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Biden admin sent ‘lethal assistance’ to Ukraine ‘well before’ invasion: Kirby

Pentagon press secretary John Kirby provides updates on the latest in the Russia-Ukraine war on ‘Your World.’

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

NEIL CAVUTO, FOX NEWS ANCHOR: Intense fighting in Kharkiv today, as Russian tanks continue to pound Mariupol and this overall ramping up of Russian attacks that knows no bounds.

We will be speaking to Pentagon spokesman John Kirby on how far this goes and what we're learning of the effectiveness of the Ukraine response.

We're also getting word that the Ukrainians are making life difficult for Russian soldiers, having now captured towns that were once under Russian possession north of Kharkiv.

Welcome, everybody. I'm Neil Cavuto. And this is YOUR WORLD trying to make sense of some fast-changing developments in Ukraine that so far seem to favor, oddly enough, the Ukrainians yet again, word that they're not only capturing some lands, but making life extremely difficult for Russian lands controlled by Russian soldiers, or so we thought.

Let's get the read from Greg Palkot in Kyiv with more -- Greg.

GREG PALKOT, FOX NEWS CORRESPONDENT: Hi, Neil.

Yes, as the war rages on, there is also a practical and a symbolic return of American diplomats here to this capital city. First, the war, yes, new Russian missile strikes to the south of us in the important port city of Odessa, including reportedly, but not confirmed, hypersonic missiles.

Outside of Kharkiv, to our east, a civilian evacuation convoy blasted by the Russians, but, yes, the Ukrainians are retaking villages around that important city. And Ukrainian fighters are still holding out in Mariupol against some very tough battering by the Russians.

Into this comes the Americans. A core staff of diplomats has arrived to prepare for a formal reopening of the U.S. Embassy later this month. It's been shut since February. Leading the way acting, U.s. ambassador Ukraine Kristina Kvien. I asked her how offensive U.S. military could aid get. Take a listen.

(BEGIN VIDEO CLIP)

KRISTINA KVIEN, CHARGE D'AFFAIRES, U.S. EMBASSY IN UKRAINE: We believe in -- that Ukraine is in the right. We believe that Ukraine should win this war. And we want to make sure that Russia not just stops their aggressive actions against Ukraine, but make sure that they don't take further aggressive actions in the region, which we're very concerned about.

(END VIDEO CLIP)

PALKOT: Neil, she had high praise for Ukrainian President Zelenskyy, Ukrainian soldiers.

And the people, as you noted, are putting up a great fight. She was scathing about the man targeting them all, Russian President Vladimir Putin. Here's more of what she had to say:

(BEGIN VIDEO CLIP)

KVIEN: I think it'll be impossible to go back to business as usual. Any future relationship we may be able to cobble together is going to be based on what President Putin does.

(END VIDEO CLIP)

PALKOT: And what does Putin, Neil, have to do to make amends, according to the acting ambassador? Stop the war crimes, get out of Ukraine, and act like a responsible global partner.

And, yes, Neil, we asked her about President Biden, when he might be making an important and symbolic visit here to Kyiv. She said she's not ruling it out, but she's not saying when -- back to you.

CAVUTO: Got it.

Greg Palkot, thank you very, very much.

With us right now is Pentagon Press Secretary John Kirby.

John, as some of you might know, many others do not, he's a retired rear admiral in the U.S. Navy, hence his comfort level oftentimes explaining complicated military matters that go right over my head.

John, very good to have you.

JOHN KIRBY, PENTAGON PRESS SECRETARY: Thanks. Good to be with you, Neil.

CAVUTO: Where do we stand right now on these Russian attacks, and particularly in Kharkiv?

Suddenly, we're told they have territory. Then we're told, uh-oh, they don't have that territory. Now reports Ukrainians are taking towns outside or north of Kharkiv.

Where is this?

KIRBY: Yes, Kharkiv has been surrounded almost since the very, very early days of this war.

But the Russians were never able to take it. The Ukrainians have mounted a very stiff resistance in Kharkiv. And Kharkiv is geographically very important to Russia, particularly if they're trying to cut off the Donbass in the eastern part of Ukraine. It's a big industrial city, which is very, very clearly placed to help them do that.

What we're seeing is, not only are the Ukrainians continuing to resist any Russian efforts on Kharkiv -- and we do think the Russians want to take it -- but they're actually now pushing them back out. And you're really seeing this very demonstrably to the east of Kharkiv, Neil, where they're pushing the Russians now more than 20 miles to the east, back into the Donbass region.

So, the Russians are actually losing ground and losing some of their firepower and force around Kharkiv.

CAVUTO: Now, maybe you can update me how things are going in Mariupol right now, because we have a separate report out today, John -- you probably are more than aware, that the Ukraine death toll may be thousands higher than the official United Nations tally, owing in large part to just not knowing the details of what is going on in Mariupol and just how many might be trapped and/or dead there.

KIRBY: Yes, I think, look, obviously, we don't want to see anybody hurt, but I think we all need to brace ourselves for the fact that the casualties will be higher and more severe than what we think right now.

And it's just difficult to know for sure, because international aid organizations can't get on the ground and stay on the ground. They have been able to help evacuate some people from that steel plant, but they haven't been able to stick around.

And the damage being done by Mariupol, even today, Neil, through bombardment and missile strikes is just devastating. And you just don't know who else is in the rubble, who else got killed in the collapse of buildings.

So I think we just need to steel ourselves for potentially much more dreadful news.

CAVUTO: Now, that dreadful news would include constant poundings and attacks on Odessa, the port city.

KIRBY: Right.

CAVUTO: And that -- President Zelenskyy is convinced it's the Russians way of making sure no aid gets in or people try to get out.

Any updates on that?

KIRBY: So, what we're seeing on Odessa is some sporadic strikes over the last couple of days, Neil.

It's not exactly clear what the Russians are up to there or what they're targeting. We just don't have a good sense. But there hasn't been a lot of airstrikes into Odessa. There's no threat to does right now presented by Russian ground forces. They can't get really much out of the town of Kherson. So they're not posing a ground threat to Odessa.

The coast, however, is still blockaded by Russian ships. So, Odessa, as a very economic -- economically important port, is not having an ability to conduct trade. Nothing's going in, nothing's getting out. But it's not exactly clear why they're conducting these airstrikes.

We don't think there's an imminent threat of invasion on Odessa itself. But, clearly, the Russians are trying to isolate Odessa and probably, if nothing else, try to pin down Ukrainian forces there.

CAVUTO: Have you gotten any evidence that it is making it more difficult to get military supplies, to say nothing of humanitarian supplies, in there?

KIRBY: No.

CAVUTO: OK.

KIRBY: The shipments from the international community continue to get into Ukraine every single day.

There's largely -- these are largely ground routes, and they change every day, multiple ways of getting stuff in there. And, as far as we can see, that flow continues pretty much unabated.

CAVUTO: Separately, John, we're learning that the Russians will not attend this United Nations Human Rights Council meeting, I think slated for Thursday. Correct me if I'm wrong.

A Russian spokesman had said that this is simply not a legitimate moment or a legitimate effort, that the Russian delegation will not legitimize what the Russians call "a presence to show the twisted nature of this bias, an extraordinary session of which we will have no part."

What did you make of that?

KIRBY: I mean, that's pretty consistent Russian bluster and denial.

What's not legitimate is the war in Ukraine. What's not legitimate is the way they're prosecuting this war in Ukraine and killing innocent civilians and the war crimes being conducted by Russian soldiers. That's not legitimate.

So, it comes as no surprise that the Russians don't want to show up at an institution and with an organization and a committee that is charged with helping preserve civil and human rights, no surprise at all that they wouldn't be want to be a part of that, because, obviously, they would come under blistering, and justifiably so, criticism for what they have been doing inside Ukraine.

CAVUTO: There's been a back-and-forth among top intelligence officials, including several today in Washington, where U.S. intelligence was questioned, not only here in Ukraine, but going back to what was going on in Syria, where we believe that the U.S.-backed Kabul government would hold out for months, and it didn't.

We had similar expectations that the Russians would sweep to easy victory in Ukraine, and it didn't. Is there something inherently wrong with our intelligence, with our military intelligence, more to the point, that it misses the mark?

KIRBY: Yes, so, I have been around military intelligence for my entire adult life.

And I can tell you, it's never perfect. It's a mosaic. And you do the best you can with the information you can collect, put it together, try to analyze it. Sometimes, you're closer to the mark than others. I -- with respect to Ukraine, the United States was literally leading the world in making it clear what we saw Russia do since the fall, in terms of amassing forces and their intentions to go into Ukraine.

And we said it loud and clear from the podium here at the Pentagon and from all over town, as well as international capitals around the world, and particularly in Europe. And not everybody believed us at the time. But we were very right about what Russia was about to do.

And we also worked hard in the lead-up to that invasion, as you remember, Neil -- you and I talked about this -- where we declassified some of that intelligence...

CAVUTO: Right.

KIRBY: ... and made that public, to try to get ahead of Mr. Putin's false flag operations.

So, look, it's never perfect, but there's an awful lot of effort going into it, and we're doing the best we can. And I think, with respect to Ukraine, the intelligence community was certainly more right than they were wrong.

CAVUTO: You know, Senator Angus King of Maine, an independent, had said on that very subject, John: "I realize the will to fight is a lot harder to assess than the number of tanks or volume of ammunition or something, but I hope the intelligence community is doing some soul-searching."

And I'm just wondering. Now, it's easy to play Monday morning quarterback on this...

KIRBY: Sure.

CAVUTO: ... especially on my part here.

But I do wonder, looking back at that, and knowing what you know now, whether a lot of this weaponry and everything that should have been and could have been in Ukraine's hands months -- months ago.

KIRBY: I think there will come a day when we will all want to take some lessons learned here and take a look back and see what might have been done differently.

But I would remind a couple of things. One, the Biden administration was flowing in weapons well before the invasion. The first billion dollars that the president committed to Ukraine did include lethal assistance. And that was before -- before Putin decided to move in. Plus, we were very open and honest about what we were seeing the Russians do.

And then the last point, which I don't think we keep in mind as much as we should, Neil, is the training and effort that went into getting the Ukrainians ready for this kind of war. Over the last eight years, the United States, Canada, Britain, other allies really helped train the Ukrainians in small unit leadership, command-and-control, operational maneuver.

The kinds of things you're seeing them do now, it's not just about the weapons. It's about the skills and the capabilities that they and the leadership that they're exerting on the battlefield. And that wasn't by accident. They really have transformed from a Soviet era, very Russian- dominant sort of military, very top-down, rigid, doctrinal military, to one that's much more Western-aligned in terms of the way they think and act and actually encourage initiative on the battlefield.

Again, that wasn't an accident. That was the work of the United States and so many other allies over the last eight years.

CAVUTO: Finally, John, President Zelenskyy had also warned of a threat to the global food supply, that the Russians are deliberately trying to block it from getting out of Ukraine.

I'm just wondering, if the Russians deliberately are trying to starve Ukraine, and then, by extension, maybe all of continental Europe, by blocking that food supply, would that warrant a NATO response?

KIRBY: Well, I won't get ahead of NATO or what -- or what the alliance would do.

Remember, the alliance is a defensive alliance. And Article 5 is triggered when there's an armed attack against a member of the alliance. It's not clear to me that a food shortage or to the economic flow being stopped would trigger that. But, again, I won't speak for the alliance.

I do think President Zelenskyy makes an important point, Neil. It is not just the warfare that's being waged inside and the violence that's being waged against the Ukrainian people. He is trying to strangle the country. He's blockaded the coast on the Black Sea. Nothing can get in and out of Odessa. He's doing the same thing in the Azov Sea too.

So it's -- he's definitely trying to limit Ukraine's ability to trade with the world, which will obviously have not only an economic impact in Ukraine, but with their partners and their trade internationally.

CAVUTO: All right, John Kirby, thank you very much.

Good seeing you again. Be well.

KIRBY: Thanks, Neil.

CAVUTO: All right, the Pentagon's John Kirby.

All right, let's take a look at a corner of Wall and Broad. You almost look at these final figures, like kind of dull, right, not much going on. We traded in a roughly 1,000-point range today, up better than 500 points, then down about 400 points, finally down about 85 points here, but doing little to calm nerves.

In fact, now there's a battle between not only inflation, but how these higher prices are going to slow things down in the overall economy, which is why you saw oil prices drop today to under 100 bucks about and yields climb down on the bond market, where all of a sudden the thinking seems to be that maybe this will slow everything down.

The 10-year note, which is attached to a lot of popular mortgages and car loans, now back under 3 percent. These guys are confused, to put it mildly.

Meanwhile, those record high gas prices you're seeing, at least in nominal terms -- they have never been higher -- they're going to have an impact too. And if you think they stop here, Madison Alworth in East Rutherford, New Jersey, I think you have another thing coming, right?

MADISON ALWORTH, FOX NEWS CORRESPONDENT: Neil, yes.

It definitely seems like these are high. And there's going to be maybe even higher. We hit that record high today. I spoke to drivers at this gas station, hearing about how this impacts them, if it's going to change their travel plans. Also got a bit more about what this means for the overall driving economy for this summer.

I'm going to tell you about all of that coming up.

(COMMERCIAL BREAK)

(MUSIC)

CAVUTO: You know Jackson Browne was previewing the sky-high movement in gas prices, but, right now, for folks who can't afford it, running on empty is about the only solution.

I hate to break it to you. There are signs here that, even with today's official record hike in prices right now, all-time highs, in nominal terms, it could get worse, and maybe a lot worse.

To Madison Alworth in East Rutherford, New Jersey, on that -- Madison.

ALWORTH: Hi, Neil.

We are now paying more for gas than we -- gas than we ever have in the history of this nation. Americans really feeling it because of these high gas prices. It's impacting how much they travel and how much they spend.

So, taking a look at what the national price of gas is today, we are now paying $4.37, on average. It is particularly shocking when you compare it to the price of gas from just a year ago. Some states have it worse than others. Three states are paying over $5 a gallon. That's California, Hawaii and Nevada.

Here in New Jersey, it's only slightly better, with an average price of $4.47 a gallon . The drivers I have spoken to say that they feel stuck.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I'm already committed to certain things. And that's why this is a big shock, because I have committed to my kids, to work, to things that I have to do. So there's no choice but to pay this price.

UNIDENTIFIED MALE: Every now and again, you do need to change the scenery. You need to get out there, take the kids out, take the family out. And we can't do that.

It's costing us just to get to somewhere. It's -- I haven't even sat down to eat yet, and I'm already $65 in the hole.

(END VIDEO CLIP)

ALWORTH: So, Neil, the Biden administration is considering a federal gas tax holiday. That could come as some good news for these Americans, because, right now, people are feeling stuck.

It's hard to pay to get to work, let alone to go on a vacation, which, after two years of being locked up, many are planning on doing. So we have to see if this impact summer travel. Analysts expecting that it very well could -- Neil.

CAVUTO: All right, Madison, thank you, I think.

To Kevin Hassett right now, the former White House economic adviser and, of course, counsel to the president of the United States Donald Trump, Gerry Baker, "Wall Street Journal at Large With Gerry Baker," a very popular show on this network.

Gerry, end it with you.

Let me get your sense about how this run-up in prices could be slowing things down as we speak, one of the reasons why yields might have been coming down today. And I'm wondering if we're at that spot, or are we overinterpreting it?

GERRY BAKER, HOST, "WALL STREET JOURNAL AT LARGE": Well, it's a complex picture.

As you heard there, obviously, gas prices are rising very, very sharply. There's a lot of gas rises, unfortunately, in the pipeline, if you will forgive the pun. We're going to get the CPI numbers tomorrow, the Consumer Price Index numbers tomorrow.

Most economists expect that to be down a little bit. That's the numbers for April, but down a little bit from the high of 8.5 that we had in March, maybe down into the low 8's. But even that's not guaranteed.

What is certain, Neil, is that we are stuck with very, very persistently high inflation, whether it's in the 7's or the 8's, or even if it drops into the 6's. The Federal Reserve is way behind the curve in terms of raising interest rates to do something about that.

They raised rates by 50 points last week. They're going to do it again and again and again probably later this year. They will still be behind the curve. And, of course, the problem is, the faster they raise rates, the more aggressively they raise rates, the bigger hit it has on people's pockets as well.

So, people are going to get hit here with the double whammy of inflation, prices rising at a much faster rate than their wages are rising. And then interest rates are going to rise, which is going to slow the economy down too. It's a pretty bleak picture, I hate to say it, because you don't want to make people miserable.

CAVUTO: Right.

BAKER: But it's not a very happy picture. And I think the reason you're seeing a little bit of back-off in interest rates perhaps today is, more and more people are starting to -- people to the market -- and you have seen the sell-off in the equity markets -- people are starting to think that a recession is an increasing likelihood.

CAVUTO: What do you think, Kevin? Is a recession coming?

KEVIN HASSETT, FORMER CHAIRMAN, COUNCIL OF ECONOMIC ADVISERS: Yes, I think we're in a recession right now.

One the things that I think that history has taught us, if you go back and look, there's a regular pattern that, when you disrupt global oil markets, with the shutting of the Suez Canal, or the Iraq War, I mean, we could go on and on -- Jim Hamilton at the University of California, San Diego, once did a study that said that all that one postwar recession happened when there was some kind of disruption in global oil markets.

And I think that we're seeing that right now. We had a minus-1.4 percent quarter for Q1. If you get a negative quarter for Q2, then we're going to say we're in recession. And the point is that, five years from now, and we look back, and we see that oil was disrupted, just like it has been with a war in the Middle East of the past, and then we had a recession, that everybody will say, well, of course we did.

And I think, right now, it's wishful thinking to think that we won't know.

(CROSSTALK)

CAVUTO: Gerry, if that were the case -- and the markets have been betwixt in between how to take this. We had a big hit, and we didn't follow it up with a big comeback.

It's like the market can't get conviction, maybe because, as you pointed out, they just don't know what's next. And they're selling into that. Do you expect that to continue?

BAKER: Yes, I do.

And if you look at the broader market indexes, Neil, we have seen -- a lot of people focus inevitably on the Dow Jones, obviously...

CAVUTO: Right.

BAKER: ... and the S&P 500. And they're off between -- they're off around 10 percent. They're in roughly in correction territory.

But if you look at some of the broad markets, the Russell 2000, which is the mid-cap stocks -- you know all about this very well -- that's off like 25-plus percentage points from its high late last year. Technology stocks have been absolutely hammered.

I mean, these are all indications -- and, by the way, on top of that, as you said, we have had this huge increase in yields, 10-year Treasury yields off a little bit today, but still around 3 percent on the 10-year Treasury yield. That's up from two years ago.

That's up -- that's up nearly -- that's up 250 basis points. That kind of move in interest rates is obviously affecting stock prices. That's why we're starting to see the stock prices -- the stock markets really fall out of bed.

But it also is very strongly indicative that, as Kevin says, the economy is getting hit, and that investors are getting increasingly nervous about whether or not -- as Kevin says, whether a recession is already here, or certainly whether this hit to demand is going to be so great that we're going to see a turnaround in the economy after this -- after this expansion from the depths of the COVID recession, that we may now be starting to see the economy declining again.

CAVUTO: You know, Kevin, the president did say today that the one bright spot is the deficits are going down under his watch.

Now, of course, he didn't do the obvious comparison that we were spending like we were over a period where we're throwing trillions at COVID. But he was saying, that is a start of something big. What do you said?

HASSETT: Right.

Well, recall that happened, because Congress decided not to pass this Build Back Better plan, and which was -- when you honestly scored it, going to add something like $4 trillion to the deficit. So he's got to find something good to crow about, and I don't blame him. He's in the White House. He's got to talk about a bad economy. It's rough.

But what I wish he did today is come out with a plan to basically talk about what he's going to do about inflation. So he's focused like a laser beam on inflation, and yet I didn't really see any ideas. I didn't see any newsworthy thoughts about what to do about it.

But what they need to do is help the Fed. OK, if the Fed does this by itself, then it's going to have to lift interest rates 3, 4, 5 percent to get this inflation under control. But if Congress were to do something that would stimulate supply, so there's more supply chasing demand, then there's a hope that we could have the soft landing that some people are talking about.

But the fact is that if you wonder -- if you want to see somebody who's really speaking frankly and accurately about the economy right now, then you should look at the Bank of England. The people who are watching should Google it. The Bank of England has basically said, we're going to have lift interest rates so much that we're going to have probably a pretty deep recession this year.

CAVUTO: Yes. They are really outlining that.

HASSETT: And I think that's probably what any truthful central banker would be saying.

CAVUTO: Yes. If you're only relying on the Central Bank, that's about the only medicine in the medicine chest.

Kevin, final word.

Gerry, great seeing you again, my friend. Gentlemen, thank you.

HASSETT: Thank you.

CAVUTO: In the meantime, the president did outline his plan to deal with these high prices.

But, if Senator John Thune is right, there is no plan there. He's next.

(COMMERCIAL BREAK)

CAVUTO: Elon Musk to former President Trump: You are welcome back, my friend.

The message from the world's richest man to the former president. At Twitter, we'd love you tweeting again -- after this.

(COMMERCIAL BREAK)

CAVUTO: All right. This was the president's moment to respond to criticism he is not on top of the inflation problem.

Not everyone is convinced, after he did take a position on it, that anything has changed.

Alexandria Hoff in Washington with more -- Alexandria.

ALEXANDRIA HOFF, FOX NEWS CORRESPONDENT: Hi, Neil.

Yes, the president said today that the economy is now his number one issue. But there was a secondary focus of this address. And that was to provide a political contrast between his economic plan and one that he says has been proposed by Republicans.

(BEGIN VIDEO CLIP)

JOE BIDEN, PRESIDENT OF THE UNITED STATES: They don't want to solve inflation by lowering your costs. They want to solve it by raising your taxes and lowering your income.

(END VIDEO CLIP)

HOFF: See, the trouble there is that Republicans have not put forth a plan.

President Biden was referring to an individual tax proposal by Florida senator Rick Scott. According to a report by The Washington Post -- quote - - "As far as we can tell, not a single other Republican in Congress has embraced Scott's specific tax proposal."

The Post gave the administration's claim that Republicans were behind a plan to raise taxes Three Pinocchios.

Still, the president today did say that a majority of Republicans were behind a plan to raise taxes. I asked White House Press Secretary Jen Psaki about that.

(BEGIN VIDEO CLIP)

JEN PSAKI, WHITE HOUSE PRESS SECRETARY: It's an alternative plan they put forward.

So it's either this put together by the person who is leading the effort to win back the Senate or nothing. And the president this morning talked about what his plan is. If they have an alternative plan, we would welcome them putting it forward.

(END VIDEO CLIP)

HOFF: Well, Senate Minority Leader Mitch McConnell said in March that the party will not propose a tax plan that -- a plan that raises taxes, that is.

He today said this about the president's economic performance:

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY): This all-Democratic government has managed a unique kind of economic turnaround that took an economy that was ready to soar, turned it around and drove it into the ground.

(END VIDEO CLIP)

HOFF: And the president today was asked about if he feels responsibility for inflation, and he said that he believes his policies are helping and not hurting -- Neil.

CAVUTO: Alexandria Hoff.

Thank you very much, Alexandria.

HOFF: Sure.

CAVUTO: To John Thune right now, the Senate minority whip, Senate Finance Committee key player, South Dakota senator.

Senator, good to have you.

SEN. JOHN THUNE (R-SD): Thanks, Neil. Good to be with you.

CAVUTO: First off, on this Rick Scott proposal, that's what the president was going after today.

And we understand this view that not all Republican senators support it, but we do know that Ronna Romney McDaniel, heads up the Republican National Committee, does like it.

So, do you? Do you know of any of your colleagues who do?

THUNE: I think everybody who's running for reelection this year, Neil, is going to come up with their message for their constituents that resonates with the people that are going to vote in their states.

Any time you have somebody propose kind of a global plan, it's going to be a different solution in different parts of the country. And so what I see happening right now is not people embracing any particular plan put by -- put out by somebody else, but developing a campaign message built around the issues that speak to the things that the people in their individual states care about.

That's certainly what I'm doing in my campaign in South Dakota.

CAVUTO: But he's not any other senator, right, Senator? I mean, he's -- in terms of raising money for Republican Senate candidates, and he has this position that seems to be certainly at odds with you, sir, Mitch McConnell, the powers that be within the Republican Party.

So, is he giving ammunition to Joe Biden, when he claims, that is, the president, that Republicans embrace raising taxes on half the population?

THUNE: Well, again, I don't think that there are -- he made it very clear that this is his plan and it's not a plan for other senators.

And most senators that I know of...

CAVUTO: And you don't support that, right?

THUNE: Well...

CAVUTO: I mean, you don't support this effort right now where half the people in this country who aren't paying federal income tax -- they're paying certainly FICA and Social Security taxes, but you would be opposed to, as I think Senator Scott has said, Senator, having everyone having some skin in the game?

THUNE: Well, I'm not -- I'm not embracing that plan. I am talking about -- again, I have got my own agenda for the people of South Dakota.

Now, having said that, Neil, one of the things that I think is clear about this, and that is that President Biden is flailing around, swinging blindly, hoping that something will land. And his latest target, of course, is Rick Scott.

But the truth is, he can't defend his administration's record when it comes to the border, when it comes to energy, when it comes to inflation. There are so many things that are in crisis right now. And so he's obviously trying to change the subject and distract away from the failed policies that he's put in place and which the American people are now reacting to, and trying to blame somebody else.

And, in this case, he's picked Rick Scott. But, I mean, the very simple fact of the matter is, this is an administration whose policies have been an abject failure on so many levels, and they're doing everything they can to change the subject.

CAVUTO: So, Senator, when the president comes out and says, I'm doing my part to do what Republicans always say they want to do, and this is decrease the deficit -- now, of course, he's making a comparison when we're at the height of COVID spending, $5 trillion over two years. That did change the math a lot. So obviously, we're down from that.

But that's his pitch, that, if you want to get this under control, want to get inflation under control, I'm doing it by decreasing the size of these deficits. What do you say?

THUNE: Well, look, I mean, I think what he has -- the things he's talked about, for example, that -- and he did get something through. He got $2 trillion through the last year, under the guise of COVID relief.

And it was a massive spending bill that grew and expanded government, flooded the economy with dollars, and created this inflationary spiral. Their solution now is another $5 trillion in spending on top of that .It is the absolute opposite prescription for what we need right now.

And I think, more than anything else, what the American people are saying is just stop the madness and stop the out-of-control spending. And I think that's what -- do no more harm. And his administration right now has no solution, except to spend more, because that's what Democrats do when they have power.

They grow government, they expand government, they spend more, and they try and raise taxes, all of which are part of his proposal to spend another $5 trillion.

CAVUTO: So when he comes back at you, Senator, not you specifically, to say, Republicans take over, what they're going to do is go back to tax cuts for their wealthy friends, you say?

THUNE: Well, look, I think the thing we do need to do, Neil, is make permanent a lot of the tax provisions in the 2017 law.

That law is working. You're seeing more repatriation -- repatriations coming from international firms, dollars coming back into the U.S. tax dollars. You're seeing the capital gains tax reductions obviously are generating more revenue. It's having the desired effect.

The economy was poised to expand and grow. And, obviously, we had a pandemic, which we had to deal with. But those tax policies were put in place, not for the short term, but for the long term. And what investors need is certainty. They need predictability. And if we make that tax -- those tax changes permanent, those tax reforms permanent, I think you will start to see the investment again come off the sidelines.

Now, you need a change in policies on other issues like energy, which is where this administration, again, has completely shut down oil and gas production in this country. There are a lot of things you could do that would get those energy producers off the sidelines and back into the game.

But I think part of our agenda needs to be making permanent the 2017 tax law, because it is having the exact effect that we said it would. And that is to increase additional investment.

CAVUTO: All right, Senator Thune, thank you very much.

Good seeing you again, sir.

THUNE: Yes, thanks, Neil. Good to be with you.

CAVUTO: All right.

Now, that Alabama prisoner, escaped inmate and the person who was helping him, it's all resolved.

The tragedy from the sheriff who was overseeing it -- after this.

(COMMERCIAL BREAK)

CAVUTO: All right, an escaped inmate and the corrections officer he was on the lam with, the saga is over. One is alive. The other is dead.

Mike Tobin has more from Evansville, Indiana -- Mike.

MIKE TOBIN, FOX NEWS CORRESPONDENT: And Casey White, Neil, is here at the Vanderburgh County jail, waiting for Lauderdale County deputies to take him back to Alabama.

That 11-day manhunt ended here in a ditch when authorities rammed the Cadillac the fugitive couple was driving and ultimately rolled it into that ditch. The sheriff here, Dave Wedding, says that's a good thing because the two were armed for a fight, four 9-millimeter handguns, one AR-15 with .223 rounds in it, even a Taser.

(BEGIN VIDEO CLIP)

DAVE WEDDING, VANDERBURGH COUNTY, INDIANA, SHERIFF: Members of the U.S. task force basically rammed the vehicle and pushed it into a ditch.

And we later found out, had they not done that, the fugitive was going to engage in a shoot-out with law enforcement.

(END VIDEO CLIP)

TOBIN: Now, the couple still had $29,000 cash with them, despite prepaying two weeks at the Motel 41.

That's where authorities closed in on them, sparking the fight that ultimately ended with Vicky White shooting herself. She ultimately died of those injury or injuries.

What is interesting is that, despite this starting out as a jailhouse romance, Sheriff Dave Wedding says Casey White shows no remorse that Vicky is dead -- Neil, back to you.

CAVUTO: Very sad.

Mike Tobin, thank you very much.

Rick Singleton with us right now, the Lauderdale County, Alabama, sheriff.

Sheriff, thank you for joining us.

Had a sad ending, obviously, for Vicky White, who took her life. But I'm just wondering what precautions, sir, are in place now to make sure something like this doesn't happen again.

RICK SINGLETON, LAUDERDALE COUNTY, ALABAMA, SHERIFF: Well, of course, we had policies in place, and those policies were violated by Vicky White.

She took advantage in exploiting her position as assistant director of operations. She was the one that coordinated all transports out of the jail. She knew that Friday morning was a very chaotic morning at the jail, because inmates were constantly in and out, being transported back and forth to court.

She assured that the four transport deputies who were at the jail were all at the courthouse when she had Casey White brought out. So the policies, everything is in place. Of course, we're going to reinforce those.

But when -- at the end of the day, when someone makes their mind up to do something, you don't know -- you just can't read their mind. You don't know what they might be thinking about doing.

CAVUTO: No, I hear you.

Sir, in the meantime, do we know whether Casey White had ever harmed her or ever threatened Vicky White?

SINGLETON: Not that we know of.

Early in the investigation, when we discovered them missing, that was a concern of ours, that he had overpowered her somehow, and took her. And, of course, then we found out that the evaluation, the court appearance she was supposedly carrying him too, there was none scheduled.

So, pretty quickly, we realized that this was an escape. And we thought that maybe he had coerced her or threatened her or her family somehow to get her to get him out...

CAVUTO: Yes.

SINGLETON: ... but didn't -- no evidence.

CAVUTO: Sir, you had said we got a dangerous man off the street today a little earlier. And he's never going to see the light of day again.

That means obviously additional charges are going to be filed. What has he said since getting back to jail?

SINGLETON: Well, of course, he's in the jail in Indiana.

CAVUTO: Right.

SINGLETON: We have a transport team en route up there now to pick him up.

I know he -- I think he's talked to them. What he told them, I don't know.

CAVUTO: Got it.

Sheriff, congratulations on resolving this.

Rick Singleton, the Lauderdale County, Alabama, sheriff.

This saga has -- has ended.

All right, in the meantime here, something that has not ended, Elon Musk and apparently a flirtation with one Donald Trump to come back to Twitter, the sooner, the better -- after this.

(COMMERCIAL BREAK)

CAVUTO: With each and every passing day, we're getting a little bit more of an inkling what we will see Elon Musk do at Twitter once he formally has the company.

There's no guarantee that he will get it. There could be some hurdles ahead, but he is giving a better idea, some big changes that could be afoot.

Kelly O'Grady with more on that out of California -- Kelly.

KELLY O'GRADY, FOX BUSINESS CORRESPONDENT: Hey. Good to see you, Neil.

Yes, he's continuing to make headlines, and this time at the Future of the Car Conference that's hosted by The Financial Times. Part of the conversation focused on, what else, well, his Twitter takeover. One of the biggest revelations coming that he would reverse former President Donald Trump's ban from the platform, Musk asserting that permanent bans should be extremely rare and reserved for spambots.

He even went so far as to call the decision morally wrong and ineffective, as it drove users away from a single form of debate.

(BEGIN VIDEO CLIP)

ELON MUSK, CEO, TESLA MOTORS: It was not correct to ban Donald Trump. I think that was a mistake, because it alienated a large part of the country and did not ultimately result in Donald Trump not having a voice.

I guess the answer is that I would reverse the permaban.

(END VIDEO CLIP)

O'GRADY: Now, Elon, also affirming Jack Dorsey agrees with him. The former CEO already tweeting his support -- quote -- "I do agree there are exceptions, but generally permanent bans are a failure of ours and don't work."

Musk, however, conceding that some posts do not belong. In addition to illegal content, he identified speech categories that are -- quote -- "destructive to the world" and -- quote -- "wrong and bad" that should face penalties.

The big question, of course, will be what content receives those labels and how? Similar criticism thrown at Twitter's current moderators.

And, Neil, that's going to be a thin line to walk, right, stepping into that editorial role, with liberals already threatening regulation. Jen Psaki even hinting at the president revisiting Section 230 at today's press briefing in response to questions about Musk.

One thing I want to highlight, he's also said that that left-wing bias might be because it's located in San Francisco. So, Neil, maybe we will see Twitter move out of California.

CAVUTO: Could you imagine?

All right, Kelly, thank you very much for that.

Kelly O'Grady

(LAUGHTER)

CAVUTO: All right, the latest on the border right now, a couple of weeks away from a momentous moment that could be a scary moment.

The Eagle Pass, Texas, mayor, here, and only here -- after this.

(COMMERCIAL BREAK)

CAVUTO: Less than two weeks away from Title 42 going away at the border, and count Rolando Salinas very concerned, the Eagle Pass, Texas, mayor kind enough to join us.

Mayor, good to have you back.

What happens on that day, assuming there's no extension mayor or no alternative plan?

ROLANDO SALINAS, EAGLE PASS, TEXAS, MAYOR: Well, what happens -- and, first of all, thank you for having me.

What happens is that we're getting prepared as a city to have thousands of people cross the border. Right now, what we're doing is working together with Border Patrol, with CBP. And we created a staging area where, if we do have, more than likely, hundreds, hundreds and thousands of people, we will be able to process them quickly out of our community, because Eagle Pass is a very small community.

And we just don't have the resources to have thousands of people in our city.

CAVUTO: So, that seems inevitable.

We have heard figures from 7,300 today -- per day. It could easily triple. Do you think that's really possible?

SALINAS: Absolutely.

I mean, and getting together with federal agents, it's very likely. And, actually, they tell me that the intel says that there's already hundreds of thousands of people just waiting for May 23, once Title 42 is no longer in effect, so that they can come in.

So we're getting ready for the worst. And we definitely don't want anything to happen, like it did to our neighbors in Del Rio, Texas, when you had an influx of over 15,000 Haitian immigrants coming to their community.

So, we want to maintain order.

(CROSSTALK)

CAVUTO: I see. I apologize, sir.

Are you angry at the Mexicans for not doing more? There had been some concern expressed by some border officials that Mexico is doing little to alleviate the pressure building ahead of this?

SALINAS: Well, we have been working.

I have been working with the mayor of (INAUDIBLE) Mexico, as well as the governor of (INAUDIBLE). They're doing a good job.

What I feel would help us is a stronger message from the federal government, from our president, to tell these people that we're a nation of laws, and that this isn't open borders.

I think the message there is what's failing, because these people think that we are a nation of open borders. That's why you have thousands of people crossing through our city of Eagle Pass, Texas. It's very sad.

Today, we got news that a lady from Honduras drowned in the river...

CAVUTO: Wow.

SALINAS: ... being seven months pregnant.

So, we're seeing stories like that. It's very sad. But I think we need -- as a country, we need to send a strong message, telling them that we are a nation of laws, and you can't just come in.

CAVUTO: All right.

(CROSSTALK)

CAVUTO: And we have got to make that clear, to your point.

Mayor, thank you very much.

That will do it here.

Here's "THE FIVE."

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