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00:00also bringing in all the first responders that they can, the U.S. Coast Guard here trying to
00:04help people get out and evacuate people as well. So what's been going on is we have this stationary
00:10boundary that's draped over the entire state of Texas. And so this is just sitting here,
00:15bringing in that isolated shower and storm potential. And we also have that moisture
00:20coming in from the Pacific, aiding in that rainfall potential. And the hard part is this
00:26boundary is still here. It's still sitting here. So we still have the chance to see showers and
00:30storms continuing on and off throughout the day, throughout the entire state, mostly the southern
00:35portion, like where we are right now here in Kerrville. So we still could see a little bit
00:38more rainfall, a few more inches of rain falling in these communities that are already struggling
00:44and just facing just a lot of damage as they start to wake up this morning and try and piece things
00:49together. You know, at our own hotel, we are, you know, a couple miles away from this town. And even
00:57there, hotels completely booked up because people are just displaced and having to evacuate this area
01:04along the Guadalupe River. So on top of this, not only are we dealing with the damage here,
01:11but farther downstream. Now we're going to start to see that water, that kind of a flood wave is what
01:18we've been calling it, moving farther downstream and going to be impacting communities farther south.
01:23And so one area, Spring Branch, their rain gauge actually rose 26 feet within the past five,
01:30six hours or so. So expecting flash flood warnings popping up. We already are seeing those throughout
01:36the community and also many flood rescues, water rescues occurring currently throughout the state.
01:42We are monitoring one near Austin, Texas, where we saw even more flooding, a lot of rainfall throughout
01:49the entire state. It's not just here. It's going to be farther south as well. So as of right now,
01:55Texas authorities have said they've had over 300 water rescues and calls for help here in Kerrville
02:03alone. So that just shows you how many people were are impacted by this and it's just absolutely
02:08devastating. So as I mentioned before, search and rescue that is at the forefront of everyone's mind
02:14and just trying to get that effort out there and hopefully reuniting people with their family
02:20members, hopefully finding them safe and sound. So that's the effort that's happening here. We're
02:24going to keep a very close eye on this and continue to monitor the situation because it is an ongoing
02:29flood threat. It's not over yet. It's continuing to move downstream and impacting even more areas
02:34throughout the state of town. All right. Thank you to our Fox weather team. Bain there showing us
02:40what it looks like waking up this morning there in central Texas after the area was hit by historic
02:46rain Friday morning, triggering this deadly flood wave and leading to four flash flood emergencies
02:53amid widespread high water and home rescues throughout the affected areas. You're taking a look on your screen
02:58there at just some of that footage we are getting in here. Now, officials in Kerr County say they have
03:04found multiple bodies so far. They put the number of fatalities at around 24. Again, we are still
03:10waiting for an update here this morning on that. And sadly, the death toll expected to rise here
03:16in the coming days. We also do know victims were reported to be adults and children with around two
03:21dozen still missing right now after this catastrophic flooding. We're going to go away for another break.
03:27Much more news to come. Don't go anywhere.
04:02Can you LDL?
04:12No.
04:14Come.
04:14Come.
04:17Come.
06:19It's the market reaction because we did know the market did close a little bit early there before the bill did pass in the House. It's not set to reopen until Monday. So really we're unsure of what the reaction here is, right? So can you just give us your predictions?
06:35Yeah, I think the broad contours of this bill have been pretty much baked in for some time. So the final result isn't going to be too shocking to markets. I think markets are going to be relieved that it came in pretty much as expected.
06:48We all knew that it was going to be bad for the debt trajectory overall. That's already been priced in. So I think markets are going to be a little bit relieved that it's final and that it's not much worse than what was previously expected.
07:00And I want to talk about the projected short-term versus long-term economic impacts of the bill. I think there's a lot of questions surrounding that.
07:10Yeah, absolutely. I think true to its name, this bill is sprawling, as you said. It is big. It contains multitudes, some of it good, some of it bad, some of it ugly. So we can't paint it with too broad of a brush.
07:22I think on the plus side, the bill does make permanent the individual tax cuts from 2017 and allows more generous expensing for investments and for R&D.
07:32And this permanent expensing is the most beneficial thing in the bill from a long-run economic perspective. It's going to increase the capital stock. It'll help eventually boost productivity.
07:43On the downside, this bill does pick winners and losers, especially in energy. And there's a lot of money spent on political gimmicks and carve-outs.
07:51The taxes on tips, on overtime pay, the deductions for interest on auto loans, these do violate the principles of fair tax treatment without any obvious benefits on the whole.
08:03And I think, you know, finally, the major criticism, which I think is totally valid, is that it's not paid for. Despite some of these growth-positive provisions, it's not going to pay for itself, and it only kicks the fiscal can down the road.
08:15And it worsens the overall debt trajectory. And it's going to increase interest expenses. And at some point, that bill is going to become due. So I think multiple things can be true at the same time. It has good aspects, but it's definitely way too expensive.
08:27Well, let's talk about another key point here, inflation. And that's what President Trump really ran his campaign on. That's one of the big talking points he focused on.
08:36And just the other day, we saw the White House touting lower egg prices. So really, how is this going to affect people when they're heading to the grocery store, when they're looking to purchase some of those items?
08:46This bill is not going to have a whole lot of impact on that specifically. And I do think that domestically generated inflation is on the down path at this point. We think that's going to continue.
09:00And, you know, Fed Chair Jerome Powell testified in front of Congress recently, and he had to defend why the Fed hasn't cut rates.
09:07And I think based on backward-looking data, a very strong case can be made that the Fed should have already been cutting. But policy has to be forward-looking. And we still have this huge rolling thread of tariffs.
09:18And if the President's going to promise a 50 percent increase in the effective tariff rate, Fed policymakers need to proceed with caution. And that's exactly what they're doing.
09:27The Fed doesn't have a great model to deal with that kind of shock. So until we get clarity on trade policy and assurances that longer-run inflation expectations are well anchored at the Fed's target, about 2 percent,
09:40the Fed's going to be comfortable doing nothing, even if domestically generated inflation continues to trend downward.
09:46And as we've been watching all of this unfold here, we watch these overnight sessions in the Senate and then in the House there.
09:53A lot of back-and-forth between Democrats and Republicans. Of course, Democrats saying this is incredibly harmful. Republicans saying this is going to benefit people.
10:02And as you can imagine, Chris, as people watch this unfold, there's a lot of questions there because we're hearing two opposite ends of the spectrum.
10:10Now, my next question, you touched on this a little bit, how this is going to, you know, impact the deficit over a span of 10 years.
10:18Can you speak a little bit, though, about White House claims and how what you're predicting here is comparing to what the White House has been saying?
10:27Sure. I think there are benefits that are going to accrue to most people in most income brackets overall.
10:34But those benefits are going to be fairly small and potentially outweighed by the higher interest costs that we're going to face overall.
10:43And the issue with this ever-increasing debt is that resources are misallocated.
10:50This is true for both the public sector and for the private sector.
10:54The government's going to have to spend more on interest payments, and they're going to spend more on interest than on defense spending for this year.
10:59That's obviously not optimal.
11:01And the private sector has to fund the government.
11:03So government spending leads to higher interest rates, and that crowds out more productive private investment.
11:10And because this bill is really just mostly an extension of the current tax rates, I don't see a big short-term growth impulse from it.
11:20Another thing that I think stuck out to some of our viewers, we had this live poll just a few days ago about questions about the big, beautiful bill.
11:26And this was a good question, so I wanted to ask you about it again for those who may not have been able to tune in.
11:31No tax on tips, no tax on overtime.
11:33How exactly is that going to work?
11:35Because someone wrote in asking, you know, how is this going to impact my paycheck?
11:39Could you explain a little bit about that?
11:42Yeah, so a couple of these provisions go into effect immediately.
11:46But given the fairly small percentage of Americans that are going to be impacted by it, in aggregate, it's really not going to propel growth forward.
11:55And we have seen this bifurcation of the health levels of those at the higher end of the income spectrum and those at the bottom end of the income stratum.
12:05And we do see more stresses in terms of increased delinquency rates on credit card loans, on auto loans, at those at the bottom portion of the income spectrum.
12:18So there are going to be short-run benefits that accrue to those folks that are going to benefit from the exemptions on taxes on tips and overtime pay.
12:27But overall, that's a fairly small portion of the U.S. taxpayer base for all.
12:35All right.
12:36Thank you to our expert there, Christopher Hodge, as he did break some of this down for us.
12:41You're taking a live look right now at the United States Capitol building this Saturday morning.
12:45We're going to go away for a break.
12:46When we come back, we're going to hear from lawmakers as they were reacting to the news that the House did pass the big, beautiful bill a little bit earlier this week.
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15:23Inside of that will be my colleague Josh Breslow.
15:25My name is Christy Matino and you're watching live now from Fox.
15:28Taxes that our mayor and our governor keep hammering them with.
15:32I've got to remind people the reason we needed salt relief was because the Democrats at City
15:35Hall and in Albany were taxing them to death.
15:38But we did what we had to do to fight for this salt relief.
15:42It's a big boost for the people I represent.
15:44And that, coupled with the senior deduction, that will eliminate the tax liability for
15:49seniors on Social Security for 51 million American seniors is really significant.
15:56My district should be very happy when they see their taxes done at the end of next year.
16:00Do you have any concerns about getting into the good terms with this bill?
16:03I know it's been a few times for some vulnerable House Republicans.
16:05It's a great piece of legislation that actually puts working Americans, middle-class families
16:11and senior citizens first.
16:13People are going to see the boost that our economy is going to get from this.
16:17We're going to see jobs created, wages lifted.
16:19People will be lifted out of poverty as a result of this bill because we're going to build
16:23on the success of the 2017 tax cuts, which we know were very successful in job creation
16:28and bringing in prosperity across the country.
16:32The only reason we never saw the full potential.
