Sen. Elizabeth Warren facing new criticism over Native American ancestry claims

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Sen. Elizabeth Warren facing new criticism over Native American ancestry claims

Warren claimed to be 'American Indian' on 1986 Texas bar registration card; panel reaction and analysis on 'Your World.'

This is a rush transcript from "Your World," February 7, 2019. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: Well, the president slamming it, House Speaker Nancy Pelosi appearing to try to distance herself from it, as the top three Democrats in the Virginia state government try to dig themselves out of it.

And, by the way, that is not near the end of it. Now Republican State Senator Tommy Norment, who is serving as the majority leader, is accused of being the editor of yet another yearbook filled with racist photos and slurs that goes back to the 1960s.

On and on we go. So here we go.

Welcome, everybody. I'm Neil Cavuto.

President Trump today accusing Democrats of killing the great state of Virginia, as the governor, the lieutenant governor, and the attorney general, all Democrats, remain engulfed in a scandal over racially charged images, and, in the case of the lieutenant governor, alleged sexual assault.

But it's not just Democrats. Now Republican Senator Norment issuing this statement just a few minutes ago: "The use of blackface is abhorrent in our society, and I emphatically condemn it. As one of seven working on a 359- page yearbook, I cannot endorse or associate myself with every photo, entry or word on each page."

Norment telling The Richmond Dispatch that he did not appear in the photos and that he did not take any of the racially offensive photos, but on and on we go.

The photos in question in this case cover the 1968 Virginia Military Institute yearbook, but it follows on the heels of other allegations and other controversial pictures that transcend the parties and now have many people asking, what is it with Virginia?

Now, keep in mind, this is a crucial state politically. Its 13 electoral votes are highly prized. And in recent years, it has gone very Democratic.

To Democratic strategist Howard Franklin, Axios reporter Stef Kight, and American Majority's Ned Ryun.

Stef, I will begin with you here and get your take on this widening scandal or controversy. The pecking order of those who would replace Governor Northam, if he ever were to resign, is getting few and far between right now. Where do we stand?

ALAYNA TREENE, AXIOS: Right.

Well, that's exactly it. And we're actually seeing calls from not even just Republicans, but some Democrats. And we saw The Washington Post editorial board came out today with a piece saying that Governor Northam should resign, not only because of the photo, but as well as the -- his shifting explanation.

And the bigger picture here is also what it's just doing to the party and to Virginia as a state, and we're seeing these two after him now falling under fire as well. And it's creating a lot of controversy.

And I think that the next few days, I mean, it's going to be hard for someone like the governor to govern the state in a position like this.

CAVUTO: Is all about material that dates back decades. So the governor can say, given the controversies of the backup and backup to him who would take over, and the fact that right now they're hardly in a position to take over, he's got a little bit of wiggle room, doesn't he, Howard?

HOWARD FRANKLIN, DEMOCRATIC STRATEGIST: He probably does have a bit more little wiggle room than he had, let's say, two or three days before.

But let's remember he didn't or has not signaled any willingness to step aside in the first place. But, obviously, all that's going on, both the admission by the attorney general and the allegations around the lieutenant governor, certainly have thrown everything into a bit of chaos.

CAVUTO: Ned, I was thinking through on this that, even if the governor were to resign, there's no guarantee that the lieutenant governor could just step in or, even following him, whether you would have the attorney general in a position to step in as well, because he has controversies of his own.

So the fourth guy most likely, if that's the case, it's like a PEZ dispenser here, Kirk Cox, the speaker, he's Republican...

NED RYUN, PRESIDENT, AMERICAN MAJORITY: Right.

CAVUTO: ... who is in control of Virginia House of Delegates, but I doubt Democrats would be interested in letting that happen.

So where are we here?

(LAUGHTER)

RYUN: Well, I think, at this point, Neil, the entire parade of pitchforks and torches that everybody had lined up calling for Northam to resign hit pause when somebody Googled Virginia line of succession.

If Northam were to go, and then Fairfax were to go, than Herring were to go, of course, it ends up being a Republican. I think right now Democrats are trying to figure out how do they keep political power?

And I have heard of them talking about Herring resigning, the deputy A.G. being placed replacing him, and then everybody else resigning, which means she's a Democrat. She would then become governor.

I think they're trying to figure out, how do they hold on to political power? I would remind people of a couple things. First of all, if the Virginia voters had known of these facts in October of 2017, do we really think these guys would have won?

I'm convinced that Ed Gillespie would have won. So if people are screaming this will overturn the elections, if the Virginia voters had been fully educated on these facts, I don't think these guys would have won.

The second thing to keep in mind, Neil, is this. There are fall elections here in Virginia. Every last state senator, 40 of them, are up for reelection. And the important part about that is all of those se senators will be in place when redistricting happens.

So Democrats...

(CROSSTALK)

CAVUTO: And a lot of these specials are next year.

Now, one of the things I want to -- maybe you can help me with this, Alayna -- is this notion that it could hurt the Democrats. And, of course, now that you have Tommy Norment, who is the Senate majority leader, not in the immediate succession plan for governor.

But is that a way for the Democrats to step back and say, oh, it's a pox on both parties, certainly not by the numbers, but that this is going to ease the friction on them? Like, I can't see as it would do that. But what do you think?

TREENE: Right.

I mean, honestly, they're in such a precarious situation with -- I don't see how they could do it either. I think that right now what really needs to happen is, they're being shown -- people taking responsibility for this.

And I think that trying to punt to the messaging off to the other party really won't seem to be effective. They might try. And I'm not really sure what their strategy is. I think they're still trying to figure out -- a lot of people are calling for resignations, others trying to say, hey, can we judge them by something that they have done in the past?

Not everyone can live in glass houses. But at the same time, I mean, we have seen not even -- I mean, look at what happened with Megyn Kelly. Like, she wasn't even -- you don't have to even wear it for -- her comments about questioning why it was offensive got her show canceled.

And I think that here it does seem like there will have to be some sort of reckoning to save the party.

CAVUTO: So, Howard, real quickly, as our Democratic strategist here, is it you sense that, keep in mind, Virginia is where three seats flipped and helped gain Democrats the House of Representatives.

Have the dynamics changed enough to put the state in play more than we once thought for 2020? What do you think?

FRANKLIN: Well, I think we have got to keep in mind that the state's always been in play.

Yes, Democrats have had recent success. And we should also push back a little bit on this -- this idea that Democrats are scrambling to hold onto power. We have had really prominent elected officials, and namely women, Senator Kamala Harris and Senator Kirsten Gillibrand, from two of the most populous states in the country, who are also presidential candidates, also call for some investigation.

(CROSSTALK)

CAVUTO: The issue right now is this state. And are they in trouble in this state?

FRANKLIN: Well, I think we're a little ways away from an election to say whether or not we're in trouble, right?

I think folks might say the same thing about Donald Trump today, but maybe not in 2020. So I think it's definitely a question and an issue, but I do believe that the leaders in the statehouse will rally and figure a way to address this issue.

CAVUTO: We will see what happens.

But I know every -- every politician worth any salt is scrambling to look at their high school and college yearbooks as we speak.

(LAUGHTER)

CAVUTO: All right, guys, thank you all very, very much.

RYUN: Thanks, Neil.

TREENE: Thank you.

CAVUTO: Well, Democrats are launching their first hearing into the president's tax returns. A top Republican on that committee is saying, really? Not so fast.

After this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI, D-CALIF., SPEAKER OF THE HOUSE: I think, overwhelmingly, the public wants to see the president's tax returns. And so they want to know the truth. They want to know the facts. And he has nothing to hide.

(END VIDEO CLIP)

CAVUTO: Overwhelmingly? I haven't talked to anyone who's been even mentioning the president tax returns.

But leaving that aside, Nancy Pelosi is convinced that the public, well, is on her side and Democrats' side, as they try to get these tax returns once and for all, this time to go back in business connections in some cases that could go back decades.

This is what's happening right now on Capitol Hill, where the hearing is going on as we speak to try to address this issue, to get to the bottom of it, and Democrats say ultimately to get their hot little hands on those tax returns. At least that's the goal.

Mike Emanuel on Capitol Hill with the latest.

Hey, Mike.

MIKE EMANUEL, SENIOR POLITICAL CORRESPONDENT: Well, Neil, good afternoon.

President Trump is calling it presidential harassment. But you have got the chair of the House Intelligence Committee, Adam Schiff of California, saying he intends to launch multiple investigations into the president.

Mr. Schiff saying he will not be intimidated or threatened by attacks. This hour, the House Ways and Means Subcommittee is doing a hearing looking into President Trump's tax returns. The subcommittee chair said basically every president going back to Richard Nixon has released their returns.

(BEGIN VIDEO CLIP)

REP. JOHN LEWIS, D-GA: I hope that we will continue the good and thoughtful work on behalf of the American taxpayers. We have been called. We have been chosen to lead at this time in our history.

(END VIDEO CLIP)

EMANUEL: Republican concern we are hearing is a concern that lawmakers may go too far.

(BEGIN VIDEO CLIP)

REP. MIKE KELLY, R-PENN.: Congress is prohibited by law from examining and making public the private tax returns of Americans for political purses -- purposes.

Such an abuse of power would open a Pandora's box. It would be tough to get the lid back on. It would set a very dangerous precedent. And the question is, where does it end?

(END VIDEO CLIP)

EMANUEL: This tax hearing has been pretty mild so far, but you can expect fireworks to fly in upcoming hearings going forward -- Neil.

CAVUTO: All right, thank you, Mike Emanuel, on the Capitol here.

Let's take a look at what was going on, on the corner of Wall and Broad today, a sell-off of that might have started with this little exchange. Take a look.

(BEGIN VIDEO CLIP)

LARRY KUDLOW, DIRECTOR, NATIONAL ECONOMIC COUNCIL: The president has indicated that he's optimistic with respect to a potential China trade deal, but, but, but, but, but, but we have got a pretty sizable distance to go here.

To quote a colleague of mine, we have miles to go before we sleep.

(END VIDEO CLIP)

CAVUTO: All right, that but, but, but, but, in other words, where they're not having anything immediate, or the signs of a deal are immediate, once Larry Kudlow told that to our Stuart Varney, Katy bar the door, they were selling, and they kept selling.

We were down to begin with. We pared some of the losses, because we were off over 300 points for a while. Bottom line was, this is still an ongoing worry for the markets how likely a trade deal will be. And if we're to at least get the knee-jerk reaction today, not likely.

Deirdre Bolton is here.

What happened?

DEIRDRE BOLTON, FOX BUSINESS CORRESPONDENT: Well, that but, but, but, as you said, even quoting poetry, right, I mean, it makes us anxious, because the implication is that the Chinese president, Xi Jinping, and President Trump will not be meeting.

But as our colleague Blake Burman points out, just if they're not meeting in person, it doesn't mean that they can't have a phone call, right?

CAVUTO: Right.

BOLTON: And we did see that at one of the last rounds or one of the last intersections.

CAVUTO: Turned things around, right? Yes.

BOLTON: Exactly, where they spoke on the phone, and they seemed to at least come to some sort of common understanding.

But, of course, the way that the market reacted, I mean, you said it. It was just like you could have just drop a stone. And, I mean, if you looked at Deere or Caterpillar, a lot of these economically sensitive stocks, reacted.

CAVUTO: And trade-sensitive stuff, right?

BOLTON: Yes, very much. Very much.

CAVUTO: Now, another thing that interested me in the comments there was, if the meeting isn't immediate, they can't put a final stamp on this until the two leaders write off on it. And that would come presumably through a meeting.

So, if that meeting is delayed, on the phone or otherwise, that means a China trade deal is delayed.

BOLTON: So, and would also seem, if the two presidents do not speak, if just a status quo, I mean, in theory, new tariffs on Chinese goods automatically kick in, right?

CAVUTO: March 1, right?

BOLTON: March 1.

CAVUTO: So 25 percent tariffs on more than $200 billion worth of goods.

BOLTON: Up from 10 percent.

CAVUTO: Right.

BOLTON: Which is where they currently stand.

CAVUTO: Is there any chance you're hearing that the administration, if it was sensing progress, would push that back?

BOLTON: I think there is so much room for maneuvering here.

CAVUTO: Yes.

BOLTON: Our sources for the moment are saying that this is today's conversation.

But, as we have seen between the U.S. and China, there is a lot at stake for both countries. I mean, these are the world's two largest economies. And as we have been pointing out, as much as it makes our investors nervous, as we saw from the markets today, for them, I mean, they're actually really being hurt, these kind of latest indications of their economy.

They're slowing.

CAVUTO: They're slowing down a lot.

And then we got confirmation today that Europe is slowing.

BOLTON: Exactly.

CAVUTO: I think the European Commission put out a survey that said that they expect growth could be up to cut in half. And they cited trade tensions.

BOLTON: Yes.

CAVUTO: It might have been an excuse, but there is a concern about a global slowdown, right?

BOLTON: I think so.

And then we also, as always, have to keep the recent gains in context as well, meaning we got that from Europe. We got a similar kind of statement from the U.K. just saying, OK, the economy is not as strong as we had hoped at this particular moment.

And this follows a good five- or six-week run that we had, which follows nine-and-a-half years that we have had of good runs.

CAVUTO: Absolutely.

BOLTON: So, I mean, at some point, yes, there are going to be some days where people sell.

And, listen, this is the same theme as we were following all throughout 2018, which was anything that happened that seemed like it would set us and China apart on these trade issues, intellectual property, forced intellectual property transfer, that's what made our markets sell-off from a sentiment point of view.

CAVUTO: Yes, the argument too about the slowdown and that helps us is that they're hurting, we're not. Money might find its way here when people sort of calm down. Right?

BOLTON: Yes, well...

CAVUTO: They say.

BOLTON: They say.

CAVUTO: Fingers crossed, everything crossed.

BOLTON: Yes.

CAVUTO: All right, joltin' Deirdre Bolton, I love that. I don't think she minds the nickname.

(LAUGHTER)

BOLTON: No, I don't.

CAVUTO: Joltin' Bolton, just it has so much oomph to it.

All right, so the Dow down, as we were saying, about 220 points here. Had been worse.

Meanwhile, Elizabeth Warren in the news, only a couple of days from formally announced she's running for the White House. But she can't shake this Native American thing -- after this.

(COMMERCIAL BREAK)

CAVUTO: All right, coincidence or not?

Elizabeth Warren will formally announce her presidential run Saturday, when a certain show is live.

(LAUGHTER)

CAVUTO: OK, I have a slightly -- with that, I think it has very little to do with our live show every Saturday 10:00 to 12:00 on this fine channel.

But she is going to make it official. She's already telegraphed that online. She's ready to run for president. But, along the way, we have had this Native American dust-up. How many places did she use that or venues did she use that, either in a Texas bar or to get into an elite school?

It's the issue that won't -- won't go away from her.

To the International Women's Forum's Nan Hayworth, Democratic strategist Scott Levenson, and, last but not least, FOX News contributor Kat Timpf.

Kat, this is a constant with her.

KATHERINE TIMPF, CONTRIBUTOR: Yes, and it should be, because it's super messed up and it's super weird.

I am a white person. And so I have lived my whole life being like, hey, I'm a white person. I mean, I don't say that often. I just don't pretend to be anything but white.

I can't imagine being Elizabeth Warren, having pulled essentially a Rachel Dolezal, and then saying, you know what? I can still run for president. I have the confidence to run for president.

I can't imagine it. I think that people need to keep hitting her on this, because it's -- in a day and age where we're always talking about cultural appropriation, people flip out if some college kids are busted eating tacos wearing sombreros, she literally took a culture that's not hers as her own.

(CROSSTALK)

SCOTT LEVENSON, DEMOCRATIC STRATEGIST: It's not accurate, because every day, every day, you see commercials on TV where people grew up thinking their lineage is one thing or another.

They take a test, they find out something quite to the contrary, that the...

TIMPF: She's lied about it.

(CROSSTALK)

LEVENSON: Let me just finish the thought.

TIMPF: She did.

LEVENSON: No, the fact is she had a -- an oral history that was brought down from her family.

She then had an understanding of what her lineage is. She tested. She found that wasn't the case.

Millions of Americans are testing for their lineage every day and getting revelations about...

CAVUTO: Yes, my issue isn't with the lineage. My issue is that she's apparently misrepresented it in a number of public venues.

LEVENSON: If she was under a belief that she had a certain lineage, she wasn't misrepresenting.

CAVUTO: I know. But did she ever say that she had used that before on the Texas bar and what have you?

Once you confuse people...

LEVENSON: I know she probably had the most attended inauguration in history, probably colluded with the Russians, and it's probably her hair.

So there's enough lies in politics these days. There's enough politics of lies these days.

(CROSSTALK)

CAVUTO: I don't think there's any issue with the DNA search and what you find out.

But we were told that this wasn't used in any other venue or to get any other sort of favor. This Texas bar thing raises an issue. And she avoided it. What other venues did you try to use where this would be an advantage?

And maybe nothing else. Maybe it's just those issues.

NAN HAYWORTH, INDEPENDENT WOMEN'S FORUM: You know, Neil, she is uniquely, to this date -- and distinctly anyway, caught up in the identity politics of the Democratic Party.

She wants to claim her piece of the identity pie. Right now, she only checks one box. She's a woman. The Democrats like to see you check off as many boxes as possible.

Here's the problem. Scott, although it's true, I don't fault her for family lore that she believed in 1986 when she applied to the Texas bar. That's what we had in those days.

But when she made such fanfare about -- she had to hire a genealogist from Stanford because the usual -- we can assume the usual commercial test didn't demonstrate enough lineage for her. And she had this big fanfare: Oh, look, indeed, I am related to the First Nations, not even American Indians.

CAVUTO: Yes, but I'm not saying -- my issue here -- and maybe I have misrepresented with you -- isn't that she applied for anything using the Native American label.

It's that she said she didn't.

HAYWORTH: Right.

TIMPF: Right. Why? Why would you say you didn't?

HAYWORTH: She did.

TIMPF: If -- she could have just easily said what you said. Hey, sorry, I thought I was, but I wasn't. That's why I wrote it down.

She didn't say that. She said I never used it. That's not true.

(CROSSTALK)

LEVENSON: No, no, no.

She said she has used in tons of ways of identifying herself.

(CROSSTALK)

CAVUTO: I don't remember hearing that.

HAYWORTH: She said she had not. She originally said, no, I didn't use it to advance myself.

And that claim seems...

(CROSSTALK)

LEVENSON: But it's not clear how she was advantaged by using it either, Neil.

(CROSSTALK)

CAVUTO: I used the Italian-American thing to get where I am, so...

(CROSSTALK)

TIMPF: I'm only here because I'm Polish.

HAYWORTH: Neil, we believe you.

(CROSSTALK)

CAVUTO: You know the politics very well. You served in Congress.

HAYWORTH: Yes. Yes.

CAVUTO: And I'm just wondering, is this the kind of stuff, in a crowded field...

HAYWORTH: Yes.

CAVUTO: ... fairly or not, that will kind of kick her to the side?

HAYWORTH: I think it will.

CAVUTO: And I don't know if that's right. It just is what it is, and all the more so in a crowded field.

HAYWORTH: Neil, I think -- I think it will.

Even though Elizabeth Warren -- and I know from having been on Financial Services, she has a formidable reputation for the kind institutionalized arrogance on policy that the Democrats are savoring this year.

(CROSSTALK)

HAYWORTH: She has a big identity problem.

(CROSSTALK)

LEVENSON: But this primary season is also going to be a season of ideas.

And the fact that Elizabeth Warren can bring ideas like universal health care to the table and allow us to debate that as a nation, that is a good thing.

(CROSSTALK)

CAVUTO: Do you worry that that has gotten lost because of this?

LEVENSON: I do.

(CROSSTALK)

CAVUTO: I mean, it feels, subliminally, where people are looking at a crowded field, they almost want to cancel someone out.

LEVENSON: I do worry that this has been a distraction to her message.

And she has a message to deliver.

CAVUTO: Just like that whole Russian investigation with Trump.

LEVENSON: It's a terrible distraction for his presidency.

HAYWORTH: And they have plenty of candidates who are promulgating the same kind of policies.

TIMPF: And they know what race they are, which is helpful.

CAVUTO: But the other analogy I will just raise real quick -- and we got to go to a break here.

But we live in a time where things we said and did that go back decades come back to bite us, whether it's in yearbooks and all this stuff.

HAYWORTH: Virginia.

CAVUTO: Is that what this is going to be?

HAYWORTH: I would like to think it's not, Neil, but I think we are still going through this massive political national convulsion about these things that has yet to be resolved.

And the Democrats, because they are the party of identity, are really in the center of this maelstrom. And I think...

(CROSSTALK)

LEVENSON: Either people are participating in good behavior or they're participating in bad behavior.

(CROSSTALK)

LEVENSON: Wait. Wait.

We, as a nation, can judge values and ethos and judge people according to the strength of their character.

TIMPF: Agreed. But Elizabeth Warren tried to capitalize...

(CROSSTALK)

CAVUTO: Scott -- I have got your yearbook here, Scott, and it doesn't look good.

LEVENSON: I think we're all right on that. A couple of things I can guarantee you without having to look at the photos.

CAVUTO: There we go. There we go.

All right, thank you very, very much, guys, seriously. Very interesting discussion. And I think we will have more of these discussions here.

By the way, Democrats were going after the president's tax returns today. They want to go back decades too, a lot of decades, from the very, very beginning of the Trump empire.

The read from the ranking member, Kevin Brady, on that, after this.

(COMMERCIAL BREAK)

CAVUTO: All right, hide your cows, hide your travel plans, because here comes a Green New Deal. The flip side is, it's going to cost you a lot of green.

We are back in 60 seconds.

(COMMERCIAL BREAK)

CAVUTO: All right, this committee hearing looking into Donald Trump and whether they can get the hot hands on his taxes just part of what's happening right out within the House Ways and Means Committee.

It's going to be a busy year for this group, and very, very different from when this fellow headed it, where there was a different direction. Now he's the ranking member.

Kevin Brady, he joins us.

Congressman, good to have you.

REP. KEVIN BRADY, R-TX: Hey, Neil. Thanks for having me.

CAVUTO: First off, on the tax thing that they're looking for, Democrats are looking for, they want to go back quite some time.

But they're -- they think they have a rationale for getting taxes that they not been able to get up to now. What is it?

BRADY: Yes, they don't.

Well, look, this isn't about whether the president should voluntarily release his tax returns. You can say yes or no to that. This is really about an abuse of power by Congress.

The law today protects individual taxpayers from Congress examining them and making them public for purely partisan reasons. If Democrats twist the law and weaponize the tax code for purely partisan reasons, they have set a very dangerous precedent, because if Congress, any Congress, can rummage around in the tax returns of the president, what stops them from doing that for anything they think is a political enemy?

CAVUTO: So, what is the rationale they're using for getting their hands on them now?

BRADY: Well, they believe seeing the tax returns will help them identify any potential conflicts of interest, perhaps within the tax code. But this is an easy answer.

You can protect private taxpayers and still look at that. For instance, few people know that the president and the vice president are annually audited by the IRS. They're subjects to epics reviews and investigation by the FBI. That's already in place.

CAVUTO: Yes, we should explain that the IRS has to look into any sort of business dealings or relationships...

BRADY: Absolutely.

CAVUTO: ... as the president and vice president are conducting official government business, right?

BRADY: Yes, absolutely. It's already there.

And, by the way, if Democrats want this president or future presidents to disclose more types of information, then fine. We have an annual financial disclosure. We can by law say to any president or candidate, look, we want to know more about this. And that's the way to do it the right way, not by weaponizing the tax code.

CAVUTO: So they're not even looking for the current years, though, as president. They're going back wondering about whether he had business relationships that were nefarious or what have you.

But do you think, whatever justification they have or do not have, that someone running for the highest office in the land, which is a grueling process, and your whole life is an open book, and they're examining your kids and what you eat and all -- I don't how people put up with it. I don't know you put up with it.

That you should provide your tax records? I mean, you should get it all out there?

BRADY: Yes, look, I will tell you, I don't think tax records, frankly, very insightful or revealing.

In fact, most of what that triggers is, by experts, a very thorough review trying to sort of glean what those relationships are. It's a really bad way of doing it.

CAVUTO: But there's a difference between your tax returns -- and you're a big muckety-muck -- and -- but someone like even the president of the United States, who is a huge muckety-muck, and a very rich muckety-muck.

Do you think that there is value in a guy that wealthy -- I'm not saying anything is untoward going on -- but just to put it all out there, get it all out there?

BRADY: If there is, there's a better way of doing it than the tax returns.

Change the financial disclosure. For example, yes, tackle that.

CAVUTO: Fine. Fine.

But do you think anyone running for president, Congressman, anyone, it should be required that they release their tax returns?

BRADY: You know, I don't know.

I will tell you, in the past, I have always seen it sort of as the gotcha game.

CAVUTO: Yes.

BRADY: Frankly, I don't think it's been very revealing.

I think the financial disclosures -- and I keep coming back to that, because that's where you really learn about relationships, how much stake you haven't businesses, what are those relationships.

I actually think, if that's the goal, if that's a legitimate goal, then, look, let's tackle that. That's a fair way to do it.

CAVUTO: All right. I mean, in the meantime, that same committee and others are looking at raising taxes, the same ones that you cut.

BRADY: Yes.

CAVUTO: How do you feel about all that?

BRADY: Yes, look, do we really want to go back to the bad old days where our economy was sub-2 percent, jobs were moving overseas, wages were stagnant? That's the result of that.

And so, look, we're going to fight it, because we think this economy can grow even more and wages can grow even more. And so, look, Washington doesn't have a revenue problem, as you know. It's a spending problem. We ought to keep taxes low.

CAVUTO: Does it bug you, after all your hard work -- and you led this parade before anyone else. And I want to tip my hat to you on that.

BRADY: Thank you.

CAVUTO: That four out of 10 Americans think the tax cuts were a good idea, four out of 10?

BRADY: Yes, you know, I don't think that's correct. And here's why.

They're often asked, what do you think of Trump's tax cuts? It really just mirrors his approval ratings. When you ask them about doubling the child tax credit, doubling the standard deduction, lowering those rates for everyone, and simplifying it, boy, those numbers turn around quickly.

CAVUTO: Yes.

BRADY: That's what we find back home. And I think, look, the Americans don't want Washington to take more of what they work so hard to earn.

CAVUTO: All right, Kevin Brady, always an honor, sir. Thank you very, very much.

BRADY: Thanks, Neil.

CAVUTO: We did reach out to the chairman of that fine committee as well. He declined for the time being, but hope springs eternal.

In the meantime, Sears will live to sell another day, a bankruptcy judge approving the sale the retailer to its chairman, Eddie Lampert, who originally invested in it, and his hedge fund for $5.2 billion.

So, for now for, 425 stores remain open, 45,000 jobs remain viable. There is that -- after this.

(COMMERCIAL BREAK)

CAVUTO: I guess it sounded good on paper, but Delta Air Lines is now regretting the move.

It tried to change this idea of you flying solo and then maybe you can take off with somebody else. It's complicated here. All I know is, it's now a mess.

Trace Gallagher on how the company is trying to dial things back.

TRACE GALLAGHER, CORRESPONDENT: And I don't think Match.com has to worry about Coca-Cola cutting into its market share with this one, Neil.

These were Diet Coke napkins handed out on Delta flights encouraging passengers to flirt a little, maybe even strike up a relationship. One side of the napkins read -- quote -- "Be a little old-school. Write down your number and give it to your plane crush."

The napkin also included a space to write your number and your name. The other side said -- quote -- "Because you're on a plane full of interesting people, and, hey, you never know."

Coke is in the process, if you don't know, of rebranding itself as the most optimistic brand on social media, and it looks like they bombed this one. As one person tweeted -- quote -- "Hey, Delta and Coca-Cola, these napkins are creepy as 'blank.' Pretty sure no one appreciated unsolicited phone numbers in the good old days, and they sure as heck don't want the number of someone who has been gawking at them on a plane for hours today. Not a good look."

Other people actually kind of like the napkins, but still Delta has now apologized and acknowledge this one kind of missed the mark. And Coke issued a statement saying -- quoting here -- "We sincerely apologize to anyone we may have offended. We worked with our partners at Delta to begin removing the napkins last month and are replacing them with other designs."

I don't know. I think the new design should say something like, have a Coke and a smile or I would like to buy the world of Coke.

I'm just thinking out loud here, Neil, but jump in any time you think you might have something to say.

CAVUTO: No, I'm not going to volunteer anything.

(LAUGHTER)

CAVUTO: Not in this day and age.

All right, Trace, thank you very, very much. Incredible.

GALLAGHER: Sure.

CAVUTO: I do think, per Trace's report, the airlines do have some bigger things to worry about.

A Green New Deal is one of them and what it would mean to emissions that we get from planes. Freshman Congresswoman Alexandria Ocasio-Cortez was asked about just that today.

(BEGIN VIDEO CLIP)

QUESTION: How do you feel about phasing out air travel with the Green New Deal?

QUESTION: Do you have anything to say on the cost of that?

REP. ALEXANDRIA OCASIO-CORTEZ, D-N.Y.: So, the resolution itself doesn't have a price tag on it, which is why we addressed each individual project.

(END VIDEO CLIP)

CAVUTO: All right, "Making Money With Charles Payne," he's here, FOX Business Network star Charles Payne.

Part of her Green Deal, we should explain, is to pay for it will come from the airlines, essentially, right?

CHARLES PAYNE, ANCHOR: I'm not sure, Neil, because eventually there won't be any airlines. She wants to phase out airlines.

And, listen, talk about maybe a high-speed rail network, which is really interesting, because another major progressive star, the senator from Hawaii, Mazie, said that ain't going to do too good for my state.

I mean, listen...

CAVUTO: The push was to make everything more green, environmentally friendly.

PAYNE: Yes.

I mean, a big component of this which has been on the progressive side for a long time is phasing out all fossil fuels. Just we don't want to use them, we won't use them, so we will eliminate 99 percent of cars. We are going to essentially have to rebuild every building in this country.

We will get rid of air travel, have a nice high-speed rail thing. Then there's the economic parts of it, guaranteed wages, guaranteed jobs, guaranteed housing, and essentially free money.

I mean, really, there will be a component of this that is also, if you don't to work, don't worry about it. We have got a nice pot of cash for you as well. So it's an amazing program.

CAVUTO: Now, she was there with Senator Markey of Massachusetts and this legislation that would put the green initiative right up front, right first. This is the identity of the Democratic Party.

What do you think?

PAYNE: I think it is.

Elizabeth Warren has jumped on it as well. Ed Markey has been around for a long time. I mean, people need to know that this is not some guy, a freshman. And it cuts to where they have -- it's been -- it's where they have obviously been going for a long time.

CAVUTO: And this wouldn't have gotten the attention -- no offense to Senator Markey -- without her.

PAYNE: Exactly.

CAVUTO: She has galvanized the attention.

PAYNE: Yes, as McCaskill called her, this shiny, bright object, the shining object, as she was on her way out of Washington, D.C.

It's -- listen, it's a utopia. And we get. It's a utopian dream that you wake up with no worries. Think about FDR's four great promises, right? He was going to take care of everything, also the freedoms, right?

The freedom of want was the one that always kind of -- I never could really understand how government could, A, get rid of freedom of want, and, B, would want to get rid of freedom of want, because want is why we get up and do things. It's why we get up and innovate. It's why we get up and invent things. It's why we get up and help other people.

So, the idea that government would even want to get rid of want and provide this utopian society in the first place, what is in it for us as human beings?

CAVUTO: But they get very creative when it comes to raising money, right?

In New Jersey, where you and I live, they want to tax the rain, essentially.

PAYNE: Oh, my God.

CAVUTO: How does that work?

PAYNE: Well, they're saying, you know what? Salt, fertilizer, when it rains, it goes into the water system. They don't have anything to capture it. So they want a tax.

Here's the problem for us, though, you and I. They already have the ninth highest gas tax in the country, the six highest income tax in the country, the number one property tax in the country. And they're ranked 50th worst state for business tax climate.

So...

CAVUTO: But it's not a rain tax, per se. In other words, every time it rains, the tax comes in.

It's a way to find a word around taxing to deal with this infrastructure.

(CROSSTALK)

PAYNE: Right.

They say they will build into the utility system a way to capture this storm runoff, and so that it doesn't go into the lake -- to the lakes.

(CROSSTALK)

CAVUTO: Yes, but I thought that was taken care of with the hike in state gas taxes.

PAYNE: Yes, exactly.

(CROSSTALK)

CAVUTO: Where did that money go?

PAYNE: Well, I don't know.

And do you think, if they were to build these facilities, they would take the tax away? They would say, hey, you know what, everything's all done four or five, 10 years from now?

CAVUTO: It's sunny now. We don't have to worry.

PAYNE: Yes, yes.

But you know what? I think this whole thing, if we do end up going with the Green New Deal, just think about Flintstones. That's all I would say. Think about the Flintstones. And everyone was pretty happy in "The Flintstones."

CAVUTO: Yes, they were. I like that big old beef on top of the car.

All right.

(LAUGHTER)

PAYNE: And no cows, though.

CAVUTO: Yes, no cows, no cows.

Thank you very much, Charles Payne

PAYNE: You got it.

CAVUTO: In the meantime, a deadline to avoid another shutdown is closing in here, but it looks -- again, I stress, looks -- they could have a deal - - after this.

(COMMERCIAL BREAK)

CAVUTO: All right, you don't want to get too excited here, but the Senate Appropriations Committee chairman and top GOP negotiator, Richard Shelby, was saying that he expects a border deal could be done by Monday. And that's after meeting with the president.

So you have to think he bounced off some of the ideas off the president.

Chad Pergram with the latest.

What do you -- what do you make of all this, Chad? Where are we?

CHAD PERGRAM, SENIOR CAPITOL HILL PRODUCER: Well, I talked to Richard Shelby after he came back from the White House, Neil.

And I'm going to read you exactly what he said here.

He said -- quote -- "It's the most positive meeting I have ever had with the president."

And then the question was, would the president still go ahead and declare a national emergency if they got a deal? And he said, "I would think he wouldn't."

When you talk to members of this conference committee, they are very positive right now. Now, here's some new information I have gotten in just the past couple of minutes. They believe that the sweet spot for border wall, barrier fencing, whatever you want to call it, is a little more than $1.3 billion.

Now, again, that's only restricted to this fiscal year. The other part of the deal -- you might say, well, why would Democrats go for that? Because they're starting to put restrictions on how that money can be used over this. It will go for some of the fencing, but we're going to put restrictions on there.

When you talk with these appropriators, they have to get some bill text by Monday. Keep in mind that the House of Representatives has this new 72- hour rule. They have to get bill text and post it for a full 72 hours. And then they have to move it through the Senate.

Now, I talked with the Senate majority leader, Mitch McConnell. I said, what happens if they can't get this worked out by a week from Friday? That's the deadline when the government has to be funded again.

He says, "I don't want to see any more short-term C.R.s." That's the interim spending bill. He says he's -- quote -- "hopeful."

So things are starting to ramp up right now, but I talked also with Lucille Roybal-Allard, Democrat from California. She's one of the appropriators, also a member of this conference committee. And she said an old adage which is always true up here, nothing is decided until everything is decided, Neil.

CAVUTO: So, Monday would be the latest they could push it to go through all this stuff to get it done by Friday. Right?

PERGRAM: That's right.

And Mitch McConnell, he indicated when I asked him on Tuesday -- now, this is going back a couple of days -- that he thought if there was an agreement, if there was a universal global deal and everything, things could move through the Senate pretty fast.

And then, of course, the question is about Nancy Pelosi. What will the left of her caucus be willing to do? What is she willing to do? I have been told that there is a sweet spot right in the middle, just not with Democrats, but Republicans, where you have maybe not the most liberal voices in the Democratic Caucus, and maybe not the most Republican conservative members over on the other side of the aisle vote for this, but it's that sweet spot somewhere in the middle.

Keep in mind, Neil, that these freshmen, all these House Democratic freshman, want to get a deal. They want to legislate. And it behooves them to do so. Nancy Pelosi is very mindful of that.

CAVUTO: All right. We will watch closely. Chad, thank you very, very much.

PERGRAM: Thank you.

CAVUTO: Well, it was a moving moment in the president's State of the Union address, the dad of one of the sailors who was killed on the USS Cole back in 2000 honored.

The commander of that ship next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

PRESIDENT DONALD TRUMP: We are honored to be joined tonight by Tom Wibberley, whose son, Navy Seaman Craig Wibberley, was one of the 17 sailors we tragically lost. Tom, we vow to always remember the heroes of the USS Cole.

Thank you, Tom.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

CAVUTO: What a beautiful moment that was.

So many of us remember 9/11, but very few forget really what happened and set the stage for it, the bombing of the USS Cole roughly the year before.

The commander of that vessel, Kirk Lippold, with us right now.

Commander, very good to have you.

KIRK LIPPOLD, FORMER COMMANDER, USS COLE: Thank you, Neil. Great to be on again.

CAVUTO: What a touching moment that was, you know?

LIPPOLD: Absolutely phenomenal.

It's the fact that the president took time to honor not only Tom Wibberley, but his wife, Patty, was also there, the fact that Tom stood there and honored all the families who paid an unimaginable price in the loss of their loved ones in that dastardly attacked by Al Qaeda.

So taking that time at the State of the Union address truly does show the nation that we as Americans will never forget their sacrifice.

CAVUTO: And somehow -- I mean, no disrespect, Commander, certainly. We have known each other for many years.

We forget about what you and your men and women went through, and how that set in motion what would be a horrific series of events and terror, and yet we almost blithely assume, well, it's over, it's gone. No need to worry.

When you hear that kind of talk, what do you think?

LIPPOLD: Well, I think it's a tragedy, Neil, because, in many ways, USS Cole was rapidly pushed to the side. There was no response by either the Clinton or Bush administrations. They kind of looked at it and said, well, that's a price that we pay for being on the international stage.

The Navy really wanted to downplay it in many ways and look forward and move on. So, in many ways, it was -- the attack on USS Cole was lost in the shadow of 9/11.

But it's nice to know, Neil, that there are Americans out there serving our nation today who still take the time to make sure that we're investing the intelligence assets, the time and the ordnance to make sure that we hold these terrorists accountable even over 18 years later.

CAVUTO: Now, this occurs in an environment where the president, as you know, wants to pull our troops out of Syria, not leaving the entire region, but reprioritizing, I guess, is the way his administration has put it, maybe even using Iraq as a place to keep an eye on Iran.

How do you feel about all of that?

LIPPOLD: Well, I think, Neil, that Americans, like -- including me, want to make sure that we're going through a deliberate process, so that we understand not only action as we start to withdraw from an area like Syria, but also that we understand what the second- and third-order effects are going to be.

What are people in the region thinking? Do they understand the context of why we're doing it? Do they understand that they're going to pick up the burden for that fight to make sure that ISIS is not only destroyed, but stays destroyed, that we cannot let them regain any kind of capability?

And I think we're going to have that. I think we're going to stay invested in Iraq. We're going to stay invested in Afghanistan. We have national security interests throughout the Middle East and that part of the world, that we need to make sure we stay there and keep supporting those people, as we try to make them understand and appreciate freedom and democracy and hopefully work toward that end.

CAVUTO: Commander, thank you very, very much. I always appreciate it.

LIPPOLD: Thank you, Neil.

CAVUTO: Commander Kirk Lippold.

If you think of those attacks and the death of those 17 soldiers and how, little more than a year later, we would have 9/11 and all the attacks since, it started then. The president didn't forget it this past week.

All right, a quick look at the Dow. We were down 220 points. It could have been worse today. I want to emphasize here that everything hinges on whether these Chinese trade talks come off, and they come off well.

This, of course, is one of the issues that was weighing on the markets, that they might be bumpy, and they might not be immediate. It's hot and cold with these guys, but, today, it was cold to selling. Tomorrow could be a different story.

That will do it here.

"The Five" is now.

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