'Your World' on Build Back Better hopes

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This is a rush transcript of "Your World with Neil Cavuto" on December 22, 2021. This copy may not be in its final form and may be updated.

NEIL CAVUTO, FOX NEWS ANCHOR: Talk about your holiday brawls. This was the scene at Miami International Airport earlier this holiday week as travelers started clashing with police, one of the offices pulling a gun to control the crowd.

Now two men are facing charges, including battery on a police officer and inciting a riot. The TSA warning of penalties for fliers who exhibit this type of behavior as we head into the long holiday weekend. Easier said than done when planes are packed and tempers are frayed.

Welcome, everyone. Glad to have you. I'm Neil Cavuto. And this is "Your World."

To Hillary Vaughn now at Reagan National Airport, where the exodus is on and the tensions are running high -- Hillary.

HILLARY VAUGHN, FOX NEWS CORRESPONDENT: Hi, Neil.

Well, another factor in all of this has been the rise of the COVID variant Omicron. Some feared that Omicron would be a Grinch, crushing the Christmas spirit of holiday travelers this season, but twice as many passengers are expected to take to the friendly skies compared to this time last year.

The TSA estimates that, last Friday and Saturday, about 4.3 million people traveled through checkpoints at airports around the country. That's compared to a total of two million people who traveled those same days last year. But even with a new COVID variant on the rise, a lot of people we talked to traveling today say they still feel safe.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: It doesn't scare me at all. It's not stopping me from traveling. I travel quite a lot.

UNIDENTIFIED MALE: Yes, I think I'm pretty comfortable.

VAUGHN: Did you do anything differently to prepare in light of Omicron spreading?

UNIDENTIFIED MALE: Not really. I just follow the rules whenever they release it.

UNIDENTIFIED MALE: I got like a fancy mask, so I'm not as concerned.

UNIDENTIFIED FEMALE: Hopefully, next Christmas, we can be free again and just travel without so much restrictions. But, so far, it has not been hindered me at all, so I'm happy.

(END VIDEO CLIP)

VAUGHN: But the pandemic has turned some travelers into unhappy travelers, triggering tensions among some of them on board, with fights on flights becoming a lot more common.

So the FAA and TSA are teaming up to keep passengers in check. Testy travelers can now lose their TSA precheck status if they act out. The FAA administrator saying expedited screening is a privilege -- quote -- "If you act out of line, you will wait in line. Our partnership aims to promote safe and responsible passenger behavior. One unruly incident is one too many."

So, Neil, the message is, pack your best behavior or pack your patience, because you're going to be waiting in the line with everybody else -- Neil.

CAVUTO: If you're lucky to be waiting in a line. They might kick your fanny off the plane or out of the airport.

Hillary, thank you very, very much for that.

What are your options now as you look to fly in these next few days, the busiest we have seen probably in a couple of years going back to before the pandemic?

Jeanenne Tornatore here, a travel expert.

Jeanenne, first if I can ask you about your options when you're looking to cancel flights or you're anxious about canceling, because you don't want to take any chances. What do you do?

JEANENNE TORNATORE, TRAVEL EXPERT: So I think the first thing travelers should know is, look, a lot of these airline policies aren't as liberal as what they were during the height of the pandemic or back when everything was canceled at the beginning of the pandemic and they were just allowing everyone to get refunds and credits.

That's really not the case anymore. I would recommend if you are having concerns or you just want to know what your options are is to check directly with your airline and find out exactly what their policies are now. Don't assume that they're the same as they were one year ago.

There are some airlines that are -- got rid of their change and cancellation fees all together, some that were more liberal and they have kind of gone back to the way things were pre-pandemic. So make sure that you absolutely know what your airline is doing.

CAVUTO: You know, a lot of people are canceling first, asking questions about getting their money back later. Maybe they see this brawl in Miami or they see these iconic images on planes where people are going nuts.

And they say, you know what? With the Omicron scare and everything else, I want no part of this. What are their options if they do this at the last minute?

TORNATORE: Well, look, I would say, if you are thinking about canceling, do it as soon as possible.

When you wait within that 24 to 48 hours before your flight, you don't have as many options and you may not get those refunds, or it may not be as easy for you to change those plans.

So, if you're thinking I have a flight a week from now, I may want to cancel it, or I may want to change it, do it as soon as possible.

CAVUTO: But I think, as you pointed out, I mean, these are rarities. They're hardly common. They catch our attention because some of them can be very graphic and very in your face.

But, by and large, what is it like this travel week going into Christmas itself?

TORNATORE: Well, look, as you heard previously, it's almost double, the amount of passengers that we saw last year.

I mean, you have airlines like United that have added more than 200 flights domestically per day just to keep up with the domestic demand, over 4,000 flights going out on United per day. So, if you could imagine that the travel demand over the holidays is normally big, it's even more so this year, compared to what we have seen in the last couple of years.

So I think travelers need to absolutely pack your patience if you're headed to the airport, get there extra early and come prepared. Make sure that you're OK with the guidelines that are in place now. I think we hear that travelers are pretty comfortable. We have all been kind of traveling and been aware of what these guidelines and protocols have been for the last year.

CAVUTO: Right.

TORNATORE: So, I think most people now are used to them.

CAVUTO: Yes, and I think most of us are pretty good about this and patient about this. We just have to all remember to be that way.

Jeanenne, thank you so much. Very good advice. I appreciate it.

Well, in the meantime here, if it weren't enough with the spike in Omicron cases to get going here, the irony is that the cases themselves are not really that serious, in fact, about 80 percent less so if you consider hospitalizations and even the extreme possibility of serious cases, even death.

That has not stopped some states, municipalities businesses to change things mightily, imposing restrictions that might go way beyond whether Omicron deserves it or not.

Susan Li looking at the fallout from all of this -- Susan.

SUSAN LI, FOX NEWS CORRESPONDENT: That's right, Neil.

For the second year in a row, New Year's Eve is going to look a little different on your TV screens. Different networks are doing different things to try to mitigate any risks from the Omicron spread.

Fox Entertainment being the latest to cancel their special broadcasts, while the traditional broadcast networks are moving celebrations outside of New York City. NBC will be live from Miami instead, ABC in Puerto Rico. CBS is going to Nashville.

Now, as for New York City and the famous ball drop in Times Square, Mayor de Blasio is still debating whether or not to welcome back the crowds this year. Meantime, you have New York mayor-elect Eric Adams already canceling his inauguration. The Rockettes' Christmas spectacular is off. Broadway shows like "Hamilton" are on hold. No live audiences at "SNL."

And the enclave of the rich and powerful at the World Economic Forum has been delayed for the second year in a row. Now, as for sports, the NHL has confirmed that the best hockey players on the planet will be skipping the 2022 Beijing Winter Olympics, precautions, they say, after the NHL had to postpone several hockey games in Florida and Colorado last week.

The NBA has delayed five games. The NFL shifted three. Now, Texas A&M has just dropped out of the Gator Bowl over COVID concerns. Now, as for getting back to the office, you have numerous companies, including the biggest on the planet, they have indefinitely delay the return to work.

And TBD, to be determined, over at Apple, Google and Uber. We know CNN has closed their offices to nonessential workers. Ford delayed the return to March, and companies like Lyft even pushing out the return to 2023.

CAVUTO: Whoa.

LI: Now, there was some good news today here, Neil, with a Pfizer COVID pill approved by the FDA. And many are hoping that will hopefully get us back to normal life again soon.

CAVUTO: All right, fingers crossed on all of that.

LI: Yes.

CAVUTO: Susan, great rundown of all of that.

Meanwhile, we're hearing from Dr. Anthony Fauci warning about large gatherings of more than 40 people, doesn't consider it safe, even among the vaccinated and boosted.

Dr. Marty Makary on that -- after this.

(COMMERCIAL BREAK)

CAVUTO: Well, if only they made a pill for COVID, right?

Well, Pfizer does. And the FDA approved it today. It's also considering a rival build from Merck. But that could be good news for people who are leery of needles or shots of any sort.

With us right now, Dr. Marty Makary of the Johns Hopkins School of Public Health.

How much of a game-changer, Doctor, do you think this is?

DR. MARTY MAKARY, FOX NEWS CONTRIBUTOR: Look, if we use this the right way, Neil, this will mark the end of the pandemic in the United States officially.

No one died who got this medication. And the trial in which it was done was conducted very elegantly. There were 12 individuals who died in the placebo arm and zero died who received Paxlovid.

Now, there's other medications out there. Fluvoxamine, ironically, has been around for a long time. That cut deaths by 91 percent. So we have got a lot of tools in the toolbox, not just Paxlovid. If we use them right, no one should be dying of COVID right now, with rare exceptions.

CAVUTO: You know, Doctor, there are a lot of people just terrified of needles.

And I'm just wondering, when you look at the unvaccinated, how many do you think is that an issue?

MAKARY: Look, needle anxiety is a known issue with children especially, but other people have reasons. They just don't like doctors or hospitals or needles. And we see that.

But the entire construct of the vaccinated and unvaccinated is a false construct. It's very frustrating for me to watch the White House briefings and the speech by President Biden yesterday, and because we know that the more precise medical terminology is the immune and the non-immune.

And about half of those who are not vaccinated have immunity and that changes the dynamics, with testing, with boosters. And it changes the dynamic with gatherings.

CAVUTO: Now, you mentioned gatherings, Doctor.

And you probably heard about Anthony Fauci saying, in groups of more than 40 people, even if vaccinated, even if you have gotten a booster shot, he'd avoid them. What did you think of that?

MAKARY: Well, first of all, we're not using testing properly. We need to do selective testing.

So if there are people who are vulnerable that you're concerned about, if your grandfather chose not to get vaccinated, and you want to get together, that's important for people to know that they're not bringing virus into the setting.

We can't do mass testing. We don't have enough tests to go around. We heard about another half-million coming online. Well, we need about one to two billion a day in order to do regular test screening. If you think about it, in a normal flu season, we might have 41 million flu cases in a matter of months.

Can you imagine if we tested everybody and then graphed the chart of cases every day? What I'm seeing is basically a denial that we have got a respiratory pathogen like others that we are not willing to accept and learn to live with.

CAVUTO: Doctor, do you think the world is overreacting, when Israel shuts down travel from other countries, or France stops accepting visitors from Britain, or the European Union cuts down on the number of members within the union who can fly to respective countries, or the mask requirements, the hyped-up restrictions now on how many can go into a restaurant or a pub?

Are we going too far here?

MAKARY: Well, Neil, I think people in these countries are acting with good intentions. I think they want the best for people.

But what they're doing is, they're using policies from 2020 in a modern era, when we have Omicron, a more mild variant, and we have got broad population immunity, either natural or vaccinated.

Even in South Africa, where only 30 percent of the population there is vaccinated, they're having a massive decline. That's not because of high vaccination rates. That's because of natural immunity. And so we have got high population immunity, and policies need to be adjusted accordingly.

Otherwise, we're going to be in this mode forever. If I told someone that their child is likely to get five or six colds in the course of their childhood, they could either choose to keep that child masked from K-12 or they can find some selective policy to use reasonable hygiene practices and learn to live with the risk.

CAVUTO: Then what about cases like the Radio City Christmas show that was shelved because a couple of members had gotten Omicron, or now the cast to "Hamilton," "Lion King" and some others shutting down until this is resolved, but usually based on one or two or several people contracting a virus that seems very, very contagious, but so far not extremely dangerous?

Is that an overreaction?

MAKARY: I think it is, Neil, because if we're going to use the criteria to shut down those events, we're going to be shutting them down almost every winter in perpetuity.

We have other respiratory pathogens that don't have the same social stigma and the sort of raw memories of last year, when COVID had a higher case fatality rate. We're going to have influenza, RSV virus, rhinovirus, coxsackievirus. There's a lot of respiratory pathogens.

And with this particular strain right now, it is nearly impossible to contain it. And so we have got to turn our attention to reasonable ways in which we learn to live with it and turn our attention to treatments, which really today was the first day we had a major milestone with the FDA approving Paxlovid.

CAVUTO: All right, this pill by Pfizer, and maybe another one by Merck coming up.

Doctor, thank you very, very much, Dr. Marty Makary of Johns Hopkins School of Public Health, bestselling author as well.

You heard a lot going into Christmas how Santa was just out of goods and the shelves were empty. Turns out that that might have been much ado about nothing. There are challenges finding certain toys, electronic items.

But what the administration plans to do has already raised eyebrows about making a situation worse, not better -- after this.

(COMMERCIAL BREAK)

CAVUTO: All right, Democrats had their phone call, their Zoom call, and everything was going just hunky-dory, even with Joe Manchin joining the call, except when it came to a run-in with Chuck Schumer live on tape, I think -- after this.

(COMMERCIAL BREAK)

CAVUTO: All right, here's how bad it was getting. I stress was getting. I mean, we still have problems, but Santa couldn't find a lot of the goods he wanted or the toys he needed or a lot of things that were in hot demand.

But a lot of the supply chain pressures have started to ease and, to hear the president tell it, dramatically so.

Jacqui Heinrich at the White House with more on that -- Jacqui.

JACQUI HEINRICH, FOX NEWS CORRESPONDENT: Hey, Neil. Hi there.

Press Secretary Jen Psaki maybe was joking around, but she said good news, we have saved Christmas. And that is the view of the administration. They are touting the steps that the supply chain task force took to unsnarl all the issues that were clogging ports, and the president today took a victory lap too.

(BEGIN VIDEO CLIP)

JOE BIDEN, PRESIDENT OF THE UNITED STATES: Earlier this fall, we heard a lot of dire warnings about supply chain problems leading to a crisis around the holidays. So we acted, a lot of recommendations of the people that you see on the screen here.

The much predicted crisis didn't occur. Packages are moving. Gifts are being delivered. Shelves are not empty.

(END VIDEO CLIP)

HEINRICH: Biden described the success from the White House push to clear the backlogs at ports, including 24-hour operations at the ports of Los Angeles and Long Beach, also eased restrictions on the trucking industry and collaborations with big box companies over their challenges.

FedEx CEO Fred Smith said it's all good news, but there is some more work ahead.

(BEGIN VIDEO CLIP)

FRED SMITH, CEO, FEDEX: The supply chain issues are not all solved, but there's a lot of effort under way to solve them. And we're optimistic that people will have a good peak season. And most of Santa Claus' products will be delivered to the consumers.

BIDEN: I thought you were Santa Claus. You're doing a hell of a job. And you got a big sleigh. Thank you.

(END VIDEO CLIP)

HEINRICH: The Omicron variant is causing fresh concern, though, about the long-term supply chain issues and what that might mean for inflation.

President Biden said money from the bipartisan infrastructure law will solve the structural issues, modernizing ports and freight rail. But he also said the Build Back Better spending bill is the biggest weapon to address inflation, once again saying that it will bring down costs for prescription drugs, health care, child care and more.

But, of course, the bill's future is murky, with Senator Joe Manchin killing it for now earlier this week, saying that he could not support it. And also, remember, some economists disagree with the premise that more government spending will, in fact, bring inflation down -- Neil.

CAVUTO: We shall see.

Jacqui, thank you very much for that, Jacqui Heinrich at the White House.

So, to hear Jacqui tell it and the White House tell it, you will find what you're looking for, for Christmas. But the flip side of that is you could be paying through the nose for it.

Steve Moore had been warning about that for some time. Kind enough to join us.

Steve, inflation is real. We do know that. It sent toy prices rocketing. Electronic items are rocketing. Santa is feeling the pinch. It's probably a good thing he dresses in red. But what do you make of this and whether it could ease? Or is it not going to ease?

STEPHEN MOORE, FORMER DONALD TRUMP CAMPAIGN ADVISER: Well, a couple of observations about what the president was saying today.

One is, it is true that it's good news that a lot of the empty shelves that we were worrying about haven't happened. So it's amazing how well this economy can adapt pretty quickly to a crisis like we had a month or two ago.

However, I should tell you just a personal story. I mean, 2.5 weeks ago, I ordered a huge number of Christmas presents for family and friends and -- from Amazon. And, usually, with Amazon, you get that stuff in three days; 2.5 weeks later, and I still don't have it.

CAVUTO: Right.

MOORE: And Christmas is two or three days away. So I think a lot -- I talk to a lot of people who say that we're experiencing the same thing.

I'm not convinced that the supply chain problems are over. The thing that worries me the most going forward over the next month or two is the overreaction, potentially, to this new variant of the virus.

I am worried about lockdowns and shutdowns. We're seeing some schools around the country now shutting down.

CAVUTO: Oh, yes.

MOORE: We cannot do that again. We cannot do that to our small businesses.

CAVUTO: And that could drive up prices too.

MOORE: You better believe it.

CAVUTO: People at home and they are ordering again. I mean, that's what kind of drove it in the early days.

MOORE: That's right.

CAVUTO: I am wondering what you make of the fact that now a lot of people who are ordering stuff might not have it in time for Christmas.

This explains why I haven't received your gift yet, so I'm patiently waiting.

MOORE: It's in the mail.

(LAUGHTER)

CAVUTO: Yes, you should try the meats and cheeses. They're never delayed. But you don't listen to my advice.

Where do you see this whole inflation thing sorting out, though? If we know the Federal Reserve is going to start hiking rates or being a little less friendly to allow this to happen, we know that, at least for now, Build Back Better is stuck. It's not going anywhere. So inflationary concerns out of that might not materialize.

Are we on the downward slope here, or no?

MOORE: That's a tough question.

I don't think so. If you look at what's happened with producer prices -- remember, you and I talked about this the other day. The producer prices were up almost 10 percent. Consumer prices are up about 6.5 to 7 percent.

When you get that situation, producer prices go up, and consumer prices have to go up, right? Because businesses have to be able to sell the products at a profit. And so I do think you're going to see some tough months ahead on inflation.

I do believe that the Fed is behind the curve. Neil, I don't understand, given the fact the Fed did say we got an inflation crisis and they admitted that they have been wrong, why are they waiting until next year? They should be acting immediately.

CAVUTO: Yes.

MOORE: They should stop the asset purchases. There's no necessary -- quote -- "stimulus" for the economy right now.

CAVUTO: Well, they say they are speeding that up.

But you're right. We haven't seen evidence of that.

MOORE: Yes. When? Yes. When? When is it going to happen?

CAVUTO: Real quickly, though, we have seen companies pass along...

MOORE: Why wait?

CAVUTO: No, I hear you.

We have seen some companies acting to pass along these increases, General Mills saying that it plans to raise prices further. They're the name behind Cheerios, Yoplait yogurt, Annie's Mac and Cheese. If you haven't tried the Annie's Mac and Cheese, I highly recommend it.

(LAUGHTER)

CAVUTO: But it's going to be pricier.

And I'm just wondering now, how long do you think that lasts that companies can pass this along to a consumer who has apparently been willing and able to pay those prices?

MOORE: That's a great question, too. We don't really know the answer to that, because, as you know, wages are going up.

They have been going up by about 4, 4.5 percent. But when you got inflation at 6 percent, people are losing money. But I will give you another example. Try to rent the car over Christmas. I don't know if you have tried that, Neil. But you're talking about prices that in some cities are up 30, 40 percent.

That's a lot of inflation.

CAVUTO: Right. Right.

MOORE: Or try to buy a new car. New car lots are either empty of cars, or people are now at a lot of the auto dealerships, they're paying more than the sticker price.

CAVUTO: Oh, yes. It's real.

MOORE: That's amazing. Usually, you haggle the price down. People are paying more to be able to get those cars.

CAVUTO: Right.

MOORE: That's inflation.

CAVUTO: Yes, just like when they did on homes, right?

MOORE: Yes.

CAVUTO: Steve, thank you very, very much, my friend.

Normally, when I run into that rental problem, I say I know Steve Moore. And then they say, well, that's great.

MOORE: Get that Maserati yet that I sent you for Christmas?

CAVUTO: Yes.

MOORE: You didn't get the Maserati yet?

CAVUTO: Yes. Still waiting. Still waiting.

MOORE: It will be in the driveway.

CAVUTO: All right.

(LAUGHTER)

CAVUTO: Yes, got it, with all the other gifts.

Steve, thank you very, very much.

MOORE: Thank you.

CAVUTO: By the way, we're talking about the big changes and whether we can go too far on restrictions of the rest when people get a little overreactive to what's going on with Omicron.

We told you yesterday, of course, that it looks like the Consumer Electronics Show -- that's a big deal -- that is still on for early next year. But we're also learning that not everyone's going to attend.

That's the old Facebook and Twitter and Amazon saying, thanks, but no thanks. We won't be there. Omicron again.

More after this.

(COMMERCIAL BREAK)

CAVUTO: Well, they say whatever happens in Washington doesn't stay in Washington, even if it's a Zoom call, especially if it's a Zoom call, and especially if it involves Joe Manchin on the same call with Chuck Schumer.

Chad Pergram on how, well, everything went down, or shall I say raucously down -- Chad.

CHAD PERGRAM, FOX NEWS SENIOR CAPITOL HILL PRODUCER: Good afternoon, Neil.

Democrats convened a virtual conclave to discuss what is next on the Build Back Better bill. Senate Majority Leader Chuck Schumer says his side will not give up on the bill. Schumer promises a vote next year. But even Schumer needs the vote of Joe Manchin just to start debate on the bill.

Democrats are trying to determine what could be different come January.

(BEGIN VIDEO CLIP)

SEN. TINA SMITH (D-MN): What we need to know from Senator Manchin is, where could he get to? Like, where does he want to end up with this? I heard yesterday on the call from my colleagues a real sense of determination to do the best that we can and a sense of urgency to get through with this.

(END VIDEO CLIP)

PERGRAM: The Senate and its arcane folkways are exasperating to House Democrats, who voted for the bill.

(BEGIN VIDEO CLIP)

REP. DAN KILDEE (D-MI): The problem is, when we get to the Senate, because of their really stupid rules that they have over there -- I'm just going to say it. The filibuster is ridiculous.

(END VIDEO CLIP)

PERGRAM: It's unclear if House progressives could accept a leaner bill which meets the demands of Joe Manchin.

Senate Minority Leader Mitch McConnell described the resistance of Manchin as a Christmas gift to the public.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY): They didn't get a -- they didn't get a mandate for this. A 50/50 Senate and a three-seat majority in the House is not a mandate to turn America into a socialist country.

The Democratic Party today is the party of Bernie Sanders. They want to turn America into a socialist country. No wonder Joe Manchin is uncomfortable.

(END VIDEO CLIP)

PERGRAM: Manchin says he will not defect. If he did, the Senate would flip to GOP control.

McConnell says Manchin would feel more at home on the other side of the aisle -- Neil.

CAVUTO: Of course he would say that.

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

Chad Pergram on all of that.

I want to go above Bob Cusack right now, The Hill editor in chief.

Bob, the president is very eager to sort of saddle up again, working closely with Joe Manchin, start from scratch, prioritize what's important, what the senator would like, what he wouldn't like, and then proceed from there. How likely is that?

BOB CUSACK, THE HILL: I think that's likely.

As far as still something getting done, I think the chances are pretty good. But what will get done, as progressives are very frustrated, to put it mildly, at Senator Manchin? So what can he accept, what price tag?

Manchin wants to raise taxes, but Senator Sinema does not. So he wants -- he's worried about inflation. Overall, this is a real problem. But Democrats can't throw in the towel, because they have just put too much time into this effort. And it's going to be a very rough, rough January, I think, for the Democratic Party.

CAVUTO: A lot of progressives have been saying better nothing than something that's so watered down, it's barely something.

What do you hear about that argument?

CUSACK: Well, I think that's a pretty good argument.

But at the same time, you have to watch, what's the breaking point for progressives? Remember, the year started out with Bernie Sanders, the Budget Committee chairman, where this all started talking possibly $6 trillion to $10 trillion. Chuck Schumer was saying big and bold, OK?

I think Democrats raised expectations. And I think that was a mistake, because they knew Republicans weren't going to get on board. That was not hard to see. Republicans are not going to vote for any tax increases. So, overall, they have to make sure that Manchin and Sinema are there at the end.

And I think progressives -- remember, Neil, even if this passes the House, it's -- the Senate, it's got to go back to the House. And just five progressives could sink it.

CAVUTO: It goes right back to the House, right.

CUSACK: Yes. Yes, a real problem.

CAVUTO: So, some of things they like that apparently even Manchin likes is this funding for universal pre-K. The difference is over the 10-year period. He's open to a child tax credit, maybe not as generous as the one that they were contemplating.

CUSACK: Right.

CAVUTO: Lower costs for prescription drugs. But they might shelve or wait on some of the other matters, like paid leave bill next year, maybe in future years, if that even happens, or expanding Medicare to cover dental and vision and all of that.

Is that what we're kind of moving toward?

CUSACK: Yes. I think, Neil, that's right. I think that's where we're headed.

Paid leave is going to be put off. And that upsets, of course, some Democrats, but it's not going to cost them votes, like Senator Gillibrand, who has been pushing for that. The child tax credit, as you mentioned, Senator Manchin wants to lower those thresholds, so a smaller type of bill.

Now, on the Medicare expansion, that is really important to Bernie Sanders.

CAVUTO: Right.

CUSACK: And so if he doesn't get anything -- and I think they -- I think Democrats and the president have to tell Joe Biden (sic): OK, listen, Joe, what do you want? But you got to accept some things that we want, otherwise, we can't get the progressives on board.

But this is going to be a tough plane to land in the new year.

CAVUTO: Is there any truth to the rumors here that the president intervened to say, we're getting really nasty with Manchin here, we're all but pushing him out of the party? Everyone dialed it back.

Of course, it wasn't dialed back in the Zoom call, I guess, but that better to deal with him than deal with him on the other side. Do you know anything about the backstory on that?

CUSACK: I don't know as a fact, Neil, but that makes a lot of sense.

I asked Manchin a few years ago, could he ever leave the Republican Party, and do Republicans ask him to do that -- to leave the Democratic Party for the Republican Party?

CAVUTO: Right. Right.

CUSACK: And he said, yes, Senator McConnell has done that repeatedly. But he said he could never leave the party because of the Republican stances on Obamacare, health care, in particular, and taxes as well.

I don't know. I mean, you have to be worried that maybe he doesn't become a Republican, but maybe he becomes an independent who caucuses with the Republicans if the progressives get too nasty with him. So I think Joe Biden saying that makes a lot of sense. And it makes sense. That's how the president operates. Let's get a deal. Let's lower the temperature.

But it got a little out of control because of White House staff and miscommunication.

CAVUTO: Yes.

CUSACK: And that's where we are now.

CAVUTO: I have Italian relatives who do that. It gets a little out of hand, and then we all apologize. And then we move on, and we have some food.

(LAUGHTER)

CAVUTO: And we will see what happens.

Bob, always great seeing you, my friend. If we don't chat again, merry Christmas.

CUSACK: Merry Christmas, Neil. Thanks.

CAVUTO: All right, Bob Cusack following those developers.

Well, one guy who is a little relieved that this was sort of falling apart was the guy who created what became known as the Trump tax cuts.

Kevin Brady is here on where we go from here.

(COMMERCIAL BREAK)

CAVUTO: All right, progressives are upset that Build Back Better all of a sudden got worse, or less likely. Republicans are delighted that the tax hikes included in it also look unlikely now for the time being.

Count Kevin Brady of Texas, the House Ways and Means Committee ranking member, pleased with those developments. Kind enough to join us.

Congressman, good to see you.

REP. KEVIN BRADY (R-TX): Good to see thank, Neil.

CAVUTO: Democrats haven't given up on this. So they do plan to revisit it, presumably with those tax hikes. Do you think that's going to happen?

BRADY: Yes, so it could.

I think there's still -- they have been stuck on sort of those seven stages of grief. They have been stuck on anger and denial for an awfully long time. I think only a few of them are starting to move toward acceptance, which the truth of matter is, this bill is as alive or as dead as Senator Manchin makes it.

And he was very clear. You're not listening to me. I'm not going there. And you can't bully me.

And so the question is, can they begin to accept that he's got parameters that they will have to meet?

I also think -- and I'm grateful for this as well -- because even the $1.75 trillion, in true numbers, there are still crippling tax cuts there -- tax hikes -- excuse me -- that will drive U.S. jobs overseas and really drive this economy lower as well.

So we're still fighting for this bill to die. But I think, at the end of the day, I think the progressives will do that for us. I don't think there's any way they can accept what Joe Manchin will insist that they do in the Senate.

CAVUTO: All right, if, though, they remove some key provisions to pass only what would be passable to Joe Manchin and all those progressives, some of the first things you hear about, Congressman, are this paid leave push, that that might be put off, also expanding Medicare for older folks to include vision, dental benefits and the rest.

And that would dramatically cut down its price, as it would the tax hikes to pay that price. Do you think -- I know where you stand on this -- any Republicans would be on board something like that, that dramatically cuts the size of this thing down?

BRADY: Not with the tax hikes included, because it makes no sense to be dramatically raising taxes on job creators and investment in the U.S., or making us less competitive against China, Russia, and Europe especially as we try to recover from this pandemic.

And so, no, I don't see that happening. Where I think the Democrats could help themselves economically are -- is that there are two key provisions there, the child tax credit, which is no longer tethered to work or earnings, which will, by some estimates, drive 1.5 million Americans out of the work force, and also the child care, the new entitlement program there.

For many families, parents where you have two kids, both the parents working, they could see their child care costs go up by almost $27,000 a year. That too is going to be a barrier to returning Americans to work.

So, in addition to the economic impact of tax hikes, making the labor shortage worse is going to work against this economy in a serious way.

CAVUTO: You know, were you surprised that Goldman Sachs, upon hearing that this thing floundered and that Joe Manchin had rejected it, said not getting this passed was going to shave economic growth next year?

I might add, Congressman, they're the only investment firm that I know of that has said something like that, but they did.

BRADY: Yes, so...

CAVUTO: And I don't -- I don't know what to make of it. Do you?

BRADY: So, two thoughts.

One, Wall Street loves stimulus. And this is -- the House version, at least, almost $5 trillion in true costs over the decade, that's a lot of money pumped in the economy, exactly at the wrong time, by the way. But I think that drove part of it.

Secondly, I think most of those firms underestimate the importance of tax policy. What we, saw just by America becoming competitive again, redesigning the code so our companies could compete and win anywhere in the world, including here at home, creating incentives to bring manufacturing, intellectual property, investment back in the United States, which it achieved beautifully there, had a significant effect.

I think often Wall Street undermines the impact of tax policy.

CAVUTO: Yes, I think you're right about, and certainly understates its significance.

Kevin Brady, great seeing you again. If we don't chat again, I hope you have a merry Christmas, your family and loved ones.

BRADY: You too, Neil.

CAVUTO: Thank you very much.

BRADY: It's great to see you. Merry Christmas.

CAVUTO: Same to you.

Kevin Brady following all those developments.

I don't know how much you are worried about inflation or how you balance that when it comes to, I don't know, buying Cheerios. Would you would you spend a lot more for Cheerios? Well, the reason why I mentioned Cheerios, it's just part of what General Mills makes, a vast, vast group of grocery items that are iconic, and now a lot more expensive.

And it's passing those increases along to you. And it got us thinking. It happens here now and then on "Your World." What would you refuse to give up on, no matter how high the price gets?

After this.

(COMMERCIAL BREAK)

CAVUTO: You know, I have always said that inflation and when we stopped paying the higher prices, when we just essentially get to the point, no mas, this has got to stop. And prices have gone up.

And General Mills indicating that it's going to keep the prices going up, pass along spikes in prices for Cheerios, Yoplait yogurt, Annie's Mac and Cheese. A host of other consumer product companies, from Cargill to Heinz, they have all been doing this and we have been paying the price, happily. No, maybe not always happily, but we are. So the prices keep going up because the demand is still there.

Let's get the read on just how far you can push it with Abby Hornacek. We have got Jimmy Failla joining us as well.

Guys, so great to have you.

Where are you on this, Abby, first off, this -- how -- is there an item you would have that you would definitely pay more for, keep paying more for, maybe there's a limit in your head, but you haven't hit it yet?

(LAUGHTER)

ABBY HORNACEK, FOX NATION HOST: Well, no shade to General Mills, but I like Kraft mac and cheese. So I would continue to pay those prices for Kraft mac and cheese.

CAVUTO: Ooh, OK.

HORNACEK: But, Neil, you pose an interesting question about, when will it be the breaking point?

CAVUTO: I do a lot, yes.

(LAUGHTER)

HORNACEK: You make some really good points. You're pretty good at your job, yes.

But when you really -- when you do ask that question, you're like, when are people going to stop paying these prices? The problem is, is if they want to stop paying the prices for, let's say, Lucky Charms or Yoplait, they're going to go reach for another type of cereal or another type of yogurt and see that those prices have increased as well.

When you look at the statistics, the U.S. Bureau of Labor Statistics says that prices rose 6.4 percent. You saw it on the screen in your intro there.

CAVUTO: Yes.

HORNACEK: And that's for at home. That's food that you're eating at home. And that's the highest 12-month increase that's been recorded since December of 2008.

You know what Jimmy Failla was doing in 2008? I checked out his LinkedIn. He was still managing his comedy career while driving cabs for 60 hours a week, that just put a time frame on it.

So I think hardworking families are really being hit by this. And I don't know if they're kind of stuck between a rock and a hard place because they have to pay these prices.

CAVUTO: Yes, they are.

But it's funny. They do keep paying this. Now, a lot of them came out of the pandemic, Jimmy, in relatively good shape, so they want to splurge, and even though it's basic food stuff we're talking about, but they are splurging and doing it.

Where's your limit, Jimmy?

JIMMY FAILLA, HOST, "FOX ACROSS AMERICA": Well, as a New York sports fan, Neil, the one indispensable item right now is booze, because we can't get through four quarters of a Jet or Giants game without drinking, the way the season is going.

(LAUGHTER)

FAILLA: Most Jets and Giants fans I know have moved on to stronger stuff at this point. But, for myself, it's still booze.

But this is incredible, when you really think about where prices have gone. Like, I never thought I'd see the day where I'd have to be turning tricks to afford a box of Trix.

(LAUGHTER)

FAILLA: But that's where the prices are at the grocery store. It's insane. And...

CAVUTO: But we do it, though. We do it, right?

FAILLA: Yes.

CAVUTO: And I just wonder. There might be a limit.

Like, I think if Ring Dings get to 50 bucks, that's my ceiling. I'm not going to spend one penny over 50 bucks.

(LAUGHTER)

HORNACEK: Fifty for green beans, Neil?

CAVUTO: Yes.

(CROSSTALK)

FAILLA: You got to have principles.

(CROSSTALK)

CAVUTO: Exactly. I have standards, right.

FAILLA: I was going to say this, Neil.

This -- as a guy who looks for the silver lining, this could become the first year ever people actually stick to their New Year's resolutions and lose weight, because it's hard to justify the extra...

(CROSSTALK)

CAVUTO: Let's not go crazy. No, no, no. Jimmy, let's not go crazy here.

(LAUGHTER)

FAILLA: Hey, I'm just trying to inspire people. I don't know.

CAVUTO: No, no, no, I hear -- I hear you.

(CROSSTALK)

HORNACEK: They're losing weight because their pockets are lighter.

(LAUGHTER)

CAVUTO: Well, you're right.

But, Abby, an interesting statistic, comparing the genders with this, women will be sooner to stop paying the higher prices when it gets ridiculous than men. And I wonder what you make of that.

HORNACEK: Well, Neil, it's because we too have standards.

(LAUGHTER)

CAVUTO: Jimmy and I do not.

FAILLA: Yes. Yes. It's a different animal.

HORNACEK: We're not paying 50 bucks for green beans, unless they have the fried onions on top.

(CROSSTALK)

FAILLA: Go ahead.

HORNACEK: Maybe it's because -- I mean, I don't know from any statistic. I can't speak to statistics.

But I can speak personally as a woman. I do feel like we probably spend more. Like, we -- not all women necessarily get their hair done, but, for me, for this job, I have to get my hair done. I like to splurge on workout classes.

CAVUTO: But you're better shoppers, right? I don't want to be sexist, but you're better shoppers.

FAILLA: Yes.

CAVUTO: You won't waste money.

HORNACEK: Right.

CAVUTO: Jimmy, it sounds like you would waste money and welcome doing so if you got what you wanted.

FAILLA: Well, just to be clear, no barber in good conscience would charge me for this haircut.

(LAUGHTER)

FAILLA: So, I do save some money there.

But here's another issue that American shoppers are going to face in January that's really affected by what we're discussing. And it's called shrinkflation, Neil.

And what that means that is, sometimes...

(CROSSTALK)

CAVUTO: Yes, indeed. The package is smaller.

FAILLA: Yes, sometimes, food producers, to get around the increased cost, will put less food in the bag.

CAVUTO: Right. Right.

FAILLA: We have all opened that bag of potato chips that's so empty, you expect to see a fat mouse at the bottom of the bag.

CAVUTO: Well, that's even more offensive. That's even...

FAILLA: Thank you.

CAVUTO: That's a whole 'nother show, my friend.

Jimmy, I want to thank you. Abby, thank you very, very much.

We will resolve this no time soon, but we will try.

Here's "The Five."

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