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The Situation Room

Rep. Mike Lawler (R-NY), Is Interviewed About Trump Flip-Flops On Tariffs, Doge Firings & Cutting Medicaid; Sen. Alex Padilla (D-CA), Is Interviewed About Stocks Sinking Amid Trump Tariff Whiplash, New Jobs Report. Aired 11-11:30a ET

Aired March 07, 2025 - 11:00   ET

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

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[11:00:36]

PAMELA BROWN, CNN ANCHOR: Happening now, breaking news. Any moment, President Trump will speak from the Oval Office. Of course, we will bring you those remarks. I'm Pamela Brown.

WOLF BLITZER, CNN ANCHOR: And we want to welcome our viewers here in the United States and around the world. I'm Wolf Blitzer. And you're in The Situation Room.

UNIDENTIFIED MALE: This is CNN Breaking News.

BLITZER: Now, we begin this hour with the breaking news. We're monitoring the Oval Office over at the White House right now. That's where President Trump will speak, we are told, at any moment.

BROWN: I've learned that he's expected to talk about this morning's jobs report that showed the U.S. added 151,000 jobs in February. That's lower than expected, but still a solid month of gains. We will bring the President's remarks to you when we get them.

Let's go to CNN chief national affairs correspondent, Jeff Zeleny, at the White House and CNN business and politics correspondent, Vanessa Yurkevich. Jeff, let's kick it off with you. What are you learning about these remarks?

JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: Pamela, President Trump, as you said, is expected to talk about that economic report, really trying to seize the narrative here and impress upon the country that the economy, as you can see there, the jobs added 151,000 in the month of February, a 4.1 percent unemployment rate, just up a touch.

But the White House has been focusing on the new jobs added in the automotive sector. Of course, the economy and high prices and really the stubborn inflation has been something that has been worrying this White House. The President does not talk about it very often.

Of course, he did considerably when he was running for office. But there's no question the White House wants to seize upon this jobs report as a good example of what they see as progress moving in the right direction. Of course, this has been just a whirlwind week here with the financial markets, the on-again, off-again threats of tariffs, taking them back off of Canada and Mexico.

So the White House is eager to sort of reset that conversation, I'm told, and talk about these jobs numbers as the President looks forward. It is a Friday. They added this to the schedule in a bit of dramatic fashion here.

The jobs report usually is just a written statement that's released. But the President, I'm told, wants to talk about these, as well as likely take other questions in the Oval Office.

BLITZER: And we'll, of course, be monitoring that. We're told that reporters and camera crews will be allowed into the Oval Office to record the President's opening statement, then the Q&A with reporters, and we'll then be allowed to broadcast that -- that exchange that's about to begin. We'll see what the President has to say. Jeff Zeleny, thank you very, very much.

I want to go to Vanessa Yurkevich right now. You're doing a lot of reporting on this, Vanessa. I want to drill down more on this jobs report that he's expected to address right in a few minutes. Give us a little bit more context on what it shows about the health of the U.S. economy.

VANESSA YURKEVICH, CNN BUSINESS & POLITICS CORRESPONDENT: Yeah, well, we've been digging into these numbers all morning. And what we're finding is that while this number for February, 151,000 jobs added, is solid, it is not quite what economists expected.

But it is an acceleration from January's job numbers, which were revised down to 125,000. Now, the unemployment rate, you see it right there, ticking up from 4 percent to 4.1 percent. But we are still in historically low unemployment periods.

But this jobs report really is a continuation. We have now seen 50 months of consecutive jobs growth. That is really important because it's the second longest stretch of jobs growth that we've had in history.

And you can see those jobs added right there. Not quite what we saw at the end of last year, but still in line with pre-pandemic levels. Also to note, wages for everyday Americans up 4 percent year over year. That is encouraging because that is outpacing inflation, which is at 3 percent.

The sectors that added jobs in this February jobs report, health care, finance, transportation and warehousing, also manufacturing, which we are sure to hear from the President on. Where we saw declines in employment in industries, leisure and hospitality, a lot of that was because of strike-related activity and also, though, the federal government.

If you break it down, looking at where these declines came from, the U.S. Postal Service actually accounted for about 3,500 jobs. And then the rest, 6,700, were made up of other federal job losses. So these are two industries really to watch as we move forward.

[11:05:10]

Will consumer spending have an impact on retail, leisure and hospitality? And will all of these DOGE cuts have -- the -- the cuts that DOGE is making at these federal agencies have an impact on the federal government jobs that we have been watching? A strong, a solid report, not quite what we were expecting, but I imagine that the Trump administration will be encouraged by what they have seen in the month of February in this report, Wolf.

BLITZER: I suspect there'll be a very positive statement coming from the President, we're told momentarily. Vanessa Yurkevich, thanks very much. And Jeff Zeleny, appreciate you as well. Pamela?

BROWN: All right, Wolf, let's discuss this now with Republican Congressman Mike Lawler of New York. He sits on the Foreign Affairs and Financial Services Committee. Congressman, thank you for being here with us. We are expecting, as it was just laid out, for President Trump to address today's jobs report at any moment. As we said, it is solid, a little below expectations but solid, according to economists. At the same time, we saw President Trump try to blame his predecessor for, you know, rising prices and the currency of the economy. Now he's embracing these jobs numbers. Is President Trump just cherry picking the economic data he likes?

REP. MIKE LAWLER (R-NY): No, I think when you look at what we went through under the Biden administration, we saw record inflation. You look at mortgage costs, 30 year highs. The average mortgage in my district, for instance, went up $1,000 a month. That's over $12,000 a year.

People could not afford basic necessities. Grocery costs obviously rose dramatically under the Biden administration. So we're trying to reverse a lot of that in a very short period of time. Obviously, reining in government spending is key to helping drive down inflation. Increasing domestic production of energy is critical to reducing cost of goods, services and transportation.

You're already seeing significant economic investment come in from outside entities. Foreign investment coming into the United States and the trillions of dollars announced in just the first 45 days here. So I think you're seeing already significant movement. I do think consumer confidence will go up. I do think prices will come down. And look, I think obviously the jobs --

BROWN: What makes you think that? What -- what exactly you think that?

LAWLER: Well, because of the work that we're actually doing. When you start reining in federal spending, you know, Joe Biden increased federal spending by $5 trillion in two years. That's why you saw record inflation. That's why you saw the price of -- of goods and services explode.

So we're reining that in. We're increasing domestic production of energy. We're going to have a tax bill inclusive of lifting the cap on salt, which will provide immediate tax relief to folks and is critically important. So there's a lot of work happening in a very short period of time. And I do believe the economy will take off.

BROWN: Right. Well, right now, though, as it pertains to it, I'm sure you hear from constituents, consumer sentiment is down. It's the lowest it's been in three and a half years. And you're hearing these warnings about the tariffs causing prices to rise. And -- and certainly that would impact your constituents. And, you know, there is a lot of uncertainty right now.

President Trump has been changing his mind a lot. He's gone back and forth on tariffs for Canada and Mexico. He's deciding just this week to pause tariffs for a month on all imports covered by a trade agreement from those countries. He's fired and rehired federal workers. He's promised not to cut Medicaid, but back the GO plan that could do just that. And then he blasted the Ukrainian president online that invited him to Washington before berating him in the Oval Office. What do you think of all of this flip flopping? Is this an effective way to run a government?

LAWLER: I don't I wouldn't characterize it that way at all.

BROWN: How would you characterize it?

LAWLER: The fact is, tariffs, well, I'm going to answer your question. Tariffs are an effective tool in -- especially in short term negotiation here to bring about actual fair trade. You have countries that are allies of ours. Japan, for instance, has barriers to entry for U.S. cars.

You have Europe putting price controls on U.S. drugs. Why do you think we pay such high drug costs here in America? We're subsidizing Europeans and their drugs because of the price controls put in place. You have countries like India, 100 percent tariffs on U.S. goods.

We are looking to force fair trade. You can't say you want fair trade, but then are OK when foreign governments have unfair trade practices with the United States. With respect to Mexico and Canada, the President has already gotten significant concessions from them and is seeking to get more.

And by the way, we should all want that. Border crossings are down to just over 8,000 in the month of February. A year ago under Joe Biden, 189,000 border crossings in the month of February 2024. So we're already seeing significant movement. Tariffs are an effective short- term negotiating tool.

[11:10:20]

And I think the President delaying on -- on auto manufacturers is not an issue. If it's covered under the terms of the U.S.-Mexico-Canada trade deal, that's fine.

BROWN: Right. And -- and let me just jump in. But go ahead.

LAWLER: You know, look, With respect to the -- yeah. BROWN: I want to give you the time to make your point. But I also want to make sure that I'm able to respond to -- to what you said with -- with the facts, you know, because in terms of the Mexico and Canada tariffs, the only thing that changed was the stock markets went down. There was clearly a big reaction to that. Donald Trump saw that and changed his tune.

And, you know, in talking to economists, I'm not an economist, but in talking to several economists, they say, look, businesses don't like this uncertainty. They don't like the back and forth. And that's kind of what we're seeing play out in the -- in the economy right now.

You, of course, have businesses in your district and constituents who this could impact. What do you say to them?

LAWLER: Look, the stock market is going to fluctuate day to day. If we're making decisions based on, you know, a one-day analysis of the stock market, that's certainly not a way to govern. The fact is that the overall --

BROWN: -- because it seems to be in reaction to the stock market.

LAWLER: Well, you're -- you're surmising -- no, you're making that assumption. Did you speak to him directly? Did he tell you that's why he did that?

BROWN: We have -- well, we have reporting that --

LAWLER: The fact is --

BROWN: Certainly we have reporting that that certainly factored into the decision making. Go ahead.

LAWLER: Yeah. The fact -- the fact is that the economy relies on key decision making at the federal level. Number one is federal spending. Federal spending is out of control. We have a $7 trillion budget with $36 trillion in debt. You think $36 trillion in debt long term is good for the economy? It's a disaster. So we have to rein in the federal government across -- across the board.

And that is what is being undertaken right now at the executive level and at Congress as we work through both reconciliation and appropriations. In addition, they are cutting regulations across the board. The President announced the other night for every regulation added, they're going to be cutting 10.

Regulations are what stifles American business and the economy. Capital markets under Joe Biden were a disaster. Getting capital to -- into the hands of small businesses was -- was so problematic. And so we are working to actually reduce regulations and actually allow for the flow of capital.

Increasing domestic production of energy. Energy is critical for everything from manufacturing to the cost of goods, services and transportation. And the fact is, when you look at some of the challenges around the globe, go look at Ukraine and Russia, for instance. The Europeans are purchasing Russian gas at the same time they're trying to combat the Russian invasion of Ukraine.

It's idiotic. They never should have been engaged in that. But because Joe Biden wasn't serious about increasing domestic production of energy, we couldn't really go to the Europeans and say, hey, you should be purchasing U.S. natural gas.

So there's a lot ahead that has to take effect. It's not going to happen in one day. We are barely two months into this administration and the new Congress. And we are working through all of the changes in policy that are necessary to actually grow the economy.

BROWN: Right. But, you know, you talk about the fact that this is we're -- we're only, you know, a few weeks into this or a little over a month into this administration. And so I think what that raises is he -- he's clearly taking credit for this jobs report today. But then you're saying, well, he's only, you know, give him some time. He's only a few -- a few weeks in.

And so it's sort of like, what is it? Is it -- is this Biden's economy? Is this Trump's economy now? Who owns it?

LAWLER: OK. That -- that's a fascinating juxtaposition. But here -- here's the bottom line, obviously, the jobs report is -- the jobs report -- I'm answering your question. The jobs report is coming out, you know, for this past month. So now we have an estimate on February. The fact is that businesses are looking to invest in the United States again.

You're getting trillions of dollars of new investment in the U.S. because people understand the tax code is going to be more advantageous to individuals and small businesses. They understand we're going to increase domestic production of energy. They understand we're going to rein in federal spending.

[11:15:00]

Again, inflation exploded in large measure because Joe Biden increased federal spending by $5 trillion in the first two years of his administration spending again. Inflation exploded in large measure because Joe Biden increased federal spending by five trillion dollars in the first two years of his administration. So now you're starting to see people have greater confidence, it was it -- it was the -- the inflation was driven by Joe Biden's reckless spending.

BROWN: That was definitely a factor, but it was not the full factor. There was also the war in Ukraine, which is why you saw inflation all over the --

LAWLER: It was the largest -- it was the largest -- it was by far the largest factor. Yes.

BROWN: OK. Economist say --

LAWLER: It was by far the largest factor.

BROWN: It depends on what economist you talk to on that one. But Congressman Mike Lawler, I do appreciate you coming on and sharing your perspective on all of this news of the day, including the jobs report. Thank you for your time.

LAWLER: Thank you.

BLITZER: And, you know, Pamela, I thought it was significant that we've been reporting now 50 straight months of monthly job growth here in the United States, 50 straight months, 48 of those months were during the Biden administration --

BROWN: Exactly.

BLITZER: -- maybe two right now in the Trump administration.

BROWN: And we'll have to wait and see, because as we heard Mark Zandi say, look, right now it's a solid jobs report, but it's not including the full picture with all the DOGE cuts. And so, you know, President Trump might want to be taking credit now, but will he want to take that credit in future jobs reports, depending on what we see with the impact of DOGE cuts, tariffs and so forth?

BLITZER: There's a lot of questions to be answered and we're watching all of it.

Once again, we're still waiting for President Trump to speak from the White House. We'll have coverage. We'll be right back.

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[11:21:09]

BLITZER: More now on the breaking news. We're standing by for President Trump's remarks from the Oval Office. We'll share them with you once that comes in as new jobs data now gives him a mixed report card for his first full month in office. Unemployment ticking up slightly as employers added 151,000 new jobs. That's slightly lower than expected.

January's numbers were also revised downward. Let's get some reaction from Democratic Senator Alex Padilla of California. He's a key member of the Judiciary Committee.

Does this jobs report, Senator, do anything to ease concerns about the economy especially with all the uncertainty right now around tariffs and federal government layoffs.

SEN. ALEX PADILLA (D-CA): Thanks, Wolf. And to answer your question, no. If anything, it raises concerns. For starters, we know that the jobs added number is less than what was expected. Less than what was forecast.

And this report is entirely from within the Trump administration. So he can't point back to the end of the Biden administration for these numbers. Second, as economists will also tell you, there's employment, there's unemployment. But in between, there's underemployment. So how many people may still be working today but may be earning less, working less and having a tougher time providing for their families while prices continue to go up? Representative Lawler in the previous segment said it's going to take time. But it was Donald Trump who promised to lower prices on day one when, in fact, prices continue to go up.

BLITZER: Most of President Trump's tariffs, Senator, are on pause right now. But there's still a lot of uncertainty right now. How is the tariff chaos affecting the agricultural industry in your beautiful state of California, of course, agriculture being a major sector of your state's economy?

PADILLA: Exactly. You know, tariffs in general, the on-again, off- again, in and of itself is disrupting and costly because every employer I know, every business leader, industry leader that I talk to are unable to reliably plan on investments, whether it's what to plant if you're a farmer, a grower, or where to build a manufacturing facility, how many people to hire because you don't know what your situation is going to be in the next couple of months.

When it comes to agriculture specifically and -- and when it comes to Canada and Mexico specifically, we're talking about California alone being a number one and number two importer and exporter when it comes to agricultural products. So it's not just the growers that are going to feel it. Workers are feeling it. And ultimately, it's consumers paying the price for Donald Trump -- Donald Trump toying with these tariff ideas.

BLITZER: Senator, as you know, President Trump is also making big, big cuts to the Veterans Affairs Department. He's also planning to dismantle entirely the Department of Education. Only a handful of Republicans have publicly cautioned him against those very extreme measures. What are you hearing from your Republican colleagues, at least in private?

PADILLA: In private, I got to be honest, we're still hearing some of the concern about President Trump's moves, but what ultimately will tell us what they really feel is public statements and public actions.

I mean, it's unconscionable that between the entire cabinet that has gone through, that has been confirmed as problematic as so many of these nominees have been, that there's been minimal, next to zero Republican opposition. Look, we're again -- we're about to get into these spending plan debates. We're facing a potential government shutdown next Friday.

Representative Lawler on the previous segment was talking about their concern about the deficit and our nation's debt. The single biggest contributor in the last couple of decades to our nation's debt is the Trump tax cuts from his first term. The tax cuts for the wealthy and the largest corporations on the planet.

[11:25:13]

If you want to tackle the debt, you don't do it by seeking another $4.5 trillion tax cut that we can't afford, and even less so paying for it by cutting into Social Security, Medicare, Medicaid, and the other vital programs that so many American families count on.

BLITZER: Yesterday, President Trump claimed he wants to use a scalpel, not a hatchet, on the U.S. government. And he says he wants agency heads, not necessarily Elon Musk, making the staffing decisions. Do you think that's a sign he's beginning to feel the enormous pressure from the public?

PADILLA: If he's not feeling it from the public, he's certainly feeling it from his lawyers, because in case after case where these -- these DOGE cuts and the administration's reckless actions have been challenged, this is exactly one of the things that judges are pointing to. Who has the authority for these unlawful firings, these funding freezes, this access to America's personal, sensitive, personal information?

It is not Elon Musk. It is not his DOGE team. So I think it's President Trump trying to cover up a little bit. But if you continue watching his message to the end of that meeting with Cabinet secretaries, he kind of goes back on it, saying, and if you don't do it, then I guess Elon Musk will. He can't have it both ways.

And again, a reminder to the public that when you -- you cut staffing at the V.A., you're impacting veterans from being able to access the benefits that they've earned. When you cut staffing at the FAA, you make it less safe for people to travel. When you cut staffing in the Department of Interior, for example, you make it harder for water managers in California and throughout the West to do the work that they need to do to get water from where we have it to where and when we need it.

So at every turn, they're doing the opposite of improving the effectiveness and efficiency of our federal government.

BLITZER: Senator Alex Padilla of California, appreciate it very much. Thanks for joining us.

PADILLA: Thank you, Wolf. Have a good day.

BLITZER: You too. And up next, Pamela.

BROWN: The Trump administration continues to cut federal jobs and vows to eliminate entire departments. We'll sit down with two radio hosts in our series called Your Voice to better understand what their listeners are calling in to discuss.

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