Sen. Graham reacts to Carson's controversial remarks; San Francisco Federal Reserve president talks interest rates

Republican presidential candidate seen by some analysts as the winner of last week's GOP early debate


This is a rush transcript from "Sunday Morning Futures," September 20, 2015. This copy may not be in its final form and may be updated.


Several GOP presidential candidates shooting from the hip in the second round of debates. Hi, everyone. I'm Maria Bartiromo. Welcome to "Sunday Morning Futures."

As candidates like Donald Trump and Carly Fiorina fight off criticisms, we'll talk policies with one contender looking to gain ground in the race for the GOP nomination. South Carolina Senator Lindsey Graham with me this morning.

Plus, a major decision impacting your money put on hold. The chairman of the San Francisco Federal Reserve Bank on why he voted not to raise interest rates last week but says a move is coming soon.

And more chaos at the borders of several European countries as the European Union scrambles to figure out how to house the millions of migrants seeking refuge. The head of the International Rescue Committee is here. David Miliband joins us live as we look ahead this morning on "Sunday Morning Futures."


Voters and political insiders alike giving high marks to Lindsey Graham for his performance at this past week's early debate. Since then, he's wasted no time getting back out on the campaign trail, hitting the first in the nation caucus state of Iowa while the majority of the GOP presidential contenders address supporters at a summit in South Carolina.

Joining us right now is South Carolina Senator Lindsey Graham, 2016 Republican presidential candidate and a member of the Senate Armed Services Committee.

Senator, good to have you on the program. Welcome.

SEN. LINDSEY GRAHAM, R-S.C., PRESIDENTIAL CANDIDATE: Thank you very much, Maria. Good morning.

BARTIROMO: What -- what do you think worked in that last debate to really help your supporters recognize your vision?

GRAHAM: Yes. Well, one, I had an audience. The first debate was like having a debate in a bathroom. So interacting with people. But basically loosening up, making some jokes to make a greater point, but having the determination to win a war we can't afford to lose and focusing in on why I am best qualified above all others to be commander in chief on day one, something that I think is going to matter over time.

BARTIROMO: And why do you think you are best positioned to be that person?

GRAHAM: Thirty-five trips to Iraq and Afghanistan in the last decade. I understand this war. I have a plan to win it. I intend to win it. Thirty- three years in the Air Force, 140 days on the ground in Iraq and Afghanistan as a United States Air Force Reservist. I understand the military. I've been on the Armed Services Committee since my entire career. I am ready to lead the finest military in the history of the world. I intend to destroy radical Islam with a plan to do it. We've got to go back to Iraq with some more ground force, get a regional army to go in on the ground in Syria and destroy ISIL. I intend to destroy radical Islam.

BARTIROMO: Well, you certainly have the leadership and the goods to do so. Let me ask you this, senator, because Donald Trump has been speaking from the hip and it has been resonating with him.


BARTIROMO: This morning we know Dr. Ben Carson made a comment --


BARTIROMO: About the that -- who -- who should or should not be leading this country. Let's talk about what Dr. Ben Carson just said about a Muslim leading America. This was --



GRAHAM: OK. OK. Me? Is it me?

BARTIROMO: Yes, yes, go ahead, senator.

GRAHAM: I lost you there. OK. OK. I'm sorry. I apologize. Well, number one, I think this shows that Dr. Carson's not ready to be commander in chief. He said that he didn't believe somebody of the Muslim faith could be loyal to the Constitution. My belief is that the 3,500 proximate 3,500 American- Muslims wearing the uniform of the United States military are loyal to the country. They're fighting and dying for their nation.

When I was Colonel Graham back in Afghanistan a couple of years ago, during the second election of Karzai, I had an opportunity to go to a polling station during the election with military members in charge of providing security. One of those military members was a young man who grew up in Kabul, went to this particular high school. He came to America. He was a member of the United States Army. He was so proud of what happened in Afghanistan. He was proud to wear the uniform. I had a cup of coffee with him. And, yes, one day, I hope that young man could grow up to be president of the United States.

America is an idea not owned by a particular religion, race or anything else. Out of many comes one. So I think Dr. Carson needs to apologize to this young man and every other Muslim serving their country and to the American-Muslim community.


GRAHAM: And if he understood the world and how dangerous it is, he would not say things like this. We have to partner with people in the faith to destroy radical Islam. And most Muslims throughout the world reject what radical Islam is trying to do to the world and their faith. So this is an example to me that Mr. Carson may be a good doctor, but he is not ready to lead a great nation.

BARTIROMO: Yes, you know, this is just happening this morning, Dr. Ben Carson --


BARTIROMO: And the quote is -- the quote is that he said, I would not advocate that we put a Muslim in charge of this nation. I absolutely would not agree with that. He said that Islam, as a religion, is incompatible with the Constitution. And, of course, this is what's being talked about on the heels of that comment. Let me -- let me ask you about the broader issues.

GRAHAM: Can I just add one thing?

BARTIROMO: Yes, go ahead, senator.

GRAHAM: Can I just add one thing?

BARTIROMO: Of course.

GRAHAM: What would he say -- what would he say to the young man that I met in Kabul who left Afghanistan, became an American citizen, joined the United States Army? What would he say to the approximately 3,500 American- Muslims who have been to Iraq and Afghanistan fighting for our freedom, risking their lives? What he should say is thank you for serving our great nation. We're all in this together.

BARTIROMO: All right. Well, look, we'll be watching for -- for this impact of this comment this morning. I've got to ask you about the broader issues that the country faces.


BARTIROMO: For example, the premier of China is going to come to the United States this upcoming week. He'll be in Washington with President Obama on Tuesday and then the president and the leader of China will do a summit on Friday. China has been the story of the economy because it is slowing down so much.

GRAHAM: Right.

BARTIROMO: What's your take on dealing with someone like the premier of China in terms of taxes, in terms of fees? A lot of people are complaining in business that China is dumping products on the U.S. at much lower prices than U.S., American-made goods.

GRAHAM: Well, we've particularly had that problem in steel where they were dumping steel into the world marketplace. They manipulate the value of the yuan. They keep it artificially low. They don't let it go to its true value, which creates a discount on every product made in China.

What would I do with China? I would have a clinched fist and an open hand. I would tell them that no longer will they be able to hack into our systems without reprisal. No longer will they be able to cyberattack our country or steal intellectual property. If you want a good relationship, you have to act in a responsible fashion. I would push back against building islands over resource rich waters owned by others and I would tell China, you're going to lose access to our markets if you keep cheating and you keep being provocative. We will suffer, but they will suffer more.


GRAHAM: It is time to really reset the relationship with China.

BARTIROMO: Well, we'll see if any of that comes out when he meets with President Obama on Tuesday.

The question of the moment, Senator Graham, and that is about the economy. Wages have not moved.


BARTIROMO: Jobs continue to be underwhelming.


BARTIROMO: What is your solution to moving the needle on jobs and growth in this country?

GRAHAM: You're never going to create a job in this economy because it costs too much to create a job. Obamacare hangs over the entire economy. If you reduce work hours to 30 hours from 40, you're not covered by Obamacare. If you're a small business, which most people in the economy are, if you hire over 50 you're covered by Obamacare. So if you're at 48, you wouldn't go to 51.

I would change Dodd/Frank to allow people to have better access to capital. I would repeal and replace Obamacare with something that's more job friendly. I would do something with the highway trust fund. I'd repatriate corporate earnings parked overseas that won't come back at 35 percent.


GRAHAM: Have a one-time good deal to put the money in the highway trust fund. I'd build more nuclear power plants. I'd become energy independent. I would build this economy --


GRAHAM: By unleashing the potential. Deregulate.

GRAHAM: Senator -- yes, that's about regulation.

Senator Graham, good to have you on the program today. Thanks so much.

GRAHAM: Thank you.

BARTIROMO: We'll see you soon. Senator Lindsey Graham.

And Senator Graham spoke at the Fifteenth Annual Faith and Freedom Coalition event in Iowa along with seven other GOP candidates in that all important first caucus state. We look at just how vital it is to connect with that crucial group of evangelical voters.

Fox News senior correspondent Eric Shawn on that angle.

Good morning to you, Eric.

ERIC SHAWN, FOX NEWS SENIOR CORRESPONDENT: Good morning, Maria. And good morning, everyone.

Well, Dr. Carson's comments on religion are in the headlines today. For 15 years they have gathered in the name of religious liberty. Evangelicals mulling over the presidential field. It was the annual Iowa Faith and Freedom Coalition. A very key part of the Iowa caucus.


DONALD TRUMP, R-PRESIDENTIAL CANDIDATE: I brought my Bible. See. I'm better than you thought, you see?


SHAWN: Donald Trump, playing to the crowd, also brought his confirmation picture, trying to reassure skeptics about the depths of his faith. Half the GOP field addressed the gathering. And while the evangelicals make up the majority of the Iowa caucus, the ultimate caucus results have been somewhat uneven when it comes to picking the eventual GOOP nominee. In 2012, Senator Rick Santorum beat Mitt Romney in a squeaker.


RICK SANTORUM, R-PRESIDENTIAL CANDIDATE: What the people of Iowa do matters. You look at the candidates. You interview the candidates. You meet with them. You look them in the eye and you do your job.


SHAWN: In 2008, Governor Mike Huckabee won. In 1988, Bob Dole placed ahead of Pat Robertson and Vice President George Bush, who, of course, went on to win the White House. And it was Mr. Bush who also topped Ronald Reagan in 1980.

Meanwhile, on the Democratic side last night, both Hillary Clinton and Martin O'Malley attended the annual Congressional Black Caucus Dinner in Washington. Vice President Joe Biden also spoke to the group earlier yesterday amid speculation that he is considering a run. Some reports predict that he will more than likely jump into the presidential race, but some are not so sure.


SUSAN ESTRICH, FORMER DUKAKIS CAMPAIGN MANAGER: They think at the end of the day Joe Biden is going to look at what's ahead and look at where he is now and realize that he doesn't really need to do this. That he has established his place in American history. That there's a wonderful ambassadorship waiting for him, and he doesn't need to lose another presidential race.


SHAWN: Well, the vice president was warmly received, as we await to see if he will join the race.

And this morning, JP Morgan Chase boss Jamie Dimon, well, he also weighed in on the race saying CEOs know how to run things but may not make the best presidents. Tell that to Donald Trump, Carly Fiorina or even Mike Bloomberg.


BARTIROMO: Yes, right, Eric, tell that to all of them. Thanks very much, Eric Shawn there.

We'll take a short break. Leaders in Europe calling an emergency summit this week to tackle the growing migrant crisis. The president and CEO of a major humanitarian relief group is with us on what the countries need to do for thousands of refugees driven out by terror in their own homes stranded now at the borders.

You can follow us on Twitter @mariabartiromo, @sundayfutures. Send me a tweet. Let us know what you'd like to hear from David Miliband. And one of the nine voters who said no to higher rates last week. We're looking ahead on "Sunday Morning Futures."


BARTIROMO: Welcome back.

European governments scrambling this morning to cope with the massive influx of migrants pouring into their countries. Hungary is now reopening its main border crossing with Serbia after sealing it off just five days earlier following violent clashes between riot police and migrants. Now while Hungary is keeping away migrants at its southern border with a razor wire fence, take a look at those pictures, refugees are arriving from Croatia on its western border and they are being met with buses and trains that escort them to Austria. That country's seeing the arrival of at least 10,000 migrants yesterday alone.

Joining me right now to talk about this is David Miliband, he is president and CEO of the International Rescue Committee.

And, David, it is good to have you on the show today.


BARTIROMO: Have you ever seen this kind of a crisis that you've got to deal with?

MILIBAND: No, this is the biggest refugee crisis since the Second World War, 4.5 million people expelled from Syria and several million more from other countries consumed by civil war. And, frankly, Europe's not been able to cope and it's vital that it gets its act together at the summit that the leaders of Europe are having on Wednesday.

BARTIROMO: Yes, they're having this summit and then they are going to agree how many to take in and who has been taking in the bulk has been Germany so far.


BARTIROMO: Is that right?

MILIBAND: Yes. I mean Germany, given the history, there's -- many people will maybe find this ironic, but Germany has shown extraordinary leadership. It's committed to take 500,000 refugees per year for the next three or four years. Of course the challenge for Europe is not just to be good at sharing out the refugees who arrive. The big issue is, who's going to provide the political and diplomatic muscle to staunch the flow from Syria and elsewhere. The -- the -- the raging Syrian civil war is going to keep on producing millions of refugees until it stops.

BARTIROMO: And the president has said -- President Obama said last week that ISIS has metastasized and that its home base, ground zero, is Syria. So the vetting process becomes that much more difficult. I mean the president said that the U.S. would let in about 10,000 refugees and yet how do we know these are not, some of them, ISIS fighters in refugee clothing?

MILIBAND: Well, the U.S. has really good systems for vetting. Security systems. My organization, the International Rescue Committee, has been resettling people into the United States for 80 years since Albert Einstein founded the organization in 1933. And people are right to ask the question about security, but they should have confidence that the measures in place are real.

Let me just give you one example, though. The orphans that are being left from -- from the civil war, no one's looking after them at the moment. So there are some easier cases. There are some harder cases. But the systems do exist. And at the moment, at a time when the rest of the world is taking hundreds of thousands, for the U.S. so far to have only admitted 1,500 Syrians --


MILIBAND: Shows that something's gone very badly wrong with both the moral and the political leadership that the U.S. has traditionally shown on this vital issue.

BARTIROMO: What -- what would you like to see happen now? We know that just overnight we had more fatalities, right?

MILIBAND: Yes. I mean terrible story of a dinghy being hit by a ferry, 13 people died overnight. A report of 24 more dying in a dinghy and I would --

BARTIROMO: And they were trying to get to -- what -- what is the route that they are --

MILIBAND: They were going from Turkey just six miles across the Aegean Sea to Lesbos (ph). I was there last Sunday, Monday, Tuesday. It's a tourist island traditionally. Now 2,000 to 3,000 refugees per day --


MILIBAND: On these pathetic dinghies which are built for 15 people and have 30, 35, 40 people crowded on them.


MILIBAND: They're paying 1200 euros each to get there, 600 euros for a -- for a kid. And there -- there are terrible stories, Maria. The woman -- we're a humanitarian organization. We provide services for people in desperate need. She said through an Arabic translator, my wheelchair was thrown overboard by the smugglers, so we had to get her a new wheelchair. Never mind the water, the sanitation, et cetera. But, obviously, there's a need for political muscle in and around Syria. Those neighboring states like Jordan, which you're -- you're featuring an interview with the king of Jordan this week, his country has got 700,000 refugees. They need help and they're a big ally of the U.S.

BARTIROMO: Right. Right. So what do you want to see now? What would you like to see come out of that meeting amidst European leaders next week, and, of course, from the U.S. The pope visiting next week. This will probably be one of his top (INAUDIBLE) as well.

MILIBAND: So a short-term and a long-term answer. The short-term answer is real mobilization to give people dignity and humanity. Businesses, we've got really good response. Trip Adviser, AOL, Google, are stepping up to support the work we're doing because, frankly, we haven't got the funds without that kind of private philanthropy, that kind of private charity, and we can provide the help, the education, the basics to keep people going. Europe needs to distribute the refugees around Europe.

But, obviously, we also need to see far greater effort at source. In the neighboring states that can't cope, but also the Syrian civil war, for whom there's currently one U.N. official plowing a lonely furrow without the support of the U.N. Security Council to bring any kind of hope that this war can come to an end.

BARTIROMO: You make a great point because the fact is, is ISIS' ground zero is in Syria and we need to go to the source so that these folks are not driving people out of their own homes.

MILIBAND: Yes. I mean what they're saying to me, these refugees I met last weekend, they're being bombed by President Assad, who is the president of Syria, bombed in their own homes on the one hand and they face the terror of ISIS on the other.


MILIBAND: It's a terrible choice and they say Aleppo, the second biggest city, Aleppo is hell. I have to leave hell. That's the -- that's the issue.

BARTIROMO: What a terrible story. David, thanks so much for your insights.

MILIBAND: Thank you very much.

BARTIROMO: We'll be watching your efforts for sure. David Miliband there.

The Federal Reserve, meanwhile, deciding to keep interest rates just where they are last week. We will talk about this with one of the people who voted. The president of San Francisco Federal Reserve Bank is with us live to find out why he said no to higher rates in this economy. We're looking ahead on "Sunday Morning Futures." That's next.


BARTIROMO: When will interest rates move higher? All eyes on the Federal Reserve this past week as it decided to leave short-term interest rates unchanged to the surprise of some. Federal Reserve officials said that while the jobs market is solid, recent global developments may restrain economic activity and further drag down already low inflation. The board voting 9-1 to keep interest rates near zero, but Fed officials say an increase is still likely before the end of the year.

Joining us right now is one of the nine members of the Federal Reserve board who voted to keep rates at their current levels, and he is John Williams, the president and CEO of the Federal Reserve Bank of San Francisco.

Good to see you, sir. Thank you so much for joining us.


BARTIROMO: Let me ask you, there was such a debate because we keep looking at the numbers in the -- in the employment story in the U.S. and they are getting better and better and better slowly. Is there some kind of a protocol that you don't want to go against the chairman? Is that what it is, that like -- like were many of those nine voters, you included, really, in your heart of hearts thinking, well, you know, we -- we really could raise rates right here?

WILLIAMS: Well, in my mind it was a close call. I think the U.S. economy is showing good momentum. We've made amazing progress on getting unemployment down, creating a lot of jobs. So on the domestic front, I think we're in a very good position. I think we're close to our full employment mandate. But global developments are a concern. But, you know, the strengthening of the dollar, weakness abroad has put some significant headwinds on our forecast for growth and also for pushing down inflation. So it's making it a little harder to get inflation back to our 2 percent goal. So we're trying to balance these various considerations, get the right decision. But I did support having -- showing a little bit more patience, collecting a little more data, getting a little bit better view of where we are and where the economy is going before initiating the first rate increase.

BARTIROMO: So -- so pull the curtain back for us a little. Tell us what went on in that room when you all were deciding what to do as markets were trading volatile and we see these global uncertainties coming out of places like China and the emerging markets and the impact. What -- what was the discussion around when -- around this debate?

WILLIAMS: Well, you have to understand, you know, before the FOMC meeting, we have about a week of preparation, each of us, for the meeting. We get lots of briefing binders and analysis of what's going on in the U.S. and abroad. And then for two whole days we sit and exchange ideas. People bring their different perspectives. The presidents of the banks bring their perspectives from their various districts, what's happening across the country. Kind of boots on the ground view of what's happening. Obviously we get a lot of discussion of international development. So it's a very -- very, I'd say, fulsome discussion and debate. Lots of different perspective. I would say a lot of discussion around risks to the outlook too, especially given the uncertainties about what's happening in the global economy.

BARTIROMO: One -- one of the risks was the employment story, in particular the participation of the employment story. So 38 percent of Americans today, working age Americans, are either without a job or without a job and they don't care. They're not going to look for a job. Why do you think that is and why has it been so hard to get wages to move up?

WILLIAMS: OK, so those two of the biggest questions about the U.S. economy but I'll take the first one first. In terms of participation, much of the decline of participation since 2007 really reflects demographics, the retirement of the baby boom. And so I think that we are -- we shouldn't expect participation rates to go back to where they were in the early 2000s. There still is a gap there if you look at the number of people who are on the sidelines waiting for the labor market to get better, to start joining -- looking for work again. There are a significant number of those people.

The good thing is, that number has come way down and I expect that to continue to come down through the rest of this year and into next year. My own view is we're going to see the unemployment rate fall below 5 percent. We're going to see improvement among all these different dimensions.

In terms of wages, the historical experience of the last couple of recoveries is wages don't really pick up until the economy gets near full strength. I think we're -- we're there now. I am expecting to see wage growth pick up. And I think that with the forecast I have with the economy getting stronger and stronger, we're going to see more increases in wages over the next couple of years and that is going to be part of the story of bringing inflation back to 2 percent.

BARTIROMO: Do you think that because you have sort of put all of this out there, now we understand the conversation behind the -- behind the decision that you don't need a press conference to announce a rate increase. Should we expect it in October?

WILLIAMS: It -- you know, I think that it would -- it would be very helpful to have a press conference or a press briefing or an opportunity for the chair to explain our decisions at the time that we do have a rate increase, whenever that is. I do think that's a great chance for our chair to explain all the kind of considerations that went into it. I thought the press conference this week was really helpful. The -- I thought that chair, Yellen, did a great job of explaining the pros and cons around our policy decision and I -- so I do think we should have a press conference or a press briefing or something like that around any meeting that we're going to -- where we're going to actually start raising rates.

BARTIROMO: All right. The reason why I mentioned October is because it's not expected that you will have a press conference in October, so that leads me to think, OK, then the rate hike comes in December, when you're planning a press conference.

WILLIAMS: No, we could always have a press briefing if there's a major decision.


WILLIAMS: So I don't think that's an issue at all.

BARTIROMO: I gotcha. So any -- any month is on the table.

Let me ask you about the international story. China keeps coming up. How important is China and the emerging markets? Why is this so impactful on the U.S.?

WILLIAMS: Well, clearly, China is one of the biggest economies in the world. But I would like to emphasize that we're not -- when we talk about international developments or financial conditions abroad, we're not just talking about China. There is a slowdowns going on across many countries around the globe, including Mexico and Canada, Australia, Europe is still struggling, Japan is still struggling. So we're not just talking about China, but clearly concerns around China's slowdown, concerns about emerging markets in general slowing down have impacts on the U.S. economy. One is it -- it weakens our export markets. But the second is, those slowdowns have led to policy actions in those countries, which have pushed their currency down relative to the dollar and that does affect the U.S. economy. So we have to take those into consideration in thinking about the outlook.

BARTIROMO: Real quick, you are hailing from San Francisco, where we've spoken about this before, there's all this innovation going on and technology euphoria.

Where is the growth in the country today?

WILLIAMS: In the U.S. economy right now, it's coming mainly from consumption and business spending. And housing still has a ways to go to get back to full strength.

What's remarkable about the expansion right now is we're still growing 2 percent to 2.25 percent. That's good. And that's in the context of a global economy that's quite weak. So these global headwinds are really what's holding us back from growing much faster.

So if you look at the domestic spending, consumer spending, government, business investment, that's actually on a very good trajectory.

BARTIROMO: Wow. Really interesting story. And thanks for explaining it so well.

John Williams, nice to see you.

WILLIAMS: It's great to see you.

BARTIROMO: Thank you so much.

And he is the CEO and president of the San Francisco Federal Reserve Bank, John Williams.

Carly Fiorina gaining steam in the polls and on the campaign trail weekend following last week's standout debate performance. What her rising stock means for the 2016 state of play as we get with our panel and look ahead on "Sunday Morning Futures" next.


SHAWN: From America's news headquarters, I'm Eric Shawn. Here are some of the other stories that are making headlines at this hour.


SHAWN (voice-over): A live look at Havana where Pope Francis is holding a massive mass this morning in Revolution Plaza. The pontiff has a packed day ahead of him in Cuba, including a closed door meeting with President Raul Castro and possibly also meeting his brother, Fidel, the former dictator who, of course, once banned the church and kicked out priests.

The pontiff is also expected to meet with young Cubans for another service later today.

Meantime the U.N. nuclear chief Yukiya Amano arriving in Tehran this morning, It's an attempt to, quote, "clarify past and current issues of Iran's nuclear program." His visit coming less than one month before an October 15th deadline to gather information on those allegations that Iran has tried to build a nuclear bomb in the past.

A final U.N. assessment is due in December.

I'm Eric Shawn. Now back to “Sunday Morning Futures” and Maria.

BARTIROMO: Thank you, Eric.

Carly Fiorina building on her post-debate momentum this week, jumping to second place in this latest CNN poll. We want to show you these numbers, with 15 percent support, that follows front-runner Donald Trump, who is now at 24 percent and ahead of Ben Carson in third place at 14 percent. Marco Rubio taking fourth with 11 percent and Jeb Bush rounding out the top five at 9 percent.

Look at Scott Walker, completely facing an all-out collapse, washout, joining four other candidates with less than 1 percent for Scott Walker.

What does this mean for the state of play going forward?

We want to bring in our panel on these new numbers which are just crossing the wires right now.

Ed Rollins is former principal White House advisor to President Reagan. He has been a long-time strategist to business and political leaders. He is a Fox News political analyst.

Julie Roginsky is a former political adviser to New Jersey senator Frank Lautenberg.

And Steve Moore, distinguished visiting fellow at The Heritage Foundation.

All three are Fox News contributors.

Good to see you all. Thank you so much for coming.

I think it's really interesting not just to look at who is moving up, but who is moving down. Trump went from in the 30s percent to down to 24 percent.

Ed Rollins, your thoughts on these new poll numbers?

ED ROLLINS, POLITICAL CAMPAIGN STRATEGIST: My thoughts are that this is about salesmen. The three people who are in the front-runners are outsiders, Trump and Fiorina are both extraordinary salesmen. We thought this was going to be the year of the governors.

We had extraordinary governors. First governor to drop out is the most elder, was Perry. The others are not doing well, except for Bush, still in the game more because of his family than anything else.

The outsiders now make up over 50 percent of the polls and what's going to happen there. Carson is a nice man. He's not going to be a viable candidate. Carly will be tested now. She basically didn't do well in a Senate race in California but she certainly has the great ability to communicate. And I think people are going to look at her hard, look at her record hard.

And Trump basically, if Trump holds 20 percent, 25 percent of the base that he still has, despite the worst performance on the show the other night, he's still going to be a player in this game.

BARTIROMO: You think it was the worst performance we've seen yet by Trump?


ROLLINS: He had no substance. That's what most of him who know him well - - we know he's a great salesman and he sells himself well but there's no substance.

BARTIROMO: Yes, Julie, that's the thing. We've got to start hearing substance about real solutions to the issues that this country faces, otherwise they are going to lose support.

JULIE ROGINSKY, FORMER POLITICAL ADVISER: Yes, and Fiorina did a very good example of exposing Trump. She was the first and the only one to really lay a glove on him in all these months, when she said everybody on the stage obviously knows who General Suleimani is, that was a direct slap at him for not knowing who the Quds Force were and confusing it with the Kurds.

So Fiorina did something that I think was very important for her but also important for the Republican Party. She went in there with substantive answers to some of the issues that were discussed. Trump looked less substantive than usual in comparison to her. They both have this newcomer business background that obviously appeals to the Republican base but she seemed to be selling the substance a lot more. And I think as we're getting closer to New Hampshire, closer to Iowa, voters have got to start looking at what those candidates are going to do for them, not just the showmanship that Trump has been seeing, showing all summer long.

BARTIROMO: Steve, how do you see it?

STEVE MOORE, DISTINGUISHED VISITING FELLOW, THE HERITAGE FOUNDATION: Carly mania is taking over this country. I've made this prediction before on FOX but I'll say it again. I think in two weeks she'll be in first place. I think she'll overtake Donald Trump.

There's a buzz about her, Maria, all over. I've been traveling just the last three or four days and talking to activists around the country. They're just enthralled with this woman. They think she's like the next Margaret Thatcher. It was an incredible performance.

The other -- the weakness I saw in that debate was there was not enough talk, Maria, about the economy.

BARTIROMO: I don't understand.

MOORE: -- about jobs and growth. It was like 10 minutes out of a three- hour debate.

BARTIROMO: That's exactly the point that I just made to Senator Lindsey Graham. This is the number one issue facing the American people --

MOORE: Exactly. They talked more about immigration and abortion.

BARTIROMO: I don't hear any questions about how do you get growth in this country and where do you go to get jobs?

MOORE: And the reason that's important, Maria, is the big statistic that came out this week that was overshadowed by the debate was the Census Bureau came out with these new numbers and what's happened to family income in the last seven years.

Under Barack Obama, the average family has lost $1,000 in real purchasing power. That's a statistic for them to hammer, hammer, hammer and they just didn't because they didn't talk about it.

BARTIROMO: But how about the fact that the Federal Reserve could not even raise interest rates for the first time in almost 10 years by 25 basis points?

ROGINSKY: Well, because the moderators don't want complicated answers to complicated questions. What they want is a cat-fight. They got one, over a whole host of issues, including Planned Parenthood, which lends itself to much easier answers and much sexier answers than talking about interest rates and the basis point and whatever else you need to talk about that really is something that you have to explain and explain and has a lot of nuance and it just doesn't make for good ratings. And CNN obviously knew that, which is why you saw three hours of fluff.



Well, you can bet that, on the Fox Business Network and on my morning show, I'm doing all...


... and economic talk.


ROLLINS: And the interesting thing...

MOORE: You should have been the moderator.

ROGINSKY: You should have been the moderator.


ROLLINS: You should have been the moderator. Carly -- Carly can talk on these issues and she will basically do very well.

There's an old rule in politics and something -- I've been on the ground for five decades -- when momentum catches up with a lack of organization, you get in trouble. So far there's no organization; there's no money in her campaign. She may do very well in the debates in the future; she may do very well, but she's got to put a structured campaign and she's got to be prepared for an onslaught, just as she got when she ran for Senate in California...


MOORE: And, you know, we were making the point in the -- in the green room, the other big story here, Maria, where are the governors?

ROLLINS: Governors.


MOORE: Remember, six months ago, everybody was talking, well, you know, it's going to be Jeb Bush; it's going to be John Kasich. And who are the three front-runners? They're -- they're the non-governors, and...

ROLLINS: Because they -- the governors have tried to talk about what they did in their state.

MOORE: Exactly.

ROLLINS: And no one cares what they did in their states. And Christie is the biggest example, Walker and all of them. People want to know, what do you --where are you going to take this country, and the economy is the issue and nobody's talked about it.

ROGINSKY: Well, look, Christie has the worst narrative. Christie -- you brought him up -- I mean, has a horrible record in his state, so that's not a record he wants to talk about.

You know, when he pointed to Trump and Fiorina and essentially said nobody wants to hear about your backgrounds, I laughed and I said "because you don't want anybody to talk about your background, and that's why."


BARTIROMO: Right, but it's just an interesting development, though, to look at -- we had all this promise in the governors.

OK, stay right there because we want to talk about the other side as well. But first, let's get a look at what's coming up on "Media Buzz," top of the hour with Howard Kurtz.

Howie, good morning to you.

KURTZ: Good morning, Maria. Donald Trump pushing back at the media over the uproar of his correcting, I should say, that questioner in New Hampshire who called President Obama a Muslim.

We'll also look at the extraordinary positive press that Pope Francis gets. He's in Cuba this morning, as you know, heading to the United States.

And Fox's Jenna Lee responding to an utterly tasteless joke by Conan O'Brien that likens the women of Fox News to porn stars. Jenna Lee's got a lot to say about that.

BARTIROMO: Oh, God. Well, we will be there. I'm -- I'm certainly going to be watching that one, Howie.


Thank you so much. We'll see you in about 15 minutes.

Hillary Clinton is losing ground to Bernie Sanders, so can she regain that once powerful momentum or is the growing uneasiness toward her creating a possible opening for Vice President Joe Biden? We're getting into it with our panel next, as we look ahead on "Sunday Morning Futures."


BARTIROMO: Welcome back. Could it be panic time in Hillary-land? Mrs. Clinton suffering a drop in support stemming from ongoing concerns about her e-mail scandal to next month's congressional Benghazi hearings. Now Bernie Sanders is gaining ground and calling her out, demanding she take stances on major issues like the Keystone Pipeline.

Our panel is back, Ed Rollins, Julie Roginsky and Steve Moore.

You know, the Keystone Pipeline -- there was something that I saw on Twitter the other day and it was Hillary speaking about the Keystone Pipeline. I re-tweeted it because I just thought it was so telling. She said, "I will tell you what I think about this soon."


MOORE: Yeah, this isn't a tough call, either. I mean, this is about as close, Maria, to a no-brainer issue as there is, really. I mean, the public overwhelmingly supports this and it's about energy security. It's about creating jobs, union jobs. I mean, the only reason a Democrat would not favor this is because they're in the thralls of this kind of radical climate change agenda. And that -- and this points out that that agenda conflicts with creating jobs in America.

ROGINSKY: Well, you just -- you just nailed it, right? So Hillary Clinton is losing among liberal Democrats to Bernie Sanders. She can't afford to be bad on climate change in the primary.

MOORE: I know...

ROGINSKY: On the other hand, the unions are very much behind the Keystone Pipeline. She really, you know, is damned if she is and damned if she isn't. But, look, you're running for president. You've got to take a position on something.

BARTIROMO: Doesn't she know how, like, just in-genuine -- just not genuine that, you know, "I'll tell you what I think soon"?

ROGINSKY: Yeah. And, look, she was secretary of state while this was all being reviewed by the State Department. This was something she obviously worked on. She has a position. I would love to hear it.

ROLLINS: If this was -- if this was a debate on substance, she'd do very well. She's a lousy candidate. And this is -- we talked at the beginning of the show. This is the year of salesmen, Donald Trump selling himself, Carly Fiorina, a great salesperson. She's not a great salesperson. She can't sell what she is.


ROLLINS: Bernie Sanders is out there taking her apart and he's a salesman, whether that's what he did for a living or not, I don't know. But he basically has a different concept and he's selling it very effectively. And my sense is Biden's gonna get in there and you may even have Jerry Brown get in there.

BARTIROMO: That's funny you keep saying Fiona, like -- it's Fiorina, we know. But, you know, the -- most American people are very slowly but surely figuring out it's Fiorina and this is...

ROLLINS: My mistake, I apologize. I've always called her Carly.


BARTIROMO: ... and this is what I stand for.

No, I'm just saying because that's, sort of, an average American commentary. They didn't know her. And now they know her.

ROGINSKY: But, you know, to your point, I think a lot of people are waiting to see what Biden does. And I think she'll consolidate a lot of her support (inaudible) Sanders. People are waiting to see, the moderate Democrats, as to what Biden does. And I think that's where she's not consolidating support. If Biden doesn't get in, she'll get most of those people back, I believe.

BARTIROMO: Can Biden beat one of the GOP players right now?

MOORE: I think the problem with Joe Biden isn't so much his gaffes. And he's had a whole series of those for some years. I think his biggest problem and the reason he's a flawed candidate, maybe, you know, a tragically flawed candidate for the Democrats, is that he's Barack Obama's running mate.

And, you know, the one thing the polls show over and over again, Maria, is the American people, right now, don't want a third Barack Obama term. And how does Joe Biden separate himself from that?

I mean, the only person who has ever been able to win -- you may correct me if I'm wrong about this, Ed -- was George Bush, senior, who ran, sort of, on Reagan's third term because people wanted a Reagan third term.

ROLLINS: He ran for the third term.

MOORE: Yeah, exactly.

ROLLINS: Reagan was still very popular. And Reagan, kind of, put his arm around him and that was good enough for the country. He obviously didn't live up to the Reagan agenda, but -- and got defeated on his own four years later.

But my sense is he -- Biden cannot run away from Obama while Obama and Valerie Jarrett and others want him to run and it's because they know he will carry the mantle. Hillary is not going to carry the mantle.

BARTIROMO: We still haven't heard Hillary's thought on the Iran deal, Julie?

ROGINSKY: No, no, she said she supported the Iran deal.

BARTIROMO: She said she supported it, but what about how the implementation of this is going to -- how that's going to take place in the coming years, when it's another person's problem, not President Obama's?

ROGINSKY: Well, she's hoping it's going to be her problem and she's saying she's supportive of the deal, that she'll uphold the deal as opposed to the Republican candidates.

Steve, to your point, though, you know, I know people don't want a third Obama term. But you can't beat somebody with nobody.

MOORE: That's true.

ROGINSKY: And when you have a contrast between a Joe Biden, for example, if he were the nominee, or Hillary Clinton, and Donald Trump...

MOORE: It ain't gonna be Donald Trump.

ROGINSKY: ... you know, or whoever it is, or Jeb Bush, I mean, the question is, do they want a -- do they want a third Bush term, or in this case, I guess, yeah, a fourth Bush term?

MOORE: But here's the problem...

ROGINSKY: So that's the problem.

MOORE: I mean, for Hillary, because, I mean, who would have thought six months ago we'd be having this -- this conversation, that it's not going to be Jeb Bush, maybe, and it's not going to be Hillary Clinton?

The problem for Hillary is people don't believe her. You know, she's lost the trust factor and...


MOORE: ... that's hard to recapture.

BARTIROMO: It really is. OK, so the question becomes who will be the candidates facing off?


Don't answer that question. Let's take a break. I want you guys to think about it. Because, if the election were tomorrow, who is going to be the candidate?

MOORE: For both parties?

BARTIROMO: Both parties, next.

The Federal Reserve also deciding not to raise interest rates. What it means for your money as we look ahead on "Sunday Morning Futures." A lot of questions ahead of the panel this morning. Back in a minute.


BARTIROMO: Welcome back. The Federal Reserve deciding to leave short-term interest rates unchanged for now last week, citing concern over recent global developments restraining economic activity and dragging down inflation.

But based on my conversation with John Williams earlier in the program, the president of the San Francisco Fed, I'm betting that we are going to see a rate increase in October.

I want to bring back our panel right now, Ed Rollins, Julie Roginsky, and Steve Moore. All of that in a second. First, the question I asked you as we went to break. If the election were tomorrow, who would be the two candidates on the Dem and Republican side?

ROLLINS: Well, if it was tomorrow, it would be -- it would be Trump and -- and Hillary, but that's not what it's going to be. And at the end of the day, my sense is our party, whoever wins the Florida primary, March 15th, whether it's Rubio or Bush, will probably be our nominee, and Hillary's going to be the nominee on the Democratic side.

BARTIROMO: Who do you think's gonna be the nominee on the Republican side, Julie?

ROGINSKY: I'm gonna still say it's going to be like back to "Melrose Place," 1992 all over again. It's gonna be Bush/Clinton. And I'll be reliving my college years and I'm very, very happy to be going back -- back to the future in this one.

BARTIROMO: Wow. All right. What about you, Steve?

MOORE: I think this could go to a convention on the Republican side, that this might not be resolved until late summer. And that could throw the -- but I think the three that are most likely to win are Rubio, Bush or Carly Fiorina.

BARTIROMO: OK, all right. Let...

MOORE: And, by the way, I think Hillary is going to limp her way to the finish line on the Democratic side.


BARTIROMO: Isn't it extraordinary, though, that, you know, on the week that the debate happens, not a word about the fact that the Federal Reserve has been the only game in town here in terms of economic stimulus, no fiscal stimulus, and the economy?

I mean, the Fed can't even raise rates a quarter of a point? We're that weak?

MOORE: Yeah, and, look, if Republicans are going to win, they have to talk about the three issues that people care about, jobs, jobs, jobs.


BARTIROMO: And they haven't been doing that.

ROLLINS: Not only that; the idiot questions the other night, "Who should you put on a dollar" -- not about how you strengthen the dollar, how you basically -- how do you deal with other world leaders?


BARTIROMO: You're right. You're right. That's funny.

ROGINSKY: Particularly when the dollar...

ROLLINS: What Secret Service name do you want?


I mean, you know, first of all, that's just idiocy. It was just an idiotic debate and it was an insult to the American public to take three hours of their time to basically have a "Housewives of New York" type of a debate.

BARTIROMO: How about a question, how do you move the needle on jobs, Julie?


BARTIROMO: What's your economic plan?

ROGINSKY: I am -- I'm still completely flummoxed by, as I've pointed out, some of these really silly questions, but nothing about the most pressing issue to the American people, Democrat or Republican, which is how do you create jobs and strengthen the economy?

MOORE: But that was CNN's fault more than...

ROGINSKY: I -- I absolutely agree, exactly right.

MOORE: The Republicans should keep -- even when their last -- you know, no matter what the question is, the answer is going back to jobs and the economy.

By the way, Ed, I did think that Jeb Bush had a strong final statement where he brought up we've got to get back to 4 percent growth.


MOORE: That was the only really solid statement in the -- in that whole debate about the economy and growth.

BARTIROMO: He did a good job. Jeb Bush did a good job in this last debate.

OK. Still to come, the one thing to watch for in the week ahead, on "Sunday Morning Futures" next.


BARTIROMO: We're back. Everybody's watching the pope next week, in D.C. on Wednesday, New York on Thursday, Steve?

MOORE: When he comes to Washington, I hope he doesn't attack free market capitalism. It is the greatest anti-poverty program out there.

BARTIROMO: Julie, what are you watching?

ROGINSKY: I'm watching who's going to try to out-Trump Trump by saying ridiculous things to try to move their numbers up on the Republican side.

BARTIROMO: Ed Rollins, real quick?

ROLLINS: It could be a big week for the president. The president gets to meet the pope on Tuesday and meets the Chinese leader on Saturday.

BARTIROMO: It's true. That will do it for "Sunday Morning Futures." Thank you so much for joining us. I'm Maria Bartiromo. I'll be back Tuesday morning after jury duty on Monday. "Mornings with Maria," 6 a.m. to 9 a.m. on the Fox Business Network. Here's where to find FBN on your cable network. Have a great Sunday, guys.

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