competing with each other. elizabeth: rainbow color fentanyl, is now flooding into college campuses as well, that warning coming out there, austin connected thank you for joining us, have a good weekend. i am elizabeth macdonald, you two have a good weekend, join us again monday night. ♪ >> from the fox studio in new york city, this is "maria bartiromo wall street". elizabeth: welcome to the program that analyzes the week that was in helps position you for the week ahead. i'm jackie deangelis and for maria bartiromo. americans continuing to struggle with red-hot inflation leading to what could be the biggest fed rate hike in more than 40 years next week. i'm asking former white house chief economist kevin hassett and purportedly a manager mark tapper about the impact.

in the wake of surging inflation the u.s. army is now suggesting our soldiers go on food stamps, nebraska governor heat ricketts response to this he is one of 22 u.s. governor sounded the alarm against president biden's massive student loan handout. he will tell us why they say this plan is a complete fail. sky high ticket prices, frontier airlines ceo reports airfares for the holidays will be the highest in five years, first here's a look at where the markets ended the week after higher-than-expected inflation numbers triggered the worst selloff in over two years, he was the president's response. >> the stock market does not reflect the state of the economy as you well know. the economy is still strong, and employment is low, job thereof, manufacturing is good, i think will be fine. >> are you worried about the inflation number? >> no i'm not were talking about

one tenth of 1%, anyway, thank you. >> joining council of economic advisers, kevin hassett and strategic wealth partner and ceo mark tapper, kevin if i could begin with you your reaction to president biden he thinks everything is fine, one tenth of 1% was the monthly change that's what he stressing to the american people who are really feeling the pain of 8.3% inflation year-over-year. >> let's focus on the facts, we had two negative quarters for gdp, were looking like were about to have a third negative quarter in a row every time we had two negative quarters it's been a recession recession is a hard time for americans. to have the white house basically in a recession denying that the economy is struggling and denying that inflation is a problem is exactly the kind of thing that would make markets panic, what markets want to see policymakers understand the challenges ahead and try to do something about it.

that's a good simple intuition as why gdp is declining and why inflation is the cause. if you look at inflation over the last 12 months, the typical american family has to spend $460 more a month in order to have the same consumption they had last year, if the wage did not go up by $460 per month and few people have been not lucky then the conception has to go down if their consumption goes down so does gdp. we see that everywhere if we don't get inflation under control government spending under control it will continue trade at a really go to bc with the bottom will be if the fiscal policy people are in denial because the fed can't do it alone. >> i think you're right a lot of people were off put by the president's reaction later that day after the cpi came out, party at the white house to celebrate the inflation reduction act, this is $739 billion more of spending that hasn't necessarily been baked into the cake you have forgiveness of student loan debt a lot of people feel the inflation is embedded in the

economy and it becomes even more difficult to tmp out even if jerome powell goes a full point when the fed meets next week. >> like kevin said you cannot do it on the monetary policy site all by itself, you need the fiscal policy to be in harmony with monetary policy, the fed has been crystal clear they have been telegraphing their hawkish and us, they have been saying for a couple months they are going to fight inflation as hard as they possibly can, they are not going to take their foot off the brake anytime soon in the markets been saying i don't believe you, i don't believe you i'm calling your boss. i think the market is starting to digest what's happening and as far as part under president biden with the timing of his victory lap talking about the inflation reduction act which doesn't reduce inflation, as you

mentioned you couple that with the student loan handout which is actually going to increase the deficit, poor timing and it's showing that they don't know what is really bothering american people and what's bothering american people is sky high inflation. that remains the number one concern with american the number one concern with voters and will see what happens come in terms. jackie: speaking of inflation reduction act, that is the name that the administration gave it but it really was a climate change in healthcare bill if you want to spell it out, of course president biden pandering to the progressive left when it comes to climate change and is getting a lot of blowback for the 900 million-dollar plan to build ev charging stations across the country. remember the average cost for a new electric vehicle is more than $66000. that is not affordable for many people. the infrastructure is not there and place to make a dramatic change towards electric vehicles

and overall green energy that's what many people are concerned about right now this will put americans further in the whole. >> let's as economist put politics aside the fact is we are and what are the most serious times of the serious economic challenging times of our lifetime, we've got an inflation spiral that is underway and we need a government that is serious about it in the fur out there, forget about the subsidies for electric vehicles although all talk about a minute second but there telling banks not to lend to oil companies to drill because it's not an esg approved activity then you are attacking supply. the number one problem they're feeding demand and attacking supply with respect to electric vehicles i wrote about this we did a study at the hoover institution right before the election with casey mulligan the co-authors said the biden plan to move everything to electric vehicles was california's trying to do, the problem if electric

vehicles are the only vehicles out there that we have to increase electricity production in the u.s. by 25% we did the estimate, 70% of electricity right now is fossil fuels and if they stop consuming fossil fuels, 70% of the electric grid is off-line they are rebid contributing hundred% of the electric grid is not going to happen when they're out there advocating the markets start to panic these guys don't have a clue while they say let's reboot 100% of the electric grid something that we added 10% over the last 20 years, if they say that instead of years were getting to fight inflation we will follow ronald reagan playbook we will feed supply and attack government spending and help the fed to which job, then there's no bottom i think the market should stop being surprised by the negative policy shocks and stop being surprised by inflation shocks and

understand this is going to get bad the fed is going to lift rates three more times and 75 basis points and don't be surprised when they do. jackie: i think the market started to realize this week it was a delayed reaction as you suggest but i think it's become crystal clear what is to come this fall as we head into the winter and you make a great point with respect to electric vehicles and how we generate electricity in this country it must defeat the purpose which adds to the variable why we are not there yet to make the switchover, having said that let's switch gears, janet yellen praising the irs and the administration's plan to spend $80 billion for more agents and enforcement, listen. >> i directed the enforcement resources will not be used to raise rates for households making under $400,000 a year relative to historical levels. in fact we expect audit rates for honest taxpayers to decline once the irs has the right technological infrastructure in

place. that means a simpler tax filing season for taxpayers who are doing everything right. jackie: unfortunately the experts are suggesting that what this is going to do in the expansion of the irs not just with the money it's being funded but the agents that are going to be adding they will target exactly those people that she is saying is not supposed to target that's the only way to generate the revenue to pay for it. >> if it's not going to target people making less than $400,000 a year i don't know where they're going to get the revenues from. if you think about it the wealthier you are the mark zuckerberg's of the world, the wealthier you are the more likely you have top tax advisors on your team that are advising you on ways to legally use the tax code to your benefit and save on taxes that way, the joint committee on taxation which is bipartisan by the way estimated that 90% of the

expected revenues are going to come from small businesses making less then $200,000 a y year, you don't have to have a phd in mathematics to know that's less than 400,000. if you think about it the low hanging fruit for the irs is to go after the people who may have accidentally fat fingered a number or two doing taxes on their own because they wanted to save a couple hundred dollars and paying someone else to do it on their behalf, i feel like as far as the small businesses they are going to probably target the single businesses filing on schedule c, the sole proprietors, the partnerships, the llcs, not corporations especially those that are cash heavy businesses. if you think restaurants, barbershops, hair salons, stuff like that. then with regards to the 87000 irs agents, i don't know where you going to find 87000 people, you can find 87000 people to

make a pizza or cook a steak to medium rare, i don't know how you're going to find 87000 people that have a vast understanding of the most complicated code that we have a country. jackie: i think you bring up excellent points this a be a wait-and-see situation, many americans are very anxious about it as we head into see how it's going to look for real people, kevin hassett, mark tepper, great to see you both as always. half of all u.s. governors are demanding more from biden cancel his plan for student loan forgiveness in the army is offering a suggestion for our soldiers struggling with inflation go on food stamps. nebraska governor pete ricketts is next. but the things that last a lifetime like happiness, love and confidence... you can't buy those. but you can invest in them.

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jackie: 22 u.s. governors sending a letter to the white house demanding more from president biden immediately scrap his student loan bailout plan. that cancels $10000 in debt for

millions of federal baller under borrowers and 20000 with those with pell grants. the governor say they fundamentally opposed biden's plan to force american taxpayers to pay off the student loan debt of an elite few. nebraska governor pete ricketts among them and he joins me now, great to be with you, thank you for joining us let's dig into this issue a lot of americans are very upset about this, feeling that their cost and taxes are going to go up so president biden could give some elites and people wildfire degrees in education handouts of ten and $20000. >> your exactly right only about 16 - 20% of americans have a student loan. if you look at the breakout by income the top 20% of earners have $3 in student loan for every dollar in the bottom 20%, basically you say the majority of americans, blue-collar workers are going to pay for

basically the bailout of the student loans for people web generally higher degrees, if you $50000 in debt you probably have a masters degree in advanced degree, you could be a lawyer, doctor, professor. we have hourly workers bailing out doctors, lawyers and professors is fundamentally unfair and the president does not have the authority to do this. jackie: a lot of people are focusing on inflation with the cpi number it didn't go down as much as wall street was expecting still at the 40 year highs, people are really struggling to work this inflation into their budget at a time with the white house continues to spend, the of the so-called inflation reduction act of 739 billion in the wiping out of the student loans were not sure what that could cost it could be about 500 billion, that might not be factored in, the conventional budget office found that the plan would wipe out any

deficit reduction from the inflation reduction act which is what the white house was touting. >> your exactly right, you could trace inflation when the democrats passed the partisan stimulus bill which frankly we did not need and that's when we started seeing inflation going up, we had five months in a row over 8% there's nothing more corrosive to a family's budget business inflation and now the misnamed inflation reduction act and the deficit reduction act wasn't coming in for years now they wiped it out with 500 billion, the cover estimate $600 billion in additional debt, you're not forgiving that you're spending more money to pay off the student loans in your spending money on the inflation reduction act, this runaway federal spending is exactly what striving inflation when you pump so much money into the economy this is what is causing prices to go up and it hurts the working families. jackie: what economists are

worried about the inflation has become embedded in the economy it will become more difficult to fight, you families are struggling you even have the u.s. are minis and service members in the army is advising them if they are struggling to apply for food stamps to fight inflation, you have local and state government issuing more stimulus checks to those who are struggling to deal with inflation within their budgets as well. the time with the spending that we seen over the course of the last 19 months or so it just keeps feeding on itself, the higher inflation stays for the longer period of time the more help people need and checks keep coming. >> that's exactly right the state of nebraska we had to raise the salaries of some of our 24 hour workers whether they're in healthcare or in the corrections field by 20%, that skinny continue to drive inflation, congress is negotiating pay increases for our soldiers.

they're talking hopper said that the equity keep up with inflation, frankly their way behind in the recruiting for the army, we are going to see employers are going to have to pay more that we're going to be able to take care inflation to bring up inflation rates to nominal level, they are wrong. jackie: my thanks to you, governor pete ricketts, thank you. >> fasten your seatbelts, airfares going higher for the holidays the ceo on frontier on what to expect next. ice cream is like whooping cough, it's not just for kids. whooping cough is highly contagious for people of any age. and it can cause violent uncontrollable coughing fits.

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flights that the most expensive in five years is airline still battle with pilot shortages, cancellations and delays, frontier airlines ceo. thank you so much for joining us let's start with the thousand foot view of what's happening in the industry right now. >> think of her having a son you're talking about the holidays and is a big concern for a lot of people and a unique situation it's strange from where it would've been had we not had the pandemic pleasure of incomes at the highest levels they've ever been at coupled with the fact that people missed holidays and vacations in the past you have a surgeon demanded i think the holidays are around the corner and if you have a trip i would recommend booking a before they sell out. jackie: the fares are on the

rise and people are worried about it if they headed to the holidays what you do attribute that to overall rising cost for the airlines we know the fuel costs are up in the labor costs are up as well, labor shortages when it comes to pilots for example, is it the overall inflation situation or is a post pandemic the shortages that you are experiencing that are passed on to the travelers. >> is a little bit of both, as an industry were not immune to fuel prices and labor cost increases and so forth but ultimately the demand is surging greater than the supply so you will see prices go up and you will see plain sellout because it will be enough seats for everybody that wants to travel this year. jackie: how have you dealt with the pilot shortage for example there were times the summerwood demand was so high that the cancellations were making headlines left and right that was a huge issue you expect that to happen during the holiday season again? >> i think most everyone has a under control we had one of the best summers we ever had i know

those in the industry did have challenges i think a lot of that is behind us and hopefully we have a merry christmas from a holiday travel perspective. jackie: an interesting trend during the pandemic when people were required to wear masks when they were traveling on airplanes and we saw unruly passengers, fights on planes, clips of this all the time surfacing on social media, has not eased at all as travelers are a little bit more free to go back to the way things used to be in the friendly skies or is this a trend were continuing to see. >> it was like magic once the masks were off the aggression stopped, it's good to see people behaving like normal and i think it's to see and enter a travelers. jackie: when it comes to demand, this issue that you pointed out demand being higher than normal people spent so much time at home another want to go home for the holidays wherever home may

be, your thoughts on how people will feel as a going into the christmas season, i looked at labor day as a turning point possibly for the economy and inflation is so high were seen company start to lay off, do you think between now and the holidays consumer behavior may shift when it comes to travel. >> they will be out traveling in the holiday season is always a wonderful time emotionally for people, i think it'll be good to see normal travel at the holidays because it's a return to normalcy. jackie: my thanks to you, thank you for joining us.pr don't go anywhere, more wall street aftereh this. more of what you earn. this is the planning effect.

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jackie: we have another big show in the works for next week tune into wall street every friday at 7:00 p.m. maria is back at 70 morning on

"sunday morning futures", she has interviews with newark of editorial candidate lee zeldin, rodney jackson, former director of national intelligence john ratcliffe and marine the divine. plus start smart every weekday from 6 - 9:00 a.m. eastern with "mornings with maria" right here on fox business. that will do it for me, thank you for watching, have a great weekend. ♪ >> hello this week on the "wall street journal at large" joe biden celebrates inflation reduction on the very day that inflation accelerates. and financial markets going to freefall, congratulations mr. president the latest news on the economy could hurt the democrats in the midterm elections but republicans are still struggling to deal with trump abortion. democrats are howlinas