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tv   Cavuto Coast to Coast  FOX Business  December 28, 2022 12:00pm-1:00pm EST

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ashley: earlier we asked how much confetti is dropped in times square on new year's eve? i tell you. 3,000-pound. for the poor folks that have to clean it up. edward lawrence in for neil today. edward, take it away. ed: how much i feel way after the dinner.
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i'm edward lawrence in for neil this week. thousands of travelers are stranded, even the feds are without patience vowing that the southwest airlines will face federal probes. action on the border. a supreme court ruling temporarily prevents title 42 from ending. the battle over the border more heated than ever. i will talk to the head of san diego county that the feds are dumping migrants at bus stops bit dozens. freeze hurting operations in northeast. this buffalo area restaurant encased in ice. we'll talk to the owner about this crazy icy mess. first, airports across the country turned in makeshift motels as southwest tries to recover from a total meltdown.
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travel remembers stranded days after the issue started. the pictures are incredible. the biden administration calling the cancellations unacceptable and vowing to hold the airline accountable. fox news, jacqui heinrich in st. croix where the first family is vacationing and the southwest does not fly. >> reporter: president made his holiday destination on air force one. thousands of americans were not so lucky. southwest airlines is having a full-blown melt down, basically slashing thousands of flights for coming days even still, trying to reset their system. the biden administration is vowing to hold them accountable. house judiciary republicans tried to throw some shade at the transportation secretary pete buttigieg tweeting where is secretary pete? #southwest airlines. buttigieg clapped back. tweeting good morning. at the moment on capitol hill not far from your offices.
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we'll use resources as an agency. if you would call for policy deepen those resources. be specific. i welcome the dialogue. for now his department is bearing down on the airline making sure customers know their rights to meal vouchers, refunds, hotel accomodations. also that the company knows what consequences will be coming if they don't fulfill the obligations. >> from what i can tell southwest is unable to it locate where their own crews are, let alone their own passengers, let alone baggage. so i conveyed to the ceo our expectation that they are going to go above and beyond to take care of passengers and to address this they indicate ad number of issues they're having withism is, legacy systems for managing their schedule where their crews are. >> reporter: republicans meanwhile are questioning past bailouts to airlines and attaching or considering attaching strings to those in the future. >> i mean these airlines,
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southwest included, have been given billions and billions of dollars over the years, bailed out by the federal government, bailed out by taxpayers. so holding them accountable for doing those upgrades, having some stringses attached if you're going to get billions of dollars from the government maybe you should have your technology in order. >> reporter: so members on the house transportation committee promised to investigate and members of the senate commerce committee have also proposed rules that would ensure customers are promptly refunded by airlines for events like this in the future. edward. edward: thank you, jacqui. southwest shares falling about 2 1/2, more than 2 1/2% today as the company's ceo warns more delays and cancellations are on the way in order to return to normal. with more than 2500 flights already canceled today more than 150 more delayed, no light yet. fox news correspondent mike tobin is at midway airport in
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chicago, the hub for southwest. i can only imagine the scene, mike? >> reporter: it is, kind of a sat scene, a visual example of what you just heard secretary buttigieg talking about. the people lining up behind me here, people coming to try to find their bags, the visual here is the purgatory of lost bags that can't make it to their destination. this is one example of the meltdown triggered by the winter storm, what the industry analysts say is lack of up to date technology on part of southwest. not only passengers stranded, not only bags are lost but the staff is standed too. the union for the flight attendants sent a screen graph of flight attendants calling into the scheduling center. one showed 7 hours, four hours, five hours, this is just the staff trying to get people home. the flight attendants union wrote all of this is generated by southwest airlines decisions. it is not about winter storm elliot. this is something we actually
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forecast. southwest is in the remarkable position where they're canceling 2/3 of their flights to get back on schedule. ceo of bob jordan is apologizing. >> the tools we used to recover from disruption service as well 99% of the time but clearly we need to double down on already existing prances to upgrade systems for the extreme circumstances that we never again face what is happening right now. >> reporter: so this morning across the nation 2700 domestic flights were canceled. 90% of them, 2500 flights are southwest. people buying tickets on other airlines. places like chicago and dallas where they operate from separate airports, they will land at the destination but they don't have a car. otherwise a lot of people are stranded and they're frustrated. >> i've been dealing with this since christmas eve. my flight got canceled at 12 in the morning while on the plane. >> we waited in line for hour 1/2. we finally get to the front of
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the line, they tell us there are no flights anywhere until the end of the year. >> this is a southwest issue. we've been very loyal to southwest. their system did not work this time. >> reporter: first visual is all the bags lining up. this line are trying to get into the baggage office try to get an example, get an idea for where their bag is. one local reporter found a number on a bag, called the women in nebraska. told her bag was here in chicago. the poor women said she has never been to chicago but her bag was. back to you, ed. edward: that is unbelievable. purgatory of lost bags, that is the statement of the day. mike, appreciate it. the airlines were given $54 billion in three rounds of congress. paid for airline payroll, cost 1months -- eight 10:00 months of salaries. 26 billion must be paid back.
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7 billion went to southwest for their operations. where did that money went. talking about the southwest and all the world's problems, republican congressman brad wenstrup. talk about all the other airlines deal with weather issues, other major carriers got things sorted out on the second day. the situation at southwest seemed to get worse. what do you make of it? >> obviously a very, very significant problem. i'm fortunate usually flying delta and american. have not run into those types of problems and made it home for the holidays from d.c. you know, the complaints that we're hearing about are, with the refunds, for example, you know, by law they're required to make the refund almost immediately for people and you know, but you mentioned it. $54 billion from the federal government to the airline industry. so where did that money go? i know it is pandemic related. they say that was to keep
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themselves afloat. but that's a lot of money and southwest, like you just said, seven billion themselves since 2020. what were you doing? we're hearing labor shortage, this and that. that should be fairly predictable. look, the industry is a tough industry, no doubt about it. it is a lot of maneuvering. they seem to had it mastered pretty well over the years. the storm probably had something to do with this. but we've got to take some action in congress and get some oversight and investigate some of this. the u.s. department of transportation needs to investigate. but so do we. i know that congressman gary graves will lead some of that and we're going to look at the whole consumer experience pause that is really what it comes down to. edward: that is what i want to talk to you about, the consumer experience. under current law weather doesn't give customers any resource for something like that. that is what southwest is saying started all of this. does something need to change for passenger compensation, then? >> i think there has to be some
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type of plan b. we do pretty well with predicting this storm. we knew for a week, right? so there should have been some alternatives in mind. maybe people should have made alternative plans but that should have been aided by airlines themselves that were actually taking your commitment to a ticket. so, these things need to be looked at. i don't know, this may be the worst example we may be ever seen. it was domino effect, one thing fallterred, kept getting worse and worse for them and worse and worse for the customer clearly. we need to get to the bottom of it. a the love money comes from taxpayers for the airlines. edward: exactly. >> to keep america moving, allow for travel and business and everything else that they have to be able to answer to. edward: congressman, i want to get this in and part of the doctors caucus in congress. the white house says president biden briefly brought up origins of covid with president xi during their meeting in november talking about transparency in
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november. here we are two years later. should we know exactly what happened and how covid came about or does it matter now? >> oh, it matters, it matters. i'm on the covid committee leading investigation for origins of covid. of the covid was devastating. the intelligence community is not giving evidence and seem to ignore it. we have to get oversight. get to the bottom line of all of this. certainly we have interest in potential bioweapons. certainly we have interest in lab safety even in china because of what could possibly if something gets out. and the intelligence community came out said, well we have broad agreement that this was not a bioweapon. they don't say at what level of confidence they have. they don't answer our questions as far as why they're coming up with this conclusion. we also know that you know, people that are coming out, scientists that are coming out saying that it was coming from
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the wet market, well they have a motive. they have a motive because they were doing research in chimeras. they were doing it with china. chimera is that gain of function. edward: in the last 30 seconds that we have congressman, i wanted to ask you, do we need subpoenas to the intelligence agencies you know that republican report that came out yesterday saying there could possibly be a connection to a chinese bio military operation or lab related to covid and that is how it got out. should there be subpoenas to get the intelligence officers to clear the air on what the u.s. believes happened? >> well i think there will have to be because they're not answering the questions that we're asking specifically, voluntarily. so we're going to have to go to subpoenas. we have a long list of people that we are ready to talk to. some may come in voluntary but a lot of other the they we will need to subpoena them. they will need to hold on to their records. edward: congressman, thank you very much this will obviously be
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big first part of next year. thank you. >> very important. thank you. edward: very important. stocks hitting session lows on worries over china's surging covid cases. the nasdaq is the lowest in more than two years. we'll take a look where things are heading in this new year. ♪. waiting. sometimes it's just inevitable. but if you're over 50 or live with a chronic condition, untreated covid could be deadly. got covid symptoms? get tested and get treated right away. it can't wait.
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or if you've had a vaccine or plan to. tell your doctor if your crohn's disease symptoms... develop or worsen. serious allergic reactions may occur. watch me. edward: some breaking news in thes the housing sector. new home sales dropping to 4%, lowest level since february of 2020. the housing index taking a nosedive is an indication of the fed rate hiking decisions are taking a toll on housing. nasdaq is on pace for its lowest close since july 1st of 2020. now we have the best in the business to help us understand exactly what is going on here. mitch roschelle, founding partner of macro trends advisors, the expert press ceo, dave maney. mitch, first to you, i'm sure coming in this year you got out of the nasdaq like the rest of
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us, not really, but what happened to the nasdaq and what's happening today? >> well, edward, good to see you, the nasdaq is really the place where all the growth companies rest and many of those growth companies benefited greatly from the shutdown of the economy, the zooms of this world, the ubers suffered but other companies like peloton thrived bus we were locked at home. growth for the future is what is unclear. whether it is the consumer who has opinion crushed by inflation or whether it is businesss who are tightening their belts, so the technology companies, the growth companies that are in the nasdaq, it is very unclear what their future is going to hold in 2023 and beyond. edward: be careful of growth, i hear that. dave, we can't get through a segment without talking about tesla. of the tesla is having a really bad end of the year. is tesla down because elon musk's attention is divided
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now because he has twitter? is that the issues or are there systemic issues within tesla? >> i think it is down for a lot of reasons, right? i mean they were the unbelievable first mover and innovation leader in product design leader but you know, they have awoken the sleeping giants, the volusia volkswagens, toyota, fords. everyone is coming at them for their market segment. they are better capitalized and have vast logistical advantages. number one their business is under plain old threat. number two it was one of the most hyped stocks on the planet t can't with stand, there is hype symmetry. what goes up must come down. third the distraction is massive there is no other company has a ceo pulled in four or five different directions and plays that role in four or five places.
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he is superhuman but not megasuperhuman and it is all coming to rest now. edward: he is even being pulled into space. so, mitch, are you making moves now then in this week that is traditionally lighter volumes, this week towards the end of the year? or should investors wait until the next jobs report comes out to see where the market is heading? it seems like the market really don't know what it wants? >> market definitely doesn't, edward. you're on the fed line talking to the fed chair and other fed governors so you're well aware that this market is hanging on the every word from the fed because it had been addicted to the stimulus coming from the fed for so long. since the fed keeps saying we're data dependent, they're addicted to trying to parse through the data. there could be a data drop at 8:30 in the morning and by 11:00 in the morning they figured out what they think the fed will do with that data, they reversed course where they felt at 8:30 in the morning.
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so i think it is going to be very hard to navigate these waters until we have a better sign of when the fed's going to slow down with the interest rate hikes. edward: yeah. so we got about 30 seconds here, 15 seconds for each of you, dave, one year from today, where is the nasdaq, where is the dow? >> i personally am not a believer in the kind of the severe recession theory. i think we've gone through the most bizarre economic shock of our lifetimes and i think that is, that is unshocking in a way that is meaningful and yes, there are, you know the housing sales are down, yes, those are recessionary pressures but i, i would, i can't tell you the number. i think it is up. i would be, i would be proactively investing. edward: mitch, one year from today, dow, nasdaq? >> up, up and up. both will be up because the both indices are forward-looking and
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the longer term future is definitely brighter than the bleakness of today. edward: dave, rich, mitch, i appreciate it. thank you for your insight on this. obviously something we'll be following throughout the rest of the year. appreciate it. so from san diego to denver, the border crisis isn't just at the border. more on what's happening in cities across the country as the federal government drops off migrants and cities are left to fend for themselves. ♪.
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february for the trump era border policy. fox news correspondent david spunt is at the justice department with more on the ruling. david? >> reporter: hi, edward. well title 42 remains in place for at least a few more months. the debate over the law brought unlikely allies together from the supreme court. the 5-4 ruling stopped the planned termination of the law which was supposed to end a week ago on december 21st. title 42 is a public health law put into effect during the trump administration to expel migrants citing the covid-19 pandemic. it was originally supposed to end earlier this year but that deadline edward, was extended several times. conservative justice on the supreme court neil gorsuch joined in a rare alliance with the three liberal justices sonia sotomayor, elena kagan and ketanji brown jackson.
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he said title 42 should not be extended full stop. he wrote the current border crisis is not a covid crisis and courts should not be in the business of perpetuating administrative edicts designed for one emergency only because elected officials failed to address a different emergency. we're a court of law, not policymakers of last resort. right now there are about 600 immigration judges in the united states. that is a small number compared to the nearly two million cases that are in the pipeline that have yet to be heard. the immigration judges fall under the department of justice umbrella. edward, we're talking nearly two million cases to be heard before title 42 ends. that number will only swell. i spoke with a multiple former immigration judges over the past year-and-a-half who warned repeatedly ending title 42 will put a tremendous burden on a court system judges are not equipped to handle the influx. right now there is a six-year backlog and growing. it could be as high as seven or
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eight years with title 42 ending. edward, the supreme court will hear arguments on title 42 in february. the nine justices will rule once and for all the end of the term, typically end of june or july. edward: the numbers are staggering, six year wait list. david spunt from the justice department. cities like el paso dealing with migrants camming on street corners. it is not just border cities. fox business's madison alworth joins us from denver, colorado, with more on the migrant crisis extending across the country. madison? >> reporter: edward, there are more than 600-miles separating this city and mexico. yet they are facing a migrant crisis. the mayor says it will soon turn into a humanitarian crisis if more help is not given immediately. so the city has declared a state of emergency. they have spent three million dollars since the beginning of the month to deal with this sudden influx of migrants.
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since beginning of december, december 9th, around 2400 migrants have traveled to the city, mostly by bus, breaking that down on average, 160 migrants arrive each day. the city is at its breaking point. >> we expected by end of this week we could see another 1000 people. that is going to create a humanitarian crisis because we simply do not have the ability to care for them, to shelter them. we don't want a humanitarian crisis. i don't want you on our streets unhoused in this very cold weather and unsafe and unhealthy conditions as we're seeing in el paso. >> reporter: the city has had to open two emergency shelters and a welcome center to accommodate this influx but the mayor was very cheer they are full. the city can't take anymore. the fear is, if and when more come there will be no beds to accommodate them. the colorado state government has helped the city with managing donations but the mayor tells us they need both the state and federal government to
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open up shelters and help financially if they want to prevent what is happening at the border from happening here. the mayor is confident that the federal government will reach out soon with short term guidance now there is a timeline on title 42 but in the meantime the migrant population continues to pour into the city, increasing their footprint here at a city where as we know the temperature only decreases. edward? edward: absolutely. gets really cold, mile-high city, madison alworth, appreciate it. san diego county, 1000 asylum-seekers have been dropped off at transit centers. the county supervisor jim desmond joins me. what a great part of the country. i love san diego. were you notified by the federal government migrants were coming and dropped off? >> two hours prior to the drop off my office got the notification. we weren't told when. i asked questions will you provide them with tickets or
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money with means to travel to get where they want, get to families wherenever they can find help, the answer was no, no, no. we had 1000 since two days before christmas is when this started. and about 1000 have been coming into san diego county with no resources. the federal government is basically the border patrol is just dropping them off. they're asylum-seekers. once they get asylum seeker status the border patrol cane days. at the end of that time, they have to release them. our services we being a border county, we have 600 beds to service this population but we're full. we can no longer with stand you know anymore. if title 42 drops or when it drops we're going to be inundated. without the federal government stepping in and providing services and guidance for these people they're dropping off in our streets. edward: yeah. this is what i want to get at,
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no extra federal help for this. capacity center is around 600. where are you now relative to your capacity? >> we're full. yesterday we had about a little over 200 dropped off in san diego county. we were able to take some into the shelters. that we've been able to let some people go out of the shelters and they found guidance but, we are full at this point in time. if they continue, you know at this pace, we're not going to be able to sustain this. unfortunately we have huge homeless problem here as well. edward: jim, has there been a dialogue at all where the federal government or you could ask the federal government, hey, hold on until we can get set up to handle this? >> there has been one-adialogue. my peers on the board of sign super advisors head of homeland
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security, area area, one of my colleagues wrote directly to president biden. we have not heard back. here is the border patrol we'll drop off another batch today. we haven't yet heard that for today. it is still early in the morning here in the west coast. but we expected, they are going to keep dropping them off if we don't have room for them, we think the federal government should be providing those services, not the county or the residents of san diego county. edward: the state of california spent more than one billion dollars on migrant support. so ultimately where does all this money come from and you know, do you need more money? what is it you need to handle this or to end this? >> well, we need a secure border is what we really need. and not a porous one people are coming across. secondarily if this will continue to happen the federal government needs to step up with money or with housing or resources for us, at least guidance with these people are
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dropped off. they're bewildered. they're confused. in a foreign country all of sudden, being dropped off a transit center, not knowing the system or anything else or not having money or cell phones to make calls. this is untenable dr. dropping them off with the resources they need. they say they are safely dropping them off. they're not giving them tools to move on. basically charity groups and welfare groups things like that have been stepping up which has been good. we need dollars, we need resources from the federal government if this is the way of the future. edward: so in the last 30 seconds we have, is there a message you have for president biden? >> secure the border and give us resources if you're not going to do that. edward: i appreciate it. jim desmond, thank you very much, county executive there at san diego county, a beautiful part of the country if you have not been. thank you for your time. >> thank you, edward. edward: restaurant in upstate
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new york turned into a ice sculpture over the weekend due to below-freezing temperatures and heavy snow. look at that we'll speak to the owner of that restaurant next. ♪.
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♪. edward: upstate new york restaurant right outside of buffalo completely frozen over, following an unrelenting "bomb cyclone." the owner of that restaurant is joining me now, eileen lang. have you ever seen anything like this before? >> a few other times, yes, not to this level of severity, only
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because this one involved a blizzard. so the wind conditions -- edward: right, you're joining us from the up stays of your restaurant. how did you get in? >> we were, my brother was able to shovel us in yesterday. we were able to open yesterday. at 11:30 and somehow we came up with enough employees, staff to get into the building to make it work. edward: so you just chiseled your way in? you had to break the ice? >> yes. so the picture can be a little deceiving. one side of the building facing the lake, the front side of the building, that is where the water splashed. on the opposite side you're seeing now, that is the side that we used to get to the door. it involved a lot of shoveling, a few feet of snow. edward: a lot of favors you had to give to friends and staff to help out. looked like monsterous looking
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icicles that were feet long. looked like something from a planet from "star wars." what did you think when you first saw this? >> it is very daunting because you don't know exactly when it is going to stop, how large they're going to get and what the thaw is going to bring. you hope for a slow thaw that is really a lot of heavyweight that can fall down periodically over the next few days. edward: how about damage? you look at that building, you is there damage inside of the building, outside of the building? >> so far from what we can tell no damage but again, the unveiling and with the that you might show more than we are aware of right now. edward: did it encase basically the restaurant? we heard on the east coast, a freeze after it is warmer, if you spray down the plants it sort of encases that, keeps them protected. is that kind of what happened.
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>> right, yes. so what happened is exactly what we wanted to happen as far as the waves freezing on impact as soon as they hit the building. underneath frozen ice we do have plywood on windows that allow for us to protect the windows until it freezes, deter water from breaking a window coming into the building itself. edward: when will you reopen? >> we are open right now. we opened yesterday. we're just going to keep going. edward: how much is this going to cost you, this storm? >> i'm not sure yet. we had to close for a few days and, i'm not sure what type of beating the parking lot took. not sure what is broken underneath the ice. so we'll know more later in the week. for sure. edward: since you're open,
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eileen have you had people come up say i want to see this for myself? >> yes, we had a lot of spectators, a lot of people coming to take a look at the ice itself. it is quite dangerous out there though. with it being so slippery, so we're encouraging customers to stay, stay put and just take a look and not go on the patio. edward: glad nobody was hurt. hopefully there won't be damage afterwards, you know ended up sort of best-case scenario but the pictures just astounding. eileen, i appreciate it. thank you for your time. >> thank you, ed, have a good day. edward: you too. so coming up after the break, gig workers can relax a little bit now that the irs will not be snooping on venmo accounts just yet. new rules may may be on hold but our next guest has a warning about the irs and your finances. plus, let's check on the markets on your way out. stocks sliding on china covid worries. the nasdaq at its lowest level since july first of 2020.
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before starting...get checked for tuberculosis. an increased risk of infections some serious... and the lowered ability to fight them may occur. tell your doctor about an infection or symptoms... or if you've had a vaccine or plan to. tell your doctor if your crohn's disease symptoms... develop or worsen. serious allergic reactions may occur. watch me. ♪. edward: so taking out tiktok. administrators in the house of representatives banning the app from all house issued mobile devices. fox business correspondent hillary vaughn live from capitol hill on if this could lead to further bans. hillary? >> reporter: hi edward. this affects anyone who works on capitol hill and has government issued cell phone. if you downloaded tiktok on the phone you have to delete it immediately. the tiktok ban applies to government device on the hill. some government lawmakers want to do more to get tiktok off u.s. smartphones.
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>> this is the first step. they're using all kinds of technology to follow and trace us, biometrics, everything they can see on our phone, where we search, everything. it is really important we keep the chinese communist party in check and keep them, prevent them from continuing to do surveillance at the mass rate. >> reporter: tiktok spoke person is blessing this idea, it is troubling rather than the encourage the administration to conclude the national security review of tiktok, some members decided to push for politically motivated bans that will do nothing to advance the national security of the night. tiktok is still trying to convince government officials they are not a national security risk and get the green light to stay operational in the u.s. while still being under chinese ownership as part of its beijing based parent company bytedance even though tiktok insists the chinese communist party will remain hands off u.s. user data not all lawmakers are convinced. >> i think any business that is
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you know, in bed with the chinese communist party, we need to take a real long, hard look, what they're trying to do. they have been doing this for decades. whether it is ip, stealing ip from american companies. whether using apps to spy on american citizens. >> reporter: senator marco rubio has proposed legislation that would put forward an all-out nationwide ban on tiktok unless bytedance sells ticktock, spins it off from their control and gives up control of the algorithm as well. edward? edward: not likely. hillary vaughn from capitol hill, appreciate it. we'll be talking to arkansas governor asa hutchinson in the next hour on this decision to ban tiktok from state issued devices but now to the irs. delaying the controversial income reporting requirement for u.s. gilling workers. we're talk -- gig workers. talking about the 600-dollar threshold for financial companies to report individuals
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to the irs. the former chief council of economic advisors and the drift author, kevin hassett joins us. regardless whether this suppose into effect the irs is buying an option to harass americans. why do you say that? >> we know the irs has done it before. just like the ticktock story you guys talked about, it is not a good idea to have government tracing where people are, every little transaction. back in 2013 they had an enemies list at the irs. lois lerner the person who coordinated the enemies list held in contempt of congress harassing using irs power to harass conservatives. right now what they want to do, recall that they have got 75 or 85,000 more people coming to do this harrassment. what they want to do, is be able to trace venmo transactions really micro level. the rule right now you have to have 20,000 in revenue from 200 people and then they have to report to the irs.
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here what they're doing is basically saying you have to report to the irs if you have 600-dollar transactions. if you give some money to a church through venmo, all of sudden the irs might put you on a watch list. i find it very, very troubling. edward: the president likes to say, kevin he will not raise taxes on americans making under $400,000 a year but when you allow the irs to do the level of snooping you're talking about into bank accounts when $600 or more are deposited, trying to collect more taxes from americans that is really a tax increase through enforcement, isn't it? >> right. that's right. they call it the tax gap. it really is the case that you know the kid next door might mow your lawn and you might pay him 20 bucks to mow the lawn with venmo and that's what the irs is going after, trying to go after. now they're just delaying it a year. i think again, the thing that disturbs me the most, we know they use the irs as a political weapon against the tea party.
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that they specifically prohibited tea party groups from getting tax except status and so on. so now imagine we're coming into the next presidential election. all of sudden the irs can look at all the venmo transactions from the political opponents, then decide what to do about it. my guess what is going to happen, it will make lois lerner look like mother teresa. that is why they're putting so much money into the irs is because they have a plan sort of similar to the chinese government's tiktok plan to use the data against us. edward: i want to turn now to the federal see reserve showing rising interest rates could cause the housing slowdown comparable to the great recession period. pending home sales show a decline in november of 4% to a record low. you know, a huge surprise to the downside. so for the fed, this means slower economic activity that fights inflation. for the rest of us, it is a lot of economic pain, isn't it? >> yeah. i guess what will happen this
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year the fed will have to tighten until the unemployment rate goes up a lot. when that happens, finally wage and price inflation will go back towards its target. it might not achieve all this year. we're looking at a number of quarters in a row of potential economic pain. the fact this is the cost of all of the expansionary democratic stimulus policies over the last couple years which fed demand while they're attacking supply. so the fed does have a lot of work to do and it hasn't made a huge amount of progress yet. finally just as you led the housing market is the first place you're going to see it because interest rates and mortgage rates have skyrocketed. the cost of buying a median home have about a monthly cost have about doubled because of a huge increase in interest rates. edward: you jess mentioned, touched on that, this is where we start to see it. even if i'm not buying or selling a home, the slowdown affects me, doesn't it? >> yeah, for sure. don't forget the home construction is one of the keys
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to to a healthy economy, when you build a new house it doesn't have washer dryer or tv or furniture. so low interest rates lead to housing boom which make industry across the u.s. flourish. if you cut that back, then the opposite happens. so the negative effects you mentioned the great recession. the negative effects of fed policies we don't know how serious they will be yet but i think all economists expect we'll have recession this year. that it is going to be one of the worst recessions, one of the deeper recessions we've had since the great recession. may be comparable to '82 when paul volcker, ronald reagan worked together to whip inflation. edward: one thing on inflation. we've seen inflation, core inflation is it really, federal reserve chairman saying it move sideways. see it come down a little bit. again in the same spot it was in july of this year. so are you concerned about that core inflation and where we are
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right now? >> yeah. again what happens in a recession that has stagflation like we see right now is that wage inflation becomes like a lower bound for price inflation because firms will go out of business if they can't have their prices go up in order to labor costs. so what happened it gone down that far. edward: we're coming up to hard break. hate to do this appreciate your time. really good insights. we'll have more on the market the coming up next. ..
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