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SUNDAY MORNING FUTURES

What recent WH decisions mean for the economy, midterms

This is a rush transcript from "Sunday Morning Futures," June 15, 2014. This copy may not be in its final form and may be updated.

MARIA BARTIROMO, HOST: Good morning. Is America headed back to Baghdad?

Good morning, everyone. I'm Maria Bartiromo. This is "Sunday Morning Futures."

President Obama saying all options are on the table, short of putting U.S. boots back on the ground. But are there other options viable as the situation escalates across the Iraqi-Syrian border.

We'll ask Buck McKeon, chairman of the House Armed Services Committee. We'll also talk to Congressman McKeon about the committee's hearings on the exchange of our one soldier for five Taliban leaders. Has the president broken the law?

Plus, an upset in the GOP, Eric Cantor primaried out by the Tea Party. Now the race is on to replace him as House majority leader. We'll ask the party chairman how it all shakes out.

Happy Father's Day to all of you dads with control of the remote this morning as we look ahead on "Sunday Morning Futures."

Hi, everybody. The militant group that seized much of northern Iraq now drawing closer to Baghdad. Security forces in the capital city are digging trenches around its perimeter in an attempt to disrupt any further advances. Meanwhile, the White House is still weighing its options for how to respond to this insurgency.

Joining me now is California Congressman Buck McKeon, chairman of the House Armed Services Committee.

Mr. Chairman, good to have you on the program. Thanks for joining us.

REP. BUCK MCKEON, R-CALIF., CHAIRMAN OF HOUSE ARMED SERVICES CMTE: Thanks for having me, Maria.

BARTIROMO: First, the Iraqi situation: do you think we will return to Baghdad?

MCKEON: The president will be reviewing all of his options. He likes to look at all the options and then act on none of them, hoping that the crisis will go away. This isn't going to go away.

Some people, I know, will want to play the "I told you so" game. I don't think that's appropriate at this time. We need to concentrate on the thousands of Americans who are in harm's way in Iraq. Their protection needs to be number one priority. We need to get them out safely. And then I think the president should look at his whole Middle East strategy.

This lead-from-behind, hands-off approach just isn't working. We need to lead from in front. We need to be strong. We need to stop cutting our national security resources. I think that it's gonna be interesting to see how this plays out.

BARTIROMO: Congressman, I want to ask you about the status of forces, what we did wrong, how we arrived here. But stay right there. First let's get the real timeline here. Because we have got a lot to talk with you about, Congressman McKeon. But first let's turn right now to what prompted this new insurgency in Iraq. Fox News senior correspondent Eric Shawn with that.

Over to you, Eric.

ERIC SHAWN, FOX NEWS SENIOR CORRESPONDENT: Good morning, Maria. And good morning, everyone. What went so wrong? Well, President Obama says his administration has been watching, quote, "with concern" for several months.

But it now seems, on his watch, Iraq has unraveled in an unstoppable sectarian civil war.

(BEGIN VIDEO CLIP)

OBAMA: Over the last year we've been steadily ramping up our security assistance to the Iraqi government with increased training, equipping and intelligence.

(END VIDEO CLIP)

SHAWN: Seeds of Iraq's destruction were sown with Shiite prime minister Nouri al-Maliki refusing to moderate his crackdown on the Sunnis, and $14 billion of U.S. military assistance could not stop those Islamic terrorists from taking more than one-third of the country.

The administration pulled out the last American troops back in 2011 after al-Maliki refused to sign that status-of-forces agreement that could have kept some U.S. forces there. And the terror group's leader, Abu Bakr al- Baghdadi, was freed from U.S. custody in 2009.

And now, even a top Iranian Quds force general, Qasim Suleimani, is reportedly now in Baghdad helping the Shiite government.

Some say if only a deal was hammered out by the administration with al- Maliki, this catastrophe could have been prevented.

Dexter Filkins, writing in The New Yorker, quote, "The negotiations between Obama and Maliki fell apart in no small measure because of the lack of engagement by the White House. Today, many Iraqis, including some close to Maliki, say that a small force of American soldiers working in non-combat roles would have provided a crucial stabilizing force that is now missing from Iraq. President Obama wanted the Americans to come home and Maliki didn't particularly want them to stay."

(BEGIN VIDEO CLIP)

CAPTAIN BOB WELLS, U.S. NAVY (RET.): All we needed was 2,500 to 5,000 troops for counterterrorism missions. We're really good at those.

(END VIDEO CLIP)

SHAWN: Now Iraq could be split in two or thirds with the Kurds, and the legacy of so much American blood and sacrifice now appears in vain, as an Iraqi prime minister and the U.S. president are seemingly unable to prevent Iraq from tipping into total failure. Maria?

BARTIROMO: Eric, thank you so much. We are back right now with House Armed Services Committee Chairman Buck McKeon.

Congressman, go back for us -- talk to us about this status of forces, as well as what we should have done differently to, perhaps, avoid this.

MCKEON: Well, the thing that hung the agreement up was protection for our troops. If we left them behind, we didn't want them charged by the Iraqis for any potential crimes that they might perceive. I think that it was a real mistake. I think everybody knows that. We felt it at the time. The military advisers, members of the Armed Service Committee felt it would be a disaster if we did not leave a supporting force behind.

But the president and his team were unable to lead the negotiations to the point where we were able to leave a force. And now we're paying the price for it. We don't want to make the same mistake in Afghanistan.

BARTIROMO: So what now, Congressman? You -- you have said all Americans should be gravely concerned by the turn of events in Iraq. How do you see this playing out?

MCKEON: Well, I don't know. I -- I was concerned -- you know, I love to play golf. But I didn't think it was a time yesterday for the president to leave Washington. I think it's -- that's been one of the problems we've had with him is the lack of engagement. I think he needs to be pulling all of his people together with him in the White House and hammer out what their strategy should be going forward.

I think the first priority should be the protection of our people there, getting them out safely. I was glad that Secretary Hagel moved our aircraft carrier closer to where they could be of more support. I really don't know what options they are considering right now. I hope that we can -- that we can get out without losing people.

BARTIROMO: Let me switch gears, Congressman, ask you about Bowe Bergdahl. You began hearings last week on the subject, the release of our one soldier for five Taliban detainees. What have you learned?

MCKEON: Well, what we learned from that hearing was that they broke long- term precedent. They did negotiate with terrorists. We're less safe than we were a couple weeks ago because of that. They kept Congress in the dark for months, in violation of the law.

And I'm really concerned that, based on what they were telling us, that they feel that they can be able to do this again. Those were very bad guys that they let out of Guantanamo. They came to Congress a couple years ago and briefed us that they were starting talks, working toward peace with the Taliban, and that they were working on releasing these five guys to get Sergeant Bergdahl back.

There was a lot of push-back, in a bipartisan way, from members of Congress. They didn't think we should release these guys and give them a chance to get back into the fight, kill more Americans and Afghans. But they -- when they started the negotiations again, they didn't bring Congress into the loop. They told 80 to 90 people -- at least that's the number that they've given us -- in the White House and the State Department, the Department of Defense, Justice Department, but felt like they couldn't tell a single elected member of Congress, who have jurisdiction for oversight on this issue, about what they were doing.

It violates the law, a law that we just passed last November -- or December.

BARTIROMO: Congressman, it's so extraordinary. I mean, what do you think the president's game plan is? Why go around Congress with such an important situation, particularly, as you say, and so many have said before you, that these guys are really bad guys? What's the president's game plan, do you think? Why would he do this?

MCKEON: I don't know. They haven't been able to answer that. I think he just felt like he knows what's best and the rest of us just better get in line. But there's bipartisan feelings against this.

In fact, they explained that the president signed that law that we passed, that they had to give Congress 30 days notice. He signed the law and said "but it's not constitutional." Well, it was pointed out by Adam Smith, my ranking member, the top Democrat on the committee, who is an attorney, that, until that law is tested by the Supreme Court, it is the law of the land. And they basically violated the law.

BARTIROMO: Unbelievable. Well, it appears he wants to close down Guantanamo, whatever it takes, on his watch.

Sir, good to have you on the program. Thank you so much.

MCKEON: Thank you for having me.

BARTIROMO: We appreciate your time today. Buck McKeon joining us.

We're going to further explore our military options in Iraq. Former Army Vice Chief of Staff General Jack Keane will join me next, as we look ahead on "Sunday Morning Futures."

(COMMERCIAL BREAK)

BARTIROMO: Welcome back. Fox News confirming this morning that Defense Secretary Chuck Hagel has ordered the aircraft carrier George H.W. Bush repositioned from the Arabian Sea into the Persian Gulf as the situation in Iraq escalates.

We want to bring in retired four-star General Jack Keane into the discussion.

General, good to have you on the program. A former Army vice chief of staff and a Fox News military analyst. Thank you for joining us today, sir.

GEN. JACK KEANE (RET.): Glad to be here, Maria.

BARTIROMO: What would you like to see happen on the U.S.'s side in response to what's happening in Iraq right now?

KEANE: Well, I think there's two components to this, one military and one political. The military is certainly the issue because we have obviously an unfolding crisis right in front of us. We have to defend Baghdad. That is for certain.

It's a sprawling city. Think of it like Los Angeles. You can enter it from multiple places. It is not that significant that ISIS -- ISIS could enter a portion of a Sunni neighborhood. They used to own many of these neighborhoods in 2006 when we went in there to fight them. But the issue is we cannot let the central government be forced out and Iraq collapses.

So in my judgment, defense of Baghdad is essential. One of the things that would help in that defense is the use of air power, and I do think the United States has a role to play here. And that would also require some air-ground coordinators with Iraqi units, probably special forces, to work with them to facilitate the use of that air power when it's close to civilians and also close to Iraqi security forces.

Additionally, the Iraqis need situational awareness. When we walked out of there, Maria, in 2011, their intelligence screen went blank. We've got to put some of that intelligence architecture back in there so they can see what is happening. We have incredible intelligence means at the national and regional level to make that screen come alive again so they can see where this enemy is, what it's doing, where its staging bases is.

So in addition to defending Baghdad, the second thing we could do, using that intelligence that I just described to you, we can use air power to go deep into Syria, where they have safe havens -- this is ISIS -- safe havens, sanctuaries, staging bases, and also deep into Iraq, in the northern and western parts of it, away from population centers, destroy these ISIS sanctuaries and safe havens.

And when they're on the move, they're a very easy target. You know, from a military perspective, this is not very difficult to deal with. These guys'

idea of an attack is to line up a bunch of vehicles during daytime and go down the road.

BARTIROMO: Right.

KEANE: There is not a more vulnerable target to troops on the move than that one, to the use of unmanned as well as manned aircraft to deal with this.

BARTIROMO: So...

KEANE: So air power does -- would play a significant role here.

BARTIROMO: So what you're saying is we should have air strikes, but also there is also a need for boots on the ground. Was it a mistake to bring all of our troops home?

KEANE: No, the boots on the ground I'm talking about are not combat troops. Yeah, special forces fight. But these are people who are used to working with host country governments. These are the guys that advised the Northern Alliance when we took down the Taliban using air power. These are the guys we did not put into Libya to help our air power use there and we found up with a stalemate for four or five months against a couple of third-rate military organizations in the Gadhafi military.

Yes, of course it was a mistake not to leave our forces in -- in Iraq. And this immunity issue that you discussed with General McKeon, that's an absolutely false issue. That only came up -- Maliki brought that up when he knew the proposal on the table by the administration was not a serious proposal in terms of troops.

The outgoing on-scene commander, General Alston, recommended 23,000 troops. The envoy for the president of the United States put 10,000 on the table and was willing to negotiate even less than that. So he -- Maliki knew he didn't have a serious proposal. He wanted cover. He threw that out there to provide him some cover -- huge mistake in not providing the forces.

BARTIROMO: What do you think, General, the implications of doing nothing are? I mean, you know, we just heard Buck McKeon say, look, the president is golfing today. And, you know, we've got a lack of engagement.

What happens, in your view, in terms of implications that the American people should be thinking about, whether it's on the economy, on perception, on sentiment, if the U.S. actually does nothing?

KEANE: Well, there's two major, major issues here. Iraq collapses, economic impact significant: oil prices off the charts. And you know better than anybody that, when oil prices spike significantly, it usually is a prelude to a recession.

BARTIROMO: Right.

KEANE: And that would have a huge setback inside the United States.

Geopolitically, in terms of security, right before our eyes, what has taken place is the spillover war that we predicted if we did not remove the Assad regime. That is happening now. It started in Lebanon and now it's in Iraq.

And now we have an ISIS caliphate in the Middle East, in the Levant, dead center in it, that would be a predator to Jordan and others in the Middle East.

But, believe me, Maria, they will bring foreign fighters in here by the thousands, and they -- this organization, and in this space of land that they will use, will be a threat to Europe and a threat to the United States.

Make no mistake about it, if we don't endear with these guys right now, we are going to have to fight them later.

BARTIROMO: Amazing. General, thanks very much for your insight. Sobering stuff here. We appreciate your time.

KEANE: Always good talking to you, Maria.

BARTIROMO: And to you as well. Retired four-star General Jack Keane there.

House Majority Leader Eric Cantor's shocking primary loss next, creating ripple effects that are being felt across Capitol Hill. We'll examine the future of the GOP with New York Republican Party Chairman Ed Cox. Back in a moment.

(COMMERCIAL BREAK)

BARTIROMO: Welcome back.

The race is on to replace Eric Cantor as house majority leader after his stunning primary loss Tuesday night. Establishment Republican Kevin McCarthy seemed to have it locked up, but now the more conservative Raul Labrador is challenging him for the post. Let's take a look at the future of the party with New York's GOP chairman Ed Cox.

Chairman, good to have you on the program.

ED COX, CHAIRMAN, NEW YORK COP: Good to be here, Maria.

BARTIROMO: Thank you so much for joining us.

First, your observation post the Eric Cantor loss.

COX: Well, the Eric Cantor loos, Democrats are gloating. This means the Tea Party -- no, our good allies in the Tea Party will still be effective allies. This was more about a great leader, Eric Cantor, who was working hard -- his meteoric rise to be majority party leader in just eight years, and his tremendous political skills as a strategist, as a networker, as a fundraiser, he was doing all that in congress and he was working nationally to expand the Republican Party, be a majority party nationally.

In all that process, he forgot about his own district. Didn't forget, he just couldn't pay attention to it the way he should have.

BARTIROMO: So, he alienated his own district.

COX: Well, he just -- they -- there's a certain attitude of throw out all the bums, including among Republicans. And it was expected that his vote majority would drop from 80 percent maybe down to 65 percent. But then instead of 45,000 voters showing up, 65 did and a lot those, we suspect, were Democrats who were urged to vote against him.

Democrats are very good at playing a guerrilla warfare behind the general election lines in order to get the candidate they want to run against in the various elections.

BARTIROMO: So, if they're very good it, what's the plan going into 2014

and then going into 2016? The people want to know, what's the theme of

the GOP? Is it going to be the establishment or anti-establishment or is

it going to be the Tea Party?

COX: It's going to be a broadening Republican coalition. We are -- I can see us picking up here in New York state as many as four additional congressional seats. And I think if that's replicated throughout the country, we will have a bigger and better Republican majority in the House of Representatives.

It looks like with this huge wave, Republican wave, that's going to be crashing on the Democrats in 2014 we'll win a nice majority in the Senate also. That will result in good legislation being produced by the House, going to the Senate processing, going to the president's desk. And this president won't know what to do with it. He doesn't know how to triangulate, compromise and do all the things you need to do to produce good legislation.

BARTIROMO: I wonder if he will veto?

COX: I think he will. And that leads to 2016, which I think we're have a very good year.

BARTIROMO: Let me ask you about this race to Eric Cantor's seat. McCarthy or Labrador? I mean, who is going to replace Eric Cantor as majority leader?

COX: Well, McCarthy is clearly in the lead. He's been a very effective whip. I can see Labrador challenging him, but I know Jeb Henarsling was interested. He dropped out. Peter Sessions dropped out. McCarthy is clearly the leader -- Eric Cantor's loss is going to be a huge loss. This was a great political skill. He knew how to not just win the majority as he did in 2010, but he was looking to expand our majority around the country with such things as military path to citizenship for DREAM kids, reaching out to the trade unions here in New York, things like that that he was doing.

BARTIROMO: Is the GOP more empowered post-Eric Cantor's loss or weakened?

COX: I don't -- weakened a little bit, because his skills will no longer be there as majority leader. But in the end, it's not going to have an impact at all. We are going to win a larger majority in the House and we will win a nice majority in the Senate.

BARTIROMO: And real quick, as far as 2016 candidate, do you have one yet?

COX: After the 2010 election when all our great governors in Wisconsin, Michigan and Ohio win re-election, that will set the stage for a lot of good candidates -- of course, Jeb Bush and Chris Christie, any of them would be much better than Barack Obama.

BARTIROMO: So, you think...

COX: I think we'll beat him with this Republican wave that's coming up.

BARTIROMO: But is Hillary beatable?

COX: Yes.

I'm not even sure she's going to run, frankly. Look, she's basically had two strokes, at least one, that's for certain. When you have a blood clot, you fall down, that's called a stroke. And furthermore, her party is going to the hard left. She voted for the Iraq War. You look at Benghazi, the problems with foreign policy now that are coming out, what's happening in Iraq, she was in charge of the State Department when the ground work was laid for this.

I think she's going to be thinking twice about whether she should run or not.

BARTIROMO: Ed, good to have you on the program.

COX: Good to be with you, Maria.

BARTIROMO: Thank you so much.

Chairman of the Republican Party in New York, Ed Cox.

The five for one Taliban swap, just one of the many issues causing the American people to lose confidence. And is this impacting the economy?

The chairman of one of America's top investment firms and real estate companies will join us on that as we look ahead on Sunday Morning Futures, back in a moment.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: All right, this is Chief Peter Sapp (ph), United States Navy. I'm from Red Oak, Texas, currently serving with U.S. forces Afghanistan here in Kabul City, Afghanistan. I want to say hi to my dad, Happy Father's Day. I love you. And I'll see you soon.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

SHAWN: From "America's News Headquarters," I'm Eric Shawn. Here are some of the other stories that are making headlines right now. Ukraine's newly elected president, Petro Poroshenko, declaring today a national day of mourning; that, after pro-Russian separatists shot down a Ukrainian military plane yesterday near Russia's border. He calls that a terrorist attack. The White House joining European leaders in condemning it. All 49 people on board that jet were killed.

Philadelphia avoiding a mess of a Monday morning commute tomorrow morning, rail service there resuming after President Obama stepped in under federal law to create an emergency board to mediate the dispute. Workers for the city's transit went on strike, shutting down at least 13 train lines.

And I'll be back with Arthel Neville at noon Eastern for half an hour of news. Then the doctors will be here, Dr. Siegel and Dr. Samadi, on "Sunday Housecall." That's just two hours from now at 12:30 Eastern. I'm Eric Shawn. Now back to "Sunday Morning Futures" and Maria.

BARTIROMO: Next week we get another window into where we are in the economy with a two-day Federal Reserve meeting on interest rates, as well as new data on inflation. I'm joined right now to get a sense of where business is, and real estate, by billionaire investor Sam Zell, chairman of Equity Group Investments.

Sam, it's great to have you on the program.

SAM ZELL, CHAIRMAN, EQUITY GROUP INVESTMENTS: Delighted.

BARTIROMO: Thank you so much for joining us.

So, first, before we put a button into the stories that we've been talking about, soldier Bowe Bergdahl, do you think any of these issues have an effect on the economy, the fact that the president went around Congress, did not live by the letter of the law before actually making this decision to swap the soldier for five Gitmo detainees?

ZELL: Well, I think that the challenge in the economy today, that has been the case for the last five or six years, is confidence, and confidence in our leadership. And when the president of the United States makes a giant event out of the return of this prisoner without knowing the facts, without all of the background involved, it just says, gee, is everything political?

Is nothing sacred anymore?

You know, here this guy was a prisoner of war, maybe correctly, maybe not correctly, I don't know. But before you, quote, "go out there" and make a case that you don't know the story of, I think that -- that shatters confidence. And that same confidence applies across the board, whether it's do I build a new factory; do I hire more people; do I expand? All of those are the kinds of things that are very much interconnected to confidence. And confidence has been the biggest loser of the past six years.

BARTIROMO: What's your take on how this plays out going into the midterms?

ZELL: You know, obviously, I don't know. I think that -- I think the country is very concerned about the credibility of leadership that currently exists, I mean, you know, between the Veterans Affairs and Benghazi and this thing and Guantanamo. I mean, how many more pickles does he want to get brined in? I don't -- I don't understand.

BARTIROMO: Yeah.

ZELL: And so I think that all it does is lead to more uncertainty.

Uncertainty leads to deferment of decisions. And I believe that the president of the United States is leading the country in a direction the country doesn't want to go.

And when that happens, lack of confidence, lack of certainty leads to deferment of decisions and a much slower economy.

BARTIROMO: So what's your take on the midterm elections? Do you think the GOP takes the Senate and keeps the House? And what kind of implications will that have? Does that mean, for the next two years, we're basically just -- you know, nothing gets done?

ZELL: I think that, over -- I think the chances of the Republicans taking the Senate is pretty good. I'm not enough of a politician to, you know, give you anything more convincing than that comment.

BARTIROMO: Yeah, but people are upset. They want change.

ZELL: Yeah, I think they want change. Obviously, the historic role of midterm elections, that plays a role. This recent EPA thing is very much relevant because there are, you know, three key states that are big energy states that this is very negative for.

So...

BARTIROMO: Well, the Chamber of Commerce said it's going to cut 235,000 jobs a year until 2030, these EPA new regulations, and it's going to cut GDP by more than $50 billion a year.

ZELL: Yeah, and I think that, if the American people wanted that, they should have voted for that specific provision. And I think not giving them a chance to vote on it is pretty negative.

Overall, though, I think that, if there is a change in the Senate, I think that will change things quite dramatically. I think, as opposed to ending up in more gridlock, I think you'll have both the House and the Senate passing legislation and forcing President Obama to decide whether he wants to use a veto pen.

In six years, he has -- I do not believe he has vetoed a single bill.

Somehow or other, that in itself suggests that the president is more subject to the political issues involved than to enacting legislation. And I think that a Republican House and Senate will pass stuff and Mr. Obama's going to have to decide whether he wants to go on record and whether his legacy wants to go on record as the veto player.

BARTIROMO: Well, that's -- that's an important point. Because it is going to be all about his legacy. And some people believe that's why he did the swap, by the way, because he wants his legacy to be that he closed down Guantanamo Bay, no matter how he gets there.

ZELL: Yeah. I'm not, obviously, you know, conversant on Guantanamo Bay.

But, clearly, he's wanted to close it down. And this is just another example of using his executive authority, in my judgment, far in excess of what the Constitution provides.

BARTIROMO: Let me ask you about the economy, Sam. You have got investments all over the world. I know that you are interested in Mexico and Colombia and India. What about the U.S. right now?

How would you characterize things right now in real estate and housing?

ZELL: I think the housing markets are OK. There isn't enormous demand.

Prices, as much as anything, have gone up somewhat. But that's as much a function of lack of supply as anything else.

I don't think we're going to have some roaring housing boom. And I think, frankly, the country would be better off if we went from the top, which was

69 percent home ownership, down into the 50s. And I think we'd end up with a much more balanced economy.

As far as real estate is concerned, the issue is all about demand. And, you know, I've been quoted often as saying that you can't have growth and wealth redistribution at the same time. And real estate needs growth. And we need policies that are going to encourage growth, encourage people to make commitments, to make spending decisions that lead to greater jobs and more activity.

BARTIROMO: So what kind of -- what policy do you think would be most important to actually have an impact in terms of growth? I mean, the GDP was down 1 percent last quarter.

ZELL: Yeah. I facetiously was asked that question recently. And I said, if you took all of the regulations and just cut them in half, it would be the biggest growth effort that this country could possibly achieve.

BARTIROMO: Too much regulation, bottom line?

ZELL: Yes.

BARTIROMO: Sam, it's been great having you on the program.

ZELL: Terrific, Maria. Great to see you.

BARTIROMO: Thank you so -- so much. Sam Zell is chairman of Equity Group Investments.

And now we want to get a look at what's coming up on "Media Buzz," check in with Howie Kurtz, top of the hour.

Hi, Howard. Good morning.

HOWARD KURTZ, HOST, "MEDIA BUZZ": Hi, Maria. Good morning to you. We're going to focus on Hillary Clinton's TV blitz and the stumbles that she has made, whether we're talking about saying that she was dead broke coming out of the White House with her husband or getting into a spat over changing her position on gay marriage. Is she just a little rusty on this stuff or is she still being very defensive with the media?

BARTIROMO: We'll be watching that. And, Howie, happy Father's Day.

KURTZ: Oh, thank you so much.

(LAUGHTER)

Let me also mention -- and we don't want to overlook -- we don't want to bury the lede there. Let me also mention our special guests, Maria, include Brit Hume and Laura Ingraham, whose radio show played a key role in helping an obscure college professor knock off Eric Cantor in that Virginia primary. I know you covered that earlier. So looking forward to talking to Laura.

BARTIROMO: And we're looking forward to it as well. See you in 20 minutes, Howard. Thank you so much.

The IRS, meanwhile, infuriating congressional investigators, now saying that it has lost Lois Lerner's e-mails in a computer crash. Our panel will weigh on -- weight in on that. The Iraqi crisis impact on fuel prices, as well, a big Fed meeting this a week, and a lot more as we look ahead on "Sunday Morning Futures."

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Hi, I'm Pfc. (inaudible) deployed in Afghanistan at Forward Operating Base Gamberi with 56th Signal Company Combat Camera. I just want to say a shoutout to my dad, happy Father's Day, and my mom and my fiancee in Japan. See you guys soon.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BARTIROMO: Welcome back. A computer crash at the IRS and all of Lois Lerner's e-mails from 2011 went poof. So why are congressional investigators just learning about this now, more than a year after they asked for those e-mails?

Let's bring in the panel. Ed Rollins is former principal White House adviser to President Reagan in both his terms. He's a long-term strategist to business and political leaders and a Fox News political analyst. Jerry Webman is chief economist for Oppenheimer Funds, and Ken Hersh with NGP Capital Management is a big investor in energy-related assets.

Good to have you all on the program. Thanks for joining us.

So the IRS loses the e-mail, Ed. Is this going to fly?

I mean, will we ever find out the facts from Lois Lerner on targeting conservative groups?

ED ROLLINS, FMR ADVISER TO PRESIDENT REAGAN: I don't think so. I think, at the end of the day, the Congress is certainly very unhappy with this. They should have been warned of this a year ago when they first discovered it.

And I think they'll use every tool that they possibly have to go try and dig it out. But I don't think they're going to get it at the end.

BARTIROMO: But I don't understand how this can fly, that they can just come out a year later and say, well, look, we lost the e-mails, computer crash.

ROLLINS: What happens, just as you know on this show, when we attempt to predict the week in advance, what's going to happen, so many things overtake -- what we were talking about last week is totally irrelevant this week, with Iraq.

My sense is the IRS, which was a two-year-old story, is not as relevant today. The Congress will go on and do other things. I think it's very important because it was an abuse of government.

BARTIROMO: Well, the NSA has to have them. Maybe we should go to the NSA.

(LAUGHTER)

ROLLINS: I'm sure they have them. Somebody has them.

(LAUGHTER)

BARTIROMO: Somebody's got those e-mails.

ROLLINS: Somebody has them.

BARTIROMO: All right. Let's talk about what's going on in Iraq, certainly an accelerating of the unrest.

Ken Hersh, when you look at the situation unfolding in Iraq, what do you think it means for the price of oil, for our energy independence? What -- how do you see it?

KEN HERSH, NGP CAPITAL MANAGEMENT: Well, energy independence doesn't mean much. The United States is ramping up its production pretty nicely, independent of what's going on in the Middle East. The biggest issue, I think, in Iraq, is what happens in the south of the region.

And, right now, that's not really in jeopardy. And that's where the basic production is. It's a big story for the Kurds, and the Kurds have really established that they have a very viable security mechanism. And moving into protect that zone, I think, is really important, longer-term, for oil prices.

BARTIROMO: But you know, $107-a-barrel oil is -- is up there. When does it start to become a tax on people where they're not spending any of their disposable income on anything other than heating their home and filling up their tank?

HERSH: Right. Well, people don't buy oil. They buy gasoline and diesel fuel and that sort of thing. And gasoline prices have not really moved up that much because that's a function of United States refining capacity and United States supply and demand. We don't get that much oil from the Middle East right now. And that's a big -- a big unknown out there in the economy because it's really -- it's really been decoupled since the United States has increased its production so much over the last four or five years.

BARTIROMO: I see. Does it have an impact on the markets and economy, Jerry?

JERRY WEBMAN, CHIEF ECONOMIST, OPPENHEIMER FUNDS: I mean, we're always going to watch the price of gasoline because we know that that affects the consumer, and the consumer has never -- just hasn't stepped up to the extent we think they have. But I think Ken is right, that we're not at levels. You know, $120 which begins to filter its way through to gasoline really matters. I don't think this is a big issue for the U.S. economy yet.

It encourages the move toward -- the federal government, sort of, turned its back on, ignored what's going on with energy production in the U.S. I think Ed would argue they could turn their backs a little more completely.

But I think this just encourages domestic production. It encourages investment in domestic infrastructure. And, you know, from a narrow, blinders-on point of economic view, probably constructive for U.S.

investors.

ROLLINS: What does happen is consumer confidence. As we've talked on this show many times, until the consumers have confidence that this economy is moving forward, you're going to see chaos in this Middle East. This thing is going to be what people predicted 12 years ago if we hadn't gone in there. And many mistakes were made by Bush and many mistakes certainly were made by this administration.

But, at the end of the day, the American public spent over $2 trillion; we put a lot of lives at risk. Over 1 million men and women were in battle.

And my sense is people will once again think we failed and failed miserably and we don't have any friends there in that part of the world. And this battle is going to go on for a long period of time.

BARTIROMO: So what does that mean, boots on the ground back? What does that mean?

ROLLINS: We can't put boots. There's no political will to do that. And my sense is whatever we do is going to be insignificant to what the battle is going to be. I think the key thing here, though, are people going to watch this and worry, even if they don't have the expertise of your guests here, so they start not consuming in a way that they probably will.

And, obviously, if we have another cold winter like we did last year, prices will go up and they'll argue that that's the reason for it.

BARTIROMO: Because it will dictate behavior.

ROLLINS: Absolutely.

BARTIROMO: All right. Let's take a short a break. The Federal Reserve set to hold a two-day meeting on interest rates. What it means for your bottom line, as we look ahead on "Sunday Morning Futures," next.

(COMMERCIAL BREAK)

BARTIROMO: And we're back with our panel, Ed Rollins, Jerry Webman, Ken Hersh.

And you made the point, Ed, that this is going to be a long war in Iraq.

ROLLINS: Well, it's a religious -- and it's not just -- it's just not Iraq. As you said earlier, it's gonna -- Iran is going to be involved in it. It's going to be a big regional war. And, you know, I would not want to be an Israeli today. I'd simply be worried about the flames around me. And, obviously, they can protect themselves and we have to protect them. But it's a very scary thing to me.

BARTIROMO: From an investment standpoint, you're investing in energy. What are the implications?

HERSH: Well, it's a true story. The more there's chaos around the world, the more I love what's happening in Texas and Oklahoma and Louisiana or the Dakotas (ph). The United States and North America in general have a multi- 100-year supply. And we don't appreciate until times like this clarity of law, clarity of rules, being able to get your workers to work, are incredible gifts that the United States and Canada have. And that forms a very compelling investment opportunity.

BARTIROMO: Yeah, but we're putting off Keystone Pipeline until after the midterms.

HERSH: I mean, that's -- that's ludicrous. There's 17 pipelines that cross between U.S. and Canada. There's 185,000 miles of oil and liquid pipelines in the United States. And all we've done is chase one of our best trading partners to other markets while we import from Venezuela.

BARTIROMO: Right. They're looking at Asia right now, and India in particular, the Canadians are.

Jerry, two-day Fed meeting next week. How do you prepare for that?

WEBMAN: I think don't pay too much attention to it. I think people -- the fans of the Fed and the opponents of the Fed, I think, have worried way too much about this sort of scholastic, or Talmudic, depending on who you are, reading of the -- of every word. That's not what's important. The Fed, the ECB, the DOJ have told us they're going to keep -- they're going to do whatever they can to maintain financial stability for as long as they can.

They're going to keep rates low for a long time.

BARTIROMO: Right.

WEBMAN: Don't worry about, you know, the -- you know, maybe it's this month; maybe it's the next month. You know, see if Spain can come back.

Instead of watching Yellen's press conference, see if Spain can come back from their defeat in the World Cup.

(LAUGHTER)

A better use of time.

BARTIROMO: Hey, Italy won.

Rates at rock-bottom levels that we really haven't seen that much of the needle move on manufacturing. And certainly we're watching unemployment.

ROLLINS: No. The other thing all of this is going to do is it's going to show again how weak the White House is. And that's not ever good for the country. Partisan Republican, when I say that, but I think, really, there's not much the president can do here. And he'll look weaker and weaker as time goes on. And if he loses the Senate in the midterm, he's going to have two years of just chaos.

BARTIROMO: So what's the implication of (inaudible)? We're going to take a short break. Still to come, that one thing that we're watching for in the week ahead or the weeks ahead, on "Sunday Morning Futures." We'll be right back.

(COMMERCIAL BREAK)

BARTIROMO: We're back with our panel. The one thing to watch for in the week ahead, weeks ahead? Ken Hersh, Jerry Webman, Ed Rollins.

What's your one thing, Ken?

HERSH: It shows you what my life's been reduced to. I'm watching the natural gas storage levels. We're about a third of the way through the summer injection season. And if we don't catch up fast, it's going to be a tough winter.

BARTIROMO: All right. And that means higher prices?

HERSH: It could mean higher, spiking natural gas prices unless the industry can respond.

BARTIROMO: Jerry, what are you looking at?

WEBMAN: For me, it's all about who's making money. So the thing to watch right away is has China bottomed? Are they going to produce the worldwide demand for capital equipment, for natural resources, for all the things that are going to help companies around the world make money? Hating the government is not an investment strategy. Pay attention to who makes money.

BARTIROMO: Ed, what are you looking at?

ROLLINS: The McCarthy race, obviously, for the Whip, for Cantor -- the one thing that Cantor did is he was the most pro-business, pro-financial- community, pro-Chamber-of-Commerce. And I want to see if Republicans back away from them somewhat.

BARTIROMO: McCarthy versus Labrador. I mean, people are wondering if, in fact, the GOP is going anti-establishment now. I mean, are we at the Tea Party...

ROLLINS: McCarthy won't be anti-establishment. The Tea Party did not win this. Cantor lost this race, and that's the truth.

BARTIROMO: All right. Gentlemen, thank you very much for joining us.

Appreciate it.

That will do it for "Sunday Morning Futures" this morning. Happy Father's Day, all you dads out there. I'm Maria Bartiromo. I'll be back tomorrow morning on "Opening Bell" at 9:00 a.m. Eastern on the Fox Business Network. Here's where you can find FBN on your cable network. I hope you'll join us

-- or satellite provider. Click on "Channel Finder" at foxbusiness.com. "Media Buzz" with Howard Kurtz is next. Have a wonderful rest of the day on this beautiful Father's Day.

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