Facebook, Apple, Amazon, And Microsoft All Reporting Earnings This Week; Apple’s FaceTime Bug; PG&E Files For Bankruptcy; Huawei Criminal
<Show: MORNINGS WITH MARIA>
<Date: January 29, 2019>
<Head: Facebook, Apple, Amazon, And Microsoft All Reporting Earnings This
Week; Apple’s FaceTime Bug; PG&E Files For Bankruptcy; Huawei Criminal
Charges; Nvidia Issues Warning; Senator Kamala Harris Backs Medicare For
All Plan; 2020 Presidential Run; Artic Temps On The Way; Effects of the
Shutdown; California Tax Debate; U.K. Weighs Exit Amendments; Colorado
Farmers Renting Water; Test For 911 in Milpitas; Progress Toward Peace - Part 2>
<Byline: Maria Bartiromo, Dagen McDowell, Cheryl Casone, Janice Dean, Jack
<Guest: Grover Norquist, Jon Hilsenrath, Matt Schlapp, Phil Orlando>
<Spec: Facebook; Apple; WhatsApp; Earnings; PG&E; Bankruptcy; Huawei;
Nvidia; Howard Schultz; Michael Bloomberg; Steven Mnuchin; Larry Kudlow;
Burger King; CBO; Federal Reserve; T.J. Rodgers; Cypress; European Union;
Theresa May; Super Bowl; Chicago Tribune; Sears; Eddie Lampert; Colorado;
Boulder County; Farmers; Taliban; Afghanistan; American Troops; Pakistan;
ISIS; al-Qaeda; John Bolton; Venezuela>
Plus, House Minority Leader and California Congressman, Kevin McCarthy, is with us, along with Michigan Congresswoman, Debbie Dingell. Plus, AFL CIO, President Richard Trumpa, here as well, big show, don’t miss a moment of it, big three hours, coming up. And we are kicking off this half an hour right now, with this top story, feeling the effects of the shutdown, Washington, D.C. back in business for now, President Trump will give his State of the Union of Address on February 5th, Tuesday. The address was originally supposed to be today.
Even though the shutdown is over, the U.S. is still feeling effects, new numbers from the Congressional Budget Office to report. The U.S. GDP will be $3 billion lower during the fourth quarter of 2018, because of this shutdown. On the immigration front, backlogs of immigration courts grew by at least 10 percent, according to Wall Street Journal.
Joining us right now to talk more about all of that is Americans for Tax Reform President, Grover Norquist, Grover, good to see you.
GROVER NORQUIST, PRESIDENT, AMERICANS FOR TAX REFORM: Good to be with you.
BARTIROMO: Thank you so much for joining us. So, the CBO is talking about a $3 billion-dollar hit, in fact, as a result of the shutdown, Larry Kudlow is having an issue with this. He says, frequently disagrees with the CBO anyway. What’s your take in terms of what the shutdown cost the economy?
NORQUIST: Look, the key thing is that the economy continues to grow and we’re looking at a three percent rate of growth for the year, so $3 billion is a big number, unless you compare it to the GDP of the United States in the fourth quarter.
So, actually, we’re doing fairly well.
BARTIROMO: You don’t think it had much of an impact then, Grover?
NORQUIST: No, it’s a small impact and we have a tremendous growth for the year, which is way beyond what the CBO said was possible, when they scored this. The CBO needs to spend a little more time going back to explain why they were so wrong on all of their recent predictions, so --
BARTIROMO: There you go. Go ahead.
HILSENRATH: Grover, the Federal Reserve and most of the economist that we surveyed at the Wall Street Journal are saying that the economy is slowing down in 2019. We had a nice burst in 2018 in part, because of tax cuts and in part, because there’s more spending, $300 billion of additional spending.
But now, they say the economy is slowing along with the global economy, what does that say about the impact of these tax cuts, are the tax cuts really created the long-run growth that Republicans said was going to happen?
NORQUIST: The tax cuts do two things. We were at 35 percent rate, which is the highest in the world. It made sense for an American company like Burger King to be bought by Canadian company, because even though they’re selling the same hamburgers, the same number of employees, it was worth more, because we had a worldwide tax system at 35 percent.
By taking 35 down to 21, we became competitive with Europe. I mean, our friends, the Germans were at 25, the Japanese were at 25. I’m sorry, the Japanese were at 30. The Chinese were at 25. And we were at 35. We weren’t even close to being competitive. It’s a huge change in the direction for the country.
And if the CBO tells you they’re pessimistic, they didn’t think you could do three percent, they laughed at three percent growth, said you could never do more than --
HILSENRATH: The question is, is that three percent growth. I think a lot of people understand that the corporate tax rate was uncompetitive, even some Democrats wanted to lower their corporate tax rate, but the question is, this new tax code that we’ve got, is that sufficient to sustain the three percent growth in 2019?
NORQUIST: It’s a good first start. We also need to do something about the workforce. We need more workers and frankly, there’s more tax reduction that needs to be done and spending restraint is very important at the end of the day.
SCHLAPP: I want to go back to this question about a shutdown, Grover, which is, people are saying, they’re almost using the reason why you couldn’t cut government, because somehow, that would have a negative impact on our economic growth. That seems like a very dangerous road to go down.
Isn’t it true that all of this money that they are saying didn’t get put into the economy, are you worried that the government actually won’t spend all of that by the time that the authority over the money, expires?
NORQUIST: For the government to -- I was taught this (INAUDIBLE) economics in college also. The government takes your money, and then spends it. It’s much better for the economy than if it lets you spend it.
NORQUIST: Because you would waste some of it by investing it.
BARTIROMO: Because they can spend money better than you, of course.
NORQUIST: And that’s the oddest thing because, of course, that’s nonsense. East Germany should have done very well, under this theory, but it doesn’t, so --
HILSENRATH: What the government is doing is borrowing other people’s money and spending it, right? I mean, we’re talking about deficits that are nearing a trillion dollars.
NORQUIST: The (INAUDIBLE) cost the government is how much the government spends, whether they borrowed or take it, it’s still gone from the -- from the real economy. The cost of government is total government spending. We should have taxes low, and then the least destructive way possible, all taxes are somewhat destructive. And you have less borrowing if you have less spending.
BARTIROMO: So, what about all of these new plans? And by the way, we are getting earnings right now, as we’re talking 3M and Xerox, both beat expectations, although 3M is cutting its forecast for the year. What about all of these ideas about taxing the wealthy? New York Congressman Alexandria Ocasio-Cortez claims for a 70 percent marginal tax rate on the tippy top, as she calls it.
Elizabeth Warren, Massachusetts senator, hopeful, for 2020, two percent tax on Americans whose assets exceed 50 million. If you’re a billionaire, three percent, what’s the impact?
NORQUIST: OK, magicians like to do this, so you’re not looking at, you know -- watch my right hand, don’t look at the left hand.
NORQUIST: The reason they talk about high tax rates on rich people, is that they want to gouge the middle class. The difference between the United States and Sweden, Finland, Denmark, the countries that Cortez talked about is, they don’t have the 70 percent rate, just back up for sec -- there isn’t a country in the world with a 70 percent income tax rate.
Many countries used to, the Beatle song, 19 for me, one for you, 95 percent tax rate, and then the Beatles moved to United States, and everybody who could pay tennis, left Sweden. And all the countries of the world realize that tax rates that high were stupid and destructive and didn’t help equality or growth or anything like that.
So, they got rid of them. The whole world got rid of them. We did it, it was stupid. We back offed it and had strong economic growth as a result, so 70 percent stupid and destructive. It’s not America saying, the world says that.
BARTIROMO: Yes. You probably showed the op-ed today, in the Journal, in California, and taxes as well. The Journal, this week, by Cypress founder, T.J. Rodgers, which was very good, Another California Tax Grab, he writes. In it, the politicians have fueled an affordability crisis that drives away businesses and exacerbates homelessness.
California Governor, Gavin Newsom, called for even higher taxes in his inauguration speech earlier this month.
NORQUIST: California is a good example of 70 percent play. They have a 13 percent rate on people making a million dollars, but they have 8 percent rate on people making $42,000. So, they want the middle class people in California to think you’re OK, because we’re really screwing the other guy.
And point of fact, Florida has a zero percent first income tax, Texas has a zero percent first income tax, 8 percent looks good compared to 13.
NORQUIST: Looks lousy compared to zero percent. They want the middle class to think somebody else is paying the freight. That’s why they have those phoney high tax rates that don’t raise much money. It’s to fool the middle class.
BARTIROMO: And it is talking point, and it works for the populist. Let me bring in Dagen McDowell on this, because we hear this every time we go into the tax discussion and we have a Democrat on which takes out another one of those talking points on taxes, Dagen.
MCDOWELL: Right. And I want to say that Senator Kamala Harris said that the first thing -- she said it last night, in the town hall, he first thing she do is to cut taxes for the middle class. Well, roughly half this country pays no net federal income tax, number one, and the Republicans just did that particularly, doubling the standard deduction.
So, I don’t know who she’s going to cut taxes for. But this is the ruse and this is the big liberal lie that all of these big new welfare state initiatives, whether it’s green energy, even single payer, it’s all going to be paid for by the super rich.
MCDOWELL: And that it’s not going to be -- that the paying won’t be spread across every person in this country to fund this welfare state.
BARTIROMO: And by the way, the numbers don’t add up even if you tax all the rich, you’re not going to get the amount of money you need for this green deal, Grover.
NORQUIST: You don’t even balance the budget if you do that, never mind half money for new things. Look, the big difference between United States and Denmark, United States and Sweden, it’s not how much money higher income people pay, it’s what happens to middle-income people.
Denmark, Finland, Sweden, the tax rate on middle income people is 10, 15, 20 points higher than an American middle class person. And, you add to that the value added tax.
NORQUIST: The difference between United States and Europe is how heavily taxed middle income people are, and they have those (INAUDIBLE) high rates that very few people pay, to make people in the middle class think that they are getting a deal.
HILSENRATH: Speaking of middle income tax -- a lot of Democrats want a carbon tax, gasoline tax and even some big American business. That’s the way to address the issue of climate change. Do you see any path towards a carbon tax that would be acceptable to your point --
BARTIROMO: I guess, but real quick, Grover.
NORQUIST: No. No, absolutely not. And the reason is, you can look at Washington State, very deep blue Washington State. They have twice had it on the ballot and twice defeated a carbon dioxide tax, gasoline taxes lose overwhelmingly. This is too obvious tax on middle-income people. It’s a loser up. They are having this fight in -- our dear friends in France or loggerhead down the subject.
BARTIROMO: We know how that played out.
NORQUIST: We had the Ontario government and the Alberta government collapsed as a result of this, and three times, in Australia.
BARTIROMO: Grover, thank you. Yes.
NORQUIST: Bad politics and lousy economics.
BARTIROMO: Grover, thank you for the facts, we appreciate it, Grover Norquist, joining us there.
Five officers injured in a shooting in Texas, meanwhile, Cheryl Casone in New York, with the details, there. Cheryl.
CASONE: That’s right, Maria. Four officers were shot and another officer suffered a knee injury in Houston. They were serving a search warrant at a suspected drug house. Police say two of them were hit in the neck. Those officers are in critical but stable condition. Two suspects were killed at the scene.
Well, a key E.U. negotiator, warning the risk of Britain leaving the European Union without a deal, is very high, as parliament votes on amendments in Theresa May’s exit plan today. Lawmakers set to consider more than 10 different amendments before taking votes. That’s going to be at 2:00 p.m. Eastern Time.
And those votes come after May’s plan to leave the European Union was overwhelmingly rejected earlier this month, a lot of those votes against her from her own party.
Well, Americans will be betting an estimated $6 billion on the Super Bowl, that’s according to the survey by the American Gaming Association. About 22.7 million U.S. adults plan to place a bet on the upcoming Atlanta game, of those bets, 94.47 percent, reportedly illegal, but let the games begin, Maria, and those are your headlines.
BARTIROMO: Be there to watch it all, front-row seat.
CASONE: I’m there for you, Maria. I’ve got surprises for you, coming up. You’re going to love them.
BARTIROMO: OK, looking forward to it. Thank you, Cheryl.
CASONE: You bet.
BARTIROMO: Coming up, crisis in Venezuela to take a look at, new sanctions have been placed on the country’s oil. Plus, National Security Advisor, John Bolton, may have inadvertently revealed the administration’s next move. Why his notes are raising eyebrows this morning.
Then, farming in America, why farmers are being forced to rent water. That’s up next.
BARTIROMO: Welcome back. A look at some of the big headlines across America this morning. The Chicago Tribune reporting on the Pension Agency criticizing Sears Chairman Eddie Lampert’s plan to acquire the bankrupt retailer. The article explaining that the agency sets to takeover Sears. Pensions objects to the bid, calling it the final fulfillment of a year- long’s scheme to deprive Sears and its creditors of assets and its employees of jobs while lining Lampert’s on owns pockets.
The Daily Camera in Colorado, reporting on how Boulder County farmers are increasingly renting water. The report explains how ownership from agricultural interests has dropped from 85 percent in the late 1950s to just 30 percent. The water increasingly moving to municipal control.
And the Mercury News writing that how in one California city you can text 911 for emergency help. According to the paper, the police department there announced that the service is now available in the city. It is meant to help people who are hearing or voice impaired. The police are also recommending that you not send emojis. Well, yes, I would think not.
SCHLAPP: What are we coming to?
BARTIROMO: My God, but it is good that you can text 911.
HILSENRATH: That’s a good step, just don’t text person emoji.
BARTIROMO: Coming up, crisis in Venezuela new sanctions placed on the country’s oil, plus National Security Advisor John Bolton may have inadvertently revealed the administration’s next move, why his notes on his legal pad are raising eyebrows this morning? We’re breaking that down when we come right back. Stay with us.
BARTIROMO: Welcome back. A framework for peace. The U.S. and Taliban negotiators making a preliminary on key issues to end the war in Afghanistan -- the longest war in American history. The two top points American troop withdrawal and insurgence vowing to end terrorist attacks abroad, that’s according to the Wall Street Journal. Many hurdles remain to ensure the peace is in place. Joining me right now is Fox News Senior Strategic Analyst, General Jack Keane. General, it’s always a pleasure to see you.
GEN. JACK KEANE (RET.), FOX NEWS CHANNEL SENIOR STRATEGIC ANALYST: Good to see you, Maria, and welcome to Washington again.
BARTIROMO: Thank you so much. And what do you think about this? I mean, are we supposed to be trusting the Taliban?
KEANE: No, we can never ever trust the Taliban, that doesn’t mean that we can’t have a treaty with them. But here’s what I think is going on, a couple of things have changed: one is the Taliban in the last couple of years have gone all out as we have so dramatically reduced our forces, thinking that they will going to be able to overthrow the regime, because the only thing the United States is really doing is training and assisting the ground forces -- no longer doing the fighting, however provide an air power. That didn’t work. They retook some territory but never took capitals or provinces and they never took -- they never able to secure a province. So, what has happened? The war stalemated. The Taliban cannot take over the government and the government cannot defeat Taliban, even with our assistance.
Second thing, and this is crucial, Pakistan has gotten involved in this in a way they’ve never have before. They forced the Taliban to go to the peace negotiation table, why? Pakistan knows it’s no longer in national interest to keep this thing stalemated. There’s growing al-Qaeda and growing ISIS presence in Afghanistan which gives the Pakistanis some concern. So, those are the new things that are happening. That’s why the negotiations have some momentum.
BARTIROMO: Well, that’s the thing, though. I mean, so many people were worried when the president said: we were withdrawing the troops. And where do you stand on that now? I mean, do you feel better about it given this peace deal?
KEANE: Well, let me answer it this way -- I mean, it is an essential question: the Taliban themselves, we are trying to get an agreement with them that, one, they’ll stop trying to overthrow the government and number two, they’ll power share with them and also, they will assist in taking down the al-Qaeda and the ISIS. I don’t think we can trust them to do that, based on the fact that they provided safe haven for Osama bin Laden for almost 10 years.
BARTIROMO: Exactly. So, what do we do?
KEANE: So, we leave in place, after we bring out the troops that are providing the training and assistance. We leave in place a counterterrorism force and an intelligence capability indefinitely. We’re doing that in Yemen, we’re doing it in Libya and we’re doing it in Africa. The one in Africa is off the coast. It’s a Maritime Joint Task Force. That is what we need to do, that is the guaranty against the Taliban because the issue in Afghanistan has always been, we would never intervene in the civil war in Afghanistan between the northern alliance and Taliban for one reason only, we didn’t evade, because they attacked the United States. That’s the reason we’re there. We don’t want that to happen again and we cannot trust the Taliban to provide that guarantee for us.
BARTIROMO: All right, let me move on and ask you about sanctions on the Venezuelan oil industry. Treasury Secretary Steven Mnuchin who will be here shortly this morning along with Security Adviser John Bolton, explain the decision in a briefing yesterday and issued warning for disputed President Nicolas Maduro. Listen to this.
(BEGIN VIDEO CLIP)
JOHN BOLTON, NATIONAL SECURITY ADVISOR: The president has made it very clear on this -- on this matter that all options are on the table.
STEVEN MNUCHIN, TREASURY SECRETARY: There’s no reason why these resources shouldn’t be used for the economic benefit of the people there. There’s no reason for the poverty and the starvation and the humanitarian crisis.
(END VIDEO CLIP)
BARTIROMO: Your reaction to this announcement yesterday?
KEANE: Well, increased pressure on Maduro regime is certainly a welcome thing. I mean, this really comes down to the loyalty of the military to Maduro. As long as that loyalty is there, it’s unlikely that Maduro is going the leave. If that loyalty starts to fall apart, I hope we’re working a ‘plan b’, which is engineering right now some kind of exit path for Maduro, where he can go into exile with recriminations in Venezuela. The Reagan administration did this very successfully on Ferdinand Marcos, back in 1986, overwhelming popular opposition to him, hundreds of thousands of people. We engineered his exit.
BARTIROMO: Let me squeeze in this question before you go general. This image from the briefing going viral and it shows John Bolton’s notepad with the notation: “5,000 troops to Colombia.” Whoa, do you think we should be sending troops to the region? What do you think about this? Caught on camera.
KEANE: Look, when we deposed Noriega in 1989 operation just cost Panama, 26,000 troops, is what it took. When we deposed a dictator in Haiti, 28,000. The ease of troops that would only be in there, move into Venezuela, if there’s a problem at the embassy to our diplomat.
BARTIROMO: How significance is revealing such a secret?
KEANE: I think he’d probably wanted to reveal it.
BARTIROMO: OK. General Jack Keane, good to see you sir. Thank you so much. We’ll be right back.
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(Show: MORNINGS WITH MARIA) (Date: January 29, 2019) (Time: 07:00:00) (Tran: 012902cb.231) (Type: SHOW) (Head: Interview with Rep. Kevin McCarthy (R-CA); Prosecutors Rest Case against Joaquin El Chapo Guzman; Golfer’s Costly Penalty; Government Shutdown Impact on American Workers. Earnings in Focus; Snapchat’s About Face; Porsche Charges Past Tesla; Interview with Rep. Debbie Dingell (D), Michigan; Pelosi Challenged) (Sect: News; Financial)
(Byline: Maria Bartiromo, Dagen McDowell, Cheryl Casone)
(Guest: Jon Hilsenrath, David Kudla, Debbie Dingell, Kevin McCarthy, Richard Trumka, Matt Schlapp)
(Spec: Toy Story; Nancy Pelosi; America; Border; Wall; Democrats; DACA; Independent; President Donald Trump; Government Shutdown; Stock Markets; Business; Technology; Automotive Industry; Congress; Legislation; Immigration)
MARIA BARTIROMO, FOX BUSINESS NETWORK ANCHOR: Welcome back. Good Tuesday morning, everybody. Thanks so much for joining us.
I’m Maria Bartiromo coming to you live this morning from Washington, D.C. It is Tuesday, January 29th.
Your top stories right now at 7:00 a.m. on the East Coast.
It is a busy day on the earnings calendar this morning. 3M among the Dow components reporting their fourth quarter. The company cut its forecast for 2019. Pfizer also cut this morning. The stock under pressure this morning after the guidance came in below expectations. Pfizer shares down almost 2 percent. 3M down two-thirds of a percent.
The big one to watch after the close tonight -- Apple. We’ve got everything you need to know as Apple prepares to report its quarterly numbers.
Rising tensions meanwhile with China. The U.S. has brought charges against Huawei as trade talks are set to resume tomorrow morning. Treasury Secretary Steven Mnuchin sounding optimistic on the state of the negotiations so far.
(BEGIN VIDEO CLIP)
STEVEN MNUCHIN, U.S. TREASURY SECRETARY: I think there’s been significant movement. And we’re working through what are still very complicated issues.
(END VIDEO CLIP)
BARTIROMO: I’ll be sitting down with Secretary Mnuchin this morning at 8:00 a.m. Eastern. Join us live as the Treasury Secretary will join the program, coming up.
Markets are under pressure this morning. Futures pointing to a lower opening for the broader averages although right now it is more like a flat showing than lower.
The Dow Industrials are up 3 points right now. S&P 500 pretty much flat, up a quarter point. And the Nasdaq is down 4 points. It’s been back and forth on futures this after declines across the board yesterday, of course.
Stocks finished off of the lows of the day but nonetheless, the Dow Industrials were down 209 points, almost 1 percent. S&P was down 20. The Nasdaq was down 79, better than 1 percent lower.
Global markets this morning. Take a look at European indices, higher across the board. This right here, this is the high of the morning. FT 100 up 1.5 percent, 97 points higher. CAC 40 in Paris up 39 points, almost 1 percent. And the DAX index in Germany up about 20 points right now.
In Asia overnight markets were little changed, pretty much across the board as you can see.
Well, the date is official now with the government back open, President Trump will give his State of the Union address one week from today. We’re taking a closer look at the fallout from the shutdown including the cost to the economy.
Snapchat’s about-face. Take a look, the social media service eyeing a major change to better compete with Instagram. We’ll tell you all about it coming up.
All those stories coming up this Tuesday morning. And joining me to break it all down -- Fox Business Network’s Dagen McDowell in New York; the “Wall Street Journal’s” global economics editor Jon Hilsenrath here in D.C. with me; and the American Conservative Union chairman, Matt Schlapp. Great to see you -- guys.
MATT SCHLAPP, CHAIRMAN, AMERICAN CONSERVATIVE UNION: Great to be here.
JON HILSENRATH, GLOBAL ECONOMICS EDITOR, “WALL STREET JOURNAL”: Great to be here.
BARTIROMO: Dagen -- good morning to you.
DAGEN MCDOWELL, FOX BUSINESS NETWORK ANCHOR: Good morning. We were talking about the shutdown. So it’s over for the time being.
The Democrats have actually been hurt by it as well. Wall Street Journal/NBC News poll shows that positive feelings about the Democratic Party have fallen to 35 percent this month. That’s down 4 percentage points since December. And that is essentially in line with the positive feelings that people have about Republicans.
BARTIROMO: I mean that’s a really good point because the President really did not get hurt certainly on his base, from his base, by the shutdown. What do you guys think?
SCHLAPP: Two things. First is that the President’s base was actually energized that he would make a spending fight.
SCHLAPP: Remember, immigration is a spending fight because if he can stop illegal immigration or reduce it, you don’t have all these social services costs.
But the second thing is, the President’s brand is that he will fight, he will fight harder than any politician on the field and he reiterated that brand. So if he can increase that reputation, I think it appeals to Independents.
BARTIROMO: They said dig in.
HILSENRATH: But isn’t his brand also -- it’s about fighting and continuing to fight and winning. And he didn’t win the wall in this case.
SCHLAPP: I don’t agree with you.
BARTIROMO: We don’t know if he won the wall yet.
SCHLAPP: There’s three steps to this - -
HILSENRATH: In this case, right.
BARTIROMO: In this case.
SCHLAPP: -- there’s three really important things. Number one, the bill he signed has $1.3 billion in barrier funding annualized.
Number two, he’s got to exhaust all legislative efforts if he’s going to go the emergency route in order to have a good case in court.