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The Situation Room

U.S. Economic Forecast Slashed; Hegseth Says, Leakers are Trying to Sabotage Trump Agenda and Me; Pope Francis' Funeral to Be Held Saturday in St. Peter's Square. Aired 10-10:30a ET

Aired April 22, 2025 - 10:00   ET

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

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[10:00:00]

PAMELA BROWN, CNN ANCHOR: Happening now, breaking news, stark warning. A grim economic outlook for America just out, the forecast saying President Trump's trade war will deal a seismic blow to economies worldwide.

WOLF BLITZER, CNN ANCHOR: And on the attack, the defense secretary, Pete Hegseth, speaking out after reports that he shared detailed and sensitive military plans in a second Signal chat. We have new reporting just coming in on his promise to prosecute leakers inside the Pentagon.

Welcome to our viewers here in the United States and around the world. I'm Wolf Blitzer with Pamela Brown, and you're in The Situation Room.

And we begin with the breaking news, President Trump's trade war hammering markets at home and now fueling global uncertainty. The International Monetary Fund officially downgrading its global growth forecast this morning, and the president's tariffs threatened to slow economies everywhere.

And on Wall Street, the Dow is up about 500 points right now, this as the market is on track for its worst April, since the great depression, after plummeting more than 1,000 points on Monday.

CNN Business and Politics Correspondent Vanessa Yurkevich is in New York monitoring all of this and CNN Senior White House Reporter Kevin Liptak is standing by here in Washington.

Vanessa, first to you, walk us through this morning's announcement by the IMF.

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Yes, Wolf. Markets are up this morning, and that is something common that we see often after a steep decline. Markets are rallying, this as investors looking to pick up cheaper stocks. So, this is quite common.

This should not be surprising, but it does not erase what has happened over the last several weeks, including, as you said, that dramatic decline yesterday that we saw with the Dow dropping at one point more than 1,200 points after President Trump issued on Truth Social a post essentially calling the chair of the Federal Reserve, Jerome Powell, a loser and calling for him to drop interest rates. Investors were worried that this signal that he was trying to chip away at the Federal Reserve's independence.

Now, the Dow, though, on track to have its worst April since the great depression, and the S&P is having its worst start to any presidency since this data started being tracked in 1928.

And it's worth noting, as you said, the IMF, the International Monetary Fund, has released its outlook for what the global picture looks like and what the economic picture looks like for the U.S. They have come out with the prediction that this year, growth in the U.S. will grow by 1.8 percent. That is a dramatic turn from what we saw last year when growth was 2.8 percent. And then when you're looking on the global scale, they expect growth in 2025 to be 2.8 percent compared to 3.3 percent last year.

So, what do investors do? Well, they tried to move their money into safe havens like gold. Gold just reached a record high. That is really the only place investors are feeling safe to put their money right now. Investors expect more volatility as they wait for more certainty about this trade war. And they're also looking to de economic data points, like the IMF, just to show or try to explain a picture of where the economy is going right now. Wolf?

BLITZER: All right. Vanessa Yurkevich in New York for us, thank you very much. Pamela?

BROWN: All right. Now, Wolf, let's go to Kevin Liptak at the White House. Kevin, how is the administration viewing the economic news right now?

KEVIN LIPTAK, CNN SENIOR WHITE HOUSE REPORTER: Yes. The message you continue to hear from the president and his top advisers is that we're in a transition period. That was the phrase that the president used yesterday as he works to reorient global trade and the global economy. Of course, the question now is for how long. As he heard from a number of retail CEOs who were at the White House just yesterday, you cannot reorient global trade overnight.

Now, it appears the president is looking for a scapegoat, as it appears more and more likely that the economy is headed for a downturn. He seems to have found that scapegoat in Jay Powell, the chairman of the Federal Reserve. You heard the president call him yesterday a major loser. He's also threatened in previous posts to potentially try and remove him from the job.

[10:05:04]

No president before has gone so far in trying to undermine the independence of the central bank, and that alone could be furthering this market turmoil that we're seeing today on Wall Street, potentially causing as much economic turmoil as the president's own trade war.

This is something that he's been warned about by a number of his advisers that potentially undercutting Jay Powell, undercutting the independence of the Fed, could cause more tumult on Wall Street, but for now, the president continuing to go after Jay Powell all for telling a tumultuous road ahead.

BROWN: All right. Kevin Liptak, thank you. Wolf?

BLITZER: Happening now, Defense Secretary Pete Hegseth is defending himself in another controversy involving his use of a commercial app to discuss very detailed plans about a military operation in Yemen. Sources telling CNN that this second group chat on Signal included Hegseth's wife, lawyer, and brother. President Trump is publicly standing by his Pentagon chief, at least for now, despite growing bipartisan concern,

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SEN. MARK WARNER (D-VA): It is way past time that Hegseth should either quit or be fired.

REP. CARLOS GIMENEZ (R-FL): If in fact he did discuss what's called top secret or things that only need to be discussed inside a SCIF with his wife, if she doesn't have that kind of security briefing, yes, it would concern me.

LEON PANETTA, FORMER DEFENSE SECRETARY: These are attack plans. These are attack plans. You've got targets, you've got weapons, you've got timing for when this attack is going to take place. Make no mistake about it, we are talking about top secret information when you're about attack plans.

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BLITZER: All right. Let's go to CNN Correspondent Natasha Bertrand. She's over at the Pentagon for us.

Natasha, Hegseth is putting the blame on everyone but himself.

NATASHA BERTRAND, CNN NATIONAL SECURITY CORRESPONDENT: He remains extremely defiant even this morning, Wolf, when he gave an interview to Fox and Friends just moments ago, where he tried to say that the Signal chat that was set up that included his wife, his brother, and his personal lawyer, was more about coordinating media interactions and coordinating talking points essentially. But that does not square with what we have been told with sources, which is that that information he shared on that signal chat did include sensitive information about military plans against the Houthis.

Now, he is also trying to place the blame on three former officials who were fired last week, two of whom are very close to Secretary Hegseth, that he says are leaking to try to undermine him. Here's what he said.

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PETE HEGSETH, DEFENSE SECRETARY: Dismiss people who you believe are leaking classified information. And, again, the investigation is ongoing and that will take time. And when the evidence is produced, it will go to DOJ. Why would it surprise anybody, Brian, if those very same people keep leaking to the very same reporters whatever information they think they can have to try to sabotage the agenda of the president or the secretary? So, once a leaker, always a leaker.

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BERTRAND: Now, we should note that one of those officials, Dan Caldwell, who was until last week at Secretary Hegseth's senior adviser and longtime associate has denied categorically leaking any classified information. In fact, he said that he and the other two officials were never given polygraph tests and that until the very day that he was marched out of the Pentagon last week, he was having access to highly classified information.

And so Secretary Hegseth clearly trying to place the blame here on these former officials, but still unclear why he would feel the need to share that information on a Signal chat with his close associates, including his own wife. Wolf?

BLITZER: All right. Natasha Bertrand over at the Pentagon for us, Natasha, thank you very much. Pamela?

BROWN: Clearly blaming everyone but himself on that note.

Happening today, the ACLU taking on the Trump administration for using the centuries' old Alien Enemies Act to deport alleged Venezuelan gang members. A federal court will hear arguments later today. And this comes as the civil rights group is claiming that the White House was failing to comply with the Supreme Court order to let detainees challenge their deportations to a mega prison in El Salvador.

CNN's Priscilla Alvarez joins us now. So, what are the chances today's hearing will deliver another setback to President Trump's deportation plans?

PRISCILLA ALVAREZ, CNN CORRESPONDENT: Well, today's hearing is going to be about the oral argument. So, it's unlikely that we will get an order from the judge, particularly because this issue is also sitting with the Supreme Court right now.

And a reminder to viewers, the Supreme Court did allow the administration to use the Alien Enemies Act, that sweeping wartime authority, only used three times, all during major conflicts, to more quickly remove migrants from the United States.

Now, what the Supreme Court also said, however, is that there needs to be some level of due process. That was one of the major concerns in March when the administration swept up those Venezuelan migrants and sent them to El Salvador was that it happened really so quickly that they didn't have a chance to contest it. So, the Supreme Court is saying, well, we need to give them reasonable time.

The question, however, has been, what does reasonable time mean?

[10:10:03] And we have seen these lawsuits sort of pop up across the country to try to block these deportations before they can happen because of the fear that they will happen so quickly. And just to get to where the Supreme Court is, which is separate from this case in New York, the Supreme Court now has briefs from the ACLU and from the administration about the use of this act. And I've been speaking to some of the attorneys in Texas where this all originated. And they tell me, look, their clients got a notice in English, some of them don't speak English, saying that they were going to be deported under the Alien Enemies Act. And then within 12 hours, maybe 24 hours, they'd be deported.

Well, the argument here is that can't be enough time. The ACLU is saying that can't -- the Supreme Court didn't say that reasonable time is 24 hours. We need more than that. And so all of this is going to boil down to what does the Supreme Court mean when it says that these migrants need due process. That is something likely to come up in the hearing in New York. It's something that is before the Supreme Court. But as you can tell, this is quite dizzying. There are a lot of different cases because there's such deep concern and distrust with the administration and their willingness to deport people very quickly to a mega prison at El Salvador.

BROWN: I want to follow up on, on another case. That's Mahmoud Khalil, the Columbia University student who has been detained in Louisiana. He was barred from attending the birth of his child yesterday. Do you know why officials denied that request?

AVLAREZ: So, the Immigration and Customs Enforcement official who denied it simply denied it. There was no explanation. It was -- the ask by his attorneys was for two weeks furlough, so to be released for two weeks, and they said that they would agree to conditions, be it a GPS ankle monitor or scheduled check-ins. But, ultimately, Immigration and Customs Enforcement decided not to grant that furlough, meaning that he remains detained in a detention center in Louisiana.

Now, his wife did put out a statement saying, quote, my son and I should not be navigating his first days on Earth without Mahmoud. She goes on to say that she is going to fight every day and that he will ultimately teach his son bravery, there it is, brave, thoughtful, and compassionate, just like his dad.

Now, the attorneys are still challenging this case, the legality of his detention and pushing for his release, but that remains to be seen. In the meantime, however, he was not there for the presence of his son's birth.

BROWN: All right. Thank you so much, Priscilla Alvarez.

And up next, a new federal health alert, the Trump administration planning to ban artificial food dyes. After the break, I'll speak to a former FDA commissioner,

BLITZER: And later, an unlikely friendship. Rosie O'Donnell will tell us how she connected with one of the Menendez brothers.

Stay with us. You're in The Situation Room.

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BLITZER: We're continuing to follow the fallout from the death of Pope Francis. CNN's Ben Weedman right now has a closer look at the various contenders for the next pope.

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BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice over): One of the top candidates to succeed Francis is the man who served as his second in command, the current Vatican secretary of state, Cardinal Pietro Parolin.

From visiting war-torn Ukraine to brokering a deal that saw the Holy Sea meant ties with China. The 70-year-old Italian is seen as a skilled diplomat and a conciliatory figure who could appeal to both conservatives and progressives.

His election, however, could lead to clashes with the Trump administration as he has rebuked the U.S. president's Gaza Plan.

Another top contender is Cardinal Fridolin Ambongo Besungu of the Democratic Republic of Congo. A strong defender of democracy and human rights, Ambongo has been cardinal since 2019.

UNIDENTIFIED FEMALE: I am happy. I'm aware of the responsibility this appointment brings.

WEDEMAN: That responsibility has seen him stand up to warlords and corrupt leaders becoming a respected moral voice. The 65-year-old is also the leader of a massive local church of more than 7 million people and represents the growing church in Africa.

A surprise candidate may be Cardinal Robert Prevost from the United States. America's global influence has made electors shy away from choosing a U.S. pope in the past, but the 69-year-old from Chicago spent many years working in Peru before leading the powerful Vatican office for bishop appointments, and he shouldn't be ruled out.

The top contender though may hail from one of the corners of the globe where the church has been growing and few Cardinals are as charismatic as Luis Antonio Tagle from the Philippines, often dubbed the Asian Francis.

UNIDENTIFIED MALE: We believe that Jesus is alive and he was born in the minister, he died and rose from the dead in Asia,

WEDEMAN: The 67-year-old led the church's charitable arm as well as the Vatican Department of Evangelization. And he may be well- positioned as the church pivots towards parts of the world where it's expanding.

Still, it's impossible to say which, if any of these candidates will be chosen. If there's anything we can glean from past conclaves, it's that, usually, the favorites don't get picked.

Ben Wedeman, CNN, Rome.

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BLITZER: And a special thanks to Ben for that report. Pamela?

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BROWN: All right. Up next, an unbreakable bond, we're going to speak to Rosie O'Donnell about how a service dog has forever changed her son's life and how a Menendez brother helped bring them together.

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BROWN: It has been quite the year for Rosie O'Donnell. The actress, comedian, and longtime Trump critic moved to Ireland in January. That's the same month that he returned to the White House.

O'Donnell and her youngest child, Clay, who has autism, are navigating their new lives in Dublin, and they're doing it with the help of Clay's service dog, Kuma.

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They say the pooch changed their lives.

The idea to adopt Kuma started at a surprising place, O'Donnell's friendship with convicted murderer Lyle Menendez. And now she's out with a new documentary about her experience. Take a look.

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UNIDENTIFIED MALE: Are you ready to meet him?

UNIDENTIFIED FEMALE: I just feel like I can breathe.

UNIDENTIFIED FEMALE: He's dreaming big. He wants to go to college. The sky's the limit for Logan.

ROSIE O'DONNELL, COMEDIENNE AND ACTRESS: I put my hands on our ears and I said, we're going to save my kid, you and me. You got it, doggy?

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BLITZER: Rosie O'Donnell joins us now from Dublin. Rosie, thanks so much for joining us. As you know, some people entertained the idea of moving abroad after the 2024 election. You actually did it. Tell us about your experience so far, and do you have any regrets?

O'DONNELL: I have no regrets. Not a day has gone by that I thought it was the wrong decision. I was welcomed with open arms. I knew after reading Project 2025 that if Trump got in, it was time for me and my non-binary child to leave the country.

And although I was not one of the celebrities who announced that that's what I would do, I made the decision within my family and my therapist, and should he win. And then when he did, we made the plan into action and we were gone before he was inaugurated.

BLITZER: You've been a long time critic of this Trump administration and a target of President Trump for that matter as well. What has it been like watching the last few months unfold from abroad?

O'DONNELL: It has been heartbreaking, I have to tell you. I knew that if I was in the United States and watched him destroy the country and the Constitution and really pay no mind to any of the laws that the founders stood by and that our country stands for as a beacon of shining light and freedom for the rest of the world, that should he do what the Heritage Foundation said he was going to do in that Project 2025, that we were going to be in big trouble. And it's as bad as they promised and even a little bit worse, and it's been heartbreaking and personally very, very sad to watch.

BROWN: I want to talk about your new documentary, Rosie, and it covers the relationship between your child and their service dog, Kuma, we just saw that clip. Tell us more about how this dog transformed your family's lives and what compelled you to share that message with the world.

O'DONNELL: Well, my child was diagnosed with autism when they were two years old, but by the time they were about eight, they were really regressing into themselves. They were isolating much more and they had no real desire to interact with anyone other than me.

And it was becoming a problem. They wouldn't go to restaurants. They wouldn't do anything with their friends at school. They had some friends at school, but they had no interest in having any time with their friends. They spent an inordinate amount of time online. And their drawings, which is one of their obsessions, were getting darker and scarier to me.

And I was trying to do everything I could to pull them back in. And I was at the end of my rope. I didn't really know what to do. We had many, many services and many support groups and many different kind of therapies, very privileged and lucky to be able to afford everything that was available at the time. But I had no idea that autism service dogs were part of a therapy for children, and that they had been so successful with many, many families. I had no idea until Lyle Menendez invited me to visit him in prison and the men who raised the dogs, the men serving life introduced me to the program. And I was blown away. I had no idea that they had service dogs for children under the age of 12 who had autism. And I found out about it and I researched it. And I met Russ, the man who runs Guide Dogs of America there in Los Angeles, and he said, why don't you come and find out.

Now, I was initially afraid. My child maybe wasn't as deserving as, let's say, a non-verbal autistic child or someone, you know, who had different kinds of challenges, but they have a wonderful vetting process. They come to your house with a service dog. There's a very long, detailed application and from the teachers in the school and the therapists that you have. And once you pass their application process, it's available to all people for free. And that's what really made me want to announce it to the world, especially to our country, to let people know that if you do have a child and you are at your wit's end and you don't know what to do, this is a service that is for you, it's for free, and it is very, very successful, as it has been with my family.

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