Return to Transcripts main page

The Situation Room

California Mayor Resigns; Democrats Hear Testimony From Epstein Abuse Survivors; Massachusetts Gunman; Inflation Rising. Aired 10:30a- 11a ET

Aired May 12, 2026 - 10:30   ET

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

[10:30:00]

MATT EGAN, CNN SENIOR REPORTER: And there are concerns gas could go to $5 a gallon eventually.

It's not just gas, though. Jet fuel has skyrocketed, so airfare has gone up. And we're also starting to see some early evidence that the war and this energy spike may be spilling over into grocery prices as well because there was a big increase for prices on fresh fruit and vegetable, meat, eggs, groceries overall.

Groceries increased by the most since August of 2022. And so this likely reflects the fact that diesel has skyrocketed in price. And so that's making it more expensive for farmers to operate their equipment and to also transport food to the grocery stores.

The other big factor here and the big headline is the fact that wages, wages are no longer outpacing prices. So, on that chart, the yellow line is prices. And you can see that, for a while, prices were going up by less than paychecks, but that's no longer the case.

For the first time in three years, we're seeing real wages, inflation- adjusted wages, are actually falling. So, no wonder why many Americans right now, they feel like they can't keep up. The data suggests they literally cannot.

So, bottom line here, Wolf, this was an inflation setback. And, unfortunately, economists expect inflation will only get worse in the months to come -- back to you.

WOLF BLITZER, CNN HOST: All right, Matt Egan reporting.

Matt, thank you -- Pamela.

PAMELA BROWN, CNN HOST: And with that data in mind, we have new CNN polling that reveals a surge in people naming high prices and the cost of living as the top economic problems facing their own families.

And those numbers could have major implications for President Trump and the Republican Party. Significant majorities believe a recession is likely in the next year, and they're pessimistic about their ability to cover expenses and make purchases.

Americans simply feel stuck, telling CNN -- quote -- "It's more expensive to exist. You're just staying afloat, instead of getting ahead. It should not be like this. My life is not affordable. No one cares."

Joining us now in THE SITUATION ROOM is CNN political director and Washington bureau chief David Chalian.

David, these numbers tell quite a story. Tell us more.

DAVID CHALIAN, CNN POLITICAL DIRECTOR: Yes, I mean, just listening to Matt talk about inflation, these numbers show how Americans are feeling what he was just speaking about.

Take a look here. first of all, at perceptions on the economic conditions in the country today; 27 percent of Americans in our poll, Pam, say those perceptions are good and that the conditions are good; 73 percent are poor.

This negative outlook on the American economy, it has been five years running. This is still sort of a post-COVID economic gloomy picture for Americans. What about the president's handling of the number one issue of the economy? It's at a record low; 30 percent in our polls say they approve of the way Donald Trump is handling the issue of the economy.

Across his entire career of both terms, he's never been lower on this issue. It used to be one of his strong suits. He used to outperform his overall approval rating, not the case anymore.

And if you take a look here, we asked folks, has Donald Trump's policies affected the local cost of living for you? Seventy-seven percent in our polls say his policies have increased the cost of living. And let me just say that includes a majority of Republicans; 55 percent of Republicans say Trump policies has increased the cost of living for them.

You noted this in your intro. The biggest economic problem facing your family today, I mean, far and away, it's expenses and cost of living. Nothing else comes close to that here. And this is an economy that Americans see as sort of stacked against them.

The economic system in this country, three-quarters say it is -- it unfairly favors powerful interests. Only a quarter say is generally fair to most Americans. In these numbers, you could see the anger, the dissatisfaction against the establishment and the political class broadly in the American electorate.

And just before we look at sort of those top economic issues, how about how does the economy stack up to other issues? It's not even close; 55 percent of Americans say the economy and cost of living the most important issue facing the country. Nothing else gets remotely close to that, Pam.

BROWN: All right, so the natural follow-up is, what could all of this mean for President Trump and the GOP more broadly?

CHALIAN: Yes.

I mean, this is -- the weight of this economic pessimism and the disapproval of Donald Trump's handling it is downward political pressure on the president and his party. I will note, though, that our poll shows, in the generic congressional ballot, Democrats have a three-point edge. That's within the margin of error.

So, again, there's a lot of anger and discomfort due to this economic anxiety that Americans apply to both parties. But no doubt, with Donald Trump and Republicans in charge, they are the ones facing a clear and present political danger this year due to these numbers.

BROWN: All right, David Chalian, thanks so much -- Wolf.

BLITZER: Important numbers, indeed.

[10:35:00]

And just ahead: Two people are in critical condition after a gunman fires more than 50 rounds at cars on a busy street in Massachusetts. The new reporting about the suspect's previous run-ins with police.

(COMMERCIAL BREAK)

BROWN: Breaking news: Democrats on the House Oversight Committee are holding what they're calling a field hearing in Palm Beach County, Florida, as part of their investigation into the Jeffrey Epstein scandal.

Survivors of the late convicted sex offender's abuse are expected to appear before the panel of lawmakers. Palm Beach is where many of the allegations against Epstein first surfaced and where officials reached that controversial non-prosecution agreement with the disgraced financier.

[10:40:02]

A short time ago, Virginia Giuffre's sister-in-law spoke her -- about her ordeal.

(BEGIN VIDEO CLIP)

AMANDA ROBERTS, SISTER-IN-LAW OF VIRGINIA GIUFFRE: We are talking about millions of files, sworn testimony, depositions, e-mails, flight records, bank records, photographs, videos, and evidence collected over decades, evidence that points to a network, not just to people who trafficked and abused over 1,200 victims, girls, children, women, and boys.

Epstein and Maxwell did not act alone, and Palm Beach was the blueprint. It was the center for expansion. So, when this Department of Justice says there is nothing to see here, survivors know exactly what that sounds like, a cover -up.

Virginia wrote in "Nobody's Girl": "Don't be fooled by those in Epstein's circle who said they didn't know what Epstein was doing." That sentence should guide this committee's work, because "I don't recall" is not enough. When people like Les Wexner are asked about Epstein's finances and alleged connections to his network, the public deserves real answers and investigations.

(END VIDEO CLIP)

BLITZER: And joining us now here in THE SITUATION ROOM, CNN's M.J. Lee.

M.J., you have been covering this hearing. What else are you learning right now from the survivors of Epstein's abuse? You're getting some new information.

M.J. LEE, CNN SENIOR NATIONAL ENTERPRISE CORRESPONDENT: Yes, as we just heard from Amanda Roberts, the location, that the fact that this so-called field hearing is taking place in Palm Beach, obviously significant, because it was the place where, for so many years and decades, so much of the abuse took place.

Listen, this is an attempt by the Democrats on the House Oversight Committee to continue to keep the spotlight on the Jeffrey Epstein investigation. We heard right off the top from the ranking member, Representative Garcia, who talked about the lack of accountability.

He called it a continued cover-up by the federal government, and he really focused on the impact that all of this has had on the survivors, some of whom have been doxxed, they have been harassed online. And they certainly don't feel like they have gotten sort of the full answers when it comes to Epstein.

The committee has started deposing and questioning some key people in the Epstein investigation. But, as Garcia asked, he asked the question of, why is this the first time that some of these people are being even looked at and questioned, when some of these issues have been known about for so many years?

We want to play a little bit of sound from Maria Farmer. She was the first survivor to testify and to speak at this hearing. She, of course, is so significant, because she's the first known Epstein survivor to have reported Epstein to the authorities. This is a part of what she said.

(BEGIN VIDEO CLIP)

MARIA FARMER, JEFFREY EPSTEIN SURVIVOR: So let me be direct about what we need. The federal government owes us explanations, accountability for injuries caused, and a promise of systemic change when crimes against children are reported.

Accountability should start with the government's acknowledgement and responsibility for their repeated failures to act in response to my 1996 report. The government needs to take responsibility for endangering and injuring girls and young women.

The government needs to start telling the truth, face my lawsuit, and be held to account to me and to all others who have been harmed. Had the FBI done their job, 30 years of child sex abuse and trauma could have been avoided.

(END VIDEO CLIP)

LEE: And, as you can see there, Maria is not testifying in person. She has had some major health issues, which she has talked about.

Many of them, she says, have come from and stem from the fact that she's not been able to properly process everything that she endured. She is still continuing to look for answers, even as her health has suffered so much.

I see now we are hearing from other survivors who are going to be speaking to the committee. One person to look out for is a woman named Roza. She is somebody whose story we haven't really heard so much in the past, so just a good reminder too that there are so many women, so many survivors and victims whose stories we haven't even heard yet.

BROWN: All right, M.J. Lee, thank you for bringing us the latest on this.

BLITZER: Yes, it's always sad whenever we hear these testimonies.

Also new this morning, a Southern California mayor is set to plead guilty to acting as an illegal agent for the Chinese government. Now- former Mayor of Arcadia Eileen Wang resigned Monday after federal charges accused her of acting on behalf of Chinese officials for two years without prior U.S. notification.

The 58-year-old was elected in November of 2022.

Let's go live right now to CNN senior correspondent Josh Campbell, who is in Los Angeles. He's got the latest on the case.

Walk us through, Josh, the details that were released in her plea agreement today.

JOSH CAMPBELL, CNN SECURITY CORRESPONDENT: Wolf, this is an interesting case, because it's not a typical spy case that we're used to, that we have seen in recent years involving people trying to steal classified information or sensitive U.S. technology on behalf of China.

[10:45:11]

But this case is about propaganda. It's about China's alleged attempt to shape public opinion inside the U.S., especially targeting news that's consumed by members of the Chinese American community.

Now what authorities say is that Eileen Wang has agreed to plead guilty to acting as an illegal agent of the Chinese government. She resigned from her position as the mayor of Arcadia here in the L.A. area.

She was charged last month with one count of acting as an illegal agent, doing the bidding of Chinese officials, such as sharing articles that were favorable to Beijing, without prior notification to the U.S. government.

She faces a maximum sentence of 10 years in federal prison. Now, a colleague that she had worked with on the scheme, a man named Mike Sun, he pleaded guilty last year to the same charge. He is currently serving four years in federal prison.

I will read you from this plea agreement. It says that Wang operated "a Web site called U.S. News Center that purported to be a news source for the local Chinese American community. Defendant and Sun received and executed directives from PRC government officials to post pro-PRC content on the Web site and sometimes sought approval from PRC government officials to circulate other pro-PRC content."

Now, the plea agreement says that she would receive direction from an official in China to post various articles on her Web site. Sometimes, she was told to edit those articles. In one instance, in an exchange with this PRC official, they say that Wang had essentially told this person, look, this article has been viewed over 15,000 times.

That person that allegedly responds: "Great."

She responds: "Thank you, leader."

Of course, finally, the timing of all this is very interesting. President Donald Trump is set to head to China today for high-level meetings with Chinese officials. And, again, with this case, we're not talking about the spying that we're all used to, but I think what this is showing, sending out news articles can get you time in federal prison.

I think it shows the threshold that this Justice Department is willing to tolerate when it comes to people doing the bidding of the Chinese government here in the United States, Wolf.

BLITZER: All right, Josh Campbell, in Los Angeles working the story for us, thank you very, very much -- Pamela.

BROWN: All right, Wolf, coming up here in THE SITUATION ROOM, you're looking at some live pictures we're putting up of Defense Secretary Pete Hegseth at the second hearing of this morning. We're keeping a close eye and learning more about his plans to join the president on his upcoming trip to China.

Stay with us. We will be right back.

(COMMERCIAL BREAK)

[10:52:02]

BROWN: Happening now, we're about to show you some disturbing video from an incident that has left two people critically wounded.

Two people are recovering from those life-threatening injuries after a gunman opened fire on a busy street right near Harvard University. (BEGIN VIDEO CLIP)

(GUNFIRE)

(END VIDEO CLIP)

BROWN: Well, the chilling incident captured on video right here as motorists and passerby scrambled for cover.

Investigators say the suspect fired more than 50 shots and damaged at least a dozen vehicles. The suspect was eventually shot and injured by a state trooper and a former Marine who was licensed to carry.

(BEGIN VIDEO CLIP)

LISA SCHILL, WITNESS: We saw the guy walking down the street and raising, like, the gun. And he was shooting, shooting. My driver got out. I tried to crawl underneath the seats.

And then I saw that it was getting closer and closer, and I could see him coming. So I crawled out of the van.

(END VIDEO CLIP)

BROWN: Let's go live now to CNN's Omar Jimenez.

Omar, what more are you learning about this shooting, the suspect and the victims here?

OMAR JIMENEZ, CNN CORRESPONDENT: Well, for starters, some of what you just showed there appeared to be sort of the end of the exchange. He may have been shot at that point, continuing to fire from the ground.

But, as the district attorney laid out, this person was just walking down this roadway, firing indiscriminately, as they believe to be at this point, with that rifle, some of which you saw on camera there, firing towards vehicles as people were getting out of their cars, trying to run away from that gunfire.

Now, this happened Monday afternoon in Cambridge, Massachusetts, which is where Harvard and MIT are, though no indication that this was related to them. And, as you mentioned, a state trooper and a civilian who the DA says is a Marine veteran with a license to carry shot at this shooter.

And I want you to watch this whole exchange. I'm going to play -- play it for you, just because two people were hurt here. And while no one was killed, the severity of this shooting cannot be overstated here. I just want to play the full exchange, and I want to warn, some of what you might see could be disturbing.

(BEGIN VIDEO CLIP)

(GUNFIRE)

(END VIDEO CLIP) [10:55:02]

JIMENEZ: So, a few things here. You see at the end the shooter appears to throw his weapon and raise his hands up to surrender.

But that comes after just the sheer amount of gunshots you hear happening, again, in a very, very populated part of the Boston area, in Cambridge, in particular. At least a dozen cars were hit from this gunfire, damaged from the fire, from the gunfire. Two people were injured, life-threatening injuries.

We're still checking on those conditions.

BROWN: Yes.

JIMENEZ: But, Pamela, I mean, you see just how many gunshots there, how serious this was. Unbelievable that no more people were hurt or even killed here.

BROWN: Just senseless, absolutely senseless. And we just pray that those two people who are in critical condition, that they heal, that they recover and that they're OK.

Omar Jimenez, thank you -- Wolf.

JIMENEZ: Of course.

BLITZER: And, coming up, we're hearing from more Epstein survivors as part of a Democratic field hearing calling for accountability over the release of the Epstein files.

More emotional moments, that's next.

(COMMERCIAL BREAK)