MARIA-02
EgyptAir 804; Will Fed Act This Year?; Trump Eyes New Mexico; Why Partisan
Politics Works; Credit Card Debt Nears $1T - Part 1>
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Hilsenrath, Dean Parker, Mitch Baumeister, Martin Feldstein>
New Mexico; Donald Trump; EgyptAir; Federal Reserve>
(COMMERCIAL BREAK)
MARIA BARTIROMO, FBN ANCHOR: Good Tuesday morning, everybody. Welcome back. I'm Maria Bartiromo. It is Tuesday, May 24th.
Your top stories right now at 7:00 a.m. on the East Coast.
A shakeup at the TSA, long lines at airports across the country costing one top official his job.
Breaking news this morning: new details in the EgyptAir crash. A senior Egyptian official telling the Associated Press this morning human remains have been found suggesting an explosion may have taken down that aircraft.
A busy day on the campaign trail to report. Washington State holding its Republican primary. We're only two weeks away from the California primary and Donald Trump is hosting his first fund raiser with the RNC today. Now Hillary Clinton and Bernie Sanders targeting Trump over his finances and economic policies.
(BEGIN VIDEO CLIP)
HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: Trump economics is a recipe for lower wages, fewer jobs, more debt.
SEN. BERNIE SANDERS (I-VT), PRESIDENTIAL CANDIDATE: Trump is a multibillionaire or so he tells us. We don't know if it's true or not. You know, he lies every day. Probably he's broke, I don't know.
(END VIDEO CLIP)
BARTIROMO: Meanwhile, Warriors star Draymond Green not facing suspension over this controversial act but he will have to pay up. Details coming up on that.
A startling valuation for Snapchat with the latest round of funding means for the social media giant.
And markets this morning a mix, mostly higher. Mixed moves overnight in Asia. The Nikkei average reports seeing the sharpest decline as the Japanese yen strengthened again against the dollar.
In Europe this morning stocks are turning higher. Eurozone finance ministers meeting today over the bailout of Greece.
And in the U.S. futures are pointing to a higher opening for the broader averages. Take a look. Dow Industrials expected to open up about 50 points this morning. Nasdaq, S&P 500 also higher.
Later this morning, we get a reading on new home sales. That comes out at 10:00 a.m. Eastern and, of course, later on in the week the GDP report is out.
Joining me this morning: Fox Business Network's Dagen McDowell; the "Wall Street Journal's" chief economics correspondent Jon Hilsenrath; and Proactive Communications president Mark Serrano.
MARK SERRANO, PROACTIVE COMMUNICATIONS: Good morning.
BARTIROMO: Good to see everybody.
SERRANO: Good to be here.
BARTIROMO: I don't know. I have to say AFLAC again.
JON HILSENRATH, WALL STREET JOURNAL: Let's do it again.
BARTIROMO: That was great. We've got a can't-miss lineup this morning. Stay with us.
Former Ben Carson national campaign finance chairman and Donald Trump supporter Dean Parker is with us along with former Reagan economic adviser Marty Feldstein, Mastercard North America president Craig Vosburg, along with former McDonald's U.S.A. CEO Ed Rensi. Plus Republican Congressman Joe Heck with us. You don't want to miss a moment of it.
We've got a big show this morning. And we take it off right now with our top story this hour.
The TSA removing the head of security operations as airport lines keep getting longer. Blake Berman is in Washington. He's got the story right now -- Blake.
BLAKE BERMAN, FBN CORRESPONDENT: Hi there -- Maria. Good morning to you.
If you have stood in one of those miserable security lines at an airport recently and thought to yourself someone has got to be held responsible for all of this madness, well now, that indeed has happened.
The former TSA head of security Kelly Hogan was replaced yesterday effective immediately. The top boss the Transportation Security Administration announcing Darby LaJoye as his replacement. LaJoye has held similar roles at New York's JFK and Los Angeles' International Airport.
A sudden spike in wait times we have seen this for days and weeks, sometimes hours long at airport security lines has become a phenomenon. The TSA has in part blamed a surge in travel combined with a shortage of security officers due to budget cuts.
The TSA head Peter Neffenger also announced a few more changes yesterday in a department wide letter. Among them at Chicago's O'Hare International Airport which has seen some of the worst waits. A new team there will oversee screening operation an incident command center has been established at TSA headquarters.
Neffenger writing of the changes, quoting here, "These adjustments will enable more focused leadership and screening operations at critical airports in the national transportation system.
However Maria, the question for passenger who are boarding planes at this very moment will do so later today and in the days and weeks to come is this. Are these adjustments a permanent solution or just a first step in a system that still needs a whole lot of fixing going forward? We will see here in the upcoming days.
Back to you.
BARTIROMO: All right -- Blake. We will be watching that.
Obviously, Blake Berman.
Turning to the latest from the campaign trail, the general election is swinging further into gear with Republicans in Washington State set to cast their votes today in the state's primary presumably giving Trump 44 delegates. This as a GOP presidential presumptive nominee gears up for his first coordinated fundraiser with the RNC in New Mexico tonight.
My next guest says Trump will have no trouble raising the money he needs to fight Hillary Clinton and that he will win the general election in November. I want to bring in former Ben Carson national campaign finance chairman and a Donald Trump supporter, Dean Parker.
Dean -- good to see you, thanks so much for joining us.
DEAN PARKER, DONALD TRUMP SUPPORTER: Great to be back with you -- Maria. Good morning.
BARTIROMO: So why are you so confident that he will be able to raise the money? There was some debate yesterday talking about a billion dollars.
PARKER: Well, there's a couple of things going on. I think one reason that I chose to join his advisory board for the Great America PAC is we get down to that -- we need to get down to unification. After 17 candidates, he won the outright ability now to be the presumptive nominee. We need to come back and start unifying the party now and not tearing it apart.
And with this process, it comes down to people putting down their weapons and everything was done against each other during this last race. And we focus now on moving forward a win in November. That is the real -- what you see happening right now.
BARTIROMO: Mark Serrano -- do you agree with that? Do you think that now the Republicans are going to coalesce behind Donald Trump and make it easier for him going into November? Because you are still seeing some pushback.
SERRANO: You know what -- they have? They are coming and unifying behind Donald Trump in recognizing that this Never Trump Movement had little life to it and little purpose, you know. And Dean, you probably would agree with me to say that a lot of the folks who are ready to cut checks are the ones who have looked at the last seven years the way this economy has been restrained and damaged and are looking for us to unleash the power of this economy particularly with the corporate tax cut rate that Donald Trump is proposing. Would you agree?
PARKER: Yes, I think that is coming across both parties. I can't tell you how many CEOs I sit with as vice chair for the southeast with YPO. And you are hearing again and again that many of my Democratic friends that run very large Fortune 500 and 1000 businesses, they are not going to go back a Democrat again. They've got to go forward with somebody that's going to be pro-business that's going to give them a chance to move forward.
It's hard for them to make profits when they're worrying about increased regulation. If you look at the amount of regulation that's been added in the last seven years, it's a staggering rate. At the end of the day, we've got to be pro-business if we are going to turn this country and continue to move us forward in a way that's going to put us back into domination mode.
DAGEN MCDOWELL, FBN HOST: That's one of the reasons that Hillary Clinton is now leaning on her husband's record during the 90s -- right?
PARKER: Right.
MCDOWELL: It's an act of desperation, but it's -- hey it's two for the price of one if you will. And I think that is a little dangerous for her because again, we played that Donald Trump ad about Bill's past sexual problems if you will. But I think that that opens the door for those kinds of attacks if you're going to run and say my husband is going to be involved in my administration. You are opening yourself up.
SERRANO: You can't have it both ways. You can't say that, you know, people are still struggling today and then forget that the White House has been run by a Democrat for the last two years.
Maria: Well, that's true. Because you know, you haven't seen 3 percent economic growth any year on the President's reform --
HILSENRATH: But that's what they -- they hark back to is the 1990s when we did have that kind of economic growth.
BARTIROMO: Right, but you know, in the last 10 years --
(CROSSTALK)
BARTIROMO: -- yes, we haven't seen much of a recovery.
Dean, what about both Hillary and Bill Clinton as well as Bernie Sanders going after Trump and attacking his finances? Listen to this.
(BEGIN VIDEO CLIP)
CLINTON: Trump economics is a recipe for lower wages, fewer jobs, more debt. He could bankrupt America like he has bankrupted his companies.
I mean, ask yourself, how can anybody lose money running a casino -- really?
BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: Her opponent who never tires of telling us how much richer he is than the rest of us won't release his tax return.
SANDERS: With regard to Trump, this is really hysterically funny. Trump is a multibillionaire or so he tells us. We don't know what's true or not. You know, he lies every day, so probably he's broke.
(END VIDEO CLIP)
BARTIROMO: Dean -- what are your thoughts on this?
PARKER: I think it's a couple of things. I find it fascinating that now we are going after a specific business. You know, at the end of the day, anybody that's had to carry a payroll, anybody that's had to go out there and grow a business knows that you are not perfect. Every time that you are, you're not going to grow.
So yes he made mistakes. Yes, he had businesses that didn't succeed. But overall he had more wins than losses. I want to ask the last lifetime Bernie carried a payroll. When was the last time Hillary drove a car? When was the last time she had to make payroll? These are real things that business owners face every day.
BARTIROMO: Yes.
PARKER: And the more that I believe that the Democrats continue to focus on these things, the more it outrages Americans.
If you look at some of the statistics we see right now people across America are just fed up with Washington. They are fed up with being told how to live their lives. As Dr. Carson used to say over and over again this is a citizen statesman you are looking for. This is somebody that goes to Washington I carry the (inaudible), I've had to do these things. I've had to go out there and do this.
And it's really hard to say if you've been in Washington for 30 years and your husband was president that you could understand where it is. You can understand giving out more money to people that are willing to work but that's a little different that having to make payroll.
BARTIROMO: That really resonates.
HILSENRATH: It's the establishment versus the antiestablishment.
BARTIROMO: But to say, look -- Bernie Sanders. When was the last time he managed a payroll? When was the last time he created jobs?
SERRANO: This is why the billion dollars is attainable.
BARTIROMO: Yes.
SERRANO: It is achievable because of the economic anxiety among, you know, the big donors.
MCDOWELL: I think he doesn't even need a billion. I think he can get by with half a billion given the TV exposure he's got.
BARTIROMO: Could because he's been doing it on a shoestring anyway up until now.
MCDOWELL: Look at that Instagram ad he put out. It was short and it was sweet and it hit Bill Clinton were it hurt.
SERRANO: And the earn that he'd gotten out of it was tremendous.
BARTIROMO: Yes, exactly.
Dean, real quick on Terry McAuliffe, how bad is it? He's under FBI investigation right now.
PARKER: I think it will be very interesting to see what comes out of there. I think it's ironic that the Virginia which is closest to Washington had the last three governors in trouble. So it just goes along the same line we're talking about and I think we need to watch this closely and see what comes out. We have wonderful people in our Justice Department and our administrations and in our law enforcement and they'll do a great job finding out the facts for us.
BARTIROMO: All right. Dean -- we will leave it there. Good to see you. Thanks so much for joining us. Dean Parker this morning.
PARKER: Nice to see you too -- Maria.
BARTIROMO: Coming up, breaking news this morning as human remains were found from the downed Egyptian airliner. It reportedly suggests there was an explosion on board. We will talk with an expert next.
Then U.S. credit card debt headed to the trillion dollar mark. Why you need to be concerned.
And they just keep snapping up cash. The latest round of funding pushing Snapchat's valuation to near $20 billion. We've got the details next.
(COMMERCIAL BREAK)
BARTIROMO: Breaking news this morning on EgyptAir flight 804. A senior Egyptian official telling the Associated Press that human remains have been found suggesting an explosion may have taken down the aircraft.
Aviation attorney Mitch Baumeister joins us now on the phone from Paris. He is the former lead attorney in the Lockerbie trial and TWA 800 and EgyptAir 990. Mitch -- thanks very much for joining us.
MITCH BAUMEISTER, AVIATION ATTORNEY: Good morning. Good morning.
BARTIROMO: What do you make of these most recent comments from aviation officials and Egypt1Air? Human remains being found suggesting also that an explosion occurred on the plane. Does that lead you to believe it was terrorism?
BAUMEISTER: Well, it's absolutely -- I have felt from the beginning, Maria, that it was terrorism and more than likely than not a bomb because there are a lot of facts that are consistent. These are some of the preliminary evidence that's coming out.
Sadly, the victims' remains are small. The debris that has been found is small. If you think back to a number of the explosions that occur, let's talk about Pan Am 103. The front of the aircraft separated then there was an in-flight break-up of the aircraft at the altitude and the wreckage was scattered over hundreds of square miles over the land of Scotland which they picked up. But there was a big section that crashed into town.
I suspect ultimately this will be small and fine debris if it is and I believe it probably is a bomb. It would be small debris spread out over probably hundreds of miles with possibly big sections of the aircraft somewhere below the Mediterranean.
BARTIROMO: Yes.
BAUMEISTER: Yes. The question really comes down, people don't think about it and Pan Am, Lockerbie, the bomb coincidentally was at a structural point that allowed the front of the plane to separate and that caused the plane to crash. Now, we don't know if this bomb was in the cargo hold, if it blew off the tail, if it blew off a wing. We don't know if there was a terrorist bomber in the cabin area.
BARTIROMO: Right. And just to be clear they are saying it's an explosion, Dagen, not necessarily a bomb. But we're waiting to find out if in fact an explosion means a bomb. It certainly sounds it. But one of things that you've been mentioning Dagen, is the fact that that you don't get any information from EgyptAir.
MCDOWELL: Right.
BAUMEISTER: Well, let me tell you. As one of the lead lawyers in EgyptAir 990 --
BARTIROMO: Yes.
BAUMEISTER: -- where the copilot drove the aircraft into the ground. We investigated that, took the depositions, worked with our NTSB. The official cause of the EgyptAir 990 was an intentional act of the pilot. The Egyptians rejected even though they asked us to become involved, the NTSB, not us the lawyers, but the NTSB. And even though they got the official result, they rejected it and said it was a mechanical error. They always played things close to the vest and information coming out. This will be very slow.
But as a final point, we rule out there is no significant weather. We know there was no midair. We know there was a sudden -- first thing pilots do is fly the plane -- I'm a pilot for 40 years and a pilot lawyer -- is fly the plane and then communicate if you can. They couldn't communicate. There is no other -- we can rule out weather. We can rule out midair collision.
And here, the damage pattern so far is consistent with some kind of an explosive event. Not a bomb. I think probably the only explanation is a bomb. The only other in-flight explosion that occurred in my 40 years of practicing law and handling aviation cases with TWA 800 which in my opinion was a center fuel tank explosion. Every other explosion or explosive event has been a terrorist act.
My gut tells me this is terrorism. It's an explosion and we are beginning to see the early signs. The black boxes will be key to the sudden onset and the place of the bomb -- cargo hold and in the cabin.
HILSENRATH: Is anyone taking credit for it? If this was an act of terror, where are the arms going up?
BAUMEISTER: Ok.
BARTIROMO: Yes, real quick -- Mitch.
BAUMEISTER: Yes, real quick. If this was an internal splinter group within Egypt to send a message to the military powers there to be, it may be that they are not that interested publicly in talking about this. If it was an outside Egyptian group, it may be a different story.
Do I have the answer to that? No. But I'm not a terrorist expert, I am an aircraft expert.
BARTIROMO: Yes. So you still think that this is probably terrorism even thought no terrorist group has actually claimed responsibility.
Mitch -- a lot of questions. We're waiting on more answers. Good to speak with you, sir. Thanks very much. Mitch Baumeister --
BAUMEISTER: Good to talk to you -- Maria.
BARTIROMO: -- joining us this morning on the phone.
Meanwhile, the Romanian hacker who says he breached Hillary Clinton's personal e-mail server is finalizing a plea deal.
Cheryl Casone with those details on a developing story this morning -- Chery.
CHERYL CASONE, FBN CORRESPONDENT: This is a developing story -- Maria.
Fox News has learned that this Romanian hacker indeed, this Marcel Lehel Lazar, he is also known as Guccifer is working out details of a plea deal with the FBI and the U.S. attorney. A spokesman for the U.S. attorney's office confirming a change of plea hearing now set for tomorrow morning. This is happening quick. Guccifer is now expected to plead guilty to some charges.
Well, switching gears now. How would you like to try a Red Angry Birds Burger? McDonald's in Singapore, they're giving two Angry Birds sandwiches. One is fried chicken sandwich. It's got a red bun. The super red burger has got a smoky fried chicken patty. It's got a fried egg. It's got lettuce, tomato and then a fiery pepper mayo. Not safe for kids, probably. There is also the (inaudible) pork burger that comes with egg, lettuce, and a mystery jalapeno sauce and a green bun. So far it's just available in Singapore.
Some big news in technology this morning. Tech Crunch reporting that Snapchat is raising another $200 million which puts the valuation of the L.A.-based company at $20 billion, maybe more. The instant messaging app popular with millennials has had rapid growth since launching five years ago. The start-up (inaudible) has over 100 million daily active users of its photo and messaging service.
Meanwhile this news. 20th Century Fox is going big with its Snapchat based promotions for "X-Men: Apocalypse". Not only are the mutants taking over all of Snapchat lenses to promote the film, users can now buy tickets to the movie directly from the Snapshot adds. Maria -- X-Men: Apocalypse hitting theaters on Friday. Just in time for the holiday.
Back to you.
BARTIROMO: All right. That's going to be a big one. Thank you -- Cheryl.
Coming up: the U.S. approaching $1 trillion in household credit card debt. But are big lenders to blame. We'll take a closer look at the debt consumer space.
Plus, Lebron James and the Cleveland Cavs in hot water after losing back- to-back games in the Eastern Conference Championship. Why it's up to the four-time MVP to pull his team out of this slump.
Back in a minute.
(COMMERCIAL BREAK)
BARTIROMO: Welcome back.
Later this morning we get a look at new home sales for the month of April kicking off a busy week on the economic calendar leading up to Friday's GDP report. That will be the second revision for the GDP.
Investors watching for clues on whether the Federal Reserve will raise interest rates in June. Joining us right now former Reagan council of economic advisers chairman and former Jeb Bush economic senior adviser, Marty Feldstein. Marty -- always good to see you.
MARTIN FELDSTEIN, FORMER REAGAN ECONOMIC ADVISER: Good to be with you.
BARTIROMO: Thank you so much for joining us.
We want to kick it off with this op-ed that you wrote in the "Journal" on the 17th of May as to why the Fed's inflation fixation needs to be ended.
FELDSTEIN: Well, it is not that they are paying too much attention to inflation. It is that they have this target and their target is 2 percent. And by the way they counted, they are now at 1.6. So their argument is we have to keep interest rates super low to get from 1.6 to 2. Who cares? Who cares?
BARTIROMO: Yes. So you think the Fed should be raising rates?
FELDSTEIN: I certainly do.
BARTIROMO: And do you think we'll see that in June?
FELDSTEIN: I hope so. I think they've now sent enough signals so they're not going to be scaring the market or surprising the market if they actually move --
BARTIROMO: Let me get John Williams' comments in here because on "Sunday Morning Futures" this weekend the president of the Federal Reserve is San Francisco, John Williams, talked about raising rates going into an election year. Here is his answer to that.
(BEGIN VIDEO CLIP)
JOHN WILLIAMS, SAN FRANCISCO FEDERAL RESERVE: We have proven over and over again that we can act in a presidential election year taking controversial policy decisions. We've done that before. We'll do it again. We are about as apolitical as you can imagine. Just focus on our goals.
BARTIROMO: So in other words, nothing is off the table. You could see rates going higher than in September right before the election?
WILLIAMS: Sure.
BARTIROMO: Or October?
WILLIAMS: It will be based on the data, based on our analysis. I mean we are really focused on the economy, what they get to tell us and how to best achieve our goal.
(END VIDEO CLIP)
BARTIROMO: And Marty, when he focuses on the economy, he said in his part of the world, and that's obviously San Francisco, it is booming.
FELDSTEIN: It is booming in the U.S. because of Fed policy. The Fed has brought us back to full employment.
HILSENRATH: Marty, you say the Fed should be raising rates. What is the urgency when inflation has been below this 2 percent goal for almost four years now?
BARTIROMO: That's the issue.
(CROSSTALK)
HILSENRATH: When the economy is barely growing?
FELDSTEIN: So there are two reasons. One is that inflation is rising. If you look at CPI, which is what most people look at, the CPI, the core CPI - -
BARTIROMO: Consumer Price Index.
FELDSTEIN: Consumer Price Index -- take out energy is up 2.1 percent relative to a year ago period. If you went back a year it was 1.8 so it is rising and rising faster as you would expect in a full employment economy. So you want to be ahead of the curve on that.
But the other thing is these super, super low interest rates that we've now had are I think distorting asset prices all across the world.
HILSENRATH: One of the things that will be distorted if the Fed raises rates aggressively is the dollar. We're going to see a much stronger dollar. What do you say to American manufacturers who get hurt by that?
FELDSTEIN: You know, the dollar will move wherever the dollar moves. And there will be gainers and losers in that process. American consumers will be gainers. They'll spend some of that money buying manufactured products made in America. So I don't think we should allow that to distort what is really the risky situation in which very low interest rates are driving up commercial real estate and equity prices and other things.
MCDOWELL: You were an adviser to Jeb Bush. Have you endorsed Donald Trump?
FELDSTEIN: I have not endorsed anybody.
MCDOWELL: Are you going to?
FELDSTEIN: I don't see any need for me to endorse anybody at this point.
HILSENRATH: Trump has said that tax rates on the wealthy are likely to go up. Is that a Republican -- is that part of the new Republican platform?
BARTIROMO: Well, wait a minute. He said that his tax plans are going to go down but they would -- after being negotiated with congress, they would go up from his lower level. So he did say that he is going to lower taxes overall.
FELDSTEIN: So if you can figure out what the bottom line is on that, that's pretty good.
BARTIROMO: What does the economy do under a Trump presidency in your view given his economic plan?
FELDSTEIN: I don't think we know his economic plan. I think that -- my hope is that we will see cuts in the corporate rate, that we will see moving to a territorial system.
BARTIROMO: Well, that's what he says. 15 percent corporate rate.
(CROSSTALK)
HILSENRATH: In the beginning he's had a plan since last September to call for a 15 percent corporate tax rate.
FELDSTEIN: Yes. Well, 15 will be hard to get through Congress. But as he said he's a good negotiator and we'll see what comes out of that negotiation. But even if it came down from 35 -- remember that's where it is now -- 35. Even if it came down to 25, that would get us in line with the rest of the industrial world.
BARTIROMO: Would that create euphoria? Would that be a growth catalyst?
FELDSTEIN: That would be certainly -- that plus moving to a territorial system, meaning that we will not penalize American companies who earn profits abroad and right now can only bring it back by paying against a tax rate of 35 percent.
BARTIROMO: Real quick -- Marty, I know you're just back from Japan. Why have negative interest rates failed?
FELDSTEIN: Well, they scared the Japanese investors. They're hurting the Japanese banks and the Japanese insurance companies. So they're not really accomplishing anything for the Japanese. And they acted -- they seemed like a desperate act on the part of the central bank that has been promising 2 percent inflation year after year and not coming close.
