Agriculture Secretary Perdue says farmers need tax reform

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Agriculture Secretary Perdue says farmers need tax reform

Agriculture secretary says tax reform is needed to help small business farmers and ranchers.

This is a rush transcript from "Hannity," November 13, 2017. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

QUESTION: Senator, before you go, Roy Moore, what's the latest there? Are you calling for him to step down from that Senate race?

SEN. MITCH MCCONNELL, R-KY., MAJORITY LEADER: I do. I think he should step aside.

(END VIDEO CLIP)

NEIL CAVUTO, HOST: That's how it began, with Senator Mitch McConnell saying no more of Roy Moore.

And this prompted a quick tweet response from the Alabama judge under fire: "The person who should step aside is Senate Majority Leader Mitch McConnell. He's failed conservatives and must be replaced."

And it's not ending there.

Welcome, everybody. I'm Neil Cavuto. And this is "Your World."

By the way, this is now impacting that tax cut you're waiting for. More on that in a second.

But, earlier, on Fox Business, Ohio Republican Senator Rob Portman telling me it's time for Moore to go.

(BEGIN VIDEO CLIP)

CAVUTO: Moore should step down?

SEN. ROB PORTMAN, R-OHIO: Well, look, I -- as you know, I did not endorse the guy. I actually did endorse another person in the Republican primary, Luther Strange, who I think is a great senator.

And I said, when I heard about these allegations, what I continue to say, which is that when women go on the record, I think it adds more credibility. I did say we ought to be sure that those allegations against him are not false.

We have now had some time to look into this. And it seems to me that those allegations have a lot of credibility. And I have not heard a response that has that level of credibility. So, yes, it would be best if he were to step aside.

(END VIDEO CLIP)

CAVUTO: And it's not ending there.

To Fox Business Network's Blake Burman with the very latest in this fast- moving development.

What do you have, Blake?

BLAKE BURMAN, FOX BUSINESS CORRESPONDENT: Hi there, Neil.

At our last count, 10 Republican senators have said that Roy Moore should step aside. Add to that 29 Republicans have said that if the allegations are true, that Moore should withdraw his name from this Alabama Senate race.

The latest accusation comes from a woman earlier today who said that, when she was 15 and 16 years old, she was sexually assaulted by Moore.

The Moore campaign continues to call this a witch-hunt. They said in a statement today -- and I quote here -- "Let it be understood the truth will come forward. We will pursue all legal options against these false claims. And Judge Moore will be vindicated." " Now, here at the White House, I asked a senior White House official earlier said today if the controversy and uncertainty surrounding Moore puts an added incentive on Republicans to get the tax bill done before that December 12 election in the state of Alabama.

On the one hand, this senior administration official told me possible, but this person also added, Neil, that, at this point, there are just too many hypotheticals involving that complicated question.

Today, as you know, on the tax reform front begins the Senate's process for marking up the bill. When you look at the schedule going forward, the House hopes to vote on a bill at this some point this week. The Senate hopes to vote on their bill at some point after Thanksgiving. Then you have to conference them together.

And Republican senators hope to have this hashed out by Christmas. What remains to be seen is whether or not Republicans can count on another senator from Alabama or not.

One thing to consider here, exactly. Even if Moore stays in this race and even if he wins it in a month or so, the head of the National Republican Senatorial Committee, Cory Gardner, said at that point he feels that Moore should be expelled from the Senate, that from his Republican colleague, potentially -- Neil.

CAVUTO: Incredible. Blake Burman, thank you very, very much.

So, how about making a moot point of the entire Roy Moore thing by just trying to get tax cuts voted on and approved before December 12 and that special election?

Jason Russell of The Washington Examiner.

How likely is that kind of a timetable?

JASON RUSSELL, THE WASHINGTON EXAMINER: Yes, it seems pretty unlikely to me.

I mean, if you look at how the House and the Senate have been working on other issues in the past, it takes them a long time to get things done, especially when it came to the health care debate. You had several stop- and-go efforts in both the Senate and the House.

So to think that they Gates get this right on the first try, I would be surprised if they were able to do it, especially with that quick time frame. That's this week, next week -- sorry, not next week -- but the week after Thanksgiving and the week after that.

CAVUTO: Right. Right.

RUSSELL: It's way too quick, in my mind, for it to be possible.

CAVUTO: So, help me with the calendar, Jason. You know it far better than I.

One is to try to get the House to approve all of this by the end of the week, in other words, ahead of Thanksgiving, quite a bit ahead, and then the Senate does its markup thing as it's been doing this week. Gets ready for a vote presumably the week after Thanksgiving.

Then they have to iron out their differences in their respective plans, which are considerable, all before, if that is the deadline, the December 12 thing, to make a moot point of this Roy Moore thing. Again, that's a tad aggressive.

RUSSELL: Yes.

I think if the differences between the House tax bill and the Senate tax bill were not so big, then it could be possible. But to think that they can go to conference and hash those differences out in just a week or less, I would be very surprised if they were able to do that.

CAVUTO: So what are the big differences then, Jason? Where do they have the biggest ones? I know the delay in the corporate tax cut. I know the different treatment potentially in retirement savings, which we're going to get into.

But I have talked to a number of senators and representatives within the Republican Party who say they think they can cross the bridge and it's not insurmountable. RUSSELL: Yes.

And you're seeing a lot of opposition from senators like Marco Rubio and Mike Lee, who are saying that the child tax credit expansion in the Senate bill is not big enough for them. You're seeing people like Jeff Flake say that the impact on the deficit, the increase in the deficit is too big for him.

Now, they're not saying they're going to definitely vote no on it, but they're those are big concerns for them that need to be addressed. So, you have to iron out those issues in the House-Senate -- in the House version and the Senate version to get this through.

CAVUTO: Right.

My gut tells me, Jason, that the House isn't a problem, getting this approved there, where the numbers are a little bit more flexible. The Senate is anyone's guess, especially if this goes past the 12th, to your point, and then you have a 51-49 potential Republican majority, little wiggle room for error there.

Is there any sense that Democrats, at least in the Senate, could be brought over to vote for this?

RUSSELL: I don't think so.

I think, when you look at their political aims here, they want to make sure that there's no legislative feather that President Trump can put in his hat. So, if they make sure that they can say President Trump and the Republicans have been a failure to do anything on health care and the tax reform, then there's not going to be much reason for Republicans to go to the polls in 2018, if they don't have those accomplishments under their belts.

CAVUTO: All right, thank you very much, Jason Russell of The Washington Examiner.

There is a separate issue that is going to cause a whole lot of controversy. And that depends whether you're under 50 or over 50. And it concerns retirement savings and a Senate markup that includes an amendment that would tax the so-called catchup provisions within 401(k) retirement plans.

All right, we got to go to someone very young on this to make sense of it for old people like me.

(LAUGHTER)

Lauren Simonetti what are we talking about here?

LAUREN SIMONETTI, FOX NEWS CORRESPONDENT: Unfortunately, I'm one of those people, Neil. I'm admitting it. You just let the 401(k) keep gaining and you try not to look at it.

But, anyway, Fox Business is learning that Orrin Hatch -- he is chair of the Senate Finance Committee -- he's proposing a change to 401(k) contributions for older Americans.

So, as it stands now, those near retirement, if you're 50 or older, you can contribute the $18,000 limit, plus $6,000 extra tax-free. What Hatch wants to do is raise that limit. We call it the catchup contributions, to raise to it $9,000, but then tax that money up front, so you're treating the 401(k) like a Roth IRA.

The thinking is, you pay the tax now, so the government gets its money now, and then, when you're ready to retire, you can withdraw your savings tax- free.

The president of the American Retirement Association is describing Hatch's amendment as a trade-off. He says this amendment is a placeholder in this point in case they need revenue as the process, the process unfolds.

And revenue is going to be a sticking point. Senators are operating under those tight budget restraints, especially since Senate Republicans have just a razor-thin majority to pass tax reform. And already we know that Senators Bob Corker or Tennessee, Jeff Flake of Arizona and James Lankford of Oklahoma have all expressed concerns about the nation's debt.

Fox Business is also reporting, Neil, that Senator Hatch wants to repeal guidelines that allow contributors to convert traditional IRAs into Roth IRAs. That's sometimes useful when you need to get around those income limits that prevent a Roth IRA contribution at the beginning.

So, under Hatch's amendment, that too would change, so potential changes to the 401(k) indeed.

CAVUTO: But all of this is to make the math work.

SIMONETTI: Yes.

CAVUTO: It might be sort of a giveaway for senators who want to delay the tax cut implementation until next year or the after, I should say, if it comes to fruition.

SIMONETTI: Yes.

CAVUTO: But they have to find a way to make those numbers jibe, right?

SIMONETTI: So, I would call this is a tweak to the 401(k). It is not going away, but some sort of change is definitely a possibility at this point because they do have to find a way to pay for this expensive tax cut.

CAVUTO: All right, this is going to be an issue from your 401(k) about 20 years from now, young lady.

SIMONETTI: Oh, thank you.

CAVUTO: So, keep up with it. Yes, all right.

(LAUGHTER)

CAVUTO: Lauren, thank you very, very much, Lauren Simonetti.

Well, forget this cover. You see this? It's out right now, calling Colin Kaepernick citizen of the year. Is Roger Goodell about to get the contract of the century?

(COMMERCIAL BREAK)

CAVUTO: Never mind a lot of NFL teams can't really fill their seats. Word now that NFL commissioner Roger Goodell reportedly wants them to fill his pockets.

Contract talks are under way. What does he want? Well, we're told a lot of money and a lot of assurances. But the back and forth on this, is it really being fair to the commissioner or the 32 team owners, two-thirds of whom have to agree to whatever extension they give him and whatever paycheck they ultimately give him.

Former ESPN reporter and a Federalist contributor Britt McHenry.

Britt, what are we looking at here? First of all, I find the timing of a lot of this stuff that he wants in this a little curious, given the fact that he's had a run-in with Jerry Jones of the Dallas Cowboys, and, lo and behold, we see today demands like a private jet for the rest of his life, insurance for he and his family the rest of his life.

That stuff is kind of odd timing wise.

(LAUGHTER)

CAVUTO: What do you make of it?

BRITT MCHENRY, FORMER ESPN REPORTER: Well, I just think these demands are unwarranted.

And the two reporters behind this story, Adam Schefter and Chris Mortensen, were my former colleagues and are as reputable as you can get.

Let's just look at his resume over the last three years, the inadequate initial punishment to former Ravens running Ray Rice of only two games for beating his wife, and then the video surfaced. We know what happened there.

Then there was Deflategate, the ego-driven feud with the New England Patriots and Tom Brady. They ended up winning a Super Bowl a year later. And what he's embroiled with now with Cowboys Jerry Jones and Ezekiel Elliott, the running back who was never legally charged with domestic violence. So, that suspension is still being upheld.

There's a lot of questions about how he's doing his job, and the anthem protest debacle. You can compare that to Adam Silver, who only makes $10 million a year, compared to these demands. He came out before the NBA season and said it's against the rules. Everybody is standing.

So you look at really what Goodell has done, what the precedent would be to give him all those demands, and it's just not simply warranted. I would say go with Condoleezza Rice. She said it was her dream job to be the NFL commissioner. And maybe that's what they need, given their history towards women.

CAVUTO: Well, do you see that as a possibility, though, at this time, Britt?

It sounds like a lot of this just developed and leaking out of this, again, to your former colleagues or whatever -- I don't take anything away from their reporting skills -- at a curious time, when Jerry Jones has had this dust-up with the league.

But the NFL did provide us a statement regarding the ongoing negotiations, stating that: "The only element of the ESPN report that is true is that there's a regularly scheduled Compensation Committee conference call on Monday. No basis in fact for any of the other reporting. Those trying to peddle that nonsense are either profoundly informed or deliberately trying to mislead."

Let's say though that he's still approved by -- it takes, what, two-thirds of the owners. Have we ever had a case where someone who takes that job or is reappointed to that job has a third of them not backing him?

MCHENRY: Well, we will have to see how it unfolds.

I mean, a lot of these owners, Neil, seven of which, at least, donated a respectively a million dollars to President Trump's campaign. They sided with him on the anthem protest. So there's a division over that issue alone.

I think, at the very least, these owners are starting to look outwards of Goodell in terms of what their options may be, because they have received a ton of scrutiny over the league, again, the last three years.

CAVUTO: But is this the time to do it, Britt? Do you get a sense that -- I was getting that, too, obviously, given all the game -- and the controversy over the flag and the national anthem.

MCHENRY: Yes.

CAVUTO: But that it might have to wait until 2024 or whatever this would go, or is that too risky?

MCHENRY: I think that, personally, these conversations need to be happening now.

And of all the owners, the one person, Neil, you probably don't want to get into a public war with is Jerry Jones. It's still America's team and they still get the highest viewers -- viewership numbers. But even the Dallas Cowboys have seen a significant drop in their own market.

So, that's where all these other owners are going to come together.

CAVUTO: Are they going to blame that on Goodell, though? Are they going to blame that on Goodell?

I mean, obviously, there's a friction here when you see someone like Kaepernick on the cover of a magazine and vaunted as a hero, they're going to look at this and say, all right, he represents the passion of our players, or that's how they are going to see it. And those players don't realize the economic hit they're taking, we're taking.

Who wins?

MCHENRY: But that's where I think the fault is, is enabling this.

CAVUTO: I see.

MCHENRY: Again, if Roger Goodell had come out before this season even started in July, in preseason, and just said, new rules, we're not allowing kneeling, just like U.S. Soccer did, just like the NBA did, then perhaps it wouldn't have grown to this level.

And I see that magazine cover, Neil, and I think, if we want to go with a football player, Houston Texans' J.J. Watt raised $37 million for Hurricane Harvey relief. Why is he not the citizen of the year?

There's a huge disconnect with reality and the NFL right now, and they need to figure it out.

CAVUTO: Well put.

Britt McHenry, very good seeing her. Thank you very, very much.

MCHENRY: Thank you. Thanks for having me.

CAVUTO: All right,

In the meantime, you see all those security cameras that are all over the place. Did I tell you a lot of them are made in China, in China? OK. There's no problem with that, right? Yes, right.

(COMMERCIAL BREAK)

CAVUTO: All right.

Our friends at The Wall Street Journal just completed an interesting story that shows the Chinese government-backed company Hikvision has its surveillance cameras all over the United States. So, what could possibly go wrong with that?

Former CIA analyst Buck Sexton says it's a big concern.

What do you make of this, Buck?

BUCK SEXTON, FORMER CIA COUNTERTERRORISM ANALYST: Well, there's a couple levels, Neil, where we have to be keeping a close eye on this.

One is just that any Internet-enabled device, especially as we now increasingly become part of the Internet of things, or that that surrounds us now, more and more is going to be Internet-connected in our day-to-day lives, not just phones and computers now, but pretty much everything around you that is running on electrons.

So, that's a concern, the moment that you have a possibility of a back door. And we're looking at Hikvision here and these cameras. There are concerns that they could be hackable, just as general proposition.

And then, more specifically, when you look at what is going on with the Chinese government and the Chinese history of cyber-activities, very aggressive cyber-activities against all kinds of opponents, including the United States, it's particularly concerning that we would have these cameras manufactured by a company that is partially -- I think it's 40 percent or so owned by the Chinese government, but enough that it raises enough eyebrows and concerns, looking over some sensitive sites.

And that was reported in the Wall Street Journal article. The moment that you have the possibility of back doors into these cameras and the Chinese government perhaps knowing a bit too much about how to get into those back doors, that's a major security vulnerability. And that's why the reporting is getting all this attention.

CAVUTO: You know, Buck, my immediately reaction to that story was, well, why did we -- I could see on commercial sites and the rest. But we why did we disproportionately go towards Chinese camera manufacturers anyway in the security side?

Certainly, the bell must have gone off in someone's head. China, spying, snooping, cameras, security facilities, not a good idea.

SEXTON: Well, Neil, you would be surprised.

A lot of times, the budget that different government organizations are working with is going to be the primary consideration.

Look, I think this is changing now. There's been a change, for example, with how we review Russian software company -- or Russian company Kaspersky and its interactions with different companies around the world.

The U.S. government is getting savvier, I think, about this, or perhaps it's just paying more attention to it. But it once again raises -- and I think this is the critical issue -- it raises that we are increasingly drawn into a constant cyber-war in which information is being stolen from the United States at a level that is civilization-changing.

What I mean by that is that our information and technology advantage is eroding day after day. And foreign actors, instead of having to spend billions of dollars on R&D, are looking to just steal it, whether we're talking about military or commercial secrets.

So, this is a huge problem. And it has already, I think, with some of the major hacks we have seen, exposed that the U.S. government is just not and has not been fully prepared for the scope and scale of this threat, and it needs to get on it right now.

CAVUTO: All right, Buck, thank you very, very much. Scary stuff.

Former CIA analyst Buck Sexton.

In the meantime, it's considered the happiest place on Earth, except if you run into Legionnaires' disease. We will explain for a number of people, and maybe a growing number, the reality that is just now hitting home.

(COMMERCIAL BREAK)

CAVUTO: Mac and cheese, Hamburger Helper, Ritz crackers, you name it, it's my food pyramid, it looks like Wal-Mart is raising its online prices for it. And get this. The retailer thinks this will help sales.

We're back in 60 seconds.

(COMMERCIAL BREAK)

CAVUTO: All right. All right, boy, they have really moved up the timetable to try to get this tax thing done and maybe well before Christmas at that.

The agricultural secretary of the United States, Sonny Perdue, with us right now.

Secretary, very good to be with you.

SONNY PERDUE, U.S. AGRICULTURE SECRETARY: Good afternoon, Neil. Good to be here.

CAVUTO: Same. Same here, my friend.

Let me get a sense from you where you think this battle is. I know this is wading into political matters, but they are warranted now, given the Judge Roy Moore situation and how this could affect the timing of that seat in that Republican stronghold by December 12, by which time we're told a lot of senators want this thing put to bed and done.

Is that realistic?

PERDUE: Well, it may be realistic. I would love to see Congress move that quickly.

I think the good thing is, they're doing this in regular order. The House is passing a bill. The Senate is going to pass a bill and then they're going to confer on it. I think that's the way Congress should work.

And I don't think it matters over one member. Tax reform needs to be done. The public wants that. I have been out at farm hearings. Farmers want it. So, I don't think one member should matter on the timing on this.

CAVUTO: You think it's ripping your party apart, though?

Obviously, you have heard the drill before, Secretary, and you dealt with it in your days as governor. There's the establishment guys, the non- establishment guys, the Steve Bannon renegade candidates, and then, of course, this whole thing.

What do you think?

PERDUE: Well, Neil, the great thing about America, the United States, the voters are the judge and jury.

In a democratic republic, we elect our representatives. And as a former governor campaigning, I always trust the electorate. Their wisdom, I find, is greater than all of ours.

CAVUTO: All right, now, the electorate, as you know, in the past week, in Democratic states, I should stress, went for the Democrat and also went for and seemed to be fond of more spending and not tax cuts, given the Medicaid expansion voters approved in a referendum obviously in Maine, the inroads made in states like Washington state by Democrats.

Does it worry you that the trend, at least on the part of voters, might be against what Republicans are trying to do?

PERDUE: That's not what I hear on the field.

I have been in Upstate New York this morning at farm hearings. And farmers are businesses, too. They're small businesses, typically. And they want tax reform, they want simplification, they want lower rates. And they want the pass-through rates.

So, that is not -- that doesn't conform to what I'm hearing out there on the road.

CAVUTO: Secretary, what about those farmers?

I mean, we always think that they're monolithic or one of type, but they would benefit from some of these lower pass-through rates, the 25 percent rate, some of them that pay at the top marginal rate as well.

What is your sense of the type of support they have for tax cuts whose size and magnitude have come down from what we were originally hearing?

PERDUE: Well, I think they're very still supportive.

I have been from California, to Iowa, to Upstate New York, to Louisiana. And what I hear is they want tax reform. They want -- again, the death tax, as you know, is very, very popular with them. And they want it repealed. They have got to plan. They have to hire accountants and lawyers in order to manage their taxes in that regard.

So, they're very anxious to get something done. And I find great support for farmers. Obviously, they're businesses. And they have to make a profit. And they invest. And the taxes they pay take away from the other investments of making their farms more productive.

CAVUTO: Do you think it will make a difference in the end if it comes into effect next year, the year after? As you know, in order to make this meet the numbers, Secretary, the Senate and House have different approaches to that.

What do you think?

PERDUE: Well, I'm personally always a sooner rather than later kind of guy from tax reform. But I don't think it will really matter.

I think when people understand that it's done and will happen, then they will be patient act it. But, preferably, personally, I would love to see it happen next year.

CAVUTO: Do you look also -- I know this is slightly outside your purview, sir, but when we look at the markets and the run-up they have had, do you think if they don't get tax cuts that there's hell to pay? In other words, the markets could turn south quickly?

PERDUE: Well, I can't tell you how much of the market is built into, promulgated on tax cuts right now.

But I think, again, we can determine that. We will find that out, obviously. But I don't -- I think that's a speculative question, because I do think we're going to get Congress agree. I think they are going to get the votes on both sides and have a good conference about the tax cuts and tax bill.

And I think we will see that. So, I think it's only speculation what would happen to the markets if it doesn't happen.

CAVUTO: Yes, I live for speculation.

PERDUE: I understand.

(LAUGHTER)

CAVUTO: Let me ask you, though, about when you talk about you get the votes on both sides. By that, I assume Republicans in the House, Republicans in the Senate.

Do you see any crossover? Do you see any bipartisan support, let's say, in the Senate, where it seems potentially more likely?

PERDUE: Well, you know, the good thing about the job I have, agriculture is not really a partisan issue.

And, frankly, I find that tax cuts are not. I was in a Democratic area in Upstate New York today. And I find Democrats want -- farmers want tax cuts and tax reform just like Republicans do.

So, I think you may well see some Democratic senators come over and vote for the bill that comes out of the conference.

CAVUTO: You know what I hear from a lot of folks, though, Secretary, is they can't see it or sense it.

Obviously, for a lot of your constituents and those in the agricultural community, there's a benefit to expensing and writing it off right away and the pass-through thing you alluded to at the outset.

But I tend to think that tax cuts are defined by how much people feel that they're their net in their ultimate paycheck, again, whether they're in business or whether they're individuals.

And I think the rap that that you heard against this tax proposal -- And I understand the limitations that they're working with in Washington -- is that they might not see substantial differences in net, that average Americans, to say nothing of those in high-tax states, won't see it, and this will be deemed a disappointment.

What do you think?

PERDUE: Well, it's the beginning of the process, Neil.

I guess I disagree with your premise there. I think they are seeing it. But the challenge with tax reform or any major policy issue is that the people who are against are going to cry louder and much quicker than those who will benefit from it, because many times people that benefit want to see it before they celebrate.

And I think that's what happens in major policy issues, particularly tax reform.

CAVUTO: All right, we will watch closely. Secretary, thanks for taking the time.

PERDUE: Thanks. Thanks, Neil.

CAVUTO: All right.

So, let me ask you a question. How far would you go, how far would you go to save about 70 cents on a box of mac and cheese? Wal-Mart is betting enough to get you off their Web site and into their stores.

Really?

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP, "HOME ALONE")

MACAULAY CULKIN, ACTOR: Bless this highly nutritious microwavable macaroni and cheese dinner and the people who sold it on sale. Amen.

(END VIDEO CLIP)

CAVUTO: Well, if you're looking for a sale, let's say, on mac and cheese over at Wal-Mart, the company is betting you will leave your home alone to get it.

Jeff Flock is at a Wal-Mart in Skokie, Illinois, to explain.

This is in fact bypassing their own website, right?

JEFF FLOCK, FOX BUSINESS NETWORK CORRESPONDENT: Well, that's true.

And who would have thought? This is -- I think this is the bricks and mortar fighting back, Neil. And we looked at a number of products. Wall Street Journal first flagged this, but we have been looking at products ourselves online. And we picked three that I think we have been told are on your diet, starting with Kraft macaroni and cheese, that large family size version.

Online at Wal-Mart, you can get it for $2.62. This is the 14-ounce. In store, $1.88. It's almost an 80 cents savings. It's even cheaper than Amazon's online, which is $2.47.

Ritz crackers, another of your favorites, the online family size box is $3.83. In the store, you save, again, about 80-plus cents. And that is something that is matched by Amazon.

And, lastly, I think this is the entree, a Hamburger Helper four-cheese lasagna online sells for $2.20, in the store, $1.50. And, again, Amazon matches that.

But a lot of these things a cheaper than you can get on Amazon online, as well as cheaper than Wal-Mart online. The idea, Neil, is to bring people back into the store. You know, you get people back into the store, they may go in for tuna helper, but then they find some other things they would like to have.

And this is something that obviously Wal-Mart can offer that Amazon can't - - Neil.

CAVUTO: I might point out, my thin friend here, these are all heart- friendly food -- well, kind of.

FLOCK: These were given to me by your staff as ones that you are noted for...

CAVUTO: All right. All right. We will talk later. We will talk later about it. Ixnay on the Hamburger Helper-ay.

What about this, Jeff? Because if I'm Amazon, right, and I'm hearing this -- and I know you and I got into this a little earlier on FOX Business -- that what is to stop me from saying, hey, I'm going to lower the price of these goods? They're telegraphing it to the world.

FLOCK: This is what Amazon has done from day one, which is not worry about profit, but instead worry about market share.

And I think right now Wal-Mart is saying, listen, we're not making money on this stuff. We're giving free shipping and we're not making any money on it.

And I cover the auto industry. They went for a long time seeking market share and not worrying about profit. And we see where that ended up. Now, I'm not suggesting Amazon is on that path. But Wal-Mart is on the path to say, hey, listen, we need to make this make money. We're going to more money online and we're going to bring people in the stores, which is going to help brick and mortar.

That is their strategy. I don't know if it works.

CAVUTO: Well, you hurt my feelings in this report, but I still love you anyway.

All right, Jeff, Jeff Flock, thank you very, very much, my friend.

FLOCK: Oh.

CAVUTO: He did hurt my feelings. But that's all right. He doesn't care.

All right, Hitha Herzog, I have got to get your read on all this, retail analyst extraordinaire.

How is this going to all fall out? Because if I'm a regular user of their website and I see that I have to go to one of their stores to get the cheaper prices, I'm going to go to Amazon.

HITHA HERZOG, RETAIL ANALYST: Right.

I think their anticipation is that people will continue to go to Wal- Mart.com. I mean, listen, they spent a lot of money trying to make sure that the infrastructure was on par, if not better than Amazon.

And I got a statement from Wal-Mart. They said that -- to your point, that sometimes items online cost more than on -- during the store. And what they want to really -- what they want to do is just pass on that savings to the customer.

So, yes, I mean, while it may cost a tiny bit more online, they're still maintaining that they are going to have the best prices overall and that customer is always going to get that same price, despite the fact that they are shopping online more.

CAVUTO: Monica Mehta also following this.

Monica, what do you think?

MONICA MEHTA, FINANCE EXPERT: Well, I think what they're doing is very interesting, because I think they're finally realizing that an online customer is very different than the customer that comes into the store.

Wal-Mart traditionally has catered to a low-income customer that comes in for grocery and just regular replenishment goods. The buyer that shops on Amazon is looking for convenience and is looking for variety.

So, by just competing on price on the Internet, you're not necessarily capturing that Amazon customer. And to Hitha's point, it does cost more to sell goods online than it does in the store. So you can't perpetually run a business that way.

It's intelligent for them to understand that Wal-Mart has this huge supply chain and it has 4,700 retail locations. Ninety percent of Americans live within 10 miles of a Wal-Mart store. And that's something that Amazon cannot match, that infrastructure, by snapping its fingers.

So the right way for Wal-Mart to compete is in its own terms, so I do think that this is a wise move.

CAVUTO: You know, Hitha, I could turn it around and say there are a lot of people for whom price is not the factor, convenience is.

And unless there's such a wide disparity between what is on the Web site vs. what is in the store or what is on Amazon, I think convenience will win out.

What do you think?

HERZOG: I absolutely agree with you, Neil.

The way the shopper is shopping now is all about convenience. And we're seeing that with what is happening on Amazon.com. In fact, I just worked on a research study with PayPal that said that 50 percent of people are shopping and using their online mobile devices to shop more.

That's only going to get bigger and better as we continue through the next couple quarters. Now, Amazon and -- excuse me -- Wal-Mart is reporting out their earnings Thursday. As we saw in the last quarterly report, a lot of that income and a lot of that revenue came from online sales.

So, it remains to be seen. If they make the switch and they do have more expensive items online, what is that -- going to happen to their earnings? I think we're all sitting here waiting with bated breath to see what happens, not necessarily this quarter, but definitely for the next couple quarters.

CAVUTO: Monica, longer-term, if this works for Wal-Mart, will it expand it to other areas and go beyond, let's say, food?

MEHTA: Absolutely.

I mean, I think one sector of business that really is not flinching, despite Amazon's growth of sales, is dollar stores. With dollar stores, people are coming in there, and the average shopping cart is $10. Amazon can't compete with that kind of business.

They're also not cratering into Costco's business, which is based on volume. Costco does well because they actually are vertical. They own a lot of the like chicken plants and eyeglass manufacturing sourcing. Like, they have a completely different business model.

What works for the Amazon customer doesn't work for every single customer in America. There's two different Americas. You have got the people who live in New York and L.A. that like convenience, and then you have people who make $60,000 a year, $70,000 a year. It's all about price and they don't mind going in the store.

CAVUTO: All right, we will see how this fares out. Again, it's still early in the process, but, again, Wal-Mart giving it a try to outmuscle Amazon kind of at its own game.

We will have more after this.

(COMMERCIAL BREAK)

CAVUTO: All right, Disneyland shutting down two cooling towers, this after nine people who had visited the park back in September who were diagnosed with Legionnaires' disease.

How can people protect themselves? We should say it included a couple people who were never in the park itself, but in the Anaheim area.

Family and emergency Dr. Janette Nesheiwat.

Doctor, thanks for coming. Good to have you.

DR. JANETTE NESHEIWAT, FAMILY AND EMERGENCY MEDICINE: My pleasure. Thanks for having me.

CAVUTO: I was surprised how relatively easy this sort of thing is to catch, not easy in the sense that everyone is vulnerable.

But explain how this happened.

NESHEIWAT: Sure.

So, Neil, Legionella is a bacteria that loves the water, and it loves to grow in the water. That's why it's easy to catch. And the way we catch it is by inhalation, inhalation via midst, water particles, water droplets.

We breathe it in, and it usually affects the lungs and can cause a pneumonia. A lot of patients will complain of chest pain, or trouble breathing, or coughing, fever, that sort of thing.

And that's why it's important, if you have any of these symptoms, to see your doctor right away, because it's treatable.

CAVUTO: All right.

Now, I noticed that the age of range was, if I remember, I think, from 54 all the way up to someone in their 90s. Does this primarily hit older people, or how does it work?

NESHEIWAT: That's a really good question, Neil.

Actually, it can affect anyone. But usually it affects those who are very young and are senior citizens, those who are elderly, and also anyone that has a weakened immune system or may have an underlying medical problem like asthma or diabetes or what we call COPD, which is a respiratory disease as well.

So, it can affect anyone, but it's usually seen more commonly in men. Sixty to 70 percent is usually seen in men. And it can affect anyone, even if you don't have any underlying medical problem.

CAVUTO: Now, Disney has reported that the water towers in question have been scrubbed, whatever they do to address this.

NESHEIWAT: Yes.

CAVUTO: But I think they're still shut down. But does that mean the harm or the threat is taken care of, or what?

NESHEIWAT: So, my understanding is, they have actually opened and shut them down several times.

CAVUTO: I see.

NESHEIWAT: And it has to be properly disinfected. And by that, I mean, superheating, hyperchlorination. There's disinfectant treatments that are available.

But I hope that they don't reopen it until they have several tests that show that it's 100 percent cleared from the system, because it can cause very serious, life-threatening disease. And, again, up to 10 percent of people can die from Legionnaires' disease.

CAVUTO: All right, now, obviously, there are a lot of people who plan trips to this happiest place on earth, the Walt Disney World in Florida not affected, Walt Disneyland, of course, what we're talking a here.

NESHEIWAT: Right.

CAVUTO: Would you recommend against that? Would you recommend caution? What?

NESHEIWAT: I would recommend just to follow the CDC guidelines, precautions. Listen to your local news report. They usually provide the most accurate and up-to-date health reports on the status of the cooling towers that were affected.

But the most common -- the best thing to do is, to protect yourself, is avoid known areas of contamination. Also, if you're a smoker, cut out the smoking that makes you more at risk for acquiring an illness, and just making sure, wherever you're going, that they're conducting proper testing and treatments of the cooling systems or air conditioning systems, or even hot tubs can cause an outbreak of Legionella as well.

And, again, it's treatable. And that's a good thing.

CAVUTO: All right, Doctor, thank you for taking the time. We do appreciate it.

NESHEIWAT: My pleasure.

CAVUTO: All right, we are getting some more news on Roy Moore, of course, more Republicans distancing themselves from him, including earlier today Mitch McConnell.

Now the Senate majority whip, John Cornyn, withdrawing his endorsement of the Alabama Republican senatorial candidate, he said he will leave judgment in the hands of the Alabama voters, where it ultimately belongs.

Separately, since a lot of people seem to think that this has sped up the process for Republicans to try to get something done on tax reform before that December 12 election, the president is going to be meeting with House GOP conference leaders on Thursday morning on this tax reform issue, slightly after he's back from his trip across Asia.

But, again, they're moving fast and furiously to make the whole issue of Roy Moore and how it might affect the numbers and the vote a moot point.

In the meantime, General Electric, remember when it was the it company, and every time it had any CEO who came in, it was sort of the Holy Grail of CEOs and how to get it done at the company that was the envy of the world? Not so much now, in fact, today not so much at all.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JACK WELCH, FORMER CHAIRMAN & CEO, GENERAL ELECTRIC: He's good from the top of his head to his toes in terms of integrity and values. And we are excited as hell to have him.

CAVUTO: Many look at you, Mr. Immelt, as being a young Jack Welch, and that's what keeps coming up, that you are really a young clone. What do you think of that?

JEFFREY IMMELT, FORMER CEO, GENERAL ELECTRIC: You know, I have never just tried to model what I did after Jack. I think GE is a special place.

(END VIDEO CLIP)

CAVUTO: I really didn't approve of that with my staff putting that in.

But, anyway, that was then, when Jack Welch was handing over the reins of General Electric to Jeff Immelt, when the running was the IT company and running it was the stuff of front-page news and, of course, a lead broadcast item.

This is now General Electric stock, with its biggest one-day drop in more than eight years, on a day its dividend was cut in half. And that's one of the few last gasps that draw investors to the stock.

Fox Business Network Deirdre Bolton on what happened -- Deirdre.

DEIRDRE BOLTON, FOX BUSINESS CORRESPONDENT: Yes.

So, Neil, this is still a front-page story. It's just a lot harder for the current CEO, John Flannery. Speaking today at a GE investor’s event, basically trying to reassure investors that they are in good hands.

It was a tough sell, though, Neil. You saw the stock down seven percent. And for the year, this is the worst performing component of the Dow. It is down 35 percent year to date. Look at the S&P 500 in comparison, up close to 15 percent.

So, the current CEO, John Flannery, really talking about this whole streamlining plan. You mentioned the dividend cut. The idea is to get some cash back in the coffers of GE as they go through a kind of tough year. He even said, listen, this is a heavy lift, but we know where we are going.

But he is very much depending on investors being patient. And investors not so much known for that. So, we will see what happens. The CEO also making some other changes, though. You mentioned the dividend. He's changing the way that executives get paid, Neil, so it's really they are putting their money where their mouths are.

Executives, the senior ones, are going to get paid 80 percent in stocks, so paid for performance. That is up from 50 percent. He himself, 100 percent equity pay. He is also changing and streamlining a lot of the businesses. They are really going to focus on the big three.

So, for him, that's health care -- and part of the reason why he has this current CEO job, he managed to turn around the health care business for the company. Also, aviation still a big part of GE, and power.

Almost everything else is going to be trimmed. I did speak with him, among other members of the press, in a closed-door session after the meeting about how many jobs would be cut and when. No specifics given on that, Neil. It just seems the talking points are, we are going just keep streamlining as we go, but that 2018, he literally said, is a reset year.

And they are just going to try to do their best to make this a more simple company. I will quote him directly by saying what he told me, which is, "Complexity has not been good for GE."

Also changing the numbers on the board, Neil. So, they used to have 18 directors. It's going down to 12. This whole idea is just trimmer and more efficient -- back to you.

CAVUTO: Deirdre, great reporting today on that, the fall of a giant.

And just a reminder here, there was a day where it was the IT company, as we were pointing out. Everyone wanted to be it, just like there was a time when there was a prodigy. There was a time when IBM ruled the software world. There was a time all of these companies had their moment in the sun, until they didn't -- GE, a reminder how quickly times and conditions change.

We will see you tomorrow.

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