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State of the Union

Interview With U.S. National Security Adviser Jake Sullivan; Interview With Council of Economic Advisers Chair Cecilia Rouse; Interview With Arizona Gubernatorial Candidate Kari Lake; Interview With Colorado Senatorial Candidate Joe O'Dea; Interview With Arizona Secretary of State Katie Hobbs; Interview With Sen. Michael Bennet (D- CO). Aired 9-10a ET

Aired October 16, 2022 - 09:00   ET




DANA BASH, CNN HOST (voice-over): Prices surge. More bad news on inflation just weeks from Election Day.

JOE BIDEN, PRESIDENT OF THE UNITED STATES: Folks are still struggling. We can't kid ourselves about that.

BASH: How long will prices stay high? And will voters trust the president to fix it? White House economic adviser Cecilia Rouse is next.

And midterm match-ups. As voters start to cast their ballots, we will look at two key contests, Arizona governor's race, with Republican Kari Lake...

KARI LAKE (R), ARIZONA GUBERNATORIAL CANDIDATE: Thank you so much, President Trump.

BASH: ... and Democratic Katie Hobbs.

KATIE HOBBS (D), ARIZONA GUBERNATORIAL CANDIDATE: I'm proud of the work we did in 2020.

BASH: And, as Biden makes a swing out West...

BIDEN: I love being in Colorado.

BASH: ... we will talk to that state's Democratic Senator Michael Bennet and his challenger, Republican businessman Joe O'Dea.

Plus: simmering crises. President Biden debates how to punish one global power and keep another from deadly escalation. The threats and the U.S. response with National Security Adviser Jake Sullivan.


BASH: Hello. I'm Dana Bash in Washington, where the state of our union is wondering what the country will look like in 23 days. As we count down to the midterm elections, the president of the United

States faces twin challenges. Gloomy new data points shows inflation is still running unchecked, despite attempts by the Fed to cool it down. The cost at the kitchen table is way up, fueled in part by the cost of war and clashes with unpredictable global powers.

The economic and foreign policy chaos part of what's driving dramatic uncertainty ahead of next month's elections. Today, a special focus on the midterms. We will have interviews with the candidates in two critical battleground races, one with tremendous consequences for the country, Arizona, where Democrat Katie Hobbs is running against Republican Kari Lake for governor, and then to Colorado, where Republican Joe O'Dea is testing whether a Republican who distances himself from former President Trump could win a purple state.

O'Dea and incumbent Democratic Senator Michael Bennet will be here.

But, first, today, we start with the Biden administration and the issue voters say over and over is their top concern, the economy.

Here with me now is White House economic adviser Cecilia Rouse.

Thank you so much for joining me.

I want to start with what President Biden said on Friday, that his administration has made some progress on reining in inflation. But annual inflation in September was 8.2 percent. It barely changed from the month before. How is that progress?

CECILIA ROUSE, CHAIR, COUNCIL OF ECONOMIC ADVISERS: So, I very much appreciate the question.

And the -- inflation is very much the president's top concern. It's my top concern. I completely understand how that's a big challenge for many families, for all families here in the United States.

So what we can see in economic data is, the Fed is focused on bringing down inflation. And the big concern is, can they bring down inflation while maintaining a robust economy, labor market? And we are starting to see signs that the actions they are taking is having an effect.

For example, we love having a very strong labor market, but it's been very, very strong. Employers are having a very hard time finding workers. But we saw in some data last month that workers -- that employers are posting fewer job vacancies, which means that there's a little bit of easing in the labor market, without having any layoffs.

We can also see that the housing market is beginning to cool. And we know that housing prices is part of the challenge for families. It's part of our inflation challenge. We know that excess savings are starting to be spent.

So, we're starting to see signs that our red-hot economy is starting to cool. And so we know that, because of that strength, we're in -- we're better positioned than most other countries for the Fed achieve its goals. (CROSSTALK)

BASH: I want to show you and our viewers some of the other data points that they deal with every single day.

The price of eggs has gone up more than 30 percent. Gas, chicken, coffee, milk, bread have all gone up significantly. These are real kitchen table issues for Americans.


ROUSE: Absolutely.

And the price of food is part of our inflation challenge. And, again, we are focused on it to the best of our abilities. But part of the challenge for food is actually through energy. And so Putin's war against Ukraine, where he has weaponized natural gas, he's weaponized energy, shows up in food prices as well, because energy is a big component of fertilizer.

We have been working to ease ports, which actually helps to ensure that farmers are able to export their products. And where they're not sitting on a lot of inventory, our Agriculture Department is doing what it can to try to increase supply and increase yields through programs such as helping farmers with double-cropping.

So there's no question that families are feeling the squeeze. It's why the president is focused on trying to bring down costs. The Inflation Reduction Act, while it doesn't directly speak to food, does go to medical care. It goes to energy costs. And so we are focused on trying to help families get through this.

BASH: Let me point to another data point that excludes food and energy, the so-called core inflation number.

President Biden touted that as a sign that the economy was improving. But now it is on the rise, 6.6 percent, the highest in 40 years. So, by President Biden's own logic, doesn't that show that the economy is actually headed in the wrong direction?

ROUSE: So, if one looks month on month, it was actually flat. So, again, a lot of the reason why core inflation increased was because of housing costs and medical costs.

The Inflation Reduction Act caps the cost of insulin for seniors at $35 a month. It allows Medicare to negotiate with pharmaceuticals, which will help bring down the cost of the most expensive drugs. It caps out-of-pocket expenses as well.

So, we are focused on trying to address medical care. And by extending the Affordable Care Act extensions, through -- for another few years, it provides accessible health care for so many people. So, we're focused on bringing down medical care costs.


BASH: You have mentioned the Inflation Reduction Act a few times.

ROUSE: And I would also point out that housing is...


BASH: Yes, I just -- I'm just curious and a lot of Americans are curious when the so-called Inflation Reduction Act will really start to bring down inflation.

ROUSE: So, the -- many parts of the bill will start to take effect next year.

For example, there are tax credits for energy to help people weatherize their homes and also bring down other forms of energy costs. So, we are focused on helping to make that transition to clean energy in a way that brings down energy costs for families.

So, this is -- this is tough. There's no question about it. This is a challenge. What I will say is that this economy is stronger than almost every other economy, that the Federal Reserve is focused on bringing down inflation. This president is committed to doing fiscal policy that is complementary to the Federal Reserve's actions, so that we can get through this period just as quickly as possible.

BASH: Cecilia Rouse, thank you so much for joining me this morning.

ROUSE: Thank you.

BASH: I want to turn now to foreign policy and some serious global tests for the commander in chief.

Joining me now is the White House national security adviser, Jake Sullivan.

Thank you so much for coming on.

I want to start with Saudi Arabia.

President Biden said this week it is time to rethink the U.S. relationship with Saudi Arabia after they sided with Russia to reduce oil production.

One thing some of your fellow Democrats on Capitol Hill are pushing is halting future arms sales to Saudi Arabia. Can you give a reason why the U.S. would want to continue selling arms to Saudi Arabia right now?

JAKE SULLIVAN, U.S. NATIONAL SECURITY ADVISER: Well, first, Dana, thanks for having me on.

You're right. The president did say that he is going to reevaluate our relationship with Saudi Arabia, because they did side with Russia, against the interests of the American people. This is a relationship that got built over decades on a bipartisan basis.

And so the president isn't going to act precipitously. He's going to act methodically, strategically. And he's going to take his time to consult with members of both parties, and also to have an opportunity for Congress to return, so that he can sit with them in person and work through the options. Those options include...

BASH: Is halting arms sales on the table?

SULLIVAN: As I was just saying, those options include changes to our approach to security assistance to Saudi Arabia. But I'm not going to get ahead of the president.

What I will say is, there's nothing imminently moving now. So there is time for him to have those consultations to make decisions that are in the best interests of the American people. That's what he's going to do.

BASH: President Biden, as you know, faced criticism for his meeting with the Saudi crown prince, Mohammed bin Salman. That was in July.

Will President Biden meet with the crown prince again at the G20 summit next month?


SULLIVAN: He has no plans to meet with the crown prince at the G20 summit.

And he is focused, however, on making sure that, through every engagement that he has across the board, he's looking out for not just the U.S., but for our allies as well.

One of the things that he was able to achieve in that meeting in July was the historic opening of Saudis' airspace to Israeli commercial air traffic, the first step Saudi Arabia's ever taken on a path towards normalization with Israel, which we believe was a positive thing for him to be able to deliver for a strong partner of ours.

BASH: Let's turn to Russia.

President Biden says the Pentagon is working on possible responses to a Russian nuclear strike. One potential Russian action could be a so- called tactical nuclear weapon that could take out a small target, relatively small, like an airport, or maybe just detonate a nuclear weapon in the Black Sea.

Would you see either of those as less serious or as deploring -- deploying, rather, a nuclear weapon just as serious, no matter how big or where it is?

SULLIVAN: The use of a nuclear weapon on the battlefield in Ukraine is the use of a nuclear weapon on the battlefield in Ukraine, and we're not going to slice the salami.

BASH: Whether that's -- does that -- does that include just detonating it in the Black Sea?

SULLIVAN: Well, first, the Black Sea includes the ports of Odessa and other cities from which the Ukrainians are currently exporting grain to the world market.

So the notion that, somehow, there's differences in use here, I think, is a dangerous notion. From our perspective, we believe it is incumbent upon the United States, working with our NATO allies and partners and other responsible countries around the world, including the likes of China and India, to send a very clear and decisive message to Russia that they should not contemplate the use of nuclear weapons in this conflict.

BASH: In Iran, security officials are continuing to crack down on protesters. Former President Barack Obama was reflecting on similar protests in Iran during his presidency. That happened in 2009. And he said he regretted holding back some public support for protesters.

Listen to what he said.


BARACK OBAMA, FORMER PRESIDENT OF THE UNITED STATES: In retrospect, I think that was a mistake. Every time we see a flash, a glimmer of hope, of people longing for freedom, I think we have to point it out. We have to shine a spotlight on it. We have to express some solidarity about it.


BASH: Is the Biden administration doing everything you can to help the protesters in Iran?

SULLIVAN: We are taking a range of aggressive actions to try to support the protesters in Iran.

The first thing that we're doing is trying to hold accountable those brutal officials in the Iranian regime who are cracking down on protesters, killing protesters, beating protesters. We have sanctioned the morality -- the so-called morality police. We have sanctioned senior officials who have participated in the brutal crackdown and repression.

We have sanctioned the communications minister, who is responsible for trying to cut off the Internet from Iranians, communicating with one another. And then we have taken steps to try to make it easier for brave Iranians, the women and citizens of Iran standing up for their dignity, to be able to talk to one another and to be able to talk to the world.

We are always looking for more things that we can do. And, in fact, just this past week, I had the opportunity to meet with Iranian activists who are working from outside the country to support those who are working inside the country to hear their ideas for additional steps the United States can take.

We stand unequivocally, clearly, emphatically, and with principles and values on the side of the Iranian protesters, the women and citizens standing up for their freedom and their dignity. President Biden has spoken to this multiple times. And we will continue to do that day in, day out, just as I am doing here on your program now.

BASH: Jake Sullivan, the president's national security adviser, thank you for joining me this morning.

SULLIVAN: Thank you.

BASH: And it's one of the most consequential matchups in the country this fall, the race for governor of Arizona. The candidates are here. Republican Kari Lake and Democrat Katie Hobbs will join us next.

And does a Republican who distanced himself from Donald Trump have a chance in today's GOP? I will talk to both candidates in a closer- than-expected Senate race.



BASH: Welcome back to STATE OF THE UNION.

With little more than three weeks before Election Day, we're going to focus on two key midterm races and talk to the candidates on both sides who will help determine how the United States is run.

We're going to start in Arizona, where the battle for the governor's mansion is neck and neck. The contest is under way to lead there. It's one of the most critical states in the nation.

Both Democratic Secretary of State Katie Hobbs and the Republican nominee, former television broadcaster and fierce Trump ally Kari Lake, are joining me this morning.

Ms. Lake, I'm going to start with you. And I want to start on the question that everybody says is their top issue across the country. And that is the economy.

Inflation is still near its highest levels in four decades. In your capital city of Phoenix, it has the highest inflation in the entire country, 13 percent. So, if you are elected governor, what specifically would you do differently to fix that?

LAKE: Well, it's a tough issue because it originates, the problem does, out of Washington, D.C., but we still have to help our citizens here in Arizona.

And the people who are suffering really the most, I have learned, is the people who are nearing retirement or who are retired. I have talked to so many of them. And they say: Kari, I saved all my life. I did everything right. And my retirement savings has shriveled up by a third. I have lost a third of it since Joe Biden took office.

And so we're going to help in any way we can. And that's why I unveiled a plan last week to put a half-a-billion dollars back into the hardworking Arizonans' pockets by getting rid of our rental tax and our tax on groceries here in Arizona.


And this is not going to harm the cities. The general fund -- we're going to help them for the next five years with the general fund. And we're going to make sure that they have enough to get by. This is a growing Arizona. People want to move here. And our revenues are going up. And we have a surplus.

We need to hand some of that back over to the hardworking people. And we will.

BASH: Let's turn to another issue facing your state, and that is the influx of migrants at the Southern border.

A lot of these individuals are seeking asylum. They are fleeing political violence in countries like Guatemala and Honduras. Do you accept that the U.S. has a responsibility to accept those asylum seekers?

LAKE: Well, the vast majority of the people coming across don't really meet the criteria for asylum.

There's a lot of fraudulent asylum claims that are being made. I'm really concerned about the people of Arizona. We have had five million people come in, and we have had a million of them called got-aways. That means we're not even processing them. They want to avoid capture because they have criminal records.

We need to vet people coming into our country. We have a great legal immigration system, a very generous legal immigration system. But we can't afford to take on the world's problems right now, when so many Americans are struggling, so many Arizonans are struggling.

And I'm really concerned about the number of seizures we have had with fentanyl coming across the border. It is the number one killer of young people in this country. And it's coming through Arizona. We're no longer going to allow the cartels to have operational control of our border. They're sending across the fentanyl.

BASH: Well, DHS says that less than 1 percent of migrants encountered at the border have a criminal record.

But I want to stick on the question of asylum, those that do meet the criteria. Should they be allowed to stay in this country? And do you think that the -- what the current governor, Doug Ducey, has done, sending some of the migrants to Washington, D.C., is the right thing to do? Would you continue that practice?

LAKE: Dana, I'm going to have to disagree with you on that figure you just put out.

We have a million got-aways. These are people who are intentionally entering this country mainly through the Tucson sector. And we don't know what their background is. There's a reason they're trying to get in unnoticed, is because they have a criminal background. And they are coming into this country. We know that they have tracked down terrorists. They have tracked down

people wanted for murder. You can go to the Customs and Border Patrol site, and you will see we have got murderers coming in. We have people with raps -- with a rape record. You name it, we have got hardened criminals coming in. So, we can't...


BASH: Well, let me say -- let me just tell you that this stat that I just cited comes from the Department of Homeland Security, less than 1 percent of migrants.

And I know that you're using language like rapists and criminals and so forth. What I was asking about our migrants seeking asylum.

But I want to move on to another really important issue, particularly when it comes to your critical swing state of Arizona. And that is what happened in 2020. You called the 2020 election corrupt, stolen, rotten, and rigged.

And there was no evidence of any of that presented in a court of law or anywhere else that any of those things are true. So, why do you keep saying that?


LAKE: Well, there's plenty of evidence.

We had 740,000 ballots with no chain of custody. Those ballots shouldn't have been counted. We had election laws...


BASH: Where is the evidence of that?

LAKE: Dana, there's plenty of evidence. You can find it. Well, I can -- I can -- I'm happy to send it to your team.

The problem is, the media won't cover it and there...


BASH: We covered this extensively, and what you just said has been debunked.

LAKE: Only one side of it, Dana.

The real issue, Dana, is that the people don't trust our elections. They haven't since 2000. I'm a reporter. I have been sitting on your side of the desk for a long time. And, since 2000, we have Americans who don't trust our elections.

In 2000, in 2004, they didn't trust the elections. In 2016, Kamala Harris, Amy Klobuchar, and Hillary Clinton, everybody on the Democrat side said the election had problems. I'm sorry, but it's a fair question. (CROSSTALK)

BASH: Ms. Lake -- Ms. Lake, there definitely has been some of that.

But I want to say, in 2000, Al Gore conceded. In 2004, John Kerry receded -- conceded. In 2016, Hillary Clinton conceded. And we didn't see that in 2020. That's the difference.

LAKE: Dana -- Dana -- Dana...


BASH: And so the question is, are you undermining faith in elections by saying that the 2020 election was stolen, when there's absolutely no evidence to support that?

LAKE: Dana, in 2018, Stacey Abrams never conceded. She still hasn't. I don't hear CNN calling her an election denier.

We have the right, and it's protected with our First Amendment, to question our government and to question elections.


BASH: No question about that.

LAKE: And we still have the First Amendment.

BASH: Yes.

LAKE: We still have the First Amendment.

And when you start seeing the media cancel people for questioning their government, then there -- that's when we have a problem.


BASH: I totally agree about the First Amendment. You and I are benefiting from the First Amendment as we speak. So, I couldn't agree with you more on that.

I want to play...

LAKE: Well, I sure wish that...


BASH: I want to play for you something that President Trump's own top officials -- they're the ones who investigated all of this. Again, these are President Trump's top officials at the Justice Department. And they said under oath that they saw no evidence of subs of substantial fraud in 2020.

Take a listen.

(BEGIN VIDEO CLIP) WILLIAM BARR, FORMER U.S. ATTORNEY GENERAL: I made it clear I did not agree with the idea of saying the election was stolen and putting out this stuff, which I told the president was bullshit.

RICHARD DONOGHUE, FORMER ACTING DEPUTY GENERAL ATTORNEY: I said something to the effect of: "Sir, we have done dozens of investigations, hundreds of interviews. The major allegations are not supported by the evidence developed."

JEFFREY ROSEN, FORMER ACTING U.S. ATTORNEY GENERAL: We were in a position to say, our people looked at that, and we know that you're getting bad information, that that's not correct.


BASH: So these are President Trump's own top Justice Department officials.

Why not believe them?

LAKE: I'm looking at what's happening in Maricopa County.

And you know what? Let's look at the 2022 election of August 2, where, one hour into Election Day, because of my opponent Katie Hobbs' incompetence, we ran out of ballots one hour into Election Day in one of our largest counties, Pinal County. We ran out...


BASH: That did happen. And the county officials there apologized.

LAKE: Only Republican ballots. Only Republican ballots.

BASH: I'm going to push back on things that didn't happen. That did happen.

LAKE: That did happen.


BASH: And the county -- and the county officials apologized.

But I want to ask about the 2020 elections.

LAKE: But, Dana, an apology doesn't -- an apology doesn't bring somebody's vote back.

All I'm saying is, we need to restore honesty and integrity and transparency to our elections. That is important.

BASH: But isn't apologizing doing just that? You're right it doesn't bring votes back. But at least that is transparent. That is transparent.

(CROSSTALK) BASH: So, if leaders like you and President Trump are saying that the election was stolen, aren't you participating, contributing, even causing the idea of people thinking that the election is not safe and secure?


We are going to make sure our elections are safe and secure for Democrats, independents and Republicans alike. We want to know that our legal vote counted. We want to know the winner on election night. We don't want to be counting for 10 days.

BASH: But isn't it...

LAKE: And we want everyone to know, Dana -- Dana...


BASH: But shouldn't -- don't you want your votes counted in...


LAKE: Dana, I have been on the campaign trail.


BASH: Don't you want your votes to be counted, no matter how long it takes, in 2022 in November?

LAKE: Yes, I do.

Dana, Dana, I have been on the campaign trail for 503 days. I talk to moms and dads who are losing children because of fentanyl poisoning. I talk to retirees who can't afford gas and food. I talk to parents whose children are getting out of high school and can't read.

We have serious problems.


BASH: I totally agree. I totally agree, which is why the election denial...

LAKE: And you want to have me on here, Dana -- you want to have me on here and talk 2020 election. And you're the one who accuses...


BASH: I would never bring this up, ever, had you not been bringing this up consistently on the campaign trail.

Let's look forward, then. Will you accept the results of the election in your election? Will you accept the results?


LAKE: Can we talk about issues?

I came on here thinking we were going to talk about the issues facing Arizonans right now.

BASH: We did.

LAKE: And you have spent the entirety of this time talking about 2020.

I think you're stuck on 2020. I really do.

BASH: I would...


BASH: I have interviewed many, many Republicans and haven't even mentioned it. I only did with you because this is a big thing that you are running on.

Let's look ahead, and let's talk about the 2022 election.

LAKE: Dana -- Dana, I'm -- Dana...

BASH: Will you accept the results of your election, Ms. Lake?

LAKE: I'm -- I'm running against a twice-convicted racist who cost the state taxpayers $3 million because of her hatred for people of color.

She paid a woman of color in her office $30,000 less than men doing the same job. Last week, we learned she held a slave auction, a mock slave auction, in high school. We saw her running from a black reporter, hiding in the bathroom from him.

I'm not going to lose this election, because the people of Arizona...


BASH: I'm going to talk to Katie Hobbs. I'm going to talk to Katie Hobbs right after we're done.

LAKE: The people of Arizona will never elect a racist like Katie Hobbs.

They just won't.

BASH: My question is, will you accept the results of your election in November?

LAKE: I'm going to win the election, and I will accept that result.

BASH: If you lose, will you accept that?

LAKE: I'm going to win the election, and I will accept that result, because the people will never -- the people of Arizona will never support and vote for a coward like Katie Hobbs who won't show up on a debate stage. She's single-handedly destroying a 20-year tradition of gubernatorial debates because of her cowardice.

So, I know already. No momentum behind her. The polls are in our favor. And we're going to win this election. I'm 100 percent confident of that. We have the ideas, commonsense ideas that people want.


And we're seeing Democrats pour over and vote for us right now. I have had many people reach out and say they're voting for us.

So, the Democrat Party is faltering. It's not the party of solutions. It's the party that has caused the problems that we're in right now. And...

BASH: Kari Lake, I really appreciate you coming on with me and answering these questions.

And I'm going to go now to your Democratic opponent, Katie Hobbs, to talk to her about some of the things that you and I just talked about.

And here with me now is Katie Hobbs.

We have a lot to get to.

But you were secretary of state. You are now -- you were in 2020. Your reaction to what you just heard on that issue from Kari Lake?

HOBBS: Look, I think anyone running for office who continues to say there was widespread fraud, they have -- they say they have evidence -- they have yet to bring any evidence forward. You and -- you and I have talked about this so many times.

This is absolutely disqualifying. This is somebody who will have a level of authority over our state's elections, the ability to sign new legislation into law, the responsibility of certifying future elections.

And she has not only, as you heard, refused to say if she will accept the results of this election, but also whether or not she would certify the 2024 presidential election if she's governor.

This is disqualifying. This is a basic core of our democracy. And she has nothing else to run on. And so this is what she has centered her entire campaign around.

BASH: Let's talk about the issue of abortion.

You said last week that you support leaving the decision between a woman and her doctor and leaving politicians entirely out of it. So can you clarify, do you support any legal limits on abortion in Arizona?

HOBBS: Look, the fact is, right now, that we are under an extreme 15- week ban that limits health care options for women who need them.

There's the potential for a complete ban. Right now, that ban is in the court's. But, under my opponent's administration, she would support a full ban. She's called this a great law. She doesn't support any exceptions for rape or incest.

BASH: What do you support us?

HOBBS: Look, when you're talking about late-term abortion, that is incredibly, extremely rare. And it's happening if there is -- if that conversation is happening, it's because there's something that's gone incredibly wrong in the pregnancy.

And politicians do not belong in that decision. There's no one-size...

BASH: But what do you support? What should the limits be?

HOBBS: The decision about abortion should be between a patient and their doctor.

BASH: So there should be no limits in the law? It should only be decided in the medical office?

HOBBS: Government making these kinds of mandates interferes with the care that doctors need to provide to their patients. They don't belong in these decisions.

BASH: OK. So, just to be clear, if you become governor, you will push for a law that has absolutely no limits in any point of the pregnancy on abortion? That's your position? That's what you would want to be the law of the land in Arizona?

HOBBS: The fact is right now that we have very limited options, and that we need to get politicians out of the way and let doctors provide the care that they are trained to provide, the health care that their patients need. Politicians don't belong in those decisions.

BASH: You declined to participate in a PBS debate against Kari Lake. Here's what one columnist from "The Arizona Republican" wrote.

Laurie Roberts and from "The Arizona Republic," this is what she wrote. She wrote: "If Katie Hobbs loses, remember October 12, the day she ran away from confronting Kari Lake. Democrats in Arizona are known for snatching defeat from the jaws of victory, but Hobbs' refusal to debate her opponent on Wednesday represents a new level of political malpractice."

Why won't you debate her?

HOBBS: Look, Kari Lake has made it clear time and time again that she's not interested in having substantive, in-depth conversations about the issues that matter to Arizonans.

She only wants a scenario where she can control the dialogue. And she's refused to sit down in a one-on-one, lengthy conversation to really clarify with Arizonans where she is on the issues. She's the one who's afraid of talking to voters where she's at.

And we are doing everything we can to take -- to make our case directly to the voters of Arizona.

And I guarantee you, I guarantee you that, when Arizonans who are struggling, when they go to open their ballot, when they're thinking about the fact that they're not sure how they're going to put food on the table, they're rationing their insulin, or they're thinking about having to drive their niece or their sister or their daughter to California to get the health care that they need, they're not going to look at their ballot and say, damn it, Katie Hobbs didn't debate her opponent.


BASH: She just came and sat down with me and answered my questions for a lot of minutes.

HOBBS: Yet...


BASH: A lot of Democrats are questioning your decision. And they're saying it's the wrong decision.

President Biden's former 2020 co-chair said: "I would debate, and I would want the people of Arizona to know what my platform is."

If you think she's as dangerous as you're saying to democracy, is it your responsibility as a candidate who wants to run Arizona to show and explain who their alternative is?

HOBBS: That is exactly what I'm doing right now.

And there is a lot more ability to have a conversation with you without her interruptions and shouting to do that. And, yes, she did sit down with you. She's refused to do that with any legitimate reporter in the state of Arizona and take her case directly to the voters. She's only interested in creating a spectacle.

And I guarantee you, people that are struggling in Arizona right now are not making their decisions about whether -- whether -- over whether or not there was a debate between myself and Kari Lake. They're going to make their decision based on the person who understands their struggle and has real solutions to try to fix that struggle.

BASH: Real quick, inflation is near its highest level in four decades. You heard me ask Kari Lake about Phoenix, highest inflation in the country.

Democrats control the House, the Senate, the White House. Does President Biden bear some responsibility for inflation that we're seeing that are affecting people's everyday lives?

HOBBS: Inflation in Arizona is being largely driven by skyrocketing housing costs.

And we have to do more about housing. We need to build more, bottom line. Supply is not keeping up with demand. Prices are through the roof. And people are being priced out of their homes. And we're seeing a huge increase in people who are experiencing homelessness right now because of that.

The fact is, I have a real plan to address rising costs for Arizonans, put money back in the pockets of working families. And experts have looked at both my plans and Kari Lakes's plans. And my plan is the plan that will actually address inflation and put people back to work by providing additional childcare assistance and a tax credit for folks who pursue a career in technical education.

The same experts describe Kari Lake's plan as putting jet fuel on the fire of inflation.

BASH: Katie Hobbs, thank you so much for joining me. Appreciate it.

HOBBS: Thank you.

BASH: And could there be a midterm surprise in Colorado?

Republican challenger, the one who's rewriting his party's playbook and the Senate Democrat defending his seat, they're both next.



BASH: Welcome back to STATE OF THE UNION.

This week, the president spent time and political capital to go somewhere Democrats thought was pretty safely blue this year, and that's Colorado.

But two-term incumbent Democratic Senator Michael Bennet now holds a narrower-than-expected lead over first-time candidate Republican businessman Joe O'Dea, who Mitch McConnell calls the perfect candidate for Colorado, someone who does not spread Donald Trump's election lies and has promised to tell his party no when needed.

Both O'Dea and Senator Bennet are here with us today.

And I want to begin with the Republican candidate, Joe O'Dea.

And I want to start with the economy. There is a new inflation report this week that shows core inflation reaching its highest point in 40 years. Utility gas is up 33 percent. Chicken, milk, vegetables, they're all up.

If you were in the Senate, what specifically would you do to fix the inflation problem?

JOE O'DEA (R), COLORADO SENATORIAL CANDIDATE: Dana, thanks for having me on today.

This inflation has been caused by the $1.9 trillion reckless spending bill that got put in place by Michael Bennet. He cast the deciding vote back in March of last year. It's caused record inflation. They have dumped over $5 trillion in the last year-and-a-half.

In addition to that, the war on energy has caused the price of diesel to go through the ceiling. And it's still there today. We have got a Fed that's been asleep at the wheel, big government in our way. And those are just a few of the issues that I'm going to address when I hit the U.S. Senate here in January.

BASH: How will you address it? How? What would you do?

O'DEA: Well, first off, we -- first off, we have got to get our energy policy back on track. We have got to get energy, wind, solar, nuclear, good and clean natural gas.

We have got to get the permitting out of the way, so we can go back to work here in Colorado and flood the market with increased supply. It'll cause the price to come down. Inflation will go away. That's how you do it.

BASH: Washington is once again debating stricter gun laws after yet another mass shooting in North Carolina.

In your state of Colorado, there is one gun death every 10 hours. You said you would have voted against a bipartisan bill that Mitch McConnell and 14 other Republicans supported this summer. So do you think any additional gun restrictions are needed at any level?

O'DEA: Look, every time we have an event, we pass another set of laws.

Democrats here in Colorado have ignored the laws that are on the books. As a drug dealer, you can possess a weapon. It should be a felony. They're not taking them off the streets. We need more cops on our streets. We need to make sure that we're enforcing the laws that we have. We don't need a whole host of no -- new laws.

What we need to do is make sure we're enforcing the ones we have.

BASH: There is a red flag law in Colorado. It's focused on mental health. You say Colorado's law there doesn't work. Why not?

O'DEA: Well, when I talk to the sheriffs that are the ones that are putting that law in place and having to implement it, they don't think that law works. It puts them at risk.


They're not happy with that law. It needs to be rewritten here in Colorado. It's not doing the job that it's supposed to do. We need to do more with mental health here to get these people off the street. But we have hundreds of laws on the books. We need to enforce them.

BASH: Well, the...

O'DEA: We need more cops on our street right now.

If you talk to Chief Pazen here of the city and county of Denver -- he's the chief of police -- he will tell you he's short 250 officers. That's because Democrats across the state of Colorado have defunded, demoralized the police. And we need to do better.

BASH: Well, let's stick to guns. Let's stick to guns, sir.

O'DEA: And we've got to restore that position.

BASH: Colorado -- Colorado, the red flag law is intended in part to deal with mental health, which is what you're talking about.

And Colorado has approved 146 applications to take away a gun from a dangerous individual in the last two years. Doesn't that make your state more safe?

O'DEA: Well, it's not. We're the third worst state for violent crime in the United States right now.

They just deemed Denver as one of the most unsafe cities in the nation. You go around here, and we have record crime everywhere. We need to enforce the laws that we have on the books, get these criminals off the street. We have got cashless bonds that are being put in place. We're not getting these criminals off the street.

BASH: Let me...

O'DEA: That's the problem with crime here in Colorado.

BASH: Let me turn to an issue that you -- I know you have talked about, and that is January 6.

This past week, the January 6 Committee held its final hearing before the midterm elections. You have said Donald Trump could have done a lot more to stop January 6, the insurrection and violent attack on the Capitol, from happening.

Do you think what happened on January 6 should disqualify him from being president again?

O'DEA: Look, I believe that the January 6 was a black eye on the country. I have been very vocal that I thought he should have done more to keep the violence from heading towards the Capitol.

Anybody that was violent at the Capitol or tore something apart, they should be held accountable. We have got processes in place that hold people accountable. And we need to move the country forward.

BASH: So, is -- but is moving...

O'DEA: I don't think Donald Trump should run again. I'm going to actively -- I'm going to actively campaign against Donald Trump and make sure that we have got four or five really great Republicans right now.

Ron DeSantis, Nikki Haley, Tim Scott, they could run and serve for eight years. I'm going to do my job as a U.S. senator to make sure that they have good campaigns in the primary here, so we have a good selection of candidates for 2024.

BASH: Before I let you go, abortion is shaping up to be a major issue in the midterms. You support a 20-week ban in Colorado, with exceptions for rape and incest.

Two years ago, your state rejected a 22-week ban. Colorado currently has no limits on abortion. So are you out of step with your state?

O'DEA: No, I believe, for the first five months, that decision should be between a woman and her doctor.

After that, for rape, incest, life of the mother, medical necessity, I believe that decision should also be between a woman and her doctor. Michael Bennet voted for a bill that supports abortion up to and including the moment of birth. And he wants taxpayers to pay for that.

BASH: I'm asking about your -- I'm asking about your position.

O'DEA: That's excessive. That's excessive.

My position is where most of America is. That's excessive.

BASH: OK, Joe O'Dea, thank you so much. Appreciate it.

I want to go now to Michael Bennet, the Democratic senator from Colorado. And he is, of course, defending his seat against who just heard, Joe O'Dea.

It has been two months since Democrats passed the so-called Inflation Reduction Act, which you called a victory for the American people. Core inflation is still at its highest level in four decades. And polls shows, as you know that -- and polls show, I should say, that the economy is a top issue for Colorado voters.

So, why isn't the Inflation Reduction Act reducing inflation?

SEN. MICHAEL BENNET (D-CO): Well, because the elements of the Inflation Reduction Act aren't going to kick in for a while, Dana.

I mean, the cap on drug prices for seniors and the requirement finally -- finally, we overcame pharma to have requirement that Medicare negotiate drug prices on behalf of the American people -- capping insulin at $35 a month, I mean, these are things that are going to take a while to put in place.

And you're right. I mean, today, gasoline is 300 -- $3.70 a gallon. Here in Colorado, a gallon of milk costs $4.20. That's really tough on people. And I think one of the things I have been trying to explain to folks is that this is a global problem. Canada has the same inflation that we have. The European -- every country in Europe has the same inflation we have. The U.K. does as well. India has as well, because as we're facing broken global supply chains that we have to -- have to address.

[09:50:03] And we're facing increases in energy prices because, two years ago, oil was at $20 a barrel, went to $93 because of the economic recovery, and then Putin invaded Ukraine. The fact that it is global is cold comfort when you're paying $3.70 a barrel.

But I think what Colorado...

BASH: I'd like to get you to...

BENNET: Sorry. Go ahead. Go ahead.

BASH: I'd like to get you to react to what former Treasury Secretary Larry Summers, a Democrat, has said...


BASH: ... which is that the spending that you, in part -- or you did vote for over the last couple of years, particularly $1.9 trillion for the American Rescue Plan, exacerbated the inflation we're seeing now.

BENNET: Right.

I mean, I know Larry Summers said that. There are economists that have said other things. I believe that the bill that we passed kept 30,000 Coloradans from being evicted. I think that it has funded law enforcement all over the state, mental health services that we desperately need. It cut childhood poverty in half last year because of a bill that I wrote.

I'm concerned that the Federal Reserve kept their interest rates at zero for too long and that their quantitative easing was too aggressive. But that's looking in the rearview mirror.

What we need to do now is fix the issue. And I think we can fix the issue by bringing our supply chains back to the United States, by making sure that we are benefiting from the Inflation Reduction Act, in the sense that we are leading the world in the transition from fossil fuels over the next 25 years to a net zero energy economy.

The United States is perfectly positioned to do that now. We are in a place now where we can -- unlike before we passed that bill, where we can reduce costs, where we can increase our energy independence and our economic strength and reduce emissions while we're doing both of those things.

BASH: Senator...

BENNET: I think that's an amazing place for us to be.

BASH: Senator, your opponent who you just heard, Joe O'Dea, disagreed with a Supreme Court's decision to overturn Roe vs. Wade. He says Joe Biden won legitimately in 2020.

I want our viewers to listen to an ad that a Democratic group ran to boost O'Dea's opponent in the GOP primary because they thought he would be easier for you to beat. Take a listen. (BEGIN VIDEO CLIP)

NARRATOR: Politician Joe O'Dea is not who he says he is. O'Dea says he wants to rein in government spending. But he supports Biden's $1.2 trillion spending bill. And before running for Senate as a Republican, O'Dea actually supported Democrats and even gave money to Michael Bennet.


BASH: So, again, that was an ad from a Democratic group. How is your campaign now going to paint him as a far right Republican?

BENNET: Well, I think he's painting himself that way.

I mean, it's incredible. He has said that he would have voted for three -- all three of Donald Trump's Supreme Court nominees, notwithstanding the fact that he knows that they overturned Roe vs. Wade. He opposes, as you just heard, Colorado's law codifying a woman's right to choose.

I'm proud to live in a state is one of the first states to codify that law. And he opposes it. He opposes -- he voted -- last time we had an election in Colorado, he voted for an amendment -- or a ballot issue that banned abortion in all -- it banned abortion and had no exceptions for rape or incest.

He says that Donald Trump, even though he probably knows better, bears no responsibility for what happened on January 6. This is not -- he...

BASH: I should say that he did support a ban after 22 weeks.

Just real quick, do you -- given everything you said, was it a mistake for fellow Democrats to prop him up as your opponent?


BENNET: I don't think -- look, I don't think -- I don't think -- I believe we should reform our campaign finance system.

BASH: Right.

BENNET: It's a mess.

I have got a racist billionaire who's funding a super PAC that supporting his campaign right now from Wyoming. That's not helping voters in Colorado.

But I want, Dana, you to know and I want your viewers to know how out of touch he is with Colorado...

BASH: Senator Bennet...

BENNET: ... not just on the abortion issue, but the idea that he would not support any additional gun laws, including a law Mitch McConnell voted for in the U.S. Senate. BASH: Senator Bennet, we're going to have to leave it there, in the

fairness of...

BENNET: He thinks that our red flag law in Colorado...

BASH: In the interest of fairness of time, we...

BENNET: ... after Columbine, after Aurora, is -- is out of touch.

BASH: We heard him say that.

We appreciate you joining us. Thank you so much for coming on, Senator. I very much appreciate it.

BENNET: Thanks for having me.

BASH: And character, consistency, hypocrisy, scandal, does any of it matter?

If you judge the question Donald Trump and Donald Trump alone, survey says probably no. But do the old political rules still apply to anyone not named Donald Trump?


Georgia just make give the answer to the country.


ANNOUNCER: No one can catch him. What a run!

BASH (voice-over): Herschel Walker spent a career shaking off tackles in the NFL, but he's now trying to outrun allegations rocking his Senate campaign, that the staunchly anti-abortion Republican who previously backed a total ban with no exceptions paid for a woman to have an abortion in 2009 and then told her to have another one two years later.

HERSCHEL WALKER (R), FORMER GEORGIA SENATORIAL CANDIDATE: This here, the abortion thing, is false. It's a lie.

BASH: Walker is rolling out a very modern play, firm denial...

WALKER: She's lying. Yes, she's lying. Yes, she's lying.

BASH: ... and defiance.

WALKER: I'm not going to back down, because this seat is too important to the Georgia people for me back down right now.

BASH: But in an interview with CNN's Manu Raju, Senate Republican Leader Mitch McConnell acknowledged that Walker's struggles bring back memories of 2012, when abortion controversies helped sink the campaigns of Republican Todd Akin...

FMR. REP. TODD AKIN (R-MO): If it's a legitimate rape, the female body has ways to try to shut that whole thing down.

BASH: ... and Richard Mourdock.

RICHARD MOURDOCK (R), FORMER INDIANA SENATORIAL CANDIDATE: Even when life begins in that horrible situation of rape, that it is something that God intended to happen.

BASH: Derailing the GOP's path to the Senate majority.

CHRISTINE O'DONNELL (R), FORMER DELAWARE SENATE CANDIDATE: I dabbled into witchcraft. I never joined a coven.

BASH: Or of 2010, when Republican Christine O'Donnell put a new spin on the old adage, if you're explaining...

O'DONNELL: I'm not a witch.

BASH: ... you're losing.

But after four years of Donald Trump...

DONALD TRUMP, FORMER PRESIDENT OF THE UNITED STATES: When you're a star, they let you do it.

Very fine people on both sides.

That call was a great call. It was a perfect call.

BASH: ... do scandals still have the same impact they used to?


BASH: In 2017, Republican Senate candidate Roy Moore may have hoped Trump's ability to defy gravity could help him weather sexual misconduct allegations.

TRUMP: Get out and vote for Roy Moore.

BASH: But he lost and an upset in deep red Alabama.

Across the aisle, North Carolina Democrat Cal Cunningham saw his 2020 Senate campaign go up in smoke after his steamy text messages leaked amid an extramarital affair. And when New York Governor Andrew Cuomo tried to follow Trump's defiant playbook amid misconduct allegations of his own...

FMR. GOV. ANDREW CUOMO (D-NY): I was elected by the people of the state of New York. I'm not going to resign.

BASH: ... he ultimately gave in and stepped down.

CUOMO: If I step aside...

BASH: One exception? Virginia Democratic Governor Ralph Northam, who, in 2019, confirmed, then denied appearing in a racist yearbook photo, but still managed to serve out his term, even after a truly bizarre press conference.

QUESTION: Are you still able to moonwalk?


GOV. RALPH NORTHAM (D-VA): My wife says inappropriate circumstances.

BASH: Top Senate Republicans are still campaigning for Herschel Walker, despite concerns over candidate quality, with McConnell telling CNN -- quote -- "Whether it's fatal or a big problem this year, we will find out."

And with polls showing a competitive race, control of the Senate could all come down to whether, in this polarized environment, voters are still swayed by scandal.


BASH: Thanks so much for spending your Sunday morning with us.

The news continues next.