Transcripts For CNBC Power Lunch 20170307

Do you recognize this pose . Legs crossed. Welcome to power lunch. Im michelle carusocabrera. First backtoback losses in more than a month. Utilities, technology are leading the way while energy lags. Another rough day for snap. The stock is down again. Trading well below the price of 21 a share. Ouch. Ouch, indeed. Snap, crackle and pop. Tyler mathisen here. Trade deficit jumping to its highest level in nearly five years as oil prices pushed up import costs in total. Zte Telecom Giant has agreed to pay the u. S. 182 million for violating iran sanctions. And clean up is under way in missouri after two tornadoes touched down last evening. About two dozen people were hurt but none have lifethreatening injuries. Jampacked two hours of power lunch coming your way. Brian sullivan is with us today from houston. Brian, what do you have on tap . Weve got a lot on tap, tyler mathi. Sen, thank you so much. We have a bunch of ceos for our cnbc audience. Conoco phillips, pemex and bp. Not just pricing but political strategy, border swruchlt tadju. Plus earlier today, we did a live, exclusive interview with the chair of saudi aaramco, opec compliance, whether or not russia was cheating and maybe that 2 trillion ipo. A lot more to do. Looking forward to it, brian. Meantime, health care front and center today. House republicans finally unwrap their plan. President trump backing the proposal and taking a new swipe as well. Drilling down on the gops Health Care Plan in a moment. Lets start with the area of market thats moving the most. Meg tirrell, pressuring bio tech stocks once again. The president wanting to remind people that drug prices arent mentioned explicitly. No plan to lower drug prices, the president has not forgotten about it. Check out the tweet. Working on a new system where there will be competition in the drug industry. Pricing for the American People will come way down. This follows a lot of comments going back to december, to january during the big jp morgan to last week, maybe softening a bit, maybe we should work to bring down the artificially high price of drugs. Some folks telling me what he has been saying has been shifting a little bit and maybe focusing on part b of medicare. We pay for drugs in a couple of different ways. Part d, drugs you take at home and part d, biologics, things you take in the doctors office. Among some of the biggest drug companies, most exposed to any potential changes in part b that may be coming. On the flip side, positive for the drug industry, two names, esperion and alexion, potentially benefiting from any sort of moves to accelerate, moves through the fda. Cholesterol drug theyre working on. Thats been rising in recent weeks. Alexion, president focusing on that quite a bit in his speech. Ys . Thanks, meg tirrell. Capital markets. Good to see you. Through the different tweets donald trump has tweeted throughout the months or so. 6 away from a 52week high. Tell me how investors are thinking about the threat of managing drug price iing and wh the valuations are. Thanks, meg. I mean, thanks, melissa. Youre seeing on one hand that investors are figuring out that donald trump will come out with scary headlines and ultimately the market wants to brush it off. And there could be compromise. On the other hand he might talk about accelerating drug approvals and moving part b to part d. They look how bad it is over the past year, a lot of it has been priced in. Not a worst Case Scenario and youre seeing the market move higher on this. I say to you, michael, give me what the most likely scenario is in your view when it comes to drug pricing and tell me which are the most exposed to that scenario. What do you say . Sure. In that case, amgen and regeneron are exposed there. The financial implications of that arent so significant and the stocks are priced in a lot of that over the past two years. What does it mean to increase competition . How do you see thatunfolding . Faster paths to market, what . Or less patent protection . Sure. I think all three of those makes sense on an extreme case, cutting patent life short. However i think donald trump is pretty proinnovation. Unlikely scenario but could be on the table. Puts more of the drugs into the hands of the pbms to increase access. So theres an increased call for pbms to negotiate. On the extreme positive end, accelerating more drugs to be approved faster would increase competition. That didnt fit in 140 characters. Those are all possibilities, right . The fact is that we still dont really know. Obviously theres a meeting with Elijah Cummings coming up this week as well where theyre talking about getting prices down. Medicare part b to part d is one way. Stocks can still move higher because that is not a worst Case Scenario. Michael, thank you. Lets get inside the gops Health Care Plan. Kayla tausche is on capitol hill. Reporter members of the administration are trying to coalesce support for this new draft, tax reform bill that seeks to create a platform under which americans can buy their own insurance using a new structure of tax credits that will vary. Many of its tenets remain. A press conference where chairman kevin brady of ways means were holding this press conference, had to defend themselves in the face of whether this is actually obamacare light. Relief to americans from this terrible law and restoring state control and the free market. These are big measures moving forward. We certainly met the tests of the president , and secretary price, who believe this is repeal and reform. To those two congressmen saying this isn important and necessary first step toward Broader Health reform effts sought by the president. Vice president pence is here on the hill, participating in a working Senate Luncheon to discuss this policy. But moments ago, senator mike lee of utah expressed his concern about this bill. How many people would use this new tax credit, we dont know how much it would cost and if this bill would make health care more affordable for americans. Make this into law. Supposed to be the most straightforward health care reform. Well see if they face opposition. Guys . Certainly tough. Thank you, kayla. Lets talk more about the republican plan to repeal and replace. Tevy, good to have you here. I want to put aside the issue of medicaid, one big issue. And instead focus on this core question. You werent getting enough young people to sign up. They were healthier. Hence their money was supposed to help offset the cost of older people. Im trying to understand, im a younger person. Now the Insurance Company can charge older people much more than they charge me, a younger person. Im pretending im younger. Theres a tax credit i get of 2,000, right . And its only cut off if i make 75,000. Speaking with someone on the hill, theres a lot more flexibility in the plans that will be offered on the individual market, presumably making them cheaper. Is that eug to get young people to come to the table . Its certainly a good start. Thanks for having me. The idea is to try to incentivize people by making it cheaper, more flexible, by giving them more options in how they Purchase Health care. The Affordable Care act did not do that. I think President Trump and others have said this is only one part. It lichlt limits what republic do in this particular piece of legislation. It gets rid of the most of the aca and creates this tax structure but other steps are coming. As i understand it, the ten basic coverages that were how do the policies get cheaper, number one . How does this plan address the issue of competition across state lines, county by county, state by state . Sure. I dont think this plan is the be all, end all. Nor are they claiming it will. Republicans have a larger package theyve been talking about that includes purchase across state lines and expanded hsas, more flexibility. The cbo did that years ago during the obamacare debate and found it would, overall, reduce the premiums. Its one piece in a large packet. How do you think its going to go down politically when it said okay we can charge people who are older much more than younger people . It makes sense, actuarily. They cost more money. Will it ultimately work, do you think . Youre right, older people cost more money. It just takes the realities of the pricing sm into account. However, you are pointing to a good issue, which is that old people do vote in large numbers and policymakers tend not to want to alienate them. It is complicated, as weve learned from some people. Tevi troy, thank you very much. Thank you. Rick santelli is tracking the action at cme. Rick . Tyler, we had our first auction of the week, 24 billion threeyear notes, 1. 63, a smidge higher. Great at the auction for demand. C minus. 49. 4, also a little light on indirects, 52 and finally 8. 4 versus 9 on direct. 9 , of course, ten auction average. Primary dealers take over 42 of the auction. Should be a lot more fun as we move down the curve. Back to you. Power lunch gang. Rick, thank you. Coming up, is the cia hacking your television to spy on you . The explosive new claims emerging from a fresh round of wikileaks documents. Full details ahead. First, lets get back to brian in houston for more on whats coming up from there. Bri . Our viewers already know, because the tv is looking at them, tyler. They know whats coming up. More big interviews here for the conference. After the break, conocophillips ceo wil join us. Talk about the price of l, their dividend, Capital Spending and maybe even michelles favorite topic, border adjustment tax and what it might do to Conoco Phillips. Welcome back to power lunch. Were pleased to be joined noi now by Conoco Phillips chairman ryan lantz. The mood a little more optimistic. You are still cautious and we could go lower camp. How come . The unconventional revolution going on north america despite the opec deal and capacity sitting in opec. We look at our portfolio. Reduce decline rates and what people have done to bring more oil on. Demand has been pretty good. We watch that pretty closely. Its difficult to set up a company right now betting on higher prices. You cant have prices bail out your business model. Were thinking lower, longer. And a lot of volatility. Weve got to be prepared. We may see 70, 80 in the next couple of years. If we do, well see 40 on the back end of it. Why . The cure for higher prices is higher prices . Absolutely. Couple extra Million Barrels coming not from around the world or opec but the United States. Thats the revolution going on here. What we would have thought two, three years ago, would drive million barrel as a day might take 70, 75 today is probably 55, 65 a barrel brent. Thats what the technology and innovation has done. Weve got to be prepared to not only survive, but thrive. Are you budgeting in the 40s . For the next couple of years, were thinking low 50s. Weve done a lot of work to now fund the capital in a 50 and below. Lowest breaking costs in the business today. Weve had to get there because we think thats the place that makes it a competitive advantage. 66 i believe it was, last couple of years during the downturn. You raised it by 6 . You said its your number two priority. Yes. Is 52, 53, 52 buck a barrel oil enough to raise your dividend in the future . Yes, it is. Were forwarding a new pathway. Were focused on Free Cash Flow generation, focused on returns. Were trying to get down to where we can Free Cash Flow money as low a price as possible. You look at our third and Fourth Quarter results and think where the company is at today, were Free Cash Flowing. So what you do with that Free Cash Flow . Invest back in the company, grow your dividends, second. Third, repair the Balance Sheet. We did borrow money last year, over the course of the last couple of years through this downturn in order to fund our capital programs through that. Those are our top three priorities, in that order. Okay. B. A. T. For cop. Let you said its not good for conocophillips. Explain why its not, and whether or not you think it will happen, ryan. Some portion of border adjustment tax might go. Independent producer here in the United States. The way its constructed today would be good for our business. Were a global producer and on balance its probably neutral to sligly not as good for the any. But what i say is Pretty Simple kind of view of it, the problem with the border swruchlt tax today, you have industries and segments of the business that might benefit very well. And industries and segments that will lose quite a bit. That disparity has to be narrowed a little bit. I dont doubt that some sort of tax might be able to come through. Taxing imports and benefiting the exports. You have to start narrow that gap between the haves and ha haveno havenots. We have a secretary of state who runs this Company Called exxon, based around here. Very pro oil and gaS Administration. Do you see anything changing your industry . Were 47 days in. The conversations around what the Congressional Review Act has done, what congress is taking up in terms of the methane rules, the dodd frank 1504 rule. Throwing numbers at me now, ryan. The point is, there have been some tangible things that have helped our industry, that keeps us more competitive in the Global Landscape and those are really good. That certainly happened with the dodd frank rule. If they take on the infrastructure, regulatory reform, we do tax reform, those are good for industry. They can take it on. Will they get it done . I think they will. I think theres enough momentum and enough silly things that happened over the last eight years in our business that just really dont fundamentally make sense. They dont have a cost benefit associated with them. I think were looking forward to it. Thank you so much. Thank you, brian. Appreciate that. Thank you. Its interesting, michelle, a few minutes the ceo of pemex. Talk about aorder adjustment tax, trade war. Maybe no oil company in the world will be as impacted as pemex. That will be our next guest. Lets not forget that the guy who runs the ways and means committee, who will write a lot of the tax legislation, hes here. Money and politics intersecting all the time, brian. Youre right. See you in a bit. Chevron ceo john watson at 3 00 pm eastern time as well. What millennials are doing that is coming to a very big surprise to the housing sector. Plus another look at todays mystery chart. Some supersized returns this year, even though they dont want you to be super sized. Hint, hint. Thats too much of a hint, michelle. The stock is up 40 . The answer is coming. Power lunch. But dont eat it. Well be right back. To win, every millisecond matters. Both on the track and thousands of miles away. With the help of at t, Red Bull Racing can share critical information about every inch of the car from virtually anywhere. Brakes are getting warm. Confirmed, daniel you need to cool your brakes. Understood, brake bias back 2 clicks. Giving them the agility to have speed precision. Because no one knows like at t. Hello, my name is watson. I am helping 8 million taxpayers get the largest refund they deserve. One Million People can benefit from precision cancer care. 197 million passengers can fly with less turbulence. I am on my way to working with one billion people. I look forward to working with you. Welcome back to power lunch. Buffalo wild wings, the company reiterated it has identified about 10 of locations it owns that could be sold to an existing franchisee or a new operator. This is something the company had mentioned during its Fourth Quarter earnings call. It lost more than 5 but slightly higher in tads trade. Melissa . Seema, thank you, with that market flash. Airlines gearing up for a battle in the skies. Ceo joins us live on power lunch with how exactly they plan to take on the competition. That story is next. You always pay your insurance on time. Tap one little bumper, and up go your rates. What good is having insurance if you get punished for using it . News flash nobodys perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. And if you do have an accident, our claims centers are available to assist you 24 7. Call for a free quote today. Liberty stands with you™ Liberty Mutual insurance hi, everybody. Im sue herera. Here is your cnbc news update this hour. Wildfires have claimed the lives of at least five people in oklahoma, the blaze burning 1,056 acres. And three ranch hands have been killed in texas, trying to protect a ranch from wildfires. A trinew Research Suggests nearly half of all deaths from Heart Disease and diabetes appears to be linked to the kinds of food we consume. Sodium and red meat leading the way. Not eating enough polyunsaturated fats like walnuts and flax seed also a contributor. British coroner says pop icon George Michael died of natural causes, resulting from Heart Disease and liver damage. Michael died at his home in england december 25th. Initial autopsy failed to determine the cause of death. That is the news update. Back to you, michelle. Thank you, sue. Battle in the skies. Phil lebeau is live in honolulu with the ceo. Take it away. Im joined by ceo of hawaiian airlines. I told you we would get out here eventually to talk about the growth. You guys fly under the radar a little bit but have had pretty impressive growth the last several years. Weve grown a tremendous amount, four times larger than we were, say, six or seven years ago. Thats all been organic growth. Weve do that by growing principally to asia, new aircraft, employing more people here locally and bringing the aloha spirit to the pacific rim. International growth. You believe that hawaiian, its largely looked at as the carrier that brings people to hawaii, tourists, et cetera. But you believe you can be an international airline. Correct . Our future lies largely around the pacific rim. Thats where we see demand for the hawaii vacation being, generating and growing. Its important we participate in these markets. In order to participate in these markets whats really important is that we keep our hawaiian roots, the cultural attributes that are so important to our company and who we are, but at the same time we come to understand the culture were serving. Your stock has had the benefit of people looking at you guys and saying not just the Airline Stocks overall growing but youre executing. Youre growing your profits. You look at the metrics that are there. You like to point out this is not simply because youre in a nice weather environment. It goes beyond that, correct . It will probably do 1600 individual flights. If that airplane is five minutes late on each of the legs, which doesnt sound like that, but at the end of the day thats 80 minutes late. So punctuality is enormously important. Weve been the most punctual airline in the United States and last year, for example, the worlds most punctual airline. Melissa has auestn for you in studio. Hey, mark, its melissa lee, back in new jersey, unfortunately. Wish i was there. I bet. An analyst flagged the growing competition with island air as a potential threat to you guys. Ma ib not right now but longer term. Theyre aggressively expanding, from 266 flights per week to 470 flights per week. Are fares going to come down . Will there be a pricing war for you to hold on to your dominant share . Let me just say that prices are set in the marketplace. Between honolulu and maui. We carry more passengers between honolulu than all other airlines combined, fly between laguardia, washington reagan airport to give you a sense of the scale of it. Island air is a competitor. They have their own Strategic Direction and obviously well be out there, competing as we always do, to hold on to our customer base. Mark, speaking of competition, the question that i hear from a lot of people is can hawaiian grow, especially internationally, with a rather thin Balance Sheet relative to your competitors, or do you need to merge . In other words can you grow independently . We can pay for them in cash d dont have to borrow money in order to bring them into our fleet. In terms of our capacity for growth, i think it is absolutely there. Hawaii has a resilient and enduring demand. Look around the world, the areas that are seeing rapid Economic Growth are principally around the pacific rim and were well situated to take advantage of that. A quick answer to that question here, do you need to merge or can you grow . Well, we think we can continue to grow. I think whats important for our business is that we run the best possible airline that we possibly can, as an independent airline. Obviously, we exist to serve our shareholders and if Something Better comes along, well have to deal with that when it comes. Meantime, a very strong and resilient business. Mark dunkerley. I told you we would get out here eventually. What do i have to say now . Mahalo . Yeah, mahalo. Back to you. You need a better shirt. I brought that up to my crew and said dont, youre here on work. Youre not on vacation. Thanks, gentlemen. Dont go native. Thats a business shirt out there. When in rome. Yeah lets get back to the markets, shall we . Modest losses, dow and s p in swre jeopardy of their first backtoback losses since january. What should be the next move for investors . Lets bring in jana barton and barry james, who is president of james advantage funds. Welcome, both of you. Barry, im going to start with you. A statistic in my note from you that sod out. And that is that your risk models indicate a 68 chance. 68 of a 10 or better correction in stocks in the how long horizon. Why do you say that . Weve had a trump rally. That race car maybe needs to come in for a pit stop. S p is going up those number of weeks, but were seeing the same number of declining stocks so not a lot of juice there. Were seeing a lot of enthusiasm, and Investor Intelligence has bullishness over 60 . Very, very rare you see that much bullishness in a market. 49 shares sold for each one that theyre buying. You see that margin debt has gone to levels we last saw in 2000 and 2007 and the ides of march are coming up on us. Of course, we have a vote in holland as far as who will lead their country, which could have an upset in europe. But also we have the Federal Reserve making a decision to raise rates and we have a debt selling. The thing with the Federal Reserve thats interesting to me, three steps and a stumble is what weve seen over and over again. Things dont go too well when the fed makes its hike. Jana, why dont you react to what barry said . The idea that last years rally was driven largely by price expansion. Hold on, tyler. Weve got to go to tom price, addressing the press. Having huge challenges, gaining care and coverage. And then medicaid is a program that, by and large, has decreased the ability for folks to gain access to care. We want to make certain we addresthat this is about patience. This is not about money. This is not about something else. This is about patience. Sadly, the costs are going up for those folks in the individual Small Group Market, acti access is going down and its only getting worse. Arizona had an increase of 116 . Deductibles are going up for many, many folks. If youre a mom or dad and make 40,000, 50,000, 60,000, your deductible in that individual Small Group Market is 8,000, 10,000, 12,000 a year. You have an insurance card but you dont get care because you cant afford the deductible. We know this is happening, because were talking to the folks out there. Onethird of the counties in the United States have only one insurer offering coverage on the exchange. Five states only have one insurer offering coverage on the exchange. One insurer is not a choice. We need to make sure we correct that. In tennessee it was announced a number of counties have no insurer offering coverage. Insurers are leaving the market on the exchange. Last year there were 232 insurers providing coverage that were offering coverage on the exchange. Now there are 167, a loss of 30 in one year alone. All this means patience are not getting the care that they need. The principles as our guiding star are affordability. We want a system affordability for everybody. Accessibility. We need a system thats accessible to everybody, of the highest quality, that incentivizes innovation in the Health Care System, and system that empowers patients through both transparency and accountability. The president spoke last tuesday to a joint session of congress and laid principles. First, that those were preexisting condition and injury are not priced out of the market. Health savings accounts, growing choices for patients is incredibly important. Tax credits that allow individuals to be able to purchase the kind of coverage that they want, not that the Government Forces them to buy. Weve always talked about, in terms of what kinds reforms need to be put in place that we need to equalize the tax treatment for the purpose of coverage. In the employer sponsored market they get a tax benefit for buying coverage, those in the individual Small Group Market, no tax benefit. Thats what this plan would do defining what Health Coverage is, flexibility, especially in the Medicaid Program to be able to respond to their vulnerable population. Lawsuit abuse. The president mentioned the practice of defensive medicine wastes billions and billions of dollars every single year and we need to make sure were addressing that as well. The president also talked about a glide path, appropriate transition to this new phase for our country. Thats important as well, so that nobody falls through the cracks. Buying insurance across state lines. The president talked about this on the campaign over and over. The American People understand the common sense nature of purchasing across state lines and increases competition and we need to make certain that that happens and then addressing the incredible increase in drug prices. Three phases of this plan. One is the bill that was introduced last evening in the house of representatives, the start of all of this second are all the regulatory modifications and changes that can be put into place. As you all well know, the Previous Administration used regulations. In fact, there were 192 specific rules that were put out as they relate to obamacare, over 5,000 letters of guidance in the like. And we are going to go through every single one of those and make certain if they help patients we need to continue them. If they harm patients or increase costs, obviously they need to be addressed. And then theres other legislation that will need to be addressed that cant be done through the reconciliation process. The goal of all of this is patientcentered health care, patients, families, doctors are headaching medical decisions and not the federal government. We commend the house for the introduction of the bill yesterday. We look forward to working with all individuals in this process. And i look forward to a few questions. Yes, sir . Youre familiar with conservative groups like club for growth have with rank and file members. What does it say about this legislation that these groups are already out with opposition . I think its the beginning of the process. We look forward to working with them and others to make certain that, again, we come up with that process that aligns with the principles weve defined, that they actually adhere to or agree with as well. And that is that we need a system thats affordable for folks,sible to individuals, of the highest quality, that incentivizes innovation and empowers patients. Congressman chaffetz said that americans may need to forego a new iphone to pay for health care. They may have to make these choices. Does the administration agree with that . Will americans maybe need to sacrifice other goods to pay for their health care . This is an important question. Whats happening is that the American People are having to sacrifice in order to purchase coverage. As i mentioned, many individuals cant afford the kind of coverage that they have right now. Theyve got that insurance card but dont have care. Our desire is to drive down the Health Care Costs for everybody, to increase choices for folks, increase competition, return the regulation of health care where it ought to be, which is at the state level not the federal level. All these things that, taken in their aggregate will, in fact, decrease health care and coverage and that will allow folks to purchase coverage they want. Yes, sir . Two questions for you. First has to do with guarantees that you can make as the administrations point person on this legislation. Can you guarantee that whatever legislation emerges and makes it to the president s desk will allow individuals, if they like their doctor, they can keep their doctor . And the second guarantee is can you also guarantee that Health Care Premiums for individuals will come down with this new legislation . Again, remarkably important question. As youll recall, if you like your doctor, you can keep your doctor. If you like your plan, you can keep your plan. Both those promises turned out to be not true. We think its incredibly important for the American People to be able to select the physician and the place where theyre treated themselves, that the government ought not be involved in that process. So our goal is to absolutely make certain that individuals have the opportunity to select their physician. In terms of premiums, we believe strongly that through this whole process and as it takes effect, that well see a decrease in not only the premiums that individuals will see, but a decrease in the cost of health care for folks. Remember, that was another promise that the Previous Administration made that you would see a decrease in 2500 on average for families across this land. In fact, what theyve seen is an increase of 2500 or 3,000. Were going to go in the other direction. Were going to go in a dection that empowers patients and holds down costs. You are quite a distance away from conservatives in this plan, in the essential part of it, tax credits, which they see as another entitlement, very similar to the entitlement of obamacare. How do you convince them, since its going to take tax credits to make this work, that they need to swallow this and move forward with the bill . Youre getting an awful lot of opposition on the central tenet of this whole thing. This is all about patients. In other words to provide that transition and make it so nobody falls through the cracks we need a system that allows for individuals to gain the kind of coverage that they want. We, conservatives and others, have said for a long, long time that we believe its important to equalize the tax treatment for those purchasing coverage, gaining coverage through their employer and those not. And the tax credit is the opportunity to be able to equalize that tax treatment. Folks have talked about this for many, many years, actually. So that theres not a distortion in the tax code for who is able to gain a benefit for being able to purchase coverage or not. Mr. Secretary, you were talking about making sure people dont fall through the cracks. Last Administration Obamacare focused in on making sure the underserved were part of the equation. What is the safety net, that you have to ensure people dont fall through the cracks also for the underserved who many are now part of the program that werent before, prior to . This is extremely important as well. And the current system, as you likely know, for those vulnerable in our population, the medicaid population, this is a systemhats broken. Youve got a third of the physicians in this country. Onethird of the doctors in this country that would be eligible to see medicaid patients who arent seeing medicaid patients right now. Its not because theyve forgotten how to take care of patients but because the rules in place that make it too onerous to see medicaid patients. Its important to allow states to have that flexibility, to fashion a program for their vulnerable population that responds to that population in the way that gives them the authority, them the choices, them the opportunity to gain coverage and care they believe most appropriate. When you find out that is not happening when you give it to the states, is there some type of punishment or piece youre going to put in place to make sure that that happens, that they follow through on your intent . Absolutely. Theres accountability throughout the plan that we have that would allow for the secretary and the department to be certain that the individuals that we believe need to be cared for are being cared for in the state at the appropriate level. But we believe this is a partnership. This is about patients and partnership. The Previous Administration tended to make it about government. We believe its about patients and partnership. And we want to partner with every Single Person in this land to wants to make certain that we allow the kind of choices in equality to exist. He described the bill as our wonderful new Health Care Bill. Theres been a little bit of confusion. Does this represent the administrations bill . Is there anything in this bill that the administration cannot support . This has been a work in progress. As you know, its been going on for over a year, the work that i had the privilege of participating in, when i served in the house of representatives in the last congress was open and transparent and we invited folks in to give their ideas and tens, if not hundreds of people, had input into that process. This grew out of that and over the past number of weeks woof been having conversations with folks on the hill in the house and in the senate. And other stake holders. So, this is a work product that is a result of all of that process. The president and the Administration Support this step in the right what we believe is in the right direction, a step that repeals obamacare and gets us moving in the direction of those principles that i outlined. Do you support everything in that bill sitting on the table . Pardon me . Do you support everything in that bill sitting on the table . This is a work in progress. As you know its a legislative process that occurs. Im glad you pointed out the bills on the table there. This bill right here was the bill that was introduced in 2009 and 10 by the Previous Administration. Notice how thick that is. Some of you will recall i turned the pages and went through that piece of legislation in a youtube. The pile on the right is the current bill. And what it means is that were we are making certain that the process, that the decisions that are going to be made are not going to be made by the federal government. Theyre going to be made by patients, families and doctors. Given the opposition that swron and others brought up today, does this plan already need to be salvaged in your view . And how do you do it . You know what happens with these things. You start at a starting point. People engage and they get involved in the process. Sometimes to a greater degree. Nothing focuses the mind like a bill thats currently on the table and that has a work in process. Well work through it. This is an important process to be had. The American People have said to their elected leaders, the obamacare process for fwaning them coverage and care is not working. Thats what theyve said. We believe its important to respond to the American People and provide a Health Care System that allows for them to purchase the kind of coverage and care they desire. What specific changes is the white house and administration looking for in this bill . Well, as i mentioned, there are three different phases to this process. This bill, this legislation thats working through under the rules of reconciliation, fancy term to mean only certain things you can do from a budgetary standpoint has to affect either spending or revenue. There are things that you cant do in this bill. And those we plan on doing across the horizon, in phase two, which is the regulatory portion. And then in phase three, another piece of legislation that would be going through the house and the senate with a majority supermajority in the senate. That process will incorporate all of the kinds of things we believe are absolutely necessary to reconstitute that individual in the Small Group Market and get us in a position, again, where patients, families, docs are making these decisions. Can you guarantee that this plan will not have a markedly negative impact or result in millions of americans losing Health Insurance . What i can say the goal and desire of the individuals on the hill is to make sure that this does not increase the cost to the federal government. Two elements of the bill i have questions about how they control costs and how they help with access. The medicaid cap, how is that fundamentally different from the obamacare regime on medicaid a the second point, why doesnt this bill do away with the costsharing . To the per capita cap, medicaid is a system that does work for patients. You have folks out there, who need care, who need to see particular physicians, who arent able to see them. All americans should be saddened by the situation that we have when there are patients out there that cant get the care they need. Allowing the states to have the flexibility to address that medicaid approximate population. Its those who are disabled, those who are seniors, healthy moms and kids, by and large. Those are the four main demographic groups. We, the federal government, force states mostly to take care of those individuals in exactly the same way. If you describe it that way to the folks on main street they say that doesnt make sense at all. You need different care for moms and kids versus seniors. So we say you know best how to care for your vulnerable population. Were going to watch you, make sure that you do so, but you know how to do that. That will decrease costs markedly. Were wasting significant amounts of money. Not that folks are getting too much care. Were wasting it, because its inefficient and significant abuse in the system its important we run through that process. The administration was spending money that they didnt have the authority to spend and congress is working through that, to make certain that the rightful holders of the authority to spend money in this nation, which is the congress of the United States, exercises that authorit authority. How does white house and you feel about the label trump care . This isnt about thiS Administration. Its about patients. I had the privilege of going to cincinnati last week with the Vice President to a Small Business round table. And one of the Small Business owners said he had 18 employees last time this year he has 15 employees not because he doesnt have the work but the Health Care Costs for those individuals forced him to let three people go. Theyre being forced to let three people go because the federal government has put in place rules and regulations that make it virtually impossible for folks in the individual Small Group Market to provide coverage for their employees. This is a system thats not working for people. So, if we focus on the patients ill call it patient care. Focus on the patients, well get to the right answer. Major complaint of concern sorry. Major complaint of concern phase one with Obamacare Repeal and replace is that its missing a measure that would allow health care to be sold across state lines. The president said this morning that that would be in phase two or three. Is that something that you believe the president can do with an executive order . Purchase across sta lines that will allow individuals to gain, again, the kind of choices that they want. Some of this might be able to be done from a regulatory or rule standpoint. Some of it will require legislation. And well need help from our colleagues on the other side of the aisle. So whether its through health plans that allows people in Small Business groups to pool together nationally, to be able to purchase coverage or whether its mom and dad who dont gain coverage through their employer through individual health pools that allow folks to pool together for the sole purpose of Health Coverage even though theyre otherwise not economically aligned. That would allow those individuals to be able to purchase coverage and get the purchasing power of millions. Thats huge power and authority that we want to put in the hands of patients and that may, in fact, require legislation. Yes, sir is this. Mr. Secretary, thank you. Two questions. First, congressman john fasso of new york has said the issue of nine federal funds to planned parenthood should be separate from whatever Health Care Bill finally emerges from congress and is signed into law by the president. Is that the administrations position as well. And will some of those whose plans we canceled be able to come back . As far as planned parenthood its important we not violate anybodys conscience. We cant to protect the conscience provisions that exist. And its important to appreciate that the bill being proposed right now would allow greater access for women to health care in greater numbers of facilities across this land. And they have proposed more money for Womens Health care than currently exist. Theyre doing their best to address that issue. Old plans that were available before might be available. Absolutely. And the opportunity to provide robust plans across this land, thats one of the big issues to bringing down costs. Were excited and looking for that to come to pass. If new plan calls for repealing penalties but keeping entitlements, how is that sustainable . Thats the work that sn somebody mentioned over here, Congressional Budget Office score. Once the congress receives that score, theyll be working through that to make certain that, in fact, it is fiscally responsible. Imagine if you would, however, a system where the incentives within the system are all to drive down costs, to provide greater choices in competition for folks and respond to the specific needs of patients and, in so doing, you actually get a much more efficient system for the provision and the delivery of health care. Its a system we dont have right now because the Previous Administration felt the government federal government ought to do all of this. Weve seen what came about when the federal government does all of that. That is, increase in premms, increase in deductibles, decreasing choices. Youve got a card that says youve got insurance. You walk in and cant afford what it is that is trying for the doctor thats trying to take care of you. This is not a system working for folks in that individual and Small Group Market and in the exchanges. Mr. Sec, many have complained that obama care resulted in higher wait times in the emergency room. Will this new bill cause that . One of the things that the Previous Administration said was that they were going to be able to drive folks away from one of the most expensive areas for the provision of health care, and that is the Emergency Rooms. In fact they did just the opposite. Many of that is because of the rules and proifgs they put in place. If individuals are able to purchase the kind of coverage they want, theyll have access to the kind of doctors and other providers that they desire and wont need to be seen in the emergency room. Theyll already have that care. Emergency rooms ought to be for emergencies not the standard of care that individuals toned receive right now. If you put in place the right system, then Emergency Rooms and Emergency Physicians will be able to have the opportunity to care for those individuals that appropriately present to their departmen department. Mr. Secretary, im interested in following up on your comment about voting on your conscience. Provision of Birth Control at these Community Health centers and, secondly, is the administration looking to actively withhold funding to planned parenthood if they continue to provide abortions as has been reported . Were working through all those issues. Thats not part of this legislation right here. Talking about Womens Health care, you said you wanted to expand more were working through the rules and regulations to see where the Previous Administration was, see how they did it and whether or not it needs to be addressed with the understanding that what we believe is important when we look at the rules and regulations, to define whether or not that rule or regulation helps patients or and decreases costs or harms patients and increases costs. If it does the latter we need to do away with it. If it does the former, we tut accentuate it. What was the issue of conscience you were talking about then . To make certain that individuals in the market are not forced to do things that violate their conscience. Mall businesses have been waiting for this. Any comment to them . Its the culmination of years of work, frustration by the American People. They knew at the time the previous law passed that it wasnt going to help them. They knew that costs would go up and access would go down. This is the culmination of years of hard work by the electorate, citizens of this country to say that we want a system again that respects patients and families and doctors in these decisions. One more. Thank you, mr. Secretary. President tweeted out earlier today he believes hes working on a plan to have drug prices come down by spurring competition. Can you tell us about what that plan might be, is it part of these phases . And the bil also includes a tax brk f insurance executives that make more than 500,000. Is this about patients, why is that tax break important to this legislation . To the latter im not aware of that. Ill look into that. Drug pricing is really important. So many individuals are now having significant difficulty being able to afford the medications theyve been prescribed. Its not able to be addressed specifically in this phase one because its not a revenue or spending issue for the federal government. So, it cant be in this faye phase one. In phase two and three, which may be concurrent along with this phase one, but in phase two and three then we look forward to bringing solutions to solve the remarkable challenge that patients have across this land with the increasiing price of drugs. Ive got to run. Youve a guy here that will answer all the rest of the questions. Thank you so much. God bless you. All right. That was the health and Human Services, followed by sean spicer, White House Press secretary. I guess he will take a few more questions on health care and other topics, presumably. Health and Human Services secretary price, laying the outlines of the new Health Care Proposal from the gop in congress with the blessing of the white house. Lets go to Bertha Coombs for a sumup of what we just heard from the head of hhs. Tyler, dr. Price stressed that what they want to do here is open up greater choice, to give people more accessibility. I was struck by the fact that when he was pressed on whether people would lose coverage as a result of this change, he didnt really address that. He basically just saidur goal and desire iso make sure that this does not increase costs of the federal government. Of course, thats because its being done through reconciliation. S p global today says they think insurers will do fine under this new transition system. However, they predict that we could see four to six Million People losing coverage under the medicaid reform plans and that 2 to 4 Million People could lose coverage in the individual market because of this shift when it comes to the tax credits being based on age rather than the size of your premium and where you were buying your insurance. All right. Bertha, good sumup. Thank you so much. We will continue this discussion right after the break with the democratic member of congress, get his take on this. And larry kudlow is here on set to discuss what he thinks about the plan and whether or not its progrowth. Termites. Were on the move. Hey rick, all good . Oh ya, were good were good. Terminix. Defenders of home. Im val. The orange money retirementquirrel from voya. I represent the money you save for the future. Whos he . Hes the green money you can spend now. Whats up . Gonna pay some bills, maybe buy a new tennis racket. Hes got a killer backhand. When its time to get organized for retirement, its time to get voya. Welcome back to power lunch and news alert on uber right now. Deirdre bosa. Just posted to the companys website he is actively looking for a chief operating officer. Next chapter on our journey. There has been speculation that he would be looking for number two, Sheryl Sandberg type that could be the socalled grownup at the table. He has long operated without a formal number two. He just stated his intention to look for a coo. Who that is, whether he can find the right person, someone to help turn around a can Corporate Culture that has gone astray remains to be seen given the bad press that has surrounded them. Ariana huffington did tell us that kalanick was looking to strengthen the management team. Another step in what they hope would be a maturing process. Thanks, derdre. Health and Human Services secretary tom price selling the plan at the daily White House Press briefing. We just carried it live. Joining us now from capitol hill is congressman swron yajohn yar. Any bill to replace obamacare will have to go through his committee. Thanks for being here. Ive already read your press release. You dont like what they proposed. Whats your biggest concern . This takes us back basically to before the aca. And just supplies some tax credits for people to buy thrns but it doesnt deal with the high cost of Prescription Drugs. Secretary price basically dodged every one of those questions. They were Great Questions asked during that press conference. They dont have many details. But the way obamacare is going at this point, the argunt is th actually it may going back to before obamacare mighte better because there are so many places where people cant get insurance. The premiums are rising and not that many people in the medical Community Service medicaid. Preobama care may be better than the current situation. No . You would get a lot of argument from my state about that. We have 340,000 people covered under expanded medicaid. Theyre not having trouble finding care. You look at all the diagnostic work, preventive services, dental care being provided under medicaid now, every category, its more than doubled. So, people are using the expanded medicaid in my state and are doing very well with it. If you dont do anything about Prescription Drug prices, you arent doing anything about how has it ever dealt with obamacare in the first place . Medicare by reducing the donut hole and phasing that out. Thats medicare. Made a real impact on the medicare side but, no, we havent in the house we tried to repeal the prohibition about medicare negotiating with drug prices. Thats about drug prices, sir. Yeah. But the issue with obamacare is that not enough people, the core issue when it comes to providing Health Insurance, not enough young people are signing up and the incentive structures within it make it unattractive to them. And that has nothing to do with the drug pricing issue youre talking about. No. There are a lot of problems with the individual market. One of them being that the mitigating devices we put in there to guard against adverse selection from the insurers point of view were sabotaged by the republican congress, starting in 2011. So, when they started signing up sucker and south carolinaer people, they were losing money. There was no reason for them to stay in that business. We had, again, the device to help work on that. Right now, what theyre doing is creating incentives under this plan for insurance to go to younger people, but theyre penalizing older people on the other side, those people in their 50s and 60s, who will now pay more, who will get less federal help. So youre going to see a problem shift in the individual market from the young to the old. And thats not sustainable either. As i understand it, correct me if im wrong, congressman, wh happenss you age through the population, you qualify for a somewhat higher tax credit. But you also the Insurance Company can charge more for the policy. Just as they could charge more for a bad driver. Right of the under the aca can you can charge no more than three times. Under this bill you can charge five times as much. Your subsidy tax credit only goes from 2,000 to 4,000 across the entire spectrum. One thing secretary price pointed to shall and hes not the first, that company after company have left the insurance exchanges. He cited a third of counties have one provider and some are going to none. Tell me about kentucky. Kentucky, we have three providers right now. We had seven at one time. Tase real challenge. One of the problems is, when you start breaking it down on a countybycounty basis, some counties dont have enough people to justify an Insurance Company coming in, going to all the work to negotiate with the providers and all the those things you need to do to enter a market when there may only be 2,000 or 3,000 within that county. Its just not worth the time. Humana is based in my district. Its withdrawing from the exchanges. Its just not their business. Thats what they said. 65 of their business is medicare advantage. They only had 150,000 or so individual customers. What if i live in one of those counties and nobody doing business there, what do i do . Right now, if you have got the one insurer, youre stuck. And that is a problem. I think the ultimate answer in the individual market, i dont think theres any other answer but allowing individuals to buy into medicare on an acuarily humana has thousands and thousands and thousands of people across the entire country, not just in a county or in a state. Humana can sell across state lines right now. Theyve been doing it. But the individual cant buy across state lines. No. Well, humana has to go into that district, yeah. Because you dont want Insurance Companies selling into states where theres no guarantee that the consumers in that state will have their benefits paid. You dont know whether somebody will set up shop in south dakota, utah and sell junk policies into areas if the Insurance Commissioners are verify theyre legitimate they can sell across state lines. John yarmuth, thank you. Thanks for having me. Larry kullow, jump ball to you. Your thoughts . Mr. Yarmuth, ill label him a moderate democrat. I dont think he answered michelle. At the bottom of this whole problem story was the mandates and the fact that the young people didnt want to pay not just the mandates but the premiums. It served them to pay the penalty rather than those other charges . Yeah, and that was sloppy. Did they . Not too many people paid. I would agree with you on that, but im not an expert and toent have the irs statistics of income in front of me. I think youre basically right. The basis of the republican plan, if you ask me its a very complicated matter and im not a super expert on this. Get rid of the mandates and also couple of other things. Help out with the tax increases. You say its going away because its progrowth to the economy, put aside the issue whether it helps the Health Care System work. Thats right. But i dont you know what . Lets take Insurance Companies, Prescription Drugs, overthecounter drugs, theyre all subject to taxes. That doesnt help the Health Care System. 3. 8 , payroll tax. All these other taxes, in my opinion, damage the Health Care System itself and really, instead of opening up competition, close down competition. Look the Insurance Companies have their own issues. They originally backed aca. You made your bed, now you have to sleep in it. You have to make the exchanges totally free markets. You get that . Totally free markets. Let the customers demand and let the insurance people provide the supply. You cant do that under aca. Already a lot of republican congressmen have come out against this, a lot of republican think groups have come out against, conservative groups have come out against this. On the refundable tax credit . On just this whole plan, on this plan. There are a lot of questions about how much republican support there is for this republican plan. How does that play into the tax reform debate . Does it make it more difficult . Thats what investors care about. Yes, they do. I do, too. Im going to lose this battle. I want the reconciliation to be expanded and it is can i go back to this . The mandates are a tax. 2012 justice roberts, that was the most important part of this. Theyre a tax. Indeed. Practically all aca is a spend and tax bill. There are some regulations, like state lines that will have to come later. But so much of it is fiscal. All i wanted, little me, is to put that into reconciliation and add one slice. Business tax reform. Take that out of the broader tax reform and put that into the recognize sill wrags bill, allowable under rules and or some rules can be broken regarding reconciltion. That was my take on this. Its swirling around. Im lobbying. Im talking to leadership, blah, blah, blah. I cant say as im making any progress on this at all. And your question . The control room is shutting you down . As usual. The music is the bottom line but your point is, by the way, the whips will have to whip hard in the republican conference. I agree with that. I think theyre going to win. I think ryan is going to win on this. I dont think its going to be easy. I want to see what compromises are made. Larry, thank you. Larry kudlow. Lets get to brian in houston with whats coming up. Brian . Melissa, thank you. Coming up, what does the Largest Company in mexico think of a proposed border adjustment tax . Good question. Well get an answer with the ceo of pemex joins us next. The Biggest Company in mexico is pemex, the national oil company. Perhaps no company in mexico would be as impacted by border tax as pemex. Lets welcome in ceo of pemex, Jose Gonzalez anaya. Thank you for joining us. Thank you very much. Do you think a border adjustment tax will happen . If it does, what does it mean for pemex . I cant say whether it will happen or not. What i can say is that pemex imports about half a Million Barrels of gasoline every day. From the United States. Mostly from texas. We export about a Million Barrels of oil, mostly to texas. And we also for now. Yeah. We also import about 4 bcfs of natural gas. This is a win win situation both for pemex and for the United States. In particular, southern texas. Michelle is a border adjustment tax expert. She knows more than i do. If its going to be taxed coming into america, if america doesnt want our oil, maybe china does, somebody else does . Are you looking at new markets . Were always looking for new markets. And we have always been trying to diversify. The truth of the smart is that were close. So the margins, the oil market is a world market. But its also a relatively low margin market. So transport matters. Being close by matters for both. We are always looking to diversify, finding new clients. Here in studio, good to see you again. I see youve hit your production targets last year. Congratulations. That was the first time in a very long time. Im wondering about we just had the head of aramco on earlier. Brian did a great interview with him. All this talk about aramco going public. I asked the individual who held your job before you whether or not he ever dreamt of the idea of pemex going public. He said it would be great. The problem is we never have any profits and thats because of the structure thats so enroped with the government. All the changes that have been happening within mexico and within the oil structure ere, are we getting to the point wherever pemex could be a publicly traded company . Well, what i can tell you is that mexico made a huge step. The president S Administration put forward a Tremendous Energy reform that is of very far reaching scale. Before the energy reform, only pemex was allowed to explore, drill, transport, refine, process or sell any oilrelated product. Today, any company can do this. Both foreign and domestic. And it allows pemex to find partners. I think thats a tremendous change and from last year, which is when i started in pemex, to today, we have not one but two partners in deepwater and a partner in some of the auxiliary services in refining. So we are makin making progress slowly but surely. This is a business of partnerships. How is it going with feksifi the Balance Sheet and managing the cash flow . Rise in the price of oil helped or has it not . Because the country actually does a futures contract that fixes what theyre going to make every year. Well, the country, the ministry of finance where i used to work before, what it does is it ensures the price of oil. It ensures the price of oil is not below a certain price. However, the rise this the price of oil has certainly helped and we made we did a very, very important Financial Adjustment Program all o last year. We cut 100 billion pesos of or budget last year, very sizeable amount even for a company like pemex. Its been a tremendous effort. Weve tried to increase our productivity. We just published this for last year and a substantial improvement. My motto is, what i have said repeatedly, is that pemexs finances are stable. Improvable, but stable. You know the peso, lets wrap it up with this, the theory is that if we get this border tax, that well see currency adjustments that could mitigate it. Do you believe if the u. S. Does this tax that the peso will drop enough that the impact to pemex or any other company would be mitigated . What i can tell you is that just the talk of these issues made the peso very, very volatile. Weve gone through one of the most volatile periods in the exchange rate. Since the 90s. 2009 crisis and the mid 90s. It certainly is an issue that has investors worried enough. Are you worried . Well, we have to be occupied and worried at the same time about this issue. Yeah. Im sure youre getting a lot of questions about it here. Yes. Yes, we are. Yes, we are. Jose gonzalez anaya, ceo of pemex. Thanks for inviting me. We are not done yet. Coming up in a few minutes, another big exclusive interview, bob dudley, ceo of bp. Well talk more about the global oil markets. Lots to do. Youre watching power lunch. Well be back right after this. Across new york state, from long island to buffalo, from rochester to the hudson valley, from albany to utica, Creative Business incentives, infrastructure investment, university partnerships, and the lowest taxes in decades are creating a stronger economy and the right environment in new york state for business to thrive. Let us help grow your companys tomorrow today at esd. Ny. Gov whether its connecting one of or bringing wifi to 65,000 fans. Campuses. Businesses count on communication, and communication counts on centurylink. Im vern, the orange money retirement rabbit, from voya. Im the money you save for retirement. Whos he . Hes green money, for spending today. Makes it easy to tell you apart. That, and i am better looking. I heard that. When its time to get organized for retirement, its time to get voya. Welcome back, everybody. Philadelphias first of its kind sugary drink tax is getting attention. Hurting sales, leading to job cuts. Sarah eisen has more on the story. Sarah . Hi, tyler. Philadelphia is the first major city to tax any sweetened drinks, diet, sodas, teas, juices, anything with sugar. Once the distributor tax is passed on to the consumer, it basically doubles the cost of a 2liter bottle of soda. Two months in, and we can report some Fresh Results on coca cola. Sources say super marks in philly have seen a fall of 30 to 50 in volumes of beverages sold. Many are cutting shelf space for beverages as a result for soft drinks, teas, juices and, of course, diets. No layoffs for coca cola at this point, over 700 people are working in the metro area. For pepsi, its also led to a disastrous decline in sales, 40 drop. 10 to 15 bump in sales outside the city. Not much of an offset and therefore they are cutting 80 to 100 of its 423 jobs in the city. If you talk to the mayors office, the city raised 5. 7 million in january, more than double than projected. Its expected to bring in 91 million for the year and help to Fund Community school programs, Infrastructure Projects like libraries and parks and prek programs, which have already created 240 jobs since january, most of them full time. They say this is a big success even with the falling sales. Its actually skeptical of those job losses at pepsico and elsewhere and are trying to fact check those claims. Bigger market, cook county, chicago, has passed a similar tax that goes into effect in july. Boulder, San Francisco and even others have voted on similar measures, despite heavy lobbying from the industry. One to watch, guys will be santa fe, a hearing on the issue this week. As far as the Material Impact on beverage sales, not much yet. Because were just talking about cities. Brett cooper told me if it gets to the state level and we start seeing states wanting to pass these kind of taxes to fill budget holes that will be a problem in our already declining market. Sara eisen, thank you. Todays mystery chart, a highflying stock to say the least. Up 40 prs so far this year. Were talking about nutrisystem, ticker ntri. Ceo dawn azere, thanks for joining us in studio. Tremendous momentum. Around your seasonally strong period, which was around new years. How do you keep that momentum going . How do you keep people in the program . Yeah. I think, you know, weve been building on the momentum. Weve had our third consecutive year, doubledigit revenue growth. It really comes down to focusing onhat the stomer wants. Its not one thing thats driving our growth. Its multiple vers. And i like that. Because then youre not overly reliant on one single factor. What were seeing is that were really focusing on what the customer wants and that informs all our Product Innovation and our marketing messages and then being able to execute. And i think were very on trend. If you look at the macro trends, everything on demand when i want it. And also this weight loss becoming more about health and less about vanity, that that all plays very well for us. Some analysts are pointing out the ability to upsell new customers and that creates stickiness. Shakes and snacks to 30 of new customers. Yes. Are those upsells, higher margin . Can you talk us through how that helps you in terms of that one product and also helps you keep that customer . Sure. Definitely, you know, our cogs are pretty similar on a productbyproduct basis. We spend a certain amount of marketing dollars. Any revenue we can generate out of every marketing dollar spent is always good. Understanding Customer Journey and knowing when and where to upsell them along their weight loss journey. Shakes, a la carte. Not only for new customers but for bringing back former ones. Right. Its sort of a stressful time in general for the American People. There are a lot of changes going on in the political stp. No matter what side of the aisle youre on. Are you finding enrollments are higher because people have gained more weight lately, eaten more . Barbra streisand had this funny thing out, i think it was a tweet, saying she gained weight since the election. That may be one example. Im curious to see what sort of context there is right now for your business. I havent seen a direct c corollary. We have a huge obesity epidemic, twothirds obese and overweight. That hasnt changed. If anything its growing. I do think having solutions and making people be more accountable for their weight loss helps the entire industry. Dawn zier of nutrichltsystem. Melissa, is the cia spying on you through your tv . The explosive new allegation out today when power lunch returns. Hey nicole. Hey i just wanted to thank your support team for walking me through my First Options trade. We only do it for everyone gary. Well, i feel pretty smart. Well, were all about educating people on options strategies. Well, dont worry, i wont let this accomplishment go to my head. Im still the same old gary. Wait, you forgot your french dictionary. Oh, mucho gracias. Get help on options trading with thinkorswim, only at td ameritrade. And the wolf huffed like you do sometimes, grandpa . Well, when you have copd, it can be hard to breathe. It can be hard to get air out, which can make it hard to get air in. So i talked to my doctor. She said. Symbicort could help you breathe better, starting within 5 minutes. Symbicort doesnt replace a rescue inhaler for sudden symptoms. Symbicort helps provide significant improvement of your lung function. Symbicort is for copd, including chronic bronchitis and emphysema. It should not be taken more than twice a day. Symbicort contains formoterol. Medicines like formoterol increase the risk of death from asthma problems. Symbicort may increase your risk of lung infections, osteoporosis, and some eye problems. You should tell your doctor if you have a heart condition or high Blood Pressure before taking it. Symbicort could mean a day with better breathing. Watch out, piggies child giggles symbicort. Breathe better starting within 5 minutes. Get symbicort free for up to one year. Visit saveonsymbicort. Com today to learn more. Welcome back. Lets talk about ibm. Erin gibbs is with s p global and craig jones is with jaffrey. What do you see in the charts . If we step back and look at this chart, its been a very nice setup in the charts. A classic head and shoulders pattern. You see that left shoulder, that head, that right shoulder. Typically when we see this kind of setup on a chart you can measure this as a measured objective. Look at the width of the chart, the height from the head to the neck, standing up. To us we can see a measured objective in the up to ten range perspective. Good looking chart. We would be buying it on any pullback or weakness here zblup more than 20 upside from here. Erin, a lot of news on ibm. Investor day today. Also yesterday news that the company is partnering with sales force, Artificial Intelligence. What do you see . So, much like we just talked about the chart, the valuations are getting a little high here. Were not expecting a huge amount of Earnings Growth right now. But that announcement is something that is really interesting. And what investors have been looking for, because its combining ibms, watson, Artificial Intelligence with public data, with the sales force, einstein Artificial Intelligence and their Customer Data that really, in theory, could come up with great targeted campaign, great product offerings. This is the kind of services were looking for and revenues out of these type of ai services. Its definitely a positive. We havent seen the revisions of the proof just yet. Its a longterm holding. We have it in a lot of portfolio. Youre concerned about valuation . Right here valuation is a little high. Erin, craig, thank you very much. Tradingnation. Cnbc. Com for more. Another big interview from the Energy Summit in houston. The ceo of bp joins us next, bob dudley. Anything worth pursuing hard work and a plan. At baird, we approach your Wealth Management strategy the same way to create a Financial Plan built to last from generation to generation. Well listen. Well talk. Well plan. Baird. Most ceos you meet wildly optimistic about their industry. Not your next guest. Bob dudley, ceo of bp joins now on power lunch. Its a pleasure. Thank you so much, brian. Youve been cautious, youve been correct. Yet bp is growing again. How do you square it . Were growing again but youre nervous about prices . I am optimistic. Youre right. Its been lower for longer. Its not lower forever. You can imagine you were here last year at ceraweek, at this conference. It was grim. It was grim. Nobody smiled. The opec agreement in november has brought some stability back and theres real commitment to meeting that and the Industry Cost basis are restructuring. Is that really all it was, that opec decided theyre going to freeze cut a million plus barrels and suddenly everything is okay again . No, but it put confidence back in again. The business sees confidence and theres a commitment to keep it within a certain band that we can make investments. 2017 is an important year for us. We have more ready. New projects being committed. This year is important for us. We will see growth. We had an interview with khalid alfadi earlier today on cnbc and i asked him is the opec deal going to be extended past may 25th. Hes obviously not going to tell us. He said it looks good. What happens if they keep the agreement . What happens if they dont . Youd have to ask them. What happens to pricing . Thats your world. If you talked to the ministers in the gulf regions and russia, theres a real commitment to maintaining this. I think they will. Theyll look at their own economics. Lower price versus cutting some production. I think the world needs an over 50 per barrel. So i think its good for the world. Its not an unnatural thing to throttle back some production. Its going to help everybody plan. You cut your cash costs by i think 7 billion over the last couple of years. You mentioned how big 2017 is going to be and all the projects. Is Capital Spending going to the next few years going to increase a little bit . Are we going to bring more jobs back . Whats it going to look like . Brian, we just did our strategy presentation. I just came from the east coast. We had teams all over the world. Were not planning on an uptick. Youre living in this world . This world for the next five years and were going to live within a strict capital diet. Down 30 where we were two or three years ago. Were going to live between 15 and 17 billion for the next five years. We can bring on these new projects within that and well keep the costs down. Youve done a lot of business. Its 20 of rosnef. Do you worry about all the noise, all the tension, all the headlines around russia right now visavis Business Contracts doing business in russia . I lived there. I worked there. I spent time there. Its a very misunderstood country when you listen to the media here. I think its a place weve been able to do business and work. Its been a very good investment for us. Our relationships are very strong. Were not just a Financial Investor in russia. We have joint ventures together in and outside of very much wi boundaries of the sanctions so its e remain very committed to it. Not concerned about it . You think it will be okay Going Forward . Major part of bp 20 interest in a massive company. Thats right. Im very comfortable with that. Again, its what we do. Its the relationships we have and the success in the business that counts. Bob dudley, ceo of bp living in the 50 world for the next five years. Its better this year than last year. I wasnt smiling last year. Last year people were honestly, the term hang dog, 27 bucks a barrel, you think people are going to start pushing you down the steps here. Its not 100 but its better than 27. Brad, thank you very much. Another big interview coming up from houston shortly. The chevron ceo john watson. Mr. Watson coming up on closing bell at the top of the hour. So is your smart device spying on you . Youll have to listen to this draw dropping story. It will make you think twice. Check please is next. The friends, the independence. And since we planned for it, that student debt is the one experience, im glad shell miss when you have the right financial advisor, life can be brilliant. Ameriprise duexperience our mostand perefined models ever. T, including the ls, lx and es. Experience amazing. The first stock index musicwas createdughout over 100 years ago as a benchmark for average. Yet many people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Its time to bench the benchmarks. Welcome back to power lunch. Spying on people using their smart devices. Its an incredible story. Eamon javers has it. Hi, michelle. Sean spicer the White House Press secretary was just asked about this at the white house briefi. This is the allegation from wikilea wikileaks. They say they have gotten their hands on cia documents, thousands of them which detail the cias inner most hacking secrets. Heres what he said. Im not going to comment on that. I think obviously thats something that has not been fully evaluated. If it was, i would not comment from here on that. So heres what we know. Wikileaks released thousands of pages of documents here. They say that these are the cias secret hacking codes. They also say that the cia horded what are known as zero day vulnerabilities for apple, google, microsoft and other companies. Zero day vulnerabilities are vulnerabilities that the companies are unaware of. Theyve never been used before. Therefore, they have zero days to respond. Theyre some of the most valuable hacking tools out there. Thats what wikileaks is saying they have here. The cia director is not commenting. We do not comment on the authenticity or content of purported intelligence documents. Now, guys, this is a particularly fraught situation for this white house. You remember out on the campaign trail back in october the president said i love wikileaks and recently hes had tensions with the u. S. Intelligence community. The question will be whether he continues to embrace wikileaks or does Something Different in the wake of these disclosures today once the white house has an opportunity to vet them and see if this is actual cia material. I did speak to a white house official here who made a big distinction between wikileaks hacking of John Podestas emails and the alleged hacking of cia secrets. They say that is a different order of magnitude, guys. Eamon, theres a difference between hording and zero gree vulnerability as opposed to turning on a smartphone or turning on the camera of a tv. Much more complicated. Reporter well, thats what wikileaks is alleging here. The cia has the capability to do in some cases, to be able to use these devices, exploit those zero day vulnerabilities as needed and spy presumably on who they want to spy on. Look, intelligence agencies steal secrets, thats their job. Presumably the cia and nsa would have an interest in wanting to develop that software. Well wait out to see if this is actual cia software. The only thing that surprised me was the tv part. Tv would be vice i assumed was listening. Reporter anything thats connected to the internet can be hacked. Got it. Good thing to remember. Eamon javers, thanks. Lets get back to brian in houston. Been a busy day. Another busy day on tap. Youre not done for one day, brian. No, not even done. By the way, put a piece of tape on the camera on the tv, take a cue from mark zuckerberg. Big day today. Tomorrow big day as well. We spoke with pet mex. We have Loredo Petroleum and others. Today, guys, the big interview was khalid al fala. He is the chair ever saudi aramco. Theyre looking to do a 2 trillion ipo. I asked him about the ipo. Whatever i tell you about aramco is going to be biased because i am a product of aramco. I grew in it. I can say safely though that on every metric aramco will surprise analysts on the up s d side. Lowest cost. Highest capital. Solid reserves certified by third party agencies. Great assets, integration. Power lunch always surprisingthe up side. Ill see you tomorrow. See tomorrow, brian. Great stuff, brian. Closing bell starts now. Hello, everybody. Welcome to the closing bell. Im kelly evans at the new york stock exchange. Im bill griffeth. How many people understand the new Health Care Proposal. Anyone . Anyone . Trying. Everybody is. Trying. Meantime, the stock market doing not a lot. The dow, the s p in jeopardy posting a first backtoback decline since the end of january. All three of the major averages are in danger of closing lower for the fourth time in the last six sessions. T