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The Situation Room

DOJ Preps For Court Battle To Force Trump Officials Testimony; Recession Fears Grow After U.S. Economy Shrinks Again; WH Frustrated Russia Hasn't Responded To Prisoner Swap Offer; Questions Loom Over Manchin's Surprise Deal With Biden As Key Democrats Stay Silent On Support; State Of Emergency As Deadly Flooding Hits Kentucky; Trump Embracing Controversial Saudi-Backed Golf Tournament. Aired 6-7p ET

Aired July 28, 2022 - 18:00   ET


JAKE TAPPER, CNN HOST: More rain is expected tonight and tomorrow.

You can follow us on Twitter and Instagram and Facebook and the TikTok if you ever miss an episode of the show, you can listen to "THE LEAD" from whence you get your podcasts. Our coverage continues now with one Mr. Wolf Blitzer right next door in the place, I like to call it, THE SITUATION ROOM.

WOLF BLITZER, CNN HOST: Happening now, the Justice Department is preparing for a court battle to force top Trump White House officials to testify about their conversations with the former president on and around January 6. Standby for exclusive new details on this new phase in the criminal investigation.

And it's official, the U.S. economy shrinks again, raising fears of a recession. But the White House is pushing back. I'll speak with former Treasury Secretary Larry Summers, who sounded an early warning on inflation last year.

Also tonight, there's growing frustration inside the Biden administration right now, as the Kremlin refuses to engage with the U.S. offer to exchange Americans Brittney Griner and Paul Whelan for our Russian arms dealer. I'll speak with a key White House official John Kirby, will speak live this hour.

Welcome to our viewers here in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Let's get right to CNN exclusive, new reporting on the U.S. Justice Department's criminal probe into January 6. Federal prosecutors preparing a fight in court to force former White House officials to testify about their conversations with then President Trump. Our Senior Crime and Justice Reporter Katelyn Polantz help break the story for us. She's here with me in THE SITUATION ROOM. Katelyn, this could be the clearest sign yet that the Justice Department is honing in on Trump's efforts to prevent a peaceful transfer of power. Walk us through your exclusive reporting.

KATELYN POLANTZ, CNN SENIOR CRIME AND JUSTICE REPORTER: Well, Wolf, Evan Perez and I are learning from several sources tonight that the Justice Department is getting ready to go to court, to try to get access to conversations that Donald Trump had in the White House around January 6. So the reason this is arising right now is that there were privileged claims or executive privilege claims that were shielding a little bit of what people were hearing from Trump in those crucial days. People specifically that we knew have gotten to the grand jury before Greg Jacob and Marc Short both to top advisors to Vice President Mike Pence. They testified to the grand jury.

Now, we're talking about a possible court fight that could be coming. The Justice Department is preparing for that, some legalese, it's some procedural stuff. But this is really a very, very big deal, because this puts the investigation squarely in the White House looking at Donald Trump's statements and actions themselves. It also is something that's very aggressive for the Justice Department to want to be preparing for a court fight knowing that Donald Trump is probably going to challenge this in court. It's something the Mueller investigation didn't even do when they were trying to get access to what was going on. We are seeing this now coming about looking for it related to January 6, and this criminal investigations.

BLITZER: Very significant, indeed. You also have some new reporting, I understand Katelyn, involving someone with ties to both Jeffrey Clark and John Eastman. And this individual is not cooperating with federal authorities. Tell us about that.

POLANTZ: That's right. So this is a lawyer named Ken Klukowski, he was a direct report to Jeffrey Clark at the Justice Department when Clark was trying to draft some letters to Georgia, he had Klukowski work with him on those to try and overturn the election as Trump wanted him to do. And what we have learned today and I was able to confirm through a statement from his lawyer that he is fully cooperating with the Justice Department investigation as well as the House Select Committee investigation, and that the Justice Department executed a search warrant on his electronic materials a few weeks ago.

Now, we already know that the Justice Department was getting data out of John Eastman's cellphone. They were searching Jeffrey Clark's home. This is another piece of that puzzle and a cooperator instead of someone who might be fighting against the Justice Department.

BLITZER: Very significant as well. Katelyn standby, I also want to bring in our Senior Legal Analyst Elie Honig, CNN Legal Analyst Elliot Williams, and our Congressional Correspondent Ryan Nobles. He's up on Capitol Hill. Elie, just how significant is this new development we just reported?

ELIE HONIG, CNN SENIOR LEGAL ANALYST: Well, Wolf, this tells me that DOJ is bracing for battle that they're willing to go into court in order to fight to get access to these high level and potentially quite damaging conversations between Donald Trump and his advisors.

Now, we know that these legal battles can take time. We've seen them take over a year in similar context. So it's really incumbent on DOJ to push the judges here to expedite because we've also seen these kinds of rulings come down in similar context in a manner of months.


And Wolf, this tells me that DOJ understands the importance of these conversations if they're going to be making decisions about whether potentially to indict or not indict Donald Trump or other key advisors, they have to have all the facts. These are among the most important facts. And they're worth fighting for.

BLITZER: It's interesting, Elliot, because this potentially could bring about one of the first major court fights over the separation of powers in the January 6 criminal investigation. How do you see this playing out?

ELLIOT WILLIAMS, CNN LEGAL ANALYST: Right. That's an excellent question, Wolf. And when courts have considered these separation of powers, issues in the context of criminal cases, they haven't really looked favorably toward the White House and the presidency.

Now, the biggest and the most obvious one is the United States versus Nixon, back in 1974 where this went all the way up to the Supreme Court. And the Supreme Court found that executive privilege, this privilege that exists among the President and his senior advisors cannot be used to sort of in an absolute sense to shield the president from criminal liability.

Now, there's some complicated questions here, because number one, you're dealing with the former president. Number two, you're dealing with staff to the White House and the vice president. And number three, it's just -- it's never -- none of these have really ever been resolved. Needless to say, when it's come up, it hasn't looked good for the White House. So we, you know, we'll see how this plays out.

BLITZER: We certainly will. You know, Katelyn, is this the clearest sign yet that we've seen that the former president of the United States may actually be a target of this criminal investigation?

POLANTZ: Well, Wolf, that word target is something that usually comes into play at the very end of an investigation. So we can't say that Donald Trump is a target here. But what this does give us is a little bit of signposting about where we are. And what it signals is that it still is a little bit early in the investigation. They did get information out of Greg Jacob and Marc Short in the grand jury, but because this fight would be gearing up, those two witnesses may need to come back later that there would be things to learn to decide, to help the Justice Department decide if Donald Trump would become a target.

BLITZER: Clearly, the Justice Department is moving ahead, moving ahead quickly. Ryan, you're up on Capitol Hill, you have some new reporting about the House Select Committee's investigation. They seem to be zeroing in on former Trump cabinet officials as well, tell us what you're learning?

RYAN NOBLES, CNN CONGRESSIONAL CORRESPONDENT: Yeah, that's right, Wolf. Just today, the House Select Committee met with Mick Mulvaney, who was the former Acting Chief of Staff in the Trump White House. He wasn't serving in that capacity on January 6, he was instead an envoy in Europe at that point. But they're also focused in on a number of other Cabinet officials. We're told that they're engaging with the former Secretary of State Mike Pompeo. And they've also attempted to set up something with the former Director of National Intelligence, John Ratcliffe. And this goes on in addition to the other Cabinet Secretaries, they have already talked to, the former Acting Defense Secretary Chris Miller, the former Acting Attorney General Jeff Rosen and others.

And I'm told that part of this is trying to delve into the conversations related to the 25th Amendment after January 6, and the efforts that were made by some cabinet officials to at least consider that based on Trump's actions on January 6. Now, Mike Pence's former Chief of Staff, Marc Short, shut that down today in an interview on CNN saying there just wasn't enough time to truly consider the 25th Amendment. And it was something that the then Vice President wasn't interested in.

But just those conversations, Wolf, could be of great interest to the committee as they look into Donald Trump's conduct at that time. And, you know, privilege to the conversation you're having, as it relates to the Department of Justice also applies to the select committee. They found unique and creative ways to work around privilege claims, and to the point that some of your other panelists have made about those court fights, when this has been tested in general, the committee has won those tests, save for Mark Meadows, who of course, was not prosecuted for criminal contempt of Congress charge when it comes to privilege, the committee has found a way to get around that. We'll have to see if the Department of Justice has the same level of success.

BLITZER: It's very significant, Elie, why would the 25th Amendment to the U.S. Constitution, and I just reread the 25th Amendment to the U.S. Constitution, he of particular importance right now to the select committee?

HONIG: Well, Wolf, I think the history behind it really gives us a sense of why this matters so much. So the 25th Amendment was ratified in 1967, just a few years after the assassination of John F. Kennedy. And the concern was, what if, God forbid, there's another attack or something horrible happens to another president, and he's rendered so incapacitated physically or mentally that he's simply unable to serve and the 25th Amendment says, if you get the Vice President and a majority of the cabinet, you can temporarily take powers away from the President. But I think, given the historical context here, given the concern about a truly incapacitated president, the fact that it was even being considered discussed at all among Cabinet members tells us just how dramatic and important that situation was.

BLITZER: Let me get Elliot to weigh in. What do you think, Elliot?

WILLIAMS: Yeah, I think one thing, just picking up on Ryan's point for a moment ago, it wasn't just Marc Short today weighing in on the 25th Amendment, Mike Pence himself wrote letter to Nancy Pelosi in the days I believe after January 6. So also very much pouring cold water on the 25th Amendment argument.


So I'm really looking to see what these former cabinet officials say, did they seriously have conversations about it? Did they approach the President or talk to the President about it? A number of them are actual insiders, and sort of loyalists to the President and so they may not be that useful for providing testimony to the committee or potentially a grand jury. So we'll just see what they have to say.

BLITZER: We shall see indeed. Elliot Williams, Ryan Nobles, Elie Honig, Katelyn Polantz, guys, thank you very, very much.

Just ahead, growing fears right now, the recession, as new numbers show the U.S. economy continuing to shrink, but many Americans think we're already there. Let's talk about it with former Treasury Secretary Larry Summers, standby.


BLITZER: Alarm bells are ringing for the U.S. economy tonight with brand new data showing economic growth falling again. CNN White House Correspondent Jeremy Diamond has more on the growing fears of a recession as well as a potential deal to pass a major piece of President Biden's agenda.


JOE BIDEN, (D) U.S. PRESIDENT: That doesn't sound like a recession to me.


JEREMY DIAMOND, CNN WHITE HOUSE CORRESPONDENT: As the U.S. economy shrank for the second time this year, tonight President Biden focusing on the bright spots.

BIDEN: We've a record job market of -- record unemployment of 3.6% today. Business or investing in America at record rates. Now there's no doubt we expect growth to be slower last -- than last year and read the rapid clip we had. But that's consistent with the transition to a stable, steady growth and lower inflation.

DIAMOND: Biden's push back coming as the latest GDP report showed the economy shrank by nearly 1% last quarter. The second straight quarterly decline this year, fueling fears of a recession, or among some Republicans claims the U.S. is already there.

SEN. MITCH MCCONNELL, (R) KENTUCKY MINORITY LEADER: Minutes ago, new data confirmed what a super majority of Americans already knew. Democrats have plunged America into a recession.

DIAMOND: Leading economists disagree, including Federal Reserve Chairman Jerome Powell.

JEROME POWELL, FEDERAL RESERVE CHAIRMAN: I do not think the U.S. is currently in a recession. And the reason is there just too many areas of the economy that are performing, you know, too well. DIAMOND: While the economy flashed warning signs, Biden getting a boost from an unlikely place, Congress.

BIDEN: Oh, so far we've got 217 yes votes for the Chips bill. House has passed it.

DIAMOND: The House today passing a major bill to boost U.S. semiconductor production. While in the Senate moderate Senator Joe Manchin and Majority Leader Chuck Schumer struck a surprise deal to advance a health care and climate spending bill.

BIDEN: It's a big deal.

DIAMOND: That bill would represent the largest investment in combating climate change with $369 billion in energy and climate programs, including electric vehicle and clean energy tax credits, with the goal of reducing carbon emissions 40% by 2030. The bill would also empower Medicare to negotiate prescription drug prices, impose a 15% minimum tax on corporations and eliminate the carried interest tax loophole.

BIDEN: This bill will reduce inflationary pressures on the economy.

SEN. JOE MANCHIN, (D) WEST VIRGINIA: This is a bill for the country. It's not a bill for Democrats.


MANCHIN: And it's not a bill that Republicans should be concerned about.

DIAMOND: President Biden also speaking today with Chinese President Xi Jinping, amid rising tensions over Taiwan, the two hour call turning tense according to Chinese State Media. With Xi warning, if you play with fire, you get burned, urging the U.S. to "abide by the one-China principle," the White House declining to respond.

KARINE JEAN-PIERRE, WHITE HOUSE PRESS SECRETARY: I'm not going to speak to that statement. The United States strongly opposes unilateral efforts to change the status quo or undermine peace and stability across the Taiwan Strait.


DIAMOND: And Wolf on the economy, the White House has been preparing for over a week now for those alarm bells to potentially sound today. They knew full well, that today's GDP data might show that second straight quarter of negative GDP prompting those fears of a recession and allegations by Republicans that we already are in one.

Now, the White House pushed back by talking about the strong jobs market, for example, as you saw there, but ultimately the White House isn't just confronting this question of a definition of a recession. They're also confronting public sentiment with an overwhelming majority of Americans believing that economic conditions right now are poor. Wolf? BLITZER: Jeremy Diamond at the White House for us. Thank you very much. Right now, I want to bring in the former U.S. Treasury Secretary Larry Summers, I want to get his reaction.

Mr. Secretary, thanks so much for joining us, as you heard, the President of the United States, the Treasury Secretary, the Federal Reserve Chair, they all are saying the U.S. is not in a recession. You haven't been shy calling them out in the past. Are they wrong? Is the U.S. in a recession right now?

LARRY SUMMERS, FORMER TREASURY SECRETARY: I think the overwhelming likelihood, Wolf, is that we're not now in a recession. It's not a recession when the number of jobs is growing. It's not a recession when total spending in a variety of categories is growing.

But to be frank, I think we are going to find ourselves in a recession before too long. That's the likely consequence of the overheating of the economy that we suffered and the Federal Reserve doing what's necessary and right to restore price stability. So I think the President is right, Chairman, the Fed is right that we're not -- we're not in a recession right now. But I think the odds that we're going to achieve the proverbial soft landing are not very high.

BLITZER: How soon you think that could be? When do you expect the U.S. could enter a recession? And how bad, Mr. Secretary, could get?


SUMMERS: It could happen anytime from the next -- from several months from now to a year or year and a half from now. And look, economic forecasts are always probabilistic, we might avoid it. But I think that it's probably three and four that will have a recession in the next two years.

No reason why it needs to be like the great financial crisis, no reason why it needs to be like, for those my age, who remember the 1982 recession, when unemployment got to 10%, no reason why it has to be anything like that. But I don't think it's going to be a walk in the park, I wouldn't be surprised at all to see the unemployment rate rise above 6%. If we carry through on doing what's necessary to restore price stability, just like it's a big risk, Wolf, that when the doctor prescribes antibiotics, if you don't take the full course, you -- and just quit when you start to feel better, you regret it down the road.

I think we've got to do what's necessary to push inflation out of the system here. And that's going to require Chairman Powell to be very determined in the way that Paul Volcker was very determined 40 years ago. I've been sorry to see voices saying, oh, my God, we might have a downturn in the economy, the Fed has to stop acting. That's a prescription for long term stagflation.

BLITZER: The Chairman of the Federal Reserve, he's moving quickly, raising interest rates as he did only yesterday as well, but it was only two weeks ago, Mr. Secretary, the Democratic Senator Joe Manchin of West Virginia, crushed -- crushed President Biden's hopes for a sweeping climate and economic deal, citing rapid inflation. That was what he was doing, then, reportedly, he talked to you. What did you say to Senator Manchin to change his mind?

SUMMERS: Well, Wolf, if I never talk about my private conversations with political leaders, but I've been making the argument for quite some time, that the right public investment program is not inflationary and could contribute to a reduction in inflation. And I think the deal that Senator Manchin and majority leader Schumer reached with the strong support of the White House meets that test in three ways. It reduces demand, because it will bring down the budget deficit over time, because unlike what we did a year and a half ago, we're raising more revenue than we're increasing spending. So we're taking funds out of the economy, we're putting direct pressure on prices that are too high. That's what the measures about pharmaceuticals to use the government's purchasing power are all about. And we're taking a set of steps that will expand the availability of energy and reduce the price of energy. And that means people will hoard less, that means the hosts more inventories because they won't be looking for big price increases. And that too, will contribute to lower prices.

So I believe that this is disinflationary policy, that's also going to make the economy more efficient. It's also going to preserve the environment. And also it's going to make us have a fairer society. So I think this is a very positive bill. I think we're in difficult circumstances because of the mistakes that we've made, but I think this is a valuable step forward.

BLITZER: Yeah. It looks like it's got the votes right now. We shall see. Larry Summers, thanks as usual for joining us.

SUMMERS: Thank you, Wolf.

BLITZER: Coming up, a flip response from Russia right now to the U.S. offer to get Brittney Griner and Paul Whelan released through a prisoner exchange. We're going to talk about the administration's frustration. A key White House official John Kirby is standing by live, we will discuss right after this.



BLITZER: A flipped response from Moscow tonight about the U.S. offer to exchange a convicted Russian arms trafficker for detained Americans, Brittney Griner and Paul Whelan, a spokeswoman saying the Foreign Minister Sergey Lavrov will, "pay attention to Secretary of State Antony Blinken's request" to discuss the deal when -- and I'm quoting again, "time permits."

Joining us now to discuss this and more, John Kirby, the National Security Council Coordinator for Strategic Communications. John, thanks for joining us, the Russian Foreign Minister can't even find the time for a phone call with Secretary Blinken to discuss this proposed prisoner swap. Is Russia showing it as the upper hand here? JOHN KIRBY, NATIONAL SECURITY COUNCIL COORDINATOR FOR STRATEGIC COMMUNICATIONS: No, quite frankly, I think Russia is showing a lack of seriousness with respect to what is a serious offer that the United States put forward. And sadly, this is the kind of rhetoric. This is the kind of snark, this is the kind of sarcasm that we have seen Foreign Minister Lavrov exert before.

But look, we're focused on a serious proposal that we made, and we want to see Russia act in good faith on that serious proposal so that we can get Brittany and Paul home to their families where they belong. That's what we're focused on. Not on trying to make public points in the press with a sarcastic comment.

BLITZER: What has Russia said about this proposal, John, have they given any, any indication they're actually open to negotiating on this exchange?

KIRBY: Well, I want to be careful here because we don't want to negotiate in public. I mean we did make public that there's a proposal out there but we don't want to go into too much more detail than that.


I think you can divine from the fact that we made public the fact that we are putting forth a serious proposal, and quite frankly, Wolf, have put it on the table. It's been weeks now, since that proposal was made, that we're serious about it, and that we haven't seen a satisfactory response to it from the Russians.

BLITZER: At least not yet. CNN reports that President Biden actually overruled the U.S. Justice Department's opposition to this prisoner swap, does this embolden foreign adversaries of the United States to take even more Americans hostage, knowing the U.S. is willing to make these kinds of trades?

KIRBY: Well, without getting into the specifics of the proposal, and I don't want to confirm any of the reporting that's been out there about what this actual proposal looks like.

I can tell you that the President carefully balanced his National Security aides with of course, his responsibility as commander in chief and President to work on getting Americans who are unjustly detained overseas, back home, and we're going to work each case individually and differently, because they need to be treated that way. But it's always a balance that you have to strike. It's always a factor in how you consider you're going to move forward with a given negotiation. And this is a serious responsibility. The President's taking it seriously.

BLITZER: And hopes these Americans are coming home and coming home soon.

KIRBY: Absolutely.

BLITZER: I want to turn to China while I have you, John, in his phone call today with President Biden, the Chinese President Xi Jinping issued a warning amid tensions over the House Speaker Nancy Pelosi's possible trip to Taiwan, saying and I'm quoting now, if you play with fire, you get burned. Are you bracing for a possible military response if the speaker does go ahead with this trip to Taiwan?

KIRBY: Well, I won't get into speculating or hypotheticals here. And I'm certainly not going to react to rhetoric we've seen out of the Chinese before, this is not new rhetoric from them. The President believes that the best way to manage this most consequential of relationships is through open lines of communication. And that's why he wanted to have this conversation today. It's really important to be able to have those lines of communication, particularly on issues where there's tension and some differences of opinion. And of course, there's some differences of opinion over what's going on with respect to the tensions over Taiwan.

But the President was clear, nothing's changed about our policy, it stays the same. And nothing's changed about our desire to not see the status quo, between the Straits there, in the Straits issue, upset by unilateral force, or unilateral action either way. The President has been nothing but consistent. There's no reason for this to devolve into conflict, because our one -- or one-China policy has not changed.

BLITZER: President Biden and Xi, they spoke for what nearly two and a half hours on the phone. What took up the majority of that time?

KIRBY: It was a wide ranging discussion, Wolf, if it'd be hard for you to pick one issue and say, well, they spent the bulk of the time on that one thing. I mean, they talked about Taiwan, of course, they talked about the war on Ukraine. They talked about human rights. They talked about climate change. There was an awful lot on the agenda, very, very full conversation.

BLITZER: John Kirby, thanks as usual for joining us.

KIRBY: You bet anytime.

BLITZER: Just ahead, is President Biden taking a victory lap too soon after Senator Joe Manchin announced his support for a major piece of the Biden agenda? I'll ask Democratic Senator Amy Klobuchar, whether her party actually has the votes to pass this legislation.



BLITZER: President Biden is hailing a major breakthrough for his domestic agenda, a surprise deal with Senator Joe Manchin on energy, climate, healthcare and more. But it's still not clear if Democrats have the votes to get it passed. Let's discuss with Democratic Senator Amy Klobuchar.

Senator, thanks so much for joining us. The President certainly sounded --

SEN. AMY KLOBUCHAR, (D) MINNESOTA: Great to be back on, Wolf, thanks. BLITZER: Thanks. President certainly sounded like he was declaring victory today. But do you actually have the votes, right now to pass this legislation? Are all 50 Senate Democrats on board right now?

KLOBUCHAR: I believe we have the votes, Wolf. Senator Schumer, who patiently worked on this bill negotiated with Senator Manchin for months and months, he knows where the votes are. And not only that, a lot of these things have been negotiated in the past.

Now, you know, Senator Sinema is still reviewing the bills, she just got it. And I will say the really important focus of this bill on climate is something she's always been supportive of. And that is a major investment in climate change, as well as getting to a 40% reduction in greenhouse gases by 2040, and 2030. And I think we are then well on the way when we're at 40% by 2030, to getting where I want to be, which is net zero by 2050. That's number one.

Number two, the pharmaceutical part, I've been leading this bill for years. Finally, we're going to take the curse off of our law, which says that on behalf of 46 million seniors that Medicare can't do anything to negotiate prices. And the fact that we've opened this up now lifted that ban that was written into law by the pharmaceutical industry 20 years ago. That is a major, major part of this agreement with AARP at our side. So as you can tell, I'm pretty excited about what we're going to do next week.

BLITZER: But Senator Sinema is still refusing to say whether she will support this bill. What's your message to her tonight?

KLOBUCHAR: No, I don't need to give her a message on the air. I know she's reviewing it. She's talking to Senator Schumer. And as I said she was supportive. She was part of the negotiation on the pharmaceutical piece of it. I would have gone farther than that as you know, a few months ago but she was part of that negotiation and has been in the middle of a lot of these negotiations in the past.


So I just know that given her State of Arizona, the climate is a big issue there. They've had fires there. They know how important it is. So she's simply reviewing the bill. That's a pretty normal thing for a senator to do.

BLITZER: While the bill certainly does include a lot, it does not include universal pre-k, does not include lower childcare costs or paid family and sick leave. What do you say to Democratic voters who are disappointed that Congress and the president haven't done more on the things you promised to do?

KLOBUCHAR: I say, election is right around the corner. And we have an opportunity to add to our numbers in a big way in the U.S. Senate, which would allow us in my mind to get a number of these things done.

The other thing I'd say is, I am someone that has been working on the pharmaceutical issue for a long, long time. And for me, when you look at the cost that people are dealing with right now, this is one of the major ones, we will continue. We are not giving up the fight in any way on anything. But we got to deal with high costs for people. And while the Republicans may like to go into an empty chamber in the Senate and give a bunch of speeches and go after people politicize it, we're actually getting something done. And that's why I'm so excited about moving forward next week on this agreement.

BLITZER: Senator, a recent CNN poll finds 75% of Democratic voters and Democratic leaning voters want someone other than President Biden to represent their party in 2024. Given those numbers, and as someone who ran against Biden back in 2020, do you think he should step aside and let somebody else run?

KLOBUCHAR: You know what, Wolf, I think he's made it clear, he is running. And that's what's happening right now. And I will say this, he's on the cusp of some major victories. Let's look at what's happened. We just passed the Chips bill through the House that is going to allow our country to finally start making chips again. These are the semiconductor chips that we need in our cars and our phones. We're down to 13% that we make and it's going to allow us to add incredibly high paying jobs to our portfolio in our country.

We have a chance of getting gay marriage passed in the next few weeks that already got threw in the House. We are taking on a major battle, in terms of protecting a woman's right to choose. We've got the burn pit bill, which the Republicans just stupidly stopped last night. I can't even explain it. I think maybe Jon Stewart did it the best, where we have our veterans that are depending on us to help them with their health care, something the president and the Democrats in Congress have been pushing for. And I believe we're going to get that done because I don't think they can explain to the veterans groups, why they would have stopped that bill.

And then you've got this, finally taking on the pharmaceutical industry, which for years have taught that they have owed Washington. Well guess what, they don't. So to me, that's a pretty good way to go into August.

BLITZER: Senator Klobuchar, thanks so much for joining us.

KLOBUCHAR: Great to be on, Wolf, thank you.

BLITZER: Coming up, the latest on the unfolding disaster in Kentucky right now. The governor there, calls it one of the most significant deadly floods ever to strike the state.



BLITZER: The state of emergency in parts of Kentucky tonight as a deadly and devastating flood disaster unfolds. At least eight people have been killed. Many, many more are missing and the governor has called in the national guard to help with search and rescue efforts.

CNN meteorologist Tom Sater has the latest for us.

Tom, one official said he's never seen this much rainfall.

TOM SATER, CNN METEOROLOGIST: And, Wolf, it was just Tuesday that historic rain fell in the St. Louis area. It was deadly and with water rescues -- most likely be the tenth billion-dollar finally disaster the U.S. has had this year.

Two days later, it happens again, and it's the same weather system, overnight, frightening. Just like in St. Louis, one thunderstorm after another moving across the same region, producing six and a half, seven and a half, eight and a half inches of rain in a matter of hours.

This is coal country. Southeastern Kentucky, counties such Knott, Floyd, Breathitt, Perry, down toward Harlan County. It is very hilly. When you have torrents of rain in a short amount of time, it just runs down the hills and hollers to the creek beds, the stream. Those streams and creeks grew very quickly, already a high flow rate. Now it is into the larger rivers.

This looks very linear. Just like it did in St. Louis. One thunderstorm after another in the same area, 24-hour totals, up to eight and a half inches. But you toss in the last few days and you're up to ten and a half.

So, again, this is just out of your mind craziness with two days this week to have rivers like this. 1957, the Kentucky River had a record of 14.7. They shattered it by over six feet, warnings are still in place. Watches are in effect. The same weather system from St. Louis to Kentucky is still meandering across the region.

There will be more rainfall in the area tonight. St. Louis, wolf, had more water rescues today, picking up more rainfall. In fact, even children at a daycare center had to be rescued. So, this front is going to meander around a while and it's going to drop more rain in the same region. It's also going to be extending out to the West. More states, West Virginia, North Carolina, Tennessee, be on the lookout.


BLITZER: A dangerous situation indeed.

Our meteorologist, Tom Sater, thanks very much.

Other news we're following, former President Trump teeing at his New Jersey golf club on this the eve of a controversial Saudi-backed golf court tournament beginning there tomorrow. LIV Golf, funded by Saudi Arabia, has rocked at the PGA tour by luring away big name players with large sums of money.

Let's get some more with CNN sports analyst and "USA Today" sports columnist Christine Brennan.

Christine, thanks for joining us.

What do you make of the former president's involvement in this controversial Saudi-backed tournament? CHRISTINE BRENNAN, CNN SPORTS ANALYST: I think it is par for the

course to use a golf term, Wolf. I think Trump did not want to miss this. I was up there yesterday covering the practice round and press conferences at the LIV Golf at the Trump National. Trump's name is all over it, and, of course, he is showing up and wants to be a part of it.

And the controversy inherent in this, as we all know, it is just an hour drive from Trump's course in Bedminster, New Jersey, to Ground Zero. We know that 15 of the 19 hijackers were Saudi's, and, of course, Osama bin Laden was Saudi as well, of course, the people that perpetrated the horrors and the attack on the United States on September 11th.

This is vintage Trump, but is politically risky, in the sense that you really want to be associated with something so close to home, especially, as you know, Wolf, in that part of the country, where the nerves and the emotions are still so raw all these years later.

BLITZER: They certainly are.

In your latest column, Christine, you write that players turning a blind eye to Saudi Arabia's human rights abuses are guilty, and I'm quoting you now, of sports washing. Explain what you mean by that.

BRENNAN: As I said, Wolf, I was at the press conferences yesterday. A golfer named Paul Casey, European Ryder Cup veteran, the best known of the three men up there. I asked him a question, the other two as well, with this platform that they have with the Saudi's, with MBS, would they now start to speak out on behalf of women's rights and the rights of gay people, LGBTQ people in Saudi Arabia. We know how awful the track record there is, and he immediately, Paul Casey, talked about playing golf with a 17-year-old Saudi girl, never otherwise address the issue.

When I asked and followed up about gay people, he said he knows nothing about that issue and could not talk about it. A 45-year-old man, obviously saying things, Wolf, exactly the way the Saudis want to hear them.

BLITZER: Christine Brennan, thanks as usual for joining us.

BRENNAN: Thank you.

BLITZER: And we'll have more news just ahead.



BLITZER: Tonight, American makers of semiconductor chips are about to get a major boost after the U.S. House of Representatives passed a bill which should significantly increase their manufacturing right here in the United States.

CNN's Miguel Marquez has a closer look at one American company making these critically important ships.


MIGUEL MARQUEZ, CNN SENIOR NATIONAL CORRESPONDENT (voice-over): It is enormous. Global Foundries semiconductor chip plant in Malta, New York.

In this fab or fabrication unit, how many chips are being made for how many products?

CHRISTOPHER BELFI, EQUIPMENT ENGINEERING MANAGER, GLOBALFOUNDRIES: So, we can produce roughly millions of chips a day.


The fab, where the chips are made, about the size of 6 football fields, the process of sensitive, a single human hair could gum up the works, even the light has to be controlled.

BELFI: Any exposure to ambient light will have a negative impact on our wafers.

MARQUEZ: The chips go into everything, cars, computers, video games, communications technology, defense industry.

SAAM AZAR, HEAD OF GLOBAL GOVERNMENT AFFAIRS, GLOBALFOUNDRIES: We're at half a trillion right now, our semiconductor industry. And conservative estimates, by 2030, we're going to be at a trillion. So, the question isn't whether or not --

MARQUEZ: A trillion?

AZAR: It's trillion dollar industry we will double between now and 2030.

MARQUEZ: The Chips Act calls for investing $52 billion in semiconductor production here at home. Eighteen states not produce chips and benefit from the funding.

GlobalFoundries started producing chips here in 2012. New York state kicked in $2 billion, helping the company secure another 13 billion to build a plant, today employing 3,000 employees with a median salary, says the company, of $90,000.

At just this one plant, the expected effect of the Chips Act funding -

AZAR: We intend a double capacity in partnership with the federal government, with the state government.

MARQUEZ: Doubling capacity, adding 1,000 more jobs, many high paying, all of it a boom to the area.

In the last decade, how has the economy here changed?


MARQUEZ: Leaps and bounds, booming?

HARR: It almost seems that it's sort of a bubble.

STEVE ROSATO, MANAGER, SARATOGA OLIVE OIL COMPANY: The dividends are felt like a ripple effect throughout the shops and restaurants and all the taverns.

MARQUEZ: Some conservatives and progressives argue that government should not be in the business of subsidizing private industry. The industry says that a little bit of public financing goes a long way.

AZAR: The proof is in the putting. Look at this facility we have, the number of jobs, the taxpayer return, 2, 3, 4x with the state.

MARQUEZ: An industry started by America, an industry essential to the tech economy, in industry critical to the nation's defense, and industry that the U.S. would like to dominate again.


MARQUEZ (on camera): Now, look, industry executives say that America's biggest competitors in this area, China, the EU, India, Korea, and Japan, they have collectively put together $280 billion, earmarked that. They say that the competition is great and the money is just as great -- Wolf.

BLITZER: Miguel Marquez, excellent report, thank you very much.

To our viewers, thanks very much for watching.

"ERIN BURNETT OUTFRONT" starts right now.