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Musk Tagged for DOGE; Inflation Rose in October; Larry Summers is Interviewed about the October Inflation Report; Melania Trump Unlikely to Move to White House; KFC Sues Church's Chicken. Aired 8:30-9a ET

Aired November 13, 2024 - 08:30   ET

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

[08:30:00]

JOHN BERMAN, CNN ANCHOR: Is going to Donald Trump's meeting with House leaders. I don't know if we know yet whether Musk will go to the White House, or whether he's even received an invitation for that. But we'll, obviously, stand by and keep our eye on that.

But Elon Musk, Patti Solis Doyle, you know, unelected, now with a lot of authority and perhaps conflicts of interest. You know, billions of dollars in government contracts, traveling almost everywhere, it seems, with President-elect Trump.

PATTI SOLIS DOYLE, FORMER PRESIDENTIAL CAMPAIGN MANAGER FOR HILLARY CLINTON: Yes. He appears to be the first best friend. You know, to be clear, lots of presidents have had very close relationships with friends outside of government. But this one seems to be quite outside the norm. You know, they've just announced the DOGE, the Department of Government - what is it - Efficiency. And there's a lot of questions around that. How is that going to work? It's outside government. Who's going to fund that? What kind of access are they going to have to the various agencies? He seems to have a lot of input into appointments and nominations. He made himself clear that he prefers Rick Scott to be majority leader in the Senate.

This man has a lot of influence. And you're right, John, he also has a lot of government contracts. He also has a lot of businesses that rely on regulation, or a lack of regulation from the government. So, it will be very interesting to see how this plays out once President- elect Trump takes office, and what his role will be, not just at the DOGE, but sort of with the regulatory agencies.

BERMAN: So, Sarah, as we outlined, a lot going on in Washington.

SARAH CHAMBERLAIN, REPUBLICAN STRATEGIST: (INAUDIBLE).

BERMAN: Go ahead, Sarah.

CHAMBERLAIN: I want to go back. I do happen to know he was extended an invitation to join him at the White House. Sorry, did not realize that wasn't public. But we are thrilled that he's joining. He will be with our House members.

You know, Elon Musk was extremely helpful in getting a lot of them re- elected. So, I think that's kind of a thank you as well. So -

BERMAN: To be clear, are you saying you know for a fact that Elon Musk is going to the White House, Sarah?

CHAMBERLAIN: I don't know if he's going. I do know for a fact he was extended an invitation.

BERMAN: All right.

CHAMBERLAIN: So, I do know that. All the numbers from last night --

DOYLE: Well, can I just say, if he goes -

BERMAN: Patti, go ahead.

DOYLE: If he goes - I was just going to say, if he goes, I would love to be a fly on that wall in that meeting for sure.

BERMAN: Well, there's a lot of reasons to listen in there.

Sarah, you know, with all these meeting, whether Elon is there for all of them or not, what does Donald Trump need to accomplish, do you think, by the end of today?

CHAMBERLAIN: Well, I certainly - you know, kind of healing a little bit of a relationship with Biden, I'd like to see. But with the House members, which is where main street really plays, trying to bring the two factions together. The Republican main street partnership, they have a largest caucus. They're the largest caucus on The Hill, with the Freedom Caucus, trying, as you discussed earlier, with such a small margin, trying to bring the two of them together so they can sit down and get some good legislation passed. That right now is Trump's number one priority.

There was a dinner on Monday with the speaker and with the different groups from The Hill, from the House. So, that's his priority. Hopefully, we can get that accomplished.

BERMAN: And just, Patti, I do want to reflect on a moment on the fact that Donald Trump was extended an invitation that he himself did not extend four years ago. He still hasn't conceded the 2020 election. He never invited Biden to the White House.

Put yourself in Biden - President Biden's mind, if you can today, being willing to do something, generosity that was not extended to you.

DOYLE: Well, look, I think this meeting is very, very important symbolism for our country. You know, that sort of peaceful transfer of power. Even after a very, very - I'll say vicious and hard-fought campaign where personal attacks were thrown on both sides, to be fair.

But this is what makes America great. And, you know, President Biden, for, you know, despite what many are saying that he shouldn't have run and all of the things, he is a traditionalist, and he loves this country. And the fact that he, you know, stretched out his - this invitation and this olive branch is not surprising to me in any way, shape, or form. This is who he is.

And again, I'm glad Trump accepted the nomination - the invitation, and I'm glad that they're sitting together, with Elon Musk maybe, and talking about what the priorities are moving forward.

BERMAN: All right, Patti Solis Doyle, Sarah Chamberlain, great to see both of you. Thank you very much.

All right, just in, a brand-new report on inflation. What does it say, and what does it mean for you?

[08:35:02]

And this morning, Kentucky Fried Chicken suing a competitor for using the phrase "original recipe."

(COMMERCIAL BREAK)

BERMAN: All right, breaking news.

We just learned that the FBI has arrested a man for allegedly leaking highly classified U.S. intelligence documents about Israel's retaliation attack plans against Iran. According to court documents, the alleged leaker was arrested in Cambodia and charged by the Justice Department for willfully retaining and transmitting national defense information.

[08:40:08]

Much more as we learn more on that.

And breaking just moments ago, brand new numbers on inflation.

CNN's Matt Egan is with us.

What do they say?

MATT EGAN, CNN REPORTER: Yes, John, this is a step in the wrong direction. Hopefully it's just a temporary one.

We learned that consumer prices increased by 2.6 percent in October year over year. Now, that was exactly as expected, but it does mark an acceleration from the prior month where we had a three year low at 2.4 percent. It also breaks a streak of six straight months where inflation was easing.

Now, it's important to note, though, when you dig into these numbers and you zoom in, you see that prices only increased by 0.2 percent between September and October. That was as expected. And it's not an alarming increase. So, that does suggest that part of this is being driven by the calendar. And what I mean by that is that inflation was falling pretty rapidly a year ago. And that was always going to be kind of hard to live up to. But when you look at the trend, we can see that we've had a lot of improvement from two and a half years ago when we had inflation at 9 percent, right, gas prices were at $5 a gallon. But look, getting back to normal, getting back to that 2 percent goal

was never going to be easy. There was always going to be some bumps along the way.

Looking further at some of the details here, there's some good news. We saw that prices declined between September and October for a few things, including gasoline, clothes, new cars were unchanged. Some of the bad news is, we did see a price increase for used cars. And that could be related to increase in demand related to the hurricane. Also, the cost of housing, shelter, that continues to be a big problem.

I think one of the questions we get a lot is, why don't people feel better if the inflation rate has goes down? And I think that's because prices are still going up, right? They're just going up at a slower pace.

And Moody's has found that the typical U.S. household has to spend $1,100 more per month for the same goods and services than they did in the beginning of 2021, all because prices have come up.

John, I think the big question though for today is whether or not this inflation report is going to be good enough to let the Fed cut interest rates again next month. And we'll have to wait and see.

BERMAN: Matt Egan, these are all very good questions. It just so happens we may have someone on shortly who can answer some of them.

Great to see you. Thank you very much.

EGAN: Thank you, John.

KATE BOLDUAN, CNN ANCHOR: And joining us right now is Larry Summers, the director of the National Economic Council under President Obama, and treasury secretary under President Clinton.

It's good to see you. Thanks for coming in.

What's your reaction to this latest report? What should people take from it?

LARRY SUMMERS, FORMER TREASURY SECRETARY UNDER PRESIDENT CLINTON: This was about what people expected. It shows that inflation is not where it was a couple of years ago. All kinds of bottlenecks have eased. The Fed has tightened policy. But it also shows that we're not securely at the Fed's 2 percent inflation target. And so we've learned from the election just how toxic inflation and high prices and high interest rates are to the American people that causes them great anger, great disillusionment with institutions, creates a dynamic that's very strongly anti-incumbent. And so, the lesson that policy-makers, both in the executive branch, the president, the secretary of the Treasury, and in the Fed need to take away from this is that we've got to stay focused on the inflation problem.

And, frankly, I don't think there's enough focus on the inflation problem. The Fed has been in too much of a hurry to cut interest rates, and much too much of a hurry to promise future interest rate cuts. They keep giving signals that they're going to cut them a lot, and then having to walk those signals back. That's what's happened in the last two or three months.

And I think the biggest lesson in all of this is for President Trump. If he carries through on what he said during his campaign, there will be an inflation shock significantly greater than the one the country suffered in 2021. He has promised, if you add it all up, more than $10 trillion in tax cuts relative to the current trajectory. He has called into question by politicizing the credibility of the Fed. He said that the dollar needs to go down, not up, raising the price of every imported good. And much more importantly, on the supply side, he's called for pushing up all kinds of prices by putting an across-the- board tariff on, which will raise the price, not just of imported goods, but of American goods that use imported goods as an input.

[08:45:07]

Also raise the price of goods that have to compete with imports. And look, I think every sensible American thinks we need to do more to secure our border. But if you're talking about deporting millions of people, that is an invitation to labor shortage and bottlenecks.

So, I hope that he will get the message from this election and adjust his program so that it is not inflationary. And I certainly hope that if his program is inflationary, it will not be accommodated by the Federal Reserve.

BOLDUAN: When you talk about this inflation shock that could come from these policies, it - when - when - what we saw during the campaign was, he was not - he was not quiet about what he wanted to do. You listed out some of the things that he has promoted during the campaign in terms of tariffs, tax cuts, mass deportation. When you add all of that together, then you also look at the side by side of, this is what a lot of Americans voted for. This is what helped him get elected, at least in part. What do you think people are missing if you think it could be so damaging if it all was put into practice?

SUMMERS: I don't think people are professional economists. I don't think people trace through the impacts of policies like deportations or tariffs for the inflation rate. We don't rely on people to figure out what kind of nuclear reactor is going to be safe, and we don't rely on people to do complex economic analysis.

And look, there are no certainties. Economic forecasts always have errors in them. But I think there would be a very strong and very widespread view that if implemented these policies are inflationary.

Now, I think many people hope that these policies are being used as threats to get other countries to reduce their trade barriers. That they're being used to send signals with respect to immigration, and that it won't actually be these policies that will be implemented. We'll have to see.

What I can say quite confidently as an economist is that, if these policies are implemented, it will mean a substantial increase in the price level. And substantial increases in the price level, we've seen how people react to those.

You know, in many ways we're seeing something we've seen before. The large checks that were sent out in 2021 were what people wanted, they just didn't want the consequences that came with it in terms of increased inflation. The job of responsible leadership is not simply to stick your finger in the air, it's to think about what policies will be in the long run interest of the country. And I have to say that economists fight and disagree about many things, but the idea that this program, cumulatively, bashing the Fed, raising tariffs, sending workers home, bloating budget deficits, the idea that it is a highly inflationary program, that generates about as much consensus among people who follow economic things as any proposition I can remember in the 40 years I've been doing this.

BOLDUAN: Especially - and - and in an industry where there often is not consensus, that says quite a lot.

Larry Summers, it's always good to have your perspective. Thank you so much.

John.

BERMAN: All right, new reports this morning that Melania Trump will not move into the White House full time with her husband. So, what does that mean for her role as first lady? And what does it tell us about the first marriage?

And a new ruling by a Louisiana judge, actually a federal judge, blocking a controversial law requiring public schools there to display the Ten Commandments in classrooms.

(COMMERCIAL BREAK)

[08:53:59]

BERMAN: This morning, multiple sources tell CNN that Melania Trump is unlikely to move back into the White House full time in January. So, what does this mean exactly?

With us now, CNN's senior White House producer Betsy Klein.

Great to see you this morning. What are you learning on this front, Betsy?

BETSY KLEIN, CNN SENIOR WHITE HOUSE PRODUCER: Well, John, Melania Trump spent her first four years in office showing a willingness to buck tradition. And she is laying an early marker here that this time around will be no different. And we're seeing that just today as she is expected to skip that meeting customary with First Lady Jill Biden as their husbands meet in the Oval Office. And sources are saying that that is because of a prior scheduling commitment related to her book.

But we are also learning, as you mentioned, John, our colleague, Kristen Holmes and I report that she is unlikely to move to Washington full time in January when President Trump takes office. And that is because she is going to likely be splitting her time between Palm Beach, where Mar-a-Lago is, and New York, where Barron Trump is in college.

Now, those same sources tell us that she is likely to be at the White House for major events, and she will develop her own platform and priorities.

[08:55:06]

BERMAN: This is going to be like a long distance marriage, or a part- time first ladyship? I mean I know that Melania Trump, and you've covered her for a long time, handles all this in a pretty non- traditional way.

KLEIN: Well, certainly. And, you know, it is unprecedented for a first lady to not live full-time at the White House. But it shouldn't be a surprise to any long-time observers of Melania Trump. And she - her preference is not to be publicly involved. And internally, among the Trump team, sources say that they're OK with that. There is not a lot of internal backlash there.

And we've also learned that she's really telegraphed this over the past few years, really taking a much less active role in this campaign compared to 2016 and 2020. She only was on hand for the announcement back in 2022, and she was on stage at Madison Square Garden a couple of weeks ago, and on stage with the family on election night. That's it.

But make no mistake, Melania Trump is a constant voice in her husband's ear, giving him advice. There is this sort of misconception that she is the secret resistance during the first four years. That is not the case. She is incredibly aligned with her husband.

BERMAN: Al right, Betsy Klein, great to see you this morning. Thank you very much.

Kate.

BOLDUAN: Some of the other headlines we're watching.

This morning, a federal judge now says a Louisiana law that would have required every single classroom in the state to display the Ten Commandments says it violates the First Amendment. The measure was supposed to go into effect on January 1st, but is now temporarily blocked. The judge calling it unconstitutional on its face and also writing that the decision said the law - in the decision saying the law is "coercive to students, and, for all practical purposes, they cannot opt out of viewing the Ten Commandments when they are displayed in every classroom, every day of the year, every year of their education." Well, immediately after that, Louisiana's attorney general said she plans to appeal. This case likely to go now to the U.S. Court of Appeals for the Fifth Circuit, one of the nation's more conservative courts.

And, sorry, kids, or maybe, you're welcome. Lunchables will no longer be on school lunch menus across the country. Kraft Heinz announced that it will remove the meal kits from the national school lunch program because of low demand. The decision also comes after "Consumer Reports" tested the school version of these meal kits and found extremely high levels of sodium, even higher levels in the school kits than those sold at grocery stores.

Oscar winning actor Denzel Washington revealing there may be a new "Black Panther" film in the works. Revealing that even before Marvel has announced plans for a third instalment. In a new interview, Denzel Washington says that the film's director is writing a part for him. Washington also talked about his future acting plans, saying that he doesn't know how many more films he's got in him, and he's going to make it matter. So, he wants to be selective about his remaining projects and choosing roles that he hasn't done before.

John.

BERMAN: He's got a lot of work still left to do. Let's hope he keeps at it for a while.

All right, this morning, a game of chicken, you might call it. KFC is suing fast food rival Church's for using the words "original recipe" in its ads. A lawsuit, it says, was filed on behalf of all fried chicken lovers.

CNN business and politics correspondent Vanessa Yurkevich is here.

This feels very important.

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: It is very important. It's a battle of the fried chicken brands. Essentially Church's Texas Chicken has launched advertisements in September saying that they're returning to their original recipe. They started this recipe in 1952, but KFC gets wind of this and says, well, hold on, wait a minute, we also have an original recipe, and it's trademarked. They send a letter to Texas Church - To Church's Texas and saying that you need to stop using this phrase because we have trademarked it. They never hear back. So, they filed this lawsuit essentially saying that you're going to be confusing customers by using "original recipe" over two chicken brands. You're also taking our intellectual property. And ultimately, it's going to impact, in some ways, their bottom line. So, they want to protect it at all costs.

Now, Church's Texas Chicken has 1,500 stores and restaurants worldwide. KFC has 30,000. But, of course, this is more than just about a phrase. It's about money at the end of the day.

Yum Brands, which owns KFC, reported in the third quarter that U.S. sales fell by 5 percent. That's the third straight quarter of losses. So, ultimately, in this lawsuit, they're also going after an undisclosed monetary reimbursement, as well as asking the judge to tell Church's Texas to stop using this phrase. And ultimately, though, the company, Church's, say that they cannot talk about this right now because there's ongoing litigation.

[09:00:00]

But, of course, if you're a customer watching these advertisements, you might get a little confused and say, well wait a minute, who does have the original recipe?