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State of the Union

Interview With D.C. Delegate Eleanor Holmes Norton; Interview With Australian Prime Minister Anthony Albanese; Interview With Sen. Joe Manchin (D-WV); Interview With Sen. Pat Toomey (R-PA); Interview With U.S. Veterans Affairs Secretary Denis McDonough. Aired 9-10a ET

Aired July 31, 2022 - 09:00   ET




JAKE TAPPER, CNN HOST (voice-over): Breakthrough. Senator Joe Manchin shocks Washington, D.C., by striking a tax and climate deal with fellow Democrats.

JOE BIDEN, PRESIDENT OF THE UNITED STATES: The hard work pays off. History is made.

TAPPER: Will the bill help with inflation? And are Democrats actually on track to pass it? The man behind the deal, Democratic Senator Joe Manchin, will be here live. And Republican Senator Pat Toomey will join me to respond.

Plus: Vote for vets? Senior Senate Republicans spark outrage by stalling a bill to help veterans sickened by toxic burn pits.

JON STEWART, COMEDIAN/ACTIVIST: I'm used to the lies. I'm not used to the cruelty.

TAPPER: Can the bill pass this week? Veterans Secretary Denis McDonough will be here.

And the changing globe. Heat waves and natural disasters raise pressure to act on the climate crisis. But with some world leaders falling short, will it be too late? I will ask the new Australian prime minister, Anthony Albanese, about his ambitious plan in his exclusive first U.S. interview ahead.


TAPPER: Hello. I'm Jake Tapper in Washington, where the state of our union is wondering if political tides may be turning.

President Biden is back in isolation this morning after testing positive with a rebound case of COVID after being treated with Paxlovid, though his doctor says he no longer has any symptoms.

This time, Biden does have some good news to mull over, first, the bipartisan passage of a bill to boost competition with China on the manufacturing of semiconductors, and, second, a sudden possible deal in Congress on a massive plan to begin to tackle the climate crisis, high drug prices, and address big companies that avoid taxes.

The breakthrough, after more than a year of negotiations between Democratic Senator Joe Manchin and Senate Majority Leader Chuck Schumer, took almost everyone in Washington by surprise. The plan would invest $369 billion into energy and the climate, allow Medicare to negotiate drug prices, extend Obamacare subsidies, and aim to close a loophole for tax-dodging corporations that report more than a billion dollars in profit.

But, with 100 days until the midterms, will the successes come in time for Democrats to sway any voters before November? And will Democrats on the Hill be able to get the bill to President Biden's desk?

Democratic Senator Joe Manchin of West Virginia joins us now to discuss.

Senator, thanks so much for joining us.

So, 16 days ago, you said you wanted to...

SEN. JOE MANCHIN (D-WV): Thanks for having me, Jake.

TAPPER: You said -- 16 days ago, you said you wanted to wait to pass any major legislation because of what you called an alarming new 9.1 percent inflation rate.

Inflation has not gone down in those 16 days. What changed your mind?

MANCHIN: Well, Jake, basically what changed our mind, Chuck, we reengaged.

I -- to Chuck's credit, we started sitting down. Our staffs kept talking through. I never did walk away. But we reorganized the bill, if you will, because what we had before that, there were things in there that I considered and thought it could be considered to be inflammatory.

And I didn't want that to happen. Inflation is the greatest -- is the greatest challenge we have in our country right now and around -- in my state and around the country. So, that's what we're fighting.

And we started talking again. We got the bill down to where there's nothing inflammatory in this bill, even though there's some naysayers. I'm sure you are going to always hear that. But there is nothing in that.

We're paying down debt $300 billion. We're increasing production, as far as, if you want to get the gasoline prices down, produce more energy and produce it here in America. That's what we're doing. And we're investing in the technologies for the future energy.

So we're doing everything to bring manufacturing back, keep people working. And I think it's a great piece of legislation. And in normal times, my Republican colleagues would be for something such as this.


We have basically pay down debt, is what they want. We have accelerated permitting, which is what they want. And we have increased production of energy, which is what they want. We have done things that we should be doing together.


Since you announced your deal, new GDP numbers obviously are sparking fears of a recession. There's a Penn Wharton analysis that found that your bill -- quote -- "would vary slightly increase inflation until 2024 and decrease inflation thereafter" -- unquote.

Senate Republicans also released a new Joint Committee on Taxation analysis yesterday showing that, in the short term, your bill would actually result in a small increase in federal taxes for Americans, like I said, short term.


But, still, what evidence do you have that this bill will reduce inflation and will not increase taxes?

MANCHIN: Chuck, first of all, I respectfully disagree with the people from Penn Wharton. They have been -- they're wonderful people. We have worked with them tremendously. We just have a disagreement on this.

But there were 17 Nobel laureates who said that inflation was going to be discretionary, it wasn't going to happen, OK, it wasn't going to be -- it wasn't going to be permanent. Well, we found that they were wrong. And people can be wrong.

But how in the world can it be inflammatory? How can it add flames to the inflation fires right now if you're paying down debt, you're increasing more production from fossil industry in energy, and we're doing it cleaner anywhere in the world? We will be energy-independent.

We're making our batteries for our cars to be here made in America before you get any credits whatsoever. We're doing everything we can to make sure that we attack the problem. And these are solutions to the problems we have.

So I know everyone's playing politics with it. This is not a green deal. It's not a Republican deal. It's not a Democrat deal. It is a red, white and blue deal. And this is what the American people want, solutions and a balanced energy approach.

TAPPER: I know there are individuals like former Treasury secretary Larry Summers who say they do not think this is going to be inflammatory, they do not think it's going to cause inflation.

But do you have evidence? Are there studies about this bill that say that it will not cause inflation to go up?

MANCHIN: We looked at everything humanly possible and had every one cross-sectioning this.

But, basically, what we did is, we said, OK, the tax rate was 35 percent in 2017, Chuck.


MANCHIN: It went to 21 percent, a 14 percent reduction, Jake. I'm sorry.


TAPPER: No problem.

MANCHIN: It went to 14 percent, Jake.

I know he's your friend.

Fourteen percent reduction. And everyone thought, well, that's tremendous. They were tickled to death at 21 percent, OK? Well, they got to 21 percent. And we -- I never knew there were people basically not paying any taxes.

Most of the people in West Virginia, all corporations, pay at least 21 or more and around the country. So don't you think they ought at least pay the 15 percent minimum, when we already gave them a 14 percent reduction? That's all we have talked about. So we never raised any taxes. We're just saying, close the loopholes and collect the taxes that are owed to the Treasury and the United States people.

That's all we're trying to do. And we didn't do it. So we're not adding there. We're not putting a burden on any taxpayers whatsoever. And we're going to create more energy for them to pay lower prices at the gas pump, hopefully lower prices at the food store, and lower prices basically in all of their -- in all their daily needs, energy prices especially.


MANCHIN: And energy is the driving force right now in inflation.

TAPPER: So you need all 50 Democratic senators to pass the bill.

Senator Kyrsten Sinema, Democrat of Arizona, still has not said anything publicly about this plan. We know that she has previously opposed closing the so-called carried interest loophole that, for instance, allows hedge fund managers and private equity investors to pay tax rates of 15 percent, instead of higher.

When's the last time you spoke with Senator Sinema? And are you open to any changes that she might suggest?

MANCHIN: First of all, Senator Sinema's my dear friend. We work very close together on so many things.

And she has so much in this piece of legislation. She's formed quite a bit of it and worked on it very hard. And, with that, she's brought down drug prices. She's been very instrumental in letting Medicare go ahead and negotiate for lower drug prices, save $288 billion, brings the price down of drugs.

And it's going to be a tremendous help to people across America. And I agree with her 100 percent we're not going to raise taxes, and we don't. And, on that, I think that, basically, when she looks at the bill and sees the whole spectrum of what we're doing and all of the energy we're bringing in all of the reduction of prices and fighting inflation by bringing prices down, by having more energy, hopefully, she will be positive about it.

But she will make her decision. And I respect that.

TAPPER: When did you last to speak with her? And are you confident she will be on board?

MANCHIN: Well, we speak -- I speak with everybody, as you know, and we have always been very friendly. And we speak a lot. And you see us on the floor and everything.

Jake, the reason people weren't brought into this, I didn't think it would come to fruition. I didn't want to disappoint people again. They were all disappointed. Everyone was upset and Matt in my delegation, if you will. For eight months, we worked on it. I couldn't get there with Build Back Better.

It was $3.5 trillion of spending. And this is taking $3.5 trillion dollars of spending down to $400 billion of investment that's definitely going to make a difference in America and everybody's pocketbook. And that's fighting inflation. That's what we're doing.

So, with that, I didn't want to build anyone -- anticipation up. And then they come down and up and down, like a yo-yo with the -- with all the drama that goes into this. So, I just basically hunkered down with my staff. We have been doing this for -- since April and May diligently.

And then we thought it fell apart a couple of weeks ago. We came back, to Chuck's credit. Let's start talking some more.


MANCHIN: We did to see if we could scale this thing to where we could basically put it in a position we have it today, which I think is great, a great opportunity.


It's not a Democrat bill. It's not a Republican bill. It's definitely not a green bill. This is a red, white and blue bill. And it's great for America.

TAPPER: The Senate leaves for August recess at the end of this week. That's the schedule anyway. Will you have passed this legislation before you go back home to West Virginia? MANCHIN: I sure hope so. I think that's been the plan. I didn't --

when it came, I was -- when it came all to fruition, and Monday, this past Monday, and I was -- tested positive on Monday morning.

So I was kind of confined up and everything. But we were working daily, day and night. The staff was working. Everyone was interacting, and things started coming together. And, by Wednesday, we had text that we all agreed on. The president agreed on it. And so did Nancy Pelosi agreed on it, and Chuck Schumer and I agreed on it.

So we had an agreement for something we have worked on for a long time. And I think that's what it's all about.

TAPPER: If it passes, this bill is poised to be one of the biggest achievements of the Biden presidency.

What role did President Biden play in these negotiations? Does he deserve any credit for this bill?

MANCHIN: Oh, absolutely.

Jake, let me tell, you don't do anything of this size and magnitude. And this is changing. It changes the whole energy production we have in our country. It changes the investment portfolio for the energy of the future. It creates jobs back here, because we give incentives. We didn't send a check to anybody. We gave them incentives to earn it.

And that's the bottom line with investments. But you don't do a bill this magnitude and this size without the president knowing what's going on, the president being involved in, to a certain extent, but also giving approval. And that's what President Biden did.

And I'm forever grateful that we have an agreement and a piece of legislation that is going to be really, I think, changing the whole landscape of America.

TAPPER: As you know, in the last couple of years, you have faced a lot of criticism, public and private, from your fellow Democrat.

Senator Sanders said you didn't have the guts to stand up to special interests. Congresswoman Jayapal said you betrayed your commitment to Democrats. She said you weren't a man of your word. After all that, how does it feel that he Democrats are now running to embrace this legislation?

MANCHIN: Jake, I take none of that personally at all. I understand the frustrations they had and everything.

But I don't look at it as politics. I didn't look at as a Democrat or I had an obligation, responsibility because I have a D by my name. And I show don't look at my Republican friends and colleagues that that's my enemy. They're my friends.

We're all Americans. Can't we put our country first? That's what I have always said. So I'm not going to make deals and I'm not going to make negotiations and I'm not going to vote because it helps one party over the other party or it's good for the next election.

This is good for America. This is what this is all about. And that's what I care about.

TAPPER: President Biden says he plans to run for reelection in 2024. You have not yet committed to supporting him in 2024. Do you think President Biden deserves a second term?

MANCHIN: Jake, I'm not getting involved in any election right now, 2022, 2024. I'm not speculating on it. President Biden is my president right now. I'm going to work with him and his administration, to the best of my ability, to help the people in my state of West Virginia and this country.

And we have agreements. We have respectful agreements, but we respect each other, and we work through them. So, this is what people are upset about. Everything's about the next election. This is about today's inflation rates that's killing people. We have got to get the inflation rate down.

We have got to have an energy policy that works for America. And we're not going to raise taxes. But people should be paying their fair share, especially the largest corporations in America that have a billion dollars of value or greater. Can't they pay at least 15 percent, so that we can move forward and be the leader of the world and the superpower that we are?

TAPPER: Senator Joe Manchin, thank you so much. Appreciate your time today, sir.

MANCHIN: Thank you, Jake. It's always good to be with you.

TAPPER: What do Republicans think of this sweeping new legislation?

Republican Senator Pat Toomey from the great Commonwealth of Pennsylvania is here to give us his perspective. Plus, we're going to also talk to him about why he is working with other Republicans to block aid for veterans injured in burn pits. And we will get a reaction from the Veterans Affairs secretary.

All that is next.



TAPPER: Welcome back to STATE OF THE UNION. I'm Jake Tapper.

Republicans are venting.

They're claiming betrayal, after Democrats announced a major climate and tax deal hours after securing bipartisan passage of a bill to boost U.S. semiconductor production. But now Republicans have set up their own controversy, sparking outrage among veterans groups, after they stalled a bill that would help those sickened by exposure to burn pits while in Iraq and Afghanistan. Joining us now to give the Republicans' perspective on all of this is

Senator Pat Toomey of Pennsylvania.

Senator, I want to get to the PACT Act about veterans in a second, but, first, you just heard Senator Manchin argue that Republicans should be supporting his climate and tax bill because it would reduce inflation, boost energy production here at home, lower gas prices, increase revenue by closing a loophole, and help pay down the debt.

I'm guessing you don't see it that way, but what's your response?


SEN. PAT TOOMEY (R-PA): Well, Jake, thanks for having me.

Look, I like Joe Manchin very much. He and I have become friends over the years that we have served together in the Senate. But it really looks to me like Joe Manchin has been taken to the cleaners.

Look, this bill, the corporate tax increase is going to slow down growth, probably exacerbate a recession that we're probably already in. The prescription drug price controls are going to slow down the development of the next wave of lifesaving and life-enhancing medicines.

They're going to take this money and spend it on corporate welfare for green energy, subsidizing wealthy people buying Teslas, and, in a blatant political bailout, the Obamacare subsidies that they said would let -- they'd let expire this year are going to be continued for high-income Americans.

All of this adds up to doing nothing for our deficits. It's going to do nothing for climate change. And what does Joe get for this? He gets the promise that someday, in the future, they will pass some kind of legislation about energy infrastructure.

If they were serious about doing this, they'd put it in this bill. It's not going in this bill because they don't have Democrat votes for it. And, by the way, we haven't seen any text. We don't even know what it looks like.


So this is a disaster. This is going to make our recession worse. It's going to make inflation worse. It's not going to do any good. I'm really surprised that Joe agreed to this.

TAPPER: So, you just said a lot. Let me -- let me do these one at a time.


TAPPER: So, first of all, when you talk about corporate tax increase, what this bill would do was that, if there is a company that has a billion dollars or more in profit, it would require that that corporation, that company spend at least 15 percent of its profits in taxes.

Now, to the average American, who pays more than 15 percent, they might think that doesn't really sound like raising corporate taxes. That sounds like, the way Senator Manchin described it, closing a loophole.


TAPPER: Why are they wrong?

TOOMEY: So -- so, let me say why this is devastating, especially to American manufacturers, especially to the coal industry, why the Joint Tax Committee says half of this burden is going to be carried by the manufacturing sector.

So here's what happens. If a company makes a billion dollars, the income, that billion dollars, is calculated using our tax laws. And then they pay 21 percent on that.

Now, what we did in the 2017 tax reform, which helps for so much economic growth and investment, is, we said, if you take your profits and you invest them back in your company, if you buy more equipment, if you buy more machinery, if you build a new plant, if you do the kinds of things that allow you to grow and hire more workers, then we will allow you to treat that as the expense that it is in the year in which you incurred the expense, rather than take that expense in little bits over many years.

So, someone with that billion dollars in which they reinvest all of it, that doesn't count as income for that year. Now, according to the financial standard, the financial accounting, financial books, which is what Joe and this deal would rely on, they don't allow you to expense that investment you have made in your business.

They only allow you to take a small sliver of that as a deduction in the year in which you incurred it. And so you will have to pay 15 percent on that investment. Guess what? That makes that investment in American manufacturing much more expensive. It means there will be less of it.

We made this change, Jake, very consciously, predicting, correctly, as it turned out, that it would accelerate the investment in American manufacturing. The Democrats are going to blow that up.

TAPPER: So you said that this isn't going to do anything for climate change.

TOOMEY: Right.

TAPPER: But, at its heart, this bill would be the single biggest investment to combat the climate crisis in U.S. history. It's $369 billion in new tax credits, investments in clean energy manufacturing, efforts to curtail emissions.

We are seeing the results of the climate crisis all over the globe, a crisis the Republican Party has been denying the existence of for decades. Climate experts say this bill would have a real impact. Why don't you agree with that?

TOOMEY: No. No, well, not the -- not the IPCC, not the definitive source that folks use for the climate modeling.

And, Jake, it's not true that Republicans are denying that the climate is changing. The fact is, all of these gestures are not going to have an impact. Look at the IPCC's own climate model. According to them, if the United States of America went to zero carbon emission tomorrow, which is, from a carbon emission point of view, equivalent to America disappearing tomorrow, if that happened, then, in 2100, at the end of this century, the surface temperature of the planet would be three- tenths of one degree Fahrenheit cooler than it would otherwise be.


TOOMEY: Given that kind of scale, what is having a few more rich people buying Teslas going to do? It's going to do nothing.

What we need is a strong economy and the ability to find the innovation and the technology that will allow us on a massive commercial scale to take carbon dioxide out of the atmosphere.

But these gestures, they may feel good. They're not going to accomplish anything.

TAPPER: I think it's more than just allowing some rich people to buy Teslas.

But I do have this important issue that I know you want to talk about, which is, Republicans, led by you, this week blocked a bill expanding health care access for veterans who have been exposed to toxic burn pits.

There are veterans currently, right now, camped out on the Capitol steps, not to mention veterans all over the country, including ones I'm sure you have been hearing from in Pennsylvania, upset about this. And this delay has a real impact.

I want you to take a listen to this from Danielle Robinson this morning. Her husband, Sergeant 1st Class Heath Robinson, who the bill is named after, he died from lung cancer attributed to burn pit exposure. Here she is this morning talking about the cost of how long this is taking to get done.


DANIELLE ROBINSON, WIDOW OF SFC HEATH ROBINSON: We know a veteran who actually took his life because of the delay. He was denied from the VA, and he lost his private health insurance. He would qualify under this new bill.

Once he learned about the delay, he actually did take his own life, because he wanted to spare his family of losing their home.


TAPPER: Now, to be clear, she's talking about a previous delay, not the one you caused last week.

But what do you say to those who find it impossible to believe that, of all the multitrillions of dollars in our federal budget, this is where you and Republicans decided to take a stand?


TOOMEY: Here's what you need to keep in mind, Jake.

Here's what you need to keep in mind, Jake. First of all, this is the oldest trick in Washington. People take a sympathetic group of Americans -- and it could be children with an illness, it could be victims of crime, it could be veterans who've been exposed to toxic chemicals -- craft a bill to address their problems, and then sneak in something completely unrelated that they know could never pass on its own and dare Republicans to do anything about it, because they know they will unleash their allies in the media and maybe a pseudo- celebrity to make up false accusations to try to get us to just swallow what shouldn't be there.

That's what's happening here, Jake. My efforts, my Republican colleagues, my...

TAPPER: But this was in the bill that passed the Senate last month.

TOOMEY: Let me -- yes.

And we were promised that we'd have an opportunity to offer an amendment to change this. And then, of course, that was reneged on, so people hadn't had a chance to be socialized about this.

Let me be very clear. Republicans are not opposed to any of the substance of the PACT Act. The honest Republican -- my honest Democratic colleagues will fully acknowledge that my objection, and if I get my way, I get my change, it will not change by one penny any spending on any veterans program.

What I'm trying to do is change a government accounting methodology that is designed to allow our Democratic colleagues to go on an unrelated $400 billion spending spree that has nothing to do with veterans and that won't be in the veterans space.


TOOMEY: That's what I'm trying to do. They could have agreed to this a month ago, and this bill would sail through at any point in time.

Look, we can resolve this with an amendment vote.

TAPPER: Right.

TOOMEY: But some of the Democrats don't even want to have an amendment vote.

TAPPER: Well, Senate Majority Leader Chuck Schumer says that he's willing to give you a vote on your amendment. And I guess the question I have is, if you get that vote, your -- a

vote on your amendment, will you agree to vote for cloture, which, for our viewers, that's allowing the bill to come to the floor? In other words, we don't expect Senator Toomey will vote for this bill.

But will you vote for -- to allow a vote on the bill?

TOOMEY: Oh, well, let's -- well, first of all, let's be clear.

If my amendment passes, and we strip out this completely unrelated provision worth $400 billion, I will vote for the bill. So that's number one.

Look, cloture is not blocking the bill. The cloture vote means there can be no more amendment votes. I might have some colleagues who have a couple of amendment -- we have been allowed no amendment votes on the biggest change to the VA in I don't know how long.

So I think we ought to have a few votes. I want to have my amendment considered, because I think this is important. We could have done this a month ago, Jake. Now, Chairman Tester, I know he very much wants this bill to pass. I believe he and his staff are working in good faith with us to get to a resolution.

But there's some Democrats that simply want to say, no, you don't get to change anything. We don't have any more debate. We don't have amendments. We're just going to jam this through. So that's the source of the tension.

TAPPER: OK, but it's not enough for you to get a vote on your amendment. You want your Republican colleagues to get votes on their amendments also, is what I'm hearing.

TOOMEY: Well, look, it's not -- it's not only -- it's not only up to me, Jake.

I mean, I do think anybody who has an amendment ought to be able to get their amendment. That probably means two or three amendment votes. We could bang that out tomorrow night, literally...


TOOMEY: ... and then pass the bill with probably 85 votes.

TAPPER: So the top...

TOOMEY: We will see if our Democratic colleagues want to actually pass the bill.

TAPPER: The top Republican on the Senate Veterans Affairs committee, Senator Jerry Moran of Kansas, he says he thinks Republicans should pass this now and fix any problems that emerge later.

TOOMEY: Yes, except there's never an opportunity to fix the problems later. That's why they're not giving us the opportunity now. They know they can prevent us from fixing it later. TAPPER: So, one of the questions that I think people have about what

you're claiming is a budgetary gimmick is, the VA budgets will always remain subject to congressional oversight.

They can't just spend this money any way they want. And from -- what how I read this legislation, it says that this money has to be spent on health care for veterans who suffered exposure from toxic burned pits.


This is why they do this sort of thing, Jake, because it gets very deep in the weeds and very confusing for people very quickly. It's not really about veterans spending. It's about what category of government bookkeeping they put the veterans spending in.

My change, honest people acknowledge it will have no effect on the amount of money or the circumstances under which the money for veterans is being spent. But what I want to do is treat it for government accounting purposes the way we have always treated it for government accounting purposes, because, if we change it to the way that the Democrats want, it creates room in future budgets for $400 billion of totally unrelated extraneous spending on other matters.

That's what I want to prevent. We are spending way too much money to use -- to hide behind a veterans bill the opportunity to go on an unrelated $400 billion spending spree is wrong. And we shouldn't allow it.


TAPPER: All right, Senator Pat Toomey of Pennsylvania, thank you so much for your time.

Really appreciate it.

Here with me now to offer his perspective on the burn pits bill is the secretary of the Department of Veterans Affairs, Denis McDonough, who delivered pizza to the families fighting to pass this legislation yesterday.

You just heard Senator Toomey arguing that the way this bill is structured could open the door to unrelated spending abuses by the VA.

DENIS MCDONOUGH, U.S. SECRETARY OF VETERANS AFFAIRS: Jake, if you look in the bill for $400 billion that he's talking about, you won't see it.

You would have to go deep in some -- into some charts of the back of the CBO report about -- to find that. Why is that fund in the bill? The fund is in the bill so that we can ensure, as you suggested, that all the spending for this program is for the veterans exposed to these toxins.

And so he says it won't impact our programming. In good conscience, I don't see that to be the case. In fact, he puts a year-on-year cap on what we spend. And then, at the end of 10 years, the fund goes away under his amendment.

So the impact of that would be, if we -- if his estimations are wrong about what we will spend in any given year, that means that we may have to ration care for veterans.


MCDONOUGH: Because -- and, by the way, that's not something I will sign up to.

Let me just say one other thing about this, Jake, is, the estimates that he uses in his amendment to set these caps on what we can invest in people like I saw yesterday on the Capitol steps is the CBO. The CBO currently...

TAPPER: The Congressional Budget Office, which does nonpartisan analysis of these bills.

MCDONOUGH: Thank you.

The CBO suggested, for one program we're currently running, the MISSION Act, that we would be spending $14 billion a year less this year.

TAPPER: Right.


MCDONOUGH: So, they're $14 billion off. And that's just four years out from their initial investment.

He's asking us to take their word for it in eight or 10 years. I can't in good conscience do that, because the outcome of that will be rationing of care for vets, which is something I just can't sign up for.

TAPPER: Right. He wants caps on how much they're spending, so it doesn't become, I assume -- I'm putting words in his mouth -- but so this doesn't become another entitlement that just gets out of control. I guess that's what he's -- what he's driving at.

There are sick and dying veterans right now who need this help right now. When you started in this job, the law was different. There was not a presumption that if you were exposed to a burn pit...


TAPPER: ... and you had cancer, that you got it that way.

Senator Tester and Rubio and others have been working to change that. Should Democrats allow Toomey's proposed change so at least these veterans can get the care they need as soon as possible?

MCDONOUGH: This has been a number one priority for President Biden.

So, you're right that the existing law is different. Notwithstanding that, the president has already established presumptive conditions, that is to say, taking the burden of proof off the veteran for veterans who have 12 different conditions as a result of their service in Iraq and Afghanistan and other places like Uzbekistan, Somalia.

So the president is moving out smartly on this and aggressively. In terms of what happens in terms of amendments and everything else up there, I guess what I'd say is, these folks have waited long enough.


MCDONOUGH: Let's just get it done.

And, also, let's not be for a proposal that places artificial caps on year by year and then, functionally, at the end of those 10 years, makes this fund go away. Let's not sign up to that, because, at the end of the day, the risk of that is going to be rationing of care to veterans.

TAPPER: Is the bill going to -- we're told Schumer is going to bring it up again.

He's offered Toomey an opportunity to vote on the amendment, although that doesn't sound like that's going to be enough for Senator Toomey. He wants more of an open amendment process.

Do you think that it will pass this time? Are there enough Republicans who voted for the bill in June, voted against it last week who are going to come back and vote for the bill? Like, Senator Daines might be example of somebody, as opposed to some of the folks who are lying about the bill, like Senator Cruz.


When you say for example, Jake, when you reference the vote in June, when 84 senators voted for it...

TAPPER: Right.

MCDONOUGH: ... there's been one change since then, just a single change related to something completely unrelated...

TAPPER: Right.

MCDONOUGH: ... to this issue that we're now -- they somehow insisted at the last minute here be debated.

So, if everybody does what they did before, this has 84 votes.


MCDONOUGH: So I think they should just get on with it, have the vote.

TAPPER: One separate matter, 24 Senate Democrats sent you a letter this week...


TAPPER: ... urging you to allow abortion services at veterans hospitals.

An analysis by the National Partnership for Women and Families found that nearly 400,000 female veterans of reproductive age live in states certain or likely to ban abortion. Will the VA take this measure and allow abortion services at VA hospitals even in states where abortion is banned?


MCDONOUGH: Thanks very much for the question.

There's three -- there are 300,000 women veterans of childbearing age who rely on us for their reproductive health care, for all their health care. We're going to make sure that they have access to the full slate of that care, because that's what we owe them.

TAPPER: In those states? Or are you going to pay to fly them to...

MCDONOUGH: We're looking expressly at these questions about how we guarantee the life and the health of our veteran -- our women veterans, those 300,000 who rely on us for their care.

I don't have any announcements to make on that this morning, Jake. But we're looking very closely at that to ensure that there's no diminution and no reduction of services to them and no risk to their -- to their lives as a result of these decisions.

TAPPER: Is your preference that it be at these -- at the VA hospitals in the states we're talking about?

MCDONOUGH: My preference is that those 300,000 women veterans -- and that's the fastest growing cohort of veterans that we have in our care, women veterans.

My preference is that they not face risks to their lives as a result of this decision from the court. We're going to make sure that we're in a position to take care of that.

TAPPER: All right, Secretary of the Department of Veterans Affairs Denis McDonough, thanks for being with us.

MCDONOUGH: Thanks very much.

TAPPER: We appreciate it.

Are some of the candidates handpicked by President Trump now struggling in the polls? We're going to take a look at those races and what they say about the state of the GOP.

That's next.




BIDEN: I know it can sometimes seem like nothing gets done in Washington. I know it never crosses any of your minds.

But the work of the government can be slow and frustrating, and sometimes even infuriating. Then the hard work of hours and days and months from people who refused to give up pays off.

History is made. Lives are changed.


TAPPER: When everything was looking down for President Biden, are things finally looking up?

I'm here with my panel.

Let me start with you, Congresswoman Eleanor Holmes Norton.

So, Biden had a pretty good week. He got the CHIPS bill done, CHIPS -- you want me to say an excellent week? He got the CHIPS bill done. Looks like there's a deal. Still, the GDP suffered losses. Possibly, we're in a recession. Economic pain is very real.

What do you hear from your constituents, your -- the Washingtonians that you represent?

DEL. ELEANOR HOLMES NORTON (D), WASHINGTON, D.C.: Well, I'm must tell you that we were looking down.

And then, all of a sudden, we're looking up, when you talk about the Affordable Care Act, with prescription -- Build Back Better, at least some version of it, and prescription -- prescription drug passage. And that coming near the end of the session, who would have predicted that?

So everybody is feeling very up, even, like, could we keep the House behind all of this, when we were set to lose it and lose it big? And now, frankly, it has closed.

TAPPER: David, you're not buying it.


DAVID URBAN, CNN POLITICAL COMMENTATOR: Listen, I -- you're a very nice woman, Congresswoman, but I think your optimism is misplaced.

People are -- you're kind of glossing over the fact that Gallup was out with a poll that has Joe Biden as the lowest-ranked president in the history of the Gallup poll. This isn't some partisan poll. This is Gallup. He is in the tank, right? There was -- I watched earlier on this network Manu was talking about a CNN poll; 85 percent of Americans feel we're -- we're not -- the economy is terrible, right. And quote another famous Democrat, it's the economy stupid, right? People -- gas prices, real Americans out in America driving on their holiday, taking their kids to summer camp still having to fill up.

Inflation -- Joe Manchin's adding to inflation. It is going to be a disaster for Democrats come this fall.

TAPPER: Let me just -- what are you hearing from people in Michigan?


People are looking at gas prices. They're pumping their tank and they're saying, this is really expensive. But there are two pieces here. Number one, they're saying, these guys keep pointing at the other guys and saying, well, it's your fault, without actually proposing any opportunity to do something about it.

And, by the way, this big effing deal of a deal, this is going to bring down energy prices on an average $500 a year for most folks. And people see that and say, that's great.

The other side of it is this. Your side is doing everything they can to kill that advantage, right? You have got this patriotism of convenience that we keep seeing. You send our young people out to war, and then you won't pay for their health care afterwards.

You have got Donald Trump, who blamed Saudi Arabia, blamed Saudi Arabia...

TAPPER: David served, so it's not...


EL-SAYED: Well, I appreciate your service, but this is the...


EL-SAYED: I appreciate your service, really, but this is the problem, right, is that politicians will send folks out, and then won't pay for their health care and, at the same time, at the same time -- last point I want to make here.


URBAN: You know that's not true.

ALYSSA FARAH GRIFFIN, CNN POLITICAL COMMENTATOR: Just real quick, I mean, Toomey -- Senator Toomey hit on this. I'm not going to belabor it.

But it was -- it's very clear most Republicans supported the veterans bill. It was a discretionary vs. mandatory holdup that is the gimmick we see in Washington.

I want to note something. This happens ahead of midterm cycles. Chuck Schumer has not actually committed to bringing marriage equality, codifying it into law up for a vote right now. Do you want to know why I think that is?

Because people like Ron Johnson, a vulnerable Wisconsin senator, is agreeing to vote for it. It could actually be a win for some of these Republicans who need a moderate win ahead of the midterms. It is so cynical how our politicians behave.

And one thing I just got to say real quick, while Biden did have this victory, we also are in a recession. By NEC Director Brian Deese's own definition, he said, in 2009, two straight quarters of negative economic growth is a recession.

So I hope they can name it. The bringing down inflation act and all good things, it doesn't mean it's actually going to do that. And we are in a recession, whether we call it that.


EL-SAYED: Alyssa, I want to jump on that point of cynicism, right, because you have got -- we can talk about Biden all we want, but the presumptive Republican nominee is Donald Trump.

He just hosted a golf tournament with folks he blamed for 9/11. You want to talk about cynicism? That seems to me to be pretty cynical.

FARAH GRIFFIN: Yes, I also think he engaged in some 9/11 denialism. So I'm with you on that. I'm hoping he's not the GOP front-runner.

And I would note this, by the way. He's the only person that loses to Biden head to head in the polling that we're seeing. But there are other candidates, there's Mike Pompeo, there's Mike Pence, there's Nikki Haley, who I think could be much more formidable.

TAPPER: Would you like Donald Trump to be the Republican nominee in 2024?

Would that...

NORTON: I would.

TAPPER: You would? You think it would make it easier?

NORTON: That kind of guarantees a win.

TAPPER: Really?

NORTON: I think it does.

TAPPER: You think so?

NORTON: Well, look at the polls. Who's going to put Trump back in power again, particularly after day after day there's something else that comes out that we didn't know about Trump, and not to mention the January 6 commission?


Meanwhile, listen to one House Democrat drawing a line in the sand when it comes to President Biden in 2024. Here's your colleague Minnesota Congressman Dean Phillips, a Democrat.


REP. DEAN PHILLIPS (D-MN): I have respect for Joe Biden. I think he's a man of decency, of good principle, of compassion of empathy, and of strength.

But to answer your question directly, which I know is quite rare, Chad, no, I don't. I think the country would be well-served by a new generation of compelling, well-prepared, dynamic Democrats to step up.


TAPPER: New generation, compelling, well-prepared Democratic...


URBAN: You got one right here.

TAPPER: Here he is. Here he is.


TAPPER: Do you -- do you think -- I mean, that's reflected in the polls, by the way. Congressman Phillips might be the only Democratic congressman saying it out loud, but most Democrats, according to polling, do not want Biden to be the nominee in 2024.

EL-SAYED: Look, Jake, it's been a really tough couple of years.

We're starting to see the medicine take, though, and things are starting to move in the right direction. I'm really interested to see what happens in '24, because you do have a crop of really dynamic Democrats who are running for seats. I want to see what we can do when we actually truly hold a trifecta, if that's possible. We will see what happens with the House.

But the other side of this...

TAPPER: You have had a trifecta for two years.


EL-SAYED: True, but, I mean, it's a trifecta, plus Joe Manchin, right?

The other piece of this that I think we have to remember is that it's not just about who is in power. It's also about who they serve in power.

I talk to young folks all the time. And there are a lot of things that the Biden administration could do right now to service young folks and really change the tide, whether it's canceling student loan debt, making sure that young people can get access to that first house, or taking on, as we talked about, the role that inflation is having on the earnings particularly of young people.

TAPPER: Last word?

URBAN: I just -- it's -- look, those are all nice things to say, but you can't -- your trifecta, right, can't pass those things, right?

EL-SAYED: Well, they're about to.

URBAN: Well, they're not going to.

This is -- yes, this is arguably not going to do much, but -- except perhaps throw gas on a fire in this...

EL-SAYED: Well, not gas, because it's green.

URBAN: Well, exactly.

TAPPER: What do you think?

FARAH GRIFFIN: Republicans are going to take back the House. It's going to be a smaller margin than it could have been, but I don't think there's a scenario where Democrats are going to win back the House in this environment,when you can't afford gas prices, you can't afford gas, you're putting things back on the grocery shelf, consumer costs are high.

And this bill is not going to do enough quickly enough to bring those down. That's -- at the end of the day...

URBAN: These are very top -- good headlines right?


URBAN: The PACT Act is a great headline,. All these things are great.

TAPPER: All right, thanks for being here. Really appreciate it.

Especially, Congresswoman, thanks for coming in.

How Australia's new prime minister is taking on the climate crisis. Plus, is Australia going to break away from the queen?

Prime Minister Anthony Albanese is here for an exclusive first U.S. interview. That's next.


[09:52:57] TAPPER: The death toll in Kentucky flooding is rising again this morning. The number now is 26 dead, as the effects of the climate crisis continue to wreak havoc around the world.

In Australia, the new prime minister has pledged to achieve net zero carbon emissions by 2050. But is the rest of the world on board?

Joining me now, the prime minister of Australia, Anthony Albanese.

Thank you so much for joining me.

The climate crisis is here. And I guess the question I have, by the time world leaders, including India and China and the United States, all get together and agree to do something significant, won't it be too late?

ANTHONY ALBANESE, AUSTRALIAN PRIME MINISTER: Well, I certainly hope not. And I'm very optimistic.

At the Madrid NATO summit, I had discussions with world leaders and also, of course, at the Quad leaders meeting. And I regard people as being very prepared to take much stronger action.

There's a greater recognition now as well that dealing with the challenge of climate change represents also an economic opportunity. We will see the greatest transformation that we have seen in our economy since the Industrial Revolution with the shift to clean energy.

And clean energy will, of course, see jobs being created at the same time, something that the Biden administration recognizes, something that our European friends certainly recognize as well.

TAPPER: Let's turn to national security, because China, as you know better than I, is increasingly flexing its military muscle in your part of the world.

A recent survey found that three-quarters of Australians believe that China could pose a military threat to your country within the next 20 years.

How are you preparing for that?

ALBANESE: Well, what we're preparing for is strengthening our alliances.

We want to have good relationships with China and cooperate where we can, but we will stand up for Australian values where we must. And that is my approach to the relationship with China. Clearly, it's changed in recent years.


Under Xi, China has become more forward-leaning, more aggressive in the region. We have strategic competition.

TAPPER: The CIA director, William Burns, recently said that it's not a question of if, but when and how China will try to invade Taiwan.

If China attacks Taiwan, would Australia defend Taiwan militarily?

ALBANESE: Look, we're not dealing with hypotheticals, as have Australian governments taken that position in the past.

Australia supports a one-China policy, but we also support the status quo when it comes to the issue of Taiwan, that people respect the existing structures which are there. I believe that clearly is in the interests of all parties.

And I have taken the view as well that it is not in the interests of peace and security to talk up those issues of potential conflict.

TAPPER: I want to get your outsider's perspective on some things going on here in the United States, especially the Congress' January 6 investigation.

I want you to take a listen to what one of the witnesses in the most recent hearing, a former Trump national security official, said about the impact of the insurrection on January 6 on America's standing in the world.


MATTHEW POTTINGER, FORMER U.S. DEPUTY NATIONAL SECURITY ADVISER: January 6 helped feed a perception that I think emboldens our adversaries.

I heard from a lot of friends in Europe, in Asia, allies, close friends, and supporters of the United States that they were concerned about the health of our democracy.


TAPPER: Are you concerned about the health of our democracy here in the United States?

ALBANESE: Democracy in the United States remains strong. The United States remains a beacon for the world in terms of democratic nations. I firmly believe that.

And whilst the assault on democracy that we saw on January 6 was of real concern to all those who hold democratic processes dear around the world, the fact that you're having an open and transparent process -- these hearings are being broadcast to the world -- indeed underlines, in my view, the strength of U.S. democracy, the strength of those institutions.

TAPPER: In 1996, after 35 Australians were killed in a mass shooting, your country's government took immediate action. You implemented a gun buyback. You banned semiautomatic rifles. You passed strict new gun regulations.

What has it been like to watch the United States struggle to address our all-too-frequent mass shootings and gun deaths from an outsider's perspective, especially given your country's experience?

ALBANESE: Well, every one of these tragedies is heartbreaking.

And every one of these tragedies keeps reinforcing, as an outsider, the fortunate position Australia's in of having these strong gun controls and the tragedy for the families affected by these crimes.

In Australia, we had a bipartisan response to the Port Arthur massacre, and we haven't had one since. And I would just say that people should look at our experience. It's up to the United States, as a sovereign nation, what direction it takes, of course, but the truth is that Australia's experience shows that less -- less guns, particularly less automatic weapons, the less crime occurs and the less tragedy occurs.

TAPPER: Before we go, and on speaking of sovereign nations, Queen Elizabeth celebrated her platinum jubilee last month.

At the time, you praised her leadership, but you also stressed that the relationship between the U.K. and Australia is now one of equals. You have previously voiced support for removing the queen as Australia's head of state and becoming a republic.

Now that you're prime minister, are you going to make that happen?

ALBANESE: Well, I do support a republic, but I -- that doesn't mean I don't respect the queen, who has presided over the commonwealth for 70 years. It's quite an extraordinary achievement.

Our priority this term is the recognition of First Nations people in our Constitution. Our history didn't begin in 1788 with the arrival of the British First Fleet. It goes back some 65,000 years with aboriginal and Torres Strait Islander people, the oldest continuous civilization on the planet.


It should be a source of great pride. And my priority is getting that constitutional change done first.

TAPPER: Prime Minister Albanese, thank you so much.

And, again, congratulations on your victory.

ALBANESE: Thanks very much, Jake. Good to be with you.

TAPPER: And thank you for spending your Sunday morning with us.

"FAREED ZAKARIA GPS" starts right now.