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The Story Is with Elex Michaelson
Interview with Governor Bob Ferguson (D-WA); Venezuela Condemns U.S. Seizure of Oil Tanker as Piracy; Interview with Senator Adam Schiff (D-CA); Fed Cuts Rates a Quarter Point, Signals Short-Term Hold; At Least 100,000 Advised to Evacuate Amid Washington Floods; Trump Calls Inflation a 'Hoax'; Los Angeles Rebuilds Homes after Devastating Fires. Aired 12-1a ET
Aired December 11, 2025 - 00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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ELEX MICHAELSON, CNN ANCHOR: Person or somebody who just go in there to enjoy their meal sitting in the corner, and all these kids show up and are doing this and they're like, just wanted some fries, but, yes.
COATES: I just wanted it. I don't know, I think it's -- let them have fun. If it's disruptive, OK, but if it's like dangerous different story. But, I mean, 6-7. Have a great show.
MICHAELSON: Yes. Exactly. All right, Laura, thank you so much.
We got a lot coming up on THE STORY IS which starts right now.
(BEGIN VIDEOTAPE)
MICHAELSON: THE STORY IS mass evacuations in Washington state due to potentially deadly floods.
GOV. BOB FERGUSON, WASHINGTON STATE: The impact on Washingtonians is significant now, and it's going to be significant in the coming days, and that is an understatement.
MICHAELSON: With us live, the governor of Washington, Bob Ferguson.
THE STORY IS seized oil tanker.
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Large tanker, very large, largest one ever seized actually.
MICHAELSON: Senator Adam Schiff with us to respond to the latest action by the Trump administration.
THE STORY IS the first house rebuilt after the Palisades Fire. But there's a catch. CNN's nick Watt takes us there.
(END VIDEOTAPE)
ANNOUNCER: Live from Los Angeles, THE STORY IS with Elex Michaelson.
MICHAELSON: And welcome to THE STORY IS. I'm Elex Michaelson.
Tonight, our top story is breaking news impacting the West Coast. An atmospheric river in the pacific northwest. Governor Bob Ferguson has declared a state of emergency and officials are advising at least 100,000 people to evacuate as they fear that, quote, "catastrophic flooding" is expected. This system could break the record from 1990 for flooding. The governor has activated the National Guard to respond to the situation.
(BEGIN VIDEO CLIP)
FERGUSON: Look, the impact on Washingtonians is significant now, and it's going to be significant in the coming days. And that is an understatement. We're mindful of that, which is why we're working so hard. And you're seeing people in this room working so hard to address this situation as quickly as we can.
(END VIDEO CLIP)
MICHAELSON: Rescue crews are already helping some residents escape the floodwaters, and in some areas, streets are already being washed out and entire neighborhoods flooded.
Joining me now live from Washington state is the governor, Bob Ferguson.
Welcome to THE STORY IS. Thanks so much. What is the most important message you want to convey to residents who are in danger tonight?
FERGUSON: Well, first, thanks so much for having me on. I appreciate it. And you know, you mentioned in your opening that this could be a historic flood. It could break records. And I'm just here to say it absolutely will not just be historic and break records, it will shatter those records. So our message to folks who are receiving those orders today, really as we speak, to evacuate. It's approaching 100,000 Washingtonians.
Listen to the experts. Listen to your local officials, and evacuate right away to critical, critical situation and truly historic in the more than 100 years we've been tracking our river systems.
MICHAELSON: So, Governor, what should we expect in terms of timing when this is going to be at its worst? What to expect overnight?
FERGUSON: Well, it's evolving situation, so it depends on which part of the state you look at. And by the way, this is a true statewide issue. But what we're especially focused at in the next handful of hours is the Skagit River. That's about -- I'm in North Seattle right now talking to you. The Skagit River is about an hour north of me if you were to drive. Along the Skagit River, what we're going to see around 4:00 a.m. is that river reaching its peak.
And again, this is going to be six feet at least above the historic high mark for that river. So this is something no local resident has ever experienced, or their ancestors may have been on the river for many years. So folks need to be aware that this is coming up right away in a handful of hours. Many folks have evacuated. We appreciate that. But if they haven't and they're along that Skagit River, the time to do that is right now.
MICHAELSON: Obviously you folks are going to need help in dealing with all this. You've already declared a state of emergency for the state, which opens up resources, but you're also hoping for a state of emergency from the federal government, from the Trump administration. How are those conversations going?
FERGUSON: So we had an emergency meeting several hours ago with FEMA to make what we call an expedited request for emergency declaration. We've made that request. We've provided the information. I spoke to those officials directly. So we've reached out and made that request. The situation is dire. I want to be very clear about that. And so certainly our hope that the White House and the federal government moves quickly to make sure we get those resources to help folks who need the help.
That's helicopters, that's emergency personnel, getting people out of their homes who have been stranded. That's happening right now. It's beyond the capacity of the state and local governments on our own to deal with this historic situation. So we really hope the federal government acts right away to get those resources for us.
MICHAELSON: So as far as what you're saying, though, is so far they have not said yes.
FERGUSON: Our conversation was Pacific Time, I believe around 2:00 Pacific Time earlier today. So they've only had that request now for, you know, half the day today. But we are looking forward to their action. hopefully tomorrow.
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MICHAELSON: So what is it specifically about this storm that makes it so bad? What is so historic about this particular atmospheric river?
FERGUSON: Sheer volume of rainfall. So I don't pretend to be an expert on these things, to be clear, right? But the sheer volume of rainfall and that really is saying something, you know, we in the Pacific Northwest, as you might imagine, we get a lot of rain. That's part of our life here. But this is something on a whole different level. And this system has settled in over this, over this area and many parts of our state.
And it's just the sheer volume. And it is unusual, to put it mildly, that we're not just breaking a record, but on the Skagit River as just one example. And again, we're seeing this all over the state. My declaration of emergency was a statewide emergency. Both sides of our mountains are getting this. But as an example, the Skagit River, literally six feet above the previous record we're hearing from local residents who are saying they've never seen anything like this in the many decades they've lived in that area. So this is on a whole another level. And that's why people need to act.
MICHAELSON: Well, we know how busy you are right now dealing with this, so we really appreciate you taking a moment to talk to us and talk to our audience about this. And hopefully people can heed your warnings. We're thinking of all our friends and neighbors in the Pacific Northwest.
Governor Bob Ferguson, best of luck in the days ahead.
FERGUSON: Thank you so much. We appreciate it.
MICHAELSON: Now let's go overseas to a developing story. The winner of this year's Nobel Peace Prize has appeared briefly in Oslo, Norway, after a daring escape from Venezuela.
(VIDEO CLIP)
MICHAELSON: Pro-democracy opposition leader Maria Corina Machado emerged from the balcony of her hotel as supporters cheered and sang the Venezuelan national anthem. She's under a travel ban and has been living mostly in hiding since last year. Her daughter accepted the Peace Prize earlier on her behalf. The Nobel Laureate is expected to hold a news conference in the hours ahead. When that happens, CNN will take you there live.
Meanwhile, the Venezuelan government is slamming the U.S. for seizing one of its oil tankers, calling it a, quote, "act of international piracy." Venezuela says the capture provides Washington's policy is part of a, quote, "deliberate plan to plunder our energy resources." Vowed to launch an international appeal. The U.S. attorney general says the tanker was being used to transport sanctioned oil between Venezuela and Iran that was being used to support terror groups.
Senior U.S. official says the ship was seized in international waters in the Caribbean, adding that there were no casualties and that more seizures are possible in the coming weeks. President Trump also addressed the incident.
(BEGIN VIDEO CLIP)
TRUMP: As you probably know, we've just seized a tanker on the coast of Venezuela, a large tanker, very large, largest one ever seized actually. And other things are happening. So you'll be seeing that later and you'll be talking about that later with some other people. It was seized for a very good reason.
(END VIDEO CLIP)
MICHAELSON: The South American country of Guyana says the tanker had been sailing under a false Guyana flag. Satellite imagery reviewed by CNN shows the ship had been hiding its true whereabouts. Its transponder put it at a location off the Guyana coast last month, when it was docked at a Venezuelan oil terminal.
Joining us now is Democratic senator from California, Adam Schiff.
Welcome to THE STORY IS for the first time.
SEN. ADAM SCHIFF (D-CA): Great to be with you, Elex. MICHAELSON: So let's talk about this seizing of a Venezuela tanker.
Your reaction?
SCHIFF: Well, deep concern over it. It would be one thing if this was simply an operation to seize a tanker that's trying to evade sanctions. We want to make sure that oil is not going to Iran in violation of sanctions. But if this is part of a run-up to the war, the potential war with Venezuela, and a lot of the other excuses just don't seem to add up. We've been told that the strikes on these boats are about narcotics.
We've been told that this is about immigration. And now we're being told this is about oil and sanctions. What it really seems to be about, Elex, is regime change. And if that is the case, they have no authorization from Congress to go to war with Venezuela in order to change the leadership there.
And it's also bewildering at the same time, because the president just pardoned the corrupt former president of Honduras for drug running. So something doesn't add up. But the American people don't want us to get into another war this time with Venezuela.
MICHAELSON: So if there was a congressional vote to authorize a war with Venezuela for regime change, would you vote no?
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SCHIFF: I would vote no. We don't need to go to war to change the leadership there. Now, hey, Maduro is a bad actor. He's a murderous dictator. He's an illegitimate leader of that country. That is not to say anything positive about Maduro. I think he's awful. But do we want to go to war to change the regime there? No, I don't think so. And it just, as I said, doesn't add up when we pardon one criminal former leader of a country and now we're going to use all this military force to depose another.
I just don't understand what's the strategy, what's the plan, what's the policy? None of it really makes sense to me.
MICHAELSON: I just interviewed your colleague in the Senate, Tim Kaine, who told me that he thinks that these strikes are illegal. Do you agree with that?
SCHIFF: Absolutely. In fact, Tim and I have now introduced a couple war powers resolutions to put an end to these, to make sure that we're not drawn into an unintended conflict or an intentional one. There's no --
MICHAELSON: So --
SCHIFF: Yes.
MICHAELSON: So then I guess the question is, because it seems like there's a lot of talking about Donald Trump and what he does. And yes, it just seems to do it. And there aren't a lot of consequences from Congress. Like what can Congress actually do? What can the Senate actually do? If this is actually an illegal strike, what can you all do to stop it?
SCHIFF: Oh, we could stop it if we had just some modicum of bipartisan support to do it. We had a couple Republicans vote with us in our resolutions to put an end to this, these attacks on these ships. This was even before we killed these survivors of that one particular shipwreck. If we had more votes, we could put a stop to it. We could stop, frankly, funding going to the Pentagon for the deployment of our naval forces in the region.
We could stop the Coast Guard from being funded for those purposes, but it does require Republicans to stand up to the president. And there are a lot of Republicans and a lot of MAGA Republicans who don't want another war. They've been very vocal about it. So this would not be in contradiction to at least some of their base. But we haven't had that willingness to stand up to the president.
And so we see things being done in our name as Americans that I think are unconscionable. I want to have the American people see that video of that strike on those two shipwrecked survivors, and let the American people judge whether we want that kind of thing done in our name.
MICHAELSON: It has been a year this week since you were sworn in to the Senate. This is some video of that. Then Vice President Kamala Harris swearing you in to a seat that she once held. And just today you made what's called your maiden speech on the floor of the Senate, where you talked about that first year. Here's some of that.
(BEGIN VIDEO CLIP)
SCHIFF: Within weeks of my swearing in, California was burning. Entire neighborhoods wiped away in minutes. Families sifting through ash where homes once stood. And yet after every fire I've ever witnessed one truth endures. When the smoke clears and the embers fade to nothing, people come back to rebuild their lives.
Right now, our nation is passing through a different kind of fire, an inferno division of fear of dreading the rent checks on the first of the month and watching institutional guardrails topple one by one by one.
(END VIDEO CLIP)
MICHAELSON: So you've thought about coming to the Senate for a long time, what you'd want to do in the Senate for a long time. Now that you've been there for a year, what's sort of been the biggest thing you've learned while in office that you didn't expect or didn't know before you started?
SCHIFF: Well, there's a lot I've learned about the institution of the Senate and about the state of California. One of the first decisions I made was to seek a seat on the Agriculture Committee. I'm the first California senator on that committee in over 30 years. We're the number one agriculture producing state of the union. That position, that seat at the table has given me an opportunity to get to know farmers in the North State, in the Central Valley and the Central Coast, and the Imperial Valley, to get a better understanding of the challenges facing farmers and farm workers with tariffs, with immigration raids, with water issues and regulation.
So that has been very eye-opening and very enjoyable. And one of the stories, Elex, I've told on the floor tonight was being in Butte County meeting with farmers, and they were initially I think a little skeptical of this big city Democrat. But by the end of the meeting, one of the farmers turned to me and said, I don't know why the president calls you watermelon head. You have a perfectly normal sized head. So that's what I know is making progress.
MICHAELSON: Yes.
SCHIFF: But in terms of the institution itself, I remember after just a couple of months of voting on nomination after nomination, and it wasn't just the Cabinet secretaries, it was a whole range of different positions asking my staff, how long does this go on, the voting on the nominations? And one of my new staff but a longtime Senate staff said six years, and I thought this was just something that happens in the early days of administration.
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But no, you vote on all these nominations, and then within a couple of years, those people, a lot of them leave and you're voting on their replacements and it never ends. So that has been a surprise how much time of the Senate is simply occupied by confirmations.
MICHAELSON: Well, you know, I've been interviewing you for a long time and I know what a big fan you are of the Big Lebowski and how you think in terms of Big Lebowski quotes and moments. And so what would be one Big Lebowski quote that you can think of that best represents the United States Senate?
SCHIFF: Oh, well, I don't know that I would say it best represents the Senate compared to the House. But I do think in politics, I often think of the line, although I don't often speak it out loud, when I hear one of my colleagues, you're not wrong. You're just an asshole. So I'm not sure you're allowed to play that on TV, but --
MICHAELSON: You could do that. We're on cable now, so we actually can say that.
SCHIFF: But that line does come to mind from time to time.
MICHAELSON: So you're saying there's plenty of A-holes in Washington. I guess that's the thing you learned.
SCHIFF: I'm sure it's not confined to Washington, but, actually, one thing, Elex, I do like about the Senate, it is much more collegial. There is more opportunity to get things done. And that is a welcome change from the House.
MICHAELSON: Well, Senator Adam Schiff, it is great to have you on this show for the first time. We've been talking for so many years, and it's a pleasure to welcome you and look forward to talking to you many more times.
SCHIFF: Thanks so much.
MICHAELSON: For the second time this year, a federal judge is ordering the Trump administration to end its deployment of federalized National Guard troops in L.A. and returned them to state control. The judge ruled that the president does not have the authority to keep the troops federalized without a clear emergency, writing that protests earlier this year could have been managed without the National Guard.
The White House says Trump acted lawfully and suggests it will appeal, arguing the troops were needed to tamp down the protests against immigration raids. The judge said he would delay enforcement of his order until Monday at noon Pacific Time.
Ukraine now, President Zelenskyy is expected to join a virtual meeting of Ukraine's allies in the coming hours. The so-called Coalition of the Willing will discuss how to move forward with peace talks. That's according to Finland. Ukraine delivered an updated version of the U.S. drafted peace plan to the Trump administration on Wednesday. The new details were hammered out during Ukraine's talks with European allies earlier this week. It's still unclear what changes, if any, Kyiv is demanding.
Well, who couldn't use a little more money? Someone, maybe, just won $1 billion tonight. We've got the winning Powerball numbers. And we'll also talk about the latest Federal Reserve move and how it impacts the interest rates you play. Plus, we'll back live to Washington state for an update on the expected record flooding in the hours ahead. We'll talk to a reporter there soon.
(COMMERCIAL BREAK)
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MICHAELSON: The winning numbers have been drawn for the second largest Powerball jackpot of the year. Those numbers 10, 16, 29, 33, 69 and the Red Powerball 22. So tonight's jackpot was $930 million.
Here's the big headline. Nobody won. So that means Saturdays drawing will be for $1 billion. Remember, when Dr. Evil used to say $1 million? Well, now we're talking $1 billion up for grabs Saturday night and Powerball.
All right, let's continue with the money theme. There's potentially good news for Americans carrying credit card debt or looking to buy a car. The Federal Reserve has cut interest rates by a quarter of a percent. Fed chair Jerome Powell says that might be the last cut for the near future, although he may not be in the job that much longer. The Central Bank is hoping to stabilize the weakening job market. Policymakers also trying to keep inflation in check.
(BEGIN VIDEO CLIP)
JEROME POWELL, FEDERAL RESERVE CHAIR: If you get away from tariffs, inflation is in the low twos, right. So it's really tariffs. That's causing the most of the inflation overshoot.
(END VIDEO CLIP)
MICHAELSON: Powell's term expires in May. President Trump does not want to keep him in the job. He will be appointing a successor who shares his desire for more rate cuts.
(BEGIN VIDEO CLIP)
TRUMP: The head of the Federal Reserve is a stiff. He did a rather, I would say a rather small number that could have been doubled, at least doubled.
(END VIDEO CLIP)
MICHAELSON: If you want to know which president appointed him to the Fed, yes, that is President Trump. That was his choice for the Federal Reserve Chair, Jerome Powell.
Wall Street cleared -- cheered on this rate cut. The Dow rose more than 1 percent. Nasdaq and S&P also higher.
More now on all this from CNN's Richard Quest.
RICHARD QUEST, CNN BUSINESS EDITOR-AT-LARGE: Elex, I shall do my best try not to bog you down in the boring numbers, the minutia, if you will, of this Fed cut. But it is interesting and I promise you, it is interesting. So the Fed cuts for the third time in three meetings by a quarter point. And now it really gets difficult because what we have, the Fed has a dual mandate. Full employment, price stability.
And at the moment both of those inflation versus new jobs are in conflict with each other, which is why the Fed chair was quite blunt about how they decided the priority now had to be the jobs market, ensuring, taking out the necessary insurance for more jobs.
(BEGIN VIDEO CLIP)
POWELL: A reasonable base case is that the effects of tariffs on inflation will be relatively short lived. Effectively, a one-time shift in the price level. Our obligation is to make sure that a one- time increase in the price level does not become an ongoing inflation problem, but with downside risks to employment having risen in recent months, the balance of risks has shifted.
(END VIDEO CLIP)
QUEST: Now let's go from the economics to the political, in a sense, because there were three dissents on the main decision. Two of them preferred to keep interest rates exactly where they were. Sit on your hands. Don't do anything. President Trump's most recent appointee to the governorship that, well, that's Stephen Miran, and he voted for an even bigger cut.
Now, if you bear in mind that next May, Chair Powell gives up the chair, and in January or late January, February, we will get the nominee from President Trump, you can see that the Fed, much as it might try to do with our economics, we are not political, we are economics. We are not political. Much as it might try to do it, it's going to be well and truly up to its eyeballs in politics in the months ahead.
Now, hopefully that told you exactly what you needed to know in a profitable moment -- Elex.
MICHAELSON: Richard Quest, thank you. And I love the way he says minutiae.
Growing affordable concern, affordability concern. We're going to talk about all that. President Trump says it's the Democrats that drove up prices. So let's get into that. Our panel. John Thomas, Dave Jacobson, standing by live to debate that. Plus, we'll go live to Washington state.
UNIDENTIFIED REPORTER: Yes, we are tracking potentially catastrophic flooding in very different areas throughout Seattle, beyond. We're going to take you inside the preparation as this effort ramps up days before the rivers crest.
(COMMERCIAL BREAK)
ELEX MICHAELSON, CNN ANCHOR: Welcome back to THE STORY IS. I'm Elex Michaelson. Let's take a look at today's top stories.
[00:32:00]
The U.S. Federal Reserve has voted to cut interest rates by a quarter of a point, as expected, but Fed Chair Jerome Powell indicated it might be the last reduction for a few months. The central bank is trying to keep inflation in check. Experts say this cut was intended more to help stabilize the weakening labor market.
Nobel Peace Prize winner Maria Corina Machado is expected to hold a news conference in the coming hours, following her risky journey to Oslo. Venezuela's government had warned that she would be considered a fugitive if she le feet the country.
The opposition leader has been in hiding since last year. Machado's daughter accepted the award earlier on her behalf.
Protesters are turning up the heat on Bulgaria's government, which is facing a vote of no confidence on Thursday. Massive crowds of people took to the streets across the country on Wednesday, demanding the resignation of the entire cabinet.
Police detained about 20 protesters. Among other things, demonstrators are unhappy with the proposed 2026 budget.
More now on our top story this hour: the severe flooding threat in Washington state. The U.S. National Weather Service predicts potentially catastrophic flooding as a result of a strong atmospheric river over the region.
At least 100,000 people are being advised to evacuate right now as a precaution.
Washington's governor, who joined us live a short time ago, has declared a state of emergency ahead of the worst of the floods, hoping to secure federal assistance for recovery efforts.
Jim Nelson with CNN affiliate KING 5 news in Washington state, joins us live right now. Jim, thanks for being with us. What's the latest from where you are in Mt. Vernon?
JIM NELSON, REPORTER, KING 5 NEWS: Yes, Elex, we are about 60 miles north of Seattle in Skagit County, where the Skagit River is raging and rising.
We're at about 28 feet right now. That is already considered flood stage. This river is expected to crest at 42 feet sometime on Friday.
Late tonight, people in the immediate vicinity of the river were told to leave now. They call it a level one, go now, evacuation. And that's where things are right now here in parts of Skagit County. Again, about 60 miles north of Seattle.
There is a permanent but aging dike system in this area. It failed in 1990, and there have been improvements made ever since. However, crews spent the better part of the day, the last couple of days really, installing a temporary flood wall.
At this point, it will hold. The river has not overflowed the banks just yet.
But one person came up to me and asked, when is it expected to hit that wall? I think the more important question is what will happen when it does?
Downtown businesses have been preparing with sandbags and boarding up their storefronts. I talked to one business owner who opened up about a year ago.
She said starting her own business was the culmination of her life's work. But now this situation is out of her hands. She's ready to leave and hopes that when she comes back, her inventory is still intact.
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MICHAELSON: Yes, I mean, you talk about 1990. That was the worst flooding in Washington history. And when we talked with the governor earlier this hour, he told us it will be worse than that. There's no question that you all are about to set a new record.
You talk about the situation where you are right there. What about the other parts of the state?
NELSON: Well, right now, we're looking at about two dozen flood warnings, and about a dozen of those are expected to be major floods.
Two of them, at least two at this point, could be catastrophic in nature, including, of course, what they're preparing for here along the Skagit River.
I mentioned that the crest is expected at 42 feet. That would be several feet above the previous record. So, they are gearing up for what could certainly be a damaging situation in the wake of this storm.
And we're dealing with it all throughout Western Washington. And it's not just the flooding. With so much rain, we have seen multiple landslides that have shut major highways down for several hours at a time.
And to think: we're still, in many ways, in the thick of it. Everyone now can simply do nothing but wait -- Elex.
MICHAELSON: Or get out. If you've been advised to evacuate, listen to those warnings, because it sounds like --
NELSON: Yes.
MICHAELSON: -- some serious stuff is coming in the days ahead.
Jim Nelson from our CNN affiliate KING 5, thank you so much and hope you are able to stay safe in the days ahead.
NELSON: Yes, thanks.
MICHAELSON: Let's talk politics.
(BEGIN VIDEO CLIP)
DONALD TRUMP, U.S. PRESIDENT: The Democrats created the worst crisis of inflation that this country has ever had. And with that came the highest prices that we've ever had. And I'm fixing it.
(END VIDEO CLIP)
MICHAELSON: President Trump there, blaming Democrats as he faces pressure over the economy and concerns about affordability across the U.S.
While the president calls those fears a Democratic hoax, a new poll shows they are, indeed, very real, at least for voters. According to the Politico poll, 56 percent of Americans say the high cost of living is the biggest issue in the U.S. right now.
Live here in Los Angeles is Dave Jacobson, Democratic strategist and co-founder of J and Z Strategies; and John Thomas, Republican strategist and managing director at Nest Point. Welcome to you both. Good to have you back.
DAVE JACOBSON, DEMOCRATIC STRATEGIST: Thanks for having us.
MICHAELSON: That cost of living thing, certainly an issue here in California, where it's even a higher issue, because it's so much, even, more expensive.
But -- but, John, when the president says this is a hoax, how does that play to his voters, the MAGA base?
JOHN THOMAS, REPUBLICAN STRATEGIST: Look, affordability is a -- is a real issue. We're seeing it across the across the country. And President Trump understands that.
This is one of the reasons why he's been pressuring Jerome Powell to continually reduce interest rates, because he understands that it's hard to afford things like a home mortgage; because home prices have been skyrocketing.
One of the things he campaigned on was bringing down prices. And he's made some nibbles around the edges. But look, there's still a lot more room to grow.
And I think it's why in these -- some of these special elections like Mamdani in New York, New Yorkers are willing to elect a socialist, because that socialist is saying he's going to bring down prices.
MICHAELSON: Right.
THOMAS: Now, I think his pathway to that is incorrect, but it does speak to voters' concerns about affordability.
MICHAELSON: He calls himself a Democratic socialist, not a straight-up socialist. But point taken.
Dave, this is -- really seems to be helping the Democrats right now.
JACOBSON: No doubt. I mean, FOX News put out a poll just a couple of weeks ago, Elex, that said 76 percent of Americans view the economy negatively.
And I think that's translating into electoral politics. We saw this in Miami-Dade last night, where a Democrat won the mayor's race. Democrats haven't held that seat in 30 years.
And it wasn't just a win. It was by 19 points. Democrats in November won races in Virginia and New Jersey. We've won races in Pennsylvania, in Georgia. So, we clearly have the wind at our back.
I think the challenge for the president is he reeks of hypocrisy. This dude is a billionaire, a mega billionaire, and he's talking about affordability as being a hoax when you have hard working families, union members across this country, struggling to make ends meet, to afford eggs and milk for their family.
MICHAELSON: Yes, I mean, I can't imagine the last time he went grocery shopping. But some of that is, like, that job of being president is so isolating, right?
You think about President Biden, who was trying to talk up the economy and telling people that inflation wasn't a real issue; it was transitory and all these things and said Bidenomics is working. And it hurt him.
It was interesting. Tonight, I talked with the chairman of the DNC for an interview that we'll see tomorrow. He said affordability was the biggest issue of 2024, and it hurt Democrats.
It's the biggest issue of 2025, and it's helping Democrats now. Really, it's, like, bad to be the party in charge.
THOMAS: It's tough. You do get blamed -- for better or for worse, you get blamed for the current status quo.
But look, President Trump has had a unique ability to identify with the working-class voters on issues like affordability.
[00:40:05]
It's one of the reasons he so famously on the -- this last campaign trail, drove the trash truck. He worked in the McDonald's drive-thru lane, showing a blue-collar billionaire relatability that you wouldn't think somebody of his --
MICHAELSON: Wearing a suit.
THOMAS: Well, but somebody of his means you wouldn't think could relate.
MICHAELSON: Right.
THOMAS: But he has been able to make that relation --
MICHAELSON: Unbelievable. Unbelievable. And changed the whole dynamics of the Democratic Party in the process.
But yet, it's his people that are complaining about affordability. I mean, you look at the polls. This isn't just Democrats that are concerned about this.
THOMAS: Well, this is partly a government problem. Government spending has been out of control for a long time now. It's been increasing prices.
And look, President Trump's tariff war, he has said there will be temporary pain to bring down prices. And Americans are sitting here looking at their watches going, how temporary are we talking?
MICHAELSON: Right.
THOMAS: And this is the problem with politics. We are, in short, these two-year cycles that prices have to meaningfully come down before the election, or voters may take it out on the president.
MICHAELSON: And our media system has gone so increasingly fast, too. You think about years ago, it was like reading the morning paper. Now it's meeting [SIC] the tweet --
THOMAS: Yes.
MICHAELSON: -- five minutes later, or X post, I should say.
Dave Jacobson, another big issue is health care. I mean, the biggest issue after the economy is health care. And those two often go hand- in-hand.
We're going to see a vote on that this week. We don't expect the Republicans to move on these Obamacare subsidies, which a lot of Americans have gotten used to.
JACOBSON: Right.
MICHAELSON: How do you see this issue?
JACOBSON: Well, it sounds like there's a Republican bill being put forward and a Democratic bill put forward. But what's fascinating is the ACA is now more popular than it's ever been, Elex. Gallup just put out --
MICHAELSON: This is Obamacare we're talking about.
JACOBSON: Obama, the Affordable Care Act.
MICHAELSON: Right.
JACOBSON: It is now polling at a 57 percent favorable rating. Right? This was reported by Gallup earlier this week.
And so, now you've got almost 60 percent of the country in favor of this health care bill [SIC], right at the moment when health care costs are going to skyrocket if a bill for -- to pass subsidies doesn't pass at the beginning of the new year.
So, I think Republicans are sort of backed into a corner on this, because they're going to get the blame. They're in power. They control all levers of government: the Senate, the House, and the White House.
So, I think Democrats are on the right side of this in terms of public opinion. The question is what Republican -- Republicans are going to do.
MICHAELSON: Is this a hill worth dying on for -- for the Republicans, who have real problems with the ACA since it began? Right?
If you think about, in 2010, that's how Republicans won the House was because of ACA. They lost it in 2018 because of it. Now we're fighting over it again.
Or do you think the smart politics is just punt on ACA subsidies? Go another year or two and get this issue off the map?
THOMAS: I think you've got to punt it. I also think, look, our -- our politics --
MICHAELSON: Meaning keep the -- keep the ACA subsidies. You would say -- you would say give the Democrats the win on this?
THOMAS: I would say that. I, though -- the interesting thing is, I think the challenge you're going to have is looking at our election cycles of really is the midterms, the battle, even though yes, it is for the balance of the House. Most of these members are looking at primary challenges as their real battle.
MICHAELSON: Right.
THOMAS: And the Republican base doesn't want to see the Republicans give on this issue.
MICHAELSON: Yes.
THOMAS: So, that's the give and take here is, OK. I could perhaps have a better general election issue. But if I'm not around in a general election, what's the point of that battle?
But President Trump also gets this, Elex. He's been going after what he calls the fat shot and other pharmaceuticals to try to reduce some of these prices for Americans.
MICHAELSON: That's what he calls Ozempic and Mounjaro and other things. Yes.
JACOBSON: But I think the challenge for the Republican Party in general, right, is they're just disconnected from where the voters are.
President Trump is polling at 36 percent, according to Gallup a couple of weeks ago. Right? The lowest he's ever polled is at 34 percent after January 6th.
And so, you've got this affordability crisis going on. If health care costs are going to skyrocket, because they don't pass an extension for ACA, they're going to get the blame.
MICHAELSON: But the generic Democrat number is not very high either.
THOMAS: It's better.
JACOBSON: It's not indeed. But if you look at the electoral performance, we do have the wind at our back.
MICHAELSON: Yes, indeed.
Meanwhile, while all this is happening, we see what's happening in Venezuela and these boat attacks. U.S. -- or this oil tanker was seized today.
And a lot of folks in Congress are like, what's going on with this? They say there should be a declaration of war. Here's what Senator Adam Schiff said to me earlier this hour.
(BEGIN VIDEO CLIP)
SEN. ADAM SCHIFF (D-CA): Something doesn't add up, but the American people don't want us to get into another war, this time with Venezuela.
But it does require Republicans to stand up to the president. And there are a lot of Republicans and a lot of MAGA Republicans who don't want another war. They've been very vocal about it. So, this would not be -- in contradiction to at least some of their base.
(END VIDEO CLIP)
MICHAELSON: How do you see the politics of this?
JACOBSON: I think the challenge for the president is his party split. Rand Paul is adamantly against this. Josh Hawley, who's like one of the strongest or most proponent --
MICHAELSON: Senator from Missouri.
JACOBSON: Senator from Missouri, one of the biggest MAGA supporters in the Senate, said that he was, quote, "skeptical" about this. Right?
So, the question is, can the president consolidate the base in the Senate and the House behind this?
And, you know, the question is, why are we doing this? If this is about drugs, why did you let the president of -- the ex-president, I should say -- of Honduras out just a couple of weeks ago? Why did you pardon him? Because he was a drug lord.
[00:45:06]
The question is, like, why are we in Venezuela in the first place?
MICHAELSON: And President Trump has been -- says that he ended eight wars. He clearly wanted the Nobel Peace Prize. He accepted this peace prize from FIFA. Sort of strange that this is happening under his watch.
THOMAS: Well, this is the complicated stuff of presidencies; is both sometimes you have to walk up to the line to achieve peace.
And the president also campaigned on ending fentanyl trafficking, or making a dent in that in the United States.
Look, hundreds of thousands of Americans are dying as the result of fentanyl. And prior presidents really haven't done much.
So, what's Trump doing? He's securing the Southern border, and he's going after what he thinks is the root cause, which in this case are drug traffickers.
I think the good news is the base and Americans know President Trump doesn't want to go to war. But a lot of our enemies have to believe that he just might.
MICHAELSON: And we don't know if his secretary of state wants to go to war, as well.
Speaking of, real quickly, there was this thing where he wants to change the fonts that are used. This is Times new Roman versus Calibri. I don't know if we have a graphic to show the difference there. Times New Roman is what Marco Rubio, the secretary of state, likes.
The other side is the old font that the Biden administration likes. Which font do you choose?
JACOBSON: I'd go with the "New York Times" Georgia font. That's my go- to.
MICHAELSON: OK.
THOMAS: Strongly. As a traditionalist, Times New Roman, projecting power, strength and certainty.
MICHAELSON: There's the conservative answer.
All right. John, Dave, great to have both of you. Thanks for the smart analysis. We appreciate it.
Coming up, a newly rebuilt home is a sign of hope for some L.A. residents after the devastating fires nearly a year ago. Next, I'll show you how the home is equipped and why a lot of residents actually are kind of frustrated by this whole story. Nick Watt takes us there when we come back.
(COMMERCIAL BREAK)
[00:51:28]
MICHAELSON: Here in Los Angeles, the city is trying to rebuild after the most damaging fire in its history.
It's been nearly a year since the Palisades Fire, and the city has now issued its first certificate of occupancy to a newly-built home in the community.
But don't expect anybody to move in anytime soon. CNN's Nick Watt takes a tour.
(BEGIN VIDEOTAPE)
NICK WATT, CNN CORRESPONDENT; New house smell. That's kind of encouraging.
WATT (voice-over): Because within a year of the most destructive fire in the history of L.A., the first certificate of occupancy was issued for a rebuild in the Palisades.
WATT: Wow. Wow. Wow.
WATT (voice-over): A major priority? Making sure all this doesn't burn down again.
WATT: So that's not wood?
STEVE SCHLAGETER, COO, THOMAS JAMES HOMES: It's not. Its cement and fibers that hold it together. You'll also notice up in the eaves, those little nozzles. WATT: Yes.
SCHLAGETER: Well, in the case of a fire, douse the house with either water or a fire retardant. There are sprinklers that pop up on the roof and douse the roof like a lawn system.
The other thing that we've added is the six-foot aluminum fence around the entire perimeter.
WATT (voice-over): He's COO of the developer that bought this lot last November to tear down, rebuild, and sell. Then it burned down. So, they built this as a show home.
SCHLAGETER: And so, the people who are thinking like, what do I do? Do I want to build again? Do I want to move? Do I want to sell my lot? It gives them an idea of what's possible out here.
WATT (voice-over): Four thousand feet, four beds, four and a half baths. Walk in his-and-hers closets.
WATT: Did you ever think, you know what? We're going to move to Florida.
JIM HUSER, PACIFIC PALISADES RESIDENT: Never.
SUSAN HUSER, PACIFIC PALISADES RESIDENT: Our community was here. You know, our church, our friends, our kids -- our kids' friends.
WATT (voice-over): Susan and Jim Huser have asked these developers to build on the lot where they lived 28 years. They missed the view.
WATT: When are they going to break ground?
S. HUSER: Well, they've started grading. Our permits are already --
J. HUSER: Last week.
S. HUSER: -- are already approved.
WATT (voice-over): Some people, like the old neighbors, are selling up. Plenty others, still fighting insurance companies for the money to rebuild, or wrapped up in red tape.
J. HUSER: When we talk to other people who are waiting for a year and a half, two years, we feel like we're on the speedy train.
WATT (voice-over): The city has streamlined the permitting process, near tripling the speed, says the mayor.
WATT: Is it streamlined?
SCHLAGETER: It's better. Yes, it's certainly better than it was pre- fire.
WATT (voice-over): But so much to rebuild. More than 9,000 structures were destroyed in the Eaton Fire to the East. Nearly 7,000 structures in the Palisades Fire; 1,200 construction permits issued here so far.
A shade over 340 projects actually underway in what was one of the most beautiful and tranquil corners of the city. Less tranquil right now. Still beautiful.
SCHLAGETER: I think when people are displaced, they just want to get home. Even if it's a bit of a construction zone, it's still home.
WATT: There's a lot of work going on, but there's a lot of work to be done.
S. HUSER: Yes, it's going to be a while before there's a real community here again.
J. HUSER: Getting the supermarkets back and the drugstores and the library and all that. That's going to take years.
(END VIDEOTAPE)
WATT: So, Elex, this developer, they have a bunch of other projects in the Palisades. And they say people are going to start moving in January, February, and by the summer there will be something of a community here. It's going to take a long while for the rest of it, but something of a community.
But listen, these guys are pros. They take 2 to 3 months to get the permits. They build in a year, guaranteed.
If you're doing it by yourself, it's going to take a lot longer, and it's going to be a lot more painful. But at least this is -- it's a symbol of hope -- Elex.
[00:55:08]
MICHAELSON: Nick, thank you.
And their permit, actually, was submitted before the fire, which is part of the reason they were able to get that permit done and get that thing built.
Folks whose homes burned down, it's been taking longer for them.
Drivers in Florida got quite a scare when a small plane landed right on top of a car on a busy highway. That story ahead.
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MICHAELSON: A harrowing moment caught.
