Scalise: Every single income bracket will see taxes go down

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This is a rush transcript from "Your World," December 21, 2017. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI, D-CALIF., HOUSE MINORITY LEADER: Headed for this accomplishment. Well, I call it a Pyrrhic victory, because it's a -- a Frankenstein.

UNIDENTIFIED ACTOR: The Frankenstein.

PELOSI: Anybody that is familiar with Frankenstein knows that it was a creation, a monster that was created.

UNIDENTIFIED ACTRESS: Oh, doctor, I'm sorry.

UNIDENTIFIED ACTOR: Don't worry.

PELOSI: You know the ending of the -- Mary Shelley's story? The monster comes back to destroy.

UNIDENTIFIED ACTOR: Good, good.

UNIDENTIFIED ACTOR: What's the matter? Quick, give him the -- quick, give him the...

(END VIDEO CLIP)

NEIL CAVUTO, HOST: And if Nancy Pelosi is right, my fellow Americans, that is what the tax cuts are going to do to you, kill you, strangle you, take all your money and make you want to return to black and white movies, and fast.

Welcome, everybody. I'm Neil Cavuto.

And Fox on top of a little bit of over-the-top drama talking about these tax cuts on the same day, days, in fact, that we have heard the likes of AT&T, and Boeing, and Wells Fargo, and Comcast, for a variety of reasons, talk about good things they hope to do.

Hardly monstrous. Hardly Frankenstein-ish. But weird. A day after the fact, the reality is the tax cuts are coming, and corporations are surprising.

Lauren Simonetti has more -- Lauren,.

LAUREN SIMONETTI, FOX NEWS CORRESPONDENT: What a monster a bonus is, especially in time for Christmas, Neil.

All right, so these corporate tax cuts, they are permanent. So, the question is, are companies going to use their tax savings? The answer is, they already are, at least some of them.

First out of the gate here is AT&T. This is what they're doing, giving 200,000 of their workers a $1,000 bonus, also investing a billion dollars into the U.S. next year because they believe tax reform will drive growth and create jobs.

And yes, Neil, AT&T, I wouldn't call them friendly to the administration right now after it blocked of their purchase of Time Warner. Comcast also giving 100,000 workers $1,000 bonuses, plus investing more than $50 billion in infrastructure, thanks also to the recent repeal by the FCC of net neutrality.

The company is adding -- quote -- "With these investments, we expect to add thousands of new direct and indirect jobs."

Speaking of jobs, many bank workers will see their paychecks go up; 36,000 employees at scandal-ridden Wells Fargo will see the minimum wage hiked to $15 an hour. That starts in March.

And Wells Fargo will donate hundreds of millions to programs that help small businesses, as well as homeowners.

Fifth Third Bancorp also hiking minimum wages for about 3,000 of their hourly employees and promising thousands more a bonus if tax reform is signed into law by Christmas.

Finally, Boeing investing $300 million in itself and in its work force. They're doling it out between charitable causes, employees training and their facilities.

So, all in, hours after tax reform was passed in Congress, we see corporate America putting their money to work. Two questions remain. Will more companies follow, Neil, or are the companies that do follow, were these companies just trying to get in the administration's good graces, like AT&T?

CAVUTO: Well, whatever their motive -- yes, you could argue, whatever their motivations, if they keep to what they promise to do, not exactly Frankenstein-ish.

SIMONETTI: No.

CAVUTO: But we shall see. All right, Lauren, thank you very, very much.

All right, Congressman Steve Scalise joins us right now, Republican of Louisiana, of course, House majority leader whip.

This man has been through so much this year, but I would think, by year's end, pretty happy about this development here.

How soon do you know, Congressman, the president will be signing this?

REP. STEVE SCALISE, R-LA., HOUSE MAJORITY WHIP: Well, Neil, happy days are here again.

You're going to see the president sign this bill in the next few days. And you're already seeing the benefit that so many millions of workers are going to be seeing that have been wanting this kind of relief. And it's not just about cutting taxes to put more money in their pockets, which is going to be important, but, as you see now, there's true competition going on, where AT&T started it, $1,000 for over 200,000 workers.

And there's more to come. You're going to see I think more and more companies every day announcing these kind of benefits to workers, because there's an increased value in workers. They are going to see increased paychecks.

This is what we said was going to happen. But it's already happening before the bill is even signed into law.

CAVUTO: So, you want to see obviously more of this type of thing. Obviously, companies can spend this tax largess anyway they want to. Not only are their rates going down dramatically. They get the benefit of a one-time low tax on their monies held abroad, I think about 15.6 percent. Take advantage of that.

And if they follow what some of these other companies like what AT&T and Wells Fargo are doing, there could be a double benefit. Is it your hope and expectation that most companies do what these are?

SCALISE: You are going to see a lot more of this, Neil. You're seeing companies invest in their workers.

They're also investing billions of dollars in new infrastructure. And you are going to see that in every sector of our economy. It's going to ripple through to the guy that works at AT&T who is maybe laying fiber-optic cable throughout more communities, more broadband going to rural communities.

This is the benefit that you are going to see, not just, again, in your paychecks, not when -- not only when you do your taxes. You are going to pay less in taxes now, but you are also going to be seeing more jobs created.

A lot of those jobs that left America that we complained about for so long, in our bill, we did something about it. We made our country competitive again, so we're going to see those jobs come back to America.

CAVUTO: You know, a lot has been made of the timing, as I said, at the outset, sir, with the president's signing of this. There's some who are spooked by the idea of holding off on that signature, because anything could happen.

Do you hope that, as some have said, the president signs this tomorrow before he leaves for vacation and doesn't wait until next week or even the new year?

SCALISE: Well, look, I'm glad after this long debate over this bill, people now realize how good it is, so much so that they want it to be signed sooner.

Look, President Trump had a great celebration at the White House yesterday, where he started the process of letting people know about this bill, because if you're just reading about it in your local newspaper, you're probably hearing a lot of this boogeyman, Frankenstein foolishness from the left, who are scared to death of people getting more of their money back.

But once people start seeing that money come back in their paychecks and they see bigger paychecks at their office, they are going to actually realize how good of a bill this is. So, as soon as President Trump wants to sign it, I'm just excited we have a president who wants to sign this bill and who helped us get to this point.

We wouldn't be at this point without the leadership of President Donald Trump, Vice President Pence. Their whole team at the White House has been great in helping us get that bill to his desk. And when he signs it, it's going to be an even bigger celebration for families and workers in the middle class who have been crying for this kind of relief for generations.

CAVUTO: You have heard, obviously, Congressman, about those who would argue that this is just a giveaway to the rich, to fat cats, what have you, and that it's disproportionately so, and that people, even the middle class who do see the relief, and that pops up in their paychecks I guess in February some time, will be disappointed that they don't net more, that for many of them, every -- whether they're paid every two weeks or one week, maybe $40, $50, and that won't move the needle.

What do you say?

SCALISE: That's all that the left has.

When these elite, liberal, out-of-touch people in Washington say they don't want you to have more of your paycheck, they just yell tax cuts for the rich. Well, all of a sudden, that worker at AT&T that just got $1,000 back who is maybe living paycheck to paycheck is saying, I'm not the rich and I just got a big bonus that is going to help me go buy more Christmas presents for my kid.

What do you tell that worker who now is going to get that money back in his pocket? Their argument falls flat for all of those middle-class families.

CAVUTO: What do you think of those who are in those high-tax states, though, sir, especially those -- like, I'm in New Jersey, and a lot of people in my state are very concerned, whether they're wealthy or not, that even the doubling of the deduction and all of that is not going to compensate for losing what used to be write-offs for their state and local taxes, property taxes that are well, well, well in excess of the $10,000 that's been allotted.

SCALISE: Yes.

And, Neil, even in those high-tax states like New York, New Jersey, California, Illinois, whatever state you might be in, every single rate comes down. And we have run the numbers in a lot of those states, by the way, Neil. And with our tax cuts, by every tax rate, doubling the standard deduction, every single income bracket in almost every congressional district sees their tax rate goes down, in every single income bracket, even with that SALT deduction going away in high-tax states.

So, you're going to see a huge benefit to middle-class families. To everybody who pay taxes, they're going to see a tax cut.

CAVUTO: And for those few -- and they might be few -- who don't, what do you tell them?

SCALISE: What I tell them is, look at all of the other income tax cuts that are coming for everybody.

Look at how our economy is going to take off and how that is going to help them. But also look to your local state. And if your state is raising taxes on you at such a high level that the only way to equalize it is by saying, please have the federal government deduct every dime of it, now they're going to go back to Albany, they're going to go back to Trenton, and they're going to say, you need to lower our taxes too, because it really worked at the federal level.

Now you need to lower our taxes, because those taxes are too high. Let's have that national debate, Neil.

CAVUTO: OK.

Obviously, a lot of people say that a lot of things changed in getting this tax cut done, not the least of which is you returning after your close brush with death and that assassination attempt.

The fact of the matter is that it did galvanize a lot of the troops. In fact, the president has become quite fond of you.

And I did notice that yesterday at the big event on the South Lawn of the White House.

I want to go back to a comment he made and what you thought of it. This is from yesterday.

(BEGIN VIDEO CLIP)

PRESIDENT DONALD TRUMP: Steve Scalise, he's braver than all of us. He's braver.

(CHEERING AND APPLAUSE)

TRUMP: Where is he?

(APPLAUSE)

TRUMP: Oh, boy. I don't know. He had a rougher year than most of us, but it's a hell of a way to lose weight, Steve. You said -- not a good way.

We love you, Steve. Great job. Great job.

(END VIDEO CLIP)

CAVUTO: It was a hell of a way to lose weight.

(LAUGHTER)

CAVUTO: How are you feeling now?

SCALISE: I'm feeling great, Neil.

Look, the president came to see me in my darkest days. When I was in the hospital those first few hours, the president and Melania Trump came and really consoled my wife.

I was unconscious just being -- fighting for my life. But my wife was really dealing with some tough, tough times, when we weren't sure if I was going to make it.

And to have the president come personally to the hospital with the first lady, it meant so much to my wife, to my family. And then he called every step of the way. And, look, I lost 50 pounds from the day I walked into the hospital until about a month later.

CAVUTO: Wow.

SCALISE: I'm trying to get some of it back and I'm building a lot of my strength back.

But to have such support from my colleagues here, Republican and Democrat, and the warm wishes of family and friends back home, but even prayers from people I never met before, I can't say thanks enough to all the people who helped me get to this point, who prayed for me.

God has been great to me. We have a lot to be thankful for this Christmas, but what an exciting time to come back to work and be a part of this, Neil. It's really -- it's been invigorating and exciting to be a part of.

CAVUTO: I know you're asked a lot of dopey emotional-type questions like this, Congressman, but did it change you, did it change your approach to even the tax cut?

There were talk -- there was talk, at least, that you were very insistent on making sure that average folks were part of this tax cut, that if some in the upper income, the top 1 percenters, were going to end up paying more in taxes, that, while you felt bad for them, you felt more of a kinship with middle- and lower-class people who you did want to see get something, and that was buoyed a lot by your brush with death.

SCALISE: Well, when you have that kind of experience that I had, I don't wish it upon anybody, but it really does galvanize and refocus you on the things that are important in life. And my family was at the forefront.

But just the things that you love doing. And I love doing a lot of things back home in New Orleans and hunting and fishing. And I have gotten to do that again. I went hunting, duck hunting, with my son for the first time just last weekend.

But to come back to work, I love this job. I love fighting for the people that I represent in Southeast Louisiana and just the things that we wanted to do to get our country back on track and restore the American dream.

I knew what was right in front of us when I was fighting to get out of the hospital in August and finally in September. And I knew that we were going to be able to have this opportunity. But if we didn't put it together, it wouldn't happen.

I have been through eight years under Barack Obama where our country was going in the wrong direction. And, frankly, a lot of us felt that we were losing the American dream, and we needed to fight to get it back. And we had a president who wanted to do this.

So, I knew we only had maybe one moment to get this right. And if we didn't get it right, I think you would have easily been able to say this Congress was not a success at all, maybe a failure. But, instead, we did it.

We said we were not -- failure wasn't going to be an option. And we stayed to get it done and we came together. You saw a lot of uniting and taking a lot of criticism from people who didn't even read this bill, but ultimately who now realize how good it's going to be for the country and to rebuild the middle class, Neil.

I talk to people every day who are just struggling to get by. And now they are going to have real opportunity because of what we did with this Tax Cuts and Jobs Act.

CAVUTO: Well, you have had incredible perseverance, a good attitude. And it didn't hurt to have a great sense of humor.

SCALISE: Well, you have got to laugh at life.

CAVUTO: But I think that's the Italian.

SCALISE: Yes.

CAVUTO: All right, but, anyway, sir, very good to see you. And have a merry Christmas.

SCALISE: Great to see you. Merry Christmas, Neil.

CAVUTO: Be well. Continued good health.

SCALISE: Really enjoyed...

CAVUTO: What an incredible story. All right.

In the meantime, try to shut us down? Guess what? We will shut our wallets. Now will Ambassador Nikki Haley make good on a threat when the U.N. essentially said, go ahead, make our day? They did. What is she going to do? And what's he going to do?

(COMMERCIAL BREAK)

CAVUTO: All right, a gain, not a record. That's a rarity here, but stocks advancing nevertheless on the distinct possibility that tax cuts could be signed into law tomorrow. No sure thing.

A big concern is this ongoing spending fight back and forth that could technically have the government running out of money Saturday morning at 12:01 a.m.

Former Goldman Sachs partner Peter Kiernan says we should avoid that as all costs. He joins us right now.

Peter, how much of a drag was that, you think, on stocks that had been up well into triple digits, and then the more unlikely that this was looking and, then suddenly likely? What do you think?

PETER KIERNAN, FORMER GOLDMAN SACHS PARTNER: I think people who are trading every twist and turn of the tax law and its changes in the long- term are going to lose.

And the best thing is to step away and look at the big picture. It's been a very, very strong market. We're up 24 percent this year. What is sort of interesting is there only have been, over the last 42 years, eight times where that has happened before.

And of those eight times, in the following year, in no time did it go more than 24 percent, and only five times did it go up in the second year. So, we're in very special place, rarefied air. It's really wonderful performance. And I think we have every reason to expect continued growth.

CAVUTO: That's interesting.

So the times that you said it didn't go maybe up as much as 24 percent, did it ever reverse course in a dramatic fashion?

KIERNAN: There were a couple of years where it reversed course.

But in four of the times, it went up in teens. It went up '74, '75.

CAVUTO: OK.

KIERNAN: It went up '85, '86 during Reagan. And then it went up three years in a row during the Clinton administration.

But the point is, what people have to really look at now is corporate behavior. You're seeing a little bit of it today. But what is going to drive these markets from here on out is not the anticipation of the taxes, because that has happened.

CAVUTO: Yes.

KIERNAN: What are people going to do once they have the money? Are they going to invest? Are they going to pay people? Are they going to buy back stock? Are they going to invest in digital or, more recently, are they going to do more M&A, buy more other companies?

Those are things that are really going to drive the markets here.

CAVUTO: What would be more of a positive sign to you?

Because you early on were saying, Neil, it's not about the sweeping cut in rates, which is dramatic, but the tax holiday a lot of these companies to bring their money back I think at 15.6 percent. They have got to take advantage of it. They all probably will or most of them.

And that means they have more money than they know what to do with, kind of like you, Peter. So, now, now they have got to put that to work. So they can actually do the best of both worlds, the bullish argument goes, buy back stock, right, and do what AT&T and these others are doing, take care of their workers.

(CROSSTALK)

KIERNAN: Well, I think taking care of workers is always a great first step.

But what really hasn't happened, if you look back over the entirety of this rebound since 2009, we have not seen the kind of investment, the kind of growth investment characteristics which propel a market forward.

Now, we have had an unbelievable run since the 6000 or so Dow that we had in 2009. But we have relied on the consumer to drive that. The multiplier effect, that pebble in the water effect of buying a plant, of building a factory, of buying equipment, of buying another company or of investing in a new technology, those are the things that really drive markets over a long period of time and will sustain this rally.

CAVUTO: So, when you asked and mentioned those markets, now, we have had come early next year a nine-year bull market going on.

There is no precedent for that sort of thing. So, how does that change the longevity tables on this?

KIERNAN: Well, here's what I would say. Markets don't die, particularly bull markets, of old age. They die for a reason.

And there aren't the kind of things that typically cause a market to correct. We don't have double-digit interest rates. We don't have double- digit unemployment. We don't have double-digit inflation.

Those are the things that really drag a market down. They dragged them down in the '70s. It dragged them down in the '80s. What we have now is low oil prices, low interest rates, relatively, pretty low unemployment, and an awful lot of ways that we can see this provides an opportunity to grow from here.

CAVUTO: We shall see.

Peter, thank you very, very much.

KIERNAN: Always a pleasure. Thank you.

CAVUTO: Good seeing you, Peter Kiernan.

All right, the difference between the media response to this and health care, dramatic.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: President Obama will sign historic health care reform legislation passed by Congress.

UNIDENTIFIED MALE: House Democrats call those changes which deal with the financial aspects of the bill absolutely essential. But Republicans, Diane, are vowing to do everything they can to stop them.

UNIDENTIFIED FEMALE: Democrats, I should say, they are ecstatic, but not one Republican supported the measure.

UNIDENTIFIED FEMALE: We will question House Speaker Nancy Pelosi, who pulled off the congressional equivalent of the decathlon with that vote.

(END VIDEO CLIP)

CAVUTO: All right, so when it was all one side, Democrats came up with health care, that was a big deal. And the media was praising it. Not so much when they were addressing on the tax cut progress that Republicans made, and ultimately achieved without a single Democratic vote. So, that was very, very different.

The president tweeting about that very negative coverage, saying that it really wasn't fair. And, by the way, you could take a look at examples of that. You have obviously seen and heard what the president has tweeted on about this.

But we're going to rocket through a lot of these headlines with a guy who knows the comparison then and now, Joe Concha.

And, Joe, it really is glaring. The health care thing, that was, you know, a religious event, this not so much. But, if you think about it, the rap against each was all lopsided by one party, right?

JOE CONCHA, THE HILL: You expected the Aaron Sorkin music soaring behind those headlines. Would have been perfect, right out of "The West Wing."

(LAUGHTER)

CONCHA: We didn't have that. It would have been a nice touch.

Yes, look, the coverage has been stunning in terms of the contrast. Mainly, the narrative here was focusing on, will the Trump family benefit?

A little message for my friends in the media. The Trump family will be fine for the rest of their lives. Usually, when you become president, you get to do speeches afterwards sometimes for $500 a pop or $500,000 a pop in Russia.

So I doubt that they're doing this so they can line their own pockets. So that was an interesting narrative.

And then other narratives were around polling, which some, including a CNN poll, showed that this tax bill was 55 percent disapproved by the public.

Here's another piece of advice. Why don't we wait until this time next year and see what the benefits are in terms of GDP, in terms of jobs and all of those things? And, most importantly, let's see how the 2018 elections go, because if this becomes a referendum on how the economy is doing as a result of this tax bill, then Democrats shouldn't probably be as confident as they are sounding right now in terms of turning over the House and the Senate.

CAVUTO: And we should note, from experience, that these things do take awhile to sort out. We should also know that revelations like not being able to your doctor and that your premiums would be affordable, that didn't pan out. That didn't get a great deal, near the scrutiny, for example, that right out of the gate this tax cut is getting apparently dooming the middle class and pretty much everyone below to nothing at all.

CONCHA: I always look back at this one piece of analysis, Neil, just adding on to what you just said.

And this is from Pew. And it's from last month, Pew Research. And they found that 74 percent of coverage on this president was based on his character and his leadership, in other words, Trump the person, only 26 percent on policy.

So, let's just do a little report card on how things have gone in terms on policy based on the issues that people voted on in the 2016 election that they deemed most important.

Economy. You would have to say that that is probably an A based on GDP, unemployment at a 17-year low, consumer confidence, stock market, all of those things. I think even Democrats would agree with that. Who gets credit would probably be where the debate is.

Then you have jobs. I just mentioned that as well as far as 17-year low in unemployment. Immigration, border crossing are vastly down, even though the will -- the wall -- excuse me -- hasn't started yet. So you could call that incomplete.

Then you could go to health care. That was a failure in terms of repeal and replace. But the Obamacare mandate was part of this tax bill, and now that's gone. So you could say that there was some success, even though, probably you go with a D there.

And finally ISIS, the caliphate has been decimated, and Trump said he would blow the hell out of them, even though these things tend to metastasize terrorists in terms of lone wolves. So it's not a solved problem, but certainly success there.

So if we look back on those five issues and how this president has done from a performance perspective, which doesn't get covered that much by the media, you would have to say this first year has been a relative success.

CAVUTO: But it always is your bias.

And the media, that it ends to be very questioning of tax cuts in general, that they always skew to the rich. That's the rap against them, and that's the narrative that is always advanced, whereas spending and health care and all of that that tends to be much more favorably covered because that is something that they support, which is fine.

But just get it out there and just say, all right, one is a big government initiative with all one-party support. The other, again a big government initiative with all one-party support, but right down the middle, you know?

CONCHA: Yes, the tax cuts for the rich thing kind of took a real -- that narrative took a shot in the gut yesterday when suddenly all of these corporations started saying, we're going to give $1,000 bonuses.

And that started with AT&T.

(CROSSTALK)

CAVUTO: That disrupted the narrative, completely disrupted the narrative, yes.

CONCHA: It completely did. And they didn't know how to handle it.

Bill Kristol said that it was creepy that this was happening. This is a conservative commentator, or allegedly one. And he even didn't know how to handle it. That was the right cross that came in that really threw that whole narrative off.

And now you could say that Republicans and the president certainly have momentum going into 2018, based on this -- finally having a piece of major legislation passed in his first year.

CAVUTO: Unless it's covered.

CONCHA: Right.

CAVUTO: And whether you like the president or not, if you can foist a narrative that he's getting away with a message, sometimes, he does, you will ignore the message, you know?

CONCHA: Merry Christmas, Neil, by the way. I got a thing. I got to go, but appreciate it. And this has really been fun being on the show this year, and look forward to possibly joining next year, if you have me back.

CAVUTO: Many, many more times. Many more times, my friend.

Thank you very much, Joe Concha, over at The Hill. All right.

By the way, a lot of people apparently have not finished their Christmas shopping and apparently there's a lot of people, oh, I don't know, who haven't even started. We're going to help you right after this.

(COMMERCIAL BREAK)

CAVUTO: All right, you're looking live at the floor of the House of Representatives right now, where they're voting on a C.R., a continuing resolution, to keep the government lights on through January 19.

This is another short-term measure, is expected to pass. The Senate? That is anyone's guess.

Back in 60.

(COMMERCIAL BREAK)

CAVUTO: All right, so days before Christmas and you haven't gotten all of your presents. Some of you haven't gotten any of your presents, have you?

Amazon to the rescue? Dealing with this on what it calls Amazon procrastination day. This is the day, the last time you have, at least through Amazon Prime, to get something and get it delivered in time for Christmas. In this case, you can get it in maybe two hours or less.

Deirdre Bolton at a fulfillment center in New York City -- Deirdre.

DEIRDRE BOLTON, FOX BUSINESS CORRESPONDENT: That's right, Neil.

And you know New York real estate as well as I do. It's unusual to have between 30,000 and 50,000 square feet. But that is where I'm standing right now.

This is the Amazon Prime now hub. And, globally, there's 50 of these around the world in nine different countries. So, this one right here is on Fifth Avenue at 36th Street. You essentially put in your zip code and then you get this list of inventory of items, about 25,000 different items which are right here.

I want to take you into the stacks. Our cameraman is going to go. And you are going to see in between these yellow dividers all sorts of what look like miscellaneous pairings of items.

There's mouthwash. It's Amazon tablets with dog biscuits and with moisturizer. It's all mixed together. But the Amazon algorithms, they know what goes where. So workers get the codes. If you order something, it goes right on the scanner, and then it goes into one of these basically plain old-fashioned bags, but with a very, very modern sticker that tells the delivery person where to go.

And since we're in New York City, of course, Neil, sometimes, that delivery person goes by subway, sometimes by foot, by bike or by van. But fear not, you can still order right until 9:00 p.m. on Christmas Eve for your goods - - back to you.

CAVUTO: The mouthwash and dog food thing, there must be an algorithm to explain why they're...

BOLTON: It's a magical -- it's a magical combo.

CAVUTO: Right. Right. Right. My dog is just desperate for this right now.

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

All right, in the meantime, the fact of the matter is, whether they're late or on time, people are spending. In fact, this, we're told, is one of the busier Christmas shopping seasons in the better part of a decade.

To retail watcher Hitha Herzog on what is going on.

What is going on here with this, Hitha?

HITHA HERZOG, RETAIL WATCHER: You know, Neil, the National Retail Federation is estimating that retail sales are going to be up around 6 percent year over year.

So, to your point, it's is one of the best years that we have seen in terms of retail. So, I think really what is driving this, obviously, are people spending online, as well as their mobile devices. PayPal was estimating about 80 percent of U.S. consumers are spending via just their phones.

So because it's so easy now, people are really heading to the stores or really heading offline to get their merchandise.

CAVUTO: The amounts they're spending that are increasing, why is that? The tax cut? Feeling good? What?

HERZOG: I think this has been a long time coming.

So, prior to the recession, people were really upping their savings. They didn't feel as great about the economy. But it's a real combination of this upped consumer sentiment and a feeling that things are going to get better.

And, yes, of course, I think people are anticipating this tax cut coming. But now we're that seeing all these bonuses being put out, I think people are just going to start spending again, especially in the next couple months.

CAVUTO: A lot of people are spending more on average on big-ticket items. Apple early with its phone and devices was thought to hog out whatever additional spending might go normally. But apparently that's not the case. And people are just doing it all.

HERZOG: People are not only buying big-ticket items, but they're also spending on the little stuff, too.

Think about it, Neil. People -- there was this frugal -- frugal fatigue is what I talk about a lot.

But, basically, that means that people are just sick of saving. They want to go out and spend. We are a society that likes to shop. So now that there is this feeling of -- euphoria might be too big of a word, considering what is going on in the rest of the country, especially in Puerto Rico and California, we had natural disasters hit those areas, but I think, for the most part, people are just definitely feeling better.

And they feel a little bit more secure with their jobs and more secure about where their income is coming from.

CAVUTO: Knock on whatever.

Hitha, thank you very much. Good seeing you again.

HERZOG: Thanks, Neil. You, too.

CAVUTO: All right.

Well, Nikki Haley, our ambassador to the United Nations, was there telling them, you know, the more you vote against us, the morning simply because of this Jerusalem decision and we think it should be the capital of Israel, and you slap down punishment on us for thinking that might be a good idea, the less we might be inclined to support you.

Now what?

(BEGIN VIDEO CLIP)

NIKKI HALEY, U.S. AMBASSADOR TO THE UNITED NATIONS: We have an obligation to demand more for our investment. And if our investment fails, we have an obligation to spend our resources in more productive ways.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

HALEY: The United States will remember this day in which it was singled out for attack in the General Assembly for the very act of exercising our right as a sovereign nation. We will remember it when we are called upon to once again make the world's largest contribution to the United Nations.

(END VIDEO CLIP)

CAVUTO: You know what? We're one of 140 countries or thereabouts in the United Nations, yet we account for more than one out of four dollars it receives to continuing operating.

And that might be in question right now, after getting strongly repudiated by the United Nations to push for making Jerusalem the capital of Israel, and this despite threats ahead of that vote by Nikki Haley, our ambassador there.

Rick Leventhal is at the United Nations on what happened -- Rick.

RICK LEVENTHAL, FOX NEWS CORRESPONDENT: Well, Neil, the threat of losing U.S. aid might have convinced some countries not to show up here today or to abstain from the vote.

Thirty-five abstained and 21 stayed home. But 128 countries still voted against the U.S. and Israel, even though that those countries received more than $21 billion in U.S. financial assistance last year alone.

Yemen, for example, which co-sponsored the resolution condemning the U.S. recognition of Jerusalem as Israel's capital, received nearly $600 million in aid this year. And Turkey, which collected $155 million last year, also criticized the U.S. decision.

(BEGIN VIDEO CLIP)

MEVLUT CAVUSOGLU, TURKISH FOREIGN MINISTER: This is bullying, and this chamber will not bow to do that. It is unethical to think that the words and dignity of member states are for sale. Let me put it in this way: We will not be intimidated. You can be strong, but this doesn't make it right.

DANNY DANON, ISRAELI AMBASSADOR TO THE UNITED STATES: Those who support today's resolution are like puppets. You're a puppet pulled by the strings of your Palestinian puppet masters. You're like marionettes forced to dance, while the Palestinian leadership looks on with glee.

(END VIDEO CLIP)

LEVENTHAL: In the end, the Israeli ambassador told me much of this is just for show. They have more support, he says, than you realize. And it doesn't matter, because the Israeli embassy -- the U.S. Embassy in Israel, he says, will still move from Tel Aviv to Jerusalem -- Neil.

CAVUTO: All right, Rick Leventhal, thank you very, very much.

I want to go to Rebeccah Heinrichs on this, the Hudson Institute's senior fellow, national security expert.

Rebecca, obviously, all Israeli operations, government offices are in Jerusalem, as things stand now. So, for Israel, it won't really change much about their government locale and all of that.

But is this a lot of faux rage at the United Nations, the whole threat notwithstanding on the part of Nikki Haley?

REBECCAH HEINRICHS, HUDSON INSTITUTE: I think it's a combination of faux rage and real rage.

For me, I thought today was a great day actually for American leadership. It was just refreshing to see Nikki Haley defending the right of the United States to put its embassy where it wants to put its embassy. And that is in Jerusalem, the capital of Israel.

And so, over the last eight years, the Obama administration sort of feigned that we didn't have the ability or we didn't have leverage at the U.N., which is just simply not true. So, I thought it was a good day for the United States.

I know that's sort of a strange take. But I also think it's important that there's so many of U.S. allies that did abstain and that didn't vote with the Palestinian cause. Poland, the Czech Republic, Canada, Australia, those are countries that deserve, I think, to be applauded. And those are who are true allies really are here.

CAVUTO: I wonder if we deliver on that.

You talk about prior administrations, too. They all advocated, Democratic and Republican administrations alike, Democratic and Republican candidates alike in the past, that Jerusalem is the capital of Israel, that someday we should put our embassy there, whatever.

They never followed up. This president did. So I understand the rage on the part of the administration's response to say, you know what? We might hold back aid to the United Nations in the future.

Should they?

HEINRICHS: I think that it's wise, on a case-by-case basis, too, especially these particular countries that went ahead and voted against the United States.

That is -- Nikki Haley said it right. This is an investment we make to the United Nations. The U.N. is just a tool to further U.S. interests. If it's not furthering U.S. interests, why are investing so much money?

The point you made is so important, though. In 1995, Congress passed a law that recognized, and passed it overwhelmingly, Democrats and Republicans, that recognized Jerusalem as the capital of Israel.

And every subsequent president has used his waiver authority not to do that. President Trump just did it. And so he is responding and implementing the will of the people. And he doesn't work for the U.N. He works for Americans. And so that's what he did.

CAVUTO: What if another government happily comes up with equally deep pockets, let's say China or Russia, and says, ah, we will cover the difference?

HEINRICHS: That's the concern. That right there is the concern.

And that's why I'm a little reluctant to just say we need to do it or we should just eliminate all funds. I mean, we need to take everything on a case-by-case basis and make sure that we're still furthering U.S. interests.

Again, it's a tool. And so I don't think we need to make a sort of ideological stand against the U.N. here. We need to be careful. But certainly it should not just be a given that the U.N. is just the arbiter of all things right. The United States needs to do what is best for the United States.

CAVUTO: Well put.

Rebeccah, hope you have a merry Christmas. Thank you.

HEINRICHS: You, too, Neil.

CAVUTO: All right, do any of you remember drill, baby drill? I think, a little late, we are -- after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

TRUMP: Where's Dan?

UNIDENTIFIED MALE: Don, Don, right behind you.

TRUMP: No, and Don too.

(OFF-MIKE)

TRUMP: I will tell you between, Dan and Don and Lisa, you've done a very great job.

(END VIDEO CLIP)

NEIL CAVUTO, HOST: Well, we found Dan.

Actually, he did show up there. Talking about Alaska Republican Senator Dan Sullivan, who was there with all the key representatives from that beautiful state, and very happy about getting ANWR and drilling for oil there tucked into this tax cut package, something that was not envisioned, but it did get done.

And Dan Sullivan is a big reason why it did.

Senator, thank you for coming.

SEN. DAN SULLIVAN, R-ALA.: It's great to be on the show, Neil. Thanks.

CAVUTO: I had no idea, to be honest with you -- maybe I wasn't following the tax cut thing as closely as I thought it was -- that this ultimately was tucked into this. How did that happen?

SULLIVAN: Oh, no, we have been working this from the beginning, several votes, hearings in the Energy and Natural Resources Committee.

And it was a great effort both from Lisa Murkowski, Congressman Don Young, Mitch McConnell, and the president, right? This is something that is a win-win-win.

CAVUTO: That it would be wrapped up into the tax cut package?

SULLIVAN: Oh, absolutely.

CAVUTO: OK.

SULLIVAN: We have been working on this for over a year.

And they had a number of hearings in the Energy and Natural Resources Committee. This was all part of the budget resolution to do this. This has been out in the open for, gosh, months.

CAVUTO: And I know this has been out there for, gosh, years, right?

SULLIVAN: Oh, yes.

CAVUTO: A lot of environmentalists have stopped you at every path to say that this would be destructive to the state and that you were going to sort of plow through what is obviously some of the most beautiful land in America.

You say to that what?

SULLIVAN: Well, look, I think they have been using 40-year-old stale talking points.

And the debate on ANWR has not kept up with the advancements in technology and the high environmental standards that we have in Alaska. The final legislation that passed just has 2,000 acres, surface footprint acres, that can be developed. That's it.

And we can do that because of the advancements in technology -- 2,000 acres, Neil, that's smaller than the Fargo, North Dakota, airport. That's going to be it. So we can do it responsibly, but, you know, that's...

CAVUTO: So, millions of acres are still off. You can't touch them.

But I guess some of them were concerned, the way they explained it to me, sir, is that just getting to that will and getting to those acres, limited as they are, will cause an environmental mess.

What do you say?

SULLIVAN: No, I think that's completely false.

As a matter of fact, before I was a U.S. senator, I was the commissioner of natural resources in Alaska. And we have the highest standards in the world. Even our exploration, we require companies to go out only in the winter on ice roads, ice pads. They melt after the winter season, zero impact on the tundra.

And this is next to existing infrastructure. ANWR is right next to Thomson and Pump Station One on the Trans-Alaska Pipeline on state land. So, it makes sense from an environmental, responsible resource development standpoint, jobs, energy, security and national security, Neil.

This is good for Alaska, good for the country.

CAVUTO: Obviously, Alaskans, by and large, been polled on it, also in favor of it. They like the revenue that could be generated from this and the checks that Alaskans get as a result for doing this.

Will it make a substantial difference in that regard?

SULLIVAN: Absolutely.

You know, the pipeline we have there, which is an incredible engineering feat, 40 years that pipeline has been pumping oil for America, but it's two-thirds empty. And we need to fill it up.

The legislation splits the revenue between the state of the Alaska and federal government 50/50. So, both the state and the feds will benefit.

But, again, we see this as very important not only for the state of Alaska, but for the country. And the president, to his credit, has made unleashing the American energy renaissance, what they -- what he calls energy dominance, which we can do as a nation, a top priority.

And this is part of it. So, again, I want to applaud him and my members, my colleagues in the Senate and the House for passing this important legislation for Alaska and for the country.

CAVUTO: All right, Senator Dan Sullivan, thank you very much. Good seeing you again.

SULLIVAN: Merry Christmas, Neil. Thanks.

CAVUTO: To you as well, Senator.

All right, again, and that was a bit of a surprise to a lot of folks who thought that would be a Herculean struggle.

And to the senator's point, it got to be included. For Alaskans, it could mean a lot more revenue, and it does touch on the small lands here.

By the way, this measure to keep the government lights essentially passing in the House. It's anyone's guess what happens in the Senate. This is just a temporary measure to keep those government issues at bay until at least January 19.

We will have more after this.

(COMMERCIAL BREAK)

CAVUTO: All right, it looks like that spending measure to keep the government operating through the middle of January, about January 19, did pass in the House, is expected to pass in the Senate.

I hasten to add, that is not a gimme, and things can change. But, right now, they are far more interested in getting out of town for Christmas than staying through Christmas and trying to sort these out, when they can do so in January.

"The Five" is now.



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