This is a rush transcript from "Your World," April 11, 2019. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: Democratic presidential candidate Elizabeth Warren is looking to ramp up taxes on the most profitable companies. Try a trillion bucks over 10 years. But will it cost into those profits and cut into those jobs?

Welcome, everybody. I'm Neil Cavuto.

First, I would like to thank my colleagues and friends, Deirdre Bolton, Sandra Smith, and Charles Payne, for filling in while I was out.

Thanks, guys.

Well, Elizabeth Warren isn't the only Democrat pushing tax hikes to pay for social and related programs, but where she is targeting and from whom she hopes to get the money, well, that's a different story.

FOX Business Network's Susan Li has been crunching those numbers -- Susan.

SUSAN LI, CORRESPONDENT: Hey, Neil, welcome back.

So, according to Elizabeth Warren, no loopholes, no exemptions, according to her new tax policy, with a 7 percent proposed corporate tax on those big, big companies with revenues above $100 million. And that's on top, by the way, of the corporate taxes that they already owe, which should be at above 21 percent, and that, she says, could net the government a trillion dollars.

Now, Amazon made headlines because they paid zero corporate taxes last year, according to some reports, but, under Warren's plan, they would pay close to $700 million. Now, Warren isn't the only 2020 Democratic candidate that wants more money from the powerful and the wealthy.

That includes Bernie Sanders. He wants a higher estate tax to start at a lower rate of $3.5 million in inheritance. And that goes up to 77 percent if you're going to inherit something over a billion dollars. Now, Bernie Sanders is also calling for a payroll tax hike and also a death tax increase as well.

And very similarly to Kirsten Gillibrand, he also wants to tax trade. So, Gillibrand here is proposing a half-percent levy on stock trades and also a 0.1 percent levy on bond trades. So that would impact the investor and the capital markets here in the U.S.

And we have Kamala Harris, and she says she wants to provide more tax credits and more credits for the lower income, but she wants to reel back some of those tax cuts. And in the end, they're looking to, as they say, soak the rich to pay for the poor -- back to you, Neil.

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

Well, if all of this was hurting Wall Street, it had a funny way of showing it, today barely budging. We will get to that in a second.

But Democrats are looking to pay for a lot of their stuff with, well, taxes on the wealthy, but at least they are saying they have to pay for that stuff. Is this the answer?

Democratic strategist Zach Friend. We have also got The National Review contributor David Bahnsen, and last, but not least, The Wall Street Journal's resident genius Mary O'Grady.

All right, so, Mary, on this, you crunch a lot of the numbers. They say, this is where you can and will get a lot of the money for this stuff. Can they?

MARY O'GRADY, THE WALL STREET JOURNAL: Well, Elizabeth Warren looks at this and most of the Democrats look at this very stat in a static way.

In other words, we're going to charge these taxes for these profits. And this is the amount we're going to get. And, of course, businesses respond to taxes. So you can't really depend on those numbers at all because investors start making other decisions when taxes are...


CAVUTO: Yes, in the case of Amazon, in fact, it could be 689 million bucks there, David.

Then you start saying, all right, that's cutting into my return, will I want to invest in Amazon and then, by extension, what do I do in the end? Where do I go?

DAVID BAHNSEN, NATIONAL REVIEW: Yes, but in this case, her point is exactly right, what Mary said.

That money wouldn't be there, because the whole reason Amazon didn't pay taxes is because they were able to instantly expense this year in the new tax code a lot of the cap-backs. So, if what she actually wants to propose is that we take away incentives for capital expenditures, if she's really willing to do that to the productivity of the economy, there wouldn't be those profits to tax, let alone all the downstream implications for jobs and wage growth.

It's a just completely unserious idea.

CAVUTO: All right. But, again, one of the things I did point out Zach, is that, look, Bernie Sanders was famous for this in his last run, that he said he wasn't going to just tax the rich, he was going to bring it down a little to some in the middle class.

So, God bless him. He was saying for all his big plans, I have got to find a way to pay for it. Now, whether the math added up in his case a few years ago is just as questionable as what these candidates, whether it does today.

But what do you think that message that's being sent for a general election nominee, not the person who ultimately gets the nomination, where this is popular?

ZACH FRIEND, DEMOCRATIC STRATEGIST: I actually think that the fact that a number of the other candidates are hedging on this issue, to some degree, is very telling about how they view it in the general election, which is to say that you actually see them saying maybe Medicare for everybody that wants it, as opposed to Medicare for all.

Maybe we shouldn't totally do away with the entire system. But with that said, the goalposts have moved in the Democratic primary, there's no question. Now it's really a litmus test that you have to sign on to this concept. And I think that campaigns are more value statements than they actually are the financial statements in many respects.

But we will see where it goes. I think that people are not totally on the Bernie train right now on all the candidates. But I think that ...

CAVUTO: But they're all like little cars on that train, aren't they?

FRIEND: He has shifted the narrative. There's no question he shifted the narrative.

CAVUTO: But most of the candidates have something like this in place.

All right, so higher taxes, a wealth tax, an asset tax, a corporate tax, surtaxes on people like you over $100 million.

O'GRADY: Well, when he says that he's going to drill down into not just the rich, but the middle class more to tax them, at least he's being honest.


CAVUTO: And he is saying to sell it that you will get more bang for the buck than the extra bucks?

O'GRADY: Yes, of course.

But at least what he's admitting is that he wants the state to own a larger and larger part of the economy, which, of course, is exactly what socialism does. And that's why people are afraid of him, because he's not just talking about -- he starts with -- socialism always starts with, we're going to tax the rich because they have too much.

CAVUTO: Yes, but look at Elizabeth Warren. She's going after top companies in this country.

BAHNSEN: But that's where I think the distinction between what Elizabeth Warren said today and what Bernie Sanders is saying is important in this sense.

Republican conservatives like myself have been critical of them for not being serious about how they're going to pay for it.

CAVUTO: Right.

BAHNSEN: But it has to be more than just that, because one of them will come up with something that involves paying for it.


CAVUTO: ... very creative ways?

Now, I blame both sides for coming up with ways to spend more money, and raise more money for that spending, but not to pare that spending.

BAHNSEN: And so if he's serious -- I mean, the last person who seriously said, I'm going to raise taxes on middle class to pay for something was Walter Mondale. It didn't go well.

CAVUTO: You're giving away your age.


CAVUTO: Because I was going to use that same example.


But I really do think that we also, as Republican conservatives, speaking for myself, have got to point out that it doesn't work economically. It's not just about not paying for it. It's a misallocation of capital to pull that money from corporations that have a profit motive.

This week is the first time I got to hear Bernie Sanders defend the profit motive.

CAVUTO: But you could look at it otherwise, Zach. You could make a credible case for this sort of thing if the economy was doing miserably, right? I mean, but we have record high employment levels of virtually every major key demographic group in the country.


CAVUTO: And we have an economy that is doing OK.

So do you want to disrupt that now with some outlandish talk along the way?

FRIEND: I think that there's two parts to that.

One of them is that we should be realistic and say that this wouldn't pass, right? I mean, it's not going to get through both houses of Congress.

CAVUTO: People always make those assumptions.

FRIEND: I really don't feel that it really has a high likelihood of passing.

But the more important thing is that I don't think the economy is working for everybody. The numbers show what -- exactly what you're saying, but the amount of economic insecurity that people feel throughout this country is very real.

CAVUTO: But there's always been economic insecurity.

But do you think there's as much as there was before? And I'm not pinning it to any president, any party any time. But the numbers are the numbers, whether people like President Trump or not. I mean, these are fairly good economic times. These are strong market times. People are seeing it in their portfolios, those who are lucky enough to have them, and they're seeing it in their bosses who right now are adding to their payrolls at a fairly good clip.

FRIEND: If that's true, why are his numbers not moving?

CAVUTO: Well, I think that's the personal stuff.


FRIEND: It's a fair point, though.


CAVUTO: I agree with you.


BAHNSEN: But it's a separate subject.


CAVUTO: It is a separate subject.


CAVUTO: You're right. And, Mary, you and I have talked about, I would say the president would be up 10 points in the polls on all these cases, if not for all the other stuff.

But on the economic stuff, it's pretty inarguably good.

O'GRADY: Well, I think what -- it's true that Bernie Sanders is going after the middle class. Elizabeth Warren says, no, I'm only going after rich -- rich corporations.

But what they have in common is what all socialists have in common, which is that they hate capitalists, but they love capital. And they are salivating about this money.


CAVUTO: They don't call it socialism. And it polls well. Right?


O'GRADY: OK, but they like a big state and they want money.

And she -- she's talking about taxing these corporations, but she's just salivating about this $1 trillion she sees out there. I mean, they believe...


CAVUTO: Do you worry that Democrats advocating that, that capital moves?

FRIEND: Yes. No, I think that's right.

I think the point you raised, Mary, is spot on. So Medicare for all polls well, but not when you drill down into the details, when you talk about some of the taxation components of it. So that's -- that's why...

CAVUTO: Who have you hooked up with?


FRIEND: I haven't hooked up with anybody yet.

CAVUTO: Really?


CAVUTO: What are you close to hooking up with?

FRIEND: Well, I mean, I have a personal relationship with some of the candidates, just from my history. But I'm not aligning myself with anybody right now.

But I have got to say this, that I don't think that Barack Obama would get through the 2020 primary.

CAVUTO: Well, he's warned about -- he's warned about this.

FRIEND: I think he's exactly right. I think the circular firing squad comment he made is spot on.

I think that this is the one -- I think this is a very winnable race for Democrats. And we might still find a way to not win it based on some of the things that we're doing.

CAVUTO: Grab defeat from the jaws of victory, right?

BAHNSEN: But it does feel appropriate, because I remember feeling that way in some of the primaries Republicans have had in recent times that Ronald Reagan wouldn't have been able to get through our own primary.

And so now it does seem like they have moved that forward leftward in a sense.

CAVUTO: And you and I covered the Millard Fillmore race.


CAVUTO: Guys, thank you all very, very much. Very good seeing you again.

In the meantime, we already know spying on a Trump aide did indeed happen during the campaign. So now Democrats are coming down on the attorney general, Bill Barr, for confirming all that -- after this.



QUESTION: Mr. President, are you pleased that your attorney general yesterday said that there was spying into your campaign in 2016?


I think what he said was absolutely true. There was absolutely spying into my campaign.


CAVUTO: All right.

Well, the president is on board with his attorney general saying that there was a lot of spying going on. And Democrats in the past have said it and that was really the big hoopla over whether the attorney general went too far to say he suspects it.

FOX News Channel's Catherine Herridge on the continuing fallout.

Hey, Catherine.


Earlier today, the president went even further, calling the spying illegal. And on the Hill yesterday, the attorney general said he wanted to be sure there was no unauthorized surveillance of the campaign. And Mr. Barr was pressed for evidence to justify his concern.


UNIDENTIFIED MALE: And I'm now asking what the basis is or what the facts are that lead you to that thought.

WILLIAM BARR, ATTORNEY GENERAL: I believe there is a basis for my concern, but I'm not going to discuss the basis.


HERRIDGE: A short time ago, Republican Congressman Devin Nunes sent Barr this formal notification for eight criminal referrals, saying there is evidence the law was potentially violated.

Along with Congressman John Ratcliffe, they are prepared to brief Mr. Barr in person on the evidence for allegations of conspiracy, lying, misleading, obstructing congressional investigators that has grown out of their two- year Russia investigation.

Also, a seven-page Virginia indictment was unsealed earlier today accusing Julian Assange of one of the largest compromises of classified information in U.S. history. It states that the WikiLeaks founder engaged in a conspiracy with Chelsea Manning, a former intelligence analyst for the U.S. Army, to crack a Defense Department computer network password.

In addition, Julian Assange and his lawyer put out a statement today defending his client as a reporter and publisher of accurate information. It reads in part -- quote -- "Once his" -- Assange's -- "health care needs have been addressed, the U.K. courts will need to resolve what appears to be an unprecedented effort by the United States seeking to extradite a foreign journalist to face criminal charges for publishing truthful information."

Also today, a high-profile Democrat, Greg Craig, was indicted for lying over his lobbying work in the Ukraine. That case grew out of the special counsel investigation. And it seems to answer critics who said Mueller only targeted Republicans -- Neil.

CAVUTO: All right, Catherine.

Well, my next guest, an Army veteran, he serves in Congress right now, says what Assange did in the WikiLeaks that compromised -- well, they obviously compromised U.S. security and soldiers' security in Afghanistan and elsewhere.

I'm talking, of course, about Florida Republican Congressman Michael Waltz.

Congressman, good to have you.

What do you make of this?

REP. MICHAEL WALTZ, R-FLA: Neil, let me be clear.

Julian Assange, Bradley Manning, and then related, but separate, Edward Snowden, they have blood on their hands. And I hope the Justice Department throws the book at them. I'm looking forward to seeing them extradited back to the United States.

And let's just talk for a second about what they did. They took all of our operational files. As a Green Beret in Afghanistan, we were conducting operations night after night after night against the Taliban and Al Qaeda, later on ISIS.

They took all of our operational files, and particularly the sources, the local Afghans that were working with us -- they did this in Iraq as well -- and put them all over the Internet.

We know that Al Qaeda had a specific intelligence unit scouring through WikiLeaks and using that -- using that information to then target not only American soldiers, but the local Afghans, the local Iraqis and any other source that we use helping us in the war on terror.

So they have blood on their hands. And I hope to see them go to jail for a long time.

CAVUTO: Congressman, their view was, particularly Assange's view at the time he was releasing all of this stuff, is that he wanted to expose to the world, to particularly the American public, how much top military authorities were lying to them, much like was the case with the Pentagon Papers, when they were released, when officials in power were misrepresenting the severity and how poorly it was going in the Vietnam War era.


CAVUTO: Do you think there was any good served by that or that they're comparing events that were very different?

WALTZ: So, 100 percent different.

I mean, the Pentagon Papers did eventually show that members of that administration were not being fully truthful. And it exposed it.

That's very different. We have whistle-blower -- we have whistle-blower laws. What we -- what it didn't do, though, was take operational data, individual names, their locations, where they lived, and expose that in the middle of a -- in the middle of a war.

So it's much closer to what maybe Jane Fonda did or what other actual spies did, and it resulted directly, I would argue, in deaths out on the battlefield.

And then, separately, more strategically, Neil, it's important to understand the effect. Post-9/11, we determined that we weren't connecting the dots between agencies. So we made a big move to share information and make that information very accessible to those out on the battlefield that needed it very quickly.

Well, then you have Bradley Manning that -- to go in and take advantage of that and expose it to our enemies. So the result is then all that information became compartmentalized again, making it much harder for all of us to fight the war on terror and to be successful in keeping Americans safe.

So, it not only had tactical ramifications. It had strategic ramifications. And what they did was, they broke the law. They made -- and they made Americans less safe. And they resulted directly in the killing of sources out on the ground.

CAVUTO: Congressman, thank you very much. Good to have your perspective.

WALTZ: All right.

CAVUTO: And thank you very much, sir, for your service to this country as well.

WALTZ: Thank you.

CAVUTO: All right, to continue that beating up on Barr, I told you a little bit earlier about Democrats who are now attacking the attorney general, Bill Barr, for saying that there was indeed spying going on of the Trump campaign.


SEN. JOE MANCHIN, D-W.V.: I think that was a horrible choice of language. And it was a horrible statement to come from our attorney general.

The only spying that I saw was Russia spying.

REP. STENY HOYER, D-MD, HOUSE MAJORITY LEADER: I believe the attorney general of the United States of America believes he needs to protect the president of the United States. And I think that's unfortunate.

REP. ERIC SWALWELL, D-CALIF., PRESIDENTIAL CANDIDATE: He has no business being on this case. I won't accept anything about this investigation until we hear from Bob Mueller.


CAVUTO: All right, Doug Burns joins us, extraordinary lawyer, extraordinary former federal prosecutor.

So, Doug, did he take a leap here? That's what they're saying, that he is...


CAVUTO: ... making a charge and then launching an investigation to confirm the charge.

BURNS: If you break it down, it's really pretty interesting, Neil.

It's a political and legal roller coaster, I'm serious, up the hill down the hill, up the hill. First, he drops the bomb, which is, there was spying. And that includes all kinds of assumptions and characterizations.

Then, however -- so, anyway, the left...

CAVUTO: Well, early on in the campaign, there was spying.

BURNS: There was spying. Right?

CAVUTO: So, where did he get it wrong?

BURNS: So everybody up in arms about the semantics. OK, they say how can you say spying?

CAVUTO: They had said if you were following.

BURNS: Call it surveillance.

BURNS: But then comes the next thing, which is he turns around and says, well, wait a minute, I'm not saying that specific rules were violated. I'm not saying that it was illegal. Hold on.

CAVUTO: But he wants to look into it.

BURNS: No, you read my mind. So the left takes a big sigh of relief.

Then he drops the second bomb. That's why I'm calling it a roller coaster. But I'm going to look at it.


BURNS: And that's not what they want to hear. You see what I mean?

CAVUTO: Now, where will this go?

Because the president had said right from the get-go here, of course, it was a witch-hunt.

BURNS: Right.

CAVUTO: And now I have been exonerated in the Mueller report, which is a little premature, we don't have the full report, but his argument was there should be an investigation into what prompted this investigation.

BURNS: There's no question that all throughout this dust-up, this fiasco for two years, you had clear delineations on both sides.

One side was saying, this is a totally legitimate investigation, and the other side saying, no, it's a witch-hunt. There was a good deal of exoneration, let's face it, particularly on collusion.

CAVUTO: Do you think...


CAVUTO: Democrats are saying, this is a -- look at this shiny object. I think Jerry Nadler even used that terminology to get the attention off of...

BURNS: I have never seen a moot court -- I'm using like the old law school term -- where each side gets up zealously arguing their positions.

No matter what happens, no matter what conclusions, you see a moot court response. So it's like Bill Barr's not accurately reporting this report. If that turns out to be incorrect, in other words, he did summarize it correctly, there will just be a pivot to the next topic.

CAVUTO: But shouldn't he be extra cautious that it looks like he is doing the president's bidding, which might not be his intent at all? Because the president has said this repeatedly.

BURNS: Well, in fairness to the other side of the debate, he wrote that 19-page memo.

CAVUTO: Right.

BURNS: That gave them all kinds of fodder to say, you see that?

CAVUTO: And they have not let go of it.

BURNS: He was auditioning for the job. And you have that.

And then, in fairness, also, point worth noting, is for Bob Mueller to have -- I hate the word punted. I mean, I love football, but to have delegated back to Barr set up the argument, why would you delegate that to the political person and all that?

But the special counsel works with the A.G., Neil.

CAVUTO: All right. All right, it is amazing.

BURNS: It is really amazing.

CAVUTO: Well, continue this law stuff. You show great promise there.


BURNS: Thank you.

CAVUTO: All right, in the meantime, Michael Avenatti, you remember him? You remember that Nike thing?

Something bigger, much bigger, something that could land him in jail for the rest of his life -- after this.


CAVUTO: Michael Avenatti cannot get out of his own way.

I'm not talking about the Nike thing. I'm talking about a brand-new 36- count indictment by a grand jury looking at a host of other issues that are going to jolt you.

FOX's Jeff Paul in Los Angeles to spell them all out.

Hey, Jeff.


In one of those cases, investigators say Avenatti withheld a $4 million settlement from a mentally ill paraplegic man. The indictment says when the client filed the documents for disability, Avenatti allegedly ignored sending the settlement information to the government, knowing it could show the alleged embezzlement.

As a result, the client stopped receiving his disability checks. And this is just one case investigators highlighted. They also say he stole millions of dollars from other clients, committed perjury, and dodged paying taxes.


RYAN KORNER, ACTING IRS SPECIAL AGENT IN CHARGE: Michael Avenatti allegedly stole from his clients and he stole from the IRS.

The money was used to fuel a lavish lifestyle that had no limits.


PAUL: Avenatti responding on Twitter -- quote -- "I intend to fully fight all charges and plead not guilty. I look forward to the entire truth being known, as opposed to a one-sided version meant to sideline me."

Now, we should also note this is in addition to the separate filing in New York where investigators accuse Avenatti of trying to extort shoe company Nike. He's supposed to be back in court April 29.

And if convicted, Neil, authorities say he could face more than 300 years in federal prison -- Neil.

CAVUTO: All right, amazing. Jeff, thank you very, very much, my friend.

Let's go to Charlie Gasparino on all of this.

CHARLIE GASPARINO, SENIOR CORRESPONDENT: Reminds me of the old Mel Weiss case. Remember, Mel Weiss was the king of the class-action lawsuits.

CAVUTO: Right. Right.

GASPARINO: It was always controversy, the way he created these class- action lawsuits.

Like, he found clients out of nowhere that bought maybe one share of stock. And, basically, he would sue the companies and they would pay the client for a little bit.

CAVUTO: But then he got his commission.

GASPARINO: Then he got his commission. He went to jail for a few years. He's now deceased.

Avenatti is different. What's fascinating about this case, as opposed to the Nike case, Nike case, I always thought, was difficult to prove, because they're basically saying he went to Nike and said, well, if you hire me as a consultant, and pay off my client, maybe I won't bring this up.

And it's kind of like a contract.

CAVUTO: Now they're claiming it's extortion.

GASPARINO: OK, but what's the difference being that with Amazon?


CAVUTO: No, I understand what you're saying.

But he's in deep legal trouble here.


And the point I was trying to say, what's the difference between what David Pecker, National Enquirer was doing with Bezos? Not that much different, entering in a contract. So it's a tougher case.

This seems really cut and dry, if it's true. It's literally taking money that should have went to the client and pocketing it. I mean, it's not that...

CAVUTO: But was it all the money? Because normally don't they get a fee of a third of whatever?


GASPARINO: Of 30 percent. Apparently, it's more than that.


GASPARINO: Now, I will say this, in Avenatti's -- I have been reading his tweets. I mean, that's how he's defending himself here.

He showed a document from one of the clients, I believe it was the paraplegic, which said that our deal is fine. I mean, listen, clients can cut side deals with lawyers. That doesn't necessarily -- that doesn't maybe comport to 30. Maybe it comports to 40. I don't know.

But remember that he does have some evidence in his side. And, Neil...

CAVUTO: Well, what does that mean? Are you saying that this is all stuff that is easily thrown out?

GASPARINO: I don't say easily thrown out. I said that he's going to have his side. He's going to have his day in court.

And he does have -- it just struck me that he did have one of the clients in a written document said that the settlement of the breakdown of the money was OK. I mean, that's out there. He put it on his Twitter feed.

I will say this. I have never seen anything like this, if this is -- if this is true. This is really an unprecedented move, a lawyer literally stealing...

CAVUTO: Do you think, had he not been so aggressive with the Stormy Daniels stuff, going after the president and everything else, we would even be talking about these other cases?

I guess it's the same thing with Paul Manafort. Had he never hooked up with Trump and the campaign, the president's campaign, would he have been facing what he is?

GASPARINO: I think so. I think at some point you trip a wire.

I mean, this guy is out there. I mean, he's tripped a wire. And for better or worse, he became famous. And now he may go down as infamous. But I'm telling you, if this is true, just think about it. When was the last time you literally saw -- listen, everybody thinks lawyers are sleazy.

I mean, that's a given. But this is like pretty -- pretty -- this pushes the limit, if it's true.

CAVUTO: All right, we will see. Thank you, buddy, very, very much.

All right, there's going to a major shakeup at the Department of Homeland Security. It's not just a single firing. Some are calling it a purge. The read when we come back from the fellow who runs the Senate Homeland Security Committee -- after this.


CAVUTO: First Lyft and now Uber.

Ahead of its own initial public offering, the ride sharing company saying that it has 3.9 million drivers on its platform. Some of those drivers are getting appreciation awards ranging from 100 to 10,000 bucks when it goes public.



THOMAS HOMAN, CONTRIBUTOR: This president is actually walking the walk. So he's actually doing everything can within a legal framework to try to secure the border.

Congress isn't helping him. They haven't offered him one fix. The Ninth Circuit is constantly issuing temporary restraining orders on everything he does. But he hasn't given up and he's going to keep changing.

That's why I think you're seeing this change right now in DHS. He's hitting the reset button. He wants fresh ideas, fresh people.


CAVUTO: All right, that was former ICE Director Tom Homan telling me on FOX Business that the shakeup going on in Homeland Security was done to give the president fresh ideas on what's going on at the border and that we sorely need that right now.

That shakeup, though, has some Republicans worried about a major void at the agency.

Let's go to the Senate Homeland Security chairman, Senator Ron Johnson.

Senator, good to have you back. How are you?

SEN. RON JOHNSON, R-WIS.: Great, Neil. how about yourself?


Let me ask you, then, about what you make of what former Director Homan is saying here, that there is a crisis at that border. This calls for sweeping action. He said of the president's replacement for Kirstjen Nielsen, Kevin McAleenan, that Kevin will put his foot on the gas, meaning that he will take dramatic action.

What do you think that means?

JOHNSON: Well, first of all, there absolutely is a humanitarian and national security crisis at the border.

Back in 2014, President Trump declared a humanitarian crisis, when 120,000 unaccompanied children and people came into this country illegally as family units. In just the first six months of this year, 240,000 have come. It's overwhelming our system.

But from my standpoint, the ball is in Congress' court. It's been the dysfunction in Congress. We have to change Laws. Listen, we need better barriers. It's up to the president to decide who he wants in these agencies to advise him, but the fact the matter is what's fueling this crisis are loopholes and legal precedents that reward and incentivize unaccompanied children and people coming into this country as family units.

It's basically, through no fault of their own, reduced CBP to a mere speed bump on the path of long-term residency for unaccompanied children and people coming in as family units. We have to change these laws.

CAVUTO: All right, now, the fact that there's been what some have called the purge going on at Homeland Security, maybe warranted -- it sounds, from what you're saying, Senator, you believe it is warranted.

But will this complicate actions in the meantime at the border at a very difficult time? What do you think?

JOHNSON: Well, I am concerned about a leadership void.

I have talked to Mick Mulvaney. This sounds like this was a planned action. I have got a great deal of confidence in the CBP Commissioner and now acting Homeland Security Secretary McAleenan. He's choosing his team. I think that's probably appropriate.

You still have seasoned managers in DHS. So I'm not panicked. I'm concerned, because leadership matters, particularly when you're in the midst of a crisis. But, again, let me emphasize the ball is in Congress' court.

The president can't fix this without Congress changing some of these laws.

CAVUTO: So we're told, sir, that White House senior adviser Stephen Miller has been very involved in this process, very dissatisfied, and maybe sharing the president's own anger at what's going on at the border. What do you think of the role he could be playing here?

JOHNSON: Well, the problem with executive action, even if it's proper, even if it's legal, they shop it to a court that overturns his decision or puts an injunction, which, again, emphasizes we have to change these laws.

Neil, only about 15 percent of the asylum claims that are made by people coming in as family units are granted. So we have to first create a -- have a more accurate initial determination, so that we only -- so that the people that actually are let into this country based on asylum claim have a far greater opportunity of having that be a valid claim.

Otherwise, we have to be able to hold those individuals, make that determination. And if they don't have a valid asylum claim, we have to return them to the home country. That would be a real deterrent.

Michael Chertoff faced this with an influx, a surge of Brazilians in 2005, small -- far smaller numbers, but 31,000. He instituted a program of rapid removal called Texas Hold' Em. The next year, only 1,400 came in.

So, we know what works. There has to be a consequence. We have to remove people that don't have a valid asylum claim. It has to be rapid, but fair adjudication of those claims.

CAVUTO: I'm wondering what you make, separately, if you will indulge me, sir.

The president has two picks for the Federal Reserve that obviously have to get Senate OKs. And the one that just got a fourth no-vote among your Republican colleagues is Herman Cain, a former presidential candidate, fast food titan.

Is he toast?

JOHNSON: It will depend on whether he can make it first through the Banking Committee. But he's been a former governor -- governor chair in the past. He is a businessperson. I think he's a capable individual.

I'm certainly not disqualifying him. I would want to listen to his testimony. I would want to evaluate him if he comes through the Banking Committee.

CAVUTO: So I know he's at the limit of no votes among Republicans, assuming he doesn't get a single Democratic vote.

I know how divided the Senate is these days and Washington in general. Is it your understanding that there are other Republicans who would similarly say, no, you're not the guy?

JOHNSON: I really have no idea.

From my standpoint, I kind of wait to see how the nominees work their way through the committees, what information they provide, how they go through that confirmation process. Then I will make my final decision.

CAVUTO: If you had a choice between the two of them, Steve Moore and Herman Cain, because obviously two rejections for the president would be a bit much, is it your sense it's going to be Steve Moore who will survive all this?

JOHNSON: Again, I really can't make that prediction.

I will -- again, I will wait for these individuals to go through the confirmation process, provide the committees the information, go through the hearings, and then we will make our determination.


I know I threw a lot at you there, sir. I just wanted to get an update from you.

Always good talking to you.

JOHNSON: Have a great day.

CAVUTO: All right.

CAVUTO: Meanwhile, forgot worries about the government just spying on you. What about Alexa listening to you?


CAVUTO: Alexa, quit spying on me.

There's a new report revealing that thousands of Amazon workers may be listening to what you're saying when you're talking to Alexa. Amazon says that it simply monitors some conversations to improve Alexa's understanding of human speech.

But just how concerning is this?

Attorney Leeza Garber joins us, Fox News contributor Kat Timpf.

Now, Leeza, apparently, the start of this was concerns about picking up comments I believe said among some guys talking in Romania, I believe, that might have been plans for a rape and simply because some of the words sounded like Alexa. I don't know the details that -- you probably know better than I.

But that they were just trying to monitor that kind of thing to see what they would do in that event. But what do you think?

LEEZA GARBER, ATTORNEY: Well, this has happened in the U.S. too.

Apart from even criminal -- Alexa has been used in criminal cases too, where they were trying to pick up sounds taking place during a murder investigation. But it's happened in the U.S.

And the problem is, the way to activate Alexa with certain buzzwords, like Alexa, computer. You have to say it.

CAVUTO: You have say Alexa, right.

GARBER: But the technology is still trying to catch up to different dialects, learning how people speak.

So behind any sort of artificial intelligence that's behind these personal assistants, whether it's Amazon Echo or even Google's personal assistant or Apple's Siri, there's still a human element behind it.

CAVUTO: This is weird.


But it's also not surprising, right? These people are probably bored at work all day. They will say, hey, let's see what this guy's up to. He's always doing some weird stuff.

CAVUTO: Well, they say they don't have the power to go and know, for example, who they're listening in on.


TIMPF: That still would bother me, right?

And this is not the first time we have seen something like this. We're seeing with technological conveniences there's a tradeoff. Like, instead of photo albums, now we have Facebook. Well, they're selling your data.

Now with Alexa, you don't have to get up and turn off the light anymore, but some dude over in wherever knows that you were up at 3:00 a.m. on a Monday wondering what happened to Gunther from friends, right?

GARBER: And so what you were searching for on Amazon to purchase at 3:00 in the morning, right?

TIMPF: Yes, which I don't care for that.

GARBER: And the other piece of it is -- right, exactly.

And that's something people forget, is these systems are constantly connected to the Internet, the capability is there. And whether we're aware of it or not, we sign on and agree to these privacy policies.

This wasn't explicitly stated in Amazon's privacy policy, but it's there.


CAVUTO: You just something I think is very profound.

The capability is there. They might not go in saying, all right, we're going to listen to Leeza, what she's doing in her family room, but...

GARBER: Well, I don't have one.

CAVUTO: OK, fine.

TIMPF: I don't either.


CAVUTO: All right. Me doth protest too much.

But I do think what they are up to is revealing to the world they have the capability to go back and process stuff that is going on in your home, if they want. They have that database. That's what I feel.

TIMPF: And that's terrifying.

And I think if they have that capability, I wouldn't be shocked based on human nature to find out that they're doing it, right? I have some loud neighbors who are constantly fighting over some guy doing the same thing over and over again to this girl. And I know exactly about everything in this saga because they're so loud.

And I turn down my TV and I listen on purpose. Is that kind? No, but it's interesting. And if I had this job, I might be interested in seeing what other people are asking Alexa.


TIMPF: I live in New York City. I live in New York City.

GARBER: The human element exists, though. I mean, it's true for Facebook too.


CAVUTO: But they had thousands of people doing this.

Now, I will try to get the benefit of the doubt here that you're trying to perfect the language and talking about something and then seeing what might come up and responding to people who they might be telling Alexa to do something and she's not responding or doing anything. But that's a scary leap.

GARBER: It is a scary leap.

And the other piece of it is, they are definitely saving, they're archiving a lot of this information. As a user, you can go back in and see what they have. But on the positive side, it's necessary. It's kind of a necessary evil if you want to take part in using this technology because they need it to get better and better. They have to review it.

CAVUTO: But they take over our lives. It's open the pod bay door, Hal, and Hal doesn't do it.

GARBER: It's already open, yes.

TIMPF: I just understand the need for the technology.

I'm an adult woman. And I have gotten pretty good at turning on and off a light switch by this point in my life. I also know how to Google things using my hands. I'm quite advanced.

CAVUTO: By the way, where you're living, the light switch is the least of your worries.

TIMPF: That's true. That's true.

CAVUTO: But, in other words, this is intrusive, but it follows a pattern we have gotten out a lot of these companies, whether deliberately or not, where you use their stuff and stuff, this is the stuff that happens.

GARBER: But the cat is out of the bag.

There's no way to go back in time. We still want that kind of Jetsons mentality where we get to leap ahead and use this kind of technology, but it is a tradeoff.


CAVUTO: Guys, thank you very, very much. We shall see.

All right, in the meantime, Democrats are saying all the while there is no border crisis, right? Suddenly, there is a border crisis. So now what do they do?

After this.


CAVUTO: All right, the president says he still could put more troops at the border, as a new migrant caravan is said to be leaving Honduras on its way to the U.S.

Assistant House Speaker New Mexico's Congressman Ben Ray Lujan joins us right now.

Thank you, sir, for joining us.

REP. BEN RAY LUJAN, D-N.M.: Thanks for having me, Neil.

CAVUTO: So let me just get to the point here.

The president says there is a crisis there. Jeh Johnson, the former homeland security secretary for President Obama, says, given the sheer numbers trying to get in, it's an emergency at the border. It's a crisis.

Do you see it that way?

LUJAN: Look, Neil, I have said consistently that I believe there's a humanitarian crisis at the border, but one that has been caused by President Trump and his administration with their failed policies.

Rather than reaching out to work in a bipartisan basis with Congress to pass comprehensive immigration reform, the president continues to threaten to either shut down the border with Mexico or to cut off funding to the Northern Triangle, to the three countries, or even shutting down to the government over the wall, and now threatening to militarize the border once again.

We can find a bipartisan solution to this. The Senate passed a bipartisan comprehensive immigration reform agreement not long ago, and Speaker Boehner and Speaker Ryan wouldn't let us vote on it. So I'm hopeful that we can find some common ground and bring order to the border and make sure that we work together.

CAVUTO: But, Representative, I think it's fair to say that these problems were there long before President Trump took office, right?

LUJAN: Well, look, these are challenges that we have been facing for some time.

And that's why it was important to pass a comprehensive immigration reform package as well. And even under President Barack Obama, when the Senate worked and pass a bipartisan agreement, Speaker Boehner and Speaker Ryan got in the way of a bipartisan agreement.

If we can pass a bipartisan comprehensive immigration reform package out of the Senate, I'm certain that we can work with Speaker Pelosi, House Democrats and Republicans in the House, to get this thing passed.

CAVUTO: But it just seems to me, Representative, that each party is talking past the each other. They both agree on the broad structure of a deal that includes doing something with these illegals who are here or the kids are those illegals who are here, the so-called DACA members in this country.

They also seem to be open for tighter border security, whether you wanted to define that by a wall or what have you. So what is keeping the two apart?

Now, the White House, surprisingly, has been saying, even though you said the president has made things worse, that it's Democrats who refuse to give an inch or do anything.

What do you say?

LUJAN: Well, I disagree with that assessment.

Look, there are 11 million or more undocumented people in the country, over half that are here with expired visas. Clearly, there's a broken system that we have to deal with.

So passing a comprehensive package should be at the top of the list.


CAVUTO: Do you agree with the president, who is saying Mexico could afford to do more at its border to prevent this from happening? Does Mexico have some blame here?

LUJAN: Well, I think the United States should be working with Mexico and the Northern Triangle countries and see how we can all work together, rather than the president constantly threatening the Mexicans that they're going to close the border, when, in fact, closing of the U.S. border with Mexico would devastate the U.S. economy and even the auto industry.


CAVUTO: Well, he's pushed back on that he's going to hold off, maybe because guys like you have been saying that would be dangerous to do.

LUJAN: Well...

CAVUTO: But I do want to get your thoughts on that and what his options might be now, because if he is going to hold off a year or more to address closing the border, there's not much more he could do but build the wall, right?

LUJAN: But, Neil, the problem is that the president makes a threat and then he walks away from it. And he only alienates those that we're trying to work with.

The president cutting off the Northern Triangle countries with Honduras and Guatemala and El Salvador is going to increase violence there.

And so, again, how can we work together? It means that the president needs to be willing to keep his word, in the same way that he made a commitment, President Donald Trump, when he invited the cameras in, and said, let's solve this problem, let's pass a comprehensive immigration reform package.

And it took, what, less than 48 hours before the president walked away from the agreement. If the president can come up with his approach, his plan, let's...

CAVUTO: Well, there really was no agreement in place, right? There is no agreement, right?

LUJAN: Well, but the president -- the president said, let's put something together, and then 48 hours, he even moved the goalposts or completely walked away from them.

And I think that's just a problem. There's a willingness to work together here. Senator Lindsey Graham was instrumental. And so let's do it.


CAVUTO: I think you're right. There is room, to your point.

Representative, thank you for taking the time. I do appreciate it.

LUJAN: Thank you, Neil. Thanks for having me.

CAVUTO: All right, in the meantime, look at the bright side. There's going to be two feet of snow throughout much of the middle part of this country. And last time I checked, it is spring.


CAVUTO: Ready for a snowstorm or worse?

Let's get the read from Rick Reichmuth on a doozy coming, well, most of the nation's way.

Hey, Rick.

RICK REICHMUTH, CHIEF METEOROLOGIST: Yes, at least kind of the western half of the country is getting this storm.

You can see the center this now winding up here across parts of South Dakota. That's kind of the bullseye from the storm, although still more energy coming out in across parts of the West with more snow across all of the mountains.

But take a look at this. This has been very heavy snow and along with it is the wind. You got a lot of winds gusting to, say, 40 to 45 miles an hour. Haven't seen a ton of sustained blizzard conditions, but we still have the blizzard warnings in effect there.

Those will be out of here by tomorrow night. We still have a number of hours to get through. Probably have another, say, six inches of snow primarily across parts of Minnesota. And then the other problem will be is, all that snow is going to have to melt, and we have a flooding problem going on across there -- Neil, back to you.

CAVUTO: All right, well, Rick, thank you, I think.


CAVUTO: Rick Reichmuth following all of that. His job never ends. His day never ends.

By the way, on FOX Business tomorrow on "Coast to Coast," we will be getting a sense of what's going on in Wisconsin right now, ground zero for the 2020 election, their pricey plans to win over for Democrats a state that the president won.

The former governor there, Scott Walker, handicaps that beginning at noon on FOX Business. See you then.

Here's "The Five."

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