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McCarthy On Debt Deal: "We Could Still Finish This By June 1st"; GOP Hardliners Doubt U.S. Will Run Out Of Cash On June 1; U-Haul Driver Faces Charges After Crashing Into WH Security Barrier; How DeSantis Plans To Jolt The GOP Presidential Primary; DeSantis Teases "7-2 Conservative Majority" On Supreme Court; Haley Campaign Takes An Early Swing At DeSantis; Trump: No Exceptions Makes It "Very Hard To Win An Election"; E. Jean Carroll Seeks More Punitive Damages From Trump. Aired 12-12:30p ET

Aired May 23, 2023 - 12:00   ET

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

[12:00:00]

JOHN KING, CNN HOST: Hello, and welcome to Inside Politics. I'm John King in Washington. Thank you for sharing this busy news day with us. The president, now speaker called their latest debt ceiling meeting productive, and they say a sign of good progress. But Kevin McCarthy's morning after update is rather bleak. Nowhere near ideal he says. This is the treasury begins checking just how long agencies can pay their bills.

Plus, legal quicksand for Donald Trump. His words at a CNN townhall push E. Jean Carroll to seek more damages and his instructions about how to handle classified documents, recorded in detailed notes taken by his lawyer and up in the hands of the special counsel. And battleground states, swing voters dread, just dread the idea of a Biden-Trump rematch. But their focus group take on what happens if there is one, well, it's quite revealing.

Up first for us though, debt ceiling negotiators back at it on Capitol Hill right now. The Biden team arriving at the Capitol last hour. They are now with Speaker McCarthy's team behind closed doors. Both sides say there is good faith, yet both sides also say there is little progress.

This morning, the speaker telling fellow House Republicans the two sides are nowhere near agreement. And because of that, he said, "I need you all to hang with me." But it's an important, but the speaker says there is time if the White House gives ground.

(BEGIN VIDEO CLIP)

REP. KEVIN MCCARTHY (R-CA): We could still finish this by June 1st in a timeline. We met again last night. We're not there yet. It really comes down to this. Why are we in the problem? People spend too much money, and the Democrats want to even spend more than we spent last year. That is not going to happen.

(END VIDEO CLIP) KING: Progressives though, are warning the president, they won't accept major spending cuts, the time crunch, more pressing by the hour. The treasury secretary says June 1. That's nine days away is when the checks likely start bouncing.

Let's get straight up to Capitol Hill with CNN's Lauren Fox. Lauren, again, it's an interesting, how do you read this? Everybody says there's goodwill, but everybody says there's no real progress.

LAUREN FOX, CNN CONGRESSIONAL CORRESPONDENT: Yes, John. I mean, I talked to the two leading Republican negotiators earlier today. And they made it clear, they need to see some clear concessions from the White House when it comes to spending. They don't want to just three spending levels. They want to cut spending going forward. That means returning spending levels to something like fiscal year 2022 levels. That's what this country spent last year.

Meanwhile, House Speaker Kevin McCarthy right now on the floor of the House of Representatives were watching for him just in case he comes out and wants to offer any more context about his comments privately to Republicans this morning that they are nowhere close to a deal and that he does need his conference to hang with him.

So far, we are seeing evidence that many Republicans trust him. They believe that he's going to cut the best deal he can with the president. They also argue that they are confident that he is going to get a deal that looks a lot like the one they passed a couple of weeks ago, John, but this is a significant moment for the speaker. It's a significant moment for his speakership and whether or not Republicans continue to hang with him as we move closer to the deadline remains to be seen. John?

KING: Lauren Fox for us on Capitol Hill. If the speaker comes out and you can corral them. Get a hold of them and come back on, we'll have a little CNN townhall right here with the speaker of the House, if he's ready to do it.

I got a great group with me in studio to share their reporting and their insights, CNN's Nia-Malika Henderson, CNN's Jeremy Diamond, Laura Barron-Lopez of the PBS NewsHour. Jeremy, let me start where Lauren just ended. These House Republicans saying, they think McCarthy can get something pretty close to what they passed.

What they passed in the House takes big Biden administration achievements off the books. What they passed in the House, would restrict spending cut, future spending way beyond what the president said he's willing to accept. If that's what they think, despite all this talk of goodwill, are we nowhere?

JEREMY DIAMOND, CNN WHITE HOUSE CORRESPONDENT: Yes. I mean, that's a non-starter for the White House. I mean, they began this negotiation by essentially taking some of their priority items off the table. They began this negotiation by telegraphing. You know, we're not going to let you, take a sledgehammer to the Inflation Reduction Act. We're not going to let you go after some student debt relief, for example. So that's a non-starter. And then you also have the fact that essentially, you know, despite this talk of productive conversations and a good tone to the meeting yesterday and at least that they're dealing in good faith that the needle hasn't actually moved. I mean, the White House is still talking about freezing spending at this year's levels.

[12:05:00]

And repeatedly yesterday, the speaker and his deputy needs negotiations Congressman McHenry told me, look we cutting spending past this year's levels to last year's levels is a red line. And so, until there's movement on one side or the other, we are nowhere.

KING: And part of the way, I want to come back to some of the details submitted. But part of the way in this town, sadly, the way this town works to get movement is to have a deadline. And the question is, is everybody in the room has to then believe the deadline is real.

However, listen to some key House Republicans here. The treasury secretary says June 1, maybe there's a day or two. But she says June 1. Everyone should lock in on that because at that point, the United States is on the edge or at default, can't pay the bills, deck economic crisis at home, economic crisis around the globe, but some Republicans say, I don't buy it.

(BEGIN VIDEO CLIP)

REP. MATT GAETZ (R-FL): I don't believe that the first of the month is a real deadline. I don't understand why we're not making Janet Yellen show her work. I no longer trust like the Obi-Wan Kenobi of wrong answers on the economy to be able to tell me when the default occurs.

REP. CHIP ROY (R-TX): The fact is, we're going to have cash in June. The fact is, we're not going to default on our debt, that's just completely false. We've got the money to do it. So, everybody just needs to be patient.

(END VIDEO CLIP)

KING: If you can't agree on sort of the flashing red light day, then everyone is going to keep saying we can keep talking.

NIA-MALIKA HENDERSON, CNN SENIOR POLITICAL ANALYST: Well, listen, I mean, even Kevin McCarthy is saying, there is a flashing red light that something needs to happen this week that he wants to give his members I think, 48 hours or so to go over the details of whatever they end up with.

So, I think the serious people who are negotiating this do see a flashing red light. They do seem to think that Janet Yellen knows what she's talking about, when she says June 1 is a serious deadline. And at that point, there will be a problem in terms of cash on hand.

But listen, this, I think is ending up the way a lot of people thought it wouldn't. Because of the people we heard on screen, that sort of hardliners in Kevin McCarthy's caucus, the ones that he empowered in so many ways. So, it's not a surprise that it's coming down to this, you know, crunch time for this. And you know, I think American people are like, you know, get your work done in Congress.

KING: And so, the question is, though, if these hardline conservatives keep telling speaker McCarthy hold firm, hold firm, hold firm, don't compromise with the White House if they don't believe Janet Yellen. This is Neel Kashkari. He's the Minneapolis Fed President. Will they believe him that if you don't act in time, catastrophe?

(BEGIN VIDEO CLIP)

NEEL KASHKARI, MINNEAPOLIS FEDERAL RESERVE PRESIDENT: A default would be a message to investors all around the world of eroding confidence in America, the Fed cannot fix this.

(END VIDEO CLIP)

LAURA BARRON-LOPEZ, WHITE HOUSE CORRESPONDENT, PBS NEWSHOUR: I mean, look, these Republicans are essentially saying out loud, also what former President Trump said out loud recently, which was unless we get everything that we want, he told House Republicans don't go along with a deal unless you get all of the cuts that you want. Trump said that.

And to think that it isn't impacting a number of these hardline conservatives, is, I think, you know, a mistake to think that it wouldn't impact them, because they are essentially saying that they don't think that a default would always have the catastrophic impact that all these economists are warning that it would have.

And what it would do is, it would mean Medicare cuts, cuts to veterans, Social Security paychecks don't go out. And that's something that the president has been trying to stress over and over again, and that he thinks the public would be on his side.

KING: Well, that's where the math gets really interesting, though, because speaker McCarthy keeps saying, we want to increase veteran spending because the Democrats have said it would be cut. We want to increase defense spending because many hawks in the Republican Party, this is a debate about this among Republicans, but the hawks want to increase defense spending.

Well, if you increase veteran spending, you increase defense spending, but you're going to cut overall spending, then you got to take it from somewhere else and progressives are telling the White House, don't you dare.

DIAMOND: Yes. And that's exactly the White House is pointing this to Republicans. And I'm told the big part of the meeting yesterday, really focused on the politics of this and the whip count, right? Because the White House is trying to telegraph this to Republicans that look, you may want all these things, but you're going to need Democratic votes.

And if you want Democratic votes, then you're also going to need to give us something as well, because cutting spending to the levels that they're talking about, cutting all these key priorities. That's just not going to fly with House Democrats.

KING: We'll see again, they're back at it today. We'll see if the goodwill actually turns into progress in the results, marking down the skeptical. It's going to happen until we get a little closer to the deadline. Some new information now about a very dramatic incident.

Near the White House last night, law enforcement sources telling CNN, 19-year-old who ramped his U-Haul van into a White House security barrier, a threatening comment at that scene site, Sai Varshith Kandula of Chesterfield, Missouri now faces multiple charges, including threatening to kill a harm or harm a president, vice president or family member.

The vehicle sources say, did not have any explosive or incendiary devices inside. Sources also tell us the evidence collected the scene includes a black backpack, a roll of duct tape, and a flag of what appears to be a swastika. The White House says the president and the First Lady were never in danger.

[12:10:00]

Up next for us, new reporting on Governor Ron DeSantis and his strategy to win the White House. Plus, as the Florida governor is about to join the 2024 race. What he's saying about expanding the conservative Supreme Court majority.

(COMMERCIAL BREAK)

KING: Not as suggested, new CNN reporting about the Ron DeSantis campaign to come and the Florida governor's early strategy to get in front of as many primary voters as possible. Let's go live now to CNN's Steve Contorno. He has the details. Steve, we expect that announcement tomorrow, the official paperwork anyway. What else do we know?

STEVE CONTORNO, CNN REPORTER: Yes, John. Ron DeSantis will become a candidate officially this week and then he will be off on the campaign trail. And the sources who are familiar with the planning are saying, that he is intending to launch an aggressive campaign that puts him in as many states as possible as early as possible and show what a vigorous and dynamic candidate he can be.

[12:15:00]

Now this is partially a strategy that DeSantis has employed repeatedly as governor where he has flooded the zone with press events all over the states, drawing attention on announcing new policy agendas, waying on the controversies of the day, but he is also planning this in part to juxtapose his youth, he as a 44-year-old candidate versus the two aging front runners in both parties, Donald Trump and Joe Biden.

This is also part of an effort to quiet some of the concerns that we have heard in recent weeks about DeSantis's readiness to take on Donald Trump. They have been fielding complaints from donors and operatives that he is not ready yet. And he has not shown that he is clear eyed about the challenge ahead. Well, this is an attempt to come out in full force and show the playbook that has worked time and time again in Florida to get Ron DeSantis in the headlines, make news and force the other candidates to react to him.

Now, I did talk to one former DeSantis political adviser, Fred Piccolo who cautioned a little bit about this strategy. He's telling me. "In presidential races, the issues kind of create themselves no matter how much star power and stamina the candidate might have. I don't think it'll be as easy for him to control the narrative." John?

KING: Steve Contorno, appreciate that. I think that former adviser has watched Donald Trump, it's hard for anyone to control the narrative. We have Donald Trump in the race. But we will see that as the test as another candidate, governor of Florida gets in this week. Steve, appreciate that.

Let's bring the conversation in the room with our great reporters. Another thing in Steve's reporting, and who knows if this works. I don't know if the old rules apply anymore. Normally, voters are focused on here and now, not a process. But DeSantis is going to make the argument to Republican voters that you don't want Donald Trump because he can only serve one more term, right?

He can only serve four years because he already was president. You want an eight-year Republican presidency, or at least the prospect of it. And one of the twists on that is that he talks about Donald Trump thinks, naming three justices to the Supreme Court that overturn Roe v. Wade is an asset for him. Ron DeSantis says, well, what about Justice Alito and Justice Thomas, they're getting up there. You might have to replace them and for that you want a two term Republican president.

(BEGIN VIDEO CLIP)

GOV. RON DESANTIS (R-FL): So, it is possible that in those eight years, we'd have the opportunity to fortify justices Alito and Thomas, as well as actually make improvements with those others. And if you were able to do that, you would have a seven-two conservative majority on the Supreme Court that would last a quarter century. So, this is big stuff.

(END VIDEO CLIP)

KING: It's six to three now. I'm not sure how he does his math. He thinks a liberal is going to leave or whether Justice Thomas, I'm not -- I don't have time. We don't have time, but the idea that you can tell Republican voters, don't vote for Donald Trump because he can only serve four years.

HENDERSON: Yes. I mean, again, I don't have time to do the math either. I mean, I think these sorts of logical arguments and electability arguments really sort of fall on deaf ears. When you're talking about a primary electorate, where it's really about emotion. It's really about sort of attachment. And we know that many, many primary voters have an attachment to Donald Trump. Donald Trump obviously talked about the Supreme Court. That was one of the reasons why I think a lot of people ended up rallying around him. He put out that big list in May of 2016 of the justices he would appoint. So, he's trying to do that now.

But again, it's six-three. I mean, they dominate the court already. They've overturned Roe v. Wade, and you have Donald Trump taking credit for that. So, you know, he's kind of trying out lines at this point to see what's going to get traction with him but not sure how is going to think (Ph).

DIAMOND: I do think, though, that if you're going to make the age argument against Trump, there's a little bit more here to work with and to move forward with and what Nikki Haley did, for example, right? Like, if you're going to make it about, well, you need two terms so that we can get all the great conservative policy wins that we want to get. So, we can get the kind of Supreme Court that we want to have.

That's maybe a more palatable argument. But I agree with you that that's not ultimately the core concern for Republican primary voters. But if you're going to go after that, maybe you do it this way, rather than what Nikki Haley did out the gate.

KING: Right. And the key is, the voters in Iowa and New Hampshire and South Carolina, the first three in the Republican calendar, so they will settle this, not the conversation at a table like this, with all due respect to these great reporters, and not a conversation among all the strategists like.

But to the point, one thing DeSantis has not done to scare more people away. And that was the hope. They had the Florida legislative session, they raised $100 million. They want to get people to get out of the way. Chris Christie supposed to get in this week. Tim Scott got in yesterday. Nikki Haley, as you notice already in.

Her team putting out a strategy memo, and again, memos don't win any votes, but they're trying to find the race. Leaks, abuse of power, drama, petty political fights. You think these are the headlines you might have seen during the Trump administration compared to the Trump campaign. DeSantis is far more disorganized.

So, they're trying to essentially go after DeSantis now, which it is interesting, if you accept the view that in the end come January, February, Republicans are going to have Trump and a leading alternative. That's the first fight, right? Who is that alternative?

BARRON-LOPEZ: I think it still is DeSantis right now, which is why you're seeing people like Haley and others appear to be more willing to go after him than they are to go after Trump. Even though, Trump is the leading candidate. Now, DeSantis is played on the conservator on making the Supreme Court more conservative.

[12:20:00]

Maybe that can work with primary Republican voters, but a general election -- a general electorate it may not work as well, because even though the Supreme Court seemed to galvanize Republicans in the past, there's a lot of independents, a lot of suburban women who have moved more towards Democrats that were really animated by abortion and by how far the Supreme Court moved to the right.

KING: To that point, listen here to Donald Trump, who went to DeSantis, you know, DeSantis just signed a six-week ban in Florida. When DeSantis says on the prolife, candidate Trump says, I'm the guy who gave you the six-three Supreme Court that overturned Roe v. Wade. But listen here, he says, be careful.

(BEGIN VIDEO CLIP)

DONALD TRUMP, 45TH U.S. PRESIDENT (voiceover): I'm a person that feels that the exceptions are very important for a lot of reasons, but they're also important from the standpoint of an election. If you don't have the exceptions, it's very, very hard. I think that's been proven, it's very, very hard to win an election.

(END VIDEO CLIP)

KING: Again, it's an open question, at least to me. This is the first presidential election post Roe in Dobbs America. It used to be, Republican candidates who might have been sort of outside the middle of the electorate, George W. Bush, for example, anti-abortion, the rape, incest, life of mother. Is it about the exceptions now or is it about six weeks, 12 weeks, 15 weeks, no limit?

HENDERSON: Listen, I mean, Donald Trump has always been worried about this, right? He was never really a hardliner on abortion. He had to sort of get there, but still I think he is reading the tea leaves from 2022, which was sort of the first midterm at least after the Dobbs decision. And he is seeing some worry here, if you're a hardliner on abortion in terms of winning a general election.

KING: And Democrats think if Republicans are fighting about this through months of their primaries that it helps them, we will see as that plays out as well. Up next, some brand new developments in several Donald Trump legal battle, the writer E. Jean Carroll says, the former president should pay her even more. And the special counsel looking into the handling of classified documents, now has new insight. That insight courtesy of notes from one of Trumps attorneys.

(COMMERCIAL BREAK)

[12:25:00]

(COMMERCIAL BREAK)

KING: Today we are tracking new developments in a number of the legal battles facing Donald Trump. First, the former president will appear virtually as part of a hearing to determine what he can and what he cannot say about the criminal charges pending against him in Manhattan.

That case of course has to do with the alleged hush money payments to Stormy Daniels. Meanwhile, the writer E. Jean Carroll is seeking additional damages from the former president. Remember, she wants to sexual abuse and defamation civil court verdict against the former president. Then he said this at a CNN townhall.

(BEGIN VIDEO CLIP)

DONALD TRUMP, 45TH U.S. PRESIDENT: They said, he didn't rape her.

KAITLAN COLLINS, CNN CHIEF WHITE HOUSE CORRESPONDENT: They did not say -- -

TRUMP: And I didn't do anything else either. You know what? Because I have no idea who the hell she is. I don't know who this woman is. They said, sir, don't do it. This is a fake story and you don't want to give it credibility. That's why I didn't go.

COLLINS: One thing you did do -- -

TRUMP: And I swear and I've never done that, and I swear to, I have no idea who the hell, she's a whack job.

(END VIDEO CLIP)

KING: CNN's Kara Scannell joining us now live from New York. You heard the former president there Kara, in E. Jean Carroll cases that he wants to fainter again.

KARA SCANNELL, CNN CORRESPONDENT: Yes, John, that's right. So, E. Jean Carroll wants to use the comments that Trump said at our townhall and also that he posted on his social media site, just 24 hours after the jury found that he had sexually abused E. Jean Carroll. And then he defamed her by saying that she was not his type that he'd never met her and that her allegations were a hoax.

So, Carroll's attorneys are asking the judge, they can amend one of their lawsuits. Remember, there was the lawsuit that she went to trial on and that was the one that were comments that Trump made after he left the presidency. And then there is the original lawsuit, which is the one that were the statements that Trump made in 2019. The statements are essentially the same, but they were two separate lawsuits, in part because the first one get held up on appeal over these legal matters.

So, E. Jean Carroll's lawyers are now asking the judge overseeing that first lawsuit, to say, you know, OK, as we decide if we're going to move forward with this, that's up to the judge. Can they include the comments that Trump made on his social media site and at the townhall.

When their jury would ultimately consider punitive damages, saying that, you know, the essence of punitive damages is to punish the person found liable, and that Trump continuing to say the same statements that a jury just found, were defamatory. They want that to be something that they can consider in the future, John?

KING: Fascinating legal question. And Kara Scannell live in New York for us. Let's bring the conversation in the room, the former federal prosecutor, defense attorney Shan Wu is here. Is there a legal framework that New York civil law that allows you to do that, the trial has been conducted. It was based on things Trump had said previously. Now he says, things after the verdict, does she have legal standing to do this?

SHAN WU, FORMER FEDERAL PROSECUTOR: Yes. And this is really her attempt to amend the earlier suit that she'd filed, the one that's been kind of like bollixed (Ph) stuff and all this litigation. And I think something that she really points out to here is the deposition testimony that Trump gave to because it goes to DOJ's position, which I think is a poor one, that they want to defend Trump in that suit. And that's the one that's been going through litigation.

And she points out that if you look at Trump's deposition, it's clear that he's really making these remarks not in his capacity as the president, but in his personal capacity because he doesn't consult with anybody. There's no policymaking. So, I find that a very intriguing aspect and may really ratchet up the pressure on Garland.

KING: Ratchet up the pressure on Garland. It's just every time you take one of these cases, it's gone away, it somehow blossoms into at least one or more other. Shan, stay with us.

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