Full transcript of "Face the Nation," July 30, 2023

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

• Former U.N. Ambassador Nikki Haley
  
• Former Arkansas Gov. Asa Hutchinson
  
• Neel Kashkari, the president of the Federal Reserve Bank of Minneapolis
• San Antonio Mayor Ron Nirenberg
  

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

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MARGARET BRENNAN: I'm Margaret Brennan in Washington.

And this week on Face the Nation: New charges of a cover-up are filed against former President Trump in the classified documents case, and some optimistic signs when it comes to the economy.

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MARGARET BRENNAN: Under the heading of "You can't make it up," a popular song on the campaign trail ushered the embattled former president onto the stage in Iowa Friday.

But Donald Trump was undeterred by that and seemingly by the growing list of criminal charges against him.

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DONALD TRUMP (Former President of the United States): We will win the election big, and we will make America great again.

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MARGARET BRENNAN: Equally undeterred, his supporters.

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MAN: They're trying everything they can do to keep him from running.

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MARGARET BRENNAN: And his opponents aren't having much luck gaining traction by being critical.

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FMR. REP. WILL HURD (R-TX) (Presidential Candidate): Donald Trump is running to stay out of prison.

And if we elect...

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MARGARET BRENNAN: We will hear from two other Republican presidential hopefuls, former South Carolina Governor Nikki Haley and former Arkansas Governor Asa Hutchinson.

Then we will look at the bright spots on the economic front last week with Minneapolis Federal Reserve President Neel Kashkari.

Plus:

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ANTONIO GUTERRES (United Nations Secretary-General): The era of global warming has ended. The era of global boiling has arrived.

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MARGARET BRENNAN: A stark warning from the United Nations. But has the July extreme heat changed Americans' views of climate change? We have got new insights.

And we will talk to the mayor of another city suffering from extreme heat, San Antonio's Ron Nirenberg.

It's all just ahead on Face the Nation.

Good morning, and welcome to Face the Nation.

Legal troubles continue to mount for former President Donald Trump, even as he continues to overshadow the rest of the field for the 2024 Republican nomination, both in terms of polling and popularity within the party.

He campaigned over the weekend in Iowa and Pennsylvania.

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FORMER PRESIDENT DONALD TRUMP: You know, they're not indicting me. They're indicting you. I just happen to be standing in their way.

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MARGARET BRENNAN: Late Thursday, we learned of new charges in the classified document case being investigated by special prosecutor Jack Smith Mr. Trump on two occasions showed off classified documents related to military plans. He's now been charged with an additional violation of the Espionage Act and two other counts.

Despite his denials, we'd known about the incidents, one of which was captured on an audiotape obtained by CBS News senior investigative correspondent Catherine Herridge as Trump allegedly shares plans to attack Iran.

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FORMER PRESIDENT DONALD TRUMP: I just found -- isn't that amazing? This totally wins my case, you know.

STAFFER: Mm-hmm.

FORMER PRESIDENT DONALD TRUMP: Except it is, like, highly confidential.

STAFFER: Yes.

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FORMER PRESIDENT DONALD TRUMP: See, as president I could have declassified it.

STAFFER: Yes.

FORMER PRESIDENT DONALD TRUMP: Now I can't.

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MARGARET BRENNAN: Trump has now been charged with unlawful retention of that document and is now accused of attempting to destroy evidence by pressuring a Mar-a-Lago employee to delete security video that had been subpoenaed by prosecutors in June of 2022.

Sources tell chief campaign and election correspondent Robert Costa, that footage could show a Trump aide moving boxes believed to be classified material out of a storage room.

And who better to walk us through these developments than Catherine Harris and Robert Costa here in Washington with me and CBS News legal analyst Rikki Klieman, who is in Southampton, New York.

Rikki, good morning to you.

I want to start with the question in this classified documents case. We are now at a total of 40 counts facing Donald Trump. If he is found guilty, what kind of punishment would he face?

RIKKI KLIEMAN: Well, ultimately, he is facing tens of tens of years in prison.

I mean, you could look up to it to 80 years in prison.But facing the maximum has no reality, Margaret. What we're really looking about -- looking at is how a judge would assess what is appropriate. And that goes back to what we call the judicial guidelines for crimes such as these.

In addition to that, Donald Trump does not stand in the same shoes as any other defendant, because you do have considerations about whether or not you're going to put him in prison at all if he were to be convicted, and then the logistics of such a detention, in terms of Secret Service. He's entitled to it throughout his life.

So, it is not simple to say he's going to face 80 years in prison or eight years in prison. It's really what is the best thing to do at the time if there is a conviction and a sentence. Also, keep in mind, Margaret, there's appeals. This could take a very, very long time.

MARGARET BRENNAN: And there will be political ramifications here, but we know this won't, practically, prevent him from continuing this bid for the presidency.

Catherine, I want to get to what we just played, that audiotape that you obtained. The indictment, the superseding indictment, included reference to this document, which investigators had found previously Donald Trump said didn't exist.

Audio shows he was talking about it. What is the significance of it?

CATHERINE HERRIDGE: Well, charging the Iran document has a ripple effect.

It undercuts the former president's public statements that he was just showing some media articles and clippings. But I think it also opens the door to the potential compromise of sources, methods, tactics, and military techniques.

A war plan is a very unique document. It is a reflection of what the U.S. government believes to be the weaknesses of an adversary, in this case, Iran. It probably included intelligence from our allies in the region. So, the sensitivity of this document is unique and also so important to U.S. national security.

MARGARET BRENNAN: And national security, I mean, protecting the American public is a fundamental responsibility of the American presidency.

CATHERINE HERRIDGE: Bottom line. Exactly.

MARGARET BRENNAN: And there's another document referenced in there as well, a map included in that charge.

Robert, the president -- the former president's attorneys were at the Department of Justice this past week. What were they talking about? What kind of agreement, if anything, did they come to?

ROBERT COSTA: Those lawyers are waiting to see if the former president will be indicted on the January 6 investigation being led by the special counsel.

Right now, the special counsel...

MARGARET BRENNAN: The second federal case.

ROBERT COSTA: There are two federal cases on separate tracks being led by Jack Smith, one on classified records, which is ramping up with these additional indictments.

And there's also the investigation of Trump's conduct in and around January 6. But what we hear about the January 6 investigation is intriguing. It's not just about Trump's conduct on the day of the attack. And we heard a lot about that from the House committee that investigated it.

But this is more about an alleged sweeping scheme led by Trump to overturn the 2020 election. And in conversations with sources last night close to Trump and this morning, there is some concern around the Republican front- runner, that this is not just a campaign now. It's almost like he's leading a legal defense fund.

So many people around Trump are looking to his PAC Save America to pay their legal fees. In a filing we expect to come on Monday, there will be tens of millions of dollars, perhaps $40 million, that is being put toward legal expenses from a political action committee. And that's an indication of what's to come in the coming weeks as Trump faces not only those two special counsel investigations, but he faces also a possible indictment in Georgia for his pressuring of election officials.

And you have the New York case hovering on the horizon over those hush money payments. All of it, though, comes down to how Trump puts pressure, allegedly, on people around him, including those who work at that Mar-a- Lago property.

MARGARET BRENNAN: And this indictment is incredibly detailed about some of those things, text messages, implications that "the boss" wanted a deletion.

ROBERT COSTA: They called him the boss. They called him the boss inside Mar-a-Lago: The boss wants us to do this. He's maybe suggesting we should delete footage.

Trump has denied that he suggested that they should delete any footage. And Trump's lawyers have told us they do have some of that footage. Trump said today he has that footage. It was never deleted.

But this comes down to a culture, and a culture that could come back to the United States, in terms of governing, if Trump wins the White House again. Who is this person who exerts this kind of pressure intensely on the people around him?

MARGARET BRENNAN: Rikki, I want to get to you on something Robert Costa just mentioned in terms of the legal fees.

There's been reports reporting in "The New York Times" and "The Washington Post" that it gets up to $40 million in legal spending to defend Trump and people working with him, that this money that people out there donate to his campaign then gets used as part of a legal defense for people working for him and for Mr. Trump himself.

Is that appropriate? Is there anything to prevent that?

RIKKI KLIEMAN: There probably is nothing to prevent it. And it may not be inappropriate if people know that, when they contribute to the PAC, that one of the things they may be contributing to is, in fact, Donald Trump's legal fees, but also the legal fees of others.

By the way, Margaret, one of things that happens in multiple-defendant cases, if there is a leader of the pack -- and, in this case, it is Donald Trump. As Robert Costa pointed out, when we look at the speaking indictment, it's "the boss" wanted the server needed, "the boss."

It often happens in multiple-defendant case that whoever is the boss and who has access to the money may pay the fees of other defendants. And that becomes a known factor.

However, when you have someone like the now Employee Number 4, whose name has now been disclosed by the press, Mr. Taveras, that when he is going to now testify against Walt Nauta, against Donald Trump, his co-defendants, he cannot possibly be represented by a lawyer who is working in tandem with Donald Trump's lawyers.

So, he had to get a new lawyer. And I am quite sure that his legal fees will no longer be paid by Donald Trump.

MARGARET BRENNAN: Catherine, I want to come back to you on another big legal development this past week.

The U.S. attorney in Delaware, as we know, for five years has been investigating Hunter Biden, the son of the president. This has been wide- ranging, but the deal came down to two tax charges and a diversion agreement related to a gun charge.

What happened in that courtroom this week that made the judge hit the brakes?

CATHERINE HERRIDGE: Well, I was inside that courtroom, Margaret, just sitting about 20 feet behind Hunter Biden during that three-hour hearing.

The simple explanation is that the federal judge is always handling plea agreements. They're very familiar documents to her. And when this one hit her desk, she said, hold on a minute. This is not a standard agreement. These are different terms than what I'm used to.

And when she pulled that thread, what she found out is that there was no agreement between the defense and the prosecution over whether this deal would shut down the prospect of any future criminal charges. And that is really when the whole thing went off the rails.

MARGARET BRENNAN: And now we know, in 30 days' time...

CATHERINE HERRIDGE: Correct.

MARGARET BRENNAN: ... they will have to reconvene in regard to this agreement.

CATHERINE HERRIDGE: That's...

MARGARET BRENNAN: So it could come together?

CATHERINE HERRIDGE: It could come together.

What I would say, being inside that courtroom for three hours, is that the two sides now have an opportunity to answer her questions and sort of renegotiate the language in this plea. But as one former federal prosecutor said to CBS News, what happened in that courtroom was a train wreck. And based on the judge's line of questioning, I think that these could be big gaps to bridge, and the bar may be even higher with this federal judge to get her approval.

MARGARET BRENNAN: Catherine Harris, Robert Costa, Rikki Klieman, thank you so much for laying out the big developments of the week.

And we spoke earlier with former U.N. Ambassador and presidential hopeful Nikki Haley from Des Moines, Iowa, where she was campaigning yesterday. And we began by asking her whether the former president should face prosecution over mishandling of classified documents.

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NIKKI HALEY (R-Presidential Candidate): If these accusations are true, it's incredibly dangerous to our national security.

But, again, this is coming down from a Department of Justice that, frankly, the American people don't trust.

MARGARET BRENNAN: Two other defendants named in this indictment, Carlos De Oliveira and Trump body man Walt Nauta, were allegedly instructed to delete security camera footage.

And the details in this indictment are very specific. It says, just a day after Trump received the subpoena requesting the video, they went to the basement and looked at the security cameras. Two days later, De Oliveira took aside a fourth employee, went through a basement tunnel to a small room, and asked about how many days the server retained footage from those surveillance cameras.

He then told another employee: "The boss wanted the server deleted."

Does that sound kosher to you?

NIKKI HALEY: No, I mean, none of that sounds good, the same way it didn't sound good when Hillary erased her e-mails.

It doesn't matter if you're Republican or Democrat. It doesn't matter if you're Hillary or if you're Trump. You shouldn't be erasing anything unless you have something to hide.

But everybody needs to be treated the same way. And that's what the American people are frustrated about. It's not that they don't want people held accountable. They just want everyone to be treated fairly. And, right now, they don't trust the Department of Justice.

MARGARET BRENNAN: Do you trust the Department of Justice yourself?

NIKKI HALEY: If I become president, the first thing we're going to do is, we're going to make sure we clean up any sort -- we'll clean it up from the top and all of senior management.

They have weaponized and put politics in the Department of Justice over years.

MARGARET BRENNAN: You've said in the past, though, you would be inclined to pardon Donald Trump. That assumes he'll be convicted. That assumes he had something to hide here.

Has your position changed? Would you still pardon him?

NIKKI HALEY: Well, I have -- what I have said is, if he is found guilty, that is certainly showing that it was dangerous to our national security.

But I will take you back to Nixon and Ford. I mean, I think that one of the things we have to look at is not what's in the best interest of the president, but what's in the best interest of the country. We have to move forward. We've got to quit living in the past. And I don't want there to be all of this division over the fact that we have a president serving years in jail over a documents trial.

I want all of this to go away. It's why we have to have a new generational leader. It's why we need to move forward. We can't keep living with indictments and court cases and vengeance of the past. We've got to start going forward. American people are not talking about these indictments.

MARGARET BRENNAN: You have said in the past that you would support Donald Trump if he's the -- wins the nomination, but he can't win a general election.

Do you think, then, that he should drop out?

NIKKI HALEY: While I think he was the right president at the right time earlier and why I think his policies were good, I don't think he's the right president at the right time going forward.

I think we've got to move forward. We can't have a general election where we are handing it over to Kamala Harris because we're dealing with indictments and court cases and legal issues of President Trump.

MARGARET BRENNAN: So, it would help you get your message out and Republicans get their message out if he drops out? Is that what you're saying?

NIKKI HALEY: Well, none of us want to be talking about indictments.

MARGARET BRENNAN: Yes.

NIKKI HALEY: I don't even know if it's the third, fourth, or fifth indictment right now, but what I can tell you is, it's a distraction.

And, frankly, the media is talking about it nonstop. But when I do these town halls, the American public is not talking to me about that.

MARGARET BRENNAN: You've said sanctions on China are not working and that, as president, you would push Congress to revoke permanent normal trade relations until the flow of fentanyl ends.

Our two economies are incredibly intertwined. How do you hit China without having blowback here at home?

NIKKI HALEY: That's the exact response that the Europeans would have told you about Russia, and look at where that got them. That got them to where they're right on the border of a Ukrainian-Russian war.

What we have to understand is, China is a massive national...

MARGARET BRENNAN: China is the second most powerful economy in the world.

NIKKI HALEY: And China is also our number one biggest national security threat. All you have to do is look at the infiltration they're doing in our country.

They're doing nuclear. They're doing artificial intelligence. They're doing cyber. We need to deal with China as the threat that they are. The way I would deal with it is, number one, we wouldn't allow them to buy U.S. soil. We would take the -- the land that they bought back from them. We would go and say, no more are we selling any sort of sensitive technologies that allow them to build up their military and threaten the U.S.

We would stop that. We would tell our universities, you either take Chinese money or American money, but the days of taking both are over, and we would get that Chinese infiltration out.

MARGARET BRENNAN: So...

NIKKI HALEY: And when it comes to fentanyl -- the number one cause of death for adults 18 to 49, Margaret, is fentanyl. And don't think for a second China doesn't know what they're doing.

So what I would do is say to China, we will end all normal trade relations with you when -- until you stop killing Americans.

MARGARET BRENNAN: So you would kick out the Chinese manufacturers who have invested in the state of South Carolina?

NIKKI HALEY: What I would say to the Chinese manufacturers is, I would say, look, we're going to make sure we know exactly what you're doing.

We only took less than 2 percent, but I wish -- I wish the administration had told the governors what was going on. What we need to do is make sure there's no sensitive technology being stolen.

MARGARET BRENNAN: You have been speaking a fair amount about President Biden's seventh grandchild, who you've said he should acknowledge. On Friday, he did, in a statement saying, it's a personal matter, not a political one.

Do you accept that request for privacy, given that there is a 4-year-old child involved?

NIKKI HALEY: When I was talking about the grandchildren, what I was saying is that we need to have term limits in Congress, and we need to have mental competency tests for anyone over the age of 75.

And I don't say that to be disrespectful. When you go and look at Biden and you -- and you ask him what country he was in the week before, and he can't say it, when you go and ask him how many grandchildren he has and he doesn't know, when you go and see him falling asleep with leaders, that's concerning.

And I know, when I was at the United Nations, leaders watch the health and -- the health status of other leaders. They are watching Biden right now. You see what happened with McConnell.

MARGARET BRENNAN: Yes.

NIKKI HALEY: You see what happened with Feinstein.

MARGARET BRENNAN: OK.

So I want to follow up on that. But I think -- are you saying that you believe the privacy of this child should be dealt with as a nonpolitical matter?

NIKKI HALEY: I haven't paid attention to what he said...

MARGARET BRENNAN: OK.

NIKKI HALEY: ... in terms of his interview.

But, of course, when it comes to family, we always want to keep that private. That's fine.

MARGARET BRENNAN: OK.

NIKKI HALEY: But, when you go and you talk about family values, and you talk about all of that, it's odd that he wouldn't acknowledge one of his grandchildren.

MARGARET BRENNAN: You have just criticized Mitch McConnell, the Republican leader, who is 81 and had some issues in front of a camera this week where he seemed to -- to freeze a bit.

Are you confident in his ability to lead? Because he says he's going to serve out his term.

NIKKI HALEY: I think Mitch McConnell did an amazing job when it comes to our judiciary, when we look at the judges, when we look at the Supreme Court. He's been a great leader.

But I do think that this is one -- you know, we've got to stop electing people because they look good in the picture or they hold a baby well. We've got to stop electing people because we like them and they've been there a long time. That's actually the problem.

You need to have term limits, because we need new ideas, new solutions. We've got to have a new generation. I hit Republicans and Democrats.

MARGARET BRENNAN: Mm-hmm.

NIKKI HALEY: We are $32 trillion in debt. We're having to borrow money just to make our interest payments.

I would love to say Biden did that to us. But Republicans did that to us too. Republicans, in the '24 budget, asked for $7.4 billion in earmarks. Democrats asked for $2.8 billion. Who are the big spenders there?

What I am saying about Mitch McConnell, Dianne Feinstein, Joe Biden, Nancy Pelosi, all of them, know when to walk away. Know when to walk away. We have huge issues that need new solutions. We need new generational leaders. We appreciate your service. We appreciate what you've done. But this is why we will fight for term limits. We've got to get it done in America.

MARGARET BRENNAN: Donald Trump is 77 years old. Would he pass that mental acuity test?

NIKKI HALEY: I don't know. I say everybody should take it. I'm willing to take it. I think everybody else should take it.

MARGARET BRENNAN: But you didn't list -- you didn't list his name when you listed all those older Washington lawmakers.

NIKKI HALEY: That goes for all of them.

You can look across D.C. They're all that. Of course, I'm talking about Trump. I have said that all throughout this campaign that it is time for us to have a new generation. We've lost -- Republicans have lost the last seven out of eight popular votes for president.

MARGARET BRENNAN: Yes.

NIKKI HALEY: That's nothing to be proud of. We should want to win the majority of Americans. We've got to start going with a new generation so that we can do that.

MARGARET BRENNAN: Before I let you go, I do want to ask you your thoughts on Governor Ron DeSantis.

He signed that law changing curriculums in the state of Florida with new standards. As you know, a lot of scrutiny about how slavery would be taught.

Do you think he has overstepped by attacking some of the black Republicans in Congress who have said they personally take issue with what he is doing and the language that he is defending?

NIKKI HALEY: Well, I haven't read the actual curriculum that he proposed in Florida.

But what I can say is, it's the 21st century. And I think we can all agree that there was no -- there were no positives that came out of slavery. And I think everybody can and should agree on that.

MARGARET BRENNAN: Has he overstepped?

NIKKI HALEY: Well, I mean, I think he needs to go and talk with the -- with the Republicans and Democrats that have issues with this.

I mean, he just should come out and say, no positives came out of slavery. I think that's important to say. And I think that's what these -- these Republicans and Democrats have asked him to say. We'll see what he does.

MARGARET BRENNAN: Thank you for your time today, Ambassador Nikki Haley.

NIKKI HALEY: Thanks. Go to NikkiHaley.com and join us.

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MARGARET BRENNAN: Face the Nation will be back in one minute. Stay with us.

(ANNOUNCEMENTS)

MARGARET BRENNAN: July looks to be the hottest month ever recorded.

And, according to CBS polling, two-thirds of Americans say they have had unusually high temperatures recently. But, like most everything, there is a split by party as to how it's impacting their thoughts on climate change. Three in four Democrats are more concerned. Just 28 percent of Republicans are, with six in 10 Republicans saying the high temperatures haven't changed their opinions.

In our next half-hour, we will talk with the mayor of San Antonio, Texas, particularly hard-hit by the heat.

(ANNOUNCEMENTS)

MARGARET BRENNAN: If you miss an episode, you can find it on our Web site or on our YouTube page. Just search Face the Nation.

(ANNOUNCEMENTS)

MARGARET BRENNAN: We will be right back with former Arkansas Governor and Republican presidential hopeful Asa Hutchinson.

Plus, is our economy finally on the rebound? We will get into it.

Stay with us.

(ANNOUNCEMENTS)

MARGARET BRENNAN: Welcome back to FACE THE NATION.

We're joined now by presidential candidate and former governor of Arkansas, Asa Hutchinson.

Good to have you here in person.

ASA HUTCHINSON (R, 2024 Presidential Candidate): It is indeed good to be here. Thanks, Margaret.

MARGARET BRENNAN: I've got a lot to ask you about, but I do want to pick up on something Nikki Haley continues to raise, and this is this idea of a mental acuity test for anyone over 75. You're 72 years old. If you win the presidency, you'd be right in that range. What do you think of her concept? Do you think that's appropriate?

ASA HUTCHINSON: Well, there's a mental acuity test every time you go to Iowa and there's a town hall meeting with the questions from the voters. They do a pretty good job of assessing those issues.

You know, as a - as a practical matter, you want a president to be in good health and in charge of, you know, the country in a good mental state. But the tests are not constitutional. And so it's really something that's a throw-away line that catches people's attention.

But the voters, I have a lot of confidence in to make the right decisions. If I get in the race - well, I'm in the race, but if I'm the nominee of the party and you've got Joe Biden there, I'll be the youngest person in the race.

MARGARET BRENNAN: OK. Well, I want to ask you about a number of things in terms of who else is in this race. You have already called on Donald Trump to - to drop out. You've been saying that for some time now. He's not taking your advice. And now we have these new charges on classified documents.

Do you think he should be pardoned for the good of the company, as Ambassador Haley suggested?

ASA HUTCHINSON: No. First of all, that should not be any discussion during a presidential campaign. You don't put pardons out there to garner votes. That is premature. Obviously, if there's a conviction --

MARGARET BRENNAN: You think that's what she's doing?

ASA HUTCHINSON: Well, I - I think that anybody who promises pardons during a presidential campaign is not serving our system of justice well, and it's inappropriate.

MARGARET BRENNAN: You are unique as a Republican candidate because while many of the Republicans on the trail are using this phrase, weaponization of the justice system, you are avoiding that. And, in fact, you have put forward a plan to overhaul federal law enforcement agencies. "The Washington Post" editorial board came close to endorsing it just a few days ago saying the idea should be taken seriously. Explain this approach.

ASA HUTCHINSON: Well, our justice system is the envy of the world. It's what sets our democracy apart. That we're under the rule of law. And if you undermine that system of justice, then you're undermining our democracy. And it's a human system so there's going to be flaws in it that you've got to correct and adjust. And so mistakes are made. And I don't like the way the Justice Department has handled the Hillary Clinton case. I think there's been errors that they have made in their investigations. That was found in the Durham report. But let's address this by reform.

And that's why I put out the reform proposal to reduce the jurisdiction of the FBI, to make them more accountable, more focused in their missions and their national security responsibilities. So, let's reform it. Let's make it accountable. And that's the approach that we should - we should take. As a party, it's about the rule of law and supporting our system of justice.

MARGARET BRENNAN: Well, traditionally for Republicans it was about law and order, but the top three Republican frontrunners are all using this term weaponization. Why is this resonating so much?

ASA HUTCHINSON: Well, because the public sees a discrepancy in how cases are handled. And, clearly, Jim Comey was wrong whenever he made the decision on Hillary Clinton that no prosecutor was going to take that case. And that wasn't his job to do it to begin with. And so they see differences as to how cases are handled. But that is not a defense in a case that's been brought against Donald Trump. So, the public is --

MARGARET BRENNAN: Which is a serious indictment on federal charges.

ASA HUTCHINSON: It's a serious indictment with enormous ramifications for our national security and our equal treatment of individuals under the law. And every case is factually different. But -- so there's frustration that's there. Let's solve those frustrations by not attacking our justice system and buying into what Donald Trump is doing, which is every day appeasing Russia and attacking our justice system. That's what I heard last night when I listened to the tape in Erie, Pennsylvania, at his rally. Both are wrong. And it's - it's putting his personal good above the public good. And above the common good. And that's what we should be talking about and not undermining that system of justice.

MARGARET BRENNAN: You're referring there to a reference he made to tying further aid to Ukraine to fight Russia to what happens with law enforcement and congressional Republicans.

ASA HUTCHINSON: Which is simply appeasing Russia. That's what he's talking about doing. And then simultaneously attacking our justice system in America.

MARGARET BRENNAN: You used to run the Drug Enforcement Agency. Fentanyl is killing a lot of people in this country right now. It's also used for legitimate medicinal purposes by physicians. Should it be a schedule one drug? How do you stop the fentanyl crisis?

ASA HUTCHINSON: Well, it won't make any difference what schedule it is in terms of our enforcement activities. But right now the precursor chemicals are coming from China. And they have legitimate medical purposes. And, so, we want good reporting and requirements on what's being shipped out of China. We'd like to see it stop. Particularly that which is going to Mexico.

But the key is Mexico, because that's where the precursor chemicals are going. The cartels have it. They're making the fentanyl at the labs there. And Mexico can control both of those.

We need greater support from Mexico. We need to use our economic pressure against Mexico so that they will cooperate us - cooperate with us to a greater extent in fighting fentanyl.

MARGARET BRENNAN: So, when you hear Ambassador Haley point the finger solely at China, you're saying she's missing part of the problem here, and that is the Mexican cartels?

ASA HUTCHINSON: Well, first of all, China is not cooperating with us, and we have a better chance of getting Mexico's cooperation. And so the solution is better there. And -- so, yes, let's focus on what we can address. It's also a challenge here in America. We need to use education. The risk, the danger of going on the street and buying a Percocet pill that could be laced with fentanyl. We have to do that education.

Governor Reynolds had a great conference there in Iowa educating parents on this. So, there's multiple responsibilities and approaches we have to do to go after the crisis we have with fentanyl.

MARGARET BRENNAN: Governor Hutchinson, thank you for your time today.

ASA HUTCHINSON: Thank you. Good to be with you, Margaret.

MARGARET BRENNAN: We'll be right back.

(ANNOUNCEMENTS)

MARGARET BRENNAN: There were some positive signs last week that the economy might be holding firm.

Mark Strassmann has those details.

(BEGIN VT)

MARK STRASSMANN (voice over): So far so good for the Fed and its twin goals, chip away at inflation but avoid a rockslide of job losses that could bury us in a recession.

JEROME POWELL (Chairman, Federal Reserve): We've seen so far the beginnings of disinflation without any real costs in the labor market. And that's a - that's a really good thing.

MARK STRASSMANN: Chairman Powell's Fed hiked interest rates again last week, bringing them to the highest rate in 22 years. Despite the high cost of credit, some sectors are booming.

For example -

MARK STRASSMANN (on camera): Construction. Average gains of roughly 15,000 jobs a month over the last year. Residential construction is especially hot despite rising interest rates. There's just so little existing inventory for sale.

MARK STRASSMANN (voice over): Inflation has eased. Last month prices were up 3 percent year over year. That's the smallest 12-month jump in more than two years. It's still higher than the Fed's 2 percent target.

JOE BIDEN, PRESIDENT OF THE UNITED STATES: I'm not here to declare victory on the economy. We have more work to do.

MARK STRASSMANN: But there's been significant progress considering America's unemployment rate, 3.6 percent, lingers at a historic low. While most people have paychecks, our new CBS News poll shows widespread pessimism about the economy. Roughly two-thirds describe it as bad. Most say the economy's struggling and uncertain.

Personally, 70 percent of working Americans say those paychecks can't keep up with rising prices. Most say, at best, financially they're staying in place. But more than one-third say they're falling behind. Nearly half, 45 percent, think the Biden administration's actions are increasing inflation. But nearly two in three believe congressional Republicans have nothing to show in the fight to tame inflation.

The message, millions of Americans still feel hard times while the Fed works to stick a soft landing with the economy.

(END VT)

MARGARET BRENNAN: Mark Strassmann reporting in Atlanta.

We go now to the president of the Federal Reserve Bank of Minneapolis, Neel Kashkari.

Welcome back. Good morning to you, Neel.

NEEL KASHKARI (President, Federal Reserve Bank of Minneapolis): Good morning, Margaret.

MARGARET BRENNAN: You just heard, Americans aren't feeling great about the economy, but then we have good economic news this week on inflation. And you have economists at the Fed saying they no longer see a recession on the horizon.

Who do you agree with here? Do you agree with the assessment, no recession ahead?

NEEL KASHKARI: I do right now. That's our base case scenario. The economy continues to surprise how resilient it is. That's a really good thing. As your reporting just showed, the unemployment rate is still very low at 3.6 percent. Nonetheless, I'm not going to dismiss the hardship that Americans are feeling. High inflation for several years has really put a dent in people's pocketbooks. We're now starting to dig our way out of that. So, we're making progress. But I'm also not surprised that people are still frustrated by how long it has taken to get here.

MARGARET BRENNAN: So, the Fed carried out the 11th rate hike since last year. How many more rate hikes do we have ahead of us here? Because Chairman Powell said repeatedly the full effects of the hikes are yet to be realized. When will the job be done?

NEEL KASHKARI: Well, we're not sure yet. We need to get inflation all the way back down to 2 percent. And while that headline number that your reporter just shared -- 3 percent is really positive news -- that headline number tends to move around a lot as oil prices and gas prices and food prices fluctuate. The underlying number - the core number is more around 4.1 percent. That's down from around 5.5 percent a year ago. So, we're making good progress.

But it's still double our 2 percent rate. And so we don't want to declare victory. We're making good progress and we're staying on it. If we need to hike -- raise rates further from here, we will do so. But we're going to let the data guide us and not prejudge the outcome.

MARGARET BRENNAN: The outcome potentially in September when you meet again about those rate hikes?

NEEL KASHKARI: Correct, September and beyond. You know, we may or may not raise in September, but we also will continue to watch all the data, the inflation data, the wage data, as well as the unemployment data to make those assessments.

MARGARET BRENNAN: So, there are some unknowns on the horizon here. And I'm wondering how you're thinking about them. We have a big labor strike already hitting a major sector of the economy. You have the resumption of student loan payments in October that Moody's estimates could suck $70 billion a year from the economy. We have all this tension with China. How do you think about these potential shocks?

NEEL KASHKARI: Well, we monitor the economy all the time for potential socks. The biggest shock, of course, was the Russian invasion of Ukraine a year and a half ago. Some of those economic effects here at home have diminished, which is good news for us, though the war still persists. So, we're monitoring all those shocks.

The one thing that has continued to surprise us is how resilient the American economy has been even when shocks have hit us. So, for example, when the enhanced unemployment benefits from a couple years ago, when those expired, we thought that would have a profound impact on the labor market. It ended up not having a profound impact on the labor market. And so we will monitor the shocks, but so far the U.S. economy just continues to signal that it is very strong, that there's a lot of demand, workers are coming off the sidelines. And so right now we know shocks can hit us, but right now the base case scenario seems to be that we'll have a slowing economy, but that we would avoid a recession. And I hope that that's true.

MARGARET BRENNAN: Can you gauge how much fiscal spending has been a factor here? I know Morgan Stanley raised their growth projections based on some of the spending that's fueling construction, for example.

NEEL KASHKARI: Yes, I think, you know, on the infrastructure side, with a lot of the investment in alternative energies and bringing manufacturing back, that will also have some effect on keeping prices in those sectors, those raw materials high. But I -- I'm not -- overall, I think that the inflation outlook is quite positive, that it should be slowly diminishing from here. But, again, we've just continued to be surprised by the dynamics of this re-opening economy. And so we can't prejudge it. We have to let the data actually guide us.

MARGARET BRENNAN: So, what are you thinking at this point? Can you actually pull off this soft landing of lowering inflation, slowing growth without, you know, causing job losses and a recession?

NEEL KASHKARI: Well, I think that I would love to see what - see it continued. You know, in your reporting you shared a quote from Chairman Powell where he said there's been so far no cost to the labor market, which is absolutely right and absolutely terrific.

I personally don't think that's realistic that we're going to end this inflation cycle with no cost to the labor market. It would not surprise me to see the unemployment rate tick up from 3.6 to 3.7, 3.8, maybe even 4 percent. That, I -- in my book, that would still be a soft landing.

We definitely want to avoid a deep recession where you have hundreds of thousands of people losing their jobs month after month after month. The kind of painful recession that we have seen in the past. If we can achieve 2 percent inflation with only a modest softening in the labor market, I think that that would be a resounding, positive outcome for the country as a whole.

We can get back to the kind of economy we had before the pandemic, which was very low unemployment, low inflation, modest but positive real wage gains for the American people. That is absolutely achievable, but we need to finish the job.

MARGARET BRENNAN: You are president of the Minneapolis Fed. So, you have a lot of farmland in your district, in that heartland part of the country. Do you have any sense yet what economic impact there will be from this extreme weather?

NEEL KASHKARI: Well, it's very challenging, obviously, for the Ag sector overall. We're blessed in our part of the country that we have a very diverse economy. So if parts of the Ag sector are under pressure, usually other parts of the economy are doing better.

But it's going to be a transition. I mean I think if -- year after year, if we continue to see record-high temperatures, it's going to drive changes to what farmers are planting, it's going to drive changes to where they're planting. You may see - you know, in our part of the country it's quite cold in much of the - you know, much of the year. That warming may mean that we have longer growing seasons here at the cost of growing seasons in further, you know, further southern regions like California, for example. So, I think it's going to drive long-term changes. But some of those changes might be upon us more quickly than we appreciated.

MARGARET BRENNAN: And we are trying to gauge that here, Neel, in our reporting. Thank you so much, Neel Kashkari, for joining us.

We'll be right back.

(ANNOUNCEMENTS)

MARGARET BRENNAN: We turn now to the ongoing heat wave which has put much of the southeastern United States under dangerous heat alerts from Florida to Texas. San Antonio has set a record high heat index this month. And its mayor, Ron Nirenberg, joins us with more.

Good morning to you, Mr. Mayor.

RON NIRENBERG (Mayor, San Antonio, Texas): Good morning, Margaret.

MARGARET BRENNAN: What has been the impact of this high heat, the demand for electricity, what is it doing to your community?

RON NIRENBERG: Well, we continue to set records every week with respect to electric -- electricity demand. Our emergency calls for heat exhaustion, heat illness are up 50 percent since last year, which itself was a record breaker. So, it is a dangerous heat wave that we're experiencing with just an unrelenting day after day heat exposure. So, we're certainly grateful for a president now that's treating this heat wave with the urgency that I think is necessary, especially given the fact that one of the challenges that we have is cities in Texas are fighting our legislature and our state government for local control, we're trying to protect residents and workers, and they are doing everything they can to prevent that from happening.

MARGARET BRENNAN: You're talking about President Biden making it now through the Department of Labor a heat hazard alert so it will guarantee workers heat-related protections. But I wonder, in San Antonio, are you actually seeing employers deny outdoor workers water breaks?

RON NIRENBERG: Well, we had a case that actually is in the courts now last year where a young man died from heat exposure. But the challenge for us is, again, we need to make sure that we're doing everything we can to ensure that employees are aware of their rights and that federal protections are known to the employers. And so we were contemplating an ordinance at the local level to mandate local water breaks, similar to what has been done in other cities. Legislation has been passed that purports to prevent local governments from doing that. And labor code, as well as preventing us from, you know, utilizing our local authority in many other areas. But, again, what we're trying to do is make sure that there's a backstop to prevent the most vulnerable members, the workers in our community, who deserve those basic things.

MARGARET BRENNAN: So this was -- you're talking about the fight you have with the state of Texas where there are rules limiting your ability locally to set regulations that would allow for water breaks. But it doesn't outlaw them, it just -- I guess the governor has justified it saying that there are federal guarantees already. Why aren't those federal guarantees sufficient?

RON NIRENBERG: Well, what the announcement from President Biden will do is make sure that employers and employees know their rights, that there are protections in place. Also, to ramp up enforcement activities through OSHA.

But the reality of the legislation I mentioned is the fact that HB-2127, which was passed by the legislature, upends 70 plus years of local authorities that have been adopted through city constitution, city charters in cities all across the state, in areas that go beyond just labor code, property code, agricultural code, commercial code, you know, local communities, local governments are - are solving problems brought to us many times by our constituents. And legislation like that upends that process and prevents local residents from able -- being able to address their concerns through the local governments that they elect. And I believe it's an affront to our democratic process, and that's why we're challenging it in court.

MARGARET BRENNAN: All right, and so that will continue, it sounds like.

I want to ask you as well about immigration. A federal judge in California just struck down last Tuesday the Biden administration's restrictions on migrants seeking asylum, arguing that it was the Biden administration violating federal law. So, if the Justice Department loses an expected appeal, what's the practical impact for a city like yours in this heat with the migrants that are crossing?

RON NIRENBERG: Sure. Well, since January 2021, San Antonio has seen, like many other big cities, a surge in migrants. And in San Antonio it's -- it's over 400,000 migrants since 2021.

While we don't have authority to reform the immigration policies in America, what we are doing is treating people with compassion. And so we have worked with the Biden administration, with the Department of Homeland Security to be able to fund a migrant resource center where we help folks who are coming through our city on their way to their sponsor families or to the next destination in -- as they wait for their asylum hearings.

The process now, we have to make sure that folks are getting their hearings, but they also have an opportunity to work in the meantime. So, while, you know, we are in the midst of the further politicization and demagoguery that's happening in Texas with respect to the immigration crisis, I do have to thank folks who are trying to take one step forward in the absence of congressional action that we've been waiting for, for 30 years. Our representative, Tony Gonzalez, has offered some legislation that would expand the work visa process. The reality is people are coming. While we don't have the authority to fix immigration at the local level, we do have an obligation to treat people with common humanity and dignity.

MARGARET BRENNAN: Well, Mr. Mayor, thank you for your time today.

We're going to have to leave it there. We'll be back with more FACE THE NATION in a moment.

(ANNOUNCEMENTS)

MARGARET BRENNAN: That's it for us today. Thank you for watching. Until next week, for FACE THE NATION, I'm Margaret Brennan.

(ANNOUNCEMENTS)

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