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Special Counsel Focuses On Chaotic December 2020 White House Meeting; Trump Lashes Out On Campaign Trail As Legal Woes Grow; Biden Speaks Out On Cluster Munitions Decision; U.S. Adds 209K Jobs In June, Slightly Under Expectations; 100 Days Since WSJ's Evan Gershkovich Detained In Russia. Aired 6-7p ET

Aired July 07, 2023 - 18:00   ET

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

JAKE TAPPER, CNN ANCHOR: That's at 10:00 A.M. only on CNN.

[18:00:04]

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Our coverage continues now with Wolf Blitzer in THE SITUATION ROOM. I will see you Sunday morning.

WOLF BLITZER, CNN ANCHOR: Happening now, exclusive new CNN reporting on the special counsel's investigation into efforts to overturn the 2020 presidential election. Prosecutors probing witnesses about a heated over Oval Office meeting during which -- desperate measures to stay in power.

Also tonight, Trump on the campaign trail once again trying to spin his legal troubles in his favor. He is going after the Justice Department and his main Republican rival, Governor Ron DeSantis.

And President Biden is speaking exclusively to CNN on his decision to send cluster munitions to Ukraine. The president voicing his concerns with the controversial weapons but ultimately deciding they are crucial to Kyiv's counteroffensive.

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

First up tonight, CNN's exclusive new reporting on that chaotic Oval Office meeting now at the center of Special Counsel Jack Smith's investigation into efforts to overturn the 2020 presidential election.

Our Political Correspondent Sara Murray is joining us right now. She's got new information. Sara, take us through the details the special counsel seems so interested in.

SARA MURRAY, CNN POLITICAL CORRESPONDENT: Well, Wolf, this was a wild meeting in the Oval Office in the Trump administration, even by the Trump administration's standards. We know that this is something that prosecutors have looked at in the past. We are now learning, our team, from sources familiar with the matter, that prosecutors have been asking witnesses about this meeting more recently, including Rudy Giuliani.

Let's just take a look at some of the folks who were in this December Oval Office meeting. There are people that you might expect to be there, people like Mark Meadows, the White House chief of staff, people like Pat Cipollone, White House counsel, and then there are people like Patrick Byrne, the former Overstock CEO. Sidney Powell, Michael Flynn, these election deniers.

And in this meeting, they are discussing these wild ideas, like using the military to seize voting machines, like imposing martial law, like making Sidney Powell a special counsel.

And this meeting was a big focus of the House select committee investigating January 6th. We got some very unvarnished opinions from those committee interviews about what people thought of the meeting. Take a listen.

(BEGIN VIDEO CLIP)

PAT CIPOLLONE, FORMER TRUMP WHITE HOUSE COUNSEL: I was not happy to see the people in the Oval Office. I don't think any of these people were providing the president with good advice.

DEREK LYONS, FORMER TRUMP ATTORNEY: I mean, at times there were people shouting at each other, throwing insults at each other.

SIDNEY POWELL, FORMER TRUMP ATTORNEY: Cipollone and Eric Herschmann, whoever the other guy was, showed nothing but contempt and disdain of the president.

ERIC HERSCHMANN, FORMER TRUMP ATTORNEY: I think that it got to the point where the screaming was completely, completely out there.

RUDY GIULIANI, FORMER TRUMP ATTORNEY: I'm going to categorically describe it as, you guys are not tough enough, or maybe I put it another way, you are a bunch of (BLEEP).

(END VIDEO CLIP)

MURRAY: Now, Wolf, this could be an important meeting to prosecutors because you saw pushback from people like Pat Cipollone, the White House counsel, reiterating there was no evidence of election fraud, that these were insane ideas being bandied about. But you still saw Donald Trump really wanting to press forward with efforts to try to contest the results.

BLITZER: And, Sara, today, we also learned about the scope and the budget of the special counsel's probe, at least so far. Break it down for us.

MURRAY: Well, it's not cheap, Wolf. The special counsel so far has spent just over $9 million, $9.2 million. That's direct spending by Special Counsel Jack Smith, as well as Justice Department support to Smith.

It's what you might expect to see from this kind of multi- jurisdictional investigation. You know, obviously, he has an investigation going on into January 6th, efforts to subvert the 2020 election results, but also the classified documents investigation. We have seen parts of that playing out in New Jersey. We have seen parts of that playing out in Florida. We have seen parts of that that they were investigating in D.C.

And this is a lot more than we have seen other special counsels, like Robert Hur or like John Durham, spend.

[18:05:01]

But if you compare it to someone say like Robert Mueller, it is a lot less. Robert Mueller ended up spending $32 million in his sprawling Russia investigation. So, we will see what the final tab is for Jack Smith, Wolf.

BLITZER: Yes, we will. All right, Sara, thank you. Stay with us. Don't go too far away. Our political and legal are also joining us right now. Elliot Williams, at what point do the extreme ideas raised during that Oval Office meeting actually become crimes?

ELLIOT WILLIAMS, CNN LEGAL ANALYST: The ideas themselves may not become crimes, Wolf, but the actions taken by individuals in the room or their associates could very well be criminal. That is why the special counsel is probing them.

Now, look, it is very significant here that the other people in the room at the time with the Trump campaign were White House lawyers. So, the question is, were White House lawyers providing legal advice and saying to members of the Trump campaign or the Trump orbit, you can't do that, what you are doing is going to do violate the law.

If, in fact, that advice was provided and they still went out and were raising funds and filing lawsuits based on faulty information, that could very well be criminal. So, it will be interesting to see what plays out and what information was provided to those Trump campaign aides.

BLITZER: Maggie Haberman is with us as well. Maggie, how much is Special Counsel Jack Smith's team actually considering Trump himself once again, and which side is he taking in this clash?

MAGGIE HABERMAN, CNN POLITICAL ANALYST: Look, I think that everything is on the table in terms of what Jack Smith is looking at with regard to Donald Trump and regarding his advisers and his allies and people who were pushing against him. What that ends up looking like in the form of charges or potential charges, I think, is a very open question. This is a very different investigation than the documents investigation, which was a pretty discreet fact set and was clear. This has lots tentacles.

Back to the meeting that we've been talking about, this has been a clearly important and key event. It was, when I broke the news that it happened the day after it took place, my colleague, Jonathan Swan, wrote the definitive piece about what took place in that meeting a couple of months later.

This has been central in part not just because of what was said in the meeting, but it was a few hours before Trump tweeted for people to be in D.C., his supporters, on January 6th, 2021 and said, will be wild. So, I think that's part of what investigators are looking at too.

BLITZER: I'm sure they are. Audie Cornish, how much are Republicans who have already been attacking the special counsel going to scrutinize his spending?

AUDIE CORNISH, CNN CORRESPONDENT: Well, I think Republicans are scrutinizing spending of any and every kind at this point. Certainly, this is going to be ripe for those questions. We will see if similarly the investigation into Hunter Biden is also ripe for those questions.

I think the big picture for me here is that back during the January 6th committee, there was this -- a lot of filling in of color and atmospherics. We actually heard about this meeting conceptually, as you played the clips. But now we are talking about motive, intent. Now, we are talking about legal proceedings and that really brings all of this into focus in a very different way.

BLITZER: Sara, let me get back to you, because Rudy Giuliani clearly played a very central role here. He was recently asked about this meeting by investigators, we have now been told. But now his credentials to actually practice law are in serious question once again. What can you tell us about this?

MURRAY: That's right. I mean, the troubles are sort of piling up for Rudy Giuliani. There's a D.C. attorney committee that recommended that Rudy Giuliani be disbarred. Again, this is a committee that was unanimous in its recommendation that Rudy Giuliani should lose his law license in Washington, D.C.

That doesn't mean that's what's going to happen. There are a number of steps that need to take place before he would actually be disbarred in a place like D.C. But they are talking about this because of what Rudy Giuliani did on behalf of Donald Trump, the litigation he signed on to. And this committee points out that there just was not evidence of fraud to back up what Rudy Giuliani was putting in this litigation and that as a sworn officer of the court, he deserves to be disbarred for it.

BLITZER: Yes, hard to believe, America's mayor, he was once called, and take a look at the troubles now, potentially getting disbarred.

Maggie, during that Oval Office meeting, and you did amazing reporting on that, Giuliani was in Trump's innermost circle. How has that changed since Trump left office and what kind of impact could that have on the probe?

HABERMAN: So, Giuliani is still somebody who has a relationship with Trump. It's not what it was. There's a lot of aggregation by people around Giuliani that his legal fees have not been paid by people who are either supporting efforts to fund witness, the defense cases of witnesses who have been called in the cases, or other entities around Trump.

I think Trump is aware that Giuliani has been seen by others around Trump as a problem.

[18:10:00]

Giuliani was blamed by White House aides for the first impeachment. He was blamed by White House aides and campaign aides for the second impeachment, and that's really absolves Trump of responsibility for his own behavior, but I understand why they focus on him.

Whether that means, that Giuliani will play a more active role in this investigation, we just don't know, Wolf. We know that The Times has reported that Giuliani appeared before Jack Smith's prosecutors under what's known as a proffer agreement, which is essentially a prelude to heading off possible charges. It's not the only way that takes place. But, again, his folks have emphasized this was a voluntary interview. We don't know what evidence he has to offer against Trump, but it certainly the relationship is not what it once was.

BLITZER: Yes, there's a lot going on right now. Everyone, thank you very much. This important note to our viewers, be sure to tune in to an all new episode of The Whole Story with Anderson Cooper, featuring Audie's reporting and the families taking on social media giants. It airs Sunday 8:00 P.M. Eastern and Pacific only here on CNN.

And just ahead here in THE SITUATION ROOM, CNN's exclusive interview with President Biden. He is speaking out on his controversial decision to send cluster munitions to Ukraine despite concerns over the risk they pose to civilians.

Stay with us. You are in THE SITUATION ROOM.

(COMMERCIAL BREAK)

[18:15:00]

BLITZER: President Biden now says the United States will send highly controversial cluster munitions to Ukraine as Kyiv counteroffensive runs into stiff Russian resistance. Listen to the president explain his decision to CNN's Fareed Zakaria.

(BEGIN VIDEOTAPE)

FAREED ZAKARIA, CNN HOST: You have news today. The news is that the administration is going to provide cluster munitions to the Ukrainians. These are weapons that 100 nations ban, including some of our closest NATO allies. When there was news that the Russians might be using it admittedly against civilians, your then-press secretary said this might be considered war crimes. What made you change your mind and decide to give them these weapons?

JOE BIDEN, U.S. PRESIDENT: Two things, Fareed. I know it was a very difficult decision on my part. And, by the way, I discussed this with our allies, I discussed this with our friends up on the Hill, and we are in a situation where Ukraine continues to be brutally attacked across the board by munitions, by these cluster munitions that have dud rates that are very, very low -- I mean, very high, that are dangerous to civilians, number one.

Number two, the Ukrainians are running outs of ammunition, the ammunition -- they call them 155 millimeter weapons. This is a war relating to munitions. And they are running out of that ammunition and we are low on it.

And so what I finally did, I took the recommendation of the Defense Department to not permanently but to allow for in this transition period where we have more 155 weapons, these shells, for the Ukrainians, to provide them with something that has a low dud rate. It's about -- I think it's 150, which is the least likely to be blowing.

And it's not used in civilian air areas that are trying to get through those tranches and those -- and stop those tanks from rolling.

And so -- but it was not an easy decision and it's not -- we're not signatories of that agreement, but it took me a while to be convinced to do it. But the main thing is they either have the weapons to stop the Russians now from there -- keeping them from stopping the Ukrainian offensive through these areas, or they don't. And I think they needed them.

(END VIDEOTAPE)

BLITZER: All right. Let's get some more on this important story. I want to bring in CNN's Jeremy Diamond. He's over at the White House for us. Jeremy, give us some more on how the administration came to this rather controversial decision.

JEREMY DIAMOND, CNN WHITE HOUSE CORRESPONDENT: Well, as you could hear there, Wolf, this is a decision that President Biden very much made reluctantly. It followed months of internal debate here at the White House, among the president's national security team. And, ultimately, that national security team was unanimous in recommending to the president that he take this step. And, clearly, it was a step taken out of necessity because Ukraine is running low on ammunition.

Jake Sullivan, the national security adviser, today described this as a bridge of supplies while the U.S. continues to ramp up its domestic manufacturing of more conventional artillery shells that it will ultimately provide to Ukraine.

But it is a controversial decision, Wolf. More than 100 countries have banned the use of cluster munitions and the president, in fact, needed to make a determination that it was in the vital national security interest of the U.S., because of a U.S. law that prohibits transferring these munitions to other countries.

And I asked Jake Sullivan, the national security adviser, today about comments made by U.S. officials in the past, including saying that these weapons have no place on the battlefield. Here is part of his response to that.

(BEGIN VIDEO CLIP)

JAKE SULLIVAN, NATIONAL SECURITY ADVISER: I'm not making an argument which says, they do it so we will do it. The argument I'm making is that Russia has already spread tens of millions of these bomblets across Ukrainian territory. So, we have to ask ourselves, is Ukraine's use of cluster munitions on that same land, actually that much of an addition of civilian harm, given that that area is going to have to be de-mined regardless?

So, when we look at what Ukraine would do with the weapons as opposed to what Russia is doing with these weapons, we see a substantial difference.

It doesn't make it an easy decision. And I'm not going to stand up here and say it is easy, it's a difficult decision.

(END VIDEO CLIP)

DIAMOND: And, Wolf, Jake Sullivan also took pains to really distinguish between Russia's use of cluster munitions and how Ukraine would use them. He told me that Ukraine had indeed provided written assurances to the United States that it will try and minimize any impact this will have on civilian areas, including not targeting urban centers in Ukraine.

He also argued that Ukraine is highly motivated to do so on its own, to avoid an impact on civilian casualties, because these are their civilians. This is their land that they are defending.

[18:20:00]

And he also said that those written assurances, as I mentioned, will ultimately -- are ultimately aimed at trying to minimize civilian casualties.

And he focused on this dud rate, which is the percentage of the cluster munitions that fail to explode. He said the U.S. provided munitions will have a 2.4 percent dud rate compared to 30 percent to 40 percent, which the Russians use. Wolf?

BLITZER: All right. Jeremy, thank you, Jeremy Diamond, over at the White House.

A note to our viewers, you can watch Fareed's full interview with President Biden this coming Sunday, 10:00 A.M. and 1:00 P.M. Eastern right here on CNN.

Coming up, CNN is near the frontlines in Ukraine as Kyiv's counteroffensive pushes toward a familiar target, Bakhmut.

Plus, Donald Trump's campaign in Iowa lashing out at federal prosecutors and his top Republican rival, the Florida governor, Ron DeSantis.

(COMMERCIAL BREAK)

[18:25:00]

BLITZER: Tonight, former President Donald Trump is once again trying to spin his growing legal troubles in his favor this time out there on the campaign trail.

Our Chief National Affairs Correspondent Jeff Zeleny is following the Trump campaign in Council Bluffs, Iowa, for us. Jeff, Trump is going after prosecutors as he tries to rally his base. Give us the latest.

JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: Wolf, the former president does have a primary campaign to run and rivals he must get around. But he made clear once again today here in Iowa, he intends to use the investigation and the indictments as a rallying cry to round up Republican support.

(BEGIN VIDEOTAPE)

DONALD TRUMP, FORMER U.S. PRESIDENT: If I weren't leading in the polls by so much, they wouldn't be indicting me.

ZELENY (voice over): Donald Trump back on the campaign trail in Iowa, trying to use the indictments and investigations surrounding him as a weapon to rally Republicans around his quest to win back the White House.

TRUMP: They want to take away my freedom because I will never let them take away your freedom.

ZELENY: The former president making clear he is consumed by the special counsel's intensifying probe of his attempts to cling to power and overturn the results of the 2020 election.

TRUMP: Every time I get a subpoena, my polls go up, I get more and more subpoenas, report to a grand jury. He is killing Biden. He is killing them all.

ZELENY: Before his appearance today in Council Bluffs, advisers told CNN, Trump would focus on confronting a leading rival --

GOV. RON DESANTIS (R-FL): Well, hello, Iowa.

ZELENY: -- Florida Governor Ron DeSantis.

TRUMP: He would be a total disaster.

Every Iowan also needs to know that Ron DeSantis totally despises Iowa ethanol.

ZELENY: But Trump stepped on his own attack lines, portraying himself as a victim of prosecutors trying to derail his candidacy. Trump returned to Iowa as many of his Republican rivals bluntly questioned his ability to win a general election. As they seek to gain attention in a crowded field of candidates, some contenders are taking to the airwaves. UNIDENTIFIED MALE: Small town boy, self-made business later.

SEN. TIM SCOTT (R-SC): The radical left have chosen a culture of grievance over greatness.

ZELENY: Others are shaking hands, introducing themselves to one voter at a time. Former Vice President Mike Pence, implored Republicans to turn the page to avoid losing in 2024.

MIKE PENCE, FORMER U.S. VICE PRESIDENT: I honestly believe that different times call for different leadership.

ZELENY: More than six months before the presidential nominating contest begins in Iowa, Republicans are a party divided between Trump excitement and Trump fatigue.

Starlyn Perdue, who leads the Pottawattamie County Republican Party and is staying neutral in the primary, is uncertain how that divide will be settled.

STARLYN PERDUE, CHAIRPERSON, POTTAWATTAMIE COUNTY REPUBLICAN PARTY: There are people still very much pro-Trump, other ones are exploring their options. And so it will be interesting to see how it plays out. I think, truly, it will just be time will tell on how it will impact this election.

(END VIDEOTAPE)

ZELENY (voice over): And, Wolf, that Republican divide is so clear when you talk to voters in Iowa, which, of course, is the state that will open this Republican contest early next year. There are many Republicans who like the Trump policies, of course, but they are ready to move on beyond him.

But it was clear the former president is trying to use this indictment, trying to use the investigation and perhaps other indictments yet to come as a way to shore up his support.

But, yes, he is leading in the polls. There's no one who is directly behind him, no one is rallying the same level of support, Wolf, but there's clearly an opening for someone to make that case. It's clearly the summer months here. Many candidates are not getting as much attention as they are meeting individually with voters here. So, yes, he's driving the train at this point, Wolf. But it's summer and several Republicans said they're going to wait a long while to make up their decisions. Wolf?

BLITZER: Jeff Zeleny reporting from Iowa for us, thank you.

Let's bring in our political experts for some more analysis right now. Maggie Haberman, does Trump have a point that his legal troubles, and they are enormous, actually boost him in this race? And will that change any time soon?

HABERMAN: Look, Wolf, we have seen that repeatedly now. He has been indicted twice, both times his poll numbers went up. Not enormously, but they did go up. And he got a fundraising boost, which was notable.

Now, he is facing the possibility of two more indictments. We will see whether that comes to pass and we will see whether it has the same affect. But there's no reason to believe that it wouldn't. He has had this hold on a certain segment of the Republican Party for some time. And as much as people try to compare this race to the 2016 race, he is starting out higher than he did there.

So, maybe something will change. It's very possible that his voters will leave him. It's possible that they will decide that they are interested in DeSantis, who is essentially pitching himself as Trump without the drama, but the drama doesn't seem to be something that bothers those voters.

[18:30:00]

WOLF BLITZER, CNN ANCHOR: Yes, good point.

Scott Jennings is with us as well. Scott, Trump is hitting Governor DeSantis for his position on ethanol. But, remember, Ted Cruz actually won the Iowa caucuses back in 2016 despite opposing ethanol. So, what do you make of the messaging from the former president?

SCOTT JENNINGS, CNN SENIOR POLITICAL COMMENTATOR: Yes. I think what I'm more interested is the fact that he just continues to pound DeSantis on that or anything else he can think of, because I think the campaign still views DeSantis as the only person who could even legitimately begin to put together enough voters to challenge him.

So, I'm not sure that that issue is going to be the definitive thing. To me, it's just the continued drumbeat attacks on one guy. It's DeSantis. They don't seem to be worried about anyone else in the field.

BLITZER: Ashley Allison, how do you see it?

ASHLEY ALLISON, CNN POLITICAL COMMENTATOR: Well, Trump is being consistent in his attack on Ron DeSantis. He is the closest person to potentially contest him at this point. Some other folks in the Republican field could get closer, but Trump is taking him directly on.

Now, it does appear that DeSantis in recent ads is starting to be more directly attacking Trump. But until they come -- some of that field in the Republican party consolidates, it just doesn't seem like one is going to be able to find a direct path to overcome Trump.

I mean, I find it interesting, though, that Trump is saying that the reason why he is being indicted is because he is leading, when we know that the investigations were going on long before he actually announced he was running for president.

And so, luckily, our legal system is not operated on politics but people who are supporting Donald Trump don't seem to have faith in our legal system right now, which is also super troubling.

BLITZER: Scott, let me get back to you. DeSantis actually told Fox his campaign has a lot more work to do. Listen to this. Listen.

(BEGIN VIDEO CLIP)

GOV. RON DESANTIS (R-FL): We have a lot more to do. I have also been attacked more than anybody, as you know, Will. Donald Trump has spent over $20 million attacking me. That's more than he spent supporting Republican candidates in last year's midterm elections.

At the end of the day, people do want to win, though, and you can't win with just Republican voters. I think we showed in Florida, if you want a big victory, you have got to win independent voters, you've got to people who haven't voted for our party in the last several cycles. I have shown I can do it and I think we can do it nationally.

BLITZER: So, Scott, why hasn't the governor's sizable war chest translated into more support in the polls?

JENNINGS: I don't think he has had a chance to fully deploy it yet. That's number one. And, number two, I think a big part of his problem is just the fragmentation of the voters who may be looking for someone else. Trump has got his people and they are not going anywhere. As Maggie pointed out correctly, they have even gone up a little bit.

But let's just say it was half and half and you have got half the party divided up. He has got the biggest chunk of that other half but he has not been able to take out Trump but he has not been able to run anybody else out of the race.

It's possible that his war chest, because he has got way more than the rest of his non-Trump competitors will eventually run some of those folks out of the field, he's going to have to do that if he has any chance at all to catch up with Trump, because that's where the extra voters are going to have to come from because I think peeling them off of Trump is going to be really difficult.

BLITZER: Maggie, you just heard DeSantis say he needs independent voters to win. But is he really achieving that by running a conservative campaign that's very far to the right, actually, of Trump?

HABERMAN: There's a lot about the DeSantis candidacy that is contradictory. He deplores pollsters and yet he's quoting polls in that same interview that you talked about. He talks about electability and yet he is taking positions that are running harder and harder to the right, which helps in a place like Iowa but is not necessarily helpful in a place like New Hampshire, and as you point out, not helpful in places like the suburbs.

His campaign tweeted out a video that the campaign didn't even make that was decried as homophobic pretty broadly, and he defended that video even though he had the opportunity not to. There's a wide swath of voters in a general election that could be troubling too.

So, yes, I think he is doing things that are not linear and it's not entirely clear what the point is sometimes day-to-day.

BLITZER: Everyone, thank you very much. Good discussion.

Just ahead, we will go live to the war zone in Ukraine as Kyiv's forces try to reclaim Bakhmut, which fell to the Russians this year.

(COMMERCIAL BREAK)

[18:35:00]

BLITZER: Tonight, Ukraine's counteroffensive is taking aim at a familiar target, Bakhmut, which fell to the Russians this year.

Our Senior International Correspondent Ben Wedeman has the latest from Eastern Ukraine.

(BEGIN VIDEOTAPE)

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice over): As soon as one artillery round blasts toward Bakhmut, the crew rushes to prepare for another. Ukrainian officials report gains in (INAUDIBLE) but since last year has been the epicenter of the war.

Gun Commander Artem has been in the area for months. The task of taking down coordinates and barking orders now routine. He says he is now half deaf from the blasts. Yet he has sensed a change.

It feels like they are off and running, he says, referring to the Russians, and then the order to fire.

There's barely a letup in the distant thud of shelling. The Russians, says this gunner, call signed Aires, are falling back. We know because they hit us much less. One or two months ago, there was a lot of incoming. It was scary to be here. Now, it's different.

On another flank, the big guns are out. This is a Bohdana, a Ukrainian-made 155 millimeter self-propelled howitzer.

[18:40:00]

Ukraine claims the Russians have poured 50,000 troops into the defense of the town, dug in deep. The Russians have fortified their positions and strand strong, Commander Dmytro tells me, but I think that's temporary.

Russian soldiers captured in the battle here told us the shelling on their positions was relentless.

That was a high explosive anti-personnel munition fired at the direction of Russian troops outside of Bakhmut.

As soon as they fire, they prepare to fire again.

(END VIDEOTAPE)

WEDEMAN (on camera): Now, it appears that the Ukrainians are pulling out all the stops around Bakhmut. Over the months I have been covering the battle in and around that town, I have always heard the Ukrainians complain about a shortage of ammunition. We didn't hear that today. They seem to have more than enough. One of those batteries told us that they are firing 50, 60, 100 rounds a day. It really does appear that Bakhmut is at the moment the focus of this Ukrainian counteroffensive. Wolf?

BLITZER: Very interesting, Ben Wedeman, stay safe over there. Thank you very much.

Right now, let's bring in CNN Contributor on Russian Affairs Jill Dougherty and CNN Military Analyst, retired Colonel Cedric Leighton.

Colonel Leighton, now that Ukraine will be receiving these U.S.-made cluster bombs, how will they leverage those weapons in their counteroffensive right now while limiting serious collateral damage? You can see in this video of a Russian attack on Kharkiv, the bombs don't always detonate immediately.

COL. CEDRIC LEIGHTON (RET.), CNN MILITARY ANALYST: Yes, that's going to be a big challenge for them, Wolf. But the basic premise behind the Ukrainian effort to get cluster munitions is that they will use them against the trenches that the Russians have drawn up all throughout the eastern front as well as the southern front. So, if they do that and if they limit the target area of those cluster munitions, they might be able to limit the civilian exposure to them once this war is over.

BLITZER: Jill, you are an expert on Russia. We you know Russia has been using these cluster bombs against Ukrainians for some time. How are they reacting to this news that the U.S. is about to provide these cluster munitions to the Ukrainians?

JILL DOUGHERTY, CNN CONTRIBUTOR, RUSSIAN AFFAIRS: Wolf, I have been looking at several stories in the Russian media, and every single one immediately jumps on the admission by the Biden administration that these weapons are dangerous for civilians, or at least they can be.

And then also, I think, significantly, they are saying, hey, look, the United States and Ukraine never signed the international conventions about these weapons, ignoring the fact and not including the fact that Russia hasn't either. And then, again, noting that the Ukrainians are using these weapons, this ammunition in Ukraine right now, leaving out the fact that Russia is.

So, what they are doing is -- it's obviously part of the propaganda approach and just trying to take advantage of it and make the United States look very bad for making that decision.

BLITZER: And, Jill, let me follow-up. The U.S. says the NATO members who will be meeting next week at the summit in Lithuania will not admit Ukraine to the alliance, at least not yet. But how much does any progress toward that go feed Putin's anxiety?

DOUGHERTY: Well, he obviously does not want any expansion of NATO, whatsoever. But I think what the Russians are trying to do is exploit any division among the allies or between the allies. So, this issue of should Sweden join? Obviously, Finland already is. But Sweden is a big issue. And because there are differences in terms of Ukraine, whether Ukraine should ultimately be given any type of promise or indication that it could be a member, that's where the Russians are going to try to exploit as much as possible any type of division.

So, what NATO is trying to do, obviously, is figure out how it can give security guarantees to Ukraine, which are crucial, and then how they can present something to Ukraine that would be forward-looking in terms of possible membership.

BLITZER: It's interesting, Colonel Leighton, the NATO summit will focus, we are told, on long-term security assistance for Ukraine, including F-16 fighter jets. What should be prioritized right now based on what you know about Ukraine's capabilities, at least at this moment?

LEIGHTON: Well, I think, Wolf, one of the key things is what in military speak is called interoperability.

[18:45:01]

And that is the idea that Ukrainian weapons system should be able to talk to NATO weapons systems. So anything that could be made to work together in a technical sense, in a doctrinal sense, that is exactly what the NATO meeting should actually result in. And if they can do that, with F-16s, that will allow a great deal of interoperability between the Ukraine air force and NATO air forces. And that would be one big step in that direction, and also long-range weapons, it could be interoperable between those areas and that would be another plus for the Ukrainians.

BLITZER: Colonel Leighton, and Jill Dougherty, guys, thank you very much.

Coming up, is the red-hot U.S. jobs market finally cooling off -- cooling off a bit? We are getting new economic data. We'll be right back.

(COMMERCIAL BREAK)

[18:50:03]

BLITZER: We are following important economic developments here in the United States. New data showing the labor market remains strong, although jobs grew at a slower pace than expected last month.

CNN's Vanessa Yurkevich is on the story for us.

Vanessa, what does this report tell us about the state of the U.S. economy?

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Wolf, it says that we're heading in the right direction. Job numbers cooling but still very robust, 209,000 jobs added in the month of June. April and May were also revised down. That's putting the unemployment rate at about 3.6 percent. That's a little bit lower than it was on the previous month.

The industry is that really picked up steam where construction, health care as well, and government. These are the industries I really love the way in terms of these job numbers. But wages, though, Wolf, are still at about 4.4 percent from a year ago. That could be concerning to the Federal Reserve because when people make more in their paychecks they spend more and that could ultimately fuel inflation.

But some good news, Wolf, working women labor force participation rate at a record 77.8 percent, there was some concern, Wolf, if you see there, the big dip over the pandemic, as millions of women left the workforce. People were concerned whether they would return. Well, Wolf, they certainly have, and they certainly have come back in greater numbers, Wolf.

BLITZER: Very impressive indeed.

Vanessa, should we expect another interest rate hike from the Federal Reserve following this latest jobs report?

YURKEVICH: We should, and they said so themselves. The Federal Reserve's minutes reveals what they discussed in the June meeting. They said they planned to raise interest rates, just maybe at a slower pace. Last month was the first time they paused raising rates after ten consecutive rate hikes.

We know that the Federal Reserve likes to see inflation at about 2 percent. Right now, it's not about 4 percent, despite these encouraging jobs report, Wolf. We should expect the Federal Reserve to continue to raise rates -- Wolf.

BLITZER: Vanessa Yurkevich, thank you very, very much.

This note to our viewers, coming up on "ERIN BURNETT OUTFRONT", why a small Texas town is divided over Elon Musk and his company, SpaceX. That's at 7:00 p.m. Eastern, right after THE SITUATION ROOM.

And coming up here in THE SITUATION ROOM, the White House confirms talks are ongoing over a possible prisoner exchange for "Wall Street Journal" reporter, Evan Gershkovich, now detained in Russia for 100 days.

We'll be right back.

(COMMERCIAL BREAK)

[18:57:47]

BLITZER: It's now been exactly 100 days since "Wall Street Journal" reporter, Evan Gershkovich, was wrongfully detained in Russia. For more, I want to bring in CNN national security correspondent, Kylie Atwood. She's joining us from the State Department right now.

Kylie, what's the latest on the potential prisoner exchange for Gershkovich?

KYLIE ATWOOD, CNN NATIONAL SECURITY CORRESPONDENT: Well, listen, we heard from the national security adviser today saying that there have been contacts between the U.S. and Russia regarding Evan Gershkovich and other Americans who are wrongfully detained in the country.

He said those contacts remain at a high level with Russian authorities, which, of course, is a good thing, that there is contact. But as we know from covering these stories, those contact tough to turn into negotiations, which often can take months, if not years to actually find a resolution. The national security adviser said very clearly that he doesn't want to initiate any false hope here.

And here is how he characterizes the ongoing discussions right now.

(BEGIN VIDEO CLIP)

JAKE SULLIVAN, NATIONAL SECURITY ADVISER: There have been discussions. But those discussions have not produced a clear pathway to a resolution. So I cannot stand here today and tell you that we have a clear answer to how we are going to get Evan home. All I can do is tell you that we have a clear commitment and conviction that we will do everything possible to bring him home.

(END VIDEO CLIP)

ATWOOD: And we should note, Wolf, that these remarks did not come unprompted. It was reporter asking him about what the Kremlin spokesperson said earlier in the week, saying that there had been certain contacts between the U.S. and Russia on Gershkovich, regarding potential prisoner swaps. But they said those discussions should have been in complete silence.

We've heard that from the Russians before. And we should also know that this is an incredibly challenging day for Evan's family. They said that they will not stop their efforts to try to get him home, until he is back here in the United States.

Today, of course, marking 100 days since he was initially detained in Russia, doing his job for "The Wall Street Journal" -- Wolf.

BLITZER: How is the family holding up, Kylie?

ATWOOD: Well, they say that it's incredibly hard. They put out a statement today saying every day that Evan isn't home is another day too many.

We also heard from "The Wall Street Journal" today, who was his employer, saying journalism is not a crime. We continue to work closely with the highest levels of the U.S. government and expect that they will vigorously pursue all efforts to free, Evan.

Now, the national security adviser also said that he actually met with the employer of Evan, "The Wall Street Journal", and officials from his family, who are representing his family at the White House today. So, clearly, they are engaged with the White House on this. BLITZER: Kylie Atwood, thank you very much. Let's hope he comes home

soon -- very soon.

And to our viewers, thanks very much for watching. I'm Wolf Blitzer in THE SITUATION ROOM.

"ERIN BURNETT OUTFRONT" starts right now.