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tv   After the Bell  FOX Business  May 9, 2016 4:00pm-5:01pm EDT

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>> amazon hard to get into that, have any competition to get gnat market. amazon prime now, huge right now. [closing bell rings] liz: here comes the closing bell. we want to thank steve dudash. the dow down 42. let's get over to the closing bell. david and melissa pick it up from here. david: stocks ending the day mixed with the dow dipping into the red. look at oil and gold, ending down more than 2%. busy movement for commodities. i'm david asman. melissa: i'm melissa francis and this is "after the bell." new at this hour, the war on wealth. donald trump changing the tune on the tax plan telling fox business he may have to raise taxes on the rich. this as protesters storm a hedge fund in chicago, demanding the wealthy pay more to help their cash-strapped city. treasury secretary jack lew in puerto rico trying to convince congress to step in to help the struggling island while many are
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worried we are setting a very dangerous precedent. peter barnes is there with the secretary for fox business exclusive. that is coming up. david: we await that. meanwhile hundreds of protesters targeting citadel headquarters, hedge fund run by ken griffin in chicago. they are demanding higher taxes for the wealthy. our own jeff flock at the beginning of it all. what is the latest? reporter: citadel that the is building. citadel means fortress but today the fortress was breached it was quite a scene in dearborn streets. hundred of protesters gathered on federal plaza, surprised everyone with, surprised building. bottom protesters inside of the building and handcuffed themselves to each other inside of cylinders that made it impossible at least for a time to have police separate them. this is the message. citadel run by ken griffin, the wealthy make too much. they introduce ad proposed
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budget for illinois. maybe they have better luck passing a budget than the legislature and governor have. this is calling for $23 billion in new revenue. higher taxes for wealthy with graduated income tax and lasalle street tax with portion of each trade executed at cme as well as closing cooperate loopholes. david, they were targeting citadel although i think as melissa pointed out earlier hedge fund profits are taxed at ordinary rates. not like the lasalle street tax issue or i know, other issues. so they're paying their fair share over there. at same time illinois without a budget, very frustrated if this state. programs shutting down. schools shutting down. things are coming to a head in a state that doesn't have a budget, not enough money to pay its bills. david: if citadel and other companies move out because of higher taxes they have less
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money money than they have now. >> reporter: who will be in the building. david: it could be empty building. >> cheap. david: thanks, melissa. melissa: scott shellady, joins us from the cmen chicago. >> what do you make of protests. >> another sign the world lost its mind and ken griffin didn't spend the money. he created jobs. politicians spent all money and didn't grow the economy. guess what happens, we have no money. what are we supposed to be tax our way out of the problem or grow our way out of the problem? they should be in springfield and washington, d.c. they don't need to be at citadel. melissa: it is amazing to me. he has a profit sheet, a balance sheet that shows a profit that he managed properly and the city has ignored their balance sheet and wildly outspent what they have taken in and somehow
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protesters are mad at citadel? they paid their taxes. i don't even understand the argument, how they reconcile it? >> i'm sure you already heard, upper 20% pays 84% of the tax. if you're not a democrat or republican or common sense-ican. how much do you want the them to pay? what is the number? i think those people protesting right now, their own taxes will have to go up to get out of this problem, not just ken griffin. melissa: another point we make when we do the stories where do the protesters come from? it was obviously professional thing they did. they knew how to change themselves to each other to be difficult to remove them. like donald trump said, they're professional protesters? who is behind this? who is hiring them? who is bringing them in? why? what is their agenda? this is another thing i ask you, when do you talk to ordinary people in the public do they think the protests spring up out of nowhere as people filled with passion or do they understand it
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is a business? >> obviously it's a business and they're paid for by somebody to show up to do what they do. we all have different ideas who that may be. at end of the day what they want to happen foes through, tax in cme on trades or tax on citadel. with will make their spending go higher as well. it goes down the line. markets widen out. not getting as much money for debt. not going to settle bonds. everything has knock off-on effect. politicians spent money and didn't give us growth. that's it. melissa: i hate to say it, because i don't want to say it about your job, one of the easiest things to move is electronic. if they want to electronic trading if they want to tax the hell out of it, very simple to move that business in another exchange. >> not in illinois. melissa: in oil know or chicago. ail down 2%. how much is being driven by some
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call firing or retirement of long time arabian oil minister naimi over 80 years old, who was at helm forever in the eyes of saudis did a faithful job for a long time keeping control of market and replaced by someone inside of saudi aramco worked alongside of him. i don't think it is big of a shake up. having spent a lot of time, knowing naimi his replacement and i don't think this is big as shake-up the news media tries to make it out to be. what do you make of that down there? >> the shake-up is drama but he is old, that shouldn't be unexpected, number one. that number two, combined with other things got people riled up. they had to float a bond first time ever to pay for their overhead. they had been able to do that out of oil but slowly but surely they have gotten tight around floating 5% of the aramco. those three things together got everybody nervous. we might see volatile summer as
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far as oil goes. ultimately about supply and demand. we still don't have demand. can't get any economic engines around the world. we have oil supply glut on our hands. there has to be new growth to solve protesters problems and get oil price higher. melissa: isn't that the truth. growth would solve all the problems. scott shellady, appreciate your time and your jacket. david: he invented a new political party. not republican or democrat he is common sense-ocrat. melissa: i love that. david: how will the protests in chicago impact the 2016 race at all. bret baier host of "special report" on fox news. bret, i may be conspiracy theorist i think more than coincidence they pick a conservative republican like ken griffin to protest rather than democrat. let's face it, "wall street journal" had a long piece today how a lot of wall street types are switching from republicans to going for hillary clinton. so, they could just as easily
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have chosen one of these wall street types who is for hillary clinton. >> that's right. first of all i'm sorry i'm not wearing my cow jacket. david: that's all right. you still are have a lot of common sense. >> listen, i think you're right. i think that a lot of this is astroturf protests that kind of pointed in a way and you bring up a good point. much of wall street is heading hillary clinton's way. i do think that it is interesting this piece about hubbard broadcasting ceo billionaire stan hubbard saying he is going to back donald trump and he is going to do whatever he can. david: right. >> to help donald trump. and saying that of these protests that, you know, they invested, they took the money, put it all on the line when he was doing his company. it goes against a lot of what president obama has said before. howard university this weekend
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saying rich got lucky. david: we'll talk more about that. >> in the past election when he said you didn't build that. david: brit, we actually had, we had him on, neil cavuto's show earlier this year, he said he is going to go with donald trump. going to hold his nose at certain points he said frankly donald trump was not his first choice but at -- leaves me to ask about paul ryan. obviously donald trump is not paul ryan's first choice and the question is whether paul ryan at anytime go for donald trump? what is he waiting for? >> well i think a couple of things, david. one he wanted to give his colleagues in the house a little breathing room, a little cover. obviously trump seized this nomination pretty quickly. people could see it coming but i think there was a thought that a contested convention might happen. now suddenly there is no chance that's happening. i think ryan is trying to also protect the things that republicans in the house have been working on.
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they have been trying to come up with legislation on obamacare repeal an replace. tax reform specifics, deficit dead reduction specifics. they wanted to layout a blueprint ahead of the convention of the problem is that the blueprint they're working on is not tracking with what the nominee is saying out and about in interviews. david: sarah palin, talking about conspiracy theorists, sarah palin is putting something out there in fact paul ryan is looking to 2020. he doesn't want to endorse donald trump if trump loses and that could hurt ryan's chance of running for president in 2020? >> i don't think that's really the driving force. i think sarah palin is obviously standing by donald trump and says she will primary and help the primary opponent of paul ryan in wisconsin. i think that is a long shot as the speaker is probably pretty solid back in janesville. i do think that ryan is trying to protect some of the things
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they have been working on and maybe this meeting is a meeting of the minds on policy to go forward with republicans and trump. david: that is for, scheduled for thursday and we will be watching very closely to see what happens. bret baier, thank you very much for coming in, appreciate it. >> see you, david. melissa: mental competency lawsuit against 92-year-old media mowing fell sumner redstone has been thrown out. ashley webster has the details on this one. as this soap opera turns, ashley. >> it was quite a is alicious trial. it was thrown out with prejudice which means it can not be brought back again, done, said the judge however this decision has nothing to do with sumner redstone's ability to manage the two company that he has 80% stake in. both companies, that would be viacom and cbs. and you can be sure that the investors of both those companies kept a very close eye on this trial. now, viacom down 2%, cbs down nearly 3% today. all of this of course bought by the original lawsuit by manuela
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herser, the ex-girlfriend that helper for sumner redstone. she is one that brought the lawsuit. upset the judge said, look, mr. redstone never set foot inside of the l.a. courtroom but media mogul certainly in taped testimony made it very clear in language that can not be repeated on television, that he was competent and that this woman deserved nothing. based on that the judge threw it out. he did step down as executive chairman. mr. redstone, that is, earlier this year. there have been questions from shareholders about his role in these two companies and his influence. if there was to be another suit, it would have to be brought now by the trust that has been set up, a seven-person trust that includes his daughter sherry redstone that would have to go before a judge with questions about his competency. there are no such questions. as you can see viacom and cbs moving lower in today's session. melissa: ashley, thank you.
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david? >> my pleasure. david: debt crisis in puerto rico. how much are taxpayers on the hook if we bail them out. are a lot of other states going to follow suit? we'll ask treasury secretary jack lew the tough questions live from puerto rico in a fox business exclusive that is coming right up. melissa: army budget cuts sending active duty troop levels to a 76-year low. is that putting our security at risk? david: is donald trump changing his tune on taxes and minimum wage? he says no. our panel weighs in. >> i would like to leave it to the states but i will tell you $7.25 is pretty tough. and as far as i'm concerned, i could see something happening there. ave a perfect driving record. perfect. no tickets. no accidents. that is until one of you clips a food truck, ruining your perfect record. yeah. now you would think your insurance company would cut you some slack, right? no. your insurance rates go through the roof... your perfect record doesn't get you anything. anything.
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e.t. phone home. when you find something you love, you can never get enough of it. change the way you experience tv with xfinity x1. shoah, ha ha.ew artist. show me top male artist. my whole belieber fan group. it's not a competition, but if it was i won. xfinity x1 lets you access the greatest library of billboard music awards moments, simply by using your voice. the billboard music awards, live sunday may 22nd, 8/5 pacific, only on abc. melissa: trump adding to series of policy changes as he
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transitions to the general election? this time on promise to cut taxes. >> i said of the low proposal i may have to raise it a little bit because this is a negotiation. i may have to raise it. i could see the wealthy getting raised but i'm not talking raise from where they are now. i'm talking about raise from my low proposal. melissa: which would still be lower than where they are now just to make it clear. days after the presumptive republican nominee said he would consider raising the minimum wage. lisa booth, high noon strategies, founder and president, rebeccaburg, real clear politics national reporter. thanks for joining us. rebecca, how do you rate this? he is still saying the rate will be lower than it is right now for top earners but he adjusted it in the face of moving into the general election? how do you parse this? >> frankly he is adjusted this remark from what he said over the weekend on "meet the press"
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and abc this week, when he said with no reference to his proposal whatsoever, but just the current tax rates saying that at the end of negotiations actually taxes for the rich would probably be higher and they would probably be paying more. frankly donald trump is not just pivoting from his primary stance on taxation and his primary plan but also -- melissa: no, i think you're one comment behind, rebecca, he is talking about, he clarified what he meant from his original policy. hang on. >> might call it clarification. melissa: no, it is numbers. very straightforward math. he is talking about it was 25 -- i'm sorry. excuse me, lisa, would you like to get in here, he is talking about from 25% from highest bracket which currently paid 39.5%. he is a saying it may have to be higher than 25. do you like rebecca think that is total flip-flop or do you think this is moderation from the primary or neither? >> i think donald trump, and this is going to be learning
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process for him because he hasn't been a politician. this isn't something -- look at candidates like ted cruz and hillary clinton, they're very, they have their talking points down. they know precisely what they're saying. this will be a little bit of a on the job learning training for donald trump because he needs to be very careful in clarifying his statements because they are going to be up for determination by media and spun by the media. hillary clinton will be act stiffly trying to turn anything he -- actively trying to turn anything he said to -- he has to be very careful into statements he is making. it gets a little bit confusing. that is why he has to be very careful in what he says. melissa: i think he would actually like rebecca's interpretation. i think it is deeper than that what he is trying to do, trying to say something like a rorschach, whoever listens to it hears what they want to hear. for example, when he says $7.25 is too low for minimum wage, you have to raise it, that excites people on the left thinking about him after bernie
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sanders is out and looking a at hillary clinton, well this guy favors raising minimum wage. people on the right are like, well, probably closer to me than hillary clinton. so rebecca, i think he is saying things so that people can interpret them the way they want to like a good politician? >> i would actually agree with you. it seems like he is being purposely vague. melissa: yeah. >> interesting your colleague neil cavuto in interview recently with mark cuban who is close with donald trump, donald trump talks about their friendship often, and cuban said he donald trump run a "seinfeld" campaign, a campaign about nothing. avoid policy specifics wherever he can, let his character and style and his persona take the lead on this campaign. so far i think we're actually seeing that come to fruition with donald trump. melissa: lisa, last word real quick. go ahead. >> we saw him on the minimum wage too. he made statements about wages.
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didn't walk it back necessarily but clarified, i'm talking about saying it is up to the states. melissa: great. >> but that is what i mean. it is important when you're talking about those things to make a little bit more of a declarative statement although i understand what he is trying to do. melissa: unless you're intentionally trying not to and -- it will carry you through. >> we'll speculate. melissa: thank you. david. david: all leading up to a deal. that's what is happening here. meanwhile we have breaking news about a new fight, a new hit in the fight against isis. the u.s. air strike that killed one of the terror group's leaders and what it means in the fight against them. plus will taxpayers be bailing out puerto rico in the debt crisis? face it that's what we're concerned about. treasury secretary jack lew will answer questions in our exclusive interview
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david: okay the markets started out down today and they stayed there pretty much all of the
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day. looked like a flat line but the big deal was with gold. look at gold. it is down about $30. there is a lot of indication that gold hit its high when it hit 1300. it hit 1300 last week but come down since then. a $30 drop in oil is significant, excuse me, gold is significant. oil was also down as well. we have breaking news from the war on terror of the pentagon has just announced that a u.s. air strike in iraq killed a man known as the military amir for isis in anbar province in iraq. abu hajib, former member of al qaeda in iraq who has appeared in isis execution videos. is it time to devote more money to the war as it appears we're hitting pay dirt? we turn to peter brookes, heritage foundation, senior fellow, national security affairs and retired navy commander. peter, this is a good news.
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>> yep. david: unfortunately we don't have many of these hits, but does this hit mean we're winning the war? >> it is hard to say taking out one senior commander in one province will make a huge difference. actually the obama administration, our military has taken out a lot of senior commanders. in fact number two of isis. they have taken out others, the minister of finance, they have taken out other major commanders but the fact is that isis still fights on. we've seen some progress but fact of the matter is, some of the turmoil, david, in some of the countries out there such as iraq, we were talking about this last week and turkey itself, who are major partners in friends in dealing with isis, they're in political turmoil now. so that could slow things, peter, are we using our money properly? so often the interests of the military and the state department are at different ends. is the money all being channeled in the right direction? >> well that's hard to say but i mean right now there is no diplomatic solution to what is
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going on in syria. these peace talks we've talked about have gone nowhere. they keep falling apart because of all of the different players there. so really our money focused on military efforts right now to take back the territory that isis has taken and get at their command structure and stop the flow of money to them and foreign fighters is well spent with our intelligence and our military. david: i'm sure you've seen these stats. the number of u.s. military personnel is dropping precipitously. we haven't seen numbers this far down, looks like a lot, but that is down to levels we had around 1945, right? >> yeah. this is troubling about the recapitalization of our military, readiness, things along that line. especially when you look around the world. things are not getting any better. we're talking about the army and navy faces challenges. look what china is doing in the south china sea. what russia is doing with military buildup and threats in eastern europe. this is an odd situation where
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we see our military shrinking when the threats are increasing. david: we need more military just as we're decreasing the number of military personnel? >> exactly. we want to make sure we maintain our force levels for the threats that we face and i think that's the concern. david: peter brookes, from the heritage foundation. thank you very much. appreciate it. >> thank you. melissa: the never trump movement, desperate hunt for a third party candidate to challenge "the donald" next. eric ericksen sounds off on donald trump's quote, convert or die outreach to the gop establishment. i like that. david: i like the phrase. melissa: yeah. david: getting personal in attacks against the clintons once again. >> we have to recognize that the kind of language coming from donald trump is hateful and we need to repudiate eight! it's a fact. kind of like grandkids equals free tech support. oh, look at you, so great to see you!
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david: some never trump republicans are doing more than sitting out the november election. according to "the washington post" mitt romney met with bill kristol last week to discuss possibility of a third party contender. here is erick erickson, "the resurgent," fox news contributor. good to see you. what do you know about this meeting? >> i was not involved in the meeting but my understanding not that mitt romney wants to run for president as third party but open to get something going,
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recognizing the down ballot disaster donald trump looks to be for republicans in november if republican don't show up. david: wouldn't it be worse disaster if there was third party? >> no the calculation for all these folks is that donald trump is going to lose to hillary clinton anyway. what we're seeing is now about 10 senate races that were leaning republican now leaning democrat. so there has to be some incentive to get republicans out in november who don't want to vote for trump or clinton, erick, you're not a trump supporter. you wouldn't vote for him, you said that before but a lot of traditional republicans beginning to come over, people like darrell issa and dick cheney or so forth. don't you think the tide is working in favor of the traditionalists coming over to trump and support him as nominee? >> that is the problem. there has been internal polling about 27% of republicans wouldn't vote for him. i think it is about 10 or 15% but that still doesn't give him any ground from where mitt romney was. in addition he is 10 points behind with independents.
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so you got to give people an incentive to vote for the down ballot races, just hillary versus trump he is losing. david: talks about incentive. there seems a lot of incentive to for a lot of people to come out for trump. may not be traditional republicans. some may even be democrats. wouldn't thatounterbalance republicans to vote for testimony? >> nothing reflecting in polling. in 2008 and 2012 the polling averages in may didn't deviate from the outcome. you're looking double-digit lead between hillary and trump. down ballot races every two points he is behind hillary puts more and more house races in jeopardy. david: talk for a minute about paul ryan. kind of seems incon grew with us the fact that he can't go with donald trump right now to make sure he is conservative enough, you talk about mitt romney, mitt romney was very liberal republican by anybody's standards. he was governor of a liberal state, massachusetts. >> right.
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david: he ushered form of obamacare in terms of health program. paul ryan had no problem getting on board with mitt romney when mitt romney had a lot of liberal credentials. >> the problem is i opposed john mccain and mitt romney in 2008 and 2012. ultimately supported them as nominee. but with them it wasn't a character thing. no one doubted they were actually good people. a lot of conservatives, particularly evangelical christians don't see a difference morally between donald trump and hillary clinton. that is his problem. david: erick erickson, the resurgent editor. you look in good health. thank god for that. >> thank you very much. melissa: west virginia primary mountain state, coal industry has seen dramatic declines during president obama's time in office. now hillary clinton and bernie sanders are trying to convince the state they can clean up the mess. our very own adam shapiro joins us with details there. how goes the battle there, adam?
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reporter: well everybody expects mr. trump will emerge victorious here because he has no competition but let's talk about hillary clinton. i want to show you the video when she met with a coal miner who was out of work here in west virginia because so many coal miners nationwide are out of work. we saw labor numbers on friday. only 56,500, according to bls, bureau of labor statistics still working. we've seen huge losses, 16% decline in coal employment nationwide. here in west virginia, almost 20% over last couple years. hillary clinton trying to fix that but not succeeding. the latest average of polls from "real clear politics," these were polls that were conducted april 26th to may 2nd, shows sanders leading hillary clinton by six points at least here in west virginia. we spoke to different people. some support her, others don't. here is what they told us. >> the coal industry is losing to the cheap natural gas. it is just economics.
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>> the problem is our economies are built around these structures. so down the street you can see restaurants, law firms, everything like that. the law firms, the clients are coal companies. their clients are natural gas companies. these restaurants, they are people eating here who work in these industries. when you have majority industry using these services, these services will be on the outside and they will be affected sooner or later too. pretty much we'll become a modern day detroit. reporter: so the man you just heard that places like this could become a modern day detroit, that is chad burnett. he was laid from a job with natural gas company, not coal. but what's happening is that the obama administration's regulations on coal drove up the price of using coal at utilities. that is now starting to happen with natural gas. the bottom line is, men like chad, women like chad, are out of work and they remember that and he is voting for mr. trump but others are voting for bernie
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sanders, not hillary clinton. back to you, melissa. melissa: interesting. adam thank you so much for that report. , david. david: we have news on facebook. spokesperson responding to earlier report that employees of the company suppressed news stories of interest to conservative readers from the social network's trending news section. our very own jo ling kent is here with details. sounds kind of familiar, jo? >> facebook responding to a report out of gizmodo that said employees were suppressing conservative-leaning posts in the trending topics section, very influential section because it is where what most people are talking about ends up being put and people click on that information of course. as we know, billion people on facebook every single day, certainly could sway the election if you look at your news feed more than once a day which is what you and i do. here is the statement, we take allegations of bias very seriously. facebook is a platform for people and perspectives from across the political spectrum. they go on to say they have
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rigorous guidelines in place and these guide lines do not permit suppression of political perspectives or permit prioritization of one viewpoint or another or even one news outlet over another. so it seems to be that they are vehemently denying this is happening right now but we'll continue to watch this space and see because, as you know, social media plays not only a big role in how people digest this election now, but also how ads are placed and how data is mined about you and how you might vote. dave. david: kind of a similar story about this with the last election in google but it is interesting it continues. jo ling kent, thank you very much. >> sure. melissa: citi out with third quarter earnings. ashery web sister has those numbers. ashley? >> melissa always one of those stocks with so much high potential but can it actually make money. look at numbers for you. solarcity reporting wider-than-expected loss of $2.52 a share. estimate was 2.32.
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revenue did beat. it can generate revenue but can't make a profit. close to 110 million-dollar estimate. this stock is down 28% last five days and moving much lower in after-hours. you can see down about 13%. a lot of people shorting this stock saying they will run out of cash long before it ever becomes profitable. they're giving a weak outlook for the rest of 2016 saying number of customers with amount of their electricity being provided to customers is not as high as first forecast. you put all that together that is why it is down some 13% after-hours, guys. melissa: ashley, thank you. >> sure. david: puerto rico is plunging deeper into its debt crisis and less than a month away from defaulting a fourth time. peter barnes talking to treasury secretary jack lew specifically about puerto rico and whether you're going to be on the hook. there's a lot of places you never want to see "$7.95."
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melissa: u.s. treasury secretary jack lew is in puerto rico today to assess the effects of its financial crisis and persuade congress to allow puerto rico to restructure its debt. while critics fear it could open the floodgates to other cities and states drowning in debt. peter barnes joins us exclusive sit-down interview with the treasury secretary. take it away, peter. reporter: that's right, melissa. secretary lou is down here trying to put humanitarian face on crisis in puerto rico which caused government to spend a lot on education and health care. we're sitting in hospital room right now and he joins us now to talk about the state of play with this legislation on the hill and where all of this stands for investors. welcome to fox business, mr. secretary. >> good to be with you, peter. reporter: i know you're here to talk about humanitarian side of it. at one point you were on fox
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business you told our liz claman there would not be a bail out for puerto rico. now you and your allies are saying saying if this legislation to restructure puerto rico's $70 billion in debt, does not passes congress there could be a bailout. governor of puerto rico said on c-span said it could be $20 billion or more. do you agree? >> peter to be clear what we're working on with congress now is not a bailout. it is restructuring. what we've said to solve the problems there is only some choices. restructuring with oversight is the right solution. if you don't do that, then you either have chaos or a bailout. but we're not talking about a bailout. restructuring to alternative to bailout. >> you but need legislation to restructuring that you want. if you don't get that legislation, last week you wrote the congress you said without this legislation, quote, a taxpayer-funded bailout may become the only legislative course available to address an
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escalating crisis. >> peter, right now some interests that do not want to see legislation are trying to characterize what congress is working on incorrectly as being a bailout. the reason that is so dangerous is it is the alternative to a bailout. it is not a bailout. there is not a taxpayer dollar involved in restructuring. restructuring is what a business goes through when it goes through chapter 11. not something that is a new idea in the united states. if you're insolvent, all creditors, all stakeholders are at the table. you restructure the debt and get to other side of it with a solvent entity. here in puerto rico you would have restructuring combine with an oversight board to make sure the fiscal problems are solved, today, tomorrow and in the future. i think that is so profoundly the right solution and it is so much the opposite of a bailout, that it is important to make the point, to make it clearly. reporter: but what i'm saying is, and that others are saying, which you've said in this letter
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to congress, if you don't get that legislation to do that kind of orderly restructuring there could be a cash bailout of some kind? >> peter what i've said is, if you don't restructure your choices become chaos or a bailout. i have never advocate ad bailout. the right solution is restructuring. but let me just give you a taste of what chaos looks like. i just spent an hour walking through this hospital, the central hospital in san juan. i visited the neonatal unit where there are tiny little babies weeks old and they tell me they can't order vials they use to give dialysis to these desperately-struggling infants unless they pay cash on delivery. and they can't get checks cut every day. every day they have to struggle to make sure they treat the little babies. talk to them about cancer treatment. cancer treatment for little kids. they can't always order drugs
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they need because none of the drug companies trust credit to be paid. only so long you can get through that day-to-day. people i met with here are doing heroic job struggling meeting desperate needs for these ill children. that is not way to manage fiscal affairs. you need to restructure. reorganize your credit. have a fiscal plan in place where you need to make cuts to. >> where the board would do with the concurrence of the governor and legislator. >> the board would have to balance competing demands of stakeholders. that is exactly what happens when a firm goes into bankruptcy. peter, it used to be a conservative position bankruptcy was alternative to a bailout. we can't allow restructuring which is really the equivalent ever bankruptcy in many ways, to be defined as a bailout. it is just not true. reporter: but if you don't get this legislation, back to what the governor of puerto rico said yesterday, if it came to that, and i have known you a long time and you're a prudent planner he
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is saying 20 billion plus possibly as a cash bailout. we've seen the forecasts by the government of puerto rico. its shortfalls are tens of billions of dollars. could you rule that out at end of the day? >> peter, i think idea instead of restructuring the debt and having bondholders be part after solution, that somehow the better alternative would be to ask for the taxpayer to come and pay the bondholders? i don't see that happening. i think this restructuring legislation has to pass. i believe we're making progress. i think we have made very good progress. we're not quite there yet. there is more work to be done. one of the things i'm here today to do is understand and then to be able to go back an communicate clearly what the sense of urgency is. puerto rico missed a big bond payment may 1, about $4,400,000,000. on july 1 they have 2 billion of bond payments.
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-- $4 billion. they are constitutionally protected beyond. they would have to pay the bonds before anything else. including the money for medicines for the children i described. now, there is urgency because the kind of chaos comes from missing july payments will take this to a new level of crisis. we're at level of crisis but the crisis will keep escalating until congress acts and the time to act is now. >> as you know, peeker paul ryan, majority leader in the senate and democratic leaders in house and senate agree with you congress should try to work something out. so the house, natural resources committee has jurisdiction over issue. had a bill out last month would provide orderly restructuring. won't get into weeds of collective action clauses and i said it, sorry, you did have some objection to the version of
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the bill last time, you have been back and forth with the committee and republican chairman to try to get closer to a product that the president could sign. have you gotten closer? have you got something the president can sign? >> we've been making progress, our teams, our technical teams spent friday working through level of details that are mind-numbing in terms of how complicated they are. this is not easy stuff. you have a lot of interests that come in with suggestions when you add them all together, can, don't necessarily add up. our task is a simple one. does it work? is it something thistles about you the ability to restructure in a way that we'll get to a more table place so congress doesn't have to do this again next week, next month, next year. i have met nobody that wants to do this a second time. the solution has to be a lasting one. it is technically complicated and we have shared the technical requirements on a regular basis but there has been a good collaborative working relationship. no one will get everything they want.
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there will be things in a bill that anyone could say i would have done differently but our test is does it work and does it treat the different stakeholders fairly? does it give the oversight board the ability to balance creditors and retirees and need for public services? there has to be ability for stable functioning commonwealth. reporter: so the bill is not there yet? >> there is technical work being done today. we're hoping to see another draft in the next day or two. we certainly would like very much to get the to point where we can s bipartisan leaders i talked to, we want to get to a place where we all embrace the same thing. that is not easy. this is challenging. there is pressures that pull parties in different directions. but this is fundamentally about congress saying we're going to do it in the public interest. know there are a lot of competing demands here. we have to create a board that can balance concerns and do it in a way at granular level of detail congress won't be
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legislating? reporter: as you have gone out and done more of education process though we started to to hear more okay objections to it. this might not be a cash from taxpayers but bailout from investors who have taken of dollars of losses on the securities, bonds of puerto rico. there are some conservative republicans in congress who are worried this would set a precedent for states like illinois and california to knock on congress's door and ask for relief from their debt burden. and then there is also some who are concerned about possible contagion in $4 trillion municipal bond market if states are allowed to ask congress for similar receive. what are your responses? >> i believe that the markets treated puerto rico very differently from all other municipal credits. you look at the spreads between puerto rico debt and all other debt. theirs doesn't appears to be any confusion about the situation in puerto rico compared to other
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jurisdictions. what the municipal markets haven't seen in our lifetime is chaotic unwinding. that we have to be on guard against and restructuring would give you ability to avoid. i think restructuring would actually calm the markets down because there would be a path forward. if you have puerto rican bonds in municipal bond fund you have seen on statements valuations reflect the change in level of risk. that's not, that's not going to be surprise to anyone who has invested in puerto rico bonds. coming up with a plan to recognize what it takes to create a stable path going forward is the way to make sure those amounts don't shrink even more. alternative to restructuring is commonwealth with ability to pay basic bills much less bond holders. reporter: set as precedent other not?
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>> i don't believe it is precedent. this is territory, not a state. it is not amending the bankruptcy code. i don't believe there is governor in the country or state in the country would choose to ask for this kind of treatment. they have a lot of tools at their disposal. this is not a pretty path to go down. reporter: mr. secretary, thanks for the update. thanks for joining us on fox business. melissa, dave, back to you. david: peter, appreciate it. couple of things, first of all "politico" had a piece how in fact there is already kind of a backdoor bailout of the island where they have allowed without congress's approval, allowed companies to puerto rico to pay off the commonwealth before they pay off the federal government. that gives them billions in extra revenue. melissa: he tried very hard not to answer that question that is on everyone's mind, will illinois be next? david: spreading. melissa: illinois is in dire straits. they are watching this very closely. if you let states go down this path, it completely upends the bond market which affects
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everybody out there watching right now. you are invested in state and local municipalities one way or the other whether you know it or not. this is big question for a lot of people that goes well beyond the idea of orderly way for puerto rico to set aside debt. david: states and cities. look at detroit. >> president obama speaking at howard university this weekend and having strong words for people who are successful. we'll give you all the details coming up. ♪ ♪ (singing) you wouldn't haul a load without checking your clearance. so why would you invest without checking brokercheck? check your broker with brokercheck. who don't have access thto basic banking,on people but that is changing. at temenos, with the microsoft cloud, we can enable a banker to travel to the most remote locations with nothing but a phone and a tablet. everywhere where there's a phone, you have a bank. now a person is able to start a business,
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>> that is a pet peeve of mind. people who have been successful, and don't realize they have been lucky. david: hmmm. melissa: president obama speaking at howard university graduation ceremony in washington, d.c., totally discounting hard work. david: as you heard the president say successful are also lucky and don't realize it. problem is, if it is just about
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luck, faith and hard work has nothing to do with it at all. melissa: why all the people sitting in audience listened to him work so hard for all the years to get that degree, get money, why did they do that if it is luck. what a message? david: it is not the lottery. melissa: risk and reward is next. >> i come up with the biggest tax cut by far of any candidate, anybody. and i put it in. that doesn't mean when we're going to get. we have to negotiate. the thing i'm making sure the middle class gets good taxes, tax breaks because they have been absolutely shunned. the other thing i will fight hard for business. for the wealthy i think frankly it will go up. you know what? it should go up. deirdre: presumptive nominee donald trump saying he plans to tax the rich more but trump wasn't done. he declaredfy what he meant with our very own maria bartiromo this morning. >> i'm not talking about tax increase. talking about a tremendous tax

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