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Sunday Morning Futures

Rep. Thornberry talks defense spending and the search for new House speaker; Assessing the economy at start of the 4th quarter

This is a rush transcript from "Sunday Morning Futures," October 4, 2015. This copy may not be in its final form and may be updated.

MARIA BARTIROMO, FBN HOST:   Good morning.

Is Putin telling the truth about his country's intentions to fight ISIS?

Hi, everyone.  I'm Maria Bartiromo.  Welcome to "Sunday Morning Futures."

The Pentagon claiming Russia is damaging the U.S.-led effort in Syria by attacking anti-government rebel fighters.  The chairman of the House Armed Services Committee and the former U.S. ambassador to Iraq today on the growing tension between the White House and the Kremlin.

Plus Jeb Bush's popularity falling in recent polls as signs are pointing to more voters siding with outsider candidates.  Our panel on that and more on the race to the White House.

Then expectations for the labor market, jobs falling way short last month.

What will it take to get hiring back on track?

Leading economist and budget expert Maya MacGuineas on that as we look ahead this morning on "Sunday Morning Futures."

(MUSIC PLAYING)

BARTIROMO:  Good morning.  A high-stakes showdown erupting this past week between President Obama and Vladimir Putin as Russia launched its first military operations in the Middle East in more than 30 years against ISIS, they say, in support of embattled Syrian president Bashar al-Assad as well.

Russia is stepping up airstrikes this morning, which Moscow says have considerably reduced the combat potential of the terror army.  The problem is the White House says few, if any, ISIS targets have actually been hit. Instead, they are targeting Syrian opposition forces, backed by the U.S.

We talk right now about that with Republican Congressman Mac Thornberry from Texas, chairman of the House Armed Services Committee.

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

MAC THORNBERRY, R-TEXAS, CHAIRMAN, HASC:  Thanks for having me, Maria.

BARTIROMO:  Now I want to get to a few things with you.  Certainly we
have to talk about the potential of a veto of the Defense Act.  But we'll
get to that in a moment.  Let's talk Russia first because we continue to
hear sources telling FOX News that Russia is bombing anti-Assad rebels and
not necessarily ISIS targets.

What can you tell us?

THORNBERRY:  Well, I think that's clear, just from the areas in which
they are conducting their strikes.  They have conducted a few token strikes
in Raqqa and other areas where ISIS is located but most of their activity
has been against the anti-Assad folks, who many people call the moderate
opposition.

So clearly they're trying to strengthen Assad and also reassert
themselves as a major power in the Middle East.  It is historic.

BARTIROMO:  Yes, while they're basically pushing President Obama
around, because they're just doing whatever they want, despite the U.S.'
opposition to this.  There were talks at the end of last week about the
deconfliction talks, the two sides getting together about how they can make
this conflict better.

What came out of those so-called deconfliction talks?

THORNBERRY:  Well, we don't know the details because, as you mentioned
a few moments ago, the only thing the administration has told us in the
last week is they intend to veto the bill that supports our troops.

But the tone is set.  Remember, Russia came and gave us a message that
says you, the United States, better not fly your airplanes in these places
at these times.

So what deconfliction really means is us going to the Russians and
asking, "Mother, may I."  And then so the tone is set, regardless of the
details.  Again, Russia emerging as a major power, coupled with Iran, to
exercise a tremendous amount of control in the Middle East; meanwhile the
United States is in retreat.

It is historic, but not in a good way.

BARTIROMO:  All right.  I want to ask you about the defense bill that
you just mentioned because we know that we just avoided a government
shutdown.  But deadlines loom.  So we'll talk about that coming up.  We
have a lot to talk about with you this morning, Congressman Thornberry.

But first, let's dig into this showdown between the White House and
the Kremlin over Syria.  FOX News senior correspondent Eric Shawn on that
angle.

Good morning to you, Eric.

ERIC SHAWN, FOX NEWS HOST:  Good morning, Maria.

And good morning, everyone.

Even as Vladimir Putin's talking, he keeps on bombing.  The Russian
president thumbing his nose at the world, prompting President Obama to
predict that Putin won't win.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  We're not going to make Syria into a proxy war between the United States and Russia.

(END VIDEO CLIP)

SHAWN:  He wants a partner, says the president, but that seems to be
asking way too much of Vladimir Putin.  The only reset button now being
pushed are in the cockpits of Russian warplanes that Putin has ordered to
drop more bombs on the Syrian rebels that we support.

It took three days of attacking the opponents of dictator Bashar al-
Assad for Russia to finally target ISIS, hitting a command post, we're
told, a bunker and a storage depot.  But critics, like Congressman
Thornberry just said, consider it just a meaningless token as Putin deploys
his military to defend and prop up Assad, claiming anyone fighting him are
the terrorists.

In Paris, a blunt meeting between Putin and French President Francois
Hollande and German Chancellor Angela Merkel ended with Putin silently
going home after they told him to stick to attacking ISIS.

While at the United Nations this past week, one day after Syrian's
U.N. ambassador was called a war criminal to his face by a Middle Eastern
reporter and he responded reportedly by calling her, quote, "a whore,"
Assad's foreign minister says the U.N. must protect his nation's
sovereignty.

(BEGIN VIDEO CLIP)

WALID AL-MOALLEM, SYRIAN FOREIGN MINISTER (through translator):  I
want to say that Syria is strong and continues to fight terrorism and that
the Syrian army and the Syrian people are united in the face of terrorism.

(END VIDEO CLIP)

SHAWN:  Meanwhile, the loss of life continues, adding to the
overwhelming humanitarian catastrophe that has so far claimed a quarter of
a million lives and displaced 11 million people.

You know, a few years ago, my son went to summer camp with a young boy
who happened to come from Aleppo, Syria.  He and his family now,
thankfully, have fled to safety.  But in this world, that makes them the
lucky ones -- Maria.

BARTIROMO:  Wow, what a story.  Thank you so much, Eric Shawn, with
the latest there.

We're back with Armed Services Committee Chairman Congressman Matt
Thornberry.

And Congressman, Josh Earnest, the president's spokesperson, at the
end of last week said that the $612 billion defense bill designates $89.2
billion of overseas contingency funds, that's money for warfighting, as
regular Department of Defense budget authority, so the Pentagon can escape
those sequestration budget cuts, he says that's no way to fund our national
defense situation, which is why the president is vetoing -- threatening to
veto this.

THORNBERRY:  Yes.

Just to put it, again, in the context we were just talking about, all
of this turmoil in Syria and Iraq, Afghanistan, we -- there is enormous
problems, all around the world, and what does our president do?

He threatens to veto the defense bill that provides exactly as much
money as he asked for.  And his reason is he doesn't like the labels that
some of the money is listed under.

So if you are an American soldier on the ground in Afghanistan or Iraq
or anywhere around the world, do you think you really care about what the
label of the money is?

Or do you want to see that you get the support, that Washington has
your back?

And so it is, as I say, nearly unbelievable to me that a president, at
this time with everything going on in the world, when people around the
world need to see the U.S. as willing to stand up and defend ourselves,
threatens to veto the very bill that pays our troops.  It is just tragic.

BARTIROMO:  Well, I'm glad you brought up Afghanistan because we know
that, you know, bombings basically impacted an Afghan hospital and they
blew apart Doctors without Borders Hospital in the battleground, killing at
least 19 people, according to the latest information we have.

What can you tell us about this?

THORNBERRY:  Well, there is going to be a full investigation to find
out exactly why this happened.

But a couple of things, I think, are important to remember.  Number
one is there is a history of the enemies we're fighting using schools,
hospitals and mosques to fight from because they know we try to pay
particular attention to those things.

So they intentionally use them, not only there, but the -- in Gaza,
the Israelis face this; in Iraq, they intentionally use hospital, school
and mosques to fight from.

Secondly, the president has really tied our hands.  We have not been
engaged in the field with the Afghan forces.  So they called us in at the
last minute.

But if you don't have that day-to-day engagement, you can't
effectively train and assist them in the way that you would want to.  So
that may be partly responsible for this terrible tragedy.

BARTIROMO:  Well, these are all issues, obviously, and very important
on the table for the leadership change that is taking place in the House.

What can you tell us about the vote happening this Thursday?

Who is the best person to succeed John Boehner?

THORNBERRY:  Oh, Kevin McCarthy is clearly the best person.  He has a
unique set of leadership skills that are really needed at this time, but
just on what we were talking about, national security.

He has been working for years traveling overseas, getting to know
foreign leaders.  I've been on some of those travels with him.  He's
regularly for years been consulting outside experts, like former secretary
of state Condoleezza Rice.

So he's the serious guy when it comes to national security and,
remember, when it comes to a Speaker's job, you're third in line to be
president.  You got to be serious about national security and I know Kevin
has been for a long time.

BARTIROMO:  Well, maybe that resume that you just cited is the issue.
A lot of people are looking at the establishment right now and saying you
haven't gotten enough done.  We want an outsider.  We know that Jason
Chaffetz is speaking out.   He said he's going to be running for Boehner's
job.

Do you think that Kevin McCarthy has this locked up?  What do you know
in terms the votes?

THORNBERRY:  Well, I think he's in good shape as terms of the votes.
But it really extends beyond that.  We talk a lot about leadership in
congress.  We really need to work on followership because 200 people in the
House are willing to stand together and work for a common objective.
Depending on the day, we have 20 or 40 with personal ambitions or other
agendas and they don't really care what happens to that broader effort.
That's what we got to worry about, because the only beneficiaries for
internal Republican dissension in congress is President Obama and the next
Democratic nominee, presumably Hillary Clinton, and other congressional
Democrats.  We just help them by fighting among ourselves.

We got enough turmoil, we need to put Kevin McCarthy in the
speakership and do the other elections but then we have got to stand behind
them, even if we don't get exactly what we want.

BARTIROMO:  All right, congressman.  We'll be watching.  Thanks very
much for joining us this morning.

THORNBERRY:  You're welcome.  Thanks for having me.

BARTIROMO:  Congressman Mac Thornberry there.

Much more to come on Russia's military campaign in Syria this morning.
What is Iraq's prime minister saying now about it and what this means for
Americans in the Middle East.  Follow us on Twitter @mariabartiromo.  Send
us a tweet on what you'd like to hear on the program, @SundayFutures as
well.  Stay with us.  We're looking ahead this morning on Sunday Morning
Futures.  We'll be right back.

(COMMERCIAL BREAK)

BARTIROMO:  More on our top story right now.  Russia stepping up air
strikes in central and northern Syria this morning as President Obama warns
Vladimir Putin his strategy there is, quote, a recipe for disaster.

Meanwhile, Iraq's prime minister says this past week that he would
welcome Russian airstrikes against ISIS in his country.  So how does
Russia's intervention
in the Middle East shift the U.S.'s strategy?

Ambassador Christopher Hale is with us right now.  He is dean of the
Josef Korbel School of International Studies at the University of Denver.
He's a former senior director of the National Security Council and former
U.S. ambassador to Iraq.

Sir, good to have you on the program.

CHRISTOPHER HILL, FRM. U.S. AMBASSADOR TO IRAQ:  Pleasure.

BARTIROMO:  Very nice to see you.

So, let's talk about this latest insertion of Russia into the Syrian
story and the middle eastern battle.  How does that change the U.S.'s
strategy?

HILL:  Well, first of all, this is very bad news.

But I want to stress in the Middle East, everybody can lose.  I don't
think this is necessarily going to help Russia.  They're going to create
huge walls between themselves and the Sunni Arab states for years to come.

But at the same time, I think it marginalizes or appears to
marginalize the U.S.  We have no friends on the ground and we have no sort
of diplomatic strategy going forward.

So, I think it leaves the United States in a very weakened position
and I think we're going to have to regroup.

There were two myths, two intel myths, of the last few years.  One was
that Saddam Hussein had nuclear weapons and the other was that Bashar al
Assad, the president of Syria, was going to leave in a couple of weeks and
that was back in 2011 and he's still there.

So, I think the U.S. needs to really think through what it is we want
to see going forward, otherwise we create a situation where Russia, I
think, is becoming a dominant force in the Middle East, potentially with a
long-standing interest finally realized of gaining access to warm water
ports in the Mediterranean.

BARTIROMO:  But haven't we already shown our cards?  I mean, President
Obama said, well, Assad passed this red line that we're drawing and then we
did nothing about it.  So, you know, President Obama has been very clear
about who Assad is, what he does to his people and here comes Vladimir
Putin basically saying, no, no, no, Assad is on our side.

HILL:  Well, there is another aspect to the red line issue, when we
didn't observe the red line, who came in and solved the problem?  It was
Russia again.

So I think Russia is looking diplomatically much stronger.

I want to emphasize in the long run, I think they have a real problem.
In the long run, I think Putin is playing a losing game, but we don't live
in the long run.  We live here now.  And I think we have a real issue in
trying to gain the upper hand again diplomatically.  And we have no one to
talk to right now.

BARTIROMO:  When I speak with leaders of other countries, they're
upset with the U.S., not only because of the red line, but also because we
did not support Egypt when Egypt most recently was going through a major
leadership change and upset.  Now, Iraq's prime minister says this past
week he wants the Russian air strikes against ISIS in his country.  How
does that fit into all of this?

HILL:  Well, I mean, that looks pretty bad.  We have spent a lot of
time in Iraq.  We have spent a lot of time, we have spent a lot of blood, a lot of
treasure.  And we have a situation now where the Iraq leadership is
essentially sort of welcoming Russia's role.

And by no means is Russia's role going to be helpful in the broader
region.  Russia's role is probably going to forestall some kind of solution
with the Sunnis, because you have to remember, Syria is 60 percent Sunni.
They no longer accept the presence of the 15 percent Alawite tribe
essentially running Syria.  So, clearly another approach has to be taken.

But now it appears to be even more difficult for the U.S. to work
something out with great powers including Russia and to have some friends
on the ground because we don't seem to have any.

Every single friend on the ground, even Egypt, we have problems with.

BARTIROMO:  Absolutely.  So you say a new approach is to be looked at.
But are we going to do that?  I mean, the reality of it is, we just talked
about the president, you know, threatening to veto this most recent defense
bill.  Are we really going to see a different approach or is this -- will
we just need a new leader in chief in the White House?

HILL:  Well, we are going to have a new leader in chief in the White
House in a little more than a year.  But I don't think we can wait for a
year to have an approach here.

20 years ago, we resolved the issue in Bosnia.  That was a tough issue
In Bosnia.  How did we do it?  We got together with a number of countries, we
came out with something called a contact group plan.  We said Bosnia should
exist within its international borders.  Bosnia should have this kind of
government and that kind of judiciary, Bosnia should have a new
constitution and went forward with that and people who rejected it we call
rejectionists and people who supported it we call moderates.

Right now, it is beyond my understanding who is a moderate in Syria.
And how do we even know?  Do we give them a questionnaire?  I mean, how
does this work?

So, I think we have a serious problem so far in the fact that we have
not come out with some kind of plan going forward and don't seem to have
anything much beyond complaining about what the Russians do and complaining
about what everybody
does.

BARTIROMO:  And that vacuum has created an opportunity for Putin to be the leader of the world.

HILL:  Yes.

I mean, it has put him in a stronger position.

But I want to emphasize, it is a short-term position.  I don't necessarily want to be looking at his inbox.  He has a lot of problems.

But the fact is for now, he's marginalized us.  And I think that is a tough position to be in.

When the United States announced we were pivoting over to East Asia and spending more attention there, nothing wrong with that, except that the unintended consequence was the people in the Middle East thought we were abandoning them and now they're seeing this activity and this looks like they were right.

BARTIROMO:  Serious consequences.  Ambassador, good to have you on the show today.

HILL:  Thank you.

BARTIROMO:  Thank you so much for joining us, Ambassador Christopher
Hill, joining us today.

A tough September jobs report, meanwhile, at the end of the last week,
coming just two weeks after the Federal Reserve decided that our economy
was too fragile to risk raising interest rates.

Will this report push any rate hike into 2016?  We're looking ahead on
economics on "Sunday Morning Futurse" next.  Back in a minute.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

(MUSIC PLAYING)

BARTIROMO:  Welcome back, big week ahead for business.  Third quarter
earnings reports will begin to flow out this upcoming week, giving us a
window into the health of the corporate sector just a few days after
another disappointing jobs report was released on Friday.

Employers added only 142,000 jobs in the month of September.  The
August data was also revised downward.  And the participation rate, those
people actually participating in finding a job, also worse, now at a 38-
year low.  This just as a few days after the government managed to avoid a
shutdown in the 11th hour last week.

Joining us once again with more on what is holding back this economy
is Maya MacGuineas, she is the president of the Committee for a Responsible
Federal Budget and a friend of this program.

Maya, good to see you.

MAYA MACGUINEAS, PRESIDENT, COMMITTEE FOR A RESPONSIBLE FEDERAL
BUDGET:  Nice to be with you, Maria.

BARTIROMO:  Thank you so much for joining us.

First off, give me your assessment of where we are in the economy.  I
want to get your take on this proposed veto of the Defense Authorization
Act for sure.  But we're coming off of all this economic data and it is
just OK, not great.

MACGUINEAS:  Yes, I have to say I would not want to be a Fed governor
right now because we're dealing with a whole lot of mixed messages from the
economy; where it is growing, things are moving along, but nowhere close to
where anybody would want them to be.

And obviously so much of the focus now is what will the Fed do in
response to that.

And they're in a very, very difficult position because, on one hand,
they have been signaling it is time to start moving rates -- probably not
in October, but looks like it was going to be in December.  This slower
economic news makes that less likely.

But they have real challenges, which is, one, we have to get rates
back up at some point.  We can't stay this low.  It possibly is sending a
lot of the complications through the global economy to have rates this low
because people are always wondering when the Fed is ultimately going to
rise and say, no, they have to.

And the second piece of this is we have no firepower in terms of
fiscal policy or monetary policy when the next economic recession downturn
actually comes along.  So we want to get to a place we have more tools in
the toolbox.

The Fed knows it needs to make changes.  But the economic indications
are slowing those changes down and it is very tricky right now.

BARTIROMO:  It is interesting because we're talking about fiscal
policy versus monetary policy.  The Federal Reserve has been really the
only game in town in terms of stimulus.

When I speak with managers and CEOs of businesses, they blame the
regulatory environment for their inability or unwillingness to hire more
workers.

When you look at the latest numbers, you saw that the workweek dropped
last week, so employers basically said to employees, look, we're going to
cut your hours down.

Is this ObamaCare largely, you know, holding back this economy?

What do you think is the reason that we are so far below where we
should be at this point in the recovery?

MACGUINEAS:  Right, so there's two different pieces of this.  There's
what kind of stimulus can you have in the short term that comes from fiscal
stimulus, monetary stimulus?  And that's what we used in the early years
right after the huge economic crisis.

But beyond that, what you really need are the things that are going to
help grow the economy.  That's a topic we'll talk a lot about in the coming
presidential election, how to grow the economy and I think there are a
couple of key pieces to that.

One, I think tax reform, clearing up our tax code, making it -- us
more competitive, simplifying, bringing rates down, broadening the tax
base.  There is a lot of discussion about that.  And I think it is
critically important.

I would put a side note, which it's really important to have tax
reform that doesn't lose trillions of dollars, which a lot of the tax
reform proposals are because that would lead into the second challenge,
which is we do have to get control of our debt.

Our debt is at record levels.  I do not believe the economy will be
able to grow when the debt is twice what it has been historically.  That's
really throwing sand in the gears of the economy.

And finally, what you brought up, we have a whole lot of regulatory
pieces of the economy which, if we were smarter about how to regulate, if
we went through, got rid of a lot of outdated regulations, reformed those,
thought from the perspective of a cost-benefit analysis, what's worth doing
and what's not in terms of regulation, I do think we could promote growth.

And I think the big picture is there is a growth strategy out there to
be had, to bring politics into it.  I think those on the Left and the Right
both have perspectives that we should try to be joining together, not make
this a fight and really come up with an American approach to growing the
economy.

Our political system is so jammed up now, we're basically taking no
steps to move that forward.

BARTIROMO:  And unfortunately, we have got to fight again because both
sides are trying to stop these sequestration cuts.

Lay out for us the next couple of months.  We avoided a government
shutdown last week.  The president is once again threatening a veto of this
defense bill.

What do the next couple of months look like?

MACGUINEAS:  Oh, it is going to be terrible here in Washington.  I
have to say, I mean, the way that we govern right now is exactly the
opposite of what it should be.

Congress basically governs from one crisis to the next, sometimes
getting policies in place at the very last minute, almost always not the
ideal policy.

So here is what we're facing.  We have to fund a government for the
coming fiscal year, which started October 1st.  They put in place a
temporary measure.  We're going to have to deal with that in December.

We have to decide whether to get the discretionary cuts that make up a
sequestration moved and replaced with smarter cuts.  Ideally, we would do
that.  We would get rid of some of this blunt across-the-board sequester
and replace it with savings from the real problems in our budget, the
mandatory or entitlement programs, but that's another heavy political lift.

We have to deal with the Highway Trust Fund, which is going to need to
be reauthorized and figure out how to fund that.

And at the end of the year, we have to deal with these tax extenders,
which are tax breaks that are in there, mainly business tax breaks, which
have already expired.

So we have companies that are trying to do their business, grow the
economy, create jobs, with expired tax cuts, not knowing which ones will be
put back in place or not.

But all told, if Congress does this in an irresponsible way, they
could end up adding hundreds of billions of dollars to the debt when they
deal with all of these must pass pieces of legislation at the last moment.

And really, what we need is for them to be working on these issues
well in advance of these final deadlines.

And the one I didn't bring up, of course, perhaps the most important,
we have a debt ceiling.  We have a debt ceiling that we have to increase.
It's a reminder that our debt is too high.  But there should be no
discussion whatsoever of defaulting.

BARTIROMO:  Right.

MACGUINEAS:  And what I'd really like to see is Congress getting ahead
of these issues and coming together with some proposals to really deal with
them in responsible ways instead of waiting for these last minute
showdowns.

BARTIROMO:  Well, no wonder the priority...

MACGUINEAS:  Which is what I'm afraid we'll do.

BARTIROMO:  Yes.  No wonder the priority has not been growth when you
have all of these near-term fires to put out.

Maya, great to have you on the show, as always.

It sounds like we're going to be talking a lot the next couple of
months.  We hope you'll come back soon.

MACGUINEAS:  It's going to be busy.

BARTIROMO:  We'll see you soon.

MACGUINEAS:  OK.  Thank you.

BARTIROMO:  Maya MacGuineas there.

A new chapter in the GOP race for the White House, meanwhile, with Jeb
Bush and Marco Rubio trading blows as a new poll sheds light on the current
state of play.

We're looking ahead this morning on "Sunday Morning Futures" and we'll
get our panel to weigh in, next.

Back in a minute.

(COMMERCIAL BREAK)

BARTIROMO:  OK, presidential politics on.  Jeb Bush and Marco Rubio
are talking -- are trading shots at one another, as Donald Trump holds onto
his front-runner status.  According to the latest Pew Research polls just
into the newsroom here, Trump is leading the field at 25 percent.  Dr. Ben
Carson taking second place at 16 percent, Carly Fiorina and Marco Rubio
tied at 8 percent.

Look at this, Jeb Bush tumbling to sixth place now, with just 4
percent, according to this poll.  When it comes to new ideas versus
experience, the Pew poll says 57 percent of Republican voters prefer
experience, while 36 percent prefer new ideas.

I want to bring in our panel right now.

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

Hank Sheinkopf is Democratic strategist and a former member of the
Clinton-Gore campaign.

And Doug Holtz-Eakin is former CBO director and president of the
American Action Forum.

Gentlemen, good to see you.

UNIDENTIFIED MALE:   Nice to see you.

BARTIROMO:  Thanks so much for joining us today.

UNIDENTIFIED MALE:   Thank you.

UNIDENTIFIED MALE:   Thank you.

BARTIROMO:  Jeb really coming down in the polls.

What is behind this and how serious is it, Ed Rollins?

ED ROLLINS, FOX NEWS ANALYST:  Well, he -- it's very serious, for two
reasons.  One is -- and the money figure is the big -- the big issue.  He
had all the money to start with.  He was perceived as the frontrunner.
He's sort of had an invisible campaign and every time he does anything,
it's not particularly productive.

And at the two debates he wasn't, it was like he was not there.

He's still the establishment's choice and I think he's still got a lot
of money, but the critical thing here, he hasn't announced how much he
raised in the quarter.  And if he had a good quarter, he would be the first
one out of the door.  They don't have to put it out until the 15th of the
month.

But no -- no one on our side has said here's how much money they
raised, which tells me none of them raised much money.  And Sanders, on the
other side, raised $26 million, $27 million.

BARTIROMO:  Right.  Unbelievable how -- how well Sanders is doing,
actually.

ROLLINS:  Absolutely.

BARTIROMO:  Hank?

HANK SHEINKOPF, DEMOCRATIC POLITICAL STRATEGIST:  Well, look, both
parties have a serious problem here.  We have populism on the right, we
have populism on the left and the normal hierarchical structure of these
parties is being challenged.

Sanders on one side, Trump on the other.

The question is, will this last?

That's a different issue.

BARTIROMO:  And what do you think?

SHEINKOPF:  I think it does last.

Why?

Because people are tired of Washington, Wall Street and state
capitals.

BARTIROMO:  Yes.

SHEINKOPF:  And they really are disgusted.  And they've figured out
the joke.  You can't fool these people anymore, the real Americans in the
heartland.  They're tired of it.

ROLLINS:  The only...

(CROSSTALK)

ROLLINS:  -- issue that I would take -- I'm sorry, just to finish this
point.

People are unhappy, but they're not going to vote for these two guys
in the final analysis.

SHEINKOPF:  Well, that's true.

ROLLINS:  And -- and so, you -- but there's going to be a dissident
group out there.  But you're going to end up with someone that's more
electable on both sides, whether it's Hillary on the Democratic side.

SHEINKOPF:  Bernie Sanders got his money from small contributors.
That's the interesting thing.  Hillary Clinton probably got it from
bundlers.  It tells you about the nature of this.

BARTIROMO:  I -- I don't know how Bernie Sanders' policies resonate
with, you know, he's telling you, look, 92 percent of your salary is going
to go to the government.

UNIDENTIFIED MALE:   Right.

BARTIROMO:  You can live on 8 percent of your salary.

UNIDENTIFIED MALE:  I...

BARTIROMO:  And yet he's raising all this money around these ideas.

Doug?

DOUGLAS HOLTZ-EAKIN, FORMER CBO DIRECTOR, PRESIDENT, AMERICAN ACTION
FORUM:  I think this is the most amazing story that hasn't been told, which
is the Bernie Sanders story.

Do people really understand he's a -- an avowed socialist running for
the Democratic nomination and promising $18 trillion in new spending
already, which is going to raise taxes to unbelievable levels?

And, you know, a lot of focus is on Donald Trump.  Very little on
that.  I find that remarkable.

BARTIROMO:  I think it's also interesting that both of you agree, and,
Doug, I wonder if you agree with this, that these two guys are not going to
get elected in the end...

(CROSSTALK)

BARTIROMO:  -- Donald Trump and Bernie Sanders.

UNIDENTIFIED MALE:   No.  No.

ROLLINS:  But their supporters are not going to go away.  I think at
the end of the day, usually both parties, after a knock down, drag out
primary fights, they come together.

BARTIROMO:  Yes.

ROLLINS:  I don't think they're going to come together.  I think the -
- I think the pro -- I mean the Trump people are going to be like the Perot
people...

UNIDENTIFIED MALE:   Right.

ROLLINS:  They're going to stay out there.  They're going to be
unhappy.  And certainly the Sanders people are not all of a sudden going to
get happy.

SHEINKOPF:  I couldn't agree with that more.  And what is
extraordinary here and needs to be paid attention to is that Hillary
Clinton gets elected, if she's the nominee, based upon what the Republicans
do or don't do.  And this mess that everybody is involved in and has yet to
be sorted out, it's going to take a long time.

BARTIROMO:  And then there's this.  "Saturday Night Live" taking a jab
at the whole 2016 GOP field last night.  Specifically, the single digit
candidates in last night's season premier.

Watch this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:   Now, there is (INAUDIBLE).  Introducing Avilify,
for people who think they can be president.  Let's face it, Avilify
destroys the damaged part of the brain that says, I'm going to president,
leading to an almost immediate return to reality.  It's the only dementia
medication prescribed for 11 specific people.

(END VIDEO CLIP)

BARTIROMO:  Well, that was for people who think they can be president.
There was another clip, of course, Hillary making fun of Donald Trump.

What's your take on last night's "SNL"?

SHEINKOPF:  Look, I thought she was very funny. It was a good move for
her -- much more important to be part of popular culture and look warm and
funny than anything else. I wouldn't have necessarily asked to -- to
introduce Miley Cyrus, which she did, because that's a little bit over --
presidents don't introduce singers on stages. That's not the case. But
making fun of herself, getting into an intimate conversation, which she did
on set, was very, very good.

BARTIROMO:  Yeah, because normally when you have, you know, a
potential presidential candidate, they may say, "Live from New York, it's
Saturday Night," they play themselves. But here she played a bartender and
then she introduced the -- the musical guest.

ROLLINS:  The old politics are gone. You're trying to reach out to
those young voters and you go any way, shape or form you can to get to
them. But everything you and I have learned in the many, many years we've
been in this business is totally irrelevant at this time.

(LAUGHTER)

I mean, it's just -- it's...

(CROSSTALK)

HOLTZ-EAKIN:  And I think one of the things that shows up there is not
so much Clinton, but all those marginal candidates, they're going to winnow
out and suddenly the Republican field's going to be manageable; people are
going to start looking at who's in there and I think the dynamics on the
Republican side change at that point.

BARTIROMO:  When? What's that point? Do you think by year end or is
this going into...

HOLTZ-EAKIN:  Oh, certainly. I mean, this is in the next month. This
is -- they're not going to be on the stages for debates and, you know, it's
going to change a lot of the dynamics.

And with Trump, you know, he looks more and more like Ron Paul. He's
got his core followers. They aren't going to go away. This isn't a bubble
that then goes out. But he's hit his upper bound.

BARTIROMO:  Yeah.

HOLTZ-EAKIN:  And so the question is, does he at some point hand his
supporters over to another candidate or does he do what Ron Paul always
did, which is just stick it out to the end and cause trouble, state by
state by state?

BARTIROMO:  I bet you he backs somebody. That's what I think. He backs
somebody, all his supporters do.

HOLTZ-EAKIN:  It's the art of the deal. He'll cut the deal.

(LAUGHTER)

ROLLINS:  The danger and the guy that's sitting there waiting is Ted
Cruz, and Ted Cruz is a very credible candidate, not particularly liked in
the Senate by his colleagues, but certainly liked by the Tea Party element
and a very articulate guy. And he easily could move into the Iowa win and
become one of the two or three finalists here.

BARTIROMO:  That's great analysis there.

Let me get to Howie. Tell us what's coming up on "MediaBuzz," top of
the hour. Howie, good morning to you.

KURTZ:  Hi, Maria. Well, I've got an interview with Rand Paul, who
goes after the pundits who are prematurely writing off his presidential
campaign. He's got some strong things to say about Donald Trump as well.
And we'll look at coverage of the campaign and particularly Jeb Bush
ripping the media for, in his view, distorting his comment after the
horrible shootings on the Oregon campus where he said "Stuff happens."

BARTIROMO:  Yeah, absolutely. Howie, we'll be there. We'll see you in
about 20 minutes on "Media Buzz."

Meanwhile, the leader of the only real democracy in the Middle East
and one of America's closest allies blasting the nuclear deal with Iran.
What Benjamin Netanyahu's comments at the U.N. mean for U.S. policy. We're
looking ahead with our panel, next, on "Sunday Morning Futures." Back in a
moment.

(COMMERCIAL BREAK)

BARTIROMO:  Welcome back. Benjamin Netanyahu taking to the podium at
the United Nations, sounding the alarm about the danger Iran still poses to
his country's very existence. And for effect, he stared down some world
leaders who stayed silent in the face of Iran's threats against the Jewish
state.

I want to bring back our panel, Ed Rollins, Hank Sheinkopf and Doug
Holtz-Eakin, joining us this morning.

Your take on -- on...

ROLLINS:  Well, there were two strong men who got exposed -- not
exposed, but basically performed, one being Putin, who flew in to give his
speech and then flew back out. And the speech was, "This is what we're
going to do in Syria and we don't care what you think; we're going to do
it."

And I think the last speaker -- Bibi always has a good -- good speech.
He gave a really tough speech this time, and it was, sort of, shaking your
finger at, you know, "Just understand, you're all making a big mistake;
you're not supporting us, including the United States, and thank you very
much, we're going to go ahead by ourselves."

BARTIROMO:  How does this play out?

SHEINKOPF:  The Chinese are great winners here because, ultimately, they'll get the oil; they'll -- the Russians and they will make a deal; they'll cut up the Middle East. The Chinese will want the oil, the
resources to continue to grow their country. The Russians will be dominant
in whatever its Syria looks like in the future. They will extend back into
Egypt, where they have always been players. Israel will go and do what it's
supposed to do. But the big loser here is not Israel; the big loser is the
United States of America.

BARTIROMO:  I agree. Well, tell us why you think that.

SHEINKOPF:  Why? American power, American dominance and the threat to
NATO. What's going to happens if a Turkish army -- Turkish air force
fighter jet, which are now in the region, and a France air force jet get
into trouble with the Russians across the line and they get shot down? What
is the United States going to do, the leader of NATO?

What is -- what is the United States going to do? What is it going to
look like and what does that mean for Europe? It means the Russians will
feel very comfortable in continuing to exert their influence into Europe.

BARTIROMO:  Yeah, it's already showing -- this whole thing is already
showing the U.S. as a loser -- on the losing end of this because Putin is
looking like, you know, he's the leader of the world.

HOLTZ-EAKIN:  I mean, what Netanyahu said at the end is, you know, you
must remain vigilant. He tried to take as positive a spin on this as he
could. I think he's going to have to come back every year and remind people
of just how bad this deal is. Because there is no good news in it. And it's
a reflection of the vacuum that is now well recognized. The U.S. has not
been there.

BARTIROMO:  Yeah, I...

SHEINKOPF:  But the tragedy here is that this president told everybody
what he was going to do. He said he was going to redirect American foreign
policy; he said he was going to...

BARTIROMO:  And he did it.

SHEINKOPF:  ... redistribute wealth within the country, and he did
that. That's what the health care plan essentially does. He's done the
things he said he would do. By his measure, he is a successful president.
By the measure of the world and foreign policy, it is a disaster.

BARTIROMO:  He's done exactly what he said he would do.

HOLTZ-EAKIN:  Absolutely. And look at what he continues to do. I mean,
with this defense bill that's come up, right, everyone agrees the Defense
Department is underfunded. He asked for more money. And he says, "Well,
you're doing it the wrong way." Well, the right way to do it, then, is to
simply raise the defense spending in regular order. But says, "No, I'm not
going to do that unless you give me a bunch of non-defense spending." So
he's holding the Defense Department hostage for his domestic agenda, and he
jettisoned our foreign policy for his domestic agenda. It's the same story
still.

BARTIROMO:  But that doesn't come out -- that doesn't play out to the
populace, does it? Because, again, the Republicans are holding the bag for
the fact that the government almost shut down again last week because of
this.

ROLLINS:  Well, even -- even -- you made the point that Obama is doing
everything he said he would. No one pays any attention. He was a big
personality in a campaign, and we had, kind of, flawed campaigns against
him. And at the end of the day, he won on his personality and he was going
to be a different -- he was going to be bipartisan, bring everybody
together. He's done exactly not that. And at the end of the day, his agenda
is being implemented, and that's why you have to look out for Bernie
Sanders and these people. What they say is what they try and do, and that's
very dangerous.

BARTIROMO:  Right, right. And Hillary is making it very clear what she
wants to do. She wants to, for example, on the economic story, raise --
double capital gains taxes. No one should think that, when she says she's
going to do something, she's not actually going to do it...

ROLLINS:  You're absolutely right.

BARTIROMO:  ... just like President Obama promised us all this stuff
that's exactly what he did.

SHEINKOPF:  The problem that Americans, because we're such
extraordinary people and believe so strongly in this system, we forget, is
when someone tells you they're going to do something, even a crazy person
overseas says they're going to do something, they mean it and they do it.
That's what public life's about.

BARTIROMO:  Yeah, so this defense bill -- and then there's the highway
spending bill as well. How does this play out in the next couple of weeks?

HOLTZ-EAKIN:  He'll veto the Defense Authorization Act, which I
consider a stunning moment. There will -- there is no strategy for funding
the government past December 11th. There's the leadership problems in the
House.

And so, you know, in normal circumstances, White House leadership
provides the way for Congress to get things done and especially on issues
of national security. that's not happening right now.

BARTIROMO:  No, it's not.

HOLTZ-EAKIN:  And so the leadership, I think -- well, really, I think,
defaults to the Senate and Mitch McConnell.

BARTIROMO:  And of course that vote in terms of John Boehner's seat on
Thursday.

Reacting to the disappointing September jobs report, and up next,
we're going to talk about the economy, why aren't we at the point we should
be in this recovery? The panel weighs in next.

(COMMERCIAL BREAK)

BARTIROMO:  Welcome back. Where are the jobs? The September jobs
report, underwhelming. Given these weak numbers, it is now more difficult
to imagine the Federal Reserve raising interest rates when it meets in
October. But we will see about that. Janet Yellen has said that they want
to raise rates by the end of the year.

Ed Rollins, Hank Sheinkopf and Doug Holtz-Eakin with me this morning.

Doug, why are we seeing such a hard situation when it comes to job
creation? What's holding back business?

HOLTZ-EAKIN:  Name it. You know, there's been a regulatory explosion
in the past seven years. We've had this conversation before. It's about
$100 billion a year in new regulatory costs coming from everywhere. The
NLRB has turned into simply a weapon of assault on franchises and other
business models; the EPA, an extremely aggressive program, very costly.

So businesses -- you know, and the Affordable Care Act, the poster
child for -- for heavy regulation -- so businesses take a look at this and
they have no particular room on their payrolls to add workers. They don't
really look at the future with a whole lot of confidence. And what they're
really waiting for is some clear signal that you're going to get a
different set of policies that provide them the room to go higher and grow.

BARTIROMO:  Right, so they'll just sit on cash and not do anything yet
and not hire people. In fact, businesses have cut hours. The work week
actually was lower this last month, Hank?

SHEINKOPF:  Lower because people don't want to pay the mandates that
are required when you reach particular thresholds of work hours. What is
really extraordinary, you regulate and you regulate in a way that big
business can't afford to tolerate, but small businesses can't afford any of
it. And that's why we're seeing a diminution of small-business activity
overall.

BARTIROMO:  And that is the area of this economy that you hope to see
the most job creation, small business. They're getting crushed right now,
Ed?

ROLLINS:  And, you know, they always talk about the unemployment
figure, which doesn't mean anything anymore. This 92-plus million people
who are not working in this country. And that's almost a record number, at
least a record number in the last 15, 20 years. And there's nothing out
there for them. People have just basically decided there's no jobs out
there; I'm not going to go look for them; I'm going to do whatever I can.

BARTIROMO:  Right, and they basically say, "Look, I give up looking
for a job," the participation rate. Real quick, Doug?

HOLTZ-EAKIN:  We shouldn't be surprised by this, to be honest. If you
look at last year versus this year, employment's grown at a 2 percent rate.
We have a zero productivity economy. We're growing at 2 percent. We have
for seven years.

BARTIROMO:  It's the same story.

HOLTZ-EAKIN:  It's not new.

BARTIROMO:  It's the same story. All right. We'll be right back. Stay
with us.

(COMMERCIAL BREAK)

BARTIROMO:  That will do it for "Sunday Morning Futures." I'm Maria
Bartiromo. Thank you so much for joining us. Thanks to our panel. The big
event this upcoming week, the House leadership vote. You don't think that
Kevin McCarthy has the votes, Doug Holtz-Eakin?

HOLTZ-EAKIN:  Not today.

BARTIROMO:  All right. We'll see about that.

I'll be back tomorrow morning on "Mornings With Maria" from 6:00 to
9:00 a.m. Eastern on the Fox Business Network. Join us. Here's how to find
FBN on your cable network or satellite provider. I've got a big list of
guests coming up this upcoming week, like Ben Bernanke on Tuesday. Join us,
6:00 to 9:00 on the Fox Business Network. Stay with Fox News Channel right
now. "MediaBuzz" begins now.

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