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The Situation Room

Interview With National Economic Council Director Kevin Hassett; New Navy Battleships?; New Trove of Epstein Documents Released. Aired 11-11:30a ET

Aired December 23, 2025 - 11:00   ET

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

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ANNOUNCER: This is CNN breaking news.

PAMELA BROWN, CNN HOST: Breaking news: happening now, the Justice Department releasing more than 10,000 pages in the latest trove of documents related to the Jeffrey Epstein investigation. CNN is combing through this new release that dropped in the overnight hours, as Epstein survivors are calling foul on the slow rollout.

Welcome to our viewers in the United States and around the world. I'm Pamela Brown. Wolf Blitzer has the morning off. And you're in THE SITUATION ROOM.

And we begin this hour with that breaking news. The Justice Department released a new batch of documents in the Jeffrey Epstein investigation, including chilling new evidence that some viewers may find disturbing. This is a jailhouse letter apparently written by Jeffrey Epstein. It says J. Epstein, and it was sent to another infamous sex offender.

That would be Larry Nassar. The letter appears to include a reference to President Trump. We should note President Trump is not accused of any criminal wrongdoing. And I just spoke to a survivor of Jeffrey Epstein's abuse, Haley Robson, a short time ago. Here's what she said.

(BEGIN VIDEO CLIP)

BROWN: And DOJ says some of these things are salacious and there's no truth behind it. That's the statement it just released. But what do you think about the mention of Trump in that letter and what it said?

HALEY ROBSON, JEFFREY EPSTEIN SURVIVOR: I think it's very apparent in that specific letter that was just publicized from the Epstein files, I think it's very apparent that there are a group of men that enjoy the company of young women and children.

And I think that letter emphasizes that he knew what was going on. And that enough, that complicity is enough for me to know you have no business being in the position of power.

(END VIDEO CLIP)

BROWN: Strong words there from Haley Robson.

And let's go live now to CNN senior reporter Marshall Cohen joining us here in THE SITUATION ROOM.

So walk us through that letter. What did it actually say, Marshall?

MARSHALL COHEN, CNN SENIOR REPORTER: Yes, Pam, so let's be really clear about what we know and what we don't know.

We have actually been aware for a couple years that Epstein tried to send a letter or maybe did send a letter to Nassar from prison. That's been out there. We have never seen it before. And it apparently was in the drop today from the Justice Department.

It was written to it L.N., Larry Nassar, on the envelope, and it was signed by J. Epstein, and it was postmarked just a couple days after Epstein's suicide. No conspiracy there. It's not too crazy to think that prison officials will need to look at stuff before it goes out in the mail. So it's dated just a few days after that suicide.

And I will read for you what it said. And, as you mentioned, Pam, it's kind of disturbing. This is the letter -- quote -- "As you know by now, I have taken the short route home. Good luck. We shared one thing, our love and caring for young ladies and the hope that they'd reach their full potential. Our president also shares our love of young nubile girls," which is obviously the disgusting words of one sexual predator to another.

But I should make clear that Donald Trump has never been accused of any sexual wrongdoing by law enforcement, and, obviously, he's never been charged with any of these Epstein-related crimes.

BROWN: And so the short route home reference, do we think that's him talking about dying by suicide because he's? Because it came out a few days after, right?

COHEN: The timeline would seem to suggest so, yes.

BROWN: Yes. Yes.

We're also seeing this 2021 Mar-a-Lago subpoena relating to the Ghislaine Maxwell case. This is new, right?

COHEN: Yes, new subpoena here.

BROWN: Do we not know about the subpoena to Mar-a-Lago?

COHEN: I didn't know about it. And I don't think...

BROWN: OK. Well, Marshall Cohen, you have been all over this story. So... COHEN: I don't think it was out there before our colleague Michael Williams found it this morning in the batch of 30,000 documents, a subpoena sent by the Justice Department to Mar-a-Lago October 2021, just a few weeks before the start of the Ghislaine Maxwell trial.

It is redacted, but it is clear through the redactions that they were looking for employment records about someone. We don't know who. But I should point out that we do know that there was one very well-known person that did work at Mar-a-Lago, one that was actually recruited to work for Epstein.

And that was Virginia Giuffre, who was one of Epstein's victims. Not sure if the subpoena is about her, but there's been a lot of talk about her being at both Mar-a-Lago and Epstein's estate. And she died by suicide earlier this year.

BROWN: Yes, very sad.

How is the DOJ responding to all of these revelations? Because it put out a statement with this batch, but not the first one, right?

COHEN: Yes, they went on the offensive this morning...

BROWN: Yes.

COHEN: ... and on offense to defend Donald Trump.

Let me read for you what they put out in a tweet this morning as they rolled out this batch of tens of thousands of files.

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They said: "Some of these documents contain untrue and sensationalist claims made against President Trump that were submitted to the FBI right before the 2020 election. To be clear, these claims are unfounded and false. If they had a shred of credibility, they certainly would have been weaponized against Trump already."

So, framing the entire conversation right off the bat to say, if you see stuff about Trump, don't believe it. But as the woman you just spoke to in the last hour made clear, there's a lot of stuff in here that has been vetted and verified.

Maxwell was convicted. Epstein, before he was charged with the federal case, he had been convicted in a state case 20 years earlier. So, the Justice Department sort of massaging the situation here, trying to defend Trump, but, as we have seen, there's a lot of stuff in here that has been verified and has vindicated a lot of those victims.

BROWN: All right, Marshall Cohen, thank you, as always. I know you and the team have a lot of work going through these documents.

So to get some more perspective and context, I want to bring in CNN senior legal analyst Elie Honig.

All right, Elie, what do you think about these new documents that really give us a window into what federal prosecutors were looking into?

ELIE HONIG, CNN SENIOR LEGAL ANALYST: Well, there's a lot of interesting new documents that came out overnight and into the early morning hours today, Pam.

There's the document you were talking about before, the letter from Jeffrey Epstein to Larry Nassar. It's grotesque to see two accused and convicted, in some cases, child sex offenders corresponding with each other. I don't think there's any real way that I'm in a position or anyone's really in a position to interpret it.

I do want to say, though, that letter would not be admissible in any prosecution of any other person. There would be multiple levels of hearsay in there. Also important to remember when it's written. It's written when Jeffrey Epstein's in prison in 2019, days before he dies. He's just been prosecuted by Donald Trump's DOJ itself.

He's clearly, in my view, trying to leave some sort of message behind. Whether people credit it or not is up to the individual viewer.

BROWN: Yes, that's important context.

And President Trump seemed dismayed that the release of these files could harm the reputation of individuals who -- quote -- "innocently met Epstein." Let's listen to what he said.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: A lot of people are very angry that pictures are being released of other people that really had nothing to do with Epstein. But they're in a picture with him because he was at a party and you ruin a reputation of somebody.

(END VIDEO CLIP)

BROWN: Does he have a point there?

HONIG: You know, he actually does.

If we take ourselves out of the very unusual world of the Jeffrey Epstein case, it would be unthinkable for DOJ to publicly release its investigative files in a closed case, in an active case. That's the reason why, Pam, if you or I served a Freedom of Information Act request to DOJ, saying, I want your files from such and such case, they'd immediately reject it. They'd say, we don't do that.

Now, there's reasons, good or bad, why they do or don't do that. But one of the core reasons DOJ does not ordinarily release those documents is exactly that point, because DOJ does not want to harm the reputation of people who have not been actually charged with crimes and don't have an official forum, a trial, to defend themselves.

All that said, who's the person who signed this law? It had to go to the president's desk, and Donald Trump three or four weeks ago put his signature on the law. So he's the one that allowed this to happen. So he's got a point, but he also contradicted himself by signing the law. BROWN: Well, and you also have the DOJ releasing this statement this

morning, saying that these documents contain untrue and sensationalist claims made against President Trump that were submitted to the FBI right before the 2020 election.

It didn't release a statement in the first batch, which was more predominantly focused on Bill Clinton. It's unclear which claims the DOJ is actually referring to here, but what do you think about that?

HONIG: It's a bizarre statement.

I can't think of another time when I have seen DOJ come out and say, hey, here's all this information. There's a lot of people named in it. We just want to let, this one guy did nothing wrong. I mean, it's obvious what their motivations are here.

I agree with you. My first reaction is, what claims are they even referring to? And some of the information in these files, I agree, a lot of it is out of context. A lot of it I think is inflammatory and could lead to improper conclusions, but some of the information is concrete and specific.

For example, we saw an internal e-mail that came out overnight from within the Southern District of New York, DOJ, during the Ghislaine Maxwell investigation that says -- it's from one prosecutor to another saying, hey, there are records here that show that Donald Trump was on Epstein's plane eight times between 1993 and '96.

That's specific. It's concrete. It's in context. Now, that's not a crime, but I think it's hard for DOJ to come out and just say, hey, everyone, pay no attention to the documents on this one particular person.

BROWN: Yes, and one of them had said it was just Trump and Epstein and a young woman on the plane, but, again, don't know the specifics. Don't have the context.

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There has been a lot made about the redactions. I just had a survivor on, and she said she didn't trust these redactions and that there's been a lot made about all these documents not being released by the deadline, the 30-day deadline of last Friday.

But, at the same time, do you think that these documents could be credibility to the administration's claims of transparency? Because these documents, some of them could be seen as damaging to Trump, but they're being released anyway.

HONIG: Right.

There are valid criticisms that I completely share with the way this rollout has happened. The fact that it's late really undermines the credibility of it. As we sit here now, Pam, you and I have no idea how much of the total documents that we have seen.

And the manner of redactions has been completely inconsistent. As you're showing right now...

BROWN: Yes.

HONIG: ... this is a graphic of a 100-plus-page document that was entirely blacked out. But, on other instances, we see just an individual name sort of lanced out of a larger document.

So I think those are perfectly valid. But I also think it's hard to say that DOJ is engaged in a massive cover-up here when they have released several documents that we have been talking about that are at a minimum embarrassing for Donald Trump.

And I do want to make one last point. DOJ is not being transparent here because the goodness of their heart or they have decided it's the right thing to do. They're producing these documents because there was a law passed by Congress signed by the president. They don't have any choice here. They're patting themselves on the back for transparency, but it's not like this is voluntary transparency.

BROWN: Yes. And there's a lot of questions about how they're rolling it out.

Elie Honig, thank you so much. Great to see you.

HONIG: Thanks, Pam.

BROWN: Well, happening now: The announcement is made and now the formidable details need to be worked out.

President Trump has unveiled plans for a new generation of Navy battleships which will be known as the Trump class of warships and be part of a new Golden Fleet. He says they will be the largest battleships built since World War II, will be nuclear-capable and with state-of-the-art weaponry.

The Navy says the Trump class vessels will be the most lethal warship to ever be built.

Joining us now is former Pentagon Deputy Press Secretary Sabrina Singh, a CNN commentator.

Hi, Sabrina.

SABRINA SINGH, CNN GLOBAL AFFAIRS COMMENTATOR: Hey, Pam.

BROWN: So the president says he will be replacing this U.S. fleet that is -- quote -- "old and tired and obsolete." What do you think about that? Is that a fair description?

SINGH: Well, Pam, good to be with you.

I mean, there's no question that the Navy needs more ships, that the Navy needs updated ships. I think what is a bit odd about this announcement is, one, Donald Trump is a living president. So to kind of name a whole fleet after you, it's just a bit odd. But, two, it's a so-called battleship. I mean, we haven't had

battleships commissioned since World War II. So I think the questions that a lot of folks that I have been talking to about it are raising is, how do these new fleet of ships fit into the Navy's larger apparatus?

Because, at the end of the day, when you're looking at a potential conflict with China or with potentially around Taiwan, what we really should be focusing on is unmanned autonomous surface vehicles, which we know are very effective and have the capability to swarm.

But also we are behind in our own submarine production when it comes to our Virginia and Columbia class submarines. And submarines are not only power projection, but they can operate in stealth. We know that our adversaries are concerned about our submarine capabilities.

So we're already behind in that. The U.S. does not manufacture ships at a rate that we can deliver on this new fleet that Donald Trump wants to have ready to go in I think within two years. So I think there are a lot of questions that people within the military are asking about this announcement and how it just fits into the whole military place mat when you look at sort of our posture and positioning in the world.

BROWN: Yes, because, China, it has dramatically outproduced the U.S. and military shipbuilding in recent years. That's been a big concern on the national security front.

And American ships typically are produced behind schedule. They're over budget.

SINGH: Yes.

BROWN: And there are fundamental challenges. U.S. shipyards are already struggling to keep up with the demand. They need trained workers and so forth.

But the Defense Department says that these two ships can be designed, built and launched by early next decade. Does that seem realistic to you?

SINGH: It's really hard to say.

I mean, I think that is an incredibly short timeline. I mean, again, we're already behind on producing some of our ships that are already in the pipeline. We're already behind on updating some of our submarine capabilities as well.

And then, when you talk about shipyard capabilities I mean, those are not things that we have here in the United States. Those are usually things that are done elsewhere around the world. So how are we bringing manufacturing back to the United States?

I think that is a worthy endeavor that this administration is trying to do. But the realistic idea of a timeline, I mean, you already have our Naval carriers out and being extended, I mean, and even being directed off the coast of Venezuela.

All of this is a sequence in a timeline of how shipyards can operate and how much capacity they can really withstand. So adding another fleet to that, I think two years, I mean, that is an incredible timeline that I just don't know that this administration will be able to turn around.

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BROWN: We shall see.

All right, Sabrina Singh, thank you so much.

SINGH: Thanks, Pam.

BROWN: Still ahead here in THE SITUATION ROOM: Brand-new numbers show the economy did better than expected over the summer, but many Americans are still failing the pinch of higher prices.

Up next, we're asking White House economic adviser Kevin Hassett about the state of the economy.

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BROWN: New this morning, a new report shows the U.S. economy was much stronger than expected in the third quarter. GDP grew at the fastest rate in two years.

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Americans are also seeing some prices ease at the grocery store. The cost of eggs, milk, chicken, and tomatoes are all down, as you see here on the screen. But, as you also see, the cost of coffee and bacon is up.

President Trump is striking deals to lower drug costs, including announcing that blockbuster obesity drugs will be available for as little as $149 per month. Gas prices are down from a year ago. But tariffs have put a strain on businesses, with many of those costs being passed along to Americans.

One analysis notes tariffs have raised the average American household cost by $1,200 this year. Next year, that number could be $1,600. And consumer confidence declined substantially this month, as Americans are especially concerned about the state of the labor market.

So we're getting some mixed signals here on the economy. Let's see what the director of the White House National Economic Council, Kevin Hassett, has to say about this.

Let's start with that GDP report. It's a great report. What made this happen, Kevin?

KEVIN HASSETT, DIRECTOR, NATIONAL ECONOMIC COUNCIL: Sure. Well, it's a fantastic report, 4.3 percent. That's just about as good as GDP numbers get, and especially coming on the heels of the CPI report, Consumer Price Index report we got, which you actually showed some interesting data that it's consistent with, that showed that quarter inflation is all the way down to 1.6 percent.

And so I think that these numbers are showing that President Trump's trade policy and his supply-side policy, which is really increasing new factory production and so on, is having a big effect, as is his trade policy.

So if we abstract from the reduction of the trade deficit, then the 4.3 percent number would only be 2.6 percent. So Trump's trade policy is really working as well.

BROWN: But I wonder what you say to economists, you say, look, this shows a vast majority of people, their spending isn't growing, that the economy is being lifted by the top 10 percent and not the people who have lower wages or are really struggling to get by. What do you say to that?

HASSETT: Well, first of all, that people lost about $3,000 in purchasing power under Joe Biden because of the inflation.

And, right now, we have got real wages up about $1,300 so far this year. And so we're making a lot of progress. But the bottom line is that, in the end, what matters to people is, like, what's in their wallet, what's happening with growth. And if you look at what's happening to growth, then it's very, very positive and income growth is as well.

And I also would highlight that there are two really big macro trends that we need to keep at eye on. You talk about the majority of what people are saying. It's really interesting that, if you go back and look for this GDP release, then Bloomberg surveyed 62 economists; 61 got it wrong by a lot, OK?

Only one person out of 62 got it right. And so what's going on is that there are things changing in the economy that economists are having a hard time digesting. I think those two things are the trade policies working a lot better than they expected. And the second is that artificial intelligence is making companies way more productive and doing a really great job at increasing production without putting upward pressure on prices.

BROWN: So, obviously, you're very optimistic about where things stand with the economy. You're a finalist for chair, for the chair of the Federal Reserve. I mean, if this economy is really growing this strong, what is the case then for lower rates?

HASSETT: Right, the case for lower rates -- which anyone who is Fed chair would understand that this is true. In fact, my good friend Austan Goolsbee all the way back from grad school just said that he should have voted to cut rates last time and, looking at the inflation numbers, he would vote to cut rates again.

And so the point is that, in the end, the Fed needs to be data-driven. And what I'm seeing and what I think people are going to see more and more is that we're in a state like we were in the 1990s, where Alan Greenspan decided that computers were going to diffuse and increase productivity throughout the economy.

We had lots of 4 percent growth numbers like we're having right now, but we didn't have inflation and he didn't have to raise rates. And so I think that the Fed will absolutely 100 percent responsibly look at the data, make sure inflation is not getting out of control.

But I think that we're in a sweet spot right now, where production is going up in the U.S. and the higher production of the U.S. is not putting upward pressure on prices. But, on the other hand, if we just mail checks to people and cut supply, which is what the previous administration did, that you would expect high inflation.

BROWN: But isn't that what the White House wants to do with some of the tariff revenue is cut checks to people in the sum of $2,000?

HASSETT: Well, to be clear, what's happened this year, year over year, is the deficit's gone down by about $600 billion. If that trend continues and inflation stays at 1.6 percent, then there would be room to have some kind of extra tax reduction or subsidy next year.

But we will have to wait and see what the data say.

BROWN: I believe, wasn't -- isn't inflation 2.7, just around 2.7 percent at last check?

HASSETT: Well, what people often do is, they look at the year-over- year number, but the year-over-year number includes months from Biden's term.

And so what we like to do is look at the latest number or maybe the average of the last three. And, again, the latest number had core inflation only at 1.6 percent. And that, I expect, is going to continue, because that's consistent with the story we're saying about how artificial intelligence is really increasing supply without putting upward pressure on prices.

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BROWN: And I believe the last report that came out, there were economists who were also saying, though, it didn't give the full picture on inflation because it was during the government shutdown. So we will have to wait and see what the next report shows.

But you talk about the tariffs.

HASSETT: Well, can I comment on that?

BROWN: Yes, go for it.

HASSETT: I don't mean to interrupt, Pam.

(CROSSTALK)

BROWN: No, please do. Please do.

HASSETT: So, we have done a lot of analysis of this. And it turns out that there are a few things that they had to impute because there was no survey because of the government shutdown.

And one of the very top people from the BLS is now working for us at the White House, a totally nonpartisan guy. And he says that if we undo all the imputations and assume the worst, that the 1.6 number could maybe be 1.7 or 1.8, but it still means that we're way below the target for the Fed even if you sort of adjust for some of the imputations they had to make.

BROWN: You mentioned the president's tariff policy and you believe it's working.

Kevin O'Leary, who has been very complimentary of President Trump and this economy, he spoke to my colleague John Berman earlier this morning and, again, praised this report that came out, but he also said this about the White House and the tariff policy. Let's listen.

(BEGIN VIDEO CLIP)

KEVIN O'LEARY, FOUNDER, O'LEARY VENTURES: Tariffs are inflationary. That's the other problem in the economy. We're still at 3 percent inflation on average. And you're hearing that quote affordability. That's the problem. We have got to get affordability nailed down and get the protein costs for everyday goods and services people buy down towards 2 percent.

A lot of that has to do with tariffs. And I understand the administration claims they don't matter. They matter. It's an input cost, but it's something they control, so it can be fixed.

(END VIDEO CLIP)

BROWN: What is your response to that, Kevin?

HASSETT: Right.

Well, Kevin's dead wrong about that, but he's a good guy. I would be happy to talk to him on the phone and explain it more. What is he wrong about specifically?

(CROSSTALK)

HASSETT: Yes.

No, OK, so the bottom line is that when President Trump took office in 2017, 22 percent of imports came from China. It's all the way down to 9 percent of imports come from China now. This big increase in exports and reduction in imports is why GDP is growing so much.

And the bottom line is that China has been dumping stuff into the U.S. forever and ever. President Trump's policy has tried to offset that. And because they were doing that, then, basically, when our tariffs went up, they had to cut their price to maintain market share in the U.S.

And that's why you can see 4 percent growth with 1.6 percent inflation. So, if China didn't cut their prices, then maybe Kevin would have a point, but it's really visible in the import prices that the people who've been dumping stuff into the U.S. have been cutting their prices to try to maintain market share even after we put the tariffs on.

And that's why we got all this tariff revenue coming in and we don't have inflation.

BROWN: Well, I mean, there is inflation.

HASSETT: Yes, it's reduced inflation. You're right.

BROWN: And I know that you're trying to make the case. But in terms of what the American people think and feel, I mean, that's what really matters. You're there at the White House. Of course, you want to look at things in a positive light. You want to see things moving in the right direction.

But when we go out and we talk to people, even Trump supporters, they're not feeling necessarily kind of what you're laying out there in terms of this rosy picture. And President Trump has blamed the stressors on the economy on President Biden.

But there was this recent Quinnipiac poll that found that 57 percent of Americans view President Trump as responsible for the current state of the economy versus 34 percent. And so whose economy is it? Because I hear when -- sometimes, when numbers aren't so great or favorable, it's Biden's economy and then, when things are going great, like this GDP report,it's Trump's economy.

Who owns it right now?

HASSETT: Right.

Right now, we're looking at data about today at 100 percent. The data of 4.3 percent GDP growth is happening because of President Trump's policies. But President Biden's policies did things like reduce real incomes by $3,000. They made it so that the typical person buying a new home had to increase their mortgage payment on an annual basis by $14,000 for the typical home.

And so that kind of stuff takes a while to repair. And if you look at the 4.3 percent GDP number, you can see that we're repairing it at record pace. I can remember being on CNN back in 2017 where I came out with President Trump and we said, we think we can get 3 percent GDP growth.

And the story in the media back then was always, oh, we're in the new normal. We couldn't possibly grow 3 percent. And now here we are at 4. And when I talked to President Trump about the 4 percent growth, he said, I think we should shoot for 20.

(LAUGHTER)

HASSETT: But it was a joke. But if we get to 20, I will be really -- we will all be really happy.

BROWN: All right, it's always to aim high, always to aim high.

All right, Kevin Hassett, thank you very much.

HASSETT: Yes.

BROWN: Happy holidays to you.

HASSETT: Thank you. You too.

BROWN: Up next: why a top official at Brown University is now on leave as the school mourns two students killed in a campus shooting and the Trump administration opens a new investigation into the school's safety.

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