valentino. senators ted cruz and marco rubio go after each other a day after rhetorically duking it out in a primetime debate. senator cruz joins us, in moments. this is "special report." good evening, and welcome to washington, debate fallout on the campaign trail. while clearly fielding some incoming fire, donald trump was not the unquestioned center of attention in the republican presidential race. instead two men with strikingly similar resumés, senators ted cruz and marco rubio are playing up their differences. on two issues. i'll speak with senator cruz from los angeles next.

first let's get up to the minute on debate reaction. here's chief political correspondent carl cameron. >> the day after the he final debate of the year, donald trump declared himself the winner and in arizona talked border security and immigration. >> illegal immigration has caused tremendous crime. has caused tremendous deaths. >> last night he defended his temporary ban on muslim immigrants. >> we're not talking about religion, we're talking about security. >> jeb bush tried to lead the charge against the celebrity billionaire. >> donald is great at the one-liners. but he's a chaos candidate. and he would be a chaos president. >> if i'm at 42 rand you're at 3. >> you think this is truf and you're not being treated fairly. imagine what it will be like when you're dealing with -- >> ted cruz was branded as a bit of a maniac by trump. >> he has a wonderful temperment. he's just fine, don't worry about it. >> the question of his judgment?

>> marco rubio went straight to iowa and renewed his criticism of cruz for opposing the defense authorization bill and weakening national security. >> the defense cuts we are facing in this country, the ones already in place, that some republicans have supported make it even deeper. how are you going to make the sands of the middle east glow if you don't have the bombs or the air force to do it with. >> the battle between rubio and cruz is likely to be crucial next year. carson and fiorina complained they didn't get enough time. john kasich urged his rivals to embrace a less divisive agenda. rubio has been hammering cruz for weakening national security surveillance programs. >> i'm proud to have joined with conservatives in both the senate and the house, to reform how we target bad guys. >> there is nothing that we are allowed to do under this bill that we could not do before. >> on immigration, cruz cast rubio as a supporter of amnesty. >> one commentator said for marco to suggest our record is the same, is like suggesting

that the firemen and the arsonist have the same record because they're both at the scene of the fire. >> cruz suggested he was open to a path to legal status. rubio says their plans are similar but rubio is willing to go further. >> i'm open to allowing people to apply for a green card. >> marco can't have it both ways, marco has more of an allegiance to chuck schumer and to the liberals than he does to conservative policy. >> chris christie running second in the polls, in new jersey mocked the senators for their legislative bickering. >> if your eyes are glazing over like mine this is what it's like to be on the floor of the united states senate. >> the holidays will overshadow the campaign. but the next debate is january 14th, in south carolina two weeks before the iowa caucuses. brett? >> carl, thank you. joining us from los angeles, senator ted cruz. fresh off that last debate in las vegas. senator, thanks for being here. >> brett, thank you for having me.

>> frank luntz had a focus group last night and the people inside said you were one of the big winners. they called you believable, truthful, commanding, a guy who means whey says and says what he means. is that what you see from last night? >> i think the reaction we've had to the debate last night has been very encouraging. and really last night, i think americans are looking for a strong commander-in-chief. in the wake of the paris attacks and in the wake of san bernardino, we realized that this is a nation at war. and we need a leader who is clear eyed, who understands who the enemy is. who will call the enemy by its name as barack obama and hillary clinton refuse to do and we'll do everything necessary to defeat radical islamic terrorism and keep this nation safe. i think last night's debate got into a lot of substance. one of the reasons why we're seeing so much momentum, so many conservatives coalescing behind our campaign, is because americans want a strong leader who will follow the reagan

strategy on radical islamic terrorism. we win, they lose, we'll do everything necessary to defeat radical islamic terrorism and keep this nation safe. >> one of the big back-and-forth moments between you and senator marco rubio was on immigration. many people said you scored some points against marco rubio there. you also said though, it has been checked today, at the debate, that you denied that you've ever supported legal status for undocumented immigrants. you said i've never supported illegal immigration. back in 2013 you did support an amendment. this is what you said. >> i don't want immigration reform to fail. i want immigration reform to pass. and so i would urge people of good faith on both sides of the aisle, if the objective is, to pass common-sense immigration reform, that secures the borders, that improves legal immigration and allows those illegally to come in out of the

shadows, we should look for areas of bipartisan agreement and compromise to come together. >> that amendment would have allowed undocumented immigrants to remain in the u.s. permanently and obtain legal status. how do you square that circle? >> actually, brett, it wouldn't have. what was happening there is that was the battle over the gang of eight. the rubio/schumer amnesty bill. a massive amnesty bill proposed by senator rubio, by chuck schumer and barack obama and i was leading the fight against am nesty. standing shoulder to shoulder with jeff ses sessions, steve king. leading the fight to secure the borders. what i did in that amendment was an amendment i introduced to save citizenship. those who are here legally, will be eligible for citizenship. the fact that i introduced an amendment to remove part of the gang of eight bill doesn't mean i support the gang of eight bill. the gang of eight bill was a mess. >> that's not what you said --

>> the rubio campaign is trying to claim gosh -- >> yahoo dug up these quotes, saying if this amendment were to pass, the chance of this bill passing into law would increase dramatically, a few weeks later during a debate on the senate floor cruz repeated his belief that this amendment is the compromise that can pass. and repeated later in prince ton that if my amendment were adopted, this bill would pass. it sounds like you wanted the bill to pass. >> of course i wanted the bill to pass, my amendment to pass. >> you said the bill. >> take citizenship off the table. it doesn't mean that i supported the other aspects of the bill, which was a terrible bill and brett, you've been around washington long enough, you know how to defeat bad legislation, which is what that amendment did, is it revealed the hypocrisy of chuck schumer and the senate democrats and the republicans who voted against it i'll give you the simplest proof

why this notion that my fighting amnesty, made me a supporter of am nesty. jeff sessions voted with me on my amendment to eliminate citizenship. is anyone remotingly suggesting that jeff sessions supports amnesty? >> of course not. we were fighting side by side to defeat marco rubio's bill for amnesty. >> the problem is at the time you were telling people like byron york with the "washington examiner" that this was not a poisoned bill. you said my objective is not to kill immigration reform. my question to you is looking back at what you said then and what oar saying now, which one should people believe? >> what the amendments i introduced, i introduced five amendments, a whole series of amendments, they illustrated the hypocrisy of the democrats. they showed it was a partisan effort and they succeeded in defeating the rubio/humor amnesty bill. >> the biggest news on immigration came after five

debates, senator rubio finally admitted not only was he for the rubio/schumer amnesty proposal, but he still supports amnesty today. he said that on english language television, not just spanish. he said last night for the first time he supports amnesty he supports citizenship for 12 million people here illegally. i think it's fundamentally wrong and one of the sharp divides. at a time when everyone is worried about national security. border security is national security. what we talked about last night is the rubio/schumer amnesty bill would have given barack obama blanket authority to admit tens of thousands of syrian refugees without requiring any meaningful background checks. that endangers our country. it makes us less safe. it's one of the reasons i think the debate last night had a number of moments of clarifying differences on policy that i think are helping americans decide who's in the best prepared to be commander-in-chief.

>> last night on this issue and last question on immigration, you said that bill clinton deported 12 million illegal aliens. you said george w. bush imported 10 million. when you look at the dhs numbers, there's removal, which is deportation and then there is returned, turned away at the border and the numbers are a lot different than what you said. is there a difference between the two? removal and return? >> those numbers are a combination of both. both removal and return. 12 million under bill clinton and 10 million under george w. bush. lots of folks in the media, lots of establishment republicans say we can't deport anyone. look the president is obligated to follow federal law, we have a president right now, barack obama, in 2013 released over 104,000 criminal illegal aliens. because barack obama refuses to follow the law. if i am president we'll follow

the law, i'll make a commitment to you, as president i will secure the borders, i will build a way that works, i will stop catch and release, i will stop releasing criminal illegal aliens. we will stop welfare payments to illegal aliens. we will solve this problem. the only thing that's missing is the political will we have the legal tools to do it. the problem is neither the democrats nor the establishment republicans want to solve this problem. i will solve the problem. >> last thing you have not had a problem attacking senator marco rubio and going back and forth with him. but it seems you have had a problem attacking donald trump. you said behind closed doors to donors, i heard the audio, who understands the threats we face, who is comfortable having their finger on the button. it's a question of strength and judgment. i think it's a challenging question for both of them, talking about trump and carson. why couldn't you say that on the stage last night?

>> when it comes to senator rube kbroe, what i've been happy to do is lay out our clear policy differences. when it comes to donald trump donald trump, the washington establishment desperately wants donald and me to engage in a cage match. i don't think that's beneficial to the country. i think donald has generated a lot of excitement. i don't think he's going to be our nominee but i want every one of those supporters showing up on november 2016 so we beat hillary clinton. and win the general election. >> what i said in the debate last night is the thing i say over and over again. the most important determination every american has to make in this election. is who has the experience, who has the judgment to be commander-in-chief to keep this country safe. that's an assessment the voters are going to make of every one of those nine candidates, myself

included. that's what the debate last night was all about. assessing who understands the threats, who has the clarity. who do i trust what they say they're going to do and actually do. that's the question the voters are deciding. >> senator cruz, thank you very much for the time. we're not going to see you probably, merry christmas and happy new year. >> i look toward to seeing you soon. you need to come out on the trail with us. the energy across the country is incredible. 600,000 contributions at tedcruz.org. conservatives are coming together. it's encouraging. >> senator, thanks for your time. when we come back, the federal reserve increases interest rates, what that means for you. and your family, when we return.

the price of credit is going up tonight.

this afternoon the federal reserve made good on its promise to begin hiking interest rates. once governors felt the economy was strong enough. the quarter-point increase in a key rate ends a seven-year period of near zero rates. correspondent kevin corke has the story from the white house. >> it's the first fed rate hike in more than nine years. a modest quarter of a percent. but while that doesn't sound like much, the decision does mean that consumer the will likely have to pay even more to borrow money. as interest rates for car loans, credit cards, nonfixed mortgages, even home equity lines of credit could go up. a boost, fed chair janet yellen said shouldn't be overstated. even after today's increase, the stance of monetary policy remains accommodative. thereby supporting further improvement in labor market conditions, and a return to 2% inflation. >> the move meant to keep the economy from overheating ramps up pressure on a white house

deeply concerned about growth. which it forecast to remain modest into 2016. >> we've obviously made substantial progress in growing our economy at a rate of a little over 2% a year since 2010. that is progress that is important, we certainly would like to see the economy grow even faster. >> the white house says the economy is showing signs of strength with businesses adding 14 million jobs over 69 straight months, the longest streak on record. other sectors also trending up. with new home sales up 15% in the past ten months. car sales up seven. spending at restaurants and bars, up eight. even furniture moving with sales up 5.6%. add to that lower gas prices and a robust stock market. for all the chest-thumping on wall street, it's stark reality on main street as millions of americans still can't find work. >> the economy still hasn't picked up. you have to look at the labor participation rate, at 63%, the

lowest since i think the carter days of 1970s. >> a recent pew research poll shows that the middle class is not only shrinking, its percentage of u.s. household income is down 20 points since 1970. >> stark numbers, no question about it. by the way, yellen today said you should expect a gradual tightening following today's hike. another nugget, experts tell us part of the reason for the lower workforce participation rate is following the 2009 recession, they say millions of americans went back to school to try to give themselves a leg up on the competition. compared to the 1970s there are millions more americans on disability. brett? >> kevin corke live on the north lawn. wall street seemed to improve. the dow gained big, 224. the s&p 500 was up 30. the nasdaq finish ahead 76. still ahead, how cheaper gas is making life better for small business owners and their

customers. first, a hung jury in the trial of a baltimore cop charged in a prisoner death. we go live to baltimore for reaction, when we come back.

a hung jury in the freddie gray trial. the judge declared a mistrial after jurors failed to reach a decision on charges against baltimore police officer william porter. correspondent leland vitter is live in baltimore. hi, leland. >> evening, brett, we know precious little about why the jury could not reach a verdict or for that matter, what exactly the final vote count was on charges that could have earned officer william porter 25 years in jail. the jury deliberated about 16

hours on four counts. involuntary manslaughter, reckless endangerment, misconduct in office and assault and couldn't come to an unanimous decision on any of them. the time focused solely on the time before gray arrived at the precinct. porter's defense focused on the fact that arrestees are rarely if ever seat belted in the back of baltimore police vans. protesters painted him as a callous cop who ignored gray's pleas for help. police called in riot officers from around the state. gray's family and attorney came to the streets asking for calm tonight. >> the family wants everyone to remain calm. they want everyone to understand what just happened. and to make sure that their tempers don't get the best of them. >> after the mistrial there were

a couple of dozen protesters who came out. now those protests number in about 100 to 150. two police arrests so far. no kind of violence. brett, tomorrow attorneys will be back in court to set a retrial date for officer porter. >> leland vitter live in baltimore, thank you. lawmakers will vote friday on a massive $1.1 trillion government spending package. tomorrow the house will vote on a $650 billion tax break bill. the tax package reverses many of the deficit gains won under former house speaker john boehner. current speaker paul ryan predicts bipartisan support for both bills. tomorrow will break down exactly what's inside. when we come back, the upside of cheap oil. the profits go up and the price of delivery goes down.

fbi director james comey says there's no evidence that the san bernardino shooters were part of an organized terror cell. comey adds there's no indications that syed farook or tashfeen malik had any contact with overseas militants groups. but said the two did express support for jihad and martyrdom

in private communications, but not on social media. the military personnel killed and wounded in last summer's attack on a chattanooga tennessee reserve center will be awarded purple hearts. the navy made the announcement after fbi director comey said the assault was motivated by foreign terrorist propaganda. the gunmen died in the shoot-out with law enforcement. austrian authorities have arrested two men they say may have links to last month's terror attacks in paris. the two were taken into custody over the weekend. at a migrant shelter in salzburg, a state prosecutor said the men are suspected of participation in a terrorist organization. he said the pair arrived in europe from the middle east. a bag of mixed messages tonight from the obama administration. on its fight against isis. national security correspondent jennifer griffin sorts it all out for us from the pentagon. >> it was not the answer that defense secretary ash carter was looking for when he arrived in

baghdad to meet iraq's prime minister. to discuss ways to accelerate the fight against isis. >> the prime minister did not make any specific requests in connection with helicopters which you mentioned in connection with ramadi. >> days before carter told congress that the u.s. was prepared to deploy apachy attack helicopters and a new special operations commando force to iraq. iraqi officials under pressure from iran have pushed back saying quote no need. the top u.s. command anywhere iraq responded. >> it's kind of hard to inflict support on somebody. >> at the white house, a briefing ahead of a u.n. security council meeting tomorrow on combatting isis financing revealed how much money isis is still making. >> 400 million in terms of oil and gas revenues a year. the white house had to clarify secretary of state john kerry's remarks in moscow after meeting russian president vladimir putin. in which he seemed to bow to russian demands, promising not

to remove syrian president, bashar al assad. >> the united states and our partners are not seeking so-called regime change as it is known. in syria. >> our position hasn't changed and i don't think that's what secretary kerry was trying to convey. >> the u.s. military announced it was withdrawing 12 f-15s from turkey, the day after the defense secretary arrived at the base. the planes arrived to fanfare last month after russia began air strikes on syria. privately officials at pentagon admit the timing of the announcement was bad, coming as the defense secretary tried to rally support in the middle east to increase the pace of fighting isis. brett? >> jennifer, thank you. to the upside of cheap oil. we continue our series tonight with how plummeting prices are a game-changer for small businesses, correspondent matt finn has a case study tonight from chicago.

>> bona restaurant hales itself as the number one italian beef caterer in chicago. delivering up to 250 orders a day. >> we have our full service catering business, that services, everything within 100 miles of here. >> fox news first visited buona in 2012 when gas in chicago was averaging $4 a gallon. faced with high fuel costs, the restaurant increased delivery fees by $5 and watched as neighboring businesses laid off workers or closed shop. >> there's a struggle, times when gas prices were higher and we had to offer lunchtime specials or even package deals. >> today gas prices have plummeted to an average of $2 a gallon. buono said it spent 25% less on gas year to date. a savings of $100,000 and it got rid of the $5 fuel surcharge. fuel experts say the lower gas prices can be attributed to the increase in america's domestic

oil produce. the highest inches been since the '70s and the saudis are overproducing oil. in an effort to force the u.s. and other competitors offline. >> we may not see a sizeable increase in gas prices until next spring and even then we still may be seeing prices next summer. that are at their lowest summertime level since recession as well. >> the national average for a gallon of gas around $2, across the midwest and in states like new jersey you can get a gallon for about $1.50. >> the republican presidential race last night's debate. today's follow-up, my interview with senator ted cruz, we'll talk about it when the panel comes back.

this idea that we can lead from behind or in the case of senator cruz, not lead at all. it's not about the --

[ inaudible ] we as commander-in-chief foresight of understanding what happened -- [ inaudible ] >> at a time when everyone is worried about national security, border security is national security. the biggest news on immigration last night came that after five debates, senator rubio finally admitted not only was he for the rubio/schumer amnesty proposal, but he still supports amnesty today. he said it on english language television. not just spanish language television. >> the back and forth between marco rubio and senator ted cruz. and the interview today, what's the fallout from that? let's bring in the panel. steve hayes senior writer for the weekly stand'd. yulely pace, and syndicated columnist charles krauthammer. charles? >> the rubio/cruz match last night was the highlight of the evening. but what's so interesting is what it led to today. rubio was willing to take a hit on an issue he knows he is the

least popular with. with the gop electorate. but he did it in order to be able to ask one question. of cruz. which is always a danger in the debate. a, you're giving up your time. and b, you have no idea what he's going to say. but what he elicited from cruz was the statement that he had never supported legalization. that was a mistake as was exposed in this unbelievable questioning that you did today. because when you asked him that, he had no answer. he pretends now that he did that in order to kill the bill. but it's clear from the record that he said at the time, repeatedly, and not even in congress, but even in the meeting at princeton with one of his old professors, robbie george, that he wanted to pass the bill but wanted instead of citizenship, legalization. the fact that he said he never supported it. is not a defensible position and

that was exposed today. that was a very complicated chess match between the two. cruz had the better of it last night. now he stuck with something he's going to have to explain away that is not very easy. >> it's interesting to see his answers, he's holding the line that he's against amnesty. but when you put forward a number of those instances, including an interview with byron york, where he said it was not his amendment a poison pill to kill the bill. that's whey said back then. >> even if you take him at his word that it was all part of a strategy to ultimately kill the bill, that's quite a convoluted argument to try to make to voters who going to be looking at what he said in 2013 and what he said last night if you look at comments he's made on the campaign trail, he's been pressed by questions that rubio asked him on stage. he's avoided it. i think it's confusing why under pressure on the debate stage, he

made such a declarative statement that's going to be hard to walk back from not only in a primary, but potentially in the general election. >> i thought ted cruz had a good debate. i thought he fought marco rubio to a draw on the question of surveillance. rubio is correct on the merits, but i thought cruz did a good job of making his case, on immigration it's very different. this is is a debate that rubio should lose by the fact that we're having it puts rubio as charles suggested, in a difficult position, because it's not the base of the republican party. i agree with clarls in that interview, he couldn't answer simple questions about what he had said before. the problem with ted cruz now saying look i didn't really mean what i said before, he said it so many times in so many different places in so many ways and sometimes -- >> and on video. >> and sometimes in response to direct questions. withabout whether he was doing what he now says he was doing. the problem for cruz is that he is a straight talker.

he's got ton where he is because he's a real conservative, unlike i would argue donald trump and he's a straight talker who wins all of the purity tests. this is a problem for him when he can't answer your questions in a straightforward way. >> what's interesting about the rubio strategy is it's broader than just immigration. they're trying to get after this idea that he's casting himself as a truth-teller and trying to show voters that actually what he's doing is saying whatever is politically popular to win an election, doing this on national security. doing this on immigration, think you're going to see a consistent push on that broad theme from rubio. >> he's trying to shift this. rubio is. from a policy debate to a character issue. that he is slippery and that well, this is one instance where i think he scored. even though rubio i think loses on the policy in the gop electorate. >> we mentioned donald trump, back and forth with jeb bush last night in debate. some interesting moments there. who got the better of it? take a listen.

>> if i'm president, i'll be a commander-in-chief, not a agitator in chief or a divide anywhere chief. i would speak out as i have the best advice that exists -- i won't get my information from the shows. i don't know if that's saturday morning or sunday morning. donald you know is great at the one-liners. but he's a chaos candidate. and he would be a chaos president. he would not be the commander-in-chief we need to keep our country safe. >> jeb doesn't really believe i'm unhinged, he said that simply because he has failed in this campaign. it's been a total disaster. nobody cares, and frankly, i'm the most solid person up here. i built a tremendous company and all i want to do is make america great again. >> fall-out from that. charles? >> look, i was happy to see jeb just stand up and get tough. i think he's had a really rough campaign. i don't think it's going to move the needle one iota. but just in terms of acquitting himself i'm glad he did it. the problem is this -- had he

done that in the first debate or the second, at a time when trump was rising, jeb was declining but still up there. i think it might have had an effect. but i think that ship has sailed. i'm not sure it's going to have any effect and it was, it was jeb was the one guy who had an interest in going after trump. so interesting last night. essentially nobody else but rand paul who was throwing a hail mary. had no interest in attacking trump and he essentially wasn't. because i think what's being debated now is who's going to be his final challenger, who is going to go up against the champ in the heavyweight fight. >> julie? >> i think can you glean a lot from candidates' positions in this race by their strategy toward trump. as charles said, jeb needed to go after trump in order to create a moment for himself. he's not going to break through on policy at this point and his record as florida governor. marco and ted cruz are surging in this race, and they don't need to go after trump. they know it's not going to help them and it's only going to take

up their time. i think the stronger candidates are now starting to try to clear a path for themselves while the weaker candidates still need the trump factor to try to break through. >> steve in. >> i thought ted cruz had a good moment in his exchange with donald trump when they were talking about trump's proposal to ban all muslims temporarily and cruz said in effect we're not going to ban all muslims temporarily. weir going to ban immigrants, people coming from countries with high concentrations of al qaeda. i think that was a much better approach. having said that, i was disappointed that we didn't see more from the other candidates from rubio, christie, from cruz, in the way that we saw from jeb bush. basically saying this is, this is policy unamerican. we don't ban as americans we don't ban entry for an entire class of people for an entire religion. i think it was a missed opportunity for those other candidates zmxt. >> and a good moment for jeff bush. >> obviously donald trump is very vocal on the trail, he's vocal on his criticism of people

who sometimes criticize him. sometimes we get some mail and tweets and facebook that we don't give him time when he's criticizing people on fox. this was today, take a listen. >> they have these guys like george will. you fall asleep listening to this guy. if he didn't wear the little glasses, he wouldn't even be bright. this george will. i mean i got to tell you, krauthammer is terrible. he is so unfair to me, he is the worst. he is the worst and i'm not allowed to criticize him. krauthammer, he's terrible. you have is a guy named steven hayes, i never heard of this guy. when my name is mentioned, it's like he's a boil. he goes crazy. >> anything? >> the cue now for me? >> am i crazy? >> i was taking your temperature. you're a boiler? >> having him pronounce my name i think i'll call him donald

thrump. >> he certainly seemed to know me before when he's gone after me before, but it's okay, i didn't know him very well before this campaign, either. >> so we gave him the time. next up, the fed's decision to raise interest rates for the first time in almost a decade what it means to you and to the economy.

to delay the start of policy normalization for too long. we would likely end up having iti]qxz tighten policy relatively abruptly at some point to keep the economy from overheating and inflation from significantly overshooting our objective. such an abrupt tightening,

could increase the risk of pushing the economy into recession. even after today's increase, the stance of monetary policy remains accommodative. >> it's tough to get through some of those fed press conferences but today was interesting. in part, it's because it's it the first fed rate hike in more than nine years. it's only a modest a quarter of a percent. but it does mean that things are are changing. what does that mean in the big picture? we're back with the panel. julia, the sense is that the economy is starting to get moving and that this is a sign that the fed is feeling more confident. but it's not total confidence can. >> yeah. it's not. because this is a very cautious plan for raising rates. the quarter of a percentage of a point now and they say they will continue to raise rates overtime and if the economy reacts poorly they can stop that plan. for most people right now, they are not going to feel a huge impact but the bigger question, especially as you put this in the context of an election year is if the

economy does react poorly to this next year, i think it's going to be tough on democrats in particular who have been arguing that the economy is on a come back and has stabilized for sure, it will make it difficult to prove that that was real, that that wasn't just kind of kabuki economics,?@ that that was a real recovery and that's really the heart of obama and now clinton's economic message. >> one thing that gets lost is when interest rates go up while it's a good sign for the economy but it's not a good sign for the debt. the national debt is over $18 trillion. if it goes up one full point we start paying more interest on the national debt than we pay for defense spending at the pentagon per year. >> but as yellen indicated, i you mean, you have to do something like this. and if you wait it's going to get a lot worse later including what will be the ultimate interest rate in the end will increase our interest payment. look, we have hadthree

immense stimuli the low interest rates of zero. b, the fiscal obama came into office. $8 trillion of debt averaging between a 1.5 trillion and now half a trillion which is considered a small deficit. and the last is oil prices at '$5. now, if you have got an economy running on this and we are still only chugging along at 2%, economy really is in trouble and, unless you start to take away the punch bowl, and this is a very, very small amount, this is a teaspoon's worth of removing stimulus, you are going to go deeply into a danger zone. it had to be done. they have signaled it will go up about 1% more over the next year, which seems to me to be exactly right in a fragile economy. >> steve? >> i think charles is exactly right. if you look at where we are economically, it's not as if we are humming along. nobody is celebrating where the economy is right now. there is talk of full plymouth, but you look at the it labor force participation rate and that

makes the talk of full employment seem foolish. and people are excited about 2 it .1 g.d.p. growth. that's nothing to get excited about. but this had to happen first of all because they signaled it was going to hict secondly because it's long overdue. you can't keep operating on what in effect were emergency moves in perpetuity. that had to change. it's going to change. she certainly signaled it was going to be slower. i think what this does is introduces two issues or it makes more urgent two issues in the presidential race. one is tax reform. pro-growth tax reform. fiscal policy. what is washington going to it do to change this stagnant economy? and, two, entitlement reform because, as you suggest, you look at taking up of interesting rates a quarter point or a full point, you are talking about, once again, this debt bomb that we are facing, 18 trillion plus. there haven't been significant reforms to our entitlement programs. everybody knows that that's

what's going to happen if you are going to solve the debt issue. this makes that more urgent. people haven't been talking about debt the way that they were four years"7 ago, three years ago. buff they need to be again. >> yeah. quickly. does this effect hillary clinton? is this a sign of good things for her? is it bad sign? >> i think it depends on what happens with the economy next year. i think if you have the interest rates start to creep up a bit and you don't see a measurable impact on the economy, it probably has no effect. if the economy does start to suffer, i think it could possibly have a negative effect for her. >> that is it for the panel. but stay tuned for some special spreading of christmas cheer.

finally tonight, it was five years ago that the "special report" staff came up with the idea to collect christmas and holiday gifts for children stuck in the hospital over the holidays. our son paul had had three open heart surgeries. we had to stay at children's over the holidays before. well, over time, the fox washington bureau wanted to join in on the holiday spirit too and all started collecting toys as well. well today my family, amy, paul, and daniel delivered a massive and i mean massive truck load of toys collected here at fox to kids at children's national. and the kids were ecstatic. both the kids receiving the gifts while hooked up to monitors in the hospital rooms and my kids delivering the gifts. including paul, who knows what it feels like to be in the intensive care unit over christmas. paul's heart surgeon dr. richard jonas who has been busy performing many

heart surgeons in recent days was there as well as his cardiologist deneen heath. thankfrom "special report" and all of the d.c. fox bureau for the outpouring of support. we created some holiday cheer today at children's national that created some big, big smiles and we will doti it again next year. thanks for inviting us into your home tonight. that is it for this "special report," fair, balanced and unafraid. greta goes "on the record" right now. "special report" online begins in just about 10 seconds. ♪ ♪ >> it is thursday december 17th, 2015. this is a fox news alert. the brand new threat to attack in two major american school districts in the wake of earlier scares in l.a. and new york.

we are live with breaking details. >> baltimore, a city on edge again. after a mistrial in the case of one of the cops charged in freddie gray's death. where does the case go from here? we are live on the ground. >> bet you never thought you would hear this. >> i would like to see the republican party come together. i have been a little divisive i have hitting pretty hard. >> done federaled trump calls for peace? "fox & friends first" starts right now. >> you are watching "fox and friend first. i am anna kooiman in for ainsley earhardt. >> i am heather childers. moving op with the fox news alert brand new threats made against major school districts across the nation. >> districts in miami, dallas and houston receiving threats of

a terrorist athreat similar to those made two-days ago in los angeles and new york. >> will carr is joining us with how authorities are handling the threats. good morning, will. >> good morning, ladies. the nation is still on edge after parents in san bernardino. now houston, dallas and miami school districts some of the largest in the country receiving threats by e ma ill similar to the ones in new york and los angeles. all will continue with classes as scheduled. they are making sure no critics but asking parents and students to be vigilant. >> we have notified law enforcement agencies. we ask you to be vig gent and support any suspicious