Santa Claus and retailers deliver a big rally for stocks on the day after Christmas

This is a rush transcript from "Your World," December 26, 2018. This copy may not be in its final form and may be updated.

TRISH REGAN, HOST: We have still got a partial government shutdown, but at least for one day anyway, you're getting a break here from that market meltdown. Quite a rally, we're seeing on Wall Street, ending the day up better than 1,000 points, biggest point gain ever.

Hello, everyone. I'm Trish Regan, in for Neil Cavuto. And this is "Your World."

President Trump and congressional Democrats bearing down on their positions regarding that border wall funding. He's not budging.

Meanwhile, on Wall Street, things looking great here after a report that American shoppers seemed to be unfazed by all that uncertainty in D.C.

I will tell you, the economic fundamentals are good, even though we're seeing a little volatility in the markets.

We're all over today with Ellison Barbara at the White House on the president who isn't budging on that money for the wall. And Kristina Partsinevelos, she's at the NYSE, New York Stock Exchange, with a look at investors that are out there buying.

We're going to begin right now with Ellison at the White House.

Fill us on. He wants that money, and he's not going to budge?

ELLISON BARBER, CORRESPONDENT: Yes, the fight is far from over, President Trump making it incredibly clear that he says the only way for the government shutdown to end is if he gets some sort of physical barrier, money for some sort of physical barrier at the southern border.

But, of course, in the middle of the shutdown, in the middle of this back and forth, the president and first lady took an unannounced trip to Iraq. Reuters reported they left late last night, Christmas night.

A Reuters reporter traveling with the president says that they kept the curtains drawn on the flight and the light off throughout the duration of the plane ride to Iraq for security. President Trump and the first lady then spent approximately three hours on the ground. The president gave remarks, a speech, to troops for about 20 minutes at Al Asad Air Base, which is west of Baghdad.

This is the president's first time trip to visit troops in a combat zone since taking office. It comes on the heels of the president drawing down troops in Syria and Afghanistan. The president has long been critical of the war in Iraq. He told reporters traveling with him, though, that he has no plans to remove U.S. troops from the country.

As for the partial government shutdown, President Trump remains adamant, saying that the only way that this is going to end is if he received funding for some sort of physical barrier at the U.S.-Mexico border. Democrats are saying that it is impossible to know exactly what the president wants here.

House Minority Leader Nancy Pelosi telling USA Today President Trump says - - quote -- "We're going" -- this is her quote, paraphrasing in her mind what he said. She said this -- quote -- "The president says we're going to build a wall with cement and Mexico is going to pay for it. Well, he's already backed off the cement. Now he's down to I think a beaded curtain or something. I'm not sure where he is."

Here's President Trump yesterday.

(BEGIN VIDEO CLIP)

PRESIDENT DONALD TRUMP: I can tell you, it's not going to be open until we have a wall, a fence, whatever they'd like to call it. I will call it whatever they want.

The people of this country want border security. It's not a question of me. I would rather not be doing shutdowns.

(END VIDEO CLIP)

BARBER: President Trump, of course, had that meeting, that very notable meeting now at this point, and well-known, with Chuck Schumer, Nancy Pelosi, in the Oval Office where he told them that he would be proud to shut down the government over the wall.

We know that the White House did take Senator Schumer a counteroffer last week. We're hearing from sources that it's about $2.1 billion for border security that includes fencing and about $400 million for other immigration priorities -- Trish.

REGAN: Thank you, Ellison.

All right. Well, President Trump was in Iraq, he said he would wait as long as it takes to get the funding for that border wall. So, amid that backdrop, what's actually going to happen when Congress gets back to business tomorrow?

Let's go right now to USA -- Spectator USA's Kelly Jane Torrance with her thoughts.

Kelly Jane, what do you think? I mean, it looks like there's a standoff, and it's a bad game of chicken, but the president is digging his heels and he says he's not budging. So does the border wall happen?

KELLY JANE TORRANCE, SPECTATOR USA: Yes, Trish, that does seem like a game of chicken, isn't it?

And I really think that the Republicans are the ones who are going to crack first. I actually don't think much is going to happen tomorrow. Let's face it. They didn't even work until midnight on Friday to try to prevent this shutdown. They gave up around 8:30 p.m.

Now, in the past, when we have seen really tough negotiations about shutdowns, they're working down right to the very end. This time, they didn't. And there was a little bit of negotiation over the weekend, but since then, nothing.

And I think part of the reason is, Democrats do have the upper hand here. As you guys noted, the president...

REGAN: How do they have the upper hand? I got to jump in.

TORRANCE: Yes, no, it's -- it's -- I'm being a little provocative here.

But President Trump, as you just noted, said, "I will be proud to shut this government down over the wall."

Now, I think, since then, maybe some of his advisers have told them that shutdowns often aren't popular, and he's now trying to paint this as a Democratic shutdown. But just last week, the White House was willing to support a bill that would have funded the government through about mid- February that didn't have money for the wall.

The president was going to support that. And it was actually a lot of prominent conservatives, like Laura Ingraham on this channel, in fact, who were very disappointed in that, and actually led Trump to change his mind yet again and say, no, we need a wall.

So the Democrats have seen that the president will support a funding bill that doesn't include the wall. And they're not budging. And while they're not budging, the White House keeps coming down and down.

The original bill had $5.7 billion for a wall. Now, as you just noted, the Republicans are offering up something less than $3 billion. The Democrats, they have stood pretty firm on their $1.3 billion for border security, not a wall.

So, while they don't move, the Republicans keep moving.

(CROSSTALK)

REGAN: ... posturing of language, right?

I mean, the president, in other words, calling it a variety of different things, no longer just a wall. But he has a valid point, in that semantics really don't matter here. Ultimately, if he wants to get a structure up, whatever you want to call it, he wants to get a structure up.

And if he can get the necessary funding, I suppose he figures you can call it whatever you want, Nancy Pelosi, Chuck Schumer.

TORRANCE: Yes, exactly.

I mean, you go from the concrete wall to what -- the president's even tweeting out pictures of metal slats that he was saying, the pointed-tip slats that a lot of people also made fun of.

But, yes, you just need something, and I think he recognizes that. I think part of it, though, by him backing down on the rhetoric, I think Democrats are seeing that as a sign of weakness. And they're saying, OK, well, he's now willing not to have a wall. He's willing to have slats. What is it next?

So they're playing this, and, of course, they're playing up the clock, because, in January, they take over the House of Representatives. And it will be even harder then.

REGAN: Yes, that's a challenge, right, right.

So, all right, well, we will see what happens. But the prognosis, at least from your angle there, doesn't sound too good. We will wait and see.

Thank you very much.

TORRANCE: Yes, thank you, Trish.

REGAN: All right, how about this everyone, a shopping spree on Wall Street? For at least one day, you got stocks rallying after the worst Christmas on record.

But take a look at this. You have got the Dow, the Nasdaq, the S&P 500 way up today. But if you look back from their all-time highs, well, maybe not doing quite so well.

Let's go to FOX Business Network's Kristina Partsinevelos for a look at all of it. She's at the NYSE. And she has insight into what people really liked out there today -- Kristina.

KRISTINA PARTSINEVELOS, CORRESPONDENT: Yes, Trish, what a swing from Monday, when you saw the Dow down 653 points, today closing well above 1,000 points, 1,600-point difference right there.

So you're seeing a lot of movement. Traders here, everybody seems to be in a little bit of a better mood. I'm not sure if it's the leftover food and all the drinks and last night, but, overall, what is pushing these markets higher?

You have got possibly retail sales, the fact that retail sales climbed higher. According to MasterCard, they said it climbed higher at 5.1 percent. You have Amazon as well, Amazon releasing a statement, not providing any exact numbers, but Amazon saying that they added tens of millions of new Prime subscribers and free trial people that signed up, as well as sold a million of their own products.

Think like the Echo and a few other products too. So that's helping show that consumer confidence is still there. We don't know the breakdown of the numbers on whether it has to do with credit cards that are fueling this growth.

But, nonetheless, people are shopping. As we know, today is a huge sale day. Other contributing factors to this market rally, according to the guys that are around me -- and some of them are saying they don't even know why. There's so many things going on.

You had Kevin Hassett, the White House economic adviser, who was on FOX Business earlier today, and also spoke to The Wall Street Journal, stating that, don't worry, Jay Powell is not getting fired, he's 100 percent safe, the president will not be letting go of the chairman of the Fed.

So you have got that as a positive factor contributing to markets. However, many traders still tell me it's still a fragile growth market. This could be just a temporary upswing.

I just want to end on the price of oil at the moment, the fact that, in October, it was $75 a barrel. Right now, we're seeing it higher today, $46.22, still much lower, but definitely an upswing, helped the energy sector. May not be so good for gas drivers. I know, as of this morning, the average was $2.31 a gallon. It may be climbing up in the near future, but still nowhere near those highs and October -- back to you, Trish.

REGAN: All right. Well, I liked today. I will take a few more of todays.

PARTSINEVELOS: Yes.

REGAN: Thank you so much, Kristina.

Let's go right now to our market watchers, Alan Knuckman. We have Rebecca Walser and we have Frances Newton Stacy.

Good to see all.

Alan, there seems to be a real divide here between what's happening economically and what's happening right within the markets, right?

ALAN KNUCKMAN, BULLS EYE OPTION: Right.

REGAN: Two different things. You get all the volatility in the markets and yet the economy sort of looks pretty good, right?

KNUCKMAN: Oh, yes, definitely. It's been a sentiment shift and the psychology has changed to very negative.

Now, today's the beginning possibly of a bottom, if we can build on this. Now, just remember, we were negative early in the session. So we made new lows and a higher close. That's very positive, but a lot of this seems to be a short squeeze today.

You need some follow-through on this. Now, we could also see some additional price pop potential, with the president -- talking about this is good time to buy, he could also construct some certainty with some trade sentiment or maybe some deal. That would give this market another boost to the upside.

REGAN: Yes.

It just fascinates me, Rebecca, because the markets tend to run, what, six to nine months in advance of the economy. And so investors are always trying to predict where the economy's heading.

And I would just say, in this particular case, there's nothing out there that tells me, six to nine months down the road, we're actually going to be in some kind of recession, which is what you hear a lot of people on a lot of different networks talking to, almost a little bit of glee in their in their voice, I would add to that.

But I don't see the recession happening, because I think that the fundamentals are just too good. So, if I'm right, does the market catch up?

REBECCA WALSER, WALSER WEALTH MANAGEMENT: Trish, this -- the other networks want to bash Trump at every second they can.

So, obviously, his strong economy, his good fundamentals, the great labor market, the great GDP numbers that we have had this year, they're not going to give him any credit. So any time the market is volatile, oh, it's all Trump's fault.

What's really happening is that we do have strong economic fundamentals. They are there, the labor market, GDP growth, but we do have a lot of geopolitical things going on, the trade, obviously, with China. That's looming. That 90-day truce is winding down, obviously a lot of uncertainty in Washington, as you just mentioned in the last segment.

So we have a lot of uncertainty. And investors like certainty. So the market is just -- I think it's just mixed signals, like, what's going on? Obviously, two-thirds of our economy are consumer, so low gas prices are great for them, not so good for energy stocks.

So you just have a mixed bag of all these things going on, Trish.

REGAN: Yes.

And, Frances Newton Stacy, you add to this a pretty confident consumer right now, because you look at these shopping numbers, and I would say it's impressive,  FRANCES NEWTON STACY, OPTIMAL CAPITAL: Definitely. So I agree with you that the market is a leading indicator, for sure.

And I think that whether the economic numbers and the fundamentals are sustainable, is going to be determined by strength in the credit markets. You have the Fed reducing the balance sheet on autopilot at $50 billion a month, $600 billion next year. You have -- we don't know what's happening with rate hikes next year.

So those things are all going to put pressure on servicing the debt. As long as the system can service the debt, then these economic numbers are sustainable.

REGAN: I'm actually not fearful that. And, look, we have all been through 2008.

Alan, I knew back then, and we spoke a lot back then.

KNUCKMAN: Yes.

REGAN: That was a systemic crisis. That was a credit crunch. That was a problem. We don't have anything that's similar, right, to that out there right now.

And, by the way, I knew you and I were talking about it months, if not years, before it actually hit. When I look out on the horizon, I'm not looking at the kind of credit crunch, a la 2008, or anything even remotely similar to it?

(CROSSTALK)

KNUCKMAN: Well, it's a very different situation.

I think that the stock market has had a big move to the upside. And so this was some gains given back. But if you look at the numbers, the EPS growth for 2018 works out to maybe 20 percent for S&P 500 stocks. That's an incredible growth rate. Companies are doing extremely well, and you -- like you keep talking about, the fundamental facts remain.

This is not a systemic problem. And I think we were spooked a little bit when someone told us not to be concerned, because I get concerned if someone tells me not to be concerned.

REGAN: Yes. And then you get concerned. That was kind of a bad move.

(CROSSTALK)

KNUCKMAN: And then we can sort it out. Yes.

REGAN: Yes. And the other thing I would add to this -- and I'm going to talk about this on my program on FOX Business tonight 8:00 p.m. -- is that the Fed is not really what you need to be worried about right now.

KNUCKMAN: Right.

REGAN: I think it's the prospect of more regulation, a la Maxine Waters, right, and the banks.

(CROSSTALK)

REGAN: I think it's the prospect of higher potential corporate taxes. I don't think they'd ever get it, but they're certainly going to try, a la Nancy Pelosi.

And so you have some real political concerns that could actually get in the way of meaningful economic policy. And that is the threat, ladies and gentlemen, right now.

We're going to leave it there. Thank you so much to all of you.

We will have much more on the president's surprise trip to Iraq, and what he had to say about his decision to pull troops out of Syria. That's coming up.

And as Congress battles over the wall, Customs and Border Protection agents are now taking some new safety steps after a migrant child died while in U.S. custody. We have all the details for you.

Don't go anywhere. I'm here right after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

THOMAS HOMAN, CONTRIBUTOR: Border Patrol agents many times will give their lunch to an illegal alien they arrested because they haven't eaten in days.

They will buy them meals. These Border Patrol agents down there with these family units, they bring toys from their own children into these facilities.

So, to -- let's not -- let's not vilify the men and women of Border Patrol. They're doing their best.

(END VIDEO CLIP)

REGAN: That was former acting ICE Director Tom Homan reacting to all the criticism that's been heaped on our Border Patrol agents after the death of a 9-year-old migrant who was in U.S. custody.

Customs and Border Protection will now give medical checks to all migrant children. So, how does this change what is going on in Washington over funding for a border wall? Does it?

Let's go right now to Jessica Vaughan of the Center for Immigration Studies.

Jessica, it's tough. A lot of these kids are coming from circumstances that are less than ideal. They're -- they're in a challenging environment. They're coming here not necessarily in the best health as it is. How do we -- how do we help them, while simultaneously making sure that we do have that strong border?

JESSICA VAUGHAN, CENTER FOR IMMIGRATION STUDIES: It is very tough, because it's not just the conditions that they're coming from, but the fact that the smuggling organizations that they pay to bring them to the border treat them like animals, or worse, and they're kept in squalid conditions, exposed to who knows what.

So it's really, really tough for the Border Patrol and the federal government to deal with situation. This is a really new phenomenon in illegal migration, with people bringing their kids and essentially using them as a deportation shield or ticket into the country.

And what -- the Border Patrol has now checked everyone in their custody. And they have pledged to be doing more thorough medical examinations when - - in the future with kids that they apprehend, but it's -- this is not going to fix the problem.

The problem is that our policies entice people here.

(CROSSTALK)

REGAN: Yes, bingo. And this is what nobody wants to talk about, Jessica. It's the law of unintended consequences, which we confront all the time in economics.

And the unintended consequence here is, by creating a scenario that makes it easier for people to come across the border with children, by enticing them, as you say, here, then you're actually creating a scenario that does endanger them in other ways that wouldn't exist if you didn't put that out there, dangling it out there to begin with.

In other words, Jessica, if their parents knew there was no chance that they were going to be able to come into this country illegally, would the parents not take the kind of risks that they're taking?

VAUGHAN: I think that's obvious from what we have seen over the last year as this has developed.

And this is such a disturbing case. And it ought to be an alarm bell for Congress to say, look, we have got -- we cannot let this continue. It's wrong to let this continue. We need to provide the president and the federal government with the resources to secure the border and also to make the changes necessary to the law.

REGAN: Nobody wants to hear that, because you know what they're to say.

VAUGHAN: Right. Right.

REGAN: They're going to say that, in essence, that's awfully mean, and that you are denying these children an opportunity to come here by saying, we're going to have this strong border wall.

But what you're saying is something different. You're saying, no, this is actually a humane thing to do, because, by discouraging, by having the kind of security there and discouraging these families from coming here, and taking such insane risks with their own children, they will be better off?

VAUGHAN: Well, they need to understand the message that they're not going to succeed, that, if they try to come here, it's not going to be worth turning over their life savings and their lives and especially their children to criminal smuggling organizations, and that they're -- they're not going to end up with what -- the jackpot of being allowed to live in the United States.

That's the only thing that's going to keep people home. We're also providing foreign aid to these countries to try to change this dynamic. And that might help as well. But, really, it -- they need to understand the message from the government, do not do this. It's not going to work. You're not going to succeed. Please don't put your family at risk in this one.

REGAN: Jessica, good to have your perspective. Thank you very much.

All right, President Trump, everyone, demanding more border wall funding to end the partial government shutdown.

A key Democratic lawmaker is here to respond to it all next.

(COMMERCIAL BREAK) REGAN: Lawmakers are heading back to Washington tomorrow, and they're going to attempt to try and get some kind of deal done to end this partial government shutdown.

Illinois Democratic Congressman Raja Krishnamoorthi.

Forgive me for mutilating that a bit, Raja.

(LAUGHTER)

REGAN: Congressman, good to have you here.

REP. RAJA KRISHNAMOORTHI, D-ILL.: Just call me Raja.

REGAN: Thank you so much for joining us.

KRISHNAMOORTHI: Thank you, Trish.

REGAN: So, tell me, is it going to happen? Are -- is the president going to be able to secure the funds that he wants and says this country needs for that wall?

KRISHNAMOORTHI: Well, first of all, thanks for having me on.

REGAN: Thanks for coming.

KRISHNAMOORTHI: I think that the American people -- absolutely.

You know, 60 percent of the American people don't want a wall; 70 percent don't view this as an immediate priority.

I think the president and Democrats should come together on some enhanced border security, and then fund the government. That's what the American people want right now.

REGAN: OK. So it sounds like you think a deal can get done. You say, come together on enhanced border security. Would that include a wall?

KRISHNAMOORTHI: Well, I believe that, earlier this year, money was appropriated to repair existing structures on the 700 miles of the border where fencing and other physical structures are located.

I think that similar efforts can be made going forward.

REGAN: No, I'm talking more than that, though.

OK. But I'm talking about more than just any repair work that needs to be done.

(CROSSTALK)

KRISHNAMOORTHI: Yes, I think that what we're hearing, especially from border state lawmakers, just, for instance, Will Hurd, a Republican who represents the most miles of the Mexican-American border, is that a wall doesn't work, it's unwise and effective, and it's a wasteful spending by American taxpayers.

Remember, it's not the Mexicans who are paying for it.

REGAN: All right, Congressman, so you just had me on the path of, like, something could get done here, right, that you believe in enhanced border security.

KRISHNAMOORTHI: Yes.

REGAN: But now you're saying you don't think that the wall works. So which is it?

KRISHNAMOORTHI: Well, I think that enhanced border security can come in the form of more manpower, the greater use of technology, repairing existing structures where they might be in disrepair.

But a 20-foot, 2,000-mile wall is not going to work. And the American people don't want it.

REGAN: OK. So now it's like this shutdown is going to keep going, then, because you're getting back to the issue that so many Democrats are really stuck on, and they don't like the idea of the construction of the wall.

Let me ask you about this, just the symbolism of it.

KRISHNAMOORTHI: Yes, ma'am.

REGAN: We just did a story, and Jessica Vaughan joined us to talk about the law of unintended consequences. And when you create a scenario that makes it easier for people with children to come here and seek asylum, well, what do you know, you get more and more kids coming here.

And so you are putting them in harm's way. You're -- you are making a more dangerous situation for these families. If you have a wall, does that symbolically send a message that might actually work in some ways as a deterrent, so, hopefully, those kids are not put in that position to begin with, sir?

KRISHNAMOORTHI: I'm not sure.

But what we do know is that this wall doesn't really address the underlying problem of undocumented immigration. As you know, half or more of undocumented -- undocumented immigrants and a greater proportion are just overstaying visas. They're flying over in airplanes, not climbing fences or going over the border.

REGAN: So, why can't you do it all?

KRISHNAMOORTHI: I'm sorry?

REGAN: Why can't you say -- why can't you do it all? Why can't you say, we want a wall, we want enhanced border security, and we want to create meaningful immigration reform?

Because I will tell you, sir, I think you and I can both agree we need it.

KRISHNAMOORTHI: That, I agree with you 100 percent on.

I think there's a big bipartisan majority that would like to work on comprehensive immigration reform that involves enhanced border security, that involves the overstay issue, and making sure that we attract the best and the brightest from around the world to come here.

REGAN: And also involves a wall, I mean, right?

So, if this is the sticking point, what's the expression, you're cutting off your nose to spite your thumb? I mean, don't you want all of it? And can't we do all of it? And isn't it up to you guys to find some kind of negotiation strategy, so it all does get done?

KRISHNAMOORTHI: I think that this wall issue -- you know, look, Ronald Reagan said it best in the 1980s, when he was president: "Tear down this wall."

There's a certain aspect to having a wall, whether it's to prevent people from leaving or preventing people from coming in, that sends the wrong message to people who want to do business here, who want to immigrate here, and who really want to make America the greatest nation on the face of the earth.

It's because of its immigrants, in part.

REGAN: Well, I'm not going to disagree with you on any of that, in that immigrants have made our country so much stronger, and the economics are in their favor and our favor if we bring more and more people that want to be here and want to contribute to our society.

We need them.

KRISHNAMOORTHI: Sure.

REGAN: They need us. No one's going to dispute you on that.

KRISHNAMOORTHI: Yes, ma'am.

REGAN: But you do want to make sure that people are doing it the right way. And if you have a shot at putting up a better kind of security system, which would include a wall, while simultaneously making it easier for the best and the brightest and those we need to come here -- and I don't even mean the best and the brightest, but people that want to work.

KRISHNAMOORTHI: Yes. So...

REGAN: That is so much what this country needs. We're not that far apart.

KRISHNAMOORTHI: You know, I go back to what Congressman Will Hurd said.

He represents 800 miles of this border. Basically, what he says -- and he's a Republican who doesn't want this wall because it hurts the economy. It doesn't work. It hurts local property owners' rights.

And this is a natural barrier that basically protects the American southern border, which would be destroyed because of a wall. I mean, we don't want that.

REGAN: I'm going to leave it there. And I appreciate your perspective, Raja Krishnamoorthi. I did a little bit better that time around.

Representative...

(LAUGHTER)

KRISHNAMOORTHI: Right. In Chicago, some people call me Roger Christian Murphy. So, that's fine.

(LAUGHTER)

REGAN: Anyway, good to see you. Appreciate it.

KRISHNAMOORTHI: Thank you.

REGAN: All right.

KRISHNAMOORTHI: Thank you, Trish.

REGAN: Fair and balanced, we're getting the other side of this shutdown story.

We're hearing from a GOP lawmaker next.

(COMMERCIAL BREAK)

REGAN: President Trump and the first lady making a surprise trip to Iraq to visit U.S. troops there.

We're getting some new video of what he told the troops. And we're going to play it for you on the other side of this break.

Back in 60 seconds.

(COMMERCIAL BREAK) (BEGIN VIDEO CLIP)

QUESTION: How long do you think this shutdown will last, Mr. President?

TRUMP: Whatever it takes. I mean, we're going to have a wall. We're going to have safety. We need safety for our country.

(END VIDEO CLIP)

REGAN: That's the president there in Iraq. He made a surprise visit to see our troops overseas with his wife, first lady Melania Trump.

Here with reaction to all of it, I have on the phone right now North Dakota senator-elect Republican Kevin Cramer.

Good to have you, sir.

He is saying, look, whatever it takes, however long it takes, he wants that wall, he wants the funding for the wall. We just heard from a Democratic congressman who says, all right, no way he's going to get it.

He'd like to see meaningful immigration reform. I'm sure you would like to see that too. But this wall here and the semantics surrounding it is preventing you guys from getting anything done. Where does it go?

KEVIN CRAMER, R-N.D., SENATOR-ELECT: Well, it's a good question, Trish.

First of all, thank you for the opportunity.

And let me tell you, from what I pick up around North Dakota -- I have served in Congress now for six years -- and I just won a seat in the United States Senate largely over this issue.

The people of North Dakota want a wall. They want a barrier of some site - - of some type, and both for its practical use, as well as the symbolism of it.

But, clearly, that's not the only issue. I mean, we have lots of immigration issues. And a comprehensive reform probably makes the most sense.

REGAN: But, in order to get there, right, you got to get to first base.

CRAMER: Right. Right.

REGAN: And first base for this president and for many of your constituents, as you just explained, is that wall. People want that symbolism. They want to erect a barrier to send a message, effectively, to anyone thinking of coming here illegally that you better not. It's going to be that difficult.

So, if you don't get that, what shot do you have at the rest of it? And shouldn't the Democrats want the rest of it?

CRAMER: The Democrats should want the rest of it.

Unfortunately, we are living at a time when it seems like every negotiation begins with all or nothing and ends with all or nothing, which usually ends up with nothing. And you have a lot of people saying what they will never do, which is, rule number one in politics is never say well you will never do this.

At least that's what John Boehner taught me. And I think -- I think it's proven to be pretty true.

But I think, politically, going forward, the reason you need more than just the wall in the discussion is because, as long -- as long as there are some people that have enough power to prevent something from happening, the only thing that gets them to allow you to do something is to give them something they want.

And therein has been the problem for at least the six years I have been in Congress. In fact, we have gotten to a point now where ,if I want three out of the four things that are before us, but I don't want the fourth thing, it seems like I'm willing to -- and I'm just not speaking for me personally, but in Congress -- we're willing to give up the three things we want.

And we have got to stop looking for losers in every situation. We can have winners and losers.

REGAN: It's discouraging. It really is.

And this is why people get so tired of it, right, and so tired of politics.

CRAMER: That's right.

REGAN: Because there's a whole lot of posturing here. And what is sacrificed is the policy that's ignored as all this posturing happens.

But speaking of posturing, Nancy Pelosi, Chuck Schumer are making it very clear where they are. The president's making it very clear where he is.

Ultimately, if this is some kind of bad game of chicken, who succeeds, in that who has the most to lose?

CRAMER: Yes.

Yes, it's a great question. And I think that's what everybody is, of course, trying to analyze. And I don't think -- I think it's hard to get a read right now, because everybody's enjoying Christmas.

The government is not as shut down as it has been in the past. In other words, there's not the personal pain, if you will, being inflicted on the voters, the taxpayers, the constituents that there would be in a total shutdown.

And when you're visiting family and friends for the holidays, you're not really thinking about whether the USDA Rural Development program is being funded.

And so I think what will happen is, when the pressures start coming from the constituents themselves -- and maybe that's not until after January 3 - - Nancy Pelosi becomes speaker of the House, so she's relieved of that political pressure, we have a divided government, where compromise is required to get something done, as opposed to just a nice ideal, my sense is that it could go on a little while, but I think that you do have the ingredients for a deal in the not-too-distant future.

REGAN: All right, hopefully, it happens.

It's good to see you. Thank you for joining us today -- or talk to you anyway, Kevin Cramer.

CRAMER: Yes, thank you for the opportunity. Happy New Year.

REGAN: And congrats on your new position there, senator-elect from North Dakota. All right.

All right, while lawmakers are battling, everyone, over $5 billion for that wall, you get some folks asking, how about tackling this number, the nearly $22 trillion we have in federal debt? It's a biggie.

Art Laffer is one of them. He's next.

(COMMERCIAL BREAK)

REGAN: All right, it's all you have been hearing.

You heard all about that $5 billion that Washington needs and how much they're squabbling about it for a wall with our southern border. But you know what? As much as we look at that, right, that $5 billion, there's another number out there that's kind of a big deal.

And it's fast approaching $22 trillion. We're talking about a whole lot of money.

I want to go to former economic adviser to President Reagan Mr. Art Laffer.

We just spend, spend, spend, and there's not a whole lot of accountability there. It needs to change at some point, Art, right? Or what is -- what is the long-term consequence?

ART LAFFER, FORMER WHITE HOUSE ECONOMIC ADVISER: Yes. The long-term consequences will be disastrous.

But, Trish, we do have time to do it. But what you said is exactly correct, is, these people don't bear the consequences of their own silly actions.

And what we have to do is make them personally responsible for it, not just at the polls. But my suggestion is, you should put all these politicians on commission. If they don't cut it, they get their pay cut.

And just like the rest of us, if you borrow too much, you're going to get a problem in your budget too. And these guys don't bear the consequences of those actions. And I think they should.

REGAN: Yes, not enough incentives.

LAFFER: That's exactly...

REGAN: I don't know how you change that, right?

LAFFER: Oh, easily.

REGAN: Because everybody just wants to spend, spend, spend, so that they can look good in their various districts, and whether they're going to be there a couple years, whether they're going to be there six years, you don't necessarily have that accountability. How do you change it?

(CROSSTALK)

LAFFER: Yes. Well, you should.

Well, you change it. Imagine if,at 3 percent growth, you gave them their pay. At 4 percent growth, you gave them double their pay, 5 percent growth, triple their pay, 2 percent growth, no pay whatsoever, and 1 percent, they owe the money they would have gotten paid.

They will never vote this way ever again. That's how you put them on incentives. It makes perfect -- that's what we do with companies all day long, stock option plans and...

REGAN: Yes, I know.

But I will tell you, I just -- and I agree with you fundamentally ,in that you need -- you need some accountability. I mean, that's what's missing, frankly, from Washington. And this is why you have these problems.

LAFFER: For a long time, long, long time.

REGAN: But, Art, I look at, for example, China, right, and what's happened with China and our trade with China. And I look at how CEO after CEO has come into these big global companies, and they just want to have a presence in China.

So none of them have cared enough, right, about things like their technology getting stolen..

LAFFER: That's right. That's right.

REGAN: ... even though they should have the right kind of incentives. They're so focused on the quarter, that they're not thinking long term either.

LAFFER: One hundred percent.

REGAN: Nobody's thinking long term.

And I guess, sir, I would ask, how do you change that?

LAFFER: Well, that, I think has to be done by legislation.

I mean, you really have to protect U.S. technology. And I think people in Washington right now, I think the administration is very focused on technology. And that's where their focus should be, and how we can have laws that protect technology.

And, by the way, it's not just to China. It's to other companies as well. You shouldn't be able to steal someone's private property, whether you're Chinese, American, Italian or whatever. And those protections should be put into place and should be enforced by the government totally.

REGAN: Lots of accountability, shall we say, needs to go around.

Anyway, it's always a pleasure to see you.

LAFFER: Well, this stock market -- did you watch this one today?

REGAN: I have.

LAFFER: I thought you brought me on today, and I thought I brought you good luck, Trish. It's amazing.

REGAN: You did.

LAFFER: Everything is in place for the boom -- 2019 is going to be the biggest year ever, Trish. Mark my words.

REGAN: I hope you're right, Art.

I have been saying I do not see any real economic challenges on the horizon.

LAFFER: The policies are in place.

REGAN: I really think that the fundamentals are good, sir.

LAFFER: They're perfect.

REGAN: So, if you have good fundamentals, you should have a market that corresponds with those fundamentals.

LAFFER: And they will happen.

I mean, this is the time. The tax bill is put in there. It's got a steep, but over the next two years, you're going to see amazing results.

REGAN: I always love talking to you.

LAFFER: I love talking to you, too, Trish. You're the best ever.

REGAN: And I love the good luck.

LAFFER: And merry Christmas, happy new year.

REGAN: Merry Christmas to you as well.

All right, President Trump, everyone, with a strong message to our troops on the fight against ISIS. He flew there in a surprise visit to Iraq with his wife. Hear what he's saying next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

TRUMP: The other reason I'm here today is to personally thank you and every service member throughout this region for the near elimination of the ISIS territorial caliphate in Iraq and in Syria.

Two years ago, when I became president, they were a very dominant group. They were very dominant. Today, they're not so dominant anymore.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

REGAN: That's the president in his surprise visit to Iraq to see the troops there.

We have more details coming in as I speak on that big visit today.

Lucas Tomlinson is at the Pentagon with all of them.

Hey there, Lucas.

LUCAS TOMLINSON, CORRESPONDENT: Hey, Trish.

There's over 5,000 U.S. troops currently deployed to Iraq and received a surprise visit today by their commander in chief. Most of those troops are assigned to train and advise the Iraqi forces. There's also special operations troops there as well.

Outgoing Defense Secretary Jim Mattis didn't make the trip today with the president. Now, while the president says he's withdrawing all 2,000 U.S. troops from Syria, those special operations troops could be used in the future to carry out any raids in neighboring Syria.

Officials say U.S. special operations forces could carry out raids similar to the one that killed Osama bin Laden. And since the -- U.S. artillery on Iraq's border with Syria has been shelling ISIS positions around the clock.

The last known ISIS stronghold is the city of Hajin, located not far from the border and within range of those cannons. At its height in 2014, ISIS controlled an area the size of Ohio. In President Trump's first year in office, airstrikes against the terrorist group increased 33 percent. Roughly 40,000 bombs were dropped on ISIS last year, Trish.

Today, the group holds only 1 percent of the territory it once held. But despite all these gains against ISIS, the situation in Iraq remains tense, one of the reasons the president and first lady had to fly in on a secret mission and only stayed on the ground at a U.S.-controlled air base west of Baghdad for only a few hours.

President Trump said he wished he had the opportunity to meet the new Iraqi prime minister. They couldn't meet because the security situation. He says he hopes to have a visit with him at the White House some time next year -- Trish.

REGAN: All right, thank you very much, Lucas. Appreciate it.

Let's get reaction with right now from former Green Beret Scott Mann.

Welcome to the show.

Let me just ask you. It's kind of interesting, right, that we're leaving Syria at the same time we're -- we're bombing Syria and taking out the likes of a couple hundred ISIS fighters. What's really going on?

SCOTT MANN, FORMER U.S. GREEN BERET: Yes, hi, Trish. Thanks for having me on.

It's not uncommon when you are going to pull out of an area to saturate it with some kind of disruption, airstrikes or surgical strikes or something like that. And it can have an effect.

And let's be clear. The bombings and the surgical strikes by commandos have had a profound effect on disrupting ISIS over the last couple of years. But if we have learned anything, I think, in this almost 20-year war, is we just can't defeat groups like ISIS and Al Qaeda by conventional strikes alone.

It just doesn't work.

REGAN: Yes, the challenge, of course, is that this is money that comes out of every American taxpayer's pocket, and you have to be incredibly selective about where you are in the world, right, because we don't want to be paying for wars that we don't want to be in, and we don't want them to drag on forever.

And we do hope that some of our European allies pick up some of the slack here. But it was 2,000 troops 2,200 troops, to pull just that fewer number out, I know you have got some real concerns about it, as do a lot of people. Explain.

MANN: Yes, I mean, I think part of the problem, Trish, is that the narrative that's out there right now is that we don't want to be the world's policeman, we don't want to do nation-building.

And, frankly, that's a Cold War era set of metrics. I mean, what we're talking about here is denying strategic safe haven to a global terror group that has proven track records of projecting violence inside the United States when they have unfettered safe haven, right?

And if we don't take that on, and we don't deny them that safe haven, then the odds are they're going to be able to strike again. And the second thing I worry about is, when we do pull out of here, this is a narrative victory for ISIS. This is their chance to stand up and say to jihadists all over the world, look, we outlasted the great Satan. Come on back, and let's fight it out.

REGAN: I don't know about that. I mean, we just killed another couple hundred of them.

MANN: Yes.

You know, look, we killed more than a couple hundred in Vietnam. And that body count metric didn't work too well there either.

REGAN: Mm-hmm.

So you would rather we stay and risk our troops and their lives, because you think, ultimately, that's a better -- a better scenario for the safety of our country going forward?

(CROSSTALK)

MANN: Yes.

And, look, I don't like saying it. My oldest son is going into the military in combat arms. And so this is hard for me to say. But I believe a persistent presence with the right kind of advisers on the ground in sanctuaries like Syria and Afghanistan, where we can train locals to stand up and fight back and push these groups out, that's the only way we're going to win this thing.

And if we don't have the patience to do it, then we're going to read it on the back end.

REGAN: You know, Scott, I find it interesting, only because, well, certainly, General Mattis echoed that viewpoint, and certainly presented it to the president on multiple occasions. And that's partly why he's not there now.

We also know that John Bolton, of course, feels very strongly about the U.S.' need to lead in that hegemonic sense and to really preserve our place in the world as the policeman.

So -- so, what motivated him here, you think?

MANN: What motivated who? I'm not sure I follow the question.

REGAN: The president of the United States. I mean, why pull them out, when so many people have said, we need to stay?

MANN: Yes, look, I think the last three administrations have demonstrated this desire to win the war on their watch.

I mean, President Bush declared it from the aircraft carrier. President Obama pulled out of Iraq with a precipitous pullout, and now this.

And I think all three of those approaches are flawed. We need to listen to the folks who fight these wars and who understand that this is a multidecade endeavor, and it's not a police action.

REGAN: Yes, unfortunately.

MANN: It's a denial of safe haven. Unfortunately.

REGAN: Yes. No, I -- I hear you.

All right, well, Scott Mann, good to get your perspective. Thank you so much, sir.

MANN: Thanks.

REGAN: The government shutdown and recent market meltdown has had a whole lot of Americans very, very worried. But something else is going down right now, and I think it might just have a lot of people smiling.

We're going to explain.

(COMMERCIAL BREAK)

REGAN: All right, here's some good news for drivers and for consumers. You got prices at the pump still going down, down, down -- 77 days in a row, gas prices have moved down.

Jeff Flock is at the CME.

And, Jeff, I know, while oil and gas futures rebounded a bit today, prices are still way down over the past couple of months. And I have to imagine this is very good news for consumers and good news for the economy. Your thoughts?

JEFF FLOCK, CORRESPONDENT: That has been a great piece of news for everybody that drives a car. It's just like getting more money in your pocket when the gas prices are $2.31 for the average.

That is what it is today, as you point out, 77 straight days. It was -- what was it, $2.36 a week ago, $2.55 a month ago. So we have had a steady decline and a steady rebate, fuel rebate, if you will.

We will see if that continues. We had a huge run-up in oil today. What a day this has been, a trading day, up 8.6 percent on oil prices today. So we will see if it continues.

Where is it cheapest for gas? That would be the state of Missouri. We're at $1.88 the average gallon of gas in Missouri. And the cheapest gasoline anywhere, if you want to drive there, you got to go to Oklahoma City, $1.61 at the Food Mart on 44th Street in Oklahoma City.

And that is absolutely good news, Trish.

REGAN: Yes.

(LAUGHTER)

FLOCK: Merry Christmas.

REGAN: I -- yes, Merry Christmas.

People -- you forget what an impact this really does have. But it -- when you think about consumer spending, and it's roughly two-thirds of the overall economy, that spending is so directly affected, Jeff, by the amount of money people have hanging around, and that correlates to gas prices.

FLOCK: A lot of people in the middle of the country, not you in New York there, but a lot of people in the middle of the country spend a lot of time behind the wheel driving around. And they burn up a lot of gas.

And so that's a huge benefit for them. We will see if it continues after this run-up today, 8.6 percent jump.

REGAN: Yes, all right. We're watching.

Jeff Flock, merry Christmas. Happy new year.

FLOCK: OK. Good to see you.

REGAN: Thank you.

Thank you so much for joining us here this afternoon. I'm going to be back in for my good friend Neil Cavuto again tomorrow.

Let's take another look at this, right? We got reason to cheer. This is a nice-looking Big Board, up 1,086 points, for the biggest one-day point game ever. And you have the S&P, the Nasdaq, all the big indices doing incredibly well today.

I'm going to see you tonight on FOX Business, 8:00 p.m., for "Trish Regan Primetime."

Jerome Corsi is joining me as a guest. He says the FBI is going after his family now. He will explain. He will have more on his $350 million lawsuit.

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