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Waltz Facing Lawmakers for First Time Since White House Ouster; Inflation Rebounds in June; Supreme Court Allows Mass Firings at Education Department to Proceed. Aired 10-10:30a ET

Aired July 15, 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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PAMELA BROWN, CNN ANCHOR: Happening now, from posting anti-Semitic rants, praising Hitler to landing a $200 million contract with the Defense Department, how Elon Musk's controversial A.I. chatbot, Grok, will be used to improve national security.

WOLF BLITZER, CNN ANCHOR: Underwater, divers were left stranded in subway stations were filled with water as flashfloods hammer parts of the northeast.

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. Right now up on Capitol Hill, the former National Security Adviser Mike Waltzs is facing his former Congressional colleagues for the first time since his ouster from the White House. He's seeking confirmation to become the next U.S. ambassador to the United Nations, but questions over his Signal gate scandal that led to his removal are certain to take center stage.

Let's go live right now to our Chief Congressional Correspondent Manu Raju up on Capitol Hill. What are we expecting from this hearing with the Senate Foreign Relations Committee?

MANU RAJU, CNN ANCHOR AND CHIEF CONGRESSIONAL CORRESPONDENT: Yes, we expect, well, that Senate Democrats in particular will be grilling Mike Waltz for this nomination to be the next U.S. ambassador to the United Nations on a number of issues. One in particular, dealing with the cuts that have been going forward on the State Department changes, on how foreign aid is being distributed by the United States and the impact that's happening for the United States and around the world. That's one big issue that the Democrats plan to press on.

But number two as well is about the controversy that occurred back in March when Mike Waltz created that unclassified chat group through the Signal app talking that later led to a discussion among top Trump administration officials about U.S.'s strikes against the Houthis and Yemen expect. A number of Democrats to press him on that matter.

But this is a Republican-led committee, Wolf, so expect a lot of defense for him as well. And Republicans so far are indicating that he is almost certain to get this job. But no question about it, Wolf, those controversies, the cuts that have come down the pike the president has pushed forward, the impact that it is having on the U.S. around the world, and China, criticism from the Democrats that this is leading to China, filling the gap for the United States used to fill, that will be a big focus for Democrats here along with the Signal controversy.

We'll see what he says as he entered the room. He didn't say much to reporters on his way in, but expect a lot of those questions to take shape in just a matter of moments when this hearing kicks off, Wolf.

BLITZER: All right. Manu Raju watching all of this unfold on Capitol Hill, Manu, thank you very much. Pamela?

BROWN: Also breaking this morning, Wolf, your money. Inflation rebounding in June as higher prices, including those from tariffs, are packing a bigger punch. This is the highest level of inflation in four months. The report also serving as a crucial point for Fed Chair Jerome Powell as he weighs the potential for rate cuts.

So, let's go live now to CNN Business and Politics Correspondent Vanessa Yurkevich in New York. What's going on here? What's costing us more, Vanessa?

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Yes, Pamela. Inflation heating up in the month of June. The numbers coming in as expected, but analysts were expecting a pickup in inflation, and that's exactly what we saw last month. You had inflation year-over- year rising to 2.7 percent on a monthly basis, rising 0.3 percent.

And there were a couple key categories that were leading the way in terms of why prices were rising. Number one, shelter, that was the biggest share of why prices rose in the month of June. That is the most that Americans usually pay every month, things like rent, for example. Also food at home, grocery store prices holding steady at 0.3 percent. And then gas prices, a really significant pickup after falling by 2.6 percent in the month of May, picking up by a whole percentage point in the month of June. We saw gas prices rise last month largely because of the conflict that was happening with Israel and Iran.

Categories also that we are paying close attention to because, Pamela, this report will not be explicit and say, yes, tariffs are causing prices to increase, but look at these categories on your screen. These are items that historically have been imported into the United States, furniture and apparel, up 0.4 percent, toys up 1.8 percent. 80 percent of all toys imported into the United States come from China, which is currently facing a 30 percent tariff.

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And then appliances, these are bigger ticket items that are largely imported, up 1.9 percent.

But we did see some prices falling on key categories that we saw Americans buying a lot of before the tariffs went into effect. Look at that, used vehicles and new vehicle falling in price because so much front loading was happening ahead of the tariffs. And then airline fairs, something to watch, down just slightly 0.1 percent, but that could be a sign that consumers are starting to pull back on travel.

Of course, this month of June is backwards-looking. This data is backwards-looking. Many analysts believe that we will really start to see the higher prices because of tariffs in July. And as you mentioned, Pamela, because of all of this, what will the Federal Reserve do in the next few weeks? According to many analysts that I've been speaking with this morning, it really takes the possibility of a rate cut off the table later this month because the Federal Reserve wants to make sure that inflation is not going to continue to accelerate before they cut rates. Remember, 2.7 percent is moving even farther away, Pamela, from the Federal Reserve's 2 percent target that they're trying to hit. Pamela?

BROWN: Yes, important context. Vanessa Yurkevich, thank you. Wolf?

BLITZER: All right, Pamela. This morning, the Trump administration can celebrate another key ruling from the U.S. Supreme Court. Justices have ruled that the president can proceed with his plan to dismantle the U.S. Department of Education with mass layoffs. About 1,400 employees were initially fired back in April before a lower court stepped in and paused the layoffs. Today, those employees are being told they'll be let go in just two weeks on August 1st.

Let's go live right now to our Chief Legal Affairs Correspondent Paula Reid. Paula, what is the basis of this ruling and what happens now?

PAULA REID, CNN CHIEF LEGAL AFFAIRS CORRESPONDENT: So, Wolf, going forward, the Trump administration can continue with its effort to really dismantle the Department of Education, starting with these firings while legal challenges continue to play out.

And I want to take a couple steps back and put this into context. In the early days of the Trump administration, some of the president's top advisers told me that they wanted to reshape the federal government. This is something he campaigned on. But they anticipated that a lot of their efforts would be met with resistance and lawsuits that this effort would be bogged down in the lower courts. But if they could just get these questions about executive power before that conservative supermajority, that they would win and be able to proceed with their plan, and this is exactly what we're seeing play out.

Because even though there are lingering legal questions and legal challenges about whether this is something that the president can do without Congress, if they can move ahead with these firings, I mean, they will achieve their goal of reshaping the federal government. People are not going to want to wait any longer than they already have to see a resolution here, a legal final answer. So, they will move likely to move on with their lives and try to get new jobs, and the government will be a largely reshaped here.

Now, I want to note that this was not a unanimous decision. The dissenting justices, the three liberals, they talked about how this is a separation of powers issue, and these are things that you need to do through Congress. They argued that the Department of Education was established through Congress, to do things required by Congress, so including support for special education, financial aid, and enforcement of civil rights laws.

Justice Sotomayor wrote, the majority is either willfully blind to the implications of its ruling or naive, but either way, the threat to our Constitution's separation of powers is grave.

BLITZER: Paula, just changing topics on an important issue, a number of Democrat-led states have now filed suit against the Trump administration demanding it to release the billions of dollars in public education money, what it has frozen, that money had been frozen. What can you tell us about this development?

REID: It's a great question, Wolf, because is it brings up a similar issue, which is the fact that Congress has required the Department of Education to disperse certain funds for programs. And here, we're talking about $7 billion in public education money specifically funds to help low income and immigrant students. So, this is just the latest clash between the states and this federal agency that is being completely reshaped.

And here specifically, the kinds of things that this money was meant for, we are talking about different programs that would help with, learning English, funding after-school care and summer programs, and the support for hiring and retention of teachers for low income areas.

So, it's interesting, this is a different manifestation of this same tension where the Trump administration wants to really reshape the Department of Education, but they face litigation over whether they can do that without Congress.

BLITZER: Paula Reid, thank you very, very much. Pamela?

BROWN: All right, Wolf, turning now to Grok, Grok for government. Elon Musk's artificial intelligence engine, Grok, just won a $200 million government contract, that despite what happened just last week when Grok posted an anti-Semitic rant praising Hitler.

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Let's go live now to CNN Tech Reporter Clare Duffy. Clare, walk us through the details of this deal.

CLARE DUFFY, CNN BUSINESS WRITER: Hi, Pamela. Yes. This is one of several contracts that the Department of Defense announced this week with A.I. companies. They are contracts worth $200 million each with Anthropic, Google, OpenAI, and Musk's X A.I. And these are to help the DOD develop new technology and really implement A.I. to address national security challenges.

This isn't totally a surprise. The government, the military has been increasingly looking at how it can adopt A.I. technology. Separately, just a few weeks ago, we saw a number of tech executives from companies like OpenAI, Meta and Palantir, sworn in as lieutenant colonels in the U.S. Army Reserves as part of this new executive innovation corps. And so this isn't a huge surprise, but it is interesting to see the companies that are involved here.

The DOD's chief digital and A.I. officer, Doug Mattie said, the adoption of A.I. is transforming the department's ability to support our war fighters and maintain strategic advantage over our adversaries. He said, leveraging this technology will accelerate the use of advanced A.I. as part of our joint mission essential tasks in our war fighting domain, as well as intelligence business and enterprise information systems.

And this comes, as you said, as Musk's X A.I. has introduced this new offering called Grok for government that will allow federal government agencies to purchase and build on its technology. But all of this is really striking in light of what we saw last week where Grok posted on X violent and anti-Semitic rhetoric. It praised Adolf Hitler and was forced, the company was forced to apologize for that and say it was rolling back a system update.

And I think that does raise questions about the safety practices and guardrails that X A.I. has implemented compared to some of those other big A.I. companies that are involved in this.

BROWN: Yes. And those questions are taking on more weight given the fact that now it will be used for national security purposes, right?

Clare Duffy, thank you so much. Wolf?

BLITZER: All right. New this morning, millions of people across the northeast remain under flood watches after some areas saw records- setting rainfall. The rain flooding New York City subways and overwhelming sewer systems. The city had its second wettest hour on record, with more than two inches of rain falling in just one hour last night, just before 8:00 P.M.

First responders in places like New Jersey had to make water rescues as floodwaters overtook roads trapping people in their cars.

Let's go live to our meteorologist, Derek Van Dam, right now. He has the latest. Derek?

DEREK VAN DAM, CNN METEOROLOGIST: Yes. Wolf, if you think that we've had a lot of flashflood events in the past couple of weeks, you're right. We're getting some new information to CNN. We've seen a record number of flashflood warnings issued by the National Weather Service year-to-date. That's really saying something about the context of how much flooding we have had to contend with.

And Somerset County, New Jersey, is just one of those examples. Here's some aerial footage. There were cars submerged in the floodwaters here, turning roadways into literal rivers. I mean, this just shows you the force. And, unfortunately, the devastation of the flash flooding, that is a fire station also taking on water as they were trying to conduct their swift water rescues.

Now, this is out of North Plainfield, New Jersey, and this car tried to drive around a flooded road. We know the National Weather Service slogan, turnaround, don't drown, there's a reason. The car stalled. Ultimately, it led to the car erupting into flames.

The flash flooding is basically coming to an end. The heaviest rainfall that we saw at the peak of rush hour last night has moved offshore. But we do have newly issued flood watches across parts of the Mid-Atlantic, including much of Virginia. We're going to take advantage of this very moist warm atmosphere across this region. And we'll see these thunderstorms bubble up.

And the difficult nature of these is that they are slow movers and they're efficient and effective rainfall producers, so flash flooding across the Mid-Atlantic. Wolf?

BLITZER: A very serious development. Derek Van Dam, thank you very much. Pamela?

BROWN: Too much flash flooding this summer all over the country.

And happening tonight, baseball's biggest stars will take the field in Atlanta for the 95th MLB All-Star game. However, history will be made thanks to new technology for calling balls and strikes.

BLITZER: Interesting. I want to go live to CNN's Coy Wire who joins us from the home of the Braves. Coy, a major focus in tonight's game isn't on a player or a coach or a manager, for that matter. It's not even human. So, what's going on?

COY WIRE, CNN SPORTS CORRESPONDENT: That's right. It should add some fun to the game, for sure. It's a huge technological leap here, introducing ABS, the Automated Ball Strike Challenge System for the first time at an All-Star game. No full-on robot umpires just yet, at least.

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Instead, Hawkeye Technology will track a pitch's trajectory and location. And if the home plate up makes a ball or strike, call that a batter, pitcher or catcher do not like, they can challenge the call by tapping their cap or helmet. Each team gets two challenges. If successful, the call's overturned, the team keeps its challenged. If not, they lose it. So, keep an eye out for players tapping their cap in the All-Star game tonight.

Now, last night we had the Home Run Derby and we saw some history. Seattle Mariners Catcher Cal Raleigh becoming the first catcher ever to win the Home Run Derby, showing everyone why he is leading the league with 38 home runs coming into the All-Star break.

He hit righty, then he switched up and hit left-handed and making it even sweeter. His dad, Todd, was his pitcher, his 15-year-old brother T was the catcher cheering him on after every swing. A million dollar prize and some cool swag for the man with perhaps the coolest nickname in all of sports, Cal Raleigh, AKA Big Dumper, yes, referring to his physique, particularly his backside, is given to him by former teammate. He and the team have embraced it and we ask Cal all about his now famous nickname. Listen to this.

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CAL RALEIGH, SEATTLE MARINERS CATCHER: I've always had a big butt and that's kind of been the, where it started, and then Jarred Kelenic, you know, tweeted something out, obviously, when I got called up. And Seattle fans, you got to give them credit, they kind of took it and ran with it when I started playing. Well, so it was a unique nickname, obviously not the one you would imagine, but it works. And as long as people like it, it's good with me.

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WIRE: Oh, they don't like it. They love it. Baby got back. The Mariners, they have Big Dumper jerseys in the team store. And on his bobblehead giveaway, let's just say the figure was bottom heavy. And he says that when fans asked him to sign it, they always want it done right there on the derriere.

It should be fun tonight at the All-Star game. Hope we brought some levity to you on this day of news. I'm going to go soak up some sun and sweat here. It's about 100-degree feels-like temps come game time.

BROWN: All right, as you should. And I love that he's taking it in stride. You kind of have a sense of humor.

BLITZER: You know, I wonder if that is the reason why he's so good with hitting home runs.

BROWN: Well, that's the theory.

BLITZER: Is there a connection.

BROWN: There's a theory, Wolf.

BLITZER: Coy, what's the connection?

BROWN: All right. Yes. What's the connection?

WIRE: He said that's where he gets all his power, apparently. So, yes, the rump has made history and he's made an even bigger name for himself here at MLB All-Star festivities.

BLITZER: Congratulations to him.

BROWN: All right. Yes, absolutely. Coy Wire, thank you so much.

BLITZER: And still ahead. MAGA at odds over the Jeffrey Epstein files. President Trump battling backlash as loyalty is put to the test.

BROWN: And not out yet, Andrew Cuomo back in the New York City mayor's race, but this time as an independent. What the third party shakeup could mean for November. You're in The Situation Room.

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[10:20:00] BLITZER: We are keeping an eye right now up on Capitol Hill, where the former national security adviser, Mike Waltz, is facing his former Congressional colleagues for the first time since his ouster from the White House. He's seeking confirmation to become the next U.S. ambassador to the United Nations. We'll bring you any new developments as this hearing goes on.

BROWN: Well, Wolf, Andrew Cuomo is refusing to throw in the towel in his bid to become New York City's next mayor.

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FMR. GOV. ANDREW CUOMO (D-NY): Only 13 percent of New Yorkers voted in the June primary. The general election is in November, and I am in it to win it.

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BROWN: Cuomo, the former governor of New York, announcing on social media that he'll remain in the race as a third party candidate, and this decision follows his surprising loss to Democratic Socialist Zohran Mamdani in the Democratic primary.

So, let's go live now to CNN's Gloria Pazmino in New York. Gloria, what is Cuomo's overall message here to voters despite having already lost the Democratic primary?

GLORIA PAZMINO, CNN CORRESPONDENT: Well, Pam, you heard it there, Cuomo making a point about the fact that only a small number of New York City's electorate actually cast their vote in that June Democratic primary. And so he is essentially hoping that he is going to appeal to more Democrats, moderate Democrats specifically, and perhaps even some Republicans who would consider voting for him in the general election.

Now, the big question here is what is Cuomo going to do differently in the next four months from now until November from what he did during his last campaign for the June Democratic primary. And there was a bit of acknowledgement in that campaign video that he released yesterday saying that he was sorry that he had disappointed his supporters.

I think in the next few weeks, we're going to see whether or not Cuomo actually gets out to New Yorkers, gets out on the streets a lot more. He said in the video that he would. And I think it was one of those things that really put the Mamdani and the Cuomo campaign in stark contrast, right? You had a candidate, Mamdani, who was really hitting the pavement every day and trying to connect with New Yorkers. And you had Cuomo who was doing a bit more of a traditional campaign, speaking to churches on Sundays, coming out on the weekends. He acknowledged on primary night that Mamdani had run a more energetic campaign.

So, the question now will be, what happens between now and November? And remember, the incumbent, Mayor Eric Adams, is also in this race as an independent, and it's very likely that the two are actually going to split the vote.

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BROWN: That's a good point. Gloria Paznino, thank you.

BLITZER: And coming up, President Trump tells his base it's time to move on from Jeffrey Epstein as MAGA allies warn the White House of, quote, big blow back over its handling of this controversy.

We'll have more on that right after the break.

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BLITZER: New details emerging this morning in the MAGA meltdown upending Washington, as the White House looks to ease the outrage over Attorney General Pam Bondi's handling of the Jeffrey Epstein files. We're learning the president himself has privately urged his team to let the story die down.

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