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INSIDE POLITICS

October Jobs Numbers; Economy and the Election; Democrats Focus on Economy. Aired 12-12:30p ET

Aired November 2, 2018 - 12:00   ET

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


(COMMERCIAL BREAK)

[12:00:07] JOHN KING, CNN ANCHOR: Welcome to INSIDE POLITICS. I'm John King. Thank you for sharing your day with us.

Gangbusters jobs numbers. The economy adds a quarter of a million jobs just four days before America votes, giving President Trump a midterm report card.

Lower taxes, more jobs once was the Republican calling card in the American suburbs, yet Democrats are poised to retake the House. We'll map out critical races and where suburban women hold the key to the election verdict.

The president back on the trail today. Two big rallies. Yes, he does brag about the economy, but his late campaign focus on immigration tells us and should tell you he's worried about Republican intensity.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: If Democrats want to have open borders and they want to invite caravan after caravan into our country, overwhelming your schools, your hospitals and your communities. You know, I think what happened? I really believe somebody was involved that's not on our side of the ledger. Somebody was involved.

(END VIDEO CLIP)

KING: Back to immigration politics in a moment.

But we begin the hour with a new snapshot of the U.S. economy that is also a pre-election gift for the president and his Republican Party. The economy adding a robust 250,000 jobs last month. The unemployment rate is low. Wages beginning to rise. Factory jobs, also up.

Yes, Democrats will and do correctly argue the rebound began back in the Obama years, but the Trump tax cuts are a big part of the boom times now and the president is quick to try to tie these new numbers to Tuesday's election. Quote, these are incredible numbers. Keep it going. Vote Republican. Directly put there by the president on Twitter this morning. CNN's Christine Romans kicks us off by taking us inside the numbers.

CHRISTINE ROMANS, CNN BUSINESS CHIEF CORRESPONDENT: John, a really strong labor market reflected in these numbers. The last big number before the midterm elections, 250,000 net new jobs created in October. A little bit lighter in September because of Hurricane Florence, but look at August, strong hiring there. The unemployment rate still at this generational low of 3.7 percent. And, in fact, could have maybe gone a little bit lower had not 700,000 people entered the labor market. Many of those people probably going for temporary holiday jobs. Those hirings have already started.

Leisure and hospitality up 42,000. Health care, a strong, steady performer in the economy, up 36,000 jobs. And manufacturing, 32,000 jobs. An important point there. We've seen manufacturing taper off the last couple of months but come back here right now. Again, a very strong job report.

And wages, 3.1 percent. You're starting to see wages pick up. That's incredibly important for worker who feel like maybe they haven't felt this strong jobs market.

Also don't forget the Fed. If you have really strong numbers, it could mean the Fed continues to raise interest rates, putting Jerome Powell and company at odds with Donald Trump.

John.

KING: Christine Romans, appreciate the number there. We'll keep an eye on the Fed debate and inflation.

With me here today to share their reporting and their insights, Julie Pace of the "Associated Press," Jonathan Martin with "The New York Times," CNN's Manu Raju and CNN's Maeve Reston.

So, here we are, four days before an election, and the expectation is the Republicans will lose the House despite 3.7 percent unemployment, 250,000 jobs added last month. Factory jobs, which the president promised, manufacturing jobs are up. Wages, which have been stagnant for years, heading up. Why?

JULIE PACE, WASHINGTON BUREAU CHIEF, "ASSOCIATED PRESS": Well, that's a great frustration for Republicans that those -- those are numbers that in a midterm election year you want to be running on. Those are good economic numbers. The problem is that it's been very difficult for the Republican Party to keep the focus on those numbers because of all of the other things that the president has been doing. If you look at the president's own closing argument, it's not about the economy.

Yes, he does talk about the jobs numbers. Yes, he does talk about the unemployment rate. But his overwhelming closing argument is not on this message. And he believes that that is a smart, strategic decision, but there are a lot of Republicans who disagree with this and I think if Republicans do lose the House, you're going to -- you're going to see a lot of complaining about the president's inability to just focus on the economy.

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: But if they --

MAEVE RESTON, CNN NATIONAL POLITICAL REPORTER: And, John, I was just with Kamala Harris out in Iowa who was addressing this very subject as she was trying to build support for the candidates in the two very close congressional races there and, you know, her argument on the trail over and over again was, yes, the job numbers are great, but they are disguising what's happening in America. There are so many people working second and third jobs. And as you go around and talk to voters around the country, they do mention that fact, that there are a lot of people that are struggling to sort of piece things together and that seems to have been a very compelling argument for Democrats this year.

KING: Yes, and to that point, the president does talk about this. The interesting question for me is, he's back on the road today, two more rallies. He always talks about the strong economy, but then he steps on his own message, if you will, with his -- and we'll get to this later in the program -- his talk about immigration, which is frankly alarmist and sometimes over the top and sometimes wanders from the facts. But the president thinks he needs to do that to turn up Republicans, turn out Republicans. Most Republicans wish for weeks and months, including the final few days, he would talk like this.

[12:05:16] (BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Our economy is at an all-time high. Republicans passed a massive tax cut for working families and we will soon follow it up with another 10 percent tax cut for the middle class.

We're putting our coal miners and steelworkers back to work.

Right now we have more Americans working than any time -- any time in the history of our country. That will be a very good sound byte in the debate when we face one of the Democrats, whoever it may be.

(END VIDEO CLIP)

KING: Now, he closes there, focuses on 2020. And we'll see if he starts to get more credit by 2020. The place his numbers are strongest is the economy, and yet it appears as if, especially -- and we're going to talk about this throughout the hour and throughout the next couple of days, in the suburbs, where so many of the key House races will be decided, that a lot of voters have just decided, I'm not listening to him, whether the news is good or bad.

RAJU: Yes.

JONATHAN MARTIN, NATIONAL POLITICAL CORRESPONDENT, "THE NEW YORK TIMES": Yes, I mean, basically the problem for the GOP can be summed up with the fact that culture is now trumping the economy and voters are voting their cultural identity and their values. And that can come in handy in the Senate. That may give them a seat or two to their one- seat majority in the Senate. But it's going to be apparently very problematic in the House because you have upscale voters in either rich communities or diverse communities or both who do not like racially incendiary policies and they are going to vote to reject that. And their 401(k)s may be doing great and their, you know, incomes may have gone up in the last year, but they can't abide the conduct of an American president who speaks about immigrants the way that this president does and about women the way that this president does.

And I think that's the direction of American politics. It's much less about voting your pocket. It's more about voting your values.

RAJU: Yes, and, look, if the economy were not as strong as it is now, we're probably going to be talking about much deeper Republican losses in the House. That is one reason why presumably the Democrats take the House. They'll have the expectations of being able to have a 10-15 seat majority, maybe a little bit more. Perhaps if the economy was doing worse than the president's own approval ratings would be much worse than they are right now. Right now he's in the mid-40s in a large part because the economy is doing well. So if he's doing worse, Republicans are doing worse, they lose the House by even a bigger margin.

But J. Mart's exactly right, the reason why they're having these problems right now in a lot of ways is the president trampling on his own message in a lot of ways and also because these same Republican voters, college educated white voters in the suburbs in particular, don't like this kind of cultural rhetoric.

KING: So is this --

RESTON: And particularly women.

KING: And particularly women, right. Who I think, again, this used to be the calling cart for Republicans, right, lower taxes, stronger economy, more jobs.

MARTIN: Good government, too.

KING: Vote for us. Vote for us.

MARTIN: So what I'm about to play, here's my question, is this legitimate or is this a cop out. This is the president's budget director, Mick Mulvaney, on television this morning, saying, well, you know, sure, low unemployment, wages up, growth numbers great, he says, but people don't process what they mean because they're just numbers.

(BEGIN VIDEO CLIP)

MICK MULVANEY, BUDGET DIRECTOR: It's sort of hard to take those numbers, and the numbers are absolutely fabulous, and turn them into stories that make sense for ordinary folks. You talk about GDP growth, job growth and it's great. Inflation is low. All that is fantastic. But they're numbers, right?

(END VIDEO CLIP)

KING: Now, they're not numbers. They're people's lives. I mean if you understand anything in your life, especially if you're a hardworking two or three-job American, you understand your pocketbook, your finances. Are you better off? Ronald Reagan's question, are you better off today than you were two years ago? And so that's, what, a cop out that we can't break -- we haven't been able to breakthrough maybe, but that's your fault, not the people's fault.

PACE: Yes. It actually reminds me very much of what the Obama administration was saying after midterm elections, where they sort of blamed the results on their inability to message on the economy, not the actual economic situation. This is sort of a different version of this.

I do think some of it gets to Maeve's point where, yes, the top line numbers do look good and there are a lot of people who are in a better economic situation now than they may have been four or eight years ago, but that is not an across the board situation. You know, certain groups of people have benefitted much more than others. That's going to be the Democratic argument. Don't worry about that top line number, worry about how you feel. And for a lot of people, like, those numbers don't actually translate into more money in their pocketbooks and more stability.

RAJU: Yes, and that was interesting you mentioned the Obama -- the Obama team, they were scared to really message on the economy because it was an uneven recovery in a lot of ways for a lot of people. They were scared of being too bullish about how things were going.

The president has been bullish since day one and there has been all of these other issues that have undercut his own message.

RESTON: And I think it's also that what's built into the Democratic argument here is that the tax bill benefitted the very wealthy, did not do as much for the middle class and Democrats finally seemed to sort of win the day on that message and some of the competitive districts, particularly in California where it has -- where the deductions issue has a big impact on people.

[12:10:19] KING: The northeast as well, New York, New Jersey.

RESTON: Yes.

KING: You see a lot of competitive House races there.

To that point, normally -- and, again, the president does talk about it. To be fair to the president, he does talk about it. But then he gets more attention by some of the other things he says in his rallies. Republican candidates seem to have acknowledged this, that we can't count on the president. We can't count on the president to lead the message. Just look at the ad spending, the Republicans. Taxes, top three Republican ad themes in House and Senate races in October. Taxes, and that includes jobs and the economy, health care, but then immigration. Democrats, health care, taxes, criticizing the Democrats for criticizing the Republicans tax plan and then campaign finance reform, trying to call for against corruption and clean -- big money in government.

The Republicans have had to spend a lot of money promoting what, forgive me, should be self-evident that, yes, the jobs boom -- the remarkable jobs boom started when Obama was president, but we have come in, cut taxes, cut regulation and sort of added steroids to it. But they're having a hard time selling that. RAJU: Yes, and that's why you've heard the president say that they

were going to pass another 10 percent tax cut before November 1st. Well, it's November 2nd. They haven't done that and they're not going to do it in the lame duck session. And it's going to be very difficult to do it next year too because of that very reason, a lot of people don't see the exact impact of this major legislative achievement, which it was, and a significant achievement in the first term.

You've also seen that ad spending also doesn't take into account all the negative ads that are on the airwaves, which is really what the Republicans hope will stop the blow on Tuesday.

MARTIN: What the president so loves is also going to be a major factor in the downfall of the HOUSE majority if the Republican do lose it, and that is, this election has been all Trump all the time.

KING: Right.

MARTIN: The last year and a half in Washington, and really around the country, has been, you know, Trump time, right? He is the product. And he relishes that. But the problem with that is that there's, you know, 60 percent of the country doesn't like the product. And a lot of them happen to live in competitive House races.

So whether it's talking about the tax cuts, the relative stability abroad, or any other sort of positive indicators, that is less important now than Trump. Like, Trump is the message, for good or for bad, not policy or substance. It's striking if you talk to voters out there. It doesn't matter the race. Sooner or later that conversation, it's going to Trump.

KING: Right. And to that point, when we come back, we'll continue that conversation.

Job numbers, they are a gift. So why is the president so focused on fear?

(COMMERCIAL BREAK)

[12:16:58] KING: Welcome back.

President Trump's midterm campaign super blitz, you might call it, continues today. Rallies in West Virginia this afternoon, Indiana this evening. This weekend, Montana, Florida, Georgia and Tennessee. You can be sure that over and over again you're going to hear him tell voters, be afraid.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: These are tough people. These are not angels. These are not little angels.

Democrats want to have open borders and they want to invite caravan after caravan into our country, overwhelming your schools, your hospitals and your communities.

(END VIDEO CLIP)

KING: The president does talk economy, he talks health care, he talks trade, but it's clear, watch these rallies, nothing gives the crowd a jolt like when the president talks about immigration, the caravan, border security. And nothing begs for a fact check like when he talks about immigration.

Last night, in a 32 minute speech from the White House, President Trump made at least one blatantly false claim and at least six misleading or unclear statements about immigration issues. In the heated days before the midterm elections, that probably doesn't matter. What matters to him is getting his base to the polls on Tuesday.

And that's what is so fascinating about this. We know this is his calling card. This is actually a very strong issue for him and for Republicans. He could campaign on it fact-based. He decides not to. Which tells me that they've seen evidence the Kavanaugh energy is fading and that he needs to ramp up intensity.

PACE: Well, Republicans, last week, I felt like felt very good about what Trump was saying on the caravan. They felt like this was a good issue for them.

MARTIN: Yes.

PACE: In the last couple of days, there's been a little bit of a shift there where they are a bit worried that he's taking this actually too far. That, yes, this will continue to ramp up the energy among his supporters, but for Republicans who might support the president and his party on immigration broadly, the rhetoric he's using becomes a bit of a problem. So you do sense this little bit of a sea-change. But for Trump, you know, he goes out to these rallies and he says these lines and he sees the energy in the crowd. There's nothing right now that is going to stop him from pushing this even further in the next few days.

RAJU: Yes, and it depends on where he's making this argument, too. I mean every race is different, particularly, as we were saying earlier, House races versus Senate races. And even some Senate races, in places like Nevada and Arizona where Hispanic voters are going to be very significant to those key Senate races, that doesn't necessarily help him. And in a district like Will Hurd's in Texas, a congressman, Republican, trying to maintain his seat in a district that Hillary Clinton carried and with a lot of Hispanic voters, also not particularly helpful. So, the president, if he could keep the party united by talking about -- broadly about border security, when he starts talking about sending people down to the border or shooting people who throw rocks at the American troops --

KING: Right.

RAJU: That raises questions.

MARTIN: Yes, there's two constituencies that recoil from that kind of language. I think one is obviously people of color who think it's outrageous and offensive and demagogic. The other group is sort of college educated whites who also believe it's all those things. Perhaps it's not personal, but certainly believe those things because they kind of believe that this is all kind of, you know, rebel rousing at the end of a campaign. They just can't believe that this is happening in their country and their president is saying and doing these kinds of things. It's like astonishing for a segment of the population. And I think that is the challenge.

[12:20:26] I mean, to Julie's point, if the president was capable of operating with a scalpel instead of a sledge hammer, I think that the caravan messaging may have been more effective. But this president doesn't know from a scalpel. He's not going to sort of do that in the final week. Of course he's going to go to the next level. And I think to sort of keep pushing the envelope, that's what he knows.

And, by the way, here's the thing, it worked for him in 2016.

KING: Right, it worked for him in 2016.

MARTIN: So why should the Washington smarts tell him what to do when they all thought he was going to lose.

KING: Right? And that's just how he feels.

RESTON: But it's so different now. I mean it's so different now in terms of, you know, the younger voters that you see, particularly coming out in those California districts, so many young Latino voters who are just infuriated by the last two years. And, you know, you had this spike this summer with the people that J. Mart was talking about when there was the family separations and what not. But it's almost like he's, you know, he's giving a gift to Democrats at the end by getting people all, you know, worked up again about his rhetoric on those issues.

And the question every time is, you know, will this be the year that we finally see an increase in Latino turnout? And I think in some of these districts, it really will be. (INAUDIBLE) --

KING: That's a giant question, will Latinos and younger voters, who traditionally sit out midterms, will they come out? I think, though, part of the president's bet is that if they come out, I'd better get every one of my voters out to counter that. And, you're right, it doesn't play in the Philadelphia suburbs. It doesn't play in Will Hurd's district along the Texas border.

It does play, look at this, in a state like Tennessee. We did our polling right there. It shows a -- shows Marsha Blackburn, in the last month, improving her standing in the Senate race. And look what else has happened in the last month. What is the top issue in the election? Republicans. 27 percent to 31 percent now say immigration is the top issue. Her -- so it's up. You might say that's only a little bit. It clearly is an issue that energizes and motivates Republicans in a state like Tennessee. A statewide race in a big Trump state.

The question for Democrats is, we've seen Republicans have to respond on health care. They've put a bunch of money into ads, a bunch of their -- their speeches have all changed to deal with health care. Do the Democrats have to respond on immigration. Listen to Tim Ryan, one of their blue collar leaders, if you will, here saying, no, keep it focused on health care and jobs.

(BEGIN VIDEO CLIP)

REP. TIM RYAN (D), OHIO: You stay focused like a laser beam on this woman or this family's economic interest. Their wages. They're losing their pensions. They're getting squeezed more and more on health care costs. Repealing preexisting conditions. Those are the things that people are talking about every single day. So our economic message has got to penetrate to that particular voter.

(END VIDEO CLIP)

KING: Is that right? Are they safe there? Is what the Democrats are saying is, OK, they get what the president's doing. He's trying to gin up Republican turnout. Democrats aren't going to get those people. If they show up, they're going to vote Republican. So we need to stay in our lane. Is that the right answer?

(CROSS TALK)

RESTON: It's really smart after what happened this summer where the message after family separations got really muddled because you had some Democrats out there calling for getting rid of ICE. And then you had, you know, a lot of suburban voters saying, wait, what, you know, and that became the frame around the Democratic message and they worked very hard to try to separate themselves from that. So I think he's exactly right to stick to the safer issues.

RAJU: And this poll --

PACE: It's also a shift from 2016 where Democrats, every time Trump threw something out, they felt like they needed to respond. They needed to shift their own message and recalibrate to talk about what he was doing.

RESTON: Right.

PACE: And now they're sort of saying, let him be over here. We're going to focus on what our (INAUDIBLE).

RAJU: And the polls do show that health care still is a top issue with voters, even in a state like Florida.

KING: Every, sit tight. We've got to save some time. We'll come back to the conversation, I promise you we're going to continue.

Up next, a look at a few key races that could well decide the fate of the House.

(COMMERCIAL BREAK)

[12:28:45] KING: Welcome back. Four days out. Nancy Pelosi says there is no doubt. She looks at this

map and says the Democrats will retake the House. Now she wants to be the next speaker. She has a bias. But is she right? Come back Tuesday night as we count them.

But this map does help explain her confidence. For starters, in our race rankings, we already give the Democrats an advantage, 206 to 199. That's leans, likelys and solids. That means if all that held, all that blue state there, Democrats would still need a dozen seats.

Where could they get them? Well, if you look at all the yellow, we have them ranked over here, there are 30 toss-up races out there. Thirty toss-up races in the CNN ratings. What stands out if you look at these? All but one is now held by Republicans. Only one Democratic- held seat on the toss up list.

So, how will we know? Number one, the Democrats think they can get most of the 23 they need to retake the House in New England, New York, Pennsylvania and Virginia. They think they can make a huge start there. If they're making progress, how will we know? It is a blue ripple? Is it a blue wave? Well, here's one place we're going to look. You go out to Kentucky. You see these races out here. Here's one, Amy McGrath, the Democratic retired military fighter pilot running against a Republican incumbent, this is a pretty solid Republican district. If the Democrats are winning here, that means they're well on their way to retaking the House. That's one place we'll look.

[12:30:01] Let's stay in the neighborhood. Let's move over here. You come over to Kansas. Check Manu's expense accounts. He's been out here, Kansas' 2nd race.