Watch CBS News

Full transcript of "Face the Nation" on May 15, 2022

5/15: Face The Nation
5/15: Face The Nation 45:45

On this "Face the Nation" broadcast moderated by Margaret Brennan:

  • New York Gov. Kathy Hochul
  • Buffalo Mayor Byron Brown
  • Dr. Scott Gottlieb
  • Lloyd Blankfein, senior chairman of Goldman Sachs
  • Mark Esper, former defense secretary

Click here to browse full transcripts of "Face the Nation."  

MARGARET BRENNAN: Good morning, and welcome to Face the Nation. I'm Margaret Brennan.

We have a lot to get to today, but we begin with breaking news from Buffalo, New York, where an 18-year-old male is in police custody following a mass shooting that killed 10 and injured three others.

That massacre is being investigated by the Justice Department as a hate crime and an act of -- quote -- "racially motivated violent extremism."

President Biden referred to it as an act perpetrated in the name of white nationalist ideology, and he has called for an end to hate-fueled domestic terrorism.

CBS News correspondent Nancy Chen reports.

(Begin VT)

MAN: A shooter, a mass shooter.

NANCY CHEN (voice-over): A frantic scene after a gunman opened fire at a Tops supermarket Saturday afternoon starting in the parking lot. Police say the heavily armed suspect shot four people outside, killing three, before moving inside the store.

GRADY LEWIS (Witness): When I first saw him shooting, he shot a woman, he shot a deacon, he shot another woman, and then he went in the store and started shooting again.

NANCY CHEN: That's when police say he encountered a retired police officer working as a security guard, who fired multiple shots that hit the gunman, but didn't impact him because of his tactical gear. The suspect then killed the guard.

Officers say the suspect held a gun to his own neck after encountering police, but eventually surrendered.

JOHN GARCIA (Erie County, New York, Sheriff): This was pure evil. It was straight-up racially motivated hate crime.

NANCY CHEN: Of the 13 people shot, 11 were black.

The suspect, 18-year-old Payton Gendron, is believed to have posted a hate- filled manifesto shortly before the shooting, which he also livestreamed on the social media platform Twitch, authorities say.

A law enforcement source told CBS News the suspect allegedly yelled racial slurs during the attack.

GOVERNOR KATHY HOCHUL (D-New York): To see that sense of security shattered by an individual, a white supremacist, who has engaged in an act of terrorism.

NANCY CHEN: Gendron is from Conklin, New York, about three-and-a-half- hours from Buffalo. He was arraigned hours after the attack on a first- degree murder charge, pleading not guilty.

(End VT)

NANCY CHEN: A first-degree murder charge carries a sentence of life in prison without parole if convicted.

The suspect is being held without bond and is set to appear in court again on Thursday -- Margaret.

MARGARET BRENNAN: Nancy Chen, thank you.

We want to go now to the governor of New York, Kathy Hochul.

Good morning to you, Governor.

GOVERNOR KATHY HOCHUL: Good morning. I'm happy to be here, to be on this show, but it's very a tragic day for all of us here in Western New York. It's my hometown of Buffalo.

MARGARET BRENNAN: Well, our condolences to you and to that community.

Are you concerned about further violence in your state?

GOVERNOR KATHY HOCHUL: Well, we are taking proactive measure to make sure that we're monitoring all social media platforms, because this -- this information was out there.

This was on a manifesto that was written a while back. And so we're very concerned about what other information is perpetrated out there on social media platforms and are out there being disseminated globally.

So, this information from yesterday's attack is already out there. It was livestreamed. The intent of this individual was telegraphed in advance. So I'm calling on social media platforms to be making sure that they're doing a better job monitoring the hate speech that's out there, especially when it's directed against populations and comes under the guise of white supremacy terrorism, which is exactly what happened here in Buffalo.

MARGARET BRENNAN: I want to come back to that in a moment, but I want to ask about the weapon that this shooter used.

You've said it was legally obtained. You've also said that the shooter had been at one point under the surveillance of medical authorities because of past comments he had made about carrying out a shooting. How was he allowed to buy and to hold on to that weapon?

GOVERNOR KATHY HOCHUL: That is exactly what's being investigated now.

I understand that he wrote something when he was in high school and that that was being investigated. So we're going to get to the bottom of that.

MARGARET BRENNAN: So, it's possible that he should not have been sold that weapon? Is that an oversight in the state?

GOVERNOR KATHY HOCHUL: Well, no, we don't know that. We don't know that right now. But I'm going to get to the bottom of and find out right now.

This would have happened a little while back. He's 19 years old. Apparently, he was investigating when he was a high school student, brought to the attention of the authorities. He had a medical evaluation based on something he had written in school. And so we're going to find out what happened in the aftermath.


I know you just mentioned going online and taking what's out there in the social media space seriously. You've called it a feeding frenzy for white supremacy. How do you actually regulate this without impeding on free speech?

You have a number of media and social media companies with big offices in your state. Specifically, what are you asking them to do?

GOVERNOR KATHY HOCHUL: No, we want them to stay in our state.

We also want them to be more vigilant and use the resources they have to hire more people, change their algorithms, be able to identify the second that this hate speech appears, and let there be a determination by law enforcement quickly.

Law enforcement also monitors this as well. I mean, we have the FBI monitoring. We also have state police. So we need a multifaceted approach. We need vigilance, not just law enforcement, but also from the platforms that are allowing this to spread.


GOVERNOR KATHY HOCHUL: They have a responsibility as well.

MARGARET BRENNAN: The Justice Department has called this an act of racially motivated violent extremism. You used a sharper word. You said white supremacist terrorism.

I know your state classifies assault based on race or religion as a terror attack. There's no federal statute that does that. Should there be?


Federal terrorism -- there are domestic terrorism laws on the books. This can be prosecuted under state or federal laws right now. It started with our district attorney at the state level. So this individual is not going to see the light of day again, whether it's under federal prosecution or state under our domestic terrorism laws or just murder one.

This person murdered ten innocent victims in our community just yesterday.

MARGARET BRENNAN: Governor, good luck to you. Thank you for your time this morning.

GOVERNOR KATHY HOCHUL: Thank you very much.

MARGARET BRENNAN: We turn now to the mayor of Buffalo, Byron Brown.

Good morning to you, Mr. Mayor. And our thoughts, our condolences are with you and your community.

How are you all handling this?

BYRON BROWN (Mayor of Buffalo New York): Thank you, Margaret.

It is obviously very painful, very raw, very fresh. We're wrapping our arms around the families of those whose lives were lost. We're standing strong as a community and working to not let this horrible act of hate detract from us being a loving, warm, welcoming community.

MARGARET BRENNAN: The shooter was allegedly motivated by white supremacist ideology.

I know that you are the first African-American mayor of Buffalo, which, as a city, has been called very segregated, if not one of the most in the country.

How do you all unite in the wake of something like this?

MAYOR BYRON BROWN: We're a midsize American city of over 278,000 people, and this part of the city, 80 percent African-American, but diverse, with people of many different backgrounds living in this community.

We are certainly saddened that someone drove from hundreds of miles away, someone not from this community, that did not know this community, that came here to take as many black lives as possible, who did this in a willful, premeditated fashion, planning this.

But we are a strong community. And we will keep moving forward.

MARGARET BRENNAN: Is there an ongoing threat? Are your residents safe today?

MAYOR BYRON BROWN: I think the question that we need to ask ourselves, are any residents safe in this country anywhere?

We have to focus on sensible gun control. That said, after all of these mass shootings that have taken place in this country for different reasons, year in and year out, month in and month out, week in and week out, let Buffalo, New York, be the last place that this kind of mass shooting happens.

MARGARET BRENNAN: Mr. Mayor, good luck to you and thank you for your time today.

MAYOR BYRON BROWN: Thank you very much, Margaret.

MARGARET BRENNAN: We turn now to the economy.

And we learned this week that the cost of things like food and energy rose compared to last month.

Secretary of Transportation Pete Buttigieg joins us now.

Good morning to you, Mr. Secretary.

PETE BUTTIGIEG (U.S. Transportation Secretary): Good morning. Good to be with you.

MARGARET BRENNAN: As a representative of the administration, I do want to ask you a little bit about this reaction to the events in Buffalo.

You were once a mayor. Do you think that there should be a federal law criminalizing domestic terrorism? The president used that phrase, but that's not really on the books.

SECRETARY PETE BUTTIGIEG: Well, I will let the president speak to the legal outlook with regard to the definition of terrorism.

But whether it's called that legally or not, this was terrorism, this was hate. And this would be a good day for every politician in this country left, right and center, every media figure in this country, left, right and center, to come out and unequivocally condemn white nationalism, so-called Replacement Theory, and any other hateful ideology that could have contributed to something like this, before it happens again.

MARGARET BRENNAN: But should there be a federal statute that elevates things when those terms you just threw out there -- should there be an association directly with terrorism?

SECRETARY PETE BUTTIGIEG: Again, we don't know, obviously, all of the details that fit the legal definitions.

What we know is that somebody traveled a long distance with an AR-15 to hunt human beings, to hunt black people. And we need to make sure that we root out that kind of hate and, by the way, that we have a conversation about the availability of the kind of tactical weaponry that he seems to have had.

And yet we seem to be having that conversation over and over and over again as a country.

MARGARET BRENNAN: I want to ask you a little bit on a personal note.

We've been talking about this baby formula shortage nationwide that's been ongoing now for months. You have infants at home. Do you have problems getting a hold of formula?

SECRETARY PETE BUTTIGIEG: Yeah, this is very personal for us.

We've got two nine month old children. Baby formula is a very big part of our lives. And like millions of Americans, we've been rooting around stores, checking online, getting in touch with relatives in other places where they don't have the same shortages to see what they can send over. And we figured it out. We're all set, at least for now.

But I think about what that would be like if you're a shift worker with two jobs, maybe you don't have a car. You literally don't have the time or the money to be going from store to store. That's why this is such a serious issue. And that's why it's getting attention at the highest levels, including, of course, direct involvement by the president.

MARGARET BRENNAN: Well, and this is going to be an issue Congress takes up this week.

I know the president said more action is coming, but this has been ongoing for months. There are supply chain issues already. Then you have the issue with this one plant, Abbott, whistle-blower in September, February, the recall. It's May. Why has it taken so long? And why did the president on Friday seem to say that it was new information to him?

He said, if we'd been better mind readers, I guess we could have done something earlier.

SECRETARY PETE BUTTIGIEG: Well, look, the administration acted from day one after the recall, taking steps like creating more flexibility for the WIC program to help rebalance the availability of formula in the States. There are more actions that are underway, including looking at imports.

But, fundamentally, we are here because a company was not able to guarantee that its plant was safe. And that plant has shut down.

MARGARET BRENNAN: But that is the federal government's job as regulators to help ensure safety of the plant.

SECRETARY PETE BUTTIGIEG: As regulators, yes, but let's be very clear.

This is a capitalist country. The government does not make baby formula, nor should it. Companies make formula. And one of those companies, a company which, by the way, seems to have 40 percent market share, messed up, and is unable to confirm that a plant, a major plant, is safe and free of contamination.

So the most important thing to do right now, of course, is to get that plant in Michigan up and running safely. And that's the work that's going on between the company and the FDA. It's got to be safe and it's got to be up and running as soon as possible.

But this is the difference between a supply chain problem, in other words, a problem about moving goods around, and a supply problem, which has to do with whether they're being produced in the first place.

Now, the administration's also been working with other companies to try to surge their production. That's led to an increase in production, which is helping to compensate. But, at the end of the day, this plant needs to come back online safely.

MARGARET BRENNAN: And we'll have more on that later in the show, but -- because I know you're not the FDA commissioner.

Let me talk to you about the things you are involved more in, which is supply chain and procurement.

How is the administration making sure that those essential ingredients that are actually required for something like formula are actually available?

SECRETARY PETE BUTTIGIEG: So, a shortage of ingredients is not what led to the shutdown of the facility, right?

MARGARET BRENNAN: No, but it is a factor that has led to price inflation. It's one of the factors among many that has been blamed for months of problems with baby formula even before the recall in February.

SECRETARY PETE BUTTIGIEG: Right, but America has the productive capacity to create the baby formula that we need. I think what...

MARGARET BRENNAN: But you're trying -- bringing it in from Europe right now.


But that's because, again, we've got four companies making about 90 percent of the formula in this country, which we should probably take a look at. And one...

MARGARET BRENNAN: Is that an oligopoly?

SECRETARY PETE BUTTIGIEG: Yeah, I mean, it's basically a series of monopolies that have added up into enormous market concentration.

By the way, this is an issue the president has been talking about in area after area after area, whether we're talking about fertilizer, whether we're talking about other things in our agriculture sector, or more generally.

MARGARET BRENNAN: But there are contracts there too...


MARGARET BRENNAN: ... because this is also part of -- I'm using the term food stamp program.


MARGARET BRENNAN: But it's a part of a government assistance program.

SECRETARY PETE BUTTIGIEG: Which is exactly why, again, from day one after the recall...

MARGARET BRENNAN: This isn't just a private sector problem, is my point. The federal government is directly involved in some of these arrangements.

SECRETARY PETE BUTTIGIEG: A plant shutting down because a company can't assure that it is physically safe from contamination is the responsibility of the company.

The responsibility of the regulator is to ensure, as they take steps to get it ready, that it will in fact be safe when it comes back online.

MARGARET BRENNAN: I have so much more to get to as well.

I want to get you on inflation. Gas prices, highest ever price in the country, $4.45 a gallon national average. Are you asking Americans to drive less?

SECRETARY PETE BUTTIGIEG: No, what we're asking Americans to do is to obviously recognize that we're working this issue because we're feeling it, too. I mean, all of us see that pain at the pump.

MARGARET BRENNAN: Should Americans drive less?

SECRETARY PETE BUTTIGIEG: Look, what we want to do is create options for Americans to be able to get where they're going more affordably.

It's why we up the fuel economy standards, so that, by the 2026 model year, the cars will be so much more efficient, if you have a gas car, that you -- if you used to have to fill up four times a month, it might be three now.

Of course, we're also working to make electric vehicles more affordable, because that has a huge benefit, especially in terms of protecting families from these kinds of price volatility.

MARGARET BRENNAN: Those battery components are also a supply chain issue.


So, are we going to take that as an excuse to do nothing and do the same thing forever, or are we going to take that as an issue to work? We're taking it as an issue to work on. But, right now, with existing technology, we know that we can get more Americans into these vehicles.

And we also know, right, that with gas prices on the rise -- and the president's acted with the Strategic Petroleum Reserve. He's acted with ethanol flexibility to try to stabilize those prices. But we also know, right now, that we could be lowering other costs for Americans.

And this is the most important thing I think we need to take a hard look at right now, when we're fighting inflation with everything that we've got, that we made the case to lower the cost of insulin to $35 and faced basically unified Republican opposition, tried to lower the cost of prescription drugs, and were blocked from doing so by congressional Republicans, who then come around and want to talk about inflation, without offering a plan.

MARGARET BRENNAN: But the public isn't interested in things that didn't work, right, or didn't pass or aren't law. They want to know what's going on right now,at their kitchen table and in their pocketbooks.

SECRETARY PETE BUTTIGIEG: Well I think they want to know what Congress is going to do to lower their costs.

MARGARET BRENNAN: Let's talk about that because I want to...

SECRETARY PETE BUTTIGIEG: And we're making the case for that to happen...

MARGARET BRENNAN: I want to ask you about what the administration thinks in regard to what some congressional Democrats, like Senator Warren -- Speaker Pelosi also says she's putting forward a bill about price gouging by companies and banning unconsciously excessive pricing.

This has been called dangerous and misguided nonsense by the Obama administration economic adviser Jason Furman. Do you agree that it is nonsense?

SECRETARY PETE BUTTIGIEG: I'm not familiar with all of the details of that legislation.

But what I can tell you from an administration perspective is that there is guidance going out to crack down on price gouging where we see it. If price gouging arises in the formula market or the fuel market...

MARGARET BRENNAN: Is that what -- how much of a factor is that, though?

SECRETARY PETE BUTTIGIEG: Look, one thing that we know is that we're in this moment, right, where we're feeling -- Americans are feeling the pinch on product after product.

And some companies have become ridiculously profitable, notably including oil companies, which have specifically said they're not going to use the permits and the production capacity that they have. Why would they? They're incredibly profitable right now. They're not complaining. They're not unhappy about the situation.

The public is unhappy. The president is unhappy. And we're taking action.

MARGARET BRENNAN: We're going to leave it there.

Secretary Buttigieg, good to have you here in person.


MARGARET BRENNAN: And good luck with the baby formula.


MARGARET BRENNAN: Face the Nation will be right back.


MARGARET BRENNAN: And we turn now to Dr. Scott Gottlieb, former Trump FDA commissioner and Pfizer board member. Good morning to you, Doctor.

DR. SCOTT GOTTLIEB (Former FDA Commissioner): Good morning.

MARGARET BRENNAN: I want to tap into your perspective, as someone who ran the FDA.

You just heard the administration's view that this baby formula shortage is really the failure of one company here and that the FDA isn't necessarily fully responsible for ensuring things at that plant. I wonder how you respond to that.

DR. SCOTT GOTTLIEB: Well, these look, were persistent problems that appear to have been handled poorly, certainly by the company.

FDA didn't exert all the oversight that they could have of that facility. There were known problems with that facility going back many years. There were findings on previous inspections.

The agency had a 34-page whistle-blower report in hand making pretty serious allegations that there was data falsifications information -- data falsification information withheld from inspectors. So these should have prompted more aggressive action earlier.

I think, now that that facility has been shut by Abbott and production isn't going on, it's going to be hard to clear the facility. The overhang of allegations of data falsification are going to be the kinds of allegations that are hard for the agency to clear, even if they're not able to prove a causal relationship between the infections that we saw in children and the facility itself, which -- which, so far, the agency hasn't been able to prove, and they may never be able to prove that.


You just said that the FDA didn't do all it could. We know they didn't inspect the Abbott facility back in 2020. They stopped inspecting some places during the pandemic that weren't mission-critical.

Isn't baby formula mission-critical? How does the facility not get inspected by the FDA?

DR. SCOTT GOTTLIEB: Well, look, it is mission-critical.

And during the government shutdown, we actually preserved inspections of infant formula plants because of the risks associated with those facilities.

MARGARET BRENNAN: When you were in office.

DR. SCOTT GOTTLIEB: And that facility probably should have been inspected, especially -- when I was in office -- especially given the fact that there had been prior findings there.

The fact that FDA went into that facility this year and found five different strains of Cronobacter, that is a serious concern. And it doesn't appear to have been a state-of-the-art facility, based on the findings in that 483.

So, they should have been under close supervision. Look, we have -- we have sort of the worst of both possible worlds right now. We have a regulatory scheme that is stringent enough that it does create obstacles to getting into the market for new entrants. There's only been one new entrant in the last 15 years that's a domestically based manufacturer, a company, ByHeart.

But, at the same time, it doesn't provide stringent enough oversight of the resulting oligopoly -- three companies control 80 percent of the market -- to ensure that there's no snafus that can cause shutdown of those facilities.

And so, when you do have a shutdown, when the market's that concentrated, it creates these distributed shortages that we're seeing right now that are very hard to resolve. They're going to eventually need to get that facility reopened.


DR. SCOTT GOTTLIEB: The timeline for that is very unclear right now.

MARGARET BRENNAN: And that's what I wanted to ask you. I'm sure the FDA commissioner will be questioned about that on Capitol Hill this week.

But you said it's a broken market. And you're pointing to regulation failures. That whistle-blower report said they failed to maintain proper records and released untested baby formula. There's all sorts of allegations in here.

Does this sound like criminal behavior to you?

DR. SCOTT GOTTLIEB: Potentially.

And that whistle-blower report was head -- sent to the head of the Office of Criminal Investigations at FDA. So it does appear to be a sophisticated whistle-blower. Remember, this division at FDA is nine people. And it was even fewer people when I was there. It's grown in recent years.

And we made some budget requests to increase the size of that group. So the entire industry in this country is overseen by nine people. This has been an under-resourced part of the agency for a very long time, and that's contributing, I think, to these challenges that the agency is facing, trying to exert more vigorous and more efficient oversight.


DR. SCOTT GOTTLIEB: Those allegations are going to be very hard to clear.

And another issue may be that the people who the whistle-blower has implicated -- and FDA has interviewed that whistle-blower -- may be the same people now making representations to the agency about the safety of that facility.


DR. SCOTT GOTTLIEB: And, if that's the case, that's going to complicate issues.

MARGARET BRENNAN: We have more to talk about with you, as always. So stay with us. And, on the other side of the break, we'll continue the conversation.

So, stay with us on Face the Nation.


MARGARET BRENNAN: If you can't watch the full Face the Nation, you can set your DVR, or we're available on demand. Plus, you can watch us through our CBS or Paramount+ apps.

And we're just -- replayed on our CBS News Streaming Network at noon Eastern.


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

Stay with us.


MARGARET BRENNAN: Welcome back to Face the Nation.

We want to continue now with former FDA Commissioner and Pfizer board member Dr. Scott Gottlieb.

Dr. Gottlieb, we've been talking about the baby formula shortage.

I want to ask you about COVID, but just to pick up on something you said, I think you told me there are only nine people who oversee the entire baby formula industry in this country. Nine?

DR. SCOTT GOTTLIEB: That's right.

And I think -- I think there were -- I believe there were three when I started at the FDA. We got some more resources for that group. There's been more resources added since then. And there's a budget request from the current administration to add four more people.

But, yeah, only nine people right now oversee -- oversee the entire industry in the United States. And it was less than that just several years ago.

MARGARET BRENNAN: That's astounding.

Let me ask you about COVID. We hit this horrendous milestone this week of one million deaths over the entire course of this pandemic. Right now, we're averaging about 326 deaths a week. So we've come a far way. But we heard from both Dr. Fauci and Dr. Walensky this week that they have started putting on masks when they go indoors once again. There's concern about an uptick.

What do you see in terms of trend lines? Where are we?

DR. SCOTT GOTTLIEB: Well, look, we're definitely seeing a surge of infection, particularly in the Northeast and parts of the Mid-Atlantic right now.

If you look at the modeling going on in those states, states like Connecticut and New York, it does appear that the infections are peaking right now. And it's mostly a wave of infection driven by B.2 and this new Omicron variant, B.2.12.1 that appears to be more contagious and have more immune escape than prior variants of Omicron.

It looks like most of the people who are getting infected aren't people who were previously infected with B.1, but some portion of the 40 percent of people who escaped the prior wave of Omicron and are now getting caught by this current wave.

I do believe that cases will continue to come down -- wastewater data collected by cities does show overall cases coming down -- and that we shouldn't have a big wave of infection this summer, although there are models floating around the administration that does show a big wave of infection this summer.

The bottom line is, we didn't see that in 2020. We didn't see it in 2021, when B.117 emerged in the spring. So this summer should be a backstop against continued spread of this variant, but it does pose a risk for the fall. And it's going to be important to learn whether or not the new -- newly formulated vaccines that are now in development will cover this B.2 variant well.

Hopefully, they will. I believe they will, but that remains to be seen.

MARGARET BRENNAN: But -- so you reject the idea of a summer surge, even though scientists like Dr. Birx, who was on this program just a few weeks ago, is predicting and seeing a trend line that makes her very concerned that could happen, because it's happened before?

DR. SCOTT GOTTLIEB: Yeah, and there is a model that the White House was briefed on last week that shows a big surge of infection in the summer driven by B.2 as it moves into the Midwest and the West.

I mean, it is certainly possible, but other people disagree with that model. There is the potential that you see a slow burn through the summer. I think it's more likely that you're going to see infection levels come down. Remember, we thought that there was going to be a big surge last year and this summer with B.117 when it emerged in the spring.

And as we got into the later spring, infection levels came down. We had a relatively quiet June and July, and then Delta came along in late August and started to create a new wave of infection.

I think that's probably the pattern we're going to see again, where June and July are relatively low, people do feel safe again, and then, as we head into the late summer...


DR. SCOTT GOTTLIEB: ... probably B.2.12.1 is going to emerge or B.2 mostly in the South.

MARGARET BRENNAN: Dr. Gottlieb, we'll be watching that. Thank you for your insight, as always.

Well, voters in five states head to the polls for midterm primary elections this Tuesday, and those contests will determine which party candidates will be on the ballot in November.

But it is the contest among Republicans in Pennsylvania that is attracting a lot of attention.

Our Robert Costa tells us why.

(Begin VT)

ROBERT COSTA (voice-over): Top Republicans are flocking to Pennsylvania in the final days of the state's red-hot Senate primary race, knowing the state will be a crucial battleground in this November's midterm elections.


SENATOR TED CRUZ (R-Texas): Every Republican running for office says: "I love Donald Trump."


SENATOR TED CRUZ: "No, no, no, I love Donald Trump even more. No, no, no, I have Donald Trump tattooed on my rear end."


ROBERT COSTA: And the top three contenders are all pitching themselves as champions of Trump's political legacy.

But voters face a conundrum: Who exactly fits the bill? Television personality Dr. Mehmet Oz won Trump's endorsement last month. But Oz has since struggled to fend off two challengers, retired hedge fund manager David McCormick, whose wife, Dina Powell, served in the Trump administration as a deputy national security adviser, and hard right candidate Kathy Barnette, whose fiery and deeply personal message on abortion has caught fire with grassroots conservatives.

KATHY BARNETTE (R-Pennsylvania Senatorial Candidate): But it definitely made me become very adamant about the sanctity of life.

ROBERT COSTA: But once polls in recent days showed Barnette jumping into the top tier, she also faced new and intense scrutiny of her past, including homophobic and anti-Muslim statements. Barnette has mostly denied and deflected, hoping to keep up her momentum.

And on Saturday at what was billed as her final campaign rally, Barnette spoke to supporters in Bucks County alongside Doug Mastriano, who was endorsed hours earlier by Trump in the race for governor.

MAN #1: Stand behind the cone, please.

ROBERT COSTA: But CBS News and others were refused entry, no access, no questions allowed.

MAN #2: They told us, no presser.


Trump has been watching her rise carefully, and warned his supporters to stick with Oz, arguing Barnette, if nominated, will -- quote -- "never be able to win in November."

And her rivals are sounding the alarm.

You have called Kathy Barnette a mystery person. What do you mean by that?

MEHMET OZ (R-Pennsylvania Senatorial Candidate): I called Kathy Barnette a mystery, because, every time she answers a question, she raises a bunch more questions. She's not transparent about so many aspects of her basic biography, that we don't know who she is.

ROBERT COSTA: Would Kathy Barnette be a risky bet for Republicans in November?

DAVID MCCORMICK (R-Pennsylvania Senatorial Candidate): Well, listen, I have gotten to know Kathy on the campaign trail. I respect her story.

But Kathy has been tested. She was tested in the last 24 months in a congressional seat, which she lost by 20 points.

ROBERT COSTA: But the race remains a tossup, with voters divided.

For Face the Nation, this is Robert Costa, reporting from Philadelphia.

(End VT)

MARGARET BRENNAN: We turn now to the war in Ukraine.

Senior foreign correspondent Charlie D'Agata has the latest on the diplomatic front and the battlefield -- Charlie.

CHARLIE D'AGATA: Good morning, Margaret.

The Ukrainian government is claiming a key victory in the battle for Kharkiv. And with Finland now on the verge of joining NATO, President Vladimir Putin faces the prospect of sharing an 800-mile border with a NATO partner.

(Begin VT)

CHARLIE D'AGATA (voice-over): Finland today formalized its intention to apply for NATO membership, with Sweden likely to follow suit in the days ahead.

SAULI NIINISTO (President of Finland): We have today a historic day. Finland will maximize its security.

CHARLIE D'AGATA: President Putin has already warned the Finnish president he's made a mistake in joining the alliance.

It comes as Russia has faced significant losses, pulling back from Ukraine's second largest city of Kharkiv.


CHARLIE D'AGATA: But the shelling continues; 67-year-old Vera Kusolopenko lost everything to a Russian missile.


CHARLIE D'AGATA: "This was my home," she said, "and, yesterday, it was burned down."

Russia has now turned its firepower on Eastern Ukraine's industrial Donbass region, targeting infrastructure, bridges, oil refineries warehouses.

But standing here, looking at the size of this crater in the middle of a dirt road in a quiet residential neighborhood, it's hard to know exactly what the Russians were aiming for.

The sheer devastation caused by an airstrike in Bakhmut that tore homes apart, leaving residents homeless and furious.


CHARLIE D'AGATA: "We need help," a woman shouts in despair. "Everything is destroyed, broken," salvaging what's left of their homes and their lives.

(End VT)

CHARLIE D'AGATA: British military intelligence reports that, despite that kind of bombardment, Russia has failed to achieve substantial territorial gains in the past month, and it's likely Russia has lost around a third of the ground forces it committed to the invasion of Ukraine -- Margaret.

MARGARET BRENNAN: Charlie D'Agata, thank you.

We will be right back.


MARGARET BRENNAN: We want to return now to the economy and the financial challenges facing this country.

We turn to the former CEO and current senior chairman of Goldman Sachs, Lloyd Blankfein, who joins us from Water Mill, New York.

Good morning to you.

LLOYD BLANKFEIN (Senior Chairman, Goldman Sachs): Good morning, Margaret.

MARGARET BRENNAN: You know, Americans haven't experienced inflation like this in 40 years now.

And the prices year over year are pretty incredible, when you look at them, gas up 44 percent, eggs 23 percent increase year over year. There's spillover into the services too now. I mean, you look at hotel prices, 23 percent increase.


MARGARET BRENNAN: ... airlines over 30.

What does all of this indicate to you?

LLOYD BLANKFEIN: Well, wage as well.

I will tell you how we got here. We had this massive exogenous event, COVID, lockdowns all around the world. And, at the time that this was -- that this was beginning, it was a huge crisis.

And I would say -- you say worse in 40 years, kind of unprecedented that everywhere in the world all lock down at the same time. In response, there was a massive public policy response, and -- to overwhelm it. And it was a little bit of fighting the last war, in some ways, because, in the financial crisis, you recall, the feeling in the aftermath was it took a long time to recover from that.

So, this time, we were going to go big. And we went big. And that created a lot of liquidity. And all those dollars are change -- are chasing -- are chasing assets.



LLOYD BLANKFEIN: So, we have too much growth, too much stimulus.

MARGARET BRENNAN: Too much growth. Too much stimulus.

So you agree with the San Francisco Fed...


MARGARET BRENNAN: ... when they point to things like all the fiscal spending adding to inflation?


Now, again, at the time, it was very uncertain. And the most important thing was to not have it -- was to not lose all those jobs and have a massive crisis.


LLOYD BLANKFEIN: And so they reacted. And I think they reacted sensibly with what they knew at the time.


LLOYD BLANKFEIN: And you can argue about that, but that's all with the benefit of hindsight.


Well, let's talk about what's happening now to try to control it. So it is the Federal Reserve's job.


MARGARET BRENNAN: You know this.


MARGARET BRENNAN: But, for our audience, it's the central banker's job control inflation here.

Chairman Powell said getting it down to 2 percent is going to involve some pain. What does that indicate to you? And do you think the Fed is doing what is needed right now?

LLOYD BLANKFEIN: Well, the object is, there's an imbalance, too much demand.

And what you have to do is, you have to slow down that demand. You have to slow down the economy. And so they're going to have to raise rates. They're going to have to curtail, hopefully reduce the number of positions that are unopened, because they -- and increase the size of the labor force.

And that's going to involve some pain. And the real pain is not so -- is partly what the Fed is going to do, but it's just that this inflation, some of it is sticky. It's going to be -- you know, we have something like 8 percent inflation.

Some of that is transitory. Some of that is transitory, will go away. Eventually, the war in the Ukraine will be over. Some of the supply chain shocks will go away. But some of it will be a little bit stickier and it will be with us for a while. And while we're talking about this in the macro sense, overall, for individuals and certainly the individuals at the bottom quartile of the pie sharing, it's going to be quite difficult and oppressive.

MARGARET BRENNAN: Difficult and oppressive.

I mean, you lived through the last financial crisis...


MARGARET BRENNAN: ... Goldman Sachs obviously a key part. You know it very well.

When you say it took a long time, it took about 10 years to recover from the last financial crisis..

LLOYD BLANKFEIN: Yeah. That's quite a long time.


So, given what you're saying is unprecedented, what does recovery look like? Are you saying strap in for more than a decade of struggle here?

LLOYD BLANKFEIN: Well, it's -- well, no, no. It's a little bit different. There was a lot -- a lot of different things going on.

And there were -- it's always at least a little bit different. This is -- this is kind of much different. And, there, you had the banks in trouble, a lot of distress, a lot of liquidity issues, big credit issues. Nobody was sure who was able to pay their debts as they arose.

And that took -- and then, again, the financial system is the intermediary by which Fed accomplishes its activity. That's not impaired today. Actually, the consumer is starting out at a strong level. There is a lot of -- it is going to be hard for people to have savings, but they already have savings. They're not necessarily going to increase it quickly because of inflation.

But they're starting in a much better place than we were then.


LLOYD BLANKFEIN: And the Fed has very, again, powerful tools.

Some of this will transition away. Some of the supply chain issues, again, will go away. China won't be locked down forever. The war will not go -- in the Ukraine will not go on forever. Some of it -- and some of these things are a little bit stickier, like energy prices.

And there are some elements of the supply chain that are going to be a lot stickier.

I will give you an example. We were the beneficiary for...


LLOYD BLANKFEIN: ... a very long time of the globalization of the economy, which made goods and services cheaper because we took advantage of cheap labor and countries.


LLOYD BLANKFEIN: Well, how good do we feel, with what we've learned to be relying -- and this as part of your last talk with -- with Secretary Buttigieg.

How comfortable are we now to rely on those supply chains that are not within the borders of the United States that we can't control?


LLOYD BLANKFEIN: Do we feel good about getting all our semiconductors from Taiwan, which is, again, an object of China?

MARGARET BRENNAN: Do you think we're headed towards recession?

LLOYD BLANKFEIN: We're certainly heading -- it's certainly a very, very high risk factor.

And there's -- but there's a path. It's a narrow path. But I think the Fed has very powerful tools. It's hard to finely tune them, and it's hard to see the effects of them quickly enough to alter it. But I think they are -- I think they're responding well.

I think it's -- it's...


LLOYD BLANKFEIN: It's definitely a risk. If I were running a big company, I would be very prepared for it. If I was a consumer, I would be prepared for it. But it's not baked in the cake.

MARGARET BRENNAN: All right, Lloyd Blankfein, thank you for your insights.

We'll be back in a moment.


MARGARET BRENNAN: Former Secretary of Defense Mark Esper is out with a new book called "A Sacred Oath," which chronicles his time in the Trump administration.

Mr. Secretary, welcome back to Face the Nation.

MARK ESPER (Former U.S. Secretary of Defense): Margaret, great to be with you.

MARGARET BRENNAN: I want to talk to you about a number of things,. but you did say recently that, after the events of January 6, which took place when you were out of office, that you now consider President Trump a threat to democracy.

The committee that's investigating January 6 is about to begin public hearings. And they've said they have in their possession a draft executive order that would have had the then-defense secretary seize voting machines, and that the Department of Justice and the Pentagon would then be involved somehow in stopping the transfer of power.

Do you think it's important for that committee to lay out these facts to the public?

FORMER U.S. SECRETARY OF DEFENSE MARK ESPER: Well, first, let me extend my condolences, by the way, to the families and friends of those tragically murdered yesterday in Buffalo.

But, to your question, yes, I think the January 6 Committee needs to get to the bottom of the truth of what happened on January 6, the events leading up to it, and understand it, so, we -- there is a degree of kind of accountability, and, second, we have lessons learned to make sure it doesn't happen again. It's absolutely important.

MARGARET BRENNAN: But it's -- I mean, just even laying that out to you, it is kind of astounding to hear.

And in your book, you write General Milley actually had an agreement with the other members of the Joint Chiefs, the lead military commanders in the country, to all resign if President Trump tried to use the military to stop the transfer of power. You write about personally being concerned that that's what he was trying to do.

So, you saw evidence or you had good reason to believe there was an attempt here to basically stage a coup?

FORMER U.S. SECRETARY OF DEFENSE MARK ESPER: I had a lot of concern about what might or might not happen in the months leading up to the election, right?

There was talk about conducting strikes against -- military strikes against other countries. The president through the summer was talking about sending troops into Seattle and Portland.

And I write about in the final days, I had this private meeting with the head of the National Guard and General Milley, and I talk about what might or might not happen the day after the election, concern that there may be the use of the military somehow to influence the outcome.

And, look, I -- there's been a lot of criticism about why I didn't speak up. It's because I wanted to be there on the spot if any of these things happened to be the circuit-breaker, because the only two people in the United States that can deploy troops, U.S. military troops, are the president and the secretary of defense.

And I was in that pivotal position to act if I thought something was outlandish, irresponsible or would affect the institution of DOD or our country. That's what it came down to for me.

MARGARET BRENNAN: So, that's why you didn't resign.

But why didn't you speak out as soon as you left office? I know you started writing the book within months.


MARGARET BRENNAN: But why didn't you speak publicly about all of this?

FORMER U.S. SECRETARY OF DEFENSE MARK ESPER: Well, the election was over.

I think, like many of us, I figured the president would -- would challenge the election, like others have done in the past, and, after a few weeks, it would be over, and we'd have a peaceful transition of power.

MARGARET BRENNAN: But he did. There was an impeachment hearing on -- about what happened with January 6...


MARGARET BRENNAN: ... and about whether there were attempts to stop the peaceful transfer of power.

You're saying you actually were worried about that yourself.


You always have to think through alternative scenarios, what might or might not happen. And I would have spoken out if called for to do it. I said on another network I would have certainly spoken out if he had won the election.

But he didn't. And at that point in time, I was patiently waiting to see what would happen, make sure that the peaceful transfer of power happened. As you know, I joined my other -- the living secretaries of defense, wrote an op-ed on January 3, three days prior to the transition, expressing our concern about the peaceful handover of power and warning the Pentagon, if you will, about the importance of them doing their duty.

MARGARET BRENNAN: You talk about and have spoken quite a lot this past week about the events in Lafayette Square.


MARGARET BRENNAN: And it's an important bit of the public record.

You were in the Oval Office with the president and he spoke about a very specific number, 10,000, of active-duty troops potentially being sent into the streets of Washington, D.C.

I want to play a clip for you here because I asked the then-Attorney General Bill Barr about exactly that.

(Begin VT)

MARGARET BRENNAN: A senior administration official told our CBS' David Martin that, in a meeting at the White House on Monday morning, the president demanded that 10,000 active-duty troops be ordered into American streets.

Is that accurate?

WILLIAM BARR (Former U.S. Attorney General): No, that's completely false. That's completely false. Sunday night...

MARGARET BRENNAN: The president did not demand that?

FORMER U.S. ATTORNEY GENERAL BARR: No, he did not demand that.

(End VT)

MARGARET BRENNAN: Why do you seem to have different recollections?


You know, I wrote about this in my book that Bill Barr and I have different recollections. Of course, if you go through my story, you'll understand that the president calls over to the Pentagon earlier that morning and talks about 10,000 troops.

That's when I'm first made aware of this request. And, look, I don't know why we have different recollections. I think, in all these cases, people hear or see different things. But I'm 110 percent confident of what the president was seeking that morning.

MARGARET BRENNAN: The former attorney general said it was completely false.

Do you think that was an effort to deliberately mislead the public?


Again, people have different recollections. People have asked me about things that I simply can't recall. All I know is, the way we defused this is Bill Barr, to his credit, because he was a good partner on this stuff, put forward 5,000 law enforcement officers, and I put forward up to 5,000 National Guard to take care of this.

I mean, do the math. 5,000 and 5,000. In my mind...

MARGARET BRENNAN: You're trying to retrofit this 10,000 arbitrary number.

FORMER U.S. SECRETARY OF DEFENSE MARK ESPER: Well, I'm -- yes, I'm trying to kind of give him his 10,000 without giving him 10,000 active-duty troops.

And we pulled it off, and thank goodness. It was -- it was the way to kind of get that down, get out of the room and get on with what we needed to do.

MARGARET BRENNAN: Are you concerned that, if the former president stands for election, that he will surround himself with people who you are deeply critical of who didn't try to short-circuit?

I mean, you were very critical of Robert O'Brien, the national security adviser. You write about the chief of staff, Mark Meadows. You talk about Stephen Miller, all people who were egging on some of these instincts.


He figured this out in 2020, after he beat impeachment. He talks about it. I describe this moment in the book, where he thinks about the people he should put into office. And so, yes, that is a concern of mine, if he runs and is reelected, absolutely.

MARGARET BRENNAN: But should any of those people have any proximity to public office right now?

FORMER U.S. SECRETARY OF DEFENSE MARK ESPER: I don't think so, but that's my opinion.

MARGARET BRENNAN: Well, they're names that we're watching and we will continue to cover.

Mark Esper, a lot more in this book. It is worth reading. Thank you.

We will be right back.


MARGARET BRENNAN: Watch the CBS Evening News With Norah O'Donnell tomorrow night for an exclusive interview with the president of the company that makes the Enfamil formula for babies.

That's it for today. Thank you for watching.

Until next week, for Face the Nation, I'm Margaret Brennan.

View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.