Trump: America's not doing well and the stock market is catching up

On 'Sunday Morning Futures,' the candidate tackles issues set to take center stage on Fox Business Network with moderator Maria Bartiromo


This is a rush transcript from "Sunday Morning Futures," January 10, 2016. This copy may not be in its final form and may be updated.

MARIA BARTIROMO, HOST: Good Sunday morning, everyone. I'm Maria Bartiromo. Welcome to "Sunday Morning Futures."

A rough week to the stock market as we enter a new one. We are ringing in 2016 as the market is off to the worst start to any year ever.

In just a moment, we will ask GOP front-runner and business mogul Donald Trump what he thinks is going on. Plus, we'll get the latest on his campaign in Iowa and in New Hampshire.

We'll also taking a look ahead to President Obama's final State of the Union Address Tuesday night. What, if anything, can he get accomplished in his last year in office?

And will a new round of peace talks in Afghanistan change the course of bringing U.S. troops home for good?

We're looking ahead this morning on "Sunday Morning Futures."


BARTIROMO: We are inching closer to the Iowa caucuses, which are now just 22 days away.Presidential candidates, hard on the campaign trail, trying to gain support.

Donald Trump, holding a rally in Iowa last night. Today, he will be headed to the West Coast for a rally in Nevada. New Fox News poll show that he is still the favorite among all candidates among the big picture nationally. He's the frontrunner with 35 percent support, holding a 15-point lead over Senator Ted Cruz.

But, it is a different story in the early voting state of Iowa. Senator Cruz leading there with 27 percent. Donald Trump sitting in second place there with 23 percent.

Joining me right now on the cell phone is Donald Trump, presidential candidate and real estate mogul.

Donald Trump, good to have you. Thanks so much for joining us this morning.

DONALD TRUMP, R-PRESIDENTIAL CANDIDATE (via telephone): Good morning, Maria.

BARTIROMO: I want to get to those polls in a moment because I know that -- I'm sure you want to talk about them. They're certainly good news once again.

But, let me begin with this beginning to the year in the stock market. Worse beginning to any year, with that S&P 500 decline last week of 6 percent.

What do you think is behind this meltdown?

TRUMP: Well, if you look at the rest of the country, it's not doing well. Jobs are few and far between. You know, you have the phony statistics where they show 5 percent, 5.5 percent, 5.2 percent -- I mean, the real number's, probably, well into the 20s because people give up looking for jobs. And, statistically they're taken off the rolls, so, you don't really see how bad -- how bad the picture is.

And, I think, very importantly, the quality of the job. They're all talking about, boy, these are really bad jobs -- we're talking, you know, if you look at the jobs, and the quality of the job, now people are saying it's at an all-time low.

So, that's not a very nice statistic to have.


TRUMP: It's not doing well. The country's not doing well, and I think now, the stock market maybe is catching up with the country.

BARTIROMO: Yes, I'm glad you mentioned jobs because, obviously, we got the jobs number out on Friday, and it, in fact, was better than expected. When you look at that part of the economy -- well, you make a great point because there are other areas, like exports, like commodities, that are plummeting.

So, if you were to win, and become the president of the United States, what would you do about it? How do you fix the economy?

TRUMP: I'd be the greatest jobs president. I would bring jobs back from China. I'd bring jobs back from Japan. I'd take jobs back from Mexico.

We're losing our business. I mean, they're devaluing their currencies. You look at what China's doing with its currency, it's unbelievable. Now, they want to devalue further to get out of their problems.

And, you look also, Vietnam -- a lot of other places happening now, and they're killing us with currency. And, we make better product, I mean, we are -- we have an ability to make great product, but we don't get a chance to make it because they beat us financially, and they beat us like a drum.

BARTIROMO: Yes, but you say you want to put a 45 percent tariff on the products coming into this country. Isn't that going to make all products so much more expensive for American consumers?

TRUMP: Yes, no, I didn't say that, Maria. What I said is this -- people ask me a number of questions. They were asking me how do you solve North Korea. Well, China should be solving North Korea, they have total power.

You know, they say they own -- they say, really, we don't have as much. They're doing that to taunt us. They have total power over North Korea.

I say we can beat them so badly -- we have such power over China with trade because we have rebuilt China. They have taken so much out of our economy in terms of money that we can -- we have a lot power over China. They should solve the North Korea problem.

As far as trade is concerned, if China doesn't play fairly, which they're not playing, and they haven't for many years because they beat us with devaluation, with nothing else. If China doesn't play fairly, we should tax their product coming in.

Now, they're going for more. You know, I don't know if you know it, but they have the largest devaluation in their history about three months ago. Now -- and, by the way, that devaluation, largest in two decades. Now, I hear they want to devalue again.


TRUMP: And, all it means is businesses are going to be unable to compete with China.

BARTIROMO: Just to be clear, I want to get to North Korea for sure, Mr. Trump, but, you did say you want to have a 45 percent tariff on exports coming into this country, correct?

TRUMP: No, no. I said that if they don't behave then --

BARTIROMO: Then you're going to put a 45 percent --

TRUMP: That would be a number, that would commensurate --

BARTIROMO: -- tariff?



TRUMP: And, I said, if they don't behave, if they don't stop doing what they're doing with the devaluations in particular. I also said we'd do something if they don't solve the North Korea problem because they can solve it -- they can solve it with a phone call, OK? That's the power they have over North Korea.

BARTIROMO: So, my question is --

TRUMP: And, if they don't solve it, I would think about doing a tariff, or a tax, on goods coming in. Yes, I would.

BARTIROMO: Forty-five percent?

TRUMP: No, it could be as high as 45 percent percent. What I said is the number that they should pay based on the kind of destruction that they've done with their devaluation is the equivalent of a 45 percent tax.

BARTIROMO: OK. So, wouldn't that make American products that much more expensive for the American consumer? You're talking about a big tax.

TRUMP: Well, it may, but, you'd also make a lot more products -- you know what would happen? A couple of things. Number one, I don't think you'd ever have to impose it because when this happened, China would start behaving very rapidly. So, I don't think it would ever happen.

If it did happen, our country would take in a lot, and it wouldn't necessarily be 45 percent, it could be a lot less than that. But, our country would take a lot of -- take a lot of money in. We would be bringing in -- you know, we do have huge deficits. And, if you look at our trade deficit with China, have you taken a look at that lately? We're talking about $400 billion to $500 billion a year.

So, you know, you say, what are we doing? We're losing $400 billion to $500 billion, in terms of a trade deficit with China. So, we have to shake it up. We have to get Carl Icahn, we have to get our great business people to negotiate for us because we have people negotiating our deals with China, with Japan, with Mexico, with all of these countries that our eating our lunch.

We have people negotiating that half of them are political hacks that, frankly, have no -- no business ability. We have people that don't understand what's going on.

BARTIROMO: You were talking about business, and Wall Street, at your rally over the weekend, and --

TRUMP: Right.

BARTIROMO: -- you said you pledged -- you pledged to tax Wall Street, and you said that you were talking about the stock market meltdown, and you said that you're not going to allow Wall Street to get away with murder. What do you mean?

TRUMP: Well, I think Wall Street, to a certain extent, has, you know, carried interest -- they various things that they have, they've gotten away with murder. The -- you look at the economy, the economy is not exactly very robust, in terms of we're sitting on a big, fat, beautiful bubble that's waiting to explode, in my opinion.

I think that's, maybe -- it may be the beginning, which you saw this first week of the new year, which is an all-time record, as I understand it.

I mean -- I think, I hear it's the worst first week ever recorded. So, we'll see what happens. Hopefully, hopefully, the bubble won't be there.

BARTIROMO: Right. So --

TRUMP: Because, if the bubble -- if the bubble's going to explode I'd rather have it explode before the next president, rather than after the next president.


BARTIROMO: I'm sure.

TRUMP: You understand that.

BARTIROMO: So, you think there's more selling to come? Do you think this bubble, as you call it, continues to burst?

TRUMP: Yes, yes, I think there's more to come. I think a lot of these companies -- I'm looking at these Internet companies, where they make, you know, here we go again with the Internet, right?

But -- but I'm looking at a lot of the company -- the tech companies, and they don't make money. And, you know, with all of the problems, and everything else, they don't make money, and they're setting new records, in terms of stock price, and we've seen that pony before, haven't we?

BARTIROMO: So -- absolutely, in the 1990s, for sure. So, I guess voters really want to understand better what are you going to do with taxes? You say, you know, you're going to make sure to keep Wall Street accountable. You mentioned carried interest, now, in other words, you don't want hedge fund managers to be able to manipulate earnings, and call it capital gains when it's really...

TRUMP: We want it to be fair --


TRUMP: Look, I'm a big fan -- I'm a big fan --


TRUMP: -- of the banking industry, of Wall Street. I've been, you know, like, I've done very well. I'm very happy with, you know? I've built a great company.

I haven't so much based it on Wall Street, I based it on deals, and making good deals, but, I built a great company, and I understand the power of Wall Street, if properly -- you know, if properly taken care of.

And, Dodd-Frank is a disaster, I think, and, you know, I think things have to be done with that, and I think Wall Street would like to hear that.

And, I'm a pro-Wall Street person, but at the same time, it has to use -- we have to use Wall Street right, you know? There's tremendous power that we have with Wall Street. There's nothing like it, and we have to use it right.

At the same time, we have to give great incentive to them to go out, and I can say on a semi-related topic, you know, the banks -- the banks are run by the regulators today. They're run so badly.

And I have friends that are, you know, good people, and not necessarily very wealthy people, but very good, you know, business people. They can't borrow money today, unless you're really, really rich --


TRUMP: -- and you have far more money than you want to borrow, the banks aren't loaning money.

So, these people want to start businesses in our country, they can't do it. And, I'll sometimes call a banker giving a reference to a friend of mine that wants to start a little business, and the banker will say, "Donald, you have no idea how bad it is. We don't run the banks anymore. They're run by the regulators."

BARTIROMO: Real quick --

TRUMP: It is sad.

BARTIROMO: Donald, you said, in terms of national security, you know, when it comes to -- when it comes to Russia, and ISIS, you said, look, let Russia fight in Syria. Just at the beginning of the interview, you said, look, you know, North Korea is China's biggest problem, let China deal with it.

How do you justify America leading, if, in fact, you're saying let everybody else fight these battles, and fight the bad actors?

TRUMP: Well --

BARTIROMO: Is that America leading --

TRUMP: Maria, look the way -- the way I look at it --

BARTIROMO: -- or is that President Obama's doctrine, lead from behind?

TRUMP: The way I look at it is that you have North Korea, you have South Korea right next to it -- I always say, I just ordered -- I ordered thousands, and thousands of television a year. They're all made in South Korea, whether it's Samsung, LG, they're made in South Korea. Every time I order, South Korea gets huge checks, right?

And, so -- I mean, they're a monster. They are absolutely a behemoth in terms of economics, an economic behemoth.

Now, we're sitting there with 28,000 soldiers on our line between North Korea and South Korea. We get paid almost nothing. We get paid peanuts. We're not being paid.

These countries, these countries are wealthy countries. These aren't startup nations. These are wealthy, wealthy countries.


TRUMP: They got to start paying up.

We owe $19 trillion, Maria, $19 trillion. Now, with this terrible budget deal that were made just, you know, recently by the Republicans, because they're the ones that approved it. Nobody could believe it, it went so fast.

With this terrible deal, we're going to be $21 trillion, in terms of what we owe very soon, OK? I mean, we just can't keep going like this.


TRUMP: We protect, as an example, Japan, Germany, South Korea, Saudi Arabia. All of these countries we're protecting. We're getting peanuts compared to the cost of what we're -- what we're doing.

We got to get more money. I'm very good at that.

BARTIROMO: Donald Trump, good to have you on the program this morning. Thanks so much. I'm going to see you on Thursday in South Carolina --

TRUMP: I look forward to it.

BARTIROMO: -- at the next GOP debate.

TRUMP: I look very much forward to it.

BARTIROMO: And, I as well. Thank you very much, Donald Trump.

TRUMP: Thank you very much.

BARTIROMO: Don't miss the next Republican primary debate. It is Thursday on the Fox Business Network. We hope you will join us. It is happening in North Charleston, South Carolina. With the early debate beginning at 6:00 p.m. Eastern, moderated by Sanders Smith and Trish Regan, and primetime at 9:00 p.m. Eastern. I'll serving as moderator alongside anchor and managing editor of Business News, Neil Cavuto.

Join us Thursday on the Fox Business Network.

Diplomats gearing up for potentially crucial meeting in the search for peace in Afghanistan. Can anyone really strike a deal with the Taliban?

You can follow us on Twitter @mariabartiromo, @sundayfutures.

We're talking about that next with Ambassador Ryan Crocker. Stay with us.

We're looking ahead on "Sunday Morning Futures," next.


BARTIROMO: Welcome back.

Pakistan getting ready to host an important meeting that deals with upcoming peace talks involving Afghanistan. The goal: to bring an end to the Taliban attacks that have been plaguing the country for years. Pakistan will present a list of Taliban members open to future peace talks as well as ones opposed to talks with Kabul. The U.S. and China will also be at this meeting.

More on this with Ambassador Ryan Crocker, the former U.S. ambassador to Syria, Iraq and Afghanistan. He's also the dean and executive professor at the George Bush School of Government and Public Service at Texas A&M University.

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


BARTIROMO: What are your expectations at these peace talks?

CROCKER: Frankly, my expectations are under control. It is good they're happening. The most important element I think in these talks is first that they're happening. Second, that the Chinese are in the room.

The Chinese have been very reluctant to exercise much political influence on the Taliban and generally in Afghanistan and Pakistan, but they have an extremely close relationship with the Pakistanis. What the Pakistanis do is key. The Chinese can be very influential in getting them to do the right thing. So, that's what I look at. But this is going to be very, very hard.

BARTIROMO: This is a really important point you make, the Chinese are in the room.

What about the U.S.? The world is on fire. I mean, you've got, what's happening in Afghanistan. You've got, you know, the Middle East getting engulfed in a new conflict between the Saudis and Iranians. What should the U.S. do?

CROCKER: In one word, Maria, the U.S. should lead. It is no coincidence in my view that at a time of greater chaos and disorder in the Middle East, it is also a time when the U.S. has never been more disengaged. And I take this all the way back to World War II.

We can't fix everything. There are huge problems there. But I think as we see, if we're not involved, if we're not leading, if we're not showing a way, if we're not rallying others, things are only going to get worse.

BARTIROMO: Of course, the U.S. needs to lead and not necessarily be the policemen, but the leader in terms of the -- in the face of these bad actors. But what does that mean from a practical standpoint, sir.

CROCKER: Well, in the case of the overarching dispute that we're seeing right now, it is effectively a Middle East cold war between Saudi Arabia and Iran. We've got to be working with our traditional allies, closely. That means Saudi Arabia, Egypt, the other Gulf States, Jordan, Lebanon. We have got to be working with them to figure out their assessments, their fears, their hopes, and work to realize those.

We should not be making nice with Iran right now. This is an adversarial situation. It is not a hot war. I don't think it's going to become one. But we need to be all in with our traditional friends and allies in that area figuring out what the next steps are. Not just sitting back and being on the sidelines. We should not try to be a moderator, we need to be an actor.

BARTIROMO: Do they trust us in order to work with us? We just did this Iranian deal. Now President Obama has said he's going to delay any sanctions against Iran despite the fact they've got their ballistic missile program very much in place.

CROCKER: We need to do what the Iranians are doing. Separate the deal from everything else. That's what they're doing. They're pursuing their own agenda as though there was no deal.

I happen to think it is a pretty good deal. But it is an arms control deal. It's not a political pact. So, fine, the deal is there, but you then have to look at everything else that is going on and act aggressively to counter Iranian influence.

We can do that. Our friends are begging for us to do it. We just got to get off the sidelines.

BARTIROMO: Ambassador, good to have you on the program this morning. Thanks so much.

CROCKER: Thank you, Maria.

BARTIROMO: Ambassador Ryan Crocker there.

Up next, Wall Street closing the week with the worst start to a year ever. We're going to talk about the economy. Are the jobs really there? Investors are running for the exits. What does it mean for the bottom line and should we be worried about the state of the U.S. economy now?

We're looking ahead on "Sunday Morning Futures." Big week ahead. Back in a minute.


BARTIROMO: Welcome back.

We are two days away from President Obama's final State of the Union Address on Tuesday night. There is a mixed bag of economic news ahead of it.

The Dow Jones Industrial Average fell 168 points on Friday, capping the worst start ever to a New Year for the U.S. stock market. Six percent decline for the S&P 500. On the other hand, the December jobs report did exceed expectations on Friday, saying that employers added 292,000 new jobs last month.

So, how strong is the economy right now? And what is the worry right now for investors?

Joining me right now is Mani Iyer. He is the president of Mahindra North America.

Good to see you, Mani. Thanks so much for joining us.


BARTIROMO: Happy New Year to you.

You know, we wanted to talk to you because your company represents the core of the economy, because of the tractors, the equipment that you make really is so specifically looking at commodities, which has seen a real breakdown. How do you characterize the economy now?

IYER: Well, the economy is -- it is a positive economy. It is a very responsive economy. We have seen some steady growth in the last few months and the economy has been well.

We have the business earnings up, corporate earnings are up, the fundamentals and the policies are very strong in the U.S. And I understand the global economy is poised to go down 3.6. The advanced market, the emerging markets will play a role. Probably, Europe will be picked up. China is down and the commodity based economies will face turmoil.

But -- and the farm industry, we know the farm industry is 40 percent down. And the -- that income is also 40 percent down.

But we are -- our economy is more based, our business is more based on general economy and we have done extremely well in the last 20 years. In the last five years, we caught up revenue, and we doubled our market share, we have doubled our workforce, we have a big plan for the next five years through -- further double revenues and market shares.

BARTIROMO: Right. You've been investing in what has been a tough environment.

But let me ask you, you said the farm business is down 40 percent generally speaking. The commodities side of the economy has declined and because the industrial side of the commodities side of the economy has been so weak, people expect -- some people are saying we could see a recession in 2016.

IYER: I don't think --

BARTIROMO: You don't think so?

IYER: I don't think so, because the last few months have shown solid job growth. And I as said, the fundamentals are very strong for us to up rise -- for us to rise up in the economy.

There are some forces. I'm not saying it is going to be an easy walkthrough. There could be some challenges. But in general, I think the U.S. economy is poised to grow.

BARTIROMO: Connect the dots for us. Why do investors react so much to China and how bad is China right now?

IYER: China is in a big market. You'll not get lot of insights into China. At any given point of time of an economy growing so fast, you're talking about for last ten years, and now they slow down to 6 percent, 7 percent, it is about growth to be at 6 percent, 7 percent. You can't expect China to grow.

I understand that it sends waves toward the nations, toward the countries, but at the end of the day, we need to be looking at some positive markets, positive aspects of the world, be it Europe, as I talked about, Mexico, it's buoyant economy, very promising, but low inflation and low unemployment. So, I believe that it's not only China in the market going forward.

BARTIROMO: So, that's what you're doing at Mahindra. You're investing. You're looking at places like Europe, like Mexico for opportunity. Tell us what you're doing.

IYER: Absolutely. We have invested big time in Canada, though it's a slow recovery. And Mexico is poised to grow. We are investing in Mexico as we speak. In the U.S., as I said, we have doubled our workforce, we have gone from one assembly and distribution point to five assembly and distribution point.

Mahindra Corporate has invested in five companies in the U.S. in the last four to five years. So, we have great plans for the next five years.

BARTIROMO: So now is the time you want to invest in America because of this weakness?

IYER: We have been doing it.


IYER: It's not just the time. I would say in any economy, in any situation, it's important for a company to invest and look forward to the future. Probably you get more opportunities during the down economy to invest.

BARTIROMO: Do you think as a result of the global economy weakness things get worse before they get better in the U.S.?

IYER: I don't think so.


IYER: My opinion is at this point, we are steady and have done many good things and many right things for the economy to grow. So, going forward, I expect U.S. to continue to drive the world.

BARTIROMO: Good news. We'll end there.

Mani, good to have you on the program.

IYER: Thank you very much.

BARTIROMO: Thank you so much. Congrats to you.

Mani Iyer is the president of Mahindra North America.

Candidates are getting ready to hit the debate stage this coming Thursday, trying to make their case as we get closer to the first presidential contest.

Who stands to benefit the most as we look ahead on "Sunday Morning Futures." Our panel is up next.



BARTIROMO: Thank you, Eric.

We're getting a much clearer picture of the presidential race over the next six weeks. Two Republican debates coming up. The Iowa caucuses now just 22 days away, the New Hampshire primary a week after that, and the South Carolina primary on February 20th.

I want to bring in our panel right now: Ed Rollins is former principal White House adviser to President Reagan. He's been a long time strategist to business and political leaders. He is a Fox News political analyst.

Judith Miller is adjunct fellow at the Manhattan Institute for Policy Research. She is a Pulitzer Prize winning author and journalist and a Fox News contributor.

And Steve Moore is a distinguished visiting fellow at the Heritage Foundation, also a Fox News contributor.

Good to see, everybody. Thanks so much for joining us.

The big debate coming Thursday. I'm thrilled to be one of the moderators Thursday in South Carolina.

Who do you think has the most to win or lose, Ed?

ED ROLLINS, FOX NEWS POLITICAL ANALYST: Well, I think it is really Cruz and Rubio who basically -- I mean, Trump has his place and he'll do as he did on his show, say whatever he wants to say and his supporters won't necessarily leave him. But the battle is who is the alternative? Those two are the only two people on the stage.

Bush has to have a good debate or he's just done. I mean, he's all for practical purposes done. But I really think if Cruz and Rubio battle it out like they did the last time, they'll both diminish themselves. They need to talk about the future, who is the strongest on national security, and those types of things.

BARTIROMO: And, of course, national security, the number one issue for the American people right now, Judith.

JUDITH MILLER, FOX NEWS CONTRIBUTOR: Well, absolutely. But, you know, if Cruz does not really win in Iowa, I don't see how he's going to be able to be taken seriously as a front-runner, establishment or anti-establishment candidate.

I'm not sure which of this is Ted Cruz wants to be. I mean, like Donald Trump, he portrays himself as both an outsider and insider. He's all things to all people. But he's been preparing for this debate since August 2013. It was his first trip to the state, to begin to line up support. That was eight months after he had been elected a first time senator. A lot is riding on this for Ted Cruz.

BARTIROMO: Interesting because that tells me America is wide and in play.

MILLER: Absolutely.

STEVE MILLER, FOX NEWS CONTRIBUTOR: You know, Maria, a year ago, everybody said Jeb Bush would be the nominee.

BARTIROMO: That's right.

MILLER: I mean, that's amazing what difference a year makes. The guy is still hanging by a thread, so the answer to your question, I think, for Jeb, this is -- he's running out of time. It has to be now and he has to have -- knock this one out of the park.

The other thing that is amazing to me about this race is all of the kind of political people that I talked to every day, they have been saying for six months, Donald Trump is going to go away. You know, that this is a flash in the pan.

And now, I'm seeing a desperation among the political class, he's not going away. And this is not a flash in the pan and the question now, everyone is asking who is an establishment -- especially the big funders, as who do I put my money behind? Who can catch Trump? We don't know the answer to that now.

BARTIROMO: But can Trump beat Hillary?

ROLLINS: That's been the argument all week long. He can't beat Hillary. Well, the truth of the matter is, we just have a poll, Fox poll, that shows all of them beating Hillary and Bush being tied with him. So, at the end of the day, she's a very weak candidate. She has got 63 percent negatives, which are extraordinary and people don't think she's honest.

And, obviously, the other things we're talking about today, Benghazi and the e-mails are not going to get any better and I don't think he's husband has helped her one bit. He ought to be behind the scenes. He shouldn't be out there defending himself, or if you sit down at a forum what do you want to hear, him or her? And, obviously, he wins out in that battle.

BARTIROMO: I want to talk about this coming up in the program because the testimony, Petraeus testified, we're going to talk about that coming up.

But go ahead. Judith, what's your point?

MILLER: But, you know, Ed, that's the thing, when Bill Clinton is out there, you know that Hillary is worried. You know that whatever her message is, it's not really resonating and she needed to get out Bubba. I think he does resonate with people still, despite the fact that he's been on the defensive over this -- I watched him last week.

MOORE: Couple of polls this week that have Hillary at 40 percent and 50 percent among Democratic voters in a primary where there is really not much of a challenger.

And, you know, it is interesting, if you look at the demographics who people are uncomfortable with, Hillary, on the Democratic side, it's men and it's young people. So, that Obama coalition is not there for her.

And I see her more and more as a kind of Democratic version of Mitt Romney, somebody not likable to voters.

MILLER: Well, let's see who she's running against.

ROLLINS: I'm not predicting who she's running against right now. Bernie Sanders is member of the Senate and he's giving her a great race, he's getting a third of vote, may very well beat her in Iowa. He's ahead now in -- very close in New Hampshire. He's not going to knock her out, but going to embarrass her.

BARTIROMO: Bernie Sanders and his 92 percent tax rate, wow.

ROLLINS: And she said, to Chris Matthews, I don't know what a socialist is. I'll tell you what a socialist is. She's a socialist.

MILLER: No, she's a progressive. That's what she said.

BARTIROMO: The economy obviously kicking the year off as bad as it has. Is this going to be a big factor for them to understand on Thursday night, connecting the dots, why this is happening? What do you think?

MOORE: A growth message. You know, Republicans have --

BARTIROMO: A growth message. Thank you.

MOORE: It is just -- it is out there right now. I mean, there's too many -- I'll say this, you know, one big story on the Republican side of the aisle is Ben Carson came out for a flat tax this week. That makes four or five of the Republicans for, you know, a flat tax or much lower rates, that's going to be a central point of division between whoever the Republican nominee is.

And, by the way, one other quick thing, Donald Trump, 45 percent tariff? I mean, that would kill the economy. That would kill the economy. That's almost worse than the 92 percent tax rate.

BARTIROMO: I'm glad you mentioned Ben Carson's tax plan. That is different than the other flat tax plans that we're seeing that it doesn't include this, you know, so-called VAT tax, and an additional tax on top of a flat tax. Ben Carson's tax plan I think is resonating.

MOORE: Yes, I think it's going to be a big debate. I hope you flush this out in the debate, Maria.

BARTIROMO: We're going to talk about that in the debate. Make sure you tune into the Republican debate on the Fox Business Network this Thursday, January 14th. We'll live in North Charleston, South Carolina.

Sandra Smith and Trish Regan will host the early debate. That's at 6:00 p.m. Eastern. And then, primetime debate starts at 9:00 p.m. Eastern. I will be the moderator alongside Neil Cavuto. I want you to be there with us at 9:00 p.m. live in South Carolina. Again, that's the Fox Business Network.

We'll take a short break. But, first, to Howie Kurtz on "MediaBuzz", checking what he's looking at the top of the hour.

Good morning to you, Howie.

HOWARD KURTZ, "MEDIABUZZ": Good morning, Maria, and I'll see you at that South Carolina debate.

We're going to jump on this breaking news of Sean Penn interviewing El Chapo for Rolling Stone magazine, meeting with a guy who's a criminal, international drug trafficker, a fugitive from justice, and Rolling Stone giving the drug kingpin veto power over the interview. Just an amazing story.

And also, why the media have made such a big deal about Ted Cruz being born in Canada, is he a natural born citizen, prodded, of course, by Donald Trump.

BARTIROMO: Yes, we got to love "The New York Post" and the headlines there with this whole Sean Penn situation.

Howie, we'll see you in 20 minutes. Thank you so much.

KURTZ: Bye, Maria.

BARTIROMO: President Obama preparing to give his final State of the Union Address this Tuesday night. What will he say?

The panel back to talk about that next as we look ahead on "Sunday Morning Futures."



PRESIDENT BARACK OBAMA: America can do anything. Even in times of great challenge and change, our future is entirely up to us and on Tuesday, I'm going to talk about the choices we have to make to set this country firmly on an even better, brighter course for decades to come.


BARTIROMO: President Obama talking about what is in store for his final State of the Union Address on Tuesday night. He says that he wants the focus to be more on America's future, not his final year in office.

Critics say it will be all about the president's agenda.

For more on what we can expect, back with our panel, Ed Rollins, Judith Miller, Steve Moore.

Judith, let's start with you. What do you expect out of the president Tuesday night?

MILLER: I'm expecting full liberal legacy mode.

MOORE: Really? That would be -- that's shocking.


MILLER: Instead of no drama, we're going to have "drama Obama". What is at stake in the future?

And we'll hear a lot about guns. We have seen the tears. Now, we're going to see the appeal.

We're going to hear about Gitmo and how he wants to close it still. We're going to hear about the things he's accomplished briefly and then move on to this vision and hope for the future. Back to the future.

BARTIROMO: And yet, Ed, national security is the number one issue on the minds of the American people.

ROLLINS: He's decided that's not his bailiwick. He's going to basically just let that -- he inherited it and whoever comes in will inherit the message that is left.

I agree with Judy. It is a legacy speech. It's going to be the last time he's going to have a big audience to watch.

And I think that reality is he's not going to talk about how he can cooperate with Congress or here is my agenda for next year. It's going to be -- what I've done and what I'm going to do and what I've already done. It's about my legacy. I'm one of the greatest presidents ever, I won the Nobel Peace Prize three weeks into the office, I earned it many times over.


MOORE: You know, it's a little a tough to give a legacy speech when the stock markets just fell.


MOORE: I mean, this is a big problem.


MOORE: You know, just week ago this was all going to be about the president's economic accomplishments. Those don't look so strong right now. And it is interesting when President Obama spoke to the nation about terrorism a few weeks ago, he didn't calm the nation. He made people more afraid.

And I wonder whether he can pull this off, of telling people, oh, everything is wonderful and doing the icky shuffle on the end zone on the economy. I'll give you one statistic that I think is amazing about this economy. It has been ten years now, ten years since the American worker has gotten a pay raise.


MOORE: I think that's the number one issue is, which party is going to create not just growth, and not just jobs, but a pay raise, because family finances are pinched now.

BARTIROMO: Which is why people, the average guy and gal, are not feeling any recovery because their wages have not gone up.

And, you know, you have to look at President Obama's term and say, what have you done?

MOORE: You know, the jobs report was good that we got on Friday.

BARTIROMO: Better than expected.

MOORE: Looking at the economy through the rear view mirror.

BARTIROMO: Some said it was a --


MOORE: The first time I'm a little bit nervous about 2015 potentially.


MOORE: I mean 2016.


MOORE: And, by the way, family finances, families are not in a position to go through another recession because they still haven't recovered the money they lost in the last recession.

BARTIROMO: Obviously, he wants to talk about guns, Ed.

ROLLINS: He can talk about guns all he wants to talk about guns. Guns sale, every time he talks about it, gun sales go up and Smith & Wesson stock goes up.

BARTIROMO: Because people are afraid and they want to buy a gun.

ROLLINS: I think there's going to be some showboat. He's going to have an empty seat there when she talks about victims. I think we all care about victims of crime and victims of gun abuse, but his stuff is not realistic. It's not going to get to the Congress.

If he really basically do this, he'd travel the country the next six months, going to get state legislatures and trying to them to change the laws because that's where the power is. It's not federal. The federal government is not going to do anything.

BARTIROMO: So, he's going to have one seat open to represent those who have been killed by guns. He's going to have another Syrian refugee in the audience.

MILLER: But that's dead. I mean, we have refugees who are now associated with terrorist crimes or attempts, that is not happening. Even Angela Merkel in Germany, who have the most aggressive agenda vis-a-vis refugees and asylum seekers, even she had to back off, because of what happened in Cologne.

ROLLINS: The tragedy of the rape, alleged rape that took place that night I think has made everybody a little bit fearful of --


BARTIROMO: I believe it was 100 women and a thousand men --

MILLER: And where were the police?

BARTIROMO: -- attacking these women.

MILLER: -- which is why the police chief had to resign. But more than that.

BARTIROMO: No comment from the White House on this.

MILLER: Outrage really.

BARTIROMO: Haven't seen much of it on mainstream media.

MILER: No, and you're not going to.

BARTIROMO: It is extraordinary.

MILLER: With due respect to Donald Trump, Obama is going to talk about how he's made the country great again. And he's going to talk about the unfinished agenda on --

MOORE: Yes, he's going to talk about climate change. I bet that's going to be a big part. By the way, if you look at polling, and ask people what are your major concerns and you ask about the top 25 things, climate change is close to number 25 on the list. So --

MILLER: Except for young people.

MOORE: Well, for young people. But still, if you ask people, is jobs more important than climate change, there's no comparison.

BARTIROMO: They don't have a job.

ROLLINS: Telling factor is the jobs --

MOORE: And the climate change agenda kills American jobs.

ROLLINS: A lot of the jobs have been created. Some in construction, because we got a warmer winter.


ROLLINS: A lot are in the restaurant business --

BARTIROMO: Services.

ROLLINS: Services, that's right, health care aides, those kinds of things.

MILLER: "Star Wars", "Star Wars" goes to the Hollywood --

ROLLINS: It's not about manufacturing. It is not about new jobs --

BARTIROMO: Manufacturing is the story.

Let's take a short break. Then, the findings from the Benghazi hearings and her e-mail server could bring new trouble for Hillary Clinton, her quest for the White House. Our panel back on that on "Sunday Morning Futures," next.


BARTIROMO: Welcome back.

More fallout over Benghazi. Former Defense chief Leon Panetta and former CIA director David Petraeus testifying before the House Select Committee this week.

Ed Rollins, what did you think about this testimony? What did we learn?

ROLLINS: Well, I think it's more complicated issue. There's a new movie coming out, but unfortunately movie sometimes define things more than testimony. The men who were there basically say they had plenty of time to do what they should have done and it was a very slow reaction from the State Department. I think she's going to have a tougher tight getting that off her shoes than anything else.

BARTIROMO: Do you think this is going to be a problem for Hillary Clinton?

MILLER: I don't really think so. I don't think this issue resonates. Apart from the movie, I agree with Ed. I mean, I think the movie is more important than the hearings which were behind closed doors.

And we know what David Petraeus has said, which is basically his department to the Pentagon, the CIA, his action group did everything it could do to rescue these people. The movie says the opposite. So, who are the American people going to believe?

MOORE: One line is going to keep coming back to haunt her over and over -- what difference does it make, remember? The problem is this is a pattern of kind of deceit by Hillary with the e-mails and others, and there's a trust issue for Hillary out there. I mean, a lot of voters just don't trust her. Once you lose your trust with voters, it's really hard to win it back.

ROLLINS: Do you remember the commercial she used against Obama, who do you want answering the red phone at 3:00 in the morning? I think we've had that answer and she didn't answer it.


ROLLINS: I think that's going to be a telling in this campaign.

BARTIROMO: I mean, the question is, of course, is there somebody on the other side who will resonate more so with the American people come the general election?

MILLER: That's right.

ROLLINS: A long ways to go. We've got three candidates that are basically still in this thing and none of them are developed today as a national leader. Trump is being perceived as a leader, but obviously, he's got a long ways to go before he wins this.

BARTIROMO: I mean, I think you make a point with the trust issue on Hillary Clinton, people just don't believe. And time and time again, we see -- look, she told her daughter it was terrorism, and yet she told the American people it was a video. Come on.

MOORE: Interesting situation now on both sides of the aisle, with both party still kind of dissatisfied with their field of candidates.

BARTIROMO: And the Democrats haven't really done anything with the voters because they just said, look, Hillary is your candidate.

MOORE: I'm hearing this chattering again, though, it's come back about maybe Al Gore, maybe Joe Biden, maybe somebody else --

BARTIROMO: Isn't it too late for somebody new to get in?

ROLLINS: You can't get on the ballots.

Here's the most telling thing -- Democrats and Obama won two elections based on young voters turning out. Young voters are now for Bernie Sanders. Are they going to get turned off with by this cycle here and obviously not support the same kinds of members, Hillary Clinton? If they don't vote, that's a big advantage for Republicans.

MILLER: And I think, that's Hillary's problem. The president is now at 47 percent popularity. That's very low and it's very hard, and yet she is attached to him, no matter how much she tries to walk away.

BARTIROMO: Yes, it could be another third term for Obama if Hillary gets in.

Let me take a short break. The one --

ROLLINS: That's a great line.


BARTIROMO: One thing to watch for the week ahead on "Sunday Morning Futures." We'll have our panel on that, next.


BARTIROMO: Back with our panel with the one big thing to watch in the week ahead.

Steve Moore?

MOORE: Of course, the big issue this week, it's the lotto. If I win the lotto, I just bought a ticket, I could become a billionaire and go run for president.

BARTIROMO: There you go.

MOORE: But more seriously, the big issue obviously, stock market. We've got to see it, if we see another slide. People are going to start panicking.


MILLER: This is Obama's issue, North Korea. Mr. Non-Proliferation, what is he going to do? Is he going to go hard on sanctions, is he going to lean on China to finally help us do something about a country whose arsenals gone from six to ten nukes?

BARTIROMO: Or lead from behind it?

ROLLINS: I'm going to watch Susana Martinez, who's going to do the rebuttal to the president's speech. She may be a new star. She's already star of the party, but she maybe an actual star. She could easily move herself into vice presidential contention.

BARTIROMO: That's a good one. I'm going to do that as well. And I'll be watching the debate on Thursday. I'll be there.

That will do it for "Sunday Morning Futures." I'm Maria Bartiromo.

Make sure to tune in and join us for the debate on Thursday night on Fox Business Network. Neil Cavuto and I will be moderating the main event at 9:00 p.m. Eastern.

I'll be back tomorrow morning on "Mornings with Maria" from 6:00 to 9:00 a.m. Eastern on Fox Business Network. Join us.

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