Return to Transcripts main page

CNN News Central

Hegseth and Caine Testify Before a House Subcommittee; Talks with Trump and Xi; Inflation Rose 3.8 Percent; U.S. Supreme Court on Redistricting Battles; Ursa Major May Have been Carrying Nuclear Reactors. Aired 8:30-9a ET

Aired May 12, 2026 - 08:30   ET

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

(COMMERCIAL BREAK)

[08:32:17]

JOHN BERMAN, CNN ANCHOR: All right, happening now, you're looking at live pictures of the chair of the Joint Chiefs, Dan Caine. He is testifying on Capitol Hill alongside Defense Secretary Pete Hegseth. They are facing House appropriators this morning, the Senate later today. No doubt there are a lot of questions about the cost of the war on Iran.

Let's get right to CNN's Brian Todd for the latest on this.

Brian, what are you seeing?

BRIAN TODD, CNN CORRESPONDENT: Well, John, as you said, Secretary Hegseth and chairman of the Joint Chiefs, Dan Caine, are just giving their opening statements.

What we're going to be watching for is, are we going to see some of the fireworks that we saw about a week and a half ago when Secretary Hegseth and Chairman Caine went before House and Senate panels, who really grilled them about the Iran War, about the progress of the war, especially about the cost of the war. And that's really where it's going to get down to basics here at these hearings.

These hearings are for Appropriations. The Pentagon is requesting $1.5 trillion in fiscal year 2027 for its budget. A lot of questions are going to be asked about the cost of the Iran War. I'm going to get to those costs in a second.

But here's a little clip of what Pete Hegseth had to say in his opening remarks just a short time ago.

(BEGIN VIDEO CLIP)

PETE HEGSETH, DEFENSE SECRETARY: President Trump inherited a defense industrial base that had been hollowed out by years of America last policies, resulting in a diminished capability and capacity to project strength offshoring, outsourcing, cost overruns, degraded capabilities. Under the leadership of President Trump, our builder in chief, we are reversing this systemic decay and putting our defense industrial base back on a wartime footing.

(END VIDEO CLIP)

TODD: And with that, he's going to be asked a lot of specific questions about this $1.5 trillion request for fiscal year 2027 for the Pentagon's total budget. And the costs of the war are really going to be a sticking point, John. As we reported in the last round of hearings, the Pentagon's comptroller, Jay Hurst, had told lawmakers about a week ago that the cost of -- the total cost of the Iran War so far is about $25 billion. CNN has been reporting, according to our sources, that's a lowball estimate, that it's really closer to $40 billion or $50 billion when you take into account the cost of rebuilding bases, replacing damaged and destroyed munitions and equipment.

You can also bet that Pete Hegseth is going to be asked a lot of questions about the depletion of munitions. CNN has also reported on that, that a lot of the stockpile of munitions has been severely depleted in these first several weeks of the Iran War. What are they going to be doing to try to build those back? He has been staunchly defending their efforts in the past weeks, but he is going to be undoubtedly grilled on that today in the House and Senate.

John.

BERMAN: We'll let you get back to watching these hearings as they unfold.

[08:35:02]

Brian Todd, great to see you. Thank you very much.

Kate.

KATE BOLDUAN, CNN ANCHOR: Also happening soon, President Trump is set to leave the White House and depart for a major trip. What could be his most important trip of the year, meeting with the Chinese leader, Xi Jinping, in China. The trip was initially postponed because of the war with Iran, which will certainly now be front and center, of course, in their talks, along with the issues of trade and artificial intelligence also on the agenda.

On the war with Iran, the president now says that the ceasefire is in its worst state yet. The president, the way the president describes it is, it being on massive life support. Sources tell CNN that President Trump is now more seriously considering starting back up with military action against Iran.

Joining us now, CNN national security analyst Alex Plitsas, with more on this.

Let's talk about this trip and what this means in the context of this moment with the Iran War, Alex. What role do you think China can play, could play, wants to play in bringing the Iran War to an end?

ALEX PLITSAS, CNN NATIONAL SECURITY ANALYST: So, China's got some competing interests here in the sense that if there was, you know, greater economic damage or cause at the moment, I think you'd be seeing a more active role from President Xi Jinping. Made it clear from interlocutors in the region that the Iranian foreign minister speaks to his Chinese counterpart on a pretty regular basis. China imports a lot of oil. It does a lot of business. And so, it becomes a question of when they intervene and if they do and why.

So, with the United States being tied up, we've also seen Chinese, you know, precursors for weapons and things of that nature that have been coming in by ship. So, it almost favors China to see if they can leave us there as long as possible until there's an economic impact because we're expending a lot of munitions and things that may be needed for contingency operations in the Pacific.

BOLDUAN: The reporting is also that, well, despite Marco Rubio declaring that the military operation is now over and that they have been victorious, that Trump is now considering restarting military action against Iran because of the stalled talks. What do you think the considerations really are behind the scenes and the possible fallout if the United States would decide to start back up with military action?

PLITSAS: Well, we'll start with the last part of the question. So, in terms of fallout, I mean, Iran has demonstrated a capability and willingness to use whatever missile stocks and drones it has left to attack its neighbors. And largely infrastructure targets, oil and gas, because they're looking to impose costs as part of that asymmetric strategy of trying to put pressure on the United States to end the war, both economically and through allies. So far it hasn't worked. But there's a concern that if it goes further, that they could target more in response, they being the Iranians in this case.

For the U.S., what does potential military option look like? Well, we stopped the bombing campaign before it was done. So, despite comments that have been made, CENTCOM, our U.S. Central Command, has been working down a pre-designated list of targets with decades of intelligence collection behind it. Probably about 13,000 targets, I believe, have been struck to date. There's about 3,000 left, or as the president characterized it, probably about two weeks of bombing, for the initial targets of the drones, missiles and the industrial base.

Separate from that, the Strait of Hormuz is mission creep. So, there could be additional strikes along the Straits. You could see infrastructure targets inside of Iran hit potentially oil and gas. And then also potentially decapitation strikes, going after any of those Iranian leaders who still remain opposed to a deal, particularly in the IRGC.

BOLDUAN: And kind of to that point, I mean, military action to this point, it has, very clearly, not forced Iran to give up control of the Strait of Hormuz or hand over all of its enriched uranium and such. Do you think, though, a picking back up and a further prolonged military campaign could actually bring that about?

PLITSAS: It leaves the president with a couple more options he doesn't have now. So, if he proceeds through the list of the remaining targets that were meant to be struck, he can basically say, look, I took care of the drones, the missiles and everything else to the extent possible. Whatever is left is small and you can sort of defend against it. And that was the original, you know, mission.

What becomes still a question, though, is the nuclear material, right? The highly enriched uranium, which even Prime Minister Netanyahu said cannot remain inside of Iran. And if they're not going to negotiate for it, that means we have two options. It's either persistent stare, leave it where it is and continue to look at it. And if they attempt to touch it, go after it. Or you'd have to send in a ground force in a very sensitive operation to go get that. And those are located underground outside of Iran's third largest city, about 300 miles inland, with incredible risk to a force that goes in. So, naturally, the president sort of left that to last until you destroy the rest of the military infrastructure. So, you're looking at potential significant options.

But then the last piece is the question, what happens with the Strait? Iran has learned it doesn't need to shut the Strait down using mines. It can simply hold it at risk using projectiles like missiles and drones. And Iran was a net exporter of drones before the war started. It only takes a couple to hold it at risk. So, there is a real possibility of a long term, you know, threat to the Strait anytime Iran chooses to do so.

BOLDUAN: Yes, it sure seems -- sure seems so.

It's good to see you, Alex. Thanks so much for jumping on.

Sara.

SARA SIDNER, CNN ANCHOR: All right, breaking just moments ago, new data showing inflation rose in April more than expected, albeit just slightly.

[08:40:03]

But it's eroding American spending power with things like prices in gas spiking at the same time.

CNN's Matt Egan joining me now to break down the report.

What does this tell us?

MATT EGAN, CNN SENIOR REPORTER: Well, Sara, look, it's another point of evidence here, that the war in the Middle East is making the cost of living here in America worse. And a lot of people, they can't keep up because prices are going up faster than paychecks.

So, consumer prices in April surging by 3.8 percent year over year. As you mentioned, that is worse than expected. And this is the highest annual rate since May of 2023. Now, on a monthly basis, prices up by 0.6 percent. That was as expected. But again, that's hotter than you want to see.

Now, this is a look at the trend for annual inflation going back for the past three years or so. And you can see, inflation was heading in the right direction. And look at this.

SIDNER: Wow.

EGAN: At the start of this year, just as the war began, inflation going almost straight up towards four percent.

Now, core inflation, which excludes food and energy, that's looked at as a better sign of underlying inflation. That's what the Fed, that's what investors look at. That also moved in the wrong direction. Core inflation heating up to 2.8 percent. That's the highest level since last fall. It's not surging like headline inflation, but it is going in the wrong direction.

So, why did this happen? Why is overall inflation going up? Well, the obvious one here is gasoline, right? Gasoline prices surging on the month by more than five percent. That's a reflection of the fact that a lot of people are paying more than $4 a gallon, $4.50, in some cases $5 a gallon for gasoline right now.

But it's not just gas. Also airfare, right? Jet fuel prices have skyrocketed. In some cases they've doubled. So, we've seen a significant increase in airfare. That's likely to continue. Elsewhere though, groceries, that's obviously a major point of frustration for people for years. Grocery prices up by 0.7 percent on the month. That's the most since August of 2022. And that may be a reflection of also the war, because we've seen diesel costs go up.

SIDNER: Right.

EGAN: So, that's making it more expensive for farmers and to transport all the food to the stores. Fresh fruits and vegetables, related there, up by 2.3 percent. That's the most since 2010. Got to keep an eye on that. Also could be related to diesel, as well as some of the immigration crackdowns.

And then shelter. Shelter was up by 0.6 percent. That is a very big weight on this inflation report. We shouldn't read too much into that one because that's likely a statistical anomaly. The government was shut down last fall. They didn't have a reading there. Now they're playing some catch up. So, that may have inflated inflation -- the inflation readings a little bit, exaggerated it. But still, you put it all together and you have a situation where prices are now going up faster than paychecks, right? And that's the first time that we've seen that where real wages, inflation adjusted wages, are falling for the first time since 2023.

You look all the way on the left side of the screen. That's the red line is prices. Prices were going up faster than paychecks. Then you had this massive improvement. And for about three years, right, people's paychecks were going up faster than the cost of living. Not anymore. We've seen that crossover there.

So, look, bottom line, this is just more evidence of how the war in the Middle East and this energy crisis is making it more expensive for consumers. SIDNER: It explains this new CNN polling, how people are feeling about

the economy. And, you know, three-fourths of the population just about are saying, it's not going well. This is why. This is --

EGAN: Yes, this is validation.

SIDNER: This is validation.

Thank you so much. I appreciate it, Matt.

EGAN: Thank you, Sara.

SIDNER: John.

BERMAN: Whoo, there's some steep curves right there from Matt Egan.

All right, two major battles over redistricting this morning with the Supreme Court at the center of them both. In Virginia, Democrats are asking the Supreme Court, the U.S. Supreme Court, to reinstate the new map that was blocked by the state supreme court. It could give them four more seats in the U.S. House.

And in Alabama, the Supreme Court cleared the way for the state, the U.S. Supreme Court cleared the way for the state to go back to a map adopted in 2023 that would eliminate a district held by a black Democrat.

With us now, CNN senior legal analyst Elie Honig.

And I will start with Virginia, which is really a debacle for national Democrats and Virginia Democrats. They've appealed this case to the U.S. Supreme Court. What cases have we seen in the last six months or so that give us an idea of whether or not the U.S. Supreme Court will touch this at all?

ELIE HONIG, CNN SENIOR LEGAL ANALYST: I think there is close to zero chance the U.S. Supreme Court takes up this case for Virginia, meaning, I think they're going to leave the Virginia Supreme Court ruling in effect, which strikes down that ten to one map.

First of all, this is an issue of state constitutional law, Virginia constitutional law, decided by the Virginia Supreme Court. If we look back over the last six months, the U.S. Supreme Court has made clear, we're going to stay out of state level resolutions of their own redistricting maps. In Texas, right, Texas is about 60-40 Republican, went to a much redder map.

[08:45:03]

The U.S. Supreme Court said, you all figure it out in the state. State courts, it's up to you. Same thing in California the other way, right, 60-40 Democrat, roughly. California, they wanted to go to a very blue map. Came up to the U.S. Supreme Court. They said, not for us. We're letting you do as you will do, California. I think the same thing is going to happen in Virginia.

BERMAN: Virginia, much more like Texas and California than some of the situations in the other states here about the way things were done.

HONIG: Yes.

BERMAN: But explain that because I think people see what happened yesterday and the Supreme Court said, OK, Alabama, you go do what you want. Essentially, probably, allowing them to get rid of a district held by a Democrat. At the same time, they're probably not going to take up Virginia. Why are these two things different?

HONIG: It's a whole new world in the U.S. Supreme Court. Even if we look back to two, three years ago. As of two weeks ago, when the Supreme Court came out with their Louisiana decision, the rule in the Supreme Court is, we are no longer in the business of policing gerrymandering if it's political. If it's heavy Republican, heavy Democrat, that's political. That's up to the states.

The only thing the Supreme Court says we will get involved in is if the states are using race as a criteria to draw their lines. Whether it's to increase or decrease the power of any group. Whether it's these intentional efforts to draw majority black districts, which the Supreme Court, by the way, blessed as recently as 2023. Now the Supreme Court is saying, that's no good anymore. Hence, Alabama yesterday sees this decision and says, well, one of our districts, we believe, was drawn with race in mind to create a majority black district, and we want to redo it now. And the Supreme Court yesterday said, go ahead, you can go back and try to redo it. And as you said, that's likely to result in the reduction of one of those majority black districts.

BERMAN: And back to Virginia, because I do think it's worth restating, what is it that the Virginia Supreme Court specifically said was done incorrectly? Why did they throw out this map?

HONIG: Yes.

BERMAN: It wasn't that they said, oh, gerrymandering, redistricting is bad necessarily.

HONIG: No. Had nothing to do with fairness, had nothing to do with whether a ten to one split was too heavy. It was all about the finding that the Virginia state officials did not follow Virginia's own rules.

And important to understand, by the way, again, this can be head- spinning. Every state has its own unique rules and procedures. How you do this. They all involve the legislatures. Some involve the governor. Some involve commissions. Some involve voter referendums, like Virginia. The supreme court basically said, there's a very specific timeline that has to be followed under the Virginia Constitution. And the short version of it is, Virginia authorities did not follow their own timeline. They rushed it too much. They didn't allow for each of the phases to happen.

And so, the Virginia State Supreme Court, four to three, said, you didn't follow your rules. It's not about fairness, it's about just, if you're going to do it, you do have a lot of leeway, but you do have to follow your own rules. BERMAN: And it's the type of thing the U.S. Supreme Court hasn't

really gotten into in the last few years.

HONIG: Yes.

BERMAN: Elie Honig, great to see you. Thank you very much.

HONIG: Thanks, John.

BERMAN: Kate.

BOLDUAN: So, there's fascinating new reporting coming into CNN. A Russian cargo ship that sank off the coast of Spain in 2024 was likely carrying nuclear reactors for submarines. What's even more extraordinary, a CNN investigation finds the ship may have been headed to North Korea.

CNN's Nick Paton Walsh has this new reporting and is joining us now.

Nick, tell us more about what you're uncovering.

NICK PATON WALSH, CNN CHIEF INTERNATIONAL SECURITY CORRESPONDENT: Yes, Kate, the Ursa Major ship, otherwise known as the Sparta Three, was used a lot by Russia to ship hardware out of Syria. But it's his voyage in the closing days of December 2024 that proved to be its last.

It set sail from Saint Petersburg with an interesting cargo. We've seen on satellite images blue squares. It went around Portugal and through the Strait of Gibraltar, where in Spanish waters it dramatically slowed on the 22nd of December before having a sharp deviation in its course and urgently demanding help from Spanish rescuers just one day later.

The captain later confessed to Spanish investigators that his cargo, outside of the blue squares he was carrying, two cranes, empty containers, things that, as the manifested of the ship said, were bound for Vladivostok, made no sense to travel by sea all that way. Amongst that cargo, two were components for two nuclear reactors, likely for a submarine, the captain of the Russian ship told Spanish investigators.

Now, that is part of a Spanish investigation that we've been speaking to a source familiar with. We've looked at satellite pictures, open- source imagery of the route taken. And it appears the captain also told investigators he believed he was going to be diverted to the North Korean Port of Rason. Just a year later, North Korea would claim it had its first nuclear submarine. This ship, though, was intercepted. It had a significant hole it seems blown in its hull according to the captain. And then, later on the 23rd, the Russian military turned up and detonated, it seems, four explosions that ultimately led the ship to sink to the sea floor.

Adding to the mystery around this, about a week later a second Russian ship, known as the Yantar, subject of many allegations against Moscow for disruption, sabotage and espionage, turned up and four more explosions followed, potentially on the wreckage of the ship at the bottom of the sea.

[08:50:06]

Now, what is down there ultimately remains a mystery. The Spanish government have remained very quiet on this. They've said they don't have the technical expertise or want to endure the risk of going down there to find out more. And there is no, at this point, no suggestion of contamination. But it's a remarkable moment, really, because there are few, I think, governments in the world who could potentially have found out what this cargo was, tracked it, and then potentially intercepted it to blow this hole and cause the ship ultimately to be sunk by its own military.

A huge Russian overreaction, you might say, here. Clearly, Moscow did not want the contents of this ship found by anybody. And as the captain said, this was components for two nuclear reactors headed for North Korea. Perhaps payback for Russia's assistance from North Korea in its war in Ukraine.

A remarkable story here. One that we've asked the Spanish government, the Russian government, the British government, potentially operational in that area, to comment on. They did not reply. And the Pentagon didn't reply either. The secret's still on the sea floor. But a remarkable voyage here and a remarkable bid it may have been to transfer this exceptionally rare and dangerous technology to North Korea.

Kate.

BOLDUAN: Yes, especially with the secrets remaining on the sea floor. Extraordinary reporting.

Nick, thank you so much for bringing that to us. Really appreciate it.

Sara.

SIDNER: All right, ahead, a mayor in California resigns. What she's admitting to after being accused of acting as an agent for China.

And sticking in the same state, California. This bear just, you know, doing his business, taking a stroll through his neighborhood, climbing a few trees that happens to be populated with humans. His neighbors responded, but authorities say they did it in the exact wrong way.

Those stories and more ahead.

(COMMERCIAL BREAK)

[08:56:16]

BERMAN: All right, this morning, you want some inspiration to hit the gym? Well, Susan Young Browne is 108 years old and she does group workouts in Dover, Delaware, three times a week. She crushes them. What's more, she still drives herself there. She just renewed her driver's license through 2033. Susan says being active is just her lifestyle. (BEGIN VIDEO CLIP)

SUSAN YOUNG BROWNE, 108 YEARS OLD: I'm over 100. One hundred and eight.

When I get up in the morning, I get down on the floor and I have an exercise routine. I think I've been doing it for the last 20 years.

(END VIDEO CLIP)

BERMAN: Well, she looks great. She sounds great. We see her doing plenty of cardio. No word yet on how she feels about skipping leg day, though.

Sara.

SIDNER: Not good. I think she does it every day. Also, she clearly bakes cakes, which I am here for.

BERMAN: Which is why she works out three times a week.

SIDNER: Truly.

All right, on our radar for you this morning, a huge fire has exploded in the Everglades, where there are many protected species. The fire is just west of Miami and has burned more than 11,000 acres so far. It started Sunday. Video showing flames spreading rapidly. Look at that. Firefighters, though, say they are containing it. There are still warnings, though, for residents to stay inside with their windows closed due to the massive amounts of smoke in the area there.

Also this morning, the mayor of a southern California city is facing federal charges for being an agent of China. Eileen Wang of Arcadia has pleaded guilty after spreading pro-Beijing propaganda through a website tied to China. Prosecutors say the activity took place before and during Wang's time on the city council. She faces up to ten years in federal prison. She has also resigned as mayor.

And a wandering black bear made its way through a neighborhood in Altadena, California, climbing trees, roaming around in yards. The bear drew crowds as people tried to get a closer look. One man even left raw chicken out on the sidewalk for the bear. But experts say, buddy, not the right thing to do because it can make the animal more comfortable around people, thinking, you know, there's going to be like a chicken dinner for it wherever it comes around. Bad idea, Kate.

BOLDUAN: Yes. I mean, obviously, if you're leaving chicken on the sidewalk, we're going to show up.

SIDNER: I'm going to come over there and eat it.

BOLDUAN: Yes, exactly. I mean, hopefully it's cooked.

SIDNER: If I were a bear, or just myself.

BOLDUAN: Hopefully it's cooked. But, you know, I digress. I digress. OK, let's move to this now.

The secretary of transportation facing questions this morning. Not about any -- not about new policy, but about a new reality TV show starring him and his family and the message that it might be sending right now at a time when high inflation and high gas prices are hitting every American.

CNN's Tom Foreman has more.

(BEGIN VIDEOTAPE)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: What a beautiful family.

TOM FOREMAN, CNN CORRESPONDENT (voice over): Another reality show. Another road trip. But it's a familiar path for this family.

TRUMP: Taking a little trip?

RACHEL CAMPOS-DUFFY: Yes.

TRUMP: A little trip all over.

FOREMAN (voice over): Transportation Secretary Sean Duffy and his wife, Rachel Campos-Duffy of Fox News, met on MTV's "Road Rules: All- Stars." And they, and their nine children, are channeling that past in this five-part YouTube series.

SEAN DUFFY, TRANSPORTATION SECRETARY: We're encouraging everyone to go take a road trip to celebrate America's 250th birthday.

Welcome to Montana.

[08:59:43]

FOREMAN (voice over): But the rollout of their made for TV trip through at least 17 states is hitting rough roads with serious safety questions about air travel and several incidents, including a Frontier plane striking and killing a pedestrian over the weekend, a hantavirus outbreak on a cruise ship and gasoline prices way up amid the U.S. fight with Iran former Transportation Secretary Pete Buttigieg posted, "this is brutally out.