'Your World' on Ukraine-Russia conflict, omicron, inflation

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Panetta: US must deal with Russia from a position of strength

Former CIA Director Leon Panetta discusses how the U.S. should deal with Putin in response to rising tensions with Ukraine on ‘Your World.'

This is a rush transcript from "Your World," January 10, 2022. This copy may not be in its final form and may be updated.

NEIL CAVUTO, FOX NEWS ANCHOR: All right, FOX on top of two very big worries, soaring prices and Omicron, soaring cases. Will we ever get a handle on either?

Welcome, everybody. I'm Neil Cavuto, and this is "Your World."

And the surge with Omicron is real, so far, not very dangerous, but it is real. The surge in prices is real too. But it is getting to be economically dangerous. And it is spreading like wildfire as well.

Let's first go to Peter Doocy at the White House on how the president and company are handling the Omicron thing -- Steve.

PETER DOOCY, FOX NEWS WHITE HOUSE CORRESPONDENT: And, Neil, this is a White House that is focused mostly or at least primarily on getting people vaccinated since their first day last January.

Now there are new questions about whether or not they were focusing enough on testing.

(BEGIN VIDEO CLIP)

DOOCY: Why is it that you guys were so unprepared for the need for testing after the holidays?

JEN PSAKI, WHITE HOUSE PRESS SECRETARY: Well, Peter, I'm happy to see you back and well.

I would second say that there has been a massive surge in cases, as you know and we're a part of, in D.C. and New York. And there has been an unprecedented -- in other parts of the country as well.

DOOCY: The president's there on television talking about a winter of severe illness and death. While he's saying that publicly, why weren't you guys doing more to prepare for the winter?

PSAKI: Well, Peter, everyone decides where they're going to go get a test. And we make a range of options available. You can also purchase tests online. Later today, we will have more details on how 150 million Americans who have health insurance can get reimbursed for tests.

So, we will have more details on that later.

(END VIDEO CLIP)

DOOCY: And we just got a detail about some of those Americans with insurance getting reimbursed.

That starts on January 15, well after the Omicron surge from the holidays. We also heard today at the White House Briefing Room that those 500 million free tests mailed to people's homes that they have been talking about for weeks, they actually haven't signed all the contracts for those yet -- Neil.

CAVUTO: Peter, how are you feeling, my friend?

DOOCY: I'm doing well. I was vaxxed and boosted and surprised last Monday when I came to the White House before dawn and tested positive.

But I isolated at home. And I'm happy to be back. Have a lot more questions for the next one.

CAVUTO: Yes, you're indestructible, my friend. I'm glad to hear that.

Peter Doocy, thank you very much, Peter at the White House.

Now let's go to Dr. Bob Lahita, the director of St. Joseph's Institute for Autoimmune and Rheumatic Diseases.

You hear a lot more about cases like Peter's and others and the surge in cases across the country. When do you think, Doctor, it begins to ebb?

DR. BOB LAHITA, ST. JOSEPH UNIVERSITY HOSPITAL: Well, based on what we know about South Africa and now the United Kingdom, or Great Britain, I presume this is going to ebb around late February, maybe early March.

So I do think the numbers are going to come down. Every -- we have had 99 percent, roughly, in estimates, of the population that have -- that have the COVID virus is Omicron. So Omicron is out there and it's taken over.

CAVUTO: So, as you have been telling us almost from the beginning, Doctor, that -- when you had a chance to study it, it is very contagious, certainly more than any of the other variants we have experienced thus far...

LAHITA: Yes.

CAVUTO: ... but, so far, not very dangerous.

So how do you see that playing out? Will it remain that way?

LAHITA: Yes, I think it's going to remain that way unless we get another variant.

But the Omicron, basically, if you have comorbidities, and you have not gotten the booster shot, I think you could have some problems. But, by and large, the beds in the hospital are filled up with Omicron patients, but not a lot of people wind up in the ICU on ventilators. And that's good news, Neil.

CAVUTO: The Pfizer CEO, Doctor, is saying that an Omicron vaccine could be ready as early as March. How significant a development do you see that being?

LAHITA: Well, this is the wonderful nature of molecular biology, which is the way science goes in this year, 2022, and certainly last year.

We can analyze the RNA segments of the virus that are responsible for the spike protein. And if they change, they can simply make a new vaccine based on the new RNA variation within the genes of the virus, which is amazing. That's unheard of. And it couldn't be done 15 years ago.

CAVUTO: All of this comes at a time when people are looking at the progression of COVID, and wondering if this is its final sort of throe here, or whether we see variations of this, and it will always be with us.

You early on said we might have to just get used to the fact that, in one way, shape or form, it will always be with us. As you know, the president of the United States disagrees with that. But your conclusion was based on just the evidence before. You don't see that changing. This is a permanent part of us?

LAHITA: No, I don't -- right. I don't see that changing.

Coronaviruses is a big group of viruses. There are variations of the coronavirus. The coronavirus has been the cause of the common cold in a lot of people over the past several decades. So, I think this coronavirus, once it is no longer a pandemic, may become endemic, which means, like the flu, every year, we will have to rev up and get a variation of the vaccine to protect all of us.

And this virus will be just like influenza. It will infect people, it will kill people, it will make people sick, but it will not affect millions and millions like it is doing today, Neil.

CAVUTO: I have asked you this before, Doctor, but I always think it bears repeating that a lot of people who have not been vaccinated for example, hear the problems with those who have been vaccinated, and they still get this, and they say, why the hell should I?

And now, when they hear people recommending a third booster, a fourth booster and all of that, and say, look, they don't even know how far and how long this goes, so why should I bother, you say?

LAHITA: I say, bother. It's worth your life. It's worth chronic illness, if you see what we see, the long-haul syndrome, people who have not been vaccinated who have shortness of breath, who can't taste anything, some of them upwards of eight months, can't taste or smell.

CAVUTO: Wow.

LAHITA: And these are terrible things that people don't want to have.

So, even if you think you can survive the virus, you can have side effects, based on your immunogenetics and other physiological variants. So let's get the vaccine and get the boosters.

CAVUTO: Got it.

Dr. Bob Lahita, great talking with you again, thank you very much.

LAHITA: Thanks, Neil.

CAVUTO: All right, an economic spike to tell you about now. And you know it quite well, the run-up in prices across the board for everything from a gas and your heating bills all the way to food and pretty much everything you like.

It's going unabated right now. And that is a problem for the Federal Reserve this year, when it already has indicated that it's going to be raising interest rates to stall that, but it's going to have an uphill battle on its hands.

And doesn't Susan Li know it?

Susan, what are we looking at?

SUSAN LI, FOX NEWS CORRESPONDENT: Yes.

Yes, we're looking at less supply, Neil. So, if you have been to your local supermarket chain the past few weeks, you will notice that there is less stock in the grocery aisles. And the complaints have been loud. And they have been circulating across social media, with videos of empty fridges and grocery shelves, so no meat, dairy or eggs.

Now, Omicron's spread is exacerbating an already strained supply chain, with the highly contagious variant really forcing workers and food makers, distributors, inspectors and the grocery stores themselves to call in sick and stuck in quarantine.

So, if you feel that meat supplies in particular are harder to find, you're not wrong. Last week, we had slaughters of hogs and cattle dropping off significantly, according to the Department of Agriculture, with less workers available.

Now, many of the biggest companies in the food industry have been very vocal in the lack of labor. And that includes ConAgra, Campbell's Soup, egg distributor Egg Innovations, and some of the large grocery chains.

So, with fears of less supply, that has shoppers stockpiling once again, which is pretty reminiscent of the early days of COVID back in 2020. But it's not just a food chain. You also have other industries and companies, including shipping giant FedEx, now warning of longer shipping delays because of workers quarantining with Omicron.

And then, of course, thousands of flights continue to be affected, delayed or just canceled, bus schedules that have been altered, and schools being shut. So, Omicron is definitely making it feel like the spring of 2020 once again.

And, Neil, as you mentioned, it could be spiking prices and continuing the high run of inflation that we have been experiencing.

CAVUTO: Yes, and just hiking rates might not stop that process, at least not immediately. We will follow it very, very closely.

Susan, thank you very much.

Susan Li following all of these developments.

Meantime, we're focused on the crime in the Big Apple right now and a new DA who doesn't seem to be reading the same script as the mayor of New York.

Why the guy who wanted to be mayor is here to say: I kind of warned you about this -- after this.

(COMMERCIAL BREAK)

CAVUTO: All right, what do you think Americans are more worried about when we talk about these spikes, the spikes in COVID cases or the spikes at the local supermarket?

What if you -- told you, well, the spikes of the local supermarket by far? It isn't even close.

Lee Carter and Gary Kaltbaum not at all surprised.

Lee, what do you make of this?

LEE CARTER, REPUBLICAN POLLSTER: I think that concerns about the economy are of the utmost concern to folks. It's been going on for a very long time.

So, when you look at the economy concern, 68 percent Americans are saying that's their top concern. But when you ask them why, there's two things. They're blaming two different parts for the economy problems. First is COVID and second is the government response to COVID.

So, when you look at what people are concerned about the economy, of course, COVID plays into that. The problem people are having is, inflation is impacting them. Your dollar is not going as far. They're not feeling good about the economic future. They're not feeling good about the future.

And so it's not all that surprising that we have seen a big shift and what the biggest concern of folks is now, is the economy really going to come back? What's going to happen if there's another variant? Is this ever going to stop? Are we going to make things better? And most people are saying, no, we don't feel like the Biden administration is going to make things better.

Fifty percent say that the Biden administration is actually making the economy worse.

CAVUTO: So, Gary, looking at this, I have always argued that inflation slows or stops when people just stop paying these higher prices. They keep paying these higher prices. Now, that's because maybe they don't pivot and look for cheaper alternatives, or they don't want to, but they're not doing that yet.

So are they absorbing this better than they're given credit? How would you define what the consumer is doing?

GARY KALTBAUM, FOX BUSINESS CONTRIBUTOR: Well, there are things you buy that are necessities. And when you're dealing with the big guy, which is oil, which -- and petroleum, which is in so many products, and every dime that it goes up over a year is $10 billion out of the pockets of the consumer, and in used cars that you can't even afford right now, and people -- the two words that come to mind for me is kitchen table.

When they sit at the kitchen table and see that their bill at the supermarket was $75, instead of $50, they get to wondering. And guess what? That's where the poll numbers move things. And that's where you see the president's poll numbers way, way down, the wondering whether he can get the job done.

And when I watch Lee Carter and what she has to say, she's nailing it 100 percent.

CAVUTO: She's got those scary little buttons and knobs that know what people think.

(LAUGHTER)

CAVUTO: So, she knows stuff long before you and I do. She is like Oz behind the curtain.

(LAUGHTER)

CAVUTO: So, Lee, let me get your take on how people are absorbing all of this news. And, right now, they're dealing with it. They're not happy about it. They want it to come down.

But I don't know if they're welcoming the means by which those prices might come down. That is raising interest rates, doing stuff like that. How do you think this all falls out?

CARTER: I don't think that people are really optimistic that there's any plan put forward right now by this administration or this Congress that is to make things better.

People are very pessimistic both about the near term and long term right now, especially -- and this is really, really concerning. Independent voters have lost confidence in this administration by 30 points just this year. Joe Biden's approval rating is only 29 percent among independents. He had it as high as over 60 percent approval rating among independents.

They don't have faith that he's going to be able to do a good job. Five in six are saying they're worse off today than they were when Joe Biden took office. So what does this mean? This means that the Republicans have a clear path to victory in the midterms if they take advantage of it, if they do it the right way, because what people don't want to hear is more fear tactics. They don't want to hear more blame games.

They want to hear solutions. They want to hear, how are we going to get out of this? They want to hear about the economy going forward. They want to hear about inflation getting better. They want to hear about the supply chain being fixed. And that is the path to victory. They want to put control back in the hands of the American people. They want to say that we're going to keep the American economy going, that people are going to continue to be able to work, that nothing is going to shut down, and that this is going to have an end.

That's what they want to hear. And the Republicans have a clear path to be optimistic, to lay out a plan forward. And if they do that, I think there's going to be a clear shift in power in Washington, D.C.

CAVUTO: Interest rates have been backing up throughout this whole process, even before, Gary, the Fed moves. We have started out the year with all the major averages down.

The Nasdaq is close to correction territory, a drop of 10 percent or so from its highs. What is the market telling us?

KALTBAUM: Well, for me, it's not just the move. It's how quick the move was.

CAVUTO: Right.

KALTBAUM: I mean, it really skyrocketed.

And when you have a market that is so used to ridiculous amounts of easy money and printing money, and things change in a nanosecond, that's where you got the bad reaction. And, maybe today, the Nasdaq had enough on the downside, and maybe we have seen enough on the upside in the near term.

But let me say, without any doubt, if interest rates back up into the 2's, look out below for the market, and it's going to be trouble for the Fed. And you know there's a problem right now with the Fed, because the one thing a president does not want in an election year is for the Fed to be tightening and taking away, as they say, the punchbowl.

CAVUTO: Right.

KALTBAUM: And the fact that that's happening let how scared Jay Powell is finally of inflation that I think, in part, he's been a big cause of.

CAVUTO: All right, we will watch it closely, guys.

And that 2's that Gary was referring to here refers to the yield on a 10- year note, which is now at about 1.80 percent, which is double where it was last year at this time, still low, but double what it was.

So it does bear watching, as does the crime in this country, particularly in the New York metropolitan area, where you have got a mayor who is promising to crack down on it, and a DA, separately elected, who has other ideas.

This should go well -- after this.

(COMMERCIAL BREAK)

CAVUTO: Schools remain closed in Chicago, fourth straight day running here. No sign things will change anytime soon, even though parents want it to stop, and so does the mayor. So, why hasn't it stopped?

After this.

(COMMERCIAL BREAK)

CAVUTO: All right, a growing question right now.

What's going on in New York bears watching, not with the incoming new mayor of the city, who, after all, was a 20-year veteran of the police department, but the guy right now, who was elected separately as Manhattan's new district attorney, who says he isn't soft on crime; he's just not for making everything that everyone is apprehended for a crime in the first place.

That is falling on deaf ears, however.

Ted Williams joins us right now on what he makes of it all.

Ted, that seems a case of mixed messaging. What do you make of this?

TED WILLIAMS, FOX NEWS CONTRIBUTOR: Neil, it is not only a case of mixed messaging. It is just dumb and stupid.

Crime is going up in New York. You have got a new mayor, a guy who is supposedly going to be, Eric Adams, progressive on crime. He brings in the first black female chief commissioner of police, Keechant Sewell, there.

And this DA, Alvin Bragg, cut the legs out from under both of them. And here it is he's talking about reducing certain crime or -- and not prosecuting certain crime. He is a prosecutor. He's not a legislator. Legislators make the law. Prosecutors prosecute cases.

And, Neil, me just tell our audience about a wonderful child, Kristal Bayron-Nieves. This is a young woman who was working in Harlem at a Burger King this weekend...

CAVUTO: Right.

WILLIAMS: ... when a lowlife came in, got $100 -- stole $100 from her and shot and killed this young child.

And we're talking about the reduction of crimes? We're talking about helping criminals in this country? What the hell is going on, Neil?

CAVUTO: Yes, that case just was so wild in my mind. I mean, she had given him the money, every -- anything he wanted. He comes back and just shoots and kills for, no damn reason.

The DA now is saying this is a case that has nothing to do with the stuff that he's looking to do. But haven't we played this game before out West and had pretty disastrous results? In other words, if you remove crimes for consideration, you just have more crimes for consideration, don't you?

WILLIAMS: You're absolutely right.

The -- they tried this in San Francisco. Now the mayor is trying to get on tough on crime. Philadelphia has had a similar problem. They are now trying to back off and get tough on crime. Chicago had wanted to defund the police. Now they're trying to reverse courses.

I think some of these mayors are getting it. These criminals are out here taking over these various jurisdiction, these various cities. And then this is one of the things that's troubling to me.

This guy, Alvin Bragg, the Manhattan DA, want to give...

CAVUTO: Right.

WILLIAMS: Lessen the penalty for murder, where a person only serves 20 years or less.

This is ridiculous. We're giving the cities over to the criminals. We don't give a damn about law-abiding citizens. You have got a young child wanting to work at a Burger King just to earn some money. And you have got a lowlife that comes in, takes $100 from her, turns around, according to witnesses, and then just shoots a woman in the chest and kills her, a life gone. And we're talking about reducing crimes.

CAVUTO: For no damn reasons.

And that beautiful girl did not even want to work there so late at night because she feared for her life. It's just so incredibly tragic.

But, Ted, to give the new mayor credit, and his police chief, they're both against what this DA is advocating, but he's separately elected. I guess the governor could recall him. That doesn't seem likely. So how do you see this sorting out?

WILLIAMS: Well, what should have happened, and this DA should have been wise, he should have sat down with Eric Adams and the commissioner of police there and try to bring about reformation in a slower manner when it comes to the criminal acts that he wants to take off the book.

CAVUTO: Right.

WILLIAMS: But you just can't -- Neil, if you take off a cold bottle of water and you just throw hot water at it, it's going to burst.

This guy is -- what he has done here is ridiculous. He is saying: I am the new sheriff in town. I'm going to do what I want to do. I'm going to not prosecute what I want to prosecute.

And he's leaving New York City vulnerable. The new mayor is going to have to step in. And he's going to have to speak out. I can tell you, Keechant Sewell, the commissioner, has already sent a memo out saying that she's not on board with this.

CAVUTO: She has. You're right. Yes, she has. He has not yet that I believe, Ted.

But we're monitoring it closely. Thank you very much in the meantime.

WILLIAMS: My pleasure.

CAVUTO: Ted Williams.

And we told you a little bit about Chicago classes canceled for the fourth straight day running. Rather than hear back more than the teachers, teachers union and all, we thought we would talk to a parent, a parent who is pretty pissed off -- next.

(COMMERCIAL BREAK)

CAVUTO: All right, so, Chicago teachers, you won't listen to us, and maybe a lawsuit will get your attention.

Laurel Golden is a Chicago parent, leading plaintiff in a lawsuit against the Chicago Teachers Union for keeping kids out of classes now four days running.

Laurel kind enough to join us right now.

Very good to have you.

LAUREL GOLDEN, PARENT: Thank you. Good afternoon. Thank you for having me.

And I actually just received an e-mail from one of the schools for my boys. We are looking at day five. Classes have been canceled for tomorrow already.

CAVUTO: Is that right?

GOLDEN: Yes.

CAVUTO: Is that tell you, Laurel? It's a day at a time, this sort of drip, drip, here's a fifth day?

GOLDEN: It -- that is been how it was last week and so far this week

However, they were kind enough to let us know by 4:00 on Friday afternoon that there would be no school for today, so that we didn't have to spend a weekend wondering yes or no.

CAVUTO: How do they justify what they're doing?

GOLDEN: They can't justify what they're doing. It's an illegal strike.

The children belong in school. The science has shown clearly all along that it is safe for the kids to be there and for the teachers to be there. There's no other choice. The option is very clear. The teachers need to go back to school, so the kids can go back to school and learn. They are falling so far behind, not just educational-wise, but also emotionally and socially.

They're beginning to learn -- or lose their skills to interact with each other.

CAVUTO: But, you know, Laurel, what I can understand, even the mayor, who's been a friend to the teachers union for some time, has had enough, says, our kids deserve to be in school, open up the class -- classroom doors. But they're not.

So what is really going on here? What is their biggest fear? What do they say is the reason why they're doing this, if Omicron cases, contagious as they are, aren't serious? Kids will wear masks. So what are they saying?

GOLDEN: They're saying that they want to have metrics in place that they can close schools when the numbers get too high.

They want to be able to say when they're open, when they can close. They want to have that power. And they're saying that the steps that they have taken are not enough as far as providing masks. And they also want to have all the children test before they go back, which, in a district with over I think 300,000 students, would be quite the feat to accomplish.

CAVUTO: You know, the Chicago school system has spent millions of dollars to get classes ready on -- for this post-COVID world, however you want to describe it.

Measures, very pricey measures have been taken to address all of your concerns. And they are still doing this, and now your lawsuit. What does the lawsuit demand?

GOLDEN: Yes, the lawsuit is to compel the teachers to go back to the classrooms. That is all that we want.

We want them back in the classrooms, where they belong, teaching our children.

CAVUTO: And when you raise your concerns, they seem very straightforward, very black and white. How do they answer? What do they say?

GOLDEN: They have -- they have -- obviously, their answer is, no, they're not going back to the classroom until their demands are met.

They're basically using our children as pawns. Our kids have been pawned since the beginning of this pandemic started two years ago. This is exactly where we were last year when the schools were supposed to open up in January and they didn't open up until March. They kept dragging it out, saying, we need more safety measures in place, we want to be vaccinated, we want more PPE.

So the city prioritized the teachers. They got all vaccinations first. They have given them the PPE. And now we're right back where we started. I -- you could have seen this coming a month ago, before the Christmas break, that we were going to have something like this happen.

CAVUTO: Yes.

GOLDEN: Why didn't they start negotiating then? Everyone knew this was going to happen.

CAVUTO: Yes. Well, you were certainly way ahead of that curve.

Laurel, please keep us posted, Laurel Golden, a Chicago parent.

By the way, we did reach out to the teachers union to get a statement from them, at the very least. They have yet to get back to us. But we will keep you posted on that.

Keeping you posted on Russia as well. You do know that they become increasingly militant and very, very bellicose. And I'm not even talking about the Ukraine.

I will explore that with Leon Panetta after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JOHN KIRBY, PENTAGON PRESS SECRETARY: Force posture by the Russians in the border areas around Ukraine. If the Russians are serious about de- escalating, they can start by -- by starting to remove some of those troops from -- decreasing some of that force posture.

(END VIDEO CLIP)

CAVUTO: Well, that is not happening, is it?

Welcome back, everybody.

The fact of the matter is, Vladimir Putin remains as bellicose as ever. And we're not just talking off Ukraine, but in Kazakstan and so many other areas, where he is doing that proverbial saber-rattling.

Leon Panetta joins us right now, the former defense secretary, former CIA director, former White House chief of staff.

Leon, always good to have you. Thanks for taking the time.

What do you think the -- Vladimir Putin is really up to here?

(LAUGHTER)

LEON PANETTA, FORMER U.S. SECRETARY OF DEFENSE: Well, it's an old playbook that Putin is using, after a number of years of watching Putin in action.

He's ratcheting up the pressure. He's deploying his forces. He's making unrealistic demands regarding NATO. And he's threatening military action. That's -- that's the way he tries to bully and get his way.

And I think it's particularly important for the United States and our allies to negotiate with him from a position of strength, which is to make very clear to Russia that he -- there is a price that is going to be paid if he takes that kind of action.

CAVUTO: He assumes that price will not be military, Leon, that there might be more sanctions. He's already one of the most sanctioned countries on the planet, save maybe Iran.

So, what if he doesn't care about any of that?

PANETTA: Well, I think -- I think the United States and our allies can actually take some pretty strong steps against Russia.

I mean, one is sanctions, which is to cut them off from the international banking system, I think using cyber to go after their infrastructure, go after their electric grid, go after their pipelines, and weaken their economy. I think, in addition to that, it's important that we move, as we are, moving up additional forces in NATO to move up towards Russia, and indicate that we are going to take a strong stand with regard -- with regards to any other aggression by Russia.

And, lastly, we're providing defensive weapons to the Ukraine, which is important, providing them with Javelin missiles, with machine guns with grenades. I hope we provide them with Stingers, anti-aircraft missiles. That was used against them in Afghanistan.

I mean, all of that means that they are not just going to be able to walk into the Ukraine without a fight.

CAVUTO: I just wonder, Secretary, over the course of the past year, particularly since the collapse of Afghanistan, if leaders like Vladimir Putin, even Xi Jinping in China, sense that we're more talk than action, and that even more so when it comes to Europe that doesn't seem to have the stomach to follow through with measures that could be very tough on them as well by implementing them against Russia.

What do you think of that?

PANETTA: Well, look, there's no mistake about it that Putin is testing.

He's testing President Biden. He's testing the United States. He's testing our allies. I think, for a period of time, Putin has read weakness on the part of the United States. He went into the Crimea. He went into Syria. He went into Libya. He's conducted cyberattacks against the United States, and he hasn't paid much of a price.

So he's testing that right now. And that's why it's particularly important that the United States and our allies stand strong, make clear that we are going to be unified in opposition to anything that Russia tries to do against the Ukraine.

CAVUTO: You know, I was surprised to learn -- and you probably have more current numbers, Secretary -- that the actual number of Russian troops in and around Ukraine is closer to 125,000, not a one of them going anywhere. And they have been there a while. At least a core group of them has.

What will it take to remove them or to ease that presence up?

PANETTA: Well, there's no question that, as we go through these negotiations in Geneva, there will be NATO negotiations, and then negotiations with the European nations, that I think it's really important that one of the steps Russia takes is to back off in terms of their troop deployment and indicate some good faith here that they are interested in negotiations.

We know that they built up their deployment. We know it's located largely through the areas next to Russia. And we also have good intelligence on just what exactly those troops are doing.

Look, I think, Neil, to some extent, the question is going to be whether Putin overplays his hand, because, first of all, he hasn't done this quietly. He's announced to the world what he's trying to do.

CAVUTO: That's true.

PANETTA: And, normally, if you want to attack our country, you do it quietly.

Secondly, I think what he's doing is resulting in the exact opposite that he wants, which is a stronger NATO and a more unified United States and our allies. And there are now countries like Finland and Sweden that are looking for NATO lead -- for membership in NATO. That's exactly what Putin doesn't want.

But that's what he's going to get.

CAVUTO: Finally, looking at this right now, do you think that this could be the year someone could make a false move, and, before you know it, we're at loggerheads here?

And there's a lot of talk of coordination between China and Russia in these moves. In other words, you keep them busy, Russia, off of the Ukraine. We will keep them busy in the South China Sea, and taunting Taiwan, et cetera.

Do you think they think like that?

(LAUGHTER)

PANETTA: You know, look, there's a hell of a lot of danger points in the world right now.

And it's not just dealing with Russia. It's not just dealing with China. It's dealing with Iran, the potential for a nuclear-armed Iran. It's dealing with North Korea, which is sending new missiles and testing new missiles all the time. It's dealing with terrorism, which still remains a threat. So there are a number of danger points in the world that the United States and our allies are going to have to pay attention to.

But one thing is clear, even though Russia and China may be trying to work together with each other. The one thing they hate is the United States building alliances with other countries, because they know they can't do it.

CAVUTO: That's interesting.

PANETTA: So, if the United States maintains strong allies, maintains strong alliances, I think we have a strong key to try to deal with these danger points.

CAVUTO: Yes, we keep forgetting they have fewer friends, don't they?

Thank you very much, Leon Panetta. Good seeing you again.

PANETTA: Good to be with you, Neil.

CAVUTO: All right, Leon Panetta on all of that.

Remember, Jon Taffer, The "Bar Rescue" guy? Well, he's back to wanting to rescue a lot of those bars and diners and restaurant owners.

And he's looking to Washington to help him help them -- after this.

(COMMERCIAL BREAK)

CAVUTO: All right, to know Jon Taffer is to love Jon Taffer, isn't it?

And I'm biased in this way, because the guy has a gruff exterior. And I don't want to embarrass him, but he's as soft as a mush, and will give you the shirt off his back, especially if you're in the restaurant industry. And he's proven it again and again.

I'm sorry, Jon. I had to just see that.

(LAUGHTER)

CAVUTO: He joins us right now.

And, Jon, you're coming to your fellow restaurant brethren's rescue again, and that they need some help. Now, they're kicking around relief for restaurants, bars, cafes, et cetera. I don't know how far it goes. But a lot of people hearing this or saying, do they need it?

You say they do?

JON TAFFER, HOST, "BAR RESCUE": Of course we need it, Neil. We're getting it from all sides.

Not only can't we get employees to facilitate the business that we did have before the latest variant, but our food prices are off the charts, Neil. I mean, when you get hit from a labor side, a product cost side, and a revenue side, we're getting assaulted from all sides.

And there is a fatigue factor too, Neil. Let's face it. We have been through heck these past two years. So we're fighting for our lives. And a little bit of relief to get us over this hump now is really required. It worked last time. It kept us going, and it will work this time too.

CAVUTO: They are disproportionately affected by these on-again/off-again vaccine mandates, and then mask mandates, and then customers who say, to hell with the mandates. I'm just not coming.

So their business can be like a Geiger counter. How are they dealing with it?

TAFFER: Well, it's difficult, Neil.

But something that's really not mentioned much is, a restaurant typically cost three times more to build than a retail store. So we're dealing with the debt of building the restaurant, as well as the additional labor cost if we can get it and the lack of revenues.

Neil, the numbers don't work. And there's no way we can make it work. We can't charge $24 for a hamburger. The consumer is going to resist. So our margins keep getting cut and cut and cut.

The fact of the matter is, it's an external environment that's caused this, Neil. Restaurant operators have stepped up. We have sanitized the restaurants. We have staffed our people safely. We have created the kind of environments that are conducive to healthy dining and healthy workspace.

CAVUTO: Yes.

TAFFER: We have done everything asked of us. But we're still getting squished by this environment.

CAVUTO: Jon, this might shock you, but I love to eat, and I love to eat out.

And almost every restaurant I go to -- and it's not an insult -- they have a devil of a time getting good help. And so you wait what -- for food and all. And I can deal with that, because I certainly understand what they're going through. But it's a problem everywhere, isn't it?

TAFFER: Oh, it's a huge problem.

I have a friend who has a sign in front of his restaurant that says, service is going to take a little longer, but please be nice to the people who chose to show up today.

(LAUGHTER)

TAFFER: And it's sort of a shame, Neil, because the people that show up are the ones that are in a pressure cooker because of the ones that haven't shown up.

But the food thing is interesting, Neil. I know you're a steak guy. If I get a steak a certain size and a certain thickness, and now I can't get that size, the other steak is too small on the plate. It doesn't look right. It's too big on a plate.

CAVUTO: Right.

TAFFER: These are not small matters.

Ketchup, for example, comes in a little packet. You can't get the packets. So, now I have to put the ketchup in a ramekin. I don't have the ramekin. I can't get the ramekin.

So now I finally find a way to get the ramekin, but, Neil, the ramekin then doesn't fit on the plate. So, I mean, these are nightmares for us as operators. Just to try to get out a nice-looking, healthy and delicious plate of food, it's a huge challenge for us now every day.

CAVUTO: Yes, I want the steaks looking like they had Fred Flintstone, those types of things, you know?

TAFFER: I know you do.

CAVUTO: But how do you see it going in the months ahead? How do you -- do you see this calming down, government help, no government help? What do you see?

TAFFER: Well, the consumers really stepped up a few months ago.

CAVUTO: Right.

TAFFER: Many restaurants were up 25 percent from pre-pandemic levels, Neil.

So the revenues were there. We were seeing light at the end of the tunnel. Then, of course, this variant came, and took our revenues away. But the food prices and the inflationary impact on the industry has been huge as well, particularly when you start to add additional labor costs to it.

Neil, the numbers just don't work. If you look at a restaurant, about 33 percent is food costs. About 30 percent is labor cost. About 20 percent is beverage cost. When you put it all together, just the prime costs can run 60 percent, before you pay your rent, your utilities and all.

CAVUTO: Yes. We have got to do something. All right.

TAFFER: It's too tight of the margins to make it work. We really need this relief package.

CAVUTO: We shall see, Jon. We shall see.

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