Louisiana braces for major flooding as Tropical Storm Barry approaches

This is a rush transcript from "Your World," July 12, 2019. This copy may not be in its final form and may be updated.

CHARLES PAYNE, HOST: More records on Wall Street, as stocks continue to rocket higher, the Dow, Nasdaq and S&P 500 closing at all-time highs, the S&P closing above 3000 for the first time ever.

More on these markets coming up.

But, first, you're looking live at New Orleans, where they are bracing for a direct hit from Tropical Storm Barry, which could be a full-fledged hurricane within a matter of hours.

Welcome, everyone. I'm Charles Payne, in for Neil Cavuto. And this is "Your World."

And we are all over this storm with Casey Stegall in New Orleans, where folks are evacuating, Adam Klotz in the FOX Weather Center on how big a punch Barry will be packing, former FEMA official Tom Panuzio on if this could be another Katrina in the making, and FOX Business' Lauren Simonetti on why it could have gas prices spiking.

We begin with Casey in New Orleans, where folks are indeed bracing for Barry -- Casey.


And the window to prepare is actually closing rather quickly. Although no official curfew has been implemented, emergency officials are asking that all residents be home and off the streets by 8:00 tonight, 9:00 Eastern time, not just for their own safety, but also, we're told, to keep all of the roadways open for police, first-responders, emergency medical vehicles that may need to get through.

Every single one of the city and region's giant floodgates have now been closed and sealed off. Look at this video. We're told the pumps are all in good working shape, as are the levees, according to the U.S. Army Corps of Engineers, that despite record water levels along the Mississippi River here, roughly 10 feet higher than normal.

So any extra storm surge or heavy rainfall could prove extremely problematic. Listen.


GOV. JOHN BEL EDWARDS, LA: ... should take this storm lightly just because it's supposed to be a Category 1 when it makes landfall. The real danger in this storm was never about the wind anyway. It's always been about the rain. And that remains a very significant threat.


STEGALL: So, clearly, constant checks are being made on the levee and hurricane protection systems.

The Louisiana National Guard is on the ground. Roughly 3,000 soldiers have been deployed. They also have, we're told, 300 buses standing by in three separate locations should they be necessary and should something happened with the levees, worst-case scenario, to get people out of here quickly.

There is this mega-shelter, as they have deemed it, up in Alexandria, Louisiana, which is about 206 miles north-northwest of here, so further away from the coast. And people are -- those shelters are standing by, and the buses are prepared to take folks all the way up there should it become necessary -- Charles.

PAYNE: Casey, thank you very much.

So just how bad is Barry going to get?

Meteorologist Adam Klotz is in the FOX News Extreme Weather Center with the very latest -- Adam.


Barry is going to become a strong storm, already a strong storm. But will it reach hurricane strength? Ultimately, that's not going to matter. Our current forecast says yes. Even if it's just a very strong tropical storm, these are all dependent on wind speeds. The wind speeds aren't going to be the legacy of this story.

The legacy is going to be all about the water. Part of that story is the storm surge. Everything here in this deeper color pink, that is three to six feet of storm surge. That's going to put a lot of communities right along the coast underwater.

Even on the lower end, you're looking at two to four feet of storm surge, that on top of the rain. And the rain is going to be an issue, this storm only moving at five miles an hour, likely making landfall early tomorrow morning. We're already beginning to see some of these outer bands of rain move through the region.

The rain is going to intensify here through the overnight hours. No surprise here, large area where we're under flood watches and warnings across portions of Louisiana and then stretching to the north, as the system eventually does slowly drift to the north as you get going on Saturday into Sunday.

All of this again north of the Mississippi River, and that's the real concern. Now, here's just one forecast model. And every time we update this, we do get a little bit of a difference here. But you see a very tight gradient. This deep white color, that's just off to the west of New Orleans, as much as 20 to 25 inches of rain. So very little shift here, and you could see that fall right over New Orleans, or it could shift a little farther off to the west.

But our current models indicate maybe closer to nine to 10 inches of rain right over New Orleans. That's going to be enough to cause some problems as that city is below sea level. You're going to have to pump that water out of the city.

Again, the water levels have been so high because it's been such a mess throughout the season. This is the Mississippi Watershed, lot of snow back in the winter across the Upper Midwest, a lot of rain in the Heartland. All of that has to eventually run down past New Orleans.

There are a lot of moderate to major flood gauges warnings across these entire rivers, from the Missouri running down to the Mississippi. And I will leave you with this one, Charles. This is what we're expecting right along the river, the French Quarter there. Again, the levees are anywhere from 20 to 25 feet. We're looking at probably a water level of getting up to 19 feet above sea level.

Currently, you're close to 17 feet above sea level. So we're going to be knocking at the door of what those levees can hold. And the forecasts could still shift a little bit. And we will be watching it.

PAYNE: Adam, thank you very, very much.

Now, this latest storm, of course, will be a big test for New Orleans' defenses amid an effort to avoid a repeat of Katrina. The question now is, will they work?

With me, former FEMA official Tom Panuzio.

Tom, everyone's concerned about this. A lot of articles have been written and a lot of money invested, the U.S. Army Corps of Engineers, $15 billion. But, recently, I read an article in Scientific America where they just sort of said, hey, all that work may be irrelevant or inadequate in just a couple of years.

TOM PANUZIO, FORMER FEDERAL EMERGENCY MANAGEMENT AGENCY OFFICIAL: Well, first of all, Charles, it's great to be here.

I agree. I mean, here's the reality that New Orleans is facing. If you look at 20 inches of rain, if you look at the flooding of the Mississippi River and the Lower Mississippi River, and you look at potentially the storm surge, New Orleans may find itself right back where they were with Katrina.

Now, I am very confident that the levees will hold. It's the rain and the water coming over the levees which is the concerning. And, remember, Charles, if you look at the two most historical disasters in terms of cost of the American people, Hurricane Harvey and Hurricane Katrina, both at $125 billion, those were primarily rain storms.

So this is -- this is extremely concerning.

PAYNE: We just heard from Adam Klotz, who says 25 inches could be the max. We could actually see the testing of those levels, those levee levels.

Again, knowing that these sort of storms are inevitable, it just makes you wonder what -- how does this city ever adequately prepare for these sort of storms, which they don't have to become the norm, but they are going to come at some point or another?

PANUZIO: Well, the reality is, you really can't.

If you look at the flooding that happened at Hurricane Katrina, it was primarily down in the Lower Ninth Ward and over at the 17th Street Canal. The only thing you can do is build the proper levees and redistribute the water and an increase the pumping capacity.

The reality is, is, New Orleans is sinking at about an inch to an inch-and- a-half a year. And until we can get better structure, better infrastructure, these problems are going to continue.

And my thoughts and prayers are with the people down in New Orleans.


PANUZIO: They're amazing people. And I think they're going to get through this. And I don't think it's going to be as bad as Katrina, but certainly it's going to be a significant impact to the area for many days, if not weeks.

PAYNE: Tom, I have just got 30 seconds, but, of course, all eyes will be on FEMA once the storm passes.

What changes have been made to make sure that the FEMA addresses the emergency issues once they arise?

PANUZIO: Well, FEMA has done a great job.

If you look at 2005 with Katrina, better federal, state and local coordination. FEMA has better assets. They are surging assets. And remember what saved us in Harvey and what saved us in Katrina, the U.S. Coast Guard. They're going to be at their very best over the next 24 to 72 hours.

They're the true heroes, along with all the personnel. And, like I said, I wish them the best.

PAYNE: Sure.

PANUZIO: My prayers are with them. And I think we're going to come out of this OK.

PAYNE: Yes, and the first responders, also, we have to add to the list.

Tom Panuzio, thank you very much.

PANUZIO: Pleasure to be here, Charles, always.

PAYNE: Now I want to get to the potential financial impact from this storm.

FOX Business' Lauren Simonetti with more on that -- Lauren.

LAUREN SIMONETTI, CORRESPONDENT: Took a look at that, Charles.

More than 250 Gulf of Mexico oil platforms evacuated. More than half of Gulf oil production is now offline. That's 1.1 million barrels a day, and that will push up the price of gasoline across the country. It's at $2.77 a gallon now, up 2 cents this week, before the storm.

Also want to point out, Charles, about half of natural gas production has been impacted. If you are flying this weekend, have a nice weekend trip coming up, 2,789 flights delayed already today, 326 canceled across the country, 97 cancellations for tomorrow already. Those numbers will all go up.

So, if you think you might be affected, please contact your carrier, rebook your travel and act fast, because, while airlines are waiving those change fees, they're only doing so for a short period of time.

The big carriers, Delta, United, Southwest Airlines, they're waiving fees. So is Spirit, JetBlue, Frontier, Alaska, as well as American Airlines.

As for the impact in dollar terms of all of this, as a potential Cat 1 hurricane, the legacy is going to be the water. AccuWeather is estimating total damage from rain and storm surge at between $8 billion and $10 billion. So it does pale in comparison to Harvey and Katrina, as your previous guest told you, Charles.

PAYNE: Absolutely. Let's hope that's it, and...

SIMONETTI: Let's hope.

PAYNE: Yes, Lauren, thank you very much.

SIMONETTI: Yes, prayers.

PAYNE: And, folks, we are going to be all over this storm tomorrow on "Cavuto Live" starting at 10:00 a.m. Eastern time, as we continue to track Barry's path and impact it's having on the Gulf Coast and beyond.

Meanwhile, Democrats slamming the administration's handling of the migrant crisis on Capitol Hill, President Trump firing back, saying it's time to address the issue at its roots.

And my next guest agrees.


DONALD TRUMP, PRESIDENT: We have a big problem. The laws are so bad. The Democrats have to help us fix the immigration laws.



PAYNE: Vice President Pence is visiting detention facilities in McAllen, Texas, amid growing criticism over treatment of migrants at the border. He arrived there just a short time ago.

To someone who is dealing with this crisis, though, firsthand.

Customs and Border Protection Deputy Commissioner Robert Perez joins us now.

Robert, I'm sure you listened to the testimony on Capitol Hill, particularly of elected officials, who described horrific, inhumane conditions and treatment toward those migrants. What are your thoughts on that?


Look, we have been in Customs and Border Protection and Department of Homeland Security sounding the alarm on the overcrowding and the unprecedented migration crisis for the better part of 18 months.

And, look, we have been open and honest about that discussion. We have been very transparent, and in fact, we have invited congressional delegations every month, multiple times, members and their staffs, in addition to all the other oversight that we have had, to our facilities, so that they could see firsthand the challenges that we have been facing.

I think it's universally accepted now that we, in fact, do have a crisis, that we have facilities that were never outfitted or built or to deal with the volume or demographic that we are dealing with right now.

PAYNE: Right.

PEREZ: It took about almost two months for us to get supplemental funding. But we finally got that. That's going to help alleviate some of that congestion.

And now we need targeted changes to the legal framework to get to the heart of the matter, Charles. Look, the alien smuggling organizations are profiting on the back of this crisis, on the back of children, by virtue of smuggling children and using them as virtual passports across our border and/or even recycling them at times to profit their illegal endeavors.

And so the targeted changes to the legal framework absolutely have to change to end this crisis.

PAYNE: Robert, I get your point does of the cynicism.

Some of these same lawmakers, just six or seven months ago, laughed, said this was a manufactured crisis, that the Republicans were overblowing the conditions or the circumstances.

But when you hear a representative saying that people were told to drink out of toilets, that women were called names, Representative Alexandria Ocasio-Cortez said she firsthand saw canker sores in the mouths of migrants as a result of un-nutritious food, I know you guys weren't prepared for this.

No one could have prepare for this onslaught. Do you take what they're saying? Is there a grain of truth there? And what has been done since then, particularly with this new funding, to make things better?

PEREZ: Well, thank you, Charles.

Look, what we have done has been an unprecedented, not only control and oversight, but ensuring that anyone and everyone in our custody is treated with the utmost care. Absolutely everyone has access to fresh water. Everybody has access to food, to snacks.

We have also surged an unprecedented amount of medical capability, nurse practitioners and physician assistants, at our facilities to check these folks and monitor them closely.

We are still making, on average, 80 trips a day to the hospital, when people are deemed by these medical professionals to need hospital care.

And so what I can absolutely assure your viewers is that we have gone over and above the standards that are very high already to deal with the people as best we can in our the facilities.

PAYNE: Right.

PEREZ: The overcrowding is what it is, and definitely presents challenges.

But I am absolutely confident and certain that everybody is getting the means that I just described to you.

PAYNE: OK, and what do you need and what can you -- what else can you be provided with, until Congress gets their act together, which could be never, because this is also a great political football that some would rather keep in play than have a solution at our southern border?

So what other -- what else does your organization need to make this better, not just for the migrants, but also the men or women who are obviously working and doing the job, doing jobs they never trained for?

PEREZ: So, we are not waiting on anybody else, as we have been doing from the get-go, when this crisis began, again, the better part of 18 months ago, Charles.

But we are going to continue to implement things like the migrant protection protocol, working with our Mexican counterparts to have asylum seekers wait in Mexico while their cases are being adjudicated here in the U.S.

We are going to continue to encourage and work alongside Mexico with all of their enforcement efforts, the ones that they are making along the Guatemalan border with Mexico, or the ones they are making on the interior. We're encouraged by those results. We need them to continue to do more.

And we're going to seek -- continue to seek solutions on our end to present and bring consequences for illegal activity.

PAYNE: Right.

PEREZ: Look, it's really important to emphasize there is a criminal element that continues to exist, not only exploiting this crisis, but that we are combating every day, drug smugglers, gang members, and criminals of all types that we have to pay attention to.

I can't say enough about our front-line men and women. They are handling this crisis in an unprecedented fashion with the utmost professionalism. And we're going to keep our eye on the ball on all the other mission sets that we have.

PAYNE: Robert Perez, thank you very much.

PEREZ: Thanks, Charles.

PAYNE: Well, forget about the running of these bulls. It's much safer, much, much more profitable to be running with these bulls on Wall Street.


PAYNE: All right, so, you know, if Neil was here, he'd be telling you those runners just realized they don't have FOX Business.

But this year's Running of the Bulls could easily be taking place on Wall Street, the Dow, Nasdaq and S&P 500 all closing the week at new record highs, sparked by hopes of an interest rate cut, maybe more than one, by the Federal Reserve.

So what out there could actually stop this rate rally?

Well, let's ask Steve Moore from the Heritage Foundation, along with our market pros, Frances Newton Stacy and Heather Zumarraga.

Steve Moore, what can stop this rally?

STEPHEN MOORE, FORMER DONALD TRUMP CAMPAIGN ADVISER: Well, look, first of all, this is like the best economy we have had in 30 years.

I mean, you look at just about everything so good about it. And I get so tired of people saying, oh, the economy slowing down. We have had that -- heard that story now throughout Trump's presidency, and you would get these little interruptions of growth, and then it erupts again.

And I think that's what we're seeing. I think the market is up now, Charles, because investors are looking at the economy, and they see some sunny skies ahead. You had the employment report was so positive. We're starting to see earnings coming in very well. You're seeing the lowest unemployment rate in 50 years.

And so this is a beautiful picture. We're going to talk to our kids about, hey, there was a time when interest rates were at 2 and 3 percent, and you had 7.5 million more jobs and people to fill them. Nothing to complain about.

PAYNE: Heather, every time this year on my show I have used the term Goldilocks, the next week, the market got hit. So I don't know if I should say...


PAYNE: I think Steve's got a point, though. Almost everything that you want to be working is working. Of course, we go into earnings season next week, which is expected to be down.

But the economy, as the underpinning for this market, it's hard to argue against that.

HEATHER ZUMARRAGA, FINANCIAL ANALYST: Yes, stocks hitting fresh new highs again today on the backs of yesterday's close.

And, look, I think investors should look at things like the Wilshire 5000 index, not just the Dow, the Nasdaq or the S&P. It's encompassing a broad measure of all stocks across the board.

And it is a broad indicator of how well the economy is doing. I do think that second-quarter earnings results will be pretty good, and the second half of this year may even prove to be better than the first half.

PAYNE: And here's the irony, of course, Frances, that the Federal Reserve, Jay Powell gave testimony the last two days, spent an awful lot of time talking about concerns, not factual things, but concerns, weakness around the world maybe washing up on our shores.

Just how much of that is a really a potential threat to derail this rally?

FRANCES NEWTON STACY, OPTIMAL CAPITAL: Well, I think we are going to have an earnings recession, right, because we basically had profit margins squeezed heavily by the dollar moving higher, input costs going up, right?

So earnings are decelerating. Growth -- growth is decelerating. Inflation is decelerating. So, to that point, they're counting on the Fed really to keep this thing afloat.

And while many of the numbers that Stephen cited are very high, some of those are lagging indicators. So we're trying to anticipate this thing. Of course, we have some announcement, right, coming about the balance sheet, but we're still tightening, because we're still rolling off the balance sheet, until otherwise noted.

So it's going to be interesting to see if he cuts in July. Does he stopped the balance sheet simultaneously? Do we get a quarter point?

And then also just to note that the Fed historically has cut near-all time highs, and then the market prices that in, we get at all-time highs, and then the market sells into the cuts.

PAYNE: Right.

NEWTON STACY: So it's just going to be interesting to see if this is sustainable. And it's going to be up to the earnings season.

PAYNE: Although, Steve, one thing the Fed is known for doing also is hiking rates and triggering recessions.

And I think the epiphany that the Wall Street thinks that Jay Powell had over the last few days came in January. He said wage inflation is not price inflation. In other words, Americans who have not had a raise in decades can look forward to raises, and that won't get the Fed to derail this economy.

MOORE: Well, that's exactly right.

And, by the way, when we put Donald Trump's economic plan together back three years ago, it was all -- there wasn't a big tax cut for the rich and helping rich people. It was trying to help American businesses, so they can expand, they could be profitable, and they could pay higher wages.

And the cool thing about this economy right now, there's this big discussion now among Democrats, maybe we should raise the minimum wage. Are they looking at what's happening to wages and the economy?

I mean, goodness, you have got Wal-Mart, Walgreens, Target, FedEx, all these major companies are raising their wages on their own, Charles. And when they're asked why they're doing that, they say, we have to raise wages to retain and to attract good workers.

PAYNE: Right.

MOORE: That's exactly what we wanted. I'm in favor of higher wages. And I hate this idea that, when wages rise, somehow, that means that costs at the shopping centers have to rise.

PAYNE: Right.

MOORE: It's just a -- it's false.

PAYNE: And Amazon probably has an even better idea, Heather, in saying that, you know what? They're going to spend $700 million to retrain folks.


PAYNE: So, instead of giving a $10 worker 15 bucks, give a $10 worker 15- buck skills, and maybe they can go to $20 from there.

ZUMARRAGA: That's right.

And according to the Bureau of Labor Statistics, average hourly wages for blue-collar workers, for lower-income Americans -- that's where it really matters -- they're rising over 7 percent. So you're not just seeing the effects of deregulation and tax cuts on the higher end. You're also seeing it for blue-collar and lower American wage-earners as well.

PAYNE: Real quick, Frances, we saw names like Boeing soaring today, no pun intended, J.B. Hunt up big, Ryder up big, economically sensitive stocks that have been under a lot of pressure coming on.

I mean, does that tell you anything about where this rally could go?

NEWTON STACY: I mean, it's definitely significant. And, again, we just have to watch the Fed.

We have to watch earnings, because earnings begets a cut in hiring. If they're going to start failing, obviously, companies stop hiring. So the sustainability of the 18 months that we have had this uptick in wages, we just have to see how that's going to play out, Charles.

PAYNE: Right. All right, we will see.

Hey, listen, there's a big difference between earnings coming down from the highest earnings in the history of corporate America to...

MOORE: That's a great point.

NEWTON STACY: That's true.

PAYNE: ... and earnings really, really in a freefall.

Great stuff, folks. Have a great weekend. Appreciate it.

MOORE: You too.

NEWTON STACY: Thanks, guys.

PAYNE: All right, speaking of which, the Gulf Coast is on alert, right? It's going to be a tough weekend down there. Tropical Storm Barry is bearing down.

We're going to have a live report coming up.


PAYNE: Evacuations already under way for Tropical Storm Barry along the coast.

We will talk to a top official down in Louisiana for a live update.

We will be right back in just 60 seconds.


PAYNE: This video just in, Vice President Pence touring border facilities in McAllen, Texas.

The vice president is expected to be briefed on the conditions in those facilities. And we will have more as it develops.

Meanwhile, Tropical Storm Barry bearing down on the Gulf Coast, forecasters predicting 20 inches of rain in parts of Louisiana and Mississippi.

Steve Harrigan is in Bay St. Louis, Mississippi, where they are bracing for major flooding -- Steve.


Conditions have deteriorated here in the past hour. The sky has gone from blue to gray, some whitecaps behind me, as the wind has picked up and the first bits of rain coming in sideways as well. It's really the threat from the rain that could hurt Mississippi, anywhere from five to 12 inches expected.

That could mean flash flooding, not only along the coast, but far inland as well. Some of the roads already overtopped. There's been a lot of water rescues throughout the day by the fire department here.

In one case, there was even an eight-foot-long alligator on a road. A storm chaser used his truck to create a wake to get that alligator back into the marsh.

When you ask people here if they're afraid of the storm that's about to come, most say no, especially those who've been through Katrina in 2005, which, for many, was a life-or-death situation.

Some people coming down to look at the water here today actually told us they were excited about the first storm of the season.


UNIDENTIFIED FEMALE: Love it. I do. But I think we're just going to get rain. I'm from, actually, Gulfport, but I like to come down here, just watch it come in.

UNIDENTIFIED FEMALE: We bought brownie mix and cookie mix and all kind of good food. So, in case we lose electricity, we will be eating well.


HARRIGAN: Traffic here still moving steadily, a lot of people out, stores open. Most store owners telling us they intend to stay open throughout the storm -- Charles, back to you.

PAYNE: Thank you very much.

Jimmy Cantrelle, who is the president of Lafourche Parish in Louisiana, which is just outside of New Orleans, and he joins us now.



PAYNE: Everyone's bracing for this, perhaps the biggest test since Katrina. What preparations have you taken? And what are you telling the folks in your parish?

CANTRELLE: OK, we're taking every preparation that we can.

We have all our pumps. We have 89 pump stations in Lafourche Parish. And we have every one at 100 percent right now. We have issued sandbags. We have to have taken people out of harm's way. We have closed some roads because of high water.

All those people were evacuated. We're hoping that we have everything taken care of. So far, it looks good for us. We're just waiting for the rain. We have a lot of rain coming. And, hopefully, we can handle it with all our pumps.

We opened a couple evacuation centers -- one evacuation center. Let me say it that way. And we are expecting a lot of rain. I don't think the wind is going to be the big, big factor. I just don't like the amount of rain we will be getting.

PAYNE: Yes, it feels like that certainly these levees are going to be tested.

CANTRELLE: Definite.

PAYNE: And people are saying, since all the work, almost $15 billion of work by the U.S. Army Corps of Engineers, might not matter, because the sinking -- the sinking of the area. The levees may just not be high enough, despite all of the improvements.

How concerned about that are you?

CANTRELLE: We're not very concerned about that, because we taxed ourselves, and without any federal taxes, we have made our own levees.

Our levee systems are very well done. That's not a concern of mine at this point. But the point is getting more rain than our pumps can handle. Our pumps are designed to handle one inch of rain for the first hour, then half-an-inch thereafter.

If we get a heavy downpour in one area, where we get five or six inches in an hour, this would be a big problem for our pumping system.

PAYNE: What would that mean if indeed there that was that much of a deluge? What would that mean for your parish?

CANTRELLE: If we had that much deluge, it could mean that streets would flood, possibly some houses.

But, hopefully, that doesn't occur, because we're in a low-lying area. The parish is right above sea level. And you're right. We're naturally sinking, and the seawater is rising. So we got to make sure our levees are always in good shape and our pump stations are in great shape.

PAYNE: Jimmy, before I let you go, have all the residents, have they hated the evacuation warnings? We know in the past that has been an issue. Some people stubbornly want to ride it out.

CANTRELLE: There will always be some people that won't heed to the evacuation. Nothing we can do.

The only problem, I told them, I said, if you get stuck, or you're in this area that you didn't listen to us, we cannot reach you, we cannot get to you.

So accept in your mind now to get out, and then we can help you. If you do get out, bring all your medicines with you and whatever else you want to bring.

PAYNE: Jimmy Cant...


PAYNE: I'm sorry.

Jimmy, thank you very much. Everyone is praying. We're watching. And thank you for taking the time to speak with our audience.

Meanwhile, folks, Democrats slamming migrant detention centers on Capitol Hill today. The latest on the battle over the border -- right after this.


REP. ALEXANDRIA OCASIO-CORTEZ, D-N.Y.: There is no need for us to arrest innocent people and treat them no differently than criminals, when they are pursuing their basic human rights.



PAYNE: Vice President Pence getting briefed at the border detention center in McAllen Texas.

We will monitor what's going on and pass along the news.

But first:


OCASIO-CORTEZ: This is a manufactured crisis because cruelty -- because the cruelty is manufactured.

This is a manufactured crisis because there is no need for us to do this. There's no need for us to overcrowd and to detain and under-resource. There is no need for us to arrest innocent people and treat them no differently than criminals, when they are pursuing their basic human rights.


PAYNE: Democratic Congresswoman Ocasio-Cortez on Capitol Hill today slamming the situation at the border, calling it a manufactured crisis, amid ongoing debate over the treatment of migrants at detention facilities.

So how will this fight play out?

Constitutional law attorney Jenna Ellis Rives, Washington Examiner's Jason Russell, and Democratic strategist Mustafa Tameez joins us.

Let me start with you, Jenna.

Obviously, very passionate. All eyes were on this -- on the hearing today. But, by the same token, it's interesting, because the so-called manufactured crisis was totally ignored by many people on Capitol Hill just six months ago.


Well, Charles, I mean, this is something that was just a complete and total media circus. I mean, Ocasio-Cortez is speaking out of both sides of her mouth just to get media play. This is the same person who just wanted herself to be sworn in for dramatic effect, when she even claimed it was a great sound bite, when the chairman said she didn't even have to be.

I mean, if Democrats really want to pay attention to the immigration problem in this country, and they really want to address real solutions in the humanitarian crisis that is going on at the border, the human trafficking, the drug trafficking, all of the things that President Trump has so clearly shown, they would actually work with Congress to pass meaningful reform.

They wouldn't do this just stunt in the media and divert attention to themselves. That was all that was going on here. And it was -- it was just a ridiculous show for the media. That was all.

PAYNE: Also, former Acting ICE Director Thomas Homan was getting visibly heated at the hearing today in defense of border agents. Let's take a listen.


THOMAS HOMAN, FORMER ACTING U.S. IMMIGRATION AND CUSTOMS ENFORCEMENT DIRECTOR: If anybody on this panel don't like what's going on, then change the law. You're the legislature. We're the executive branch.

And the reason when someone says -- makes an allegation about children being mistreated, they're in an overcrowded facility because of Congress' failure to supply the supplemental funding months ago. Don't blame the men and women wearing the uniform, doing the best they can. It's outrageous.

This is political theater at its best.


PAYNE: Mustafa, political theater or something else?

MUSTAFA TAMEEZ, DEMOCRATIC STRATEGIST: You know, the Trump 2020 campaign should be, we're not going to build a wall, we're going to build cages, and we're going to bill it to the American taxpayer, because that seems to be the Trump campaign and the Trump administration plan for immigration.


PAYNE: Well, some might say that those cages -- those so-called cages were already there.

TAMEEZ: They're not putting together any kind of a comprehensive plan.

Look, this is what is a manufactured crisis that the administration created. It's a circus that they have created at the border. They want this for their base. They're trying to gin up people to come out for Trump in 2020.

It's not going to work. And it's sad. And it's just a deplorable way of them doing this kind of a policy.

PAYNE: You know, Jason, a record amount of migrants, particularly families and unaccompanied children, have flooded our southern border.

Past officials in the Obama administration admit that this is a crisis. So maybe -- what do you think beyond -- getting beyond the political rhetoric, can be done or could happen in Washington, D.C., so we can solve this issue?


I think the only progress that we heard during the hearing today was, like you said, six months ago, one side of the aisle was saying that this is a crisis, and now we have two.

The problem is that no one has any kind of reasonable, realistic, sustainable solution that can actually fix this. Despite what some people might think, nobody wants kids in cages. Nobody wants people in cages.

But there's no plan to speed up processing or to figure out a better way to handle reforming the asylum system, so that there are better ways to handle people seeking asylum.  So, for the time being, it seems like everyone's just going to yell at each other for the next six months to a year.

PAYNE: All right, so we have got a couple minutes left.

Without yelling, Jenna, maybe perhaps respond to Mustafa. What do you think the Trump administration would like to see done? What proposals do you think they will roll out to resolve this issue?


Well, I mean, I think that rather than just having the political rhetoric and the banter back and forth, commonsense solutions, like actually saying what can be done to secure our border, actually building the wall, actually securing our nation.

I mean, that's something that President Trump has advocated for from the very beginning. But let's also recognize that President Trump has stayed within the margins of the Constitution by saying that Congress needs to be the one that comes up with the legislation.

He's not going to overstep his constitutional authority here.

PAYNE: All right.

ELLIS RIVES: So it's Congress that has to bridge that gap. And they have to close the asylum loopholes and they have to make sure that they are securing Americans first and foremost.

PAYNE: OK, we got to -- I'm sorry to jump in.

ELLIS RIVES: And they have to provide meaningful reform.

PAYNE: But we're crunched for time.

Mustafa, I apologize. We will get you in more next time. This -- unfortunately, this situation is not going away.

Appreciate everyone's comments.

Meantime, folks, Congresswoman Ocasio-Cortez fighting another battle, as many Democrats rush to defend Nancy Pelosi in their growing feud. Will the lack of unity affect the Dems in the 2020 race?



QUESTION: How do you response to the criticism that you're playing the race card against Nancy Pelosi?

OCASIO-CORTEZ: No, that's campaign untrue.


PAYNE: Democrat Congresswoman Ocasio-Cortez dismissing criticism from those Democrats defending House Speaker Nancy Pelosi amid the growing rift in her party.

So, who's winning this war of words, and how will it play out ahead of 2020?

Catalina magazine publisher Cathy Areu joins us now.

Cathy, I mean, listen, it feels like it's been a long time coming. But it's gotten so explosive this week. Who is winning this? And can Nancy Pelosi actually reel in the so-called squad?

CATHY AREU, PUBLISHER, CATALINA: She doesn't need to reel them in. I mean, they can do what they want to do, because the Democrats need an answer to Trump.

The Republicans, the GOP has a Trump. So, the Democrats have their own Trump, AOC and her crew of three -- or the crew of four. So it's equal. They're both balanced. And we have our moderates.

So the moderates have to control the fringe people. And that's what they have. That's the way it is.

PAYNE: But are you comfortable with, for instance, AOC suggesting that Nancy Pelosi is a racist? Are you comfortable with that?

AREU: She said she didn't claim that she was a racist.

So, AOC, in an interview, said she didn't believe that Nancy Pelosi was a racist. But AOC is about AOC. Donald Trump is about Donald Trump. So both parties have their Donald Trumps on both sides. And then we have our Nancy Pelosis, who know how the system works, and are going to lead this country through being moderates, for doing the right thing for what their followers, their constituents want.

PAYNE: Well, let's be...

AREU: So, we need those politicians who know how D.C. runs.

PAYNE: Right, but...

AREU: AOC and Trump do not know what they're doing, yes.

PAYNE: Well, one -- one person is the president of the United States, with the record stock market close today, almost record unemployment, 200,000 people...

AREU: Thanks to Obama. Thanks to Obama.

PAYNE: ... filing for unemployment benefits.

Listen, Cathy. Listen, I want to kind...

AREU: What?

PAYNE: ... stick to the Democratic part of this, because you can dismiss it all you want.

AREU: OK. I'm not dismissing.

PAYNE: But the world is watching. The country's watching. And it feels like the Democratic Party is imploding.

And it feels like AOC is snatching the power away from Nancy Pelosi.

AREU: Absolutely not.

Nancy Pelosi is reeling it in. And she is doing what she's supposed to do. Her party, they all believe in the same exact things, rights for women, the environment. They're all on the same page. One is just louder than the other.

The world is watching. And they're watching our country be divided by a president, a tweeter in chief. He's dividing our country, not the Democrats.

PAYNE: Well, it feels like, in the next debate, we're going to hear Biden pressed on no borders. We have already seen Kamala Harris going after him on busing.

I'm not sure, Cathy, that your party is so unified.

AREU: What?

PAYNE: I'm not sure the Dems are so unified.

AREU: John Lennon talked about no borders. John Lennon talked about no borders.

I mean, "Imagine" is played in the grocery store all day long.


AREU: If you listen to it, it's about no borders. This is not new.

This is the Democratic Party.

PAYNE: He also talked about no heaven and no God. So, I love his music, but he's not my political -- he is not the person I'm going to follow politically or religiously.

Cathy, we're out of time. Thank you very much.


PAYNE: All right.

AREU: Thank you.

PAYNE: President Trump swinging through some of the key Midwest swing states today. We're going to get the latest on that next.


PAYNE: President Trump continuing his Midwest blitz today, getting ready to head to Cleveland, Ohio, for a fund-raiser, as he's making an early 2020 push.

So let's get the read on this from The Wall Street Journal's Allysia Finley.

What do you make of it? I mean, he's riding high pretty good right now. The market is up. The economy is doing extraordinarily well. And the fund-raisers, he hasn't had a lot, but they have been -- he's raked in a lot of money also already.


And he's been in Wisconsin, where the unemployment rate is around 2.8 percent, record low in these Midwest areas that he has to win. Democrats are also basically camping out in these -- territory -- or in Wisconsin, Ohio, Pennsylvania.

And there's really been a manufacturing rebound over the last two, two-and- a-half years. It's slowed. But it is -- he has tremendous...

PAYNE: But it was remarkable.

FINLEY: Right.

PAYNE: I mean, it began with like the -- when -- the country wrote off -- the last president wrote it off. Many economists said we could never generate hundreds of thousands of manufacturing jobs again. And we have.

FINLEY: And that's really thanks to tax reform, which has increased capital investment, as well as deregulation, which, when you think of energy investment in particular in the shale in Ohio and Pennsylvania, there's really been a boom, which has actually helped supplanted some of the coal mining jobs that were lost during the Obama administration.

PAYNE: Before President Trump took off on his trip, he came out with Alex Acosta, the labor secretary, who is announcing he is going to be leaving in a week.

What kind of impact will that have on the administration and Trump's reelection?

FINLEY: I think that's all going to blow over.

In fact, the acting secretary will be Pat Pizzella, who is very well supported among employers, businesses. And they think he will actually be even more aggressive with deregulation. It's really unfortunate that, basically, Alex Acosta had to take one for the team, per se.

Really, all of this controversy was whipped up by the left, and he really had not done anything wrong. But I think, in another year-and-a-half, nobody's really going to remember it.

PAYNE: The economy. Today, we saw -- yesterday, initial jobless claims down yet again.

The only concern people seem to have is just the quality, the skills training, if you will. Where are we there? And what role should the government be playing?

FINLEY: I don't think the government really needs to be playing much of a role.

As we saw yesterday, Amazon announced that it was going to spend $700 million to retrain a third of its work force, basically providing free college for 100,000 workers. I think other companies, as well, who want to compete with Amazon are going to find they have to do something similar.

PAYNE: Wages have been going up for about 11 straight months. And the lower-income households are doing extraordinarily well.

Should we expect to see that continue?

FINLEY: I think so.

I mean, it's been tremendous. The wages for the lower-income households have actually been increasing more than for the upper, the affluent, or at least the wages.

PAYNE: Right.

FINLEY: And you saw 4.1 or 4.2 percent for retail.

PAYNE: It's been well over a decade since that's happened.

Thank you very much.

By the way, thank you, folks, for watching.

And know we're going to be all over this Tropical Storm Barry tomorrow on "Cavuto Live." We begin at 10:00 a.m. Eastern time.

Make sure you tune in, but now "The Five."

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