Rep. Warren Davidson: GOP leadership fight is healthy

This is a rush transcript from "Your World with Neil Cavuto," November 13, 2018. This copy may not be in its final form and may be updated.

CHARLES PAYNE, GUEST HOST: Fresh off the midterms, freshman lawmakers began arriving on Capitol Hill, as the battle over leadership rages on.

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

The battle for power moving into high gear, as Democrats and Republicans prepare to pick their leaders. Who's in and who's out?

Mike Emanuel on Capitol Hill to sort it all out for us -- Mike.


One race to watch is who will lead House Republicans in the new Congress.  The contest is between the current majority leader, Kevin McCarthy, and Ohio Republican Congressman Jim Jordan.

One newly elected Republican says he's impressed by both.


DAN MEUSER, R-PA., CONGRESSMAN-ELECT: I think they're both outstanding people. I have had conversations with them over the past weekend asking them what their plans will be, since we are -- will be in the minority over the next two years.

They're discussing those plans now and waiting to gain some more information there and then make a final decision. But I think very highly of both of them.


EMANUEL: On the Democrat side in the House, Nancy Pelosi wants to be speaker again. But some of her newly elected Democrats campaigned against supporting her. One new Democrat told us why she's a yes.


VERONICA ESCOBAR, D-TEXAS, CONGRESSWOMAN-ELECT: She's an incredibly strong leader. She shepherded through the Affordable Care Act, when many people thought it couldn't happen. We need that kind of strength right now. I think it's a job for a woman.


EMANUEL: Also here for orientation, Vice President Mike Pence's brother Greg, newly elected to the House Republicans representing the state of Indiana.

There are also some senators trying to find their way around Capitol Hill.  We caught up with Mitt Romney earlier, and he said that he is basically looking forward to getting started, working here on Capitol Hill, noting it's orientation day and he's getting oriented, a lot of fresh faces.

Feels kind of like the first day of school -- Charles.

PAYNE: Thank you very much.

Well, a contentious fight heating up between House Majority Leader Kevin McCarthy and Freedom Caucus favorite Jim Jordan over who will be the next minority leader.

Ohio Republican congressman and Freedom Caucus member Warren Davidson on what's at stake. And how big of a gamble is this for the Freedom Caucus?

Welcome to the show.

The Freedom Caucus, of course, has had -- had its share of run-ins in the first two years under President Trump. But it feels like the election outcome, the voice of the people have sort of spoken. And I think the Freedom Caucus perhaps feels like they have been given a nod for greater leadership within the party.

REP. WARREN DAVIDSON, R-OHIO: Well, Charles, the conference did get more conservative. Unfortunately, we're not in the majority.

And part of the -- part of the challenge is, as Republicans, we had some members who aren't coming back who -- who took some tough votes, who had a hard time being able to get the things done that we campaigned on, but also at times broke from their district.

You look at Jeff Denham, who's in a close race, maybe can find a way to close the gap there in his district, he broke from party. And I think that's the thing. If we're going to work our way back to the majority, we have to be the conference that you can come here, stay on the principles that you campaigned for, and in some cases, you got to represent your district and not just come here to follow orders.

PAYNE: Well, the following orders part has always been sort of the bone of contention, the Freedom Caucus sort of saying, hey, we want to get back to the roots of the Republican Party, we want to be the group that fights.

And, of course, there's an old-school methodology in Washington, D.C., that sort of goes, hey, you want to get along with the other party. The Freedom Caucus seen as a contentious bunch. Is that a bad rap?

DAVIDSON: I think it is.

I mean, if you look at a lot of positions, Freedom Caucus is fine working with -- with Democrats on civil liberties and things like that, but we're not -- we're not necessarily on board with the amount of spending that's taken place. That's been a bipartisan effort to get us $21 trillion in debt.

And, frankly, as I have talked to people, whether the Republicans or Democrats, I don't know anyone who ran for Congress because they felt like things were going so great in Congress. And so you look, whether it's Republican or Democrat, we're looking at people that have been in leadership for a long time, the status quo isn't working for a lot of America.

And the reality is, if you do what you did, you're going to get what you got. And I think we have to really listen. And I have been encouraged when I talked to Kevin McCarthy. I already know Jim Jordan's plans. And it really is a strong break from the way we have -- we have done business.  It's not business as usual.

PAYNE: Well, so, am I to assume then that if Jim Jordan doesn't make it, you will be OK with Kevin McCarthy? I mean, you are a Freedom Caucus member.


And the reality is, it's healthy that we have this debate, that they air their different views of what we should go forward. And that might find a way to unify the conference in having the debate and having the vote.

And we will see. We will see who wins in the end. But I hope that we really go about it in a methodical way and go with a bottom-up process that really makes sure that everyone, including our newest members, are part of the team.

PAYNE: Well, Representative Davidson, where do they differ? Where's the -- where's the big differences here between these two gentlemen that -- well- respected, to your point? But, obviously, there's got to be something that's tugging you.

What would be the main deciding point for you?

DAVIDSON: Well, I think one of the biggest ones is, if you look last year, the House passed all of our spending bills on time, ahead of October 1.  That was the first time since 2005.

And the Freedom Caucus held on board to get tax reform. We had continuing resolution after continuing resolution. And what we were promised is, we were at least going to make the Senate vote. And when it came time, the Senate made their first public counteroffer, and we folded.

It was a complete surrender on spending. We did the march on the bus. We didn't even get 24 hours to read the bill. And I want to know that whoever is leading our party is actually going to be able to do what we said we were going to do. We're going to fight for the principles that we said.  And where possible, by all means, let's work together.

But let's not surrender.

PAYNE: Do you feel the Freedom Caucus is more in tune with the agenda, President Trump's agenda?

DAVIDSON: Oh, there's no question.

I was at a rally in Cleveland, where President Trump came to Cleveland the Monday before the election. And I was walking through the parking lot with Jim Jordan. And literally hundreds of people getting out of their cars, hey, that's Jim Jordan, running up to him.

And just the amount of energy, and I think that we need that. We need that on our party. We need to make sure that Jim is a key part of our team. My hope is, he's the minority leader.

And when you look at the challenge for us, engaging that base, like the ActBlue money was, it's not just the support.

PAYNE: Right. Right.

DAVIDSON: Small-dollar contributions made a huge difference in this, who holds the House.

PAYNE: Representative Davis, and thank you very much. Really appreciate it.

DAVIDSON: Thank you.

PAYNE: Now, of course, the Democrats also bracing for leadership fight as well.

New York freshman Congressman Max Rose telling Neil that he is not a fan of having Nancy Pelosi as speaker.


NEIL CAVUTO, HOST: You were not keen on Nancy Pelosi.


MAX ROSE, D-N.Y., CONGRESSMAN-ELECT: Yes, I'm not a supporter of Nancy Pelosi. I'm not voting for her.

CAVUTO: So, you won't -- for her to be your leader?

ROSE: Absolutely not.

What I can tell you, because what I can control right now is my vote. And I am not voting for her, no if, ands or buts, under any circumstances.


PAYNE: And Max Rose might not be backing down, but if Nancy Pelosi wins, will he have to?

And what does my next guest make of all of this, Missouri Democratic Congressman Emanuel Cleaver.

Congressman Cleaver, thanks for joining us.

REP. EMANUEL CLEAVER, D-MISS.: Good to be with you.

PAYNE: A lot of folks who won in the midterms, a lot of Democrats, voiced their opposition to Nancy Pelosi right up front. In fact, some very young dynamic stars, emerging stars in your party, Joe Cunningham, Conor Lamb, saying, hey, there needs to be fresh leadership.

Do they have a point?

CLEAVER: Well, yes, under normal circumstances, I think we would certainly want new leadership to emerge. And it's going to emerge.

I just did a TV show with a young person today, and I believe very strongly that he, as well as a lot of others, are going to begin to rise.

However, in the unique situation that we find ourselves, Nancy Pelosi is very likely going to be elected speaker. We have come from nowhere to the majority. And it's going to be difficult to push her back.

And right now, there's nobody even opposed to her. Nobody -- nobody has -- there are those opposed to her. I apologize. But there's no announced opponent to her.


CLEAVER: So she's going to win, unless something happens that we haven't had any idea to think about.

PAYNE: And I understand you had signed a letter of support now. You are on board with backing Nancy Pelosi as leader?

CLEAVER: I'm going to support Nancy Pelosi.

We have a system where either I'm going to have to vote for Nancy Pelosi or I will vote for Mickey Mouse or one of the Kansas City Chiefs, Mahomes, probably, the quarterback.

And that's what I have been telling people. I mean, most people don't realize it. Anybody in the country can be speaker. They don't have to be a member of Congress. So I'm going to vote for Nancy Pelosi. But that's not the only choice. There are other choices.

PAYNE: What is the final -- just why did you decide on that? Is it because she can raise money? Or do you really believe in her leadership abilities?

I mean, yes, she's been in the position before, but you guys also suffered some catastrophic losses under her leadership.

CLEAVER: Absolutely, we did. And I think she recognizes that and all of us recognize it.

We're in a tough spot right here. We -- we need some seasoned leadership for the -- over the next two years. We need people who've been there before. We're in the majority in the House. But we have got to work with the Senate and we have got to work with a president that's not easy to work with.

And so it's going to require someone who understands give and take. We're not going to have our way. Somebody who also is not coming in here screaming, we have got to do impeachment. And she has said that very openly and very clearly.

And I remind people, she voted against the -- she voted for the motion to table the articles of impeachment, as did I, when they were introduced earlier.

PAYNE: Right.

And yet Axios had an article, I think it was yesterday, 85 investigation targets already singled out by Democrats. Everything is going to be requested, from taxes to the Space Force.

I mean, is that going to be the way to go? You got two years to prove to the American public that you can legislate and do things. I mean, going to war with President Trump, it just doesn't sound like a smart idea.

CLEAVER: Well, it's not a smart idea.

And I -- when my election was called, and I made my speech last Tuesday, the first thing I said is that I'm not going into the new term to concentrate on Donald Trump. I'm going into the term concentrating on the people of the 5th Congressional District of Missouri.

And I think most people are doing that. Reporters are constantly asking us, what are you going to concentrate on? Now, I don't think most members -- I have not had one conversation with a single member who said, we got to do impeachment, not one.


CLEAVER: And so I think, in some ways, the media -- and they're doing their job, but they're asking, so, are you going to do impeachment?

No, we're not going to do that. That's not even on the agenda.

PAYNE: Yes. welcome

CLEAVER: What is on the agenda is making certain that we have checks and balances.

PAYNE: Well, sir -- sir, there's a term for that. Trump coined it. I will let you think about what it is.

And I would go with Mahomes too, the way he throws those passes.


PAYNE: Thank you very much. You're a gentlemen.

We always appreciate having you on.

CLEAVER: Good to be with you.

PAYNE: Well, election dramas playing out in Florida and Georgia. Will the courts have the final say?


PAYNE: A Thursday deadline fast approaching, and election officials in Florida, well, they're still counting.

To Phil Keating in Water Hill, Florida, with the latest on both the Senate and governor's race -- Phil.

PHIL KEATING, FOX NEWS CORRESPONDENT: Charles, off the top, breaking news out of Tallahassee.

A Leon County circuit judge has now ruled in the Palm Beach County recount that it can have a five-day extension to get that machine recount completed. Palm Beach County has said it's outdated equipment would unlikely meet the Thursday 3:00 p.m. deadline.

And the superintendent there, Bucher, she thinks this ruling may not actually be implemented, because it will undoubtedly now be challenged in federal courts.

Meanwhile, here in Broward County, a major milestone this afternoon. An official inside says they are now ahead of schedule. They have completed the machine recount of all early votes cast in Broward County. That's about 300,000 votes.

Now they still need to sort all the day-of votes and then recount and tabulate all of the day-of votes and the mail-in ballots. Broward does feel confident they can make that Thursday 3:00 p.m. deadline.

As for the superintendent of Broward County's Elections Department, Brenda Snipes, very much criticized all last week. In fact, for months and months, she has been criticized. She has been called to resign or to actually be suspended by the governor.

Former Governor Jeb Bush tweeted just that yesterday. That's the man who actually appointed her superintendent of elections. And Brenda Snipes spoke on that earlier today.


BRENDA SNIPES, BROWARD COUNTY, FLORIDA, SUPERVISOR OF ELECTIONS: I did hear about the tweet. I don't do -- I don't tweet, so I didn't read it.  But I did receive the information from several people.

And many of them were concerned that that statement was made. However, it's an opinion. You know, he feels that I should be removed. He did place me here for a year. And then I liked it, and so I ran. And I was reelected four times.

So -- but it is time to move on.


KEATING: While several counties in Florida out of the 67 total have already completed their recounts, down here in South Florida, the most populous counties in the state, they are still recounting -- Charles.

PAYNE: Phil, thanks a lot.

Now to Georgia. A judge ordering the state to wait until Friday to certify results of the governor's race.

Jonathan Serrie has the latest from Atlanta -- Jonathan.


Well, today, Democrats are celebrating a series of federal court rulings in their favor. A federal judge has ordered election officials in the Atlanta suburb of Gwinnett County to stop disqualifying absentee ballots just because voters failed to properly write down their birth dates on them.

As a result, when that county is having to reinvent evaluate numerous disqualified ballots, and they say that they're not going to meet the county deadline to certify election results today. It'll probably happen sometime later in the week, closer to the earliest potential state deadline.

This follows a separate ruling requiring Georgia to set up a hot line or Web site for voters who were flagged for registration problems to check on the status of their provisional ballots.

Take a listen.


GREG BLUESTEIN, THE ATLANTA JOURNAL-CONSTITUTION: The most important thing I think it does is, it opens up to review potentially thousands of rejected provisional ballots that Stacey Abrams' campaign believes could be the difference between forcing a run-off and losing this race.


SERRIE: Now, Republican Brian Kemp is just a fraction of a point above the 50 percent threshold needed to avoid a run-off in this race -- Charles, back to you.

PAYNE: Thank you very much.

So what is the legal fallout from all of this?

To FOX News senior judicial analyst Judge Andrew Napolitano.

Judge, what do you think?

ANDREW NAPOLITANO, FOX NEWS JUDICIAL ANALYST: Well, the legal fallout should be that the voters should have who their representatives and governors will be, not judges.

But the tension between state court judges and federal judges is sometimes pretty obvious. State court judges are more likely to want to enforce state law as it is written, and federal judges are more likely to follow a looser constitutional standard of it. If there's a way to get a person to vote, and if they made all the effort to vote, then their vote should be counted.

So the person that Jonathan Serrie ran in that clip is quite correct...

PAYNE: Right. Right.

NAPOLITANO: ... when he says the Democrats are happy when federal judges rule. Federal judges usually rule more time, more votes to come in. State judges usually rule, if you can generalize, less time, let's get this over with.

PAYNE: Yes, but we just heard this five-day extension? I mean, that's going to -- a federal judge ultimately is going to have to rule on.

That seems -- that seems long. We want every vote to count, but it's also making a mockery of the system, doesn't it, the longer this stuff takes?

NAPOLITANO: Well, here is the problem.

How specific and precise and demanding are state officials going to be?  So, take my name, Andrew P. Napolitano. If I signed it Andrew Napolitano, instead of Andrew P., and the official record shows Andrew P., are they going to deny me the right to vote?

That's what's going on hundreds and hundreds of times. A rigid interpretation of state law would say, you signed your signature different than the way you did when you registered to vote, we're not taking your vote.

A more reasonable approach would be, well, you're obviously the same person. With the passage of time, you sign your name a little differently, so we're going to count your vote.

Take that scenario, just hypothetically, because it involves me.

PAYNE: Sure.

NAPOLITANO: And multiply it thousands of times. That is what is happening in Palm Beach and Broward and in this county north of Atlanta.

PAYNE: But aren't those rules already established, whether -- don't they - - I mean, they have dealt with this over a couple of centuries.

NAPOLITANO: So, if you read the rules literally, they demand literal compliance.

But if you read the interpretation of the rules by judges, they should -- they say, be rational, be fair, because people have the right to vote.

I myself in New Jersey on many instances was the judge in the county where you live, Bergen County, a prosperous and populous county. And on Election Day, that was my assignment. You bend over backwards to find a way to justify the person to vote, unless you think they're deceiving you.

Again, take that and multiply it thousands of times. That's what they're confronted with.

PAYNE: Yes. As someone, though, quick -- there's only 30 seconds -- who embraces the Constitution, are you concerned, though, that these -- the delays, the recounts, the bogged-down mystery, something is wrong with the implementation of our system?

NAPOLITANO: Look, if the impression is that the victor really didn't win, that he won by cheating, that is very bad. That person's credibility will be undermined their entire time in office.

So not only must this be fair, it must appear to be fair, the impression must be that it is fair and lawful.

PAYNE: Yes, well, they keep finding boxes of ballots. That's not good.


PAYNE: Judge, thank you very much.

NAPOLITANO: You're welcome, Charles.

PAYNE: Well, California reeling from what is now the deadliest wildfire in that state's history. We're going to talk to a California fire official on the front lines next.



PRESIDENT DONALD TRUMP: We mourn the lives of those lost, and we pray for the victims. And there are more victims than anybody would ever even think possible.


PAYNE: President Trump commenting on the worst wildfire in California history, more than 40 people dead, and most in the town of Paradise.

Claudia Cowan is in Paradise, California, with the latest -- Claudia.

CLAUDIA COWAN, FOX NEWS CORRESPONDENT: And, Charles, six days later, some buildings and homes here continue to smolder, while the death toll continues to rise. Thirteen more victims were found yesterday.

And the grim search continues today to find more victims of this devastating Camp Fire. In burned-out neighborhoods throughout town, more than a dozen search and recovery teams are coming through the ashes.

They say when they see multiple cars in a driveway, it could be those people got trapped and there remains are in the rubble. Starting today, teams will be using cadaver dogs and mobile DNA labs to help speed up the identification of badly burned remains.

The sheriff is also bringing in portable morgue units on loan from the military. While they were helping people escape the flames, 90 of the town's first-responders lost their homes. The local fire chief said the inferno was like a snow blizzard of embers, pelleting homes and setting one after another on fire.


DAVID HAWKS, PARADISE, CALIFORNIA, FIRE CHIEF: It's just absolutely heartbreaking to drive through Paradise and see the level of destruction.  My family lost their home in the fire. My parents did. My grandmother did.


COWAN: And more than 52,000 people remain evacuated. Many still don't know if their loved ones survived or what is left of their home.

Before evacuation orders can be lifted, the city needs to be secured, power needs to be restored. I can tell you that a massive cleanup job is well under way. But people may not be allowed to return into Paradise until after Thanksgiving -- Charles.

PAYNE: Claudia, thank you very much.

Joining us on the phone right now, California Fire Captain Richard Cordova, who has been battling the Woolsey Fire.

Captain Cordova, thanks for joining us.


PAYNE: Tell us how things are going. Bring us up to date, if you will, because we know the situation continues to change, and these battles, while hard-fought, it feels like it's tough to get them under control, any of these fires.

CORDOVA: Well, down here in Southern California, we're still dealing with the Santa Ana winds, with drove this fire in the very beginning.

We had a significant run this morning of an area, but we handled it pretty well, put that area out. So it's just a matter of time, waiting for the Santa Ana winds the died down, so we could wrap our arms around this.

PAYNE: The -- describe, if you can. We're hearing now, for instance, of course, the Camp Fire that has wiped out Paradise, the worst in history, but just seeing the carnage, the death tolls keep rising, the towns, the homes, the businesses, that they just keep climbing.

And it's hard for us to get our hands around this, to grapple with this.

CORDOVA: Yes, it's just very unfortunate.

Being with my department, Cal Fire, for 20-plus years, years -- about three or four years ago, when I witnessed the Valley Fire, I thought that was my career fire. But ever since then, it's just been getting worse and worse.

And a lot of it has to do with the drought that we have dealt with here in California for six-plus years. And we're just seeing very extreme fire conditions. And, unfortunately, when you put all three elements together - - and that's that's high temperatures, low humidity and the winds -- you cannot control these fires.

And, as firefighters, we cannot respond to these fires and start putting the fires out. We go right into rescue mode and start clearing homes and homes to make sure people are safe.

PAYNE: It does seem like the evacuations were well-rehearsed. They -- and, fortunately, they were smooth, they were quick and for the most part efficient, despite the death toll.

When did you get a chance to focus on fighting these fires? Or is there a point where it's strictly impossible? Because I'm watching these giant passenger jets scoop up gallons of water, tens of gallons of water, or whatever the chemical are, and then dropping it on these fires, and it doesn't seem to make a difference.

CORDOVA: Yes, it doesn't.

We -- once we get into these wind conditions, some of these aircraft cannot fly in those conditions, because it's just too dangerous for them.

But, also, when we experience extreme heat, sometimes, this fire retardant doesn't hit the ground. I have been on a fire in my lifetime with this department, and in a situation where they were dropping on top of us, and we never felt a drop of fire retardant.


CORDOVA: So, when it -- when it's very hot like that, a lot of this stuff is just going to evaporate.

So they're dealing with very extreme conditions at this time.

PAYNE: Sir, let me ask you how your team, how your men, men and women of the fire department, how are you guys holding up?

CORDOVA: We're doing pretty good.

This takes a hit on a lot of us. Firefighters are -- we want to be out there to serve the public. And when we start losing homes and lives, we take a personal hit on that, because we felt like we're a family in some ways.

But, as the men and women on the ground, they continue the fight. They continue to put these wildland fires out. And we're going to learn from a lot of this.

PAYNE: All right, Captain Cordova, we echo President Trump's comments today.

We thank you for your service and the sacrifices that you guys have made.  You make all the difference. And thanks for spending some time with us this afternoon.

CORDOVA: Thank you very much, sir.

PAYNE: All right, we will be right back.


PAYNE: No rally on Wall Street, the Dow Jones industrial average dropping for a third straight day, down nearly 1,000 points in the past three sessions. It's getting waxed pretty good.

We will discuss it later, and we will be back in 60 seconds.


PAYNE: New satellite images shows North Korea could be maintaining a network of undeclared ballistic missile operating basis, as talks between the United States and the rogue nation have stalled.

President Trump dismissing this as fake news, tweeting: "The story in The New York Times concerning North Korea developing missile bases is inaccurate. We fully know about the sites being discussed. Nothing new and nothing happening out of the normal. Just more fake news. I will be the first to let you know if things go bad."

Is America being played? That's a question. Is Kim Jong-un playing us?

Retired Four-Star General and Fox News strategic analyst Jack Keane joins us now.

General Keane, what do you make of this? It's -- we have heard these sort of reports since we have been engaged with North Korean in dialogue and trying to find a solution here.

JACK KEANE, FOX NEWS SENIOR STRATEGIC ANALYST: Well, are we being played?  I mean, it's a good question.

I don't think we know that answer yet. But here's what we do know.  Clearly, there's been progress. And the president touts that progress, and rightfully so. There's been no nuclear weapons testing. There's been no ballistic missile testing flying over Korea, I mean, and also over Japan, which gave us so much concern.


KEANE: So, what -- and there's been obviously reconnecting North Korea and South Korean families, reconnecting rail lines, which is in the planning, works, hasn't happened yet, return of hostages, and also return of remains.

All of those are good things. But -- and it's a big but -- denuclearization involves a complete inventory of the weapon sites and the ballistic missile sites. We don't have it. It also involves a program to destroy, disarm and dismantle all of that on the inventory. We don't have it.

And there has not in a single nuclear weapon that has been disarmed or destroyed, and the same thing for ballistic missile. So if that doesn't start to happen fairly soon, I think we can start to draw the conclusion that Kim Jong-un may be behaving just like they have behaved in the past with previous administrations.

PAYNE: Well, throughout this process, you have expressed to me reluctance to believe them or listen, being cautiously optimistic, at best.

Those images, though, that were in the paper that we saw, could they had been old images? I mean, is there a feeling that this is new development to you?

KEANE: I will take the president at his word.

Listen, he has -- he has all the intel sources. They have the details on what's going on. They have considerably more sophisticated intelligence than what The New York Times has access to. And if he says there is nothing new there, I take it at that.

I suspect the North Koreans are likely still involved in nuclear weapons production. They're not in testing. But I believe they're involved in production. They're still likely involved in ballistic missile production, because they're one of the sellers of ballistic missiles.

PAYNE: Right, right.

KEANE: Particularly to Iran.

PAYNE: We talk -- you talk about all the things that you want, or that we should want North Korea to do. But this is their only currency to the world.

This is the only reason they're relevant. In their minds, Kim Jong-un's mind, when he gives this up, he's got to get something in return. And that's always been the question. What exactly are we going to give him in return?


What I think he strongly wants is, number one, the reason he has all of these weapons is for his own preservation of the regime and the country.  So we got to give him assurances that the United States is not going to conduct a regime change, which has always been his grandfather's problem and his father's problem and likely his problem.

PAYNE: Right.

KEANE: So, that is -- the second thing is, economic revival has got to take place.

And those are the two major things that will have to take place if we're going to make the kind of progress.

PAYNE: And I know he's talked about some of these world leaders, Saddam Hussein and others, who ended up being deposed or killed.

Can we offer him a condo in Florida? No, I'm just joking.


KEANE: But what we -- I think we got to stay really tough on him.

PAYNE: Yes. But the administration is, though, right?

I mean, the sanctions are there. They're biting. They're hurting them.

KEANE: But here's the problem with the sanctions.

China's opened the door a little bit. We got to get them to shut it, as they had in the past. Russia has always kept the door open. They have been lying about it. And it's tough on some of the other nations, because the missiles aren't flying and the tests aren't being conducted.

The aura of the crisis has been removed. And it's tougher for us to make sure those nations are enforcing it.

PAYNE: All right, General Keane, always great talking to you.

KEANE: Appreciate talking to you too, Charles.

PAYNE: How low can oil prices go? A losing streak driving the lovers right now. You can see, a huge move for oil to the downside.


PAYNE: Drivers celebrating the longest losing streak for oil prices ever.

Fox Business Network's Jeff Flock with the latest from Chicago -- Jeff.

JEFF FLOCK, FOX BUSINESS NETWORK CORRESPONDENT: Oh, what a day it was here on -- in terms of oil.

We're down 7 percent today, Charles, down to $55.69 a barrel. This is the -- as you report, the 12th straight day of declines for oil. That has never before happened in history, in the history of oil futures trading, which dates back to the early 1980s.

We are now in what you call a bear market. That is to say, if we put the graphic up, a 20 percent decline since the most recent peak, which was around $76 a barrel. We're now at $55.

Why is all this happening? Well, we're in an oversupply situation. We thought, you know, with sanctions against Iran, we thought with perhaps cuts in OPEC production, that we would actually have problems and oil prices would be going up. Well, just the opposite has happened.

The president has been jawboning, what we used to call jawboning the market down. Today, in this day and age, it's actually tweeting the market down, saying that he doesn't want higher oil prices and consequently higher gas prices. Take a look at the gas prices. They have been going just the other way.

A month ago, we were at $2.90 for an average gallon of regular. A week ago, we were at $2.75. Today, we were at $2.68. And after today's big fall, I can only imagine tomorrow we're going to see another decline.

If you have got a car, go driving. Good time for it.

PAYNE: All right, Jeff, thank you very much.

Point, click, create a lot of jobs, that's what Jeff Bezos and Amazon are doing. But why is this newly elected Democrat congresswoman slamming the online giant for bringing 25,000 jobs to her city?



JOHN SCHOETTLER, VICE PRESIDENT OF GLOBAL REAL ESTATE, AMAZON: I'm here to confirm that New York will be home to one of Amazon's new headquarters and more than 25,000 new high-paying jobs over the coming decade, with room to grow.

I would like...



PAYNE: Well, you know who isn't cheering? Newly elected Democrat Congresswoman Alexandria Ocasio-Cortez, slamming the tax breaks Amazon's getting in a series of tweets.

Democrat strategist Robin Biro thinks she's right to be a little skeptical of this deal, while market watcher Melissa Armo thinks this is a great deal, period.

Melissa, why?

MELISSA ARMO, THE STOCK SWOOSH: Well, first of all, I live in New York, and this will provide more revenue for the city.

The city needs money coming in so badly. Mayor de Blasio has spent so much money since he's been mayor in the city, and we need tax revenue coming in.  It also will provide jobs.

And I have to laugh, Charles. She thinks that people are going to get pushed out of Queens that are regular people, working people because all of a sudden all these high-end people are going to buy luxury condos and all these luxury condos are going to come up in Queens.

That is so laughable, Charles. People will live in Manhattan that make a lot of money and they will commute to their jobs in Queens. It doesn't mean all the people that work and live in Queens are going to lose their homes. That's crazy town.

PAYNE: Robin?

ROBIN BIRO, DEMOCRATIC STRATEGIST: It's so easy to dismiss this congresswoman-elect because she's the youngest ever to be elected to Congress, I believe, 29 years old.

And I have been a frequent critic of hers. But she brings up -- brings up some valid points. This does put a drain on the local municipalities. Let me explain why.

These tax cuts are enshrined for sometimes 15 to 20 years. And they present a huge impact to the local infrastructure. That's specifically what she's talking about. You have seen large-scale developments of subdivisions and big boxes, where they just absolutely destroy the roads, and they often don't pay for those with environmental impact fees and develop -- development impact fees.

And yet they're getting tax breaks. So she's right to criticize it. But when you look at it from a cost-benefit analysis, in the long term, it does pay off, but I get where she's coming from, Charles.

PAYNE: You know, Melissa, there are neighborhoods in New York that I never thought would be -- quote, unquote -- "gentrified," where I never thought a brownstone that may have been 100 grand, not even 100 grand in 1980, would be going for $10 million now.

So people feel like they do get pushed out eventually. And we know in The Journal today saying that there was almost a 300 percent explosion of inquiries for condos in that Queens area. So, ultimately, if people start to -- who make 150 grand start to buy homes there, could that do something with respect to income inequality?

Could it push out people who have lived there? And, by the way, $1.5 billion, that's a lot of money, and it could -- it could haunt someone politically at some point.

ARMO: All you have to do is look at the economy right now in Seattle, where Amazon has its headquarters, and look at how much that's helped that city.

I mean, seriously, it's going to help New York. It's going to help Virginia. That's where the other second headquarters is. And they were all ecstatic about it down there. Bloomberg is for this. Mayor de Blasio is for this. Governor Cuomo is for this. And they're all Democrats and they're for it.

And I'm telling you, it's good for New York. I hear what you're saying about -- about people -- sometimes, there will be people that come in and - - but the property values might rise a little bit. But it's never going to be so much that the negatives overweigh the positives. It is good for New York. It is huge for New York City.

I'm telling you, I live here. And I'm telling you, right now, people are not going to get pushed out of their homes. People that own real estate right now in Queens are jumping up and down, because their real estate is going to increase.

PAYNE: All right, Robin, do you find it interesting, though? There are a lot of conservative groups who have actually come out against this deal.

They love the idea that maybe Amazon would build in New York, but the $1.5 billion tax credits, the $300 million cash, credits, they think this could be a form of corporate welfare.

BIRO: Yes. And that's my concern as well.

And in some respects, she almost sounded like a Republican here because she's talking specifically about the tax burden.

PAYNE: Well, libertarian, probably.


BIRO: Well, libertarian, you're correct in that.

But she's talking about the tax burden. And it's a little unfair to some of the adjacent property owners who are paying basically to subsidize all of these development impact fees that are going to be incurred because of this immense large-scale development.


BIRO: So, and what we're seeing basically are just growing pains.

They will experience growing pains. They won't reap the financial benefits for at least five years. But look at what it's done for Nikki Haley when she was governor of South Carolina with Boeing and BMW. She got a lot of heat for those corporate tax subsidies.

PAYNE: Right.

Of course, the flip side of that, of course, is some people think Scott Walker was hurt a little bit politically because of Foxconn.

Hey, thank you both very much. Great seeing you.

BIRO: Yes. You too, Charles.

PAYNE: Well, we have got growing concerns over President Trump's shakeup at the Justice Department, and we will discuss that next.


PAYNE: Maryland's top attorney asking a federal judge today to block Matthew Whitaker from serving as acting U.S. attorney general, saying that his appointment is unconstitutional.

Joining me now to, discuss former federal prosecutor Doug Burns.

Doug, what's the argument here? What's the case to be made here?

DOUG BURNS, FORMER FEDERAL PROSECUTOR: Well, it's interesting, because I have seen people all over the place on this thing, and I think jumped to the conclusion.

And I will just answer what you're asking me. I think they have an uphill battle. I think it's a tough case, because I think this appointment is legal.

Now I will explain why. The argument is, to answer your question, they say, you can't appoint an attorney general without Senate confirmation.  You have heard that. There's only one problem with that. He's not being appointed attorney general. I'm not being cute. He's being pointed acting attorney general, which is an interim post with a 210-day time limit on it.

PAYNE: Right.

BURNS: So it's just a different animal.

Next, there's a statute called -- you have heard this -- the Reform Act of 1998, Vacancy Reform Act, VRA. And it says the president can appoint either the deputy A.G., who's next in line, someone else in the department who's been confirmed, like the solicitor general, or -- and this is what the president relied on, on the advice of sophisticated lawyers -- or somebody who's in the department for 90 days who's at a pay grade of G-15 or higher.

And Mr. Whitaker meets that. So everybody's all up in arms saying it's unconstitutional. What they're really arguing is the statute, the VRA, to the extent it allows the president to make that appointment of somebody, is unconstitutional.

PAYNE: Well, they're not really arguing that, right? They're just making noise. Right?

They're making political hay. I mean, that's what they're doing.


PAYNE: Now, some folks who don't want to go that route because it's too obviously disingenuous or simply...


BURNS: Right, good point.


PAYNE: Hey, maybe the alternative is that Whitaker recuses himself.

I mean, what -- what -- what do you...

BURNS: First of all, I love your point, which is -- so thank you.

I mean, yes, they just tap-dance out of the straight legal realities of it, which is, here's the statute, it allows for this. And then they're like, well, wait a minute, he should recuse himself.

And what they say is, he had given opinions in the past -- obviously, I have seen everybody covering it over and over -- where he disparages the Mueller probe.

I don't think that it rises necessarily to the level of recusal. But I did hear, in fairness -- and I agree with it -- that he's speaking to the ethics experts at DOJ, and he's going to follow their advice.

So everybody should not necessarily prejudge it and calm down. It's the politicization of the situation. I also think the president may -- I don't have a crystal ball -- may very likely make an appointment six, eight weeks from now, just guessing, to obviate this idea that this is a seven-month thing.

But, frankly -- not to overstate this -- I have been very surprised the last couple days honestly, to watch people saying, this is illegal. There was a very strong op-ed in The New York Times by a law professor out of Texas, where he argued calmly why it is actually legal, not illegal.

PAYNE: In The New York Times?

BURNS: Yes, which is interesting, right?

PAYNE: Wow. That's news.

What about, though, the idea that President Trump has chosen someone who likes President Trump? Everyone's up in arms and suggesting that there's something wrong with that.

BURNS: That is not the first time in history, is it?

That President Reagan chose his personal lawyer that he dealt with for years and years.

PAYNE: Kennedy chose his brother.

BURNS: Kennedy chose his brother to give him some legal experience, the old joke. Griffin Bell was very close with President Carter.

But, again, you know what it is? I'm so glad you asked that, because in a politically toxic climate, all of the sudden, he's picking somebody who supports him.

I mean, if you just sit back, it's kind of a silly argument, as you just said.

PAYNE: What do you make of where we are right now?

We were promised or the suggestion was, we would get something soon after the midterm elections with respect to Robert Mueller. A lot of speculation out there that they're crossing the T's and dotting the I's right now.

BURNS: I think the American public is getting to the point where they want to see some finality to this. That's not editorial. That's not political.

This has gone on a long time. There were rumblings about how it's going to be wrapped up shortly after the election. And I think the time is now. It really is.

PAYNE: Yes. It would seem that, if they had something, at this point, whatever they have, they should share it with the public.

BURNS: I would so say. No, I agree, Charles.

PAYNE: Yes. All right, well, we will see what happens.

It's -- I think there is Mueller fatigue and investigative fatigue.

BURNS: I think so. I agree.

PAYNE: Thank you very much.

Well, that will do it here. Catch me tomorrow on the Fox Business Network at 2:00 p.m. Eastern time.

Neil Cavuto, he will be back tomorrow.

"The Five" is now.

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