Kamala Harris takes on Joe Biden over race issues during 2020 Democratic presidential debate

This is a rush transcript from "Your World," June 28, 2019. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: Historic, one word for Wall Street closing out of banner month.

For the Dow, we have not seen a June this good since 1938, up around 7 percent. I want you to think about that. That was more than 80 years ago. Gas was selling for around 20 cents a gallon back then. Seabiscuit beat War Admiral in a horse race that captured the nation's attention.

And Howard Hughes flew around the world in record time. It only took three days and a little over 19 hours. And Orson Welles created a panic with his radio broadcast "War of the Worlds" about Martians invading Earth.

That was then. So where do we go now?

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

To Susan Li with more on a June we won't soon forget.

Hey, Susan.

SUSAN LI, CORRESPONDENT: Hey, Neil. Oh, that summer of 1938.

That was back during the Great Depression and during Franklin Roosevelt's a second term. That June, the Dow jumped nearly a quarter, 24 percent, thanks to what was then a big stimulus package of $4 billion. So 1938 may dwarf 2019's 7 percent gains, but it's a different time and also a much healthier economy.

For instance, unemployment back then was 19 percent 80 years ago. Now it's at 3.6 percent and near its best in 50 years. And President Trump taking credit this morning, tweeting that "The stock market is up massively from the day that after I won the election, all the way up to the day that I took office because of the enthusiasm for the fact that I was going to be president. That big stock market increase must be credited to me. If Hillary won, a big crash."

Well, as for this month, you can thank investor hopes of a U.S.-China trade deal, with that big Trump-Xi meeting taking place tonight on the sidelines of the G20. But mostly credit the Federal Reserve for the month, with nearly 100 percent of the market predicting a rate cut next month, which will mean trillions of dollars will be released into the U.S. and global economy.

And June can also be characterized as a month of Bitcoin, with the cryptocurrency up nearly 40 percent and more than tripling in value so far this year, some big numbers there -- Neil, back to you.

CAVUTO: Just incredible.

LI: Yes.

CAVUTO: All right, Susan, thank you very much.

Before we get to our panel on what we're talking about here, the Dow back in that month in 1938 was at around 133. That is 1-3-3 -- right now at around 26566, yet another reminder that if you stick with it for the long term, you will be richly rewarded.

So, as the market keeps going up, Democratic presidential candidates continue to rip the rich, disproportionately, they say, benefiting from all this, as President Trump, as Susan reported, takes credit for the strong markets.

So who's going to win out on this argument?

Let's go to market watchers Keith Fitz-Gerald, Kimberly Foss and, well, he was there in 1938, Teddy Weisberg, outside the New York Stock Exchange.


CAVUTO: Actually, he wasn't.

Teddy, I joke, but for the decades I have been talking to you, it's always been an honor.


CAVUTO: So, let me get your sense, Teddy, of this, of this particular month, a strong first half, and what has been a big an undeterred bull market. In fact, this expansion will be 10 years old next Monday.

So what do you make of all this?

WEISBERG: Well, I don't know -- I don't know who invented the cliche markets like to climbs walls of worry, but, clearly, we have all had a lot to worry about, impeachment talk, negative talk about the economy, dysfunctional politicians.

I mean, it goes on and on and on. And yet that's all trumped by a very good economy, very good corporate earnings, an accommodative Fed, and low inflation and low unemployment. And the latter is the fuel for a positive market environment. And so the markets -- the markets just continue to climb this proverbial wall of worry.

And I suspect it will continue, Neil, because Mr. Market never lies.


The market, Kimberly, as you see it, sends signals about what it wants to do to keep going. In other words, does a trade deal and getting one scored sooner rather than later matter? What do you think?


You know, 80 years ago, as you said, we were worried about the Great Depression and going to war with Europe, and, today, it's a different war. It's a different war with China. Right?

CAVUTO: Right.

FOSS: So it's really important that we look at tonight's meeting between President Trump and China as a positive.

And, hopefully, they will come out as a positive. And I think that will support the market absolutely even further. Even, Neil, if we get a postponement of the tariffs and maybe just some more ongoing talks, I think that would be a positive for the markets as well.

So, we definitely want to see this agreement come through, and especially for the businesses around the world. Our markets are so interconnected now. It wasn't like it was 80 years ago. But we really need this to happen for the long term, for this market to be sustainable long term.

CAVUTO: You know, Keith, when I look at the numbers and what's been happening here, it does seem we are leading the pack, we're leading the world. And a lot of money when it's nervous, to Teddy's earlier point, finds a very safe haven in the United States.

Do you think that continues?

KEITH FITZ-GERALD, MONEY MAP PRESS: Oh, I think that's very, very true, Neil. They may hate our guts, but they love our money, and they love our investments, no matter how bad things get.

I think there's enough fuel that we could go on for another decade, not in a straight line, but we have enough fuel in cheap Fed, cheap accommodative Fed, to get there in another decade.

CAVUTO: You know, Teddy, the president was tweeting about this market and everything else, and it's all him, and saying that, without him, it wouldn't be looking at all of this.

Having said that -- and everyone plays politics with it. His argument is, you don't really reelect me, you're staring at a crash. What do you think of that?

WEISBERG: Well, I tell you what, I mean, I think I would be careful about being too much of a cheerleader, because markets have a funny way of flapping in the face when you least expect it.

But I would say that whether he takes the credit and whether he deserves the credit, that remains to be seen, but the reality is that we have an accommodative Fed, we have a very good economy, we have good corporate profits.

And all these other negative issues, listen, you can't dismiss them. They're all very real. But at the end of the day, the market is looking at sound economic fundamentals.

CAVUTO: Right.

WEISBERG: And, at the end of the day, Neil, that's what drives stock prices.

If this deal happens in the -- with China, who knows, maybe the market sells off on the news. Good news, sell them, buy them on bad news. I don't -- I don't really know the answer. Nobody knows the answer. It's all -- we're all -- we all could look at the markets, all have an opinion, and all be right or wrong at any given time.

But the bottom line is, you have an accommodative Fed, you have a good economy, you have great unemployment numbers, low inflation. I mean, for the stock market, it doesn't get a whole lot better than this.

CAVUTO: You know, Kimberly, I went back and looked at press clippings at the time of in prior periods of significant periods like this back in the late 1930s. And the rap against Wall Street, it was just for a select few, the rich fat cats who were benefiting, that in an environment that produced a 133 on the Dow.

We sit here, similar arguments today, just in the past couple of days, these two days of Democratic debates, that it's tilted to the rich, Wall Street is their playground, not Main Street's, and many of them want to raise taxes.

They was talk with Elizabeth Warren and others to start a trading tax, a wealth tax. And Bernie Sanders much has -- to do the same to provide college for all. What do you think of this back and forth?

FOSS: Yes, I think it's a lot of noise, honestly.

It's just -- it's a lot of rhetoric. It's a lot of noise. The bottom line is, money goes where it's best rewarded. And, right now, it's being rewarded in the U.S. markets. And as I said before on your show many times, Neil, the United States stock market is the greatest wealth creation tool in the entire history of the human being, right?

And so long as markets remain free -- and that's what this has done in the last couple of years, it's made the markets freer. And as long as we are free, our investors, people with the 401(k)s, they're the ones who are going to benefit for it.

So stay invested long term. And you know what? Keep all your eyes on Monday morning your 401(k). And I would say today, if you can, put money into the market, it'll be a positive next week.

CAVUTO: Keith, you agree with that?

FITZ-GERALD: You know, that's an interesting sentiment.

And, yes, I do agree with that, because I think the history shows very clearly money wants to work hard for you. The question, of course, for most investors is, will you let it? And I think the history shows, again, not in a straight line, but earnings are good, employment is good, Fed's cheap, let's go to the races.

CAVUTO: All right guys, I want to thank you all. Have a wonderful weekend.

Stocks might be banking on a trade deal with China, but there's a flip side to that too. What if we actually get the deal and all of a sudden then we don't, we don't get the interest rate cut because we got the deal?

After this.


CAVUTO: All right, just hours away from that big trade meeting we have between the president of the United States and his counterpart in China, Xi Jinping.

Hard to say what happens here. A lot of people have expectations that are off the charts. Others just kind of shrugging their shoulders.

John Roberts in Osaka, Japan, where it all goes down -- John.


Last night, the top U.S. and Chinese negotiators, Robert Lighthizer, Steve Mnuchin, and Liu He, all got together to try to lay the groundwork for what they hope will be a successful meeting today.

What transpires here in Japan this morning could pave the way either for the resumption of trade talks or could irreparably break things down or, if not irreparably, at least certainly hold up the process for a while.

And a bilateral meeting with Brazil's President Jair Bolsonaro yesterday, President Trump building the anticipation for what might happen today. Listen here.


DONALD TRUMP, PRESIDENT: We will see what happens. It will be an exciting day. A lot of people are talking about it. And it's very interesting. And it's going to come out hopefully well for both countries.

And, ultimately, it will work out.


ROBERTS: Chinese officials have been setting expectations for the meeting today, telling FOX News that they will not make any major trade concessions unless and until all tariffs that are currently imposed upon China are lifted.

In addition, they also want restrictions lifted on Chinese telecom giant Huawei. Geng Shuang, who is the Foreign Ministry spokesman, saying -- quote -- "We hope that the U.S. can meet China halfway and work together with us to promote a positive result of the meeting. This is in the interest of both countries and also meets the common expectation of the international community."

Chinese officials also told Fox News that they have a promise from the president going into today's meeting that he will not impose any new tariffs on China for the next six months as a gesture of goodwill to try to get talks started.

But in that bilateral meeting with Bolsonaro yesterday, President Trump said, I never said that. Listen here.


TRUMP: No, I haven't promised. Good question. No.


ROBERTS: No, I have not made any such promise.

So, can the talks get back on track? Neil, we will find out about seven hours from now.

CAVUTO: John, thank you very, very much, John Roberts.

I know some of you at home might be thinking that, all of a sudden, I'm going to do the Abbott and Costello thing, that the president said one thing and then he said another. But just said you weren't going to put tariffs. Now you are going to put -- but, no, that's all I'm going to do.

All right, so what could make these talks and a possible deal happen? And would it be the president giving away any preconditions or offering up the tantalizing possibility of delaying the higher-priced tariffs maybe for another six months?

We're getting mixed reads from the president himself, but let's see what our guests think of that, National Taxpayer Union's Mattie Duppler. We have got FOX Business' Charlie Gasparino and Democratic strategist Christy Setzer.

You know, Charlie, are the markets anticipating we're going to get a deal? Because it seems to me that they have been waiting for this, but they might just as well be happy if they don't get it and what they get is a guaranteed cutting interest rates. What do you think?

CHARLIE GASPARINO, SENIOR CORRESPONDENT: Yes, I mean, listen, one of the good things that President Trump has going for him is that he's beat the hell out of Jerome Powell so much, he's backed off on any interest rates, right?

So he's going into this meeting not worried about higher interest rates. And the markets are pretty stable. We're kind of like at the highs at the Dow, 26500.

The real question is, if he does get something marginal -- and this is what I -- I think it will be a positive for the market. It's kind of a debate out there whether it's priced it or not. If you get something marginally positive, markets could rally on this.

And I think they could rally. And depending on how good it is, they could rally significantly. I mean, this is -- then you have low interest rates and a trade deal at the same time. And, by the way, this helps him going into the elections. I mean, there's no doubt, Dow 29000-30000 and decent GDP, because you got the trade issue, and you got interest rates...


CAVUTO: Very good.

I want to get this circled around here.

Christy, what do you think of what he just outlined? Because that could be problematic for Democrats.

CHRISTY SETZER, DEMOCRATIC STRATEGIST: Listen, I think that what markets are expecting, what Wall Street is expecting is that there will be the hold on new tariffs that the president actually just put into question.

So I think what, again, what Wall Street's expecting is that we will have this result where, sure, we're keeping the existing tariffs, there's not going to be new ones. And that would be an OK sort of middling result that is not actually probably going to allow for a bump in the market.

But if we don't even get that, then, no, I mean, there's no reason to think that the markets are going to rally, because what would we have gotten out of it?


CAVUTO: I do want to spread it -- Mattie, one of the things that's come up here on this -- these trade talks is the fact that China becomes a front- and-center issue, whatever happens.

And, of course, Joe Biden, remember, got into some controversy a weekend into his announcement saying that China wasn't a competitive threat. And then he reversed himself and said it is. And now I notice, in the candidates' issues of top worries, for I think about six or seven of them, China was among them.

What do you think has changed here?

MATTIE DUPPLER, NATIONAL TAXPAYERS UNION: I mean, you saw in the debate last night Democrats do not have an answer about China.

And if President Trump is going to continue to flex on China, whether it's with tariffs, whether it's just talking tough and tweeting tough, that still draws a very stark contrast between himself and the Democratic Party.

And I think that does play well with most of the country. But, of course, there are consequences.

CAVUTO: You have to get results, though. You have to get results right?

DUPPLER: Exactly.

SETZER: Right.

DUPPLER: There are consequences to these economic decisions.

So tariffs, of course, are hurting the heartland. They're hurting farmers. They're hurting manufacturers. We need a resolution to this trade war. So while any kind of inertia coming out of this weekend will be a market- positive event, the tail on what happens this weekend is really important.

And we need to see actual movement towards resolution so that our farmers and our manufacturers aren't held in limbo for the coming months. That certainly won't play well politically, because it's not going to play well economically either.

CAVUTO: Christy, do you think the vice president, the former vice president, hurt himself by this 180 on China?


I think that he had to explain himself by what he meant that China wasn't a threat. And I think he did that reasonably well, by saying that you need to have these talks. And so, no, I mean, look, I think that the Democratic electorate, for the most part, is far more ginned up about other issues than they are about trade.

That obviously will change once we get to the general, and that's not true for everybody in the Democratic Party.


SETZER: But right now, no, it's not as much of a voting issue as...


GASPARINO: I think Trump is stealing that trade issue from them.

I mean, what do blue-collar workers care about right now? They care about trade. They're marginally in favor of tariffs, if you took a look at it. So I think he's sort of taken that.

And I will say one other thing. Listen, there's no one Wall Street. I don't -- when I say I spoke with Wall Street, I mean I spoke to some of my sources. So they have different opinions.

But you get a decent trade deal, you get you get low interest rates or stable interest rates, that is a really good positive for the markets. I don't care.

And one other thing, even though we have a tariff war, GDP is still pretty strong. We're still at 2 to 3 percent. It's not really impacting the economy in the major way that the doomsayers say.

And, by the way, one of those doomsayers was me.

CAVUTO: By the way, we don't have those higher tariffs really in effect yet...

GASPARINO: Not all of them, right. Right.

CAVUTO: ... because it will affect the new stuff coming in. And that has yet to arrive.

But, Mattie, to Charlie's point here, I do find interesting that, with all that stuff the president has at his back here, including the stronger economy, including what's been happening with the markets, he's not benefiting much.

And I think, to Christy's point, that's why many in the Democratic Party are latching on to other issues and feeling they're gaining traction.


CAVUTO: I don't want to mischaracterize what Christy said.

But I think that that's part of what's going on.

DUPPLER: Yes, I think Christy is right, though. Trade is not a super sexy issue, right, for primary voter.

We haven't had a lot of conversation, I think, in our political elections about trade. But what President Trump was very smart at doing was, he identified the problems that people in the Midwest and blue-collar communities were having. And he said he understood them. He respected what they were going through and was going to help fix it.

Now, the consequence of that is, trade has become a major issue for this administration.

CAVUTO: Right.

DUPPLER: But, when you look at the long term, looking into the 2020 election, another thing the administration has made a priority is the USMCA, which, of course, is a free trade deal with Canada and with Mexico.

If you were able to cement that, I think a lot of these questions about China and the U.S. would be blunted a little bit, because it would show the administration is serious about creating certainty for those businesses to invest and giving a lot of that economic feedback back into the country that's been missing a little bit, or at least has been dampened by the trade war with China.

CAVUTO: All right, I want to thank you all very, very much. See how this all sorts out politically, economically, in the markets, you name it.

The Trump administration, meanwhile, is under intense scrutiny over conditions at facilities that are housing these migrant kids. What needs to be done?

Former New Mexico Governor Susana Martinez is here -- after this.



SAVANNAH GUTHRIE, NBC NEWS: Raise your hand if -- if your government plan would provide coverage for undocumented immigrants.



CAVUTO: Raise your hand if you think this is going to come back to bite you.


CAVUTO: I don't know how you guys feel about anything, but, that said, that's a moment that will be locked in, and no matter who of that bunch, if it's that bunch there, gets the Democratic nomination, each and every single one on the stage last night saying that their health care plans would provide coverage for illegals.

The former New Mexico Republican Governor Susana Martinez on all of that.

Governor, that's a moment they can't take back.

SUSANA MARTINEZ, R-N.M., FORMER GOVERNOR: It's not a moment they can take back.

And that is what has become a magnet for illegal immigrants to come to the United States. It's all the free stuff that is being advertised by either the cartels or the folks that are bring people from other countries to the United States, free health care, free higher education, minimum wage jobs at $15, on and on and on.

It is unsustainable, and it is pure and simple. It is socialism.

CAVUTO: Well, the one thing, whether you're for or against this sort of thing, a lot of them say, we got to do this on humanitarian grounds, whatever, it's a right and all of that.

And we argue that forever, but they must know, in so stating this, that it's one more reason for folks to come to this country or try to get into this country any way they can, right?


I mean, and that's what's being advertised right now on radio stations and with flyers in Guatemala, El Salvador, Honduras. They're selling -- they're passing out flyers that say, you can get free health care, you can get free education and college, you can get all kinds of freebies, if you make your way and pay me, the cartel, to get you to the United States, and become one of those that is released into the United States, because all these freebies are going to be available to you.

Americans will end up paying for it finally. Every one of us will pay for that kind of a benefit.

CAVUTO: I'm wondering, if you don't mind my switching, Governor, on this $4.6 billion measure that's meant to sort of shore up these conditions along the border, including feeding and housing of these kids and those who have come here, not to mention providing more manpower, border officials, to deal with this, and the regular job they have to do, which is policing the border.

What do you think about it?

MARTINEZ: Finally. Here we are, what, June 30, and we are barely, barely coming to the realization that that bill had to pass.

On July 1, they're going to run out of money. It's unfortunate that it comes down to the wire to finally do the supplemental funding of $4.6 billion to ensure that we have the proper food, diapers, clothing, shelter, et cetera, for the individuals that we have in those shelters, but also the manpower that comes with it.

They're inside of the shelters doing things that they were not hired to do. These are brave men and women on the border. Doing their job on the border is what they should be doing as law enforcement officers.

And, instead, 60, 70 percent of them are being pulled to be in these shelters doing things that they weren't trained to do and they weren't meant to do.

CAVUTO: But now we have got this measure, to your point, that does -- or hopefully will ameliorate that, and address the needs of even the very folks who are protesting today, dissatisfied with this measure because it doesn't go far enough and doesn't protect kids enough.

What did you think of that?

MARTINEZ: I think they're doing the best job that is absolutely possible.

You cannot release unaccompanied children and just open the doors and say, come back whenever you're hearing is. They have to be held in a location where they are safe and fed and have a roof over their -- over them overnight.

The problem is going to be, it's a Band-Aid. It's a supplemental funding. It is not overall reform of the immigration bill or the laws of asylum.

CAVUTO: All right, Governor, hopefully, cooler heads prevail, and at least there's some progress there.

MARTINEZ: I hope so.

CAVUTO: Very good having you. Have a very good weekend, Governor.

MARTINEZ: You too.

CAVUTO: All right, it's the answer that was heard around the world, the president's comments to the Russian president over getting involved in an election.

The controversy -- after this.


CAVUTO: You hear about this?

More kids are ditching their smartphones this summer, and they love it. They're happy about it.

What about millennials and all those other generations? Still hexed. Still vexed.



QUESTION: Mr. President, will you tell Russia not to meddle in the 2020 election?

TRUMP: Yes, of course I will.

Don't -- don't meddle in the election, please.


CAVUTO: All right, the media all over that one, the president warning Russian President Putin about meddling in the 2020 elections during their meeting at the G20 In Japan.

Others read into this the fact that he was so cynical and actually kidding about it.

Let's get the read on all of it from The Washington Examiner's Tiana Lowe.

Tiana, what's the fallout from this?

TIANA LOWE, THE WASHINGTON EXAMINER: Obviously, the media is upset about this, and rightfully so.

This is not a laughing matter, the fact that Russia is -- has repeatedly attempted to circumvent our electoral process.

But it is interesting how much Trump's behavior towards Russia disagrees between policy and persona. I mean, obviously, this hostility that he's showing towards Iran is not benefiting Putin. Putin obviously doesn't want us to go to war with Iran or tighten our sanctions on them.

Yet, when Trump meets Putin in person, he can't help but be this affable with him.


LOWE: That's the thing.

Trump is attracted to strongmen in the Wilsonian model. Trump enjoys people who seem assertive. And I think there's a level of machismo that Trump appreciates about Putin.

I don't think it's some 4-D underwater backgammon strategy. I think Trump, just as -- on a personal level, likes building a rapport with people like this. We see him do it with North Korea, and now we're seeing him do it again with Russia.

And it's one of his worst -- it's one of his worst tendencies, especially considering that his Russia policy has actually been quite good.

CAVUTO: No, I'm glad you did a distinction there, as you always do, between what he says and what he does, because what he does is ticking the Russians off a lot. They're not happy about it on a whole host of issues, from the ongoing trade war with China, to, as you said, the way we're handling Iran, to his beefing up security around the Venezuela issue.

So he has a history of his actions speaking louder than his words. But what I do notice -- and this is a consistent theme -- he will blast another foreign leader. Yet, in that foreign leader's presence -- Theresa May comes to mind about a year ago, when he was blasting her how she was handling Brexit and everything else. Meet her in person, it was all pie in the sky.

Pretty much the same with Angela Merkel, blasting how she handles the Russians, with her today, pleasant and agreeable. And maybe that's just human nature. Maybe we're all that way. But it does stand out.

LOWE: It certainly does.

And it's good that you actually did bring up Theresa May, who also met with Putin. And she did -- she demonstrated pretty much the perfect display of how a thug like Putin should be handled. He is obviously a diplomatically elected leader. People in his own country recognize that he is the leader.

It's important that our world leaders all meet at G20. But she didn't cower to him. She didn't smile. And she made it very clear that Russia is responsible for people being killed on British soil. And she treated him like the thug that he is.

Trump would be wise to maybe take a note from May in that respect.

CAVUTO: Yes, just be icy. It's OK to be icy. It's OK to be a little put- off-ish there.

LOWE: Yes.

CAVUTO: Tiana Lowe, very, very much -- that would never apply to you, Tiana, just so you know. But thank you very, very much.

All right, in the meantime, a lot of Democrats are looking at Vice President Joe Biden's performance yesterday, the whole pass the torch thing, and thinking maybe, maybe they're right -- after this.



SEN. KAMALA HARRIS, D-CALIF., PRESIDENTIAL CANDIDATE: You also worked with them to oppose busing.

And, you know, there was a little girl in California who was part of the second class to integrate her public schools, and she was bused to school every day. And that little girl was me.

JOSEPH BIDEN, D-PRESIDENTIAL CANDIDATE: That's a mischaracterization of my position across the board. I did not praise racists.

That is not true, number one. Number two, if we want to have this campaign litigated on who supports civil rights, and whether I did or not, I'm happy to do that.


CAVUTO: All right, a major moment from last night's big debate.

Did California Senator Kamala Harris just start chipping away at the Democratic front-runner, Joe Biden? She was raising a lot of money, getting a lot of media attention off of it.

Former Clinton pollster and Fox News contributor Doug Schoen on all of that.

Doug, good to see you.


CAVUTO: How do you think it went? I know -- were you in Jerusalem last night for this? Did you get a chance to see it?

SCHOEN: I was.

I certainly did get a chance to see it, Neil.

And my sense is, this was a very significant blow against former Vice President Joe Biden, and a great benefit for Kamala Harris. I think the dynamic of the race may well have changed, as your comments have suggested.

CAVUTO: You know what I found surprising, Doug, that the vice president wasn't more prepared for an issue that has been out there.

And he had to have been ready for what would have been an attack line, and that she would probably be the one delivering it.

SCHOEN: You know, Neil, you're exactly right.

And that was my reaction. I'm a political professional, whatever else I am. And I would have thought Joe Biden would have stepped up to the plate and said in as strong and passionate way as he could, I got the voting rights bill done. I got the civil rights bill done. I got these bills done to change America. I'm proud of that. And I stand here proud and emboldened for what I have accomplished and what we will do in the future.

In fact, as the comments you just played suggested, and others, he was ill- prepared, almost uncertain of what to say. And I think it was a dramatically and catastrophically harmful moment for him, Neil.

CAVUTO: You know what I also thought, Doug?

You can't fake passion and rage. I remember Michael Dukakis when he was asked, well, what if your wife, Kitty, were raped?

SCHOEN: Yes, sure. Yes.

CAVUTO: And he had a very surgical, calm, almost medicinal response.

But, obviously, the nation wants to hear, hey, your wife has been raped. Why are you answering this like an SAT question? And, of course, it cost him dearly.

Now, I'm not likening the two, but wouldn't that have been an opportunity for Joe Biden to show his passion and rage? Who are you to lecture me on civil rights and working on behalf of people who didn't have a voice in Washington? I was that voice.

He didn't do any of that.


And, again, Neil, you're right on the money. That's what I would have thought. I have prepared candidates for these debates. And in these situations where you know the attack is coming, you prepare them to go right back at the attacker, so that they have a moment of compelling political theater.

It didn't happen. And I think Joe Biden is going to feel the effects with fund-raising and in the polls.

CAVUTO: All right, now, we can all remember Ronald Reagan and the microphone issue in New Hampshire. I paid for this microphone. And he showed his anger.

SCHOEN: Right. Right.

CAVUTO: And people remember that.

So they do remember emotion.


CAVUTO: Now, I'm wondering, in the Kamala Harris situation, and some of the candidates you think might have emerged or start rising as a result of the last couple of days, who are you looking at?

SCHOEN: Well, look, Kamala Harris did well, but it was more in an than I thought a great moment for her.

I thought Elizabeth Warren did particularly well. Mayor Pete was, I thought, reasonable, in the face of the onslaught he's been facing, given what's happened, the tragedies in South Bend.

Bernie, I think had a less-than-stellar evening. So I think that's how I see it. I don't think there's going to be dramatic movement. But I do believe that, for Joe Biden, this was a very bad night and, for Kamala and Elizabeth Warren, a much better night.

CAVUTO: I would love to get your thoughts. We discussed earlier in the show all of them raising their hands to provide health benefits to illegals.

Is that something they might regret down the road in a general election?

SCHOEN: I sure think it will be. I mean, any time you get in these lightning rounds, where you're raising your hand, committing yourself to things that probably, on reflection, you really would want to be either nuanced about or say no, I think that's bad.

And I think the real winner last night, Neil, was President Donald J. Trump, because nobody distinguished themselves. And I don't think anyone came out of it the clear star, the clear beneficiary.

CAVUTO: That's very interesting.

Doug Schoen, thank you very, very much. A safe trip back home.

SCHOEN: Neil, as always, thank you.

CAVUTO: All right. Thank you, my friend.

All right, in the meantime, a lot of Democrats are talking up tax hikes. Republicans might, in fact, be going just the other way again -- what the president wants to do and thinks he can after this.


CAVUTO: Well, double down, that's the White House view when it comes to this whole debate over the tax cuts and the wisdom of all that, and all the bashing they got from Democrats, apparently looking at maybe cutting the capital gains tax.

Hillary Vaughn is with us with more on that -- Hillary.


Well, capital gains could be next on the chopping block, as the White House figures out ways to work around congressional gridlock. Administration officials are looking at an executive order that would cut taxes by indexing capital gains to inflation. And they're on a tight deadline.

Reportedly, White House officials want the tax cut to move forward as soon as possible, so the benefits of it hit before the 2020 election.

But the vice president's chief of staff is tempering expectations, telling me today -- Marc Short saying that he supports indexing capital gains to inflation, but he says the conversations at the White House are still in the -- quote -- "infant stages." And he hasn't addressed this specifically with the president.

Indexing capital gains would slash tax bills for investors when they sell stock or real estate by adjusting the original purchase price, so no tax is paid on appreciation tied to inflation.

Critics of this idea say it mostly benefits the 1 percent and it could push investors to sell. A lot of those critics, Neil, work on Capitol Hill, but in 1992 some key Democrats voted in favor of cutting taxes on inflation -- 27 years ago, then Congressman Chuck Schumer said this on the House floor about capital gains:


REP. CHARLES SCHUMER, D-N.Y., SENATE MINORITY LEADER: If we really want to increase growth, there are proposals that we can do. I would be for indexing all capital gains and savings and borrowing.

And that indeed would shift the balance in this country away from too much consumption, too much borrowing, and towards more savings and investment over the long run.


VAUGHN: And Schumer was in good company. Nancy Pelosi and Bernie Sanders both voted for that tax package that had an amendment that would tie capital gains to inflation.

But it seems like, decades later, they have had a change of tune -- Neil.

CAVUTO: I guess they have.

All right, Hillary, thank you very much, Hillary Vaughn from the White House.

Well, age is getting to be a hot topic in this 2020 race, as you have heard by now. Do millennials think it is time for older candidates to pass the torch?

Our Gen Hexed is here, and they better be very careful -- after this.



REP. ERIC SWALWELL, D-CALIF., PRESIDENTIAL CANDIDATE: I was 6 years old when a presidential candidate came to the California Democratic Convention and said, it's time to pass the torch to a new generation of Americans.

That candidate was then Senator Joe Biden. Joe Biden was right when he said it was time the pass the torch to a new generation of Americans 32 years ago.


SWALWELL: He's still right today. If we're going to solve the issues of automation, pass the torch. If we're going to solve the issues of climate chaos, pass the torch.

If we're going to solve the issue of student loan debt, pass the torch.


CAVUTO: And right after that, the vice president said: Get off my lawn!


CAVUTO: So does age really mattered to millennials when it comes to a presidential candidate?

Let's ask some pretty young folks in their own right.

I'm talking about "Your World" audio technician bestselling author Dion Baia. We have got entrepreneur Michael Parrish DuDell and attorney Leeza Garber.

What do you think, Leeza? Age matter?

LEEZA GARBER, ATTORNEY: Of course age matters.

And I'm a millennial myself, but I can still quote Ronald Reagan. And I can say, as Thomas Jefferson told him, it's not your age that matters as a president, but your works.

And I think, for millennials, we need a candidate that's in our age range, that shows our values, reflects really what we care about. And it's not just, jokingly, marijuana. It's economic issues. It's environmental issues.

CAVUTO: Marijuana is top.

MICHAEL PARRISH DUDELL, ENTREPRENEUR: We got to marijuana very quickly.


CAVUTO: So he wasn't a kid when he was running.

GARBER: It's true. And that's why he made that point about, he knew Thomas Jefferson.

But, at the same time, millennials are the most diverse group of people in America. And we need to be reflected by that kind of candidate.

DION BAIA, FOX NEWS AUDIO TECHNICIAN: That clip reminded me of when Reagan said that too, when he was debating. He said, like, I won't let my candidates -- or my partner's age...

CAVUTO: Youth and inexperience.

BAIA: Yes, hold against him.

DUDELL: Yes. I think that Leeza got it right when you come down to values. Values really matters.

Age, I am actually not so sure it makes a big deal. If you look at 2016, more millennials voted for Bernie Sanders than Trump and Hillary combined.

CAVUTO: You read my mind.


CAVUTO: Just the other day, we had Ken Langone, Bernie Marcus here. The two of them combined are like 300 years old.

And yet I don't obsess over ratings, but young people with -- our most popular segment.

BAIA: You would think that in, like, 2008, they made such a big issue about McCain's age vs. Obama's age.

CAVUTO: Right.

BAIA: So you would think that, in the old days with the older generations being like squares, that you would think that the younger people would gravitate to somebody they can identify with who is younger, charismatic.

DUDELL: I think that the political climate has changed so much that right now what people crave is candor. They crave transparency and authenticity.

And if that's coming...


CAVUTO: And that's ageless.

DUDELL: That's ageless, hopefully.


BAIA: And it's only one presidential cycle. Four years ago, it was so different.

DUDELL: Exactly.

BAIA: Now we're in a whole new game here.

GARBER: Candor is ageless.

But, at the same time, I would say that there's such a huge age range of candidates right now that we're seeing from 37 to 77. I would like to see a little bit of a change-up in that.

CAVUTO: That's right, 37 to 77.

DUDELL: It's a big range.

CAVUTO: Well, all of you go.


CAVUTO: Escape from social media, a relief.

There's a new survey that shows 93 percent of kids who take a break from a smartphone or any of these devices because of summer camp or something like that, they originally resist, but, in the end, they just love it.

Could we benefit from a break? What do you think?

BAIA: Doesn't seem weird that -- I mean, this seems logical that -- I don't think kids at a certain age should be even on social media or having these devices.


CAVUTO: But what they're saying is, these kids use it the most, when forced to go without it a day, they did a little grumbling and all, but then they liked it.

BAIA: But if they're going to these summer camps, say, where these phones are banned, and then they're able to -- they have less anxiety, they go outside, they're playing.


CAVUTO: But that's the lesson. It applies to older people.


GARBER: And you don't grow horns, right, that little news bite that came out.

CAVUTO: Exactly. Exactly.

GARBER: But at the same time, millennials check their phones, I think the statistic is 150 times per day.

CAVUTO: How many times do you check?

DUDELL: Three times since this segment started.



CAVUTO: Well, I hope you're enjoying your last visit here.



DUDELL: It's a millennial issue.

But when we look at teenagers, it's younger than millennials. It's not just millennials.


BAIA: Why would you have a kid under 12 or 13 have a phone? Why aren't they outside?


CAVUTO: That there can be great wisdom and great reward for just cooling it.

BAIA: But how about the studies about them -- all the damage it does...


CAVUTO: You're focusing on them and not yourself. Could you do it?

Do you think -- would you take a lesson?


BAIA: I don't know.

DUDELL: The addiction is really crazy.

CAVUTO: Absolutely.

DUDELL: So I have a 1-year-old. She doesn't have screen time. When I read a book to her that has a picture of a screen, she swipes.


CAVUTO: Is that right?

GARBER: That is scary. It is scary.

DUDELL: And she has no screen access. She just sees me do it. And she does it as well.

BAIA: The scariest thing is when you go to a restaurant and you see no one's talking.

And then the kid who is like 15 months old is on the tablet ordering, trading stocks.


GARBER: You don't want to have that preprogrammed where you accept that really connected...


CAVUTO: I think there's a lesson for you all of you.

BAIA: All you youngsters.



GARBER: I haven't checked my phone yet this segment.

CAVUTO: Hello? It's been three minutes.

All right, robots might not be coming to take your job anytime soon, but you might have to answer to one. Artificial intelligence companies are looking to use software to actually try to make workers more effective.

So would you want a robo-boss?

GARBER: I would have loved a robo-boss at many of the law firms I worked at in the past.


GARBER: And I think it's not just you take out the potential creepiness of a boss or someone who's not objective and the inappropriate jokes.

CAVUTO: Like robo-boss-ism a little here? That is like HAL.


CAVUTO: You know how "2001" went.


GARBER: A robo-boss still is going to be more objective. It's a boss that can really look at your face and read your expressions and know how to respond to everybody individually.

CAVUTO: But it could misjudge you, right?

DUDELL: It totally could.

And I think that we have to think about how automation and A.I. will play a role in the future. I don't think it's going to be from a management perspective. I think it's going to be from an enhancing perspective of productivity, an enhancement of various things related to the workplace.

But we still need the human-to-human interaction. That goes back to the last story about the smartphone.

BAIA: I think it's going to drive people crazy just having that monkey on your back, someone like, you're not doing it right, Neil.



BAIA: Open the pod bay doors, Neil.

GARBER: But there's no way to get around it. The A.I. is out there for every device in our life. And it's definitely...


CAVUTO: No, you're right.

BAIA: I have to check my cell phone now.

DUDELL: My robot is going to check mine for me.


CAVUTO: Using a conventional landline phone.

DUDELL: Wow. Wow.

CAVUTO: Guys, I want to thank you all. Have a wonderful weekend, a tech- free weekend.


CAVUTO: We will be exploring these and other issues, including the latest on the Chinese developments, once the talks have been completed, tomorrow 10:00 a.m. live on "Cavuto Live."

Until then, here comes "The Five."

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