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Fed Cuts Key Interest Rate By A Quarter Percentage Point; Pentagon: China Military Growing Despite Anti-Corruption Campaign; U.S. Supreme Court Will Consider Impending TikTok Ban; House Panel Secretly Voted To Release Gaetz Ethics Report; Optimism Builds For Gaza Ceasefire & Hostage Deal. Aired 3-4p ET

Aired December 18, 2024 - 15:00   ET

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

[15:00:34]

JIM SCIUTTO, CNN HOST: Hello. I'm Jim Sciutto in Washington. Thanks so much for joining me today on CNN NEWSROOM.

And let's get right to the news.

We begin with breaking news from the U.S. Federal Reserve. Chairman Jerome Powell has just announced that the Fed is cutting interest rates for the third time this year, this time by a quarter percentage point. The move makes borrowing somewhat easier for Americans, but we're already seeing a notable reaction from the markets, which are trending down since the announcement.

CNN's business editor at large, Richard Quest, joins me now with more.

Market down a fair amount. Do they want more?

RICHARD QUEST, CNN BUSINESS EDITOR-AT-LARGE: Well, the market -- I think it's an interesting question, Jim, because the market had been up before the announcement in anticipation that there was going to be a rate cut today. But to a large extent that was well priced in.

And if you look at that graph, so what is in that graph? What happened that suddenly turned the market, the market upside down? Really simple. Powell basically said you've had it for now. You've got your three cuts. We're basically going to pause, wait and see.

We are expecting higher inflation next year. Now, that's not just because it's already trending higher at the moment. But he knows that the policies of the incoming administration on tariffs, on deregulation, on tax cuts, all stand to be further bad news for inflation.

Listen to how Jerome Powell put it in his press conference a few moments ago.

(BEGIN VIDEO CLIP)

JEROME POWELL, FEDERAL RESERVE CHAIR: When you ask about 2025, I think that the lower the slower pace of cuts for next year really reflects both the higher inflation readings we've had this year and the expectation that inflation will be higher. You saw in the S&P that risks and uncertainty around inflation, we see as higher. Nonetheless, we simply see ourselves as -- as still on track.

(END VIDEO CLIP)

QUEST: Yeah. On target up to a point. We've had three rate cuts. The market was hoping that it would continue with 3 or 4 next year. The dot plot shows likely to this is where this is now, Jim, a wait and see Fed. They're not taking risks.

SCIUTTO: That's quite a statement for from the chairman of the Federal Reserve saying he expects inflation will be higher next year. And we should note that already for this year, consumer prices are up 2.7 percent, so that above the 2 percent target already this year. But it will go even higher next year. And you're saying that's based on planned Trump administration policies?

QUEST: Yes, we've already got I mean, if you take where we are now, at this moment, we've already got inflation under control, but trending higher, 2.7 percent the last couple of months have shown that the trajectory of falling inflation has slowed to a stop, and its actually now starting to bubble a little bit.

Now think of it as embers of the camp fire, if you will. The embers are sort of glowing and they're glowing a bit more than chair Fed -- Chair Powell would like.

Now, if Donald Trump comes in and starts throwing gasoline on that -- and look, I'm trying desperately not to make political points here because the reality is higher tariffs means higher inflation. It's an economics 101.

Tax cuts means more consumer spending. It's an economics 101. It will lead to higher inflation unless it's sterilized.

Therefore, the Fed is looking for fiscal policy, fiscal policy from the administration to boost inflation.

SCIUTTO: It's not politics, man. It's facts. It's economics, as you say.

Richard Quest, thank you.

QUEST: Thank you.

SCIUTTO: You can catch more of Richard's astute analysis at the top of the hour on "QUEST MEANS BUSINESS".

Well, another story we're following closely. China is aggressively and rapidly growing its military and on track to meet its goals for nuclear expansion, even as anti-corruption efforts have toppled some of its highest ranking military leaders. That is the conclusion from a Pentagon report out today on the Chinese communist party's defense strategy, one that President-elect Donald Trump will, of course, inherit in just a few weeks. Plus, another major piece of China related news today. The U.S.

Supreme Court has announced it will hear emergency arguments on the future of access to TikTok in this country.

[15:05:03]

In one month, TikTok is required by law to separate from its Chinese parent company, ByteDance, or be banned from U.S. App Stores. TikTok says the mandate violates the First Amendment. The government says it has a right and obligation to protect Americans' national security.

Joining me now to discuss, Congressman Raja Krishnamoorthi. He's the ranking member on the Select China Committee, as well as a Democrat from Illinois.

Congressman, thanks so much for joining us.

REP. RAJA KRISHNAMOORTHI (D-IL): Thank you, Jim. Thanks for having me.

SCIUTTO: So when you look at this court here, do you believe this court will -- the Supreme Court, when it takes this up on an emergency basis next month, right before the law would take effect, that it is going to uphold congressional legislation?

KRISHNAMOORTHI: Yes. Anything is possible with this court. But on the other hand, this particular law has now been validated by all three branches of government, including the very powerful D.C. Circuit Court of Appeals, which had a very diverse ideologically, kind of, different set of judges. There was a Trump appointee, there was an Obama appointee, there was a Reagan appointee -- all of them unanimously agreed that this law is valid. And so, now, it's time for ByteDance to accept the law and to sell TikTok.

SCIUTTO: As you know, I'm sure, many TikTok users, they don't trust Washington. They see this ban as Congress trying to prevent the free flow of information. They invoke, of course, the First Amendment, as TikTok is doing.

What's your answer to that argument? And could Congress declassify any of the intelligence which your committee and others say supports that ByteDance is a national security threat?

KRISHNAMOORTHI: Well, first of all, I support any and all efforts to declassify information that we reviewed so long as we don't somehow inadvertently disclose sources or methods of collecting that information. But as the D.C. Circuit Court of Appeal repeatedly suggested, there is a First Amendment right to free speech, but not a First Amendment right to harm our national security. And in this particular case, measures were taken to mitigate the threat in the least, kind of, least interventionist way that would harm the First Amendment.

So in this particular case, we are requiring ByteDance to sell TikTok so that the threat, the control of the Chinese communist party of the platform is mitigated. SCIUTTO: Okay. I want to ask you about findings from this Pentagon

report on China and the growth of its military. As you know, President-elect Donald Trump has invited the leader of China, Xi Jinping, to his inauguration. He often speaks of their strong personal relationship. He's even expressed admiration for his leadership. Xi Jinping's leadership of his country, though, as you and I know, he imprisons dissidents and a whole lot more.

Given the findings of this report, should President-elect Donald Trump have this kind of relationship with the Chinese leader?

KRISHNAMOORTHI: I don't feel comfortable with that. But on the other hand, I think that this that having dialogue at the highest levels of government is a good thing, to make it very clear, like what our concerns are, what our red lines are, why we feel that, for instance, disagreements in the South China Sea or with Taiwan should be negotiated at the bargaining table, not at the end of a barrel of a gun.

With regard to this report that just came out, you know, China -- the Chinese communist party has now increased the number of nuclear weapons they have to over 600. They would like to get over a thousand nuclear weapons and essentially shift the balance of power in the Indo-Pacific in a very aggressive manner. And so, now, we have to work with our friends, partners and allies to counter that aggression as much as we can.

SCIUTTO: U.S. defense officials say that China is, quote, almost certainly learning from Russian experience. The Russian experience in Ukraine to apply to China's posture towards posture, towards Taiwan. In my own research stories and interviews, I've done, that connection is made by virtually everyone I speak to in Asia, in Europe, in Ukraine, here in Washington, that China is watching Russia's experience to -- in Ukraine as it makes its own calculations about Taiwan.

If President-elect Trump as president pushes Ukraine to give up, in effect, perhaps under conditions that it does not find optimal, giving up a lot of territory, for instance, would that encourage Taiwan -- China to take a shot at Taiwan?

[15:10:07]

KRISHNAMOORTHI: Absolutely. So what we're trying to do in the Indo- Pacific is to deter conflict, discourage aggression. And so any moves that kind of remove assistance from Ukraine, in my opinion, lowers deterrence and invites more aggression and the possibility of open hostilities and conflict.

And one thing that we see repeatedly in polling of the American people is and this is across Republicans, Democrats and independents, is, the vast, vast majority of Americans want us in the U.S. government to do everything possible to deter and prevent war, prevent open hostilities in the Indo-Pacific, and with the Chinese communist party, even at the same time that we win the strategic competition economically, militarily and technologically with regard to the CCP. SCIUTTO: As you know, your fellow, your fellow congressman from the Republican Party yesterday recommended that Liz Cheney, former congresswoman, be criminally investigated for her role in Congress's own January 6th Committee.

Your Democratic colleague in the Senate, Chris Murphy, said the risk to Liz Cheney is part, quote, of how Trump is putting into action a plan to cripple our democracy in a way that we may never recover from.

What will Democrats do to help protect Cheney and perhaps other members of that committee who might come under attack from unlawful prosecution?

KRISHNAMOORTHI: Well, I think that, first of all, this is meritless. Liz Cheney was my colleague in the House. And I called her a friend, and she's a patriot.

I think that what is going on right now is, a couple of things. One, I think that Donald Trump and his allies are trying to brush back people who might even consider criticizing him or his administration or his policies going forward. So this is almost a message to other people, not just Liz Cheney.

With regard to Liz Cheney in particular, we have to do everything in our power to shine a light on what's happening and, do whatever we can to expose the truth. And I know that, you know, the president, the current president is also looking at this situation very closely. And we just have to continue to monitor developments here because we cant have a situation where, you know, whether it's Kash Patel or someone else goes on a political vengeance tour at the FBI or at the DOJ, and implicates a number of people, baselessly, as they are right now.

SCIUTTO: And yet he's quite publicly threatened to do exactly that.

Congressman Krishnamoorthi, thanks so much for joining.

KRISHNAMOORTHI: Thank you so much.

SCIUTTO: Coming up, reversing course. The U.S. House Ethics Committee has voted via secret ballot to release its report on Matt Gaetz. How the former Florida congressman and very short lived Trump attorney general nominee is responding ahead of its release.

(COMMERCIAL BREAK)

[15:16:31]

SCIUTTO: In a stunning reversal, the House Ethics Committee will now release its report into Matt Gaetz. The panel secretly voted to publicize the report earlier this month after it had voted along party lines not to release the report. When Gaetz, you'll remember, was tapped to be Trump's attorney general. The years-long probe looked into allegations of sexual misconduct, illicit drug use and accepting bribes, among other claims.

Gaetz has denied all allegations against him and took to X today, saying, quote, in my single days, I often sent funds to women I dated, even some I never dated, but who asked. I dated several of these women for years. I never had sexual contact -- conduct -- contact with anyone under 18. It's embarrassing, though not criminal, that I probably partied, womanized, drank and smoked more than I should have earlier in life. I live a different life now.

But in that statement, Gaetz resigned from Congress last month.

CNN's Alayna Treene joins me now.

Alayna, I wonder what made the difference there when he was a nominee, there was a vote along party lines not to release the report. Now, some Republicans had to go along with it. Do we know what led to that change?

ALAYNA TREENE, CNN REPORTER: That's right, they did. I would remind you that when that vote happened and they voted against its release, that's because it was a party line vote. The committee is evenly divided. So the fact that they have voted earlier this month to release this report means that Republicans had to get on board.

But look, I think some of the difference is exactly what you laid out before. Matt Gaetz was still under consideration to be Donald Trumps attorney general pick. And there was a lot of concerns about what this report could mean. I would also note that at the time, gates had abruptly resigned from Congress. A lot of people saw that as a move by him to try and protect himself from this report and try to bury the allegations, because typically we haven't really seen the house, the House Ethics Committee release a report into a former member of Congress. We know that on occasions that it has, but that is not usual.

Of course, we are now seeing that reversal, and they are voting to release this. It will be released. Were told its going to happen at some point after they already end the session and go home, fly home for the holidays after their last vote. Part of that, I'm told as well, is because a lot of these members want to be out of town when this drops.

But the other thing to keep in mind, just to your question about why is there this reversal -- all along, many of these Republicans, but Democrats alike, of course, have had very tense relationships with Matt Gaetz and many times, I think, described as hostile relationships. Part of that is, of course, because many of them are still angered by Matt Gaetz for leading the charge last year to oust the former House speaker, Kevin McCarthy. A lot of people have hung on to that.

But I do think the dynamics of having Donald Trump, the incoming president, the president-elect, name Matt Gaetz to be his attorney general. And the questions of really, would they bend the knee and show their loyalty by confirming him was a big question at the time. That is no longer a problem.

Matt Gaetz has withdrawn his name from consideration. He's also said that he has no plans to return to Congress. However, all of this is still going to be impactful because I do -- you know, as much as we know, Matt Gaetz is not coming back to Congress, he has already said that he plans to join One America News Network as an anchor in January.

He is still very much a major player in Republican politics. He still talks to Donald Trump frequently. I know he talks with a lot of Donald Trumps allies.

And so this report we are expecting to be very damaging.

[15:20:03]

It could be explosive. We have to wait and see exactly what the committee found and what they have laid out in this report, but it's something that they have been investigating for years now. And so this could be pretty explosive and could potentially impact Gaetz's career moving forward.

SCIUTTO: Yeah. And you see in his statement him trying to get ahead of some of the details in that report, we'll see exactly what those details are.

Alayna Treene, thanks so much.

Well, RFK, Jr. is so far receiving little pushback from Republican senators as he attempts to shore up support for his confirmation as secretary of health and human services. The prominent vaccine skeptic is working to reassure senators he will not ban vaccines despite previously and repeatedly expressing doubts about their impact, pushing conspiracy theories as well.

Dr. Peter Hotez, a pediatrician and co-director at Texas Children's Hospital Center for vaccine development, joins us now.

Doctor, good to have you back.

DR. PETER HOTEZ, PROFESSOR & DEAN OF TROPICAL MEDICINE, BAYLOR COLLEGE OF MEDICINE: Yeah, thanks for having me, Jim.

SCIUTTO: So RFK, Jr. for years has claimed a connection between vaccines, specifically the MMR vaccine, measles, mumps, rubella vaccine and autism, though the science shows the opposite. Your and I should note for our audience, your daughter has autism. You've written a book yourself titled vaccines do not cause -- did not cause Rachel, your daughter's autism.

And yet the president-elect openly questioned whether vaccines do in fact cause autism.

Can you, for our audience, tell us what the science and the research through many years and decades actually shows?

HOTEZ: Yeah. And in fact, you know, with -- with Mr. Kennedy, with Bobby is, as I would call him, when we would have these long discussions back in 2017. It's not just a one time assertion that he dropped it. He kept hammering away at this for more than a decade, almost really two decades.

So his initial assertion that was disproved was that it was the measles mumps rubella vaccine causing autism. Then he wrote a paper in "Rolling Stone" magazine and "Salon" magazine simultaneously claiming, okay, maybe it wasn't MMR, but it must be the thimerosal preservative that was in vaccines.

Then when that was disproven through large epidemiologic studies, which are very expensive and time consuming to do by the scientific community, he came up -- well, it's because we're spacing vaccines too close together, also debunked.

Then it was aluminum in vaccines, alum in vaccines. Then it was the HPV vaccine for cervical cancer and another cancers saying it was causing autoimmunity or infertility. And then he started railing against COVID vaccines.

So it's a persistent pattern that's been very damaging. And it's more than just an annoyance because it's affecting public health. We had 200,000 Americans who needlessly died because they refused COVID vaccines. And now we've got a five-fold rise in whooping cough cases in the U.S. over the last year, four-fold rise in measles outbreaks.

And we know we have massive scientific evidence showing there's no link. And also we know what autism is. We know how it begins in early fetal brain development before the baby is even born. So there's not even any plausibility.

So if I sound a bit frustrated, that's the reason for it.

SCIUTTO: Listen --

HOTEZ: It's been this exhausting two decades of --

SCIUTTO: And, of course, it's --

HOTEZ: -- hammering away at this.

SCIUTTO: -- you have quite personal experience of it, given your daughter.

I wonder, already conversations like this and unfounded doubts lead to lower take up of vaccines, and therefore I wonder, does that make it difficult to maintain herd immunity? And does that bring us to a situation in this country where we're going to see a resurgence of some of these diseases to a greater degree?

HOTEZ: Well, that's exactly it. As -- as I briefly mentioned, but we can go into it a bit more now. It's affecting the whole vaccine ecosystem in the United States.

So we've seen a drop off in pertussis immunizations, whooping cough, fivefold rise in cases over the last year, drop in measles immunizations, four-fold rise in measles outbreaks.

Jim, we have polio virus in the wastewater in New York state in 2022. So, with this continued disparaging of vaccines as he's been continuously doing, we know where this is going. Its going to bring back all of these ancient childhood diseases in a big way, and its going to affect -- affect us globally as well.

SCIUTTO: Let me ask you this, because you will sometimes hear from anti-vaxxers, okay, fine -- it's fine. You and your kids get vaccinated. I just won't vaccinate myself and my kids.

Can you explain to viewers why it's important for everyone or as close to everyone as possible, to get it for the health of the population?

[15:25:06]

HOTEZ: Yeah, there's two parts to that. One is, first of all, no vaccine is perfect. You know, even the polio vaccine, two doses gives you 90 percent protection better with more additional doses. But it's not 100 percent. So, there's still that risk. And that's true for measles and the others. So there's that piece.

But also if enough kids don't get vaccinated, then that ignites an epidemic. And the epidemic is devastating for a community and becomes a huge surge on the health care system, too. We saw this in 2018, 2019 with the measles outbreak in New York. You started having 20 percent of the kids were hospitalized, including many of them in intensive care units. And we have limited pediatric bed capacity in the United States. So it really has a big impact on our whole health care system.

SCIUTTO: There are some Americans who believe that health officials did not adjust their guidance on COVID, even as it learned more. I mean, I'm thinking of things like social distancing and raised expectations too high for the efficacy of the COVID vaccine in terms of preventing infection, though, we know it had quite concrete effects in terms of reducing mortality.

Given those questions, what can health officials do now to retain that confidence, to bring back or reclaim rather that confidence?

HOTEZ: Yeah, I think, you know, part of the problem, Jim, is the narrative that says, well, it was the health officials who screwed up in the communication. You know, the communication was imperfect. And the truth is, not only were COVID vaccines more than 90 percent protective against severe illness and deaths and hospitalizations, but they also had a big impact on reducing heart disease because this is a thromboembolic and virus causing strokes and heart attacks. Big impact on long COVID and that message didn't get across to the American people, in part, because the anti-vaccine lobby was so aggressive at trying to do everything they could to discredit the vaccine.

So you started to see this in 2021, in their zeal to push back against vaccine mandates for COVID, which you could kind of understand, tragically, they went the next measure and they falsely discredited the effectiveness and safety of vaccines. And that's why so many Americans lost their lives, because they thought they were -- they didn't need to get vaccinated.

SCIUTTO: People pay, right? They pay with their own health and sometimes -- sometimes with their lives.

Dr. Peter Hotez, good to have you on. We appreciate it.

HOTEZ: Thanks so much.

SCIUTTO: Well, in the 48 hours after ABC News settled a defamation lawsuit brought by brought by the president elect, Trump sued Iowa pollster Ann Selzer. Her polling firm, "The Des Moines Register", and its parent company, Gannett.

You may remember in the final days of the election, Selzer, a very highly regarded pollster who Trump had previously praised, released a poll showing Harris beating Trump in Iowa. Ultimately, Trump won Iowa handily, and he now alleges that poll and the news coverage around it was somehow intended to help Democrats.

It is just the latest lawsuit as Trump escalates his legal campaigns and attacks and threats against the media, something which he claims he must do.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT-ELECT OF THE UNITED STATES: And I feel I have to do this. It should have the Justice Department or somebody else, but I have to do it. It costs a lot of money to do it, but we have to straighten out the press. Our press is very corrupt.

(END VIDEO CLIP)

SCIUTTO: I just want to remind folks. And joining me now is Gabe Rottman, policy director at Reporters Committee for Freedom of the Press.

The Trump, in an interview in 2017 after his first election, he told Lesley Stahl when pressed that the reason he attacks the press is that when they come out with coverage critical of him, he can undermine confidence. We've seen this campaign play out with great effect, frankly. Now, we're going to see Trump have the levers of government power and law enforcement power.

How concerned are you about how far this goes? Is it just going to be civil suits? Are they going to be attempts to prosecute journalists criminally? How far will he go?

GABE ROTTMAN, POLICY DIRECTOR, REPORTERS COMMITTEE FOR FREEDOM OF THE PRESS: Thanks, Jim.

I -- so were looking at a number of different -- a number of different avenues that we could, we could see play out.

You know, when it comes to the civil suits that you mentioned, you know, we've seen two different types. We've seen the defamation claims, similar to the one that's at issue with ABC. And then the Iowa case is a consumer protection law. What's key is that in both of those instances, there's going to be strong First Amendment protections in play, that are there to ensure that, to protect -- to protect against suits based on honest mistakes.

[15:30:10]

And then we're also keeping an eye out for, like we saw in the first Trump administration, aggressive investigations into leaks of classified information, and -- and as well as prosecutions of journalistic sources.

So there's a number of different things out there that were keeping a close eye on.

SCIUTTO: Does the ABC settlement, there's of course, been a lot of public criticism of this, and you and I weren't in the room with their lawyers as they made a judgment about how this might proceed. But was the ABC settlement in advance? In effect, encouragement for further suits like this?

ROTTMAN: I can't -- I can't speak to ABCs thinking when it comes to this specific case. What I will say is that the case itself and the lawsuit itself, again, shows the importance of having these long standing constitutional protections remain robust to ensure that a free press is able to -- is able to do its job and that its not being hailed into court, again, based on its mistakes.

SCIUTTO: Last year, Justice Clarence Thomas and he's done this more than once, called for the Supreme Court to reconsider "New York Times" versus Sullivan. This is a landmark ruling that made it more difficult for public officials to prevail in libel suits. That Sullivan decision requires public figures suing for defamation to prove the defendant acted with actual malice.

Do you fear that this court might take an opportunity to reconsider that ruling, and therefore make it easier to sue media organizations and journalists for libel?

ROTTMAN: So I think there's two answers. One, it shouldn't. These protections are essential for a free press and for -- for everybody. And so, it's essential that they remain robust, and then the other answer is, you know, we the Reporters Committee, we actually went back during the first Trump administration. And we looked at every case -- every opinion brought down by a Trump appointed judge, a judge appointed, nominated by President Trump. We looked at each of those cases.

And what you see, you don't see a groundswell of support among those judges for revisiting the Sullivan framework, right. This notion that for public figures, in order to prevail in a defamation suit, they've got to show that either you knew that what you were saying was false or you really harbored strong suspicions that that it was false.

And again, you know, the, uh, unlike other, other areas of law, the judges appointed by, by President Trump, they apply that precedent consistently and faithfully, maybe with a few exceptions on the margins. But you don't see a groundswell of support for revisiting Sullivan, which is a good thing.

There's a different question here as to whether the just the attack and the suit itself is the end is the end game here.

In 2006, Trump sued a "New York Times" journalist, Timothy O'Brien, for writing that Trump's net worth was less than what he claimed. And when running in 2016, he said about that lawsuit, quote, I spent a couple of bucks on legal fees and they spent a whole lot more. I did it to make his life miserable, which I'm happy about.

Is your concern that Trump and allies might launch these suits knowing they're going to lose, but just to run up legal bills and, and, you know, spread some mud around?

ROTTMAN: I mean, that's precisely why there are these legal protections in place. There's a whole category of lawsuit that we call SLAPP, strategic lawsuit against public participation, which are brought not in the hope that you'll recover damages in court, but that the lawsuit itself, the burden, the expense of litigation will serve to suppress speech that will cause that chilling effect.

You know, and that's exactly what the court, you know, at this point, 60 years ago in the in during the civil rights era, you know, that's precisely what the Supreme Court pointed to in Sullivan is the concern and the reason why we have these strong First Amendment protections.

SCIUTTO: Beyond the law, there's, of course, the dollar, right. That's an influence in this. And that was the criticism or the allegation from some that Jeff Bezos, owner of "The Washington Post", killed that endorsement of Kamala Harris because he was worried about his business under a Trump administration. Some critics have leveled the same allegation. And again, we weren't in the room for their decision making against Disney regarding the ABC suit.

What is your level of concern that business concerns from the owners of media outlets? Will Trump press freedom concerns?

[15:35:02]

ROTTMAN: Well, so -- so again, the most important thing is that there be strong legal, legal protections to ensure that that's not the case. And so I guess I would say two things. One, there is certainly history going back to the Nixon administration of the misuse of levers of regulatory power, in efforts to influence news -- news coverage that the powers that be perceive as -- as unfavorable.

And what's essential is that there be legal protections and recourse to the courts, when that happens. The other thing I would say is that one of the reasons why these legal protections are so important is that it's really about the smaller news organizations, the smaller outlets that may not have the kinds of resources to fight these fights.

And, you know, again, that's why and, you know, that's why you see, public officials from all parties, from all points on the political spectrum, really supporting strong free speech protections in this area.

SCIUTTO: And there is some concern that at the local or state level, that you might have a similar tactic. And of course, those smaller media organizations don't have the resources, the national ones do.

Gabe Rottman, thanks so much for walking us through it all.

ROTTMAN: Thanks so much. Thanks, Jim.

SCIUTTO: Coming up, it's a bird. It's a plane. It's a drone. Actually, it's probably just a plane. We're going to be talking about some of the drone hysteria as there are reports, more reports, skyrocketing of drone sightings over New Jersey.

Former Congressman Adam Kinzinger, he's a pilot himself, and he thinks he knows what's to blame here. He's going to join me next to walk through and knock down some of the crazier theories.

(COMMERCIAL BREAK)

[15:40:04]

SCIUTTO: President Biden and members of the House Intelligence Committee are all saying the same, quite clearly, quite publicly. Speaking to reporters before departing for Delaware last night, Biden said there was, quote, nothing nefarious going on with drone sightings reporting across the eastern United States. Federal officials said they are still looking into around 100 reported incidents, but have cleared thousands, many of them as just being, well, commercial airliners.

Joining me now to discuss is Adam Kinzinger. CNN senior political commentator, commentator, former Republican congressman also happens to be retired pilot for the Air Force, who still flies around the country himself.

Congressman, thanks for joining.

ADAM KINZINGER, CNN SENIOR POLITICAL COMMENTATOR: You bet. Good to be with you.

SCIUTTO: So you have repeatedly and very publicly knocked down the worst drone conspiracies from these are aliens. This is a foreign actor. Tell me what your best explanation is for what these sightings actually are.

KINZINGER: Yeah, well, first off, there probably are some version of drones out there. We know drones exist, right? I've flown a drone. I've seen visual stuff from drones. Like there are hobbyist drones. Some companies fly drones.

There's people testing, you know, air taxis that are drones. So let's just lets because -- because kind of the proponents of the drone theory are now trying to move the goalpost to just there are drones that exist. Yes, there are.

This started the hysteria of this started particularly when Representative Jeff Van Drew said that this is an Iranian mothership launching drones and spying on Americans. Now, this is a government official that said this. That's what launched the hysteria which sent everybody outside.

And once you go outside and you look up and you stare for the first time, most of us, I mean, me included, don't go outside and stare up. So, Jim, I lived under the flight path for O'Hare for a very long time, and there were nights I would come home, particularly on clear winter nights, and there landing west to east. And I would each time my breath would be taken because I would see like five strange looking objects out in the distance. And each time they were lining up in a long arrival to land at O'Hare. Its just airplanes, but they don't look like they're moving.

The other thing to keep in mind is this why are there no good pictures of drones? Why are they all blurry? Because there are plenty of people out there with long telephoto lenses. Because the long telephoto lenses zoom in on an unidentified object and they see that it's an airplane. They don't take a picture and they move on, but somebody next to them with an iPhone zooms in. When you zoom in with your iPhone, you see a blurry blob that looks like a drone, and you post it on the Internet.

I mean, the conspiracy theories behind this are maddening from aliens to Iran to Project blue book, which is the a government false flag to bring in one world government, to nuclear sniffing drones, all are creating panic and they're not true.

SCIUTTO: I mean, it almost as you were describing that the blurry photos, it makes me think of, you know, Sasquatch sightings, right? Always like a blurry kind of figure. Never clear.

You do -- you do hear from members of Congress, Mike McCaul. He's claimed the drones are spy drones. Trump said he's not going back to Bedminster, one of his properties, because it's too close to where these drones are sighted.

Both those people get briefings. I mean, Trump is getting intelligence briefings as the president-elect. Why are they deliberately stirring the pot here?

KINZINGER: I can't answer for them. I mean, I guess I can answer for Trump in that. Look, Trump wants to do everything he can to make Joe Biden look bad. This is what he does.

I mean, just honestly, he's like, it's always Joe Biden's asleep at the wheel or whatever. So Donald Trump has never, at least as far as I've seen, never said and like his tweets, that these are foreign adversary drones or whatever. But he's always like doing his thing where he's kind of like doublespeak and throwing it out there where you can take it for what it is.

You know, McCaul, I don't know. McCaul of the, you know, understands foreign affairs. Are there spy drones that exist? Sure. Yes. There are spy drones that exist.

But the question isn't, are there spy drones that exist? We have them. Enemies have them, whatever. The question is. Has there been a spate and a rash of drones on the east coast related to either a foreign adversary or aliens? And the answer to that is absolutely not.

And there is no proof of it. And, Jim, I've spent a lot of time weirdly obsessed with this, you know, pulling up pictures of all these so-called drone spottings, including the ones over the capital of the United States. Each time it's an airliner, or if its unexplainable, it's got FAA approved and compliant lighting. So if it's Iran or the aliens, they're at least being polite and complying with FAA rules in American airspace.

SCIUTTO: Well, let me ask you a different question then. Separated from this recent kind of hysteria, have drones become more of an issue from an intelligence perspective, in terms of intelligence gathering, right? I mean, I think of the Chinese balloon that flew across the U.S. I mean, that was an intelligence gathering apparatus. It like this then created all this other hysteria because anything floating over the northern United States became a target for F-16s.

[15:45:11]

But is there an actual increase in this kind of surveillance over secure facilities, bases, sites, et cetera, in this country that that the U.S. military intelligence agencies are watching?

KINZINGER: Yeah, absolutely. And, you know, the interesting thing with the whole Chinese spy balloon and remember, they we ended up having F- 16 shooting down hobby balloons.

SCIUTTO: I know, I know.

KINZINGER: It's how crazy that whole thing got. But we wouldn't have been able to shoot down that balloon had it not been for fifth generation fighter capabilities that had the ability to kind of zoom up and launch a missile because they were so high.

So, yes, there is an increase in this. We have increased capabilities. Our enemies have increased capabilities. And that's important to be aware of, right?

Like and we also know that drone warfare is, is if you look in Ukraine, you see the importance of drone both in intel gathering and actually an offensive and defensive capabilities. But there's a difference between recognizing that there is an increase, a change on the battlefield or a change in the intelligence landscape, and creating panic as a government member, when you don't know anything, telling people that they're actively being spied on by Iran in their homes in New Jersey. And that's just not true.

Look, Iran is scared to death of its own backyard right now, Jim. They're not sending stuff over here.

SCIUTTO: Yeah, and no insult meant to New Jersey, of course. Adam Kinzinger, thanks so much for helping. Anyway, see, through it all, all the fog. Thanks so much.

KINZINGER: You bet. See you. Take care. SCIUTTO: Coming up, what were learning about the feelings within Hamas

about the possibility of a ceasefire deal with Israel, perhaps in the coming weeks.

(COMMERCIAL BREAK)

SCIUTTO: Ukrainian President Volodymyr Zelenskyy has conceded that Ukraine does not have the force strength to take back all of the territory Russia has invaded and occupied.

[15:50:05]

In an interview with the French outlet "Le Parisien", Zelenskyy said the West has the strength to put Putin in his place. His admission comes as the war stretches into its third winter. Russia, using North Korean soldiers, thousands of them now, to shore up its ground forces on Ukrainian territory, and Ukraine's allies are now slowing military aid.

Well, as Israel continues intensive bombing at the Gaza Strip, there are signs that a ceasefire and hostage deal could finally be coming together after so many false starts.

CNN's Jeremy Diamond has more.

(BEGIN VIDEOTAPE)

JERMEY DIAMOND, CNN JERUSALEM CORRESPONDENT: Well, there is optimism in the air. Significant diplomatic activity in the region and a clear sense of momentum towards a potential hostage and ceasefire deal between Israel and Hamas. But will there actually be a deal?

That is indeed the question at this moment, as we are seeing a number of officials arriving in the Middle East to try and get this deal across the finish line, the latest arrival in the region appears to be the CIA director, Bill Burns, who has been the top U.S. official in these negotiations for months now. He often travels and arrives in the region at critical junctures in the process, and this does indeed appear to be one of those critical moments yet again, following visits by the national security adviser Jake Sullivan last week, President Biden's top Middle East advisor, Brett McGurk, also in the region. And of course, we've seen an Israeli delegation, Hamas delegations in both Cairo as well as in Doha, Qatar.

And accompanying this flurry of diplomatic activity, you also have the rhetoric. We've heard optimism from the Americans, from the Israelis, from all sides, really saying that they believe that we are closer than ever to a deal. Hamas also joining that optimistic rhetoric yesterday in a statement saying that they believe a deal is, quote, possible. A Hamas source also saying that the state of talks is, quote, positive and optimistic.

But they are also offering a note of caution as so many others involved in the process are as well, Hamas saying that a deal is possible as long as Israel does not continue to make additional last minute demands in this process, and all sides are really urging caution, even as they are sounding an optimistic note, because we have seen so many times before, these two sides get very, very close to a potential agreement, but ultimately a deal not falling through.

But officials in the region believe that conditions are now at their ripest for an agreement to actually take place, and there's no question that it is very much needed. As we are watching in Gaza over the last 24 hours, according to the Palestinian ministry of health, 38 people have been killed, more than 200 have been injured. And of course, the humanitarian conditions in Gaza certainly not improving. Much needed aid would get in if a ceasefire were to go in place. And then, of course, there are those 100 hostages still held in the Gaza Strip, about half of whom Israel believes are still alive, their fate, of course, also hanging in the balance.

Jeremy Diamond, CNN, Jerusalem.

(END VIDEOTAPE)

SCIUTTO: Our thanks to Jeremy Diamond. Of course, the hostage family is waiting desperately for positive -- positive news on their loved ones. We'll continue to monitor and we'll be right back.

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[15:55:55]

SCIUTTO: Well, we've been watching the markets with minutes until the U.S. stock market closes for the day. You see it down there nearly 1,000 points over 2 percent. This after the fed said. And just over 1,000 as I was speaking there said it would drop interest rates by a quarter percentage point today, a quarter percentage point today. Though, the Fed chairman says it expects inflation to be higher next year.

Another day closing down means the Dow is on pace for its longest daily losing streak since 1974. We'll continue to watch the markets there. Thanks so much for joining me today. I'm Jim Sciutto in Washington.

And Richard Quest, "Quest Means Business". We'll have a lot to say about this. He's next.