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Inside Politics

New CNN Poll: Americans Paint Bleak Picture Of U.S. Economy; New CNN Poll: 77 Percent Say Trump's Policies Making Inflation Worse; New CNN Poll: Voters Split On Which Party Should Lead Congress; Soon: Trump Leaves For Beijing For Pivotal Summit With China's Xi; Inflation In April Soared To 3.8 Percent, Highest In Three Years. Aired 12- 12:30p ET

Aired May 12, 2026 - 12:00   ET

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

[12:00:00]

PAMELA BROWN, CNN ANCHOR, THE SITUATION ROOM: The Iranian Embassy in London denied having any link with or involvement in the London attack, saying in a statement, such baseless accusations against the Islamic Republic of Iran, lack credible evidence and appear to serve narrow political agendas and to mislead public opinion and distract from the real root causes of terrorism and violent extremism.

WOLF BLITZER, CNN CO-ANCHOR, THE SITUATION ROOM: And before we go, we want to pass along news of the very sad passing of Abe Foxman. He was the forceful advocate for Jews in America for decades. Foxman served as the national director for the ADL, the Anti-Defamation League for nearly three decades before retiring in 2015.

He born in 1940 to polish Jews in what's now Belarus. Foxman survived the Holocaust after a nanny had him baptized as a Catholic to conceal his Jewish identity. He was reunited with his parents after the war, and the family moved to New York. Abe Foxman was 86 years old. Our deepest condolences to his family. May he rest in peace and may his memory be a blessing.

And to our viewers, thanks very much for joining us this morning.

BROWN: Inside Politics with our friend and colleague, Dana Bash, starts now.

DANA BASH, CNN HOST, INSIDE POLITICS: Americans feel crushed by costs. And a new CNN poll shows most blame President Trump.

I'm Dana Bash. Let's go behind the headlines at Inside Politics.

Quote, my life is not affordable. No one cares. That is one of the respondents to a new CNN poll that reveals a deep sense of anxiety and insecurity about the economy. Here are some more quotes. It is more expensive to exist. You are just staying afloat instead of getting ahead. It should not be like this. 73 percent say current economic conditions are poor and the cost of living keeps rising.

We learned this morning the inflation rate in April soared to 3.8 percent, the highest in three years. Energy prices were the biggest factor, driving prices higher. It's also the first time in three years that the cost of living is rising faster than average wages. You can see right there on that chart where the red line rises above the orange line.

With less than six months until the midterms, nearly eight in 10 Americans, including a majority of President Trump's fellow Republicans, say the president's policies are making the inflation problem worse in their own community. But it's not just about the president, it's about a country that is lost faith in the concept of the American dream.

Fewer than half, 47 percent say, hard work is enough to get ahead, 38 percent of Americans who do not own a home and would like to say they expect to be able to afford -- they don't expect to be able to afford one, 34 percent say they could comfortably afford a thousand emergency expense, 28 percent say they could comfortably afford a vacation.

I'm joined by a terrific group of reporters here to go through these, frankly, just really depressing numbers, no matter which way you cut it, Tyler.

TYLER PAGER, WHITE HOUSE CORRESPONDENT, THE NEW YORK TIMES: Yeah. I mean, we saw President Trump return to the White House on a message of lowering cost. He railed against the Biden administration and promised to usher in an era of bringing down inflation and bringing down cost. And so, to now see a president battling the same issue that he promised to address, is a reality test for him and for the broader Republican party.

Obviously, much of this is driven by the conflict with Iran and the difficulty in lowering gas prices because of the closure of the Strait of Hormuz. But it is filtering in a sense across parties, across the nation of Americans that feel that things are just too expensive. And obviously, gas is a primary driver of that, but it's much broader than that. And I think that is the challenge, the president, the White House and his entire party face.

When the sense -- this economic sense is hard to uproot. And so, even if gas prices start to decline somewhat in the coming months, Americans are overwhelmingly as the new CNN poll shows dispirited with the economic situation.

BASH: And it's wide and it's deep. And we're just going to put up some of the numbers broken down by demographics. First of all, if you look at the whole question of the economic conditions are poor, all of these respondents you see there in the middle say 73 percent. But if you look at gender, men 67, women 78. Look to the right of your screen, by race, white, black, Hispanic, I'm sort of most interested in the last two, 82 and 81 percent for black and Hispanic, considering the fact that the president genuinely did better with those demographics.

Speaking of that, if you look at the lower left of your screen, under the age of 35, younger people 83 percent. And then if you look by income, really the people who feel the best, not a surprise, are those who make over a hundred thousand dollars, but it's still 64 percent. [12:05:00]

AYESHA RASCOE, NPR HOST, "WEEKEND EDITION SUNDAY" AND "UP FIRST": Yeah. I mean, look, I think that this is a huge issue for this White House, but this is also a huge issue for this nation, right? Like, this has been people have not been feeling good about the economy since the pandemic. And there's also just this fundamental idea of what it means to get that American dream where you have young people who are like, I'll never be able to get a home, I'll never be able to, you know, have a lifestyle that my parents were able to have.

So, I do think that there is an overall issue that the entire government will have to deal with left, right, and center. But I do think for this president in particular, he is always seen as someone who will break the rules and do whatever he wants to do, knock down parts of the White House to get what he wants. But then on this issue, it seems like, oh, well, we'll roll back the gas tax that's like $0.18. Like where's the dramatic action? And I think that people will be asking that, like, what, OK, do something dramatic to help lower these prices.

BASH: Right. And the dirty little secret, maybe it's not so secret, is it's not that easy.

RASCOE: It's not.

BASH: There is no magic wand --

RASCOE: No, not at all.

BASH: -- which president, after president who have dealt with things like this feel that way. Let's look at gas prices because this is one of the most telling, I think to me parts of this poll for the president. Josh, if you look at disapproval of Trump's handling of gas prices, all 79 percent, but look at this number. A majority of his fellow Republicans, 52 percent say they don't approve. And then in a related, but different number, inflation. Trump's policies increase the cost of living, whether people feel yes or no, all say, 77 percent say yes. Again, that includes a majority -- more than a majority of his fellow Republicans.

JOSH DAWSEY, POLITICAL INVESTIGATIONS REPORTER, THE WALL STREET JOURNAL: Yeah. It's a striking difference from the first term when he was in office and the campaign where no matter what sort of controversy he was embroiled in, no matter what he was doing. His numbers on the economy tended to be higher than Democrats, right, in this first term in office. It was a one issue that most of them, he was above water. He was above 50 percent that even if people didn't like, you know, x, y, z, whatever he was doing, foreign or domestic policy, they gave him credit on the economy.

If you look in the 2024 election, right, his pollsters, one of him nonstop to talk about the economy. They said, you have double-digit leads over Kamala Harris and Joe Biden on the economy. Americans may not like you on these other issues, but on the economy, they trust you the most and you're seeing significant erosion there, right? It's the first time as Trump as a political figure when he's been, you know, in public life really since 2016, where his numbers have plummeted on the issue that Americans have traditionally given him the highest mark side --

BASH: On the economy.

DAWSEY: -- right, on the economy. They would -- they would get tired of other things, but they would say, you know what, we give them credit on the economy. That's what matters to us. We want low prices, we want low gas, we're willing to put up with x, y, z, thing, whatever, right? It's a little bit more of a peerless situation for I think -- and I think his own people would admit this. If that under sort of pinning of support, folks saying, oh, you can handle the economy well, you know, erodes much further.

RASCOE: Yeah. And it seems unlikely that gas prices are going to come down significantly anytime soon. I mean, I've talked to experts who say, you can expect for the rest of the year that gas prices will be elevated and that the only thing that would bring them down significantly and fast would be a recession. So, he is in a very difficult spot right now because these gas prices, which everyone is seeing, every time they drive around, it's so visceral, they're not going to come down dramatically.

BASH: So, one of the big political questions, really the big political question is how this is going to affect turnout and the outcome in the midterm elections. Put this question up on the screen, if you will. It's what we call the generic ballot. Your choice for Congress, whether or not, you'll vote for a Democrat or a Republican.

There's no clear leader despite everything we showed you. There's no clear leader, which says a lot about sort of where the brand of the Democratic party is and why Republicans, even though these are really bad times politically and policy-wise because of everything we just showed are feeling not as depressed as maybe they would be in another time.

PAGER: Yeah. And I think it also speaks to just the political polarization that we're seeing in this country. The country has been very deeply divided for a long time and people are largely going to vote based on who they voted for in the past. We're not seeing as much split ballot. We've seen these elections in key states be very close.

But I think to your point, it's about turnout as it always is, and who is motivated to vote, and also those independent voters. We look the poll you just showed earlier about approval rating of Trump's handling of the economy, vast disapproval, not just from Democrats, but also independents. Those are going to be key voters as we head into the midterms.

[12:10:00]

But also, Democrats have work to do, and it's not just on their brand, as you mentioned, but also, they've had serious setbacks as it relates to redistricting over the past few weeks. And so, the map that they thought was very favorable to them, I still think there's a lot of optimism, especially on the House side, but the map has shrunk in some ways in key areas, especially in aftermath of the Supreme Court decision.

BASH: Yeah. We'll talk about that but --

DAWSEY: And they have other fundamental issues, right? The Democratic party does. They have zero money. I mean, the last report shows they literally have no money. They put together this whole autopsy of 2024 election. Now they won't put it out because of few visions on the party. Trump's numbers are not great. And still basically half of the country says in that poll, you know, we might still pick, you know, Republicans over Democrats. I mean, the numbers over a generic

And as Tyler said with the maps, I mean, there are lots of ways that the Republicans are chipping away seat, seat, seat, here and there, here and there, right? So, a lot of experts say that the Democrats still are favored in the midterms, right? I think the broad number of experts that we've talked to do, but I don't think it's fait accompli. And part of that is because of a space of the Democrats find themselves in right now after the bruising 2024 election.

BASH: All right, everybody standby. Coming up. Defense Secretary Pete Hegseth is on Capitol Hill right now. He's facing questions on the ballooning cost of the Iran war. As sources tell CNN, President Trump is seriously considering resuming combat operations.

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[12:15:00]

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BASH: The war in Iran has cost an estimated $29 billion so far. That's according to the Pentagon's CFO who is testifying on Capitol Hill today. And that's likely low balling it. For instance, it doesn't include the cost of damage to military facilities. Meanwhile, President Trump is preparing to head to China for a pivotal summit with China's President Xi Jinping. The war in Iran, not trade may top the agenda. It's probably expected to and sources tell CNN, President Trump is growing more frustrated with the pace of -- peace talks and is even closer than ever to resuming strikes since the ceasefire started about five weeks ago.

This morning, the president was asked about reports that China is actually helping Iran.

(BEGIN VIDEO CLIP)

SID ROSENBERG, WABC HOST, SID & FRIENDS IN THE MORNING (voiceover): There's lots of rumors that the providing weapons for Iran through the Caspian Sea, other outlets Russians, by the way, providing drones seems to me like Xi wants to play it both ways, yet, yet, yet he loves you. What's the real deal with this meeting coming up on Thursday with China? DONALD TRUMP, PRESIDENT OF UNITED STATES OF AMERICA (voiceover): Well, I think it's going to be good. And I -- we do have a good -- it's good to have a good relationship. You know, when I first got involved, China was just really taking advantage of us, and they're not anymore. And you know, we're doing -- we do great with China.

(END VIDEO CLIP)

BASH: My panel is back. Ayesha, this is complicated in the best of times. And when I say this, I mean the U.S. relationship with China. And now the question is whether or not the president is going to use this purported fantastic relationship he has with Xi. Not just to deal with economic issues, but despite what he says in public to deal with perhaps their meddling in Iran.

RASCOE: I think it's going to be really tough. I don't think that either side wants Iran to kind of derail all the other things that they're going to have to talk about when it comes to trade. But I think it is in a very difficult position because China, while not, you know, outwardly, you know, want backing Iran completely.

There are these reports that they are helping them, maybe on the backend and they're dealing -- having dealings with them. And it doesn't seem like they want to. It seems like they are trying to have it both ways and Trump doesn't really seem to have an answer for that. I mean, he can try to put pressure on them, but it's not clear that he will be able to influence China any more than he's been able to influence Iran at this point.

BASH: Listen to, I mentioned that Pete Hegseth and other Pentagon officials are on Capitol Hill today. Listen to what Senator Lindsey Graham said to Pete Hegseth about the idea of China being involved in Iran.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R-SC): Bottom line here, China. Does China buy 90 percent of Iranian oil, Mr. Secretary?

PETE HEGSETH, DEFENSE SECRETARY: China buys a very large percentage of Iranian oil.

GRAHAM: OK, 90 percent is pretty large. President Trump, when you go to China, realize that the person you're talking to is propping up Russia and Iran.

(END VIDEO CLIP)

BASH: So, there's meddling and then there's sort of this, which is from the perspective of Lindsey Graham, and probably the president and other people who want to try to diminish Iran. The idea that China is buying the oil that Iran has and not, you know, sticking by any blockade or embargo is certainly not helpful to the U.S. effort.

DAWSEY: Yeah. I think the Lindsey Graham certainly is a spousal particular position here, very anti-Iran. We also have lots of folks on the conservative wing of the party who want Trump not to make some sort of deal with Xi that that he may be tempted to make or they're afraid he may be tempted to make, right. So, it drunk influenced him with -- on Iran and China talking directly to the camera here as they want to do. You can almost hear the Lindsey Graham like speaking to the president, audience of one directly.

[12:00:00]

On Iran though (Ph), you know, Senator Graham and others have been really pugilistic pushing for, you know, more bombing, more aggressive actions. And there are lots of others in the president's orbit who are saying, you know, we don't want to go back to strikes. We don't want to go back to more attacks. We do not want to be embroiled in this as a midterms come.

It's bad for the party, it's bad for your brand, it's bad for gas prices, it's bad for the economy. And so, you're seeing the sort of push and pull here of the folks like Lindsey Graham who say, you need to finish off, you need to do more, you need to go further, and lots of others who say otherwise.

BASH: Yeah. What are you hearing from your sources, Tyler?

PAGER: And with that, I mean obviously there's been this debate roiling the Republican party since even before Trump decided to go to war with Iran, but it also seems that Trump himself is skeptical of restarting this war. For all of the bluster and rhetoric, we have seen from Trump over the past several weeks since the ceasefire went into effect.

He's not really followed through at all on those threats. He has repeatedly threatened to essentially wipe Iranian civilization off the map and said, if Iran doesn't do this or Iran doesn't do this, we're going to resume strikes. But even as Iran has continued to put forth proposals that Trump then rejects, he has not shown any readiness to want to restart the war, in part because as Josh said, they know that a prolonged war is problematic for the party's political brand.

Advisors are telling Trump that, and Trump is a political junkie. He knows that a war and elevated gas prices are not good for his party. And he's caught between trying to get a deal that he can sell to the American people as better than Obama's JCPOA, and worthwhile for the pain that they've suffered over the last few weeks, but also not wanting to restart war. That is only going to prolong these challenges.

BASH: Yeah. I think the technical term is to be in a box. All right, standby. Up next. President Trump does want his new Fed chief to slash interest rates quickly. Higher inflation may make that impossible. What will Kevin Warsh do?

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[12:25:00]

(COMMERCIAL BREAK) (BEGIN VIDEO CLIP)

URSULA SPENCER, MARYLAND RESIDENT: It's survival mode. And that's a mode that I'm haven't been used to.

CLARA SIMONE, ATLANTA RESIDENT: For me, a financial stressor is groceries.

UNIDENTIFIED FEMALE: Everybody, thing's gone out from the beef to the eggs.

THOMAS BOYCE, ATLANTA RESIDENT: I'm a junior and I missed a whole semester of school because I couldn't afford housing. I want to have a house and have a family, and you know, what I mean, like my parents did.

UNIDENTIFIED FEMALE: You know, I thought that maybe one day I would buy a house and now that feels probably not, not so likely.

UNIDENTIFIED FEMALE: The price of things are going up but pay isn't increasing. So, it's just kind of like you all are increasing everything that we have to pay for, but wages aren't, you know?

(END VIDEO CLIP)

BASH: Those Americans don't need data to show them how they feel. But new data out today does validate those feelings. We just heard, inflation rose 3.8 percent and new data show price increases completely erasing Americans wage gains.

CNN Business senior reporter Dave Goldman joins us now. Dave, can you please just help us understand what these numbers really tell us? Not just about how people feel, but the state of the economy?

DAVID GOLDMAN, CNN BUSINESS SENIOR REPORTER: Well, people hate this economy as you can see, but I think what's really strange is that the economy has been doing OK. We actually started 2026 on a pretty strong node. Inflation wasn't that high. Job growth has been fine. And you know, when we thought that we were going to get all of these tax refunds, things were going to be kind of, you know, having a wind at our backs going into this year. But what's happened is we went to war with Iran and that threw everything for a loop.

And so, as you mentioned, we're for three straight years, we as Americans on average had a paycheck that was beating inflation that came to a screeching halt in the past month. Now, inflation ate your entire raise over the past year. And so, if people are saying that they don't feel good about the economy and that was while their paychecks were out gaining inflation. Now what's going to happen when that is reversed?

And so, obviously a lot of this has to do with gas prices, right? Gas prices are surging and we know that some of these effects are going to take a long time to get through the economy. We are starting to see that. If you look at food, airfares, those are the kind of things that are starting to rise. But there hasn't been a pervasive problem in the economy yet. This mostly has to do with people going to the pump and fueling their cars. And that's really eating up a lot of their savings, unfortunately.

BASH: Yeah. Inflation ate your raise, that's for people who actually got raises. I want to ask about the person who the president is really hoping will take the helm of the Fed. I'm talking about Kevin Warsh. He's actually expected to be confirmed this week. And what the president wants more than anything is for him to cut interest rates. How do the numbers we just talked about play into that decision?

GOLDMAN: Well, the good news is it doesn't seem that the economy is in a lot of trouble, but here's the thing. President Trump, as you mentioned, wants him to cut rates. That is what he was hired to do, and that's what war has said that he favors doing. But we're in a different world right now. When you have inflation at 3.8 percent, you cannot reasonably start cutting rates without the expectation that inflation could start taking off.