secretary, is touting this deal potentially as a historic economic framework, his words. President Biden's White House chief of staff, Ron Klain, says this is, in his words, twice as big in real dollars as the New Deal was.

But without paid family leave, without two years free community college, without vision and dental care expanded to Medicare, is this plan truly, truly as transformational as they say?

YELLEN: Well, I think it's transformational.

I think we should focus on what's in the -- what's in the deal. We have two additional years of early childhood education that's universal. We have investments in child care that will limit the cost of child care for most of America's families to no more than 7 percent of their income, investments in home health care for the elderly, in disabled support that will reduce health care costs, and, of course, very, very important investments to address climate change, which is an existential threat.

And, remember, President Biden is 10 months into his term. He's fully committed to working to achieve paid leave for the American people and to add vision and dental care to Medicare. And he has time to pursue these additional programs, which are also important.

BLITZER: You say, Madam Secretary, that the former Obama administration Treasury Secretary Larry Summers, a man you know well, is wrong -- your word, wrong -- that the U.S. could lose control of inflation.

But it was months ago that President Biden said this was temporary. Now you say inflation, correct me if I'm wrong, may not subside until the second half of next year.

Clearly, Madam Secretary, this inflation problem in the U.S. is not temporary, right?

YELLEN: Well, I still would say it's temporary, although I don't mean just a matter of a month or two, although monthly inflation rates are substantial -- have substantially declined from where they were just four or five months ago.

But what we're really seeing is, the impact of the COVID pandemic has severely disrupted economic activity.


It's hugely boosted spending on products, on goods, and diminished spending on services. It's created an enormous demand for semiconductors.

And these supplies, although they have increased, are -- have encountered bottlenecks. And it's really caused some inflationary increase in recent months. As people get back to work, as we defeat the pandemic, and as demand shifts back to services, and as supply has a chance to adjust, I believe that price increases will normalize.

And we will see lower monthly inflation rates, I think, by the second half of the year. Annual inflation rates will be going to decline toward their more normal level of around 2 percent.

BLITZER: As you know, Madam Secretary, inflation, for all practical purposes, is like a tax on working-class people, the middle class. People are spending a lot more on gas, food, Thanksgiving meals coming up, the holidays coming up.

Is this going to get worse before it gets better?

YELLEN: Well, there will be some continued shortages.

Semiconductors are in very short supply. That's caused the prices of both new and used vehicles to surge. Energy prices have gone up. But I believe energy prices will begin to moderate in the months ahead. That's what market signals and fundamentals suggest.

And let's remember, the rescue package that was put into effect quickly when the president was elected has meant that people have jobs. They're -- they find it easy to find work. They're confident about the

job market.

Compare this with what happened in 2008 after the financial crisis, when it took years to get employment back to normal levels. The unemployment rate has declined from a peak of almost 20 percent now to just 4.8 percent, and will fall further in the months ahead.

So, prices have increased somewhat. As I say, I believe those price increases will subside. But income growth has been very, very strong, and wages are going up, especially for low-skilled workers in the service sector.


BLITZER: Thanks to the Treasury Secretary, Janet Yellen. She joined us earlier here in Rome.



BLITZER: We're following new developments in the investigation into the deadly shooting on the set of the Alec Baldwin movie "Rust."

CNN national correspondent Natasha Chen has the latest.


NATASHA CHEN, CNN NATIONAL CORRESPONDENT (voice-over): One of the last people to handle the gun handed to Alec Baldwin before he fired that fatal shot has broken her silence. A statement from the attorneys for "Rust" armorer Hannah Gutierrez Reed says she's been falsely portrayed. It goes on claiming safety is Hannah's number one priority on set and would never have been compromised if live ammo were not introduced. Hannah has no idea where the live rounds came from.

The Santa Fe sheriff told CNN the live rounds may be key to their investigation.

SHERIFF ADAN MENDOZA, SANTA FE COUNTY, NEW MEXICO: That's the focus of the investigation as I stated. Why these rounds were there, who brought them there and how they got there.

CHEN: Reacting to allegations reported by "The Wrap" crew members they may have used them for target practice during down time, Gutierrez Reed's lawyers say she never saw anyone shoot live rounds with the guns, nor would she permit that.

MENDOZA: We encourage Ms. Gutierrez Reed to come in so we can try to determine how those live rounds ended up on set.

CHEN: Gutierrez's Reed's attorneys defended their client stating she was hired for two positions on "rust," making it hard for her to focus on the job of armorer. It says she fought for training, time to maintain weapons but was overruled by production.

A new inventory list for a warrant revealed 12 revolvers and ammunition have been recovered from a prop truck. It's unclear if the ammunition recovered includes live rounds.

Gutierrez Reed claims two accidental discharges on the "Rust" set before the fatal shooting were at the hands of other people and that she's never had an accidental discharge.

A key grip who worked with Gutierrez Reed on a previous film says there were unannounced discharges on that set.

STU BRUMBAUGH, KEY GRIP ON "RUST": Those are star in our film had actually yelled out about the unannounced discharge.

CHEN: He says, in general, producers find younger people willing to work for less instead of hiring Hollywood veterans who demand more manpower and time for everyone's safety. BRUMBAUGH: This young mother, this DP, was killed on a movie set

because of money. And that's really what it boils down to. And that's the sad part about this.


CHEN (on camera): The production company behind "Rust" says it's not aware of any official complaints about weapon or prop safety, adding that safety is their top priority, Wolf.

BURNETT: Natasha Chen reporting for us, thank you very much.

And to our viewers, thanks very much for watching. I'm Wolf Blitzer in Rome. I'll be reporting from here tomorrow and Sunday morning.

"ERIN BURNETT OUTFRONT" starts right now.