Gov. Kristi Noem on phase one of trade deal between US, China

This is a rush transcript from "Your World," November 7, 2019. This copy may not be in its final form and may be updated.

NEIL CAVUTO, ANCHOR: Thank you, Shannon.

And how about a couple of records to tell you about? Signs that China and the U.S. may, may, may be moving to roll back tariffs, even though that was disputed later in the day, had stocks rolling to record highs, the Dow and the S&P 500 finishing there, the Nasdaq a little shy.

This another reminder that, if you want to know what dictates Wall Street's move, it is everything to do with trade and zilcho to do with, well, impeachment.

Stocks were losing some of their gains earlier on a report that everyone is not exactly everyone when it comes to getting rid of these tariffs or taxes on some goods here.

We're kind of confused on this, but, by and large, the tariffs are going to go, and that was enough to ignite this rally.

Now, we're going to talk to Republican South Dakota Governor Kristi Noem about all this. You talk about a state that has a lot of agricultural interests at stake, what she thinks about all of this.

In the meantime, first to FOX Business' Blake Burman with what he's hearing on this confusion of the tariffs.

First off, Blake, on, off, delayed, what?

BLAKE BURMAN, CORRESPONDENT: May, may, may is how you started your show, Neil, and I think that's a very, very, very good way to put it.

There's been a lot of headlines moving over here in the last 24 hours or so. Let me just try to try to tick through it and work through it with you here.

According to sources who we have been talking to, the idea of rolling back tariffs is still being mapped out at this point. But the markets earlier today certainly love the comments that were coming out of Beijing from a government spokesperson there, a spokesperson for China's Commerce Ministry, who said at one point the following, saying -- quote -- "Both sides agreed to remove the additional tariffs imposed in phases, as progress is made on the agreement. If China and the U.S. reach a phase one deal, both sides should roll back existing additional tariffs in the same proportion simultaneously."

Now, so far, no one back here in Washington within the Trump administration has put forth an official comment. And that includes the U.S. Trade Representative's Office, which is leading the negotiations for the U.S.

However, a source familiar with the negotiations here at home says the comments made in China today are on the correct course.

The question then, Neil, becomes which tariffs might be in play, and when might they be rolled back? Again, the U.S. side not publicly touching this one. But according to Chinese sources, China wants tariffs lifted as the deal is being negotiated and comes together, with all of the tariffs being rolled back before the completion of a full trade deal.

Those Chinese sources also say the U.S. wants some tariffs to stay in place after an eventual deal is completed. This is seen as ensuring the China keeps up their end of a trade deal after implementation.

Now, if there is a trade one deal -- let's just bring this back to trade one first -- phase one for a second. If there is a phase one trade deal, sources on both sides say the tariffs for December 15 likely will not go into effect.

As for the timing of this, Neil, we are also told from sources on both sides that they are still operating under the APEC timeline, which is trying to have phase one wrapped up by the end of next weekend. That is when APEC, of course, was supposed to take place, no longer taking place.

Important to note, with all of this, Neil, when you look at all of the headlines, the comments in China, what we're seeing at home and the headlines that have moved the markets up and down, as of this very moment, as we talk today, there is still not a phase one trade agreement at this point for President Trump and President Xi to sign, though some are feeling that -- some are feeling optimistic that this is moving in the right direction -- Neil.

CAVUTO: All right, Blake, thank you very, very much, Blake Burman.

Now, obviously, this is the kind of news that Kristi Noem wants to see resolved.

The South Dakota governor joins us right now.

Governor, thank you for taking the time.

The devil is in the details, I grant you that. And the talk that the tariffs are going to be taken out of the equation right now, you would, I assume, welcome that.

GOV. KRISTI NOEM, R-S.D.: Oh, absolutely.

This trade agreement is incredibly important, not just for our state, but for our country. And the indication is that China will be purchasing double the amount of agricultural products that they do today, up to $50 billion worth, which will be very significant in bringing our markets up and getting us better prices.

CAVUTO: All right, it wouldn't exactly return you -- I don't know in your specific state, Governor -- to where you were prior to all of this. Does that bother you?

NOEM: I think it would get close, though.

Phase one is really where a lot of the egg tariffs get addressed. And this opens up markets and adds more fairness that we didn't have before. In this agreement, which, if you remember, Neil, when I was in Congress, I was on Ways and Means, and we negotiated these trade agreements.

We faced not just access to market challenges. We also faced regulatory challenges. So, we have got language in this agreement that is going to deal with some of those regulations that China used to punish our farmers.

If we can remove those regulations and open it up and be treated much more fairly, that's really going to help us at the end of the day.

CAVUTO: I remember you back in your House days where you would question the Chinese on whether they could deliver the goods, so to speak, obviously a different environment back then.

But I'm sure, as governor of a crucial state here, especially when it comes to agricultural interests, you want to verify what they're doing.

Are there mechanisms, from what you have been told, to make sure the Chinese are going to follow up on those purchase ideas?

NOEM: Oh, absolutely.

And that's what I think a lot of my knowledge that I had in working with Ambassador Lighthizer when I was in Congress, I'm bringing to the seat now as governor of a state of South Dakota, where our number one industry is agriculture.

That experience is incredibly important. And, remember, Neil, back when we negotiated the USMCA agreement, we got language in there that helped set the table for this China agreement. So if we could get USMCA ratified and through the House, if Pelosi would get that finalized, that helps this Chinese agreement get completely finalized as well.

So, phase one looks very encouraging, but let's not forget about the other markets that we need to finish. And the only one holding that one up is Nancy Pelosi. USMCA is incredibly important, and it could be done within a matter of weeks.

CAVUTO: Governor, if I could switch gears a little bit here, and talk about the environment with impeachment and everything else going on and whether any of this other stuff gets done, a number of your colleagues, Republicans, that have been worried about what happened this week in these four states that had special elections or otherwise for governor, all the way to legislature, assembly seats.

And what was a common pattern throughout, Governor, as you probably know better than I, is that women are not big Republican supporters, especially suburban women, suburban voters, period.

Is this a problem for the party? This is the third type of election like that running since the president was elected where that has been the case.

NOEM: Well, women are the majority of voters in this country.

So the Republican Party absolutely has to address that issue. But if you look at who the Republican House leadership has recruited to be candidates for Congress, there are some incredible women in that group.

They are young. They're businesswomen. They're family-focused, and they're out there running hard to really represent the demographics of this country.

So I have long said, Neil, there's not women's issues, there's not men's issues, there's issues and a women's perspective on every single one of them.

I think that women just bring a different perspective to every single issue. And that's why it's important that we're weighing in on policy. So we need to maybe go out and tell our story better. That's maybe what Republicans don't do very well.

But if we do that and talk about how we're impacting families, we're making decisions that really do help those working hard every single day in our lives to be better, people will see that the Republican values line up with that agenda.

CAVUTO: Does the president, though?

I mean, with all the inroads you have made, your own election and your own prominent political career notwithstanding, and all the women who are coming forward, and are going to be prominent candidates themselves, that it might be something about the president?

NOEM: Well, it might be, Neil.

But, gosh, let's remind people about what he's done. So, this isn't new things to tell people to focus on, but I care a lot more about policies than I do about what somebody's saying.

So I look at what -- the fact that he campaigned on, what he's actually accomplished has been incredibly important for families and those who are pursuing the American dream.

So we live in a world, Neil, that is addicted to being offended, and we love to be offended by everybody. And I'm just going to ask the American people to quit wasting time on that. Instead, focus on your future, on your children, on your businesses, what you can do to protect our freedoms.

And you will see that you're going to wind up voting for President Trump next November.

CAVUTO: All right, we will watch what happens...

Governor, thank you very, very much.

NOEM: Absolutely.

CAVUTO: ... for the time being.

All right, there is something to that, being offended.

NOEM: Thanks, Neil.

CAVUTO: All right, we have got Charles Payne. Talk about a guy who never offends. He's here right now.

Charles, good to see you.

A couple of quick things. Impeachment, markets ignore it. Anything trade, markets just eat it all up, especially when it's good news. Presumably, what we're getting wind of is good news, even though there's talk but maybe those tariffs aren't lifted.

It's following a perfect script, isn't it?


But the irony of it all is that we're at all-time highs with tariffs. I mean, we have had these tariffs in place for a year-and-a-half. They got a lot more tougher this year. They brought in now $360 billion worth of goods we are tariffing just from China alone.

A year-and-a-half ago, all the experts said there's no way in the world that we could have the economy that we have, wages through the roof and jobs through the roof and the stock market through the roof.

The irony, I believe, honestly, Neil, I think we're going to get to the point when we do get something like a phase one, where we will have a little bit of a sell-off.

CAVUTO: Sell off on the facts, right?

PAYNE: Exactly, exactly.

So, listen, these daily reports, they will make your head spin. It's a negotiation. It's a tough negotiation. It's a problem that built up over several decades.

It stands to reason that they're going to push, push, push, pull, pull, pull. I do believe, though, that China wants this done before December 15, before those other tariffs are scheduled to go into effect.

CAVUTO: The reason why I mentioned it, Charles, is there's apparently a battle raging in the White House between the trade hard-liners and those who are saying, all right, let's just do this one step at a time. And the hard-liners then leak out this stuff.

Oh, no, no, don't assume the tariffs are just going to go away. Where is this going?

PAYNE: It might be the hard-liner.


CAVUTO: I see what you're seeing there.

PAYNE: Let's face it.

I mean, there's always been a battle from the beginning of this, with Mnuchin on one side, Lighthizer on one side, and Peter Navarro on the other side.

CAVUTO: There's a party.

PAYNE: There's a party. Oh, boy, let me tell something. Whew. OK.


PAYNE: And it's one of these things where, if you go by the White House in recent weeks and months, Peter Navarro is the happiest guy there.

CAVUTO: Right.

PAYNE: And I don't -- I think he probably is saying to the president, come on, don't be a chump. You're going to -- they're going to -- they're playing you, my man. Don't do it.

He's probably needling, needling, needling. And, in the meantime, Lighthizer and Mnuchin are saying, hey, the time has come. We can wrap this up, we can claim victory, and we can move on to other things.

CAVUTO: Your thought on young people. You're always big about that and helping those who typically don't follow stocks closely or really get involved.

They're looking at these markets and these records that you were way ahead of, and now all of a sudden saying, all right, well, I guess, if I dove in, I'd be late.

What do you tell them?

PAYNE: Yes, yes.

I just kind of -- I try to go back -- and you do this a lot. You bring up the 100-year chart on your show all the time.

CAVUTO: Because I was around 100 years ago. There's a difference.


PAYNE: That's when you were young.

CAVUTO: Yes. Yes. Yes. Yes.

PAYNE: But you say, you could have said this at X-day.

CAVUTO: Right.

PAYNE: When the Dow first hit 3000 for the first time, 5000, 10000.

I look at the underpinnings, the economic underpinnings of what's going on right now, I feel like we're poised now for an amazing year next year. I think we could get that 3 percent GDP growth.

CAVUTO: Do you really?

PAYNE: I see wages 4 percent year over year on average. The job market is so tight. They did the Michigan -- they did the Kansas City data manufacturing survey.

And one of the respondents, one of the employers said, I just want someone who shows up and stays all day. Like, they are really grappling for workers and they're paying them a lot more money. And I think -- I think we could ride this wave into next year.

But young people, to your point, they love making money. Now, the problem, the only problem I say is that it's short-term-ism, right? Right now, the big thing is gambling. It is huge. I mean, and when I say huge, like, they're betting on strikes and balls and innings.

And before, a couple of years ago, it was poker, and everyone was going to be professional poker player. So, they want to be part of this.

Robinhood had a thing. This is the app they use for the markets that shut down the other day.

CAVUTO: Right. Right.

PAYNE: So they're in. They're engaging. I think the only thing I would caution is, you're not going to be a millionaire overnight.

But they do want to make money, probably more than any other young generation ever wanted. Like, they believe it can be done. Now, not everyone can be a YouTube star and become a billionaire, but they do believe it can be done. I would only caution that it can't be done overnight.

CAVUTO: All right, and he provides the blueprint. And he's been ahead of a lot of the people who are always, whatever. So keep that in mind.

Meantime, both sides are digging in with another impeachment transcript that is just out. But they're reading the same thing. And I'm telling you, they have got two very different versions.

Fair and balanced, we have got both of them -- after this.


CAVUTO: All right, still more transcripts and details that are coming of a State Department official, George Kent, his testimony.

Mike Emanuel with much more on that.

Hey, Mike.


It is worth noting we expect to hear from George Kent in an open hearing next week. But the transcript of his session behind closed doors is now out. And George Kent says he raised concerns about Rudy Giuliani's efforts to pressure Ukraine.

From the transcript, Kent says: "Well, Mr. Giuliani was almost unmissable starting in mid-March. As the news campaign or campaign of slander against not only Ambassador Yovanovitch unfolded, he had a very high media promise. So he was on TV, his Twitter feed ramped up, and it was all focused on Ukraine."

But in an exchange with Texas Republican Congressman Michael McCaul, McCaul asked this question -- quote -- "So when the State Department evaluates foreign assistance to countries, isn't it appropriate for them to look at the level of corruption in those countries?"

Kent: "Yes, part of our foreign assistance was specifically focused to try to limit and reduce corruption. And we also try to the best of our knowledge and abilities to do due diligence to make sure that U.S. taxpayer dollars are being spent for the purposes that they were appropriated and that they are as effective as they can be."

Meanwhile, FOX News has learned Ohio Republican Congressman Jim Jordan wants Chairman Adam Schiff to call the whistle-blower to Capitol Hill to testify. Republicans are frustrated, while Democrats continue defending the person who brought this complaint.


REP. ERIC SWALWELL, D-CALIF.: You see these continued attacks against the whistle-blower, which seem only designed to punish the whistle-blower, put the whistle-blower in harm's way. That is concerning, because we have more than enough evidence that this person had all the reason in the world to pull the fire alarm.

SEN. LINDSEY GRAHAM, R-S.C.: I think the whole process is out of line with what we have done in the past. It is a sham. It's being driven by political people.

The best way to deal with a president is at the ballot box.


EMANUEL: Chairman Adam Schiff set a Saturday deadline for Republicans to turn over a list of witnesses they would like to call up here to testify -- Neil.

CAVUTO: All right. Thank you very, very much, Mike.

In the meantime, ahead of next week's public hearings -- that's what they formally get to kick off, so you can see what's going on -- what does my next guest expect you to see?

The House chief deputy whip, Democratic Michigan Congressman Dan Kildee.

Congressman, good to have you.

REP. DAN KILDEE, D-MICH.: Hey. Thanks, Neil.

CAVUTO: Republicans are saying, this will not be the process Americans are coming to expect it might be, a fair one. What do you say?

KILDEE: Well, I think it'll be fair, because the American public and, of course, anybody in the room, Democrats and Republicans, will have a chance to hear directly from these witnesses, so that they can tell their story, answer questions from both sides, and then come to their own judgment.

This is a process that I have been advocating for, for a long time. I -- it has been my feeling that public hearings were going to be the most important part of this. The deposition phase is now drawing to a close.

And I think we can all breathe some sigh of relief that whatever is happening is going to happen under full view of the entire country. And I think that's a positive thing.

CAVUTO: There are a variety of polls, the Monmouth one just the latest, to say that most Americans think that it's not a very fair process, that they think this is more political than anything else.

You have seen these variations. And it is borne out in some of the battleground states. Are you afraid Democrats got ahead of their skis on this or made it such a drive and a passion, that they overdid it?

KILDEE: I don't really think so now, because I think the game changed after the news of the Ukraine telephone call came out.

And I will admit, Neil, when I'm back home, this is not the subject that the constituents I represent want to talk about all the time. There are lots of other things they want to talk about.

But when they do speak...

CAVUTO: So, are you afraid, because of that, though, sir, that it's going to boomerang on Democrats, that whatever the merits of this process and opening it up and all the things like that, that it makes it look like this is all Democrats are concerned about?

KILDEE: I think there's always that risk.

But I think, when it comes to a matter like this, what I have been telling my friends and my colleagues on both sides of the aisle, that if we're thinking about the implications for the next election, we're probably thinking about the wrong thing.

This is a serious matter. And I know people can come to their own conclusions about whether it rises to the level of an impeachable offense, but in no world is it OK for a president to seek support and help from a foreign government in investigating a political opponent and trying to influence the outcome of an election.

And that's what we have seen, not just from the synopsis of the phone call -- it wasn't a transcript, but the synopsis -- but these other witnesses that have come forward.

So I think it's OK for people to come to different conclusions as to whether that rises to an impeachable offense, but I don't think in any way, shape or form should it be tolerated or somehow considered a new norm.

And that's what I hear from people.

CAVUTO: We shall see.

Congressman, thanks for taking the time. Be well.

KILDEE: Thank you, Neil.

CAVUTO: All right.

All right, talking about this outside of the impeachment stuff, what Republicans are losing now three years in a row -- after this.


CAVUTO: Vice President Mike Pence all smiles today in New Hampshire, where he was filing official paperwork for his boss to participate in the state's primary come next February.

But should the vice president and the president be worrying more about Republicans losing key suburban voters that could prove crucial, not only in New Hampshire, but across the country?

Karl Rove on that?

Karl, what do you think?


2018 showed a lot of defections in the Republican suburbs. The question is, are they going to come back? And, on Tuesday, we had evidence on both sides of how big this problem could be.

But we also had some silver linings in it. We saw, in Virginia, the Republicans lost the suburban seats in Northern Virginia, in the Richmond area. On the other hand, they gained seats in New Jersey in the Assembly in suburban areas. And they lost historic battleground -- or excuse me -- strongholds in the southeast part of Pennsylvania.

But on the other hand -- and this is why -- we have spent a lot of time in last couple of days talking about Kentucky and about the suburban problem there. It is a problem for the governor, not for the rest of the ticket.

For the first time since -- I think since the Civil War, the Republicans took every statewide constitutional office, except the governorship, which has been held for -- out of -- since 1973, by Republicans for only eight years out of the last 30-some odd years.

But Bevin got 705,000 votes. Right underneath him, the Republican candidate for attorney general got 823,000, running 118,000 votes ahead of the Bevin. The agriculture commissioner, 821,000 votes, 116,000 ahead, the auditor, 779,000 votes, the secretary of state candidate 746,000.

At the very bottom of the Republican statewide ticket is the state treasurer, 856,000 votes, ran 151,000 votes ahead of the governor.

And if you look at it, a large part of it is the difference in the suburbs. South of Cincinnati and Northern Kentucky are Canton and Boone, two suburban counties. And then just north of Louisville is Oldham, which is a suburb of Louisville.

And in each of those counties, the attorney general candidate ran 11 points ahead of Governor Bevin. So in there is a lesson, that if you're a Republican who can appeal to suburbanites, you can hold those voters.

And we will see how it goes for Republicans next year, but they better be focused on it and they better have a plan.

CAVUTO: Well, so far, it appears they don't.

And the reason why I raise it, in an editorial in The Wall Street Journal today, quoting here: "Worse than defeat for Republicans is the voting trend." You kind of alluded to it there."

But it continued suburban losses of 2017 and 2018 that cost them the House. In Virginia, it cost them the overall share of the government." This is me paraphrasing here, but now the losses are extending to suburbs around Richmond and areas like that, in other words, that it seems to be spreading.

ROVE: Right.

CAVUTO: What do you think of that phenomena? What is offsetting it?

ROVE: Well, the problem that -- for the Republicans is they're gaining among working-class voters who have a high school education, not a college education. They're losing support in the suburbs among college-educated voters, particularly women.

Now, it's not across the board. For example, if you take a look here in Texas, we lost two members of Congress, one in Houston, one in Dallas, who were Republicans, and, on the other hand, the Republican -- the Republican governor gets reelected by a 13-point margin.

So it's -- those suburbanites are being very discriminating in who they're voting for and who they're voting against. And last fall, like in most midterm elections, they had a chance to send one message to the president of disapproval and hope that he does better.

But at the same time, they tended to support Republicans with a strong image who represented their values and views. So the Republicans have got -- this is not inevitable that they lose the suburbs. They have got to focus on what will keep the suburbs, bring them back slightly, and keep what they have got there.

And I think there are two issues. One issue is, who do the Democrats nominate? Because the further left the Democratic nominee is, the better the Republicans can do in the suburbs, but only if they make a focused,, disciplined case about how bad, say, Elizabeth Warren or Bernie Sanders would be.

CAVUTO: Right.

ROVE: On the other hand, the president also needs to do a little bit better in those suburbs.

Those people generally like what he's doing, approve of what he's done with judges and the economy, strengthening the military, but they don't like how he conducts himself.

So he's got to find a way to be more presidential, which is sort of -- he's been a disruptive candidate and disruptive president, but he's got to find a little way to mellow things out between -- sometime between now and the election, so people say, I can -- you are doing good things on the policy side, and I think I can put up with everything else for the next four years.

Otherwise, we're going to have real problems in key states like Pennsylvania and Michigan and Wisconsin, where -- where he had some weakness in 2016 in the suburbs already, but it was offset by strength in sort of blue-collar, working-class areas, nontraditional Republican sources of support.

CAVUTO: Karl Rove, thank you very much, my friend. Good catching up with you.

ROVE: Thank you. Take it easy.

CAVUTO: He touched on it here, what's happening in Kentucky. And they want a recount to go through that very close gubernatorial election, where it's proven very difficult for a Republican of that state to ever get reelected.

It's an anomaly in Kentucky, but no such anomalies going on in Mississippi, where it stayed red, even though, to hear a lot of folks tell it, not quite as red.

The new governor-elect Tate Reeves -- after this.


CAVUTO: Disney is the happiest place on Earth for investors, certainly, after-hours.

The stock up around 4 percent, company handily beating earnings and revenue estimates, of course, all of this days before the launch of a streaming service that will feature Star Wars, Marvel content, you name it -- after this.


CAVUTO: All right, well, this was not Kentucky, was it?

Mississippi Republican Lieutenant Governor Tate Reeves handily defeating his Democratic challenger, Attorney General Jim Hood, in a competitive governor's race.

The governor-elect joins us right now, his first interview since his big win.

Governor, very good to have you. Congratulations.

TATE REEVES, R-MISS., GOVERNOR-ELECT: Well, thanks, Neil. It's good to be with you this afternoon.

CAVUTO: A nearly 6 percent margin is very respectable in your state. You already had people saying, well, you know, four years ago, it was 34 percent, that things are narrowing in Mississippi, maybe not turning blue, but a tighter fight than you would have expected.

What do you say?

REEVES: Well, it was a tight fight. It was a battle. There's no doubt.

Four years ago, the Democrats nominated a truck driver that didn't even go to the polls and vote for himself. This year, they nominated a four-term attorney general that was very popular. He served 16 years in state office and had been a district attorney up in the north part of our state for eight years prior to that.

So he had never lost an election. He was popular. And he -- and he ran a good race. But, at the end of the day, we had overwhelming turnout by conservatives throughout our state. And we ended up with a six-point victory. And we feel very, very good about the outcome.

CAVUTO: I noticed turnout was very strong for both parties. It was something that was predominant in a lot of races, especially these four races, the four states that we were focusing on.

And what's remarkable about it -- and you know better than others -- is that both parties seem to be very successful now at bringing out crowds that would normally not be there in an off-year election or a special election.

I'm wondering what that says about next year, especially in your state?

REEVES: Well, I will tell you, I think you saw a huge turnout in Mississippi. We had a turnout that was larger than any gubernatorial election in many, many, many years.

And I think the reason for that is because people are engaged. People understood the importance of this election. And, honestly, the fact that President Trump stumped here for us late in the campaign, as did Vice President Mike Pence.

And then, by the same token, former President Barack Obama did robo-calls for my opponent...

CAVUTO: Right. I saw that.

REEVES: ... on the night -- the eve before the election.

So there was a lot of interest here from national Republicans and national Democrats, and that really motivated people to get to the polls.

CAVUTO: I know you have far more important things, like taking over the state and then your own priorities, but there has been talk increasingly that Republicans shouldn't take this all for granted, shouldn't take states like Texas for granted, where, depending on the poll and the moment and the month, it's tight or very competitive.

Do you buy that, that Republicans have to sort of look over their shoulder here, that maybe something's going on in the South that they are taking for granted?

REEVES: Well, I don't think that the Republicans are taking anything for granted.

I do believe that elections are going to be competitive throughout the country. When you talk about President Trump and winning Pennsylvania winning Michigan in his original election in 2016, the -- races are competitive now.

There are more people paying attention. There are more people getting their news and getting their information from online and other sources. And so, with that being the case, I don't think we're necessarily taking it for granted, but I do think you have to run a campaign like we ran our campaign.

We literally went to every county in the state. We tried to earn the vote of every single Mississippian. And when you look at the returns, what you find is that we did -- we performed very well, throughout our state. This was a statewide victory.

And I think Republicans across the South, just like Republicans across the country, can be competitive, and must be competitive. But they got to work hard to do it, and they can't take anything for granted.

CAVUTO: What do you think, next door, Jeff Sessions kicking around running for Senate again?

REEVES: Well, you know, I don't know the former senator very well. I have watched his career.

I wish him the best of luck. I know there probably is going to be a large number of Republicans in that United States Senate primary over there.

And one thing I know for sure is, the best thing for the country is not to have a liberal Democrat representing the state of Alabama. I had the opportunity to talk to Governor Ivey in the last couple of days. She and I have been friends for a long time.

CAVUTO: Right.

REEVES: And I know the Republicans in Alabama are committed to ensuring that we send a Republican and a conservative back to Washington, someone who is not going to stand with Senator Schumer, as their Democrat senator does.

CAVUTO: All right, and so Jeff Sessions would be better than any of them?

REEVES: Well, there's no question that a conservative and a Republican would be better than a Democrat representing any state in the South, and, quite frankly, any state in the country.

CAVUTO: All right, governor-elect, thank you again. Congratulations.

REEVES: All right, Neil, thanks so much for having me.

CAVUTO: All right, in the meantime, Elizabeth Warren is going after billionaires, but, this time, a billionaire is going after her.



BILL GATES, FOUNDER, MICROSOFT: I have paid over $10 billion in taxes. I have paid more than anyone in taxes.

But I...


GATES: I'm glad to have paid -- if I'd had to pay $20 billion, it's fine.


GATES: But when you say I should pay $100 billion, OK, then I'm starting to do a little math about what I have left over.

SEN. ELIZABETH WARREN, D-MASS., PRESIDENTIAL CANDIDATE: You may have heard some billionaires on TV recently crying about that 2 cent wealth tax.


WARREN: Aww. Aww.

But if we ask the top one-tenth of 1 percent to pitch in 2 cents on their fortunes, we can invest in an entire generation.


CAVUTO: All right, you saw the tape there. I don't think Bill Gates was crying about it. He was pointing out the fact that he was open to paying even double the taxes. If it's $10 billion now, he could pay $20 billion.

The 2 cents thing is a little disarming here, but you should realize that, in the case of people like Jeff Bezos, it would mean another $7 billion in taxes, in the case of someone like Bill Gates, closer to $15 billion, at a minimum, in taxes. And that's just to get started.

So the 2 cent thing can be a little misleading. Nevertheless, that is the issue she's pounding. It's making her very popular with her base and maybe making her closer to the Democratic nominee.

But what happens after that? Well, anyone's guess.

We have got market watcher John Tamny here, our own Charlie Gasparino.

Welcome to both.

John, she is trying to say it's no big deal for these guys. There, you have someone like a Bill Gates saying, well, it is a big deal, and I'm open to paying $20 billion vs. $10 billion.

So I guess he's open to a doubling in his taxes, but maybe $100 billion is where he draws the line. But what do you think of this back and forth?

JOHN TAMNY, FREEDOMWORKS: I think it's nonsensical.

It cannot be stressed enough that an extra dollar in Bill Gates' pockets is exponentially more stimulative to the economy than an extra dollar in my pockets.

And the reason for that is, I would spend it. But what really drives economic growth is saving and investment. When Bill Gates has a lower tax bill, we all benefit, given the basic truth that there are no companies and no jobs without investment first. The rich invest.

And so a tax on them puts a bullseye on everyone who's not rich.

CAVUTO: I'm just wondering, Charlie Gasparino -- you and I have gotten into this on FOX Business a lot, which, if you don't get, you should demand. Billionaires love it.


CAVUTO: But the argument being that, well, they can afford it, they can afford it.

But it's not static money. I mean, these guys have SWAT teams of accountants and lawyers. That money is movable, isn't it?


They do save and invest more than the average person, which definitely helps the economy.

I think the bigger problem with Warren is not that she wants to tax billionaires and millionaires a little more. It's the other side, the spending side. It just doesn't add up.

And when you start adding it up, the Medicare for all, just all the crazy program she has, I mean, she probably wants to forgive student debt as well. I mean, I'm not sure she went there yet, but she will be.

When you start adding up everything she wants to do, forget about billionaires and millionaires. This is the average Joe is going to get screwed. It's just logic.

And even her Democratic opponents know it. Even guys like the most woke people in corporate America are people like Bill Gates, they're people like Jamie Dimon. They are Democrats. They are -- they used to be called liberal.

CAVUTO: And they're nervous, right?

GASPARINO: They -- I can't imagine they're going to vote and support her. I just -- what she wants to do with the economy is too crazy.

CAVUTO: You know, John, -- let me ask you about that, John.

John, Paul Tudor Jones was among those saying, if she becomes president, the market is going to tank at least 25 percent. Now, maybe that was for dramatic effect, but that it would be that damning.

Now, there are others that say she can only do this if she has a Democratic House or Senate with her. What are your thoughts on this?

TAMNY: Well, I think there is a lot of drama here for exactly the reasons you allude.

She would have to have Democrats go along with her. She would have to have control of Congress, which I doubt she would have. She would lose it very quickly.

And so her ability to do one-tenth of 1 percent of what she wants to do is probably pretty limited. But it concerns me when Bill Gates says, oh, I'd happily pay $20 billion.

It's got to be remembered that a tax on Bill Gates as a tax on me, because politicians don't take in that money to stare lovingly it. As Charlie alludes, they have all these spending plans. Every extra dollar they get means more control over the economy by politicians.

GASPARINO: That's true.

TAMNY: I don't want the rich to pay more in taxes.

GASPARINO: That's true.

But let me make this one point about Elizabeth Warren. Even if she doesn't have the Senate and the House -- and, obviously, if she does, that's really bad for the markets, they will tank -- but she's -- just being president, you can do so much damage, I mean, in terms of regulation and things of that nature.

CAVUTO: Yes, you can be after these guys ad nauseam.

GASPARINO: And you could have show trials, if you want. I mean, you can get the Justice Department to investigate them.

CAVUTO: All right.

GASPARINO: So, she could do a lot of damage.

CAVUTO: All right, guys, thank you both very much.

I might point out too that all of these rich guys, when it comes to their giving pledge, they, to a man and woman, including Bill Gates, including Warren Buffett, they have decided that they would give to the Gates Foundation or these other private efforts that they feel can be more constructive than the government.

To a man and a woman, what they seem to be saying is, when we leave this Earth, we're certainly not going to leave it to Washington. We're going to leave it in better hands.

We will have more to this.


CAVUTO: Two former Twitter employees are now being accused of helping Saudi Arabia spy on users.

FOX Business' Jackie DeAngelis has the latest on that -- Jackie.


Here's the latest on this story. Of the three men named in the Justice Department complaint, one was arrested in Seattle. The other two are believed to be in Saudi Arabia. And the FBI is encouraging them to come to the United States for trial, saying, in part -- quote -- "We encourage them to return to the United States to face these allegations. As with all defendants in the United States, they are presumed innocent until proven guilty, and they have a right to a fair trial and to defend themselves in federal court" -- end quote.

Now, the two former Twitter employees are being accused of violating the terms of their employment to access private information on certain users, in exchange for money and other benefits. Who were they spying on?

People that were considered to be dissidents within the kingdom of Saudi Arabia? There's a third man. He was a go-between. He allegedly took the information from the men and to the government of Saudi Arabia, though no officials have been named in this complaint.

What kind of information are we talking about? E-mail addresses, phone numbers, I.P. addresses, dates of birth, presumably the kind of information that users need to establish an account and the kind of information that would help you locate them if you needed to.

So many privacy issues here, Neil, and this is just another example, another layer of this lengthy conversation that we have been having.

CAVUTO: Jackie, thank you very much.

That's a little disturbing, to put it mildly, Jackie DeAngelis.

In the meantime, kids, does three more hours of each day sound like something that you would like to be interested in? 2020 Democratic candidate Kamala Harris is pushing it.

Forget about, well, you kids. What do you think about mom and dad? Will they buy it?


CAVUTO: 2020 Democratic presidential candidate Kamala Harris introducing a bill to lengthen the school day by three hours, so it better aligns with working parents' schedules.

Let's ask some parents what they think of this.

Run For America founder David Burstein and CEO Lyss Stern.

Lyss, what do you think of it?

LYSS STERN, DIVAMOMS.COM: I think that kids don't need additional time; 8:00 to 3:00, 8:00 to 4:00 is more than enough time to be in school.

CAVUTO: All right, David, the argument for this, I'm told, is that kids are in school a lot longer in Asia, their grades are off the chart, they're little geniuses and all of that, we have to catch up.

What do you think?

DAVID BURSTEIN, DEMOCRATIC STRATEGIST: Well, that's one part of the argument.

The other part of the argument is -- and if you read the language of the bill, importantly, she's not actually saying that schools would have to keep students in school to 6:00. She's just saying they would have to be open until 6:00, so that students could stay there, parents pick them up longer, and that gap in child care, which, really, one of the leading costs for working families is child care.

And it puts a real strain on people's budgets. So I do think that's important.


CAVUTO: Who's going to pay for that?

BURSTEIN: Well, obviously, taxpayers were -- will, and these schools will have to pay for them in keeping them open longer.

But I think it's an important debate to be having. I'm not actually sure that I agree. But I'm glad to see someone putting forward some serious ideas about education, which so far has not really been talked about, frankly, at all in this Democratic primary.

And I think it's one of the most critical issues.

CAVUTO: With all respect to David, I don't know if this is a serious idea.

I mean, if you want to talk about concentrating on the math and sciences with kids, that's one thing. Keeping the school doors open for another three hours, that's another.

What do you think?

STERN: Yes, but let's also talk about, why don't we instead think about creating some kind of kindness programs, some kinds of programs about bullying?

I mean, this is stuff that the schools really need.

BURSTEIN: Absolutely.

STERN: And they need to implement this into the curriculum.

I think adding on an additional two to three hours a day of school is not something that these kids need right now.

CAVUTO: Why do you think she did this?

STERN: I think she did this because she's thinking of the working parents, which I understand.


STERN: But I think, at the end of the day, when it comes to the kids and their mental health and the state of anxiety that they have and the schoolwork and the school load, they don't need all that extra time in school.

CAVUTO: David, as a new dad yourself, and you're looking at the future, how important is it that you're going to look for the best schools possible for your kids?

BURSTEIN: Well, look, I think the reality is, education is probably the most important issue in our politics, if you look at it, when all these things that -- come back to education over and over again.

My concern about these candidates is, there's not a lot of substance here. I mean, to the point here, look, what's actually going to be done with those hours in the day? I think that's -- and Lyss is raising that point. That's a much better part of the question than necessarily, should we keep it open or not?

CAVUTO: Yes, even some schools, Lyss, I believe, that their kids are dropped off early, they have breakfast programs just to accommodate that.


CAVUTO: Has that made a big difference one way or the other?

BURSTEIN: I think these things do make a marginal impact, because, mostly, the kids getting to spend time together and being in a place -- a lot of kids don't have access to a hot meal unless they have it at school. These things are relevant to people's education.

CAVUTO: So, real quickly, that thing, that kind of approach is OK, Lyss?

STERN: Yes, absolutely.

If you want to go to school and drop your kid off an hour early or 45 minutes earlier to have breakfast, or if you want them to stay an hour after, it's fine.


STERN: But not three extra hours.

CAVUTO: So, we're pro-food. On that, we can agree. We're pro-food.


CAVUTO: Guys, thank you very much.

Here comes "The Five."

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