On this “Face the Nation” broadcast moderated by Margaret Brennan:
- Rep. Zoe Lofgren, Democrat of California
- Dr. Scott Gottlieb, former FDA commissioner
- Brian Deese, director of the National Economic Council
- Loretta Mester, president and CEO of the Federal Reserve Bank of Cleveland
- Dr. Ibram X. Kendi, professor, author and CBS News racial justice contributor
Click here to browse full transcripts of “Face the Nation.”
MARGARET BRENNAN: I’m Margaret Brennan in Washington.
And this week on Face the Nation: Inflation rises, and so does the risk of recession.
Plus, more evidence from January 6 shows that former President Trump and his allies knew their plot to overturn the election was illegal. The lawmakers investigating the January 6 attack on the U.S. Capitol and witnesses to that day warn that former President Trump and his allies pose a clear and present danger to American democracy.
(Begin VT)
REPRESENTATIVE BENNIE THOMPSON (D-Mississippi): Former President Donald Trump and other political allies appear prepared to seize the presidency in 2024.
(End VT)
MARGARET BRENNAN: Last week’s hearings revealed shocking new details about how close we came to a potential act of horrific violence.
(Begin VT)
REPRESENTATIVE PETE AGUILAR (D-California): Approximately 40 feet, that’s all there was, 40 feet between the vice president and the mob.
(End VT)
MARGARET BRENNAN: We learned more about the extraordinary pressure the former president exerted on his vice president to overturn the 2020 election, despite top aides telling him the scheme was unconstitutional and his claims of voter fraud were bogus.
(Begin VT)
WILLIAM BARR (Former U.S. Attorney General): He has become detached from reality if he really believes this stuff.
(End VT)
MARGARET BRENNAN: We will talk with one of the investigators, California Democratic Congresswoman Zoe Lofgren.
Plus: The Federal Reserve signaled it will hike interest rates at the most rapid pace in decades to fight inflation that is running at a 40-year high.
(Begin VT)
JOE BIDEN (President of the United States): I’m using every lever available to me to bring down prices for the American people.
(End VT)
MARGARET BRENNAN: But is the president powerless? And can the country avoid a recession?
We will hear from the director of the National Economic Council, Brian Deese, and the president of the Federal Reserve Bank of Cleveland, Loretta Mester.
Then: Vaccinations for the youngest Americans are set to begin this week. We will ask former FDA Commissioner Dr. Scott Gottlieb about the rollout.
And, finally, as Americans observe Juneteenth, we will hear from author and historian Ibram Kendi.
It’s all just ahead on Face the Nation.
Good morning, and welcome to Face the Nation.
We have a lot to get to today, including some long-awaited COVID news finalized just yesterday. Nearly 20 million children will finally have access to coronavirus vaccines, after the CDC approved emergency use in infants, toddlers and preschoolers, relief for parents.
But there is more economic anxiety. Fears of a recession are piling on top of struggles with inflation. The Federal Reserve hiked interest rates by three-quarters-of-a-percentage point, in the single largest increase in nearly three decades.
But we begin with a crisis in our American democracy, the investigation into the January 6 attack and the elaborate scheming that led up to it. Lawmakers and witnesses are warning that the threat is not over.
For more on what we learned and what’s next in the hearings, here’s CBS News congressional correspondent Scott MacFarlane.
(Begin VT)
MIKE PENCE (Former Vice President of the United States): On this vote…
SCOTT MACFARLANE (voice-over): An unprecedented pressure campaign against a sitting vice president ended with Mike Pence in an underground loading dock beneath the Capitol for four hours January 6.
He’d been rushed into safety from the U.S. Senate chamber and, at one point, insurgents were just 40 feet away.
REPRESENTATIVE PETE AGUILAR: A confidential informant from the Proud Boys told the FBI the Proud Boys would have killed Mike Pence if given a chance.
SCOTT MACFARLANE: That day, he refused to leave.
GREG JACOB (Former Counsel to Vice President Mike Pence): The vice president did not want to take any chance that the world would see the vice president of the United States fleeing the United States Capitol.
SCOTT MACFARLANE: Earlier that day, the president personally pressured Pence one last time before the electoral vote. Witnesses say he called Pence a wimp.
In a speech Friday, the former president denied it…
DONALD TRUMP (Former President of the United States): I never called Mike Pence a wimp. I never called him a wimp.
SCOTT MACFARLANE: … but again asserted Pence could have stopped the official certification of the electoral votes.
FORMER PRESIDENT DONALD TRUMP: I said, well, what is he, a robot? He’s a human conveyor belt.
SCOTT MACFARLANE: The committee argued the already violent mob was egged on further by Trump’s midafternoon tweet that Pence lacked courage.
MAN: I’m telling you, if Pence caved, we’re going to drag mother (EXPLETIVE DELETED) through the streets.
RIOTERS: Hang Mike Pence! Hang Mike Pence! Hang Mike Pence! Hang Mike Pence!
SCOTT MACFARLANE: A series of White House lawyers and aides described an elaborate, weeks-long effort to strong-arm Pence into executing a scheme devised by California lawyer John Eastman to reject some of the electoral votes and steal the election.
White House lawyers testified, the president and Eastman both knew the plan was bogus and unlawful.
A Trump White House aide described a call to Eastman.
ERIC HERSCHMANN (Former White House Attorney): I said: “Are you out of your F’ing mind?” I said: “You’re going to cause riots in the streets.”
(End VT)
SCOTT MACFARLANE: The committee has two hearings planned for the week ahead, including one in which they’re expected to argue that Donald Trump tried to interfere with local election officials, including in Georgia.
And CBS News has learned the committee also has a team investigating the role played by far right groups, including their efforts to plot and plan ahead of the attack — Margaret.
MARGARET BRENNAN: Scott, thank you.
We now want to go to Congresswoman Zoe Lofgren of California. She is in San Jose.
Good morning to you.
You’re one of the investigators on this Select Committee.
And I think one of the most powerful moments was when the retired conservative judge, Judge Luttig, said that he sees a clear and present danger today. He said there could be further attempts to subvert American democracy in 2024.
What exactly is the threat you see?
REPRESENTATIVE ZOE LOFGREN (D-California): Well, I think Judge Luttig said it very well. And, by the way, he is a very conservative man, once considered by Republicans for the Supreme Court.
I think his concern — and I share it — is that the former president is continuing on his campaign to undercut confidence in the election system. They are installing loyalists who say that the election was stolen in states who are going to count the votes.
They clearly tried to get the vice president to throw the actual votes out and replace electors with the losing candidate. And it looks like that’s in the works for the next election as well. It’s a grave concern.
MARGARET BRENNAN: So, to be clear, there are about 100 Republican candidates for office right now who are repeating that they are election deniers. They’re repeating some of what President Trump still claims.
At least five of them have won their primaries. Have you found any direct links between any of those candidates and the grift that you have been tracking?
REPRESENTATIVE ZOE LOFGREN: Well, we are going to release additional information.
I have got the staff working on it right now. Obviously, the hearings are a couple of hours each, and you can’t lay out all the information that’s been compiled. So, I know there’s been substantial interest in the — the big ripoff. And we will provide additional information to the public soon.
MARGARET BRENNAN: You’re saying establishing direct links between those individuals standing for election to office now and the scheme you’re laying out?
REPRESENTATIVE ZOE LOFGREN: Not necessarily.
We will lay out what we have, and people can look at it. I don’t want to just pop off irresponsibly here.
MARGARET BRENNAN: Your colleagues on the committee Republican Congressman Adam Kinzinger said on another network this morning that he just received a death threat against him, his wife, and his 5-month-old child for the work he’s doing.
REPRESENTATIVE ZOE LOFGREN: Right. Right.
MARGARET BRENNAN: He said there is violence in the future.
Do you agree that you have a fear of political violence? And have you received threats?
REPRESENTATIVE ZOE LOFGREN: Well, I don’t want to go into the threats I have received. I think it just encourages more of them.
But it’s very concerning that Adam and his wife and his little baby were threatened. I saw the threat. It was a written threat. We saw that Republican Congressman, a very conservative representative, Crenshaw was roughed up over the weekend at a Republican meeting because he was not conservative enough.
And I think that’s what the former president has unleashed here. You know, when he sent out the tweet attacking his vice president, he already knew that the violence was under way. The only conclusion you can reach is that he intended to accelerate that violence against the former vice president.
So, we’re in a very rough time in America right now. And we, all of us, elected officials, but also just Americans and their neighbors, need to stand up for the rule of law and against political violence. It’s not what America is about.
MARGARET BRENNAN: Well, for the busy American people who may not have been watching the hearings as closely as we were, exactly what is the endgame here?
Are you laying out a road map for the Department of Justice to ultimately try to prosecute the former president?
REPRESENTATIVE ZOE LOFGREN: We are doing what we were asked to do when the committee was formed, which is to find the truth, lay it out.
And we will also be making legislative recommendations. For example, the Electoral Count Act was violated. Dr. Eastman admitted as much .But we think we can tighten that up, so it’s less susceptible to abuse. And we’re working at — especially Liz Cheney and I are working on that.
The Department of Justice has to make its own decision. We’re laying out facts. They can see it. But I’m sure they have access to other information because they’ve got grand juries meeting with various defendants. We are going to be helpful to them in terms of specific information that they wish from the — our own investigations.
But they have got a — it’s not the role of Congress to decide who gets prosecuted.
MARGARET BRENNAN: Well, a number of your committee members, your fellow committee members, have criticized Attorney General Garland for not moving faster.
So, they do want to see some kind of action here.
(CROSSTALK)
MARGARET BRENNAN: And there was this letter from the Justice Department asking for transcripts and saying that your committee’s failure to immediately hand them over was complicating their investigation.
Exactly what is going on here?
REPRESENTATIVE ZOE LOFGREN: Well, that was kind of — we were surprised by that, frankly.
And we will engage. We’re not going to be an obstacle to the Department of Justice prosecution of individuals. We’re in the middle of putting these hearings together. The staff is working, I mean, incredibly hard, along with the members of Congress, where we will get particular information that they need over to them in an orderly way, certainly, by the beginning of next month.
MARGARET BRENNAN: By the beginning of next month.
In the next week, you have a number of Republican officials from state, local governments coming, including Arizona House Speaker Rusty Bowers, who said he had been pressured by the president — the former president’s attorney Rudy Giuliani and by the former president himself to retroactively change Arizona law to choose a different slate of presidential electors.
He also has said he received e-mails from Ginni Thomas to reverse Trump’s loss. And she is the wife, of course, of sitting Supreme Court Justice Clarence Thomas.
Will you ask Bowers about that link to Thomas?
REPRESENTATIVE ZOE LOFGREN: Well, I’m not going to step on the committee’s lines for the hearing.
But, obviously, as you know, we’ve invited Ginni Thomas to come in and visit with the committee, answer our questions. And we’ve received actually additional information when we got evidence from the Eastman e-mails that have now been ordered released by Judge Carter in California.
So, we have questions for her, and we may have questions for him as well.
MARGARET BRENNAN: Will Ginni Thomas appear? Do you need to subpoena her? And will her husband appear?
REPRESENTATIVE ZOE LOFGREN: Well, we’ve asked her to appear.
She — it was a private letter. She decided to disclose it, which is her right to do. And she said publicly that she looks forward to coming in and talking to us. So, I take her at her word that she intends to come in. And we look forward to talking to her.
MARGARET BRENNAN: Congresswoman Lofgren, thank you for your time. And we will be watching.
Face the Nation will be back in a minute. Stay with us.
(ANNOUNCEMENTS)
MARGARET BRENNAN: We go now to former FDA Commissioner, current Pfizer board member Dr. Scott Gottlieb, who joins us from Westport, Connecticut, this morning.
Happy Father’s Day to you, Doctor.
DR. SCOTT GOTTLIEB (Former FDA Commissioner): Thank you.
MARGARET BRENNAN: And I have been asking you for years now when my children were ever going to be able to get a vaccine. And now we know they’re actually being shipped out.
But this is a pretty unique rollout for these youngest of Americans. In fact, children under the age of 3 can’t go to these mass vaccination sites that we’ve seen for older people.
How complicated is rolling this out to the youngest Americans going to be?
DR. SCOTT GOTTLIEB: Well, more complicated than other age segments. And I think it’s going to be a little bit more of a slow rollout, relative to what we’ve seen in past rollouts with the other age groups.
There are going to be pharmacies that are vaccinating children. CVS is going to move it into their pharmacies, but they’re only moving it into the pharmacies with advanced care providers with their MinuteClinics. You’re probably not going to see clinic stood up. Maybe around children’s hospitals, you’ll see some clinics stood up.
But most people are probably going to get vaccinated and their pediatricians’ offices. And it’s going to take a little bit more time to get the vaccine into those local settings, because it’s more difficult to vaccinate a child who is very young. You need people who are specially trained to do that.
And so you want — you want the settings to be appropriate.
MARGARET BRENNAN: The White House adviser Dr. Ashish Jha briefed this week, and he said almost 50,000 children under the age of 5 have been hospitalized due to COVID infections, a quarter of them in the ICU, so really directly disputing the idea that kids don’t get that sick.
But then, when we look at the orders here, 10 million doses made available by the government. Just short of four million were actually ordered. That indicates perhaps a low level of uptake.
Does that concern you?
DR. SCOTT GOTTLIEB: Look, it’s continued to concern me that we haven’t seen a lot of uptake among children generally, that only about 30 percent of kids ages 5 to 11 have been vaccinated with two doses.
That’s lower than what the initial estimates are. Right now, there are surveys showing that about 20 percent of parents plan to vaccinate children under the age of 5. I suspect it may end up being lower than that. I think, as prevalence declines going into the summer, a lot of parents may choose to take a wait-and-see attitude and reconsider this in the fall.
So I would suspect that uptake is going to be pretty slow. I think the 4.98 — or 3.98 million doses that have been ordered so far is a reflection of that fact. I think, over time, we’re going to see more kids get vaccinated. But this is a serious disease in children. More than 1,000 have died, about 440 under the age of 4.
We’ve seen, as you said, tens of thousands of hospitalizations in this age segment. And this isn’t a benign illness in a lot of kids, healthy kids, as well as kids with a lot of comorbid illness. And we’re still seeing tens of thousands of hospitalizations every week in that pediatric age segment.
And the final point I will just say is that COVID is a much different disease in children who are immune-naive vs. children who have some prior immune exposure. So, if you can gain some prior immune exposure through vaccination, when a child is eventually going to confront this infection — and most people, eventually, over the course of their lifetime, are going to get this infection — it’s a much different disease once you’ve had that prior immune exposure and have some baseline immunity against this — this infection.
MARGARET BRENNAN: So, I hear you saying it’s not that your kid won’t get sick, if they get the shot; it’s that they will not necessarily be hospitalized, right?
DR. SCOTT GOTTLIEB: They’ll have more baseline immunity. They’ll have some T-cell protection. They’ll have memory B-cells that can protect them in that setting.
MARGARET BRENNAN: OK.
Look, every part of this pandemic has become politicized in some way. And there was this back-and-forth between the White House and the state of Florida, the governor there, Ron DeSantis, whose state is actively dissuading children from being vaccinated.
And there was this back-and-forth over not ordering vaccine supplies. What is this about? And he’s claiming the trial data was abysmal and it should not have gotten FDA authorization. He’s not a doctor. You’re a doctor. Tell me, what’s your view here?
DR. SCOTT GOTTLIEB: Well, look, these vaccines have gone through robust clinical studies. We have a lot of experience with these vaccines now in children, children ages 5 to 11.
This got a unanimous vote from a pretty diverse set of advisers at the FDA, 21-0 in a unanimous vote from CDC. So, I think people should feel confident in the safety and effectiveness of both of these vaccines.
I think there’s really two questions on a table with respect to the state of Florida. Are they right to actively discourage vaccination, and did they take steps to actively impede the ability of physicians in that state to get access to the vaccine?
I think they’re wrong to actively discourage vaccination. They could have taken a neutral stance and just merely said, we’re not recommending the vaccine for children. Instead, they affirmatively oppose the vaccine. I believe they’re the only jurisdiction to do that. Other countries that aren’t recommending the vaccine haven’t actively opposed vaccination. They haven’t said that kids shouldn’t get vaccinated.
With respect to the second question about the access to the vaccine for providers, I don’t think that they’re actively impeding the ability of pediatricians in the state to get the vaccine. They’re just not facilitating that. And this is a position that they said they would take all along. They articulated this much earlier in the year.
What’s happening in every other state is, the states really act as an intermediary, taking possession of the vaccine from the CDC, and then redistributing it to physicians within that state.
And so what other states did, where they preordered vaccine, in the state of Florida, they’re not playing that role. They told physicians, you’re going to have to direct order from the CDC. And because of that, no preorders were placed. Physicians were only able to place orders once this was approved.
So the state of Florida was the only state that wasn’t able to get preorders in, and the first shipments that went out were those preorders. Now, the White House has taken steps to…
MARGARET BRENNAN: Yes.
DR. SCOTT GOTTLIEB: … prioritize the orders that have come in from doctors in Florida. About 20,000 have come in as of yesterday. So, they’ll be getting vaccine this week.
MARGARET BRENNAN: But, to be clear, it’s an emergency use authorization. Private industry can’t buy this directly. The government has to be involved, correct?
DR. SCOTT GOTTLIEB: That’s right.
So, in the state of Florida, physicians are going on to the Web site, the Florida State Web site, and putting in orders. It’s effectively through the state. I mean, the state’s acting as a broker. Those orders are then going into CDC. But the state is not taking possession.
And what’s happening in other states is that they are taking possession of the vaccine, then redistributing it. And a lot of states have chosen to do that because they want to make sure there’s equitable distribution. They want to get early supply. They want to be able to target to certain — certain parts of the state.
In Florida, they said: We don’t think people should be getting this vaccine and we’re going to play no role in facilitating that access.
So, they’re not blocking access. They’re just not facilitating that access.
MARGARET BRENNAN: Right. Right.
No, interesting perspective from you, Dr. Gottlieb. Always love having you on the program.
We will be back with a lot more Face the Nation. Stay with us.
DR. SCOTT GOTTLIEB: Thanks a lot.
(ANNOUNCEMENTS)
MARGARET BRENNAN: We turn now to our economic challenges.
CBS News senior national correspondent Mark Strassmann has more on how we got here.
(Begin VT)
MARK STRASSMANN (voice-over): If your paycheck feels smaller, it probably is. Our economy is racing red hot, with widespread worry it’s careening toward a cliff.
JEROME POWELL (Federal Reserve Chairman): We have both the tools we need and the resolve that it will take to restore price stability.
MARK STRASSMANN: But beyond raising interest rates, there’s much the Fed can’t control, the multiple drivers behind the highest rate of inflation in 40 years, like Russia’s invasion of Ukraine, now almost in its fourth month, its global impact on the prices of minerals and metals, food and fuel.
Russian troops have blockaded or stolen Ukrainian wheat and corn. Corn futures trade at $8 per bushel, the highest price in a decade. And, most conspicuously, the war’s impact on gas prices. At roughly $5 a gallon, the average price of U.S. gas is $2 higher than it was a year ago, with a cascading impact throughout our economy.
Take poultry prices, up almost 17 percent year to year, roughly double the rate of inflation. Farmers need gas for equipment transportation, even fertilizer. They’re paying more, so you’re paying more for chicken. Another inflationary pressure, ongoing supply chain issues, an outgrowth of the pandemic. Demand dwarfs supply still.
Take China, makers of the world’s cheap goods. Its zero-COVID policies have shut down many of its manufacturing centers, including at one time much of Shanghai, its financial hub. U.S. car buyers feel it, too few options on the lot, new cars up almost 14 percent in a year, used cars up 16 percent.
Inflation is also high because of a competitive labor market. The jobless rate is under 4 percent, with almost two available positions for every job seeker. One way employers compete for scarce workers, raise wages.
And yet, despite everything costing more, Americans keep spending right through the price increases, a combination of pandemic cabin fever and deep pockets. Washington pumped out $6 trillion in stimulus in two years, including putting checks in the hands of consumers. And, as a country, we have money to burn, $2.3 trillion in excess savings.
What isn’t clear, whether inflation has peaked or if rising interest rates will slow growth too dramatically and trigger a recession.
(End VT)
MARK STRASSMANN: And then there’s the battle of inflation, psychology, consumer confidence, something the Fed can help shape, if not control.
Can its policies and messaging help balance supply and demand, given the widespread belief out there that, with inflation, things could get worse before they get better? — Margaret.
MARGARET BRENNAN: Mark Strassmann, thank you.
Coming up, we will speak with two people who help shape economic policy, Director of the White House National Economic Council Brian Deese, as well as the president of the Federal Reserve Bank of Kansas City, Loretta Mester.
Stay with us.
(ANNOUNCEMENTS)
MARGARET BRENNAN: If you can’t watch the full Face the Nation, you can set your DVR, or we are available on demand. Plus, you can watch us through our CBS or Paramount+ apps.
We will be right back with a lot more Face the Nation, so stay with us.
(ANNOUNCEMENTS)
MARGARET BRENNAN: Welcome back to Face the Nation.
We’re joined now by Brian Deese. He is the director of President Biden’s National Economic Council.
Good morning, and welcome to the broadcast.
BRIAN DEESE (Director, National Economic Council): Thanks for having me.
MARGARET BRENNAN: You have an incredible challenge on your hands.
Yes, the jobless rate is low, but wage growth not keeping pace with inflation. What do you say to Americans who are thinking that they might need a second job to pay their bills?
DIRECTOR BRIAN DEESE: Well, it is an uncertain moment. And we face real challenges, global challenges. Inflation is a global challenge, 9 percent in the U.K., over 8 percent in Europe.
But we also have real strengths here at home. And so what I would say is, we need to navigate through this transition in a way that gets us to stable growth, without giving up all of the incredible economic gains that we’ve made. You mentioned the jobless rate at 3.6 percent. We’ve also seen household balance sheets strengthened over the course of this period.
MARGARET BRENNAN: Congressional Budget Office predicts that high inflation will persist until 2024. The Treasury secretary has said it will stay higher than the originally forecast 4.7 percent.
When does it come down? How much time are you talking about?
DIRECTOR BRIAN DEESE: Well, prices are unacceptably high right now. And that’s why the president has said we need to make this our top economic focus and do everything that we can to get them down.
Most independent forecasters, the Blue Chip, the Federal Reserve, as you said, see inflation beginning to moderate over the course of this year. But our focus is on, what are the steps, what are the policies that we can take?
And the single most impactful thing that we could do right now is to work with Congress to pass legislation that would lower the costs of things that families are facing right now.
MARGARET BRENNAN: Like what, and how?
DIRECTOR BRIAN DEESE: Like prescription drugs.
We could lower the cost of prescription drugs by allowing Medicare to negotiate better prices. That would actually lower federal spending, and it would lower the costs that people pay.
MARGARET BRENNAN: The president said this week in a rare interview that he actually has the votes to do it. Where’s the deal? When’s the vote?
DIRECTOR BRIAN DEESE: Well, lowering prescription drug costs is one piece. Lowering utility costs by providing tax incentives for energy is another piece, but, equally important, lowering the federal deficit by enacting long-overdue tax reform.
If we can do a package like that, and we can move forward in the near future, it will not only help in lowering prices, but it will send a signal to the markets and the global economy that the United States is really deadly serious about taking on this inflation.
MARGARET BRENNAN: Hiking taxes isn’t going to change the price of milk. When and how are you actually putting forward this package?
DIRECTOR BRIAN DEESE: The package has been debated. It’s been worked through.
MARGARET BRENNAN: It failed back when — Build Back Better’s version of it.
So, if inflation is the number one priority right now, when are you scheduling a vote to do the things you just laid out?
DIRECTOR BRIAN DEESE: We’re working very closely with congressional leadership, with Senate leadership on that.
Senator Schumer is working with his caucus to try to get a final package in place. And we’re hopeful that we’ll see progress on that in the coming weeks.
MARGARET BRENNAN: So, in the coming weeks. You think you can get this done on a party-line vote before September?
DIRECTOR BRIAN DEESE: We’re hopeful we can move forward on that and other priorities in Congress as well.
There’s a bill on semiconductors, which I know you’ve talked about on this program, computer chips. The lack of affordable and available computer chips has driven up prices across the economy, including in things like automobiles. We’re hopeful that we can move that as well before the August recess. That would provide some real relief to the economy as well.
MARGARET BRENNAN: Despite all of what you laid out — and I know the president said recession is not inevitable — it seems increasingly probable.
The Conference Board put out their survey this week. It shows eight out of 10 global CEOs now expect a recession within the next 12 to 18 months.
So, what power does the president have to stop that kind of contraction?
DIRECTOR BRIAN DEESE: Well, I think what — where we are in the economy right now is in a transition.
And I spoke to CEOs this — over the course of the past week from sectors across the economy, and they’re figuring out how to navigate this transition. Some of this is exactly what we need to see.
MARGARET BRENNAN: They’re planning around a recession.
DIRECTOR BRIAN DEESE: Well, they’re planning around transitions in our economy.
People are buying less goods spending time at home. They’re spending more on services. That creates some real challenges for some companies and some CEOs.
What I would say is that not only is the recession not inevitable, but I think that a lot of people are underestimating those strengths and the resilience of the American economy.
MARGARET BRENNAN: But shouldn’t you level with the American public and just say, we are in uncharted waters?
I mean, even the Federal Reserve Chair said this week there are things beyond his control. He can’t control the price of gasoline. He can’t control the war in Europe. He can’t control COVID. He has a limited set of tools. And so do you. Is the president powerless here?
DIRECTOR BRIAN DEESE: Absolutely not.
Look, we face unprecedented global circumstances, a global pandemic and a war in Europe that is affecting the global economy. But, at the same time, we have a strategy that will make a difference.
That legislation that we were talking about, lowering the cost of prescription drugs, lowering the cost of energy, lowering the federal deficit, that would make a real difference.
MARGARET BRENNAN: And you have all 50 Democrats on board for that? Because you didn’t last time you tried parts of this bill.
DIRECTOR BRIAN DEESE: Look, nothing is — nothing is done until it’s done. We’re hopeful. We’re working hard. We have got our head down, and we’re going to try to get something done.
MARGARET BRENNAN: So, a number of economists — I want to put up a chart of inflation here for our audience to see, measured by the Consumer Price Index, so from the beginning of the pandemic through now.
And, as you can see, the tick-up began a good year before the war in Ukraine began. A number of economists, including at the San Francisco Fed, have said that the tremendous fiscal spending that went under way, the $6 trillion in two years, did add to that, including, as you can see right on there, the $2 trillion that the Biden administration pushed through in the spring of 2021.
So when people look at that, and they say, well, the White House told us why that inflation would be transitory, the White House told us we could go through with this kind of spending, we’d be fine, even when Democrats within your own party were warning this would add to inflation, how do you win credibility here to the public and say, this time, we’re not wrong?
DIRECTOR BRIAN DEESE: Well, you just have to look around the world today to recognize that the two principal drivers of inflation are the pandemic and Putin.
We’re seeing this everywhere. It is a global phenomenon. As I mentioned in the U.K., inflation’s hit 9 percent.
MARGARET BRENNAN: Right, but the point is, those are the things you can’t control.
DIRECTOR BRIAN DEESE: In Europe, it’s over…
MARGARET BRENNAN: I’m talking about the things you can.
DIRECTOR BRIAN DEESE: Absolutely.
MARGARET BRENNAN: So, how do you win that credibility back?
DIRECTOR BRIAN DEESE: Well, if we look at the things that we can control, we win credibility by taking action.
This president is acting. This president galvanized the global community to do a historic release of oil from the Strategic Petroleum Reserve, a million barrels a day. Leading oil market analysts this week said that action was single-handedly responsible for keeping oil prices from going up even further.
MARGARET BRENNAN: Right, short term.
DIRECTOR BRIAN DEESE: We are going to take action. We’re going to prioritize. We’re going to make clear that tackling inflation is our top economic priority.
MARGARET BRENNAN: One of the things that you do have control over at the executive is the approach on tariffs.
Treasury Secretary Yellen told me back in November, she acknowledged that the Trump era China tariffs do add to inflation domestically here. The president was asked about this yesterday and said: “We are still in the process of making up my mind.”
If inflation is the number one priority, why are you dragging out this decision?
DIRECTOR BRIAN DEESE: Well, I will let the president’s words speak for himself.
We’re looking closely at it. And I anticipate the president will have more to say on that issue in the coming weeks.
But, just to be very clear, over the course of the last couple of months, this is an issue about our supply chains and about getting goods to the United States in a way that is effective and cheap. And the president has been incredibly focused on that.
MARGARET BRENNAN: Well, we’ll continue to track it.
Thank you very much, Brian Deese, for coming in.
DIRECTOR BRIAN DEESE: Thank you.
MARGARET BRENNAN: And we’ll be right back.
(ANNOUNCEMENTS)
MARGARET BRENNAN: There are just 12 people who get to vote on whether to adjust interest rates and by how much, the members of the Federal Reserve’s Open Market Committee.
Loretta Mester is one of those people and she joins us from Philadelphia this morning.
Good morning to you.
LORETTA MESTER (President, Federal Reserve Bank of Cleveland): Good morning, Margaret. Glad to be with you.
MARGARET BRENNAN: Glad to have you back.
You know, this sustained high inflation continues to surprise Federal Reserve officials. Chair — Chairman Jerome Powell — excuse me — said as much this week, and that’s why he said there was this unusually large interest rate increase of 75 basis points.
He expects another similar one in another few weeks. What would alter that plan for you?
LORETTA MESTER: Well, what we’re looking at is trying to get our interest rates up to a more normal level, so that we can stem some of the oversized demand momentum in the economy and bring it back down, so that we can relieve some of those inflationary pressures.
So we’re going to be looking for the month-to-month changes in inflation rates to get some really good evidence on whether we’ve seen inflation first stabilize and then begin to move back down. It is going to take a while to get inflation back down to 2 percent.
But what we’re looking for is that we could see some moderation in demand, which has been incredibly strong, bringing it back in alignment with supply side, which, of course, as you know, has been constrained, alleviating some of that price pressures, getting inflation moving back down, and on a sustainable path back to 2 percent, which is our inflation goal.
So that’s what we’re going to be looking at is, what’s going on in the monthly numbers? And, frankly, the May CPI report basically was bad across the board, in terms of, we didn’t really see inflation stabilize. In fact, some of the measures actually looked worse in May than in April. And so that was part of the calculus of why moving up at a slightly higher-than- normal rate increase happened at our meeting last week.
MARGARET BRENNAN: Well, and one person did dissent, Esther George of the Kansas City Fed. She said she thought the Fed was moving by too much and too fast. She argued: “Significant and abrupt changes can be unsettling to households and small businesses.”
Why is she wrong? And are you confident these dramatic hikes won’t trigger a recession?
LORETTA MESTER: Right.
Well, I would never say Esther’s wrong. It’s an alternative view. We had signaled that we thought 50 would be appropriate, but then we got new data. And we’ve also said that we really need to be nimble in this period of uncertainty.
And when we see data moving in the wrong direction, or continuing to move in the wrong direction, and information that inflation expectations, not in the short run, but even in the longer run are moving up, that was what was convincing to me that it was appropriate to move at a bigger clip than we had signaled early on.
MARGARET BRENNAN: And you would expect that next time?
LORETTA MESTER: But, again, clearly, what we’re going to be looking at is, is demand moderating and coming better in line with supply, and is inflation turning back down?
That’s going to be key here. We need to see compelling evidence that inflation is beginning to move back down towards our goal.
MARGARET BRENNAN: Well, the Treasury Secretary, Janet Yellen, you know her from her time when she was running the Federal Reserve.
She said this morning the economy will slow. How much are you expecting it to slow? Are you predicting a recession?
LORETTA MESTER: So, I’m not predicting a recession.
If you look at the forecasts that were submitted and released earlier this week of all the participants in the FOMC meeting, you’ll see that we do have growth slowing to a little bit below trend growth, and we do have the unemployment rate moving up a little bit. And that’s OK, right?
It’s sort of, we want to see some slowing in demand to get it in better line with supply. But there’s other things that are going to be happening later in the year too. For example, we’ve already seen households really shifting some of their spending, rather than spending on goods, which really was the bulk of spending coming out of the pandemic, height of the pandemic, when the economy reopened, into more services.
That’s going to help alleviate some of the upward pressure on goods prices. So other parts of the economy will be moving, as well as what we’re doing on interest rates. We’ve already seen interest rates have an effect in the housing sector, where the housing sector is pulling back from the heights that it had seen.
So, we want to see some moderation in demand, right? What we’re going to be navigating, though, is setting our policy rates, our interest rates, so that we can maintain a healthy economy and healthy labor markets as we go through this period.
But there’s a lot of uncertainty out there. And we’re going to have to be very careful and nimble in how we approach this pulling back of this very accommodative monetary policy that’s something more appropriate to the economy.
MARGARET BRENNAN: Right.
The Fed chair, though, was pretty clear that there are things that are beyond your control. Monetary policy can’t solve this problem. He said gas prices are beyond your control, the war in Ukraine, COVID.
So, for people at home, does that mean they should assume their food and energy costs are going to stay high for the next year or two?
LORETTA MESTER: So, I agree with Chair Powell, right? The way monetary policy works is on the demand side of the economy. We can slow some of that demand that’s way above where the supply currently is.
But we should expect to see some moderation and some improvement on the supply side as we go forward as well. Highly uncertain, I agree. Monetary policy can’t control that. What we can do is really do what we can with our tools to get this inflation problem. And, as you said, it’s at a 40-year high. We’ve got to get monetary policy in a good place to combat that excessive demand and the excessive demand that really is driving price pressures.
That’s what we can do with our tools. And we’re committed to doing that and keeping inflation — moving it down back to 2 percent. But the reason it’ll take a while is because we need to have that supply side come back into better balance as well.
MARGARET BRENNAN: Right.
LORETTA MESTER: And that’s why it isn’t going to be immediate that we see 2 percent inflation.
MARGARET BRENNAN: Right.
LORETTA MESTER: It will take a couple of years. But it will be moving down.
MARGARET BRENNAN: A couple of years.
I mean, the other thing that’s hard to measure is just people’s confidence, right? And when they look at being told by the administration, by the Fed that inflation was transitory, they can say, people were wrong, right? The officials got it wrong.
Gary Cohn, former president of Goldman Sachs, formerly Trump economic adviser, said the Fed was clearly behind the curve, clearly late in raising rates, and now the runway for a soft landing is now much shorter and narrower.
You’re not predicting recession, but you’ve got to acknowledge that there have been missteps, and the risk is rising.
LORETTA MESTER: Right.
The recession risks are going up, partly because monetary policy could have pivoted a little earlier than it did. We’re doing that now by moving interest rates up. But, of course, there’s a lot of other things going on as well. The Ukraine situation, which is a tragedy, right, has really led to that high oil prices that everyone’s feeling the brunt of and high gasoline prices.
So other things were moving on the supply side as well. No doubt, supply conditions remain constrained longer than I think anyone thought. The businesses that we talked to in the Cleveland district all thought that there would be meaningful improvement even as early as last year. We didn’t get that. Now they don’t see meaningful improvement until farther — much further out.
So, again, other things are going on.
MARGARET BRENNAN: Right.
LORETTA MESTER: What I want to say, though, is, we at the Fed are very committed to using the tools at our disposal, right, to bring this inflation under control and getting it back to 2 percent.
It is the number one challenge in the economy now.
MARGARET BRENNAN: It is.
LORETTA MESTER: And I believe it’s necessary to do that if we want to sustain healthy labor markets.
MARGARET BRENNAN: Right.
LORETTA MESTER: I don’t see this…
MARGARET BRENNAN: OK.
LORETTA MESTER: … as a tradeoff at all.
MARGARET BRENNAN: OK.
Well, it’s a — it’s a huge economic challenge and a political one. We’ll continue covering it here.
Thank you, Loretta Mester.
We’ll be back in a moment.
(ANNOUNCEMENTS)
MARGARET BRENNAN: Today is Juneteenth, a federal holiday marking the abolition of slavery and African-America freedom.
June 19, 1865, was when the last enslaved people in Texas received word of their freedom, more than two years after President Abraham Lincoln had signed the Emancipation Proclamation.
For more, we’d like to turn to CBS News racial justice contributor, Dr. Ibram Kendi, who is also the author of two new books, “How to Raise an Antiracist” and “Goodnight Racism.”
Good morning. Happy Father’s Day, by the way.
IBRAM KENDI: Thank you.
(LAUGHTER)
MARGARET BRENNAN: I know you have a 6-year-old daughter. So, I wonder, how are you going to teach her what this holiday is?
IBRAM KENDI: Well, I’m actually going to teach her that it’s Freedom Day and that, throughout this nation’s history, there’s been two perspectives on freedom, really two fights for freedom.
Enslaved people were fighting for freedom from slavery, and enslavers were fighting for the freedom to enslave. And, in many ways, that sort of contrast still exists today. There are people who are fighting for freedom from assault rifles, freedom from poverty, freedom from exploitation, and then there are others who are fighting for freedom to exploit, freedom to have guns, freedom to maintain inequality.
So I really want to get her to understand that there are multiple kinds of freedom, and she should be fighting for and joining with those who are fighting for freedom from something like slavery.
MARGARET BRENNAN: So, this concept gets to sort of the core of what so many of your books are about, when you say anti-racist.
And I just want to be clear for people who are listening. You do not teach Critical Race Theory, or CRT, which has become very politicized. You focus on this idea of anti-racism.
How do you explain to people at home the difference? And for those who say, this might be too advanced for a child, how do you — how do you respond?
IBRAM KENDI: Well, the difference is, Critical Race Theory is an anti- racist sort of theory, but I’m thinking about something — I’m really trying to get the American people to really understand that there’s inequality, and the cause of that inequality is not what’s wrong with, let’s say, black people. It’s what’s wrong with — with bad policies.
And the way kids can understand it is, kids understand bad rules. My daughter understands what’s not fair. And we can teach children that there’s bad rules in society. There are things that are not fair in society. And that’s why, let’s say, black people have less. It’s not because they are less.
MARGARET BRENNAN: You — so, I think, for people at home who are trying to understand the concept, it’s interesting, because you basically are arguing being colorblind is not a virtue.
For so long, people were taught, be blind to color. You’re saying acknowledging this is important, because, if you ignore it, it allows racism to survive. Is that right?
IBRAM KENDI: It does.
And, unfortunately, we, as parents and teachers and caregivers of children and just adults, want to believe that, but, unfortunately, it’s just not true. I mean, studies show that, as early as 3 years old, our kids have an adult-like concept of race. They’re not only seeing color, but they’re attaching it to qualities, like smartness, like honesty.
And so we have to share with our children, yes, there are all these different colors, but they don’t mean anything, just like a book cover doesn’t mean anything. You literally have to open the book, and you have to open someone’s heart to see who they and what they truly are.
MARGARET BRENNAN: You know, Condoleezza Rice, the former secretary of state, was on this program around this time last year. And I was reading her remarks.
And she said, when it comes to teaching about race, she wants children to be taught about America’s birth defect of racism, but also forward progress on its issues. She said: “I don’t want this to be black against white, my weaponization of my identity against yours.”
Do you see that weaponization happening, because there is fear of that?
IBRAM KENDI: I actually think that that weaponization can happen, but that’s why, for instance, I talk about the clash between racism and anti- racism, as opposed to black and white.
And I also think it’s important for us to understand what I call in my work racist progress, how, over time — let’s take voter suppression policies, have become more sophisticated over time. And so, if we’re not recognizing both racial progress and racist progress, then we’re going to be missing the ways in which racism and why racism is persisting and why inequality is persisting.
MARGARET BRENNAN: You know, one of the things that we are tracking right now in this country is this threat of domestic extremism.
And, just this week, the 18-year-old white man who killed 10 Black people at a supermarket in Buffalo, New York, made an appearance in federal court. He apologized to his parents, but explained his motivation as being about preventing the elimination of the white race.
How do parents prevent their child from being radicalized like that? I mean, that sounds like online recruitment for terrorism or something.
IBRAM KENDI: It is.
And that’s a huge, huge problem, I mean that the number of particularly white male teens who are being recruited in multiplayer video games, online through memes, through direct messages is really high.
And the way that we protect our kids from that is ensure they can identify white supremacist ideology. And the way you — the way they can identify white supremacist ideology is to teach them about it. There’s no way they’re going to be able to protect themselves from it, just like they can’t protect themselves from cars. They have to understand to look both ways, whether they’re teenagers or young people, so they won’t get harmed.
MARGARET BRENNAN: Dr. Kendi, thank you very much. Good luck with the books.
And Happy Father’s Day again.
IBRAM KENDI: Thank you.
MARGARET BRENNAN: We’ll be right back.
(ANNOUNCEMENTS)
MARGARET BRENNAN: That’s it for us today. Thank you all for watching. And a reminder that you can set your DVR if you can’t watch the full show.
And, to all the dads out there, including my dad, my father-in-law, and my husband, happy Father’s Day.
Until next week, for Face the Nation, I’m Margaret Brennan.
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