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Biden Aims To Deter Panic After Two Historic Bank Failures; Michael Cohen Exits After Testimony In Trump Hush Money Probe; Pence Sharpens His Rebuke Of Trump's January 6th Role; North Korea Test- Fires Two Missiles From Submarine; CNN Films' "Navalny" Wins Best Feature Documentary. Aired 6-7p ET

Aired March 13, 2023 - 18:00   ET

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

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[18:00:00]

WOLF BLITZER, CNN ANCHOR: Happening now, President Biden tries to reassure the nation and deter panic after two historic bank failures in the United States within days. I'll ask the former U.S. Treasury Secretary Larry Summers about the federal government's intervention and whether Americans' bank deposits are safe.

Also tonight, longtime Trump Lawyer Michael Cohen left the courthouse just a short while ago, after testifying before a grand jury investigating hush money payments he says he made on Trump's behalf. This as former Vice President Mike sharpens his rebuke of Trump's role in the January 6th insurrection.

And a new flood emergency in California threatens millions of storm battered residents as the east coast braces for a powerful storm packing heavy rain, strong winds and possible blizzard conditions.

Welcome to our viewers in the United States and around the world, I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Tonight, the Biden administration is scrambling to respond to two of the biggest bank failures in U.S. history, that are creating new peril for the economy and for the president and lot of Americans are worried right now. Here's CNN's Chief White House Correspondent Phil Mattingly.

(BEGIN VIDEOTAPE)

JOE BIDNE, U.S. PRESIDENT: The bottom line is this, Americans can rest assured that our banks system is safe.

PHIL MATTINGLY, CNN CHIEF WHITE HOUSE CORRESPONDENT (voice over): President Biden seeking to reassure a nation on edge.

BIDEN: During the Obama/Biden administration, we put in place tough requirements on banks, like Silicon Valley Bank and Signature Bank.

MATTINGLY: He also placed blame on his predecessor for contributing to this moment. BIDEN: Unfortunately, the last administration rolled back some of these requirements.

MATTINGLY: Biden pointing to a 2018 law that eased some of the strictest post-financial crisis restrictions on mid-sized lenders, lenders like Silicon Valley Bank.

BIDEN: I'm going to ask Congress and the banking regulators to strengthen the rules for banks to make it less likely this kind of bank failure to would happen again.

MATTINGLY: Biden's new regulatory push framing a new crisis moment.

BIDEN: Treasury Secretary Yellen and a team of banking regulators have taken action.

MATTINGLY: Just hours after the administration's top finance officials triggered a dramatic showed of dual-pronged government force. The action designed to halt financial contagion that threatened to rip through the banking system after the failure of Silicon Valley Bank. The bank's failure on Friday risking a cascade of events that threatened stability with the second bank failure, Sunday, and several more institution on the brink, official said.

BIDEN: When we learned of the problems of the banks and the impacts they could have on jobs, some small businesses and banking systems overall, I instructed my team to act quickly to protect these interests.

MATTINGLY: 93 percent of Silicon Valley Bank's deposits set above the $250,000 deposit insurance limit.

JANET YELLEN, TREASURY SECRETARY: I have been working all weekend with our banking regulators to design appropriate policies to address this situation.

MATTINGLY: Leaving thousands of small businesses and individuals at risk.

BIDEN: I instructed my team to act quickly to protect these interests. They've done that.

MATTINGLY: But the speed of the crisis and the potential systemic effects marking a jarring term for an industry viewed as stable and well-capitalized.

BIDEN: There are important questions of how these banks got into this circumstance in the first place. We must get the full accounting of what happened and why those responsible can be held accountable.

MATTINGLY: And setting the stage for an equally unpredictable political fallout in the days ahead as officials move quickly to try and separate their actions from the politically toxic bailouts of the 2008 financial crisis.

BIDEN: No losses, and I want -- this is an important point. No losses will be borne by the taxpayers.

(END VIDEOTAPE)

MATTINGLY (on camera): And, Wolf, both President Biden and lawmakers are pledging a thorough review of what exactly happened in just the 24-hour period in which Silicon Valley Bank completely imploded, so too is the Federal Reserve. One of the bank's supervisors has launched a review led by the vice chair of supervision, Michael Barr, to look into the supervision, the regulation and saying that a transparent process is demanded after -- in the wake of the catastrophic failure. They expect to have results by May 1st, Wolf.

BLITZER: Phil Mattingly at the White House, thank you very much.

Let's bring in CNN Business Editor at Large Richard Quest along with CNN Business Correspondent Rahel Solomon. Richard, is the Biden administration, in your opinion, doing enough right now to prevent a domino effect?

RICHARD QUEST, CNN BUSINESS EDITOR AT LARGE: Yes, they're doing everything they can. They are shoring up the weakest banks, taking them over where necessary and using the stress tests that have been put in place in recent years. They are doing a radar sweep to see who might be next.

[18:05:01]

This is all because of rising interest rates. And those banks are stuffed to the gills with bombs which have gone down in volume. So, the assets have gone down, the banks are dodging and they've had to be taken over.

It's highly likely, Wolf, that others will follow, but it is not systemic. They have managed to ring fence, contain and deal with it for the time being.

BLITZER: Rahel, how is this impacting the people who actually bank with that Silicon Valley Bank?

RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: Look, Wolf, if you had an account with SVB, the last few days have probably felt like an emotional rollercoaster, as one founder described it to me. She said it was the wildest 72 hours of my professional career describing panic, anxiety and ultimately relief when the government stepped in last night.

Wolf, I want to draw your attention to some of the companies that bank with SVB, or banked with SVB. Some of them are companies that we know, the Vimeos of world, the Etsys, the Rokus and the Shopifys. Some, however, are small startups, like the woman that I spoke, Iza Watson (ph), who's banked with SVB for five years but has seven employees. And, Wolf, what she told me is that when she wasn't able to access her account this weekend, it was her employees, it was those seven employees around the country that she was worried about. So, ultimately, relief but after a few sleepless nights.

BLITZER: Richard, what can you tell us about this proposed rescue plan that's now out there? Is it a bailout?

QUEST: Well, that's a very good question, Wolf. A bailout is a bailout by any other name. Yes, of course, it's a bailout at one level but it's a bailout of depositors. The $250,000 FDIC limit has basically been thrown out the window, which does beg the question, why I bother having it in a sense or why not raise it if that's what you're going to do.

However, the main concern is keeping small businesses, small depositors, and by small, I mean over 250,000 up to, say, 500,000, 600,00, 700,00, keeping them whole, but at the same time ensuring that investors in the banks and shareholders in the banks, they bear the losses. That's what has to happen here. Otherwise, we're back to the 2008 argument of moral hazard. After all, when risk is free, who cares?

BLITZER: Richard Quest and Rahel Solomon, guys thank you very, very much.

And joining us now, the former treasury secretary and economist, Larry Summers. Mr. Secretary, thank you so much for joining us.

I know you said Friday you don't expect the SVB meltdown to pose a systemic risk to the financial system. Do you still feel that way after the shutdown of Signature Bank and the plunge in stocks of First Republic and some other regional banks?

LAWRENCE SUMMERS, FORMER TREASURY SECRETARY: I think that with the support that the government is providing, this is need not be and I don't expect will be the kind of major systemic event that is affecting everybody in the country that we had in 2008 or that we had during the depression.

This obviously has ripples that go well beyond Silicon Valley Bank but I was glad to see the authorities step in and guarantee the deposits for Silicon Valley Bank and glad to see the authorities make clear that they were prepared to provide support to other banks to enable them to pay off all of the deposit.

BLITZER: What else should the government do in the short-term to help consumers and prevent what's called contagion and what are the long- term lessons to strengthen regulation to make sure this doesn't happen again?

SUMMERS: In the short run, I think they need to make this facility that will provide loans to banks to enable them to pay off deposit or who want to get access to their funds, they should make sure that facility is up and running and effective and actually usable. They need to inspect institutions that are clearly struggling and there may be others who, like Signature, need to be closed, but it will represent only a very small fraction of the country's banking system.

For the longer run, there are important lessons about supervision and regulation here, and I have to say that it doesn't appear on current facts that a very good job was done of regulating and supervising Silicon Valley Bank. [18:10:03]

It had committed kind of one of the most elementary errors in banking of borrowing money in a very short-term way and then investing it in a long-term way and then when interest rates went up, those assets lost their value and that loss of value put the institution in a very problematic position.

BLITZER: Are you suggesting, Mr. Secretary, that there may be some more bank closures coming up?

SUMMERS: I don't have any direct knowledge, but when you see the prices of the stocks of a small number of banks decline by 50 percent or more, you have to wonder about the health of those institutions, whether they'll be closed, whether they may sell themselves to acquirers, that's certainly also a real possibility.

BLITZER: So the bottom line at least for now, for the average American, Mr. Secretary, what is the risk right now? How worried should they be?

SUMMERS: I don't think the average American has a problem. Their money in a bank is going to be fine. Our economy is going to go on. Stock market will wiggle about, but it's certainly not doing anything like crashing. And so I think that what almost all Americans should do is to continue to support their families, do the work they do, do the shopping they do, take the trips that they do.

For those particularly concerned with banks, the fact of this problem does point up a lot of issues that are going to demand attention, but this need not be a nationwide significant event for the economy.

BLITZER: Let's hope it isn't. Everyone will be watching the Federal Reserve next week, but you say it would be a serious mistake to slack off on efforts to curb inflation. Didn't these massive rate hikes over these past many months help self the conditions for the banking problems we're seeing right now?

SUMMER: I think these problems had much more to do with the failure of risk management at Silicon Valley Bank. I also think that if we didn't operate to contain inflation, we would have even higher interest rates and those even higher interest rates would make more financial problems, not less. Postponing confronting real issues, like inflation, is rarely the way to make them better.

I think the Federal Reserve is going to have to make a very challenging judgment at its next meeting, which is that these events have clearly had a disturbing impact on the economy and surely will mean some reduction in the flow of credit, and that means some of what the Fed was trying to do, which was decelerate the economy, will happen naturally. And if it happens naturally, then there's less need for the Fed to do it. So, they'll have to make a judgment about how to set interest rates at their next meeting.

But I sure do think it would be a real mistake if the priority that has been attached to getting inflation under control was something that we lost sight of. And, you know, if you ask the American people, the American people are very clear that the thing they're most worried about in the economic sphere is inflation.

So, I think we need to focus on getting it down, because if we don't get it down quickly and it comes to be something everybody expects that it will come over time to be an even larger problem that's even more costly to resolve.

BLITZER: Former Treasury Secretary Larry Summers, thanks so much for joining us.

SUMMERS: Thank you, Wolf.

BLITZER: And just ahead, Michael Cohen testifies for three hours to a grand jury investigating his former boss, Donald Trump.

Stay with us. You're in THE SITUATION ROOM.

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[18:15:00]

BLITZER: Long-time former Trump Attorney Michael Cohen is decrying what he calls the former president's dirty deeds as he testified for three hours today before a Manhattan grand jury probing hush money payments made to adult film star Stormy Daniels.

CNN's Kara Scannell is working the story for us. Kara is joining us right now. What are you learning about Cohen's appearance today, Kara?

KARA SCANNELL, CNN CORRESPONDENT: Well, Wolf, Cohen was in for about three hours, as you said. And this is the first time he testified before the grand jury. This is about his 20th time meeting with prosecutors over the past several years but the first time he was sworn to oath to give statement before the grand jury. Our cameras caught up with him as he entered the office earlier today. Take a listen.

(BEGIN VIDEO CLIP)

MICHAEL COHEN, FORMER TRUMP LAWYER: My goal is to tell the truth. My goal is to allow Alvin Bragg and his team to do what they need to do. I'm just here to answer the questions.

(END VIDEO CLIP)

SCANNELL: Now, Cohen's meeting came as prosecutors are nearing a decision on whether to charge the former president. They are investigating him, according to sources, with and exploring possible charges of falsifying business records for how they reimbursed Michael Cohen for advancing the hush money payment to Stormy Daniels, as well as looking into possible felony charge at falsifying business records in connection with either concealing or committing another crime.

[18:20:01]

That would be campaign finance records for those checks that you see there on the screen for how they reimbursed Cohen.

Now, Joe Tacopina, Donald Trump's current attorney, was on Good Morning America this morning, and he was saying that no crime was committed here, that this was a personal payment to stop embarrassing information from being made public, that information about the alleged affair. Of course, that came just days before the 2016 presidential election. But all signals and signs, Wolf, that this investigation is ramping up and that the historic decision of whether to charge a former president is looming.

BLITZER: Historic, indeed. They potentially are. Kara Scannell, thank you very, very much.

Let's discuss with CNN Legal Analyst Jennifer Rodgers and CNN Senior Political Analyst Gloria Borger.

Jennifer, could Michael Cohen overcome his history of deception to become a credible witness?

JENNIFER RODGERS, CNN LEGAL ANALYST: Well, that's a great question, Wolf. I mean, prosecutors will have to tread very carefully with him. They'll want to do two things. They'll want to keep his testimony narrowly focused and they'll want to corroborate it. So, any time you have a witness who has credibility issues you really just want to show the jury that they don't really have to rely on the credibility of that witness because what that witness says is corroborated by other evidence in the case, other witnesses, other pieces of evidence, documents, et cetera.

So, that's what they're going to try to do with Michael Cohen. The fact that they put him into the grand jury suggests to me that they do believe him and that they are going to try to use him. Although today may also have been a little dry run. You know, if you want to put someone in the grand jury, see how the grand jurors react to him, see if you think he performs well under that kind of pressure. That may help them make the decision about whether to call him or not if this goes to trial.

BLITZER: As you know, Gloria, Cohen says Trump needs to be held accountable for his, quote, dirty deeds but he was a key player in that hush money scheme himself, wasn't he?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Sure he was and he went to prison for it, Wolf, in 2018. I mean he was the fixer. He was the middleman in all of this. And we know what he testified before Congress. What he testified before Congress was that this was a phony scheme of reimbursement so that Donald Trump could hide what the money was for.

And so, yes, while he did go to prison for this, he can also say, look, this is how it worked. This is what I did. This is how we tried to hide it. And, you know, so, in some sense, because he's already testified before Congress for this, and you have the checks as you showed when Kara was on the air, a grand jury could look at him and say, okay, yes, he's already sworn under oath about all of this before the United States Congress, so perhaps that affects the credibility issue to some extent, Wolf.

BLITZER: You know, Jennifer, Trump's current lawyer says the former president will not testify as part of this investigation and he's now floating a defense that this hush money case is plain extortion. Is that a strong defense?

RODGERS: Well, it's interesting because what he's really doing is trying to undermine the felony possibility here. The falsification of business records seems fairly straightforward. It's falsification of business records. It wasn't a legal payment. It was a hush money payment. But where it becomes problematic for Trump really is if it's a felony, and that requires the concealment or that it being connection with another crime.

And that's what Joe Tacopina is trying to do here. He's saying, listen this wasn't paid to try to influence the campaign. This would be personally embarrassing to the former president if it came out. He doesn't want his wife to know, et cetera. In other words, there are personal reasons to hush her up, not campaign reasons. And he is pushing that because that's the difference between a felony and a misdemeanor here.

BLITZER: Jennifer Rodgers, Gloria Borger, thanks to both of you. Thanks very much.

Coming up, Donald Trump is firing back at Mike Pence tonight after his former vice president went farther in criticizing his ex-boss and his role in the January 6th insurrection.

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[18:25:00]

BLITZER: Tonight, Donald Trump is trying to deflect blame for the January 6th riot here in Washington, and he now argues his former vice president, Mike Pence, was actually at fault. The Washington Post says Trump just told reporters that Pence was to blame in, quote, many ways for the events of January 6th because he didn't try to overturn the 2020 presidential election results. This comes as the former president is ramping up his 2024 presidential campaign with a visit to a key battleground.

CNN's Kristen Holmes has more from Iowa.

(BEGIN VIDEOTAPE)

KRISTEN HOLMES, CNN NATIONAL CORRESPONDENT (voice over): Former President Donald Trump making his first trip to Iowa since announcing his third run for the White House --

DONALD TRUMP, FORMER U.S. PRESIDENT: I'm thrilled to be back in the great state of Iowa.

HOLMES: -- and leaning into his education platform as the topic becomes a political flashpoint.

TRUMP: I will fight for parents' rights.

HOLMES: Becoming the latest 2024 Republican hopeful to visit the crucial early state.

GOV. RON DESANTIS (R-FL): I'll build the wall myself. I'll do it. Just let me at him. We'll get it done.

HOLMES: As Trump looks to build support for his campaign, he's facing fresh criticism from his former running mate and potential future rival, with Mike Pence leveling his sharpest rebuke yet of Trump's role in the January 6th attack. The former vice president taking these comments --

MIKE PENCE, FORMER U.S. VICE PRESIDENT: I've also made it clear that President Trump was wrong. I had no right to overturn the election. And his words that day were reckless and they endangered my family and others at the Capitol.

[18:30:05]

HOLMES: -- and going a step further during a private speech in Washington saying, quote, I know that history will hold Donald Trump accountable for January 6th. Pence who had to be rushed to a secure location at the Capitol during the riot also scolding Republicans seeking to minimize the events of that day. The remarks coming after Fox Host Tucker Carlson aired selective footage from January 6th in an attempt to downplay the violence.

TUCKER CARLSON, FOX NEWS HOST: These were not insurrectionists, they were sightseers.

HOLMES: According to the U.S. Capitol police, 140 officers from various departments were assaulted that day. Pence, telling dinner attendees, quote, tourists don't injure 140 police officers to sightseeing. Tourist, don't break down doors to get to the speaker of the House. What happened that day was a disgrace and it mocks decency to portray it in any other way.

House Speaker Kevin McCarthy, who gave Carlson exclusive access to the tapes, once again defending his decision following the Pence comments.

REP. KEVIN MCCARTHY (R-CA): My goal here is transparency. And we will slowly roll out to every individual news agency they can come see the tapes as well.

HOLMES: Even as Pence splits with Trump on January 6th, the former vice president attorney's have asked a judge to block a federal grand jury subpoena for his testimony related to the events that day.

(END VIDEOTAPE)

HOLMES (on camera): And, Wolf, as you noted former President Trump just recently responded to these remarks by Pence. He was talking to a small group of reporters aboard his plane on the way to Iowa. And according to The Washington Post, he sought to blame Pence for January 6th saying this, quote, had he sent the votes back to the legislatures, they wouldn't have had a problem with January 6th. So, in many ways, you can blame him for January 6th.

And, of course, as we have reported, Pence has said on numerous occasions that he did not have the legal authority to send those votes back to legislatures. Wolf?

BLITZER: Kristen Holmes, reporting for us from Davenport, Iowa, thank you very much.

Let's get some more on all of these. Joining us now is CNN Anchor and Chief Correspondent Kaitlan Collins and CNN Chief National Affairs Correspondent Jeff Zeleny.

Kaitlan, two days after we heard, and we were there, we heard Mike Pence sharpen his rebuke of Donald Trump, the former president is responding. What do you make of his argument that, in many ways, you can blame Mike Pence for January 6th?

KAITLAN COLLINS, CNN ANCHOR AND CHIEF CORRESPONDENT: I don't think it's surprising at all. What I have been told is that Trump has been complaining about the positive press coverage that Pence has gotten from making those remarks that he did on Saturday night, saying that he does believe history will eventually hold Trump accountable for what happened on January 6th.

Obviously, the roles that they took on that day and then the events leading up to it were quite different. Pence was the one who sought legal advice on what he could do legally that day. He was the one who is pushing back and had attorneys pushing back on Trump and his attorney, saying that there was no way that he could send those votes back to the state legislatures. Obviously, that is something that settled. We have established what has happened there.

Trump is also suggesting though that Pence is only speaking out now because of the numbers that he's seeing as he is preparing to launch his own presidential run. He hasn't done so yet but, obviously, other reporting has been that he plans to do so.

And I do think timing was a factor in what Pence said on Saturday night. You know, the 2024 field is starting to take shape. Pence kind of set this standard of what other candidate are going to be asked about when it comes to Trump's role on January 6th. But I think this is Trump being unhappy that Pence not only came out against him so forcefully but also that he's doing so and injecting that into the 2024 race even more.

BLITZER: You know, Jeff, Trump made these comments, as he was traveling to Iowa for a campaign event. What does that tell you about what his message to voters might be later tonight?

JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: Wolf, he's scheduled to be giving an education-themed speech in Davenport, Iowa, on the eastern side of the state of Iowa. It's his first trip back in 2024. Of course, I think all of us would be surprised if he focuses his remarks solely on education.

But I do not think necessarily that he's going to dwell on January 6th or his former vice president to a rally of voters that he's trying to win over. Trump is very much, I'm told now, in the arm twisting mode, trying to sell supporters and convince them to stay with him and support his candidacy. So, it's certainly very interesting to see what he says this evening but he at least is not expected to dwell on the past. He is trying to look forward, at least in some respects, at these campaign rallies.

It's far different what he said to an interviewer or says on social media or to reporters than what he may say at a rally. And I was in Iowa last week, and one thing I heard from his supporters, as well as some other Republicans, that they want to see the former president move forward, have a forward-looking message. He has heard that. He said many phone calls with some of his old supporters in Iowa over the last couple of weeks and they have told him that they want to sort of see himself his candidacy, his ideas for winning.

So, tonight it would be a very good test to see if he can look forward or if he still so distracted and obsessed with looking backward.

[18:35:06]

BLITZER: Kaitlan, Pence's comment Saturday night attacking the former president were very, very strong. But it's important to also remember he did not agree to testify before the January 6th select committee and is now pushing back and testifying before Special Counsel Jack Smith, right?

COLLINS: I do think that's important context here. I think if you talk to Pence's team, they're going to say, well, the reason he's pushing back on the testimony, they believe, is that he doesn't have to testify about everything. They do believe ultimately he is going to testify in part potentially, Wolf. They don't believe they want it to be all the private conversations he had with Trump and that's why they are invoking this speech or debate clause argument, is saying that's why he can't because he was technically acting as president of the Senate that day as they were certifying those votes.

It is true he did not go speak before the January 6th committee. That is something they wanted him very much so to do. He did also write a book about his experience that day and talked about that. That's something legal experts have said could complicate his fight on that subpoena from the Justice Department.

But, Wolf, the other thing from the comment that stood out to me, was he wasn't just going after Trump. He also criticized Fox News and one of their most prominent hosts for selectively editing the 40,000 hours or so of January 6th footage. He went after them saying it mocks decency to portray it the way that they did. That's just as significant is going after Trump is going after one of the most popular hosts on Fox News when you are about launch a Republican presidential campaign.

BLITZER: And let me get to Jeff to weigh in on this as well. I thought it was -- I agree totally to Kaitlan. It was very significant that the former vice president was going after Fox News and Tucker Carlson for what they've been saying. ZELENY: It certainly was. I mean, Kaitlan is absolutely right. I mean, the idea that you would sort of take on not just the former president because there is a big appetite for change among some of the Republican party, but there is almost unanimity behind Fox News and Tucker Carlson.

So, the former vice president obviously, you know, he said that it simply isn't decent. I mean, he said simply it mocks decency. Those are very strong and simple words, unmistakable words and messages there. You get the sense of the former vice president, yes, he is on the verge of likely jumping in again but he's also trying to essentially return to the old Mike Pence, if you will, to the extent that's possible, perhaps trying rebrand himself as the former governor of Indiana, a social conservative and try and get out and distance himself from some of this Trump orbit, but that was absolutely significant that he said it mocks decency. We'll see what Tucker Carlson says tonight, if anything.

BLITZER: We shall see. All right, Jeff Zeleny, thank you. Kaitlan Collins, thanks to you as well. Important note to our viewers, Kaitlan, of course, will be back tomorrow morning 6:00 A.M. Eastern along with Don Lemon and Poppy Harlow for CNN This Morning.

And this just coming in to THE SITUATION ROOM, we have an update on Senate Republican Leader Mitch McConnell after he fell and suffered a concussion last week. His office says McConnell has been discharged from the hospital and will now receive physical therapy at an inpatient rehab facility. McConnell's spokesman revealing the 81-year- old senator also was treated for a minor rib fracture.

Just ahead, severe flooding across California is expected to get a lot worse as residents there brace for another brutal rain storm. We'll go there live. That's next.

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[18:40:00]

BLITZER: Right now, we're tracking very severe weather on the east and west coasts of the United States. In the northeast, a major storm is expected to bring heavy snow, strong winds and coastal flooding. And out in California already struggling with widespread flooding, they're bracing for heavy new rain.

CNN's Veronica Miracle has more from one of the hardest hit towns in California.

(BEGIN VIDEOTAPE)

VERONICA MIRACLE, CNN CORRESPONDENT: Storm-battered California is getting hit by another atmospheric river, more than 18 million people under flood alerts.

MAYOR TYLLER WILLIAMSON, MONTEREY, CALIFORNIA: We're dealing with this tropical pacific atmospheric river which we call the pineapple express and it's caused significant amount of rain and wind gusts that have gone up to 55 miles per hour.

MIRACLE: At least 11 such river events have hit the U.S. west this winter. Late last week and over the weekend some places across California saw over a foot of rainfall.

WILLIAMSON: And with the ground already being saturated, from previous rainfalls and this one hitting us hard, you know, our team has been as prepared as possible but weren't expecting it to be as bad as we're seeing it.

MIRACLE: This drone video shows flooding in the central coast region of California after the Pajaro River breached the levee.

SHERIFF TINA NIETO, MONTEREY COUNTY, CALIFORNIA: We had failure at the levee and we knew that if there was failure at the levee that it would inundate the community of Pajaro.

MIRACLE: Now Monterey Peninsula residents could soon find themselves on a virtual island cut off from rest of the country by the floodwaters.

NIETO: When we give you an order you out, please get out.

MIRACLE: This ring video shows firefighters going door to door trying to wake people in the area warning them that if they didn't leave they could get trapped.

CURTTIS RHODES, CALIFORNIA FIRE: Some of the water that comes across the road is about four to five feet right now and your standard vehicle cannot get across it.

MIRACLE: Another evacuation warning for people living along some areas of the San Joaquin River.

UNIDENTIFIED MALE: It's going to get higher. Yes, it's going to get higher this time.

MIRACLE: From excessive rainfall to heavy snow fall, people living near the sheer in Nevada mountain range are dealing with a deluge of snow leading to dangerous road conditions.

UNIDENTIFIED MALE: That was a white knuckle experience.

MIRACLE: The heavy snow even causing a South Lake Tahoe store's roof to collapse.

UNIDENTIFIED FEMALE: We knew that there was a lot of snow on the rooftops but just didn't expect it because we didn't hear anything yet.

(END VIDEOTAPE)

MIRACLE: And, Wolf, here in Pajaro, first responders with the Monterey County sheriff's officers actually performing a rescue by boat for two families in a neighborhood right behind us.

[18:45:05]

The sheriff tells me over the last couple of days, they've performed about 200 rescues. Some families just refused to leave. Others could not make it in time because water levels rose too quickly -- Wolf.

BLITZER: All right. Veronica Miracle, thanks very much for that report.

Coming up, Kim Jong-un's military unveils a menacing new weapons system. Cruise missiles launched from a submarine.

(COMMERCIAL BREAK)

BLITZER: In North Korea, Kim Jong-un's military is showing off a frightening new weapon, submarine-based cruise missiles.

Brian Todd is following the story for us.

Brian, this potentially could give the Kim regime a brand-new way to threaten the U.S. and its allies.

BRIAN TODD, CNN CORRESPONDENT: Right, Wolf. They can now threaten the U.S. and its allies according to analysts with missiles that can fly lower and are more difficult to detect and shoot down.

[18:50:04]

(BEGIN VIDEOTAPE)

TODD (voice-over): A cruise missile hurdles from the surface of the sea off North Korea's east coast, test-fired from a North Korean submarine, according to state media. Two projectiles that North Korea says flew 900 miles in figurate patterns for over an hour and struck a target.

ANKIT PANDA, CARNEGIE ENDOWMENT FOR INTERNATIONAL PEACE: It does represent, I think, a substantial advance of the kinds of capabilities including nuclear-armed capabilities that North Korea could bring to bear in conflict.

TODD: Analysts say Kim Jong-un's menacing ambitions include building his submarine-launched missile capabilities to add another layer of threat to South Korea, Japan, and U.S. forces in Asia, where his previous sub-based launches involved ballistic missiles.

PANDA: This involved cruise missiles which fly lower in the atmosphere, and thereby are more difficult for radar systems to track and engage. That, in turn, creates challenges for missile defense systems.

TODD: Analysts say most of Kim's submarines are old, slow, and loud. But he is building more and is modernizing them.

The submarine missile test came just ahead of scheduled joint U.S./South Korean military exercises, which kicked off today near the North Korean border, the largest exercise between the two countries in five years.

Kim's sister warned last month North Korea would take, quote, powerful overwhelming counteraction to the enemy's hostile moves.

BRUCE KLINGNER, THE HERITAGE FOUNDATION: North Korea will depict these exercises by the U.S. and its allies as preliminary preparations for attacking them including the leadership, including decapitating the North Korean leadership.

TODD: The submarine test comes just three days after Kim supervised a short-range ballistic missile drill along with his young daughter, believed to be about 9 years old and named Kim Ju-ae who more and more often is being seen at her father's appearances.

But analysts point out, South Korean intelligence recently said Kim also has an older son who hasn't been seen in public.

KLINGNER: It may be the older brother who's being groomed, but not yet unveiled until he's more of age. And then they may roll him out with indications of how brilliant a military strategist he is.

(END VIDEOTAPE)

TODD (on camera): But if Kim Jong-un's daughter or his sister were ever to be put in place as the supreme leader, would the North Korean people accept a female at the top? Analysts say when it comes to this family, it's more important to be a Kim than to be male -- Wolf.

BLITZER: Interesting. Brian Todd, thank you very much.

Just ahead, the CNN film "Navalny" takes home an Oscar for its inside plot to kill a Kremlin critic. We'll talk to our own Clarissa Ward whose reporting helped drive the film.

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[18:56:44]

BLITZER: CNN won its first Oscar for the documentary film "Navalny," which follows the brazen poisoning of Russian opposition leader Alexey Navalny.

His wife Yulia spoke about his brutal confinement in a Russian prison in her very moving tribute at the awards ceremony.

(BEGIN VIDEO CLIP)

YULIA NAVALNAYA, WIFE OF ALEXEY NAVALNY: My husband is in prison just for telling the truth. My husband is in prison just for defending democracy.

Alexey, I am dreaming the day when you will be free, and our country will be free. Stay strong, my love.

(END VIDEO CLIP)

BLITZER: CNN chief international correspondent Clarissa Ward features prominently in the film. She's joining us now.

Clarissa, thank you so much for all you've done. Thanks for joining us right now.

Amid a very dark time for Russia, how far does this win, this academy award win go to amplify Navalny's message to the world?

CLARISSA WARD, CNN CHIEF INTERNATIONAL CORRESPONDENT: Well, wolf, I think the real hope that Navalny's family have and that the filmmakers who spend so much time with him is at the very least this Oscar win and all the publicity that comes with it will go some ways to keeping his name in the headlines and affording him a measure of protection from further retaliation from the Kremlin, from President Vladimir Putin.

They're hoping that as long as people are talking about "Navalny," there won't be further punishments against him. Because let's be very clear, the situation for Alexey Navalny right now, who is in solitary confinement, maximum security penal colony, according to his lawyers, has lost more than 20 pounds, has debilitating stomach cramps. His lawyers tell us that apparently he's been prescribed incorrect antibiotics that are very strong, that have really destroyed his digestive tract, and there have been very real concerns about his health.

And so, the hope is that this Oscar win will go some small way to trying to give him, as I mentioned, some kind of protection.

BLITZER: Let's hope. What was it like, Clarissa, to work with Navalny himself as you investigated his poisoning, along with Bellingcat, and your team?

WARD: I think some people perhaps who haven't seen the film -- and you do get a sense of this when you watch it -- wouldn't be aware that he has a very mischievous sense of humor, that he is very down to earth, very funny, but also incredibly determined and very stubborn. There were a lot of people around him who said, Alexey, if you go back to Russia now, you will almost certainly face incarceration. And yet he understood those risks and decided to go ahead and do it anyway.

And when I pushed him on this issue, his reply was simple. He said, I am a Russian politician, if I don't serve the Russian people, then who am I? What possible relevance do I have sitting in the safety and comfort in Europe if I am not of some kind of service to ordinary Russians?

And he went on to add, now that I know everything about this plot to poison me with Novichok, he said, quote, I would never give Putin such a gift as to stay back in Europe instead of returning home.

And we see what that homecoming has cost Alexey Navalny, and he understood that risk, and he did it anyway, Wolf.

BLITZER: CNN's Clarissa Ward, thanks for all your excellent, excellent reporting. We really appreciate it.

And you can watch "Navalny" any time on our sister network HBO Max.

Thanks very much for watching.

"ERIN BURNETT OUTFRONT" starts right now.