Kasich: Growing debt will become an economic calamity

This is a rush transcript from "Your World," October 15, 2019. This copy may not be in its final form and may be updated.

NEIL CAVUTO, ANCHOR: Well, ahead of the big Democratic debate tonight, did Hunter Biden just put his dad on the spot this morning?

(BEGIN VIDEO CLIP)

QUESTION: If your last name wasn't Biden, do you think you would have been asked to be on the board of Burisma?

HUNTER BIDEN, SON OF JOE BIDEN: I don't know. I don't know. Probably not.

I don't think that there's a lot of things that would have happened in my life that -- if my last name wasn't Biden.

(END VIDEO CLIP)

CAVUTO: Biden has indeed made a difference in his life.

Now just hours for him seeing his remarks today could spell trouble for dad tonight.

Welcome, everybody. I'm Neil Cavuto.

And the younger Biden says he might have used bad judgment in his dealings with Ukraine, but those dealings weren't bad or illegal. Still, he acknowledges appearances do count for a lot, which is why he vowed today that he would avoid all possible foreign business entanglements should his dad become president, that is, after all of this, if his dad becomes president.

Peter Doocy is at the scene of the big debate in Westerville, Ohio, as the 12 Democrats prepare to square off.

What are you hearing, Peter?

PETER DOOCY, CORRESPONDENT: Neil, what we're hearing from Hunter Biden is that he knows things look bad, but he didn't do anything bad in his overseas business dealings.

And he insists that President Trump is wrong to say that he got a $1.5 billion kickback from China.

(BEGIN VIDEO CLIP)

BIDEN: It's crazy. They feel like they have the license to go out and say whatever they want.

It feels to me like living in some kinds of "Alice in Wonderland," where you're up on the real world, and then you fall down the rabbit hole, and the president's the Cheshire Cat asking you questions about crazy things that don't have -- bear any resemblance to the reality of anything that has to do with me.

(END VIDEO CLIP)

DOOCY: The president caught part of that interview. And he tweeted about it this: "Hunter Biden was really bad on GMA. Now sleepy Joe has real problems. Reminds me of crooked Hillary and her 33,000 deleted e-mails. Not recoverable."

Joe Biden seems to disagree. And he said recently his son Hunter will join him on the campaign trail at some point. But that doesn't mean that his son plans to go into much more detail about his resume.

(BEGIN VIDEO CLIP)

BIDEN: Look, I'm a private citizen. One thing that I don't have to do is sit here and open my kimono as it relates to how much money I make or make -- or did or didn't. But it's all been reported.

(END VIDEO CLIP)

DOOCY: And with that, Hunter Biden is still giving us more detail about his overseas business dealings than his dad has in the last few weeks.

And both father and son insist they only ever find out what one another are doing through the press -- Neil.

CAVUTO: Hmm. That might have to change.

All right, Peter, thank you very much, Peter Doocy.

Well, Hunter Biden may be trying to remove potentially embarrassing issues for his father, but did he just reignite them?

We have got former Obama adviser, market maestro Robert Wolf here.

Robert, what do you think? I mean, the very fact that he has to explain the day of his father's big debate. You know this is going to come up tonight. Did it just confuse the picture?

ROBERT WOLF, FORMER ADVISER TO PRESIDENT OBAMA: I don't think it did. And I hope it doesn't come up tonight, because if I was a Democratic candidate, and I have about six minutes on stage tonight of my -- where I can speak, the last thing I would talk about is Hunter Biden, because half the candidates are at 3 percent or less that are on stage tonight.

They're trying to get in November.

CAVUTO: Well, they're the ones who might want to try to injure the lion, right?

WOLF: Those who have punched up are still at 3 percent.

CAVUTO: Yes.

WOLF: It just hasn't worked.

People want to vote for someone, for something. We need to hear about what people are talking about, wages and health care and foreign policy.

CAVUTO: You sound Republicans who say, going after the president, the same thing. They want to go back to those issues.

WOLF: Well, those are good issues to talk about, because that's what people vote on.

CAVUTO: So, does this thing in a way to neutralize the impeachment argument on the one thing with the president, your son, and then what kind of favors did he have when he was in Ukraine?

WOLF: I think they're non sequiturs.

I think the impeachment inquiry is a constitutional thing. I think the Hunter thing has been debunked god knows how many times.

CAVUTO: But it does raise concerns that almost cancel each other out.

I guess what I'm asking, do you see this going anywhere? Or does it end up being a focus on the issues that you want to hear?

WOLF: So, for me, I could care about the Hunter stuff zero, because, in my opinion, nor do I care about what Donald Trump's kids are doing right now either.

CAVUTO: Do you care about the impeachment thing that is over this Ukraine thing?

WOLF: I think that what I would like -- and we have talked about it -- is, I think the House take a vote, and this impeachment inquiry should be formal.

And I know they're saying it is formal, but I'd like to see a formal vote. That's been normal process. And even though they have the right to do this inquiry without it, I would like to see them do it.

I think, actually, that would make the U.S., all the citizens around the country feel a lot better about it, even though right now it's trending about 50 to 60 percent that people think there should be an impeachment inquiry.

I think, at the end of the day, people want more transparency.

CAVUTO: Do you think, though, the way this is going, that even -- let's say it's not illegal. I don't know enough about these matters of courting favors in a foreign country and working a name connection, just as I don't know with the president jawboning for maybe a favor to look into a potential opponent.

WOLF: Yes.

CAVUTO: Do you think, though, it's gotten to the point now where Biden risks being damaged goods, that none of them even have to say anything, although I think maybe Tulsi Gabbard might -- but a moderator probably would.

WOLF: Right.

CAVUTO: That, without saying anything, they want this to stick to him and they want an alternative to him?

WOLF: I don't think that the polls are showing that.

Biden has been flat to up.

CAVUTO: Yes.

WOLF: Warren's gains have been off Bernie Sanders.

And so, right now, in our party, we have the moderate lane, which is 30 to 40 percent. We have this populist lane, 30 to 40 percent. And then we have everyone deciding which way to go.

CAVUTO: Who is more electable to you right now?

The rap is that Joe Biden stands a better chance, because he's a little bit more moderating in his positions, less so Elizabeth Warren.

Do you agree with that?

WOLF: I totally agree.

I think a moderate is more electable, because we actually see every year it's all about where independents go. They either going to go -- because the swing states, we're down to about 10 swing states.

CAVUTO: Yes.

WOLF: And it's where independents are going to go. They're either going to go left or right.

And I think, when people are saying we should have Medicare for all, and have the possibility of taking 150 million-plus private insurance away, I don't think that's a winning strategy.

So I'm much more aligned to where the vice president is and Mayor Pete and some of the others that are much more of a moderate tone.

CAVUTO: Well, let me ask you about that.

There does seem to be maybe some angst in the party developing about who they're left with, even though it's still a crowded field. The leaders right now don't seemed to jazz them across the board. That could change, to your point.

But all of a sudden, they added a name in New Hampshire. That name was Michelle Obama, and, boom, she's out front, without ever even expressing the remotest interest...

(CROSSTALK)

WOLF: As you know, I was with the Obamas in August and spent a lot of time with them as part of the board of their foundation.

It would be great if Michelle Obama ran for all of us. She's not running. She's probably the most popular person in the country. It's not happening.

CAVUTO: So, when she hears poll numbers like this, what do you think?

WOLF: I don't think these poll numbers are actually depicting where we're going, because, in 2008, it was Obama, Edwards and Hillary.

CAVUTO: You're right.

WOLF: In 2016, it was Hillary and Bernie.

We're still at 10 candidates. This field is going to narrow.

(CROSSTALK)

CAVUTO: But what does that say about a party that, even with this crowded a field, that they still thirst or hunger for someone else?

WOLF: Well, listen, Michelle's a rock star. I don't blame them for having the excitement around her.

CAVUTO: But you know for a fact she's not interested?

WOLF: It's not happening.

CAVUTO: OK.

WOLF: Not happening.

CAVUTO: All right, I will take your word for it.

Robert Wolf, always good seeing you, my friend.

WOLF: Thanks for having me on.

CAVUTO: All right, in the meantime here, to Washington, and Rudy Giuliani telling FOX he will not, not, not comply with a subpoena, the very same day we learn that former National Security Adviser John Bolton had serious concerns about Giuliani's what he called Ukraine pressure campaign, likening the president's top lawyer to a live hand grenade.

To John Roberts on how the president is responding to all of this at the White House -- John.

JOHN ROBERTS, CHIEF WHITE HOUSE CORRESPONDENT: Neil, good afternoon to you.

There's nothing definitive, but there is a lot of chatter, I will tell you, around here at the White House among staffers, even the president, as to whether or not some of this information that's dribbled out over the last few days might have come from the former National Security Adviser John Bolton himself.

Now, we're not talking about the whistle-blower complaint, which was filed back on August the 12th, but other things that have sort of trickled out over the last little while.

Bolton was very much at odds, there's no question about that, with the president on several foreign policy issues, including Syria, Iran, Russia and North Korea.

The latest thing to dribble out was what former White House Russia adviser Fiona Hill told the congressional committees yesterday, that John Bolton once described Rudy Giuliani as a -- quote -- "hand grenade" on Ukraine who was going to blow everybody up.

I spoke with Giuliani about what Fiona Hill said yesterday this morning.

And he told me the following -- quote -- "I am disappointed in John. I'm not sure he realizes I received all of this evidence as part of my representation of the president. It was all part of the evidence and suppression of evidence involving Ukrainian collusion and the origin of some of the false information against the president."

Rudy Giuliani says that he still considers John Bolton to be a friend.

Now, to what you said at the top of all this, Neil, Giuliani did tell me a little more than an hour ago that he is not going to comply with a subpoena that he received from the three House committees that are conducting the impeachment inquiry.

He said, there's a number of reasons for it. A lot of them follow along the same lies as the reasons that the White House articulated to Nancy Pelosi and the chairmen of the three committees that letter from Pat Cipollone. It also goes to executive privilege. It also goes to attorney- client privilege.

So, unless and until Congress decides that it tries to enforce the subpoena, they are not going to get any cooperation from Giuliani -- Neil.

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

Well, maybe this, this could be the president's best defense against impeachment, a booming stock market, darn close to another record.

(COMMERCIAL BREAK)

CAVUTO: Well, John Bolton says Rudy Giuliani maybe a grenade, but investors say the market is the bomb.

Take a look at which had more of an edge today. Well, the bomb, the market up 237 points, despite lingering doubts about that trade deal and whether it will be formally signed off, and what's happening in Turkey. It is really back to basics here.

John Layfield says, markets move in the longer term on fundamentals, like earnings, and those earnings that are sort of petering out now as part of this quarterly ritual we go through, by and large, they have been better than expected. And, by and large, they have offered some nice guidance.

John Layfield, you like that, right?

JOHN LAYFIELD, CONTRIBUTOR: I like that very much.

I would love for this market to trade on fundamentals. The U.S. economy is still doing quite well. We have got a lot of geopolitical potential headwinds out there that look to be mitigated too a little bit with respect for this, with Brexit and with the trade war right now.

At least no more bad news is coming out right now, a little bit of positive news. But I think, more importantly, it's what happened in December is the same thing that happened today.

December, we had a pretty big pullback in the market, a lot of uncertainty. J.P. Morgan reported first. You know, general electric, as you know, used to be the bellwether for the economy.

CAVUTO: Right.

LAYFIELD: When it reported, it gave you a good barometer of how the economy's doing.

I think now that's J.P. Morgan. J.P. Morgan came out again this morning, good earnings, so the consumer is still strong. The concern lending business is still strong. And I think that's why the market is up today.

CAVUTO: John, there are a lot of things we don't know yet, for example, whether we will get past this phase one of this China deal.

The Chinese are raising hackles that, first, you got to remove those December tariffs that are going into effect. No movement on that.

Then the Turkey stuff, we don't know when that's ending. We just know it's accelerating. And we have upped the ante with sanctions, and Congress says even tougher sanctions. Then we have got this impeachment thing, which goes on and on and on.

And yet the market climbs and climbs and climbs.

LAYFIELD: Add to that Brexit, the Iran problem that's going on right now, Kashmir.

CAVUTO: Right.

LAYFIELD: We have a lot of issues that are going on in the world right now.

I think it also goes, portends to the -- the IMF just came out and said that the global GDP growth was going to be around 3 percent, which is the lowest that we have had since 2009, when we actually had a contraction in GDP.

So I think you're seeing a global slowdown right now. You see a lot of problems in the world. So you want to put your money where it's safe. And there's no yield to put your money.

So, to me, dividend stocks , especially, but stocks that are more -- a lot -- fragile assets that are dependent upon this trade war or geopolitical events to me are the place to put it. And the only place to do that right now is the United States.

CAVUTO: John, the secret weapon in all of this, I like to tell folks, is us, consumers. We have been very upbeat in our buying plans, very upbeat when you look at these holiday spending plans, almost apart from everything you hear about CEOs and CFOs that have scaled back their own spending initiatives.

What do you make of that?

LAYFIELD: I think the consumer is over 70 percent of GDP. And Americans love to spend money, whether it's in recessions or whether it's in times of growth. So it's very good for the American economy that the consumer leads it.

CAVUTO: Yes.

LAYFIELD: Consumer sentiment is very important in this.

That's why some of these headwinds put a little bit of a damper on it. Any time you have somebody running against an incumbent -- you saw this in 2008, where you're running basically against President Bush, who wasn't running, but that style, that incumbent of a Republican, and 2012, 2016, you're seeing a lot of money being spent on putting a damper on this economy, because you want to get somebody elected.

That folds into consumer sentiment as far as spending that goes on right now. We're going to see that a lot more going forward. But I think the consumer is very strong, which is great for our market.

CAVUTO: Thank you, my friend, John Layfield, on all of that.

And, by the way, as John was talking, just putting a dot on the I and a cross on the T, we're a little bit more than 300 points from the all-time highs we reached on the Dow back at the end of July.

Meanwhile, did the king just lose his crown?

After this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

LEBRON JAMES, LOS ANGELES LAKERS: I don't want to get into a word -- a word or sentence feud with Daryl, with Daryl Morey, but I believe he wasn't educated on the situation at hand. And he spoke.

And so many people could have been harmed, not only financially, but physically, emotionally, spiritually.

(END VIDEO CLIP)

CAVUTO: All right, be careful what you say.

That is NBA legend LeBron James' take on the controversy between the NBA and China. You know all about that. But it's boomeranged on him certainly in social media since.

We have got Mike Gunzelman here, Susan Li.

What's going on, Gunz, with the reaction he's getting?

MIKE GUNZELMAN, INTERNET RADIO HOST: All right.

So, essentially, congratulations to LeBron James, because he blew it. All right? Because here's what he did. He had an opportunity here. It's LeBron James. He is the biggest superstar. Now, he goes beyond basketball. He is a global superstar when it comes to brand and all that.

And he could have stood up for America here and American values and all that. And, instead, he didn't, for two reasons.

One, he didn't want to be inconvenienced. He said that, when the players went over there, they were bothered by the tweet, et cetera, and the response from China.

Also financially, because LeBron James reportedly has a $1 billion lifetime deal with Nike. And that is why he essentially sold out to the Chinese here.

CAVUTO: All right, what's the fallout here?

SUSAN LI, CORRESPONDENT: Well, the fallout is, in Hong Kong and the demonstrators, they're saying, you know who's misinformed and uneducated? King James is no longer ruling in Hong Kong.

CAVUTO: They actually do call him King James, don't they?

LI: Well, not tonight. I will tell you that, because the protests are...

CAVUTO: Well, he is King Gunz.

GUNZELMAN: Right.

CAVUTO: Yes. Yes.

(LAUGHTER)

LI: It's anti-LeBron tonight, because we have protesters actually burning LeBron shirts. They're wearing masks and mocking him in, what, 200-people protests, saying, LeBron, we don't need you. You need Chinese money, but we don't need you at this point.

However, I would say that, look, it is protecting about business interests. When you have 600 million NBA viewers, you're selling a lot of jerseys, a lot of shoes. He is one of the main endorsers for Nike, which makes about 20 percent of their sales in China.

He's protecting business interests.

CAVUTO: But, you know, it's quite different for some of these players, not all of them, who have no problem not going to the White House. That's their personal call and all, and saying things about the administration or just what -- conditions in the United States, but far rougher conditions, far rougher leaders in China, that's OK.

GUNZELMAN: Well, and that's the thing with the LeBron James, because he has protested here in America.

CAVUTO: Right.

GUNZELMAN: He wore the hoodie for Trayvon Martin. He was wearing the hooded sweatshirts on the basketball court. He's gone against the president, et cetera.

But it's those same freedoms that he's saying, oh, well, I'm allowed to do those here, but Daryl Morey wasn't allowed to tweet those, because it would offend the Chinese government.

And I think, yes, he's getting some backlash in Hong Kong. But also LeBron James' brand is now kind of tarnished here in America because he's not standing up for the American people.

CAVUTO: Well, but he will still sell a lot of stuff in China. Right?

LI: Right.

CAVUTO: In Hong Kong, he might be a little controversial, but in China, he's still a rock star, right?

LI: He's still king for now.

CAVUTO: For now.

And they continue to do business in China. Why didn't they call the bluff, the NBA, and just say, all right, well, if China is so upset about this, go to the European league, go to your China basketball...

GUNZELMAN: Well, they should have. They should have, yes.

LI: But there's only one NBA, right?

And LeBron is a four-time MVP.

CAVUTO: Well, that's a position of strength to say, hey.

LI: Yes.

GUNZELMAN: And that's where the real question comes in against commissioner Adam Silver and against the some of these players.

LeBron James had the opportunity. It's LeBron James, the biggest superstar pretty much in the globe. He could have stood up and made a stance right now, saying, no, guess what, I'm not going to play in China. I'm not going to do these games.

LI: I think the point...

(CROSSTALK)

GUNZELMAN: And they didn't. They blew it.

(CROSSTALK)

CAVUTO: I want you guys to listen to this.

Apparently, Nancy Pelosi addressed this issue and LeBron James just a few minutes ago. Take a look.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI, D-CALIF.: If America doesn't speak out for human rights in China because of commercial interests, then we lose all moral authority to speak out for human rights anyplace in the world.

(END VIDEO CLIP)

CAVUTO: All right, a FOX News Alert here, Gunz and Nancy Pelosi are on the same page.

(LAUGHTER)

GUNZELMAN: No, I don't...

CAVUTO: Wait a minute. It's time for my FOX News Alert.

GUNZELMAN: Wait. No.

(LAUGHTER)

LI: If she really wants to fight for human rights, she should take up the Hong Kong Democracy and Human Rights Act this week. That's a bipartisan bill that she now could put on the floor.

CAVUTO: But this is a bipartisan bashing the NBA has been getting on this, right?

GUNZELMAN: Yes. Right. Absolutely.

It doesn't matter if you're on the right or the left. I mean, hey, because I don't agree with anything on speaking -- with Nancy Pelosi.

CAVUTO: All right.

GUNZELMAN: But the thing is, it's selective outrage. That's what LeBron James exhibited.

CAVUTO: And the fallout in Hong Kong is palpable, right? They don't like the fact that this is going on.

LI: No.

Well, I mean, they obviously want people to understand what they're fighting for, which is that they are fighting against repression.

They want a future that is not under Chinese rule. And they need people like Pelosi and like LeBron...

CAVUTO: And King James isn't helping.

GUNZELMAN: And he is not helping.

LI: ... and Congress to help.

CAVUTO: A royal mess, as it were.

LI: That's right.

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

Meanwhile, sanctions are coming, so why is Turkey still bombing?

We're on that after this.

(COMMERCIAL BREAK)

CAVUTO: Well, she knew this day was coming.

Actress Felicity Huffman reporting to a California prison to start her sentence for her role in those college admissions scandals. She's going to be there for 14 days.

We're back in 60 seconds.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM, R-S.C.: I and think most members of Congress and hopefully the administration will hold Erdogan personally accountable for any atrocities committed in and around Kobani.

This would be an escalation that will destroy the relationship between the United States and Turkey. I will be introducing sanctions against Turkey Thursday.

And I do appreciate what the administration has done against Turkey through executive action, but more to follow.

(END VIDEO CLIP)

CAVUTO: Indeed more to follow.

Lindsey Graham saying these are sanctions on top of the president's proposed sanctions in response to Turkey's brutal invasion of Northern Syria that went way beyond what the president thought the Turks would do.

Senate Armed Services Committee member Thom Tillis with us now.

Senator, thank you for taking the time.

What do you think of these added sanctions Senator Graham wants?

SEN. THOM TILLIS, R-N.C.: We're still studying the provisions of Senator Graham's bill.

I spoke with him this morning. I also spoke with the president. And I'm convinced that the president's prepared to go as far as he can with current executive authority to hold Turkey accountable.

CAVUTO: Now, obviously, Lindsey Graham, Nancy Pelosi, others, for which this has bipartisan support, felt the president didn't go far enough.

Do you think the president's move alone went far enough?

TILLIS: Well, I think it's a step in the right direction.

But we're concerned with some of the potential atrocities. We're concerned with a possible escalation.

We have to keep in mind that Turkey is a NATO ally. And he's -- I think the president's trying to strike the balance. But I also think the president will move more on his own with the authority that he has. We just need to see whether or not the additional sanctions would be helpful.

And, if they are, I'm prepared to support it.

But, right now, I also appreciate what the president's doing. The discussion I had with him today makes me feel like there's more yet to come.

CAVUTO: You know, Senator, folks like you, a number of generals, retired and otherwise, had warned the president that this was the kind of thing that probably would have happened if he moved the way he did. And he did anyway.

So isn't this his creation?

TILLIS: Well, I think one of the things we have to keep in mind is, the president is mindful of our men and women being in harm's way.

He made a campaign promise back in 2016 that he was going to end these endless wars. And I think he's dealing with that struggle of, on the one hand, we don't want to create a vacuum. We don't want to give fertile ground for ISIS or the next terrorist organization to grow.

But, on the other hand, he really does want to bring down some of the dangerous situations we have our men and women in. It's a tough job. The president's got a lot of things that he has to consider.

But I also believe that the president will hold Turkey accountable. He will implement more sanctions. He will -- he will do what he needs to get to what he thought moving out of Syria would have produced.

If it -- if it's going in the direction that we see it today, I think you can count on the president for taking the proper action.

CAVUTO: But to your earlier point, when this all started, that the Turks counted on maybe this type of response, but not a military response, that they're not in shock and awe here.

TILLIS: Well, again, it's unfolding.

We're back here. I have got two classified briefings this week that I think I will be better briefed on the specific circumstances on the ground. We will hear from Department of Defense and those in the theater.

And then we can, based on that information, determine what, if anything more we need to do or what more the president needs to do to actually de- escalate what I think is a very dangerous situation right now.

CAVUTO: Senator, we have already heard Rudy Giuliani today on this impeachment probe going on in the House will not honor a subpoena for information.

The White House's view on this is, wait, I guess, for a formal inquiry. There's also issues of client-attorney privilege right now for Mr. Giuliani and the president.

But they're fighting it every step of the way. Do you think, if a inquiry vote is granted, and the House approves it, that the president, that all his surrogates, all the people around him should cooperate?

TILLIS: Well, Neil, I have got a real concern with just what's played out.

It reminds me -- I sit on the Judiciary Committee. It reminds me of the games that were played during the Brett Kavanaugh confirmation process.

The fact of the matter is, they haven't gone about it in the regular water or the proper way in the past. So when they start behaving in a way other than what I have seen up to this point, the steady drip of information, the -- just the manner in which they have conducted themselves in the House make me really suspect their real intent here.

And I think it's more political than anything else.

CAVUTO: All right. We will watch it closely.

Senator, thank you for taking the time.

TILLIS: Thank you, Neil.

CAVUTO: In the meantime, Elizabeth Warren says she has a plan for what ails us.

Well, John Kasich has actually got a book and 10 foolproof ways we can all get back on the same page.

And, fair and balanced, and to the former Republican governor's credit, he's ready to tick off both Republicans and Democrats -- after this.

(COMMERCIAL BREAK)

CAVUTO: All right, I have been looking forward to this.

Let's see. You have got Rudy Giuliani saying he won't comply with a congressional subpoena over Ukraine, the very same day that Hunter Biden takes to TV to say that he might have exercised bad judgment there, but there is nothing bad there.

Both parties seizing on each other's troubles and foibles to create more trouble and more foibles, but unfortunately do little else.

And that is what really bugs former Republican Ohio Governor John Kasich, who says both parties are failing us, so "It's Up to Us," the title of his latest book, to get everyone back on track.

Governor, very good to see you.

JOHN KASICH, R-OH, FORMER GOVERNOR: Thank you, Neil. It's always -- it's great to be with you again.

CAVUTO: Same here, like the good old days.

KASICH: You and I have been friends for a very long time.

CAVUTO: A long time.

I remember when you were the House Budget chief, when you were a young man.

(LAUGHTER)

(CROSSTALK)

KASICH: Neil, I try to tell people I'm a change agent. And they look at me. And I said, do you know what it took to get the federal budget balanced? And we ran surpluses for four years...

CAVUTO: I remember that vividly. I remember that vividly.

KASICH: ... and paid down debt.

And look at where we are today. Nobody says anything.

CAVUTO: Look where we are today, both parties spending like crazy.

You address it in references about where their priorities are. Now, obviously, it's not about getting together on that, in fact, not getting together on anything.

KASICH: Yes.

Neil, my feeling about that is, look, it's about our children. And it's not about numbers. It's never been about numbers. And we know that if we keep piling up the debt, the children, the grandchildren, they're going to have to pay it. And it will lead to an economic calamity at some point.

But, you know, people are kind of worried down there about themselves. And they're not so worried about taking heat. And it's just not a -- not a good system. That's why -- that's part of why I wrote this book.

CAVUTO: But this system where you talk about -- I know -- I joked that Elizabeth Warren has a plan.

You have got this book with these 10 ideas, but a lot of them involve just changing the way we treat each other and the way we kind of look at ourselves, but we can't get past that.

But I do notice that it sounds more like a Democrat wrote this book.

KASICH: Well, if we think that the power in America comes from the bottom up, and when we study the history of America, the people are the ones that make a difference.

Civil rights, bottom up. Rosa Parks, Martin Luther King, pastors, preachers, rabbis marching together, changing politicians.

CAVUTO: And you quote them. You quote Robert Kennedy. You quote Martin Luther King. You quote Maya Angelou. You quote Eleanor Roosevelt, not too many Republicans.

KASICH: Well, I could have quoted Ronald Reagan, because he was the guy that I cut my teeth in politics with. And I loved Ronald Reagan.

CAVUTO: But you didn't.

KASICH: Well, but you go through, you write something, you try to pick the ones that you...

(CROSSTALK)

CAVUTO: But it feeds that narrative some have of you, Governor...

KASICH: Yes.

CAVUTO: ... that, oh, he really...

KASICH: No.

CAVUTO: He doesn't like us, Republicans.

KASICH: Oh, well, look, I am a Republican.

CAVUTO: Yes.

KASICH: It was my vehicle, though, never my master.

And I always felt it was my job to kind of be an American. I don't -- I didn't dress in red. I kind of dressed in red, white and blue. And that's the way I think everybody in the country should.

And there's a profound difference between Republicans and Democrats. And I stay a Republican because I yearn for the old days, when it was about less government and bottom up.

Remember, I was never in a position of where you could kind of put a label on me, because I would work with whoever I needed to work with to achieve a goal.

CAVUTO: And you have to. And each side has to work...

KASICH: Yes.

CAVUTO: But now it's almost a sin to do that.

But how did it get that bad? I mean, is it the media's fault? Is it just the polarizing times, where I'm going to talk to fellow Democrats, I'm going to talk to fellow Republicans, but never the two in between?

Ronald Reagan was very effective at that.

(CROSSTALK)

KASICH: Yes.

I remember when people -- I began -- saw the beginning of it was when I was sharing the Budget Committee.

CAVUTO: Right.

KASICH: And the Republicans would meet and say, we're going to shut the Democrats up after a couple hours.

I said, no, we're not. We're not going to shut them up. My mother taught me about a pressure cooker. You blow the lid off the thing. Let them talk. Give them something to win. Give them -- give them something to win. And they would look at me like I was crazy.

And then, when it worked out, they were like, yes, that's a good formula.

CAVUTO: Remember, Ronald Reagan would say of Tip O'Neill, never rub it in his face. Give him something to take back.

KASICH: Correct.

CAVUTO: Now it's, rub it in the other guy's face.

KASICH: Yes. And I think it's -- but, you know, Neil, the other problem is, in your district, whether -- well, or in your state, if you're a senator or congressman, you fear those loud voices that actually don't represent a majority.

I think most people want to see them work together. Most people want to find common purpose, because, as you know, a house divided against itself will not stand. And right now, America is a house divided against itself.

And we need to bring it together.

CAVUTO: Well, you think the president -- you don't name him in your book. You refer obliquely to him, but the tone he sets, you don't like.

KASICH: Oh, it's terrible, I mean, division, attacking.

I was with a guy that -- well, in fact, the principal of the school where my daughters went. And he said, you know, people now bully. And it's kind of accepted. And...

CAVUTO: You blame him for that?

KASICH: Oh, I blame Trump for a lot of that, yes.

CAVUTO: Really?

KASICH: Yes.

But I think the hard left has...

(CROSSTALK)

KASICH: Look, Ellen...

CAVUTO: Are you going to support -- are you going to support him in the next election?

KASICH: No, I'm not because of the division.

CAVUTO: Who are you?

KASICH: I have no idea.

Maybe I will write you in, because I can't write McCain in this time.

CAVUTO: Well, do you like any of the ones challenging him for the nomination?

KASICH: Oh, I'm not -- I'm -- no, I'm not going to go -- they're fine people, but...

CAVUTO: Are you going to challenge him for the nomination?

KASICH: Very unlikely, but nothing is determined.

CAVUTO: Oh, you didn't rule it out.

KASICH: No, I don't rule anything out.

If I -- but I'm not going to do it if I couldn't win. But I'm also -- listen...

(CROSSTALK)

CAVUTO: Here's why I say, because you tease it in your book.

KASICH: Yes.

CAVUTO: You say: "Looking back on my own career and seeing where I am now, I like to think I'm fulfilled. Some days, I feel this way in my bones. Others, I'm not so sure."

KASICH: Yes.

I have to figure out, frankly, what is the opportunity and that little voice, which comes from our creator, what I might think I'm supposed to do.

CAVUTO: Well, the little voice also would say, you don't have a chance.

KASICH: But, look -- well, no, I'm not worried about that.

CAVUTO: Yes.

KASICH: It's about whether it can happen in my own mind.

Look, when I say that Trump was a divider, here, I see Ellen down at a football game with George Bush.

CAVUTO: Yes.

KASICH: And the hard left savaging her because she's in a -- at a football game with George Bush.

I mean, that's -- that's unacceptable on both sides, the division, the attacks, the personal things.

And I wrote this book, Neil, because -- and there's no politics in it. I mean, you read it. You read it carefully. I read it, because...

CAVUTO: There's kind of politics in it.

KASICH: I don't think much.

CAVUTO: I didn't like what you said, if you get FOX News, you should look at CNN, or vice versa.

KASICH: Yes.

CAVUTO: If you read The Wall Street Journal, read The New York Times.

That's fine.

KASICH: Well, but what I want people to do, Neil...

(LAUGHTER)

CAVUTO: Right.

KASICH: ... is, I want people to get out of their silos.

CAVUTO: OK.

KASICH: And I want people to realize they're made special, and they have gifts.

And that's what contributes to a stronger culture and a better world, is when people can realize they can do something bigger than themselves and do something good, whether it's a big thing, where you can have a global effect, like this young girl Greta Thunberg, who did this, right?

CAVUTO: Right, 16-year-old girl.

KASICH: Right?

I mean, she started at 15.

CAVUTO: Amazing.

KASICH: Amazing.

Or whether it's Albert Lexie, the shoeshine guy who donated over $200,000 to mothers and fathers that couldn't pay their kid's bill at the children's hospital.

It's about all of us. And a lot of people think -- oh, they wring their hands about this: I want Trump to win or I don't want him to win.

It -- you know what? Fine. You can care about that. But what are you doing where you live? Because this country is strong when we're together and people are looking up, when they see the sun coming up, not the sun going down.

CAVUTO: But that takes a more moderate approach to handle politics, right, where a moderate is going to look to the other side.

Sometimes, they're called in this day and age globalists. And, no, no, no, we will not -- we will not have those old-fashioned deal-making sides doing that.

But it's the only way to govern.

(CROSSTALK)

KASICH: But, Neil, you know, when I became governor, and with my growing faith, and becoming governor, I had to take care of the folks that lived in my state.

CAVUTO: Right.

KASICH: So I expanded Medicaid.

Why? I didn't want people being in -- who are mentally ill or really drug- addicted living under a bridge or being in jail.

CAVUTO: You and Governor Christie at the time, right?

KASICH: Pardon?

CAVUTO: You and Governor Christie at the time.

KASICH: Well, I -- yes.

CAVUTO: You went a little further, right.

KASICH: Well, no, we did that. And I wanted people to get helped on that.

But I also felt this. I cut income taxes, but I created an earned income tax credit. In other words, I wanted everyone to feel included. And when I ran for reelection, I ran on the basis of the things I was doing, including expanding Medicaid.

And I won one of the greatest victories, political victories, in the history of the state.

So I have a definition of what...

CAVUTO: Twice. Twice.

KASICH: Yes -- what conservatism is.

And my -- I don't see my party kind of representing that now.

(CROSSTALK)

CAVUTO: All right, now, is that the president's fault, or is that just the evolution of a party?

KASICH: Could be.

CAVUTO: He beat the best and the brightest, including you.

KASICH: Yes.

CAVUTO: What did he get that maybe you didn't?

KASICH: I don't know, Neil, because I don't believe in a party that says we should have tariffs on everybody.

I don't believe in a party that doesn't care about debt. I don't believe in a party that is not interested in immigration. I think it's a vital part of our country.

These are things -- now, I -- what I do like...

CAVUTO: Well, they're not interested in immigration. They're just trying to crack down on illegals.

(CROSSTALK)

KASICH: Oh, I think there's been -- I think there's been way beyond just - - look, nobody is for illegals coming in.

CAVUTO: Right.

KASICH: But there are also people who are trying to come in here seeking asylum who are in deep trouble. And there's also been an effort in this administration to reduce the overall amount of immigration.

The other thing I'm concerned about is, the reason why you don't have a job is somebody from somewhere else came in and took it.

That is not building unity.

CAVUTO: Well, then what do you think of the Elizabeth Warren approach...

KASICH: Oh.

CAVUTO: ... that you don't have a job or you're not doing as well because the rich are taking it all?

KASICH: I don't like that. I don't like it. And I don't like the fact...

CAVUTO: And she cites the president's tax cuts as beneficial to the well- to-do.

KASICH: Yes.

CAVUTO: What do you think of that?

KASICH: Well, I -- frankly, I think the tax bill could have been better. I think some of it could have been paid for.

But what I liked about the tax bill was the deregulation or that whole economic plan of deregulation.

CAVUTO: So, that part, you think the president did OK?

KASICH: Yes, I thought he did well on that.

Now, Elizabeth Warren, when she says she wants to take -- somebody is working out here at a company, and she wants to take their health insurance away, and give them some government program, are you kidding me? You can't win on that.

And it doesn't even make any sense.

CAVUTO: Who would you be left for you? You wouldn't skip out and not vote for anyone?

KASICH: No.

I -- again, you could be my guy. I wrote in McCain the last time.

CAVUTO: I see you dodging this. Yes.

(CROSSTALK)

KASICH: I don't know what's going to happen, Neil. It's -- but, look...

CAVUTO: Yes.

But you haven't given up on higher office yourself.

Certainly, if it's not this year, down the road?

KASICH: You know, the real question is, can somebody not -- wait a minute.

CAVUTO: Because this isn't your party anymore.

KASICH: Can somebody -- I can help shape it and reshape it.

But can somebody who doesn't hold public office still have a voice? And I'm going to have a voice, I hope, because it's the 21st century, and we have a new way of communicating.

But, look, I want people to look at this book, because I think it's an antidote. It's a handbook for how people can be impactful. It is a handbook for how people can make a difference.

And it's for the young, it's for the middle-aged, and it's for our seniors.

CAVUTO: No, it's a very good book.

And, Governor, you know, one of the things I like about your approach is, you're an equal opportunity basher here. You go...

KASICH: Or supporter.

CAVUTO: ... after Republicans and Democrats.

Well, maybe.

But you say of Democrats on this whole push at impeachment -- and this was something you brought up, I think recently in a Washington Post interview - - "The Democrats have to be careful not to be blinded by hatred."

KASICH: Yes.

CAVUTO: Now, you voted in the House for Bill Clinton's impeachment.

KASICH: Very hard for me to do.

CAVUTO: Were you blinded by hatred?

KASICH: No, that was -- I remember it was a Saturday morning drinking coffee with a very close friend of mine, just walking through it all. And it was excruciatingly difficult.

And I remember seeing Bill Clinton and his wife walking up, getting ready to deliver the State of the Union. And I saw them. And I said, "I'm just very sorry what's happening to you."

I'm not trying to paint myself...

CAVUTO: Did he -- what did he say?

KASICH: Well, I think they were kind of shocked and stunned that I would have done that or said that, because they were under so much fire.

But, no, that was a very tough decision.

And what I...

CAVUTO: But, you know, they're thinking it all over again for this president.

KASICH: Oh, I -- listen, you have to be very careful. And that's why I...

CAVUTO: Are these serious, impeachable grounds to you?

KASICH: Well, not at this point.

I have said that we should have an inquiry, but I'd like to see a quid pro quo in order to determine whether I felt he should be removed.

And I have argued with people about it, but let's have an inquiry, and let's vote it in the House, but also...

CAVUTO: Would you look into Hunter Biden and his relationship with his dad at the time?

KASICH: I think that's a reach, Neil.

CAVUTO: So you don't think there's anything there?

KASICH: I haven't really studied it, but I think that's a reach.

CAVUTO: Should it come up in the debate here?

KASICH: Look, if I was there, and they started attacking him, I'd probably be there to defend him. I think Cory Booker did that.

And, look, fine. Anything's fair play.

But what I'm concerned about, and I think you're concerned about -- and you should be -- is that, when the president of the United States calls a leader of another country and tries to dig up dirt on his political opponent, that's just flat-out wrong. And I don't know why people won't say it.

As to whether that means he should be removed from office is a whole 'nother question.

CAVUTO: Do you think Republicans are just afraid of him?

KASICH: Yes, they're afraid of him, and not just afraid of him.

They're afraid of the base that supports him. And they are...

CAVUTO: The base going back on them?

KASICH: Yes.

And, look, at the same time, why are the Democrats not voting for an impeachment inquiry in the House? I mean, is that political? I suspect it is.

What's fair is fair. Let the facts come out. Let's have it be an open process, and get a decision, and move on, and start thinking about some of the things that affect our families.

One of them, Neil, is this health care business. I mean, it costs so much. And even when you have your health care, you think about the co-payments and the deductibles. How do families do it? This whole system has got to be reviewed.

And turning it over the government isn't going to fix it.

CAVUTO: All right.

KASICH: There has to be creative ways to do it, some of which we did in Ohio.

CAVUTO: Good luck coming out of your shell. It seems to be working.

John Kasich.

KASICH: Look, I hope they will look at this book. OK?

CAVUTO: It's a very good book. It's very uplifting. It shows you the possibilities, if we all just get past the name-calling.

But, of course, I'm Italian. That goes with the turf.

KASICH: But, Neil, you know, we're all made -- every human being is made in the image of God.

CAVUTO: All right.

KASICH: So, we have got to respect them, whether we are agree with them or like...

CAVUTO: Everyone? Everyone?

KASICH: Everyone.

CAVUTO: Well, let me look into that.

KASICH: Yes.

(LAUGHTER)

CAVUTO: Governor Kasich, very much -- I do urge you, look at that book.

We will have more after this.

(CROSSTALK)

KASICH: We're out of time.

(LAUGHTER)

(COMMERCIAL BREAK)

CAVUTO: All right, so hours from the big debate, two really big questions: Do Joe Biden's rivals dare bring up Hunter Biden, and does Elizabeth Warren are take down heart attack survivor Bernie Sanders?

Those are the two big ones, many others.

FOX News' Ellison Barber in the middle of it all in Ohio, what we can expect later tonight.

Hey, Ellison.

ELLISON BARBER, CORRESPONDENT: Hey, Neil.

So there are 12 candidates on one stage tonight. The candidates leading the group, they're going to be standing in the middle of the stage, Sanders, Biden and Warren. Those with lower polling numbers will be further out.

All eyes, of course, will be on former Vice President Joe Biden. There will surely be questions about impeachment and his son Hunter Biden, who resigned from the board of a Chinese company this weekend.

FOX News is told the former vice president plans to emphasize the need to keep the focus on what he believes is President Trump's unprecedented abuse of power.

The RealClearPolitics average has Biden leading the field, but we have seen Senator Warren slide to the top in a number of recent polls.

In recent days, Senator Bernie Sanders seemed to try and separate himself from his longtime friend, saying that Warren is a capitalist and he is not.

Senator Sanders is taking the stage after suffering a heart attack roughly two weeks ago. In addition to impeachment and all that surrounds it, other topics likely to come up tonight include health care, the situation involving the Turks and the Kurds in Northern Syria, as well as immigration.

This morning, former Housing Secretary Julian Castro visited an undocumented immigrant who has been living in sanctuary for two years in a church in Columbus not far from here -- Neil.

CAVUTO: All right, Ellison, thank you very much, Ellison Barber in the middle of all that in Ohio, the big debate, of course, among those one dozen candidates.

Keep in mind, who would raise Hunter Biden as an issue, whether it's the moderators or one of the candidates who might want to seize on this and see how much capital they can gain from it?

Tulsi Gabbard comes to mind. There are others as well.

We have a lot more coming up, including the latest on the markets today and why they did what they did today, what that could be portending for tomorrow.

(COMMERCIAL BREAK)

CAVUTO: All right, up about 237 points today.

I left out the possibility not only that there was optimism about what's going on in this country, but optimism what's going on in Great Britain. I don't know if you heard, but a Brexit deal that looked dead, gone, not going to happen, no way, well, apparently, way.

At the last second, it looks like Boris Johnson might have cobbled together a deal that would get European approval, would get approval in Parliament, and save the day for Britain to go ahead and bolt from the European Union.

Then, of course, the details and what a Britain would look like and what that new Europe would look like.

We're all over that on FOX Business tomorrow, the new look, in fact, the rest of my torso.

Content and Programming Copyright 2019 Fox News Network, LLC. ALL RIGHTS RESERVED. Copyright 2019 ASC Services II Media, LLC. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of ASC Services II Media, LLC. You may not alter or remove any trademark, copyright or other notice from copies of the content.