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This is a rush transcript from “Your World,” May 11, 2021. This copy may not be in its final form and may be updated.

CHARLES PAYNE, FOX NEWS ANCHOR: You’re looking live at the Israel-Gaza
border, where the situation remains tense, as the violence over there
escalates.

Hello, everyone. I’m Charles Payne, in Neil Cavuto. And this is “Your
World.”

I want to get straight to Trey Yingst in Israel with continuing coverage —
Trey.

TREY YINGST, FOX NEWS CORRESPONDENT: Charles, early this evening, rocket
fire was continuing into Israel.

And then a very important moment happened. It was a change in escalation.
We saw factions inside Gaza fired dozens of rockets towards Israel’s second
largest city, Tel Aviv. This sent millions of people running for shelters,
as alerts came in and sirens were blaring. We were here along the border
watching efforts by Israel’s missile defense system, the Iron Dome, to
intercept some of these rockets.

But Hamas, the group in control of Gaza, is firing barrages throughout the
day. We know that, according to the Israeli chief of staff of, Aviv
Kochavi, 500 targets were selected by Israel and already hit today in
response to the rocket fire that started yesterday.

To give you a sense, though, of where all of this is headed, we heard just
in the past 20 minutes from Israel’s Prime Minister Benjamin Netanyahu and
the defense minister, Benny Gantz. They made very clear that Israel will
act decisively against Hamas, the group that controls Gaza, that is, from
their perspective, the sole organization behind the rocket fire.

When you get down to it, there are a lot of factions inside Gaza. But
Israel holds Hamas responsible. And they say this is just the beginning of
what is turning into a very large round of conflict in the region, more
than 500 rockets fired into Southern Israel.

Inside Gaza, we do have updated numbers from the Palestinian Health
Ministry, who say that 30 people have been killed in Israeli retaliation
strikes. Inside Israel, three people are dead from rocket fire that has
happened throughout today.

Lots of injuries all over the region. And they’re really — Israel is
bracing for what the night will bring, because there has been a red line
drawn and crossed on each side of this conflict. And the latest red line
has to do with towers and infrastructure inside Gaza, factions there
threatening more rocket fire towards Tel Aviv if Israel decides to take out
any of the large buildings inside the Gaza Strip.

We do know at this hour, according to Palestinian media, that the Israelis
are warning people inside these tall buildings, some of which hold military
infrastructure, to get out. This is an indication they plan on striking
these towers and an indication that Hamas and Islamic Jihad will respond
with more rocket fire — Charles.

PAYNE: Trey, thank you very much.

And, folks, we may go back to Trey later in the show.

In the meantime, I want to get the read from Hudson’s Institute’s Rebeccah
Heinrichs.

Rebeccah, these provocations, for us in America, they seemed to come out of
left field. And it’s always a curiosity as to what sparked it. What’s
sparking this round of exchange?

REBECCAH HEINRICHS, THE HUDSON INSTITUTE: Well, it’s hard to know exactly
what was the thing specifically that’s the pretext for these Hamas terror
attacks against Israel.

But they are the worst that we have seen in a decade. I heard one quotation
it’s not — it hasn’t been since not even just since 2016 or 2017, but in a
decade. And it’s important to remember Charles that Hamas is aiming for
civilians, and then they are using civilians for shields.

And so, when the Israelis defend themselves and retaliate against Hamas
militant targets, when civilians are killed, Hamas tries to make it seem as
though the Israelis have done that. You might even hear some of that from
some members of Congress who are more sympathetic to Hamas.

But this is — this is what Hamas does to try to earn favor from the world
stage. But this is a terrible thing. And it’s only going to get worse as
the Hamas barrage of rockets continue to fall on Israel.

PAYNE: To that point, Prime Minister Netanyahu has said that we’re going
to see an increase in both the intensity and the rate of attacks.

And, to your point, Israel has already warned that they know there are
civilians in these buildings where weapons are being housed. They’re giving
them plenty of time to get out. But it sounds, according to Trey, at least,
that those will be targeted. So, to your point, this escalation continues.
Then what?

HEINRICHS: Well, if the — I saw recent, just — reporting maybe just 30
minutes ago the Ashkelon oil pipeline was attacked by Hamas, attacked in
Israel. If that’s true, that is a significant escalation.

Keep in mind, when you see this Iron Dome missile defense system amazingly
intercepting these rockets that are coming in, this is — this enables the
Israelis to not only protect their own citizens, which they’re doing. It
also helps them to have the ability to exercise restraint against the
Palestinians, because, if they weren’t able to absorb some of these attacks
with this missile defense system, it would require a much stronger, more
robust, offensive retaliation against the Palestinians.

So, the Israelis are demonstrating restraint with this missile defense
system, but it cannot continue. If they’re going to have infrastructure,
energy infrastructure, and civilians being attacked, there’s going to have
to be stronger retaliation against the Hamas militants on the part of
Israel.

PAYNE: Yes, Rebeccah, that civility that you’re talking about, that
restraint that you’re talking about, the warning of folks and buildings
that, hey, these are going to be attacked at some point, and, still, Israel
has a tough public relations battle, particularly here at home.

You mentioned members of Congress sympathetic to Hamas. Isn’t Hamas seen as
a terror organization by both Israel and America? And if so, should we be
more involved?

HEINRICHS: It is a terrorist organization.

And not only is it a terrorist organization. It’s directly funded by the
largest state sponsor of terrorism in the world. And that’s Iran, Charles.
Iran gives Hamas $30 million a month, funds them. And all of that is going
towards their weaponry.

And so when you hear Democratic members of Congress and the Biden
administration eager to undo the progress of the previous administration
towards Middle East, and to reenter the Iran deal, just keep in mind that
this money does not go towards the citizens of Iran. It does not go towards
peace. It does not go towards anything that’s productive.

It funds terrorists. And until the Iran regime changes, this will continue.
And so yes, this is — Hamas is a terrorist organization. These are the
militants, and all of this money is coming from Iran, and that’s who’s
funding the attacks against Israel.

PAYNE: Rebeccah, Israel has been in the midst of a really divisive
presidential, prime minister election.

And it feels like maybe they’re going to finally get to a conclusion. Does
that play a role in this at all? Does Hamas sense some sort of fragility
within the country of Israel in a way to exploit that?

HEINRICHS: That’s an important point, Charles.

Not everything is about the United States of America. We have our own
politics that obviously affect world affairs. But then there’s also
domestic politics. But you can’t help but notice the combination of all of
these factors that are happening at once. Nothing like this happened over
the last several years.

This really is a new thing. It’s unprecedented. And whenever you have seen
the Abraham Accords and progress made towards the region over the last
several years, and you see something like this, it’s hard to get around the
fact that it is the Biden administration coming on the stage that is
perhaps emboldening different toxic combination of things to take place
that’s providing the context for increased violence.

So, we certainly hope that we can find some sort of de-escalation solution
to this problem. But when everybody on the world stage is calling for this
both sides thing, for both sides to step back from the edge, just keep in
mind that it is Israel that is responding defensively to protect
themselves.

And it is Hamas militants that are the aggressors here. And this is bad for
Palestinians. It’s bad for Israel. And it’s bad for peace in the Middle
East.

PAYNE: Rebeccah Heinrichs, thank you very much.

More on this developing situation when we come back with Pennsylvania
Republican Senator Pat Toomey.

(COMMERCIAL BREAK)

PAYNE: President Biden meeting with governors today and their states’
vaccine rollouts and rolling out a new COVID response partnership of his
own.

FOX News White House correspondent Peter Doocy has the details — Peter.

PETER DOOCY, FOX NEWS WHITE HOUSE CORRESPONDENT: Charles, good afternoon.

The president’s event today was closed to the press, so no opportunity for
anybody in the pool today to ask him any questions about anything. But the
White House did provide a link to a livestream, so we could see the
president there making an announcement about free rides to vaccination
sites.

(BEGIN VIDEO CLIP)

JOE BIDEN, PRESIDENT OF THE UNITED STATES: To ensure that transportation
is less of a barrier, from May 24 through July 4, Uber and Lyft, Uber and
Lyft are both going to offer everyone free rides to and from vaccination
sites.

I think that is really stepping up.

(END VIDEO CLIP)

DOOCY: This administration has long said they would lead with science and
truth, but a New York Times report reveals, when the Centers for Disease
Control and Prevention released new guidelines last month for mask
squaring, it announced that less than 10 percent of COVID-19 transmission
was occurring outdoors.

“Saying that less than 10 percent of COVID transmission occurs outdoors is
akin to saying that sharks attack fewer than 20,000 swimmers a year. The
actual worldwide number is around 150. It’s both true and deceiving.”

And that comes as Dr. Anthony Fauci, who leads many of this
administration’s efforts on COVID-19 hit the Hill to mix it up with
lawmakers curious about the origins of COVID-19.

(BEGIN VIDEO CLIP)

SEN. RAND PAUL (R-KY): Dr. Fauci, do you still support funding of the NIH
funding of the lab in Wuhan?

DR. ANTHONY FAUCI, CHIEF MEDICAL ADVISER TO PRESIDENT BIDEN: Senator Paul,
with all due respect, you are entirely and completely incorrect, that the
NIH has not ever and does not now fund gain of function research in the
Wuhan Institute.

(END VIDEO CLIP)

DOOCY: So, we did not lay eyes on the president in person today, but,
tomorrow, we expect to see him when he hosts Republican Leaders Mitch
McConnell and Kevin McCarthy at the White House for the first time —
Charles.

PAYNE: Wow.

Peter, thank you very much.

I want to bring in FOX News medical contributor Dr. Marty Makary.

Just want to get your reaction, because we had another one of those real
serious showdowns, of course, an exchange between Kentucky Republican
Senator Rand Paul and the White House chief medical adviser, Dr. Anthony
Fauci today. Let’s take a listen.

(BEGIN VIDEO CLIP)

PAUL: You’re fooling with Mother Nature here. You’re allowing super
viruses to be created with a 15 percent mortality. It’s very dangerous. I
think it was a huge mistake to share this with China. And it’s a huge
mistake to allow this to continue in the United States. And we should be
very careful to investigate where this virus came from.

FAUCI: I fully agree that you should investigate where the virus came
from. But, again, we have not funded gain of function research on this
virus in the Wuhan Institute of Virology.

No matter how times you say it, it didn’t happen.

PAUL: You’re parsing words. You’re parsing words. There was research.

(END VIDEO CLIP)

PAYNE: Dr. Makary, this is a brand-new term for me, and I think most of
the audience, gain of function research, because it does look like we did
fund something in Wuhan.

So, what are we — what are we trying to do here? What is what is Dr. Fauci
trying to say here?

DR. MARTY MAKARY, FOX NEWS CONTRIBUTOR: Well, gain of function refers to
making a virus more contagious, more deadly, more dangerous. And that is
what there was a government ban on. There was a moratorium placed on gain
of function research, actually, during the Obama administration.

But what was happening over there appears to be gain of function research.
Now, we will never know for certain, but how do you go from a virus that
was otherwise just infecting bats to several patients showing up at a
hospital five miles down the street from this hospital?

Laboratory accidents are very common. People don’t appreciate it, Charles.
When you’re talking about a respiratory virus in a laboratory, experiments
run late into the night. There’s often understaffed personnel conducting
those experiments. Lab accidents are common.

To me, it’s extremely obvious what happened here. And there was definite
NIH funding of that lab. The question is, was it gain of function research?

PAYNE: And perhaps they’re splitting hairs.

Even if we made that investment thinking, OK, wouldn’t that go toward this
gain a function, many wonder why we would be involved in the first place?
Why would the National Institute of Health in the United States be funding
any sort of research in a Wuhan lab?

MAKARY: Well, in the virology community, there’s sort of gain of knowledge
for the purpose of knowledge increase. So you have manipulation of viruses.
You have, ironically, work on viruses that may have been designed to create
a vaccine in the future. That’s how many of these knowledge increase
research projects are justified.

Ironically, that may have led to this leaking out of the lab. It’s very
obvious to me that it leaked out of the lab.

PAYNE: So, Dr. Makary, why is China so resistant to the idea that maybe it
was an accident, that maybe it did leak out in the lab?

Of course, they didn’t allow the World Health Organization to have a real
thorough investigation. They haven’t allowed anyone to have a thorough
investigation. They’re letting all kinds of speculations fly. And people
want answers. I mean, obviously, this thing took down the entire planet. We
want to make sure it doesn’t happen again.

MAKARY: Well, it’s the biggest liability case in the history of the world,
in the history of liability.

So you can imagine there’s not going to be cooperation. If you look back on
what happened in the initial days when cases presented to that local
hospital, those doctors were detained, some of them forced to sign
affidavits. And some of those doctors are basically unable to speak now
freely.

So, look, the frozen food theory is still what China’s peddling out there.
It’s very obvious to me it was a lab accident.

PAYNE: Yes, and I think it’s obvious to a whole lot of other people.

Dr. Makary, always appreciate your insight. We always learn. And this isn’t
going away. So thank you very much.

MAKARY: Thank you.

PAYNE: Folks, we’re going to have more also on the escalating violence on
the Israeli-Gaza border coming right up.

(COMMERCIAL BREAK)

PAYNE: The Dow diving as prices keep spiking. We’re on it.

And it’s Governor Gavin Newsom’s California dreaming. Why is the state
receiving billions of dollars in COVID relief if the budget has billions of
dollars in surplus?

We’re back in 60 seconds.

(COMMERCIAL BREAK)

PAYNE: Tensions rising between Israel and Hamas, as both sides continue to
exchange rocket fire.

With me now, Republican Senator Pat Toomey.

Senator Toomey, just your thoughts on this latest round of escalation over
in Israel and here on the border again.

SEN. PAT TOOMEY (R-PA): Well, Charles, obviously, it’s very disturbing.

I mean, this — my understanding is, there have been literally hundreds of
rockets fired by Hamas towards Tel Aviv. Iron Dome apparently is — has
been effective. But we have always been concerned about the possibility
that it can be overwhelmed by sheer volume.

It’s also a reminder of what a malign force Iran is throughout the region.
We all know it’s Iranian money that funds this. It’s Iranian materials that
make these attacks possible. And civilians are in serious danger. It’s very
disturbing.

PAYNE: Is it — could it be a de facto message of sorts to the Biden
administration, as they continue to engage, reengage Iran?

It feels like this administration desperately wants to get back into this
Iranian deal. And we remember they drove a pretty hard bargain with then-
President Obama.

TOOMEY: Yes, I think the Iranians ran circles around them.

And my worry is that the Biden administration wants back into this deal way
too badly. And this attack should be a reminder that we have got to
consider Iran’s malign influence throughout the region, its sponsorship of
terrorism, its development of delivery systems. All of that has to be on
the table.

And one other thing, Charles, I’ll say. If the Biden administration decides
to go down the road that President Obama went and do this with bipartisan
opposition, and no Republican support, because they fail to address the big
issues that we have been concerned about, then how enduring this
disagreement going to be?

PAYNE: Right.

TOOMEY: We’re going to be in the same position we were in last time, when
an incoming Republican administration is going to pull us out again. What a
terrible way to run foreign policy.

PAYNE: Yes, absolutely.

Let me switch gears here.

TOOMEY: And the fault will be President Biden’s, if he chooses not to
listen to Republican concern about this, to be clear.

PAYNE: Thank you very much for being clear about that.

And I would like your thoughts also, as President Biden making his — I
guess it feels like the final push for infrastructure this week. You’re
set, of course, to meet with him on Thursday.

TOOMEY: Right.

PAYNE: I want you to listen to what White House Press Secretary Jen Psaki
had to say about this week’s meetings with members of Congress.

(BEGIN VIDEO CLIP)

JEN PSAKI, WHITE HOUSE PRESS SECRETARY: You could spend the entire meeting
talking about areas of disagreement. There’s no shortage of those. Or you
could spend it seeking opportunity for common ground, and he’s going to
choose the latter.

(END VIDEO CLIP)

PAYNE: All right, sir, so where are those areas of common ground when it
comes to infrastructure, Senator?

TOOMEY: Yes.

Yes, sure. So, I hope that ends up being true, because there is overlap,
there is common ground. And it is on actual infrastructure. So, Republicans
think that there is a case to be made for increasing funding for roads and
bridges and ports and airports and water surface transportation mechanisms.

What we’re not interested in is expanding the welfare state, which is most
of what the Obama $2.2 trillion plan is about. So, we’re also not
interested in a tax increase that will undo the great progress we made in
2017, which gave us the best economy of my lifetime, just before the
pandemic hit.

So, if the president wants to focus on the areas where we agree, then let’s
focus on real infrastructure. I think the way to fund this is not through a
devastating, damaging tax increase, but, rather, let’s repurpose money we
have already approved, but hasn’t been spent yet, money that was said to be
about COVID, but isn’t even scheduled to be spent for years in the future.
How’s that about COVID?

There’s a lot of it, hundreds of billions. Let’s use that. I’m open to some
user fees to pay for the actual development as it occurs. But we don’t need
a debilitating tax increase to do this.

PAYNE: Yes.

Just a couple of quick thoughts here.

President Biden, I do find it interesting, when he does speak with
reporters or to the public about this plan, he talks about Republicans and
not understanding clean water and things like that. He never brings up
eldercare, per se.

TOOMEY: Yes, right.

PAYNE: And when it comes to tax policy, it’s always really about — it’s
more punitive than economic, in my opinion. It’s always about the rich
getting their fair share.

So, I hear where you’re coming from on this. And that’s why I’m really
wondering, where does this come out? Because, obviously, President Biden is
determined to have something go through. He would like — obviously, he
would love to be able to say it was bipartisan.

Would you agree that broadband would be bipartisan, that that’s part of
modern-day infrastructure?

TOOMEY: I do think it’s part of the modern infrastructure.

But I would point out there’s an awful lot of broadband being built into
our — across our country now. There’s a massive amount of private
investment. There’s fiberoptic cables, but there’s increasing capabilities
by satellites.

So, there’s — there’s still some more work to be done. But, unlike the
highway system, for instance, this is — this is massively being done
today, as you know, by the private sector. So, I’m open to this
conversation, but we shouldn’t lose sight of that fact, that a great deal
of investment is already occurring.

PAYNE: Senator Toomey, always a pleasure. Thank you very much.

By the way, before I let you go, they told me to wrap up, but, because you
are leaving — this is your final term — does that give you more strength
in these negotiating meetings, or less?

TOOMEY: Oh, you know, honestly, Charles, it doesn’t really change things.

PAYNE: OK.

TOOMEY: You know, I’m too old to learn new tricks.

(LAUGHTER)

TOOMEY: I believe in economic growth and personal freedom. And I’m stuck
with those beliefs. And I don’t regret it.

(LAUGHTER)

PAYNE: All right, you’re cool as a cucumber, no matter what.

TOOMEY: Yes. Yes.

PAYNE: We appreciate it. Thank you so much.

TOOMEY: Thanks, Charles.

PAYNE: All right.

Well, meanwhile, Main Street and Wall Street rattle, as prices keep
spiking. So, where’s all of this heading?

We report and, well, you just may want to hide.

(COMMERCIAL BREAK)

PAYNE: Sticker shock sending shockwaves across Main Street and Wall
Street. Shoppers are feeling it.

Investors are clearly spooked by it, and a new report showing that we could
be stuck with it for a while.

To FOX Business Network’s Susan Li with the very latest — Susan.

SUSAN LI, FOX NEWS CORRESPONDENT: Hey, Charles.

So, whether it’s at the pump or at the grocery store, Americans are paying
up more. Inflation, as it’s called, or higher prices, has already arrived.
So, you walk into the supermarket these days, you will notice the seafood
prices are up 5 percent. Eggs are costing more, along with oranges,
lettuce, chickens and canned vegetables.

Now, that’s not all. Larger items like appliances are also more expensive
these days, not to mention paying up at the pump. We have national gas
prices sitting at their highest now since 2014, close to breaking $3 a
gallon for the first time in seven years.

The Colonial Pipeline shut down means prices are skyrocketing, up 8 cents
the past week. And for every penny the gas prices go up, that’s a billion
dollars that less in consumer spending, which hurts the U.S. economy.
Recent inflation fears spooked the stock market today, the worst day in two
months for the Dow Jones industrials.

Wall Street is also concerned that the Federal Reserve might be forced to
raise interest rates in order to keep prices under control. And we will
find out tomorrow just how much more we’re paying with the April consumer
price reports. Americans, though, are already bracing for the fastest price
hikes in nearly a decade, predicting that prices will go up by 3.5 percent
in a year’s time.

But here’s the good part, is that rising prices are usually indicative of a
recovering economy. We saw another sign of that this morning, a record
eight million-plus job openings in the month of March, the most in
manufacturing, construction and hospitality.

But, Charles, the point and the problem here is that finding the people to
fill the jobs is the hard part.

PAYNE: It certainly is.

Susan Li, thank you very much.

Now, of course, those spikes on Main Street had Wall Street investors
running for cover today, as more Americans are feeling the pinch. The
question everyone’s asking is, are these prices going to pinch our economy?

Let’s get the read from our money gurus.

Larry Glazer is with us, Gary B. Smith, and Melissa Armo.

Larry, let me start with you.

Just break it all down for us.

LARRY GLAZER, MAYFLOWER ADVISORS: You know, Charles, you don’t have to be
a financial expert to see that these rising costs and the soaring inflation
spiking everywhere we look is really already having an impact on the
consumer, rising milk prices, rising chicken prices.

How’s that barbecue going to feel on Memorial Day when you can’t get food
for the grill? Gas prices through the roof? There’s already shortages. It’s
everywhere we look, Charles. Wall Street is beginning to get worried.
Consumers are worried. It’s affecting labor shortages. It’s affecting
material shortages.

We can’t get all the things we need. Nothing will crush consumer confidence
more than a big spike in gas prices. And that’s what I fear could happen
this summer. Charles, look, we have had a lot of good things to celebrate
this year. Let’s keep it up. But inflation could kill this, biggest soaring
price increase since the Jimmy Carter administration. That’s not good news
for any of us.

PAYNE: Melissa, the Fed says, yes, it’s going to spike, but it’s going to
be transitory, so don’t panic. You agree?

(LAUGHTER)

MELISSA ARMO, THE STOCK SWOOSH: Well, I wouldn’t panic because the markets
had a beautiful, beautiful bullish run up.

But that being said, I think we could see some more selling even as early
as tomorrow or in the next few days. So people need to be aware of the fact
that we could see more selling, so just plan ahead. And if you want to take
profits, if you’re up, you can take profits.

I think inflation is a problem going into the summer, specifically when
people travel and go on vacation with gas prices. But inflation isn’t
something that hits you overnight on every single product. It creeps up on
you. And I think it’s been creeping up really since 2020.

The economy has to get back going. Last week, we had bad unemployment data,
and we have to open up. New York City is not fully open up. Until we open
up again and people go out and spend money, we’re going to have a problem
with the economy. It’s going to create a long-term problem if we don’t
start to open up as a country as a whole.

People got to get back to work.

PAYNE: Gary B.?

They do.

Gary B.?

GARY B. SMITH, FOX NEWS CONTRIBUTOR: Well, I’m not as sanguine as Melissa
is. I think inflation is here.

When you have corn prices doubling, lumber prices doubling, as you know, as
Melissa pointed out, gas prices just doubling again, you can’t — now
companies, because the government has sprinkled so much money around, it’s
tough to hire people because they want to stay on these unemployment
benefits. So what’s going to happen?

The Fed is going to have to raise rates. Now, they did a silly thing a few
months ago and said, oh, my gosh, we’re going to stand out until, what,
2024, Charles?

(LAUGHTER)

SMITH: I think they’re going to have to jump in now and turn tail. That’s
going to create a bigger crisis in the market.

I think the best of times we have seen in the markets are over.

PAYNE: Wow. That’s a strong statement, Gary.

Yes.

GLAZER: Charles, we have the biggest labor shortage — we have the biggest
labor shortage ever.

We have jobs going unfilled in this country. Small businesses can’t afford
to eat these inflationary pressures. They pass it through to the consumer.
It becomes a regressive tax hitting working families in this country. Once
you let the inflation genie out of the bottle, you can’t get the genie back
in.

PAYNE: So–

GLAZER: And that’s what’s going to happen this summer.

PAYNE: So, let me–

GLAZER: And that’s what I worry about for working families in this
country.

PAYNE: Then let me build on that, because, this morning, we learned that
there are 8.1 million jobs out there.

That is the most ever. Those are jobs that are opening in March. And yet,
you go back to Friday, and we couldn’t get anyone to fulfill those jobs.

So, Melissa, has the government just sprinkled too much money out there?
Are too many stimmy checks, extra 300 bucks, and everything else really
going to be another thing that conspires to destroy this economic rebound
that we have enjoyed?

ARMO: I think it depends on the industry. There’s certain industries.

Like, here, example in New York, if I want to order something from Amazon,
I can’t get it. That’s crazy. There’s food available from Whole Foods. It’s
because they can’t get the drivers to work. They can’t get people to come
into work at Whole Foods to put my grocery order together. So, there are
specific industries where people are actually earning more money to stay at
home.

Why would you go to work if you can make more money at home? Because, at
the end of the day, all you care about is your bottom line. Until they stop
the stimulus all across with these extra bonuses, people are not going to
go back to work.

PAYNE: Right.

And to your point, we lost 77,000 courier jobs last month, lost.

So, Gary B., we’re dealing with this, all of this cash that has come in to
help prop up the market. It’s made a lot of people wealthy, at least on
paper. Now we have got to face the tax consequences. President Biden’s
pretty serious about lifting our taxes across the board.

And that’s something to market is going to have to grapple with as well,
right?

SMITH: Yes, absolutely.

Look, he’s talking about raising the corporate tax. I am certain that, with
all the programs he has out there, infrastructure and some of the other
things, he’s going to have to raise tax on — quote, unquote — “the middle
class.”

Look, taxes are going to go up on everyone. So that’s another — like
inflation, which is a tax, as Larry pointed out. We’re going to have more
income taxes. There is going to be more money out of the pocket. I just —
we faced a pandemic, the biggest health crisis. Now I think we’re about to
face the biggest economic crisis most — certainly that this Fed has ever
seen, and probably this government has ever seen.

It’s a tsunami of bad things coming all to a head. I’m — I wish I was as
optimistic as Melissa.

(LAUGHTER)

PAYNE: Yes. Hey, you know what, a year from now, I wouldn’t be surprised
if we were talking about deflation, though, not inflation, because of these
points you just brought up.

SMITH: Yes.

PAYNE: You were a fantastic panel. See you all very soon.

Meanwhile, it’s off to the races for Medina Spirit at the Preakness this
weekend, but only under a strict set of conditions.

Trainer Bobby Baffert’s attorney is with us. He’s next.

(COMMERCIAL BREAK)

PAYNE: Giddy up.

The Maryland Jockey Club announcing Medina Spirit will be allowed to run in
the Preakness Stakes this weekend, now, that decision coming after trainer
Bobby Baffert agreed to grant full access to training — testing results
amid the Derby doping scandal.

His attorney, Craig Robertson, is with us now.

Craig, thanks for joining us.

So, give us the — give us more details on these terms. What exactly are we
looking about — looking at, in addition to what might be normal testing
and scrutiny?

CRAIG ROBERTSON, ATTORNEY FOR BOB BAFFERT: So, we have agreed that we
would give full access to all the veterinary records. That’s pretty normal.

The thing that is outside of the norm is that we have agreed to full and
complete testing before the race, pre-race testing, to make sure that
everything is clear in advance of the race.

But Pimlico wanted that. They didn’t want any suspicion over the Preakness.
But we wanted it as well, because we don’t — we don’t want any sort of
cloud hanging over the race.

So, that’s the main sort of new term that would be unusual that we agreed
to.

PAYNE: So, Bobby Baffert came out, vigorously defended himself and
everyone associated with the race, the horse and the team.

How do you adjudicate something like this, as we wait for a second testing
to come through? What are the other courses to say, hey — to prove
innocence, if, indeed, the second test shows that there’s a higher level —
a higher-than-accepted level of this — of this drug that’s in question?

ROBERTSON: Listen, it’s a process.

And we’re just at the beginning of the process. And we, with each day, are
learning more facts and information. And we will know a lot more about this
case a week from today than we do today, and even more a month from now.

There is a lot of documentation that we don’t have yet related to how this
sample was handled, what happened, and what specifically transpired at the
testing lab. None of that — we don’t have that information yet. And we
don’t have it because we really don’t even have a confirmed finding of a
positive test, because there is this thing called a split sample that
hasn’t been tested yet.

And there is no official — quote, unquote — “positive test” until the
split sample comes back and either confirms what the primary sample test
results were or negates them.

PAYNE: Right. Right.

Bobby Baffert was — really complained bitterly about the racing
institution itself, the lack of organization, the access that so many
people had to Medina Spirit, just sort of — it feels like an
extraordinarily sloppy — sloppily run business, where anything could go
wrong. There are no safeguards.

And, of course, these sort of situations come. Is this sort of the line
that you feel like is the most prevalent, in other words, just that
anything could have happened, that there’s just no safeguards against
something like this happening accidentally or deliberately?

ROBERTSON: Well, here’s the fundamental problem that horse racing has
wrong.

They are testing at these minute, minuscule levels that have no effect and
that are easily picked up via contamination. For example, I mean, they are
testing, in this particular case, at the picogram level. A picogram is a
trillionth of a gram.

Well, just because your testing labs now have gotten so sensitive and —
that they can test at these low levels, that doesn’t mean you should be
regulating at those levels.

Where we ought to be regulating is where there’s some sort of pharmacology,
in other words, at a level where, OK, above this, it would have had some
effect on the horse and potentially affected the race, but, below this, it
wouldn’t.

And, instead, the problem that horse racing has now is that we’re just
testing at these minute levels, where you can pick up these innocent
environmental or human contaminants that really have no effect whatsoever
on the horse.

PAYNE: Well, good luck with the race. Good luck with the case.

And, of course, we appreciate you coming on. And we learned a lot more
about what’s happening. Thank you very much.

ROBERTSON: Thanks for having me.

PAYNE: Meanwhile, folks, California governor Gavin Newsom wants to use
some of that state’s budget surplus to send out yet another round of
stimulus checks. But is it really necessary?

We’re going to debate that next.

(COMMERCIAL BREAK)

PAYNE: All right, call it the Golden State stimulus.

Democratic Governor Gavin Newsom proposing another round of $600 stimulus
checks, this for California residents, after the state’s budget was found
to have $75 billion in surplus.

Now, all of this as California already receiving $27 billion from the
federal government for COVID relief. So what’s really going on out West?

With me now, GOP strategist Alexandra Wilkes, Democratic strategist Jessica
Tarlov, and, from The Washington Examiner, Kaylee McGhee White.

Kaylee, let me start with you.

Golly, I remember, less than a year ago, California was $50 billion in the
hole. They were drowning, all of them — talk about stimulus. All of this
federal money goes to them, and now Gavin Newsom gets to hand out these
checks right before the recall.

KAYLEE MCGHEE WHITE, THE WASHINGTON EXAMINER: Well, there are two big
problems with this.

The most obvious is Newsom’s decision to send out another wave of stimulus
checks. We saw a devastating jobs report last week that suggests massive
stimulus payments and unemployment benefits are contributing to people
deciding not to go and find work, because they could just file for
unemployment instead.

And President Biden dismissed those criticisms on Monday and said that
there wasn’t any evidence of that. But I actually know a few of those
people personally. And I can tell you that, if they know they’re going to
make more on unemployment than working gig economy jobs or minimum wage-
paying jobs, they’re going to choose unemployment.

PAYNE: Yes, Jessica, California’s got 1.3 million people on pandemic
emergency assistance, another pandemic program, 750,000. And, by the way,
extended benefits, their numbers went up last week. I mean, go figure.

So what’s going on here? I mean, is Gavin Newsom — did just fall on his
lap at the right time?

JESSICA TARLOV, FOX NEWS CONTRIBUTOR: I’m not sure I would say that
anything has fallen in anyone’s lap at the right time at this particular
moment.

California did a lot of work to make sure that they did have a budget
surplus this time around. And I don’t think that all of us sitting in
either an air-conditioned studio or in our homes should be sitting —
sitting here saying that $600 for families who are making $75,000 is too
much.

I understand the point about the unemployment benefits. And that is the
discussion I think the Biden administration needs to have, but $600? The
people who did get money from California before were earning $30,000 or
below. That’s the poverty line. They absolutely needed that money.

But no one is going to not look for a job because they got another $600.
And Gavin Newsom is sitting about 50 percent in terms of who thinks that he
shouldn’t have been recalled. And people like Caitlyn Jenner are on TV
talking about what a mess he is, and she’s polling at 6 percent. It seems
increasingly like a vanity campaign.

And I think he’s just trying to help the people of his state get back on
their feet.

PAYNE: Alexandra, it’s not just this $600. It’s $600, $300 of regular
state unemployment, the stimulus checks that have already gone out and all
kinds of other monies.

I mean, we’re being a little disingenuous to say it’s just $600. That being
said, though, it is amazing. This is what a lot of red states were
complaining about when this whole thing was going down, that somehow these
blue states that had the most ham-fisted lockdown approaches to this, that
kept schools closed the longest, that had the most people on unemployment
benefits, were going to still find a way to be rewarded. And some people
feel that’s the case.

ALEXANDRA WILKES, GOP STRATEGIST: Absolutely.

And then basing the stimulus aid on unemployment numbers, rather than
population, that’s exactly what the $1.9 trillion stimulus that President
Biden signed into law in March was intended to do. It was intended to prop
up these blue states who have had years of fiscal mismanagement, my own
state of New Jersey being chief among them.

Suddenly, these blue state governors who have mismanaged the budget for
years all of a sudden have this money to hand out. And in the case of Gavin
Newsom, this is really coming at just the right time for him. This is an
opportunity for him to reach out to the people of California, after a year
of one of the most restrictive lockdowns in the country that devastated
California’s economy, and ahead of a recall election where his name is
going to be on the ballot to answer for those policies.

So, look, I mean, I think that this is exactly what Democrats had intended
in the stimulus bill. And I think that, unfortunately, this is where common
sense is going to meet Democratic rhetoric, because anybody living outside
the Washington bubble or the New York bubble, San Francisco, if you go to
talk to any small business owner that has a help wanted sign in their
window–

PAYNE: Right. Right.

WILKES: — they will tell you that they cannot hire people because of the
generous benefits that are out there.

PAYNE: Jessica, to that point, California, I just had Chef Gruel on my
show last week — their small businesses are hurting from a combination of
factors, and perhaps one of the reasons we’re having this recall in the
first place.

What do you say about that?

TARLOV: Well, I think the work that Chef Gruel and the Barstool Sports
folks, like, I guess I’m supposed say El Presidente, have been doing to
raise funds for small business owners all over the country is not only
heartwarming, but done a huge service for people in terrible times of need.

I am admittedly a person who watches those videos when Dave Portnoy calls
up people and says, I have $10,000 for you to keep you running. I’m going
to be with you until you’re ready to open your doors at full capacity and
can get back on your feet.

And I’d love to see more assistance in that form, obviously, coming out
from the government. We have authorized a ton of money for that. But I
really can’t sit here and say that I think it’s appropriate for people to
bash the idea that blue states are getting — quote — “bailout money,”
when blue states are the ones bailing out red states all year round every
year.

You hear Mitch McConnell rail about this, people from Southern states. New
York supports Alabama. New York supports Kentucky. California does the same
thing. That’s what’s at issue here. And it’s hypocritical.

PAYNE: We have got to — OK.

Well, one day, there will be an accounting. Remember, we did $8 trillion in
additional unemployment benefits, and almost all that went to blue states.

I’m done here. I will see you tomorrow.

“The Five” starts now.

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