maybe some money going into our stock market. that too is still at almost at the high of the day. that's what's happened. deirdre, ashley, kendi, all of our guests thank you very much for help in covering what is an extraordinary situation. connell in for neil. connell: really is extraordinary, stuart. waiting for the president in this hour as well. welcome everybody, to "cavuto: coast to coast," i'm connell mcshane filling in for neil. we'll have a live report from hong kong as things develop there but we also have the white house pushing tax cuts, rate cuts. with cutting a deal with china fix everything? how about tax cuts being paid for? the cbo, the congressional budget office just warning that deficits will top a trillion dollars next year. but a new report from the cbo also says recession does not look likely.

so the market likes that part of it. as i said, we're waiting for president trump. he is speaking with reporters right now. we should have play back of the comments any moment as we start the hour with blake burman on the president. some of the comments, i'm looking at headlines around the building where you're standing, comments on taxes interesting. president as usual making a lot of news. bring us up to speed. reporter: the president you remember yesterday, connell, he gave idea, would endorse the idea of indexing capital capital gains that would be a tax cut for the wealthy. we're hearing president trump might not be supportive of it. on the south lawn as the president is leaving right now, he just told reporters quote i'm not looking to do indexing. it is perceived as somewhat elitist. he want tax cuts for middle class, people who work so hard. indexing is better for upper

income groups. connell, tough to figure out where the president and this white house lan on tax cuts. just yesterday he was endorsing idea of indexing capital gains taxes. today he is not looking to do it because it is perceived as somewhat elitist. the president said he was for a payroll tax cut, a different kind of tax cut a payroll tax cut, at least he thought about it. the day before that we heard it really wasn't a viable idea. it was only something kicked around at the lower levels. so you had reversal on a payroll tax cut monday into tuesday and now i believe at least what we're about to hear from the president, is reversal on indexing capital gains from tuesday now into wednesday. set that all aside on tax cuts for a second, the president and white house are discussing all sorts of possibilities on tax cuts. we get this fresh reminder from the congressional budget office,

that we are running massive deficit and debt. here is highlight as we look going forward. according to the congressional budget office, they're projecting 960 billion-dollar deficit in 201019. cbo says increase of another $63 billion this year. over the next decade, cbo says the average annual deficit will be roughly $1.2 trillion. that means deficits are projected anywhere from 4.4 to 4.8% of gdp. cbo says the well above the average of the last half century. the federal debt by the public estimated to rise from 79% of gdp this year, to 95% in 2029. that would be highest level since just after world war ii. connell, you know how this goes with the congressional budget office. democrats and republicans when they like the report put out by the congressional budget office they hold it up. they don't like the report from the congressional budget office,

they say these economists are missing the mark. connell: they are out of their mind. there are parts you can pick out, like comment about growth, don't like deficit part. pick and choose. reporter: pick and choose. connell: point well-taken, mr. burman. reporter: we'll hear from the president shortly. connell: from the south lawn of the white house the president is speaking one note blake said we'll have play back for you from our fox producer as they take them in live from president trump, he made a comment on china will get at the love attention. it has this quote attributed to the president. quote, i am the chosen one, president trump just said with regard to china and he said i'm the one who had to take them on. similar in some ways what he had to say yesterday. i was out here to do a great job. nobody would do the job i've done. should china wait and get biden? he went into similar argument he made in the past, the chinese figure they would be better off with joe biden in the

white house than they would be with the president. anyway, hear the president in his own words on that. wanted to pass along that one quote. ii am the chosen one says president trump when it comes to china. dan mitchell joins us. center for freedom and prosperity. go back to taxes, dan. this is interesting what the president is doing on taxes. clearly somebody has gotten to him sounds like making an argument what type of tax cuts you could sell better. you want to take up indexing of capital gains to inflation. explain it a little bit. talk about your thoughts on the president characterizing that as either elitist or other people would see it as elitist. what do you think? >> first thing in explaining indexing capital gains, if you somehow bought a stock say for $10,000.30 years ago and you sell it today, it is probably gone up in value but a lot of that increase in value might simply be because of inflation. the idea of indexing capital

gains, some sense a moral argument in ad deck to a economic argument. people should not be taxed on gains due to inflation. estimates this would be akin, equivalent, slightly reducing b. when you're looking at it in the effect, yes, rich people get most of the of us will benefit as well. connell: of course. the perception sometimes politically becomes reality, this goes after, helps the investor class, rather than the middle class. the president a few minutes ago, looking at middle class tax cuts but maybe as kind of an example by the fact he has been in the last couple days all over the place on this kind of thing, just yet according to our hillary vaughn they asked him about a payroll tax cut, dan, he said, i quote, now, i'm not looking at a tax cut now.

we don't need it. we have a strong economy. that is push-pull with the federal reserve. if things are so great why do you have to cut taxes. if things are so great why do you have to cut interest rates? trying to argue the economy is strong. that gets whether we need to have more stimulus or not, right? what do you think? >> it is strange. like the president some days he wakes up on the left side of the bed, says one thing. on the other day he wakes up on the right side of the bed, says something else. here is the bottom line politically, he can do indexing by i amhimself. it would be within his authority. it is regulatory matter for the treasury department. connell: there is controversy about that, but you think he can get it done himself? if he wanted to? >> he could certainly do it, whether or not the courts would ultimately overturn it, i doubt they would, but who knows. here is the thing, he can't cut payroll taxes by himself. is there any chance that the democrats vote for additional tax cut especially leading up to

the 2020 election? i think that's a fantasy. there is one big tax cut trump can deliver unilaterally for the american people. he can get rid of all his trade taxes he has been imposing. connell: get rid of tariffs. that would be a bigger stimulus. you're right on that. we talked about that a lot. get one thought on the cbo report, dan, before i let you go, i wanted to ask you about that before new comment came in from the president. couple things from the cbo report. deficits will keep going up, more than they thought as a percentage of gdp getting to 4.7% in the next 10 years. $1.2 trillion deficit on the screen projected for next year. these are higher projections than we had. the cbo also said that growth will, while the willwon't slow n levels by any means. it will be higher next few years, they think, than they previously forecast. put all that together for us, if you can. >> cbo, like all economists is not very good at forecasting. they missed the 2018 recession.

they missed the dot-com bubble bursting in the recession then. no, i'm not criticizing them. no economists do good job on that. but what they do a good job, looking at long-run forecast. there is no question we have a very serious problem because government spending is growing faster than the private economy. connell: right. >> that is driving deficits. the deficits are symptom, growth in government is an underlying disease. trump made that worse. kamala harris wants to make that worse. connell: nobody cares about it. >> we have a nightmare scenario. we'll be grease in 20 years if we don't get a grip on growth of government. connell: that is one thing everybody should agree on, both parties whether you agree or other things they haven't addressed this. dan, good to see as always. dan mitchell. while we wait for the president, there are good signs in the economy. they are on the screen right now in the american consumer target is through the roof stock

pricewise. lowe's is also up. latest indication consumer is hanging in there. gerri willis joins us from the new york stock exchange. reporter: connell, that's right. two great reports. two upbeat earnings reports from brick-and-mortar retailers. target and lowe's beat estimates for top line and bottom line earnings and sales. lowers up 5.9%. target up nearly 20%. lowe's reporting sales of stores open a year longer 2.3% rise. that is a shade better than rival home depot. upbeat report really a surprise coming from a company that announced thousands of layoffs. target raised the full year outlook, reporting digital sales growth of 34%, impressive, on a conference call we listened to. the company said if a new wave of tariffs go into effect december 15th, this is a side note here, that impact would not show up until the

first quarter of 2020. sounds like all good news but it is not. while prick and mortar discounters appear to be thriving. department stores lowered 2019 out look. lowe's and jcpenney quarterly sales reports were disappointment. depends who you listen to. it is hit-and-miss with the retailers. some doing well. some thriving. others not so much. connell, back to you. connell: gerri, good stuff on the consumer. gerri willis on the floor of the new york stock exchange. back to china, president said a few moments ago he is the chosen one to take on china. his commentary at least yesterday and today, quite different than when it comes to china than what we heard in the past. he essentially sounds like, certainly made this argument yesterday, now even if his trade war with china hurts economy in the short term it is worth it. let's listen from yesterday.

>> doing this whether it is good or bad whether we fall into recession for two months the fact that somebody had to take china on. my life would be a lot easier if i didn't change china on but i like doing it. connell: contrast that to the president made in the past comments. here is sample. >> we're taking in many billions of dollars. there is absolutely no inflation. frankly it hasn't cost our consumer anything. i see where we collected close to 59 billion in tariffs so far. in my opinion, the consumer has not paid for it because of devaluation by china. the tariffs have cost nothing in my opinion or certainly very little. we're not paying for tariffs. china is paying for tariffs for the 100th time. connell: let's bring in rebecca walter in on this obviously a change, rebecca. for everybody else. it is important to try to figure out why the president is changing his tune on this.

is he indicating he is willing to cut a deal with china sooner rather than later? or saying hey, i'm the guy who has to take him on, i have to fight this longer than we would think, i need the fed to help me out with lower rates? how do you read what we've seen last couple days? >> i think it is the latter, connell. president trump is absolutely right. i think he does believe ultimately china pays the price of the tariffs but he sees recessionary card is being called out, very much so the last week 1/2. so he is letting people know. this is not easy. this is a hard job. this is a long term, long play strategy and when you're watching the market every day like he does, he watches market every day and bothers him, he tweets about it, he cares, he is looking for reprieve from the federal reserve to have a long-term strategy because the short term -- it was him advocated federal reserve cut rates last month, the very next

day. so part of it is his time frame but again he sees it as a long term strategy, he needs time to do it and frankly we need to do it. 50 multinationals changed supply chain because of tariffs. that is what we be. china doesn't want to be china supplying united states with cheap goods you in look at the china made in 2025 plan. connell: short term stimulus, now the president is acknowledging reality economic, that china is not paying tariffs. this does hurt american consumers, certainly might hurt them more in the past, dan brings up the point, there are not many who have this point of view, if he takes off tariff, that would be what economy needs. the fight with china long term is really what the country needs. that is the argument he is making now, right? >> yes, absolutely. people don't understand that. we can always go and fix short term pain and feel good about ourselves but when you're dealing with a country that strategically wants to take the place and surpass the united

states as the preeminent economic leader of the free world, the entire world, because they are communists we can't play the short game. the short game he is saying in the press conference it, would be easy to deal with and forget it, move on. that is not best interests of the american business and american consumer long term because we know china is trying to get rid of cheap labor, cheap goods, and they're trying to become semiconductor and technologically sophisticated from manufacturing perspective and they will not be the china we're used to, trying to help them preserve by saying get rid of all this and forget about it. that is totally wrong. he has to stay the course. chuck schumer, obviously the head of the democrat party in the senate also agreeing with him, stay the course on china. it has to get done. connell: rye beck car, thanks for coming on as always. >> thanks, connell. connell: the president's remarks will be played back to us shortly as he speaks to reporters before leaving the white house. we'll bring you those comments,

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>> if you want our endorsement, if you want our vote, if you want our support, then show us that you're unambiguously pro worker and pro union. >> unions built america's middle class and unions will rebuild america's middle class. connell: union vote. so afl-cio is hosting the 2020 democrats in iowa after warning them not to take union support for granted. let's bring in "real clear politics" cofounder tom bevin on this. the question for the democrat, tom, as we await for the president, any minute on the south lawn of the white house,

whether whether they can rely on this vote anymore? the president flip ad lot of voters, but there could be trouble if democrats can't get in on the act? >> union membership is down for some time with passage of right-to-work laws around the country. there is relatively powerful political force. you have high concentration of union voters, 700,000 of them in pennsylvania and 600,000 in michigan and ohio. those are voters democrats need to hold on to. they need to win in big numbers if they want to win back the states and presidency. connell: president trump had 38.4% of union members voting for him. that was 8 points higher than romney. from 2012 to 2016. any prediction where that might wind up in 2020?

>> president trump has strong case to make. focusing on increase in manufacturing. we've seen wage growth. we've seen a good economy under his watch. i think that is a strong is case that i just mentioned in the states where he needs to win those states for re-election, that they don't want to go in different direction. things have been good under him, if you want to stick with the progress, stick with trump. we'll see whether that pans out or not. depends on the strength of the economy. he has a case to make to union workers. connell: what do you make of his comment on taxes? we understand he got on marine one. we'll have the play back in a few moments. capital gains, people that that is elitist, would help rich people or investor class, seems to be hinting middle class tax cuts, while at the same time, maybe no tax cuts now the economy is strong enough, we don't need it, trying to play a lot of sides of all this, right? >> definitely played it both

ways. one time he is talking up economy everything is great, everything is great. but at the same time i'm considering all those options to pump the economy which is almost implicit acknowledgement there might be slowdown. the democrats are doing exact opposite, talking down a economy growing pretty well, at odds reality a lot of vote remembers feeling. connell: retailers like target, stock on the screen was up 20%. tom bevin, good to see you as always. thank you very much. quick commercial break in here. you see the bottom of the screen we're waiting president's comments. he just wrapped up, speaking to reporters on the south line of the white house. so when we come back we should have the president on a number of different eschews. we'll be right back. our 18 year old was in an accident. usaa took care of her car rental, and getting her car towed. all i had to take care of was making sure that my daughter was ok.

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connell: breaking news out of washington. president trump has just boarded marine one from the white house south lawn on his way today for a trip, a political trip to the state of kentucky.

before he did so he spoke to reporters assembled at the white house more than a half an hour, covering all types of different topics we were talking about before the break. on china and tax cuts, whether or not a payroll tax cut makes more sense. some other kind of tax cut like indexing capital gains to inflation. when we get the comment cued up for you, they run more than 35, 36 minutes, they will play back any moment now. markets so far have loved everything coming out in terms of data. we're up 274 on the dow jones industrial average. up 1% pretty much across the board. we've been up throughout the day on this theory, something we're talking about all week long, that the american consumer, more than hanging in there, is doing quite well. that was he willlous -- was illustrated in the target

numbers. taking other retailers along with it. while we wait for the president, target, tjx, macy's, lowe's, we'll talk for a moment about technology. they're still cueing up the president's remarks. we have not had the two-minute warning on that. we have to wrap this up a little bit quicker, former republican senator jon kyl is in the news. it is an interesting story. they brought in jon kyl at facebook, had him lead into an audit into bias. he found quote, significant work needed to be done to ease concerns of conservatives who accused facebook of not acknowledging bias in the audit. liberals are coming out saying they're upset facebook did an audit. harmeet dillon joins us, you have been vocal. similar cases in the past but what did you make of this one, the one senator kyl was involved in. >> i didn't think it went far enough. i think it is to placate

conservatives than address issues rampant in facebook's ad filtering, suspending of people with vague policies and inequitable application of those rules. connell: right. >> human resources across the board. so i don't think it does much of anything. connell: how do you solve an issue like this? the main thing, one of the main things how you define what is inappropriate. many times comes up as hate speech. something one group might see as political statement, seen by other people quote, unquote, hate speech? how do we get to a point with appropriate definitions of what should be banned on platforms? >> i don't think it is that hard. it requires honesty, decency and requires transparency. none of these things are present here. for example, assembly hiring a former senator who is now a lobbyist, have his law firm interview a bunch of people over several month, make a report about it, it doesn't do anything. what facebook need to do is acknowledge that 90% plus of its

employees who apply the rules are biased. that the rules are vague and biased. that the rules have been applied inequitiably against conservatives. as a result of vagueness and inequitable kind of regime, people are censoring themselves, the quality of facebook experience decreased as well as transparency of everything that they do and that is unattractive from a product point of view. but from a point of view of speech and regulation, it really gives the impression to conservatives that they're being discriminated against. connell: right. >> that remains so after this fairly shallow, white-washed reporters facebook clearly sees it as an issue. they wouldn't have a report like this. your point, they are getting better pr, to it look like they care? >> that's right. we will not be fooled by it. they need to name the problem, acknowledge it, take steps to follow through with it. nobody is being fooled by this. connell: what is a step a step

that could resolve it? >> they should have transparency who they ban and why, so people can study it, comment on it. they doesn't have that right now. they should have clear rules. one the things the report, forced non-profits to describe themselves as political entities to run ads which jeopardizes their non-profit status. they claim they changed that. they keep changing rules right before an election, right before somebody wants to buy ads. always conservatives seem to be banned. pro-life groups -- connell: jump on you. we knew the president's comment would start soon. here they are. >> but our economy is the strongest in the world by far. nothing even close and a lot of good things are happening. we had some very good retail numbers this morning as you saw and i guess the stock market is quite a bet up. so -- reporter: are you demanding jay powell lower interest rates? >> i don't demand it but if he used his head he would lower

them. in germany they have zero interest rate. we do compete, much stronger than germany, but we do compete with germany. in germany they have zero interest rates. when they borrow money look what happened, look what is going on over there. they borrow money, they get paid to borrow money. we have to compete with that. so if you look at what's happening around the world, jay powell and the federal reserve have totally missed the call. i was right, just about everybody admits that. i was right. he did quantitative tightening. he shouldn't have done that. he raised interest rates too fast, too furious, we have a normalized rate. you call it that. and now we have to go the other direction. we'll see if he does it. if he does it, you'll see a rocket ship. you will see boom, if he does it we have a very strong economy. but we could be, we could be in a place that this nation was

seldom at if we had interest rates cut by the federal reserve. the federal reserve has let us down. they missed the call. they raided them too fast. they raised it too high. they did quantitative tightening. they shouldn't have done the tighten and raise the it to the extent. we could have had raises. reporter: mr. trump, why have you backed down on background checks? reporter: why don't you have an appetite for back drowned checks? >> i have an appetite for background checks. we're working with democrats. we're working with republicans. we have strong background checks. we'll fill in some of the loopholes we call them in at the border. speaking about the at border, it would be really nice if the democrats would indeed fix loopholes because it would be really nice, but despite that i want to thank mexico. they have 26,000 soldiers at our border. they're really stopping people from coming in. so what happens is with

background checks, we're dealing with democrats, we're dealing with republicans, we're dealing with the nra. we're dealing with gun owners. we're dealing with everybody. and i think we'll have something hopefully that is meaningful. reporter: are you caving to the nra? >> reporter: >> i didn't say anything about that. we had a great talk with wayne yesterday. didn't say anything about that. we talked about concepts. wayne agrees things have to be done also. we have areas where we can close, for instance, we did "fix nics" last time. we have a lot of background checks right now. gun owners can tell you that, others can tell you that, but there are certain weaknesses. we want to fix weaknesses. i think that will happen. we'll see what happens. reporter: what do you stand for? >> no matter what we agree to, when we get there, i'm concerned the democrats will say, oh, we now want this, you know it's a slippery slope. that is what actually you gun

owners, a the other people are concerned with. assuming that is not going to take place by the democrats, assuming they really want to get this done, we can get it done. reporter: sir, you said it wasn't a slippery slope. why is it now a slippery slope? reporter: veteran suicide. amvets says the top priority. talk to me what the administration has done -- >> we're doing a lot having to do with veteran suicide. we have a task force set up. there is a product that is made right now that just came out by johnson and johnson which has tremendously positive, pretty short term, nevertheless positive effect. i've instructed the head of the va to go out and buy a lot of it. we are buying a lot of it. hopefully we're getting it at a very good cost. this is a, i guess it's a form of a stimulant where if somebody is really in trouble from the standpoint of sucide, it can do

something. it is pretty well-known, just came out. it is made i believe by johnson & johnson. we have calls in now to johnson & johnson. those calls, we've been dealing with them for two month on buying a lot of it. reporter: who are you accusing american jews being loyal to? reporter: because they wouldn't talk about -- >> denmark. i look forward to going. i thought the prime minister's statement that it was absurd, it was an absurd idea was nasty. i thought it was inappropriate statement. all she had to say, no we wouldn't be interested. we can't treat the united states of america the way they treated us under p president obama. i now it was very not nice way of saying something. they could have told me no. this was discussed many years. harry truman had the idea of greenland. i had the idea. other people had the idea. goes back into the early 1900s, but harry truman

strongly thought it was a good idea. i think it's a good idea because denmark is losing $700 million a year with it. it doesn't do them any good. but all they had to do is say, no we would rather not do that or we would rather not talk about it. don't say what an absurd idea that is. she is not talking to me. excuse me. she is not talking to me. she is talking to the united states of america. you don't talk to the united und states that way, at least under me. president obama when they wouldn't let him land in the philippines, treated him so badly in some places philippines is comes to mind. that is different. they can treat him any way they want to, that isp to him. they can't treat the united states with the statement, how absurd. reporter: who are you accusing american jews being disloyal to, sir? >> let your wife do it. who is the boss?

reporter: i am the boss. >> she is the boss. i agree. go ahead. got a lot of people. yes. got a lot of people watching. go ahead. reporter: [inaudible]. background checks why should anyone who wants to buy a ground go through a background check? >> i want guns in the hands of people mentally stable. those people i want them easily to be able to get a gun but people that are insane, people sick up here, i don't want them to be able to get a gun. reporter: who are you accusing american jews being disloyal to? reporter: [inaudible] >> if a person is sick, if a person is mentally ill, a person done things in the past that are horror, case of dayton, got expunged he was 17 years old, he wrote a list out, the list said it was a death, not about guns. he had a kill list and he had a rape list. but it 17.

one of the things we're talking about is getting rid of the age limit. he was 17, when he turned 18 it was expunged. we didn't find out about that, a big percentage of the zoo, the parent wouldn't let the kids go to the school because they heard about it. it was very big thing. when he was 18 it all went away. we can't let that happen. reporter: sir you said russia was kicked out of the g7. reporter: guns, do you see public health emergency? >> i do. i do. they die for a lot of other reasons too. but they do. as i said, i think i said it very loudly and plainly and i don't think i've changed positions at all. we're working on background checks. there are things we can do. but we already have very serious background checks. we have strong background checks. we can close up the gaps. we can do things that are very good and things frankly gun owners want to have done but we also have to remember the gun doesn't pull the trigger.

a person does. we have great mental illness. reporter: what do you say to republicans who want to primary you? republicans want to primary you, sir? reporter: [inaudible] brown law and prosecute antifa demonstrators under the law that they make it a federal crime -- [inaudible] >> right. we're looking at a lot of different things relative to antifa. antifa in my opinion is a terrorist organization. you see what they have been doing. we have had great support on that. we're looking at various different things. reporter: why are you coming up ways to hold migrant families longer, migrant families? >> behind you. reporter: [inaudible]. >> no. just looking. greenland was just an idea, just a thought. but i think when they say it was absurd and it was said in a very nasty, very sarcastic way i said, we'll make it some other time. we'll go to denmark.

i love to denmark. i've been to denmark. frankly we'll do it another time. reporter: sir who are you accusing american jews being disloyal to. >> has to be shown to the united states. go ahead. reporter: yesterday you said american jews that voted for democrats are disloyal. to whom are they being disloyal, sir? so -- [inaudible]. >> so i have been responsible for a lot of great things for israel. one of them was moving the embassy to jerusalem, making jerusalem the capital of israel. one of them was the golan heights. one of them frankly is iran. iran is a very far weakened nation right now, much different. hopefully something works out. we'll see if it happens, it happens. wait a minute. wait. no president has ever done anywhere close to what i have done between golan heights, jerusalem, iran and other things. excuse me. wait a minute. wait a minute. no president has done what i

have done. we have a group, i call it aoc plus three. you can call the person representative talib. you could say representative omar. you can do it anyway you want to go, they are anti-semites. they are against israel. she had a plan to greatly embarass israel by going there with the fact she wanted to see her grandmother. i assume that's true. i hope that's true. but it was very bad. very bad, the things she and others of that group and other democrat have said. and they have become the face of the democratic party. i will tell you this, in my opinion, the democrats have gone very far away from israel. i cannot understand how they could do that. they don't want to fund israel. they want to take away foreign aid to israel. they want to do a lot of bad things to israel. in my opinion you vote for a democrat, you're being very

disloyal to jewish people and you're being very disloyal to israel. and only weak people would say anything other than that. reporter: sir, they're americans first, no? reporter: [inaudible]. >> i haven't heard anybody say that just the opposite. i think that if you vote for a democrat -- you are very, very disloyal to israel and to the jewish people. reporter: what do you say to republicans who want to primary you? >> i'm at 94% now on the republican party, highest in history. highest of any republican. so i think they would have a hard time. reporter: sir, you said russia was kicked out of the g8, you said russia was kicked out of the g8 because they out smarted obama. in fact because they annexed crimea. you know that. they're still there. they're still there. why let them back in. >> out smarted empty obama, they took over his term, not during

his term, not mine. reporter: took -- >> stop being organ of a democrat. let me answer the question. i will answer it very easily. simple question. the fact president putin totally outsmarred president obama on crimea and other things. including the red line in the sand. all right? he out smarted -- he made a living on out smarting president obama. and frankly because of it, obama was upset and he got obama out of what was the g8 into the g7. it has come up, should we put russia back in? we spend a lot of time talking about russia at those meetings. and they're not there. i think it would be a good thing if russia were there so we can speak directly, not have to speak, by telephone and other things. so, here's the thing. it is a vote of what is now the g7. they were taken out because

putinout outsmarted on crimea, red line, other things, totally outsmarted obama. obama was upset. they took them out. i think russia should be a part of it, we're looking for world peace and other things, trade and other things. it would be a lot easier to have russia in where they had always been. reporter: they're still there, sir, they are still there, why let them in if they're still there? reporter: [inaudible]. >> i read the same report as you. i'm not looking to do indexing. i've studied indexing for a long time. i think it will be perceived if i do it as somewhat elitist. i don't want to do that. i want taxes for, for the middle class, workers people that work so hard. that is what i'm looking. i think indexing is really,

probably better for the upper income groups. i'm not looking to do that but if i wanted to do it i believe i could, but i would need a letter from the attorney general. reporter: why are you coming up with ways to hold migrant families longer? reporter: [inaudible]. do americans need to -- >> so the fake news of which many of you are members is trying to convince the public to have a recession. let's have a recession. the united states is doing phenomenally well. but one thing i have to do is economically take on china because china has been ripping us off for many years. president clinton, president bush and president obama and others should have done this long before me. my life would be much easier, although i enjoy doing it, but my life would be much easier if i just said, let china continue to rip off the united states. all right? would be much easier. but i can't do that. we are winning against china.

they have lost 2 1/2 million jobs in a very short period of time. they want to make a deal. a deal that has to be good for the united states. they want to mca deal. probably we will make a deal. but if i didn't do that, i'm not doing it, somebody said trade war. this isn't my trade war. this is a trade war that should have taken place a long time ago by a lot of other presidents. over the last five or six years china has made $500 billion, 500 billion, ripped it out of the night. not only that, if you take a look, intellectual property theft, add that to it, add a lot of other things to it. so somebody, excuse me, somebody had to do it. i am the chosen one. somebody had to do it. so i'm taking on china. i'm taking on china on trade. and you know what? we're winning. because we're the piggybank. we're the one that all these

countries, including the european union, wants to rob and takes advantage of, european union, $200 billion. china, more than $500 billion. sorry, i was put here -- reporter: do you believe you're the second coming of god. >> i was put here by people to do a great job. that is what i'm doing. nobody has done a job like i've done. now, would china rather wait for a little more than a year and try to get "sleepy" joe biden to negotiate with, instead of president trump? maybe, but i don't think so. you know why? they're losing too many jobs too fast. they had the worst year in 27 years, but i think it was actually 52 or 54 years. it is the worst year they have had in half a century. that is because of me. i'm not proud of that but you know what? they want to negotiate. and "sleepy" joe doesn't have a clue. "sleepy" joe said, china is wonderful. china is wonderful for china but

i'm wonderful for the usa. reporter: sir, do you believe you're the second coming of god? , sir, do you believe the you're the second coming of god? reporter: [inaudible]. >> we'll meet sometime, the prime minister used a terrible word when describing something we've been talking about for years with our country. president trump man said, what about greenland? he talked about it, very openly, it was a big deal at the time. i brought it up again, it was discussed many other times. and i thought it was not a nice statement the way she blew me off. because she is blowing off the united states. we've done a lot for denmark. we've done a lot. i know denmark well. i have many friend from denmark. i have many people from denmark that live in the united states. we treat countries with respect. reporter: they served with us in afghanistan, no? >> she said absurd. that is not the right word to

use. reporter: didn't they serve with us in afghanistan, sir? they served with us as well, no? reporter: [inaudible]. >> louder. reporter: [inaudible]. >> well, if you remember president obama had separation. president obama built the cells. he built the cages that you people always talk about and attribute them to me. president obama in 2014 built those cages and you were very embarrassed when "the new york times" as usual and others put a picture of a cage and they said how bad trump was, only to find out it was president obama that built those cages. so president obama had separation. i'm the one that brought them together. this new rule, will do even more to bring them together. but it was president obama that had the separation. reporter: [inaudible].

>> we're being very strong on the border. you see the numbers are way, way down. i want to thank, i want to thank mexico for that. the night could make your question, could make that problem go away very easily if the democrats would meet and we could fix the asylum, what you're talking about to an extent. but let me just tellou mind. it bothers me very greatly. people make this horrible 2,000-mile journey. one of the things that will happen, when they realize the borders are closing, the wall is being built, we're building tremendous numbers of miles of wall right now, in different locations. it all comes together like a beautiful puzzle but one of the things that is happening when they see you can't get into the united states, or, when they see if they do get in the united states, they will be brought back to their country, it won't matter if they get in or not because we're doing that. they won't come. many people will be saved.

many women's lives will not be desvoid and ruined. reporter: joe biden, sir, you like to attack joe biden's gaffs. reporter: tax cut -- >> i'm not looking at a tax cut now. we don't need it. we have a strong economy. certainly a payroll tax cut. president obama did that in order to artificially jack up the economy. president obama had zero interest rates. i don't have zero interest. i have real interest rates, despite that i have a strong economy. president obama did two payroll tax cuts and despite that, i have a much stronger economy. if you look at my numbers from november ninth, you look at them, november 9th, to present, the stock market is up over 50%. reporter: joe biden es gaffs, you like to attack joe biden for his gaffs -- >> you are the most biased reporter, nbc. i made a lot of money for nbc with the app prentice -- app

prentice. peter is such -- he should be able to ask a question. same question in a better way. obviously biased and that is why the public has no confidence in media. reporter: sir, i just said joe biden's gaffs. i will ask my -- you said the mass shootings happened in dayton, you said the mass shooting happened in toledo, it happened in dayton. is that fair game. >> joe biden -- reporter: is that fair game. reporter: "new york times," -- >> i think "the new york times" now has totally lost credibility. they have given up on the russian collusion delusion. what they're doing, is they're trying to racist deal. that is not going to work because i am the least racist person ever to serve in office, okay? i am the least racist person. but "the new york times," they're trying everything they can. it's a totally dishonest newspaper. it's a paper that is really has lost tremendous credibility.

let me tell you, in six years, or maybe 10 or maybe 14, right, in six years, when i'm not here, "the new york times" goes out of business very quickly. you know who else goes out, nbc -- nbc news has less credibility in my opinion with guys like you than cnn i think cnn has more credibility than nbc. reporter: couple additional questions. why should you be trusted -- >> i hear what i said. you have more credibility than this guy. go ahead. that not saying much. you know what, you know why, i don't think you have very much credibility. reporter: why should you be trusted to fight for stronger background checks. >> nbc has less credibility than cnn. that is not saying much. reporter: why should be you toughed on stronger background checks. reporter: [inaudible] >> mental health, very important.

>> reporter: [inaudible]. >> there are many, many things in play. people are talking about videos. people are talking about lots of different things. but we do have a way of bringing what we already have, because we have many many, as you know, with very many, many people that are unable to buy guns right now. many people are unable to buy guns. we have back ground checks. but there are loopholes in the background checks. that is what i spoke to the nra yesterday. they want to get rid of loopholes as well as i do. at the same time i don't want to take away people's second amendment right. i don't want to take away the constitution about gun ownership. we're talking about background checks, all of sudden we're talking about take everybody's gun away. people need weapons unfortunately for protection. reporter: [inaudible] >> trump talking point.

you approve one thing, then another thing, then another thing. then all of sudden you're on that slope, all of sudden nobody has any legal protection. we have -- reporter: sir, you said you disagree with that. you said you disagree with that two weeks ago. >> the second amendment will remain strong. reporter: sir, you said you didn't think there is slippery slope two weeks ago, sir. go ahead. >> go ahead. reporter: awed [inaudible]. >> well, you know, at a certain point russia, afghanistan. iran, iraq, turkey, they will have to fight their battles too, okay? we wiped out the caliphate, 100%, i did it at record time, at a certain point all these other countries where isis is around, they have been decimated by the way, badly decimated, all of these countries will have to

fight them, because do we want to stay there for another 19 years? i don't think so. so at a certain point other countries, that includes russia it includes iran and turkey and iraq and afghanistan and pakistan, and india, look, india's right there. they're not fighting it. we're fighting it. pakistan is right next door. they're fighting it. very little. very, very little. not fair. the united states, we're 7,000 miles away. we have designated isis. you haven't been hearing much about isis. we took the when i took it in '98 i said all right, maybe we go home now. let other countries handle it. everyone went crazy. i said do 100%. they said it was going to take a year. it took me a month and they're gone. the caliphate is gone. by the way, we're holding

thousands of isis fighters right now and europe has to take them. and if europe doesn't take them, i'll have no choice but to release them into the countries from which they came, which is germany and france and other places. because we beat them. we captured them. we've got thousands of them and now as usual, our allies say oh, no, we don't want them. even though they came from france and germany and other places, so we're going to tell them, we've already told them take these prisoners that we've captured because the united states is not going to put them in guantanamo for the next 50 years and pay for it. reporter: sir, why should americans -- why should americans be allowed to buy assault weapons? >> i went to the hospitals, i will tell you this. i went to the hospitals. it was totally falsely reported.

there were beautiful, beautiful, very sad, you know, horrible moments but there were beautiful momen moments. these people, the families and also, the people that were so badly injured that i was with, they love our country. frankly, you want to know the truth? they love their president. nobody wrote that. nobody wrote that. you didn't write the truth. "new york times" doesn't like to write the truth. but they love -- they totally love our country and they do love our president. so when i went to dayton and when i went to el paso and i went into those hospitals, the love for me and me maybe as a representative of the country, but for me, and my love for them was unparalleled. these are incredible people. but if you read the papers, it was like nobody would meet with me. not only did they meet with me, they were pouring out of the rooms. the doctors were coming out of the operating room.

there were hundreds and hundreds of people all over the floor. you couldn't even walk on it. so you know -- reporter: what do you say to those critics -- >> the people of dayton, let me just explain, people of el paso, these are incredible people. those victims and the survivors and the families, i love those people. reporter: sir, what do you say to those critics, what do you say to the thumbs up with the migrant child? reporter: [ inaudible ]. >> i've looked at indexing for a long time. it's not something i love. i think it's probably better for the high income people and i'm not looking to do that. i want to do for the workers. i'm looking to do for middle income people. indexing, now, i would have to get a letter from the attorney general or from the justice department, which i think i might be able to get. otherwise i'd have to go through congress. but i'm not looking to do

indexing and i haven't been seriously looking at it but certainly, it is an option if i wanted to. we have such a strong economy. if the fed did what they were supposed to do, they would drop interest rates by 100 basis points, they maybe would do not only not tightening but they would do some loosening or leave it alone, do nothing, but they dropped interest rates by a hundred basis points or more. nobody, nobody would be able to compete with the united states. right now, the fed is tying our hands because we're paying interest rates and germany and other countries that aren't like us are not. it should be the other way around, in a sense. why should they be paying no interest rate and even have an incentive beyond that, and we're paying interest rates? the fed has missed the call for a long time. reporter: the thumbs up photo with the migrant child, what do you say to the critics who attacked you for that? what do you say to critics who

attacked you over that? >> i think we have a very strong economy. i just don't see any reason to. i think the fed has been very late and very early. they were very early to raise and then very very late to cut, but the fed can do the whole thing. yesterday, we had the strongest dollar in the history of our country. yesterday we had the strongest dollar in the history of our country. now, in one way, i'm honored by that. but in another way, it makes it much harder to export goods. you understand. so in two ways, one, i love it but in another way, i don't like it because it's much harder to compete. but we had literally the strongest dollar in the history of our country. reporter: the thumbs up with the migrant child, was it -- reporter: -- the rule changes? >> say it? reporter: are you going to do an executive order on birthright citizenship? >> we're looking at that very seriously. birthright citizenship, where you have a baby in our land, you walk over the border, have a

baby, congratulations, the baby's now a u.s. citizen. we're looking at it very very seriously. reporter: the thumbs up with the migrant child, is it fair to attack you over that? >> we are looking at birthright citizenship very seriously. reporter: sir -- >> frankly, ridiculous. reporter: your thumbs up with the migrant child, is it fair to attack you over that? reporter: -- migrant minors -- >> do i what? reporter: -- migrant minors [ inaudible ]. >> i am the one that kept the families together, okay. you remember that, right? just remember i said it. now it gets even better. president obama and others brought the families apart but i'm the one that kept the families together. with what we're doing now, we'll do even more of that but it will make it almost impossible for people to come into our country illegally. plus we're building large sections of the wall. i won the lawsuit two weeks ago in the supreme court. we're building large sections of wall and lots of other things

are happening. reporter: sir, the thumbs up photo with the migrant child, was that appropriate? was it fair for them to say that? reporter: [ inaudible ]. >> i do. reporter: [ inaudible ]. >> oh, i have them with everybody but he's the one that calls me. that's why he's a great executive. because he calls me. others don't. others go out and hire very expensive consultants and tim cook calls donald trump directly. pretty good. i would take their call, too. but the only one that calls me is tim cook. he calls me, whenever there's a problem, he'll call. now, the problem was samsung, a competitor, good competitor, wouldn't be paying tariffs and tim cook would. i got to help him out short-term with that problem. because it's a great american company. samsung is in south korea. not fair that samsung isn't while he is. the reason i think tim cook, he's the one that calls me. the other ones don't call. they go out and hire for millions of dollars consultants that have less power.

reporter: what do you want to say today [ inaudible ]? reporter: -- israel, is that what you're saying? >> i'd say so, yes. it's only in your head. it's only anti-semitic in your head. if you look at what tlaib, omar, cortez, if you look at what these people say, if you -- aoc plus four or plus three, if you look at what they say, they are so bad for israel, they are so bad for jewish people. you take a look at the horrible anti-semitic statements that they've made. you take a look at what they want to do to israel. take a look at the fact that they want aid, all of the aid, almost $4 billion, all of the aid cut from israel, you take a look, you know what? the democrats have to own it. i say this. anybody that votes for a democrat, they're voting for that. that's the face of your party. that's very bad for israel.

reporter: [ inaudible ]. >> you'll find out. reporter: when? >> you're going to find out. reporter: does hong kong give you leverage in the china faulkfaulktalks? >> i don't view it as leverage. i hope hong kong works out in a humane way. i don't view it as leverage or not leverage. i hope it works out in a humane way. i think president xi has the ability to make sure that happens. connell: all right. just making sure he's really walking to the hospital. a lot there for president trump short time ago at the white house. a couple things for us here. it's fox business, after all, we will focus on the economy. one, the comments, new ones on taxes and the second thing is china which we will get to in a moment. the "i am the chosen one" quote from the president. former democratic tennessee congressman harold ford jr. and

charlie gasparino are with us. by the way, we are up on the market about 300 points on the dow. every stock in the dow 30 is higher. congressman, maybe the new quote, this is new because it's different than, say, yesterday, from president trump now on taxes, we apparently don't need a tax cut, the economy is so strong. when john roberts asked him he said, quote, i'm not looking at tax cuts now, we don't need it, we have a strong economy. what's your view? >> i think the president sees the numbers that we all see. he looks at michigan and ohio and pennsylvania, wisconsin, colorado, the real battleground states, and realizes that middle class families are not doing as well as they had hoped to do ors he promised they would do three years ago as we head into an election cycle. i think he's concerned about the narratives coming from the elizabeth warrens and bernie sanders and joe bidens about ways in which to reimagine capitalism, reinvent it in a way that actually makes it work for everyone. i hear a president who is

searching for ways to resonate. he realizes if he has to cut taxes or offer a tax proposal over the next several months, he can always harken back to this moment and say we thought we might have needed it months ago because the fed hadn't acted, china is being unreasonable. i think he's giving himself cover here. what is clear is that the narrative that he campaigned on three years ago, he's not been able to realize that for the millions of americans in those battleground states that voted for him. connell: on that point, charlie, about the president feeling or maybe feeling -- the back-off on the indexing of capital gains, that was clear, he said it might be perceived as elitist so if he was to cut taxes he wouldn't be looking at that, i guess. >> politically it's a smart move. i don't want to disagree with harold. the economic numbers show that middle class and working class people are doing a lot better now. wages are now going up in a meaningful way. the unemployment rate as you

know is low. the underemployment rate is lower. there is legitimate gains on behalf of poor, working class and middle class americans right now that are coming in these numbers. now, that doesn't mean that donald trump is loved in those states, still, that he doesn't have an issue with some, with you know, formerly democratic blue collar democratic-based voters because of some of his rhetoric and the way he comes across. he obviously does. the polls show that. but this is an economics election. the democrats lose big-time in my view -- >> as things stand right now. connell: unless we go into recession. by the way, the stock market is not saying we are going into recession. it's signaling the possibility we may go into recession because of this trade issue which can be fixed pretty quickly if he comes out and says no harm, no foul,

i'm walking away from all these tariffs or -- connell: you don't get that talk. >> you don't know. you don't know. connell: we have proved that the last two days. >> you don't know what larry kudlow is doing with steve mnuchin on this issue. >> on the china issue. connell: charlie brings up that point. if you do get rid of those tariffs, maybe that's the best stimulus and that's why you don't need to talk about tax cuts. the political argument the president is making is you don't need to talk about all of that and maybe he continues to make this argument for as long as he can because the economy is strong. you see it in the numbers, you see it -- >> wages. wages. connell: you look at that, harold, you say to yourself i got to stay on that message, we're doing all right for now. what do you say? >> i think if all of those things were true, i happen to agree with charlie a lot more than i ever disagree with him but everything charlie laid out there were the facts, this president would be talking about that more.

[ speaking simultaneously ] >> if you forecast out four to six months, i think he's concerned, this president and the party, the republican party en masse is concerned about where the battleground congressional districts, how people in those districts are going to feel about the economy and about how their futures are looking. now, again, if i were the president, if i were advising the president we would be talking only about the economy. i have not seen all the numbers they're seeing. i have seen some of the battleground state polling numbers and i think this president has some concern about it. now, there's no doubt there are those in the corporate world, the big corporate world, who are now saying we have to reimagine and rethink the way we involve and -- involve employees and workers so i don't think this president is oblivious to these things. if indeed the economy remains as strong as we are talking about here, this president will be

very -- >> we are talking about -- >> i don't think in battleground states they are seeing that. >> we are talking about the business roundtable edict we should be thinking of employees as much as shareholders. i want to point out one thing about that statement. they didn't renounce the corporate tax cut. okay? there's a reason why jamie dimon and larry fink, two democrats running jpmorgan and blackrock respectively, why they didn't renounce the corporate tax cuts. they are not attacking trump's economic policies on regulation. far from it. jamie dimon and larry fink support his regulatory agenda which is deregulated financial industry. >> they're not saying what trump -- trump economics is bad. they provided themselves some cover because the democratic party went so far to the left, they're looking to throw a fig leaf to liz warren if she should happen to win this. if she does happen to win this, it's going to be interesting to

see how -- stee -- because the difference between biden and trump is there but it's not that great. the difference between warren and trump's economic agenda is night and day. we are talking capitalism versus socialism. that will be very interesting. connell: that's how the argument would be made. thanks to you both. i'm going to move to the panel on the issue of china. the president moments ago said basically hey, he was the one who had to take on china. here it is. >> excuse me. somebody had to do it. i am the chosen one. somebody had to do it. so i'm taking on china. i'm taking on china on trade. and you know what? we're winning. connell: james freedman is here today. many describe him as the chosen one. not the case. mike murphy and lauren simonetti. never a dull moment here. >> chosen one when another guest canceled. connell: right. for now. exactly right. aur at the chosen one for today.

so the president -- go ahead, say what you were going to say. >> i mean, this is part of the reason americans chose him. he laid out a very clear agenda, some of us were very concerned about what it does to trade and the costs it imposes on consumers but i think this is in part why he was chosen, people felt that we needed to change the economic relationship with china and i think this is one issue where he's actually achieved a consensus. you may not like the tariffs, but there is general agreement that china is stealing our intellectual property and not respecting the rule of law. connell: i noticed a little bit a change in tone from the president. actually more than a little bit. in the last couple days, just on china, he's finally making an argument which a lot of people like you and others have called on to make for awhile, listen, this isn't going to be pain-free. these tariffs are going to leave

their mark but it's worth it. that's what he was saying yesterday and almost kind of like what he's saying here today on it. it's not like china is paying the tariffs and all that's gone for now. >> and he's pointing out i think, although it was tongue in cheek when he said i'm the chosen one -- connell: was it? >> he will be annihilated for that in the press. what he was saying was someone should have done this a long time ago. china has been stealing from this country. we know it's factual it was unfair trade, now i'm the one whose going to come in and fight them. i would be better off if i wasn't fighting them. now i am involved in this trade war because i'm standing up for you and me and for the united states of america. i think it's good. i think it's necessary. i think the economy is doing fine in spite of it. connell: we have seen with the numbers that have come out, it's a targeted number of times, the dow is up, we are all over the place but this idea that somebody had to do it and i'm going to keep doing this, i keep wondering if that's an argument that we are in this for longer than people anticipated. >> absolutely. connell: and he wants the fed to

be his cover so he can fight a longer trade war. >> two things. number one, i don't think president trump expected that president xi would be such a competitor and so hard. he thought these tariffs would bring xi and china to the negotiating table and in a way, they have, but where's the deal. okay? i think that's a little harder and taking a little longer than the president expected. the other thing is, you can make your argument for or against whether the tariffs are working but they are a talking point at least you can say, they are hurting the consumer or they're not but we are talking about it. a calendar doesn't cause a recession but if you look at where we are, it has been so long since we had a recession, unfortunately the timing might align that the economy slows down vis a vis tariffs right when we go to the polls. connell: most people agree, the economy will slow down. slowing down is different than contracting. look at what the cbo said today. we will talk about this. a couple things. number one, the deficit's going up, but more than they thought. but the other thing that was in

that report is although growth will slow, largely to lauren's point because of these trade concerns, it won't slow as much as they thought so that take-away is like hey, we will hang in here growth-wise a little more. >> that's positive for now but growth will slow at some point. we will go into recession at some point. you can take it to the bank. not all recessions are like 2008. not all are the great recession. the economy will heat up, the economy will overheat at some point. the economy will swing the other way and we will have a recession. that's gone on throughout history. that's fine. i don't think you can pin the china trade war on that, and more importantly -- connell: you don't think growth slows because of the trade war? >> i think it may be slowing because of the china trade war. if we could, when you go back and say let's let china keep taking advantage of us, let's not have the trade war, because those were i think the two options on the table. either we stand up to them or we let business continue as usual. i wouldn't want to go backwards. i think we are going in the right direction. connell: would you go back?

>> i think if he's saying we are in for a long battle with china here, i think what he's got to do to avoid the slowdown because it's clearly, the trade fight is clearly depressing corporate investment, so to counteract that, i think he ought to be really pursuing aggressively zero tariff deals with other countries. connell: right. >> you want to say china has a specific problem and we got to address it, it would make a lot of ceos more willing to invest if they saw freer trade happening with other -- connell: you line up everybody against china. >> stop fighting with our friends and do a new tpp, understand you can put a new name on it, maybe a little different language. but let's have free trade with other places in asia. connell: let me squeeze in a break. up 275 on the dow. these guys are staying with us. we will bring carle fiorina in after the break. join me "after the bell" at

4:00. lot of earnings coming in in the strength of retail. we'll be right back. ♪ ♪ ♪ introducing the all-new chevy silverado. with fifty industry-firsts. it's the strongest, most advanced silverado ever.

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i'm not looking at a tax cut now. we don't need it. we have a strong economy. certainly a payroll tax cut, president obama did that in order to artificially jack up the economy. president obama had zero interest rates. i don't have zero interest. i have real interest rates and despite that, i have a strong economy. connell: the latest reversal from president trump on tax cuts, came a little earlier today as the cbo came out and said a trillion dollar deficit is returning next year. former hewlett-packard ceo carly fiorina, former gop presidential candidate, joins us now. good to see you. let's start on this idea of tax cuts and whether or not they are needed because that does speak to the health of the economy and where things stand right now. what do you think?

>> well, i think in this case, president trump is right, we don't need a tax cut, and i actually think deficits matter a lot. so the fact that the deficit is continuing to rise at now an accelerating rate i think is concerning, and i think argues against a tax cut. the economy is strong now. it's also true as some of your previous speakers have said that this is a ten-year bull market. it's a ten-year expansion. business investment has turned lower. the tariffs are beginning to impact consumer purchasing power and large economies around the world are slowing. so all of those factors indicate that the economy will probably not continue to accelerate, but that doesn't mean we are rushing into a recession either. connell: if you had to, and the panel is still here, they will have questions or comments for you in a moment, if you had to make a political argument in this environment to attack deficits and neither party for

years has made that argument but as you point out, the cbo comes out and says as a percentage of gdp they will go up in the next ten years to 4.7%, their previous estimate was 4.3%, the 50-year average is 2.9%, but if you had to make an argument politically in this environment to do something about it, what would that argument be? >> government is bloated, big, unaccountable and in many cases, because it's so big and bloated and unaccountable, it has become corrupt. those are just facts. now, true, you're right that government has gotten bigger for 50 years under both democrats and republicans. so no one will make this argument. president trump, when he was a candidate, talked about draining the swamp. i as a candidate talked about reforming government. but just as business sometimes becomes so big and so powerful they lack accountability, we have seen that happen in the

financial crisis, in the opioid crisis, with some of our technology companies, the same thing happens with government. so the argument i would make is government still needs to be reformed and no one's tackled it. >> james freeman of the "wall street journal." glad to hear you talking about the need for spending restraint even though we are not really hearing that in washington these days. on the tax issue, i was kind of disappointed to hear him rule out indexing capital gains for inflation. he kind of dismissed it as a rich people's issue as if only rich people own assets in america. i just don't understand why someone should be taxed on inflation, the inflated value of something that hasn't actually increased in value. >> well, you're making a very logical argument, but the president is a politician. he ran as a businessman. it turns out he's a politician. as all politicians do, he is

assessing what argument is going to win with his base and the capital gains tax cut is a non-starter right now. connell: i notice the word he used, too, perception of that it would be elitist, not necessarily that it should be that way, but his idea was that that's how people would perceive it. he might be right about that, that it would be easy for the democrats to come back, attack him and say you're only for the rich, right? >> well, yes. let me hook this, if i may, to the statement that just came out of the business roundtable. full disclosure, as a ceo in the early 2000s, i was asked what is the role of a ceo. my answer then and my answer now is that a ceo's job is to balance the requirements of shareholders who invest in your company, employees who produce value for your company, customers who reward that value with revenue and profit and communities who can either enhance your value by embracing what you do, or who can destroy

value by resisting what you do. that statement was made by the business roundtable because business has destroyed a lot of trust and confidence. they have destroyed trust and confidence through the financial crisis, through the opioid crisis, through technology companies taking advantage of consumers and being less than transparent. so the business roundtable needed to make a statement that said shareholder return, particularly when the typical shareholder holds on to stock for six weeks or less, is not the end-all and be-all. i think president trump is being realistic in saying you know, putting our eggs in the basket of helping investors right now and businesses isn't a politically tenable argument and business needs to rebuild and restore trust. >> it's mike murphy. if you could dust off your crystal ball for a second, if you were the president, you had one -- in 2016, do you think you would have gone after china the way president trump has, or just

kind of as past presidents have done, just let it be, or do you think it was something that finally, would you have been the chosen one that was going to stand up to china as well? >> oh, i think china had to be confronted. i said so on the campaign trail. i have said so for the years that president trump has been in office. he should have confronted china. i think tariffs never work. my objection here is not that he's taking china on. it's the how. first of all, i have done business in china for many decades. the chinese always take a long view. they want to know what the win for them is. we need a strategic view here and strategic plan. my own view is it would be far more effective not to play battles with tariffs but instead, to say to the chinese very clearly, as long as you continue to steal and abuse our intellectual property, among other things, the deal is this. you will play in our country by the same rules that we are forced to play by in your

country which means you don't list your stock on our stock exchange. you don't get to buy our companies. we will determine, the government will determine in conjunction with businesses here what you get to do, where you get to put your factory. it would have an impact. we need to change the game. we need to change the rules. tariffs aren't going to work. they're not working. but president trump was right to bring this issue to the fore. connell: went after the companies, chinese companies, as opposed to going after the government. lauren? >> well -- the companies are the government in china. as you well know. the companies are the government. connell: that is true. >> every american company that does business there is told by the government what company you are going to do business with, how much of an investment stake can you make, where will you put your factories or your marketing efforts. they are one and the same. they are not a capitalist economy. they are a command and control economy. connell: we are going to wrap this up.

let me get in another break. always great to see you, carly fiorina. thank you. as we always appreciate it. in a moment, the panel comes back and the next, well, the attorney general at the center of a big tech antitrust fight. we will talk about some of the big tech companies. we'll be right back. you wouldn't accept an incomplete job from anyone else. why accept it from your allergy pills? flonase sensimist. nothing stronger. nothing gentler. nothing lasts longer. flonase sensimist. 24 hour non-drowsy allergy relief

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be more than hanging in there, doing just fine. look at target, up 16 bucks today, nearly 20%. the former toys "r" us ceo, former target vice-chair, jerry storch, is our next guest. boy, this is the story. it's been out there for awhile but is reinforced today, the american consumer is still alive and quite well. what's your read? >> the consumer is very strong. if anything, spending has been accelerating. we saw that with the july retail sales report that came out just a few days ago. we saw it with walmart earnings, target earnings. she's changing where she shops so every time someone comes out with bad results they go oh, my gosh, i'm worried about the consumer but the consumer is not shopping department stores in the mall anymore. she's moving to the internet and she's moving away from apparel which has really been taking it on the chin and buying more experiences type of products. again, target, walmart, costco, et cetera. connell: could argue because of that, was a macro story, then an industry-specific story,

execution of companies, the type of company that's doing well, maybe that doesn't speak as much to the macro environment. what do you say? >> all the macro numbers are good. that's how you know it's good. you see that in retail sales. the consumer has money and the experience, she has money she's going to spend. so there are winners and losers with anything. the gap has increased between winners and losers. the winners are providing a value for customers every day. it's a discount chain, people like dollar general, and amazon and the internet that's growing like crazy. she's spending tons of money and she's spending even more in restaurants, on services, on the cell phone bill, all kinds of things. so she's spending lots of money. she has the money and there's no end in sight for that. connell: i will continue along your theme of this imaginary person who is doing the spending and whether she as you say will continue to do that. all the stories out there, even if you don't believe we are headed into some sort of economic downturn that turns into very slow growth, recession, whatever it is, some say all the talk of that, we

heard the president touch on that, could damage the economy. will that have an impact, do you think, on the consumer, the fact people think things are going to slow down? >> theoretically it could but i really don't think it will. the reason is people have money in the bank, money in their wallets, and history is if they have that, they are going to spend it. they have job security, there are lots of jobs out there, they are seeing pay increases, they will spend the money. they hear all this noise about politics. that's like background noise to most people. connell: our panel is still here, james, mike and lauren, and at least two of the three had to hold -- something was going on there. there was a comment about to be made and i don't like you to hold it in. james? >> thanks. jerry, i have been wondering, we have been talking about this dichotomy where the consumer is really happy, optimistic, well paid, well employed, the ceos are not so optimistic, not so happy, worried about trade.

i'm wondering eventually what gives here. do these spending consumers convince ceos to lighten up, or does the lack of investment eventually pull down the economy and limit the jobs and make those consumers less happy? >> ceos are speaking with respect to their own company. there are winners and losers going on in every industry right now. there's winners and losers, people are more or less affected by government policies or tariffs or things like that. but by and large, the economy is strong and the consumer is strong. connell: the one way it could have an impact, the ceos, if they suddenly, the way it could impact consumers directly is if they start firing some of those consumers in some of those industries. the manufacturing business has slowed down investment and have to cut back. we haven't seen it but we could, no? >> we could. it's more people losing their jobs, that's going to eventually hurt us. let's worry about that when we get there, not now.

>> none of that is happening right now. that's a highly theoretical question. that is not what we are seeing. we are seeing the reverse. when people have money and jobs, they are going to spend. of course, the consumer economy is almost two-thirds of gdp. it's a huge amount of our economy overall. what will happen is eventually they will have to make those investments in order to keep up because they won't be able to keep the shelves full and keep consumers happy. so you could say what if, oh, it could happen, that could happen. connell: but it is happening, some of the businesses are cutting back on investment. lauren? >> question for you, jerry. how much can the consumer actually handle? you have all these reports, tariffs, if they go in full effect, are going to cost $1300 a year for the average family. can we afford $1300? how big does that number get before we start cutting back? >> again, my math doesn't approach the numbers they have talked about. some of the numbers being thrown out by a lot of people are

multiples of the tariff amount which makes no sense to me as a retail owner, business person. our job is not to multiply the tariff effect. our job is to mitigate it. that's why everyone out there is working on moving production to other countries, on negotiating to lower the price of the product and only then will you raise prices. if you look at it like the latest round of increases on roughly $300 billion of goods, at 10%, that's $30 billion, it's not going to happen right away, it will be spread over time. on a $14 trillion consumer economy, that's only a tenth or two of a percent inflation for each consumer. some of that is theoretical. what people are missing here is that capitalism is flexible and acts and as ceos, we take action to change what's going to happen. we don't just go there are tariffs, we have to raise prices by that amount. that's not what we should do. tariffs are becoming the new weather. the ceos that complain about the tariffs are the ones that complain about the weather all the time, say that's why sales were bad because it was cold or raining or whatever it was. go do something about it.

at 10% it's easy enough to fix. the 25% tariffs, 50% on washing machines, that's a different story. connell: jerry, thank you. always good to see you. i'm sure everybody has been waiting for us to talk about denmark, right? the president still has it on his mind, believe it or not. he's on the plane ride headed to kentucky and tweeting about denmark. we go back and forth over greenland, whether there will be an offer to buy greenland from denmark, now the trip is canceled. some say this back-and-forth between the president and denmark, a nato ally, could end up backfiring. we will talk about it after this. - in the last year, there were three victims of cybercrime every second. when a criminal has your personal information, they can do all sorts of things in your name. criminals can use ransomware, spyware, or malware to gain access to information like your name, your birthday, and even your social security number. - [announcer] that's why norton and lifelock are now part of one company,

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connell: we will get to denmark. first to this big tech crackdown that's been wrapping up on the federal and state level. the attorney general from the state of louisiana joins us, part of this group of attorneys general that are pushing the investigation of the big tech

companies. this is the antitrust look at the -- at these companies. what do you see, mr. attorney general, that's going on here that should not be happening? what's anticompetitive about the practices of these big companies? >> well, for about 18 months, many attorney generals from around the country on both sides of the aisle have been ringing alarm bells about some of the practices of these big techs. we visited with a number of these companies, we have heard a lot of rhetoric out of these companies, we haven't seen a lot of action. that certainly is frustrating. our concern is protecting the consumers. that's what we have been talking about over the last 18 months. of course, when people say what are the problems with big tech, you could break it down into a multitude of problems. you have personal data mining, is the consumer actually getting something for what they are taking from them. you could talk about the ad, the anticompetitive conduct that's being -- that's taking place in the digital ad market, you could

talk about content suppression, you could talk about section -- there's a host of things. connell: on the anticompetitive, in digital ads, it's anticompetitive. google's big business is ads. let's talk about google or alphabet, their parent company. they always made the argument, these big tech companies make the argument, listen, nobody handed this to us, we were in an environment that was quite competitive, lot of companies trying to do what we do, but we are just better than they are. you know, we beat them back and have established this quote unquote, dominant position because we performed well in a competitive environment rather than that the environment wasn't competitive. what do you say? >> well, look, the internet absolutely created an entire new commodity as it comes to digital advertising, right? the problem is that the person who owns or the company that controls the exchange, that commodity exchange, is google. i will give you an example.

if google, if we would allow companies to control the new york stock exchange or the commodity exchange in chicago the same way google controls the digital ad commodities exchange, we wouldn't just have civil action. we would be looking at criminal action. so again, that's problematic. why should we allow google to control, to virtually control 100% of the digital commodity exchange? connell: what are we looking at here? some say this is going to drag on for years. how is this process from your point of view and what's happening at the state level, you have a bunch of attorneys general in on it apparently together. how is it going to play out from here? >> well, history has shown, if we look back at history, look at u.s. steel, look at the standard oil cases, look at at & t, look at microsoft, these cases are not brought about instantaneously and not dealt with and put aside or a resolution comes very quickly. we are in it for the long haul.

i got to tell you, the leadership that general barr is exerting in this particular field has been extraordinary. you can tell from the meetings that we've had with him that he absolutely has a firm grip of the problems that are going on in this sector. connell: all right. he's in on it. you guys are in on it in a number of other states. jeff landry, attorney general from the state of louisiana, thank you. we will stay on the issue, keep talking about it. bringing the panel back in a moment but on another issue, we talked about denmark and will talk about it more because that's what the president is tweeting about on his way to kentucky, about this key nato ally and whether or not they are paying their fair share and all this, and of course, it plays into the back-and-forth on greenland. that's next. housing as well. existing home sales getting a boost in july from lower mortgage rates. sales rising 2.5% in july. from the previous month. we'll be right back. at carvana, no matter what car you buy from us, you get the freedom of a 7-day return policy. this isn't some dealership test drive around the block. it's better. this is seven days to put your carvana car

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denmark is losing $700 million a year with it. it doesn't do them any good. but all they had to do is say no, we'd rather not do that or we'd rather not talk about it. don't say what an absurd idea that is. she's not talking to me. excuse me. she's not talking to me. she's talking to the united states of america. you don't talk to the united states that way. at least to me. connell: the president now is on twitter, you know, adding, i guess, to those comments. he's angry at the prime minister of denmark. here's the tweet for the record. denmark only at 1.35% of gdp for nato spending, they are a wealthy country, should be at 2% because we protect europe, only eight of the 28 nato countries at 2%. united states much higher level than that. and he goes on because of me,

the president says, these countries agreed to pay $100 billion more, still way short of where they should be for the protection. sorry. former bush -- former trump and bush 43 state department staffer christian whiton is our guest. panel's still here. boy. so first, everyone was laughing at this, why you want to buy greenland. now the president in the last couple days spun it into this whole back-and-forth about nato. those tweets came on the plane on his way to kentucky. so he's making it into, as he's wont to do, into a completely different story. what's your take on it? >> i think it's frankly the biggest question i have is why white house staff thought it was a good idea for him to go and visit denmark in the first place with its left-leaning prime minister. as he pointed out, this is a country that only spends 1.35% of its gdp currently on the military. they are supposed to be at 2%. they have no plan to get to 2%. they have a plan to get to 1.5%

by, get this, 2023 which really means never, in political cycles. you know, i think it's a good debate to have about, you know, we always say this is our key ally. well, they were key allies in a war that ended 74 years ago this month. but they really aren't terribly relevant to the world now. also, there's a serious discussion to be had about why greenland has languished economically. frankly, greenland and its majority population very similar to eskimos in alaska would be much better off under u.s. sovereignty. connell: what do you say, i will get the panel in on the greenland story, what do you say to people who make the criticism you are referring to, that the president, you know, will speak more kindly about enemies, like russia should be back in the g7, make it the g8, than about so-called allies? what do you say to people who bring that criticism? >> you know, the allies who pull their fair share who are still committed to fighting for freedom, who haven't sort of thrown in the towel on history as old europe has, he is very

complimentary of. if you look at prime minister abe in japan, one of president trump's closest counterparts and colleagues, very warm relationship. the same with south korea. the same with the united arab emirates, a key country in the persian gulf that spends a whole lot on the military and does a lot. if you look at the countries that are more relevant, throw in poland and the baltics. connell: let's talk about it more. christian, stay with us. what do you think about it, james? it went from everybody having a little chuckle, i didn't know we were going to buy a country to now it's back to this whole nato back-and-forth. trump versus denmark. what do you think? >> i guess i'm open to -- it couldn't really be a state. connell: people made the natural resources argument, maybe there was something to it, we tried before and it worked with alaska. >> i never really saw the motivation to sell here.

denmark's in relatively good economic health so not sure there's a whole lot of pressure on them to want to make a deal although maybe the president trying to create some now, pressing again for them to hit this 2% spending level. connell: mike? >> one thing we know about president trump is that he's made it a point to go out and have people stand up to agreements they have made. i think as an american citizen i'm for that. if you agree to pay 2% and you are not, we should enforce that. connell: people let it slide for a long time. >> the fact it was let slide doesn't make it right. we have an agreement, i'm not saying you have to now go to 3% but if you agreed to pay 2%, get to 2%. if i'm delivering my end, you should deliver yours. connell: which is what, he spun that whole thing into the last, you know, started off as something else. >> but back to why we would want greenland, access to the arctic circle, china trying to be a big player in that area, so this could be don't give china any position there. connell: i had no idea if they thought it through that much.

it may be you could, maybe, i don't know if they thought it through that much or if the president did or not, but that it was kind of a counter to the chinese belt and road. what do you say? >> i think it's a combination of factors. you point out china is interested in the arctic. that has russia worried despite happy talk. russia of course more interested in the arctic and even though, you know, there's dispute over what causes global warming, there undoubtedly was a warming phase in the 2000s and earlier in this decade that created more access to the arctic and a recession in some of the icecap in greenland. there was a lot of oil exploration off the shore of greenland in the late '70s that wasn't productive but the u.s. geological survey found out there could be 17 billion barrels. this country would benefit enormously from an alaska-style dividend where the people benefit from exploration and again, these aren't veins. these are inuit people. connell: it's off the table but the tweets are still coming from the plane.

christian whitt whitton, thanks for coming on. thanks to the panel. good stuff. we have the fed minutes, i always get excited but this time more than most because of some of the recent attacks on the federal reserve. charles payne will have it moments from now. the federal reserve minutes coming up. dear tech, let's talk. we have a pretty good relationship. you've done a lot of good for the world. but i feel like you have the potential to do so much more. can we build ai without bias? . . .

y business. we've got some work to do. y business. and we need your help. we need your support. let's expect more from technology. let's put smart to work. ♪ ♪ (past them because she didn't sknow they were talking to her.g and she would just walk right (deborah) i just could not hear. i was hesitant to get the hearing aids because of my short hair, but nobody even sees them. (avo) our nearly invisible hearing aids are just one reason

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connell: every seng fell stock in the dow 30 is higher. dow is up 264. i will see you at 4:00 p.m. by then we know what is in minutes. first to charles payne to let him get it set up for you. charles: good afternoon, i'm charles payne. this is "making money." right now the markets as you can see moving much higher with more evidence the economy is actually booming. as a new report says a number of retirement savers with at least a million dollars in their account hit all-time high.

it is about earnings, right, target, lowe's, shows american consumer continues to shop. they are shopping in physical stores. what about the fed jennifer schoenberg has the fed minutes. let'slet's go to her right now. >> fed officials were divided whether to cut interest rates. didn't hint so much as further rate cuts but preserving optionality. charles, several members did not want to cut rates last meeting, citing that the economy was in a good place because after strong job market and stronger consumer confidence. for those that decided to vote to cut rates they said there was deterioration in business investment and manufacturing. they wanted to implement risk management, they wanted to push up inflation towards their 2% target. those who did vote to cut said the action should be viewed as part of an on going