An Education E.O. & Avian Flu’s Spread 3/21/25

0:00Bring in show music, please. This is Squawk Pod, and I'm CNBC producer Cameron Costa. On today's podcast, President Trump's executive order aimed at dismantling the Department of Education. Former Education Secretary Margaret Spellings weighs in on the point of the department and the value we'd need to make up without it. If we're sending money to the states and we're eliminating those oversight and data functions at the department. How will American taxpayers know if they're getting any return on their investment? And curbing the avian flu spread and the rise of egg prices with former FDA commissioner Dr.

0:44Scott Gottlieb. If this is in fact endemic in North America and it's a persistent threat that we're going to have to deal with, it just increases the chances that it can continue to evolve in ways and get into other species. Plus, major American companies warning on the economy, congestion pricing in NYC gets a reprieve, and the saga of Mr. Musk goes to Washington. We get into all of it. I'm as real as the day is long. You know that. Oh, I know that. It's Friday, March 21st, and Squawk Pod begins right now. Stand by Joe in three, two, one, two. Yeah, not sure of those outfits. Good morning and welcome.

1:27It's on the cover of the Wall Street Welcome to Squawk Box here on CNBC Live from the NASDAQ market site. In Times Square, I'm Joe Kernan, along with Melissa Lee, Becky, and Andrew, are off the date. You know, 4 o 'clock's a long way off. Hope spring's eternal. The Dow and the S &P are in the green for the week. The NASDAQ is slightly negative. If it does end in the red, it would be five straight weeks for the NASDAQ to close lower. That's the index's longest stretch since 2022. And Treasury yields in an overnight post on his social media network. President Trump again called on the Fed to lower rates.

2:04The market's doing it on its own, regardless of what the Fed does. 4.22 on the low end of, at least on the low end of the range. I don't know if it makes a stand here as far as yields go. But it'd be nice if this trickled into, but you know banks, they love it when rates go up. It's like, oh, geez. It's like a millisecond and everything goes up. On the way down, it's like, oh, me. You know, they're very slow. And you want lower rates, but you don't want rates to go lower because of the economy. Right. And you don't want them to go below four because I think that would signal a little bit more panic.

2:45It'd still be good just from where it is. You're right about if it's the reasons are negative, then it's bad. But lower rates are great in a lot of ways in terms of inflation. They may engender inflation. All across the board, credit card. I mean, credit card, you know, if rates fall, credit card loans might go below 24 percent. I know. It would be really nice. 23 and a half. Bring back the CFPB or whatever the heck. FedEx this morning cutting its full year profit and revenue forecast as it reported mixed third quarter results. Revenue at the shipping giant beat estimates, though earnings were slightly below consensus.

3:23FedEx has been battling softer demand and uncertainty over President Trump's tariff plans. The company says its reduced forecast does not include the potential impact of U.S. tariffs, which will go into effect early next month. On FedEx's earnings call, the CEO and chief commercial officer mentioned weakness or softness in the industrial economy at least nine different times. During that call this morning, FedEx shares are down by 7.3 percent, but implied in that guidance with that asterisk that it's not including the impact of the tariffs, is that there's downside risk to even those lowered forecasts if they include those tariffs.

3:56Volatile stock, as we know, and an important group, Transports, to give us an indication of the health of the economy. More corporate commentary on those tariffs. Here's what Home Decker, Home Depot CEO, Ted Decker, get ahead of myself, told Jim Cramer, told Jim Money on last night's Mad Cramer. We had tariffs in 2017. I mean, when did we have, you know, customs houses in all our ports? We've had tariffs forever. We will manage through it and come out the other side better than anyone. So it's not something we worry about. Decker said Home Depot is focused on value and aiming to move volume to everyday customers and wholesalers.

4:40Well, drivers trading in a record number of Tesla cars so far this month. That is according to new data from national car shopping site Edmunds provided to Reuters. Tesla's model year 2017 or newer accounted for 1.4 percent of all vehicles traded in until March 15th, up from 0.4 percent in March of last year. If the trend holds, the current pace of trade-ins at dealerships would be the highest ever for Tesla. Musk and his car brand have faced recent backlash over his political ties to the Trump administration and their push to cut government spending. Tesla's and Tesla showrooms have been targeted by criminal acts of vandalism and arson.

5:17Yesterday, Attorney General Pam Bondi announced three people have been charged in connection with arson at Tesla dealerships and charging stations. On the stock front, Tesla shares currently on pace for the ninth straight negative week. This is the stock's longest ever downstretch. Though in an analyst note, late yesterday afternoon, Morgan Stanley's Adam Jonas reiterated his overweight and top pick rating on the stock. He did cut the price target to 410 from 430. Elon Musk also sought to reassure Tesla employees in an all-hands meeting yesterday in Texas, telling them that despite some rocky moments, they should hang on to their shares.

5:50Which are still valued at$759 billion. Down 40 % year to date. But still up year over year. General Motors, market cap$49 billion. So$759 versus$49 billion. I don't know what the 1.4 % didn't sound, versus.4 sounded. like it tripled, but I don't know what the normal rate is. Does that sound like a lot of trade-ins to you, 1.4 %? You have to think that there's also a Model Y refresh. Model Y is the best-selling car, one of the best-selling cars in the U.S. And so when that refresh is happening, people want to trade in their cars feasibly. I mean, this could be the bull case to get a new one. And that's why sales are down.

6:34That's why deliveries are down. That's why you've seen this sort of softness in the Tesla numbers in anticipation of this handover to the view. This stuff happening is people keying cars and all this kind of stuff. I saw on social media some guy flipping off a three-year-old that was sitting in the passenger side of a Cybertruck. I will say that where I live, if I did decide to take something out on a Tesla driver driver or on the car itself, I could pick the first one coming towards me, the second one, the third, the fourth, the fifth, the sixth, the seventh, or the eighth that are coming at me in short hills.

7:18It's everywhere. Is that what it is? Yeah. Well, every car is a Tesla. Every car. I mean, I used to, before I felt empathy for what the company is going through, I used to say, I'm so sick. There's a white one. There's a red one. There's a blue one. They're all the same colors, the same style, the same, it's like, it's almost like, um, change the body style, or give me some new colors, or do something, but, and people used to get mad at me, the Tesla zealots, there aren't any of them left, because they were all lefties to start with, so now they're just, they're so conflicted at this point, oh, the climate, but, but, but the government, you know, they don't know what to do, they're like your mother, your sister.

7:57Well, regardless, there's things that, that shouldn't be going, I mean, the, vandalism should not be going on at any level, even if it's for political protest. That's not right to damage other people's property. And at the same time, sitting government officials shouldn't tout stocks. You think it's a fluke that... As Commerce Secretary Howard Lutton did. Right. You think it's a fluke that on late night TV, Luigi Mangione received all kinds of weird, maybe they didn't outright say good job or were behind you, but they certainly implied it on late night. And the same thing is happening right now.

8:28I mean, all of it is bad. You commit a lot. crime, it is wrong. Period. I don't care who it's against. President Trump is dismissing a New York Times report that said Elon Musk will head to the Pentagon today for a briefing on the military's plans for any potential war with China. Three defense officials telling NBC News Musk is scheduled to visit the Pentagon for a meeting and a briefing today and that China will be on the agenda. But in a post on a social media network, Mark, Trump called the Times report incorrect and ridiculous and said China will not be discussed at all. You know, if you don't read, I'm going to start using this.

9:08If you don't read the newspaper every day, you're uninformed. And if you do read it, you're misinformed anyway. Supposedly Mark Twain, but supposedly he didn't say that, but he's credited with that. You like it? Will you use it? That's it? Interesting? you're not going to make a value judgment about it. No. Fake news, no. I guess we're part of the whole conflict. We are part of the news. Okay, but we're not fake. Are you going to say that we are fake? No, I'm as real as the day is long. And you know that. Oh, I know that. And you know that. And congestion pricing, no one knows, it's so divided.

9:44I want to ask you about that too, because you have to get in here every day. Oh, it's been wonderful. Exactly, but don't you feel guilty? Don't you sort of feel guilty? I do, I do. I know. Because I don't have to. I mean, we pay, but we don't really feel good. Somebody pays. Right. But the people, I don't know. I can't imagine trying to take a bus in from New Jersey, but people do. The Trump administration is extending the deadline for New York City to shut off the tolls for its congestion pricing program. State authorities in the New York MTA had refused to comply with today's deadline to halt the program, saying it would remain in effect until there's a court decision on the matter.

10:20In a post on ex-Transportation Secretary Sean Duffy said the federal government and President Trump are putting New York on notice. He said they will provide New York a 30-day extension for discussions to continue and warn that the billions of dollars the federal government sends to New York are not a blank check and that noncompliance will not be taken lightly. A spokesman, spokesperson, I got it, I got it. For Governor, Kathy Hochul said congestion pricing is working. and support for the program continues to grow. Secretary Duffy attempted to end the program last month by reversing a key federal approval.

10:58The MTA sued, and the head of the MTA has said that it's awaiting the government's response as part of the normal litigation process, but will not turn the cameras off without a court order. The story is so complicated. They already spent the money. Right, for all of the cameras and the infrastructure to be put in to support. And they spent the money that they have to, over the next year, get from the congestion pricing to make good on the money that they already spent, which supposedly is going to make the MTA and the mass transit better, but everybody jumps over the... No one pays, and no one pays on...

11:38I think, how many people pay when they get on the bus? The poor bus driver can't... You know, what's it going to... Every single person... Yeah, he's going to say, yeah, you can't go on there without paying. It's a mess. But if I think about me, Al Franken, which is an old Saturday Night Live thing, I guess you got. But if just us, there's less traffic. So we kind of like it. There's a lot less traffic. But that's not what we should base all of our... That's also good for the buses that come in from New Jersey and other states. And buses that go up and down the avenues here. I mean, it's fantastic.

12:11Right, right. And I was against the congestion pricing initially. I know, me too. I felt bad for the drivers. Because there's a lot of people that do still drive. Maybe if they're not driving away, they could take the, I guess, the trains. The trains or maybe a bus. The trains to the subway. Just, you know, keep your eye open in the subway, you know, and don't stand near the track. That's just simple. Well, crimes have been improving on the subway to be, you know, year to date. The crimes have been getting better? Oh, I mean, the crime rate has been getting better. I dropped the rate. I think it's all delivered.

12:49Cheese will be next. Next on Squawk Pod, President Trump's effort to dismantle the Department of Education. Former secretary of that department, Margaret Spellings, argues that state control President Trump wants to achieve, well, we already have it. School districts and states, they decide, do they want to lower class size ratios? Do they want to buy technology? Do they want to, you know, you name it. They have lots of discretion around those title funds, a lot of local control. What voids would be left in the department's absence? The data that President Trump cited comes from the federal government.

13:32This is Squawk Pod. This week, President Trump signed an executive order to dismantle the Department of Education.

13:44And it sounds strange, doesn't it? Department of Education, we're going to eliminate it. And everybody knows it's right. And the Democrats know it's right. And I hope they're going to be voting for it because ultimately it may come before them. Congress will have to approve the abolition of the Education Department. It was Congress that established the department in 1979 under President Jimmy Carter. Now, the biggest battle ahead for the effort is likely going to be from Democrats. in the Republican-controlled Senate. 60 votes in favor will push it through. Democrat arguments against the Department of Education's dissolution include concern that without the department, rural, low-income, and special-needs students will be at risk.

14:29Joe Kernan spoke to Margaret Spellings on Squawk Box. She's currently the president and CEO of the Bipartisan Policy Center, but she's also the former U.S. Secretary of Education. Adam, Secretary, this has been talked about for quite a while by President Trump. And I guess you'd have to say that people that voted for him should not be surprised by this. I guess that's right. As a result, I mean, it's not going to be easy. I don't know if he can do it this way. I don't know what your thoughts are. And I don't know whether you think you're in favor of it. There are a couple of things that I didn't realize that I'm finding out.

15:06$1.6 trillion in student debt. That would make the Department of Education one of the largest banks in the United States. And it doles out$270 billion a year. And whoever is president can basically decide who gets some of these block grants for their own agenda. And we've had no improvement in any scores anywhere since it's been around. Well, that's not entirely true. And you've said a mouthful. There's lots to react to there. First of all, the Congress is going to have the last word on this proposal, obviously. It was congressionally created, and there are various requirements and remits for the Department of Education.

15:49President Trump has already laid off about half of the people at the Department of Education. It's college enrollment season, for example. Students are anticipating financial aid decisions. University administrators are needing to process those things. You know, the Trump administration says, and it's encouraging, that the funding levels will continue, that we are still in service to low-income and special education students on the K-12 side and financial aid on the higher ed side. And you're right, it's a big bank. So I have a lot of questions about whether they're going to be able to meet the requirements, the congressionally mandated requirements that they're charged with, with these reduced levels of staffing.

16:31And further, if we're sending money to the states and we're eliminating those oversight and data functions at the department, how will American taxpayers know if they're getting any return on their investment? Is it overregulated because it's a federal program at this point? Does a lot of it fall through the cracks? $2.2 billion for a program, a block grant, to support effective instruction. And those, you know, we're hearing a lot about federal mandates, one size fits hall. state control. States and local school districts are in charge of public education in our country. Nine cents on the dollar comes from them.

17:10They stipulate curriculum. They write tests. They set the passing scores for tests. They describe reading lists, on and on and on. And the federal government is prohibited from those one-size-fits-all sorts of decisions. The federal thesis about the Department of Education is it's an agency that was founded in the great society that we as Americans believe that everyone should have opportunity for education as a route to the American dream and that we, all Americans, had an interest in helping support that irrespective of zip code or rural or urban status or anything, especially for low-income and special needs students.

17:55Right, but you've got, okay, so the student loan, we saw what Biden tried to do with the student loans. It's$1.6 trillion. It is estimated that$500 billion is eventually going to be written down, and that's just like an entitlement. That's another unfunded entitlement, and all it does is drive up college. The only people that benefit are the universities. Truly, yeah. And that's why we need a federal role that can, you know, describe to students and to taxpayers, what is the value proposition around American higher education? You know, you shouldn't be taking hundreds of thousands of dollars of debt for programs that are not going to have a payoff in the job market.

18:41Or if you do, you should do that, you know, eyes wide open and maybe on your nickel and not on the taxpayers of America. But I think that role of data and information and truth telling, both on K-12 and in higher education is critically important. And really, the U.S. Department of Education or the federal government, it can certainly live elsewhere in the federal government, is really the only place that that kind of data can be surfaced and understood. And we can really help states and school districts understand what's working and where. Is it true or false? No country spends more and gets less for what they're spending on.

19:19You said I was wrong about that. No, no. I mean, that's largely true. We also in America are attempting to do something that few other countries do. I mean, we do believe that teach math and reading and get and watch the scores go down every single year, year in. No, our thesis as Americans is that every single person who shows up special needs, low income, so on, that those students ought to be served in our public schools. that it's virtually a universal right. Countries around the world, they have tracking systems. They say, you're here, you're there, you're academically able, here's your track, and so forth.

20:01So we are a nation of second-chance believers, and that opportunity ought to be provided broadly. So we're trying to do something a little different from lots of other countries around the world. Where would it fall through the crisis? Are we worried that because I can't see why the federal government would be better than than state and local governments. If you had the same amount of money and you gave it to one, you know, you try and do it from the federal level or we'll give you the same amount of money and you try and do it from the state or local level. What are we worried that some of the states are are going to are going to be not very good at doing this?

20:38Well, they they have proved. And look, I've worked around state legislatures around this country and many years in Texas. I mean, I'm a true believer in local control. I worked for a school boards association and I understand that we shouldn't sit up here in Washington and try to describe that. But may I say that when we had, you know, more accountability tied to this thesis around opportunity for everyone through these title programs and we said, test kids every year in reading and math, report that data and do something about the achievement gap from From 2000 to 2015, we were going in the right direction.

21:17And then we started to flatten and fall in the last 10 years. Why? And don't take my word for it. Just take a look at the data. Are we getting, for the amount of money that we're spending, where? What's every dollar? What do we actually get out of every dollar? Do we get 70 cents? Do we get 50 cents? Do we get 20 cents? What do we actually get, and where does it go? It varies. It varies widely because these title programs that we're talking about on the K-12 side of the house, if you will, have tons of latitude. I mean, school districts and states, they decide, do they want to lower class size ratios?

21:56Do they want to buy technology? Do they want to, you know, you name it. They have lots of discretion around those title funds, a lot of local control. It's not against the law for states to have high student achievement. And I don't know any governor who would say, well, we're not going to do it unless the federal government gets out of their business. They're trying to nurture and develop competitive workforces. And really, the federal government is the last thing holding them back from doing it. In fact, the federal government is the one shining the light on the data that President Trump cited, the data that you've just cited, comes from the federal government.

22:33Now, I'm just wondering where is the where's the problem with it? As you got the block grant here and all this money and what we said about this 270 billion that we spend. And then here coming out the other side is these test scores. Here's the problem. Where is it going? We don't have it. We don't have an expectation that every student can and should have the opportunity to achieve. And we don't resource that priority like we mean it. So we have a lot of resources. And, you know, if you're a very experienced teacher because of the way union contracts and other processes run, you're in a cream puff high school.

23:13If you're struggling brand new, you're trying to educate our most disadvantaged kids. So we don't put our money where our mouths are. That's a matter of local control, as a matter of fact. So, you know, just a sense of urgency around, you know, the needs of students and that we need to keep student achievement top of mind. And that's one of the things I'm worried about is as we have these the niceties of these conversations, which bureaucracy should run these programs? You know, I hope that we won't lose sight of the things that you rightly say. And that is the very, you know, underwhelming student achievement we have in the aftermath of a 10 year period where we were going in the right direction.

23:56Right. We are what how we educate our children because they become who we are. And we're going to, you know, it's been well documented. Some other countries, you know, how much better they are at STEM and a bunch of things like that. So it's important. I have no, you know, I'm at a loss. Yeah, they're super, super centralized systems, the ones that are ahead of us. Just saying. Really? Well, that's counter to what we're doing right now, then. Yes. It seems like. Yes, it is. All right. Well, that's not good. Secretary Spelling. We'll talk again. Yep. Let's do. We'll figure this out. Thank you. I hope so.

24:34For the sake of our future. Next on Squawk Pod, much ado about bird flu. Former FDA Commissioner Dr. Scott Gottlieb discusses keeping our food system healthy. We've got to lock these chickens down now and homeschool them. The increased biosecurity deals with things like, you know, hosing down trucks and workers' boots.

25:03You're listening to Squawk Pod today with Joe Kernan and Melissa Lee. Stand Joe by. Three, two, his mic. Q. Protecting the American egg supply from the avian flu. Former FDA Commissioner Dr. Scott Gottlieb argues that the best way to fight the ongoing threat is through biosecurity and vaccines. Dr. Scott Gottlieb joins us now. Scott, if I left this next line out, I don't know what the world might end. Might stop spinning. He is also a CNBC contributor, and he's on the boards of Illumina and Pfizer. How's that? I'm done. Thank you. What am I most scared of? My not being able to have scrambled eggs or bird flu jumping and being a real threat to the next pandemic for humans?