, but the number actually ticked up a little bit, but you can see it's a slope here. it's moving in the wrong direction, but it is not crash ing just yet, so for the moment small businesses do have some access to credit if they want it. now, this is the problem. maybe they don't want it because now, we've got a new leader at the top. when they are asked about their single-most important problem, it's no longer inflation, folks. we're going to pull up their single-most important problem facing small businesses right now. i've talked about this on this show and it's finding quality labor. it is really really tough. you can see the transition right here, inflation has come down. quality labor has gone up. i don't know. maybe it's because i live in new jersey i hate to diss my own state but it is so frustrating and i can imagine being a business owner i've had so many complain to me. maybe it'll get better but right now small businesses need help, liz. liz: yeah, they have for about a year now, actually. charles: you're right. liz: its been a long time. we are all going to need help,

charles because we're starting the countdown clock, t minus 59 minutes until the moment that could have major implications for the stock market and your money. 4:00 p.m. eastern the debt ceiling meeting begins in the oval office. ahead of it stocks right now in the red. not by much though. we have dow jones industrials down about 24 points at the moment. president biden and leaders of the house and senate will try to hammer out a deal to raise the nation's borrowing limit before the u.s. runs out of money to pay its obligations. that could happen as early as june 1. what we're going to do in this hour is tick-by-tick be watching the markets and also take you live to the white house , plus you've got to hear what jason trennert anticipates will have the power to break up that impasse between democrats and republicans, because for the moment, both sides are refusing to budge. jason is the voice a lot of people in d.c. and on wall street listen to. he's going to join us in the

back half of the hour. all right to the markets i already told you the dow jones industrial is down about 21 points. if you look at the dow leaders at the moment because there is some green on the screen. boeing, right now, is in the number two position up about 2.25%, and now above 201 bucks a share. salesforce is in the number one position, but listen. boeing is doing well after low cost carrier ryan air placed a hefty order for 300 787-max jets dow laggards at the moment, intel is the worst down just under 2%, 3m down 1.25%, nike down 1.25%. by the way, if you look at the s&p at the moment it's down about 12 points but the nasdaq, i need you to really focus on that. it's down 62 points but guess what? it finally exited the bear market yesterday. entered a new bull market and now it's down. all right this first debt ceiling meeting is not the only thing keeping a leash on the bulls. the two regional bank stocks that were supposedly out of the woods are still in the woods

okay, we do have western alliance bancorp turning around and moving higher. earlier it was down 3% and if you flip it over to pacwest, it also reversed course, erased earlier losses. now up 5.6% but month-to-date we're talking nine days of the month of may. western alliance has dropped 28% and pacwest has tanked 43%. earlier the entire sector was being lead lower because of that valley national is still down just about $0.05 a share, metropolitan bank had a challenging month losing 31% month-to-date although it's up about half a percent, ozarks is down about half a percent and zions bank up 2%. this as federal reserve vice chair john williams said at the noon hour the banking sector problems we've seen since march appear to be "limited in scope" to just a few banks. do we believe that? all right let's get to the floor

show to ask about a lot of money in the stock market, jeff sica and dan geltrude. a potential negative and potential positive, that is earnings, 86% of the stuart: has reported earnings, 70 plus percent have beaten on revenue and expectations. which side of this are you listening to and investing around? >> well i'm looking right now what's going on in washington d.c. because that's huge. it's huge. why? because these two sides who by the way have no fiscal restraint at all, republicans and democrat s, are going to try to get together and work out a deal in my opinion, a deal does not happen until midnight before, if you know what i mean. meaning they have to get through all their political dances in order for them to ultimately get to a compromise. they have no choice. there has to be a compromise. liz: there has to be but let me just say for the republicans are

trying to be fiscally responsible, jeff, and yet when you look at the bond market, it is speaking volumes. the yields are moving higher, especially on the short-term part of the yield curve, and especially if you just look at the one-month, four weeks people would rather take their money out of the stock market, park it for one month in the government treasury world, and look at this yield at the moment. that's the two year. two year is at 4%. the 10 year is more like 3.52%, but the one month yield is stunningly high. well-above 5%. what is that saying to you and investors out there? >> well, i mean, the inverted yield curve is obviously a sign of a recession but it's also showing we've been staved out of the bond market for so long that we really had no choice but to invest in the stock market. now, you could buy very short-term bonds, have full liquidity, and not have to deal with the risk. i think we've gotten to a point

when it comes to risk reward where bonds just seem like the default measure to take to keep -- liz: okay three-month, 5.24% you guys the one month, 5.5% but dan , it doesn't mean that there aren't stocks that you have your eye on. i mean, you've got to look at some of the ones that hit it out of the ballpark as far as earnings are concerned, palan tier, the big data company, and they work for both the government and their consumer, or their basic business, their corporate business is starting to look really strong and they are profitable for the entire year is what the ceo says. >> yes, they are. keep in mind peter thiel, be of the co-founders of this company. any company who is that deep into ai and having success, that should catch your attention because that's the future. they are doing military contracts, government contracts, the corporate world is looking at them. i really like this company. they are projecting to have half

a billion income from operations that's impressive. liz: yeah, it's impressive and alex karp, the ceo, has been sitting right in that chair, and he has very confidently said we're going forward and we are the best-in-class so clearly, it's starting to pay off. but jeff, some companies that have yet to come out with earnings, thursday is disney. that of course a dow component. disney was earlier down today but it has had a pretty decent year when you're talking about 2023. you've been a long time shareholder. tell me what you're doing with disney. >> i'm so frustrated with disney. i've owned this stock for 30 years now so it's the first stock i bought. i am looking at a lot of things, now that bob iger is in charge. i was a big cheerleader for him to take over and i'm looking at they've done a lot of cost cutting. they are saving billions of dollars in cost cutting. streaming is going well so i think that it's going in the right direction, but they

need to at this point, they need to decide what they are going to do with espn, they need to decide that and they need to decide what more cost cutting they need to do. i find that disney involves themselves in a lot of things that aren't necessarily good for investors. liz: you're still in the money. this is the 25 year chart. you're up about 160%. >> i know but the last five years, the s&p 500 is up 56% and we're flat on disney. liz: and on top of it both of you, we've got a writer's guild strike. right now, we're in the thick of it, and it could go on through the summer. i've got a lot of people i know in hollywood who are telling me it's an outrage, 98% of the writers saying we've got to be paid what we are worth. not only that, you just mentioned ai. they need some protections against ai-written scripts don't they? >> yeah, they certainly do, because listen. i've been playing around with chatgpt. it's amazing what it can do, so i don't know.

maybe there's a future for me, jeff, with the writers guild. i don't know what do you think? >> well, you might, but you know, i think that the chatgpt is a big issue with the writer's guild. i'm in solidarity with the writ ers. i think they are starving right now and one of the problems that i have is that they're not participating in the syndication they aren't participating in the growth of streaming, so they are worried about chatgpt because to me, i think that it's ironic that we're even thinking of this platform that completely takes away the creativity. liz: then what about the googles and the microsofts of the world? they seem to be out in front on ai. >> yeah, listen. this is the race that we see now , liz. all of these companies are trying to get to the end of the rainbow, that pot of gold, and listen. there's no end in sight. there's no limits here to what ai can do. liz: well let me give you a limit here. cpi, we are getting that number

tomorrow, and this is the consumer inflation report for the month of april, and jeff , this thing isn't coming down fast enough. the fed has raised 10 times. here is what's expected. up four-tenths of a percent month-over-month, 5% up year-over-year, and that's just the headline number not even the core. >> uh-huh, well, i mean, think about it, liz. here you have cpi report that's going to determine whether or not the fed is going to raise interest rates because it is the most important, it is an ominous report and if it's up , they are going to raise interest so i think it's going to pullback and because of what's happening with the regional banks, these regional banks are on razor's edge. if rates keep going up, we're going to see a lot more failures , so we're going to be so zeroed in on this number that nothing else is going to matter, and the fed, really i said last time i was on your show. they have nothing but messed up toxic choices. that's a line from the movie " american hustle." they have no, to them, if they

raise rates, they are going to hurt the banks. if they don't, then they are going to continue to see this trajectory of inflation that's crippling the consumer. liz: yup, and we've got that, plus what's going on in washington d.c. dan, jeff, thank you both very much. as we look at the clock here we're 49 minutes away from the big meeting in washington d.c., as we await that and of course tomorrow's cpi report. warby parker already has inflation foresight. in fact they had it a year and a half ago. the prescription eye glass maker began slashing expenses months and months ago. what was behind their 20/20 vision and more importantly now what do they see ahead? the co-ceo's these two guys founded warby parker, they are here with that, their quarterly report and why they are purposely walking into brick-and-mortar walls. all right, dow jones industrials at the moment almost went positive a second ago. still down about four points the

"clayman countdown" is coming right back. don't move. a lot going on in this hour.

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they made us feel completely comfortable in our home. and, yes, it's affordable. i wish we would have looked into it sooner. think i might look into one myself. stay in the home and life you've built for years to come. call... to receive a free kohler® toilet with the purchase of your walk-in bath. and take advantage of our special financing, no payments until 2024. liz: all right, let's take a look at warby parker. i guess you could say as far as investors are concerned a little bit of blurry vision. the stock has been up. its also been down during the session. now it is up just a fraction. now, listen. the eye glass retailer posted a first quarter beat on both adjusted earnings per share and revenue. year-over-year gross margins did contract slightly to 55.1% from 58.5% due to an increase in employee benefit and salary costs. yeah, there's your inflation. warby grew store count by six during the quarter for a total

of 204 now. selling, general and administrative expenses fell to 62.3% of revenue from 80.5% the previous year. what did warby parker see in the economy that caused it to start slashing and burning expenses instead of hiking prices? and what do they see now? joining me now in a fox business exclusive from their new york city headquarters warby parker co-founders and co-ceo's dave di lboa and neil blumenthal. great to have you, gentlemen. back on the show. dave, i'll start with you, what was it that you saw because we're about to get consumer inflation tomorrow for the month of april and it's almost like you guys have warby vision of some sort. >> one of the great advantages that we have is a direct to consumer business is that we're able to get immediate signal and immediate feedback from customer

s, and what we saw last year was that it was a really unusual year in the optical industry that typically grows anywhere from 3-5%. they are very steady and predictable patterns around when people get eye exams and glasses but those patterns have been disrupted because of the pandemic and the lingering after effects of the pandemic and so when we saw that it was going to be a depressed demand environment, we immediately pulled back on some of our marketing spend and really focused on driving efficiency so that we even in this type of environment, we could grow in a sustainable manner. we could improve our profitability in this quarter is emblematic of that. we just reportedq 1 which is our most profitable quarter ever on an adjusted ebitda basis, and just an indication of our

ability to grow in a sustainable manner regardless of the external environment. liz: well, but i want to press on this not cutting, not hiking prices rather, neil. 12-13 years ago you guys started and your eye glasses were $95 a pair. today they are still $95 a pair. you have upperrish elon where it goes higher, for example, i know you have progressives for $295 but how are you able to do this , because we've got ceo's watching the show all the time and they have felt compelled to hike rates just to continue operating. >> yeah, you know, we still run the business based on the philosophy with which we started which is we want to provide exceptional value to our customers and we started warby parker because we were frustrated going into an optical shop, getting excited about a pair of glasses and then getting upsold, and upsold, and walking out feeling like we've been ripped off and that's why we started by providing, you know,

the best quality glasses at $95 including prescription lenses with anti-scratch coatings and we've been able to maintain that pricing because we continue to vertically integrate. we now have two manufacturing facilities in the u.s.. one about an hour from where we are now in new york, and another in las vegas, nevada, so we continue to sort of find efficiencies and productivity within the business and pass those on to customers. in this case we passed on the savings by not raising prices just like every other company was doing. the other thing that we made sure to be careful of is not to sort of over-order inventory. one of the thins that we saw last year was all these companies just purchased too much inventory. liz: right, exactly. >> and then raised prices and then have to discount and we've always believed in sustainable growth. steady, consistent high growth.

liz: though it isn't cheap to open new stores, and you plan to open 40 this year. dave, what does it cost to open a location and i understand that it depends on the actual location, what city, if you're in a big, big city, it's obviously going to be more expensive but is there a basic cost? >> yes, so our stores are really capital efficient. on average our stores payback in less than 20 months, and we target four-wall margins of 35% and we're finding that even in this environment, our most recent cohort of stores are hitting and exceeding those targets, and so while it does take a lot of effort to find the right location, build up beautiful stores and in all of our new stores we're also building out eye exams, we're hiring eye doctors, making it really easy and convenient for customers to have a one stop shop to get their prescription. liz: are you having any trouble

finding the labor, i know they are in great demand and you guys even had to raise the salaries of your optometrists. yeah, so there's going to be a shortage of optometrists in america. we only graduate in a country 1,800 optometrists a year, so it's important to build a environment where optometrists want to come to work and thankfully we're a preferred employer of eye doctors and one way that we do that is make sure we're buying top of the line equipment, and ensuring that they are able to deliver great clinical care so for us it's actually a big part of our strategy in all of our new stores to have exam sweets new equipment, and enable our customers to not only buy glasses from us, but get eye exams and contacts as well. liz: well you guys were the first to really go online and offer people the opportunity to try on five pairs at a time and then return them if they didn't like them.

you've been very disruptive. let me just finish with this , dave. i know that smart glasses and wearables are something that some eye wear companies are looking into. have you guys had any meetings about that? are you looking at that down the road? >> yeah, we're certainly excited that the form factor of a pair of glasses is becoming more interesting and people are thinking about how you can incorporate more technology into them. glasses were really the original wearable technology that had both form and function and there's no question that overtime additional capabilities can be added to similar shapes but we believe that we're still several years from kind of mass consumer adoption and right now we're focused on near term technologies that can help our customers and patients today. liz: i can tell you that mike no vogratz the billionaire bitcoin wears warby parker on

the show because we were promot ing my podcast and he said i'm wearing them right now. so good luck to you guys, thank you very much and your stock is up now about a quarter of a percent, so, investors are looking at it. much appreciated. >> great. thank you. >> thanks, liz. liz: you got it. they started 13 years ago, and they met in a business school and came up with the idea. there you are. under armour investors losing their shirts at their hour. we'll tell you what the athletic company forecasts for the year that now has the stock sprinting lower by 5%. closing bell 37 minutes away. dow jones industrials down about 16 points, the s&p down 13, nasdaq is deepest in the red down about 74 points we're coming right back.

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liz: fox market alert. let's take a look at the moment and this , if this could speak, what we have on the screen right now, the dow being down just a fraction, the s&p down 13 points , the nasdaq down 74. it would say "we're waiting." we are waiting for that meeting at the white house at 4:00 p.m. eastern time between house and senate leadership and president biden. we are watching this very closely. the big discussion, let's call it a fight, to razor not to raise the debt ceiling, and the ramifications could be very ugly for the stock market, so let's look at individual names while we're waiting. novavax is soaring off the highs of the earlier part of

the session after announcing plans to eliminate a quarter of its global workforce. the covid-19 vaccine maker looks to cut 2023 expenses by about 40 -50%. the covid-19 vaccine itself is novavax's only commercial product however the companies combination covid flu vaccine has provided results and produced results that are very positive in phase ii trials. novavax is also betting on a standalone flu vaccine and a new high dose covid vaccine to drive sales of 1.4 billion to 1.6 billion this year. already it's driving the stock higher by 27%. under armour, under pressure at this hour down 5% hitting a six- month low after the sports apparel maker reported annual sales and profit below expectations, as if that weren't bad enough the company also expected 2024 net sales to be flat compared with estimates for 3.7% growth from analysts on the street. under armour seeing diminished

demand due to inflations impact on consumer behavior. steep discounts are also cutting into profit margins. trex is jumping to a nine-month high the stock is up eight and one-third percent after reporting a top and bottom line beat for the first quarter. this is the maker of decking and railing products made from recycled plastic bags reaffirming 26-27% ebitda margin for the full year and the companies board approved a new share repurchase program of up to 10% of outstanding shares. trex received a slew of price target hikes following the report. currently it's at about $60.93 a share pushing to its year-to-date gains of 45%. well, you may want to clear the decks as we head toward the end of the trading day, president biden about to meet with the country's top four lawmakers after the markets close to hash out a debt ceiling deal. will be they able to prevent the first-ever u.s. default?

we get the latest on this very very tight business here, live from the white house. plus, we've got the former gop congressman who while ranked among the most buy members of the house did vote for raising the debt ceiling in 2021. how serious are the administrations warnings of catastrophe? we'll ask. but before we get to the nations debt, how about start-up debt? my guest this week on my grand new everyone talks to liz podcast episode did everything he could not to go into debt before starting his home clean ing company, including working nights as a cook and planting real estate signs on weekend for a nickel a piece. it took him years to reach his goal of $150,000 but once he got it, he launched not just this multi million dollar business for house cleaning. he's so addicted to success he already started his next one, pink zebra moving company aimed at making moving fun. how is that possible?

well download the brand new episode wherever you get your podcast closing bell 28 minutes away. we are coming right back with much more. stay tuned. your record label is taking off. but so is your sound engineer. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

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life is for living. let's partner for all of it. i'm so glad we did this. edward jones liz: all right, the dow has just turned positive. it's up six points, in just 23 minutes. the senate and house leaders from both parties are going to sit down, or maybe stand up, with president biden, get their fists up. we don't know, in the oval office, the deadline to raise the nations debt limit looms. the high stakes negotiations could get contentious. republicans lead by house speaker kevin mccarthy and senator mitch mcconnell want to make a deal. lift the debt ceiling but parity with spending cuts. the president and ranking house member hakeem jefferies and senator chuck schumer had holding to a no negotiation stance demanding a clean lift but treasury secretary janet yellen warns both sides got to

knock it off. time and money are running out. if lawmakers can't come to an agreement by early june, the u.s. government will default on the debt, causing a ripple effect of painful economic consequences. right now, we are looking at the moment to go live to the white house where edward lawrence has the very latest. have the players arrived yet, edward? reporter: no, not as of yet. we do expect them very shortly but i can tell you that maybe the markets reacting to comments on the senate floor just now by senate minority leader mitch mcconnell. he said basically the president needs to negotiate going forward he says the president has been m ia, but this is the key point. he said a compromised package between the president and house republicans would easily pass the senate. that would mean that it could hit the president's desk. that might be effecting the markets right now. in about 15 minutes we'll see the biggest meeting basically of the year almost. it's not a coincidence this meeting will happen after the trading ends today at 4:00, because whatever happens at this

meeting will effect trading tomorrow. have to see which way it goes. this meeting though if you listen to white house press secretary karine jean-pierre, it's meant to persuade house kevin mccarthy to get off this point to pullback on the need for spending cuts. there be no negotiations according to her. listen to this. >> so if cutting government spending would help reduce inflation faster, in this meeting today, is the president open to hearing other viewpoints? >> so look, as you know, ed, because you ask me this question many times, when it comes to the economy, when it comes to priority that the president has for the american people, lowering costs for families is a top priority. reporter: so, long answer for maybe "no" so agreeing to some spending cuts might help the president in the long term. that's because government spending has pushed inflation forward, cutting government spending could help in the long term bring that down. senator ron johnson says the house bill does need to be

brought up in front of the senate. he believes there's support for it. listen. >> i completely support what the house did. that's why i'm saying what should happen here is the senate should pass the house bill and the president should sign it and we be done with this. we wanted to go a lot further but house conservatives who are very reasonable in working with other house republicans in passing what they pass, so we made more than enough concession s. reporter: democratic senator joe manchin also hinting he would support spending cuts with a debt ceiling increase if the bill comes up we could see some democratic support. again, the plan could have democratic support. maybe those comments by mitch mcconnell made the difference here to add just a little bit to the green although i see it coming back down. back to you, liz. liz: well it is a moment-by- moment situation. we really want our viewers to understand this. yes, we have come up against debt ceiling deadlines many times before, but it's very rare to try to tackle "the situation" with the divided congress and ultra-slim vote margins in both

bodies. what will it take to reach a meeting of the minds? let's bring in former republican representative of new york's 24th district john john john john catkoe. am i correct, congressman, you did vote to raise the debt ceiling, right? >> yes, i did, liz, thanks for having me and it's something that ultimately i think will happen, but i think both sides are especially those who want to cut the budget view this debt ceiling opportunity as or last and only opportunity to really try and bring in spending which they view as out of control. liz: well we have to and the u.s. national debt and i'm looking at the live picture right now is $31.736 trillion. something has got to give. if you could, it's that number on the far left side there. upper left side. if you could, congressman, set the scene for us, from your past experience, what is happening

inside, what do you think will happen inside the room during the negotiation where neither side for now at least will move? >> well i think, what i hope they do is channel some historical perspective and that is tip o'neill understood that he had republican president. barack obama understood he had a republican house, and they both compromised at times when they needed to, and barack obama was opposed to the similar situation back in 2011 and that was born out of that was the budget control act which did cut spending to some extent and reign in spending but it also raised the debt ceiling and barack obama to this day looks at that as something he points to for his legacy of cutting federal spending so i think there's room for both sides to compromise, but for the white house to say we're not moving, we're not budging, that's tough nuggies, that's just not logical, because we have a

republican congress. liz: yeah, there's quite a bit of calficiation on both sides at this point. >> there is. liz: i will say that when you go back in history and i'm talking relatively near term history, bill clinton, when he was president as a democrat working with a republican congress in some cases, definitely was able to get , wow, a surplus. we had a budget surplus for a short window in time, but so far from that at the moment. who do you think has some ideas and who of the four or five players, five players, including the president, do you think might be the bridge builder, if there is one? >> well, i think all four of them, it's incumbent on all four to be the bridge builder but really the ball is in the president's court because the republicans have spoken. they laid down their marker in the house and said this is what we want to do. they are saying we're willing to negotiate. we're willing to compromise and the balls in your court, mr. president, so he really does have a key role here, and quite

frankly the markets are watching and everyday you get closer to violating the debt ceiling is another day closer to chaos in the markets, and credit issues, and you know, we're already on the verge of a recession and we can't afford this , but so i just hope cooler heads prevail. i hope they understand the democrats understand that they aren't in control of everything, so they can't control everything and they have to channel good leaders from the past on both sides of the aisle who understand compromise isn't a word and we've got to do this. liz, right now, we are on a course in the not too distant future to have the interest on the money we borrow cost more than it is to defend our country from nuclear powers and china and north korea. think about that. that's insane. liz: unbelievable. we cannot continue on this path, and maybe -- >> we can't. liz: there might be an opportunity where both sides give a little, so that the rest

of the nation can figure out how to pay down this debt. congressman katko please come back. thank you very much. >> thank you. liz: specifically you have worked with both sides and you are a bipartisan guy on the republican side, is very interesting to have your perspective so thanks very much. >> i'd be happy to volunteer and go in and sit down to tell them to cut the crap and get a deal. liz: [laughter] i'm with you, can i come? thank you, congressman. >> let's go. all right liz: we are coming right back. a lot of indecisiveness here ahead of that meeting at 4:00 p.m. eastern, the dow has crossed the line 80 times so far this session. right now it's down 27 points. there are some things that go better... together. burger and fries... soup and salad. thank you! like your workplace benefits and retirement savings. with voya, considering all your financial choices together... can help you make smarter decisions.

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we moved out of the city so our little sophie could appreciate nature. but then he got us t-mobile home internet. i was just trying to improve our signal, so some of the trees had to go. i might've taken it a step too far.

(chainsaw revs) (tree crashes) (chainsaw continues) (daughter screams) let's pretend for a second that you didn't let down your entire family. what would that reality look like? well i guess i would've gotten us xfinity... and we'd have a better view. do you need mulch? what, we have a ton of mulch.

♪. liz: we are getting this breaking news, if we put up paramount, to the lows of the session, falling 2.7%. bloomberg is reporting that paramount is cutting 25% of its staff in the domestic cable network. it obviously came out with news last week that did not help the stock at all. the stock is down 38% over past 52 weeks. month to date, down 9% f

question get anymore information we'll get it to you. "60 minutes" story ha company working for blackstone was found to employ unaged people to work in conditions. charlie gasparino. >> i didn't watch 60 minutes on sunday. scott pelley i know and respect, that "60 minutes" correspondent. have you looked into the thing with the company pssi. a company that cleans out, cleans out slaughterhouses. horrible, tough work. liz: dangerous work. >> they have been dinged by the department of labor for employing child, employing children, people under 18 a lot of them. i said no, i haven't. you should look into this. i'm under pressure to basically do something with blackstone,

they own this, maybe divest from blackstone from certain portfolios that include pssi. he goes on to say i think they're getting a bad rap, that "60 minutes" left a lot out. "60 minutes" found one or two kids. liz: "60 minutes" had two photos they were allowed to use. one hundred worked the overnight shift. >> let's be clear what happened here. kids are smuggled into the every day by drug cartels. these are illegal aliens, all of them. this was not a kid here as u.s. citizen. this is someone smuggled into the country with illegal papers. then they get into the country, the cartels supply them with more illegal papers to show they are over 18 to work at jobs like this which do pa it is dangerous work. blackstone doesn't get any benefits from hiring underaged or overaged people they pay the

same. they get people overaged, over 18 or over, somehow, don't ask me how this happens, the country's e verify systems that are legal immigrants over age. how does that happen? liz: false identification. >> this is the federal government's allegedly great check, e-verify which sounds like it is insane, literally saying that children with fake i.d.s can, are over age. i'm not saying that blackstone doesn't deserve to get dinged this pssi is one of its portfolio companies for hiring kids. if one is 13, obviously 13, that's horrible. liz: it was discovered, the kid had burns from chemicals that he was using overnight. the danger -- >> it's dangerous job. i get it but why is the federal

government saying that kid is over 18? why? liz: well clearly there are all kinds of loopholes and mistakes. >> it is not loopholes. it doesn't work! >> it doesn't work. it has to be fixed. >> that is the blackstone story. by the way -- liz: against child labor violations. >> not just blackstone involved in this. black black. nbc, they had to retract the story, a kid came in here that was you know underage, he worked at, teachers reported him, did a big blow up the kid turned out to be overage but he had two fake i.d.ss. they were both in the e-verify system. liz: blackstone had pssi fire a bunch of managers. if nothing was done wrong, why did they fire them? because they didn't do due diligence. >> they did. liz, did you ever get in a bar

when you were 16. liz: not about me, charlie, not about me. >> i got into bars when 16 with i.d.s. liz: >> why is the federal government relying on e-verify system, blaming blackstone for using. liz: the government has a lot of issues, charlie, including the debt ceiling. we're five minutes away from the president meeting with the bicameral leaders in the white house to discuss the debt crisis. we have idea based on markets how this will play out on history. 2011 the markets fell 14% from july to september. talking about the s&p. at one point there was a single day drop of 5% for the s&p and on the dow august 4th as lawmakers were unable at the moment to reach a deal on the debt ceiling. this could get ugly. jason trennert, she yo of strategas research. jason, exiting the cap to leave for the big four meeting at

white house, speaker mccarthy told reporters, i hope the president is finally willing to negotiate. are both sides too far from a deal or closer? >> i don't want toby overly partisan the republicans did pass something out of how the. liz: they did. >> the president's approval rating this weak, losing to donald trump in a poll, head-to-head poll. i think the lock cut of power is on the republican side than the democrat side. seems the president has more of an incentive to deal than the republicans do. whether we go over the chief or not i don't know. we're not going to default. we have cash load to pay interest expense on our debt. liz: what is janet yellen mean when she says june first we run out of money? >> tax revenues come in much lighter than expected. we're also now not benefiting as a country, i don't think we benefited at all by the fed essentially subsidizing our debt

costs. so our interest expenses are exploding, our debts and deficits will explode next couple years. whoever the next president is, whoever that may, president biden or president someone else will have to deal with some austerity as far as government spending is concerned. the bill has come due for decades of profligacy, quantitative easing and financial suppression on part of the fed. liz: feels like own most of the points of the bill the republicans passed it was reasonable. some of the unspent covid money, just don't spend it. that is reasonable. >> absolutely. liz: why is it so difficult suddenly to say, no, it has to be a clean bill then we'll talk? how about we'll sign a clean bill and hear is what you get when we talk, does that work? >> i think for the president himself, the republicans could be his best friends to the extent to which inflation is one of the biggest issues con fonting the country right now.

in some ways the federal reserve is fighting the federal government down because we're addicted to spending. neither side wants to deal with it. the republicans this time have somewhat serious forecast or somewhat serious plan here. it seems to me that it could do what the president some good politically to actually indicate that he is willing to cut spending because this is what we is to do to get inflation under control. liz: so people are watching right now, saying, what is my defensive strategy here beyond a one-month treasury which is now yielding 5 1/2%. >> right. liz: people are parking it with the so-called safe government? >> right. liz, two issues, regardless of the debt ceiling unfor unfortuna recession is quite likely second half of this year. liz: we're expecting that. >> we have a checklist. seven of the eight are checked off. so it doesn't mean it is for certain but quite likely. debt ceiling to is something should worry investors like i

said the government will not be able to spend as it did before but growth is going to be slower. we're arguing that people should higher than level, higher than average levels of cash. they should have some exposure to gold. we also like health care, we like consumer staples. to a lesser extent we also like energy and basic materials for other reasons but, in our opinion, investors should be defensive going into the summer, not just because of the debt ceiling but also because of likelihood of a recession. liz: i think that is very sound advice. jason, thank you for getting in the chair with us. >> thank you. liz: meeting is a few seconds away. tomorrow airbnb ceo brian chesky to discuss earnings due out any moment now. [closing bell rings] that will do it for "the claman countdown." dow down 54 points, s&p down 18, nasdaq down 74. "kudlow" is next. ♪. larry: hello, folks, welcome to "kudlow" i'm larry kudlow.

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