Cotton: Mexican government can't handle the cartel violence

This is a rush transcript from "Your World," November 5, 2019. This copy may not be in its final form and may be updated.

NEIL CAVUTO, ANCHOR: Good for you, Brit. Now, that is power.

And here's something powerful, the first polls set to close in less than three hours in four key states today, Kentucky, Mississippi, Virginia, and New Jersey. Off-year elections usually don't get much attention. Not this year, because these campaign contests could set the tone for 2020 and, by the way, maybe the bull market itself.

Welcome, everybody. I'm Neil Cavuto.

FOX on top of key races in Kentucky, Mississippi, and races the president is paying very close attention to.

Right now, we're going to go with Mike Tobin with the one that matters mostly in Kentucky -- Mike.

MIKE TOBIN, CORRESPONDENT: And, Neil, last night, Matt Bevin, the incumbent Republican, got his bump from President Trump.

Last week, he got support from Vice President Mike Pence, who rallied the base. But as he cast his ballot today, Bevin made the prediction that the polls are wrong, that this race is not neck and neck, as they have predicted. In fact, he said, in a few hours, we're going to see the governor run away with this election.


GOV. MATT BEVIN, R-KY: I don't think this is going to be a very drawn-out process. I think this is going to be known pretty quickly.

I think you're going to know, frankly, even before polls close in the west, because you can expect that the west is going to roll in big for us.


TOBIN: The challenger, Democrat Andy Beshear, calls Bevin unhinged and said he's been too divisive in his first four years.


ANDY BESHEAR, D-KENTUCKY GUBERNATORIAL CANDIDATE: The last four years of Matt Bevin, he's created an us vs. a them every day. But I know, as Kentuckians, that we have more in common than would ever divide us.


TOBIN: Now, Beshear tried to keep this campaign local.

Bevin said since, he's the only incumbent Republican governor up for election right now, of course this race is a proxy for all things in national politics -- Neil.

CAVUTO: All right, Mike Tobin, thank you very much.

To Jonathan Serrie now in Jackson, Mississippi, where the GOP is also facing a tough fight, on what could be and should be a solidly red state -- Jonathan.


Although Mississippi is a solidly red state, the race for governor is surprisingly tight. You have Tate Reeves hoping that recent visits to the state by both the vice president and president will push him over the 50 percent threshold needed to win tonight's race outright.


DONALD TRUMP, PRESIDENT: I can't believe this is a competitive race. It's like embarrassing. I'm talking to Mississippi.


SERRIE: Former President Barack Obama recorded 11th-hour robo-calls urging supporters to vote for Jim Hood. Now in his fourth term as attorney general, Hood is the only Mississippi Democrat to currently hold statewide office.


AUSTIN BARBOUR, REPUBLICAN STRATEGIST: Jim Hood has had a very successful political career because he is this sort of hill country Democrat who tries to portray himself, I think, more as a moderate than he really is.


SERRIE: Both candidates are vying to succeed current Governor Phil Bryant, a Republican who, as with all governors in this state, is limited to two terms -- Neil.

CAVUTO: All right, Jonathan Serrie, thank you very much.

Well, we know that president thinks these races are important, but what do they say about 2020?

Phil Wegmann with some views on that of RealClearPolitics fame.

You know, we do attach a lot of importance, maybe just for the seeds that they spread about the possibility of the implications for 2020. But in the case of a couple of these, they're important, Virginia particularly with a potential change Republicans are watching and Democrats are watching in the state legislature.

What do you think?

PHILIP WEGMANN, REALCLEARPOLITICS: Especially in Kentucky and Mississippi, as we just heard.

I think that a year out from the big dance, what we're seeing is that both sides are looking to these two elections as if they are dress rehearsals for 2020. And both of the reporters before, they hit the nail exactly on the head, because what these Republicans have tried to do is nationalize the race by doing their best to put Donald Trump on the ticket, because these are two states that he won handily.

And they're hoping that momentum, especially since he has gone to both states and held rallies, will see them to victory.

CAVUTO: You know, we often look at the states where it's about control of the apparatus of government, the legislature in New Jersey, the Assembly, or you're talking the House of Delegates in Virginia, but that matters a great deal.

And that was something that Democrats gained substantially in the last go- round in the midterms, where they picked up six such states. And I'm wondering, with Republicans still holding 61 of these edges in state government, is there any possibility Democrats widen their showing from last go-round?

WEGMANN: They certainly could.

And what's interesting about these local races for the legislature is, it's more difficult to make an argument that they are a national indicator, but the consequences are significant, because what happens tonight on Election Day, that could have consequences going forward for decades, especially when we consider the implications that come with redistricting, and then also with gerrymandering.

So these are lesser known names, but no less important.

CAVUTO: You know what I'm curious about, Phil?

In the case of Kentucky, a state I think the president won by more than 30 points, Matt Bevin is in the race of his life to get reelected. And I know it's problematic for a Republican governor to get reelected there. I was surprised by that.

But you think with the wind at his back of the president's numbers, the economy, that he wouldn't be having the trouble he is. What do you think?

WEGMANN: Well, and if Bevin does win and Kentucky, he will be the second - - he will be the first Republican to win a second term there since the Second World War.

But you're absolutely right. What's interesting about Matt Bevin is he's sort of a proto-Trump. He was very aggressive with the media, very aggressive with his opponents, even before he was a governor, going back to his challenge of Majority Leader Mitch McConnell.

And so he tried out a lot of these populist techniques that President Trump later employed to greater success. But what's interesting is that it didn't exactly work for him at the local level. He has the ignominious reputation as the least popular governor in the country because of a lot of the ways that he's handled himself there in Kentucky.

And like we reported over at RealClearPolitics a month ago, what he has been trying to do to save his seat is wed his reelection to the impeachment inquiry of President Trump. He's trying to make this a us vs. them election. And he's hoping that with Trump's visit to the state that that can take him to the finish line.

CAVUTO: We shall see, my friend.

Philip Wegmann of RealClearPolitics in Washington, thank you, Phil.

WEGMANN: Thank you, sir.

CAVUTO: Meanwhile, the president says, if he goes away, this goes away, like records for the Dow and the Nasdaq today, when all was said and done. The president thinks, well:


TRUMP: Your 401(k)s, how you doing? Pretty good, right?


TRUMP: Pretty good.

If the Democrats get in, that's not going down by 50 percent. That's going down to nothing. It's going to be worthless.

Under Republican leadership, the economy is booming. Wages are rising. Confidence is soaring.



CAVUTO: All right, and you impeach him or don't reelect him, it all ends.

To The Wall Street journal's James Freeman, market watchers Rebecca Walser and Art Hogan.

Art, what do you think of that? Is that a view -- and we have gone to the Clinton impeachment process together. We can remember that Wall Street, not a red or blue entity. I always like to say green. They were making a lot of money with Bill Clinton. They wanted him to stay there. They have been making a lot of money with Donald Trump. I'm sure they don't want that disrupted either.

ART HOGAN, MARKET STRATEGIST: Yes, it's interesting.

The couple of things that we know are true, Neil -- and you and I have talked about this a lot -- is presidents generally don't make a big deal out of the market and don't address it a whole lot, because they know they have little control over that. And it can come back and bite them in the fanny.

I think that's exactly what's happening here. You got a president that, every time there's a new high, says, you're welcome and enjoy spending your money. And I just think that, at some juncture, comes back to bite you.

I also think that the this is an economy that has underwhelmed, necessarily, and certainly in 2019, we're kind of back to trend. And the trend is OK. The trend is good enough for all-time highs in the market, and it's good enough for a good third-quarter earnings reporting season, but it's not a bragging point.

And if this administration is going to run on the economy and the market, it's probably the wrong way to be looking.

CAVUTO: The president says, a lot of that, you can kiss goodbye if he goes goodbye.

Do you buy that, Rebecca?

REBECCA WALSER, WALSER WEALTH MANAGEMENT: I do, Neil, especially if we're looking at Warren as a contrast.

I mean $52 trillion Medicare for all, which they don't tell you is that it's a 10-year cost. So that's a decade per cost. And, absolutely, you're talking about the complete overhaul of one-sixth of our economy with medical being completely overwritten by the government.

So, this president deserves more credit. I disagree with Art. We have the highest median income in the history of our country. Incomes have gone up over $5,000, real dollars. When you add in the tax reform, it's another $1,500, over $6,000.

Obama, they went up over $1,000 over an eight-year period, seven-and-a- half, you take out the recession. So I think this president deserves a lot of credit.

CAVUTO: You know, I'm curious, though, James.

Whether you want to get this president granted, or do the political thing with it. The fact of the matter is, this president is fond of mentioning that this is what's been going on under his watch, the markets go higher and higher.

How much do you think that resonates on the stump? I mean, obviously, people want to hear about jobs. And in the battleground states, they want to make sure that those -- that is, Republicans want to make sure that those unemployment rates stay low.

They're lower than where they were when the president first got elected. But they're higher from the levels that they were a little more than a year ago. How does this play out?

JAMES FREEMAN, CONTRIBUTOR: Yes, well, I think nothing resonates like having a job and seeing rising incomes, as we mentioned.

You mentioned, in a lot of these battleground states, unemployment rates very close to historic lows. We have this amazing phenomenon in the country, which is new in the Trump era, of more than a million more open positions, open jobs waiting to be filled than we have unemployed Americans. This has never happened in a few decades of the government keeping these statistics.

So I think that does resonate. That's why in polls typically the president doesn't get a great approval rating, except on the economy. For that to continue, though, I think he really does need to resolve this China trade dispute.

And you see that signal from investors every day. When it looks like we're getting some kind of deal, the market goes up. And when we get bad news on that front, it goes down.

CAVUTO: You know, it is interesting, Art. And you can almost time it exactly.

The more optimistic investors are about a China deal, the more they buy, the less optimistic or concerned they are, the less so. There was growing indications today that both sides are going to remove tariffs, many of which were -- in this country were going to kick in next month, and that had the buyers out.

What do you think?

HOGAN: I think that's -- yes, I think that's a great question and a great point.

And I would say that if we were able to put the U.S.-China trade war at least in a compartment and say, we're not going to escalate from here, we have completed phase one, there's not a great deal of uncertainty because you know it's not getting worse, yes, but the tougher hurdles like I.P. theft and forced technology transfer will be difficult in 2020's business, I think the market was celebrate that.

We have consistently seen, the more constructive we get on the tone on U.S.-China trade, the better the market does. And the opposite is certainly true. We saw that in the month of May. We certainly saw that for the entire month of August.

So I agree with you 100 percent. If we can put this in the rear-view mirror, I certainly think that helps this administration and the polls in 2020. And I think they're going to try to choreograph that news around that. It makes a great deal of sense.

CAVUTO: I don't know whether the impeachment stuff is noise, Rebecca, but I do know the markets, by and large, ignore every development.

What do you do about it?

WALSER: I mean, this impeach -- obviously, we don't want a whole 'nother year of this going on. And I think that doesn't help the China situation, right, because if they think that this president's going to be someone they don't have deal with, then they're going to try to outwait him.

But China needs this deal more than we do. They are at 6 percent growth, the worst growth they have in almost three decades. They have got more of an issue. Their supply chains are leaving en masse. They have got to deal with this and they have got to deal with this president.

And so I would appreciate the impeachment dying down, so that we can actually get this trade deal. I agree with both James and Art. We have got to get this trade deal ironed up and sealed tight.

CAVUTO: All right, we shall see. It could be determined in a matter of days.

Guys, thank you all very, very much.

Again, just to remind you, the Dow and the Nasdaq both hit records today, the second in as many days, the Nasdaq just doing that by the close of the day, the S&P not so lucky, but again at or near records established just yesterday.

Meanwhile, the transcripts of two key witnesses are out, as the House impeachment inquiry ramps up -- after this.


CAVUTO: All right, bit by bit, more comes out.

House committees releasing transcripts of two key witnesses testifying in this whole impeachment inquiry, what they knew about the Ukraine phone call and when. You know the drill.

So does FOX News' Chad Pergram, who has been following it very, very closely on Capitol Hill.

Chad, what have we got?


I'm going to start with a phone call, part of the transcript, not the call between the president of Ukraine and the president of the United States, but a call between Gordon Sondland, the ambassador to the European Union, and the president of the United States.

And this is in the deposition that was released today.

Sondland said to President Trump -- quote -- "I asked him one open-ended question. What do you want from Ukraine? And as I recall, he was in a very bad mood. It was a very quick conversation. He said: 'I want nothing. I want no quid pro quo. I want Zelensky to do the right thing'" and says President Trump hung up on him.

Now, I'm going to direct you to another element of the transcript which we got today. And one element, one word we might start to focus in on here is the word presumed.

And this is also from Gordon Sondland and the transcript released this afternoon -- quote -- "I presumed the aid suspension had become linked to the proposed anti-corruption statement."

And Republicans are seizing on that word presumed, that Gordon Sondland wasn't really saying there was a potential quid pro quo there, but this was just his presumption, his interpretation of events.

And that's why, when you parse these statements and go through the transcripts, it's very much subject to interpretation. Democrats are going to say one thing. Republicans are going to say something else.

The reason, Neil, is because most people won't read the transcripts, they will listen to the news and listen to interpretations.

CAVUTO: Well, it's not really going to move the needle as of yet. If you're convinced the president did something wrong, that won't changed. If you're convinced just as well that he didn't, that won't change.


And that's why probably, in about a week's time, we will start to get some polling on this. And this is why who the people are fighting on Capitol Hill are so important.

There's been a lot of chatter the past couple of days here about possibly moving Jim Jordan, the top Republican on the Oversight Committee, to the Intelligence Committee. It's pretty apparent from that resolution that the House passed last week that the Intelligence Committee for sure will have hearings.

But Jim Jordan isn't on that committee. I'm going to use a sports analogy here. In ice hockey, you want to have the best matchup, and this is where, if you're playing hockey, the visiting team has to put their players on the ice first, and then the home team, they put their players on the ice second.

They look at who the visitors put out there. And then they try to get the best matchup. So what the Republicans are trying to do is get the best matchup.

But with the Select Committee on Intelligence -- Select Committee, that's a very key, important term here -- House Speaker Nancy Pelosi, she is the one that has last change. She could potentially veto putting Jim Jordan on the Select Committee.

And this sort of change, a change of player personnel, is so rare on Capitol Hill, nobody knows if that's the case. But you could see why Republicans would want to have Jim Jordan out there fighting for President Trump.

He's obviously been one of the president's most ardent defenders.

CAVUTO: You got a perfect score in your SATs, didn't you?


PERGRAM: No. Nobody -- I got five minutes for fighting in hockey, and two minutes for instigating.


CAVUTO: All right, I find that hard to believe.

All right, thank you, my friend. Great job, as always.

PERGRAM: Thank you.

CAVUTO: The guy is amazing, just amazing.

Meanwhile, with impeachment by House Democrats likely coming, how are Senate Republicans preparing? Judiciary Committee Republican Thom Tillis will answer -- after this.


CAVUTO: All right, a top diplomat revising his testimony in the impeachment probe to say that U.S. aid would likely be withheld until Ukraine issued some sort of a statement on corruption there.

Democrats are calling this a clear smoking whatever, a clear quid pro quo. But is it?

Let's ask Senate Judiciary Committee member North Carolina Republican Thom Tillis.

It's easy to get in the weeds on this, Senator.

Good to have you.

But is that, for the president, a smoking gun?

SEN. THOM TILLIS, R-N.C.: Absolutely not.

Look, the president is responsible, this administration is responsible for sending hundreds of millions of dollars to -- aid to the Ukraine. The Ukraine government recognizes that they have corruption problems, and we expect the president to step up and point to a commitment to ending corruption and graft in his administration or across the whole of the Ukraine.

That doesn't rise to the level that they're trying to make it, an impeachable offense, nor did they original transcript or the whistle-blower complaint. This is just a series of additional shiny objects to try and justify what I think is an insufficient basis for moving forward with impeachment.

CAVUTO: Not everyone is on the same page of this, as you know, Senator, with the bits and dribs and drabs of testimony we have gotten from other players, that there did seem to be an insinuation that aid was delayed to Ukraine until this issue was resolved.

Some of your colleagues have gone so far as to say it doesn't matter, even if it was, in the extreme case, delayed, and even if that is a quid pro quo, it is not an impeachable offense. Do you agree with that?

TILLIS: I tend to agree with it.

And I still go back, Neil, to the problem that I have from the beginning, when Nancy Pelosi, before she ever read the original transcript, decided to go with impeachment proceedings.

Now, they voted last week. You had two Democrats join Republicans saying they shouldn't move forward. They look like -- as they have for the past three years, they're just looking for a way to negate the election of 2016.

They will have a chance to have the voters decide the next president in 2020. I just don't see, based on what -- what's transpired to this point, with their antics with impeachment, that it's going to rise to the level of an impeachable offense.

CAVUTO: All right, so if we get to -- and this is a moving target, but it keeps to be a target that's getting moved back.

Steny Hoyer, the number two Democrat in the House, had said that he hoped to have this to a vote or resolved in the House by, I believe, Christmastime. That's only six, seven weeks away, Senator.

That doesn't look likely. So, then what? What do you think? What are you hearing?

TILLIS: Well, I think we will probably come up with some agreement to convene sometime right after the first part of the year if they send it to us in the Christmastime frame or maybe the week after Christmas, and then we will be on it.

We will have the president's defense counsel there. We will have the floor managers. We will hear the testimony.

And I'm sure that the president and other -- others may offer up motions. We, on the other hand, are jurors. We have to sit there and be quiet. We will be listening to the testimony and probably getting on it sometime in early January.

CAVUTO: You know, that's right by the caucuses and the primaries and the presidential contest heating up.

TILLIS: Right.

CAVUTO: How do you think that's all going to go?

TILLIS: Well, I think that anybody who's in a Democratic primary or Republican primary, for that matter, if they have a job back in the U.S. Senate, they should be seated in the chamber listening to the testimony and being thoughtful about what they're doing.

I think that most of them will. You can't go out on the stump pounding the table for impeachment when you're one of the potential jurors who should be sitting here listening to the testimony.

I do think that it's not something that's likely to string out over weeks. It could be three or four weeks at the very most. I think it gets disposed of. If we get it in late December, I think it's deposed of in January.

CAVUTO: You know, Senator, your colleague John Kennedy of Louisiana had suspected, and only half-kiddingly, that this was an orchestrated plot on the part of Democrats to make it difficult for the six Democratic senators running for president to campaign, that they have to be back in Washington, to your point, if it gets to be an impeachment trial.

And the beneficiary of that is Joe Biden. What do you think of that?

TILLIS: Well, I'm not going to -- I'm not going to go down that path.

I think that the fact of the matter is...

CAVUTO: See, I thought I would get you in a weak moment where you just might...



TILLIS: You know, but John Kennedy never ceases to make me smile.

But the fact of the matter is, they have been trying to impeach for the last three years. Whether or not that had anything to do...

CAVUTO: But wouldn't that be a kick, Senator, that that would be potentially that result of, that the former vice president would benefit?

You could argue Buttigieg as well. But what do you think of that? In the quest for a moderate nominee, that's the way they get it?

TILLIS: Well, that -- I guess that's -- Washington's full of conspiracies and gaming out.

What I would say, though, to the vice president, Vice President Biden, he should be paying attention to the travesty that's going on here on Capitol Hill and not taking advantage of that situation.

And I expect the Democrat candidates for president to be in the chamber. We will make note of if they're not.

CAVUTO: All right, we talk about the economic news and the market news.

And yet, so far, in a lot of the polling, Senator, you could think that the president would be benefiting more than he is. In battleground states, he's doing better than he was, but he's still got a heck of a battle against all the other candidates, and fears that unemployment rates in some of those states are backing up a tad, nothing like they were back when he got into office.

But are you worried, in those states -- and it's in those states that are so crucial, your own included -- that that's going to be important?

TILLIS: Well, I think it will be.

But I think the question that people will get asked next year, after we get through the primaries, is, are you better off now than you were four years ago?

We get the USMCA passed -- that's something Nancy Pelosi owes the American people, many Democrats who support it. We get the Japanese trade agreement passed, we get the first phase of several phases of trade agreements with China passed, I think we will see an economic bump.

And some of the jobs that may be on the sidelines now, even though we do have very strong employment numbers, I think are going to be a very positive message going into the general election next year.

CAVUTO: What about the stock market?

TILLIS: I think the stock market has the potential for continuing to go up.

Look, if we get trade moving on a level playing field with China, and we get the USMCA in place and ratified, I think you're going to see some capital that's on the sidelines right now get into the market. And continuing deregulation, continuing to give certainty in the regulatory environment, I think, are all things that could stimulate a positive economic message for us going into next year.

CAVUTO: All right, we will watch it closely.

Senator, thank you very much.

TILLIS: Thanks, Neil. Take care.

CAVUTO: Senator Tillis.

All right, the White House isn't being quiet on the release of some of these transcripts -- after this.


CAVUTO: All right, remember the push for $15 minimum wage?

Bank of America just upped the ante. Try $20 an hour. A company is doing that. It's not a government edict. Is that the difference?


CAVUTO: All right, the White House continues to play down the impeachment probe transcripts and the meaning of what was released. Much ado about nothing?

Well, they are saying something.

John Roberts at the White House with more on that.

Hey, John.

JOHN ROBERTS, CHIEF WHITE HOUSE CORRESPONDENT: And what they're focusing in on, Neil, is a couple of things.

First of all, in the revised testimony that the ambassador to the E.U., Gordon Sondland, gave on Monday, he says that he does now recall telling a couple of people, Bill Taylor, who was the highest-ranking diplomat in Ukraine, as well as Tim Morrison, who is the former Russia expert here at the NSC, that it looked like there was a quid pro quo between Ukraine aid, U.S. aid to Ukraine, and the Ukraine launching an investigation into corruption, including Burisma.

But Sondland also says in this revised statement, I -- quote -- "presumed that the aid suspension had become linked to the proposed anti-corruption statement."

Doesn't say, I know. He says, I presumed.

And in his testimony, Kurt Volker told investigators he saw no quid pro quo. Volker said: "Well, you asked what conversations did I have about that quid pro quo, et cetera. None, because I didn't there was a quid pro quo."

So the White House has taken these two specific things and put out a statement about them, saying: "Both transcripts released today show that there is even less evidence for this illegitimate impeachment sham than previously thought. Ambassador Sondland squarely states that he didn't know and still doesn't know when, why, or by whom the aid was suspended. He also said he presumed there was a link to the aid, but cannot identify any solid source for that assumption.

"By contrast, Volker's testimony confirms there could not have been a quid pro quo because the Ukrainians didn't know about the military aid hold at the time."

So the White House, despite the fact that Sondland went back and revised his testimony to a degree that a lot of people are now saying, well, there it is, there's the smoking gun, the White House is still saying that these two witnesses are beneficial to them.

Also, the White House is going to come out in a little while with a statement about the invitation for Mick Mulvaney to come up on Friday and talk to the three committees that are investigating potential impeachment articles against the president.

The White House was thinking of just putting out a statement saying he's not going to show, but something a little more colorful than that may be coming down the line, Neil, because I think the White House wants to stand its ground here and really show the flag in terms of this idea of executive privilege before Congress -- Neil.

CAVUTO: So, from what you're saying, it sounds like, at least the leaks we have gotten out, the transcript testimony and all that, is that there's something there for everybody.

Democrats can seize on stuff. Republicans can seize on stuff. But is it really moving the needle either way thus far?

ROBERTS: I don't know.

I think what -- I think what probably happened, if you look at the original Sondland transcript, it's full of a lot of "I don't know" and "I can't recall."

And the Democrats who put together that compilation of excerpts were very specific to put all of that in. I think Sondland thought, well, maybe they're laying a trap for me here. So he went back and said, after talking to a couple people, I do recall now telling Ambassador William Taylor and Tim Morrison and the Ukrainians that I think that aid was conditioned on this idea of corruption investigations.

So now he has squared himself with Congress. And he squares himself with the White House by specifically using that one word, "I presumed." So he's got something for everybody just in this revised testimony, Neil.

CAVUTO: All right, John Roberts at the White House, thank you very much, my friend.

Meanwhile, this tragic news south of the border. Just how safe is it, when we learn that three women and six children were killed?

Senator Tom Cotton on that and what we do -- after this.


CAVUTO: Mexico's president already saying, his country get handle it, we don't need your help, USA, after nine Americans are ambushed and killed by a drug cartel near Sonora, Mexico, three women, six children, all dead.

Arkansas Republican Senator Tom Cotton on these fast-moving developments.

Senator, the Mexican president is making it clear, even though the president has offered U.S. security forces to help out and get on top of this and the cartel that was behind it, but they say no.

SEN. TOM COTTON, R-ARK.: Neil, unfortunately, it's plain that the Mexican government can't handle this.

President Lopez Obrador came into office almost a year ago saying that his strategy for dealing with the cartels was going to be more hugs, not bullets.

That may work in a children's fairy tale. But in the real world, when three American women and six American children were gunned down and burned alive, the only thing that can counteract bullets is more and bigger bullets.

If the Mexican government cannot protect American citizens in Mexico, then the United States may have to take matters into our own hands.

CAVUTO: You know what was so incredible about this, is that Americans are normally not targeted by these drug cartels, for fear the very hell of response that they could be looking at now, and that because these women and children were traveling in three SUVs that they looked to this cartel like a competing cartel.

Have you heard anything like that?

COTTON: It's unclear exactly what caused the attack, Neil, but, by some accounts of the surviving children, one of the women left her vehicle to try to indicate to the shooters that it was only women and children traveling.

CAVUTO: Right. Right.

COTTON: But, in the end, it doesn't really matter, Neil.

You can't train a pit bull, you can't let a pit bull loose in your yard off the leash and then, when it attacks an innocent bystander, say, oh, it didn't mean to, it was just a case of mistaken identity.

That's why the United States may have to take matters into our own hands, if President Lopez Obrador cannot protect American citizens inside of Mexico.

CAVUTO: He's having a tough enough time protecting his own people, right? Crime has dramatically escalated there. I'm talking not just in this in area, Mexico City, what have you, where it is a real concern. It's not all cartel-related. It is just getting to be a powder keg.

How do we even deal with that?

COTTON: Unfortunately, Neil, murders have reached a new high in Mexico over the last year.

Again, when you come into office promising hugs, not bullets, to counteract criminals, it's the same thing when you try to appease aggressive dictators or terrorists. They take it as a sign of weakness, and they prey upon the innocent.

CAVUTO: What do you think our response should be? If we can't identify the cartel involved, if that's the case, how do we on foreign soil find out who did?

COTTON: Well, first, Neil, these cartels have already been designated as a transnational criminal organization.

Congress ought to take a look at our laws and impose even harsher punishments on such criminal organizations, similar to what we do on foreign terrorist organizations like Al Qaeda or the Islamic State.

But I will say again, if the Mexican government can't protect Americans inside of Mexico, then America may have to take matters into our own hands. We showed that we can do it last week in Syria. We showed eight years ago that we can do it in Pakistan during the Usama bin Laden raid.

This is only 50 miles away from our southern border. We can certainly defend American citizens inside of Mexico, if Mexico isn't willing or able to do so.

CAVUTO: You know, the local press there today online, Senator, talked about how it's panicking local residents, Mexicans, who are fearful for their lives, and ironically looking more to escape to the United States.

It could even complicate that.

COTTON: That's a genuine problem, Neil.

Unfortunately, in an attack like this that happened only 50 miles away from the border of Mexico and Arizona, it's a reminder of just how important it is to secure our border.

We want to work with the government of Mexico, not just to protect our border, but to also help them get control of the cartels that are making life inside of Mexico a living hell for their citizens and for ours.

But, in the meantime, we have to protect our citizens, if the Mexican government cannot.

CAVUTO: All right, so tragic and so unnecessary.

Senator Cotton, thank you for taking the time.

COTTON: Thank you, Neil.

CAVUTO: All right, forget shouting "Death to America." Is Iran one step closer to actually acting on it?


CAVUTO: From chanting "Death to America" to the scary thought of Iran now trying to make it a reality.

The country will start enriching uranium again at an underground plant tomorrow, we're told, breaking part of the 2015 nuclear deal, moving closer to potentially a nuclear bomb.

How risky is this?

Rebeccah Heinrichs very worried.

Rebeccah, good to have you.

What do you think of what's going on here?

REBECCAH HEINRICHS, THE HUDSON INSTITUTE: Well, this is -- Iran has two choices before it in order to get sanctions relief, which is what it wants.

It's geared -- gearing these threats towards the Europeans because they think that the Europeans will break easier than the United States. And so they want the Europeans to give them sanctions relief. So they're threatening to do more work at the Fordow site.

They are not allowed to be enriching uranium under the Iran deal that the Obama administration negotiated at the Fordow site. But the Obama administration's deal never converted or required a conversion of that nuclear site into a purely civil site. It was a military site.

And so everything that was there before the deal is still there. And so now the Iranians are threatening to begin work again at that site. The other option, of course, Neil, to get those sanctions relief lifted is to behave like a normal country.

Stop terrorism, stop this illicit behavior. But that's not the take that the Iranians are going with.

CAVUTO: It's very similar to North Korea's behavior, right?

I mean, well, technically not violating what they had told the president, even though others argue they're certainly tempting fate, they get more and more provocative, in the hope that will bring the U.S. to the table.

I would imagine just the opposite. The same with Iran. But it's a weird strategy.

HEINRICHS: Well, this is particularly strange -- well, not strange behavior, but bad for the Iranians, because they're humiliating the Trump administration in a way.

The Trump administration just once again authorized civil nuclear waivers, to allow some civil non-military nuclear work to continue with the Iranians, in the hopes of having some leverage with the Iranians to try to actually negotiate a better deal, to have -- to keep an eye on some of what goes on at those sites.

But days after those waivers were issued, the Iranians make this announcement that they're going to continue -- that they're going to now escalate its provocative behavior at those sites.

So it is -- it's embarrassing for the Trump administration's approach, which is supposed to be a maximum pressure campaign towards the Iranians to try to compel them to change their behavior.

CAVUTO: All of this, of course, as we just look back at the 40th anniversary of the seizing of those American hostages in Tehran during the Carter administration.

And now I'm seeing the same video or film then, video now, of "Death to America," burn the American flag. It's like that great '70s show all over.


I will say there too, Neil, sometimes, Americans get impatient for fix the problem, get this regime under control. And, sometimes, it's just a long slog. Under the Trump administration, at least now that the deal has mostly been done away with, we're not in -- we're no longer enabling the Iranians with all of these funds and sanctions relief to funds their proxies, their -- the terrorist groups that they have been funding across the region.

And so we have seen a lot of those funds dry up. And now the Iranian military has continued to having to cut a lot of their resources because of the pressure that the United States government has placed upon them.

So, sometimes, it just takes a long time to compel and squeeze a regime like Iran. We have moved a lot of military assets back into the region during the Trump administration to try to deter them, especially after that attack against those Saudi oil fields.

So you got to kind of buckle in and take a while sometimes to pressure a change in behavior.

CAVUTO: We shall see.

Rebeccah, I always learn a lot. Thank you very, very much, Rebeccah Heinrichs, following this from the Hudson Institute.

Meanwhile, who needs a $15 minimum wage, an hourly wage, when along comes a major bank to say, we're going to up that, make it $20?

After this.


CAVUTO: All right, I will take your $15 and -- well, anyway, forget the battle for 15 bucks an hour.

Bank of America just upping its minimum wage to $20 an hour. So, are the free markets taking care of what some on the left have been saying the United States government should?

Not so fast, according to Democratic strategist Shavar Jeffries, who says that the fight is still needed, hike everyone's pay. But Independent Women's Forum president Carrie Lukas says, let private companies like Bank of America do just that.

So, Shavar, you're looking at this and saying, not enough, right?


I mean, as is the best of American capitalism, it's a mix between the public and the private. It's a beautiful thing that Bank of America wants to pay its wage -- its workers a better wage, wants to share greater earnings and returns with its workers in the form of higher income, hopefully benefits as well. That's a beautiful thing.

We need more employers to step up and do that as well.

CAVUTO: But not every employee can be a Bank of America, right?

JEFFRIES: Well, that's why -- well, we have many employers, though, frankly, where there's -- that are reporting historic earnings, historic returns in terms of earnings, and we need more employers to share those returns with their workers.

But at the same time, we are going to need the government to push people to say that, in the United States of America, if you work hard for 40 hours a week, you should be able to take care of your family, and too many families are unable to do so.

CAVUTO: All right, that's a good point.

But I do distinguish, Carrie, between very wealthy, bigger than colossus bank like Bank of America offering this, and let's say a small, medium- sized business owner. Not everyone is a Fortune 500 company.


This is something Bank of America can afford to do to, to keep and retain good workers. But other companies are going to have to have different strategies.

And let's remember that not all workers want -- just want higher wages. Some are going to perform other kinds of compensation, whether it's more benefits, more leave time, greater flexibility. So we should let workers and businesses find the best match between them.

CAVUTO: But, Carrie, are you surprised that -- and many more businesses of all sides have been pushing and getting closer to that $15-an-hour-level. And it hasn't caused this economic nightmare that some had feared?

LUKAS: Well, this is because we have a strong economy. You have historic low unemployment rates.

So banks -- and Bank of America and other employers are having to compete. And that's because they have resources. If profits go down, they wouldn't be able to continue paying these wages.

So we need to be careful and not throw this into jeopardy.

CAVUTO: Shavar, the flip of that is, if you -- if we do enter a slowdown, it's not as if we repealed recessions. It's just been a long time since we had one.

But there will be a slowdown. There will be a recession. I think that's - - that's clear. We don't know when. And then, if you lock a lot of businesses into a $20 hourly wage or thereabouts, they're not going to be able to deal with it down the road, when things dramatically slow down.

A lot of people could lose their jobs. What do you think?

JEFFRIES: Well, first of all, Democrats generally propose minimum wage rules that actually have carve-outs for very small businesses; $20 an hour, let's be clear, that's $800 for a full workweek.

Very few families in this country can afford to take care of their family with that, pay for health care, pay for college.

CAVUTO: Well, what do you think a minimum wage should be?

JEFFRIES: Well, I mean, I think we have to have a living wage, and that's going to be a different wage in different parts of the country.

I mean, obviously, it costs more to live in certain parts of the country. And we need to have wage policies that reflect...


CAVUTO: So, not even $20 is good enough?


JEFFRIES: What I'm saying is that what employers ought to do is, they should want to employ people in such a way that they can actually take care of their families. That's what employers want to do, before we even talk about the government.

I would hope any employer would say they want to pay their workers to be able to live.


CAVUTO: Carrie, what do you think of that? It's the company's obligation to do it?


Not everyone is trying to take care of a family. We need to make sure that you also have opportunities for teenagers to -- people who've had long-term unemployment, people coming out of prison. They're not going to be -- these companies are not going to take a chance on someone like that at $20 an hour.

JEFFRIES: Of course.

LUKAS: We have to make sure that there are jobs for people and opportunities to get in the door.

This idea of $20 or more for everyone, that's just going to lock a lot of people out of the work force entirely.

JEFFRIES: The idea that it's unheard of to pay a worker so that they can actually take care of their family, at a time when 40 percent of Americans report that they couldn't handle an unexpected $400 bill, we should push more...

LUKAS: They will have a harder time if -- when they're -- when they're out of work.

CAVUTO: All right, well, we will watch it. The debate ensues right now.

Bank of America wants to make this the policy here, but it will respond to market forces as necessary. So, we will see what the fallout of that will be.

Again, just to remind you, we have two more records to tell you about today, the Dow and the Nasdaq. So that's the wind at this economy's back.

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