Leon Panetta on Biden's lack bipartisanship: It takes two to tango

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Leon Panetta on Biden's lack bipartisanship: It takes two to tango

Former Clinton chief of staff says Democrats and Republicans have to get back to governing on 'Your World'

This is a rush transcript from "Your World," April 28, 2021. This copy may not be in its final form and may be updated.

NEIL CAVUTO, FOX NEWS ANCHOR: All eyes tonight on the president of the United States, as Joe Biden outlines his latest spending initiative. It's a $1.8 trillion plan to help America's kids and families, we're told.

But that is on top of spending that has already been building under this president, including a $2.25 trillion infrastructure package, what could amount to, when all is said and done, about $2 trillion already spent on COVID relief.

We're going to get into the details of all of that, fair and balanced, with John Barrasso, the Republican senator from Wyoming, and Leon Panetta, Bill Clinton's chief of staff, and whether we are building up a lot of debt very, very quickly.

Now, of course, back in the -- in the Bill Clinton years, we started seeing those deficits being pared down and turned into surpluses. This president is very confident that a lot of these initiatives will lead to economic booms that might have the same effect. We shall see.

Right now, we're going to go to Peter Doocy at the White House with what we can expect in a bit of a different setting tonight, right?

PETER DOOCY, FOX NEWS WHITE HOUSE CORRESPONDENT: Yes, Neil, it'll be socially distanced this evening.

And we can expect to see President Biden try to appeal to American families who might be watching and might not normally pay attention to what happens here by offering them $1.8 trillion in new taxpayer-funded stuff.

So, we have got a graphic to show you how it breaks down. It's a trillion dollars in investments, then $800 billion in tax cuts for American families, $200 billion for universal preschool, $109 billion for two years of free community college, and then $225 billion for free childcare.

And officials here insist this is only going to get paid for with new taxes on the ultra-wealthy.

(BEGIN VIDEO CLIP)

KATE BEDINGFIELD, WHITE HOUSE COMMUNICATIONS DIRECTOR: What you will hear the president say tonight is that we really have a once-in-a-generation opportunity right now to seize the moment to make these investments to really not only create jobs, but create jobs for the long haul.

These are really critical investments. And the president believes we have an opportunity right now to come together and to make these investments.

(END VIDEO CLIP)

DOOCY: A small group of network anchors met with President Biden privately today, and he made this very revealing comment, according to a transcript.

He said: "I mean, we talk about, you know, can you unite the parties? Well, I united the Democratic Party, and no one thought it could happen, and pretty damn quickly."

And that follows Mitch McConnell, the Republican leader in the Senate, saying he doesn't think that President Biden has been reaching out quite enough.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY): The Biden administration seems to have given up on selling actual unity, in favor of catnip for their liberal base covered with a hefty coat of false advertising.

(END VIDEO CLIP)

DOOCY: So, the final preps are under way here at the White House. We have not seen the president yet today. We do not expect to see him for another four-and-a-half-hours, when he walks out of the house to the car to go up the street to the Hill -- Neil.

CAVUTO: Peter Doocy at the White House, thank you very much.

Now to Chad Pergram, where the president will be denied on Capitol Hill.

It's going to be a different environment in this post-COVID world, not as many seats occupied. Could you explain?

CHAD PERGRAM, FOX NEWS CONGRESSIONAL CORRESPONDENT: That's right, Neil.

The president's annual speech to Congress is the most visually important event in American politics. But this will look very different, only 200 people allowed in the House chamber. That's a fraction of the 1,600 they usually have.

(BEGIN VIDEO CLIP)

DR. ROSS BAKER, RUTGERS UNIVERSITY: I think audience response is really important. And when you have a limited audience, the people spaced very far apart, it creates a completely different atmosphere in the room.

(END VIDEO CLIP)

PERGRAM: With so few members, this may be the biggest change since Lyndon Johnson shifted his address to prime time in 1964.

The January riot lingers in the minds of security officials.

(BEGIN VIDEO CLIP)

FRANK LARKIN, FORMER U.S. SENATE SERGEANT AT ARMS: Access control is its number one. You have to make sure that whoever gets inside that chamber is supposed to be there.

(END VIDEO CLIP)

PERGRAM: GOP South Carolina Senator Tim Scott delivers the response. Watch to see if he talks about police reform -- Neil.

CAVUTO: Chad Pergram, thank you very much.

To Russell Vought right now, the former Office of Management and Budget director under President Trump.

Russell, good to see you.

A lot of spending here and a lot of tax hikes, the irony being that, even though a record number and amount of tax hikes, they don't come close to footing the entire $6.33 trillion bill, between the Rescue Plan, the Jobs Plan, the Families Plan, lots of plans.

Even with those tax hikes, not nearly enough to cover them all. What do you make of that?

RUSSELL VOUGHT, FORMER OMB DIRECTOR: It's insane, Neil.

And I think the reality is that those are just on -- what's on paper. But if you look at the Obama administration, they had about $650 billion in tax revenue increases on paper. That led to $3 trillion in revenue lost, because the economy tanked because of their policy agenda.

This administration is basically the next one from the Biden administration -- from the Obama administration. And so I think all of these job-killing taxes are going to really cause us to have not just an inability to pay for the spending, but a really damaging economy.

CAVUTO: Well, you're not saying the economy tanked under Barack Obama, right?

I mean, after the meltdown, it actually went up. It picked up considerably. It could have picked up a lot more. You're right. It was tepid by recovery standards, but it didn't tank. It went the other way, right? The markets and everything else went with it, right?

VOUGHT: Well, yes, I mean, we had slow growth.

And when you saw President Trump come into office, we were now starting to talk about 3 percent growth once again. And I loved yesterday. You had Ro Khanna on, who is now talking about we were going to grow out of this economic situation that we find ourselves.

But we got lambasted for suggesting that we could be anywhere near 3 percent growth. And now they're talking about growing ourselves out of this, even though they're -- they're declaring war on energy, regulating the economy and raising taxes.

CAVUTO: Fair enough, Russell.

It is interesting that the markets, today notwithstanding, have been continuing their winning ways under this president. So either they don't have the same fear as you do about all of this spending, or they're dismissing it and saying it's going to be very stimulative to the economy, the economic numbers look very strong, retail sales numbers look very strong, that that is the wind at the president's backs tonight.

What do you think of that?

VOUGHT: I think that's right.

I think they're still trying to ride the wave and the momentum. I think they're following the Fed chairman very closely and watching his press conference today. And so even many of the critics of the Fed currently are saying, let's ride the momentum for a lot longer.

And, at some point, things will change. But we're not quite there yet. And I think that's where the market is as of right now.

CAVUTO: With all of this spending, it can't help but goose the economy. We have seen what happens when you give people $1,400 checks. They spend them, with similar type reaction when you were in the White House with the president.

I'm wondering if that is sending a signal to Democrats that, the more they do this, the better the response, in other words, that a majority of Americans like this spending, I guess, as long as they don't have to pay for it. But what do you think?

VOUGHT: I think, once we went through the pandemic and the economic shock, we made the staggering numbers of trillions something that was relatively normal.

And now that -- that was -- we were dealing with a once-in-a-generation situation, and we had to throw a bazooka at it. And I think now we're faced with the reality where the Biden administration can just put forward proposal after proposal that rounds to $2 trillion, and it's completely normal.

But I think the American people are going to be on to it. I don't think they want a transformed federal government that takes over all of their lives and takes on the responsibility to have universal pre-K and continue to dump money into education, when we have already have sizable education spending in this country.

So I do think it will lead to an awakening of the American people. But I think that we're seeing an ongoing legislating and proposing in the pandemic era where trillion dollars is normal.

CAVUTO: Well, of course, you guys were no strangers to that, right? I mean, maybe for perfectly valid reasons at the time, Russell, but, of course, you guys built up deficits and debt with abandon as well, right?

VOUGHT: Well, again, you have heard my defense before.

And we were dealing with a pandemic and an economic shock that we were going to throw everything we could at it, but we were proposing trillion dollars in savings that Congress did not take us up on. And, unfortunately, we have lost that opportunity to have that conversation with Congress.

CAVUTO: But you were building -- that spending was building up -- but that spending was building up prior to the pandemic.

I mean, we had a very good economy and, prior to that, it was a record low unemployment economy, but deficits and debt were building fast and furious long before COVID came along, right?

VOUGHT: Neil, we were the last president to put forward a balanced budget, even over 15 years. We're proud of that budget. We would welcome a bidding war on balancing the budget at this point.

And, unfortunately, that's not where the Biden administration is headed.

CAVUTO: All right, Russell Vought, thank you very, very much.

I want to explore that in a little bit more detail with John Barrasso, the Wyoming Republican senator.

Senator, I have a pretty good idea where you are on all of this spending, because, even through the Trump years, you were worried about deficits building and debt building. And it's still building.

But a majority of Americans favor and like what they're seeing here, I'm not saying by overwhelming margins. But are you worried that, whatever your own doubts, it does seem to be resonating with the American people? They like it, maybe, as I was just raising with the former OMB director, because they don't have to pay for it.

What do you think?

SEN. JOHN BARRASSO (R-WY): Well, ultimately, people are going to have to pay for this, Neil.

As you know, Joe Biden is becoming the $6 trillion man, as you just showed on the screen. And he doesn't have any of the superpowers that he would like to have. His powers are in basically destroying jobs and I believe damaging the economy.

The impact of the average family in this country, it's $46,000 for every household. I mean, that is a heavy weight on the economy. We're talking about more money in six months of Joe Biden's presidency than all that we spent to win World War II.

So, we're talking about a massive amount of red ink.

CAVUTO: So, I know you're against all the tax increases that are part of this, largely leveled at the rich, but you have also said that it wouldn't end with the rich. Could you explain?

BARRASSO: Well, I think that what we're seeing, with this amount of red ink, that there's going to have to be tax increases if Joe Biden is going to be able to deal with all of this.

You're talking about taxes that everyone is going to have to pay, not just some higher income or businesses. Look, when you tax businesses, that ricochets back on the people that live and spend money in our country.

So, they're going to raise taxes on individuals, on businesses, on investments, on -- on death, on inheritance, all of those things. Everyone will ultimately pay. And that will hurt the economy.

What we know is that, when we cut taxes in 2017, more people worked, higher wages, lower unemployment, the things that you would want in a growing economy. When you raise taxes, it goes the other way.

So, I have a lot of concerns about what I'm expecting to hear tonight, which is Joe Biden giving away the store.

CAVUTO: Do you have any concerns right now, Senator, that these initiatives -- like infrastructure, for example, Republicans have come up with a plan that I think is about a quarter to a third of what the president's is. But it would not involve tax increases.

I believe user fees, tolls, that sort of thing. How likely is that? Is that the best -- when Democrats ask, is that the best Republicans are countering, is that the best alternative that Republicans are coming up with to challenge what the president wants to do on infrastructure?

BARRASSO: Well, that's core infrastructure. It's roads and bridges. It's the sorts of things that most Americans think of when they think of infrastructure.

Remember, the president's proposal, which is basically act two of the spending -- act one was the so-called coronavirus relief, which -- where very little went for health care. Act two is his so-called infrastructure, where less than 6 percent of the money goes for roads and bridges.

And then act three is what we're going to hear tonight, I believe, in terms of free everything, free college, free childcare, you name it. That's so far the three-act play for Joe Biden.

With the infrastructure proposal that we have made -- and I was one of the for proposing that at the news conference the other day -- it's core infrastructure. It will help with roads, bridges, ports, airports, waterways.

CAVUTO: All right.

BARRASSO: The Biden plan has more money for electric cars in it than it does for all of those key issues that the American people need, want, and we can afford to do right now.

CAVUTO: Senator Barrasso, thank you very much. Good catching up with you.

BARRASSO: Great to be with you.

CAVUTO: John Barrasso of Wyoming.

All right, fair and balanced now, a popular Democrat who says, yes, you can, with good and proper and focused spending, create a boom in the economy. The guy who was at Bill Clinton's side when just that happened.

Leon Panetta is next.

(COMMERCIAL BREAK)

CAVUTO: All right, this is earnings season, and a lot of the big tech names, including Facebook, out with earnings that handily beat estimates. So did revenue.

Without getting into the weeds here, the stock is up about 5 percent in after-hours trading, and this despite all the pile-on by politicians of both parties right now to go after Facebook. But it is a juggernaut and continues to be even more of one.

About 10, 15 minutes from now, we're going to be getting numbers of the same quarter from Apple. We will keep you posted on those.

But that is the backdrop for my next guest. Leon Panetta is the former White House chief of staff under Bill Clinton. And, if you think about it, that tech boom, the Internet boom, everything associated with it, it started gaining traction in the Clinton years.

And that approach, along with zeroing in on spending, government spending, helped get deficits turning into surpluses, and for the first time in American history, the debt slowly, but surely and steadily wiped away.

That was then. A number of Democrats who agreed with President Biden's approach are saying the same thing will happen now.

Leon Panetta kind enough to join us.

Leon, good to see you.

When you look at these tech numbers, and you think of that boom that really -- the technology boom that started in the '90s and into the early 2000s, do you think that your colleagues in the Democratic Party have it right, that a boom, whether it's done by government spending here, which might be a leap, will be able to wipe out a lot of these deficits, maybe take a stab at the debt?

What do you think of that?

LEON PANETTA, FORMER U.S. SECRETARY OF DEFENSE: Look, I think, whether it's the Republican saying that, if you -- if you have enough tax cuts, that will deal with the debt, or the Democrats saying, if you spend an awful lot, that will deal with the debt, frankly, both parties are not being responsible when it comes to dealing with the budget.

The reason Bill Clinton was able to do what he did was because we put together a very tough budget that had about $500 billion in deficit reduction, $250 billion in spending savings, $250 billion in revenues.

And it complemented actually what George Bush did with his budget. And for that reason, those two budgets, we were able to ultimately balance the federal budget and create a surplus for this country.

That approach to budgeting has gone to hell. And the budget process itself has been broken for the last number of administrations. And unless we begin to come back to some degree of discipline with the budget that looks at both spending and revenues together--

CAVUTO: Right.

PANETTA: -- we're going to continue to raise the debt, as we are now.

CAVUTO: No, I think you're right about that, Leon, which in your case, you should run the other way, if I'm agreeing with you.

But I did -- I did wonder about how Bill Clinton reached across the aisle, worked with Newt Gingrich, welfare to work, all of these memorable bipartisan projects. There's nothing bipartisan about what's going on now.

And I guess the hope is that all of this trillions upon trillions of spending, something's got to stick and will create a boom. But can government spending alone create that kind of a boom?

PANETTA: Look, Neil, I don't -- Joe Biden has presented a vision.

And, obviously, look, he's getting some high points from the American people for the way he's conducting his presidency. I understand that. And he's also done some great things with regards to dealing with the pandemic, as well as trying to get the economy going again.

But every president, every president is going to ultimately be judged not on vision, so much as what he's able to get done--

CAVUTO: Right.

PANETTA: -- and whether or not he carries the support of the American people.

So, I know there's a lot of panic and politics around this whole issue of his proposals. But, ultimately, if he's going to get anything done, particularly in the Senate, where the numbers are as close as they are, he is going to have to compromise. He's going to have to develop some kind of bipartisan approach in order to get it passed.

That's the bottom line. And I expect that Joe Biden himself understands that he's got to do that, if he's going to be able to get anything done with regards to infrastructure or anything else.

CAVUTO: There's no sign that's happening, though, Leon.

PANETTA: Well, yes, look, it takes two to tango.

And what I would like to see is the Republicans as well come to the table, and the Democrats go to the table and begin to negotiate and bargain, as we used to do when I was in Congress, which is to basically sit down, listen, work together, come up with a compromise, and move forward.

That's the -- that's what governing is all about. And, very frankly, both the Democrats and the Republicans and the president are going to have to learn how to get back to governing.

CAVUTO: There you go.

Leon Panetta, thank you very much. And good catching up with you, Leon Panetta, former defense secretary for Barack Obama, former chief of staff for President Bill Clinton, but was there at a time when we did see a boom, we did see deficits reverse into surpluses.

It is possible, but much of it hinges on bipartisan cooperation and a commitment to being as creative in how you address spending as to how you address tax cuts or hikes, depending on your point of view.

All right, we have a lot more coming up.

More on this Rudy Giuliani situation, where federal investigators initiated a search warrant at his New York City apartment. What were they looking for, and what's going to happen now?

After this.

(COMMERCIAL BREAK)

CAVUTO: Federal investigators issuing a search warrant of Rudy Giuliani's apartment in New York City today. We don't know exactly why. We are told it might have to do with his connections to the Ukraine when he was working with Donald Trump.

We will see -- after this.

(COMMERCIAL BREAK)

CAVUTO: All right, we're getting a report out of The New York Times that Governor Cuomo's office in New York was apparently much more involved in the pandemic death toll undercounting than had earlier been reported.

Now, the only detail is whether it was deliberate.

Let's go to Bryan Llenas, who's following this story in New York -- Bryan.

BRYAN LLENAS, FOX NEWS CORRESPONDENT: Neil, good afternoon. That's right.

We are learning more about the extent to which Governor Andrew Cuomo's aides tried to reportedly cover up the true number of COVID-19 deaths in the state's nursing homes, The New York Times reporting that, since early spring, earlier than we -- than what was reported before, the aides tried to purposely hide this data.

Reportedly, Cuomo's senior aides prevented the state's health department from publishing a scientific paper which incorporated the true nursing home death toll data.

An audit of the death numbers was not made public for months. And two Health Department letters drafted for state lawmakers on the subject were never sent.

Now, Governor Cuomo's administration is reportedly under investigation by the FBI and the U.S. attorney in Brooklyn, looking at whether Cuomo's team purposely covered up the true death toll data in nursing homes.

Remember, this was requested by the Department of Justice twice last year. It has already been reported that Cuomo's top aides omitted more than 3,000 nursing home COVID-19 deaths from a July Department of Health report, saying they could not verify how many residents died at hospitals, despite the fact that we know they were collecting all of this data since last April.

An attorney representing Cuomo's office told The Times this: "The whole brouhaha here is overblown, to the point where there are cynical suggestions offered for the plain and simple truth that the chamber wanted only to release accurate information that they believed was totally unassailable."

Now, Governor Cuomo's administration, Neil, is not only accused of purposely hiding this information, but they're accused of doing so because they feared of political consequences.

Remember, there is also the accusation that this was purposely done because Governor Cuomo was publishing a book last year, and that this report that came out last July was timed at the exact moment that he was negotiating an at least $4 million book deal for that memoir on leadership skills -- Neil.

CAVUTO: Bryan Llenas, thank you very, very much.

And now to a story involving another prominent New Yorker, Rudy Giuliani, and federal investigators raiding his apartment today.

Charlie Gasparino on what they might be looking for -- Charlie.

CHARLIE GASPARINO, FOX NEWS SENIOR CORRESPONDENT: Well, we don't have a lot of information right now.

Rudy is supposed to come out and provide some sort of statement. I found it interesting that he did not host his radio show on WABC 77, a talk radio show. He did not do that. They had some filler in for that involving the mayoral race.

Be that as it may, it's -- this is still pretty murky. If you -- if you're going to guess, you read The New York Times, we have been following this, it's Rudy's ties to the Ukraine, whether he was lobbying for these business interests overseas with the president and whether he broke laws doing that.

I will say this. I spent some time talking -- speaking with Rudy's people who were friends with Rudy. If he stepped out of the line on something like this, something that he should know, that he's really slipping, there's something wrong here, because this is something that Rudy, as a longtime lawyer, the former U.S. attorney for the Southern District, the premier law enforcement office in the country, which is probably doing the investigation into him right now, which is somewhat unprecedented.

I don't think I have ever heard of a former U.S. attorney being investigated by the office he once ran. He would really have to -- he really screwed up here.

But, again, I will say this, Neil. As in so many of these lobbying cases, it's murky about whether someone is officially lobbying and whether that is actionable in terms of a crime. Clearly, they're looking at -- for his e- mails to see what he was thinking about, state of mind, intent to do something illegal, whether he knew was illegal when he did it. That's a huge thing.

Sometimes, people step over the line because they don't know. And we should also point out, Neil, that this is an investigation. It doesn't -- it doesn't -- he's not guilty of anything. And -- but I will say this/. For the FBI to raid his home and take his computer, a federal judge would have to show you -- they would -- the U.S. attorney's office would have to show probable cause, or they have to have something here.

CAVUTO: All right.

GASPARINO: So, this is this is very serious. The former mayor, U.S. attorney is in hot water. And this is clearly an indication of that.

But, again, we got to hear with Mr. Giuliani has to say. Rudy is supposed to give a statement, I think. There's conflicting reports on Twitter. He put something out earlier today.

(CROSSTALK)

CAVUTO: Right.

We're waiting. And there was a -- they thought they might. We will see.

GASPARINO: Yes.

CAVUTO: But, Charlie, thank you very, very much.

Charlie Gasparino on all of that.

We're going to take a quick break here.

Want to let you know that Apple's earnings are out. Let's just say it was a blowout quarter. Sales were up more than 50 percent, 54 percent. It also blew past sales estimates in almost every product category, $90 billion promised in share buybacks.

You announce that kind of a report, not surprising, your stock rises close to 5 percent. Ditto Facebook, out with similar strong earnings today. So, the technology world continues to make money hand over fist.

Stay with us. You're watching "Your World."

(COMMERCIAL BREAK)

CAVUTO: It is probably more closely watched of earnings in general, forget about just technology, because Apple has become a key economic barometer pretty much for the country, and maybe the markets as a whole.

Its sales and earnings sizzling in the latest quarter, usually considered a slower quarter, after the busy fourth-quarter Christmas shopping season. But this one was just nothing less than a blowout, overall sales at 54 percent higher than the year-ago period, much stronger than they thought.

Just to put it in some context right now, the number of iPhones it sold, 65 percent more than last year, the number of iPads, about 70 percent more, personal computers, around 78 percent more.

After-hours trading, the stock is jumping, continuing a trend we have seen with the likes of Facebook and Alphabet, to a lesser extent with Microsoft.

To Art Hogan, National Securities Corporation, Scott Martin, Kingsview Asset Management.

Art, to you first.

What do you make of what's happening with Apple and, more to the point, technology in general?

ART HOGAN, MARKET STRATEGIST: Right.

Neil, one of the things we think about a lot as we sort of normalize the economy is, how many of these companies really pulled forward a lot of demand because of the pandemic? We're all working at home. We knew we need new laptops and iPads and phones, et cetera.

And, clearly, this quarter shows that that's not the case for Apple right now. They continue to create demand for their new products. And, clearly, we're just at the tip of the iceberg for the 5G rollout.

What's more interesting to me is that they just added $90 billion to their current buyback program, right?

CAVUTO: Right.

HOGAN: I mean, that still has $30 billion left on it.

So, it's a very shareholder-friendly report right here. And the numbers just blew everybody away.

CAVUTO: Yes, it's increasing its dividend.

For a lot of our viewers who sort of get caught in this and want to know, what does that mean, obviously, when a company expresses enough confidence to buy it stock, that limits the available stock, lets the market go higher, and all of that.

But having said all of that, Scott Martin, it is a good reflection the American consumer, in this case, the global consumer as well, coming out of this pandemic, not that they were hurting during it. But what do you make of that consumer's appetite to buy items that aren't necessarily cheap?

SCOTT MARTIN, FOX BUSINESS CONTRIBUTOR: It's a great tailwind when some of that money, Neil, is coming for free in the mail or coming via direct deposit from your friends in Washington, D.C. It makes those purchases probably a little easier.

Now, Art made the point, and you did as well, I mean, this -- we're in the midst of -- or the early innings, really, of a 5G, iPhone upgrade cycle. So that's really, I think, what is showing up in this quarterly report.

What else is interesting, though, that could be just pursuant to maybe more of that consumer demand that's out there, Neil, is the services part of Apple, which, really -- I mean, gosh, guys, in the last few years, has really taken on a life of its own. I mean, you're talking about Apple iCloud. You're talking about the App Store. You're talking about Apple Music and Apple Arcade, which, yes, I play at home with my kids.

(LAUGHTER)

MARTIN: Those things are the high-margin services products that the company has, Neil, and those are firing on all cylinders, too.

So this company soup to nuts is really taking care of business here, and the stock price is reflecting it.

CAVUTO: You know, Art, if I could just step back from just technology, the markets in general, are you bullish with all this?

Because the markets, which were on a tear under Donald Trump, continue to build on that under Joe Biden. And I'm just wondering how long this goes on. Are there enough doubters out there, enough issues or worries to justify it? Usually, when everyone capitulates and says, oh, the hell with it, I'm just riding this bull as long as he can go, what do you tell people?

HOGAN: Well, I will tell you this.

I think that, interestingly, this has been one of those years where earnings estimates have gone higher during the quarter. That's only happened twice in the last 10 years. So, we're clearly seeing the beginning of what's going to be some pretty parabolic earnings growth, and, obviously, GDP growth, as the economy normalizes.

So, I don't think we have been able to correctly factor in what the S&P 500 can earn next year. In the middle of last summer, we thought that was going to be about $172. Coming into this morning, it looks like $186. And I bet you anything it's going to be north of $190 for the S&P 500 earnings for 2021 by the end of this reporting season.

CAVUTO: Wow.

HOGAN: And that means, if you don't even change the multiple, you get to 4300 on the S&P 500. So, yes, I think there's more tailwinds than there are headwinds right now.

Do the stocks need to take a pause at some juncture? Yes. And I think we have had some rotational corrections. Technology sold off a month ago. It's back in favor now. Cyclicals are selling off right now. They were very much in favor for the entirety of the first quarter. The Russell 2000 had an 8 percent drawdown. It's back in favor again.

So, I think what we're seeing is rotational corrections, which makes it a very healthy market.

CAVUTO: Scott, if I could throw out a very unhealthy development in Washington, maybe healthy as the market sees it, because stimulus is stimulus, right, but trillions of dollars in spending.

I noticed Wall Street doesn't have any discretion as to whether it's coming through more spending or tax cuts, but they seem to like it just fine. If they're worried about it, they have a funny way of showing it. What do you think?

MARTIN: Yes, wild parties are fun until your parents come home.

I think I know that from experience, maybe have a flashback or two.

(LAUGHTER)

MARTIN: But that is the reality, though. At some point--

CAVUTO: I never went to parties. I was very busy at home studying, and as was Art.

MARTIN: No, no, no.

CAVUTO: So we cannot relate to that -- to that--

(CROSSTALK)

CAVUTO: But continue that thought.

MARTIN: I was the one that, at the parties, that nobody would come over to, Neil, yes, so maybe we are in that same camp.

CAVUTO: Oh, I got it. I got it. Right.

MARTIN: But the reality is, Neil, that D.C., though, is addicted to this, just like students are to partying--

CAVUTO: Right.

MARTIN: -- in the sense of like, they keep spending, they keep putting out these numbers. They keep keeping the consumer on the government dole, until they can't stop anymore.

And so, at some point, this does have to be paid for. I think we're starting to see indications of that, capital gains taxes, corporate tax rate hikes, income tax rate hikes. That stuff will definitely show up sooner than later. And that's when I think we start to have some market volatility here.

CAVUTO: Art, a new investor comes to you today and says, Art, I want in on this market. I have never been in on it. But I hear all these good things. I caught you and Scott last night, and I want to -- I want in.

What do you tell them?

HOGAN: I tell a new investor that you want to have a barbell approach in 2021, where, on one end of that barbell, you're going to have thematic, fast-growth companies. 5G is one of those themes. Cloud computing and cloud security are two of those other themes. Apple falls into that category of 5G.

On the other end of that barbell, I want you to have exposure to economically sensitive cyclicals. And then we're going to look at your portfolio and keep that barbell level every two months, so that, if technology is running ahead, we're going to take profits and put it into cyclicals.

If you did that in 2020, you outperformed the S&P 500 by 475 basis points, and the same thing is holding true through the first quarter of this year. So I think that's a new -- a new investor has to look at this as balanced and diversified.

CAVUTO: Yes, it's your perspective.

For me -- I know, for young people, it's -- longer term can be a ways, people like Scott. But, for me, long term is lunch tomorrow. So, we will have to sort that out.

(LAUGHTER)

CAVUTO: But, Art, Scott, thank you both very, very much.

Again, some big news we got out of Apple very, very closely watched, other technology stocks, including Facebook and Alphabet, Microsoft, all firing on all cylinders. Now the big question is, how do they top that?

Stay with us. You're watching "Your World."

(COMMERCIAL BREAK)

CAVUTO: All right, much has been said of the president's big address to a joint session of Congress tonight.

It's going to be a little weird, as we told you, a maximum of 200 people in the audience there, in a COVID-safe environment. Nancy Pelosi has arranged 40 Republicans and 40 Democrats can come on their own or bring people they designate or see fit or want to invite in their stead.

All of this, though, at a time that the president isn't only going to be talking about all that planned spending, better than $6 trillion worth, if you even go back to the COVID relief a few weeks back, but his new plans that will include for families and kids initiatives that will provide everything from pre-day care coverage and a lot more.

Peter Doocy at the White House with what we might be able to expect.

Hey, Peter.

DOOCY: Neil, good afternoon.

The social distancing on screen isn't going to be the only thing that looks different, because viewers at home grew accustomed over the eight Obama States of the Union or joint addresses to Congress of seeing Joe Biden seated behind him in the vice president's seat.

This is going to be the first time that Biden steps up to the mic, and it's going to be the first time that there are two women seated behind him, the vice president, Kamala Harris, and the speaker of the House, Nancy Pelosi.

We have not seen the president yet today. He, we understand, over the last two-and-a-half days has been very involved with the crafting of this speech, making sure that everything is perfect. We heard one of the White House officials this morning say that it is about 5,000 words right now.

We don't know how much he is going to be slowed down by applause. But, to your point about the trillions upon trillions of dollars, the infrastructure package that he proposed for about $2 trillion a few weeks ago has not been debated yet in the Congress. They were still trying to figure out what infrastructure actually means or what qualifies as infrastructure.

But they are now moving forward with about $1.8 trillion in new spending proposals. It's a combination of spending proposals and tax relief for American families. There are some progressives, though, who might not be completely happy with everything they hear because of what is going to be left out.

Over the weekend, Bernie Sanders led a group of progressive senators in writing to the president, asking him to use this opportunity to announce that he is expanding Medicare eligibility and that he wants to lower -- that he has a concrete plan to lower prescription drug prices, both things that candidate Biden promised and that during the transition Biden talked about happening within the first 100 days.

Day 100 tomorrow, those things are not happening. So listen for that afterwards -- Neil.

CAVUTO: All right, that sounds like a lot of spending, a lot of details on the spending.

Peter, thank you very much.

Peter Doocy on all of that.

When we come back, remembering an icon who passed away. Remember Michael Collins, the command module pilot on Apollo 11? He died.

(COMMERCIAL BREAK)

CAVUTO: He was the iconic Apollo 11 astronaut who did not walk on the moon.

While Neil Armstrong and Buzz Aldrin were doing that on the lunar surface, Michael Collins was circling some 60 miles over that surface. He didn't mind, said he appreciated the tranquility. He died of cancer at 90. His family said, it was peaceful, it was quiet, much like the dignity and style he brought to becoming an iconic hero, something he hated being called.

But over the years, I had the pleasure of interviewing him and his colleagues on that mission. He reminded me that half the joy was just exploring. The moon was just a stop. Even back then, he was setting his sights on Mars.

Take a look.

(BEGIN VIDEO CLIP)

MICHAEL COLLINS, FORMER NASA ASTRONAUT: Neil Armstrong, who I think was a far more competent engineer than I, thought that -- in discussing Mars, he thought there were chinks of missing knowledge along the way, and that those chinks could perhaps be filled in at least partially by a stopover or some intermediate step of going back to the moon.

It was not clearly delineated. Neil died almost five years ago.

CAVUTO: Right.

COLLINS: But that was one of the questions.

So, I think the current plan is -- has been well-thought-out, but I just disagree with it. I think we ought to shoot directly for planet Mars. I used to joke when I came back from Apollo 11 that I'd been sent to the wrong planet, that NASA should be renamed the National Aeronautics and Mars Administration.

(LAUGHTER)

COLLINS: I -- some years ago, I even wrote a book, a whole boring book on "Mission to Mars." And I have always been a believer in Mars.

I would choose a direct. I would call it the JFK Mars Direct Express is what I would call it.

CAVUTO: The conspiracy theorists who said that you guys never, never got to the moon, that this was all a sham, it was all a show, I know how your colleague Buzz Aldrin dealt with that issue.

But does it bug you with these conspiracy guys on this 35th anniversary saying, on this very day, that that was the case?

COLLINS: I just don't know how to answer that. They saw the gigantic Saturn rocket go off from Cape Canaveral. It went somewhere.

(LAUGHTER)

COLLINS: They saw the pictures of a small Earth. They were taken from some great distance. They saw Neil and Buzz on the surface of what appeared to me to be a moon. I didn't see any cigarette butts or anything lying around out there.

(LAUGHTER)

COLLINS: I'm convinced that we went.

But how do you convince someone who's not? I have no idea. It's beyond me.

(END VIDEOTAPE)

CAVUTO: An American hero and a genuine article. And he was shy. He was intensely quiet, didn't like to brag, didn't like to boast.

And yet he was the astronaut most couldn't quite recall, because he was the guy who didn't walk on the moon. He was 60 miles above it and enjoying, he said, every minute of it.

One time, I asked him, what was it like all alone in that command module as you were waiting, knowing there was a possibility you would have to pick them up, but, if something went wrong, you would have to go home alone?

He said: "I never thought of that. What I enjoyed before I did was how quiet it was, blessedly quiet."

Michael Collins, dead at age 90. We will miss him and his urge to explore.

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