This is a rush transcript from "Your World," January 4, 2019. This copy may not be in its final form and may be updated.


PRESIDENT DONALD TRUMP: Three hundred and twelve thousand jobs was a tremendous number, and obviously having a big impact on the stock market today.


NEIL CAVUTO, HOST: Big impact, indeed, jobs surging, investors cheering, stocks roaring, the president doing some crowing. You can't blame him today.

Welcome, everybody. I'm Neil Cavuto.

And stocks on a tear after they were yesterday, well, a terror, as those job numbers keep the bear at bay, at least for now. The Dow soaring than 800 points earlier, ultimately up about 743.33 points, about 70 or more points than we fell yesterday.

So what's going on?

We got Fox team coverage with Fox Business Network's Deirdre Bolton on what is driving those numbers and Rich Edson with what the president is saying about those numbers.

We begin with Deirdre.

What happened?

DEIRDRE BOLTON, CORRESPONDENT: Well, Neil, that December jobs number, it was a wow, right?

When that number crossed, we were collectively surprised. Labor Department saying that the U.S. economy added 312,000 jobs in December. So that blew past forecasts for 177,000 jobs.

Now, that data point also rounded out the year really well. So in total, if you look for 2018, employers added an average of 220,000 jobs per month, making 2018 the best jobs growth year since 2015.

So more jobs added to the U.S. economy, also wage growth gained. So it went up by 3.2 percent annual rate, best full year again in a decade. Now, unemployment did move higher. So it went from 3.7 percent to 3.9 percent. But this was mostly due to more workers entering the work force.

The director of National Economic Council had an optimistic take on the report with reason.


LARRY KUDLOW, DIRECTOR, NATIONAL ECONOMIC COUNCIL: There is no recession coming. There is no recession in sight. Consumers are strong, jobs are rising, wages are rising.


BOLTON: Neil, when you look at the other reasons, the jobs report not the only bright spot for investors

Fed Chairman Jay Powell speaking at an event this morning indicating the Central Bank would monitor the markets' move. So traders heard a more cautious tone in his comments vs. even what he was saying about a month ago.

And traders, a lot of them at least, began to estimate that a slower pace of potential future rate hikes is possible. Also signs of hope that progress can be made between the U.S. and China on trade, both countries sending high-level officials to meetings next week in Beijing.

So, Neil, basically a trifecta. You had jobs, Fed and trade all giving investors a little hope -- back to you.

CAVUTO: Yes, we needed that, an up week in the first trading week of the year, the Dow up an excess of about 1 percent here, but most investors will take it.

Deirdre, thank you very, very much. Have a good weekend.

BOLTON: You too.

CAVUTO: Rich Edson at the White House with how the president was responding to all of this.

Hey, Rich.

RICH EDSON, CORRESPONDENT: Hey, good afternoon, Neil.

And just after that meeting here at the White House that the president had with congressional leaders on trying to reopen the government, the president came out to the Rose Garden and he talked about the economy, the better-than-expected 312,000 jobs added last month, and all signs according to the White House here, of an economy that is strong.


TRUMP: One of the things that is so beautiful to watch is 3.2 percent wage growth. That hasn't happened in so long for our country. That's an incredible thing.

That means people are actually getting more money, taking home more money.


EDSON: Government pointed to 2.6 million jobs added in 2018, best year for growth since 2015. Substantial gains in the month of December in health care, largest since keeping records in 1990, manufacturing, construction.

Now, investors outside of today's trading have been concerned about rising interest rates, slowing global growth, the ongoing trade fight with China. The president mentioned China today. He says there is a massive ongoing trade negotiation with China, and that the United States is doing very well.

He was also asked about Apple downgrading its -- cutting its revenue forecast because of slow iPhone sales in China. He says he's friends with Apple CEO Tim Cook, and that he's urging Tim Cook to start building iPhones here in the United States, instead of China.

Also, Jay Powell not only talking about interest rates today, but he was also asked that would he resign basically if the president asked him to? Powell said no -- Neil, back to you.

CAVUTO: Well, that's the way I'm going to be. If they tell me to go, I'm not leaving. I think it's a good strategy to take.

All right, Rich, thank you very, very much, Rich Edson.

Just to show you how widespread this job growth goes, because it can't be overstated here, this was across the board, folks. Virtually every key sector of the economy added jobs, and a lot of them. If you think about it, health care more than 50,000, construction 38,000. We saw restaurants and bars 41,000, manufacturing 32,000, retail 24,000.

We see that also the prior months also had an uptick in activity from that prior period as well. So the average gains in the last three months have been an excess of 250,000 jobs. And that kind of pace shows a pickup in activity.

What would that mean and does that mean that whatever is ailing China is unique to China and not us?

Traders Kevin Caron join us, Michelle Girard, along with Scott Martin.

Michelle, what do you make of this and how broad-based this was?  MICHELLE GIRARD, NATWEST: Oh, it was, as you said, Neil, across the board in terms of job growth.

Another thing that's really impressive that us economists like to look at is not only were more people working, but the people who are working, their companies had them working longer hours, which is like the equivalent of another 300,000-plus jobs.

So there was a strong labor input and companies were having their workers making a lot of goods. As you said, it's suggests much better momentum at the end of the year than some of the other reports and certainly then some of the pessimism that had seemed to have overtaken the markets over the last couple of weeks.

CAVUTO: You know, I don't know what to get used to here on this, Scott, with Michelle saying that, and all that's very, very true, very obvious, but it's the mirror opposite of yesterday.

So given these extreme swings, which is accurate?

SCOTT MARTIN, KINGSVIEW ASSET MANAGEMENT: Well, I don't know yet. I will tell you tomorrow -- or Monday, rather, Neil, because I will tell you, I mean, you're right.

The market has been very schizophrenic and not taking its mood meds. And, Michelle, I will tell you, I'm probably one of those pessimists now, because the thing that I do like is the strengthened number today, Neil. You pointed out the broad-based nature of it, but my goodness, guys, we have had these numbers before, I mean, yes, maybe not 312,000, but we have had easily close to 200,000 now for several months running.

And tell me why the 10-year note rate then has plummeted from, say, 3.2 percent in October, all the way down to a low of, say, 2.60 or so yesterday. Yes, it bounced back today. But the bond market is trying to tell us something, my friends.

So I don't want to be accused of pulling out or let's say pouring out the party punch here at the party. But the reality is the bond market is saying that there's maybe more disinflation ahead.

CAVUTO: You know, Kevin, in the middle of this, we had the Federal Reserve chairman saying, look, I don't see a reason to pounce on anything and willy-nilly raise rates -- I'm paraphrasing here -- but his message seemed to defy a very strong economic report that you could argue would necessitate in continuing with that tightening cycle.

What did you make of that?

KEVIN CARON, WASHINGTON CROSSING ADVISORS: Yes, he said that he's going to pay very close attention to financial markets.

And the financial markets definitely got his attention the last month. And what financial markets have been saying is that there is some worry out there. So the bond market, the yield curve flattening, the 10-year yield moving down, like we just said, that's indicative of a weakening global economy, where we see most of the weakness outside our borders.

But the data here in the United States has been very strong. So you had this wind shear throughout the year. The story here has been very good. We got more evidence of that today. The rest of the world not so much. And foreign investors have been funneling money into our economy, into our treasuries, driving up the price of the treasuries and down the yields.

But, ultimately, if the global economy erodes too badly, that is going to affect us here at home. So we're right on that precipice where we have to see which way the cat bounces.

CAVUTO: Obviously, Michelle, the stock market liked the talk out of the Fed chairman to say they wouldn't willy-nilly move to raise rates right away.

We're still factoring, I think, two rate hikes this year. Are you?

GIRARD: I am still expecting that the Fed will nudge up a little bit more.

Again, my outlook is really one for the economy to continue to perform well. I mean, I think a big point about today's number, as you said, in the context of the weakness yesterday, is that you can't take any one piece of information as the rule, as the gospel.

CAVUTO: Right.

GIRARD: The bottom line is, the economy doesn't swing from growth to recession back to strong growth like these economic indicators do.

And I think what today did was remind people that, hey, the global economy may be a bit slower, U.S. growth may be a little bit slower, but it's a very different thing to be talking about slowing from over 3 percent in 2018 to maybe 2, 2.5 in 2019. That is not a recession forecast.

That is still above trend growth. And it still potentially would keep the Fed saying, hey, we shouldn't be -- we should be very cautious about raising rates too much, but also about falling behind the curve if in fact the economy does perform better and we do start to see inflation pick up.

CAVUTO: You know, Scott Martin, when it comes to the Federal Reserve, he was asked point blank about this, but Jerome Powell said, even if the present asked him to resign, he wouldn't.

What did you make of that?

MARTIN: I thought it was a good answer.

I guess he's somewhat confident today, maybe more so, Neil, with the market going up the way it was after his comments. I mean, gosh, you can attribute maybe 35 S&P points to Powell and the group today. It was a nice little reunion, by the way, with Bernanke up there too. Haven't seen him in a while.

But I got to disagree with Michelle.


CAVUTO: Yes, it was an Avengers, wasn't it? It was a monetary Avengers team.


MARTIN: It reminded me of my high school reunion, except I was made fun of at that reunion.

And what's funny is too, is, to Michelle's point, though, Neil, I don't see inflation anywhere. And that's what I don't get about the Fed. They have been so concerned about inflation. They have been reducing their balance sheet, yet Powell still has talked about -- until today about this outlook for inflation that I just do not see.

So I think they have some room to really pause here. The market is telling them to do that. If they do pause going forward, I think you're going to see the S&P stocks get some support.

CAVUTO: Kevin, your quick thoughts on Powell and whether his job is safe.

CARON: Yes, his job is safe.

But the message in the markets since the markets' volatility picked up a couple months ago has been lower expectations for interest rates. It wasn't today. Those expectations got -- started to get backed out of the market through the month of November, through the month of December.

All Powell did today was sort of confirm that. And keep in mind, the market was already on a tear coming into the session this morning, and helped by the employment figures, which were very, very strong.

CAVUTO: Indeed, they were.

Guys, I want to thank you all. Have a happy new year.

GIRARD: Happy new year.

CAVUTO: We got the first week out of the way, right?

All right, in the meantime here, want to tell you a little bit about this. You know Carl Icahn, probably one of the most successful investors in investment history, also an uncanny read of undervalued either companies or companies he argues are poorly run.

He rarely talks to the press, but, when he does, he makes a lot of news. He's going to be talking to us on FOX Business. We're going to be replaying a lot of that on this show.

But Carl Icahn, my special guest on FOX Business, noon Eastern time on FOX Business, which, as Carl would tell you, if you don't get it, demand. You're going to lose money hand over fist, if that's what you want to do.

Anyway, do you think we are anywhere close to resolving this shutdown? The president says he's prepared apparently to wait months, if not years. And he stands by that.

Does Republican Congressman Jim Jordan? He's next.


KEVIN CORKE, WHITE HOUSE CORRESPONDENT: FOX News Alert. Welcome back to "Your World." I'm Kevin Corke.

Two very different viewpoints of a meeting today at the Situation Room here at the White House between Republicans and Democrats. The president was upbeat. He called the conversation productive, despite the nearly two- week-old government shutdown, saying that even on a day that saw the jobs report and the markets soar, he'd be even happier if a deal could get worked out to end the shutdown.


TRUMP: I will be even more proud if we can have great border security for the first time in really the history of our country. The southern border is a dangerous, horrible disaster.

We have done a great job. But you can't really do the kind of job we have to do unless you have a major, powerful barrier. And that's what we're going to have to have.

VICE PRESIDENT MIKE PENCE: Our aim will be to find a solution, not just simply to end the government shutdown, to provide funding to end the crisis at our southern border, to achieve real border security, and to build a wall on our southern border.


CORKE: Earlier at the White House, Speaker Nancy Pelosi drew a line in the sand that could, frankly, portend of a protracted and painful shutdown.


REP. NANCY PELOSI, D-CALIF., SPEAKER OF THE HOUSE: But we all -- we recognize on the Democratic side that we really cannot resolve this until we open up government. And we made that very clear to the president.


CORKE: Both sides will have working groups here at the White House over the weekend, hoping to once again move closer to ending the shutdown -- Neil.

CAVUTO: All right, but it seems it's going to last a while. That's the impression I'm getting, right?

CORKE: I agree. Yes, it could be months. I'm not kidding.

CAVUTO: Oh, man, oh, man.

Kevin, thank you very much -- Kevin Corke at the White House.

Let's get the read on things and where they're going -- or maybe not going -- from Ohio Republican Congressman Jim Jordan.

Congressman, welcome to you. Happy new year.

REP. JIM JORDAN, R-OH: Happy new year to you, too, Neil. Good to be with you.

CAVUTO: Same here.

Is it your sense that this could drag on a while?

JORDAN: Well, I mean, look, Democrats are more focused on stopping the president than they are on helping the country.

And, frankly, until that changes, I think it's difficult to get to -- to get to a solution, as the vice president said. The solution is real simple. Democrats should support what they have supported before, which is funding for a border security wall.

Unfortunately, it doesn't look like they want to go there. So we will see.

CAVUTO: Right.

I know it's all over dollars and how much and whether we even call it a wall. Is it your sense that it is over dollars, though, not so much whether they call it a wall? And if it is over dollars...

JORDAN: Well...

CAVUTO: ... and the $5 billion really represents just a down -- continuing down payment on something that's going to be $25 billion, where's this going?

JORDAN: Well, I don't -- I don't know if that's accurate, Neil.

I mean, remember what they have said. Nancy Pelosi said a wall is immoral, which I think is an amazing statement. So, if a wall is immoral, then where's the legislation being introduced by the Democrats to take down the wall between Tijuana and San Diego?

So, I mean, so I think it is the term in some -- in some regards at least with the Democrats. And, of course, it is some about the money. But this is just common sense. And the president said today in his -- in his press event. He said, look, we're going to do what he's told the American people he's going to do.

And he's going to stand firm for that. And I think that's exactly the right position. We just got to keep making the argument, and the American people have to keep speaking up in support of it, I think. That's when we ultimately get the Democrats to do the right thing.

CAVUTO: The president seems to be saying, in the name of national security, he can do this on his own. Can he?

JORDAN: I think he can, but I think that will get challenged in court. That's why we think this is the better approach, to actually appropriate dollars to build a border security wall, like we all promised the American people we were going to do when we ran for the job.

This is simply doing what we said. If you want to deal with the gang problem, and you want to deal with the drug problem, and you want to deal with the human trafficking problem, build a border security wall on the southern border, like we all promised, and like Democrats have supported in the past.

But now, some -- for some -- if you need no other evidence, look to what happened yesterday, that they are more concerned about stopping the president than helping the country.

Brad Sherman files articles of impeachment on the very first day. Representative Tlaib makes her disgraceful comments last night about the president. That shows where they're at. That's not for the good of the country. The wall is. So let's get back focused on what helps this -- what helps this great nation.

CAVUTO: Let's talk a little bit about the China potential trade deal that could happen next week.

China, of course, itself is going through a slowdown. Some are worried about, even if we get a trade deal, they might not be able to follow through on commitments anyway.

But we got a reminder as well that our economy is doing just fine. Whatever is plaguing them isn't plaguing us. Do you think that that distinction has been made?

JORDAN: No, I mean, how good our economy is doing? I certainly don't think the Democrats get it.

Again, 312,000 jobs added last month. And what are the Democrats' first two things they do? They pass a rules package that looks to raise taxes. They introduce impeachment resolution. And you have a new member of Congress from Michigan say the disgraceful, terrible thing she said about the president.

So I don't think they understand what this -- think about this president, taxes cut, regulations reduced, economy growing at an unprecedented rate, 312,000 jobs last week, lowest unemployment in 50 years, Gorsuch and Kavanaugh on the court, out of the Iran deal, embassy in Jerusalem, hostages home from North Korea, new NAFTA agreement.

And what are Democrats focused on? Impeaching the president and saying the terrible things that they said yesterday. So that's the fundamental problem. We can come to a solution. We can work together if they're willing to focus on the country and not President Trump.

CAVUTO: I don't want to hit you blindside with this, Congressman, but we're just getting reports now that the Mueller investigation grand jury has reportedly been extended some six months, so at least six more months of this.

What do you think?

JORDAN: Six more -- yes, six more months, and they will continue to try to find something. They haven't found anything there.

Six more months to -- the whole premise of this was to show that there was some or find out if there was some type of coordination between the Trump campaign and Russia that impacted the election.

To date, after a year-and-a-half not one bit of evidence, and now we're going to extend it six more months? I haven't heard what they're doing exactly.

But, look, I hope this thing winds up pretty soon, so we can, as I said, get focused on the things that are actually going to help the country.

CAVUTO: All right, thank you, Congressman, for your patience on that.

JORDAN: You bet.

CAVUTO: And, as I just said, a grand jury in Washington, D.C., with Mueller's team now looking to be extended some six months, and on it goes.

More after this.


CAVUTO: All right, we are just learning, as I touched on in the prior segment here, that a federal grand jury in Washington, D.C., which special counsel Mueller's team has been using has been extended.

The original term of 18 months expired today. We're told it was extended by an additional six months. There is no way to confirm that. But sources in the courthouse are telling our producers there that the extension is for another six months. Typically, a grand jury term caps out at 24 months. So this has been going on for 18 months.

So that would mean at the very least that this investigation will go into the summer. And that's just when it's -- when it's wrapped up. It doesn't necessarily mean that the full report and the full findings are released. But it does give you a sense that this could drag on a while.

Reaction now from Democratic strategist Christy Setzer and The Wall Street Journal's Dan Henninger.

Dan, what do you think?

DANIEL HENNINGER, THE WALL STREET JOURNAL: I suppose, Neil, it doesn't necessarily mean that it's going to extend out for six months. But it is obviously going to go forward now.

And a couple things here, Neil, this is the problem with special prosecutors. This is -- we used to have an independent counsel law back in the Reagan years. Congress ended the independent counsel law because these investigations tend to go on forever, years and years.

And the independent counsel or special prosecutor, there is a question of accountability. And I would say here, Neil, that if this thing starts dragging on that, once the new attorney general hopefully is confirmed, William Barr, then I think Attorney General Barr and Deputy Attorney General Rod Rosenstein probably should call in Robert Mueller and ask him to explain exactly what he has and what is going on, rather than let this thing simply extend indefinitely into the future, hanging over the American system, as it has for the past 18 months.

CAVUTO: Christy, what do you think?


This has been an amazingly successful investigation so far by Mueller, in that he has received already five guilty pleas, not indictments, guilty pleas, from former Trump advisers who are actually quite close to the president, of course, including Michael Cohen, Paul Manafort, and others, right?

So of course, this is going to keep going, because it seems, the way that Mueller has conducted his investigation thus far has been that he's sort of -- if you think of it about as concentric circles around the president, he started with people who are not all that close to the president. Now we're sort of zeroing in on the people who are closest to him.

We're finally sort of getting more and more information about what are actions that, say, Don Jr. may have taken or Jared Kushner, the president and his family, right? You can't stop just now, right before we're actually getting information.


CAVUTO: You can also flip it around to say that...


CAVUTO: ... to use the president's parlance, it's witch-hunt. They're still -- they need more time to get more stuff because they don't have enough stuff. You say?

SETZER: I would say that's, again, ironic.

When you look back at, let's say, the Bill Clinton impeachment, that was because there wasn't actually anything around Whitewater. They had to go to the fact that he had this affair with an intern in the Oval Office. That's immoral, but not illegal.

Mueller has turned over all kinds of actually illegal, criminal activity around Donald Trump.


HENNINGER: Wait a minute. Wait a minute.


CAVUTO: I will get to -- but I just want to explain, Christy, that that Clinton investigation veered wildly off course, from real estate land deals to obviously a relationship with an intern.


CAVUTO: And the issue I raise for you, Dan, is, if this goes beyond the original, without finding Russian collusion or anything like that, into business deals that might go back quite some time, decades even, this has morphed potentially in the time requested, and it might not be the full six months.

It might just be extended into something else, right?

HENNINGER: Well, that is complete conjecture.

I mean, all we can do as guess. I mean, these convictions that Christy was mentioning mostly have been for very low-level people for lying to the FBI, not for any explicit crimes.

SETZER: Also Paul Manafort and his closest personal attorney.


HENNINGER: Christy, Manafort was about Ukraine. Had nothing to do with the Trump campaign activity.

SETZER: Well, there were 18 criminal charges. So, obviously, some of them actually did have to do with that, right?


CAVUTO: I guess what I'm asking, guys, real quickly, if this is a sign that obviously he's not ready to wrap this up and tie it in a bow ...


CAVUTO: ... and it's six months more conjecture like this going back and forth, I cannot imagine that's going to be a very productive environment in the meantime, right?


HENNINGER: Well, it simply allows the possibility of a Mueller report, leading to a basis for the Democrats to file impeachment charges against the president, something that's been hanging over the president's head now for the last 18 months.

And here you have got people in both parties claiming that they want to get on with the nation's business. Meanwhile, Robert Mueller is standing there, this deus ex machina hanging over the entire system.

When is it going to end, Neil?

CAVUTO: All right, we shall see, guys. I want to thank you. Sort of went a little long there.

We are going to explore this in more detail, especially on our Saturday show tomorrow, "Cavuto Live," the implications of this. Any extension at all is going to rattle Republicans, maybe consider delighting some Democrats here, and confusing pretty much anyone and everyone in between.

But it is a big development here that the investigation has been extended, at least for a grand jury to sit tight for a while, while they dot the I's, cross the T's or whatever else they do. It's lawyers, and a lot of them.

We will have more after this.


CAVUTO: You won't let me build that wall? I will claim a national emergency and make sure I build that wall.

The president talking tough with Congress. Militarily, does he have a point, if it's for our security? A general on that after this.


CAVUTO: All right, the president was making it clear today he's prepared to keep the government partially shut down for months or years, if necessary, to get the funding for that wall.

He also laid out a possibility that, in the name of a national emergency, he will make sure he gets it done himself.

Can he do that militarily? He says it's about our security and keeping us alive.

To retired Four-Star General Jack Keane on that.

General, obviously, I don't expect you to be a constitutional scholar and all of that, but he's claiming, in our natural interest, in our -- for simple national security reasons, that thing has got to be built, and he will take the power into his own hands to do it. What do you think?

JACK KEANE, SENIOR STRATEGIC ANALYST: Well, I think it's indisputable that we have a real national security problem at our southern border.

And I think, obviously, he's spoken to his White House lawyers and the Department of Justice, and they have given him some advice that, yes, you can do that legally.

I mean, the facts really speak for themselves. I mean, they're really quite stunning, with 2,000 people per day illegally trying to penetrate our border, 17,000 criminals last year apprehended in doing that. And this one. Listen to this, 3,000-plus suspected terrorists apprehended at our border.

I mean, we have 1,000 inside the country that the FBI is looking at. And we consider that a very serious challenge for the FBI. And here we have stopped 3,000-plus more joining that list.

I clearly think it's a major national security issue.

CAVUTO: General, I know I'm hitting you with a lot of breaking news here. But the Appropriations vice chairman of the Senate, Patrick Leahy, Democrat of Vermont, has said that the real -- quoting here -- "The real natural emergency is the president's senseless and costly shutdown."

It goes on to say that: "The president stealing resources from the Defense Department for construction of a wasteful border wall at taxpayer expense to defend against the president's imaginary invasion would make our country less safe and the men and women of our military less safe."

Your thoughts?

KEANE: The thing I have never quite understood about the opposition to the wall, there's already 800 miles of wall there that Democrats and Republicans have both approved. Some of it has to be improved, because it's deteriorated or it never was the right quality.

And then they want another 600 miles or so of it. When you talk to the Border Patrol and the people who are dealing with this every day, and some of the Army folks that are down there, I mean, clearly the wall slows down to penetrators and it gives the Border Patrol an opportunity to apprehend them.

And if you were able to do that in all the places they believe that the most vulnerable, then you begin to shut this thing down. So, I -- the logic just doesn't seem there when you try to say that there is -- there's no value here.

And $5 billion out of $716 billion defense budget, I mean, that's on the margin and easy to find, frankly.


CAVUTO: But it wouldn't be just the $5 billion. In that case, it would be -- that would be a continuing down payment on something, we're told, General, could cost in excess of $25 billion.

I don't know the exact figures here. But, militarily, would you be comfortable with transitioning some funds earmarked for other purposes to this?

KEANE: I would hope that the president can get this without having to do that.

But if there are -- if there's no other alternative but that, yes, I would -- I would support it then, certainly, because it is a national security issue. And you have to look at it as such.

CAVUTO: Finally, your thoughts on these Chinese talks that are going to be revived next week.

The president was saying today that the Chinese really need these talks to succeed, they need them a lot more than we do, and he seemed to be talking from a number of vantage points, militarily, their own financial security seems to be at risk, and that we have the upper hand.

Do you buy that?

KEANE: Well, here's what I do buy.

The national security strategy from this administration has identified China as a long-term strategic threat to the United States. And I think that is absolutely spot on. And it separates -- it separates this administration from previous administrations.

And this is a threat from what? This is an economic -- they're economic predators, to be sure, and that has got the largest piece of the focus. Their military expansion in the region in terms of dominating the region, and they want to drive the United States out of the Asia-Pacific, and President Xi has stated time and time again that he intends to replace the United States as the global leader of the world.

Now, this is usually ambitious strategic objectives from the Chinese. And their economic predatory behavior is existing in Asia, in Southeast Asia, in Africa, in South America, and in the Middle East. It is really quite extraordinary what they're doing to compete with the United States and actually dominate the world in a way that the United States has enjoyed world hegemony for a number of years.

CAVUTO: General, thank you very, very much.

Have a happy new year.

KEANE: Yes, happy new year to you too.

CAVUTO: All right, we were talking about China.

They have a vehicle right now on the surface of the moon, the dark side of the moon. That's never been done before. And the Chinese are committing on an inflation-adjusted basis more than we did to get to the moon. What are they up to, first on the dark side? And you should hear what they're planning on all other sorts of sides.

Stay with us.


CAVUTO: A freshman Democratic congresswoman making some waves, saying this about the president of the United States.

Take a look.


REP. RASHIDA TLAIB, D-MICH.: When your son looks at you and says, "Mama, look, you won, bullies don't win." And I said, "Baby, they don't," because we're going to go in there, and we're going to impeach the mother (EXPLETIVE DELETED).


UNIDENTIFIED MALE: I have been made aware of the language that was used, I guess, yesterday by one of my colleagues.

And what she said was wrong. Wrong is wrong. Many Democrats are saying, we're not going to do as our colleagues on the other side did when the president used language like that. We're going to condemn it.


CAVUTO: All right.

We have got West Virginia Senator Democrat Joe Manchin with us right now.

Senator, what did you think of that language?

SEN. JOE MANCHIN, D-W.V.: Oh, so disgusting. It was horrible, Neil. No one should approve of that. And I hope she doesn't talk to her son that way either.

But what can you say? I can't in any way condone that. It's not how we act in West Virginia. It's not how we talked about public leaders. We might disagree with each other, but we try to get through it. We try to find a pathway forward.

And to act like that, just awful, and to speak like that is even more deplorable. I'm so sorry. I want to apologize to all Americans. Any sitting congressperson, there's 535 of us there, 100 senators and 435 Congress people.

We should have better manners than that, I assure you.

CAVUTO: So, the language notwithstanding, Senator, the sentiment expressed by some in your party, maybe the extreme left, however you want to call it, to look at taking impeachment action or more against the president, too soon to discuss that, or what?

MANCHIN: Oh, Neil, it's crazy.

I mean, here's the thing. They're going through an investigation. Let the investigation be completed.

Every person in this country in our judicial system, every person is innocent until proven guilty. And people want to start speculating just because you don't like somebody or don't like their personality, you don't like the way they talk, the way they act. I can disagree with all those things. It's not the way I was raised.

But the bottom line is, I have a job to do as United States senator to try to help my state the best I can. West Virginians expect me to do that, and also to make sure that my country is protected and strong with great opportunities.

I'm going to work with whoever is there, whoever the people from respective parts of this country send there. And the president is my president. And that's -- that's what we have in front of us. So let's work together to try to get this thing fixed.

This shutdown is ridiculous right now.

Neil, I was just -- I was just looking. We have -- of the five that bills that passed, we have 12 appropriation bills.

CAVUTO: Right.

MANCHIN: Five have been passed. Department of Defense was one of them.

In that Department of Defense bill was a $69 billion funding for OCO, overseas contingency fund. Therefore, pulling back, there should be money there. If the president believes that he can use it, he should use it, then we should be able to give him the ability to transfer that money.

Doesn't take out anybody else's wish list or whatever else we have our responsibilities and obligations for. And let's move on. This government should not be shut down for one minute longer.

CAVUTO: So, you think Democrats who are balking at providing him the moneys to do this should let him do that?

MANCHIN: Well, if they're providing -- if they're balking about putting new money and more debt in this, we have already provided $69 billion for OCO.

That's overseas contingency rMD-BO_fund for our military. Surely we can find $5 billion of that, if we're pulling back in different areas, and not pulling back from Afghanistan some, which I agree with the president. I'm more concerned about pulling out of Syria, very much concerned.

But still yet we're ratcheting back. There should be $5 billion. And if he has an emergency, and it's -- and I believe our borders need to be secured. I support securing our borders. And it's more than just a so- called wall. We're not even talking the optics of a wall.

We're talking secured -- some type of a secured structure, more of a high gate, high steel strength that you can see through, whatever it takes. But it's more than that. It's going to take basically X-rays and hardware that we're going to need on our ports of entry, container ships coming in, mail coming in, sensors that we need, more agents that we need.

I still would say, Mr. President, please accept the 2013 compromise bill that we had and we passed in the Senate. But the hard right prevents him from going in that direction, Neil. And it's a shame.

So both extremes are being detrimental to our country and our welfare and our well-being.

CAVUTO: Real quickly, I want to get your thoughts on reports now that the Mueller investigation, the grand jury has reportedly been extended maybe up to six months. What do you think of that?

MANCHIN: Well, I just -- I would like to see it come to an end quicker. I surely would.

I have not been directly involved with that, even though I'm on Intel Committee. Basically, Mr. Mueller was doing his job and doing his thing, and I think we still have all the credibility -- I have all the faith in him doing it and doing it fairly and doing a thorough job.

I would like to think that it could come to a conclusion quicker than that.

CAVUTO: All right. We will watch very, very closely.

Senator, thank you very much. Good seeing you again.

MANCHIN: Neil, it's always good to be with you. Happy new year.

CAVUTO: To you as well, sir, Senator Joe Manchin. All right.

Well, a 1973 Pink Floyd album, and now a new feat in space exploration. China has landed a spacecraft on the dark side of the moon, the dark side of the moon.


CAVUTO: This is remarkable.

I don't think it's gotten a lot of play this week, but, if you think about IT, China making history, China, as the first country to land a spacecraft, not on the moon -- a lot have done that, we have done that repeatedly -- but on the far side of the moon, the dark side of the moon that we never see.

Joining me now to discuss the significance of all of this is the former Apollo 17 astronaut. He walked on the moon, one of the two men to walk the moon, the sole survivor of Apollo 17, Harrison Schmitt.

Harrison, always good to have you, an honor.

HARRISON SCHMITT, FORMER APOLLO ASTRONAUT: Neil, it's great to see you. Happy new year to you and all the staff.

CAVUTO: Same to you, my friend.

This is remarkable, isn't it? I -- and they come to explore the resources there, which people forget, when you and Gene walked on the moon, you were trained geologists. You were looking at that as well.

And here they are doing the same thing, but apparently with a very aggressive agenda. What do you think of it?

SCHMITT: Well, I think, scientifically, it's going to add to everything that the United States and India and others have added to our knowledge of the far side of the moon.

The Lunar Reconnaissance Orbiter that remains in orbit around the moon today, and the GRAIL mission that established the gravitational field of the moon, as well as the (INAUDIBLE) satellite on which we had a payload that gave us a great deal of information about the mineral composition of the surface of the far side, all of these, I'm sure, were taking advantage of by the Chinese in navigating to a far side landing.

I hope, though, that the landing itself and the existence of that landing lights a fire under NASA. Many of us are concerned that NASA has not shown the kind of urgency that they should, geopolitical urgency, that they should in implementing the president's directive to go back to the moon and prepare to go to Mars.

CAVUTO: You know what, Harrison? I was thinking -- and you and I have chatted about this before -- but I always think that what took away the momentum of going way beyond just what you and Gene and 10 other brave men who walked the moon did is that we did it.

We achieved the goal. We beat the Russians. We did it before the proverbial decade was out, in your case the last man to walk on the moon in 1972, and then we kind of shook our hands. And that was it.

I often think that the thing that helped John Kennedy when he was pushing the space program was the battle with the Soviet Union and to beat them and the Cold War mentality. I don't want to be crass about it.

But, in a weird way, do you think the competitive juices between ourselves and the Chinese might do it now?

SCHMITT: Well, I think they should.

The president and the vice president both have indicated in one way or the other that a new Cold War has -- is upon us. And part of that Cold War, psychological part of that war, as well as technological, is going to include the moon.

And as soon as the United States fully recognizes that and NASA fully recognizes that, and the Office of Management and Budget recognizes that, and the Congress recognizes it, the better off we're all going to be.

To have another nation, whatever nation, but particularly to have China now, take away the primacy of the U.S. as being the only nation to have put human beings on the moon, I think, would be psychologically and geopolitically very dangerous.

CAVUTO: I do want to talk about something that maybe isn't as jarring, but settle this score for me.

The singing on the moon, Gene Cernan has argued that was him singing. Others who have criticized the singing said, no, that was -- that was Mitchell singing, and back and forth -- or Schmitt was singing.

Who was it, you or Cernan?

SCHMITT: It was both of us. If you really listen to the tape, you will see that both of us had joined in, in singing a number of times.

CAVUTO: So you both had horrible voices, just to clarify that?

SCHMITT: We did, no question about it.


SCHMITT: And not only that, the communications system made it more -- even worse.

CAVUTO: It did. But that was then, the heroes just the same. Maybe you couldn't open a lounge act and all, but, man, oh, man, historic.

Harrison Schmitt, thank you very much. It's a real honor.

SCHMITT: Well, thank you, Neil. And you all take care of yourselves, and keep up the good work.

CAVUTO: We will, indeed.

The sole survivor of Apollo 17, one of four surviving men who walked on the moon. That is a special breed, my friends.

We will have more after this.


CAVUTO: So, do you think the president can go ahead and build a wall in the name of national security if Congress won't let him?

Well, the president is certainly pushing that. I will be talking to National Border Patrol Council president Brandon Judd, who was with the president just yesterday, my special guest tomorrow morning, as we are live, 10:00 a.m. Eastern time, looking at these and so many other issues.

See you then.

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