Full transcript of "Face the Nation" on Feb. 5, 2023 - CBS News

On this “Face the Nation” broadcast, moderated by Margaret Brennan:

Republican Sen. Ted Cruz of Texas
Democratic Sen. Cory Booker of New Jersey
Gary Cohn, former top economic adviser in the Trump White House and current vice chairman of IBM
Reps. Robert Garcia, Mike Lawler, Summer Lee and Zach Nunn

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: The high-stakes diplomatic drama over the Chinese spy balloon is intensifying, as we learn more about what the Chinese may have discovered from their soaring surveillance.

In the end, it took a missile fired from an F-22 fighter jet flying over the South Carolina coast to shoot-down the gigantic surveillance balloon that had floated across the U.S. 60,000 feet above ground.

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(CHEERING AND APPLAUSE)

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MARGARET BRENNAN: Recovery efforts are under way to determine just what the Chinese had attached to that balloon. The Saturday shoot-down marked the end of a tense week for the Biden administration.

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QUESTION: You were saying the recommendation from your — was from your national security…

JOE BIDEN (President of the United States): I told them to shoot it down.

QUESTION: On Wednesday?

PRESIDENT JOE BIDEN: On Wednesday.

QUESTION: But the recommendation from…

PRESIDENT JOE BIDEN: They said to me, let’s wait until the safest place to do it.

(End VT)

MARGARET BRENNAN: We will ask Texas Republican Senator Ted Cruz how the incident will impact our already strained relationship with China.

Then: Following the brutal beating of Tyre Nichols by the Memphis police, we will take a look at efforts to renew police reform with New Jersey Senator Cory Booker.

Plus, how will the new 53-year low in unemployment impact the Fed’s moves to lower inflation. We will hear from Gary Cohn, who led the National Economic Council under former President Trump.

Finally, ahead of Tuesday’s State of the Union address, four new House members weigh in on the prospects of action on crime, immigration and spending in this divided Congress.

It’s all just ahead on Face the Nation.

Good morning, and welcome to Face the Nation.

Well, it was a drama that had all the signs of a Hollywood movie. The end of the Chinese spy balloon’s journey was somewhat predictable, but what happens next is still very much up in the air.

According to the White House, the balloon was detected a week ago in Alaskan airspace, and was not assessed to be an intel risk or threat. It then drifted through Canadian airspace moving southeast and was spotted in Montana, home to a U.S. nuclear missile base, where it turned into a very public diplomatic crisis.

Beijing insisted the balloon was an airship gathering weather data that had just drifted off course. Secretary of State Blinken abruptly canceled his trip to China, a visit intended to thaw icy relations between the two countries.

Many lawmakers, mostly Republicans, expressed frustration with the administration for not taking action earlier. But the president stuck with the Pentagon’s recommendation to wait until the balloon moved offshore and away from civilians, still within U.S. waters.

Now, the debris from that balloon, as well as what the Chinese learned from the mission, is of huge interest. The Chinese government issued a scathing reaction to the shoot-down, stating they strongly disapprove and that it was a clear overreaction and a serious violation of international practice, and warned that Beijing reserves the right to make further responses.

We want to bring in our David Martin for more on this story.

David, the Pentagon says this is part of a fleet of balloons and that it was surveilling sensitive military sites. Do we have a sense of the damage?

DAVID MARTIN: Well, the Pentagon claims that there was no real damage because most of this intelligence, they already collected with the satellites that China sends over the U.S. every day.

But it loitered over an American intercontinental ballistic missile field in Montana. And it was fitted with what the Pentagon says were cameras and antennas. And you have to believe that they picked up something, or it wouldn’t have been worth all of the risks that they ran in sending a balloon over here that they knew was going to be detected.

There’s no way they could have believed that they could sneak that balloon across the United States. So, I think you have to assume that they got some intelligence value out of it. Now, I think you have to assume that the U.S. got some intelligence value out of it, because they sent planes up to photograph that sensor pod that was on the balloon.

And they have got videotapes of it. So, they — the U.S. was essentially watching China watch us. And it’s all spy-vs.-spy stuff. And, over time, the spy vs. spy stuff just tends to cancel itself up. One day, you’re up. The next day, you’re down.

MARGARET BRENNAN: Well, what can you actually see from 60,000 feet? What’s the advantage?

DAVID MARTIN: Well, back in the day, I actually went up to 60,000 feet in a backseat of a U-2.

And, up there, it’s not just like being in an airline, or only higher. You can actually see the curvature of the Earth. And you’re in a plane that is filled with cameras, which have obviously a much higher resolution than the human eye. And they’re not looking just straight down. They’re looking out and all around them.

And they’re sending those pictures up to a satellite, which is then relaying it down to a ground station, where an intelligence analyst is watching in real time. The U-2 is a great intelligence collection platform. It’s got one problem. Anybody with a missile that can get up to 60,000 feet can shoot it down.

And, of course, that turned out to be the balloon’s problem as well.

MARGARET BRENNAN: Which indicates this could be a problem.

But the message from the administration to date has been that this wasn’t really a threat. It did throw off that attempt to reset relations with Beijing. And that could have some big implications. Diplomats are really trying to lower the tension, but you see in that Chinese statement there’s some edge.

DAVID MARTIN: Well, they say, yes, we reserve the right for further responses.

So let’s see what those further responses are. Are they going to send another balloon? Is the U.S. going to shoot it down right away? Or I think, more importantly, are they going to start some serious harassment of these American reconnaissance planes that fly around the periphery of China?

They have already been buzzing them. And the U.S. has already been filing diplomatic complaints about it. I would not want to be flying the next mission around the periphery of China. And the question is, will the U.S. provide armed escorts for those reconnaissance planes?

MARGARET BRENNAN: Yes.

DAVID MARTIN: And what happens if some…

MARGARET BRENNAN: Yes.

DAVID MARTIN: … Chinese fighters show up, and you have a confrontation?

MARGARET BRENNAN: David, always sobering to talk to you. Thank you for your reporting.

DAVID MARTIN: Sure thing.

MARGARET BRENNAN: We want to go now to Dallas, Texas, where we are joined by Republican Senator Ted Cruz.

Good morning to you, Senator.

SENATOR TED CRUZ (R-Texas): Good morning, Margaret.

MARGARET BRENNAN: So, this balloon traversed 11 states, but the Pentagon says they were able to mitigate some of its impact.

Do you think there is upside to the fact that this was captured this time?

SENATOR TED CRUZ: Well, listen, I want to start by doing something that I don’t do very often, which is commending Joe Biden for actually having the guts to shoot this down. That was the right thing to do. That is absolutely what the president should have done.

Unfortunately, he didn’t do that until a week after it entered U.S. airspace. He allowed a full week for the Chinese to conduct spying operations over the United States, over sensitive military installations, exposing not just photographs, but the potential of intercepted communications.

And — and, more broadly, I think this entire episode telegraphed weakness to Xi and the Chinese government. And to illustrate why, I would just ask one — one hypothetical question. Imagine how this would have played out if nobody had taken any pictures of the balloon, if nobody in Montana had looked up and noticed this giant balloon, if it wasn’t in the news.

MARGARET BRENNAN: Yes.

SENATOR TED CRUZ: We know that when the Biden administration knew about the balloon, they said nothing, they did nothing, they didn’t shoot it down.

And, at the end of the day, I think the only reason they shot it down is because it made it into the news…

MARGARET BRENNAN: Well…

SENATOR TED CRUZ: … and they felt forced to, as a matter of politics, rather than national security.

MARGARET BRENNAN: Well…

SENATOR TED CRUZ: That’s a bad message for the Chinese government to hear.

MARGARET BRENNAN: Well, the Pentagon has since disclosed that it’s apparently happened four times before, never quite like this.

Back in 2020. the Trump administration shuttered the Chinese Consulate in Houston after detecting espionage. Do you think there needs to be more diplomatic fallout on that scale now?

SENATOR TED CRUZ: Look, I — I think there does.

When — when — when the Trump administration shut the Chinese Consulate in Houston, I spoke with the secretary of state, Mike Pompeo, about it. And what they had discovered about the espionage activities being carried out in the state of Texas by the Chinese government was horrifying.

Right now, there is a Texan, Mark Swidan, who is a political prisoner. He is a hostage in China. He’s been there for 10 years. This past week, I introduced a resolution on the floor of the Senate, along with John Cornyn, calling on China to release Mark Swidan. He’s wrongfully imprisoned. He’s been there 10 years. They’ve sentenced him to death on charges for which they have little to no evidence.

And — and I had been urging Tony Blinken, when he was going to Beijing, to raise Mark Swidan’s case…

MARGARET BRENNAN: Yes.

SENATOR TED CRUZ: … and to make the case for Mark to be released.

China, if they want to demonstrate that they’re not bad actors, if they want to demonstrate that they can aspire to being a great nation, they should release Mark Swidan because great nations and great powers don’t hold political prisoners.

MARGARET BRENNAN: Yes. And he is wrongfully detained, according to the State Department.

SENATOR TED CRUZ: Yes.

MARGARET BRENNAN: This was raised to Xi Jinping in November, and there — there hasn’t been a release to date. Thank you for mentioning that.

But I want to ask you about your role. You are the top Republican on the Senate Commerce Committee. You’re also a dad. I know you know how hard it is to keep kids offline and this app called TikTok. It’s been downloaded 200 million times. I know you think it’s espionage.

Are we at the point where we’re past a ban, where this is just so embedded, that you can’t get rid of it?

SENATOR TED CRUZ: Yes, look, TikTok is incredibly concerning.

You’re right. With our kids, if you have teenagers, if you have kids in junior high or high school, they’re all using it. And the degree to which they have infiltrated our children is really disturbing.

There are lots of problems with it. There are problems in terms of the messages that they’re pushing on young kids, body image messages, where, for girls in particular, you have problems with eating disorders, where they push one message after another. You have messages of self-harm, where the algorithms push self-harm messages on young girls, and we’re seeing really disturbing figures among teenagers.

MARGARET BRENNAN: Yes.

SENATOR TED CRUZ: And then, on top of that, you’ve got the espionage risks.

The Chinese Communist government has access to all of the information TikTok collects. I think it is a serious, serious threat. I will tell you, on the Commerce Committee…

MARGARET BRENNAN: Yes.

SENATOR TED CRUZ: … I have already sat down with each of the Republican members on the committee to ask them their priorities, and there was consensus on this side of the aisle that focusing seriously on TikTok is a real priority.

MARGARET BRENNAN: As a ban?

SENATOR TED CRUZ: And I think there are a lot of Democrats who are very concerned about it as well.

MARGARET BRENNAN: As a ban or to force the sale of it?

SENATOR TED CRUZ: Well, I — I think all of the options are on the table.

And I will tell you, I encourage Maria Cantwell, the Democrat chairwoman, that I think it makes sense early on for us to have a hearing on TikTok and examine these harms very directly, how it’s hurting our kids, and how it’s undermining national security.

As I said, both Republicans and Democrats are very concerned about the impact of TikTok.

MARGARET BRENNAN: Yes.

Should America restrict U.S. companies from investing in Chinese industries and key technology sectors?

SENATOR TED CRUZ: Well, I think we should be doing a lot to delink our supply chain from China, to make it so that we are not dependent on China.

We saw, during the pandemic, when one of the major Chinese state-owned newspapers threatened to cut off lifesaving pharmaceuticals, things like heart medication…

MARGARET BRENNAN: Mm-hmm.

SENATOR TED CRUZ: … that — that people depend upon. And it makes no sense for us to leave the lives of Americans at — at the whim of the Chinese government.

MARGARET BRENNAN: Yes.

SENATOR TED CRUZ: I will tell you, in the last Congress, I introduced an amendment on the floor of the Senate to block the United States government from purchasing electric vehicles or batteries that were manufactured using slave labor in concentration camps in China.

MARGARET BRENNAN: Right.

SENATOR TED CRUZ: China has over one million Uyghurs in concentration camps.

And, Margaret, sadly, when we voted on it, every Democrat but one, every Democrat but Joe Manchin voted no.

MARGARET BRENNAN: Yes.

SENATOR TED CRUZ: And, right now, the Biden administration is one of the largest customers in the world for the concentration camps that are carrying on murder and torture right now in China.

MARGARET BRENNAN: Yes, and that…

SENATOR TED CRUZ: That doesn’t make any sense, and it’s not right.

MARGARET BRENNAN: No.

Senator, I want to ask you about something here at home. You also introduced a bill to limit terms to two six-year terms in office for Senators. Why aren’t you holding yourself to that standard? You said you’re running for a third term.

SENATOR TED CRUZ: Well, listen, I’m a passionate defender of term limits. I think that Congress would work much better if every senator were limited to two terms, if every House member were limited to three terms.

I have introduced a constitutional amendment to put that into the Constitution.

MARGARET BRENNAN: But you’re still running.

SENATOR TED CRUZ: And if and when it passes — if and when it passes, I will happily, happily comply.

I have never said I’m going to unilaterally comply. I will tell you what. When the socialists and when the swamp…

MARGARET BRENNAN: Are you running for president?

SENATOR TED CRUZ: … are ready to leave Washington, I will be more than happy to comply by the same rules that apply for everyone.

MARGARET BRENNAN: Yes.

SENATOR TED CRUZ: But, until then, I’m going to keep fighting for 30 million Texans, because that’s the job they’ve asked me to do.

MARGARET BRENNAN: You — I think you heard me — I think you heard me ask if you’re running for president.

SENATOR TED CRUZ: I’m running for reelection to the Senate.

MARGARET BRENNAN: Yes. OK.

SENATOR TED CRUZ: There’s a reason I’m in Texas today. I’m not in Iowa. I’m in Texas.

MARGARET BRENNAN: Yes.

SENATOR TED CRUZ: And I’m fighting for 30 million Texans.

MARGARET BRENNAN: All right, thank you very much, Senator Cruz, for your time today.

We turn now to Democratic Senator Cory Booker in Newark, New Jersey.

Good morning to you, Senator.

SENATOR CORY BOOKER (D-New Jersey): Good morning. Thank you for having me on.

MARGARET BRENNAN: I want to start on the news of the moment.

Mark Warner, fellow Democrat, chair of the Senate Intelligence Committee, tweeted: “There is no way the Communist Party of China would allow a balloon like this to fly over the Chinese heartland.”

I wonder if you personally are concerned that it was allowed to enter U.S. airspace at all?

SENATOR CORY BOOKER: Well, again, Mark Warner is right. We should not have had this kind of incursion into the United States.

And we have a real problem with China on a number of issues, from their human rights violations, to their violations of international business law, to even the challenges we’ve had with them on overt spying.

So, I’m grateful that the military took decisive action when they did and how they did. But we obviously have issues here.

MARGARET BRENNAN: And the issues with espionage, as you just indicated, go into a number of different areas.

Due to national security concerns, Congress had banned TikTok, for example, the social media app, on federal devices. Your home state of New Jersey has also put restrictions in place. But you still use it personally. Does that mean that you think it’s too late to go ahead and ban this? It’s already on 200 million American devices.

Is it just so integrated that that espionage is something we have to live with?

SENATOR CORY BOOKER: No, absolutely not.

And I think there’s two ways to approach this. One, the proactive step of banning and on government devices is something that the United States federal government is doing, states and even localities are doing. But the other way to go about this is going directly to the company.

They are now working with U.S. intelligence folks to try to make sure that the proper precautions are taken, so the Chinese cannot get access and use it for spying. So, this is something we have to take seriously.

MARGARET BRENNAN: I want to ask you about the meeting you had with fellow Democrats at the White House on Thursday in regard to police reform.

What agreements did you all come up with? And is it anything you can get Republicans to sign on to?

SENATOR CORY BOOKER: Well, first of all, I want to again express my condolences to the family of Tyre Nichols.

This was a really horrific murder. We saw a man on the ground handcuffed, being beaten, and eventually die as a result of his wounds. This should not happen in the United States of America.

And so I’m grateful that the president has taken decisive action in the last Congress with an executive order, but it falls to Congress to find a bipartisan way forward to make sure that we are doing what is necessary to raise police standards and professionalism, to create more transparency and accountability in American policing.

I believe we can find a way forward. It is going to be more difficult in a divided Congress.

MARGARET BRENNAN: Yes.

SENATOR CORY BOOKER: But I believe that a moment like this, a moral moment like this, requires decisive action.

MARGARET BRENNAN: Well, we’ve been through moral moments before, and negotiations have failed, as they did when you were talking to your Republican colleague Tim Scott back in 2021.

He says that this — House progressives’ police reform bill — I assume he means George Floyd Act — it won’t go anywhere. But he has given an impassioned speech saying he wants solutions that would have made a difference, specifically, more grants, more de-escalation training, and duty-to-intervene training.

Is this a starting point for talks?

SENATOR CORY BOOKER: Absolutely.

I mean, I have been talking to people on both sides of the aisle, on both sides of the Capitol, in the House of Representatives and in the Senate. There is a pathway forward. And I’m going to be tireless and not stop until we do significant things to make Americans safer and to make our policing standards higher.

And I’m not standing alone on this. The fact that we have police leaders, the largest union that represents the majority of police…

MARGARET BRENNAN: Yes.

SENATOR CORY BOOKER: … that we’ve been able to come together on bipartisan ideals, I think there’s a pathway forward, though I’m very sobered, in a divided Congress, about our ability to get it done.

MARGARET BRENNAN: Are you talking to Tim Scott now about this?

SENATOR CORY BOOKER: I don’t think Tim Scott and I have stopped talking. Let’s be clear, Tim and I have been a proven partnership.

We’ve gotten things done, from…

(CROSSTALK)

MARGARET BRENNAN: Well, you walked away from the talks a year ago, so you did stop negotiating. Are you renewing those negotiations?

SENATOR CORY BOOKER: Again, Tim and I have not stopped talking.

We’re guys that have gotten the Opportunity Zone legislation done. We’ve gotten the criminal justice reform done. We may have stopped formal negotiations, but he and I are actually friends. We may be in different parties and disagree on a host of stuff, but the reality is, we’re two black men in America who have had really awful experiences with law enforcement that law enforcement leaders say are unjust.

We’re motivated.

MARGARET BRENNAN: One issue you put to the side back in 2021 was that really hard issue of qualified immunity, which is whether to hold individual officers accountable for — or the entire police department accountable civilly for police misconduct.

Lindsey Graham tweeted that: “Holding departments accountable makes sense because, in America, if you run a business and produce a product, you’re responsible for your actions. The same should be true for police departments.”

Is he offering you the start here of something?

SENATOR CORY BOOKER: You know, I have had conversations, meetings with Lindsey Graham, in this Congress as well.

He is somebody that agrees with me that there is common sense here. You can’t have accountability without consequences when things go wrong. And we should definitely agree that the things we’re seeing too often now because of body cameras and other filming have to stop in our country. This is wrong.

And I’m happy that I have Republican colleagues that agree this is wrong, and we’re trying to work something out. And I’m going to continue with it. And I’m grateful for the president of the United States…

MARGARET BRENNAN: Yes.

SENATOR CORY BOOKER: … to members of the House of Representatives, like the Congressional Black Caucus.

We’re determined to try to get something done. May it be a big comprehensive bill? In this Congress, that might be hard.

MARGARET BRENNAN: Yes.

SENATOR CORY BOOKER: But we can find ways to do things that make things better.

MARGARET BRENNAN: Senator Booker, thank you for your time this morning.

We will be back in a minute. Stay with us.

(ANNOUNCEMENTS)

MARGARET BRENNAN: We have got some good news this week. Hiring surged last month, but there may be a downside.

Mark Strassmann reports.

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MARK STRASSMANN (voice-over): Not since the Nixon era, May 1969, has an American president watched unemployment dwindles so low, 3.4 percent, despite big tech’s latest bloodbath, pink slips galore at Amazon, Google and Microsoft, American labor overall added more than a half-million jobs last month.

MAN #1: We’re gaining jobs, which is great, but in terms of, like, inflation, interest rates, definitely would love to see that improve over the next year.

MARK STRASSMANN: But the sizzling job market complicates the Fed’s mission, bludgeon inflation with higher interest rates.

Inflation is now at 6.5 percent compared to this time last year, down from the June peak of 9.1 percent. The Fed raised its benchmark rate by another quarter-point last Wednesday, its eighth hike in 11 months. Expect rates to go up again in the months ahead.

JEROME POWELL (Federal Reserve Chairman): We will need substantially more evidence to be confident that inflation is on a sustained downward path.

MARK STRASSMANN: Those latest economic developments do little to calm millions of Americans. Ahead of Tuesday’s State of the Union address, our new CBS News poll shows ripples of anxiety.

Six in 10 Americans believe the economy’s condition is bad, pessimism that has been in place over the last year. Among all America’s challenges, our poll says the top priority, lowering inflation. Three in four people said they worry about it the most.

WOMAN: I think you never fully stop holding your breath when you see prices going up.

MARK STRASSMANN: Over the next year, our poll shows roughly six in 10 Americans expect the economy to be in recession or slowing.

Many everyday Americans are sweating this economy. Instability generates insecurity.

MAN #2: I feel like it’s kind of falling apart, the economy. We need to rebuild it up. I don’t know what the exact answer is.

MARK STRASSMANN: It’s vexing because of all the guesswork involved for economists, for all of us.

For Face the Nation, I’m Mark Strassmann in Atlanta.

(End VT)

MARGARET BRENNAN: And we will be right back with a lot more Face the Nation.

Stay with us.

(ANNOUNCEMENTS)

MARGARET BRENNAN: Be sure to tune in for special coverage of President Biden’s State of the Union address Tuesday starting at 8:00 p.m. Eastern on our streaming network and 9:00 p.m. on the CBS broadcast network.

(ANNOUNCEMENTS)

MARGARET BRENNAN: We will be right back with Gary Cohn, who led the National Economic Council under former President Trump.

(ANNOUNCEMENTS)

MARGARET BRENNAN: Welcome back to FACE THE NATION.

We want to turn now to the economy and that surprising jobs report for the month of January. We’re joined by former top economic adviser under the Trump administration, Gary Cohn, who is now the vice chairman of IBM.

Good morning. Good to have you back here.

GARY COHN (Vice Chairman, IBM): Thanks for having me, Margaret.

MARGARET BRENNAN: So, 517,000 new jobs, but a lot of companies, particularly in tech, are announcing layoffs. So, exactly where is the economy headed?

GARY COHN: So — so, it’s interesting. We did see the 500,000 plus new jobs, which was quite surprising I think to many of us. But I think what we’re actually seeing here is a re-normalization of the new economy. A lot of the jobs that we saw were jobs in the service industry. The service industry is coming back very strong because we’re starting to see the economy go back to what we historically think of the economy. For the first time we’ve seen occupancy rates in offices in major cities over 50 percent. When you see occupancy rates go up, you need the service sector to work. Think about people going back into the office. They need parking attendants. They need people to work in the buildings. They need security. They need people to clean the buildings. People stop for coffee when they go into the buildings. They go out to lunch. They go to bars.

For the – for that to happen, you need the service sectors to come back to work. So the 128,000 service sector employees that came back to work, that 100 percent correlates with people going back to what is the new normal. It may not be five days a week in the office, but it’s enough days in the week in the office where you need the service sector to come back to work.

The interesting thing about last month’s employment numbers is, we brought people back to work, but we did not have to entice them with pay. So, the monthly — the month over month number in wage gains was 30 basis points. The prior month was 40 basis points. So we’re seeing – we’re getting people back into the labor force for a lower wage than we were prior to this. I –

MARGARET BRENNAN: And – and that’s a little bit hopeful for you on the inflation front?

GARY COHN: Yes. Yes. And I think this is natural. I think what we’ve seen is after all the stimulus that was put in the system over the last three months, people are running out of stimulus moneys. We saw that in the fourth quarter last year. We saw consumer spending slow down. We saw debit balances on credit cards go up. We started to see delinquencies go up. And you know what happened, people actually did the right thing and they went back to work, they re-engaged and they reentered the workforce. And I think we saw a lot of that in the January numbers.

MARGARET BRENNAN: So, these more positive signs have led Bank of America, for example, to say recession, still in the cards, but not until after March. I wonder what your thoughts are on that. And as CEOs warn about borrowing costs going up as a result of the Fed hiking, they are tightening belts. So, how far off is this recession?

GARY COHN: Well, we — we’ve got a couple phenomenons going on. Interest rates have been going up, so borrowing costs have been going up for companies. On the flip side, the dollar has been weakening. So the multinational corporations in the United States, who repatriate earnings from offshore, those repatriated earnings have become more valuable.

I think the people that have been really worried about a recession in the first and second quarter of this year, I think after what we’ve seen this week with both Chairman Powell’s announcements and the data in unemployment, I think that recession is off the table for Q1 and Q2 this year. You know, we’re going to get another employment report before the next Fed meeting and we’ll see where the economy’s going, but it does feel like we’re in relatively good shape here.

The question is going to be, how does the Federal Reserve handle what’s going on in the economy?

MARGARET BRENNAN: Yes.

GARY COHN: Are we going to continue to have to increase wages to draw people back in the labor force, or are people coming back in the labor force because they need to and we’re not going to have wage inflation. And if that happens, the Federal Reserve is actually in a very good place.

MARGARET BRENNAN: Let me ask you about something the Fed chair said this week. He said, Congress has to lift this debt ceiling. I’m throwing one of the things that could screw up your – your rosy prediction at you.

GARY COHN: Absolutely.

MARGARET BRENNAN: He said, no one should assume that the Fed can protect the economy from the consequences of failing to act in a timely manner. He’s warning. He’s not making plans for a default. You’re on your own if it happens.

GARY COHN: Yes.

MARGARET BRENNAN: Should there be a plan for the Fed to step in? I mean, I know legally it’s in question here, but I hear — talk to people on Capitol Hill who say, Wall Street’s not taking this seriously enough. The politics are really bad around the debt ceiling.

GARY COHN: The politics are very bad. You know, the one thing is, every American, every American is holding the U.S. government to raise the debt ceiling. The full faith and credit of the U.S. dollar and the U.S. dollar being the reserve currency is imperative to our economic well-being as a country. We ultimately have to get the debt ceiling raised.

That said, what’s going on here is not something out of the ordinary. If you look at debt ceiling raises over the last 40 or 50 years, no matter which party is in the minority, about 50 percent of the time debt ceiling raises come with some amendments attached to them from the other party. So, this is quite normal, the process that we’re going through.

MARGARET BRENNAN: You – you don’t sound overly concerned?

GARY COHN: Look, I’m always concerned when we’re dealing with debt ceiling, but I have a feeling that we will get there in the end when we have no other choice.

MARGARET BRENNAN: Yes.

GARY COHN: You had the – you had the speaker here last week, and he felt confident that we would get there when we had no other choice. The speaker met with the president of the United States this week. The two of them came out of the meeting relatively confident. I feel they both understand, there is no choice. In the end of the day, we have to raise the debt ceiling. The question is, can the Republicans get something in the legislation attached to the debt ceiling legislation that they want, that they feel like is a win and the Democrats are willing to give it to them? Historically, that is what’s happened numerous times.

MARGARET BRENNAN: Yes. Yes. And the risk there is real.

I want to ask you as well about China. Mark Warner was here with us last week, and he said, technology competition with China is the biggest issue of our time. He’s worried about things that — like your company does, IBM

GARY COHN: Yes. Yes.

MARGARET BRENNAN: In terms of quantum (ph) computing. Is enough being done to keep America competitive on that front?

GARY COHN: Well, we’re starting. You know, if you look at where – where we’ve been this year, you know, we passed the Chips Act in the United States, which, you know, is – is – is something that’s not a normal motion for us in the United States for the federal government to pick and choose an industry.

MARGARET BRENNAN: To subsidize. Yes.

GARY COHN: And to subsidize. It really is not a normal action. It’s an action that, you know, historically I probably not would have been — have supportive of. I was extremely supportive of the Chips Act. We, at IBM, were extremely supportive of the Chips Act.

If we learned nothing else from the pandemic, we learned that there are certain goods that are necessity goods for this country to have. And we are overly reliant on places like China. And if we don’t find ways to change the manufacturing system in the supply chain and move it back to the United States where we can take care of ourselves, we have made a – a catastrophic miscalculation.

MARGARET BRENNAN: Yes.

GARY COHN: Chips are one of those areas where we cannot depend on the rest of the world and run our manufacturing business and continue to grow our economy. Pharmaceuticals is another area where we really have to move that industry and that manufacturing back to the United States. So I think we really have to evaluate what are the most crucial and sensitive businesses or industries that we cannot live within the United States and we’re going to have to make real investments in those here in this country.

MARGARET BRENNAN: And we’ll keep talk about it with legislators, who have to figure out how to pass some of those laws.

But we’re going to take a quick break and when we come back we’ll be talking with four members of the freshmen class in the 118th Congress.

(ANNOUNCEMENTS)

MARGARET BRENNAN: Joining us now for a look at the new Congress, a group of freshmen House members. Congressman Robert Garcia is the president of the Democratic freshmen class. He’s from the state of California. The gentleman next to him is New York Republican Congressman Mike Lawler. Congresswoman Summer Lee is a Democrat, and she is from the state of Pennsylvania. And Congressman Zach Nunn is a Republican from Iowa.

So, I want to talk about some of the things you all think you can get done here in Washington.

Congressman Lawler, the former speaker, Nancy Pelosi, recently told “The New York Times” that Democrats could have held on to the House if New York politicians had realized earlier on that crime was such a key motivating issue.

In the last Congress, they green lit about $4 billion in grants for local law enforcement. Do you think that money now needs to be accompanied by some kind of reform, something more on crime?

REP. MIKE LAWLER (R-NY): Here in Washington, there’s a lot of bipartisan support, I think, for especially making sure that law enforcement has the resources they need and the training that they need to do their jobs effectively. I think, obviously, the situation in Memphis with Tyre Nichols is a horrifying example, but I think there’s a lot of area where we can work together to address the rise in crime and why we are seeing such a rise across the country.

MARGARET BRENNAN: Like what?

MIKE LAWLER: You have to look at, what are some of the root causes of why, you know, we’re seeing such an increase in crime, gang activity. Obviously, you see the scourge of fentanyl pouring into our communities, drugs being dealt that are having a devastating impact. So, I think there is a lot of area where we can work together to address these challenges.

MARGARET BRENNAN: What about you, Congressman? This is your party in the majority.

REP. ZACH NUNN (R-IA): Yes.

MARGARET BRENNAN: $4 billion in grants just went to local law enforcement. Does Congress need to do anything more to address crime?

ZACH NUNN: When I was chair of judiciary at the state level, Iowa moved very aggressively after the George Floyd homicide. We immediately said that we were going to allow our attorney general to investigate crimes directly so that we weren’t waiting on county attorneys. We made sure that bad law enforcement officers couldn’t be cycled through without some kind of a background check. We made sure that we made a direct investment in mental health across the state and made sure that our regional, both our urban, but also our rural communities, had access to that.

And, ultimately, we also worked with our law enforcement to make sure that law enforcement had a better relationship with the community, rather than one of conflict.

There’s some tangible successes we’ve seen at state levels. Let’s bring those up to the federal level to make sure they can work the same way.

MARGARET BRENNAN: So you do want to see more legislation on —

ZACH NUNN: Yes, I think there’s absolutely more that needs to be done on this.

What doesn’t need to be done are what I will call these fig leaf grants, the idea that we can just hire more minority officers in rural Iowa. That is a very challenging thing to do. We should be identifying – and we saw tragically, even in Memphis, that that alone is not a silver bullet solution. We’ve really got to get to the effort of, you know, good policing, but also recognizing, when there is good law enforcement, we hold that up as a partner in the community. That’s where this money could be going. And it needs to be accountable. I think far too much of this has gone to, you know, some major metropolitan areas which have seen actually crime spike in those neighbors.

MARGARET BRENNAN: Congresswoman, you said it would be good to revive the George Floyd Policing Act but we’re so far past that right now we really need to kind of escalate the conversation faster. What do you mean? What are you calling for?

REP. SUMMER LEE (D-PA): So, let me be really clear, there is a proliferation of disinformation and bias in conversations about crime and conversations about policing. And to be very clear, police violence is crime. We cannot say that we care about crime but then do nothing, choose to do nothing, over and over and over when the crime is committed by a police officer. There are statistics that show that less than 2 percent of police officers who are engaged in the misconduct are ever indicted at all. And while we can all celebrate that five black police officers, right, in – let — not escape us, that it was only when they were black that there was swift action and there was a sixth who was not black and there was not swift action, that we can say that Tyre should be alive, so should Atatiana Jefferson, so should Antwon Rose II, from my district, so should Mike Brown, so should Philando Castile, they should all be alive.

So, when we’re talking about crime and we’re talking about how we’re going to solve it, when I say that we need to change the conversation, we need to acknowledge that public safety does not begin with policing, public safety begins with investments, it begins with addressing our own implicit and explicit biases in policy making and education and appropriations.

MARGARET BRENNAN: So when the president talks about reviving George Floyd Policing Act, you’re saying not as it’s currently written. You want more measures added?

SUMMER LEE: Absolutely. I want us to be intentional at every step about addressing racial bias, about addressing poverty, about addressing crime and about addressing police violence.

REP. ROBERT GARCIA (D-CA): I think Representative Lee is absolutely right. Listen, I would vote for the George Floyd Policing Act if it was on the floor tomorrow, but more needed to be done. Additional steps need to be taken.

MARGARET BRENNAN: It won’t be put on the floor tomorrow under Republican leadership, to be clear.

ROBERT GARCIA: Absolutely. And that’s why I want to be clear also with our – when colleagues bring up that more should be done around this issue. The truth is that you look at a place like California or most of the country, we are actually safer today than we were 15, 20, or 30 years ago. Statistically. And so there’s a lot of concerns around crime, and there should be. We all want to be safe. But I also think we’ve also got to look at the data and actually look at the facts. The truth is that every single election cycle, it just seemed that there is a lot of focus on crime and inner cities. And the truth is that we are safer than we were 20 or 30 years ago in our communities.

MARGARET BRENNAN: But there was a spike in violent crime and you can’t —

MIKE LAWLER: In New York state – in New York state in particular, the reason there was a focus on crime by voters is because they didn’t feel safe. You had people being pushed in front of oncoming subway cars, you had people being stabbed in the street. By the way, the vast majority of victims of crime are black and brown people. So, to act as though it – there — there’s not a crime issue I think is – is dismissing the fact that it is serious and people do not feel safe. And so, yes, we need to address the root causes of why someone may turn towards crime or why they may find themselves as part of a gang, but we also need to hold people accountable with the decisions that they make.

And I think part of the problem here is that oftentimes it is very easy to go say law enforcement bad. But the vast majority of people who are in law enforcement are good people. I come from a community that has a strong law enforcement presence. Fifty percent of – of households in my district have a cop, a firefighter or a first responder or a veteran in them. They’re good people and they want to do right by our community.

SUMMER LEE: The vast majority of people in poor and working class neighbors are good people.

ZACH NUNN: That’s right.

MIKE LAWLER: They are. They are.

SUMMER LEE: And they are victims of crime that we don’t say anything about. For instance —

MIKE LAWLER: And they want police presence.

ZACH NUNN: Exactly.

MIKE LAWLER: They want to be protected.

ZACH NUNN: They want a police presence.

SUMMER LEE: But, for instance, there is no police presence when they’re a – when they’re a victim of waste theft. Who – who — we’re not seeing anybody fear mongering —

MIKE LAWLER: You what, I passed legislation – I passed legislation to prosecute that. And it should be prosecuted.

SUMMER LEE: That’s awesome. And I would like to see it happening here because what we don’t see, when we’re talking about crime, we’re really talking about white collar crime, we’re really talking about ways in which we’re going to hold corporate criminals accountable, we’re really make — taking any strides in any level of government to do anything about that, but we continue to talk about the crimes of desperation, and particularly the crimes in marginalized communities.

MARGARET BRENNAN: I want to ask you about some other issues, immigration and border security.

It has been years and there has been failure to legislate on this. What’s going to be different in a split Congress now? Do you see hope for this?

ZACH NUNN: I do. I really do. The challenge right now is, until we secure the border, we have a really porous situation where the folks who are coming here illegally are jumping ahead of the folks who are coming here legally. The folks who have set up shop in America and want to be got citizens are finding themselves outfoxed by people who are being encouraging to come here illegally. And it’s not like everybody has the chance. It’s those who can get here.

ROBERT GARCIA: Most Republicans in this Congress have been disingenuous on immigration. I’m an immigrant. I came to the U.S. when I was a young kid. I had the privilege and honor of becoming an American in my early 20s. I am grateful to this county. I love this country. Immigrants love this country. They just want an opportunity to be here, a pathway to citizenship, or even just worker programs.

MARGARET BRENNAN: But you’re talking about dreamers. You’re talking about border security.

ZACH NUNN: Right.

MARGARET BRENNAN: You – I mean there are different aspects of this.

ROBERT GARCIA: Well, you can do both. You can – you can do both.

MARGARET BRENNAN: What part of this can get through in this Congress? Which piece?

ROBERT GARCIA: So I –

ZACH NUNN: Well, I would like all of the above.

ROBERT GARCIA: I would hope that both could be done in this Congress.

ZACH NUNN: Yes. I – yes, done. I agree with you on that.

ROBERT GARCIA: Here – here’s the thing. The thing is, is that, unfortunately, we — there’s this myth that Democrats somehow aren’t secured about a secure border, that we don’t want an orderly process, but we also want to insure that we want secure – everybody wants a secure border, but we also want to insure that we’re talking about the humanity of people.

SUMMER LEE: Absolutely.

MARGARET BRENNAN: Yes.

ROBERT GARCIA: These are people that are coming to this country that are desperate, that are suffering. And so this idea that we can’t give these people justice, we can’t support and help them I think is anti-American. And I am hopeful, like some of you, I have talked to some Republicans on the other side that have an interest in a broader immigration reform package. And that’s something that I hope we can all work on.

MIKE LAWLER: My wife is an immigrant as well. And she came to this country about a decade ago in search of economic opportunity. She comes from eastern Europe. A former Soviet satellite state.

The bottom line here is this, we embrace immigration. All right. But we have to have a legal process. You need to secure the border. We need to increase border patrol. We need to increase the number of judges and court personnel to hear asylum cases. Nobody should be waiting two to three years to hear an asylum case with the hope that they may come back for the court hearing. That’s insane.

And then we need to fix the legal immigration process so that people who want to come here can do so legally and contribute to our communities, to our culture, to our economy. And I think there can be broad bipartisan agreement on this if everybody is willing to kind of give a little. Both sides have failed on immigration for years. For years. This is not one party or the other. Both sides have failed miserably here. And we have a situation that is unsustainable.

MARGARET BRENNAN: I want to move on to – to governance and debt. Can I see a show of hands, are you all confident that America will avoid defaulting on its debt?

MIKE LAWLER: Yes.

ROBERT GARCIA: Yes.

ZACH NUNN: I think –

MARGARET BRENNAN: Show of hands.

ZACH NUNN: I’d like to think so.

SUMMER LEE: I hope so.

MARGARET BRENNAN: You are – you’re confident we will avoid the cliff?

MIKE LAWLER: We – we absolutely will. The bottom line is this, we have incurred debt previously. We have an obligation to pay that. We will lift the debt ceiling. But —

MARGARET BRENNAN: Do you believe that some of your Republican colleagues, who have been very — in a very different place on this, will come along and that the party —

MIKE LAWLER: Absolutely. But – but here’s the point I would make. Over – over the past many decades, major spending reform has been tied to the debt ceiling, OK. So, the White House needs to recognize one thing. One party rule in Washington is over. They need to negotiate with the speaker in good faith to come to a long-term agreement that puts us on the path to fiscal solvency.

MARGARET BRENNAN: Social Security, health care, including Medicare and Medicaid and then defense are the three biggest line items. Where do you cut? If you have to have this conversation, where do you cut?

SUMMER LEE: Defense. The reality is, is that we can’t keep asking the same people to compromise over and over and over. When we talk about these conversations, we have to humanize them. We have to be very clear, what we are proposing to cut, who are going to be impacted by it.

ROBERT GARCIA: What we’ve actually been spending all this money on is actually getting our country back on track. We just went through the single largest loss of life event in the modern era of our country. We lost over a million Americans. We spent money trying to keep people alive. We spent money trying to keep businesses afloat. We spent money to ensure that people were housed, people that needed support. And so, yes, we spent. There was a significant spending, but it was spending to respond to this incredible pandemic. And so this idea – and so this idea —

ZACH NUNN: So, I have to be respectful and say, you’re saying government’s the solution for this. I’m saying states like Iowa, they opened back up, people were the solution.

ROBERT GARCIA: We’re – we’re – we’re in the business of governance. So, of course, government is the solution.

SUMMER LEE: Oh, (INAUDIBLE).

ZACH NUNN: Absolutely. And so – so let’s – with respect —

ROBERT GARCIA: And as far as – and as far as — as far as this unity amongst Republicans around the debt ceiling, the truth is there is no unity. We’re not — Democrats are united.

ZACH NUNN: You’re not in our conference.

ROBERT GARCIA: We’re not going to cut Social Security. We’re not going to cut Medicare. And so I’m interested to know how we’re going to get to this resolution so that – because we know that this – this issue, at the end of the day, impacts working people the most.

MARGARET BRENNAN: So the discretionary spending you would cut is also in defense?

ROBERT GARCIA: Listen, look, I think, first of all, I –

MARGARET BRENNAN: Because you just said (INAUDIBLE) –

ROBERT GARCIA: If it was up to me, we’d be raising taxes on billionaires and the corporations. That’s where we’d be getting more support. But I think Representative Lee is right, I think we have to be able to look at an institution like the Pentagon —

ZACH NUNN: So let’s be very clear here –

ROBERT GARCIA: Not all.

ZACH NUNN: If somebody is looking for an opportunity to go to college –

SUMMER LEE: Not all.

ZACH NUNN: They have the opportunity to serve in the military, and it will help pay for them to have the privilege of going to college. What I will not do is see members of the military who are on the front line defending our very opportunity to even go to college have their paychecks cut or their opportunity to defend themselves cut because of lackluster equipment.

SUMMER LEE: (INAUDIBLE) there is a vast difference between –

MARGARET BRENNAN: House Speaker McCarthy –

ZACH NUNN: Look, the military – the military is very – no, no, no, you just said Pell Grants versus military.

SUMMER LEE: No, but, no, no, no, she asked us –

ZACH NUNN: Let’s humanize this.

SUMMER LEE: Let’s humanize. There’s a difference between sending our – our troops somewhere defenseless and then looking at our defense budget.

ZACH NUNN: Right. So —

SUMMER LEE: Which is the highest of the next, what, 20 countries combined.

ROBERT GARCIA: Right, and we are continually forced to defend the world.

SUMMER LEE: We’re not saying that we’re sending – absolutely, we’re – with endless – endless wars. With endless wars.

ROBERT GARCIA: And that’s (INAUDIBLE).

ZACH NUNN: No – no him, by our maker (ph).

MARGARET BRENNAN: But you know Speaker McCarthy, on this program last week, said when it came to cutting discretionary spending, actually one of the places he would look to trim fat was the Defense Department. You don’t sound like you’re OK with that.

ZACH NUNN: Margaret, I think – no. So let’s – let’s take, first of all, what he did say is take things off the table. We’re going to protect Social Security.

MARGARET BRENNAN: Yes.

ZACH NUNN: People have paid into that. They deserve to have that back. Republicans are committed to that.

Let’s take the Medicare that has gone out there to make sure that people have access to the health care they need to be successful off the table. When it comes to defense spending, what I just heard was, cutting things across the board. If there is a review, everything should have the opportunity to be assessed.

MARGARET BRENNAN: So you’re on board.

ZACH NUNN: (INAUDIBLE).

SUMMER LEE: (INAUDIBLE) to cut.

MIKE LAWLER: (INAUDIBLE) what?

ZACH NUNN: Yes, I think we should be looking across the board. And I would also say, here’s where we have been successful in a state like Iowa that has the number one growth rate –

MARGARET BRENNAN: OK.

ZACH NUNN: Is that we don’t spend more than we take in. And ever year we only spend –

SUMMER LEE: But who are you going to cut?

ZACH NUNN: No, no, it’s not about cutting.

SUMMER LEE: Because she asked me, who are we cutting? Yes.

MIKE LAWLER: Here’s – here’s how – here’s part of the problem with –

ZACH NUNN: How do we grow the economy to begin with?

SUMMER LEE: By taxabilities (ph).

MIKE LAWLER: We have not had a real budget process in a very long time.

ZACH NUNN: That doesn’t grow the economy.

MIKE LAWLER: And you have to go line by line and you need these departments and agencies to justify their spending.

MARGARET BRENNAN: Right.