maria: thanks, everybody. right to "varney & company." >> another amazing show. see you in a couple hours or thanks very much, maria. president trump turns on the charm. he tells them cut off north korea. either way, news on taxes, too. good morning, everyone. president trump across the world stage. publicly a very conciliatory towards china on trade. he doesn't blame them for the huge trade deficit. he gives them credit for playing the hand while. he's coming away with trade deals with a quarter of a trillion dollars.

included in math and spelling. $37 billion for stocks up again. the president access dealmaker and chief. the north korean coast featuring not one, not to, but three aircraft carrier battle groups. not before. next up, vietnam where he made he with vladimir putin. taxes come understandable make changes to the plan now coming out of the house. sources tell fox business that top rate will come down to 37% from its current 39 points six and there will be a one-year phase-in of the 20% corporate tax rate. i will tell you now, investors hated. i can't resist this. this is how democrats celebrated the one-year anniversary of the trump win. screaming at the sky. just wait until they see this show. "varney & company" is about to

begin. i'm screaming here. take a look at the futures market, please. we are going to open lower. the dow, s&p, nasdaq on the downside. this is about the possible delay in the corporate tax rate cut that may be part of the plan. it is part of the plane come in market doesn't like it. president trump is not blaming china for what he called the bad trade deals with the united states. roll tape. >> the trade between china and the united states. has not been over the last many, many years a very fair one for us. as we all know, america has a huge annual trade deficit with china. i don't blame china.

[applause] after all, who can blame a country for being able to take advantage of another country for the benefit of its citizens. i give china great credit. [applause] but in actuality, i do blame past administrations. stuart: does a black candid slap of previous administrations if ever i saw one. ryan brandenberg, business professor at king's college of manhattan. he's making big time deals. is he just window dressing? >> a lot of these deals were already announced. they find a lot of grievance. i don't blame him for doing that. the bigger issue with trade and the blame issue and you notice how he's turning his predecessors under the bus and i think he's actually right to do that. we have been awful in china stealing trade secrets from us

for years and years. i'd like to see them do something about it. stuart: is this the right approach if you want a better deal on trade with china? it's very conciliatory. >> the approach we've taken the past of not doing anything about it. he's on china's home turf bit unexpected and have the same rhetoric here, but what i want to see them do is make a difference on intellectual property. $300 billion worth of trade secrets a year we are losing to china because we don't go after them. stuart: wait a second peer $300 billion a year. >> these are the estimates of how much intellectual fast. stuart: is at the heart of the trade deal of the dispute china. >> the biggest problem. it's actually not the trade deficit. that's a secondary effect to the problem of the chinese stealing intellectual property. this is the basis of the u.s. economy. this is how we compete in the world. 27 million american jobs depend

him in china since the ip come and they go to the heart of our economy and the trump administration should do something about it. stuart: brian come and stay there. thank you indeed. i want to turn to the donna brazile saga. a rolls on and on. she told tucker carlson that she leaked questions to hillary clinton for the good of the party. roll tape. >> and i made sure that our candidates come i didn't want them blindsided. that's what i admitted to. what wikileaks put out. >> it's so good. [laughter] lisa booth, "washtington examiner" columnist, fox news contributor or issue smiling, too? >> tucker's reaction is everything. i watched the interview to see reaction to everything. stuart: the saga does go on.

did you see on abc news, nbc news, did you see it? no come you didn't. it's not there. >> we know the media has long covered for hillary clinton so that is unsurprising. i don't blame donna. do you blame donna brazile? stuart: now, i want to know why she suddenly come out with an thrown hillary under the bus and the rest of the democrats under the bus. why did she do it? >> i don't know. i think a lot of people that democratic party see hillary clinton as a drag as they should. look, she lost the primary election against president obama when she was supposed to be the frontrunner then. she also had every advantage when it comes to fundraising committee minded people on the ground on her campaign. should the mainstream media backing her out. she her up. she had every advantage over president trump and still could not defeat him. look, the democratic party is very sick of her. she's hurt the party.

hillary clinton is sort of roadkill right now. stuart: wait a second. have you heard this? hillary is taking credit on twitter for the democratic race in virginia and a new jersey on tuesday. here is the quote. last night was a great reminder of what's possible when they come together and fight for what we believe in. so i wanted to take a few minutes to celebrate the extraordinary success of a few groups i and non-word to gather proudly stride alongside. she's taking credit. >> if that makes her feel better she needs her right now. go ahead, hillary clinton if this makes you feel better. democrats wanted to blue states. virginia has been trending blue. pat on the back of the good for you. you should be winning. you know, hillary clinton is this moment, by all means. stuart:.if the democrats. do you feel little disappointment at the performance of the republicans in the one year since the election? i do.

>> how could you not? i work on campaigns fighting for repeal of obama character that hasn't happened. tax reform has a lot of issues. there's a lot of issues with the senate plan. i hate the way small businesses are being treated in the house version of the bill. i echo the nfib. the way passive income is treated, 90% of businesses unable to enjoy the rate that corporations are getting 20% rate. i think small businesses are the backbone of the economy and republicans have been saying for a long time there on the side of small businesses. time to prove it. i'm disappointed in that. i know is subdued if you can tell, but of course i'm disappointed with the republican party right now. >> both parties are in disarray in this country at the moment. >> that's an accurate assessment. stuart: you are all right, kate.

>> better than the alternatives. fine opening to the show. good stuff. a couple of big retail names reporting their financial position before the bell. macy's sales have made more profit. the sales went down for the stocks recovered a little bit at little bit up to .7%. more on that in a moment. the other side of the coin, the profit miss the mark and they are down 8%. this is retail ice age articles in macy's not doing much better. nordstrom report their finances after the closing bell today. this is a walk up to the moment at $38 per share. a subject we are all interested in. a new driver the shuttle bus in las vegas launched yesterday to around the ship.

it was sideswiped by a delivery truck. the bumper was damaged. a damaged. eight passengers, nobody injured. there was a truck driver's fault. their shuttle did everything right. i suspect they will say that to the judge. that is going to court. liz: do they respond to points? stuart: the lady you see on your screen is taking some heat. she helps the sites carry out an investigation that may lead to deportation of illegal alien. open as a sanctuary city. judge napolitano has a lot to say about it. the more we learn about his tax plan and the less said is a reagan plan. however, art laffer, one of the

reagan plan is with us next.

stuart: now, fox is not the price of gold $1286.32 browns getting closer third 1000. sources tell fox business that the new tax plan from the finance would come i'm not sure -- get rid of that graphic. i'm going to update it. sources tell fox business that top tax rate on individuals may come down from 39 points six to 37% and liquid pearl coral that 20% for businesses will be shifted along for a year faced in at one year. that is the latest we are learning a fox business. with those changes make the plan more reagan ask? let's ask art laffer, the man who i think had a lot to do with the original reaganesque tax cut

of the 1980s. before these changes were proposed are considered, the ones i've just changed phasing in the corporate rate come i didn't think this was reaganesque at all. with these changes, do you think it's improved? >> la mesa reagan in personal income tax or productions in the 1991 bill not corporate rate reductions. but he did make a mistake and it is a huge mistake of phasing in the tax cuts. when you do this years. do while you can to defer income and output and we created the great procession because we faced in tax cuts. if these guys are smart enough to realize they've been in a corporate tax rate reduction is going to kill the economy, they shouldn't be there.

stuart: it put in the wrong incentives. i love the reproduction. just do it. i love reducing the higher tax rate as well. the right thing to do. what i'm hoping at some of the other changes in the senate bill that look like they're going through like the deduction for state and local taxes, i love the face of the inheritance tax to be honest with you. my kids will treat me really nicely. stuart: stop it. >> the phasing of the inheritance tax is not inheritance tax does not do detrimental impacts phased-in to the personal income tax. that was a joke obviously. they don't want me to die quickly. but you know, i don't think there is a person alive who will vote in for a face and life in sense of history. the deduction for state and local taxes.

did you say you approve of that. if the deduction is done away with comments an awful lot of people who will end up paying more in tax and that would include some middle income people. >> come on, stuart come a lot of room to pay more in taxes because they have higher paying jobs. the whole purpose of this bill is to create economic growth, not to think statically. if you think statically like the state and local tax deductions are like which group benefit and what doesn't come you're missing the whole point of this bill, which is to create economic growth. let me tell you, economic growth will benefit those people in the dark, minnesota, connecticut, high tax state senate will be correct because we in tennessee should not be required to subsidize new york's contributions to the federal government by giving them deductions for their state policies. stuart: you don't care about the poor rich people in new york,

new jersey, connecticut. >> they do. i want them to earn a lot more. i just don't want them to rip off the other states that don't have an income tax and deductions. we should all pay the same base to the federal government and not be allowed to deduct state and local taxes. stuart: you know what i think, art laffer? you are sitting back in low tax tennessee with a quiet little chuckle about all those rich liberals in new york, new jersey and elsewhere who have to pay more. >> i don't think they're liberal. i'm from southern these people sit in new york have a perfect option to move like i did and make chose not to. and they chose not to. now they want me to pay for their mistakes? i don't think so. stuart: you don't have the luxury of moving from california. >> of course they do.

250 years ago there were many people in california. they all moved in there that can move just like i did. stuart: you are done. you really are done. i am out of time. god ago. we will see you again soon. john costin and become a top the irs. he's got a parting gift for america. he'll make small businesses pay fines if they have it reported their situation properly. he's fired up about this one and he will join us after this. who knew that phones would start doing everything?

entertaining us, getting us back on track, and finding us dates. phones really have changed. so why hasn't the way we pay for them? introducing xfinity mobile. you only pay for data and can easily switch between pay per gig and unlimited. no one else lets you do that. see how much you can save. choose by the gig or unlimited. xfinity mobile. a new kind of network designed to save you money. call, visit or go to xfinitymobile.com. stuart: here is how america sticks it to america.

here is how the irs takes it to america. on the left-hand side of the screen. john costin and have decided to enforced a rule that is two years old that will eventually make small businesses pay about $9 billion by april 15th of next year. here to explain this in more detail says brian brenberg. somehow this works. >> the small businesses have to provide approve health care packages to their employees and if they don't have to pay a penalty. it's a horrible role. everybody hates it, especially small businesses. the obama administration doesn't enforce it did in 2014, 2015 and 2016. but come 2017 when is the trump administration and the obama i arrested when he is going out the door, what is he say? you're going to pay $9 billion to $10 billion. stuart: the only way to fix this is by legislation and republicans have failed to offer that legislation.

>> you can blame the obama administration, republicans for not fixing the problem twice when they had the opportunity to do at this year. republicans are just as much to blame. train for the treasury secretary could overrule this. the question is will mnuchin step in and overrule this? >> he can certainly delay it. it is on the books at the law. it has to be enforced. liz: at $9 billion you >> it's a lot of money. stuart: on the last day in office the man does not? liz: notorious for acting independently, whatever administration does they are not enforcing guidelines. costin and decides to do this on the way out. stuart: the dow industrial and

four minutes time will be down 80 points. there is some proposal to phase in that lower corporate tax rate. market doesn't like it in minute from now. alerts -- wouldn't you like one from the market when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today.

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stuart: thursday morning, dow industrial coming off a string of record highs but they will not open higher this morning. looking for a drop of 70, 80, 90 points were trading begins, which will happen in five seconds time. big negative for the market this morning. phasing in that lower corporate tax rate. here we go. right from the get go, 86 points, for those of you listening on the radio, down 101 points. 23,400. that's where we are in a sea of red on the left-hand side of the screen. about 25 of the dow 30 are going down. down 105 points. that's a drop of a half percentage point. s&p 500 is down half of a percentage point, 13 points. the nasdaq in the early going down .79%. what you've got here is a

broad-based selloff. big retail names reporting profits today. macy's and cold. macy's is up, corp. was down sharply 5% lower. by the way, they've just announced 24/7 pickup for the holidays. here is how it works. order online, pick up at the store whenever you like. now, bowling has a $37 billion order from china, the 300, however, this reportedly consists mostly of previously agreed to deals. we will ask. twenty-first century fox reported better revenue, higher sales from traditional and online distributors. twenty-first century fox, 27 bucks a share. there is some disappointment

outline. brian brenberg stays and of course art laffer. a lot of disappointment about this. liz: giving companies a ton of 50 billion of the 1.3 trillion. it's a disappointment. it's depressing and i think the middle class will get hit if they are in the high tax state it deductions go away. and the democratic. and not collapsing them into four. so it is really in flux. i think the democrats have a strong argument about the middle-class year. >> lives makes a good point. they talk about so many unhelpful things in this debate that the average american is sitting back saying what's really going to happen here? i totally agree with art laffer

phase in a 20% corporate tax rate cut is a very bad idea. stuart: the market is down 90 points on the dow industrial. do you think that is because of this suggestion that there is a one-year phase-in of lower corporate rate? >> yes. stuart: you are killing me. >> abroad place to climb. almost all of the 30 industrials or the nasdaq, s&p, sounds broad-based to me and something that is macro, phasing in the tax cut is a bad idea. >> let's stay on the tax reform. if stocks take a hit, if nothing is done on tax reform, where is this safe haven? the big technology a stock, our big tech safe havens. >> they are the ones. they are going to eat lunch with

the guys dependent on it. >> keep an eye on the safe havens. people are disappointed with what's not coming out. in the corporate tax rate. by which you phase-in those companies. everything will be deferred. the economy hurts. >> the safe haven is the place to go. president trump making deals for american companies in china. art laffer, we brought you the news of the 47 william dollars order for boeing, but much of that is previously signed and delivered years. is this just window dressing, the dealmaker in chief? >> previously part of all of this stuff. i'm very pleased at the way trump is dealing with china and

with xi. frankly it was sort of afraid it might be a trade war with them and i don't think that is going to happen. we are going to have trade with china which helps the united states enormously. i think anything like this is a positive. stuart: i should tell everybody that today in china, president trump suggested it's not china's always got this big deficit. it is president trump's predecessor. china just like they can very well. liz: he got applause for that. stuart: he was obviously an applause line. the story of my life. stuart: look at this comment on exactly 100 points as we speak. we are five minutes in, just down 97 right now. ashley: when we see these tapes before, it's been a buying opportunity. we will see how long this

continues for the renewable coming in again. stuart: very good point. we will see those big tax. okay, relax. we are showing you down 4%, the sales were up, but the rate of growth of sales slowed down. don't do that. we will take you to the cleaners down 4%. for berry, a name i know, or used to know, wants to go upmarket. i thought it was upmarket anyway. and even more luxurious brand. don't do that. macy's, where are they right now? same-store sales were down a little bit. stock is up, profits were okay. profit were up or down. i can't remember. anyways, retail down. 4% lower.

nordstrom, where was that? they report this afternoon to 24/7. go online, order something and tried down. sears down $4.67 per share. art laffer, what doesn't economists say about what is happening with retailers these days? >> i'm not really sure what economists say, but the overall market has really good, responding to great policies and that will continue a long time to come. >> you know things are badly now the term retail apocalypse has its own entry in wikipedia. there's its own page about the retail apocalypse. stuart: is that right? transfer that is correct. stuart: they've not done very well at all. apple has outbid netflix for a

show starring a couple of hollywood a-list stars. ashley: jennifer andersen cover reese witherspoon outbid everyone in the tv industry biggest players. they are splashing the cash. these actresses will be part of a tv show that hasn't been named yet. the morning tv rule. that could be interest in. pitch from stuart varney. the producer -- i'm trying. this is the same producer or did house of cards. content is king in hollywood. there is a production boom all online. train to live he comes back. liz: i can't just help it. you are so funny. stuart: the department of justice reportedly demand that cnn be sold as a condition for the time warner at&t deal to go through. professor brian brenberg. >> i think this is a bunch of

hooey. i do not know why they care so much about whether at&t on so much. it is yesterday's news. political maybe yesterday. >> president trump. ridiculous. he's not supposed to have any influence that he does. how much would it go forth it has to be sold? >> i really wouldn't. i find all the stock stuff interesting, but i'm not an expert on individual stock unfortunately. i wish i were. i would be rich. stuart: yes, you would. my producer was saying something in my gear solid luster response and what did you say again, justin? everyone has denied this is about cnn. reporting profit -- i've got

them in my ear now i can't even speak. disney reports profit this afternoon. am i going to ask you what are we expecting? liz: i know you hate that. disney shares have been in soft mow down 4%. about half of the profits comes from media networks expect pretty much flat revenue growth. what can disney do to get investors excited about streaming strategy? that's going to be the question. ashley: cord cutting from espn. stuart: we just had an all new low. what do disney expect from investors at 4:00? i'm not interested. stuart: i hate to end on such a sour note. art laffer, you're great today. brian brenberg, you were okay, too. gentleman, thank you indeed. dow industrials down 107 points. that puts us at 23,453.

that is a half percentage point drop pretty much across the board all the three indicators. here is what is coming up for you. president nixon made an historic trip to china 45 years ago. he welcomed china onto the world stage come accepted them, not quite as an equal, but certainly acceptable on the world stage. very similar perhaps to a president trump is doing today. would that be accurate? monica crowley, former nixon staffer joins us next.

stuart: lowered the day down 130 points tomorrow, 132400 or eight. the market i believe it's concerned about his suggestion that we are hearing that 20% corporate tax rate will be phased in, take a year to get their paint the market doesn't like it. apple working on an ipaq redesign. i believe it's got facial recognition.

tell me about it, nicole. >> bring it on. people love the iphone can facial recognition feature now trying to rebound the ipaq for sometime next year in 2018. the first revamp back in 2015. though it will have the facial recognition. the passcode will work. it will also have the animated analogies if you want to make more faster in a similar screen size. here's what's interesting. the thing that it won't have is the clarity. if you have an identical twin, this is the one caveat. sometimes the identical twin will get in. stuart: i never thought of that. i never thought the identical twin with it mixed up there. thank you very much. two months after equifax reported one of the worst data

breaches in history. interim chief tells congress he wasn't sure whether the company was encrypt in consumer data. tell me. transfer senator corey gardner said are you now -- he said i don't know at this stage. 125 million people got consumer data hack. by the way, he ran asia-pacific region for equifax. he's not interim ceo. i'm talking about pulling out to barrett. you know, this is the thing. they are making money selling identity theft services while taking our consumer data without our knowing it and making money off of that selling it to banks in the light. stuart: not good. transfer he should've asked people day one. stuart: okay. president trump is in china and he is doing some comparisons to

president nixon's china all those years ago. monica crowley as it does at the london policy research and choose the former nixon staffer. and president nixon went over there in 1972, and that was the great opening. is this the same when president trump goes to china? >> it's not quite a seismically important. opening to china in 1972 with an historic move based almost solely on strategic considerations because of growing soviet power at the time. then the u.s.-china relationship has evolved over time to include economics. china is not just an economic competitor, but also strategic competitor all across the south china sea. stuart: they want to be seen as a nickel on the world stage with the united states. that's what they crave. i am told that is what they crave. are they going to get back that recognition from president trump? >> the president's visit is from both sides. not only every competitors in the areas we discussed, but the

collaboration that's needed. >> are they going to give them what they want? >> user to given them that by the mere presence on the ground in beijing. remember, and they ran very strong against china talking about china's economic competitor and so on. he cannot give away, but their areas of there are areas of cooperation particularly with the north korean nuclear program where they are holding intense discussion that for all the criticism that our president has gotten over the last nine, 10 months, he has been able to lean on the chinese and strategic calculations to have roe effect on the north koreans, where the chinese et cetera. he's had real successes. maintaining a positive constructive relationship with beijing as the name the competitive framework is critical. the president is executing a very sensitive relationship

quite well. stuart: out to totally turn the subject or to think of you as a republican. i don't see a vote that way or that way or not. tonight i am conservative. trains are a little disappointed with the republican policy one year after the election? >> a little? how about a lot. republicans cannot even get the simplest things done. obamacare, health care, health care and understand the complex issue but they've been running on not or eight years. the core plank of the republican platform since its inception has been limited government reducing the tax on the american people rolling back regulations or the president is trying to do his part through executive orders. but the republicans in congress cannot even get through. they are having such difficulty and i understand it is complex. tax reform, tax cuts come a central plank of their ideology, what they run on every two, four or six years and they cannot get

that done or they are going to delay the corporate tax cuts. they cannot get the most basic part of their agenda through and it's a disgrace. stuart: i say that the republican brand has shifted. the republican brand today is not the same as the republican brand say 18 months ago. transfer sorry, monica makes an important point. the brand has shifted. ted kennedy, joe biden, john kerry, al gore all voted for the reagan tax cut. they are not at the table talking about what is their economic growth policies. stuart: no clue. get it all, spread it around. ashley: split party do you believe? >> democrats are still the party of barack obama. this republican party is split because donald trump is not elected by republicans. donald trump was elected by disaffected democrat in the 10

key swing states. he created a whole new coalition, so there are realignments going on within each party in across-the-board and i don't think anybody quite has a handle on it. you better get your act together on tax reform. if we can appeal on the logic of tax cut you are not going to get it if you don't get reform through. stuart: i think you are right. monica coming thank you indeed. >> always a pleasure. stuart: we better check the market because this is a new low down almost 150 points. 148 to be precise. left-hand side of your screen is a sea of red. only four stocks that are red. 26 down and we just take down 151 points as we speak. dallas cowboys owner jerry jones threatening to sue the nfl over roger goodell's contract. jones wants goodell out.

more "varney" after this.

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stuart: well, coming back a little. we were down 150 and now we are only done 120 points, so i have% down. dallas cowboys owner jerry jones threatening to sue the nfl over

roger goodell's contract. ashley: yes, roger goodell's contract comes up at the end of the 2018 seasons. he should not be extended. jones has had an ongoing thing with goodell. now he's reportedly hired an attorney, high-level attorney who's represented al gore in the 2000 presidential election was recently by harvey wein being. that could be a scare tactic, but no doubt about the owner some dissatisfaction with the roger goodell. we've got to admit he's done a terrible job handling the anthem controversy. a terrible job explaining the tv ratings decline. terrible job on a number of other issues. what's interesting is many owners are also upset with goodell because he gives jerry jones too much power. getting the picture of an nfl structure that is split and they are not happy. they don't like the way these things have gone. interesting to see how far this goes. the threat is there for jerry jones.

stuart: what is this about nbc admitting the ratings decline is the not failed prophet. transfer reportedly when they gasparino, here's the quote. the list of advertisers have made themselves very clear. if you continue covering political coverage of the nfl anthem, we would not be part of the nfl appeared she doesn't have the proof, but the ratings have been her because at the end the protest. the national anthem was not broadcast prior to calling kaepernick taken any. now they are broadcasting it and hitting it is the bottom line. stuart: now, everyone, one year ago we voted for a new president, that would be president donald jay trump, that's a lot of discipline and grumbling republican voters, too. my approach on the subject three minutes away. so you can head into retirement with confidence.

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stuart: one year ago we, america, woke up to a new president, president trump. one year later, disappointed

hillary supporters scream at the sky to show how unhappy they still are. wait for it. there screaming away. there you go. there are a lot of disappointed republican voters. they don't scream but they sure are grumbling and with good reason. job one, repealing obamacare didn't happen. still got it. by the way it come back to bite us again. the irs chief wants to fine small businesses that didn't meet obamacare reporting requirements. $9 billion. a parting shot from john koskinen. if republicans replaced obama care it, wouldn't be happening. tax reform, it is not done. what we've seen from the plan, to some disappointing. it helps businesses, that is good. yes, it helps the middle class. that is very good. it does not cut taxes for everyone. in fact many people will pay

more. it doesn't bring us to 4% growth. now that is not me that makes that forecast. that is from the republicans who wrote the plan. infighting that is not helped the gop's image and we've seen a lost infighting. division is a better word. is maine's susan collins in the same party as texas he's ted cruz? in short, after a year in power, many are beginning to wonder what the republican message really is. it feels more like party of big spender nelson rockefeller, than ronald reagan. democrats are howling about hillary's loss. for republican as year that began with so much promise end with so much more disappointment. politics clearly in disarray. not good for anyone. the second hour of "varney & company" is about to begin. ♪

thursday morning, 10:00, we have latest read on mortgage rates. ashley: 3.9%. that is down from the week before. 30-year fixed still pretty darn low. stuart: i would say so. every week i'm tempted to say i paid 12 1/2 in 1970s and you paid? ashley: 17%. can you imagine. 17%. >> i can't imagine. lizzie is being very quiet. liz: you should have waited. stuart: welcome backed goo to see you honestly. liz: okay. stuart: big tech companies, especially amazon. they say they employ 17,500 veterans and military spouses. they expect to hire another 10,000 by 2021. the stock is down a fraction there, seven bucks. disney reporting the financial situation after the bell today as walk-up to that

announcement, they're at $102 share. snap getting cut to underweight. i don't know exactly what that means but it is not good. morgan stanley saying that. look at roku, they make the box you plug into the tv set, lets you stream all kinds of video. they're selling a ton of them. the stock is up, am i reading that right? 44%. i call that a rally. we'll take it. how about the price of oil? saudi arabia versus iran, that is not going down well, 57 bucks per barrel. back to my take at the top of the hour, gop supporters are at least disappointed, no repeal of obamacare, infighting over taxes, joining us from radio show host larry o'connor in d.c. i think i've been relatively restrained that republican voters are pretty disappointed.

what say you? >> i think sadly these days in washington, d.c., you have to say which republican voters because you have your republican establishment who a year ago yesterday who were sure they were going to lose the presidency and probably lose the majority in the senate and you have your trump republican. with regard to obamacare, stuart, you know the president is sitting there with pen in his hand he is waiting. his big mistake he actually believed all the republicans in this town who said they were going to repeal obamacare. he can't legislate it. he is waiting to sign it. we'll see what shakes down with the tax reform package as the senate looks at it. we're expecting something this afternoon or later tomorrow. d.c. equivalent of what an analyst thinks of disney's streaming revenue. stuart: republicans are at the point where this is do-or-die. >> they have to do something. stuart: you got to do it. >> i went to have been event with yesterday, with speaker

paul ryan. he talked about a litany of all the things the house has done. he is right, they have passed quite a bit. but the senate has a logjam. pretty much every senator thinks they should be president. sadly they don't want to show any progress because they want to undermine trump. stuart: oh dear, what a situation. >> i told you couple months ago, game thrones without much blood. stuart: fair point. switching sides asecond. would you believe this, larry, hillary clinton taking credit for democrats win on tuesday. don't laugh, here is what she tweeted. last night is a great reminder what is possible to fight for what we believe n i want to take a few minutes to celebrate success, that i and onward together proudly fight alongside. larry, i know you're laughing, she is not going away. >> nope. she isn't, i'm glad she can

tweet in between glasses of chardonnay as she feels sing of last year's loss. we talk about the republicans in disarray let's focus on democrats. this town is still on fire overdone that -- over donna brazile east book. this party can not move outside of the hillary clinton. she is the defacto leader of democrats. everyone looks at clintons before they follow their lead. i think hillary 2020. >> stuart: you're joking. sarcasm is low form of wit. >> is leader of party? elizabeth warren? stuart varney. stuart: moi? [laughter]. sarcasm is very low form of wit. >> that was a low blow. stuart: you're out of here. you're done, o'connor.

>> thank you. stuart: lot of numbers out on retail burt flickenger coined the term retail ice age. we stole it from this man here. welcome to the program. deal with may ses. the stock is up a little bit about 3%. they came out with sales and profit report. how do you assess it? has macy's got a future. >> macy's does have a future, stuart. they will be the sole survivor of major department stores. they're making money outside of retail. taking hundreds of thousands of square feet from bloomingdale's flagship, lex and 60th. moving executives across the river to long island city. macy's star reward program will be most powerful one in retail. they're finding ways to profitably grow. going into the fourth quarter with the macy's day parade better than ever, they're finding their footing. the analysts got it wrong. stuart: before you leave at macy's, you say they will be sole survivor.

so all the malls around the country anchored by big-name department stores, all the rest are going leaving macy's. >> i believe in don, a board member, who i had dinner, macy's bloom dale will sale and saks if i have afterand lord & taylor survive on the high-end. penney's a jump ball. a lot of bad board appointments and mike ullman, would save the company. sears, two thumbs down. stuart: going away? >> yeah. stuart: nordstrom. >> nordstrom family will probably buy it, part of another company okay as regional not a national. stuart: this byes me to kohl's. they didn't make as much money as some were expecting. they blamed the hurricanes. i believe the stock is down. does kohl's have a future. >> voting on coach mccarthy, and coming back.

kevin mansel, never vote against kevin the dynamic leader of kohl's. he is located near ashley webster's beloved green bay packers. they got hit because of hurricanes. non-hurricane areas they are positive. a lot of new brand and expansion and beauty. kohl's will be a winner. analysts are getting it wrong and looking out the windows in midtown manhattan instead of going to stores. stuart: bo back to sears. they're making a deal to sell, i believe up to 140 stores. if they sell them that gives them cash to pay their pension costs the that sound as little shaky, not shaky financially but that is rotten deal to have to make, isn't it? >> rotten deal to have to make. pension costs that have to be made. a company that loses 7 to 9 million a share and approaching 50 consecutive quarters negative same stores. amazon retail ice age,

accelerating o'connor talked in the prior segment, without the republican tax cut, they will be devastating implications across all of retail. and states with the biggest number of stores going bankrupt will be mitch mcconnell's states and chuck schumer states. they will have their tax base just eviscerated with shopping centers, retail stores, and employers, people losing jobs. it will happen across america. but in mitch mcconnell's state of kentucky and blue states, you will see thousands of extra stores going bankrupt without the tax cut and this purchasing power for -- stuart: if they don't get the 20% top rate, the corporations, then, all hell breaks loose in these regions? >> and individual tax cuts. lefty reports bible for financial analysis following retailers downgraded more retailers to f-1, which is one

step away from financial failure than ever before. the tax cut, as you said, stuart, corporate rattily, individually is critical to either get the economy to rebound or else go over niagra falls in a barrel, break below and get sucked into the whirlpool down below. stuart: on that note, burt flickenger. that is interesting. you're the man who coined the phrase, retail ice age. burt, you have been right. thank you very much. look at stock price of boeing. they made a $37 billion deal with china, selling them 300 planes. reportedly these orders mostly apreviously agreed-to deals. sources on ground tell fox business deals signed today, are expected to total, for all of the deals in china, $250. that is a quarter of a trillion dollars. boeing a small part of it. former dnc chair donna brazile airing the party's dirty

laundry. someone coming up says brazile's book shows the media covered up hillary's health problems. we have details in full. we have details on the senate tax plan. senator bill cassidy is next. will he confirm them for us? you're watching the second hour of "varney & company." ♪ copd makes it hard to breathe.

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stuart: talk taxes. senator bill cassidy, republican from louisiana, in d.c., he joins us now. sir, we're hearing reports, fox business sources are telling us that, that the senate people are considering a delay in the imposition of the 20% top tax rate for corporations. a delay of one year. your comment on that, sir? >> well, certainly been something that has been

discussed. what we want to focus on is economic growth. how we make it better for families, via economic growth. if that is what eventually comes out in the final bill be released today, the idea probably planning already occurred for this first year. what we're really concerned about is impact of planning -- stuart: don't you would think it would make no difference if you delay the top 20% tax, delay it for a year, doesn't make any difference to economic growth? >> not saying that it doesn't necessarily make a difference. you're trying to put the money where the biggest bang will be for that money. stuart: is that being used if you do delay for one year, you would save some money. are you going to spend that money by reducing top rate of tax from 39.6 to 37? sources telling you considering that too? >> everything is, everything is trying to strike a balance. how do you get the corporate rate so we're competitive with other countries. how do you give middle class families, working class families

as big tax break? how do you keep the distribution effect kind of constant? if you're giving it here you're taking from someplace else. stuart: what about the state and local tax deduction? we hear, again, we hear it is going away completely. are you going to do that? >> that has been a back and forth and we'll find out later this morning exactly, i don't want to give away what we're giving out, but clearly state and local tax deduction is subsidy for high-taxed states. so, whether or not the federal tax payer in kansas or louisiana should be be subsidizing peoplen new york and california is subject of debate. it saves the federal taxpayer $1.5 trillion, which allows us to lower rates overall for everybody. stuart: possible the deduction would stay to a limited degree? >> an for a limited aspect of it stuart: so what i'm getting at,

we'll soon find out what the senate plan is. under discussion are significant changes to the top corporate tax rate, delay of one year, maybe. and a new top individual rate, 37%, maybe. and maybe some change in the total elimination of these state and local tax deduction. i will sum it up like that. that i think you have confirmed that for us? >> yes. all those are under consideration. i won't give away final version but we certainly, those are some things we have discussed. stuart: that took the market down this morning. it is coming back a bit now. it was down 150 points on the dow, this very suggestion you would mess with the 20% corporate tax rate. >> clearly market is doing very well right now. the certainty regarding regulations, certainty regarding tax codes is bringing up numbers of jobs, increasing wages in some quarters. all that have good for families. i think market responds nicely in the long haul what we're

doing. stuart: senator, thank you for being with us this morning. you can't spill the beans and reveal all i know you can't do that but you went part way. we appreciate that. >> thank you, stuart. stuart: how about this? from trip advisor, putting new warnings on hotel listings in mexico? give me the full story. liz: you go on trip advisor. they have an icon next to the name of the hotel warning there could be health or safety issue. this was prompted by not just the state department warning about sexual assaults at resorts overseas, including in mexico, a woman, number of years ago out of dallas was raped by a security guard at a resort in mexico in cancun. so she put a posting up on trip advisor. trip advisor took the post down. put it back up, you know what? this is information our consumers want. now you see warnings from trip advisor about hotels with health, safety, discrimination around the world. stuart: i don't mean to be

pejorative here, but you could probably find something negative in those areas, sexual harrassment, rape -- find them almost any hotel in the world. liz: if it happens at the hotel. they will base it on news reports, police reports, people complain about it. the hotels could push back on it. stuart: they will. liz: when you have the state department putting out warnings at certain resorts, you can confront this i think trip advisor is picking up on a new trend. stuart: i see it. i wonder if the warning labels, everything has a warning label on it these days, so people don't pay any attention. there is that. liz: that's a good point. stuart: fallout over kevin spacey continues. a movie he was supposed to be in debuting in three weeks, now undergoing major edits. we will have details for you in a moment. ♪

stuart: update on kevin spacey. he is being cut out of another film,. liz: liz: "all the money in the world." christopher plummer is set to replace kevin spacey. it is about the oil man, john paul getty, whose grandson was kidnapped. he refused to pay the ransom. ridley scott, sony pictures, cast and crew, unanimous, remove kevin spacey. put in christopher plummer. they hope for december 22nd release date. mark wahlberg, michelle williams, the cast, said get him out. this is supposed to be oscar

contender. they don't want the taint of kevin space -- spacey's sexual assault allegations to hit it. stuart: "house of cards" -- ashley: "house of cards" is shot around the city. dry cleaners, transportation services. season 6 is suspended for now. it was supposed to be the last season anyway. the big question will they finish it off without spacey. there is a lot of people, 2,000 jobs rely on this. stuart: whoa. ashley: so his story is having huge ripple effect throughout the industry. >> i don't know, do you think that has any impact on the stock, the end of house of cards and difficulty? i don't know? liz: did position netflix as go-to streaming conflict. first blockbuster. number of awards as well. ashley: can't help. stuart: obviously. coming up the man who says donna brazile's book shows the media covered up hillary's

health issues. you remember that fainting spell there? he will be here to explain that in a moment. ♪ ♪.

♪ stuart: that is my anthem, by the way. [laughter] all right. moving on. we were down 150 about a half hour ago. now we're down a mere 72. look at the level, 23,491. how are the big techs holds out on this downside move? not that great. well all of them, the big five

are all lower, not that much. the big loss was alphabet, which is down 1 1/2%. the department of justice reportedly demanding that cnn be sold as a precondition for time warner to go ahead and take on the merger with at&t. at&t's stock is up. time warner is down. more u.s. subscribers for the dish network. that is doing the stock some good. it is up 4%. 51 on dish. let's get to donna brazile, former interim dnc chair. she is making the rounds of her new book. she explains to tucker carlson why she gave debate questions to hillary during the campaign? >> i made sure our candidates, i didn't want them blindsided. that is what i admitted to. but wikileaks -- >> that is greatest answer i ever heard. i didn't want them blind-sided. that is so good. you should this for a living. stuart: cruel, tucker.

nonetheless. she didn't want to be blindsided. separate from that. here is the headline from our next guest. it reads how brazile's book exposes liberal media's hillary health cover-up. that interests me. "new york post" columnist michael goodwin, pulitzer prize winner, nonetheless. is here on the show. >> thank you, stuart. stuart: how did the liberal media cover up the, are you referring to the fainting spell. >> donna brazile said after that, she would start or consider the process of removing hillary because she thought she wasn't well. i go back and recount throughout the campaign there were many instances of coughing fits for example, hillary clinton had, the fall, history of falling. the liberal media was saying there is no story there, leave it alone. especially labor day of 2016, she can not finish a speech. struggles through a speech in ohio. she is coughing, coughing. tries to talk to the press later

on the plane, just allergies. she had to stop again she is coughing, coughing. five days later she collapses at 9/11. stuart: it was pneumonia. >> that was the thing. they told us allergies, "new york times," "washington post," cnn, they scoffed of any stores about her health until she collapses. it had been a lie. she knew she had pneumonia, it was related to health a serious issue. the history of falling. she fell recently again. stuart: she did? >> she broke a toe. stuart: i didn't know that. >> it is always something but we're always told it is something. brazile, what she did by saying that she thought it was serious enough to consider removing her, but nobody in the media knew this. how did they not know that? because they're not covering hillary clinton. they're covering up for hillary clinton. stuart: that was the moment, we

just showed it moments ago, on 9/11, anniversary thereof. >> yes. stuart: she was walking towards the suv. she does appear to need support from the people around here. it was at that moment, donna brazile decided we need another candidate. >> they told donna brazile that is dehydration. she said, that is not going to fly. they lied to her too. only when the video came out they admitted it was pneumonia. stuart: this is disgrace. we might have elected someone unwell, unhealthy and not in physical position to take the job. we could have done that. >> media didn't care because all of their focus was on defeating donald trump anything that made trump look bad, top of the broadcast, page one, ream after ream of copy but for something like this with real serious issue, the media is not skeptical, not curious. doesn't turn over every rock.

doesn't pretend to. the different standards they applied were how they ended up covering up for her. stuart: it is not over, michael because when we had this revelation from donna brazile she had indeed tipped the dnc towards hillary, elizabeth, senator warren came out, yes, it was rigged, abc, cbs, nbc, did not report it. they did not report it at all. that is disgrace. >> they're not covering the menendez trial. another democrat on trial for corruption, democratic senator, not a word on broadcast networks. stuart: not seen that anywhere. >> they ignore the bad news for democrats. stuart: is this going on for another three years? >> i think so. look, it is good business for them. half of the country gets all of their news from the democratic white-washed media. stuart: gross misleading of country. the media is not doing its, i'm going to say constitutional position. it is not doing what it is supposed to do.

>> look, it has public trust but these are businesses, right? i think we have never seen this movement in our times where there is a directs, deliberate attempt, by the mainstream media, to pick the president. and, then once the country picks another person, to demonize and destroy the sitting president. we have never seen this in our american, modern american history, stuart. yet we are witnessing it evolving every day. we get numb to it. but this is history in the making. stuart: yes it is, indeed. michael, thank you so much for bringing this to our attention. good story you got there, lad. lad. sorry. you are younger than me. now this, the senate's tax plan, sources are telling fox business that they're talking about delaying the 20% corporate tax rate for a year. and another point, they're considering lowering the top individual bracket to 37% from

39.6. those are two changes we're told they're talking about. come on in, john allison, former cater institute ceo. he is joining you now. john, if that were the case if that did happen, delay for one year in the 20% corporate rate around lower top individual rate, would that be approved by you? would you like, do you like the sound of that? would it make it more reaganesque? >> i think it would make it a little more reaganesque, although the program is definitely not reaganesque so far. if you look at whole purpose of redoing the tax code, driving faster growth in the private sector. the real issue in our economy is that the private sector produces more than the government sector. you want the private sector growing faster than the government sector. if you look at the house bill, cutting corporate tax rate and other changes in the corporate tax code are super of the what they have done on consumer side

is largely useless. stuart: really? no more about getting votes. cutting high-end rate is very good. and it would be a good tradeoff if you're certain only going to have one year delay in the corporate tax rate. stuart: here is a question, i got to ask this one. okay, you're disappointed with the plan as we've seen it, and as we thought about it, and has it been revealed, but would you rather have that than nothing? is something better than nothing? >> that is an interesting question. i would say yes. it is disappointing that it isn't a lot better because it could be a lot better if they focus what purpose of changing the code is instead of what the politics are. stuart: i'm looking at market very closely. about 15 minutes ago we had senator bill cassidy on the program. i asked him about this, they're discussing delaying for one year the 20% corporate tax rate. when that, and he said yes, we're talking about it. when he confirmed that, the market started to go down again.

we were down 30, 40, 50 points, before that interview. now we're down 100 points. so that, if there was that delay, the market would not take it very well. do you agree with that? >> i do. it is critical thaw also get the cut in the high-end tax rate. you know if you delay the corporate tax rate, that is bad. if you also cut high-end tax rate, that would be good. high-end, people are the ones that have great discretion, in terms of energy and investment. moving around middle income taxes sounds good politically, middle income people don't have a lot of discretion. they can't change investments. can't change workloads. entrepreneurs can. high income tax rate is very destructive on economic activity. stuart: but then again if you don't tax the rich until the pips squeak, you might lose politically. that is way it is in america. i hate to say that. if with the media in control of view of the politics, media

skews left, the idea you might give a tax break to people actually paying taxes, that is is anathema. you can't get it through. what do you say, john. >> that is a shame. you care about the middle class overall standard of living. if you cut taxes on high-end, they create more jobs, drive faster economic growth and the world is better place to live. that should be what we talk about how to make the world a better place to live for everybody. stuart: prosperity for everybody. let's have a go at that. john allison, you're a favorite guest on the program. because you used to be with cato. we love you, man. come again soon. >> thanks a lot. stuart: i like the accent. nice. snapchat, planning a big redesign of the app? liz: this is a company that every quarter since they went public in march it has shown losses. it has shown slowly daily active user growth.

ininstagram, ashley pointed out. we're posting losses and astounding cash burnings people don't understand the website. people don't understand snap. users don't understand it. advertisers don't understand it. try to make easier ways to click through snapchat. stuart: pile it on, liz. stating the facts. liz: look at that hockey stick chart. stuart: the man who assaulted rand paul entered not guilty plea. ashley: he didn't say a whole lot but yes to the judge. pleaded not guilty to fourth degree assault. according to report he could face up to a year in jail be convicted. catch people up if they didn't hear, rand paul was attacked mowing his lawn in bowling green, kentucky, home, outside with his earphones on. got hit from behind, taken down by the neighbor, 59-year-old rene boucher.

we understand he suffered six broken ribs. that is incredibly painful. takes a long time to recover from. the suspect will be back in court november 30th. the big question is why? stuart: yes, we don't know that. ashley: we're told something trivial, not political. stuart: six broken ribs. that is not good. liz: we don't know when he is coming back. stuart: let me get this in. the dow industrials are down 100 points. i will link this to our interview with senator bill cassidy, people in the senate are talking about one year delay in the top corporate rate of 20%. one year delay. not popular with investors. not good for business. right after that interview, the market started to come back down again. okay, we've got that. check this out, please, a self-driving electric bus in las vegas crashed within the first hour of operation. self-driving, i might add. the city of las vegas was crash was result of human error. a human error, on part of the

truck driver, after the truck driver failed to stop in time. no one was hurt. lawyers will have to sort that one out. coming up former fbi director james comey changing the wording on the hillary email investigation from grossly negligent to extremely careless. did comey fold? if so, why? we're asking that former fbi official. james comey is on his way. ♪

ashley: sources tell fox business that the 20% corporate tax rate will be phased in after one year. well, former reagan economist art laffer says that is a bad idea. roll tape. >> let me just say that reagan did personal income tax rate reductions in the 1981 bill, not corporate rate reductions. stuart: right. >> but he did make the mistake, and it was a huge mistake of phasing in the tax cuts. if you know they will cut tax rates next year, stuart, what do you do this year? you do all you can to defer income and out put, and we

created the great recession of 1981 and 82 because we phased in tax cuts. if these guys are not smart enough to realize phasing corporate tax rate reduction will kill the economy, they shouldn't be there. they have no sense of history. ♪ ...we've helped our investors stay confident for over 75 years. call us or your advisor. t. rowe price. invest with confidence.

stuart: new york state. ups, the stock, new york state announcing it will work with ups to convert the delivery trucks from diesel to electric power.

not done the stock any good at all. it is down half of a percentage point. former fbi director james comey changing the wording on the hillary email investigation, changing it from grossly negligent, to, extremely careless. question? did comey fold on clinton? joining us now, james kallstrom, former assistant fbi director right here in new york. james, did comey fold? >> well i think he folded a long tile ago. i've been talking with you about this well over a year. you know the fact that he was acting strange, doing things that were not things that the fbi should be doing, not putting people before a grand jury. the notion that barack obama was going to let hillary clinton get indicted, that was obvious to anybody that knows anything at the very beginning. so the fact that he changed the language, fine. but like you and i building a cake. putting a cake in the oven with no flour, no eggs, no sugar, we're talking about minute thing

about the salt shaker wasn't right. you know what i mean? stuart: okay. >> whole abundance of things this guy did. he was a political, turns out unfortunately he was a political hack. stuart: you think, flat-out james comey sided with the obama administration, sided with hillary clinton, flat-out, you think that? >> i think he maybe started out in honorable way. his opinion of himself was, sky-high. you know, just unbelievable guy. stuart: really? >> arrogance about him. that got him in trouble. he thought he was superman. he found out that he wasn't. the dogs will always bite your heels when you're dealing with the clintons. look how long the public, the american people have been dealing with the crime syndicate known as the clinton foundation? stuart: strong stuff, james. careful. >> seriously, there is no question about it. look what is in the public domain. the clintons have been, i mean,

taking advantage of their stations in life for so long back in '95, '96, bill clinton let our guidance technology for icbm missiles go to china. things like this very devastating. now today, we sold 20% of our -- stuart: uranium. >> uranium, come on. for what reason? why was that? stuart: okay. >> why all of a sudden does someone appoint this guy, the deputy attorney general, what is his name. liz: rod rosenstein? >> rosenstein, yeah. what does he do as soon as he gets in there, appoint aspects counsel. who is it? bob mueller. roll the tape backwards. bob mueller is the fbi director. rosenstein is u.s. attorney in baltimore prosecuting people in this case, right. stuart: you think all woven together, almost a semiconspiracy to support the

clintons? >> i was thought first off, why would they appoint rosenstein, someone basically put in there by the democrats, barbara mikulski. now you name this guy the deputy attorney general, when the attorney general has recused himself from this huge forest fire, burning up his real estate. you're going to put some guy in there that has no, you don't have to put your brother in there like kennedy did, put somebody in there that agrees with the policies you're trying to put together. rosenstein throws this hand grenade at you, naming this counsel which was bs, putting mueller, who has a conflict of interest 20 miles wide in as job. later on we find out mueller and all these people, i don't know if it's a conspiracy but sure smells like one. we have all these major crime things bubbling, all of which were 20 times worse than watergate, you know and nothing seems to be happening. the attorney general in coma or,

what his problem is. i mean, just unmasking of nails alone is a major scandal. what is going on there? now we've got the intelligence committee in the house paying, playing goody-two-shoes which the guy that runs gps. why are we doing that with him? why is he setting the rules? the whole thing is nuts. stuart: james, one question after another. >> yeah. stuart: but you laid it out very well. come back soon, okay? i want more on this. unfortunately we have such limited time. we do interviews in three or four minutes. we'll give you more time. >> an honor to be here for one minute. stuart: kallstrom, get out of here. is your wife watching? >> my wife is watching. stuart: susan, calm him down when he gets home. >> my pleasure. stuart: rebuilding cities in trump's america. detroit, telling high school students, college isn't the only way to end up with a good-paying job. the jeff flock will tell us in a moment how the city is training

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ashley: now this there is a big effort to rebuild detroit. and it is taking a page from president trump. jeff flock is there, jeff, i guess this is all about skilled strayed workers, right? reporter: you know it is cool again to teach vocational training. students from detroit, plumbing toilets to how to build walls, crux trades. follow me across here. 500 students in detroit. no city needs rebuilding more than detroit. it was on hard types. now in the midst of a huge construction boom. they need people that know how to do it. they're teaching them everything here from electrical to laying brick. this young lady here? >> yes? >> you're interested in the construction trade. >> yes i am? reporter: why? >> i don't know. i like working with my hands. reporter: everybody says you need to go to college and learn algebra and technical things. you like construction? >> i do, i do.

definitely me being a female kind of different. you don't see many females in this construction trade. reporter: you might make out. >> yeah, definitely. reporter: i let you get back to this. this is real stuff. construction trades. more "varney." of.

stuart: how many times have we heard this: trump will start a war? he has no foreign policy experience, he'll mess things up for sure. well, after the foreign policy retreats, defeats and plain bungling of the obama years, any change will be welcomed. but the left thought trump would be a foreign policy catastrophe. not so. first, consider the personal relationships this president's been able to cement with benjamin netanyahu in israel. we are again solid allies. there's a welcome change there. with the saudis, firm friends in the contest with iran. with japan's leaders, trust in the confrontation with north

korea. then consider strategy. this president has had to mop up the obama mess. america is out of the onerous, costly and ineffective paris climate deal. he's moving against the giveaway iran nuke agreement. he's the only president to confront north korea forcefully, and he's also the president who confronted the europeans about defending themselves. and please don't forget isis has been crushed in the middle east. on his current trip to asia, he has reined in his bluster, he has rallied our allies without backing down to rocket man. again, you have to say it, who would have thought the man with no foreign policy experience has done quite a job of standing up for america's interests. oh, what a concept. and, oh, what a change. the third hour of "varney & company" is about to begin. ♪ ♪

stuart: ah. ♪ ♪ stuart: wait for it. [laughter] >> is that a beatles' song? stuart: no, it's not. let me move on, please. president trump on the world stage coming away from china with trade deals worth, wait for it, a quarter trillion dollars. maybe some window dressing there. later -- more on that in just a little while. check that big board, the dow 30 showing a great deal of red, i'm afraid to say. we've only got six dow stocks up, the rest are down, and the dow industrials are down 88 pointing. there's a -- points. there's a lot of worry about the tax plan. come on in, scott martin. here's what they're worried about, scott. we have sources, fox business has sources which say the senate people are considering a delay of one year in the imposition of that top 20% corporate tax rate.

senator bill cassidy told us about 40 minutes ago, yes, they are talking about that. i think that's what's taken the market down today. what say you? >> i agree. and those are good sources, and i trust them, stuart. i think that is really the crux of what we're seeing here. you know what's crazy about this to me is? this was supposed to be the easy one. this is the breakaway, lay-up or slam dunk, however you want to put it, because this was going to get bipartisan agreement, this was what ailed the economy, this was what everybody wanted to see, was this great corporate tax rate cut, and we're not seeing it. we're seeing all this wrangling about it. i'll throw in one more thing. you guys have talked about the tech sector maybe being the safe haven. don't forget the trillions of dollars that's sitting overseas that may not be repatriated right away which is another concern with respect to the tech sector which has done so well this year. stuart: let me repeat that, because i was going to come to you and say, surely, big tech --

with very, very strong fundamentals -- is a safe haven. but if you're telling me if there is no tax deal, then you won't repatriate all that money, you say that is a negative for big tech? is it? >> you bet your bottom dollar or your bottom pound, if you will, because i'll tell you, you know, stuart, this has been a big thing fueling the tech sector, i believe. and, yes, you're right, the fundamentals in tech are probably the best of any of the ten or eleven how you look at it s&p sectors. i'll give you that. but the market has traded on this hope of that money coming back stateside, and that was going to be reinvested in maybe job growth, certainly stock buybacks, maybe some dividends. if that money doesn't come back over, i want to use the words of one of my favorite wordsmiths in d.c., joe biden, that's a big f-ing deal when he was talking about the aca once upon a time. that's certainly something the markets and those tech companies were trading on, and that

concerns me with regards to their prices. institute i want to talk about -- stuart: i want to talk about retail. quickly, if it all falls through, does this market come way down? >> i don't think way down, and i think it'll give those a buying opportunity that have held cash, that have missed this run. but i do believe we will see a 5-10% pullback just on the fact that that hope, that punch bowl has been taken away. and it puts in question other parts of this agenda that was going to be the lay-up. this was going to be the one that was going to be the easy one. and if this isn't get done and then we've got the midterms in 2018 which is certainly unnerving, you've got some questions in this market for next year, i believe. stuart: yes, indeed, we do. scott, thanks for joining us. this is a fast-action news day, sorry to keep it short. scott martin, thanks very much. all right, take a look at the number on your screen, that's how much apple's stock has soared since tim cook became ceo in 2011. i'm looking at 226%.

>> wow. stuart: it's called a rally. our next guest helped steve jobs launch the original apple mcintosh. she also wrote a new book, and it's called "get to aha." what's that? get to aha. [laughter] if i can't read it right -- >> i think you have a point. stuart: and your name is andi cunningham. how would you rate tim cook's performance as ceo? the market loves it. howhow would you rate it? >> apple's been going through a huge transition since steve jobs. in my new book, it's about positioning. under tim cook it's become a product-oriented company, or what i call a mechanic. this transition has happened to apple. it is not a mindful one, and that puts apple behind the 8-ball as it relates to their

corporate positions. stuart: explain that. >> in danger of losing control of their marketing message. in other words, if you don't know who you are at your core, you can't be in control of the messaging. in the future, it's likely to be the market defining apple going forward, not apple defining apple. stuart: really? >> really. [laughter] stuart: no, no, i'm just trying to get the grips with it. you're saying that apple's future is a little cloudy bearing in mind the direction that tim cook has taken this company in, am i right? >> well, sort of. tim -- this transition is happening to apple, not -- tim is not in control of this identity shift. he's in control of a million other things, and he's doing a really nice job operationally. stuart: right. >> but he is -- what's happened is the market is defining the company as a product-oriented company, not a concept-oriented company which is why you haven't seen the next big thing out of apple since steve jobs died. that's okay, but you have to be in control of the messaging

around that kind of company, and they're still relying on the old marketing strategies. stuart: have you any idea from your sources, and i know you've been right inside apple, obviously, have you any idea what the next big thing might be? i ask this because apple's got $268 billion in cash. i've never heard of that kind of money being held by a company, let alone a government. >> it's crazy. stuart: any idea what they might do with that money in terms of the next big thing? >> it appears that the autonomous car might be their next big thing, but frankly, they haven't had one in several years, so we're in danger of there not being a next big thing. stuart: you don't know what might be on the horizon? >> no, other than car, no, i don't see it. stuart okay. tell me about steve jobs. i'm intrigued. i've only got a minute left. we've interviewed you before, we went back to the day where steve jobs didn't have a shower for a year and ate only apples, you knew him at that time.

>> i did. stuart: he was a dreadful boss, wasn't he? >> he was very challenging -- stuart: i say dreadful. [laughter] >> he was to tough, but he was y pure in his ageneral da to thing -- agenda to change the world. money, power, women, one of those things were part of his agenda, and in today's world -- stuart: that's different. [laughter] >> and it's incredibly refreshing. stuart: okay. i'll take your word for that. andi, this is fascinating stuff. the name of the book is? >> get to aha, it's a book about positioning. stuart: aha, thank you very much. >> thank, stuart. stuart: jam packed hour ahead. fox business' maria bartiromo will sit down with treasury secretary steve mnuchin in new york. they're going to talk tax reform. we could get some headlines there, that's what we're hoping for. twenty minutes from now, speaker ryan will take the podium. we're likely to hear his take on

tax reform as well. you don't want to miss it, this is "varney & company." but first, former clinton adviser doug schoen calling for a special prosecutor to investigate hillary clinton. more donna brazile revelations coming out. and, by the way, doug schoen is a democrat. we'll be back. ♪ ♪ i was playing golf days ago... love golf. i used to love golf. wait, what, what happened? i was having a good round, and then my friend, sheila, right as i was stepping into the tee box mentioned a tip a pro gave her. no. yep. did it help? it completely ruined my game. well, the truth is, that advice was never meant for you. i like you. you want to show me your swing? it's too soon.

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stuart: i have breaking news for you. virginia congressman bob goodlatte not seeking re-election. moments ago, this is what he tweeted: it's been an honor to serve -- not sure how you read that -- >> virginia. stuart: thank you for you support and trust. it's time to step aside.

i've decided i will not seek re-election. bob goodlatte is the chair of the house judiciary committee. it's an important member of congress. and we have this for you, moments away now from treasury secretary steve mnuchin sitting down to talk with our maria, maria bartiromo at an event in new york, they are going to talk about tax reform, and we will bring it to you live when it happens. watch out, that could move the market. former dnc chair donna brazile defending her decision to send debate questions in advance to hillary clinton. that's called cheating. listen to what she told tucker carlson last night. oh, you've got to see this. >> and i made sure that all candidates -- i didn't want them blindsided. that's what i admitted to. [laughter] but wikileaks -- >> that's the -- >> that's so good. you should do this for a living. [laughter] stuart: well, tucker was having fun, was he not? this is a tweet from a frequent

guest on the program, doug schoen. it reads: this is simple, we need a special prosecutor to look into hillary clinton. doug schoen, by the way, is a fox news contributor, he's a former clinton pollster, and he's still, i believe, a democrat. >> i am, indeed. stuart: now, you're not referring to needing a potential prosecutor because donna brazile cheated and gave hillary the questions. >> no, no. stuart: what are you referring to? >> i'm referring to two things, uranium one deal and the dossier which nobody seems to know how it got commissioned and paid for. just a question of 12, $13 million that happened to go to fusion gps to hire a british spy, to hire russian informants who may well have provided phony and salacious information. stuart: why are you, a democrat and, b, someone who used to work very closely with the clintons, why are you suggesting we get to the truth with a special prosecutor? >> you answered the question, we

should get to the truth. i'm just saying let's get the facts out as we are on the russia deal with donald trump. stuart: do you dislike the clintons that much that you'll pursue them all the way to russia. >> >> i want to do what's right, and i want to investigate. and i think both of these deals raise substantial questions that require -- stuart: hold on. i'm sorry, doug, maria's now talking tax reform with secretary my mnuchin. >> please, please. >> thank you for inviting me to be here, and thank you for interviewing me. this is, obviously, an iconic place to talk about tax reform. it was 1962 that president kennedy was at the new york economic club, and it was a little bit over a year ago that i was here where john paulson interviewed then-candidate trump, now-president trump on one of his major two speeches on economic policy. so it's absolutely great to be here with you. we're excited about where we are. the house has released its bill.

it's going through the process, through committee and down to the floor, and later today i expect the senate to release its bill. i had the opportunity to meet with the finance committee last night, go through some of their final thinking. i think that fundamentally the two bills are very similar. there are some differences to the bill, but i think this is a terrific process. it'll be released to committee, they'll be going through a committee process, and our objective is to get this to the president to sign in december. maria: would you be comfortable with phasing in the 20% corporate rate over a year which is what is being talked about out of the senate bill? >> so, i think this -- a lot of this has to do with the math of reconciliation. so as i like to say, there's a lot of things that are much more similar in business and washington than washington wants you to believe. but the budget process is

something that is quite different, and we obviously have a trillion and a half dollars to use in reconciliation. now, as i've kind of described the math, there's 500 billion difference between policy and baseline, so we think that we should be comparing this to the policy, not the baseline. that takes it down to a trillion. and as you've heard me say, we think we're going to pay for this with $2 trillion of growth. some people have questioned my growth assumptions, but even if you get to 40 basis points of additional gdp growth, you break even. so i'm giving you the longer answer to this, the phase-in, the president would like this to go into effect right away. i think the soon we get this -- the sooner we get this, the 20% rate, the better it is for the economy. but the house and senate are having to look at huh we pay for all of -- how we pay for all of this including a major focus of the president, his middle income tax cuts. so these are things that are

still being discussed. obviously, right away is better than a year, but a year is better than, obviously, a longer phase-in. maria: because, i mean, would that have an impact on business if it's a year phase-in? maybe that year people can plan what's to come in 2019. i mean, obviously, the speculation initially was that it would be phased in over five years, so this is a real improvement, if it's actually one year. >> well, maria, with the incentives even if there is a year phase-in, is if we have the automatic expensing right away and particularly if there's a higher tax rate, that's going to be a huge incentive for businesses to invest right away. so i'm confident wherever we get on the exact when it's -- the most important thing is that we end up with a competitive business tax system. i think that as you now know, we have one of the highest tax rates in the world. we tax on worldwide income. we have of this crazy concept of deferral. if you leave your profits offshore, you don't pay taxes,

so it's not a surprise we have a trillion dollars offshore. the most important issue is we cop accelerate from a worldwide -- convert the from a worldwide to a territorial system. maria: there was a lot of discussion, debate, upset, frankly, about the so-called bubble rate, 45.6%, for a portion of people's income. people say that that means, some people, many people are getting a tax increase out of this plan. >> well, for this group in new york -- and i've heard this from plenty of people, including the president -- he will have a tax increase. so for people who make over a million dollars in the high-tax states, there will be a tax increase. now, the bubble rate is, you know, a technicality we're trying to work through. but the president's focus is this is on a middle income tax cut, this is about businesses being competitive. obviously, people in this room will benefit from the business tax. but this is not about tax cuts for the rich. maria: let me ask you about

that, because you bring up new york and, of course, the elimination of the deduction, the state and local income deduction. people in this room are saying, you know what? new york is a donor state. they pay $48 billion more than what they get back. why are you raising taxes by eliminating this deduction on a donor state that's actually paying more than it should anyway? >> it's a good question, maria, and obviously -- [laughter] i just came back from california where there were very similar comments. so, first, let me comment on the concept of a donor sate -- state. we have a tax system where the rich people pay higher tax rates, and a majority of the taxes collected from high earners. so to the extent that a state has more wealthy people -- which new york and california does -- there's a lot more tax revenues in coming from the state. i don't think this is a question about whether it's a donor state or not a donor state, i think

fundamentally we believe the federal government should get out of the business of subsidizing state taxes x that's the reason to do it. we're getting rid of the amt. for a lot of people in new york, they do pay the amt, so that is an offset. and we've run a lot of numbers. we're very sensitive to people who make 2 and $300,000, that they're going to get a tax cut in new york. you know, as i said, this room people have done very well for the last eight years. this is really focused on the american worker who has had no wage increases for the last eight years. maria: is there any wiggle room on that, in your view, in terms of putting a cap on income? so those people who make $300,000, $400,000 a year, maybe they still can deduct that state and local, but maybe over a million you can't? are you still working on that, and is there room for wiggle there? >> you know, the house has a version. my expectation is the house version will get passed. we'll see what the senate comes

out with. there's still discussion. but again, i'd say on the house version they added a deduction for real estate taxes. that was something we were very focused on for the middle class. but i can assure you i've had a lot of conversations with people. i specifically went to california to talk about tax reform. i was at the reagan library on sunday night which was, again, another iconic location to talk about taxes. they got me on the road going to new jersey next week, so we continue to have these conversations. maria: so you're hearing it from all these states, that's for sure. let me ask you, do you expect behavior to change as a result of this elimination in the deduction? a real estate developer that i was speaking with recently said he's expecting a mass exodus out of new york. people are going to say, look, when i counter local, state, i'm at 53%, my tax rate, why shouldn't i go to florida and be at 25%? will we see movement, people moving out of new york if they're losing that deduction and local and state taxes stay

the same? >> maria, i've heard these issues for a long period of time. so as you know, i've lived in new york most of my life. i never thought i could move anywhere outside new york city and have a higher tax rate, and i did that -- maria: you found it in california. >> -- by going to california. i know in new york when i was at goldman sachs, we had lots of discussions about new york versus new jersey in tax rates. i've heard this in california, aye heard this -- i've heard this here. look, i'm surprised. some businesses move and a lot don't. i do hope that this sends a message to the state governments that perhaps they should try to get their budgets in line, and the question is why do you need 13 or 14% state taxes? maria: i'm going to ask you about spending on the federal level as well, but let me stay on this idea that we're going to see some moderate changes coming out of the senate bill. there's an expectation that the highest rate goes from 39.6% to 37%. would you be comfortable with something like that?

>> i'm not going to comment on the specifics because it hasn't been released yet. so, you know, again, there's discussions about the top rate. again, i'd prefer not to comment on that until after the senate comes out with their plan. maria: the corporate move down to 20% from 35% seems to be one of the pieces of this plan that you believe will really move the needle on economic growth. talk to us about that. why do you think that's going to dictate behavior on the part of managers and ceos, that they're going to take that extra savings and create jobs. connect the dots. how do you expect them to change behavior? maybe they'll just take that extra money and buy back stock and do dividends. >> well, maria, as you know, i had the opportunity to travel on the campaign with the president last year and literally met with hundreds, if not thousands, of business people. big business, small business. and the two things we heard on the campaign were regulations and taxes. and the president is 100%

convinced, as am i, that if we give u.s. business a fair, level playing field, that we can compete better than anybody on the world. and when you have a tax system that incentivizes moving jobs offshore, that's not consistent with what we want to do, and this is all about bringing jobs back here and making this competitive. i think as you know on the campaign the president wanted to have a 15% rate. we started at 15% rate. the president got comfortable that 20% was the right balance of what we could afford and an incentive, but we're sticking with the 20%. that's critical. maria: okay. the 20% rate is critical even if it's a year later. >> again, we'd rather it's sooner, but we'll work with the house and senate on the rollout of that. maria: so when you look at what's going on in terms of business right now, we've seen a real recession in terms of business. they've been sitting on cash. and you think that they will use

this extra money from the tax cut plan and say, okay, now i can actually put this money to work in terms of buying, you know, investing as well as creating jobs. that's what i'm trying to understand, how you get to job creation. >> sure. i mean, there's no question there's trillions of dollars sitting offshore on the international system. so when we have deemed repatriation and they pay a one-time fee, they're going to bring back the cash. there's no question about that. when we create a level playing field that our tax system makes sense and is competitive with the rest of the world, we think combined with expensing that money will be invested here. and let me just also comment on, you know, we're going to have tax relief for pass-throughs. so most small and medium-sized businesses are structured as s corps, partnerships, llcs, and this is about creating tax relief for small business as well. maria: why was it important to do a 25% rate on pass-throughs,

but a 20% rate on corporate? why not the same? >> well, if you're a corporation and you dividend out your money, there's a dividend tax. so they're not exactly equivalent in looking at pass-throughs which doesn't have double taxation. maria: you've said in the past you think that the repatriation part of this needs to be permanent. you want to see companies know that they will be able to bring that money back and have an attractive rate and then not pay double taxation, which has been the case. will all of this be perm meant? -- permanent? >> there's no question it is our intention that the business side has to be permanent. and, again, this is if we do it under reconciliation, there's something called the byrd rule in the senate to make it permanent, and that's how you look at the, what happens after then tenth year. so, yes, it's absolutely critical. you can't have a system where you change from a worldwide to a territorial and then ten years later you say we're going to change back. so the house has phased out some

of the middle income issues. again, my expectation is that those get extended, and that's the way we're looking at it. again, some of that is just for scoring purposes. maria: the rules around reconciliation are complex in terms of what you need to be, where you need to be. it's $1.5 trillion that you're sort of confined, and that's what you have to make the numbers, correct? >> that is correct. maria: yeah. okay. so in terms of where the money comes from to pay for it, you've said in the past that one move, one percentage move in gdp is equivalent to $2.5 trillion. >> that's correct. that's correct. maria: $2.5 trillion. so what where would you see thet case scenario in terms of growth? your talking about $2.5 trillion equivalent to one point in gdp, would we see a move of two points in gdp in the coming years? >> i'd say i'm or very comfortable that we can get up to sustained gdp of up to 3% or higher. now again, we've had some

quarters at 3% now, which is the first we've had in a very long period of time. the scoring off of the cbo is off a 2.1, 2.2. so i'm very comfortable we're going to get to 3%, and that's what we're scoring this off of. the president is confident we're going to get higher. maria: s&p yesterday was talking about the potential of a recession, basically saying a recession happens every eight years, and one of our members had a question for you earlier, and that is about the interest tied to -- [inaudible] so if you're capping interest in this plan at 30%, what happens when things slow down? what if we were to have a recession? your, you know, it goes down but your interest doesn't? >> so let me just comment that, first of all, there's a lot of companies that will still be able to have 100% deductibility of interest. so pass-throughs will have deductibility, real estate, you tilts, there's areas -- utilities, there's areas that

have permanent that that's important for. so what we're basically talking about is c corps, and they're getting the benefit of the 20% rate. now, when we spoke to lots and lots of ceos across lots of industries and we asked them tell us what, how you feel about the rate, how you feelabout expensing and how you feel about interest deductibility, the number one thing that everybody said that was consistent is get us as low a rate as possible, and if you get us that, we're comfortable giving up some things on the other. so to get to the 20% and pay for that, we've done expensing for five years, not permanent, and we have a slight haircut on interest deductibility. so that's kind of where we ended up. maria: a lot of people over the last several years have looked at carried interest and said this is really not fair where a hedge fund manager or a real estate person could actually look at their revenue and treat,

and treat ordinary income as if it were capital gains. are there going to be any changes on carried interest? >> i'm sure there's nobody in this room at all that cares about this topic. maria: that's why i'm asking. [laughter] >> i like to say this is a highly interesting issue to a very small part of the population. now, the president said on the campaign that he wanted to change the rules for hedge funds and carried interest. the house has proposed going to a three-year holding period. i think that's a big step in the right direction. i would just also comment that when you look at carried interest, two-thirds of this is actually in real estate. only a third of it is in private equity and venture capital and other areas. a lot of this is about small developments. but i think it's a big step in the right direction, and we're working with the house and senate on that. maria: so we could see more changes there. >> we'll see what the senates out with. i know there's still discussions. and, again, we're going through a healthy process of discussion

both at the house and senate before a final bill gets to the president's desk. maria: secretary, moments ago you said, look, people in this room, the people in new york, you know, they're not necessarily going to be, you know, impacted so much even if taxes go higher for them. but i want to ask you about this, and i know you've heard me ask this question a lot. if you're looking at the number of taxpayers, the high 10% of the highest earners are paying 70% of the tax. doesn't it make more sense to cut taxes on those who are paying taxes rather than people who are not paying taxes? 50% of the people do not pay taxes. are you cutting taxes on the people who actually pay taxes with this plan? >> again, if you look at the plan, and let's just start with what has been the president's objective from day one. the two objectives have been middle income tax cuts and make our business tax system competitive. that's really what we've been focused on. and i think the current bill in the house and the bill that's going to come out of the senate meet those objectives.

and that, that's what's critical. so, you know, people who make over a million dollars, there's going to be plenty of other benefits. there's changes to the estate tax. again, fundamentally republicans believe in getting rid of the estate tax because it's a double tax. you've already paid taxes. we'll see where the senate comes out, but i expect there'll be some changes to the current system in the senate version. maria: i heard the senate doesn't want the estate tax. >> again, i'm not going to comment on what they're going to come out with in advance. maria: okay. >> but we can talk about that tomorrow. maria: okay. so continue, you were -- >> so i think, you know, the bills are meeting the objective, and i think that's what's critical. maria: i only ask because i feel like for so many years i've been hearing about trickle down economics. you create an environment for the job creators, an environment for the highest earners, and they will turn around and put that money to work, and it trickles down. do you still believe in trickle down economics? >> i do. and, again, i think one of the

big incentives on the corporate rate is at a 20% rate, companies are going to be incented to reinvest those profits as opposed to dividending them out. i mean, that's an enormous impact. when you look at the business side of this which is a 20% rate, a discounted rate for pass-throughs, automatic expensing for five years, that's going to be, make our businesses very, very competitive. and i think that's going to be great for the economy. maria: i want to ask you a question from the audience. it's a newsworthy question because we know that the president has rolled back so many regulations, and he is, actually, the least regulatory president that we've seen in some time cutting federal pages by more than 30%. but now there's this talk about at&t/time warner and perhaps forcing this company to sell cnn and the turner broadcasting business as a way to allow this to pass. if he's trying to cut regulations, why is the doj

getting heavier hand with that deal? >> well, maria, i think it would be inappropriate for me to comment on the specifics of that, because that is being handled by the justice department as an antitrust issue. that's not a regulatory issue, and i'm not going to comment on the specifics of that. but what i would say is president trump, you know, this is the greatest move in regulation since ronald reagan. and we are committed for every one new regulation we get rid of two regulations. we've already done a lot in the financial area. we're working on the energy area. i mean, again, as we traveled during the campaign, businesses were as much concerned about recklations as they were -- regulations as they were about taxes. maria: we've talked in the past about the government-sponsored agencies like fannie mae and freddie mac and what went on under the obama administration where they actually took money from those companies and used it for other things. is that true? >> it is. stuart: let me interject for a

moment. when this interview started about 15, 16 minutes ago, the dow industrials were down 95 points. we're now down 130 points. why the drop? that interview. the treasury secretary started out talking about what we've been talking about, which is a possible one-year delay in imposing that lower 20% maximum corporate tax rate. he was asked directly, are you thinking about delay aring for a year? -- delaying for a year? he didn't answer directly. he said the president wants it to be in effect immediately, but we will have to talk about a delay for one year. >> yeah. >> that was awful. >> yeah. and they were also talking about keeping all seven tax brackets as well. stuart: yeah. but -- >> just keep the corporate -- stuart: but the market is down. >> the market is down. stuart: -- any hint you delay that 20% rate, and you -- >> because it ices over economic growth. companies will sit and not do economic business activity if the rates are not cut now.

mnuchin saying the president does want it now, but the congress is saying we may delay it. stuart: yes. he has confirmed that they are talking about a delay -- >> right. keep saying no. stuart: it sold off. second item. read inen between the lines of what secretary mnuchin had to say talking about state and local tax, the deduction, therefore, going away. he implied that, yes, it's going away. >> you know what he said? he had no sympathy for the so-called donor states, the left of california and new york, all of those high states in local taxes. basically said this sends a message to state governments to get your budget in order. that was his response. >> i mean, that means refund checks will go down. we will not get the same -- and spending will go down. stuart: that is correct. and doug schoen, who lives in new york city -- >> i do. stuart: -- and has to pay the state and local taxes and will sufferer mightily under this -- >> yes. stuart: i think he just confirmed that that deduction's

going away. >> yeah. and he also confirmed that for republican members and, of course, democrats in high-tax states like california, new york, new jersey and connecticut, this is going to be, i think, a non-starter as i believe lee zell din said today on your air. stuart: he did -- well, yesterday. >> yesterday, i apologize. stuart: for him, it's a non-starter. >> politically, listening to this, my bottom line, stuart, it doesn't go i through. doesn't pass the smell test. stuart: really? >> that's my take. we'll see. stuart: any other input, please? >> it feels like a deflated balloon. >> it does. >> when the president won, we were talking about tax cuts, now they're talking about taxing 401(k)s, capping the mortgage, medical -- what is this? this is how you're going to get growth? stuart: market down 142 points on the dow jones industrial average. dave mcintosh is with us, club for growth president. dave, i'm sure you've been listening to what secretary mnuchin is saying to our maria

bartiromo. it looks to us that they are, indeed, talking about a one-year delay in that 20% tax rate for corporations. what's your response to that? >> so i think the real problem here is they have this artificial constraint of the budget they can only cut taxes $1.5 trillion. mnuchin said their bill fits into more like a $2.3 trillion cut. so they've got to figure out a way to do more tax cuts so they don't hurt the individuals, as you were describing, but they can keep the very robust corporate tax cut they have. right now it's out of balance. all of the pro-growth in the house bill that we see is on the corporate side, and the individuals are paying higher taxes, the pass-through rate they say is 25%, but it's really 35% because they take 70% of it back. stuart: okay. >> so they've got a big problem. one way to do that, stuart -- stuart: well, hold on a second. you're the guy who comes from the club for growth. >> yeah. that's what we care about. stuart: if this bill passes as

is, do we get growth? >> you do. you get growth with that corporate tax rate -- stuart: how much extra growth? we've got 3% now, what's it going up to? >> the tax foundation says another 3%. i think more likely another 1 percent. but that's at 4, and that's tremendous growth. stuart: you think, okay, with this tax bill as is if it was passed as is, today, you think we'd get 4% growth next year? that's pretty good. >> i do. and i think you could get even more if you actually gave a real tax cut for the pass-throughs, and you won't get all the dislocation that is going to happen with the way the house bill's doing. so we're pushing them, do more. you can, and one of the ways they can do it, by the way, is to eliminate the mandate in obamacare. that gives them about half a trillion dollars more the actually do real cuts on the individual side. stuart: would you say at this point, would you say that something is better than nothing? >> yes. we're pushing that they make the

bill better, but they need to pass a bill. we're going to support whatever they come up with, but we're pushing them to make it better so it doesn't harm individuals at the high end. basically, the message out of the house is corporations get a big tax cut, but individuals who are successful, you're going to pay more, and we think that's not good for the economy either. stuart: yeah. i mean, i want to pick on -- pick up on that for a second, because secretary mnuchin addressed that. he said this is not about a tax cut for the rich. does that -- >> so they bought into the class warfare that the democrats -- it's a trap they've set for them. what they should do, and i hear the senate's thinking about doing this, is give a small cut for that top bracket, and that'll offset the loss from losing the state ask local tax deduction. so they at least come out neutral or a wash rather than a tax increase. stuart: so i want to sum it up like this: you are from the club

for growth and you're saying, yes, pass it as is and we will get 4% growth next year, and this is, this something is better than nothing. sum it up like that? you okay with that? >> let me amend it. we'd still like them to make some changes to make the individuals and the pass-through rates better, but they need to pass something. stuart: okay. >> make it as good as they can. stuart: we hear you, mr. mcintosh. dave, that would be. thanks for joining us. >> good to be with you. stuart: while secretary mnuchin was speaking there, paul ryan's been holding his press conference. he's made a headline? >> pretty much we do not want tax cuts for the rich, so that's a common line we're getting both from steve mnuchin and from paul ryan. paul ryan also saying that he would support repeal of the individual mandate, said he would like to see that as well. stuart: but he's focusing on the middle class, i understand. >> absolutely. stuart: keeps repeating that. >> this' the strong message. stuart: look, that is

politically popular. president trump's base will get a break here, there's no question about it, and he says it's not about a tax cut for the rich. so politically, this looks more attractive than if it were an across the board, huge tax cut which would, indeed, reward richer people. politically good, economically not so great. doug schoen, go. >> i was going to say in john f. kennedy's administration -- and i think it was '62 -- in '86 when we had bipartisan tax cuts we had a massive cut in rates. why is everyone getting so timid about doing what's right, reasonable and responsible for the economy? trump is sounding like a scared liberal democrat. it's ridiculous. >> great point. stuart: you got to president trump. look what you've done. [laughter] now you have to move from new york city to florida. >> exactly. and can i get a one-way ticket. [laughter] stuart: i'll buy it for you. >> thank you. stuart: sorry, doug. herb london is with us, president of the london center for policy research. okay, you've researched this. so you tell me, do we get real

growth? no, you're shaking your head. >> it seems to be -- i do not like the idea of attempting to engage in class warfare. it seems to me that you want to get a tax cut for some of the rich. after all, they put that money back into the market. these are the investors. they have something to do with economic growth. we want to get to 4% growth in the united states. it is possible. it is certainly possible. and it seems to me that the trump administration ought to think seriously about doing that. obviously, the emphasis is on middle class tax cuts. that's where it should be. but at the same time, you don't have to engage in this kind of class warfare. stuart: now, one thing that did not occur in the treasury secretary's interview there was this other factor which we've been told about; that is, that the senate is considering lowering the top individual tax rate from 39.6 to 37%. that would, therefore, create a tax cut for everybody -- >> but the trade-off -- stuart: a tax rate cut. >> the trade-off, you wouldn't

have four tax brackets, you would have seven. stuart: okay. but you get a lower top tax rate -- >> still got the medicare tax at 3.8%. stuart: that's true. >> for the wealthy, you're at 41, 42, plus state and local, you're 55, 56 before anything else kicks in. >> you've got scandinavian rates here in new york. >> that's exactly right. stuart: the dow is falling quite sharply, now we're down 170 points. >> wow, look at that. stuart: when the interview with maria started, the dow was down 95 points, now we're down 170 points, and i have to believe that it's got a lot to do with the treasury secretary not sell. ing the -- squelching the idea of a one-year delay -- >> right. this is like obamacare. they're totally straitjacketing by the way they're setting up the vote to avoid the democrats trying to filibuster it. stuart: why can't hay change the rules of the senate? you know about this. >> why can't they do this on a bipartisan basis and so do what

we're all suggesting, be intellectually honest and unafraid of class resentment, relatic being used? stuart: no democrat in the senate would give any help whatsoever to the trump administration on taxes, period. they would never vote for anything -- >> if there was a plan that had been worked through with democrats from the start, we might have seen a different result. right now i'd have to agree with you. stuart: you're totally wrong. [laughter] >> well, i wasn't wrong in '86, '62, and you know what? if there was real effort to work together collegially, we would have a better economy and better rates and more growth and a better stock market. stuart: there's that ticket, okay? [laughter] >> i'll see you around. stuart: thank you, doug. all right, herb, you stay right there, please. you can leave. >> i know. i got that message. [laughter] stuart: it's been a jam packed hour. we've got a lot more for you. the judge, by the way, is next. ♪ ♪

stuart: at&t wants to merge with time warner, but the justice department, we hear, has a few problems with the deal. before it goes through, we hear

they might want time warner to sell cnn. then maybe the deal go through. what does the judge think about this? and i ask the question because president trump has been outspoken on cnn. he's really gone after them on a number of occasions. do you think it's possible that the president has influence on the justice department telling them, hey, get rid of cnn, and is that a valid thing for the president to be saying? >> okay, there's a lot of questions here. a little bit on the facts. the justice department at one point denied that this was in the mix and at another point admitted it was in the mix but claimed that time warner threw it in the mix and said whats per atedly -- exasperatedly at a meeting what do you want us to do, sell cnn and the justice department thought it was serious. the other issue is, what business is it of the federal government if two publicly-traded entities want to merge? stuart: no, no. >> the justice department's job

is to prevent monopolistic behavior. stuart: you're going off subject. the real question is should president trump be weighing in even if it's indirectly on this merger? >> went he weighs in, it -- when he weighs in, it has a chilling effect on the free speech protection that cnn enjoys. just as barack obama weighed in about whether news corp. should still own fox news would have had a chilling effect on us. stuart: so you don't think he should have said anything. >> no, i don't, but it may be fatal to the justice department's wish, however improperly designed that may be, to force cnn to be sold. because if there is a whiff of a political motivation here, this is going to go to court. the government will lose. because the government cannot base it decision on whether a merger is monopolistic or not on the politics of one of the entities. itit can only be on the economis of be the merger.

stuart: i do want to draw everybody's attention back to the market, please, because we're down now very close to 200 points, 195. bottom right-hand corner of your screen, to be precise. now, when maria began her interview with treasury secretary mnuchin -- and it was live on this program when she began -- the dow was down 95. now we're down 190-odd points. and i have to believe that that was because secretary mnuchin kind of wavered on whether or not there was going to be a delay in allowing that maximum 20% tax rate on corporations. it may be delayed for a year. when mnuchin said that, the market started to come down. have i got that right, herb london? >> i think you've got it exactly right. it was, in fact, a readier unfortunate comment. -- rather unfortunate comment. stuart: he had to be honest. >> nonetheless, you're starting to see the effects on the market, sos it is a worrisome matter. stuart: it is being talked about -- >> it is. stuart: and he had to confirm that.

>> the senate is going to roll out its plan, the markets are worried, they are trying to climb that wall -- >> they're trying to create a value-neutral tax system. it's not possible. >> what are the republicans afraid of? why don't they just cut the rates like jfk and reagan did? stuart: look, you asked a good question, what are the republicans afraid of? why can't they just cut rates -- >> they're afraid of the d.c. media beltway -- >> that's right. stuart: the democrats will be all over you, and there are some moderate republicans who will listen carefully to this. you can't have a giveaway to the rich when we've got a deficit of $20 trillion. >> i bet if it were up to the president of the united states -- if he could do this on his own, bend the congress to his will, he would cut everybody's rate and forget this 450-page thing that's almost impossible to understand which actually makes the tax code more complex. stuart: now, you tell me, is it constitutionally possible for mitch mcconnell to abandon

these reconciliation rules, abandon the byrd rule and just go straight ahead and say, yeah, cut rates, do it? >> it's constitutionally possible, but it's probably not numerically possible because he would have to have 60 votes. >> exactly. exactly. [inaudible conversations] >> let's think about this, think about this -- >> aren't there any rational democrats? [laughter] [inaudible conversations] >> wait, think about this. we have not had a 3% downturn since brexit. wouldn't it be striking that this nudes over the republicans stumbling over tax cuts will cause that 3% downdraft that we -- >> maybe then, maybe then the spineless republicans will open up their eyes to base economics 101. tax people less, they have more money to invest. >> don't hold your breath. stuart: but you still can't change the rules without 60 votes in the senate. >> aren't there any democrats that want lower taxes? [inaudible conversations] even the democrats running for re-election in states that trump carried? >> not going to provide any support to this president, i can

assure you. stuart: we know vigorous debates, but occasionally we have to pay the bills -- >> you're bitter again. stuart: quiet with, please. [laughter] they pay us to put commercials on the air, and that's what we're going to do right now, but there will be more "varney" after this. ♪ ♪

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stuart: if you have been watching us this morning you've seen real live action news taking place right in front of you. a few minutes ago we had treasury secretary steve mnuchin interviewed by our own maria bartiromo. he was interviewed in new york and the subject was, what's the senate tax plan going to look like and what's being discussed? before he started that interview, the dow was down 95 points. now it's down 170 points. what went wrong? well secretary mnuchin confirmed

that is the senate is indeed talking about delaying the 20% corporate tax rate for one year. he is also implying that the deduction for state and local taxes will go away. not good news for the market. neil, sir, it's yours. neil: not at all, sir. his tone just disasterous. he is horrible marketer for horrific plan unraveling. stuart: you don't like it. neil: it is beyond a joke, beyond incomprehensible taking what is easy run into end zone and turning it into a interception. i can not fat them it. it is unraveling before our ice. we'll explore it in great detail. stuart was right to point out what secretary