On this “Face the Nation” broadcast, moderated by Margaret Brennan:
- Rep. Garret Graves, Republican of Louisiana
- Sen. Joe Manchin, Democrat of West Virginia
- Bank of America CEO Brian Moynihan
- Ukrainian Ambassador Oksana Markarova
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: debt crisis averted. Now what else can a divided Washington accomplish for Americans and the economy?
President Biden signed the bipartisan deal to cut federal spending and suspend the nation’s debt ceiling just hours before what could have been a catastrophic default.
(Begin VT)
JOE BIDEN (President of the United States): No one got everything they wanted, but the American people got what they needed.
(End VT)
MARGARET BRENNAN: We will ask two dealmakers, West Virginia’s Democratic Senator Joe Manchin and Louisiana Republican Garret Graves, about what’s next for the country.
Plus, Bank of America CEO Brian Moynihan on how brinkmanship impacts an ever-changing economy.
Then: The field of Republicans running for president is growing, with one high-profile competitor diving in.
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GOVERNOR RON DESANTIS (R-Florida) (Presidential Candidate): Our great American comeback will start by sending Joe Biden back to his basement in Delaware.
(End VT)
MARGARET BRENNAN: And more expected to cruise into the race this week.
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MIKE PENCE (Former Vice President of the United States): Come this Wednesday, I’m announcing in Iowa.
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MARGARET BRENNAN: We will check in with our experts CBS News political panel on what voters can expect as the race intensifies.
Overseas, Russia steps up its attacks in and around Kyiv. Can Ukraine’s coming counteroffensive put Moscow back on its heels? We will check in with Ukrainian Ambassador Oksana Markarova.
It’s all just ahead on Face the Nation.
Good morning, and welcome to Face the Nation.
We have a lot to get to this morning.
And we begin with Republican Congressman Garret Graves, who led Republican negotiators during the debate over raising the debt ceiling. He joins us from Baton Rouge, Louisiana.
Good to talk to you.
REPRESENTATIVE GARRET GRAVES (R-Louisiana): Hey. Great to be with you.
MARGARET BRENNAN: President Biden said you all were respectful, honest and operated in good faith.
Do you see any sign on the heels of this that Republican leaders can work with the White House on big issues like immigration reform and border security? Is there momentum?
REPRESENTATIVE GARRET GRAVES: Look, the negotiations certainly were in good faith, but they also included a lot of candor.
We had some tense moments throughout. But I would love to tell you that we could build upon this. We certainly have a crisis in the energy space. We continue to have a financial crisis. And, as you indicated, immigration is a huge issue where we should be able to work together.
MARGARET BRENNAN: Well, more Democrats and Republicans actually voted for the deal that you negotiated. And it leaves largely intact most of the President’s economic agenda.
How can you claim, as you told my CBS colleague the other day, that the White House got schooled?
REPRESENTATIVE GARRET GRAVES: Because the White House laid down about seven red lines, including that they wouldn’t negotiate, that they wouldn’t allow anything to be done on work requirements, that they wouldn’t allow any changes to environmental laws, that they wouldn’t allow us to take any funds from IRS agents, and on and on.
And yet every single red line that they laid down, we crossed right over in negotiations, resulting in the largest savings in any legislation in the history of the Congress. This was a huge accomplishment, huge legislative wins. And lastly, Margaret, I think when you look at the president’s statements, all he could do is talk about things that didn’t happen versus anything that did that was positive for his agenda.
MARGARET BRENNAN: Yes. Well, a trillion is a trillion-and-a-half over 10 years in savings.
But you said there was an erosion of trust within your own party between you and some of those harder-line Freedom Caucus members, who said it was a bad deal that you negotiated. And, this morning, Congressman Ken Buck of Colorado said Speaker McCarthy has credibility issues, and while a motion to vote vacate won’t happen right away, he should be concerned about being removed from office.
How big of a problem is this right wing of your party?
REPRESENTATIVE GARRET GRAVES: Look, there were erosion of trust issues because folks went out and began attempting to define or interpret a deal while we were still in negotiations. There wasn’t even an agreement struck.
And, of course, their interpretation or definition of the agreement, as you can imagine, was flawed. In regard to Speaker McCarthy, let’s be crystal clear. This speaker has been one of the best strategists we’ve ever had, delivering transformative immigration, energy, parents bill of rights and other legislation that, looking back at previous congresses, not even one of these things has been done, much less we’re about 10 huge wins this year.
MARGARET BRENNAN: Yes.
But 71 members of the House Republican caucus voted against it. I know you had 67 percent. I mean, you had the majority of your caucus, but 71, that’s not nothing there. I mean, can you rule out a government shutdown in the fall? Are these hard-line members going to be emboldened on the back of this?
REPRESENTATIVE GARRET GRAVES: Well, Margaret, let’s talk about what their goals are. Their goals are trying to change the trajectory of spending, transform Washington in a way that’s more responsive, long-term thinking about the next generation and the fiscal crisis that we’re approaching.
I don’t think that should be a partisan issue. We should all be on board with those objectives. In this case, I think that leverage was trying to be exercised that really threatened the economy in a large way. We’ve already seen, under this administration, stock market has lost around $9 trillion in value, hurting retirement accounts and families all across the country.
MARGARET BRENNAN: Yes.
REPRESENTATIVE GARRET GRAVES: We can’t continue to see those types of challenges.
And so I do think that, in the appropriations process, we are going to be working hard to continue the momentum that we’ve gained through this negotiation, saving trillions of dollars.
MARGARET BRENNAN: Can you rule out a government shutdown?
REPRESENTATIVE GARRET GRAVES: I’m not ruling out anything. It depends on how reasonable each side is, obviously, in the negotiations. It’s very difficult to predict.
But I want to be clear. Republicans are going to demand continuing to build upon the success that we were able to achieve in debt ceiling negotiations, in changing the way that Washington spends.
MARGARET BRENNAN: But I know you’re one of Speaker McCarthy’s lieutenants here, but when you hear a member go out on television on CNN and say that he should be worried about his job, that he doesn’t have the faith of the caucus, that’s got to be concerning.
That affects your tactics, at a minimum.
REPRESENTATIVE GARRET GRAVES: Look, I have known Ken Buck for years and certainly respect him.
It is not a mainstream position. I will tell you right now, Speaker McCarthy’s position is absolutely safe. He is going to continue delivering wins for the country, changing the direction of Washington and being more representative of the — of the priorities of Americans across the country.
I have no doubt his position is safe, and we’re going to keep marching forward continuing to build upon the historic wins that he’s been able to achieve this year.
MARGARET BRENNAN: So, to — to get what you’re calling these historic wins, though, Democrats would say Republicans took the economy hostage. It was a pretty big game of chicken here to threaten default.
I mean, Fitch Ratings is now saying, even with this deal, they still — still could downgrade U.S. credit outlook here because of political standoffs around the debt limit and last minute suspensions before the X- date. It lowers confidence in America.
Why was it worth possibly damaging America as — as the benchmark of the financial system and the credibility?
REPRESENTATIVE GARRET GRAVES: You know, yeah, Margaret, it’s a great question.
I think it’s one that you need to pose to the White House, considering the fact that they refuse to negotiate for 100 days, despite indicating otherwise. They’re the ones who brought us to the brink. If we had begun negotiations back in February, when the president and speaker first had their — their meeting to discuss this…
(CROSSTALK)
MARGARET BRENNAN: Right, but it was a point of leverage that Republicans are using.
(CROSSTALK)
REPRESENTATIVE GARRET GRAVES: … then we’d never — we wouldn’t be in this situation today. We would have finished negotiation months ago.
MARGARET BRENNAN: So would you take — some Democrats are talking about take the debt ceiling just off the table entirely. I know you’ve suspended it for two years. But what about a vote to just get rid of it?
REPRESENTATIVE GARRET GRAVES: No, I don’t think that’s appropriate…
MARGARET BRENNAN: Do you need the leverage?
REPRESENTATIVE GARRET GRAVES: I think that it’s really important, just like if you had a child mark that hit their credit card limit and was unable to pay their credit card bill that month, you’d probably step in and help them out.
I know that I would. But I would also have a candid conversation about reform of spending. The Committee for Responsible Federal Budget has calculated that every child or grandchild born in America today is going to end up paying about $4.5 million because of the irresponsible spending in Washington, $4.5 million over their lifetime.
That is absolutely inexcusable. And we cannot continue on this trajectory.
MARGARET BRENNAN: Well, one of the things that fellow Republicans are criticizing is the fact that you adopted the Biden defense budget and the 3.5 percent boost, which doesn’t keep up with inflation. How do you justify that that doesn’t hurt defense?
Because that’s what Republicans like Lindsey — Lindsey Graham are saying.
REPRESENTATIVE GARRET GRAVES: Yes. Yes, it’s a great question.
So — so let’s keep in mind that we’re actually increasing defense by about $20 billion to $886 billion. When you take every other function of government, it equals about $704 billion. There’s no question in my mind that we can improve efficiency of the Department of Defense, the large- scale acquisition programs, whether it be weapons systems, aircraft and others.
We’re all familiar with the toilet seats and hammer stories of the past, where the Department of Defense was paying outrageous prices. So we are going to continue…
MARGARET BRENNAN: Yes.
REPRESENTATIVE GARRET GRAVES: … ensuring that our war fighters have the upper hand, while we also ensure that the Department of Defense improves its efficiency.
MARGARET BRENNAN: Well, we’ll have to have you back.
Garret Graves, we’re going to leave it there for today.
We turn now to West Virginia Democratic Senator Joe Manchin.
Senator, welcome back. We really came down to the wire here.
SENATOR JOE MANCHIN (D-West Virginia): Yes. Well, it’s good to be with you.
MARGARET BRENNAN: When you were…
SENATOR JOE MANCHIN: Well, it’s a shame that we do that, yes.
MARGARET BRENNAN: I know.
When you were with us in March, I remember you saying Speaker McCarthy and Joe Biden, they just have to stop grandstanding and they needed to start negotiating. How much of a miscalculation was it by Democrats to wait?
SENATOR JOE MANCHIN: I think it’s harmful.
It shows you that the extreme left was pushing so hard not to even negotiate, not to even talk about it, you know, just hold your ground, hold your ground, hold your ground. That’s not who we are in America. The process of democracy, you sit down and work.
I want to get…
MARGARET BRENNAN: Well, they — they said that the Republicans were hostage-takers, right?
SENATOR JOE MANCHIN: How can you be a hostage-taker if basically you’re talking about shouldn’t we recognize that we have an unmanageable debt?
Shouldn’t we figure out how we got here so fast and so high at $31.5 trillion? Trajectory is out of sight if we don’t do something. So I want to give both sides, negotiating teams, credit.
When you have Garret Graves and — Congressman Graves and his team, on behalf of Kevin McCarthy, did a wonderful job, and when you have basically — you have Shalanda Young, you have Steve Ricchetti, and Louisa Terrell working on behalf of the president, those were good people that worked together to make this happen.
It’s a shame that we didn’t acknowledge it much quicker…
MARGARET BRENNAN: Yes.
SENATOR JOE MANCHIN: … three months ago, at least, and not come down to brinksmanship, when it kind of throws the uncertainty into the market to where here we are, the reserve currency of the world market.
MARGARET BRENNAN: Yes.
SENATOR JOE MANCHIN: The reserve currency of the world has to have stability where people believe that it’s — it’s safe.
MARGARET BRENNAN: Yes.
SENATOR JOE MANCHIN: You can’t play these games.
MARGARET BRENNAN: Agreed.
Well, you — you also got an energy project tucked into this, the Mountain Valley Pipeline, which cuts through your state. It’s also cutting through Virginia. And Senator Tim Kaine said, this was a slimy way to handle it — that was his word — because it bypasses the courts and has the government seizing land from people in a hard-hit part of his state.
How do you respond to that?
SENATOR JOE MANCHIN: Well, first of all, Tim Kaine is my dear friend and a good person. He and I were governors together, so we understand both of our states very well.
And the Southwest Virginia area he’s talking about is entirely — my entire state is demographics along those lines. First of all, this has been under review for over eight years, eight years. Now, after eight years, basically, a lot of this land has already been purchased and people have been paid fair market values. And they’ve negotiated and paid.
Next of all, it’s gone through eight NEPA reviews, eight. It’s been in the court system nine times. And then, on top of that, Margaret, these processes or these projects cannot move forward…
MARGARET BRENNAN: Yes.
SENATOR JOE MANCHIN: … unless the FERC commission determines there is a need. Now, three times, they have issued a need for this product as far as more gas in the market.
MARGARET BRENNAN: Right.
SENATOR JOE MANCHIN: Next of all, Jennifer Granholm and this administration came out with a statement saying this is the national interest.
The people in the Carolinas are paying 10 times more than we are in West Virginia for the gas we produce. That’s ridiculous for them to have that…
MARGARET BRENNAN: Well…
SENATOR JOE MANCHIN: … a heck of a stranglehold on them, and also helping the rest of the secured national markets as far as energy.
You have to be independent. You have to be secured. This is a great project that’s going to help, not only just West Virginia…
MARGARET BRENNAN: OK.
SENATOR JOE MANCHIN: … but the entire energy security system.
MARGARET BRENNAN: OK.
Well, it’s interesting, because, last month, you said you were going to block all of Joe Biden’s — President Biden’s EPA nominees until he halts a radical climate agenda. But he just green-lit a whole bunch of fossil fuel projects, including this one.
You’ve been very critical of the president in recent months. Does this change your point of view? Are you ready to endorse him?
SENATOR JOE MANCHIN: Well, the bottom line is, is that I’m going to work whenever I think that, basically, we’re moving in the right direction.
What you’ve just seen is basically the extremes trying to run this operation, the United States government, from the far left and far right.
MARGARET BRENNAN: Yes.
SENATOR JOE MANCHIN: It was the middle that pulled everybody together. It was basically reacting to the people saying, enough is enough.
That’s what bothers…
(CROSSTALK)
MARGARET BRENNAN: Well, that wasn’t a yes when I asked you about endorsing him, though.
SENATOR JOE MANCHIN: Well, the bottom line is, I’m not involved in the political process right now, with all the things that we have to do.
Everyone thinks about politics first. I don’t. It’s not about the politics. It’s not about my reelection or anyone else. We have an awful lot of work to do. And we still have permitting to get done.
MARGARET BRENNAN: Yes.
SENATOR JOE MANCHIN: We have geopolitical unrest around the world. We have to support Ukraine. We have to make sure that we get our financial house in order and get inflation down.
MARGARET BRENNAN: OK.
SENATOR JOE MANCHIN: But if you throw politics in, I will guarantee you, you won’t get any decisions on any of that.
MARGARET BRENNAN: OK. To…
SENATOR JOE MANCHIN: And I don’t think we would have got this bill done.
MARGARET BRENNAN: To get all those permitting issues done, because you only got a fraction of them in this bill, you want things that will help speed up energy infrastructure permitting for both fossil fuels and for clean energy.
Do you need a second term?
SENATOR JOE MANCHIN: Absolutely.
MARGARET BRENNAN: Do you need a second term to get those things done?
I mean, another term. Excuse me. Are you running for reelection?
SENATOR JOE MANCHIN: Well, we basically continue…
(LAUGHTER)
SENATOR JOE MANCHIN: You have got to continue to keep working.
We can get it done now. We’re on the brink of getting it done right now. We could have got it done last year, but politics entered into and we couldn’t. And now here we are. We got part of it done. We got basically some reforms done as far as permitting.
MARGARET BRENNAN: Right.
SENATOR JOE MANCHIN: And now what we can do is basically make sure that we’re able to get the pipelines and the delivery system we need for clean fossil all over this country to be energy-independent, and also be able to invest in the technologies, the cleaner technologies with — with less carbon.
But we’re going to need more transmission.
MARGARET BRENNAN: But you know why…
SENATOR JOE MANCHIN: I’m for all-in — above energy policy.
MARGARET BRENNAN: But you know why I asked it that way, because…
SENATOR JOE MANCHIN: I can support this from wherever I’m at.
(LAUGHTER)
MARGARET BRENNAN: From wherever you’re at. You’re leaving your options open.
SENATOR JOE MANCHIN: Yes, I know. I know exactly why.
(LAUGHTER)
MARGARET BRENNAN: You know why, because, Jim Justice, your governor, Republican, I mean, he is coming for your job.
He has declared. And I know you have said you are going to take your time, until the end of the year to decide. But doesn’t he have an at least six- month advantage here? Don’t you need to tell people what your plans are?
SENATOR JOE MANCHIN: Well, here’s the thing, Margaret.
You just said I’m — I’m — about my job. My job is to do what I can to help the people of West Virginia and support this great country of ours and defend the Constitution. That’s truly the primary cause of my job. It’s not for me to get reelected.
MARGARET BRENNAN: Yes.
SENATOR JOE MANCHIN: Now, if I run, I’m going to win.
And I’m looking at everything I can to basically help my country to be stronger, to be more moderate, more centrist-governed than anything I have ever done. That’s what my focus is, because I know that’s where good decisions — look what happened here.
We got clear to the brink.
MARGARET BRENNAN: Yes.
SENATOR JOE MANCHIN: But this is the first time I have ever seen from the House, working with the Democrats, Hakeem Jeffries and his team…
MARGARET BRENNAN: Right.
SENATOR JOE MANCHIN: … working with Kevin McCarthy and his team to make something happen. I read about that when it used to be Tip O’Neill and President Reagan.
Now I have seen it.
MARGARET BRENNAN: OK.
SENATOR JOE MANCHIN: And I have seen also President Biden and his team come back to the middle…
MARGARET BRENNAN: Yes.
SENATOR JOE MANCHIN: … getting away from where the left have pushed them.
MARGARET BRENNAN: Well…
SENATOR JOE MANCHIN: So, basically, it’s the middle that brought them together.
MARGARET BRENNAN: Well, that’s what — Joe Manchin, there’s always more to talk to you…
SENATOR JOE MANCHIN: That’s where we are.
MARGARET BRENNAN: No, more to talk to you about. And I want you to come back to talk to us when you make a decision about whether you’re running for reelection…
SENATOR JOE MANCHIN: I will.
MARGARET BRENNAN: … or that other option you said last time you’re leaving open, possibly a presidential run.
SENATOR JOE MANCHIN: Everything’s open. Everything’s on the table and nothing off the table.
(LAUGHTER)
MARGARET BRENNAN: Yes.
SENATOR JOE MANCHIN: But, hey Margaret, one thing I wanted to mention to you.
MARGARET BRENNAN: I got..
SENATOR JOE MANCHIN: We need a risk — we need a risk assessment team, a risk management team.
For the United States of America to get to this brinksmanship every time…
MARGARET BRENNAN: Yes.
SENATOR JOE MANCHIN: … we should be taking on — this on seriously every day. What’s the risk we’re taking if we don’t do that, rather than wait until the last day?
MARGARET BRENNAN: I want to talk — I want to talk about that with one of our upcoming guests, the CEO of Bank of America.
So, stay with us.
(ANNOUNCEMENTS)
MARGARET BRENNAN: We got some good news about America’s job market this week, but there appear to be economic headwinds on the horizon.
Mark Strassmann reports.
(Begin VT)
MAN #1: The bill is passed.
MARK STRASSMANN (voice-over): Turmoil averted by Washington’s treasured blueprint, governing by crisis.
MAYA MACGUINEAS (President, Committee for a Responsible Federal Budget): The great news for Americans right now is that we avoided the catastrophe of hitting the debt ceiling. I think the troubling news is that we came that close.
MARK STRASSMANN: But, like Washington, the rest of us have bills to pay. Good news first: Spending consumers keep creating more jobs.
Employers added another 339,000 jobs in May, gains in health care, construction, leisure and hospitality, but still not enough job seekers for restauranteur Nick Osborne (sp?).
NICK OSBORNE (Restauranteur): We are in need of some extra depth, and it has been hard to find that extra depth, for sure.
MARK STRASSMANN: But there were also layoffs in the tech sector and a sharp rise in black unemployment that pushed up the overall jobless rate. It’s a snapshot of a complicated, wobbly economy, with stubbornly high inflation and the specter of a recession.
Pessimism is having a late spring to remember. In a recent Gallup poll, 55 percent of people believe their financial situation is only fair or poor. Half say it’s worsening. Fewer Americans, less than two in three, have $400 squirreled away for an emergency.
MAN #2: And that’s…
(CROSSTALK)
MARK STRASSMANN: For house hunters, that struggle hits home, loan applications down roughly 30 percent from a year ago. Why? Rising interest rates, now just under 7 percent, tightening credit, and cities like Orlando have a startling lack of inventory, one-third the sellers this market needs.
WOMAN: They don’t want to leave because they don’t want to give up their interest rate.
(End VT)
MARK STRASSMANN: For the first time in more than a year, the Fed is expected to hold rates steady at its regular meeting later this month, at least for now, like everyone, uncertain whether this economy is stabilizing — Margaret.
MARGARET BRENNAN: Mark Strassmann, thank you.
For more, now we are joined by the CEO of Bank of America, Brian Moynihan.
Good to have you back here in person.
BRIAN MOYNIHAN (CEO, Bank of America): It’s great to be here, Margaret. Thank you for having us.
MARGARET BRENNAN: Well, the — our last two guests talked about the fact that we came to the edge.
What do you think is the financial cost here, since America’s credit rating is still in question?
BRIAN MOYNIHAN: Well, since I have been CEO, we had the one in ’11. We had the one in ’13.
It’s not good for the United States to go through this. It’s a political process. It’s — it’s good they came to resolution. It’s good it’s behind us. And I think that has provided momentary momentum in the markets and allows us to face the real economic issues and real debt level issues ahead of us.
MARGARET BRENNAN: Because some of the CEOs of banks have talked about setting up war rooms and doing emergency planning. I mean, how much of an impact is there?
BRIAN MOYNIHAN: Well, it’s — because it’s over, there was an impact. We were doing all that. We were prepared in case it didn’t come out right.
But the good news that came out, right — and you heard your past guests talk about the — coming together in the center and voting it through, which is good. And so now we can move forward, but there’s still issues ahead of us. And we can talk about those.
MARGARET BRENNAN: Well, do you think that they should get rid of the debt ceiling, as some CEOs have called for?
BRIAN MOYNIHAN: It — that’s a political question. At the end at the end of the day, we need to have a serious discussion about how much debt we can have in this country, how much we could afford and how it’s spent.
And that discussion needs to go on. The debt ceiling triggers certain debates around at certain times. It’s — it’s part of the process of government and, whether you’re Republicans, Democrats, have to get together and do it. And we have to be careful that we keep the financial stability and strength in the United States paramount, because, at the end of the day, if we’re not strong, the rest of the world is not going to be strong.
MARGARET BRENNAN: Well, let’s talk about that strength, because the Federal Reserve is predicting a mild recession on the horizon.
What are you seeing there in terms of how the consumer is behaving and where we might be seeing any kind of slowdown?
BRIAN MOYNIHAN: So the last time I was here was — it was the end of last year, and we predicted a recession this year. We have moved it out. It’s basically third quarter this year, fourth quarter this year, into first quarter, a mild recession.
And unemployment gets up in high 4 percent range, still very low by historical norms. And that’s our core prediction. As you think ahead of it, what’s going on now is the impact of the Fed’s tightening has had — had its effect. So consumer spending, ’22 over ’21 by Bank of America consumers, $4 trillion-plus a year, was up 9 percent.
Year to date, it’s up about 5 percent. In the month of May, it was up about 4 percent over last May. So it’s slowing down. That level is more consistent with a 2 percent growth economy and a 2 percent inflation economy, not a 4 percent inflation level economy, 4 to 5 percent.
So the Fed is getting the consumer spending level in line. And now you’re – – we have the jobs report and other things which sends some confusing…
MARGARET BRENNAN: Yes.
BRIAN MOYNIHAN: … and ambiguous messages.
But the reality is, the — the activity of consumers more in line with what the Fed wanted, because the rate increases and other aspects have had their effect. Quantitative tightening has had the effect.
MARGARET BRENNAN: You just gestured to this that the prediction of recession keeps getting pushed out. It’s basically like economists keep getting surprised by some of the data out there.
Is the prediction that going into this presidential election year ahead of us, that we will be in the midst of a recession?
BRIAN MOYNIHAN: You know, I think we’re at the point now, with the Fed, having tightened as much as it has, with the impact of the failures of two or three banks which are different than a lot of the banks, but failed, the impacts of the Treasury funding has to come forward.
The impacts of the environment around us. It slowed the economy down. The question is, is inflation under control?
MARGARET BRENNAN: Yes.
BRIAN MOYNIHAN: And, right now, most people are thinking and like, in 1984, when Continental Illinois failed and Volcker, who was fighting inflation heavy, paused then, that maybe the Fed should pause…
MARGARET BRENNAN: Yes.
BRIAN MOYNIHAN: … and let — let the effects of all this take hold, and let’s be seen what happens.
MARGARET BRENNAN: Yes.
BRIAN MOYNIHAN: But, at the end of the day, that has a slight recessionary — it’s a slight recession.
MARGARET BRENNAN: We’re going finish this thought on the other side of the break.
Stay with us.
(ANNOUNCEMENTS)
MARGARET BRENNAN: If you miss an interview or an episode, you can find it on our Face the Nation YouTube page.
We will be right back.
(ANNOUNCEMENTS)
MARGARET BRENNAN: We will continue our conversation with Bank of America CEO Brian Moynihan when we come back.
Stay with us.
(ANNOUNCEMENTS)
MARGARET BRENNAN: Welcome back to FACE THE NATION.
We’re back with the CEO of Bank of America, Brian Moynihan.
I want to pick up on something you indicated earlier when you said the Fed had accomplished something. You said recently the Fed won the war. Is that the war against inflation?
BRIAN MOYNIHAN (CEO, Bank of America): Well, the inflation is tipping over. But one of the toughest things for the Federal Reserve is the power of the U.S. consumer. And they were – they were – they were employed, they were earning more money and they were spending. And what you’re seeing is that’s tipping down. That’s a key component to actually getting inflation under control because if people – the unemployment’s at all-time lows. People are getting, you know, five, six, seven percent wage increases. And on a multi- year above the rate of inflation and the one year not (ph), that — that creates a hard job for the Fed to slow that down because the U.S. economy is so consumer led. They – they have won that battle. They’ve won that battle. Inflation is tipping over, but importantly you can see the U.S. consumer activity is slowing down, which then, if you project that out, ought to bring inflation down to match.
MARGARET BRENNAN: With one of the impacts of the banking turmoil we just went through, for lack of a better term, we’re hearing about credit tightening up. What are you doing to tighten up lending standards? How much harder is it for consumers to come out and borrow money?
BRIAN MOYNIHAN: You know, at Bank of America we have responsible growth. We’ve been (INAUDIBLE) for decades. We don’t really change lending standards that much given different types of cyclicals. But just to give you a sense, the consumer credit quality in our industry is very strong. Most of us are reporting numbers now that are below 2019, which is a multidecade low in consumer credit costs. So that’s good news.
Lending has tightened largely because of two factors, beginning last year, just the feeling that a recession — everybody was predicting a recession and going into a recession. People tend to tighten credit standards in tougher (INAUDIBLE) and things like that. And then the second thing is the disruption caused the capacity of lending to come down, which, again, is the — as they pulled money out of the banking system and onto the — into the Federal Reserve as cash or into the overnight repo facility and deposit have come down, part of the monetary tightening, there’s less engine in the engine room to lend. And so that causes banks to make — be more careful when they lend and who they lend to and how much they lend. And so that’s tightened credit standards pretty dramatically.
MARGARET BRENNAN: And it’s more expensive to get a mortgage.
BRIAN MOYNIHAN: It’s – it’s more expensive because rates went up.
MARGARET BRENNAN: Right.
BRIAN MOYNIHAN: When the Fed raises rates, they’re trying to slow down borrowing capacity.
MARGARET BRENNAN: Right.
BRIAN MOYNIHAN: And in the most — you know housing and autos and things are most rate sensitive come down the quickest. And then things like mortgage loans, most – you know, 90 percent of the consumers are locked into mortgage loans below 5 percent. So, that slows down.
MARGARET BRENNAN: Right.
BRIAN MOYNIHAN: And so – but the home buying and other things kind of bounce around until everybody gets used to rate cycle and then it moves back up. We were in a very low rate cycle for 15 years, and that’s – that’s a little bit what’s confusing people.
MARGARET BRENNAN: Are you slowing down your hiring right now?
BRIAN MOYNIHAN: Yes, we are. Last May we hired 3,000 people. This May we hired 700 people. And that’s due to the attrition rate that has slowed so much and we need to trim head count. So we’ll be down 3,000 FT this quarter. We don’t – we’re not making layoffs. We’re trying to do it by attrition. But even attrition has slowed to half what it was last year.
And when I talk to other companies, I get the same input. It depends on the industry. If you’re trying to get welders in very specific areas, that’s – that’s a lot of – that’s a tough work on the employment side.
MARGARET BRENNAN: Yes.
BRIAN MOYNIHAN: But if you’re in a general industry, the employment conditions have leveled back out.
MARGARET BRENNAN: Yes.
BRIAN MOYNIHAN: They’re still — still strong for employment but have leveled out a bit. And that’s good news because, again –
MARGARET BRENNAN: Right.
BRIAN MOYNIHAN: That allows the tightening cycle to pause or slow down and let the economy get back under itself.
MARGARET BRENNAN: Brian Moynihan, good to have you here in person.
We’ll be right back.
(ANNOUNCEMENTS)
MARGARET BRENNAN: Campaign 2024 got down to business in Iowa this weekend as most of the declared or potential Republican candidates visited the early nominating state. Notably absent the GOP frontrunner, former President Donald Trump, who was off the trail this weekend.
Joining us now to discuss are three of our sharpest political reporters, CBS News political correspondent Caitlin Huey-Burns, Ed O’Keefe is senior White House and political correspondent, and Robert Costa is our chief elections and campaign correspondent.
Welcome to you all.
I want to start with you on Donald Trump because we learned from the Department of Justice that they will not be bringing charges against Mike Pence for his classified documents that he was mishandling. What do we know about the case against Mr. Trump?
ROBERT COSTA: Sources with knowledge of the investigation believe that a charging decision in the documents case on the federal level being led by the special counsel is imminent. It could be coming in the next few weeks. In fact, the grand jury might have some activity this week. We hear from sources close to this investigation. We also hear that the Trump lawyers might be meeting at some point with the Justice Department to talk through where things stand.
MARGARET BRENNAN: When will we know? When you say the next few weeks and imminent. There is a Republican debate in August. Are we going to know the answer to this before they all take the stage?
ROBERT COSTA: The investigations, Margaret, over former President Trump, they loom over this entire presidential race. We hear that a charging decision could be made in June on the documents case. The January 6th investigation by the special counsel continues, but that could end up going into 2024 when some of these primaries are unfolding next year.
But right before the debate, the thing to pay attention to, a charging decision and a possible indictment in Georgia, where Trump is being investigated for pressuring election officials, that could come in early August, just weeks before that first debate in Milwaukee in late August.
MARGARET BRENNAN: This is going to be an incredible primary season with that.
I want to turn to you, Caitlin, because when they take this debate stage, in order to even walk on alongside Mr. Trump or whomever else, there are some parameters that are being sent. We know there are at least ten Republicans who may be on the stage. To get up there they have to agree to endorse whoever the nominee is.
CAITLIN HUEY-BURNS: Yes, they’re being asked to sign this loyalty pledge. And what’s interesting about this field is that when you ask the candidates, will you commit to supporting Donald Trump if he’s the nominee, they really won’t say. I’ve interviewed Mike Pence and Tim Scott, and they have not been able to answer that question.
On the other hand, Trump hasn’t been able to answer that question either. He hasn’t said whether he will support the eventual nomination if it’s not him or if he will participate in the debates altogether. That still remains kind of a wild card here.
He could be advantage skipping the first debate. He’s ahead of the polls, of course. He’s the frontrunner, at least at this point. But at the same time, if he does skip the debate, that does give his rivals the opportunity to make their case as the alternative without having to stand there and kind of weather the attacks.
MARGARET BRENNAN: But that assumes there are attacks, right? I mean we’re listening to some of these speeches out in Iowa and he was the candidate who loomed large but his name was not spoken.
ED O’KEEFE: That’s right. Yes.
MARGARET BRENNAN: And Chris Christie, who may be jumping in, one of the few who – who does take aim directly at the former president, but he said he’s not going to be a hired assassin. That’s what he told “Politico.”
ED O’KEEFE: Right. Look, there’s a – there’s a ceiling that he’s hitting right now about 35 percent to 40 percent. Everyone else in this race knows that and they’re focused on that 60 percent or so that’s still out there to be had. Everything is Donald Trump’s to lose. I think anyone showing up to an event hosted by someone else is clearly curious. And the idea of all the legal matters he’s facing, all the personal issues he’s dragged along with him through the years, is on the minds of these voters, especially in Iowa, where we were this week.
A lot of them saying, look, if he’s ultimately the guy, I’ll pull the plug. I’ll be there for him. But all this stuff or this baggage, you know, I’m kind of done with it and I’m hoping somebody else rises. And the names we hear, Ron DeSantis, Tim Scott, Nikki Haley are the three that came from voters’ voices most frequently when talking about somebody else. All of them understand they’ve got to lay out what they’re about, what they would do differently, because they’re obviously not Donald Trump.
And DeSantis, notably several times over the course of this past week, was asked about Trump or made inferences to him in his remarks, making it clear that he thinks the party has to move on. He called his attacks juvenile. Said that’s why he lost voters back in 2020. And why he won’t be able to drag them back. I mean if that’s not the argument some other Republican isn’t going to make –
MARGARET BRENNAN: Right.
ED O’KEEFE: You know, what will work to convince those Republicans otherwise.
MARGARET BRENNAN: But – but then that question, Robert, is always, does a possible, you know, movement in this case, does an indictment for hypothetical purposes matter here, or is that even what we’re talking about at this point?
ROBERT COSTA: To build on what Caitlin and Ed laid out, there’s a real wait and see mentality with so many of these campaigns. They don’t want to attack Trump on the investigations. They want to see all of that run its course.
But they are starting to not necessarily attack Trump, but take out the scalpel on policy. And you can expect Pence, when he gets into the race this week, according to people close to him, to start saying Trump is not conservative enough to be the Republican nominee.
And you’re also seeing that same type of attack from Governor DeSantis coming at Trump from the right, linking him with Dr. Anthony Fauci, saying the response to the pandemic was too favorable to corporations, too federal in its nature. So, this is a different kind of position for Trump to be in, not to be facing questions about his conduct or his character, but about his conservatism.
MARGARET BRENNAN: It’s fascinating.
Caitlin, you have been looking very closely at the issue of abortion as this galvanizing political force. President Biden had said that he would set a national standard of access up to the point of viability, which is roughly 24 weeks under Roe versus Wade. But the Republican candidates each has a different answer here and they don’t seem to have a unified position on how to handle something that is so politically loaded.
CAITLIN HUEY-BURNS: Exactly. Well, Republicans right now are caught between a primary electorate that is cheering the overturning of Roe versus Wade, and a general electorate, a broader electorate that has really rejected that decision. We saw that at the ballot box in 2022 and especially in places like Wisconsin and Pennsylvania. We saw it earlier this year in Wisconsin.
When you talk to Republicans, operatives and also those on the anti- abortion side, they want the candidates to be engaging in this issue because they feel like they ceded ground last time around. And so you do have groups like Susan B. Anthony List pushing candidates to take a stance on federal abortion restrictions. And that has kind of tied these candidates up in knots.
I think what changed this week, however, is how the candidates were talking about it in Iowa. Obviously, Iowa is where the evangelical base is. Governor Kim Reynolds signed a six-week abortion ban there. So, you heard Governor DeSantis talking about that, playing up his six-week abortion ban that he signed into law in Florida. That’s a play for those voters and they’re more open about it.
MARGARET BRENNAN: Yes.
CAITLIN HUEY-BURNS: And we also got a more concrete answer from Donald Trump, who has tried to kind of avoid this altogether, trying to remind voters that he was responsible for overturning it.
MARGARET BRENNAN: But the federal – but the Republican line on this had been, it’s up to the states. And I thought it was interesting when Nikki Haley was on this program recently she said, candidates are not being honest when they claim it’s possible to get a national law on abortion.
CAITLAN HUEY-BURNS: And there is some truth to that, right, the idea of, you know, having 60 senators pass anything is unlikely. But it is trying to kind of thread that needle between the primary electorate that you need to come out and support you in a place like Iowa, and general electorate, especially women. Also notable that they’ll play this issue differently in New Hampshire and Nevada than they do in Iowa and South Carolina.
MARGARET BRENNAN: Ed, I have to ask you about the man running for re- election, President Joe Biden.
ED O’KEEFE: Yes.
MARGARET BRENNAN: It was a big week for him with this bipartisan deal. But in that speech from the Oval Office it went quickly from very bipartisan to a bit of a campaign speech.
ED O’KEEFE: Yes. Let’s raise taxes on the –
MARGARET BRENNAN: Exactly.
ED O’KEEFE: On – on the wealthy and – and let’s remind ourselves of what Republicans were pushing for in that deal that didn’t get through.
The goal through the end of this year is to just keep him being president, looking presidential. He’s got meetings this week with the Danish and British prime ministers. He’s going to have some events on the economy. He’s speaking with the Kansas City Chiefs. All of that sort of checks the box of, I’m commander in chief, I’m in charge. Look at the big deal I just got.
He’ll be raising a lot of money between now and the end of the year. Not a lot of campaigning. That’s not because of his age. That’s not because of his vigor. It’s consistent with what President Obama did back in 2011 going into 2012. And they believe if he can raise all that money now, they’ll be more than happy to spend it next year. And they want to just sit back and watch Republicans squabble over how many weeks of a ban should there be for abortion, who’s conservative enough, knowing that they should be able to go into those elections next year in the six or seven battleground states and – and hope that they can continue to make the compelling argument. They worry that if it’s not Trump there’s a generational argument to be head, which is why you saw Ron DeSantis, alongside his wife and young kids so much in recent days and you’ll continue to. It’s also why they’ve got to get the vice president out there a bit more to talk about, you know, issues of concern, especially to the base.
MARGARET BRENNAN: All right, this is going to be a very interesting campaign season.
Thanks to all of you.
COSTA: And it’s just starting.
MARGARET BRENNAN: It’s just starting. But get ready for a busy summer. There’s no slow summers anymore news wise.
O’KEEFE: No there are not.
MARGARET BRENNAN: Thanks to all of you for joining us.
A quick programming note. Tune in next Sunday for an interview with North Dakota Republican Governor Doug Burgum, who’s expected to launch a 2024 presidential bid in the coming days.
We’ll be right back.
(ANNOUNCEMENTS)
MARGARET BRENNAN: We turn now to the war in Ukraine. Ambassador Oksana Markarova joins us for an update.
Good morning to you. It’s good to have you back with us.
OKSANA MARKAROVA (Ukrainian Ambassador to the U.S.): Good morning. Always good to be back.
MARGARET BRENNAN: I want to ask you about what’s happening now because Defense Secretary Lloyd Austin said U.S. trained Ukrainian brigades have arrived in Ukraine and they’ve been rehearsing, training and maintaining for weeks. He mentioned the weather has improved. He’s describing the conditions for that counter offensive to potentially begin very soon. What are you expecting in the coming days and weeks?
OKSANA MARKAROVA: Well, you know, for us, counteroffensive never stopped to be honest. Since February 24 that’s all we were focusing on, how to liberate our land.
But, of course, with additional trained brigades, with additional equipment, with everything that we are working on now, we are hoping that our commanders, as soon as they will see the openings, will start this — whether it’s going to be one or several counter offensives. But the faster we can liberate all the territory and all our people, of course the better.
So, I will note, of course, as you heard our president and our commanders, we will not announce anything. We will not – we will see it when the results are there. But we are expecting to liberate more soon.
MARGARET BRENNAN: And your president said we are ready. Russia, though, throughout the course of the week, has been launching missile attacks, including on the capital of Kyiv. They appear to be testing your air defenses. And I know President Zelenskyy has said Ukraine needs more patriot missiles. Are you getting help getting that kind of air defense right now? Is the U.S. doing enough?
OKSANA MARKAROVA: Well, we are – we are very grateful for everything we are receiving. So it’s patriots, it’s nasoms (ph), it’s all other capabilities. But we clearly need more. So what Russians have been doing again for 466 days now, but also this week, you know, we have seen how daily, several times a day, there were deadly attacks by rockets, but also Shahid drones, all – all the time. So, it’s the terror, it’s the destruction that it brings, but also it’s the, you know, expending our capabilities that we have now. We definitely need more.
MARGARET BRENNAN: The Biden administration released another $300 million in military aid. Some of that included drones. Are these surveillance drones, are these attack drones that the U.S. is giving?
OKSANA MARKAROVA: It’s a range of – of the drones. So — and we need all of them. We need the surveillance. We need the attack drones. We need the Kamakahi drones. So there will be different capabilities in the packages.
MARGARET BRENNAN: There is an upcoming NATO meeting in July that the president, President Biden, is expected to attend and Ukraine’s entry — possible entry into the military alliance is a topic there. Do you know what the U.S. is going to promise?
OKSANA MARKAROVA: Well, we all look forward to this summit. Ukraine has NATO aspirations, transatlantic aspirations –
MARGARET BRENNAN: For some time now.
OKSANA MARKAROVA: In our hearts, in our constitution, and the majority of people support it. Since 2008, when the first declaration was made that we will be members of NATO, we believe it’s time to start discussing some specific steps in that regard.
Now, again, as President Zelenskyy said, we are realists. We understand the limitations that the ongoing war puts to it. But I think at this moment, after this horrible violation of international law, after Russia attacked us completely not provoked, when we were not part of NATO, after historic decisions on Finland and Sweden, it’s time for everyone to realize that it’s about good versus evil. And we need to be members of NATO as much as NATO needs Ukraine also in order — because we have a lot to add to NATO.
So, yes, we look forward to this forum to discuss this.
MARGARET BRENNAN: Your president said he knows this wouldn’t happen until after the war is concluded. In other words, the U.S. wouldn’t be drawn in directly to this conflict now as a NATO member. But promise of future entry. What are the security guarantees that you are looking for?
OKSANA MARKAROVA: Well, you know, President Zelenskyy put out this peace formula which clearly outlines how the war should end and how to build — restore the security. So there is a lot of elements. It’s – it’s the military security, justice, rebuilding — building Ukraine, ensuring that we can altogether deter Russia from making it again. And it’s all been discussed with – with partners individually but also with the group. It was one of the items discussed at the G-7 summit and others. So, it’s a work in progress. But I think, you know, the real security guarantee, and not for Ukraine, but for transatlantic community and for our part of the world but globally for everyone who believes in U.N. statehood (ph) is for us, in the future, to become the member of the alliance that is a peaceful defensive alliance of the people with like-minded values.
MARGARET BRENNAN: $45 billion in U.S. support to Ukraine has been pledged so far but that funding ends in September and there will have to be a request for more. Are you concerned about all the political pressures that may make that more difficult, particularly going into a presidential election year?
OKSANA MARKAROVA: Well, any democracy, and Ukraine and the U.S. are both democracies, have good Democratic elections and processes. And, yes, it’s an additional factor. But I believe American people support us. And we are very grateful for American people for the support we have received. We will always remember it.
And I know that the majority of politicians on both sides of the aisle, you know, equally, we have this strong bipartisan support and I really hope that Ukraine will continue uniting people in Ukraine even through this electoral process.
MARGARET BRENNAN: Ambassador, we’ll be watching closely in the coming days and weeks and thinking of Ukraine. Thank you for joining us.
OKSANA MARKAROVA: Thank you.
MARGARET BRENNAN: Turning now to rising tensions between the U.S. and China. A Chinese warship came within 150 yards of hitting an American missile destroyer in the Taiwan Strait. U.S. Defense Secretary Lloyd Austin said it was extremely dangerous. China’s defense minister called the presence of that American destroyer a provocation to China and defended sailing the warship across its path.
It’s just the latest flare up in the relationship between the two powers. And it came 34 years since the crackdown in Tiananmen Square when Beijing brutally quashed peaceful pro-democracy protests by unleashing tanks and troops on demonstrators. The death toll is still unknown, but estimates range from several hundred to several thousand.
Seven days after the massacre, then FACE THE NATION moderator Lesley Stahl briefed Americans on the fallout ahead of a conversation with the U.S. ambassador to China at the time.
(BEGIN VC)
LESLEY STAHL, FACE THE NATION MODERATOR (June 11, 1989): The White House now says the Chinese government has murdered many, many of its own people. Leaders Dong Cho Ping and the other hardliners are consolidating their control over the country, searching out, rounding up the pro-democracy leaders while western businesses pack up and begin pulling out of China.
Official Chinese television is denying there was ever any blood bath, any brutality in Tiananmen Square, showing pictures of the arrests of what authorities there are calling thugs and hooligans.
Ambassador Lilley, in the morning papers today there are a lot of stories suggesting that the U.S.-China relationship is tearing apart, is disintegrating rapidly. There’s a lot of anti-Americanism in their official press. What’s your assessment of where we stand? President Bush keeps saying he wants to preserve the relationship. How is that possible at this point?
JAMES LILLEY, U.S. AMBASSADOR (June 11, 1989): I think we’ve gone through many ups and downs with China. And I think right now we’re going through a down. But I don’t think we should sort of give up on it. I think that would be a terrible mistake.
(END VC)
MARGARET BRENNAN: Those ups and downs continue today. China’s defense minister refuses to speak to Secretary Austin, but two top U.S. officials are arriving in Beijing today in an attempt to thaw relations. The visit comes after CIA Director Bill Burns’ secret trip to China last month becoming the most senior Biden administration official to visit Beijing since our relationship with China sharply deteriorated following the February shoot down of Chinese surveillance balloons over American territory.
We’ll be right back.
(ANNOUNCEMENTS)
MARGARET BRENNAN: That’s it for us today. Thank you for watching. I’ll be off next Sunday, but you will be in great hands with CBS News primetime anchor John Dickerson.
Until next week, for FACE THE NATION, I’m Margaret Brennan.
