--:-- [Upbeat music fades out, and the hosts, John Bickley and Georgia Howe, introduce the podcast]
--:-- John Bickley: Welcome to Morning Wire, I'm John Bickley.
--:-- Georgia Howe: And I'm Georgia Howe.
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--:-- Georgia Howe: With 2028 in his sights, Gavin Newsom goes on offense, attacking red states and defending his leadership in California.
--:-- John Bickley: The California exit, by the way, complete bullshit now. I'm Daily Wire executive editor John Bickley with Georgia Howe. It's Wednesday, July 16th, and this is Morning Wire.
--:-- Georgia Howe: Inflation ticks up fueling president trump's calls for an interest rate cut they've had some big forecasting errors and this may be one now and trump gets the go-ahead for layoffs at the department of education what happens next thanks for waking up with morning wire stay tuned we have the news you need to know.
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--:-- Georgia Howe: Democrat Governor Gavin Newsom appears to be ramping up for a presidential run, while his state of California continues to battle a number of crises. Here to discuss is Daily Wire reporter Amanda Presser-Giacomo.
--:-- Amanda Presser-Giacomo: Hey, Amanda. So there's been long speculation that Newsom is eyeing a 2028 run for the White House, And over the last month, he's made that really clear that this is his intention. So catch us up to speed. What have we seen from him lately?
--:-- Georgia Howe: Yeah, well, just last week, Governor Newsom visited South Carolina for a two-day tour. He met with local Democrat leaders and voters. He said he was there to discuss federal health care cuts, but it's pretty clear this was political. South Carolina might be a red state, but it's become the Democrats first primary state. And therefore, it's significant if you're looking to become the Democrats guy in 2028.
--:-- Amanda Presser-Giacomo: Here's Newsom talking to South Carolina voters, hitting on cultural issues and sounding a lot like a candidate. They're banning speech in classrooms, but also in the boardrooms. DEI, ESG, CRT. They're trying to bring us back to a pre-1960s.
--:-- Georgia Howe: In addition to launching his own new podcast, where he's hosted a number of right-wing figures, Newsom is moderating his views. He's proposed limiting free health care coverage for illegals, and he suggested that he's not totally on board with males who identify as transgender in girls sports.
--:-- Amanda Presser-Giacomo: More recently, he appeared on the Sean Ryan podcast, which is generally viewed as right of center. During the four-hour long episode, Newsom said he was directing an objective review of California COVID policies. California had some of the strictest lockdown orders in the nation. And, you know, politically, this was pretty bad for Newsom. It sparked a significant exodus out of California And you know famously he was caught dining at the very posh French Laundry while Californians were locked down Yeah hard to forget that moment So he trying to get out ahead of all that COVID controversy.
--:-- Georgia Howe: Yeah, that's pretty clear. And, you know, he's also trying to back away from the increasingly unpopular position of supporting trans procedures for minors. Remember, Newsom made California the first sanctuary state for minors who were seeking these life-altering surgeries.
--:-- Amanda Presser-Giacomo: Here's Ryan asking Newsom if an eight-year-old is too young to transition. I mean, is eight years old too young? Yeah. I mean, look, now that I have a nine-year-old, just became nine. Come on, man. I get it. So those are legit. You know, it's interesting, just the issue of age. I haven't, as I am, as someone that's been so focused on equality, broadly LGBT rights, particularly though gay marriage. The trans issue for me is also novel. It's over the last few years, I'm trying to understand as much as anyone else. So again, seeming to moderate though, not really going on the record and saying anything directly there.
--:-- Georgia Howe: Right, right. That's pretty common with Newsom. And then we have Newsom praising California and other Democrat-run areas for tax revenue surpluses. And we're, by the way, a donor state. We provided $83.1 billion more than we received from the federal government. Texas took $71.1 billion. Now, California is a top state when it comes to tax revenue to the federal governments. That's, of course, no surprise. The state is huge, and there are a lot of very wealthy people who live there. However, California has a lot of major problems. The cost of living is one of the highest in the nation and typically soar gas prices. Electricity costs are rising. Insurance costs are at a crisis point. Homelessness is worse in California than any other state. Nearly 25 percent of all homeless people reside in California. There have been issues with drugs and human feces on the streets, especially in San Francisco.
--:-- Amanda Presser-Giacomo: Newsom was asked about that, specifically about how this was all very quickly cleaned up for a short amount of time when California hosted Chinese President Xi Jinping. And it seemed like all of that was cleaned up when she came to town.
--:-- John Bickley: Yeah. Is that true? Complete bullshit. Here's Newsom in 2023. I know folks say, oh, they're just cleaning up this place because all those fancy leaders are coming into town. That's true because it's true.
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--:-- John Bickley: Inflation ticked up slightly last month as President Trump continues to pressure the Federal Reserve to cut interest rates. Daily Wire senior editor Cabot Phillips is here to break down the numbers.
--:-- Cabot Phillips: So, economists and investors alike wait with bated breath each month for these reports to come out as they provide a helpful snapshot of the overall health of the economy. Now, when President Trump first took office, economists had offered really apocalyptic warnings that his trade policy, specifically tariffs, would cause inflation to spike. Month after month, though, inflation fell significantly below expectations, defying all of their warnings. But on Tuesday, the latest inflation report showed that rates were going up, even if ever so slightly. Consumer prices went up 2.7% compared to the same month last year, while core inflation was at 2.9%. The goods most impacted were natural gas, coffee, and beef, all of which were up around 10% compared to last year, while gasoline, televisions, and smartphones were all down around 10% on average.
--:-- John Bickley: For more on the report, I spoke with Joe LaVornia, a senior advisor to Treasury Secretary Scott Bessett. The numbers met expectations, so they were not hardly bad at all. And on the CPI, the core CPI, that was weaker than expected. In fact, every month that President Trump's been in office, the core CPI, which some consider to be the underlying trend in inflation, has either met or surprised to the downside. But if you look in the CPI and you look at goods prices broadly defined, excluding food and energy, which is the way you probably should look at it. Prices are up only up a couple of tenths and they've been very well contained.
--:-- Cabot Phillips: So it sounds like the Trump administration isn't too worried about this. They are not. They're confident this is just a blip on the radar. And to their point, the context is important. Remember, from 2021 to 2024, people would have done anything to have a 2.7% rate. Inflation peaked at 9%. And there was a two-year span where it was above 6% every single month. But this is really the first step we've seen in the wrong direction since Trump took office. And now his critics say that his tariffs are to blame.
--:-- John Bickley: So let's get into that. What's their argument? Well, they say that there's simply no way for businesses to pay a 20% tariff without passing at least some of that cost on to consumers. To that point last month, furniture, toys, and clothing all saw relatively significant price increases. And those are all items particularly sensitive to tariffs. Critics say this is just the start. They believe companies are trying to hold off on full price increases until President Trump sets his final rates in September, at which point they say prices will really take off. But again, for the time being, we've really only seen a modest uptick that is nowhere near what economists have been projecting.
--:-- Cabot Phillips: Here's LaVornia's take on that. I would say that in general, the inflation numbers have been absolutely fantastic, meaning they've been much lower than virtually everybody, perhaps outside the administration, had thought. There's really been no noticeable impact of tariffs at all. In fact, a lot of the imported goods the CEA had done analysis on showed that at least through May, you actually had disinflation or deflation in many of these categories. So the inflation news has been great, and we believe the trend will actually get better, meaning you'll see even lower inflation going forward.
--:-- John Bickley: Now, how has President Trump responded to these latest numbers? He has not said anything. He's been totally quiet. No, I'm kidding. Of course, you know he weighed in, once again urging Federal Reserve Chair Jerome Powell to cut interest rates. Now, historically, the Fed has lowered rates when inflation is low, but Powell has been remarkably hesitant to do so, prompting Trump to accuse him of keeping rates high for a political purposes. Here's Trump at the White House yesterday. Exactly as anticipated, very low inflation. So what you should do is lower the rate. The Fed should lower the rate immediately.
--:-- Cabot Phillips: Now, President Trump has repeatedly called on Powell to resign, and he's even gone so far as hinting that he might fire him. But he can only do that with cause. So it means he'll likely have to wait until 2026 for a new chairman. That's when Powell's term expires.
--:-- John Bickley: Well, the markets don't seem to be that concerned about tariffs anymore. Cabot, thanks for reporting.
--:-- Cabot Phillips: Absolutely.
--:-- John Bickley: The Supreme Court says President Trump can move forward with mass layoffs at the Education Department. It's the latest in a string of wins for the Trump administration at the high court. And Daily Wire investigative reporter Mireille Delordi is here to tell us what this means for the department going forward.
--:-- Mireille Delordi: Hey John, so first, what did the court decide?
--:-- John Bickley: Hi Mireille, yes, so the Supreme Court decided Monday that Trump can go ahead with his plans to dismantle the Education Department. This was one of his key campaign promises. The court voted six to three along ideological lines to block a lower court's order. A federal judge in Boston said in May that about 1,400 employees of the Education Department must be allowed to return to work after they were fired in mass layoffs earlier this year. Now the Trump administration will be able to fire them, at least while the rest of the legal challenge plays out. And Trump said on Truth Social, that's exactly what they'll do. He wrote, the federal government has been running our education system into the ground, but we are going to turn it all around by giving the power back to the people. America's students will be the best, brightest, and most highly educated anywhere in the world.
--:-- Mireille Delordi: Education Secretary Linda McMahon reacted to Monday's ruling. This lifts the handcuffs off of what we've been trying to do, which really is to get education back to the states where the president believes it does belong.
--:-- John Bickley: Justice Sonia Sotomayor wrote a pretty angry dissent accusing the conservative justices of making an indefensible decision. Sotomayor argued that Trump is trying to illegally shutter the department without congressional approval. The other two liberal justices, Ketanji Brown-Jackson and Elena Kagan, joined Sotomayor's dissent.
--:-- Mireille Delordi: Now, what will the staff reduction actually look like? Does this entail firing any teachers?
--:-- John Bickley: No. So in March, Trump signed an executive order dismantling the Department of Education at the federal level. As we mentioned, this was one of his key campaign promises to shift more control to local communities and parents. So also in March, Education Secretary Linda McMahon slashed about half of her department's workforce. That's about 1,400 staffers.
--:-- Mireille Delordi: Here's Trump talking about the cuts. They're number one, not showing up to work. Number two, they're not doing a good job. We have a dream. And you know what the dream is? We're going to move the Department of Education, we're going to move education into the states so that the states, instead of bureaucrats working in Washington, so that the states can run education.
--:-- John Bickley: So after that, the administration was hit with two lawsuits. One was filed by a pair of Massachusetts school districts in the American Federation of Teachers Union, and the other was filed by 21 Democratic attorneys general. And eventually this case ended up at the Supreme Court. And Republicans do eventually want Congress to fully shut down the department.
--:-- Mireille Delordi: Here's Secretary McMahon talking about how this would actually help students. We just got the NAEP scores at the end of January. That's the nation's report card. And we saw the state of Louisiana come up. You know, I think they were number one in improvement in bringing their scores up. We had the Mississippi Miracle in which those readers and their literacy tests came literally from almost bottom in the country to now reading it at average level, which was an incredible jump. So there are states that have been innovative and aggressive in what they've been doing, and they didn't need the Department of Education to do it.
--:-- John Bickley: Well, critics have pointed out that the Education Department doesn't do much educating. Though it spends $80 billion in taxpayer dollars each year, it has no say over public school curriculums, which are decided at the state and local levels. Instead, it doles out $18.4 billion annually for Title I, the low-income school district program, and $15.5 billion for special education. It also enforces certain Title IX civil rights laws and sets the rules for colleges to participate in the $1.6 trillion federal student loan program.
--:-- Mireille Delordi: The Trump administration says other departments are better equipped to manage these programs. And by the way, under the Trump administration, the Education Department has terminated over $600 million in grants for training teachers in divisive ideologies, including social justice activism, anti-racism, and recruiting teachers based on race. It seems like there's still quite a bit of fat left to cut there.
--:-- John Bickley: Mara, thanks for reporting.
--:-- Mireille Delordi: Thanks, John. Thanks for waking up with us. And if you're watching on YouTube, please like and subscribe. We'll be back later this evening with more news you need to know. Thank you.
