Ronna McDaniel: This is a middle class tax cut

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This is a rush transcript from "Your World" December 20, 2017. This copy may not be in its final form and may be updated.


PRESIDENT DONALD TRUMP: We are making America great again. You haven't heard that, have you?



NEIL CAVUTO, HOST: That had a hint of Captain Kirk there.

Welcome, everybody. I'm Neil Cavuto. And this is "Your World."

And the president in a world of joy today, as are Republicans in general, on a big win on the floor of the House of Representatives. Of course, that was expected. A perfunctory vote.

And then everybody to the South Lawn of the White House, a who's-who of the Republican Party to say, we have just done it. We have just passed a generational tax cut, the likes of which we haven't seen since Ronald Reagan was president of the United States, and now confident that in short order this will be signed by this president of the United States.

Here's thing, though. With all the hoopla, pageantry, and remarks, one after another today, it's not been signed by the president of the United States, so it's not quite a done deal.

Kevin Corke at the White House, when will it be?

KEVIN CORKE, FOX NEWS WHITE HOUSE CORRESPONDENT: Not quite. You're right. Probably sometime next week, my friend.

But, either way, whether it happens next week, maybe here or down in Florida, maybe the president tries to wrap this thing up obviously this year, because, if you don't, there are a number of other things that cascade, and it pushes back some other parts of entitlements.

But the fact is probably mid next week, after this thing is enrolled on the Hill and reviewed by the White House, he is going to sign this thing, and ultimately we can all say yes, indeed, Neil, this was a historic day here at the White House, not just for congressional lawmakers, but obviously for the president himself, making good on a promise to overhaul the nation's tax code.

But today's ceremony was also heavy, frankly, on a simple theme, one you and I have talked about on several occasions. Promises made, promises kept.


TRUMP: We did the largest tax cut in our history. We -- I hate to say this, but we essentially repealed Obamacare, because we got rid of the individual mandate, which was terrible.


TRUMP: The whole country, the world, they tried with Ronald Reagan, they tried with the Bushes, they tried with everybody. They never got ANWR. But we got ANWR in this bill.


CORKE: Now, for those, Neil, who were busy, tied up with other things today, you may have missed the event or maybe you saw it, but you weren't really listening, there were a couple moments that I thought were pretty poignant that people will certainly be talking about.

The president's shout-out to Steve Scalise, and also the incredibly powerful words of Utah Senator Orrin Hatch.


SEN. ORRIN HATCH, R-UTAH: We're going to make this the greatest presidency that we have seen not only in generations, but maybe ever.


CORKE: Boy, that was really something to listen to him. You could sense in his remarks, Neil, how much this meant to him.

Keep in mind, a number of guys on the Hill, men and women, have been working on this for years and in some cases even decades. Now, I know that you will get into the weeds on the particulars.

But for the folks that don't know money as well as you do, let me just share a little of the details about the tax bill while we have a moment. It reduces the corporate rate to 21 percent down from 35. If you're earning between $49,000 and $86,000, you are going to get an average tax cut of about $930.

Families making $86,000 to $149,000, even bigger, just over $1,800. It should be larger, we're told, by congressional lawmakers.

But I should also point this out, Neil. Many of these tax cuts could sunset by 2026 unless congressional lawmakers do something. And the state and local tax write-offs are certain to decrease.

And one more nugget, I think the folks at home might find this interesting, especially if you're trying to buy a house or if you own a house. Mortgage deduction capped at $750,000. Now, that's actually a bit of a compromise. I know some lawmakers are telling me they wanted it right around $500,000.

But if you are on the coast, East and West, where property is super expensive, $750,000 is actually a better deal than you might have seen before. Anyway, historic day no matter how you slice it -- Neil, back to you.

CAVUTO: And you were there covering it all. Thank you, my friend, very, very much.

CORKE: Yes, sir.

CAVUTO: Kevin Corke at the White House.

Well, look what we have here, an interesting development, that companies would pounce on this and try to do something with all that money that is coming their way, including, curiously enough, hmm, AT&T.

Listen to the president talking about it.


TRUMP: AT&T plans to increase U.S. capital spending $1 billion and provide $1,000 special bonus to more than 200,000 U.S. employees.

And that's because of what we did. So, that's pretty good. That's pretty good.



CAVUTO: All right, now, that stood out, but it wasn't alone. Boeing is also planning to invest a lot of money, about $300 million in work-related, other charitable donations.

But the AT&T one stuck out to me at least, probably to my buddy Charlie Gasparino over at FOX Business Network, because that is in a bitter struggle with the administration over getting that he Time Warner deal approved.

A link there, connection? What do you think?

CHARLIE GASPARINO, FOX NEWS SENIOR CORRESPONDENT: Well, of course it is, because it's more aggressive than Boeing.

As you know, Boeing, if they do more charity, I guess they get more write- offs for that, right? Let's be real clear here. Listen, I think it's great what AT&T is doing. Putting money in people's pockets in great.

Investing in plant equipment is great. That's why we needed to get down the corporate tax rate. We were so uncompetitive. We had one of the highest in the world. I think there was maybe two other countries, and they weren't exactly like major players that were ahead of us in this thing.

And it makes us less -- it hurts our competitiveness. Companies -- listen, I grew up with a lot of guys that were Irish immigrants. They came to the U.S. because of their jobs here, right? Guess what? Jobs are going to Ireland, because corporations can domicile there and get the lower corporate tax rate.

And so that's what's going on here. This is a really good thing. That's why the markets like it.

Where it gets a little bit muddied is on the individual side. I mean, that is really not a great deal on the individual side. They're actually raising taxes for people, and a lot of them are not rich fat cats. These are what would be middle class in New York, California, New Jersey, really raising their taxes, by not lowering the top rate that much and getting rid of all these deductions to pay for this corporate tax rate, which I think is necessary.

And that is not tax reform. That is something that Reagan -- Reagan did not do that. George Bush didn't do that. And Donald Trump is doing that. So what he's doing here -- what Congress and Trump is doing is that they are allowing some very, very -- they're allowing corporations to make a lot of money.

A lot of very rich people who work in private equity keep their so-called carried interest deduction. They keep that. That's a huge, huge win for them. That's $2 billion a year for that industry.

Real estate is going to get some big breaks, by the way, after this. If Donald Trump wasn't a billionaire before this thing, he is going to be a billionaire after this thing passes.


GASPARINO: And some taxpayers are going to get a small tax cut, people that don't pay a lot of income tax. And others will get a tax increase.

CAVUTO: But would there be a connection with the AT&T -- that one is interesting. Obviously, companies do things in their own financial interests.


CAVUTO: And obviously it's in their financial interest with this forgiveness of money held abroad, bring it back for a 15 percent pay rate. It beats the 35 percent no or even the 21 percent eventual rate.

But then does that register? In other words, do -- is the thinking that the more jobs or that you will put yourself in better favor with Republicans, with the White House if you immediately start pouncing on this and just don't plow it back into your stock?

GASPARINO: Yes, I mean, they have to do some cosmetic stuff.


GASPARINO: But let's be real. And this is largely cosmetic, which -- this is not -- it's not all -- AT&T is an immensely profitable company.

But remember what the CEO, Randall Stephenson, of AT&T and his board of directors -- they have a fiduciary responsibility. It's not to their workers. It's to their shareholders.

So, this -- they can do some of this stuff where they can say, listen, we need to image -- burnish our image. We need to like get some public relations here, because we're fighting the government on our merger, planned merger with Time Warner, which the Trump administration is against, as you know.

But, bottom line, that these companies all have to take care of their shareholders before they ever think of taking care of workers. And that's another issue here.

CAVUTO: It's a fiduciary responsibility. People forget that.


CAVUTO: You're right, buddy.

Thank you very, very much.

GASPARINO: Any time.

CAVUTO: All right, in the meantime, the RNC chair, Ronna McDaniel, joining us.

Ronna, very good to have you. Thanks for taking the time.

RONNA MCDANIEL, CHAIR, REPUBLICAN NATIONAL COMMITTEE: Always great to be here. Thanks for having me.

CAVUTO: We were talking about these companies, and it would be nice if they committed to hiring and expanding or doing good stuff, and not just plow it back into their stocks or the market.

Are you in that camp that says, look, you spread the wealth around?

MCDANIEL: Well, let's look at today with these big announcements that you just mentioned with AT&T giving $1,000 to 200,000 employees, and then you have Boeing putting $300 million back into their employees and charitable giving.

I think that is going to be something that is going to, you know, go across the market. I think a lot of companies are going to do that. But, remember, too, you have got 401(k)s going up and pensions going up. And a lot of people across this country going to see their retirement savings benefit from this tax cut.

CAVUTO: Yes, I think people don't appreciate the magnitude of that.

I think we make a big deal of the fact, well, the mainstream media will talk about how it benefits the stock market and all, as if that average folks are impervious to that or it doesn't connect with them. Half are invested in the market directly and up to three-quarters of Americans are directly affected by that market.

So, just having said that, but there is this concern that average folks won't see it net-wise in their paycheck.

What is your thinking when February rolls around, assuming it's February, and they start seeing it every week or two weeks, depending how often they get paid, and that will make a difference?

MCDANIEL: This is a middle-class tax cut.

And you just reported on families between $46,000 and up to even $149,000 are going to see money coming back. An average family that is making $75,000, a family of four, is going to see $2,000 extra in their paycheck.

And let's remember, we have had stagnant wage growth in this country under Obama. People were seeing their wages freeze and their costs go up. This is something that is going to be good for the middle class in this country.

And I will say, a police officer pulled the president aside when we were in New York a couple weeks ago, and said, my pension has gone up so much since you have been president. Thank you.

So, everyone is going to be affected by this tax cut. It's good for our country and it's good for the American people.

CAVUTO: It's so weird, because the economy is racing along. The market is racing along, today notwithstanding.

But it doesn't dent the president's so far soft polling numbers. Just stepping back from that, whatever your allegiance to the party or the president, are you surprised?

MCDANIEL: Well, 90 percent of the mainstream media coverage is negative about this president.

And that has a ripple effect, when every day you turn on the news and it's negative. And I think right now you're starting to see these numbers break through. You're seeing record unemployment. You're seeing consumer confidence at an all-time high. You're seeing the stock market.

Now you see this middle-class tax cut. You're seeing the deregulation. You're seeing our economy starting to grow again. And you're seeing policies being put in place that are going to help everyone in this country.

And President Trump is going to benefit from that. And I think by November next year, every voter is going to go, am I better off than I was two years ago? Have Republicans delivered on the things they campaigned on? And they are going to say yes.

CAVUTO: We're watching as you're speaking, the Congress coming back from the White House from this bus trip there. Now they're back and they're going to their respective offices.

If you don't mind my digressing a little bit here, there had been talk that the president sometime back had been concerned about the Romney in your name. You're the niece of Mitt Romney, the former presidential candidate. Might be a candidate for Senate in Utah.

Was there any truth to that, that just didn't want you to use Romney in your name?

MCDANIEL: This is one of the most ridiculous stories, the silliest stories that is out there.


CAVUTO: You know, I told my producer that, Ronna, and she just insisted.

No. I'm kidding.


Well, I have three reasons why I emphasize the McDaniel a little bit more. And their names are Patrick, Abigail and Nash McDaniel, who I don't see four to five days a week with this job as I'm traveling the country.

And, yes, I wanted to have the McDaniel get a little more love. And so I have chosen to emphasize it more. But Romney is my still middle name. I'm very proud of where I come from and my roots.

And, of course, the president would never direct me to change my name to be the RNC chair. It's ridiculous.

CAVUTO: All right, by the way, the president and Mitt Romney on good terms? When he was out in your necks of the woods there, he seemed to be very complimentary.

MCDANIEL: Yes, he called him a couple weeks ago. They had a good conversation. I talked to the president about it.

We're all celebrating today to see these historic tax cuts passed, to see Republicans delivering. And, remember, Democrats are nowhere to be found. What have they accomplished this year? It's a big fat zero. And Republicans are delivering at every level.

CAVUTO: All right, Ronna McDaniel, thank you very, very much. Good seeing you again.

MCDANIEL: Thanks for having me, Neil.

CAVUTO: All right.

Now the question becomes when the president signs this thing. It's got a lot of Republicans a little nervous.

I wonder if Republican Congresswoman Kristi Noem is among them. The fear is that it's not official until his John Hancock is on that -- after this.



CAVUTO: Are you in that camp that says, sign it now, Mr. President, and don't risk anything, or take your time, Mr. President, we have got this?

UNIDENTIFIED MALE: I would like to see him sign it now.

REP. KEVIN BRADY, R-TEXAS: I think they're going to want to sign it sooner, rather than later.

SEN. ROB PORTMAN, R-OHIO: There's an enrollment process you have got to go through. And you have got to sure every I is dotted and every T is crossed. But I think he should go ahead and sign it.


CAVUTO: It does seem like it's a closing on a house. You are going to risk delaying the closing. All sorts of things could happen. The paperwork, a form doesn't show up.

So maybe this done deal on getting that house falls through if you delay it.

South Dakota Republican Congresswoman, House Ways and Means Committee member, key Republican Party leader Kristi Noem with us right now.

Congresswoman, to a man and woman, a lot of the leadership I have talked to, they're worried that the president shouldn't push this back too much. What do you think?

REP. KRISTI NOEM, R-S.D.: Well, we would prefer obviously that he sign it sooner rather than later.

We have worked very hard on it. We have gotten it to the finish line. But we also recognize there's an enrollment process. So, the president talked consistently throughout this process that he wanted to give a Christmas gift to the American people.

And this truly is meeting the needs of low- and middle-income folks, and focusing on those small businesses and letting them have an opportunity to reinvest in their people and in their operations.

So I think the sooner he can do that, the more we can follow through on really giving them the relief that they need.

CAVUTO: Here's where I'm confused. And you're always polite handling my idiotic, confused questions.


CAVUTO: What is the advantage of delaying, Congresswoman? I know there's certain legislative things that more helpful if it's pushed into the new year, but there are also more dangers in waiting, period, right?

Explain the advantage of pushing this off.

NOEM: I think maybe they start the new year with a good narrative, that this relief is coming. Also, members can be there for signing ceremonies.

But, you know, I haven't been in those discussions on really where the decision will be made. I think that the optics of signing it somewhere where there is folks that are getting relief, a single mom, a family that's getting some tax cuts out of this bill that is going to mean the world and make a difference for them would be great.

So, I think that if they plan it and really message it well, that it's an advantage for all of us going into the new year.

CAVUTO: Today, we had our first signs, Congresswoman, where a couple of companies, AT&T among them, Boeing, already committing to use that money for their workers or charitable endeavors.

Do you want to see more of that? What if other companies say, you know what, we're just going to plow it into our stock and help our shareholders? Would you be disappointed if they did just that?

NOEM: But, Neil, I sit on the Ways and Means Committee that wrote the House bill, and then I have been on the conference committee that negotiated the differences between the two bills and produced the final product that we have.

We have heard companies coming to us over and over again about how they're going to move back to the United States, how they're going to create jobs, how they're going to reinvest in their people.

Over and over, they have told us they're going to raise wages. In fact, a lot of our analysis that we have done has been based off of those projections, and then looking at tax cuts in history and what happened and how companies and families reacted.

So, this is based on -- all of these projections we have is based on knowledge that we already have of indications that they have given us that they will make their people's lives better.

CAVUTO: You hope, right, because I can remember the Bush tax cuts and the temporary reprieve, tax break to bring that money home. A lot of them didn't do that.

Now, maybe there's more pressure for them to do that. But, in other words, you're optimistic they will?

NOEM: I'm optimistic because it's permanent.

We gave them certainty, which is what business needs.

CAVUTO: Gotcha.

NOEM: We also met the needs of families that haven't seen a wage increase. They need more money.

Neil, if you remember the statistics, half of Americans don't have $400 for an emergency situation. This is going to give them that kind of relief that they need.

I tell the story all the time of a mom I met in a grocery store. A handful of coupons and a cart full of generic food, and she said, when is it going to get better? Today, it got better. Today, it got better because we gave her more money that she can meet her family's needs.

CAVUTO: Congresswoman, I have talked to a number of Democrats as well who say, boy, if the president poured this much energy into infrastructure, instead of tax cuts that can't be paid for, we would be a lot better off.

Now, never mind that is coming from a side where the debt piled up under their watch. Do you think that that is the next area and then that should be the next focus and that's where bipartisanship might be found?

NOEM: Yes, the president has told me that infrastructure is a priority of his. So, I do think that is something the administration is going to focus on.

We also in the House want to do poverty reform. Our federal programs that are supposed to lift people out of poverty only perpetuate it. So, we want to reform those, so we really can give families another step in that hope to providing for their kids and their grandkids, and making sure that we don't just perpetuate poverty, but we give people an opportunity to go into these new jobs that we're going to help create with this tax cut.

CAVUTO: Congresswoman, thank you again. Congratulations. Good seeing you.

NOEM: Thank you, Neil. Good to see you, too.

CAVUTO: Congresswoman Kristi Noem. All right.

There's a lot of people who sort this out in a variety of ways, including those who worry about charitable contributions. In other words, if you're not going to be individually writing off stuff and you get a larger standard deduction, what would compel you to make a donation, outside of just a good heart, and you don't really focus on that?

A cardinal who is very worried. Yes, the archbishop of Washington is next.


CAVUTO: All right, if your tax cut is the kind that really is built on a higher just general exemption and write-off, so it doesn't factor in individual things like mortgages, charitable deductions, are you going to be inclined to do any of that or as much of that?

The archbishop of Washington, his eminence, Cardinal Donald Wuerl, with us right now.

Your eminence, very good to have you. Thank you.


CAVUTO: So, your concern is what, that, in this new tax environment, people might have less incentive to give to charity?

WUERL: I'm not certain that there's going to be that type of impact.

You know, we just had this terrible experience of the hurricanes. And the response, the response of people was extraordinary. Now, we're not a very, very large diocese when it comes to population, but we had almost $800,000 worth of gifts, people just saying, help those people who need help.

And I think that's going to continue. Whatever the frame of reference around taxes might be, there's something wonderful about being called simply to help other people in their need, regardless of whether you benefit a lot from it or not.

And I think that's the beautiful thing. In fact, that's what Christmas is all about, isn't it? The call. The call to remind us we're supposed to care for one another. We're supposed to be there for one another.

CAVUTO: But, you know, if you think about it, Cardinal, there are many who, whether they're charitable undertakings or bishop appeals or cardinal appeals or general appeals, that, if the whole charitable contribution thing is sort of pushed aside, would people give as much?

And some are worried, beyond just obviously the Catholic Church, that people won't be. Are you?

WUERL: Yes, I think we have to wait and see what exactly is in this legislation, in this tax cut.

So far, I haven't heard anything specific about what is actually contained in it. In fact, I was a bit surprised when I heard on the radio this morning that there are over 100 pages in this document. So, let's wait and see what is in it.

CAVUTO: Well, you will be happy to know, despite the thick document, that you can still fill it out on an index card. It will just be challenging, nevertheless.


CAVUTO: But let me ask you as well. There is something, a measure in here that I know you do like. And that is these child care credits that were largely championed by Marco Rubio.


CAVUTO: And they apply to people who, even though they don't necessarily pay income taxes, they do pay payroll taxes. It's just another box of money that makes its way to Washington.

So, the senator and others who backed that, Republicans who were bragging it today, were saying that this is going to particularly benefit poor folks, single moms, that sort of thing. You like that aspect of this cut. Is that correct?


I think we would all applaud any part of the cut that focuses on people who have the greatest needs. And that's where we want to take the focus, people who have enormous needs, working people, people who are raising children, people who have their kids in schools and need to be able to get some support for that.

Those are the people you want to see get a break. And I'm hoping that that's what's going to be in this package when we finally get to be able to understand what is in it.

CAVUTO: Your eminence, it's been portrayed in the mainstream media that the rich are disproportionately benefiting from this.

And, of course, the Bible goes back in time to talk about how tough it is to be rich anyway and get into the kingdom of God. I think easier for a camel to get through an eye of a needle.

Do you think that the rich are -- are getting a good deal here, to the detriment of others?

WUERL: Well, I think, again, we have to wait and see how this all plays out.

But nobody likes taxes. And so, when there's a cut, I think everybody is looking to see what will be their share of it. Isn't that what we're waiting to see right now? How is this going to play out?

CAVUTO: But I have a feeling, Cardinal, that you actually -- you're a smart guy with this.

I think you have actually studied this better than maybe you're kind of letting on here. And I -- not to question that, but I -- that you do know a lot about this, and your big hope seems to be that, in the end, people of all income levels will still be generous and will still look after their fellow man.

WUERL: Isn't that the goal, though?

We don't have to depend on the government to be able to encourage us to do the things the Gospel asks us to do.

In fact, one of the things we have learned in this country over centuries is, we really have to respond in faith to the Gospel, regardless of what the government is saying or doing.

And I think that's one of the beautiful things about faith. People of faith, we understand we have an obligation to one another. We have to be there for one another. And we have to care for one another.

Now, it helps -- it helps if the tax structure is such that we have some money with which to do that. But it's not dependent on that.

And you're right. There should be an equitable distribution of the burden for everyone, so that everyone gets a fair share of the burden and a fair share of the benefit.

And we have to wait to see now how this is all going to play out. But the church and people of faith don't depend on a tax structure to be able to live out their faith and do good to one another. And I think that's just a blessing. It's a blessing of faith.

CAVUTO: You know, the president has been very big at saying merry Christmas wherever he goes, that he's helped bring that back. How you feel about that?

WUERL: Well, I think merry Christmas is something woven into the fabric of our land, our language.

One of the reasons is, we are merry, we are happy at Christmas, because we get to hear all over again that wonderful message of, love one another, that God loves you, God cares for you, God's son is with us.

And it's that love that we're called to share and manifest in the world. That's the good news.

And of course we're happy. Christmas -- Christmas reminds us of all of that and challenges us to live it, to do it. So, we are merry, we are happy.

And I think it's good to hear that back in the vocabulary, back in the language. Be joyful. Care for one another. Love one another. Take care of one another.

And while you're doing it, recognize it's reason to be joyful. This is a spirit, a season. This is the season of joy.

CAVUTO: All right.

WUERL: Joy to the world. Why?

CAVUTO: Cardinal Donald Wuerl, thank you very, very much, archbishop of Washington.

The fallout from what he said, particularly on tax cuts, after this.


CAVUTO: So you think these tax cuts are already baked in the market, can't do any better, and that's why we were down today? What if I told you some are saying they're not priced in at all, not remotely?

Back in 60.



GARY COHN, PRESIDENTIAL ECONOMIC ADVISER: Now, you look at what's going on in the stock market, I don't think a lot of the tax reform is in the stock market.

What I think is in the tax -- what is in the stock market right now is what is going on in the economy. If you look at what the tax plan is going to do, I don't think that's factored in.


CAVUTO: So, this enormous run-up we have seen in the stock market, if top White House economic adviser Gary Cohn -- by the way, this has been echoed by Treasury Secretary Mnuchin, who said kind of the same thing -- a lot of what, the run-up we have seen, is based on lower regulations, a more positive environment.

You add the tax cuts in there -- and we haven't fully added them in there - - we're off to the races.

Do you buy that?

Market watcher Heather Zumarraga, and we have got FBN's Charles Payne, the host of "Making Money." I'm telling you, you can actually make money on that show.


CAVUTO: So, Charles, I end it with you. Let me begin with you on what Cohn appears to be saying. You ain't seen nothing yet. Do you agree with that?


I think what we have seen so far in this market -- remember the old role that the stock market was like a harbinger of things to come? It would tell us or anticipate what the economy would be 12 months out, six to 12 months out?

We're already seeing record earnings go through the roof. Every single day from every niche of our economy, we're hearing numbers out of this world, whether it was housing, existing housing sales today, housing enthusiasm traffic the highest it's been in 19 years, corporate earnings, corporate America.

So, I think we're just building up a nice wind in our sails economically. And that's going to be the underpinnings for this market to go higher. The tax cuts will be an added bonus.

CAVUTO: There's that old adage, Heather -- and you have and I discussed it before -- buy on the rumor, sell on the fact.

Well, the fact is the tax cuts have passed. We're just awaiting the president's signature, that, if you just want to take your profits, now is a good time to do so. What do you think?


HEATHER ZUMARRAGA, FINANCIAL ANALYST: Well, perhaps in the short terms.

That is why you're seeing the Dow and the markets are slightly down on the day today. But, look, over the long run, Neil, we're hearing from these companies such as AT&T and FedEx that they are going to be receiving a lot more on their bottom line.

That's going to go back into the hands of their employers or their stockholders in the way of investing in plant property and equipment. FedEx said they're hiring workers. And AT&T said that they're giving $1,000 back to their employees, to each employee.

That is a big one for our economy. So, the stock market may be pulling back today and in a few days or weeks to come, but next year, get ready, because it's going to continue to rally.

CAVUTO: Charles, another thing that worries some who look at the markets - - and maybe it's a good thing to worry about -- is, the Federal Reserve sees things picking up, seems so, might continue to raise interest rates, maybe at a faster clip. Market rates hit a nine-month high today on the belief that maybe that is the case.

Again, it splits both ways. How do you see that?

PAYNE: You know, I think as long as the Fed is reacting to the economic reality, Wall Street is OK with them hiking rates.

In fact, they already have begun that cycle. The market -- the rally didn't miss a beat. And, remember, when Janet Yellen hiked rates in December of 2015, that was one of the worst Januarys in history.

I think the Federal Reserve has learned its lesson with respect to hiking rates for any reason other than the fact that the economy is coming on.

So, J. Powell is coming in there. I'm not concerned there. In fact that, my only concern is that I'm so excited and so convinced of this market, you kind of want to have some doubt. But right now, I feel really good. Everything I'm looking at points to our economic revival gaining steam.

CAVUTO: You know, Heather, it's a point, but I wonder what the rich do. We just showed their rate goes down 39.7 to 37.

But offsetting that, a lot of them in these high-tax states might still see a tax hike, Charles, for example.


CAVUTO: Do you see that as a problem? Because they are the engine here for the economy, if you think about it. They account for a disproportionate number of the spending. Right? So, what do you think?


ZUMARRAGA: Yes, top 1 percent spend a lot, as well as pay a lot in taxes.

So, they really stuck to it the blue states in a sense that, you know, they can no longer deduct state and local taxes above the $10,000 property tax limit.

So, I don't think it's enough to have the rich or the wealthy move to a different state. I think that the rich, actually, reducing the rate from 39.6 to 37 percent on that top rate will be a net positive.

But you're right. Some of those deductions are no longer there. So, in the end, the rich may pay more.

I mean, the liberal media has it wrong. They're saying this is a tax cut for the rich. The rich may end up paying more. This is a tax cut for the middle class, Neil.

CAVUTO: All right.

Well, that's why, obviously, Charles has been in a foul mood.


ZUMARRAGA: Well, it be for me, but not for you and Charles.

PAYNE: That's why you got me down here in the dungeon doing a hit, yes.

CAVUTO: That's exactly right.


CAVUTO: That's exactly right.

Guys, I want to thank you both. Very, very nice of you.

All right, a lot of people are saying, well, the one thing we're sure the Republicans got rid of were a lot of these little loopholes that were tucked in there for, I don't know, things like electric cars. What if I told you not at all? They're charged. Are you?


CAVUTO: You know, this was one that actually surprised me, because I know a lot of Republicans, they are not big on these tax credits.

Then again, they did have that child care credit. But they kept one that really stunned me, a $7,500 tax credit for electric cars. That stays in the bill.

Now, a lot of people look at that and say, whoa, whoa, whoa, whoa, this is one thing you were against. I understand how these things come to fruition.

But, bottom line, Deirdre Bolton of FOX Business Network, I was surprised. How about you?

DEIRDRE BOLTON, FOX BUSINESS CORRESPONDENT: Yes, it was surprising, because, at one point, there was discussion that, OK, well, maybe these incentives would be taken away.

To your point, very much left in. And let's just say carmakers are very happy. GM's CEO Mary Barra is saying this really changes things in a positive light, she says. These incentives change the equation that determines whether or not people want an electric vehicle.

So, electric vehicles, such as the Chevy Volt, the Tesla Model 3, they all have sales prices around $30,000 after the credit. So it's going to be helpful to those companies.

Now, on a fuel-related theme, Neil, after 40 years of wrangling, Congress voted to open Alaska's remote Arctic National Wildlife Refuge, otherwise known as ANWR, to oil and natural gas drilling.

So, House Speaker Paul Ryan spoke about the decades and the decades that it took. He said some of the people that he's working with have been working on this particular project all of their lives.

Here's his quote: "We're opening a small non-wilderness area of the Alaska National Wildlife Refuge for responsible development." And, in his words, he said, "It is the most ambitious step we have taken in years to secure our energy future."

Now, environmentalists see the vote as a defeat. They have basically been fighting since the 1970s to block drilling in Alaska.

The tax law also appeals the individual mandate to purchase health insurance, a big hit, of course, to the 2010 law the Affordable Care Act, or Obamacare. So the requirement that all Americans carry health insurance, or face a penalty, that penalty has been removed.

So, lots of changes in this first major overhaul of the nation's tax laws since 1986. Here we are, Neil -- back to you.

CAVUTO: You know what is weird about the Tesla thing, though? A lot of people who buy especially the high-end cars, they don't need a tax credit. They're pretty wealthy.

BOLTON: Yes. And critics did certainly raise that point, saying, OK, really? Who are you helping out?

But then when you look at some of these prices, the Chevy Volt is one of the more popular ones that is available around $30,000. And then, of course, Tesla does have the sedan that is meant to be a little bit more price-competitive. But, yes, you're not alone, Neil Cavuto, in thinking that.

CAVUTO: It's the way my mind works.

All right, Deirdre, thank you very, very much.


CAVUTO: Good seeing you again, Deirdre Bolton of FOX Business fame.

Meanwhile, first the tax-cutting, and now on to infrastructure? We raised it with Congresswoman Noem, right? Why that is looking more and more likely, but why the TSA wants in on that to keep us safe -- after this.


CAVUTO: All right, you're probably getting ready to travel, if you haven't already, in what will be the busiest Christmas travel season we have had I think they're saying in about 12 years.

But all of this comes at a time where the people who want to get us there safely want to make sure we get there safely.

TSA Administrator David Pekoske joining us.

Sir, very good to have you.


CAVUTO: You know, what I notice in this, David, is that it varies from airport to airport, just how -- what they check, what they don't check, how aggressive they are, how they're not aggressive.

Any basic rules for travelers about how they handle all of this?

PEKOSKE: Well, for travelers, the basic rule would be, particularly in a busy season like this, the holiday season, just past the Thanksgiving holiday period as well, is just give yourself a little bit more time.

So, get to the airport a little bit earlier than you might otherwise. And then just pay attention for the transportation security officer, the first person you see in the line, and follow their directions. I think, once you do that, it goes very smoothly.

CAVUTO: Of course, there's going to be a lot of crowds. Of course, the Atlanta situation with the airport there when the lights went out, that's not the TSA's fault, I grant you, but it did lead to some pandemonium.

People eventually calm down and all of that, but it gets them nervous. What happens then?

PEKOSKE: Well, that was a long-term power outage that got restored just about midnight on Sunday night.

CAVUTO: Right.

PEKOSKE: And so for us, the busiest period for us really was the following day, when all those passengers that couldn't travel on Sunday needed to travel on Monday.

But we worked very closely with the airlines and the airports there. And everything was cleared out Monday. So, it ended up working out very well due to the great cooperation of our partners and really the patience of our travelers.

CAVUTO: You have got a big high-pressure job, so for you, Administrator, what is your biggest fear? Obviously, the bad guys are getting increasingly clever at trying to sneak stuff in.

What is the stuff that you're looking for, increasingly are worried about?

PEKOSKE: Well, we're always worried about what is the newest thing that the bad guys would be using.

And so we try to stay a couple of steps ahead of where they are. We look at our technology. We look at our procedures, try to refresh those on a continuous basis, so that we do stay ahead of them.

But one of the things that really helps us out a lot is passengers. And passengers who are in a line or in the airport or in a mass transit system. If they see something that just doesn't seem right to them, what we would encourage them to do is to go up to a Transportation Security Administration officer if they see one, or to a police officer who may be nearby, and just mention it to them, because something that doesn't seem right is something that all of us want to investigate a little bit further.

CAVUTO: There's talk that we're going to have a big infrastructure push in the new year. The president has indicated that.

A number in both parties have expressed support to at least hear each side out. Obviously, the TSA and security at airports could and likely will be part of that. What do we need?

PEKOSKE: Well, we need -- when TSA first was formed, we basically worked into the existing infrastructure at airports.

And, of course, some airports have modernized over those 16 years. But many have not had the opportunity to do that just yet. And so we would like to design security areas in airports with security in mind, not just as an area that we had available to us that we could put security there.

So, the biggest thing for us is to work closely with the airports and the airlines to make sure that they're aware of our requirements and for the future and that we build security in from the very beginning.

CAVUTO: How do you deal -- we always talk about keeping people safe.

You talk about be extra early, get there extra early. But for a lot of flyers, it's their fellow flyers that they have altercations with, not TSA guards and all of that. What do you do to try to urge everyone to keep their calm?

PEKOSKE: Well, I think that's key is just to keep calm and be patient and know that it's going to be -- with a lot of people, it's going to take you just a little bit longer.

A couple things we're doing, though, is we're trying to put in place in some airports -- we have got about 106 of a new kind of a security lane in place where, rather than waiting for the person immediately in front of you to take all their stuff out of the carry-on bag and put it in a bin, now five passengers can do that all simultaneously.

That eases up, I think, some of the frustration on the part of travelers, who may have someone who is not as familiar with traveling as they are in front of them that might be, in their view, holding them up a little bit.

But I think the biggest thing is, this is a joyous time of year, it's a happy time of year, and just would encourage people to be patient.

And, like I said, if they see something that bothers them, that they don't think is quite right, just say something to somebody that can do something about it.

CAVUTO: Administrator, those are very wise words.

David Pekoske, the TSA administrator, joining us out of Washington, he's going to have high-pressure city going on just in his office this year.

Thank you, Administrator, very, very much.

PEKOSKE: Thank you very much. Appreciate it.

CAVUTO: All right.

All right, in the meantime here, just want to take a flash here at the Dow, down about 28 points today.

Interest rates, interestingly enough, the 10-year note, which is a key sort of harbinger of things to come, at least for mortgages and that kind of thing, tacked to that, that inched up today to a nine-month high, largely on the idea, the economy is heating, so too will interest rates, that they will go up.

So far, that is exactly what is happening. It's not a bad thing, but it's a neat thing to watch.

That will do it.

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