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The Lead with Jake Tapper

Biden Cabinet Secretaries Press Mexico For Border Help; Haley Releases New Hampshire Ad Featuring Gov. Sununu; Michigan Supreme Court Rejects "Insurrectionist Ban" Case, Keeps Trump On 2024 Primary Ballot; Israel Official Warns War Will Go On For "Many More Months"; 2023 Holiday Retail Sales Rose Despite Inflation Concerns; Taylor Swift Ties Elvis' Billboard Record. Aired 4-5p ET

Aired December 27, 2023 - 16:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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ANDY SCHOLES, CNN SPORTS CORRESPONDENT: The winning team gets to eat it. How that's going to work with it being a real life mascot, I don't know, but I sure cannot wait to see.

JESSICA DEAN, CNN HOST: Wait a minute.

BORIS SANCHEZ, CNN HOST: An inedible mascot?

DEAN: You tell me you can walk around and nibble on it?

SANCHEZ: I guess so. We should have a mascot like that here on "CNN NEWS CENTRAL". Maybe not a pop-tart but like a brownie.

DEAN: OK, we'll look into that, maybe for 2024.

SANCHEZ: Yeah, something to pick us on the afternoon.

DEAN: Well, it's going to be a long year everyone. But we'll have a brownie walking around.

SANCHEZ: THE LEAD WITH JAKE TAPPER starts right now. Thanks for being with us, Jessica.

DEAN: Thanks for having me.

SANCHEZ: Of course.

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BIANNA GOLODRYGA, CNN HOST: As the U.S. secretary of state head south to Mexico, a massive migrant caravan is making its way north toward the border.

THE LEAD starts right now.

Senior U.S. officials are urging their Mexican counterparts to do a lot more to drive down the number of border encounters. These crucial meetings come as a record number of migrants is overwhelming both sides of the border. And now, the Biden administration is facing a barrage of complaints from elected officials who are usually on his side. We'll explain.

And talking 2024. The latest development in another attempt to keep Trump's name off of it state primary ballot next year. How one consequential state responded to a challenge to Trump's eligibility.

And why is it that Americans are spending so confidently yet so many don't think the economy is doing well? We'll bring in two bright minds on the finances and feeling heading into the New Year.

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GOLODRYGA: Hello, everyone. Welcome to THE LEAD. I'm Bianna Golodryga, in for Jake Tapper. Right now, top officials of the Biden administration are in Mexico looking for help in slowing the surge of migrants at the southern U.S. border.

The pictures from the border show how urgent the crisis has become. Border authorities apprehended around 6,000 migrants along the U.S.- Mexico border yesterday. That's a drop from what we have been seeing. Earlier this month, there were 10,000 apprehensions in a single day. Right, now 11,000 migrants are waiting just across the border in Mexico, 3,800 in Tijuana. And another 7,000 near the southern tip of Texas.

And that's why Secretary of State Antony Blinken and Homeland Security Secretary Alejandro Mayorkas are in Mexico City as we speak.

Let's start the hour with CNN's Priscilla Alvarez, who's at the White House for us.

And, Priscilla, U.S. officials are essentially trying to play every lever they can to ease the migrant surge. What specific requests are they making?

PRISCILLA ALVAREZ, CNN WHITE HOUSE REPORTER: Well, they're trying to get Mexico to also implement a series of measures to drive down these border crossings. And it's clear that this is an urgent moment for the White House, simply by who is participating in this meeting. The president deploying some of his highest ranking officials to talk with the Mexican president and some members of his cabinet about what more can be done to stem the flow of migration.

Now, officials tell me these asks include, for example, moving migrants who were in the northern part of Mexico further south, sort of decongesting that area of the border. Also controlling railways, which are often used by migrants to more quickly get to the U.S. southern border, and providing incentives like visas, so that migrants stay in Mexico and avoid turning to the U.S. southern border.

Now, all of this is an extension of a call that occurred last week between President Biden and Mexican President Andres Manuel Lopez Obrador, who both agreed that additional enforcement is urgently needed. Now, we know that numbers have dropped slightly along the U.S.-Mexico border. Homeland security official telling me that yesterday, encounters were around 6,000, down from a few days ago, when they were surpassing 10,000 arrests. But that's not sustainable. That still raises alarm bells and is overwhelming federal, state and city resources as we have heard from border towns.

So, the president, under increasing pressure here to try to get some solutions with Mexico to stem this flow.

GOLODRYGA: Priscilla, how much leverage does the U.S. actually have over Mexico here?

ALVAREZ: Well, the U.S. and Mexico both benefit from slowing down the flow of migrants to the U.S. southern border. One of the most obvious examples is ports of entry. That's used for trade and the two are trading partners. So, we saw earlier this month that those ports, some of them, had to be suspended. So that personnel could move to help process migrants. That is a huge blow to the two trading partners.

So, that is part of the conversation here. They don't want to see that happen again. We have seen Mexico take some of the steps that I mentioned to you earlier, and it does yield results. The question though is how long can Mexico sustain that when they are also dealing with limited capacity?

So, there are multiple obstacles that the U.S. and Mexico are trying to overcome here to show you how much of a challenge this has been. The year started with President Biden in Mexico with his counterpart, talking about tackling migration.

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We're now ending the year and the two are still trying to wrap their arms around this issue.

GOLODRYGA: It's a challenge that U.S. presidents and Mexican presidents have struggled with for many years now.

Priscilla Alvarez, thank you.

Now, let's get a look at what is happening along the border. CNN's Rosa Flores is in Eagle Pass, Texas, for us.

Rosa, listen to what the mayor of Eagle Pass told CNN earlier today.

(BEGIN VIDEO CLIP)

MAYOR ROLANDO SALINAS JR., EAGLE PASS, TEXAS: Our city here in Eagle Pass, we've been getting slammed with 2,000 to 3,000 people a day. And it's just an unfair, unethical situation, what's going on here in Eagle Pass. We feel ignored by the federal government.

(END VIDEO CLIP)

GOLODRYGA: Rosa, is that in line with what you've been seeing and hearing down there?

ROSA FLORES, CNN CORRESPONDENT: It absolutely is. And not just from the mayor. I can tell you from speaking to the Maverick County sheriff here in Eagle Pass, where I am, and other border sheriffs have told me the exact same thing, that they feel abandoned by the federal government. Many of them have invited President Joe Biden to visit their communities. They would like for the president to see with his own eyes the impact to border communities.

And that's what I hear over and over. And that's why some of these officials tell me that, even though they don't agree with everything that Texas Governor Greg Abbott is doing here in his state, taking border security into his own hands, deploying those controversial border buoys, deploying the concertina wire, the containers that you might see behind me, too, that sometimes line the river, the busing of migrants and now the flying of migrants from Texas to blue states -- a lot of officials have told me that they don't agree with everything that Governor Greg Abbott is doing, but they always say, Rosa, he's at least doing something. He's trying something. He's trying to help border communities. And these individuals appreciate that.

Now, has Texas actually stop illegal immigration? The answer is no. Have these border buoys actually stopped migrants from crossing the Rio Grande? Absolutely not. I've watched it with my own eyes. They simply walk around the border buoys.

But again, individuals here in the state of Texas are appreciative that the governor is doing something. Now, this, the governor's effort, is called Operation Lone Star. It is costing Texas taxpayers billions of dollars. And now, even some of the individuals who supported the governor say that his promises have fallen short. Take a listen.

(BEGIN VIDEO CLIP)

EDDIE MORALES (D), TEXAS STATE HOUSE: There comes a point, went after doing this for two, two and a half years, we can't continue just throwing money at this and expecting for the border issue and the migrant issue to go away. We need to think outside the box that we need to make sure that we hold ourselves as legislature and Governor Abbott holds himself accountable to the taxpayers. This is Texas taxpayers money that we've been spending. And what do we have for it?

(END VIDEO CLIP)

FLORES: And, Bianna, that was Texas State Representative Eddie Morales, and he also says that given those talks that are happening in Mexico, he wishes that Governor Abbott had a seat at the table. We, of course, know that he's not there, but he really wished that he could be a part of the conversation because the governor is taking immigration into his own hands -- Bianna.

GOLODRYGA: Because this is happening in his own state.

Rosa Flores in Eagle Pass, Texas, thank you.

Well, let's discuss this and more with Democratic strategist Karen Finney and "National Review" editor Ramesh Ponnuru.

Welcome to both of you.

Karen, let me start with you because immigration is one of the biggest challenges that President Biden is facing right now. Recent polling showing his approval rating on immigration is only 26 percent, with 69 percent disapproving.

What does the administration need to do to turn that around and do it quickly?

KAREN FINNEY, CNN POLITICAL COMMENTATOR: Well, I think you saw the president try to do one of the things that needs to be done, that is to get a deal with Congress to have additional resources to help surge to those border communities, to help with that influx and to help other communities that are dealing with the influx. Unfortunately, it is about $14 billion in the deal that President Biden put on the table. The Republicans and Congress left town. So, that's left to be done.

But I think it shows that it's the president and Congress that have a role in this. The president's job is to enforce the laws on the books and surge resources when possible. In terms of our system, I think we need -- I think we've known for a long time --

GOLODRYGA: So, pretty harsh --

FINNEY: -- real reform.

GOLODRYGA: Yeah, it's a pretty harsh critique to hear from the mayor of Eagle Pass, that they just feel ignored there. We hear from Democratic mayors and major U.S. cities that are clamoring for better coordination in coping with the migrants, especially the cities that keep getting those busloads of migrants from Texas.

I want you to listen to what Democratic Chicago Mayor Brandon Johnson told our Poppy Harlow this morning.

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(BEGIN VIDEO CLIP)

MAYOR BRANDON JOHNSON (D), CHICAGO: Without real, significant investment from our federal government, it won't just be the city of Chicago that won't be able to maintain this mission. It's the entire country that is now at stake. But in a way, what the state of Texas is doing is helping the cause.

(END VIDEO CLIP)

GOLODRYGA: Karen, we've heard similar frustration from the mayor of New York. Is there any sense that the Biden administration is going to help states work together on this?

FINNEY: Well, I think what they're trying -- a couple of things. Number one, what the mayor there was talking about is, it's not helpful, it's harmful, it's harmful to the individuals as well when you've got the governor of Texas flying people up to Chicago. So, that's one piece of it.

But, yeah I think the administration needs to do more to work with communities. Again, the president was trying to get more resources to be able to do that. So, when Congress returns, perhaps we can get that done, but as well as coordinating resources are a little better.

Look, it's a really tough issue. And actually, research shows that about 69 percent of Americans want a balanced approach to how we deal with this. That means both dealing with (AUDIO GAP) as well as making sure that we have humane pathways to citizenship for those who are here.

But I think the system overall needs reform. And that's going to take Congress and the president working together.

GOLODRYGA: Ramesh, let me move on to the race for the presidential nomination. Nikki Haley is starting a campaign swing through New Hampshire, hoping to close the gap with former President Trump. But Haley already has had some help from New Hampshire's governor, whose endorsement of Haley is featured in a new ad. Watch.

(BEGIN VIDEO CLIP)

GOV. CHRIS SUNUNU (R), NEW HAMPSHIRE: She's a leader who builds people up. She's a live free-or-die Republican who understands physical responsibility and individual liberty. She's a new generation of conservative leadership who can help leave behind the chaos and the drama of the past.

(END VIDEO CLIP)

GOLODRYGA: So, having watched that and seen a bit of a spike in popularity there, a resurge for her, do you think the Trump campaign is legitimately concerned about her recent rise?

RAMESH PONNURU, EDITOR, NATIONAL REVIEW: Well, I think the Trump campaign is pretty optimistic about his chances in the primary, and justifiably so. But there's no question that it has been turning more of its fire against Nikki Haley in recent weeks and is really targeting her more than Governor DeSantis of Florida at this point. I think that it's a clear response to the polling, which has shown her having some momentum.

GOLODRYGA: Meantime, Ramesh, Vivek Ramaswamy's campaign is signaling the shift away from TV ads in Iowa, supposedly as part of a strategy to target more specific voters more effectively. But what exactly does that indicate to you about his campaign and its longevity and his chances really in Iowa next month?

PONNURU: So, Ramaswamy is saying that spending a lot of money on television ads is something that only low IQ candidates do, this after he spent more than four and a half million dollars on such ads. I think that he does have enough of an IQ to see that is not helping, and it's not working for him.

But I think the problem isn't -- the problem for his campaign has not been which media he uses. The problem is that, as more people got unfamiliar with him, the less they have liked him. GOLODRYGA: Yeah, Karen, you're nodding your head, I don't think there

will be much love last if he leaves sooner rather than later among the other candidates.

What's your take?

PONNURU: Yeah. I mean, look, candidates always say, it's about (AUDIO GAP) what they really mean is, you know, I'm not breaking through. So, clearly, he's going to try to do the best he can with -- you know, they talked about how they're going to do more direct mail, okay, and see who they turn out. I think the best thing about January is that it may be the last month we actually have to deal with Vivek Ramaswamy in the context of him as a candidate.

I suspect we'll be hearing a lot from him throughout the campaign after he endorsed -- endorses president -- former President Trump.

GOLODRYGA: All right. Karen Finney, Ramesh Ponnuru, thank you so much.

Coming up, huge news in a major 14th Amendment lawsuit brought by a group trying to keep President Trump off the primary ballot in Michigan. How this ruling is different from a recent ruling in Colorado.

And, even though inflation is cooling off, consumer say prices are still hitting them hard. So, what to make up huge holiday spending? We'll discuss the counterintuitive signs on the economy.

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GOLODRYGA: In our law and justice lead, we are following two major legal developments today in cases involving former President Trump.

First, the Michigan state court has rejected an effort to kick Donald Trump off of the state's 2024 primary ballot. The ruling comes just eight days after the Colorado state supreme court's decision to disqualify Trump from appearing on that state's Republican primary ballot over the Constitution's insurrectionist ban.

Let's bring in CNN's Jessica Schneider and CNN's Kristen Holmes for more on this.

So, Jessica, these are two very different rulings but they were also very different legal proceedings.

Walk us through what happened in Michigan.

JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: Yeah. So, really, Colorado and Michigan are very different. I mean, Colorado, Bianna, was a lot more momentous because the Supreme Court they're really got to the meat of the issue and they decided to take Trump off the ballot there. Of course, that opinion is paused until Trump actually appeals this. But they really decided the heart of this going into the 14th Amendment, saying that Trump did engage an insurrection. Also, saying because of, that he should be taken off the ballot.

When it came to Michigan today, they really just rubberstamp a lower court saying, look, this case should not be decided by the courts here, and also saying that the secretary of state in Michigan does not have the power to decide on the eligibility of presidential candidate when it comes to the primary. So, the Michigan court really not going to the merits of this case.

It's possible, though, eventually, the U.S. Supreme Court could get to the merits on this case.

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We're expecting that Trump's team will file an appeal to the Colorado decision before January 4th and, if the U.S. Supreme Court takes this up, they could go into what exactly the 14th Amendment means with this insurrection ban, or the Supreme Court could avoid the issue, just like Michigan did and just say this isn't for the courts to decide. This is really a political issue.

GOLODRYGA: Yeah, a really short statement from the Michigan Supreme Court there.

SCHNEIDER: Yeah.

GOLODRYGA: How do these two decisions, Jessica, compared to other efforts across the country to remove Trump from the 2024 ballots?

SCHNEIDER: We've really seen a flurry of these cases, where challengers have tried to take Trump off of the ballot in several states. A lot of these cases have been dismissed immediately because the challengers just haven't been the right people to bring these cases. But we've seen a number of them. I mean, Colorado the most momentous, their ruling that Trump should be taken off the ballot.

But these challenges have been rejected in several states -- Arizona, Michigan, Minnesota and New Hampshire. There's also one case pending in Oregon still.

And we also know that the Maine secretary of state is expected to issue a decision on whether Trump should be enough about there. That is an interesting case because it goes before the secretary state in the hearing first before it goes to the hearing of courts. So, no matter what the secretary of state decides, it's likely that it will get appealed. But these are ongoing issues in several states here, Bianna.

GOLODRYGA: Yeah, Kristen, this Michigan decision, it's hard not to see it as a kind of victory for the former president in a key battleground state. What is he saying about it?

KRISTEN HOLMES, CNN NATIONAL CORRESPONDENT: Well, Bianna, they have long suspected that most of these cases would get thrown out just because, as Jessica, said in Arizona, in Minnesota, in New Hampshire, they have been rejected, really never even made it past the first round. But there is celebrating what they perceive to be a win in Michigan, particularly after the Supreme Court and Colorado's ruling.

This is what Donald Trump said. He said: Michigan Supreme Court has strongly and rightfully denied the desperate Democratic attempt to take the leading candidate in the 2024 presidential election, me, off the ballot in the great state of Michigan.

As you, know Michigan is a swing state. It's going to be critical in 2024, going to be particularly contentious if Donald Trump is the GOP nominee. This is considered a win for them and it's something that they're likely to include in a potential appeal to the decision in Colorado.

GOLODRYGA: Let's turn now to the 2020 election subversion trial, where special counsel Jack Smith filed a motion seeking to block Donald Trump from making certain comments in front of a potential jury.

Jessica, what exactly is Smith trying to stop Trump from saying here?

SCHNEIDER: He's really trying to preemptively tamp down on Trump's penchant for speaking about court cases. We've seen it in any of these court cases that Donald Trump is facing. So, what Jack Smith's team here did today, they filed a motion before the district court that is going to be eventually hearing the trial in this case, saying, look, we want you to stop Donald Trump from talking about his claims that this is a politically motivated prosecution, that this has anything to do with the Biden administration directing the special counsel to bring this case. We also want you to stop Donald Trump talking about his claims that he is immune from this prosecution because that is an issue that is being decided by the appeals court.

So, Jack Smith put it this way in this filing, saying, the court should not permit the defendant to turn the courtroom into a forum in which he propagates irrelevant disinformation and should reject his attempt to inject politics into this proceeding.

You know, Bianna, this filing is actually pretty notable from Jack Smith, because all of the proceedings in this case have been paused while this appeals issue plays out. But Jack Smith continues to file in the district court, because he wants to keep things moving along in hopes that they will be able to preserve that March 4th trial start date that is currently set, with the way the appeals is going here, January 9th will be the oral arguments. It's unlikely that that date will stick but Jack Smith and his team are trying everything they can to keep that date in place and not let it slide.

GOLODRYGA: And, Kristen, is there any sense that Trump of the people around him are concerned about these filings?

HOLMES: Well, Bianna, just like Jack Smith wants to keep that date, Donald Trump's team wants to delay the trial as long as possible. So, we actually have heard from the former president. Instead of taking issue with any of the substance of what was in that filing, instead, he's taking issue with the filing itself, saying, that if Judge Chutkan says that all legal proceedings are on hold, if there is this pause, why is he still continuing to file motions? That is what they are focused on right now. And again, this goes to

their larger scale legal process. What they're wanting to do here, which is delay all of these trials. But now particularly looking at this one that was supposed to be scheduled for March 4th, as long as possible, and hopefully until after the election.

GOLODRYGA: It's going to be a very busy January.

Jessica Schneider, Kristen Holmes, thank you.

Well, coming up, after more than 11 weeks of fighting, triggered by Hamas's deadly October 7th attacks on Israel, the U.S. is pressing Israel to focus on high value Hamas targets.

[16:25:06]

Up next, a shelling continues, CNN has a look at the aftermath of one deadly strike.

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GOLODRYGA: In our world lead, as the Israeli Defense Forces push deeper into southern Gaza, Israeli officials are warning that the war against Hamas could continue well into the New Year. This as the U.S. pressers Israel to minimize the number of civilian casualties.

Israel has hit Hamas and Gaza with airstrikes for over two months in the week of Hamas's October 7th attacks. Today, the Hamas-controlled ministry of health in Gaza says 20 people were killed in an airstrike near a hospital in Khan Younis.

[16:30:03]

CNN obtained video of the aftermath and we want to warn you, it is graphic. Here's Will Ripley.

(BEGIN VIDEOTAPE)

WILL RIPLEY, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): Smoke rises over Southern Gaza, haunting from a distance. Horrifying up close.

Video obtained by CNN showing a sidewalk covered in blood and bodies.

Men, women, children, at least 20 dead from yet another Israeli airstrike. This time, near a hospital, the Hamas-controlled health ministry says.

CNN is not able to independently verify the staggering death toll, around 21,000 and rising. The wounded rushed to Al-Amal Hospital, one of the handful still operating. In the parking lot, pandemonium. The doctors and nurses already overwhelmed, scrambling to save lives.

An international team of surgeons gaining access to emergency rooms on life support. Doctors warn supplies are running dangerously low, severely limiting treatment of trauma patients. Some dying as they wait for urgent care.

Civilian casualties climbing fast, more than 55,000 injured since October 7th. The Hamas health ministry says. Inside a crowded medical tent in Jabalia, Palestinian Red Crescent medics treating a tidal wave of patients.

Wounded women and children, many injuries, horrific. The pile of body bags growing by the hour, and at times the dead at weighing the living. Naval ships comb the coast as drones hover overhead, documenting the destruction, explosion after explosion. The IDF targeting tunnels used by Hamas fighters, hitting both military and civilian infrastructure.

The Israeli offensive in Gaza showing no signs of easing up. Israel's goal to root out Hamas leaders. An edited video circulating on social media appears to show Palestinian men and at least two children detained, stripped by the Israel Defense Forces it in a stadium in northern Gaza.

The fighting is fierce, the offensive expected to transition into a slower intensity mobile campaign soon, Israel says. The question hunting Israeli leaders, will the change in strategy to be effective? Will it neutralize Hamas's military power?

Israel's artillery hitting a U.N.-run school in Central Gaza, leaving holes in the walls, blood on the floors, next to sleeping mats of displaced families. At the school in Rafah, some of those families crowded to classrooms, sharing what little food and water they have, supplies are running low after ten-long weeks of war.

The Palestinian prime minister says Israel is starving people to death. This teacher's lesson, welcome a distraction for children, surrounded by suffering and death, trying to find some semblance of a normal life.

(END VIDEOTAPE)

RIPLEY (on camera): But a normal life may prove elusive for children in Gaza for many months to come. Back to that video that we showed you, there were actually two children in the video of that stadium in Gaza, with men detained by the IDF who are stripped shirtless. At least two children seen in the video, CNN has reached out for an explanation, we don't know exactly when this video was taken. We can't independently verify it. It was posted on Christmas Eve.

But in the past, the IDF has said that they strip these people down because they need to check them for explosives. In fact, Bianna, just a matter of days ago, IDF claims they found and one of the houses that they raided in Gaza and explosive vest that had been modified for a child to wear.

GOLODRYGA: All right. Will Ripley, thank you.

Still ahead for us, the numbers look better but, when it comes to the U.S. economy, consumers are still feeling gloomy. So, why the disconnect? We'll discuss, up next. (COMMERCIAL BREAK)

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GOLODRYGA: In our money lead, Americans spent a lot this holiday season. Retail sales are up about 3 percent over the last year but that spending is only barely outpacing inflation. And even though we're spending a little more, a lot of Americans say they are not feeling great about the overall economy.

Douglas Holtz-Eakin is here to discuss, he's the president of the American Action Forum and the former director of the Congressional Budget Office.

Doug, good to see you.

A lot of your colleagues, both Republican --

DOUGLAS HOLTZ-EAKIN, FORMER DIRECTOR OF CONGRESSIONAL BUDGET OFFICE: Thank you.

GOLODRYGA: -- and Democrat, thought that inflation would be much harder to tame and that the Fed's aggressive response would trigger a recession at this point. That didn't happen and it doesn't look like it will anytime soon. So, give us your expert take on the state of the U.S. economy right now.

HOLTZ-EAKIN: Well, I think that's exactly right. We did expect to have a recession late this year and it didn't develop. That's a tribute to the strength of the U.S. consumer. And going forward, I think one of the real issues is, will they keep it up?

As you know, employment is quite high, unemployment very low. We've finally seen solid real wage growth, wages growing faster than inflation, in the past six months. So, that's -- both -- things in the right direction. But the bad news is we've seen rising credit card debt and delinquencies. We've seen the savings rate fall by two full percentage points over the second half of this year.

So, that looks like a household sector that is digging deeper into its resources to keep the spending up. You do wonder how long that will keep up.

GOLODRYGA: I want to get to the bad news in just a minute because a real head-scratcher here is, despite the relative good news in the economy, according to recent polling, Americans aren't satisfied with President Biden's handling of it, which, objectively, as you just noted, is in decent shape right now and much stronger than most other developed nations.

[16:40:04]

Do you think people's partisan politics play a role in how they feel or at least say they feel about the economy?

HOLTZ-EAKIN: Well, certainly for a long time, if you look at the index of consumer sentiment, that was a very partisan indicator. The party that was out of office was really dour on the economy and the party that was an office was far more confident and upbeat.

What was really striking was that in the first few years of the Biden administration, that went away. And I think what the administration is really facing is a hangover of 2021, where inflation grew by seven tenths of a percent faster than wages. 2020, to where it was 1 percent. Now, they finally turned a corner but they've had two bad years where basically employment was very high. So, people were working and falling behind as they did it. That didn't produce a lot of happiness.

GOLODRYGA: And it's the first time for a lot of people that they really experienced any inflation in this country, for many decades.

HOLTZ-EAKIN: Yes.

GOLODRYGA: Let's go back to what you pointed out. The credit card debt is up, people are saving less housing prices are soaring. How concerned are you about those trends?

HOLTZ-EAKIN: As I said, the household sector kept the economy afloat in the second half of this year. So, that's a concern, whether they can keep it. The flip side for that is that the business community has not. One of my real concerns is that, in every postwar recession except the pandemic, the one we had most recently and that's what we tend to look at, every other recession begins with a downturn of spending.

We saw business fixed investment in the third quarter dead flat, not strong at all. That's a concern for me. The Fed continued to tighten, the financial conditions tighten. What is a business community look like in the second half of this year and early next year? If they really give up and sort of cut back sharply, that's usually the trigger for households to get nervous and cut back as well.

So, I'm looking at this as a bit of a horse race, business community that is weak and a household section that is strong. All the business community come up to the household or the reverse? That's the key.

GOLODRYGA: Yeah, commercial real estate also really in dire shape, too.

Doug Holtz-Eakin, thank you.

HOLTZ-EAKIN: Yes, in general, housing is a disaster, so, got a hope for a better 2024 in the housing front.

GOLODRYGA: Yeah. We're going to keep an eye on that. Thank you so much.

Well, let's discuss the politics of this with Ron Brownstein. He's a senior editor of "The Atlantic" and CNN senior political analyst.

So, Ron, let's pick up on what we just discussed with Doug. How big of a role do you think partisan politics and the perception is playing and how well people say they feel about the Biden economy?

RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: First of all, I'm happy to sit and listen to you two talk about the economy, that was really interesting.

As Doug said, it has been -- it has been a consistent factor for years now, that the out-party is usually a negative on the economy. I think it is more intense when Republicans are the out-party. And Biden does have some legitimate accomplishments, as you alluded to. Tremendous job, growth low unemployment and an absolute investment boom in semiconductors, clean energy, electric vehicles, tied to the big bills that he passed in the first two years.

But inflation, Bianna, has been a cloud just kind of obscuring all of that. You know, I -- the pollster Stan Greenberg, who's been doing this since the '80s, Democratic pollster, polls for parties all over the world, center-left parties, and often says that the ruling party just always underestimates how disruptive inflation is to people and how disorienting it can be.

Now, as you pointed out, wages are now rising faster than prices. The Fed has signaled that it is going to cut interest rates next year. University of Michigan and the conference board and the Quinnipiac University all found a notable uptick in consumer confidence in December.

So Biden may have wind and sails to improve his position but he is starting in a deep hole and how people perceive the economy while he's been in office.

GOLODRYGA: Yeah, and businesses are really bullish on the Inflation Reduction Act as well. But we see Biden continued to push the term Bidenomics, which didn't really do well for him. He used it again last week, claiming that it led to it Black small business boom in Wisconsin.

Do you think that this term and really putting his name on it is something he should carry forward into an election year?

BROWNSTEIN: This is an enormous debate in the Democratic Party, and really, the debate is not so much about the label but about whether you should be trying to take credit for the positive trends that have occurred while people are still dealing negative overall, or whether --

GOLODRYGA: Donald Trump did it.

BROWNSTEIN: -- you look out of touch.

GOLODRYGA: It worked for Donald Trump.

BROWNSTEIN: What's that?

GOLODRYGA: It worked for Donald Trump.

BROWNSTEIN: Yeah, yeah. But, of course, that was in a period where there was a much higher level of overall consumer confidence. I think people were overall, you know, feeling better.

[16:45:00]

Look, I -- I think, as we said, the kind of the wind in the sails, it's likely, given the trends and inflation and interest rates, that Biden's approval on the economy and American attitudes about the economy are going to be better in November of '24 than they are today. But I think even with that improvement, it is likely that on election day, if it's Donald Trump as the Republican nominee, more people were going to the ballot box thinking that Trump would be better for their bottom line than Biden.

I think it's gong to be hard for him to overcome that. The precedent, though, is that in 2022, an unusually large number of voters who were dissatisfied with the economy voted against the Republican alternative anyway because they viewed it as too extreme. I think in all likelihood, that is going to happen.

There is a path to a second term for Biden. It's not that people in the and consider him better on the economy than Trump, it's that he becomes more competitive on the economy, and there is a decisive slice of voters who think Trump might be better for their bottom line, better for interests but still view him as an affront to their values and won't vote for him anyway.

GOLODRYGA: So, do you think up until this point, Biden has been too risk-averse, and maybe a little too sensitive to those who are not feeling great about the economy? And should he take more ownership of the positive headlines and data points?

BROWNSTEIN: Well, you know, I mean, look, I mean, that is, as I said, that is the perpetual debate. You can see the pull and tug within the Democratic Party as he talks.

I think where they are going, and where much of the strategists of the party want them to go, is to talk less about the macro economy, you know, the $600 billion in private sector investment that they generated under for semiconductors and EVs and clean energy, and more about specific measures that can help families with their bottom line. For example, Biden is performing, holdings his vote among seniors compared to '20 much better than he is among young people. One reason is he has a lot of really tangible things that have come out of the Inflation Reduction Act that helped them. Medicare negotiating for prescription drugs, you know, $2,000 a year spending caps, $35 insulin, et cetera.

So, there is a lot of argument that the Democratic Party says talk more about what you're helping -- doing to help families make ends meet each week, and less about a debate about the stewardship of the macro economy.

GOLODRYGA: Yeah, there are a number of reasons he may not be polling well with young Americans. Student debt relief, geopolitical headlines as well.

BROWNSTEIN: Exactly. GOLODRYGA: Ron Brownstein, great to see you. Happy holidays.

BROWNSTEIN: Happy holidays, yeah.

GOLODRYGA: Well, some are fans, some are fatigued. Call it whatever you want. But this person of the year is having the time of her life. You know who it is. More on Taylor Swift, up next -- up next.

(COMMERCIAL BREAK)

[16:52:14]

GOLODRYGA: In our pop lead, are you ready for it? Taylor Swift breaking another record this week, tying Elvis Presley as the solo artist with the most weeks spent at number one on the billboard 200.

Well, not everyone might be a Swifty. You can't deny, she's been a huge part of 2023. Splashed across social media, football games, and magazine covers.

CNN's Anna Stewart takes a look at an epic year for the 34-year-old and all her fans of all ages.

(BEGIN VIDEOTAPE)

TAYLOR SWIFT, AMERICAN SINGER-SONGWRITER: Welcome to the Eras Tour.

ANNA STEWART, CNN REPORTER (voice-over): She's certainly not the anti- hero of 2023.

(SINGING)

STEWART: In fact, she is Time "Person of the Year."

Even in Taylor Swift's wildest dreams, it would be hard to imagine greater success, or bigger revenues. Not one but three bestselling albums. They're not all exactly new, "1989" and "Speak Now" were re- recorded as Swift continues to reclaim ownership of her music.

SWIFT: We are about to go on a little adventure together, and that adventure is going to span 17 years of music.

STEWART: In March, Swift embarked on a record-breaking worldwide tour. It is expected to rake in more than $2 billion in North American ticket sales alone. Swift even helped bail out the Box Office in a difficult year with a movie version of the Eras Tour concerts. It made $96 million on its opening weekend in the U.S. and Canada.

Spotify and Apple Music have both named her "Artist of the Year."

ZANE LOWE, HOST OF "THE ZANE LOWE SHOW," APPLE MUSIC: There isn't an artist on the planet who has achieved so much in the calendar year, and we at Apple Music, we felt the same way. And it was just no denying that, you know, what she has achieved over the last 12 months, in my lifetime at least, from a productivity and a quality point of view, is sort of unprecedented. STEWART: Bloomberg says Swift came a billionaire in October, and Swift-fluence spread beyond music this year. The artist was spotted not on the bleachers, but in a box, as she debuted a new relationship with Kansas City Chiefs player Travis Kelce.

(SINGING)

STEWART: The "Love Story" boosted ticket sales and NFL TV ratings. It all comes down to a powerful bond Swift has forged with her fans, using hidden messages and clues known as Easter Eggs in songs, performances and social media.

[16:55:00]

LOWE: Every time she puts anything out, there's a sense of anticipation that surrounds that experience and also the idea that we, as fans, can be invested in that by uncovering details, moving in different ways.

I mean, the depth of Easter Egg placement is sort of unbelievable. It just strengthens that connective tissue between the artist and the fan, which is what this is all about and something that Taylor Swift has been completely dedicated to her whole career.

STEWART: Do you think we have now hit peak Taylor Swift?

LOWE: If Taylor Swift has proven anything, even the people who don't listen to her music, is that she will not stop creating at the highest level. So, not only Taylor will decide, you know, how and where she moves. And when she comes back, like every other time, she will be dedicated and committed to it. That's one thing I really appreciate about Taylor Swift, is when she comes out with a record or a tour, she is all in.

STEWART: The Eras Tour continues through 2024.

(SINGING)

STEWART: So we know all too well that it will probably be another year of Swift's success.

Anna Stewart, CNN, London.

(END VIDEOTAPE)

GOLODRYGA: How could you not be impressed by Taylor Swift?

We'll be right back.

(COMMERCIAL BREAK)

GOLODRYGA: That's it for us. Thank you for watching THE LEAD.

Our coverage continues now in "THE SITUATION ROOM".