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This Morning: Trump Holds Call With Canadian Prime Minister; Israel Strikes Southern Beirut For The First Time Since Ceasefire; Rep. Raja Krishnamoorthi (D-IL), Is Interviewed About Washington Post Report Saying Internal WH Draft Document Details Huge Fed Cuts. Aired 11-11:30a ET

Aired March 28, 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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[11:00:38]

WOLF BLITZER, CNN ANCHOR: Happening now, breaking news. Another critical phone call. President Trump and Canadian Prime Minister Mark Carney will speak this morning. As Carney says, the old relationship with the United States is quote, over.

Welcome to our viewers here in the United States and around the world. Pamela Brown is off today. I'm Wolf Blitzer. You're in the Situation Room.

UNIDENTIFIED MALE: This is CNN breaking news.

BLITZER: And the breaking news this morning from the White House. President Trump is holding a critically important phone call with Canada's Prime Minister as the two neighboring nations face a truly historic split. And it comes after the new Canadian leader said Trump's escalating trade war has decimated the relationship between the close allies. Listen to this.

(BEGIN VIDEO CLIP)

MARK CARNEY, CANADIAN PRIME MINISTER: The old relationship we had with the United States based on deepening integration of our economies and tight security and military cooperation is over. What exactly the United States does next is unclear.

(END VIDEO CLIP)

BLITZER: Let's go live -- let's go live to our senior White House reporter, Kevin Liptak. Kevin, this is really significant. What can you tell us first of all about this phone conversation?

KEVIN LIPTAK, CNN SENIOR WHITE HOUSE REPORTER: Yes, quite an important conversation that will be taking place this morning. Mark Carney said yesterday that the White House had reached out to him to try and get this phone call on the books. But, you know, he was sworn in as prime minister 14 days ago. Typically, an American president would get on the phone much sooner with his counterpart up there in Canada. And it does give you a sense of just how strange this relationship has become between Washington and Ottawa as President Trump talks repeatedly about trying to annex Canada, but also as he slaps these tough new tariffs on that country, including just this week, the 25 percent tariff on automobiles imported from Canada and other countries. That has caused an enormous amount of consternation among the Canadians. And Carney saying just yesterday that the Canadians will have to rethink their relationship with the United States, saying that they will have to dramatically reduce their economic ties with Washington.

Of course, remember, Wolf, Carney is in the midst of a heated general election campaign. Polls had shown his Liberal Party heading towards defeat. But certainly President Trump's combative rhetoric has given Carney and the Liberals a boost.

But certainly this will be an important phone conversation, potentially a contentious conversation, as President Trump gears up to apply those reciprocal tariffs next week. Wolf?

BLITZER: All right, Kevin Liptak for us over at the White House, thank you very much. We'll stay in close touch.

Now, there's more breaking news we're following, this time on the markets. Look at this. The Dow Jones is down 597 points, almost 600 points at least so far today. Let's go to our business and politics correspondent, Vanessa Yurkevich, who's joining us from New York. What's behind this dramatic fall?

VANESSA YURKEVICH, CNN BUSINESS & POLITICS CORRESPONDENT: Yes, Wolf, investors are digesting all of the economic data that we got just this morning, consumer sentiment falling by 12 percent and also inflation data. This is a measure that the Federal Reserve likes to look at when trying to understand where inflation is in this country. On the baseline, inflation was unchanged. But we -- when we dig into the report, core inflation, this is stripping out volatile fields like food and energy, that unexpectedly rose up 2.8 percent year over year and up 0.4 percent in February. So that is concerning if you're trying to understand which direction inflation is going.

It's going in the upwards direction when you look at core. Investors are also trying to digest all of this news around tariffs. You have that 25 percent tariff on autos that is going to take effect on April 3rd. And then auto parts going to take effect on in May sometime. And you just see markets there really tanking as they're sort of sorting through this mixed picture of what does inflation look like? And then what do tariffs on top of rising inflation on the core front truly mean for the U.S. consumer?

There's a lot of uncertainty here and there's not a lot of planning that businesses are able to do right now. And that's why you have investors feeling very shaky about this economic news this morning. The markets, as you said, down, the Dow down almost 600 points as they are trying to understand exactly what these reports mean and what is to come on President Trump's trade war front. Wolf?

BLITZER: Investors clearly not happy about this. Vanessa Yurkevich joining us. Thanks, Vanessa, very much.

I want to turn right now to new CNN reporting on the Signal group chat. Current and former U.S. officials say text messages from National Security Advisor Mike Waltz and CIA Director John Ratcliffe may have damaged America's ability to gather intelligence on the Houthi terrorist targets.

[11:05:07]

CNN's Katie Bo Lillis is here in The Situation Room with me. She's got some new reporting. What more can you tell us, Katie Bo?

KATIE BO LILLIS, CNN REPORTER: Yes, Wolf, up until now, we have mainly been talking about Defense Secretary Pete Hegseth's text messages, offering operational details of these pending strikes on the Houthis. But my colleague Zach Cohen and I had a number of conversations over the past couple of days with current and former U.S. officials who say there's also some really, really sensitive information that is potentially betrayed in text messages from CIA Director John Ratcliffe and National Security Advisor Mike Waltz that didn't initially get as much attention.

Ratcliffe, in one of these text messages, in the portion of the conversation where they're kind of debating, should we pause on these attacks? Should we move forward? Should we have a delay? Says, well, look, if we have a delay, the CIA might have an opportunity to, and I'll quote, identify better starting points for coverage on Houthi leadership. That pretty clearly indicates, according to our sources, that the CIA was using technical means like overhead surveillance to conduct surveillance on the Houthis.

Well, why does this matter? Because it offers the Houthis kind of a breadcrumb that they can follow to maybe piece together the way the U.S. is doing that surveillance and potentially avoid it in the future. In the text message from Waltz later in the conversation, he gives kind of a -- a -- an after action report once the strikes are over. And he tells the group that the Houthis -- that the Americans have a positive I.D. of a particular senior Houthi leader walking into his girlfriend's building.

So, again, drawing the Houthis, a very specific map of what the Americans were watching, how they were tracking these leaders and offering them potentially the opportunity in the future to learn from that and avoid it going forward.

BLITZER: Because potentially they could damage what the intelligence community calls critically important sources and methods for gathering important intelligence.

LILLIS: That's exactly right, Wolf. Now, the -- the CIA director and other senior national security leaders in Trump's administration are saying no sources and methods were shared here. They're saying no classified information was shared here. That really contradicts what we are hearing from, again, former and current sort of career American officials who deal with this kind of information every day who say, look, even if those sources and methods weren't detailed explicitly, even if the technical means weren't explicitly named in this group chat, it offered enough clues that the Houthis might be able to sort of infer enough information that they could better protect themselves in the future. And the Houthis, Wolf, already a really, really hard target for American intelligence agencies to follow.

BLITZER: Yes, because they publicly said in this chat that they knew that this Houthi leader on missiles was walking into a building where his girlfriend was. And so that means they were monitoring his personal nature of his personal relationship with his girlfriend. Then they said the building was collapsed. So presumably they killed the girlfriend and him in the course of this attack.

LILLIS: That's -- that -- that seems to be the -- the sequence of events here. And, you know, again, these were not texts that were intended to become public at the time. But the concern, of course, for national security officials is if you're having this kind of sensitive conversation on an unsecure platform like Signal, it's possible that it could become vulnerable to foreign hackers. And adding an even more interesting layer to this, these texts were texts that "The Atlantic" initially withheld. They didn't publish them initially on -- on Monday when that story first when the -- when these text messages sort of first became -- became public.

It was only after the administration was sort of up and down and across the board saying nothing sensitive in here and nothing classified that "The Atlantic" then moved to make them public.

BLITZER: Yes. Jeffrey decided originally it was too sensitive to even report it. And then after the administration officials saying there's nothing sensitive, nothing classified, don't worry. He -- he reported it and we could see it was very, very sensitive indeed.

LILLIS: Yes.

BLITZER: All right. Thanks, Katie Bo. Appreciate it very, very much.

And we're following other important breaking news in the Middle East right now. The Israeli military striking southern Beirut for the first time since the November ceasefire with Hezbollah. The IDF claiming the attack was in response to two projectiles being fired from Lebanon towards Israel. I want to go straight to CNN's Jeremy Diamond. He's joining us live from Tel Aviv right now. Jeremy, what more can you tell us about this latest strike?

JEREMY DIAMOND, CNN JERUSALEM CORRESPONDENT: Well, Wolf, this strike is quite significant because it is -- it is the first time that Israel has carried out a strike in the Lebanese capital since this ceasefire went into effect back in November. The Israeli military indeed saying that they carried out this strike in response to two rockets being fired from southern Lebanon towards northern Israel. One of those rockets was intercepted.

The other rocket fell short and landed in Lebanese territory, according to the Israeli military. Within hours, the Israeli military then issued evacuation orders for a specific building in Beirut and the surrounding area. And within about an hour and a half after that, they then carried out this strike, dropping bombs on this building, resulting in an enormous plume of smoke.

[11:10:07]

And you can see in some of the footage of the aftermath that this building was absolutely leveled. The Israeli military says that Hezbollah was using this building as a facility to store its drones. And now, Wolf, the question, of course, is where does this leave this ceasefire between Israel and Hezbollah? You know, we should note that over the course of this ceasefire, Israel has carried out strikes in Lebanon, accusing Hezbollah militants of moving material and violating the ceasefire.

But -- but now things seem to be going to a different level with this strike on the Lebanese capital. We saw last week also very significant Israeli strikes in southern Lebanon following the firing of two other rockets from southern Lebanon. Important to note that Hezbollah denies actually being responsible for the firing of these rockets.

And the images that we've seen of the rocket launchers that were used in today's attack, as well as last week's, are quite rudimentary, which led the Lebanese president to say that he does not believe that Hezbollah was responsible. Perhaps it could be a smaller militant group that is in the area. But the Israeli government says it will ultimately hold the Lebanese government responsible for any violations of the ceasefire that occur on Lebanese territory.

A very tense moment once again for this region, Wolf, and questions about whether this ceasefire can hold. Wolf?

BLITZER: Yes, that situation clearly heating up over there in the Middle East. Jeremy Diamond, thank you very, very much.

Still ahead, new reporting about the looming layoffs involving Veterans Affairs, how job cuts could affect service members who need to make a doctor's appointment.

And more details emerging about the group chat where classified military plans were in fact discussed. My next guest is calling for the secretary of defense to resign. Congressman Raja Krishnamoorthi is joining us live. Stay with us. You're in The Situation Room.

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[11:16:32]

BLITZER: We're just getting some new reporting here into The Situation Room. Multiple sources now telling CNN that call center employees are included in the mass layoffs coming to the U.S. Department of Veterans Affairs. The agency is expected to move to automation instead of using live agents to take calls. Let's discuss what's going on.

Joining us now here in the Situation Room, CNN's Brian Todd. Brian, what more are you learning, first of all, about these layoffs and how they could affect America's military veterans?

BRIAN TODD, CNN CORRESPONDENT: Wolf, as you know, we've been reporting for a while now on the overall targeting of about 80,000 employees at the Department of Veterans Affairs, 80,000 to be laid off. That makes up a little less than 20 percent of the V.A.'s workforce.

But now we have some new information from multiple sources in Congress and in the V.A. These are sources familiar with the plans for cutbacks at the V.A. What they're telling us is that V.A. call centers are expected to be streamlined with automation, and that reduces the need for live agents to answer veterans' calls on the phone.

Now, that could be a problem because, according to congressional staffers who have talked to us about this, the median age of a veteran is about 64 years old. Many veterans, of course, are elderly and disabled. So if they are going to an automation in the call centers, that could be a problem for many of them.

Here is what one Democratic congressional staffer briefed on the layoff plan for call centers at the V.A., told us, quote, this is heartless and dangerous. Veterans in need of life-saving care and compassion should be met with a person who understands their needs and can provide them the information and resources they seek, not a lifeless machine. And this staffer also reiterated again about the age and the disposition of many veterans.

Some of them are disabled. It's tough for them to deal with automation on the phone rather than a live person. Now, we did reach out to the V.A. for this. The V.A.'s press secretary, Pete Kasperowicz, said that final decisions have not been made yet. And this is what he said about the reporting that we're doing. Quote, we are planning to reform the Department of Veterans Affairs to fix major problems. As part of this process, we've asked career subject matter expert employees and senior executives for recommendations on how to improve care and benefits for veterans without cutting care and benefits for veterans.

He also kind of expounded on the idea that they're going to try to expand their staff of doctors, nurses and claims processors, Wolf. But they are also going to cut, according to our sources, medical and health care support staff and some administrative roles like healthcare, excuse me, human resources personnel.

And that, according to members of Congress that we talked to, could also be a problem with the V.A. because the human resources people had been understaffed there for many years. They've just started to build them back up. They fill crucial roles in promoting, demoting and disciplinary.

A lot of them are expected to be laid off. We also have a timeline for you, Wolf. These employees at risk of being laid off are going to be identified in April and May. They will be notified of this in June. First round of layoffs scheduled for July, second round scheduled for September. So it's coming soon.

BLITZER: So, basically, are they suggesting that some of these elderly veterans in their 60s, 70s, 80s and beyond go online and check what they want to see if they can get answers when many of them are not that experienced in online technology? TODD: That's a little unclear. They're not -- they're not saying that right now. But think about this. If it's all automated, you know, hey, raise your hand if you like automation when you call a customer service line. No one likes that. That's a problem in and of itself.

And, again, as you mentioned, if they have to go online, that's going to be a problem for some of these elderly and disabled veterans. It really is. And look, it's almost a psychological thing, too. You feel better if you're talking to someone, a live person, who can say, oh, yes, OK, here's where I can get you to. Here's -- here's the appointment I can make for you this time and this place. That, I mean, the automation and going online for people, you know, again, of that disposition is going to be tough. We're going to see how this works out in practice.

[11:20:19]

BLITZER: Yes, they've got to be sensitive to the elderly veterans especially. All right, thanks very much. Excellent reporting, Brian Todd, here in The Situation Room.

And there's more breaking news. President Trump just wrapped up a call with the Canadian Prime Minister, Mark Carney. I want to go live to our senior White House reporter, Kevin Liptak. Kevin, what can you tell us about this call? What are you learning?

LIPTAK: Yes, this was the first phone call between Trump and the new Canadian Prime Minister, Mark Carney. Trump is reading out that conversation on his Truth Social. He calls it an extremely productive call. He says that he and Carney agree on many things and that they will be meeting immediately after Canada's upcoming election to work on elements of politics, business, and all other factors that will end up being great for both the United States of America and Canada.

So really revealing no contention in that phone call with Carney. Of course, we saw Carney just yesterday talk about the U.S.-Canada relationship, how far it's deteriorated, saying that the old relationship between the U.S. and Canada was no longer viable. We also see in this readout from Trump none of the contention that was contained in his phone calls with Carney's predecessor, Justin Trudeau. Those phone calls were quite contentious, including some expletives being shared between the two men.

Instead, Trump's saying that he does plan to meet with Carney once Canada wraps up its general election. That election's set to take place exactly one month from today on April 28th. Of course, the political dynamic in Canada could be quite different by the time these two men get together, whether Carney's Liberal Party is victorious or whether the Conservatives, led by Pierre Poilievre, are -- are victorious in that election.

So you do see in this readout at least some elements of conciliation between the U.S. and Canada, but clearly relationships between Ottawa and Washington are very strained amid these tariffs, amid Trump's pledge to annex Canada. These two men will still have a lot to talk about over the next several weeks and months. Wolf? BLITZER: So I take it, Kevin, in the statement that Trump released, he didn't call Prime Minister Carney, governor, right?

LIPTAK: He didn't. He didn't. He called him prime minister. That is a notable shift. That was the moniker that he continued to use for Justin Trudeau -- Trudeau right up until the time that Trudeau stepped down from office, obviously a reference to his pledge and desire to try and make Canada the 51st state. That obviously contributing to this darkening relationship between the two countries.

He clearly seems to be trying to take a different tack now. I think perhaps mindful of how much his rhetoric is influencing the election that is underway in Canada. You know, the Liberals had seemed destined for failure for so long under Trudeau. Their poll numbers have been rising in part because of reaction to the President's own comments about Canada.

And so you do hear a much more conciliatory tone in this statement today. Whether that lasts, I think, remains to be seen. Wolf?

BLITZER: We will see. All right, Kevin Liptak over at the White House for us, thank you very much, Kevin.

Right now, there's more news coming in on the Trump administration's proposed cuts. "The Washington Post" saying 22 federal agencies are considering layoffs of up to 50 percent of their workforces, that according to an internal White House document obtained by the newspaper. Let's discuss that and more with Democratic Congressman Raja Krishnamoorthi. Congressman, thanks so much for joining us. What kind of impact are these cuts going to have on the basic functioning of the federal government?

REP. RAJA KRISHNAMOORTHI (D-IL): There'll be draconian cuts that will fundamentally harm the functioning of these agencies. The best example is the 80,000 layoffs scheduled for the V.A. That is absolutely going to affect veterans access to benefits because in part, you know, we're talking about medical staff.

We're talking about administrators. We're talking about people who help veterans with their daily therapy. And so if they can't access those people, they can't access their services.

Another good example is what's going to happen with HHS. A huge number of employees are going to be let go there. And that's going to affect everything from the FDA's ability to control the youth vaping epidemic to what's happening with toxic heavy metals and baby foods.

Right now, very little. And if you shift resources further away from the FDA, they're not going to have the ability to do anything on that.

[11:25:01]

BLITZER: As -- as you know, Congressman, many of President Trump's moves to slash the government are tied up in court right now. Do you think cuts of this anything on that? As you know, Congressman, many of President Trump's moves to slash the government are tied up in court right now. Do you think cuts of this magnitude survive? Would -- would they survive a major legal challenge, even if it had to go all the way up to the Supreme Court?

KRISHNAMOORTHI: I know that legal experts are debating this. I think that from my standpoint, they should not, because basically what's happening is when you cut those agencies by so much, you are essentially, I think, going against the will of Congress in terms of how those agencies -- agencies should be functioning and administering their programs.

The best example is USAID, where technically USAID continues to exist. However, none of its employees or very few of its employees remain. And so it's not able to really carry out its basic functions, which goes against the will of Congress.

BLITZER: What are you hearing from your Republican colleagues about these very aggressive Trump administration cuts? This is a direct challenge to the Congressional Spending Authority, the power of the purse, which everybody in Congress totally supports. And a former -- former lawmakers have traditionally fiercely guarded, as you well know. What are you hearing from your Republican colleagues?

KRISHNAMOORTHI: Silence. A lot of them in private complain about what's happening, but they're not willing to publicly stand up to Elon Musk, DOGE and Trump. But what I hear at my town hall last week, you know, we had an overflow crowd, not only in the place where I spoke, but also in the overflow room, is that Elon Musk and DOGE are literally and figuratively four letter words. They -- my -- my constituents don't want to see waste, fraud and abuse, but they despise the way in which DOGE, Musk and Trump are going about their work. They feel that it's chaotic. It -- it shows incompetence and it's reckless in terms of gutting these agencies.

BLITZER: Before I let you go, Congressman, you're a key member of the House Intelligence Committee. We saw your questioning of those witnesses the other day. I want to turn to the fallout from the Signal group chat that all of us have been watching so closely. Curt and former U.S. officials are telling CNN that messages sent by National Security Advisor Mike Waltz and CIA Director John Ratcliffe may have done long term damage to the U.S. ability to gather critically important intelligence on the Houthi terrorist rebels in Yemen. First of all, do you share that assessment?

KRISHNAMOORTHI: Yes, it's possible, because remember, some of our friends, partners and allies do share intelligence with us. So to the extent that they shared intelligence about, for instance, terrorist targets among the Houthis, and that was somehow in the Signal group, then people who might be on the ground, who might be sources for our friends, partners and allies, could be at risk.

The second thing I want to just say is this has really touched a nerve beyond Democrats, Wolf. Yesterday we had a rally in downtown Chicago calling for the resignation of Pete Hegseth. It caught so much attention, in part because I think even Republicans are quite upset about this. I saw polling showing that 60 percent of Republicans believe that this is a serious security lapse. Roger Wicker, the senior Republican senator in the Senate and in charge of the Senate Armed Services Committee, has called for a full investigation. I echo that, but I want to see Hegseth go first. He must be terminated or he must resign immediately because he's endangering our safety.

BLITZER: Congressman Raja Krishnamoorthi of Illinois, thanks so much for joining us.

KRISHNAMOORTHI: Thank you, Wolf.

[11:28:52]

BLITZER: Up next, Utah has just become the first state to ban fluoride in drinking water. This despite major opposition from dentists and pediatricians. We'll have a live report on what this all means. That's next.

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