Full transcript of "Face the Nation," May 28, 2023

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

House Minority Leader Hakeem Jeffries, Democrat of New York Rep. French Hill, Republican of Arkansas Austan Goolsbee, Federal Reserve Bank of Chicago president and CEO CBS News cybersecurity expert Christopher Krebs

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

MARGARET BRENNAN: I'm Margaret Brennan in Washington.

And this week on Face the Nation: Breaking overnight, the White House and congressional Republicans reach a deal in principle on the debt limit. But will they find the votes to pass it in time to head off a default?

Finally, a breakthrough in Washington. House Speaker Kevin McCarthy told reporters late last night that he and President Biden had agreed on a two- year post-2024 election extension of the nation's debt limit and that both sides had made concessions.

(Begin VT)

REPRESENTATIVE KEVIN MCCARTHY (R-California): Yes, historic reductions in spending, consequential reforms that will lift people out of poverty into the work force, rein in government overreach.

(End VT)

MARGARET BRENNAN: But the plan has a potential for a resounding round of no's on both the far right and the far left in the House, exactly what President Biden feared earlier in the week.

(Begin VT)

JOE BIDEN (President of the United States): We have to be in a position where we can sell it to our constituencies. We have a pretty well-divided House, almost down the middle. And it's not too different in the Senate.

(End VT)

MARGARET BRENNAN: We will talk to the top Democrat in the House, Leader Hakeem Jeffries, and to an ally of McCarthy's, Congressman French Hill.

Plus, Chicago Fed President Austan Goolsbee will weigh in on the economic impact.

Then: a closer look at the growing concerns over A.I. with the president of Microsoft, Brad Smith and analysis from CBS News cybersecurity expert Chris Krebs.

And a tribute to the class of 2023, a generation of graduates who faced down some unprecedented challenges.

(Begin VT)

JIM RYAN (President, University of Virginia): You can do hard things because you have already done hard things.

(End VT)

MARGARET BRENNAN: It's all just ahead on Face the Nation.

Good morning, and welcome to Face the Nation.

With just eight days to go before Treasury Secretary Janet Yellen says the U.S. will be forced to default on its spending obligations, there is a deal in principle to head off the crisis. The bill is still being written, and we are short on details at this point, but it will include a temporary cap on spending in areas other than defense, veterans or entitlements.

The plan would expand work requirements for able-bodied adults who receive some government benefits, including food stamps, but not for Medicaid recipients. And it calls for clawing back some unspent money from COVID relief funds.

Leaders in both the House and Senate will now have to convince their members to vote for the bill. And we are seeing signs just in the last hour that it could be a tough challenge for both sides.

House Democratic Leader Hakeem Jeffries joins us now from his district in Brooklyn.

Good morning to you.

Let's get straight to it. Can you deliver a majority of Democrats?

REPRESENTATIVE HAKEEM JEFFRIES (D-New York): Well, good morning Margaret.

I do look forward to the White House briefing that's going to take place later on this afternoon with the House Democratic Caucus. We'll be able to have a robust discussion.

But let me say this. President Biden has delivered a result that avoids a catastrophic default, that prevents us from our economy crashing, and stops the extreme MAGA Republicans from triggering a job-killing recession, which, as we've seen over the last week or two, increasingly seemed to have been a position that they were taking for political reasons.

MARGARET BRENNAN: OK, well, we'll only avoid a default if you can get the votes to get it through.

Speaker McCarthy predicted this morning he can get a majority of Republicans, he says. Some Democrats, he thinks, will vote for it. But he also quoted something he says you told him. Listen.

(Begin VT)

REPRESENTATIVE KEVIN MCCARTHY: I think there's going to be a lot of Democrats who vote for it too. Right now, the Democrats are very upset. But one thing Hakeem told me, there's nothing in the bill for them. There's not one thing in the bill for Democrats.

(End VT)

MARGARET BRENNAN: Did you say that? And how do you convince Democrats?

REPRESENTATIVE HAKEEM JEFFRIES: I have no idea what he's talking about, particularly because I have not been able to review the actual legislative text. All that we've reached is an agreement in principle.

Now, what I have consistently said both privately and...

MARGARET BRENNAN: Did you even talk to him?

REPRESENTATIVE HAKEEM JEFFRIES: I talked to him yesterday afternoon.


REPRESENTATIVE HAKEEM JEFFRIES: But I haven't talked to him since that point in time.

What I have consistently said, however, privately and publicly, was that the extreme MAGA Republican negotiating position, and that the extreme bill that they passed on April 26, the default on America act, contained nothing that was consistent with Democratic values or American values.

And it was unreasonable to think that that negotiating position was going to be able to result in a resolution...


REPRESENTATIVE HAKEEM JEFFRIES: ... that would make sense for the American people, when he understood and everyone understood that a bipartisan resolution was the only way forward to avoid a catastrophic default.

MARGARET BRENNAN: OK. OK. And that's a bill that is going nowhere.

In terms of the one that was or is being written as we speak, the head of the Progressive Caucus, Pramila Jayapal, said on CNN this morning, you need to worry about the left flank of the party. She has 102 members in that caucus. How many Democratic defections do you expect?

REPRESENTATIVE HAKEEM JEFFRIES: Well, I have had several conversations with Pramila Jayapal over the last several days, and will continue to do so. And I expect that she'll be part of the caucus briefing that takes place later on today.

Here's what I can say is that the agreement that was reached in principle by President Biden does several important things. In addition to avoiding a devastating default that would hurt everyday Americans, it protects Social Security.


REPRESENTATIVE HAKEEM JEFFRIES: It protects Medicare. It protects Medicaid. It protects veterans. It protects the American people from the type of devastating spending cuts that they were...

MARGARET BRENNAN: She's concerned about environmental -- environmental policy changes and food stamps.

REPRESENTATIVE HAKEEM JEFFRIES: Hold on. It protects -- hold -- hold on. I will get to that.

It protects the American people from the types of devastating spending cuts that were proposed by Republicans in their default on America act. Those are incredibly significant steps forward.

Now, in terms of the permitting issue, I haven't had the opportunity, nor have any of us had the opportunity to review what the proposed language may ultimately be in terms of the permitting situation.

In terms of SNAP, as I understand it -- and, again, we'll have the opportunity to review that language in a few hours, when it is released, but, as I understand it, it will actually result in an expansion of eligibility for people like veterans and the homeless because of changes made to exemptions as a result of what will be in this agreement, in terms of the original 1996 law that was passed.

MARGARET BRENNAN: Well, according to the White House, it is going to relax work requirements for veterans and homeless people, but it still pushes up the age to 54 from 49.

Are you implying -- do you mean to say here that the White House hasn't kept you fully briefed on the details?

REPRESENTATIVE HAKEEM JEFFRIES: The White House has, of course, kept all of us fully briefed every step of the way.


REPRESENTATIVE HAKEEM JEFFRIES: However, I do think that, as the White House has indicated, this is only an agreement in principle.


REPRESENTATIVE HAKEEM JEFFRIES: There will not be a final agreement until we all are able to review the actual legislative text.


The White House is still calling this a budget deal and a separate debt limit increase, but McCarthy says it's a 150-page bill and not a clean debt ceiling increase. Is this one vote, one bill?

REPRESENTATIVE HAKEEM JEFFRIES: Well, that remains to be seen. And, ultimately, that's a decision that House Republicans have as their prerogative to make.


REPRESENTATIVE HAKEEM JEFFRIES: I do hope and expect to see a significant number of House Republicans voting for this agreement.


REPRESENTATIVE HAKEEM JEFFRIES: It's my understanding that they are committed to producing at least 150 votes, if not more.

They were the ones who negotiated this agreement with the White House. And I expect that they will provide a significant number of votes to get it over the finish line.

MARGARET BRENNAN: OK, so 150 Republicans. You need something in the range of 70 Democrats. Do you think you have that?

REPRESENTATIVE HAKEEM JEFFRIES: Well, I do expect that there will be Democratic support once we have the ability to actually be fully briefed by the White House.


REPRESENTATIVE HAKEEM JEFFRIES: But I'm not going to predict what those numbers may ultimately look like.

We have to go through a process consistent with respecting every single member...


REPRESENTATIVE HAKEEM JEFFRIES: ... of the House of Representatives and their ability to fully understand the resolution that has been reached.


Well, Jim Himes of Connecticut, not a progressive, said this morning: "If this vote fails, I think we're going to see the kind of market reaction that none of us want to see."

Can you deliver a vote? Can you deliver someone like him? Can you deliver a vote that wins on the first try? He's talking about a market crash.

REPRESENTATIVE HAKEEM JEFFRIES: Well, we have to, of course, avoid a market crash. We have to avoid tanking the economy. We have to avoid a default.

The reason why we're in this situation from the very beginning is that extreme MAGA Republicans made the determination...


REPRESENTATIVE HAKEEM JEFFRIES: ... that they were going to use the possibility of default to hold the economy and everyday Americans hostage, period, full stop.

MARGARET BRENNAN: Right. Understood. But that's -- that's where we are right now.

REPRESENTATIVE HAKEEM JEFFRIES: And that's why -- that's why...

MARGARET BRENNAN: And that negotiation happened.


MARGARET BRENNAN: You negotiated with them. So here we are.

REPRESENTATIVE HAKEEM JEFFRIES: And that's why I'm -- and that's -- well, that's why I'm thankful that President Biden has reached a resolution.

And that's also why I'm thankful that, notwithstanding the fact that they were trying to jam 10-year spending caps...


REPRESENTATIVE HAKEEM JEFFRIES: ... down the throats of the American people, we were able to apparently match up a freeze in spending consistent with 2023 levels...


REPRESENTATIVE HAKEEM JEFFRIES: ... 2023 levels, not the 2022 levels that what they were trying to extract...

MARGARET BRENNAN: Yes, there's some disagreement.

REPRESENTATIVE HAKEEM JEFFRIES: ... and make sure that we avoided a catastrophic default.

MARGARET BRENNAN: There's some disagreement on those, but we don't have the text. So we will just have to wait on that.

But I want to ask about the backup plan; 213 Democrats voted for this discharge petition, this idea of being able to vote to lift the debt ceiling, even if Republicans -- if the Republican leader doesn't do it. You'd need five Republicans. Can you do that? Can you guarantee people that we will not see a default?


MARGARET BRENNAN: All right, Hakeem Jeffries, glad to have you with us. Hopefully, we see you here in person next time.

We got a lot of work ahead in Congress and also on the Democratic side of - - Republican side of the aisle.

And that's where we're turning now, to Arkansas Republican Congressman French Hill, who joins us from Little Rock.

Good morning to you, sir.

REPRESENTATIVE FRENCH HILL (R-Arkansas): Margaret, good to be with you.

MARGARET BRENNAN: Let's pick up where we left off. The leader says 150 Republican votes can be delivered by the GOP. Do you have those votes for this deal?

REPRESENTATIVE FRENCH HILL: I feel confident that we'll have those votes after people review the text, talk with their colleagues, compare it to our goals.

Speaker McCarthy is the only person who's demonstrated urgency on this point, starting when he was sworn in, and starting with this first meeting with President Biden to get to a sensible and responsible increase to the debt ceiling.


REPRESENTATIVE FRENCH HILL: He had two red lines, Margaret...


REPRESENTATIVE FRENCH HILL: ... no tax increase and not a clean debt ceiling. And I think he's achieved that.

MARGARET BRENNAN: OK. So it will be just one bill, one vote?


MARGARET BRENNAN: OK. That decision has been made, it sounds like, based on what you're indicating here.


MARGARET BRENNAN: In terms of the votes, though, you still have to be able to deliver those 150 Republicans to vote this through.

Hakeem Jeffries says he can get the Democrats in line. We'll see. Can you guarantee that this vote will happen and will succeed on first try?


I will tell you why. We had our plan, which we passed, as you noted, on April 26, with the full support of the American...


REPRESENTATIVE FRENCH HILL: ... people to stop the avalanche of spending. And each component we had of limiting the rate of growth limiting the amount of spending...


MARGARET BRENNAN: But that -- but that's past tense. I don't want to talk about the past tense. That bill's dead.

REPRESENTATIVE FRENCH HILL: No, no, no, it's not past -- no, no, no, it's not...

MARGARET BRENNAN: We're talking about the deal that just was brokered.

REPRESENTATIVE FRENCH HILL: No, no, no, it's not past tense.

MARGARET BRENNAN: I want to talk about whether you can actually deliver that on Wednesday.


MARGARET BRENNAN: This Wednesday is when the speaker says it will happen on this tentative agreement.

REPRESENTATIVE FRENCH HILL: OK, well, my point is that it's not past tense.

Each of the components we had in the bill on the 26th is reflected in this negotiated deal and principle that the speaker achieved with President Biden. And that's why I believe that we'll have those votes on Wednesday, because we limit the rate of growth, we cut spending, we claw back unneeded spending and recision, we stop unnecessary spending, and we get our economy growing with regulatory relief and by encouraging more people back to work.


Well, Chip Roy and others from the Freedom Caucus said they don't even want to see the vote happen, and they're going to try to block it.

REPRESENTATIVE FRENCH HILL: OK. Well, they need to read the text and visit with their colleagues.

MARGARET BRENNAN: Have you read it? Because we haven't.

REPRESENTATIVE FRENCH HILL: This is a -- not a -- no, I'm going to read it this afternoon...


REPRESENTATIVE FRENCH HILL: ... when it's posted on the House Web site.


So, in terms of what is being drafted, there's differences here in terms of spending freezes, and which year we're comparing it to. The spin for the Republicans and Democrats is very different on this. What is actually going into the text?

REPRESENTATIVE FRENCH HILL: Well, we're going to limit the rate of spending growth for nondefense, nonveteran spending. It will be at FY22 levels. Defense and Veterans will be at FY23 levels, and then we capped the growth right and spending 1 percent a year for six years.

That was a key component in the April 26 bill when we offered 1 percent of growth for 10 years. We also are going to go to a Massie-Emmer approach on appropriations bills, which finally opens up and gives strength to the appropriations process, that if all 12 bills are not passed by September 30, then we go to a continuing resolution at 99 percent of current year spending levels.

That's an immense incentive for the Congress to do its work and pass all 12 bills in the House and the Senate.


REPRESENTATIVE FRENCH HILL: And that's the spending issue. And then we -- we claw back, as you noted, COVID relief money, other recisions.


REPRESENTATIVE FRENCH HILL: We stop the first year of the 10-year increase in the IRS budget. That's nearly $2 billion of spending stopped of about $80 billion that was to be spent over 10 years for hiring IRS agents.


Well, we will wait to see that text as well.

I want to get to what you were just talking about in terms of freezes. I mean, every American knows that -- that your dollar doesn't go as far as it used to because of inflation. This may be a problem for you in the Senate, because we already have Republican Senator Lindsey Graham criticizing this deal and the defense increase, as you referred to it, because it doesn't keep up with inflation.

How do you sell that?


MARGARET BRENNAN: Because he just -- he's -- he's said...


MARGARET BRENNAN: ... that national security threats are increasing, and this is a disaster for the Navy and a win for China and Putin. How do you respond to that?

REPRESENTATIVE FRENCH HILL: Well, first, I think that's why Speaker McCarthy and President Biden agreed to the $888 billion spending level, which was the president's level, plus 3 percent inflation, was exactly that point contained in this negotiated deal.

I also would say, look, we've had a gross overreaction in fiscal and monetary policy since the pandemic. And that's why House Republicans are trying to slow the growth in spending and get back to normal before the pandemic, and all areas are going to have to sacrifice.


REPRESENTATIVE FRENCH HILL: But, look, the speaker and the president agree. We want to preserve defense, preserve -- preserve veterans, and take Social Security and Medicare off the table.

And those are big chunks of the federal budget.

MARGARET BRENNAN: Well, this has to make it through the House and then through the Senate.

So, it sounds like there's still a lot of convincing you need to do on those points you just laid out.

Are you worried that the scope of this isn't big enough for you to then go back and sell to some of the skeptical members of your caucus who wanted to see bigger reductions?

REPRESENTATIVE FRENCH HILL: Well, I'm one of those people that wanted bigger reductions. But I also recognize we control only the House of Representatives. We've got to get it through the Senate, as you note, and the Biden administration controls the central government here.

If they were so concerned about the debt ceiling, they could have negotiated with McCarthy a lot earlier, or they could have even raised the debt ceiling when they controlled both branches of the House and Senate and the federal government in December. But they didn't.

So this is the world we have. It's not the spending cuts I would prefer. But when you look at pay-go on regulatory costs, that's a big change. When you look at the Massie-Emmer note...


REPRESENTATIVE FRENCH HILL: ... on 99 percent C.R. on appropriations, that's a big change.

So I think we're in the absolute right direction. And it absolutely follows the goals of House Republicans as laid out on April 26.


All right, Congressman, thank you very much for coming on, giving us a glimpse into what Republicans are putting on paper right now.

Face the Nation will be back in a minute. Stay with us.


MARGARET BRENNAN: We go now to Austan Goolsbee, who is the current president of the Federal Reserve Bank of Chicago and a former White House economic adviser in the Obama administration.

It's good to talk to you.

I know you were chairman of President Obama's Council of Economic Advisers when we came to the brink back in -- in 2011. Markets are closed tomorrow, but we are still very close to that default deadline. How dangerous is the territory we are in, even with this tentative deal?

AUSTAN GOOLSBEE (President, Federal Reserve Bank of Chicago): Well, it's definitely a little dangerous.

As -- as Chair Powell has stated from the beginning, we must raise the debt ceiling. Now, the fiscal decisions, of course, are between Congress and the president. And however they sort it out is -- is good by us.

But if you -- if you did not do that, the consequences for the financial system and for the broader economy would be extremely negative.

MARGARET BRENNAN: How important is it that this vote succeeds on the first try?

AUSTAN AUSTAN GOOLSBEE: I know -- like I say, this is a fiscal decision left to Congress and the president. So, I -- I -- it's -- it wouldn't be the place...


AUSTAN GOOLSBEE: ... for anybody from the Fed to be saying what -- what they should pass or -- or how they should vote.


AUSTAN GOOLSBEE: But I -- I liken it to there's a legitimate argument, if you're trying to lose weight what, what can you eat and how much exercise.

Everybody should be able to agree that the first strategy should not be cutting off your toe.



AUSTAN GOOLSBEE: Because that doesn't save much weight, and it's really painful.


AUSTAN GOOLSBEE: And that's -- that's kind of where the debt ceiling is.

MARGARET BRENNAN: Well, Treasury Secretary Yellen said it's -- it's already kind of painful, because she's already seeing borrowing costs and that -- go up and that there is a cost to being in this place of brinksmanship.

What is -- can you in any way quantify what the impact is to the economy being in the place we are?

AUSTAN GOOLSBEE: Yes, look, Margaret, you raise a great point that even the anticipation of these problems does have consequences on the economy and does have consequences on financial markets.

In a way, this couldn't be happening at a worse time. So, I'm -- I'm definitely heartened that you saw both parties there on the program expressing confidence that they're going to be able to raise the debt ceiling, and -- and -- because if you -- if you just look at what's happening to the rates, you already see that -- that there's fear and uncertainty.

But there are multiple steps that can get worse. So,if you have banks already on edge because of the financial and -- and banking stresses that we've seen over the last couple of months, taking the safest asset on anyone's balance sheet, which is U.S. Treasuries, and kind of calling it into question is not good for the banking system, is not good for lending, is not good for the real economy.

And you'll start to get into other problems. Like, if the rating agencies downgrade...


AUSTAN GOOLSBEE: ... U.S. Treasuries again, then that could raise the interest rates we have to pay even more.


AUSTAN GOOLSBEE: And you get into secondary problems, like there are insurance companies that aren't allowed to hold things that -- whose rating isn't high enough. So let's just avoid it.


AUSTAN GOOLSBEE: Let's just raise the debt ceiling and -- and get on to the next thing.


And -- and I understand that you're in a very different role now at -- at the Fed than you were back then, but this is a complicated economic environment we are in. Can you say at this point -- I know you haven't seen the text -- no one has -- what this will do to the fight against inflation and some of the choices you will have to make at the Fed?

AUSTAN GOOLSBEE: Well, look, as I say, raising the debt ceiling and decisions about the budget have -- that -- that's none of the Fed's business.

The law gives the Fed two jobs, maximize employment, stabilize prices. We've done very well on the employment side. We're improving on the inflation side, but we have not succeeded. Inflation's still well higher than where we want it to be.

So, at -- at a moment of banking crisis, it will be a great relief if we raise the debt ceiling. We can go back to dealing with the -- with the matters at hand, which are the real economy side of -- of employment and inflation.

MARGARET BRENNAN: Do you have a sense yet of whether you personally want to raise interest rates again at this next June meeting?

AUSTAN GOOLSBEE: Well, as a voting member of the FOMC, I have tried not -- to make it a point not to prejudge and make decisions when you're still weeks out from the meeting.

And we are going to get a lot of important data between now and then. I think the part that makes this job difficult is, you got two simple goals, but the actions that the Fed takes take months or even years to work their way through the system. So the Fed has raised the interest rate by 5 full percentage points over the last year.

That's the fastest increase in decades, rivaling ever. And some part of that still has to work its way through the system.


AUSTAN GOOLSBEE: So, there's no doubt inflation is too high still. It has come down. And we're just trying to manage, can we get inflation down...


AUSTAN GOOLSBEE: ... without starting a recession?


AUSTAN GOOLSBEE: There are people who say we cannot. But I think we -- that -- that we can. And that's for sure the goal.

MARGARET BRENNAN: All right, President Goolsbee, thank you for your time.

And we'll be right back with a lot more Face the Nation. Stay with us.


MARGARET BRENNAN: On this Memorial Day weekend, we want to pause and pay tribute to those who lost their lives protecting our country.

We would not be here today without them. And we thank them for their service.


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.

Artificial intelligence is raising concerns on a number of fronts, even among the companies who have devoted considerable resources towards its development.

We spoke with Microsoft president Brad Smith late last week.

(Begin VT)

MARGARET BRENNAN: You said: "A.I. offers perhaps even more potential for the good of humanity than any invention that has preceded it."

I mean, that's an incredible statement.

BRAD SMITH (Vice Chair and President, Microsoft): It's fundamentally an invention that can help us all do research, learn more, communicate more, sift through data better.

And its uses are almost ubiquitous, in medicine, in drug discovery, in diagnosing diseases, in scrambling the resources of, say, the Red Cross or others in a disaster, to find those who are most vulnerable where buildings have collapsed.

MARGARET BRENNAN: Data crunching, essentially?

BRAD SMITH: That's one part of it.

It identifies patterns in data that may be difficult for humans to access. But, in a sense, it's going to impact all of our lives in a multiple of different ways. So, think about it as the next step in our ability to learn, communicate, express ourselves.

MARGARET BRENNAN: But what should American consumers know about artificial intelligence?

BRAD SMITH: It's a co-pilot, if you will, to help us do things.

I think one good thing for everyone to know is, it's already part of our lives. If you have a Roomba at home, it finds its way around your kitchen using artificial intelligence to learn what to bump into and how to get around it.


BRAD SMITH: So it isn't necessarily as mysterious as we sometimes think.

And yet, at the same time, it is getting more powerful. It can do much more to help us, and I think the other thing that all of us should think about as Americans is, like any powerful technology, we need to keep it under human control. We need to keep -- keep it safe. And that will require the work of companies that create it, that use it. It will require, I think, a level of law and regulation as well.

MARGARET BRENNAN: You just made a big jump from a Roomba...


BRAD SMITH: Yes, I did.

MARGARET BRENNAN: ... to the machine takeover here.

I mean, when you say that you have to make sure humanity has control -- in control here, is there really a risk that it won't be?

BRAD SMITH: Whenever you have something that fundamentally can do good, but could also go and do harm, you put a braking mechanism in place. You put a safety brake, an emergency brake.

We should think about A.I. the same way.

MARGARET BRENNAN: What's the most promising concept you've seen?

BRAD SMITH: Well, I do love these examples where A.I. can detect a disease, a form of cancer, before the human eye or other human doctors might.

You take something like pancreatic cancer. You know, it is so small when it begins that typically it's undetectable to the human eyes of doctors. And yet A.I. is very good at sifting through patterns and detecting things and flagging them.

MARGARET BRENNAN: So what's the next interface that people should expect?

BRAD SMITH: Think of the ability to, in effect, tell a computer what you want it to do. You don't need to learn to code. You can simply say, can you go find information about whether this restaurant is open on Monday nights, and, if so, does it take reservations and how do I make one?

You can write that in one sentence and get all of the information back. You no longer have to spend your time clicking on links and finding answers. Take that example and generalize further. You want help. You have writer's block. You've got to write a memo. You need to sift through your e-mail. You want to create a PowerPoint slide.

You can tell a computer what you want it to do. As I say, we're -- we create what we call a co-pilot. You don't have to know how to do everything. You just have to know what you want done and how to ask for it.

MARGARET BRENNAN: How do you know the -- the information is accurate?

BRAD SMITH: I do think that it's, in part, based on using your brain.

I have often found, in the world of technology, if something doesn't sound right, you should double-check. That will still be true.

MARGARET BRENNAN: On the concerning side of the ledger, Goldman Sachs predicted A.I.'s ascendance will disrupt 300 million jobs here in the U.S. and in Europe. How fast is this going to happen?

BRAD SMITH: It will be years, not decades, although things will progress over decades as well.

There will be some new jobs that will be created. There are jobs that exist today that didn't exist a year ago in this field. And there will be some jobs that are displaced. There always are.

But I think, for most of us, the way we work will change. This will be a new skill set we'll need to, frankly, develop and acquire.

MARGARET BRENNAN: You have a very deep concern here about deepfakes.

Now, this is content that looks realistic, but is completely computer- generated. On Monday, there was a photo that actually moved the markets. It was a fake photo, it looked real, of an explosion near the Pentagon. And it was potentially partially created by A.I.

The market sold off quickly. It was fact-checked.


MARGARET BRENNAN: But that image was put out there from an account that looked legitimate as well.

So how do you stop something like this from happening?

BRAD SMITH: We'll need a system that we and so many others have been working to develop that protects content, that puts a watermark on it so that, if somebody alters it, if somebody removes the watermark, if they do that to try to deceive or defraud someone, first of all, they're doing something that the law makes unlawful.

We may need some new law to do that. But, second, we can then use the power of A.I. to detect when that happens.

MARGARET BRENNAN: So that means a news organization like CBS would have video that somehow could be identified, besides our little eye icon, something embedded in there that your computers would see...

BRAD SMITH: Yes, absolutely.

MARGARET BRENNAN: ... to say this is real?

BRAD SMITH: Yes, that is exactly where this should go.

And I would guess and hope that CBS will be absolutely at the forefront of this. You embed what we call metadata. It's part of the file. If it's removed, we're able to detect it. If there's an altered version, we, in effect, create a hash. Think of it like the fingerprint of something. And then we can look for that fingerprint across the Internet.

MARGARET BRENNAN: I want to ask about another topic here that's related.

The RNC -- politics -- they put out an attack ad using A.I., and I know we have video of it. It was meant to mimic a news report from the future, from 2024. It said, Joe Biden won the election, and then it shows this dystopia.

And in teeny, tiny little script in the upper left hand corner, it says, generated by A.I. Is that sufficient?

BRAD SMITH: I do think that there is some real virtue in telling the public when they are seeing content that has been generated by A.I., instead of a human being, especially if it is designed to look like a human being, a human face or voice, so that people know, no, that's not the real person.

We, I think, will need some new standards in that space.

MARGARET BRENNAN: Who sets that?

BRAD SMITH: This, I think, is one of the issues that we're going to need to discuss together and find a path through.

Now, we do need to balance that. We live in a country that, I think quite rightly, prides itself on free expression.

MARGARET BRENNAN: We're on the cusp of a presidential election year. How much of a factor is this going to be, these deepfakes and misleading ads?

BRAD SMITH: Well, I think there is an opportunity to take real steps in 2023, so that we have guardrails in place for 2024, so that we are identifying, in my view, especially when we're seeing foreign cyber influence operations from a Russia, a China or Iran, that is pumping out information that they know is false and is designed to deceive, including using artificial intelligence.

And that will require the tech sector coming together with government, and it really will require more than one government. This needs to be an international initiative. But we've done that in recent years in other spaces. We can do it again, and I think we should.

MARGARET BRENNAN: Sam Altman, the CEO of OpenAI, which made ChatGPT, testified recently before Congress and recommended an entirely new federal agency be set up to oversee A.I.

You like this idea.


MARGARET BRENNAN: But it's also implying that the federal government is not currently up to the task.

BRAD SMITH: We do need more than we have.

We need our existing laws to apply. They need to be enforced. But, especially when it comes to these most powerful models, when it comes to the protection of the nation's security, I do think we would benefit from a new agency, a new licensing system, something that would ensure not only that these models are developed safely, but they're deployed in, say, large data centers where they can be protected from cybersecurity, physical security and national security threats.

MARGARET BRENNAN: How do you convince people that this isn't the big bad tech giant of Microsoft setting the rules of the road and running the little guys off of it?

BRAD SMITH: We're not suggesting that any single company or the entire industry together should be the one to set the rules.

We should have the United States government, elected by the American people, setting the rules of the road, and we should all be obliged to follow them. Look, we need rules, we need laws, we need responsibility, and we need it quickly.

MARGARET BRENNAN: There were a number of tech leaders, including Elon Musk, and one of the co-founders of -- of Apple, Steve Wozniak, who called publicly for a six-month pause in A.I. systems that are more powerful than GPT-4 or have governments institute a kind of moratorium until there are safety protocols in place.

Is there something to that? Do we need to tap the brakes a bit here?

BRAD SMITH: I'm not inclined to think that that's the answer. First of all, it will take 12 months to get the government to debate whether to decide whether to have a pause that will last for six months.


BRAD SMITH: But I think the more important question is, look, what's going to happen in six months that's different from today?

How would we use the six months to put in place the guardrails that would protect safety and the like? Well, let's go do that. Rather than slow down the pace of technology, which I think is extraordinarily difficult -- I don't think China's going to jump on that bandwagon -- let's use six months to go faster.

Let's adopt an executive order here for the federal government, where the government itself says it's only going to buy A.I. services in certain categories, say, from companies that are implementing A.I. safety protocols and the like. You know, let's start to get some legislation moving.

MARGARET BRENNAN: And you think this will happen, some -- some regulation or some legislation in the year ahead?


The world is moving forward. Let's make sure that the United States at least keeps pace with the rest of the world.

(End VT)

MARGARET BRENNAN: You can see our full conversation with Microsoft president Brad Smith on our YouTube channel.

We will be right back.


MARGARET BRENNAN: We want to turn now to Chris Krebs. He was the director of the Cybersecurity and Infrastructure Security Agency in the Trump administration and is now a CBS News cybersecurity expert and analyst.

Good morning to you.

CHRISTOPHER KREBS: Good morning, Margaret.

MARGARET BRENNAN: I want to start on some of the other news from Microsoft within the past days, which is that they, alongside U.S. intelligence, revealed the discovery of malware from a state-sponsored Chinese actor embedded in U.S. critical infrastructure that was meant to shut down communications between the U.S. and Asia in the event of a conflict.

That sounds a lot like planning for a potential invasion of Taiwan to a lot of analysts. How significant a breach was this?

CHRISTOPHER KREBS: Well, I think it's significant, in the fact that it's an escalation or evolution of Chinese capabilities.

I think it's no surprise that China is in the cyber-offensive operations game. Ten years ago, Mandiant, a cybersecurity company, released a report called APT1. They talked about their espionage capabilities. That same year, there's evidence that they were in U.S. gas and oil systems and stealing network schematics.

So, from a pure cyber play perspective, China is quite capable. Even -- even this year, Director Wray of the FBI said that the Chinese have 50 hackers to every one FBI agent. So they are quite capable.

But, to your point, what's different about this report is, it shows operational preparation of the battlefield. It shows that they're getting in place, that, if tensions continue to escalate with Taiwan, they are in a position to cut off lines of communication, logistics and the ability of the United States to support and defend Taiwan.

MARGARET BRENNAN: Yes, this was in Guam, which is a -- there's a U.S. military installation there in the Pacific, that would be very key in the event that you just laid out there.

But, broadly speaking, how vulnerable is U.S. infrastructure to these kinds of attacks?

CHRISTOPHER KREBS: Well, I mean, I think, just as Brad Smith pointed out in the previous segment, is that we are using technology in virtually every aspect of our lives, from day-to-day to operational capabilities and critical infrastructure.

So we are highly dependent upon technologies. And we don't always implement them in the proper way. And there are vulnerabilities. And there are misconfigurations that we have seen bad guys from criminals to state actors take advantage of.

But I think we have seen an improvement in resilience. And I think the Ukrainians' performance in the face of a Russian cyber onslaught last year shows that you can be resilient, you can prepare, given the right information and the right time and investments to secure and harden and improve systems.

MARGARET BRENNAN: Microsoft is proposing an entirely new branch agency, government agency, be set up to regulate A.I. Do you think we're at that point?

CHRISTOPHER KREBS: I called for the creation of a digital agency last year in a keynote I gave at the Black Hat conference in Las Vegas.

I think we are well past the time that the U.S. government needs to rethink how it engages and creates market interventions on technology, cyber disinformation and beyond. And A.I. is probably that kind of forcing function that will push us there.

And there is precedent for reshaping government to meet emerging risks, 1939, the Federal Reorganization Act. The government was reorganized, 2001 in the wake of 9/11, we reorganized. I think we're on the cusp of that. And I think the issue is that government is not keeping pace with technological development...


CHRISTOPHER KREBS: .. and the harms that we're seeing in society.

MARGARET BRENNAN: Well, the U.S., the Biden administration is looking to restrict the sale of certain technologies, export controls, to adversaries like China, for example.

But the CEO of some -- some of these companies, they don't -- they don't like it. Nvidia, which is an A.I. chipmaker, they have pushed back, saying the Chinese will just build their own chips.

What do you think of this solution of trying to export-control?

CHRISTOPHER KREBS: Well, they -- China is a significant market for many American companies, whether it's on Wall Street or technology and chip companies.

I think the current policy to restrict the more mature and advanced chips to the Chinese market, I think it's a smart policy decision. I think it maintains European and American geopolitical competition -- competitive posture. I think we need to think, though, how does this apply in an A.I. model perspective?

And I think that's, in part, what Brad was getting at with his policy agenda. And that is going to take quite some time from a legal and regulatory framework to really scope these things out and figure out, at what points of the economy do we make those interventions?

MARGARET BRENNAN: Right,so not a quick timeline to turn that around.

What do you think?


MARGARET BRENNAN: I mean, hearing a tech giant ask to be regulated is unusual, to say the least. What are we to make of that?

CHRISTOPHER KREBS: Well, if you kind of sit back and look at it, the tech industry is one of the least directly regulated.

There are secondary regulations that come in through the New York State Department of Financial Services, for instance, and other California laws. But I think, when you see this sort of push for regulation, in part, it says that they're concerned, they're worried, but they're also looking for, I think, a little bit of protection.

And I think, if you step back and look at kind of the range of risks that you may encounter across A.I., there are very mundane risks that do not require additional regulation. And Brad talked about that. And that's criminals using A.I. to build the better mousetrap. It's students using A.I. to cheat.

But as you get further up the risk hierarchy, there is disinformation. There's autonomous weapons systems that will have A.I. built in. And then you kind of get to that point of, as Elon Musk has talked about, that super intelligence turning into the Terminator. There are areas, particularly, I think, on the models, not necessarily implementations in the apps, but the actual learning large language models that are driving a lot of the innovation right now, that's an opportunity to look at licensing.

And, in part, I think what they're trying to achieve is some indemnification that, hey, we -- we're playing by the rules. You have put in place guardrails. You have reviewed our models. And, if it's abused by someone else outside of our control, then that's not -- that's not on us.

MARGARET BRENNAN: Protect themselves as well.

Chris Krebs, always good to get your analysis.

We will be back in a moment.


MARGARET BRENNAN: This Memorial Day weekend, we'd also like to pay tribute to the hundreds of thousands of college graduates this year who may be better prepared for real life than those before them.

(Begin VT)

MARGARET BRENNAN: This spring, on college campuses from coast to coast, reminders of the unprecedented challenges faced by the class of 2023.

KAMALA HARRIS (Vice President of the United States): A once-in-a-century global pandemic took millions of lives and disrupted life for billions more. America ended our longest war, and Russia launched the first major ground war in Europe since World War II.

MARGARET BRENNAN: Some faced more adversity than others. Graduates at the University of Idaho spent an agonizing six weeks without an arrest in the stabbing deaths of four of their fellow students last November.

LOUIS FREEH (Former FBI Director): You have gone through a fiscal crisis, a pandemic, and a horrific tragedy that could shatter any community, but did not here because of the strength and the work and the love that were shown to you.

MARGARET BRENNAN: Tulane students had been looking forward to some normalcy in the fall of 2021 after a long year of COVID restrictions.

What they didn't expect was an evacuation ahead of what ended up being a Category 4 hurricane.

MICHAEL FITTS (President, Tulane University): This is a class that came back together after being displaced by Hurricane Ida, only to defy expectations, defeat the odds, and question the status quo.

MARGARET BRENNAN: The University of Virginia community lived through the horror of one of its own allegedly murdering three and shooting two others just hours after what would become the school's last football game of the season.

JIM RYAN (President, University of Virginia): The deaths of three students, Devin Chandler, Lavel Davis Jr., and D'Sean Perry, were devastating. The depth of the loss of these talented and beloved teammates, classmates, and friends is incalculable.

MARGARET BRENNAN: The tragedy, UVA's President Ryan said, on top of COVID brought more life lessons than could be taught in any classroom.

JIM RYAN: You rose to those challenges with grace and courage. You masked when it mattered and even when it didn't, because you cared about this community above all else. And when tragedy struck last November, you organized and attended a silent vigil that brought this community together in profound and powerful ways.

MARGARET BRENNAN: UVA's athletic director, Carla Williams, was invited to deliver the school's commencement address.

CARLA WILLIAMS (Athletic Director, University of Virginia): I had decided to politely decline, because I just did not know if I had enough left in the tank to give you guys my best. But, as fate would have it, I received a text from D'Sean Perry's mom, Ms. Happy Perry, asking me if I thought the university would consider allowing her to stand in D'Sean's place today.

I said: "It's permissible, but are you sure you can do it?"

She paused and said: "Yes. He would be very proud of me, and I will power through to do it for him."

It was in that moment that I knew I would be speaking today.

(End VT)

MARGARET BRENNAN: We thank Carla Williams for her perseverance and for offering this sentiment we wish to pass on to all graduates this year:

(Begin VT)

CARLA WILLIAMS: You are bright and shining examples of the best we have to offer. We need your courageous spirit. We need your innovation. We need your creativity. We need your stubbornness. We need your toughness, your brilliance, your grit.

And we need your compassion. We need each of you, and we need all of you.

(End VT)

MARGARET BRENNAN: We will be right back.


MARGARET BRENNAN: That's it for us today. Thank you all for watching.

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

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