The Constitutional Battle Looming Over the State Of The Union

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Monday, February 23rd, 26, I'm Mike Emanuel. A new week in Washington will feature President Trump's State of the Union address Tuesday night. After a setback at the Supreme Court on tariffs, the question now is if Congress should give the president formal tariff authority. Congress is so polarized now. We can't, we can't ever make a deal. We can't ever strike a deal with trade. or when it comes to terrorists, we'll never be able to agree. And yet the President of the United States, he is the CEO of our country. I'm Chris Foster. Food costs are up, labor costs are up, but there's cautious optimism in the restaurant industry. It's a very challenging environment and especially challenging when you face a consumer that is also pushing back against price increases and saying affordability is a major issue. They're struggling to make ends meet. And I'm Guy Benson. I've got the final word on the Fox News rundown. Tuesday night in primetime, President Trump will deliver his annual State of the Union address. The president is not looking forward to seeing the Supreme Court justices who ruled against his tariffs. They are invited, barely. Barely. Three are happily invited. No, no. They're barely, they're barely invited. Honestly, I couldn't care less if they come, okay? The president going further on the six justices who voted against him using emergency powers to tax imports without Congress. I think it's an embarrassment to their families. You want to know the truth. Treasury Secretary Scott Bessent says this president won't give up. The president remains undeterred in his determination to lower our trade deficit and bring manufacturing back to the U.S. Democrats are delighted with the high court. House Minority Leader Hakeem Jeffries says the ruling will help many Americans. Farmers and small business owners, companies, as well as perhaps most importantly, the American consumer have been hurt, being forced to pay. thousands of dollars more per year and additional expense. Clearly, close allies of this president are disappointed and contemplating next steps. I think it brings in clarification. Oklahoma Senator Markwayne Mullin, we spoke with him early Sunday morning. You know, when you start talking about the emergency economic powers to which the president was putting some of those terrorists in place. It eliminated that saying that that isn't a path forward, but it didn't talk about the other three to four paths that they can go through, one of them being national security. And so the president, his initiative to bring back manufacturing to the United States is a national security risk. And so I believe what it did is eliminate one. The speculation is if he can do it, because he can do it underneath a couple of different directions. It just said what he can't do it through, which is, like I said, EPA, which is the emergency economic powers.

So I believe the president did it right. When he went out and he said, well, he doesn't necessarily agree with the other six justices. He agrees with the three. However, thanks for the clarification, because now it tells me what he can do. When you start looking at, he start looking at was the money needed to be reimbursed. The court was silent on that. And it wasn't that it wasn't an issue that they knew they had to address. I think they just chose not to address it, which means that, in my opinion, it doesn't need to be refunded. It's just now we go back and focus to what the president always has been talking about. And that's, you know, MAGA, make America first again, and that including shoring up our lack of manufacturing. And the... vulnerabilities that brings when we don't bring things or don't make things inside the United States anymore. So I wasn't disappointed. I wasn't too disappointed in. I appreciate the president's immediate shift into a new focus, though. Of course, Tuesday night is the annual State of the Union address. Do you expect the president to ask Congress for formal tariff authority during that address? And would you support a bill that grants him that power? I absolutely would. I don't think – I don't know if he will or not. I have not spoken to the president about what he's going to be visiting and addressing. And the purpose of me not asking is because I don't want to be accused of leaking it because everybody's asking that. So I – but if he did ask, I believe we do need to make a redirection on the way Congress is so polarized now. We can't – We can't ever make a deal. We can't ever strike a deal with trade or when it comes to terrorists. We'll never be able to agree. And yet the President of the United States, he is the CEO of our country. Not only is he the Commander-in-Chief in the President of the United States, but we're a world economy now. We're not the economy that necessarily was something that our founding fathers even thought was possible, even though they did think of... trade as being a, you know, a major contributor to our economy, which is why, you know, our Navy was even started to begin with to protect shipping lanes in our flag vessels. When you start looking at the way the world needs to be able to pivot and the way that our presidents need to be able to negotiate on behalf of the United States, I believe it is time that Congress relooks at the way we handle the economy and delegate more of that to the CEO. And I hate delegating powers away from Congress. That's not what I want to do. But if we stay focused on what the... Constitution says about what we are supposed to be focused on and what falls within legislation, authority, I believe tariff is one of those things that can be delegated to the president.

Taking a look at some other policy matters, it would make sense if we hear something from President Trump on immigration. Some Republicans are starting to urge a little softer tone on enforcement to broaden the party's appeal before the midterms. Do you want to hear the president double down on taking a tough stance or pivot toward broader reform? Well, I think the president's already addressed this. He has made it very clear that he wants to enforce the rule of all and bring back security and safety to our streets again. He wants to make America safe again. But, you know, what was happening in Minneapolis, he came out and made a statement. Look, if you want us to come to your city and help you with your criminal activity, we will, but you're going to ask, please, first. As far as enforcing our immigration policy, if we have a guy that or a person or a group of individuals that are robbing and philging the United States and we have, you know, there's been felonies filed against them, we're going after them. And when we go after them, we're going to do our best regardless of where they're at to apprehend the individuals. But I believe the president made it very clear that these, you know, so-called sanctuary cities, which I think are completely illegal. and they need to be held accountable. I think there will be a different approach moving forward with DHS. The government also remains in a partial government shutdown. Do you expect the Democrats to bend a bit on some of their immigration reform demands? And how does this play out? When do we get back to a normal functioning Department of Homeland Security? Yeah, you know, the Democrats chose to play political theater with DHS, knowing good and well that, I mean, even Patty Murray said that they can't actually accomplish what they want by shutting down DHS because... IF and Border Patrol is fully funded through the one big beautiful bill through the president's term. So all the thing that has shut down is FEMA, TSA, the Coast Guard, and, you know, and our cybersecurity and secret service. And so I believe that we do reopen it at the end of this week. I think before Congress goes home for the weekend, we'll have some type of bipartisan approach, but the bipartisan approach is probably mostly what was already inside. The original appropriation bill that passed out of the house, they want training. We want training for our officers, too. They want body cameras. There was already $20 million in the appropriation bill that passed out of the house that had body cameras. When they start talking about judicial warrants, We're not interested in judicial warrants. We want judicial warrants to be used for what they're supposed to be used for, you know, for entry into houses maybe. But for administrative warrants and not have to have a judicial warrant, or they want judicial warrants for all immigration, that'd be like having, have to have to have a judicial warrant to pick up a DUI driver. It doesn't work.

Anything that helps ICE do their job, we will be supportive of. Anything that prohibits them or makes it harder for them to enforce the laws that Congress passed, we won't negotiate on. So there'll be some type of back and forth, but I think VHS is reopened by Friday evening. Obviously, a huge priority for the president, for you, for all Republicans, is maintaining the majority in the House and the Senate. What should be some of the goals this year to make that happen? But we stay focused on the economy. I mean, people make decisions a lot of times with the way they fill and what their wallet says. I believe with inflation coming down by half of what it was when Joe Biden was in, in fact, if you want to go to their high, it's over 9%. Now we're at 2.4%, but average over 5%. Inflation coming down is good. We're moving on the right track. interest rates that are taking place. We're hoping that interest will come down because the prices of goods have come down. You see energy costs falling at a five-year low. You continue to see basic goods on the table that are starting to come down. We see that you have, you know, protein is coming down for the most part. There's more that can be done there. Bring home pay is up over $1,200. A year, we expect that to continue to climb. And then when we start talking about the taxes that we firmly put in place for the American people, you're going to see the American people having the largest tax returns they've had in probably their lifetime. All those are good, and if we continue moving forward and staying focused. on the economy and allowing the businessman that we elected President Donald J. Trump to lead, I believe we'll do just fine in the midterms. Senator, I'd like to get your reaction to some breaking news over the weekend. The Secret Service saying a man in his early 20s was seen at Mara Lago's Northgate around 1.30 in the morning Sunday carrying what appeared to be a shotgun and a fuel can. Secret Service officers took out... the gunman, the suspect, and this is obviously President Trump's Florida home. He was not there this weekend, but a reminder, I guess, of the threats against the presidency. Yeah, unfortunately, the temperature in the United States, because the rhetoric from those like Tim Walz. and Maxing Waters and Alexandria Ocasio-Cortez and Omar and the list can go on. They continue to drive this derangement towards Trump. And another one you can add to that last week, there was a gunman that stepped out of his truck carrying a shotgun and a tactical vest and started running towards the Capitol. And the Capitol Police had to stop him. It's a wonder they didn't use lethal force in that matter. And so the temperature across the aisle and across the Democrat Party has to be brought down. When they start using the words Nazi...

and which they use constantly. And anytime they can't make a logical argument on something, they immediately move to racism as the factor behind it and fascism to the factor behind it, which is absolutely the farthest saying from truth. I mean, even on the SAVE Act, you have Chuck Schumer that goes out and calls it Jim Crow 2.0, yet 37 states in the country already require it. It's just absurd, and the Democrat plays a significant role in this. And people need to learn how to take a deep breath, too. I mean, I'm very passionate about my beliefs, but I'm not trying to kill somebody over it. And unfortunately, you're seeing that on one side of the equation, not on the Republican side, but you're seeing on the Democrat side. Senator Markwayne Mullin at the great state of Oklahoma. It's really wonderful to have you today, sir. Thank you for your time. Have a great week. Thanks, brother. Talk you later. Bye.

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Food costs are up. Labor costs are up. That's really one of the bigger challenges right now is labor costs are up so much. But it's not just food and labor. It's insurance, it's taxes, it's everything, right? And we've seen the overall profit margin narrow pretty significantly since the beginning of the pandemic. Your typical full service restaurant has a profit margin of 2.8%, which is pretty narrow. It's even narrower than it was before the pandemic, which was 4%. For limited service restaurants, that is 4. It would have been 6. And those are 2024 numbers. I mean, I can imagine that in 2025, those numbers would have narrowed it further. And so it's a very challenging environment, and especially challenging when you face a consumer that is also pushing back against price increases and saying affordability is a major issue. struggling to make ends meet. Are we going to see more closures this year? And also, what happens to those Johnny Rockets or whatever else that gets abandoned when those franchises go under? There are a lot of closures. It's probably a little bit more than the normal. There are also a lot of openings. And so that gives me a little hope as well that there are still people who want to get into this business of opening a restaurant. And there's a word romanticism about that, I suspect, in many ways. I think that you also are seeing that even in some of those closures, you're seeing some refocusing in terms of maybe we can close some of the restaurants that are underperforming, but really focus on those that are doing well. Yeah, like Wendy's, for example, they're saying this is going to be a rebuilding year and they're going to close, I forget how many, hundreds of underperforming places. And I guess that also shows the risk of being a franchisee when you're beholden to decisions from the top that you might not agree with and might not be working out for you. I think the bigger picture here is that it is a very challenging environment. I just think the cost structure in the last few years since the pandemic have made it even more challenging. I mean, if you look back and think of just all the things that restaurants have faced over the last decade, right, with trade wars and the pandemic and supply chain shocks. Great resignation. Every time you turn around, there's another challenge to be, you know, to go through. And for me, from my point, I actually think that 2026 is going to be a better year than we think. I think that you are going to see some tailwinds this year. You know, the one big beautiful bill is going to provide tax incentives from both consumers as well as business investment. You are going to see lower interest rates probably later this year. And so I think you're going to continue to see some resilience there. And so. Hopefully, this is a rebuilding year for those restaurants that have really struggled. And I think that's one of the goals that when I talk to operators is getting more butts and seats, trying to increase those traffic trends and turn them around, increase your off-premise sales, but also try to keep your costs under control. Yeah, butts and seats versus those off-premise sales. There's food and then there's eating out. There's hospitality. How are dining in restaurants, traditionally dining restaurants, adapting to this world with more people?

just wanting to order food at home on their phones. I mean, is it disruptive? Does it cut into table revenue? Or is that extra money that you wouldn't have made? It's extra money. I think you've certainly seen a huge increase in off-premise sales, especially amongst younger generations. We know that your typical American eats out at least once a week, right? That's takeout delivery or drive-through. And Gen Z and millennials tell us that that's an essential part of their lifestyle, right? And so restaurants really need to cater that. You've seen a lot of investment in that space to... really not just your quick service restaurants, but also full service restaurants, having the ability to do takeout, working with third-party delivery vendors, having the drive-through options in ways that maybe they didn't before. It doesn't mean that they're not prioritizing getting butts and seats, right? That still is, you know, that still has been the goal the last two years is to turn around those larger traffic trends to get people in the restaurant. But I think that those extra Focus on takeout delivery and drive-through is another one of those add-ons that is really a growth driver for many restaurants. Do you expect technology in-house to lead to fewer restaurant jobs or just higher or higher productivity with the people that are there or a little of both? So my bias is always that some of the technology fears are overblown, right? It largely is a productivity story. It doesn't mean we won't need fewer workers at some point, but largely what technology has done is made those workers more productive, right? So you're seeing a lot of customer-facing technologies, you know, the kiosks and apps and all of those things that really ease payment, hopefully eliminate. challenges you might have with the order, making sure it's more accurate, but really freeing up other workers to do other things. We're seeing technology being implemented for sourcing, for human resources, and obviously for the operations in the back in the kitchen itself, right, to make sure that. overall orders are coming out quicker. Most restaurants tell us that they're not, technology is not displacing workers, and I suspect that that's going to continue to be true. What it's really doing is it's freeing up the manager and those other workers to do other tasks. We know that the United States is going to be net negative in population as soon as 2030, and the only real growth in population is going to come from immigration. And so, you know, we do have to, as a society, this goes beyond restaurants, think about where are the workers going to come from? over the next few years. And technology can certainly help alleviate some of those challenges by making workers more productive to really kind of stay on top of what it's going to really be, at least in my view, kind of a structural tight labor market over the next few years. You mentioned immigration. I mean, your industry obviously is a big interest in immigration policy. This report says 22% of workers are from another country. Now, what would the industry as a whole, if you could speak to it, like to see with immigration reform?

We would like to see some comprehensive immigration solution. We have seen obviously some issues with immigration over the course of this year when it comes to recruitment, retention, and also sales in some isolated pockets of the country. But I think the larger narrative here is that we need immigration. We need more people coming into this country. And it certainly helps to fill those labor gaps that we see not just for restaurants, but for our suppliers. Our staff shortage is expected to ease. at all this year is it is it finding and also is it finding people people are keeping people We know that in the state of the industry that you referred to earlier, 22% of restaurants said that they had staffing challenges last year. That was the lowest we've seen really since the pandemic. It's easier to hire fine workers today because people are not leaving. Yet at the same time, it's a challenge to find good managers. It's a struggle to find chefs and some really isolated kind of really highly skilled workers in the restaurant sector. And so I think that's going to continue to be one of those issues of. Finding skilled workers is going to be a challenge, not just for restaurants, for the whole business community, at least in my view. There's been talk, or the last, I don't know, year or two, about Chili's, for example, being a pretty big success story. Now, there are lots of restaurants, or there have been or were, some of them going under restaurants in that category of restaurant. What do some companies get right that others get wrong? For example, what's Wendy's, what is a lesson? What's something that a Chili's is doing that other people should have been doing? Well, I think restaurants are trying to figure out, you know, we think we're a great value. We think, you know, when you come into our restaurant, it's a great experience, it's a great value for the dollar, right? Why aren't consumers seeing that? I think that's the big question that our operators are having, not just about chilies, but about other restaurants in the sector as well. I think it's important to note that when you come into a restaurant, it really depends on the occasion. In some occasions, if you're going out to celebrate those big events, I want the full experience, right? I want to be waited on. I want, you know, a great meal. I want to have the nice setting. The ambiance is great. It's something I couldn't fix at home. And even, you know, even if you're thinking down into thinking of more family casual or quick service, that experience still matters, right? And so I think when restaurants are thinking of value, they're thinking about price. They're thinking about, you know, the dollar. But I think they're also looking at.

How can I make sure that when people come into my restaurant, they're feeling like they're welcome. It's a clean environment. They're getting a great meal, a great price. And I think that all of those things are coming into that larger conversation that people are looking at. So yes, they're learning from some of those success stories. But I think they're also looking at what is that overall experience? What are we good at? And how can we communicate that better, I think, for our customers so that we can be a success story as well. Chief Economist of the National Restaurant Association, Dr. Chad Moutre. Thank you very much. Thanks, Chris. Here's a look at the week ahead. Monday, Nick Reiner, the son of late director and actor Rob Reiner, will be arraigned in a California courtroom. He was supposed to enter a plea last month, but his defense attorney unexpectedly quit, prompting the delay. He's accused of stabbing his parents to death at the end of last year and facing a maximum sentence of death. Tuesday, the president heads to Capitol Hill for the first state of the union address of his second term. A number of Democrats are expected to boycott the speech, opting to hold a rally, on the National Mall instead. Wednesday, after months of delays, the White House picked for Surgeon General finally gets her nomination hearing. The 38-year-old wellness influencer was originally scheduled to face the Senate Committee in October, but went into labor. Thursday, the first of two high-profile depositions to the House Oversight Committee about Jeffrey Epstein, former Secretary of State Hillary Clinton, is day one, and Friday will be former President Bill Clinton. And that's a look at your week ahead. I'm Tom Graham. Fox News.

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