The pontiff thanked all for respecting his decision to retire. He is the first pope in 600 years to do so. Im deeply grateful for understanding, support and prayers of many of you from those at home and around. The decision i have made in gods will and deep love of church. Pope benedict xvi asked for special prayers for the cardinals and whomever they choose to be his successor. He will officially enter retirement tomorrow. That will do it for us. Fox friends starts right now. Good morning. Its wednesday. Its february 27, 2013. Im gretchen carlson. I hope youre going to have a great day. Thanks for sharing part of it with us. Fox news alert. A final farewell to the pope. Thousands gather as Pope Benedict xvi gives one last prayer. Steve john boehner is a man of a few words but when he speaks, hes very clear. We should not have to move a third bill before the senate gets off their [bleep] and begins to do something. Steve democrats say they can only act if we raise taxes again. Not going to happen. Brian students forced to wear burkas and call 9 11 hijackers Freedom Fighters. Teachers say it was a lesson. One of the students in that picture joins us this hour. Is that okay with you . Fox friends starts now. Wait a minute. Why would anna koiman be playing basketball this hour . Gretchen watch out for the double dribble . Im not the best basketball player; thats for sure. Good morning to everyone at home. We told you about this little kid. Hes an 11yearold. Julian newman who is a basketball prodigy. A lot of our viewers are completely impressed by him. So we came out here. Were going to show him some fox friends love. We watched him play last night. He leads the state in assists or he leads the state in assists in the top 20 in the nation, so hes incredible. Im going to be playing him one on one. Thats my best one there. Brian how much time do you have to practice before he shows up . What time does his alarm go off . Hes actually on his way right now. So a little nervous. Back to you. Brian were going to see him about 45 minutes from now. If you have Phil Jacksons number and you can scramble him to florida, she needs help. Gretchen dramatic video released of that hot air balloon crashing in egypt after cashing fire. You can catching fire. The crash leaving at least 19 tourists dead. Two people lucky to be alive after surviving that plunge. Foul play ruled out. The crash is expected to push egypts tourism into even deeper recession. Two California Police officers dead after being gunned down while following up on an arrest. Cops say the suspect shot him as they approached his home. After a short search, gunfire broke out and the suspect was shot and killed. The officers had 38 years of experience between them. Last night a bus carrying the university of maine Womens Basketball team crashed off the highway. It is believed the driver had some kind of medical issue while he was driving. He is in serious condition. Students and coaches walked away with minor injuries. A lot of traffic. Gretchen nascar fans injured in a fiery wreck now considering a lawsuit. As you remember, that was the scene saturday at a tphaeubgs wide race at Daytona International speedway. 30 fans were hurt when an engine, tires and debris from cars went through the fence. Now a lawyer for the fans said they are considering filing an injury suit calling the safety fence into question. Experts say liability waivers written on the tickets could make a lawsuit difficult. Brian i heard it could have been a lot worse without that fence. Gretchen fox news alert again for you now because Pope Benedict wrapping up an emotional final appearance in front of thousands. He officially steps down tomorrow; the first pope to do so in 600 years. He told the crowd he made the decision for the good of the church and thanked them for their support. I am deeply grateful for understanding, support and prayers of so many of you not only here in rome but also around. The decision i have made after much prayers and trust in gods will and a deep love of gods church. Gretchen that will be something youll never forget . Live in rome. It was very moving to be on saint Peters Square for this historic occasion. It is a Beautiful Day here in rome. Bright blue skies. I kept thinking as i watched Pope Benedict xvi go around in his pope mobile euro for your thoughts, penny for your thoughts because we get the sense he have suffered quite a lot in making that decision. He did address that issue today in his final address in saint Peters Square. He talked about how he prayed to god making that decision. He claims to be at peace with the decision. He says hes not actually reclaiming a personal life. He wont be traveling. He wont be going to conferences. Hell be still with the church and dedicating himself to prayer and reflection and hes aware of the gravity and novelty of this decision. He said theres been good times and difficult times in his role as pontiff. But he said he has never ever felt alone. There were lots of people out on saint Peters Square, as you can see from the pictures. Some of them, the faithful wanting to receive his blessing one last time. Others just curious because this is such an historic moment. There were young people out there who had only really known this post. There were priests, seminarianans saying he inspired them with his intellect. People came out for Different Reasons today but it was, i think, for everyone a pretty moving event to watch him out in public one last time. Of course Pope Benedict xvi has 24 hours, a little bit less than that on the job. Then he will be clearly removing himself from the fray before the conclave begins and the arrested and the task of finding a new pope. Gretchen they would like to find a pope before the easter season. Brian lets talk about whats happening with two days to go now, on friday, march 1, sequester happens, takes place. I dont know anybody on capitol hill who dont believe it is actually going to go forward and which means its going to be billions of dollars cut from our budget and were going to start feeling it probably by april and the easter season. And both sides spent a lot of time blaming each other. The president went out to newport news, virginia, in front of a military facility and said we cant build this ship because of republicans. Republicans said, wait a second. It was your idea. Its been a year and a half. And now you find it to be an emergency. Steve there are some senators on the republican side in the u. S. Congress who are trying to give the president a little more flexibility even though he currently has plenty of leeway to figure out a better idea to make the cuts as painless as possible. But right now it looks like hes going for maximum pain for political gain. Republicans want to give him more flexibility. Yesterday where he was there in virginia, he said i dont want that flexibility because its not easy to do it. Also in anticipation of the looming sequester, i. C. E. Has started releasing hundreds of illegals in this country. According to foxnews. Com, it looks like theyre going to release up to 10,000 to try to save money. Gretchen why . I understand theyre trying to save money. But are you telling youre going to release Illegal Immigrants before the sequester actually takes effect . Steve they have. Gretchen it is one thing to release them possibly on friday. But to release them before . I dont really get that logic. Heres senator marco rubio and Speaker John Boehner. The solution to all these problems is rapid dynamic Economic Growth. But we cant have rapid dynamic Economic Growth if we dont bring our budget problems here under control. This is not the best way to do it but its better than raising taxes as an alternative and its better than doing nothing. The ideal way to do this is to save and reform medicare because those are the programs driving long term debt. But the president decided he doesnt want to do that so the sequester will kick in friday. For 16 months the president has been traveling all over the Country Holding rallies instead of sitting down with Senate Leaders in order to try to forge an agreement over there in order to move the bill. We have moved the bill in the house twice. We should not have to move a third bill before the senate gets off their [bleep] and begins to do something. Gretchen this is part of the story that a lot of americans dont know because only one in five americans are paying attention to this entire sequester discussion. And thats a problem if youre a republican. Because if they just see the headlines and they just see the president saying blame republicans, maybe that is what goes into their head unless theyre really paying attention. But i do feel this time around more people actually are not blaming the republicans if you look at the polls. Did the president overplay his hand now then in this kind of analysis that he could just blame the republicans and the public would be on his side and that he could get away with it . Not so fast this time around. Brian its kaoeufpbgd kaoeufpbgd kind of interesting because for the president not to overplay his hands hes got to inflict maximum blame on the people. Hes been speaking that armageddon comes and its not his fault. Im wondering if theres going to be extra pressure to make these cuts as painful as possible with the fourhour delays in planes and no one inspecting our meat. Steve remember, its really just a decrease in the increase going forward. Its crazy washington talk. Nonetheless, harry reid, given the fact that were facing that looming deadline on friday, he says the republicans can fix it all if they do the one thing they absolutely wont do, which makes this impossible, and that is jack up taxes. Those cuts will go forward. They are all cuts. I think we need some revenue to take the pressure off everybody. The American People agree with me. Until theres some agreement on revenue, i believe we should go ahead with the sequester. Gretchen its interesting because the president talks about compromise. I know time goes by fast. But the republicans just did compromise and they did raise taxes. In fact, everyones taxes went up because youre all paying Social Security again now. The taxfree holiday is gone. Its amazing to me that this messaging is still out there, that this is all about taxes. By the way, senator reid, americans dont agree with you totally. Heres a rasmussen poll. The best way to slash the deficit, reduce taxes alone, only 6 . Reduce by cutting spending 45 . A combination, more spending cuts than tax hikes 36 . Steve heres the thing. What the president now wants is what john boehner offered at the end of last year. John boehner said if we close these loopholes, we wouldnt have to jack up the or rather let the rates go up for the most successful people in america. But the president now says, no, what i want to do is i want to go ahead and close those loopholes. Whats interesting, back in the mid1980s there actually was a sequester that kicked in. It was part of the grammrudman sequester. Fill gramm writes in the phil gram writes in the wall street Journal Journal today in anticipation of the sequester there were a lot of people in washington talking about doom and gloom and the sequester hit and it never happened. The reason it never happened, phil gramm writes today is the fact that the federal government actually has a lot of leeway. And despite the chicken little sky is falling stuff, if they make some smart allocation, move money around, it wont be that bad. Gretchen if they would just look at the real problems, which are entitlement spending, maybe more americans would Pay Attention to the issue as well. Brian straight ahead, he lived a long life and loved everything about new york except the new york times. The man who got his final say in his obituary next. Gretchen moving economies in america and they all have one thing in common. Common. Well explain next. Look what mommy is having. Mommys having a french fry. Yes she is, yes she is. [ bop ] [ male announcer ] couldve had a v8. 100 vegetable juice, with three of your daily vegetable servings in every little bottle. This is another tadaa try charmin ultra strong. It cleans so well and you can use up to four times less than the leading value brand. Oh there it is. Thanks son. 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If your tires need to be rotated, you have to get that done as well. Jackie, tell me why somebody should bring theyre car here to the ford dealership for service instead of any one of those other places out there. They are going to take care of my car because this is where it came from. Price is right no problem, they make you feel like youre a family. Get a Synthetic Blend Oil change, tire rotation and much more, 29. 95 after 10. 00 rebate. If you take care of your car your car will take care of you. Its not a candy bar. 130 calories 7 grams of protein the new fiber one caramel nut protein bar. [ engine turns over ] [ male announcer ] we created the luxury crossover and kept turning the page, writing the next chapter for the rx and lexus. This is the pursuit of perfection. Gretchen if youre just waking up, 16 minutes after the hour. The sequester, what weve been talking about for a long time here, now only two days from going into effect and president obama out on the campaign trail again warning americans of its potential effects. What the sequester does, it uses a meatcleaver approach to gut critical investments in things like education and National Security and lifesaving medical research. And the impact of this policy wont be felt overnight but it will be real. The sequester will weaken americas economic recovery. Steve while the president continues to push tax and spend as a remedy for americas economy, there is a renaissance of growth going on in lowtax, highincome states, so says stu varney live here in the studio with us. Good morning. There are certain parts of this country im going to call them corridors of real prosperity because they are pursuing policies on tax regulation and energy which create growth and businesses are moving to them. First corridor, im going to call that the gulf corridor. Thats the states immediately surrounding the gulf of mexico. Gretchen what are they doing right . They have low tax. They have smart regulation. And theyre exploiting the energy in those states. You do that, and people will move to you. You have a strong rate of growth. You will create jobs. And your state finances will be in much better shape than elsewhere. That was just one of the four corridors where there is real prosperity. The inner mountain states, i believe thats called, the midwest corridor. That is another one. Why are you laughing . Gretchen im getting my geography lesson at the same time. Those are two corridors, the inter mountain states and great plain states. And the eastern seaboard, carolinas, tennessee, that area too. They have this commonality of policy which is producing prosperity. It is the exact opposite of the policies pursued in california, illinois, and new york, which are proobama policies. High taxes, intense and punitive regulation. And do not exploit the Energy Resources that are under our turf. Steve thats why theyre impoverished. Along most of the eastern seaboard and west coast as well you cannot drill for oil. California has hundreds of billions of barrels of oil under its territory. If you went and fracked the shale underneath california, you have hundreds of billions of barrels of oil. New york state has huge reserves of natural gas. If Governor Cuomo were to allow us to go and frack for that natural gas, we would have massive reserves and enormous provision of jobs. Gretchen hes politically putting that decision off, similarly to the president putting off the keystone pipeline. Exactly. There is a huge contrast between the policies of those successful and prosperous states and the policies of california, new york, illinois and the federal government. Steve you go back to the 1970s, there was a bad spill in california. And a lot of environmentalists, every time people talk about we should drill out there, they say remember what happened. Even though the technology completely changed. The message from the prosperous states is surely this mr. President , liberate private enterprise, quit the fearmongering over sequester and bring in intelligent taxes. Do that and america could prosper. Steve but the chances of that happening zero. Totally zero. Theres the bad news at the very end of the piece. Sorry about that. Gretchen were all going to be looking for the good news when you join our viewers at 9 20. Over on the fox business network. Thanks. Steve straight ahead, terrorism taking on a new lesson, the english lesson. Our next guest says he has warned the government and they are not listening. Gretchen one major brew watered down. Say it aint so. Dont they call that lite . Vo always one step ahead with an intuitive motion activated lid and seat, bold makes sure youll never have to ask him again. Thats not much, you think. Except its 2 every year. Go to etrade and find out how much our advice and guidance costs. Spoiler alert its low. Its guidance on your terms, not ours. Etrade. Less for us. More for you. Gretchen quick headlines for you. 24 minutes past the top o