tv CNN Newsroom With Poppy Harlow and Jim Sciutto CNN July 28, 2022 7:00am-8:00am PDT
good morning, everyone. i'm bianna golodryga in for poppy. >> and i'm jim sciutto. president biden holding a highly anticipated call with president xi jinping. it is their first conversation since march this year. it comes a s the relationship between china and the u.s. has deteriorated to its lowest point in decades.
plus the u.s. and russia debating a prisoner swap. antony blinken speaking with sergey lavrov. and a breakthrough on capitol hill. chuck shchumer and joe manchin striking a deal after a year of negotiations. >> there's a lot in this bill, including tax changes. we begin with major developments on the u.s. economy. the gross domestic product fell 0.9%, following a 1.6% drop in the first part of this your, blamed in part on the omicron surge, all of this adding to fears the u.s. could be in a recession. joining me to talk about all this, white house national economic director brian dees. good morning. thanks for taking the time this
morning. >> happy to be here. >> two consecutive quarters of negative growth. every period since 1948 of two straight negative quarters of gdp has coincided with a recession. >> in every prior recession in the united states, we have lost jobs. and over the course of the year we have gained 2.7 million jobs. the unemployment rate is 3.6%. there's only been a couple of months in the last decades that unemployment has been as low. we have a strong labor market. we have resilient consumers that are continuing to spend and businesses continuing to invest. we are in a transition. there's no doubt that the economy is slowing. that is most expected coming off of an extremely strong and fast recovery last year. all of the under cases we see right now is for an economy showing extraordinary resilience
in the face of global challenges. the most important thing we can do is to move on historic legislation that would lower costs and encourage greater business investment over the long term. >> i want to get to that but it seems that companies themselves are returning to a downturn. walmart lowered their outlook for quarter two, saying they're seeing less discretionary spending by consumers. gma said they're going to cut spending due to moderate economic downturn. that portends further slowing, does it not? >> with respect to where we are economically, almost any outside lan list, jpmorgan, morgan stanley, bank of america, citigroup, jpmorgan, they have all in the last couple of weeks said nothing in the data right now is consistent with the economy being in recession. on the consumer side, we're absolutely seeing a transition and this is a transition that
many called for and many anticipated in two respects. one shifting from spending on goods to services. people are getting out more, they're traveling more. that's why you're seeing hospitality, leisure, airlines with a lot of activity. and, second, people are shifting to focus on more discounted products. every individual company will have to deal with that. some companies that may be more opportunity or more risk for them. overall we're seeing a resilient consumer. household balance sheets have stayed strong during this period. >> the feds raised interest rates again. the fed admits it was too slow to act here to head off inflation. i wonder, are you concerned now that the fed -- and i know you don't like to dip into fed affairs but are you concerned that the fed might overreact and push the economy into a recess? >> there's a reason we don't comment on that kind of question. the best thing we can do is give
the fed independence. it's important for our institutions and confidence in the u.s. economy. so i will leave the question of the tactics of monetary policy to the fed. what i will say is as we move through this transition, the single most important thing that we can be doing, that congress can be doing, is moving on legislation that provides some relief to consumers and also reduces price pressures in our economy. and the inflation reduction act that senator schumer and manchin outlined yesterday is probably the best way we can do that, along with the chips bill. we're hoping to have historic progress. there's real action we can take. >> i want to talk about the budget reconciliation deal. nobody thought it had a chance and now manchin is on board. do you have the votes? do you anywhere sinema or bernie sanders stands on this?
are you confident it will pass in the senate? >> we are doing everything we can do to get to this to his desk without delay. it going to lower the cost for prescription drugs for families and seniors but also for medicare. and technology neutral, more supply of energy and increased energy security at home and address thei issue of tax fairness. this bill would say all companies should be paying something, 15%. that is a sensible, base broadening tax reform that will help to address some of the unfair in our current tax code where companies that offshore production or offshore jobs do so because they can get a tax advantage and move their production overseas and get benefits for that. >> let me ask you finally, "the washington post" is reporting that larry somers was key to convincing joe manchin this
package is not inflationary. he was one of the first to say inflation is coming before others did. explain why spending all these billions is not inflationary. >> the principal purpose is to reduce costs, lower costs for health care and health care premiums for 13 million americans and lower energy and utility bills. number two, it would reduce the federal deficit and we will reduce price pressure in a way that's complementary to what the fed is doing on monetary policy. even over the past 18 hours that this has been announced, some analysts who agree and some who haven't say this would be a construct of step, it would move in the direction of lowering price pressures and provide consumers and families some direct relief.
>> brian deese, we appreciate you taking the time to join us this morning. >> happy to be here. >> this morning the president holding a critical call with chinese president xi jinping. >> it's the first call in months since the tension between the two nations. this conversation has been going on a little over 90 minutes now. any word about what's come out of it? >> well, we're still waiting to hear from the white house on whether this call between immedi president biden and chinese president xi jinping this morning. it's the first time the two have spoken since president biden took office last year. this comes as u.s. officials say the president has tried to keep this open dialogue with one of america's greatest competitors and that is china. they've also acknowledged there are real points of tension that were likely to arise on this call. that includes taiwan, china's posturing in the south china
sea, the war in ukraine and the competition occurring between the u.s. and china. now while this call had been scheduled and the planning had been worked on for several weeks, it's taking place against the backdrop of that pop visit by speaker of the house nancy pelosi to taiwan, a trip that has drawn -- a possible trip that has drawn a strong rebuke from china. last week president biden revealed that the u.s. military did not think it was a good idea for pelosi to travel to taiwan at this time. administration officials have been working to try to convince her of the possible risks. we know defense secretary lloyd austin spoke with pelosi recently about the security assessment of the region, though he didn't get into the details of what they discussed and china promised a forceful response if she traveled. this is expected to come up between the president and she at a very precarious moment. >> thank you.
i'm joined by a staff writer for "the new yorker" and the author of "joe biden, the author, the run and what goes on now." president xi hasn't left china since president biden has been in office, but president biden has long touted their relationship going back to when he was vice president and they had several meetings back then at the time. i'm just curious given that relationship, do you think it benefits in any way to help sort of lower the tension now and stabilize at least the relationship given at the low levels it is right now? >> well, bianna, as you say, they do go back a long way. i think biden likes to point out, he says we've known each other a nglong time. doesn't mean we're friends. he means they do have a basis for communication. biden visited china when he was vice president, xi jinping at that time was china's vice
president. they spent a lot of time on the road together. they know how to talk to each other. they can cut through some of the static, some of the get to know you. they've been on the phone now for more than an hour. that makes sense. there's a lot for them to talk about. a lot of things on the table. when you have this kind of background, you can get right into it. but it is worth pointing out here that the backdrop to this entire conversation is what analysts call strategic mistrust. it means neither side fundamentally trusts the other's intention here. the united states is wary of what china is seeking to do and china is wary of what the tunitd states wants to do. >> specifically with the issue of taiwan and the potential visit of nancy pelosi, i want your perspective on how president biden will approach this issue. he doesn't want to say your
blustering rhetoric has stopped this trip from happening and at the same time president biden has said she would prefer she not travel now either. >> president biden will say what you see from the outside may not be how it operates internally. when the chinese say to the american political system in effect, look, we are threatening you saying there will be repercussions if nancy pelosi comes to china, that may seem as if it's going to make it harder for nancy pelosi to go. in fact, as joe biden is likely to be telling xi jinping right now, that narrows the options and makes it harder for nancy pelosi to change course because now it looks like it's a climb down against chinese pressure. what he likes to point out is internally we have a lot of dynamics, not just because nancy pelosi and joe biden are
democrats, doesn't mean she has to do everything he says. he's been publicly clear about the fact he thinks the military would prefer she didn't go. that doesn't mean he can snap his fingers and make it happen. he's trying to make xi jinping understand that and give xi jinping the political ammunition he needs internally, i did what i could, let's not overreact and turn this into a larger issue than it needs to be. >> and it's about the economy as well. we note that china's economy is at play there. president xi's approach to economics and policy internally and the zero covid and word that china's growth estimates will be lower than initially forecast. i'm curious, is there any deliverable on the part that president biden could perhaps
offer in terms of the $370 billion in trade tariffs that are still in play from the trump administration. is that an area where they could see eye to eye in lifting those is this. >> it an opportunity to negotiation. it's easy to forget these days, we have more than $370 billion of tariffs on american goods here. that is a point that both sides would like to see ultimately change. i think the chinese side expected the biden administration to change it when they came into office. that was a misreading on china's part. the biden administration said we're in no hurry to make a change unless we get something in urn are, whether we get greater opportunities for, ports into china. but the china leadership is under pressure. the economy has slowed to a standstill in the most recent quarter, they're facing a dropoff in the working age population in the years to come. that creates the environment for a negotiation to, say, let's figure out how this is going to change. i don't expect it would happen
overnight. if you're going to see tariffs come off, it would be piecemeal. there are some prominent voices who are saying let's hold on to these as long as they can, labor groups, some american domestic companies say we benefited from this. in many ways, it's an opportunity for the two sides to find some area of shared interest in a moment when they don't have a lot and they're pointed at a collision course in other ways. >> evan osnos, thank you so much. we appreciate your i'm. >> you're welcome. >> still to come, after more than a year of negotiations, senate democrats have reached a major deal on climate, tax, medicare legislation. senator tom carper joins us next to talk about the road ahead. >> and the kremlin saying no agreement on president biden's proposed prisoner swap. why russia could be holding out. >> and later --
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remarkable, unexpected reversal, senator joe manchin has reached a deal with chuck schumer on a broad budget bill, including provisions for energy, health care, climate provisions after a year of negotiations. the major piece of legislation would pay down the national debt, cut health care costs, raise at a minimum tax for
corporations. senator, thanks so much for joining us. i wonder just until a few days ago, this deal was considered dead in the water. how did it come together at this late hours? >> it's a testimony to never giving up. i didn't give up. my staff never gave up. we continue to negotiate with senator manchin, not just on methane emissions reductions but other aspects of it. we worked with our caucus and senator schuman and that of his staff and leave it to joe manchin to find the middle and address climate change in ways that create jobs and economic opportunity. it paid for, it's deficit neutral and on inflation, it's helpful in combatting inflation. so it's an amazing development
and thrilled to have been a part of it. >> it is not yet whether kyrsten sinema or bernie sanders are on board. are you confident you have the votes to get it through? >> defeat is not an option here. it's common sense, all good stuff, deficit neutral, works on inflation, puts people to work, covers folks for health care, brings down prescription prices. who would not be for that? >> "the washington post" is reporting that larry somers was key in speaking to manchin and convince him this package is nonot inflationary. can you explain to folks at home how it will not be inflationary? >> in this cause, some of the earlier spending a year or two ago was not paid for. this is fully paid for, offset
in ways that make a lot of sense. god bless larry some ers, one o the best economists we've got and he reached out to governor manchin to give him information and that was helpful. >> methane, controlling that from the oil and gas history, does this meet u.s. commitments made by president biden in scotland last year? >> if you put the entire package together, which includes tax credits with respect to promoting clean hydrogen, green h hydrogen and advanced nuclear tax credits that are designed to fight climate change, you put it all together, it's a comprehensive package. the federal reserve until recently has been absent without leave with respect to inflation. they're all into it now.
we have a great package implemented all over the country. you've got this country, which is designed to go after climate change but in ways that complements job creation and we've got the federal reserve weighing in on monetary policy. put all that together, it's a great package. >> republicans are now threatening to torpedo the chips bill which had reached bipartisan agreement here. i wonder, do you believe they'll follow through on that? how should democrats respond? should they risk this reconciliation bill to save the chips package? >> i don't think we have to do one or the other. the republicans are smart. they were good to come and work with us on the chips legislation, and i think at the end of the day, they'll basically do the right thing. and there's a lot of good people on that side of the aisle as well. we'll be working with them closely just as we did on our side with senator manchin and his team. >> you've seen i believe this morning new economic statistics
are out showing that the u.s. economy did shrink during the second quarter by just under 1%, that by traditional definitions would mean two consecutive quarters of negative growth, which means recession in minds of some, although i know that other economists will look at a number of indicators. i just wonder you speak to voters in your state all the time. is the u.s. in recession? >> i am going to speak to a lot of them and go to the state fair. we'll have a lot of good news to share. job creation numbers from the department of labor the last three, four, five months, 300,000, 400,000 jobs created a month. on that front we're doing fine. the infrastructure bill, which is still being implemented and the legislation we're hopefully going to pass, there's plenty of stimulus to keep the economy more. the difference here is it's paid for. it fully offset in ways i think make a lot of sense.
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right now biden administration officials are frustrated with moscow's lack of a substantive response to the proposed prisoner swap that would free two americans detained in russia in exchange for convicted russian arms dealer victor boot. it would secure the release of brittney griner and veteran paul whelan. >> boot is an arms dealer. the leader of the nba players association told us last hour she's grateful president biden is willing to take this step. >> i am very hopeful that this go-time moment, this mobilization of so many different organizations, the afl-cio, athletes for impact, athlete ally, so many organizations coming together,
mobilizing around b.g., saying her name and talking about this case. i'm hopeful that what that did show president biden and his administration was that he had the support, he has our support to do whatever is necessary to bring them home. >> joining us now, christine brennan, sports columnist for today and cnn sports analyst. christine, always good to have you on. if this goes through, relief for brittney griner's family, for fellow players and so on but we do know the nature of this exchange. victor boot is an arms dealer, one of the world's most notorious. there is the question of what this means for other american athletes abroad. do they become targets because they become the next bargaining chip? does that sensitivity play into this with the spoke you speak with from the basketball world?
>> from the sports world there seems to be much more of a sense of relief, hopefulness and relief that brittney griner may get back home. i don't think that your worried about the strategic chess match that could unfold. you're right, there are athletes from the u.s. all over the world, not just in the olympic games but so many female athletes having to go overseas to supplement their income. there's no doubt that the p.r. campaign, which was massive by the wnba and wearing brittney griner's jersey and the number 42 of where plastered at the courts at the all-star game, the players all came out in the second half and wore her jersey, number 42, and the family appeals to the president has worked. now, the ramifications moving forward geo politically, one can only imagine. from a sports standpoint there is hopefulness that it is really working. >> and of course we all want to see these two american detainees
brought home. brittney griner front and center here. can you talk about the long-term implications? the short answer is these players need to be paid for so they won't go to other countries that don't have an independent judicial system. you have players that are in turkey, china, russia. do these leagues bear more responsibility in warning them not to go or to be more cautious? i mean, you look at the calendar. brittney griner was detained february 17th. the war started just a few days later. >> that's absolutely right and that's a huge piece of this. why was she going there? she's going there to supplement her income. to those who haven't paid attention or don't know, the top wnba is basically $230,000. with bonuses you can get another hundred thousand or so. the to be nba salary is over 40 million. so hundreds of thousands to millions.
it's an issue of capitalism really. if this bothers people, then the wnba, you got to buy tickets. that's a way to show your support for these athletes. and i think over time women's sports is gaining as title 9 continues to work its magic but right now the wnba pales in comparison as a cash cow to the nba. >> and another area is liv golf, saudi arabia spending billions to draw some of the world golfers there. when they've been asked about where this money it's coming from, the kind of regime it's coming from, they haven't always had great answers, as you know. turn there yesterday when some of these players had to answer questions about how they feel about taking this money. how were those answers? what did they say? >> jim, i asked paul casey, who is a firve-time ryder cup playe
from europe as now having the platform. they're important to mbs and important to the saudis. will they speak out for women's rights, gay rights? we know those issues are huge in saudi arabia, the lack of rights for women, for lgbtq people, et cetera. and immediately paul casey started talking about playing golf with a 17-year-old saudi girl at a pro am earlier this year. things are getting better because she says things are getting better. so what a story. and another guy chimes in, yeah, i played golf with her, too. that is the essence of sports washing. it's a relatively new term, people don't understand it. boy, that's it. i asked what about gay rights? i asked a two-part question. paul casey who is 45, traveled the world and is a relatively smart person i always enjoyed talking with said, yeah, i don't know anything about that and
another guy said i don't know anything about that. what a mess. it's really an embarrassment for sports that these guys are making that decision and being pawns for the saudi regime. >> not shining the best light on the sport, that is for sure. christine brennan, thank you as always. it's good to see you. >> you as well. >> cnn has learned that former acting white house chief of staff mick mulvaney is testifying today before the january 6th committee and they hope to get another former member on the record as well. we'll tell you who coming up. [whistling] when you have technology that's easier to control... that can scale across all your clouds... we got that right? yeah, we got that.
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this morning the january 6 committee deepens its probe, collecting information and testimony from high-level trump official. we just learned that the committee interviewed president trump's former secretary steven minuchin. >> joining us, elliott williams, former deputy attorney general. elliott, the list of senior trump administration officials very close to the president and with firsthand knowledge of his actions and efforts on that day prior and afterwards, this is becoming quite a long list. tell us what the significance that is for the investigation. >> it's not just senior government officials, it's
senior cabinet level government officials. the constitution allows the vice president and majority of the cabinet to remove the president if the president is unable to perform his duties. s question is did the 25th a amendment come up? i don't think people should get too excited here. you don't know what they're providing to the committee and are they still trump insiders defending or protecting the president but it is significant. >> there are reports going back to last year about cabinet officials really huddling and discussing whether they should invoke the 25th amendment in the hours after the unrest began at the capitol. you can't help but this so much of this goes back to the testimony of cassidy hutchinson. she seemed to open the flood gates to all of these higher level male officials. she had much more to lose than
they did to come forward but they clearly, it seems, now starting to follow suit and are willing to participate more with the committee in light of her testimony. >> that's exactly right, bianna. it's been said many times and liz cheney, the vice chair of the committee said it quite explicitly that this young woman, who had a lot to lose, is in some ways showing more integrity and indeed courage than some of the senior male cabinet secretaries and other members of the administration. basically an attempt to shame them into cooperating. of course when you get a subpoena, shame is really not the issue, you really have a legal obligation to respond. but elliott was exactly right. there were questions on the table. two cabinet secretaries resigned for example. secretary chow and secretary voss. secretary voss said this is an inflexion point. what happened here on january 6, that's it for me. we know there were credible
reports. the committee wants to get to the bottom of it, that other cabinet secretaries like mnuchin were going to invoke the 25th amendment. >> you would then say if you were considering 25th amendment, why? did you consider the behavior criminal? i want to bring in our reporter who has new reporting this morning about these key cabinet officials testifying. tell us what you know. >> reporter: there is a long list of names in the cabinet that the house is looking into now trying to get information out of as their investigation continues on. so the new information today is that they have interviewed the former secretary of the treasury, steve mnuchin and are negotiating for interviews with john ratcliffe at the end of the trump administration.
we learned yesterday that mike pom p pom pompeo was in talks to do an interview. mick mulvaney, the former acting white house chief of staff, he had spoken. what does it mean when you put all of these names together? it really is all about the 25th ae amendment. whether that conversation was taking place on whether the cabinet should step in and try to remove donald trump from power or somehow take the reins of the administration of the democracy away from him, that is a big question for the house select committee. we already know that they did speak to gene scalia, another cabinet member, what we learned is he was asking trump to call a cabinet meeting and trying to get the president to say the election was not stolen and that
it was the end. back to you. >> it was interesting because from the testimony that we heard from the likes of kaitlin hutchinson where she said it was the threat of the 25th amendment being invoked that really triggered the president to go out and finally persuaded him to make some of those videos calling on the rioters to go home. thank you so much for that reporting so elliott williams, out of all of the list of people who we heard from, high-level cabinet initials and intelligence initials, who are you most interested in hearing from once they do sit down with the committee members? >> i think anybody who was in the room with president trump on january 4th, 5th or 6th and to some extent we don't know exactly what meetings he might have had because some of the call and meeting logs from the white house don't,ist exist. someone like ken cuccinelli has been an ally of the president
from the beginning. i would have questions of what he's able to or going to provide but the firsthand knowledge will be very important for building either a criminal case but this dereliction of duty point that the committee is moving toward, this question of did the president simply violate his oath of office and ought he serve as president again. >> and defying that subpoena might have helped grease the works a little bit. thanks so much to both of you. >> the governor of kentucky, this is such a sad story, has called overnight flooding some. worst in the state's history. the pictures just devastating. we'll have an update coming up. g to ask you, carl. does your firm offer personalized index invnvesting? hmm? so i can remove a stock that doesn't align wiwith my goals. i'm a broker, , not a barista. what about managing gains and lolosses to b be more tax efficient? not a wizard either. looks like schwab personalized indexing can.
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seen this ad? it's not paid for by california tribes. it's paid for by the out of state gambling corporations that wrote prop 27. it doesn't tell you 90% of the profits go to the out of state corporations. a tiny share goes to the homeless, and even less to tribes. and a big loophole says, costs to promote betting reduce money for the tribes, so they get less. hidden agendas. fine print. loopholes. prop 27. they didn't write it for the tribes or the homeless. they wrote it for themselves.
right now people are missing and others are waiting on the roofs of flooded homes to be rescued after parts of kentucky were inundated with as much eight inches of rain overnight, the governor calling it one of the most devastating flooding events in the state's history. >> what we're going to see coming out of this is massive property damage. we expect a loss of life. hundreds will lose their homes and this is going to be yet another event that it's going to take not months but likely years for many families to rebuild and
recover from. >> it does take years to recover from events like this. meteorologist chad myers is live in the weather center. is the threat over for kentucky? where is the system headed next? >> it is for now. there will be rain showers with the same system move into the carolina and also into virginia. this is still the same stationary boundary that made the flooding in st. louis 24 hours before this. the rain has stopped but because of the wave they the valley is we're still seeing the river rise with six to eight inches and even more. it rained on tuesday. we have a bump in the river here and all of a sudden last night, that gauge is broken.
it can't go any higher. it probably higher than that right now but we can't even know. we're seeing pictures here across the country, and i believe we're probably going to see pictures that come in tomorrow that are going to be a lot worse. we have not had access to the worst hit areas. hot across the deep south, more showers and storms will fire up today. notice how it jus's just right g the same latitude. that's where the boundary, where the stationary front is. we're back out tomorrow to arkansas. and look at texas that could really use some rain getting absolutely nothing. i've looked at the maps, nothing for the next seven days. >> remarkable. >> it was devastating to hear governor beshear saying there will be loss of life following that threading. >> thank you for joining us today. >> it's been a busy day.
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hello, everyone. i'm kate bolduan. we begin with new and mounting concerns about the u.s. economy. for the second straight quarter the u.s. economy shrank contracting a the an annual rate of 0 op.9%. soon we're going to hear from president biden directly about the latest on the economy and also the big news that major pieces of his agenda, which have been frozen, may be on the move again with a surprise deal
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