This is a rush transcript from "Your World," January 15, 2018. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: Man, oh, man, just forget about this whole, I don't know, S-hole thing. Is anyone paying attention to a bigger hole that we're just about four days away from, a possible government shutdown? Don't dismiss it, because I'm telling you, the way this day has been going, plan on it.

Welcome, everybody. I'm Neil Cavuto.

Let's go to The Washington Examiner's Susan Ferrechio on Capitol Hill with what once seemed unthinkable.

But I don't know, Susan. I don't see much budging.

SUSAN FERRECHIO, THE WASHINGTON EXAMINER: Do you have your shutdown clock ready, Neil?

CAVUTO: I think we're going to need a couple of them.

FERRECHIO: Well, definitely, this is a week of brinksmanship here on Capitol Hill.

Democrats are threatening to vote against a short-term government funding bill if they're not able to get a deal on the so-called dreamers. But there is really is not a deal ready to go by Friday. So they are going to have to decide over here in the Senate if they're willing to filibuster a short-term spending bill, because the 19th is the deadline.

That would mean that government funding, if it's not approved, would expire on the 20th, which is the year anniversary, of course, of President Trump's inauguration. They just don't have anything ready on immigration.

So, the pressure will be on, because Republicans in the House will be able to pass it, send it over to the Senate, where all the Republicans will support it, and that will put all the pressure on Democrats.

If they vote against it, it will be on their shoulders if the government is not funded.

CAVUTO: All right, so, the bottom line, the Democrats want this DACA and/or immigration stuff all attached to whatever spending measure we come up with. Republicans are balking at that and proposing this short-term continuing resolution.

Is there any middle ground, leeway ground? What are you hearing?

FERRECHIO: The only middle ground that I can predict at this point is if Democrats can save face for themselves and say that progress is being made.

So, this week, I expect there will be more intense talks. And you may see Democrats coming out saying, look, we feel ground is being gained here. We're getting more of what we want.

They need to save face, because their base is getting very frustrated. This is the fourth short-term spending bill. And people who are in support of the dreamers are pressuring Democrats, saying you're not going to vote for another one of these things because time is running out. There's this March deadline coming and they claim hundreds of so-called dreamers are losing their protected status every week.

So, they're being pressured from their base. However, Democrats alone will be responsible if the government shuts down. Now, you know Republicans always get blamed for this. And Democrats have had some comfort level thinking, well, if we vote about it, hey, the Republicans control Congress. They control the White House.

But in this instance, I think that that is not assured that they would escape the blame. And you see President Trump tweeting today about it, where he's belittling Senator Dick Durbin about the DACA deal, but he's also saying they would be responsible because they don't support increased military funding in the spending bill, which is another issue that is holding up an accord.

CAVUTO: Yes, I was noticing he was calling him little Dicky Durbin.

(LAUGHTER)

FERRECHIO: That's right.

CAVUTO: All right, thank you very, very much, Susan.

Real quick, you have been noticing in your lower right portion of your screen what looked like a regular stock market trading day. These are the futures. The markets, of course, closed today for the Martin Luther King holiday.

So I didn't want you to think, hey, they traded and all that. It's the futures trading, a good indication how things could open up tomorrow. No guarantee. But, of course, the markets were even worried about any of these crosscurrents and a possible shutdown, even in futures trading, they have a funny way of showing it.

Conservative blogger Allie Beth Stuckey with us, Fox News contributor Jonas Max Ferris, Democratic strategist Robin Biro.

Allie, let's get a handle on what happens if the unthinkable happens Friday. They can't cobble together a deal. They can't cobble together a short-term continuing resolution. Then what?

ALLIE STUCKEY, CONSERVATIVE BLOGGER: Well, let's just hope that doesn't happen.

I mean, no one wins in a government shutdown. I think that has bipartisan agreement. Really, what is going to happen afterwards is, you are going to see a lot of blame-shifting like you're seeing right now.

You have the Republicans saying this is going to be in the hands of the Democrats if the government shut down. You have Democrats saying the same thing.

But the fact of the matter is, is that Democrats are asking for amnesty not just for these 800,000 people that are covered by DACA, but almost two million illegal immigrants. And that's just not going to happen. That's why I think it truly is Democrats' fault if the government does shut down. I think that would help Republicans in the midterms. We will see what happens.

CAVUTO: I don't know about that.

Robin, my view is a pox on both parties' houses if it gets to that brink. What do you say?

ROBIN BIRO, DEMOCRATIC STRATEGIST: No, I agree with you.

Nobody benefits from that, especially politically heading into the midterms. I will say, though, that last week, we gave Donald Trump our first proposal. He shot it down. But that was just step one.

(CROSSTALK)

STUCKEY: It wasn't a proposal. It wasn't a real proposal. There wasn't really anything in it good for Republicans.

(CROSSTALK)

CAVUTO: Go ahead, Robin.

(CROSSTALK)

CAVUTO: Let Robin finish a point.

Go ahead.

BIRO: Yes, just like any other deal, you come out with your highest, and then you end up somewhere in the middle. That's where we were.

I expect these negotiations to continue. We are going to end up with something reasonable. I have every faith that they're going to come through within these few days, Neil.

CAVUTO: Robin, are you worried that a lot your colleagues by branding the president a racist, or going that far, is that really right?

BIRO: I am concerned that it's distracting.

My main concern, Neil, is that it's distracting from the message. It's basically hijacked a news cycle for days now. And I don't know why anyone is feigning shock and surprise when Donald Trump has always been a brash New Yorker who just speaks whatever the heck is on his mind.

He probably went too far her and could have issued -- walked that back with a statement. But it's just taken over. We have more important things to do right now with this budget business and the military.

CAVUTO: To your point, it's lost in the sauce.

Jonas Max Ferris, one thing that has been amazing me is even though there was no trading today, there was trading in futures. If the markets are getting a little bit nervous about this, they're not showing it. Is that because they're under the belief that this will all get settled, the theater and hyperbole eases, and we move on?

JONAS MAX FERRIS, MAXFUNDS.COM: I'm not sure.

I think the parts where you see it showing it are more of the value of the U.S. dollar and to some extent U.S. government borrowing costs. Those have been showing less interest in America as an investment place, which is kind of unusual, because right now our economy is very strong. We just passed a very favorable tax package to foreign investors to invest in U.S. companies.

And yet this kind of arguing back and forth, there might be a relative winner. But the bottom line is, America loses with these kinds of fights. Sure, you might be able to position yourself, well, we're out of power. It's not our fault.

But it's not good. It doesn't make America look like a desirable place to invest in, to own debt in. And longer, longer term -- and this is an immigration issue -- is people come to America to be successful. And if we can't get it together financially and keep pushing these issues off and doing short-term resolutions, there's going to be a point where we have to tax success more.

And that is going to limit the immigration quality we get anyway over the long haul. So it's not like this is a good situation for anybody. It could be a relative winner in the elections, but there's no long-term winner for America with these kind of games.

CAVUTO: Allie, I'm wondering about, let's say we do get a short-term measure to just get us over the hump and then debate these and other issues for the next presumably more permanent one a month from now, whatever it is.

But it would be the fourth such time we have done it in just this -- in this cycle. That's weird. That's like Italy.

STUCKEY: Right. I agree.

And while I did say and I stand by the fact in this round I think it's on the -- it's in the hands of the Democrats of why we're not reaching a deal, I think it does say something about Republicans, who do have control of Congress, who are in the White House, that they're unable to pass a good deal.

But it seems like Democrats are so opposed to any kind of commonsense immigration reform, I really think that is what is holding us back more than anything. Any kind of leeway that they're able to give, I think would be able to push us forward into a more permanent deal. But they seem unable to do so.

At the same time, I do think it's on the Republicans to be able to strike that deal with them. So we will see.

CAVUTO: We will see is right.

Guys, thank you all very, very much.

The president will be leaving Mar-a-Lago very shortly in Florida. Due back at the White House a couple hours from now.

We will have more after this.

(COMMERCIAL BREAK) CAVUTO: Did they say every Saturday?

(LAUGHTER)

CAVUTO: Welcome back, everyone.

First the panic, and now the fallout.

The Hawaii emergency management employee who was responsible for that botched missile warning, he has been reassigned, after reportedly receiving death threats. As if.

FOX News Channel's Will Carr in Honolulu with more.

What are we hearing, Will?

WILL CARR, FOX NEWS CORRESPONDENT: Well, Neil, state leaders are continuing face an onslaught of criticism.

And we have learned that the agency that was behind that botched text is getting threats as well. Now, people didn't know what was going on Saturday morning for nearly 40 minutes.

Many thought they were about to die thinking, that North Korea had launched a missile against Hawaii. Some parents so scared, they put their kids into the sewer for protection.

Now, the government has apologized multiple times since. And that really seems to have resonated with President Trump.

(BEGIN VIDEO CLIP)

PRESIDENT DONALD TRUMP: We hope it won't happen again. But part of it is that people are on edge. But maybe eventually we will solve the problem, so they don't have to be so on edge.

(END VIDEO CLIP)

CARR: We have learned that the mistake was the result of an employee at the Emergency Management Agency hitting the wrong button during a shift change.

That employee has been reassigned while the investigation continues.

(BEGIN VIDEO CLIP)

VERN MIYAGI, HAWAII EMERGENCY MANAGEMENT AGENCY: I have talked to him this morning. And just encouraging him to hang in there. We need to find out what's going on and advise him that we will get ahead of this and just to hang in there.

(END VIDEO CLIP)

CARR: And it's hard for the residents in Hawaii to understand this, but authorities say, because of a flaw in the system, it took 38 minutes from the time that first text went out to the time that a corrective text went out letting people know this is a false alarm.

As a result of all of it, there's now both state and federal investigations going on, and they want to figure out exactly what happened. They want to break it down, Neil, so they can make sure it never happens again.

CAVUTO: That had to be the longest 30-plus minutes of a lot of Hawaiians' lives.

Thank you very much, Will.

All right, well, a lasting image from that false alarm, this kid being placed into a storm drain for protection just in case.

Gary B. Smith says if this happened in the private sector, somebody would be gone long by now. We have also got Gordon Chang, author of "Nuclear Showdown," and former CIA analyst Buck Sexton.

So much we don't know, but this much we do, that they're still assessing how this could have happened. But it happened. What do you think?

BUCK SEXTON, FORMER CIA COUNTERTERRORISM ANALYST: Well, Neil, the lapse seems to be just beyond anyone's possible wildest imagination here.

That there were 38 minutes in an age of instantaneous social media where the government didn't get out the message that this was a false alarm, that's a complete outrage. But that the system was so easily tripped here that one individual could make a mistake and send out this message with tremendous ramifications, the notion that there could be an incoming missile to Hawaii is one that Hawaiians have to take quite seriously, given the situation with North Korea.

And so this just goes to show that the state of Hawaii is asleep at the wheel on this one. They have not been doing their job with this. And they need very serious reforms right away.

CAVUTO: You know, I don't who ultimately will change the priorities or go- through for something like this, Gordon Chang.

I do know that if I'm Kim Jong-un in North Korea, I'm laughing my you-know- what off.

GORDON CHANG, AUTHOR, "NUCLEAR SHOWDOWN: NORTH KOREA TAKES ON THE WORLD": Well, certainly, you would because you can see the United States is not prepared. But that wasn't a big secret.

Ever since the end of the Cold War, civil defense systems have been taken down across the country. We really haven't paid that much attention to them. And so we were very lucky in a sense, Neil, because this occurred in a sparsely populated state on a Saturday on a weekend in daylight.

CAVUTO: Right.

CHANG: You know, you change any of those variables, and this could have been a tragedy of immense proportions.

So, at least we now understand what needs to be done. And, by the way, Neil, people are not focusing on this, but that alert wasn't carried on all the cell phone networks in Hawaii and not all the sirens across the state went off.

So there were problems on both sides, being tripped too easily and when tripped not working as should have.

CAVUTO: Yes, a couple of the islands were never part of this. And they expressed concern about that.

Leaving that aside, Gary, what signals is this sending to you?

GARY B. SMITH, KADINA GROUP: Well, I kind of disagree with my colleagues a little bit. They're talking about the whole infrastructure and things like that.

And I guess Gordon made some good points, that that needs to be fixed. But it seems pretty simple. The employee, probably in his training, said, look, this is the button you hit for drill. This is the button you hit for no drill. And, oh, by the way, if you hit the no drill button, an alert comes up apparently that says, are you sure you want to hit this button?

Somehow, this person managed to screw that up. Look, I feel bad for him. Everyone makes mistakes, Neil. But this seems like a pretty easy one that he should have gotten right. That's why I come down on the side this all gets back to this one person. He should be gone, not reassigned.

(CROSSTALK)

CAVUTO: Well, or at least a chain of command you go through for something like that.

If you're at the point where you're doing a real drill -- now, of course, he accidentally he hit that button. All bets are off.

But, Buck, a lot of people talk about states' rights and all that, but is this something over which the federal government has to have control?

SEXTON: This is up to the state of Hawaii.

And I think that there's no reason that the Hawaiian government can't be in charge of this and do a better job. Remember, this is about notification. Nobody is expecting that Hawaii is going to on its own be left to respond an incoming ballistic missile.

CAVUTO: Right.

SEXTON: This is just about letting people in the state know what's going on.

(CROSSTALK)

CAVUTO: And you're comfortable with a local government handling that, as long as everyone is on the same page, obviously?

SEXTON: Yes.

With state government, I think there's important precedents here, whether we're talking about notification for natural disasters, whether it's a hurricane, tornadoes, any number of things.

It's up to the state government. If they need federal help, then of course they can call for it. The governor can call in assistance from the National Guard.

But with this incident, you have look at this and say, obviously, this individual messed up. There's no question about that. But usually you have redundancies in place. It's not supposed to be as straightforward as you press one button and maybe you press another button, and, all of a sudden, the whole state thinks that they might be hit by an incoming ballistic nuclear missile.

That's actually what we're talking about here. So, clearly, they didn't really think that this was something that they had to prepare for. They didn't adequately prepare for that eventuality.

And just you need more layers before you can send out this message. I do think, Neil, though, that the worst part of this was the 38-minute window where they didn't correct it, where people are cowering in fear, terrified in their bathtubs or underground or wherever they were hiding, and understandably so.

CAVUTO: You know, Gordon, it's going to get us back to what we did.

Certainly, I can remember as a young kid where you had these drills, you hid under your desk and you went through the whole nine yards preparing for the unthinkable. I always used to think even as a kid, what difference is it going to make that I'm under my desk?

(LAUGHTER)

CAVUTO: Leaving that aside, do we need to revisit that kind of stuff?

CHANG: Yes, I certainly think that we should, because we live in a different world than the end of the 1990s or the end of the 1950s.

We're talking about a world where there are a number of actors who have ballistic missiles who, you know, are going to eventually get nuclear weapons. And we just have to think about this. I think about this stuff all the time. And actually I'm not prepared at home. We don't have enough water. We don't have enough food.

I think Americans are going to go through just a change in psychology. We're going to understand that we are at threat, even though we're protected by two great oceans.

CAVUTO: We have enough food in our house. It's my wife doesn't really flip over my selections, though.

(LAUGHTER)

CAVUTO: It's processed meats and cheeses. But they can last for decades.

(LAUGHTER)

CAVUTO: Guys, thank you all very, very much.

SEXTON: Thanks, Neil.

CAVUTO: In the meantime, I want you to think quick about this. What does this guy last night have in common with this guy today? Maybe more than you think.

(COMMERCIAL BREAK)

CAVUTO: You know, the Minnesota Vikings were going to lose that playoff game to the New Orleans Saints. Then, in literally the final seconds, this happened:

(BEGIN VIDEO CLIP)

ANNOUNCER: Keenum steps into it. Pass is caught!

Diggs, sideline, touchdown! Unbelievable! Vikings win it!

(END VIDEO CLIP)

CAVUTO: Now, that was an unexpected ending.

Now, a lot of people expecting Republicans to lose the House or the Senate or both in the 2018 midterms, because that's expected. That is just the consensus, as was the consensus up until the final few seconds of that Vikings game that they weren't going to win. And then they did.

Erin McPike from The Independent Journal Review and conservative commentator Angela Morabito.

You know, Angela, as if we need the reminders, history is defined by those events that we didn't see coming. So, if the consensus sees a Republican landslide defeat coming, at the very least, we should question it, shouldn't we?

ANGELA MORABITO, THE WASHINGTON EXAMINER: Absolutely.

You look at the research on what happens to the president's party in midterm elections, and, on average, since World War II, the president's party has lost 25 seats in the House.

But I cannot point to anything since the day Donald Trump was elected president of the United States that has gone down in an average way. Polling is broken. And what we expect -- our expectations are not really worth much anymore. It's so much harder to predict.

CAVUTO: Yes, and I know there are a lot of variables here, a lot of very powerful Republican incumbents who are not running again. They can't count similarly big names to run for their seats.

So, it does feed this narrative, Erin, that the Grand Old Party is in a grand old pickle. Do you agree?

ERIN MCPIKE, INDEPENDENT JOURNAL REVIEW: I do agree with that.

And, Neil, I would tell you, we talked on the day of the Virginia governor's election, when I thought that Ed Gillespie actually might eke out a victory in that race. And, boy, was I wrong, since he lost by almost 10 points.

(CROSSTALK)

CAVUTO: By the way, Erin, that's a big problem with you. You readily concede when you're wrong. Don't do that.

MCPIKE: Well, I'm not often wrong, but on that one I was.

CAVUTO: No, you're fine.

MCPIKE: And I will admit it.

But, look, since Election Day, I have heard from a number of professional Republicans -- and that is people who work in the District of Columbia and make their money off of advancing the Republican Party and who live in Virginia -- who have told me that they voted for Ralph Northam, the Democrat, who won, and not their friend Ed Gillespie, who they have worked for before or worked with before, because they wanted to send a message to Donald Trump.

And if professional Republicans wanted to do that in the 2017 election, I would have to assume that a number of independent voters, even light Republican leaning voters, in a number of suburban districts around the country probably want to do the same thing in 2018.

CAVUTO: That's interesting.

But, Angela, I will flip it around and say a wild card development here is the tax cut. And while I have a lot of reservations about the tax cut, it apparently proved so large for corporations, for example, that they're doing more than just benefiting their shareholders.

They're sharing the loot, 150 of them now benefiting upwards of 2.5 million Americans in terms of higher bonuses, lower insurance-related health care costs, even, you know, utility customers, that we didn't quite grasp the magnitude beyond the personal cut and how the business cut could come back to individuals.

And that will be appreciated later in the year. I don't know if that's the case, but I think that is an underappreciated element. What do you think?

MORABITO: Without question.

You have a whole slew of companies who are giving their employees bonuses and raises because they are able to, thanks to the GOP tax cut package. And even if your company isn't one of those, for anybody watching, you're still probably taking home more of the money that you have earned when you go to work.

The GOP effectively gave everybody a raise with this tax bill. And not a single Democrat voted to make that happen. If the Republican Party reminds voters of that very simple fact every day until midterm elections in November, it's going to be the Democrats who have to throw the Hail Mary pass this time.

CAVUTO: Well, but Republicans, I got tell you ,when it comes to explaining this tax package and just simplifying it the Ronald Reagan way, I think you should get more of your money, not the government and leave it at that, they gets into the weeds and get too incredibly detailed about it.

So, Erin, failing that, people are going to have to see it for themselves. They are going to see it in their checks. They are going to have to see it in the bonuses. They are going to have to see more companies sharing the loot. And then it could make a difference.

Without that, I don't know about Republicans selling it. What do you think?

MCPIKE: Yes, I want to talk about 2006 for just a minute, because remember that 2006 was before the great recession, and the Democrats won. They won the House, they won the Senate in 2006. And they won it because they campaigned against the Republicans.

And what they said was the culture of corruption and the opposition to the war in Iraq. Those were two things that really didn't have anything to do with the economy. I mean, obviously, they do have things to do with the economy, but it wasn't about the economy and about pocketbook issues.

And the Democrats still won. So, yes, the Republicans can try to campaign on this tax bill and on these tax cuts, but they had a disastrous year of governing, and just got the tax package through at the very end, after a miserable year.

CAVUTO: All I'm saying, all I'm saying, ladies, is I think -- and, believe me, I had a lot of problems with the tax cut package. The magnitude of it and the spillover effect is more substantial than I think people appreciate.

Could be early. But we will see.

Thank you both.

MORABITO: Thanks.

MCPIKE: Thank you.

CAVUTO: I left you speechless, almost as speechless as me.

(LAUGHTER)

CAVUTO: All right, get ready for more of this. I'm not talking about Massachusetts. Try Mississippi.

(COMMERCIAL BREAK)

CAVUTO: Welcome, America, to more snow, including you folks in the South, all the way up to Ohio and points north. How bad is it going to get?

So bad, you have to come back in 60 seconds to find out how bad.

(COMMERCIAL BREAK)

CAVUTO: You know there is another winter storm coming? It's sweeping across the Midwest, the Northeast. And if you were thinking maybe in the South, you were going to be safe, not even close.

FOX News meteorologist and constant bearer of good news on these matters, Adam Klotz.

Adam, what are you doing? what are you doing to us?

ADAM KLOTZ, FOX NEWS METEOROLOGIST: Well, I know I always feel bad whenever I'm here, because I can only bring bad news. They never bring me out when it's going to be gorgeous out.

What we're looking at is snow again across the Midwest for now that is eventually going to spread farther to the South. So far, we have seen a decent amount of snow running through the Ohio River Valley, now stretching back to the Ozarks.

Right behind this, that is a line of cold air that is pushing in. It's been cold, but it's getting even colder. These are your current temperatures really piling up here into the Upper Plains States, five degrees in Minneapolis, currently four degrees.

But if you add in that windchill -- and that's when it starts to feel really cold -- what it feels like outside, suddenly you see these numbers dropping down into the negatives. Negative 15 degrees in Minneapolis. Getting closer to negative 20 degrees in some of these spots.

This is only going to settle farther and farther to the south. So, if you're south of this, that cold air is coming. And unfortunately right along this boundary, eventually, that snow is going to be on the way as well.

Here's your future radar. As it begins to move this direction, you can kind of see it behind my head. We're taking you throughout today into Tuesday, eventually into Wednesday, as this entire line stretching all the way from portions of New England back down towards Texas, it continues to move.

And, yes, portions of the South are at least going to see some snow and some ice here over the next 48 hours. And as I said, it is stretched way on back there, which is why we're seeing some of these winter storm watches, advisories, warnings stretching all the way from portions of South Texas all the way up into New England, running up into the U.P. of Michigan.

And some of these areas that you're looking at in this pink color, spots where you typically don't get it as bad, those are the warnings. So those are the biggest concerns stretching you from portions of Mississippi back down into Texas, Austin, San Antonio, close to Dallas, all areas where perhaps freezing rain, which often can be the worst part of this, Neil, that's all on the way in the next 24 to 48 hours.

CAVUTO: Incredible. Adam, thank you very, very much.

KLOTZ: Yes.

CAVUTO: Well, I think, as Adam would remind you, it could be worse, much worse, much, much, much worse.

Talk to rescue workers in California who continue their search for more victims of those deadly mudslides there.

FOX Business Network's Hillary Vaughn in Montecito, California, with the latest.

Hey, Hillary.

HILLARY VAUGHN, FOX NEWS CORRESPONDENT: Hi, Neil.

Well, officials tell me they have absolutely no idea when people will be allowed back into their homes to assess the damage. Now, some homes have been completely wiped out. We have walked around on foundations.

But then others that are still standing, you can see what they're dealing with, a giant pit of mud essentially laying here that crews are working to scoop up shovel by shovel and clear out all this debris that has filled the homes.

Some of these homes are going to be total losses. And officials say that this process is moving a lot slower than they anticipated. And they're looking for more landfills and places that they can put all this mud once they clear it out.

(BEGIN VIDEO CLIP)

CAPT. JUSTIN COOPER, MONTEREY FIRE DEPARTMENT: Firefighters were here at the Thomas Fire fighting the fire up here on the mountains. And then, you know, a couple weeks later, we're transitioning to mudslides.

So fatigue working on these piles is extremely just really, really exhausting. You're sinking in to knee-high mud, waste-high mud in places. There's dog teams that are searching through, and then just trying to move the debris. You can see these -- a lot of this debris is extremely heavy.

(END VIDEO CLIP)

VAUGHN: So far, 65 single-family homes have been completely destroyed. Nearly 500 others have been damaged.

Eight businesses have been buried under mud, and 20 also have sustained major damage. Now, only nearly 70 percent of the total damage still hasn't even been looked at, Neil. So they really have no idea how big of a problem or how expensive this cleanup is going to be.

This deadly mudslide has also killed 20 people. Four people are still missing.

We followed a K-9 search-and-rescue team that has been searching piles of debris, desperate looking for any signs of life or human activity underneath the piles of debris in these neighborhoods. Now, communities here remain both desolate and dangerous.

These are essentially a no-go zone for all residents, because more rain is expected. And similar things could -- it could be a dangerous situation if more rain is on the way, Neil.

CAVUTO: All right, Hillary, thank you very much, Hillary Vaughn in California.

Meanwhile, you probably know, on this Martin Luther King Day, that this civil rights leader just called President Trump a racist. What would the civil rights icon have to say about that?

His niece Alveda is next.

(COMMERCIAL BREAK)

CAVUTO: Well, Congressman John Lewis slamming the president, calling him a racist after that infamous S-hole comment.

What does Alveda King make of it? She was with the president not too long ago at a Martin Luther King event.

The niece of Martin Luther King, the daughter of A.D. King, joins me right now.

Alveda, very good to have you.

DR. ALVEDA KING, NIECE OF MARTIN LUTHER KING JR.: Hello, Neil. And it's wonderful to speak with you and to all of our viewers.

And today is MLK Day, M.L. King day. So this is just another right time to discuss this.

CAVUTO: You know, I think of your dad, I think of your uncle, I think of your big old family where there's a great deal of division. Right?

Martin Luther King's son, MLK III, of course, saying that he thinks that Donald Trump is closer to George Wallace. Other family members have said just about the same.

(LAUGHTER)

CAVUTO: But not you. Why not?

KING: Well, you know, my cousin Bernice King spoke at MLK Day in Atlanta for a church service. We had a day on praying and asking God to help everybody to come together in unity.

She did mention that her daddy was like George -- not her daddy -- wow -- excuse me -- that Congressman Lewis was like George -- was comparing George Wallace to President Trump.

Let me get this straight. George Wallace was a racist who repented and began to go around and apologize for being a racist, because he had been one of the worst racists in history in America. And so President Trump is being called a racist because he's supposedly called something an S-hole.

But, from a perspective, if you look at it this way...

(CROSSTALK)

CAVUTO: By the way, we should say, the president denies that he used that word.

But go ahead. Go ahead.

KING: That's what I'm saying.

So, in all of these nations, you have corrupt leaders who just take every - - suck everything out of the country, use the money for their own greed and gain. And then the people become unhappy and want to immigrate to America because they feel as though things are better here.

And that leaves the country in a state of being something like a hellhole. I don't say the other world at all. So, whether President Trump said it or not, I wasn't there. And so I can't said what he said or didn't say. I wasn't there.

But I know that those nations are hurting. Not the people. The people are good people. But the corrupt leaders have made the country bad.

Neil, can I share with you a quote from my uncle?

CAVUTO: Sure. Sure.

KING: I put it in my new book that is coming out tomorrow. And it's called "King Truths: 21 Keys to Unlocking Your Spiritual Potential."

But this particular quote, Bernice read it at her service today, and it's in my book. Martin Luther King said: "I am convinced that men hate each other because they don't know each other. And they don't know each other because they don't communicate with each other. And they don't communicate with each other because they are separated from each other."

So, when Congressman Lewis and they want to protest and boycott and not go to the State of the Union, they're just separating themselves. Well, how are you going to come together in peace if you refuse to come together at all?

CAVUTO: Now, there's a number of, you know, congress men and women who don't want to go to the president's State of the Union address.

KING: Yes.

CAVUTO: What do you make of that?

KING: Well, we are praying for -- I was with Bruce Levell, who is another member of the surrogates for President Trump, and other leaders.

There were several African-American leaders who greeted Secretary of HUD Dr. Ben Carson today in Atlanta at the M.L. King Day. And so what I'm saying is that President Trump really is draining the swamp. The employment rate is going up. The unemployment rate is going down in the black communities as well.

People are getting bonuses at work. Minimum wage is going up. All of that will help every community to come to have equality, one skin color, one blood, but getting equal opportunities to work and to be safe. That's what the president is doing. None of that is racist, Neil. Not any of that is racist.

CAVUTO: Dr. Alveda King, thank you very much.

KING: Thank you.

CAVUTO: All right, do any of you remember this?

Some of the biggest stars came out in support of Haiti in 2010 after a massive earthquake. A total of about $13.5 billion was raised. At last check, Haiti is still one of the poorest nations in the world, 60 percent of the population living in poverty, none of that money getting to them.

FBN's Charles Payne, the host of "Making Money," has been doing some digging.

Charles, good to have you. What happened?

CHARLES PAYNE, FOX NEWS CONTRIBUTOR: You know, Neil, to be quite frank with you, it's still a big question mark.

Now, there's been improvement. If you recall, after the earthquake, 1.5 million Haitians were homeless, living in tent cities. Over 95 percent of them have been relocated. But just the amount of money put through from U.S. aid, which $3.2 billion, that's the U.S. federal government aid, to monies promised around the world.

Now, I will say that is a U.N. number, that $13 billion. I'm not sure it was -- it was -- quote, unquote -- "earmarked." So I'm not sure how much ever really made to it Haiti. But it's just been a series of unaccountability.

You have got 10,000 NGOs operating in Haiti. And let's face it. There's been a lot of mismanagement of that money, some deliberately, some perhaps not. But we have a ways to go.

CAVUTO: Do you ever -- as a prominent African-American in your own right, and you hear the comments that are raised about the president, Martin Luther King III saying the president deliberately chose a country like Norway that he liked because he likes white people, and not Haiti because it's all black people, what did you think of that?

PAYNE: You know, it's really tough, because you don't want to think of the president in a certain way.

And, listen, if it was -- if it was -- here's the thing. These countries that he talked about, other than using the word that he used, have been described in certain ways. We know Haiti, for instance, is the poorest country in the Western Hemisphere. We know that a lot of these other countries have their problems.

Now, and consequently, what I find compelling is that the best and brightest of those nations often choose to leave those nations. Today, at this very moment, there could be a doctor in Alabama operating on an American -- an immigrant from Nigeria, a doctor, operating on someone, saving their lives in Alabama, instead of Lagos.

So you start to ask yourself, what is going on that even the best and brightest of those nations want to leave? And I would love to see someone say, what is going on with there?

Now, I do hope and I think, going into the State of the Union address, that this presents a great opportunity for President Trump to understand one thing. Whether he said something or didn't say something, his words are very powerful.

We all like to be liked, and everybody wants to be liked by the president of the United States. Occasionally, you have to go out of your way and say, that was not my intention. OK? And you cannot let the mainstream media and others turning into something that you keep telling us that you're not.

And it's OK, because I have hurt people's feelings, not on purpose. We all have done that. We have all said things that we found out later made someone feel bad about themselves. And I think the president could do a better job with that respect, knowing that the mainstream media and Democrats are going to skewer every word that he says, in some cases words that he didn't say.

So there's a responsibility on that part. But the feigned outrage that I here that I did not hear when I heard the quote people clinging to their guns and their Bibles or a basket of deplorables, you could have easily argued that those were dog whistles and racists also, but we didn't hear the same people complaining about it.

CAVUTO: That's a very good point, Charles.

PAYNE: Thanks.

CAVUTO: Thank you very, very much.

Good seeing you again, my friend, Charles Payne.

PAYNE: You too. Thanks.

CAVUTO: Well, you didn't think that Steve Bannon could tear things up even more? Wait until you hear what Charlie Gasparino has been discovering about what he wants to do now.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP, "SATURDAY NIGHT LIVE")

KATE MCKINNON, ACTRESS: What are you doing now?

BILL MURRAY, ACTOR: I'm working on a web series for Crackle.

(LAUGHTER)

MURRAY: It's called "Cucks in Cars Getting Coffee."

(LAUGHTER)

MURRAY: And I'm also coming out with a new line of wrinkled barn jackets called Frumpers for guys.

(LAUGHTER)

MURRAY: Springtime, skin care line, Blotch.

(LAUGHTER)

(END VIDEO CLIP)

CAVUTO: So, that's what Stephen Bannon was up to. I had been wondering.

But FBN's Charlie Gasparino kind of knows what he's really been up to or wants to get up to, right?

CHARLIE GASPARINO, FOX NEWS SENIOR CORRESPONDENT: You know, satire -- satire always has a little bit of truth to it. You know that?

(CROSSTALK)

(LAUGHTER)

GASPARINO: So, there is some truth to that.

Here's what we understand about Steve Bannon. As you know, he's been ousted from Breitbart after his comments -- President Trump did not like his comments and neither did the Mercer family, one of the owners of Breitbart, the rich Mercer family, his comments that appeared in that Michael Wolff book about Don Jr.

Here's what we have been learning. He's quietly plotting his return to some sort of a public life post-Breitbart. He's told friends he may possibly reenter the news business at some time. And we should get into that a little bit.

But he's also telling friends he's thinking about creating some sort of a populist think tank that will spread ideas of -- the Bannon ideas, much of the same stuff you see in Breitbart. That think tank would do that.

It's unclear how he is going to raise this money. As you know, these big benefactors, the Mercers, are no longer quite enamored with him anymore after the Trump book, Michael Wolff Trump book, came out. But he's talking about this.

And I will tell you, one thing that I hear from close to -- to people close to Steve Bannon, they say, OK, he may not have money from the Mercers going forward to support any of these projects he has in his head, which includes getting back into the new business somehow, but he does have a very powerful friend, and his name is Peter Thiel, the Internet billionaire, who is a Trump supporter.

And they are apparently still close, according to friends of Bannon. And what they say is, don't be surprised if Mr. Thiel doesn't finance any of this stuff, including what people were telling me close to Bannon is a possible -- he would make a possible run at buying Breitbart. That is not out of the question, people close to him tell me, not now probably.

He's going to do this political thing apparently now. At least that's what he is talking. We should point out that Bannon tomorrow will be before the House Intelligence -- Intel Committee talking about potential Russian meddling in the 2016 election.

So, he has got a pretty busy schedule right now. But his post -- he does have access to money if -- and he was a former investment banker. So, he knows how to raise money. And he has this connection with Thiel.

And what people say is that, if he wants to make a run at Breitbart, if he wants to go to Breitbart's widow and say, listen, you make X-amount a year, or you make very little a year on this Web site, we're willing to pay you $5 million, $10 million, here's the financing, that could happen.

That's what people close to him say.

CAVUTO: Not on his own. He would need a feeler or someone like that, right?

GASPARINO: He would need some people.

He has a few bucks.

CAVUTO: OK.

GASPARINO: I mean, he's been around.

CAVUTO: Yes.

GASPARINO: But Thiel likes him. That's what I hear.

CAVUTO: All right. Well, he's not Charlie Gasparino. But he has a few bucks.

(LAUGHTER)

CAVUTO: All right, my friend, Charlie Gasparino.

More after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

CAVUTO: All right, what is that excitement about? Apparently, these folks just found out we're going live on Saturday.

(LAUGHTER)

CAVUTO: "Cavuto Live" kicks off this weekend, 10:00 a.m. I'm speechless, actually.

We have got a lineup no one will see coming. So, don't miss it. And that's the homework assignment for you. If you want to be ahead of the curve, watch us live on Saturday.

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