Transcripts For CNBC Power Lunch 20170504

Itunes, icloud, ieverything, music, tv, Apple Services business, it is on fire. Ceo tim cook tells our jim cramer where he sees growth in the next three years. Its staggering. Power lunch, im going to stagger back to the lunch. It starts right now. Welcome to power lunch. Volatile session today, major averages are lower but the dow just bouncing back within triple digit losses. It could be oils plunge that really helped to send the markets lower. Take a look at the picture in crude oil down by 4. 3 . Tyler mentioned five month lows. The sector following suit. Fitbit soaring about 13 after posting a smaller than expected loss. Anheuserbusch up 5 and beezer homes up more than 10 on its strong earnings report. Bob is on the floor of the New York Stock Exchange with more. Hey, bob. Hello, melissa. This is largely a commodity story. A lot to like about stocks right now, but we talked this morning about the fact that theres a couple flies in the ointments that can make things messier. That is playing out today. China has been talk of slowing spending patterns in china, tighter monetary conditions as well, maybe more regulatory scrutiny. Thats playing out a little bit. Secondly, oil dropping. You saw the numbers that tyler showed you. This is largely commodities. Steel and iron ore stocks. Allegheny technologies, all notably weaker. Copper stocks like free port, southern copper also on the weak side. Vedanta as well. Theres the clear indication global weakness on the china story. On the oil story, chesapeake, southwest energy, whiting, marathon oil. The entire group is down, 3, 4, 5 . Of Course Energy stocks now are now starting to show up on new low lists believe it or not. Apache, murphy, range resources all 52week lows. The oil patch has to start cutting production. Q2 production would be lower than expected, that stock is moving down. Guys, i think youll see that a lot more often. Were only eight points from a new high on the s p 500. Back to you. From wall street now to d. C. , President Trump facing a major task as they are debating the Health Care Bill. The expectation is that it will pass, but it could face major hurdles in the senate. Still a win today would be a major milestone for the president. We have all the angles covered for you. We have live on capitol hill and at the white house. Whats the latest . Reporter melissa, the house is currently debating the Health Care Bill on the floor thats expected to wrap within the next 10 to 15 minutes or so and open it up to votes. Latest count from nbc news is that there are only 17 republican lawmakers who remain opposed to the bill. That would give leadership enough support to push this through. Remember, they can only lose 21 votes if democrats remain united in their opposition. Earlier today, Minority Leader Nancy Pelosi slammed this bill in a press conference with reporters. Republicans are maliciously again attempting to destroy health care and coverage for the American People. This is really almost i would say a welcomed debate. I would hope that they realize that this is really bad for the country, but i do say that it is good in one respect. Its going to provide a great civics lesson for america. Reporter but even in a bestcase scenario for republicans this afternoon, this bill still faces Big Questions in the senate. Mitch mcconnell warning reporters that this legislation will see major changes once it gets to the upper chambers. Guys, this fight is far from over. Ylon, thank you on capitol hill. Now to the white house. Reporter hi, melissa. They know exactly what ylon was saying they have a big uphill fight in the United States senate. Here at the white house, they say theyre feeling good about todays vote. Theyre confident theyre going to win. The president talked about it in the rose garden earlier today. He was at an unrelated event on a religious freedom executive order, but he talked about his confidence that this would be a good day for the white house today. Here is what he said. Today is a very big day. We have a big vote coming up in a little while and hopefully well have a wonderful day and wonderful vote and take care of a lot of people, great, great people from this country with their health care, their Health Care Needs and we hope to be able to do that. We have all fought very hard to be able to do that. Now take a look at a live lookin at the house of representatives up where ylon is standing. They are getting ready to conduct this vote later on this afternoon. Were told within about an hours time well see the vote. In terms of the United States senate, at the white house, a big vote in the house could go a long way in the senate. A lot of the senators vote in lock step. Theyre looking for those linkages between particular house members and senators. They think they can get this done in the senate but that is a big open question right now. Its the political question of the day. Thank you. Lets get back to the capitol hill right now and talk to a member of the gop whip team, representative mark wane mullens serves oklahoma second Congressional District and is a key player in garnering votes. Welcome to power lunch. Good to have you. Thank you for having me on again. We know its a very fluid situation right now as the house prepares for a vote, but according to nbc news right now 17 gop members of the house plan to vote against it. Does that member match . Were watching that 21 number very carefully. Well, we have the votes to make it across the floor. Obviously its pretty thin margins, but were there. I dont have the exact number. Some of the members arent here. They had a couple actually had emergencies back in their district and so we get that. We also lost a yes, too, because of it. But were there. Were excited about this day and were looking forward to the vote coming up here in the next 30 minutes or so. You know, one of the most contentious parts of the bill has been its treatment of people with preexisting conditions. Can you assure those who have coverage now and have preexisting conditions that they will be able to be covered at an affordable price under this new legislation . Absolutely. Preexisting conditions have never been on the table. Theres been a lot of confusion about it. But the truth is right now what were allowing people to do is people with preexisting conditions have access to health care. We have five states currently that have nobody in the exchange. Which means people with preexisting conditions cant go anywhere. Oklahoma, which is the state that i have the privilege of representing is on the verge of losing those. We also seen virginia and i believe it was iowa that recently came out where theyre going to lose their coverage, too. So what were doing is were actually protecting people with preexisting conditions at the same time giving them the ability actually shop health care that works for them. Theyre losing their health care thats not affordable the way that it is, so were bringing it to the patient and allowing them to build to have a market that they can actually go shop at. One of the criticisms of what is known as obamacare is that so many insurers have pulled out of those local or state markets. Thats right. Aetna announcing it would pull out of virginia yesterday. I believe thats what youre probably referring to. Yes, absolutely. By what mechanism does this new legislation ensure that more commercial insurers will choose to do business in all 50 states . In other words, in some states there may be one or none. Under this new legislation, do you expect there to be dozens of providers who will choose to do business in states or what . Well what were doing is opening the market up and allowing people to go compete. What this does is take the layers and layers of bureaucracy and regulations thats piled up on the insurance carriers the way they are right now which is causing our premiums to skyrocket, our deductibles to skyrocket and peeling back those layers at the same time protectionings preexisting conditions and allowing the states to carry themselves to allow the insurers to fill in, if they need to, and allows them to come back into the market and compete for our business. What would cause them to want to come back in . For one, we changed the ratio which is a 3. 1 ratio or 51 or which ever way the states want to ratio it. Older patients can pay will have to pay five times . Im sorry. No. What we do the 3151 ratio what that means is the programs or the insurers packages that they bring to us, we say that instead of through obamacare they have a 31 ratio, they have to have one person with high risk means age or preexisting condition per three healthier actually, two healthy individuals. What we do, we allow the insurance carriers to spread that out. They can offer a package now thats a 51 or at the state chooses to go above that we give them the flexibility to do that, which allows the risker to be able to be shared throughout everybody rather than having to confine it to a short number of people. So, we allow them to spread the cost out. Thats okay. Thats what all insurers do. At the same time, we close the loophole that allows people that have insurance to be able to claim a hardship and go back 90 days backwards because of whatever unvariable hardship and go 90 days forward. Someone can have a full year of coverage and only pay two months of premiums for the whole year. Well, what happens is the insurance carriers have to pass that on to us. What were saying is, look, if you want insurance, we have to create the market for you to go out and afford it, shop it and buy it. At the same time, some of the most expensive requirements which is regulations on the insurance, the insurers are saying kills us. Doesnt allow us to the stay in the market. We closed some of the loopholes that they have to pass on to the consumer which is us. You did a wonderful job explaining a complicated thing. Im not sure i understand it any better, representative mullen, but you tried your darnest to do it. Youre saying it will be more economical for the insurers to entry the market and thats what will bring them back. Absolutely. The patient will be allowed to hunt or shop actually in a market where people are competing if our business again. It is complicated. Theres no question its complicated. Look, the obamacare or aca was 2,700 pages when it passed. Its swollen to over 8,000 pages now. Were taking it and were dropping it down to under 300 pages now. And allowing the patient to have control of their health care again, but it is extremely complicated. Thats why its taken so long to get this thing across the finish line. We know you have a lot of work to do in the next half hour or so. I do. Just do clarify, its 216 thats the magic number we need to watch for in terms of passage of this . Its 215 or 216. That number is changing because like i said theres been a couple people thats had to leave because of emergencies thats in their district. Its still in flux. Yes. We have one member in a very unfortunate circumstance right now with his wife. So we lost some people arent here. The magic number could be 215, 216. Got it. Thank you so much for your time. Appreciate it. Congressman markwayne mullen. Our next guest says our Current Health care system is broken, so what needs to be done to fix it. Bring in executive director and ceo of the permanente group. You have a new book call mistreated. There it is. Put it up there. Why we think were Getting Good Health Care and why we are usually wrong. Im completely confused. I dont understand it. I cant help but feel that it would be simpler im not saying i favor it or whatever, that the world would be simpler if there was a single payer in this country. Am i wrong about that . Youre not wrong in the sense that could be. Might not be better. It could be simpler. It might not be simpler, but the theme of the book mistreated is its less about who pays and the coverage and how care is delivered. Right now the cost of care is rising more rapidly than individuals, businesses or the government can spend. Half a Million People die every year from preventable disease, from medical error, including my father, which the book opens with, and that is why it is mistreated. The system is broken. Its a 19th century cottage industry. Is this legislation that the gop and the president are pushing going to make for a Better Health care Payment System and a Better Health care Delivery System . Its going to help more people . So at this point theres so much uncertainty. Still talk about state waivers. Its not clear what the states are going to do as a consequence of that. We still havent figured out if the socalled Cost Reduction subsidies are going to be maintained. And of course you heard earlier, melissa talked about the fact that it has to go through the senate and of course the bipartisan committee. So theres more unknowns that are there, but the real issue the Delivery System and neither the aca or acha does very much to change that Delivery System. And my book and my focus as a physician is that weve got to get to the Delivery System better so patients avoid disease, so patients avoid medical error, so care becomes more affordable, integration, collaboration, technology. These are the underlying pieces. Doesnt a Delivery System sort of grow up and fill in im thinking of a mold and the mold is the system in how things are paid for and how people are insure and the system sort of adapts and both sort of adapt together, so therefore part of the system is designed because of the Way Insurance is set up in this country, no . I mean, when youre talking about rising costs, is part of that the lack of transparency we have. Theres the inability you mentioned this several times theres a complete inability of consumer with health care to go and see what something costs. Anybody can change charge for anything because i dont know what it costs and the insurers pay for it any way so i dont care what it is. Youre right. Its completely nontransparent to the patient. The issue and the Delivery System is different. Doctors are scattered across the community. Hospitals in every little town. The technology is Old Technology that exists right now. You cant have a video visit with your doctor. You cant send a secure message. You cant book your own appointment. Think about this in banking, retail, finance, you would never tolerate what you tolerate in your health care everyday. Thats why i believe were mistreated. Im a big admirer of kaiser permanente. It is a nonprofit or not for profit organization. Yes. I worry that when you bring in a validly profit seeking Enterprises Like Insurance Companies, like pharmacy benefit manager companies that the profit motive drives increased costs in many ways. Thats just my little editorialization. But my thinking is that ultimately were going to that Health Care Delivery and insurance is going to be done the way kaiser does it. I get my insurance from the same company that provides my medical group that does my diagnostic testing that puts me in the hospital. And its going to be kaiser or its going to be mass general or its going to be mayor or its going to be inova or somebody like that. Am i far off about that . No, youre exactly right. Thats what mistreated is all about. Those four pillars of how you put it together, integrating horizontally and vertically between the insurance and Delivery System, within a specialty, how doctors Work Together to provide that care to you. Im the chairman of whats called cap, the Council Accountability for physicians. The groups you talked about and all of these groups have come together exactly the way youre describing. The question s whats going to take for all of america, every place in the United States upmc to get there. Good luck with the book, dr. Pearl. Thank you. Big day for President Trump as House Republicans get ready to vote on health care. Will it pass this time . The markets may move if it does not. So well head back to capitol hill for a check. But first, oil and gold getting clobbered today. Hitting levels we havent seen in five month. 47 was that support, 45 to 47 is new range of support. Are we headed even lower . The levels you need to watch. Big interview with the ceo of vanguard. Power lunch is back in two. We, the entertainmentloving people, want all our rooms to be tv rooms. Because those are the best rooms. Because they have tvs in them. And, when were not in those rooms, we want our shows to go with us. Anywhere . You got that right, kid show thing. Get a directv allincluded package for 4 rooms. Only 25 a month, price guaranteed for 2 years. Available for at t unlimited plus customers. Crude oil and the metals all taking a hit today. Crude hitting five month lows breaking below 46 bucks a barrel. Lets dig in deeper on these declines. Dennis, always good to speak with you. You know, sometimes we look at oil and we look at the decline in oil and say its supply and demand. But here we are in a situation where its not just oil, its the Industrial Metals, its gold and everything sitting basically fivemonth lows. What does this tell you . Well, i guess its speaking to the fact that the world is concerned that Global Economic activity may, in fact, be slowing down. We worry all the time whether china will continue to be as aggressively globally strong as it has been over the course of the past several years, but the data coming out of china recently has been a little less than exuberant and has been detrimental. Its not just that crude oil is weak or copper is weak, its that the other Industrial Metals are all weak and also we see the grains with fundamentals being rathser strong for the grain markets even the grains today are weak. This has grown into becoming a margin clerk type liquidation phase. I think theres a bit of panic in the air. When you take crude oil down 4 in one day, take gold down 1 in one day, thats probably beyond rationality and probably margin liquidation than anything. People are getting taps on their shoulders with these declines. Theyre getting taps on their shoulders absolutely saying you have to get out whether you like it or not, if you dont, well get you out. How about the trade and the hope for infrastructure . I know, dennis, you have been a fan of infrastructure trades, but all of these commodities have basically erased everything that theyve gained since trump was elected. So at this point, whats your outlook . Do the metals and the commodity action tell dwlu perhaps a trade is long in the tooth given whats going on with the legislative agenda . Theres no question that the trade is long in the tooth. When u. S. Steel last week broke 25 in one day because of bad earnings, you could tell that the game was beginning to change. Some of the other infrastructure trades are Still Holding on. Cement still seems to be holding on. Aluminum seems to be holding on. One of my favorites is ball bearings but whats more incumbent in Economic Growth is ball bearings than every motor in the world. It seems to be holding out. Copper and steel are clearly showing signs of disdain and dismay. You agree with those declines but when it comes to like a timkin or another ball baring producer forgive me i dont know too many of them thats it. Youre on board with that . You are you and i am me. I did not know you could trade ball bearings as a commodity. There are a couple in the United States. We need if you did it would only have two members in it and it would be probably ill advised. So, the only way to do it is to buy one or two of the ball baring manufacturers. Do you think opec reups that sixmonth Production Cut deal at the may 25th meeting . No question. They have no choice but it wont matter if they do or not. We have become the marge kal producer at the margin. And the fact of the matter is we continue to produce crude oil t attiat progressively lower prices. Two things are happening, not only are we producing more crude oil, something that nobody paid attention to last week, the first fracked well was fracked in the arctic in russia. If thats the first, there will be hundreds more. And you have to believe that theres plenty of frackable land. Theres plenty of supply. At the same time, demand seems to be weakening. Your automobile you drive now days is so much more efficient than the ones that were in production a mere five days. You have problems. Last quick question, dennis. Do we believe that equities follow commodities . Thats a real good question. The trend is still up in the equities market. Still moving from the lower left to the upper right. You have no choice. One doesnt have to be aggressively bullish, but one still has to be bullish of equis the whether you like it or not. Commodity prices on balance if they decline, all things being otherwise equal should be suppo supportive. Dennis, good to see you. The house is set to vote on health care any minute now. A win today would be a major milestone for the president. Will he get the win . Seems like its stacking up that way. Thats i believe florida representative kerks iativ iati in the well of the house. Speak eer ryan will speak in a w minutes. Thats what speakers do, speak. T medicare doesnt pay all my medical expenses, i looked at my options. Then i got a Medicare Supplement insurance plan. [ male announcer ] if youre eligible for medicare, you may know it only covers about 80 of your part b medical expenses. The rest is up to you. Call now and find out about an aarp Medicare Supplement insurance plan, insured by unitedhealthcare Insurance Company. Like all standardized Medicare Supplement insurance plans, it helps pick up some of what medicare doesnt pay. 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And could save you in outofpocket medical costs. Call now to request your free decision guide. And learn more about the kinds of plans that will be here for you now and down the road. I have a lifetime of experience. So i know how important that is. Welcome back to power lunch. Live on the floor of the cme. Rates have moved up. Really since 8 30s release. The data points maybe postfed yesterday. Oneweek chart, we cleared the zone. Open the chart up to november, were right back into that kind of 230 range define the bottom. But the real story is, look at commodities then look at the dollar index. Look at this november 1st chart of the dollar index because we are about less than a 12th of a cent away from testing that low you see. The last low at the end of april 98 78. The dollar index would be at the lowest level since november. A lot of counterintuitive things going on in commodities with respect to the dollar. It will be exciting to watch the follow through. Thank you. Oil one of your top market stories right now. Oil plunging this hour, falling below key support levels, gold sliding, too. Good afternoon, brian. Thats right. The drop were seeing in crude oil today and commodities across the board is coming from fears traders tell me about the weak data coming out of china all week. After the numbers were off yesterday, there could be a serious issue with demand here. That seasonal boost in demand is the only reason that crude prices would rally at this time of year aside from some major opec action in a couple weeks from now. You can see the moves in oil reflected in the metals, too, specially in copper and gold taking a big hit as well. Look at the charts. Crude down more than 6 . Copper more than 3 , too. It was when crude broke 46 today key technical level of support there that equities started to turn and the markets started to stake a cue from commodities that maybe theres some risk not priced in here. Back to you. A quick market flash. Lets dove tail off of what jackie was talking about gold. The gold miners etf the gdx down 2. 5 so far. Take a look at shares, all lower today. Thats whats dragging that etf down, but not everything tied to gold is getting hit today. Check out of shares of Rangold Resources positive. Back over to you. Thank you. Lets go down to d. C. Nancy pelosi is speaking on the house floor. I think those words bare repeating. Over 50 years ago, dr. King said of all of the forms of inequality and jinjustice in health care is the most shocking and inhumane because it most often results in physical death. We come to the floor with the moral force of the dr. Martin luthers words in our hearts. Its a civil right, a fundamental right for every person in our country, not just the privileged few. And so in the spirit, let us be prayerful about how we go forward on this very personal issue about the well being of every person in our country. Speaker ryan once called this bill an act of mercy. An act of mercy. There is no mercy here. Indeed, inequality and inhumanity is exactly that is exactly what trumpcare has in store for the American People, but when he said its an act of mercy here is what others said. From the beginning trumpcare was a moral monstrosity that will devastate seniors, children and hard working americans. That was from me. But dont take it from me, Sister Simone camp bell said this is not the faithful way forward and must be rejected. The Catholic Health association wrote we strongly encourage the full house to reject this replacement bill. And the United Methodist church said opposing trumpcare. This is what they said people will die because of efforts like this to roll back healthcare. Lutheran services in america said trumpcare will jeopardize the health care and Longterm Services and support of millions of americans. The Episcopal Church said trumpcare falls woefully short of our spiritual calling to care for the least of these as well as the noble values upon which our great nation was founded. End of quote. And in all that was said before the republicans decided to destroy the protections of americans with preexisting conditions. I grant our republican friends their position. I respect them and their constituents who sent them here, but i reject the wrong priorities in trumpcare. Tax cuts for the rich at the expense of Health Insurance for tens of millions of working class americans. Trumpcare spotlights the differences in priorities between democrats and republicans in congress. It is step forward in the long standing republican belief that medicare should wither on the vine, that medicaid should be shrunken and that Social Security should be privatized. If you believe in the health and well being of the American People, you must reject this bill before us now. It is what trumpcare here is what it means to the American People. You know, much has been said about policy here today and over time, much has been said about politics. What the politics of this. But whats really important is what this means to the American People. And they know, they are listening, they know what it means to them. And it means trumpcare does, it forces families to pay higher premiums in deductibles increasing out of pocket costs. Higher cost. Less coverage. Trumpcare will take away health care from more than 24 million hard working americans. A crushing age tax. Trump care forces americans age 50 to 64 to pay premiums five times higher than what others pay for health coverage, no matter how healthy they are. Steals from medicare, steals from medicare. Trumpcare shortens the life of Medicare Trust funds and ransacks funds that seniors depend on to get lrongterm car they need. Thats why its consistent with their wither on the vine for medicare philosophy. And then, if that were not bad enough, and they couldnt pass their bill because it was that bad, they moved further away from the American People by gutting key protections. Trump care eviscerates essential Health Benefits such as maternity care, prescription drugs, emergency coverage, prenatal care and guts protections for americans with preexisting medical conditions. As bad as trump care was the first time around, you know, it was dead. It died. It died right here on the floor. Now its come back to life like a zombie, even more scary than before. And it is even worse. If republicans have their way, americans with preexisting conditions will be pushed off their insurance and segregated into high risk pools where they will face soaring costs, worse coverage and restricted care. Trumpcare means huge, huge premium increases. Its frightening future for families who need affordable, Dependable Care the most. Now on the floor, the republicans have recklessly and some would say fraudulently claimed that trumpcare covers americans with preexisting conditions. It does not. It does not. As robert at the conservative center said about the upton amendment, the 8 billion amount is a pit ens spread over five years its a fifth of a pittance. Were going to step away. House Minority Leader Nancy Pelosi making the case for not repealing obamacare. We are expecting House Majority leader, House Speaker paul ryan to come out in support of the ahca, his plan call it trumpcare, whatever you want to call it, that vote set to take place. Were going to take a short break and come back with more on this and your markets and your money. Stick around. Pass please. Im here to fix the elevator. Nothings wrong with the elevator. Right. But you want to fix it. Right. So who sent you . New guy. What new guy . Watson. My analysis of sensor and Maintenance Data indicates elevator 3 will malfunction in 2 days. There you go. You still need a pass. With e trades powerful trading tools, right at your fingertips, you have access to indepth analysis, level 2 data, and a team of experienced traders ready to help you if you need it. Its like having the power of a trading floor, wherever you are. Its your trade. E trade. Start trading today at etrade. Com whether its connecting one of or bringing wifi to 65,000 fans. Campuses. Businesses count on communication, and communication counts on centurylink. Ltry align probiotic. N your digestive system . For a nonstop, sweet treat goodness, hold on to your tiara kind of day. Get 24 7 digestive support, with align. The 1 doctor recommended probiotic brand. Now in kids chewables. Announcer cnbc news update is sponsored by all right, any minute now the house will vote on that Health Care Bill, highly the controversial. Nancy pelosi the minority leader speaking now against the bill. Lets go to ylon live on capitol hill with the latest. Ylon, when obamacare was passed, it was passed with the thinnest of margins. All democrats, no republicans. Thats whats going to happen here, right . Reporter thats what we expect to happen, certainly. And what democrats are trying to do right now is to delay the Health Care Vote by continuing to debate using parliamentary procedures to push back the Health Care Vote that is so critical for republicans. Now, meanwhile House Speaker paul ryan did tweet even as his colleagues were on the floor debating this, he put out this statement, obamacare has failed less choice and higher presume yums, return to patient centered health care is long overdue. Now the first time that this bill was scheduled to come up for a vote and that paul ryan had to pull it, he said the party was under going some growing pains. This would be an opportunity for paul ryan to show that his party can be the adults in the room, conservatives and moderates can come together and actually govern and get some legislation passed. But remember, even under a bestcase scenario for republicans this afternoon, if this passes, this is still going to face a big challenge in the senate. All right, ylon, thank you very much. Youre following it for us there from washington. Well be back with you when the vote starts or if not sooner. Larry, what do you make of all this . What i know of the house bill, the new house bill the revised bill, im fine with it. The good should never be the enemy, the perfect. I think theyve dealt with the critical issues. You know, one thing republicans have to deal with here, there are uninsured people and you cant let the issue of preconditions, people who are sick, get in the way of that. And the other part is tax credits have to be distributed to the working poor. Now to the point of this bill, fredty upton put in 8 billion more so that goes into the community ratings, the risk pool. I think that works. Theres only a couple thousands people here, really. Its 140 billion more more or less. Thats going to cover them. They should have gone there in the first place. The gop should have said in the very beginning we are a generous country. We must protect these people, pure and simple. I didnt know anything about preexisting conditions. We hear it and i did not according to Kaiser Family foundation, nonprofit, Nonpartisan Group i just put this on my facebook page, 52 million americans now have what would be considered most of them, one in three in every state in the south. So we have got a it is a most are covered by private insurance. Only couple hundred thousands are thats a bad number. Thats a misleading number. The point that larry is making is that some people have conditions that are already insured. Thats what i said and thats what they said. This whole mish mosh we have to depoliticize it. This is all theater. Of trillions of dollars of taxing spending and regulating. Okay . A governmentrun Health Care System was about a couple hundred thousands people. I say, okay, were a generous nation. Cover them. Just cover them. I think they should do that. I dont know why the gop doesnt come out and just say that. The other part is very important and i dont know the details here. The essential benefits mandate drives up the ten things that were called for. Ten things. Mental health, maternity leaf, things like that. Not Everybody Needs all of them. We should pick and choose. Thats what ryan was trying to say. If you can separate out the ill people from the healthy and then allow the Healthy People to choose what they need, you will see crashing premiums. And you will see skyrocketing demand. Im going to jump in here. President just tweeting out the president tweeting out its the trump tweet just crossed. Im watching the democrats trying to defend the, quote, keep your doctor. You can keep your plan and premiums will go down, end quote, obamacare lie. So, the president deeply involved in this and obviously watching the vote. Do you know yes this seems like hes responding to nancy pelosi who he just heard, thats what im guessing. Obamacare is very deeply unpopular from day one. The gop has not gotten the job done of getting a good plan and marketing the plan. Okay . So i get that. I just want to say, though, if you went back to like, i dont know, 2005, 2006 before we had obamacare, 80 some odd of americans were happy with their health care insurance. I just want to make that point. Im going to interrupt you, larry. Were going to listen to speaker ryan who will rebut presumably nancy pelosi. Chairman brad di, chairman black, sessionings. I want to thank the members of those committees and ways and means, budget and rules. I want to thank all the members who make constructive contributions throughout this entire, dlibtive bottom up organic process. I want to thank the president of the United States for his steadfast leadership. [ applause ]. In his address mr. Speaker house will be in order. It is addressed in this chamber he called on congress to act. And today we take the next step to repeal and replace obamacare. [ applause ]. I want to thank Vice President pence, secretary price, director mull vany and all of their te teams, my colleagues theres a fundamental and urgent choice at the heart of this debate. We can continue with the status quo under obamacare, and we know what that looks like. It means even higher premiums, even fewer choices, even more Insurance Companies pulling out, even more uncertainty and even more chaos. Look at what has happened in iowa this week. As is the case in so many areas in this country, iowa is down to one insurer. That, of course, is not a choice, but now that one insurer is saying that it will have to pull out of 94 of 99 counties in iowa. This is happening right now. So tens of thousands of iowans will go from having one option to no options. That is not a choice. This is a crisis. And it is happening right now. What protection is obamacare if there is no Health Care Plan to purchase in your state . This is the direction obamacare is rapidly heading. So we can continue with this status quo or we can put this collapsing law behind us, end this failed experiment. Lets make it easier for people to afford their Health Insurance. Lets give people more choices and more control over their care. Lets make Insurance Companies come in and compete for your business. Lets return power from washington to the states. Lets help get people peace of mind. Lets put the patient, not the bureaucrats, at the center of the system. This bill does all of those things. This bill delivers on the promises that we have made to the American People. You know, a lot of us have been waiting seven years to cast this vote. Many of us are here because we pledged to cast this very vote, to repeal and replace obamacare, to rescue people from this collapsing law. Are we going to meet this test . Are we going to be men and women of our word . Are we going to keep the promises that we made . Or are we going to falter . No. After all of this, after all of this, after seeing what is happening in iowa and around the country, after seeing this law collapsing while we witness it across the country, knowing all this turmoil that is coming, we will not falter. We will replace. And today is the day that were going to do this. Today this house has the opportunity to do more than just fulfill a promise. We have the opportunity to raise our gaze and set a bold course for our country. We have the opportunity to show that weve got the resolve, to tackle the big challenges in this country before they tackle us. To stop the drift of arrogant, bigoted Government Policies in our lives and to begin a new era of reform, based on liberty and self determination, giving people choices, letting them control their own destinies. That is the day that is before us right here. So let us pass this bill to take the next step to put obamacare behind us. Let us pass this bill to build a better Health Care System for american families. Let us pass this bill to leave the country better than we found it because that is why we are here. This bill to leave this country better than we found it because that is why we are here. That is what is at stake today. And that is why i am going to be so proud to cast my vote for this legislation and i urge all of my colleagues to do the same. [ applause ] and we been looking at house speak r paul ryan make an appeal for the pass savaged of aaca. In the meantime were going to take a quick break. Power lunch will be right back. Im dr. Kelsey mcneely and some day you might be calling me an energy farmer. Energy lives here. I cant wait for her to have that College Experience that i had. The classes, the friends, the independence. And since we planned for it, that student debt is the one experience, im glad shell miss always brilliant. Ameriprise. Well t market is still judging over jim cramers interview. They talked about everybody from cutting to stock prices to china. For this year we think we can become fortunate 100 Company Without adding something new. So its working in our interest for the services. We also say that were going to double the services business. Our objective is to double by 2020. And that projection is a sum of new services and existing services. Shark takes kevin oleary picked apple with the number one selection over stock drafts. Kevin were going to get your reaction to thing you heard in jims interview with tim cook. I think this corridor is positivetal in a pig wbig way. For years now the biggest in investors have or is it something else. Services in the last 24 he or she have gone through 10 of 12. Cook told jim hes going to double this to 24, to 25 revenue. Thats a completely different model. The Service Industry has some of the highest margins in the content world. Thats the reason i made this any number one stock pick. I believe cook will go it. That is a huge change in what apple is. It becomes a highmargin players. We pointed this out is that Apple Services business is number two business behind the iphone. It is bigger than facebooks entire business rng does more revenue than all of facebook. And yet apple trades at a significant discount in a pe ratio. It is a very conservative number. This stock has been the yin and yang between the Consumer Electronics and Services Content for five years and its in fact more volatile than facebook is and its business keep growing. I think its going to get in voefrts with the stock buy back and the increase in dividend which you know i love. And im protesting outside with a card on, we should be including dividends. Thats mee outside of of i want my dividends. Price appreciation in other words . Exactly my friends. So, why do you think the market has tagged apple with that sort of punitive evaluation . And its been that way for years and years and years, and whats going to wake investors up . One simple reason, the phone business grew so quickly that it became huge, people started thinking about this company even three years ago as simply another cell phone hardware manufacturer. Everybody knows where that story in, moe kia, motorola, they all ended up in this smithsonian and destroy Old Technology. They have continued to build other technologies and make sure the phone is a point by which you enter a consumers life. Look at how much the memory as grown. The aid is coming, its going to be a memory pig. Youre going to have to pay a fortunate to store your videos, pictures and music on that thing just for the memory and the cloud. I love that business so much it makes me cry. Well well send soclean next kevin. Thank you very much. Thank you. By the way, fox draft a week ago and don peeble have a nice lead. The peeb peeb bls choice. The vote on healthcare, rich johnsons hoping for a win they can deliver to their constituents and the president. We will find out ahead, i believe this is a preliminary vote, can somebody advise me on that. This is mott the final vote on the legislation. Welcome back to power lunch everybody. Moments away from the big vote on the American Healthcare act in the house. Right now theyre voting on a preliminary measure. President trump keeping a close eye on whats happening on the hill. Tweeting about it moments ago and pushing back his departure to new york by three hours. Lets go to e lon on capitol hill. What are they voting on now and when does this big vote come up . Tyler, the house is voting on a series of measures this afternoon. The healthcare is the second one that theyll take up. Right now theyre considering a related provision that would require members of congress to be subject to the American Healthcare act and its provisions. That Means Congress has to abide by whatever they end up passing later on today. That vote will probably happen in about 20 or 25 minutes, that vote on the healthcare bill after they wrap up this first provision. We heard House Speaker paul ryan give a speech on the house floor earlier this afternoon. He was met by thunderous applause and its important to note his rhetoric in that speech. He used images of hope and optimism and the idea he wants to build a Better Future from the country, thats different than what we heard previously about obamacare being a disaster. It took the country into a downward spiral. Theres a lot of optimism, hope here on the floor on capitol hill as this voting is underway. Lets bring in healthcare panelist, kevin, john goodman, and on set, larry kudlow. I want to show and explain to people thats not the vote for obamacare, it is a double negative. Its a vote that exclude the provision to exclude commerce from having to use all of the provisions of the new healthcare law. In other words it gives congress the ability to pick and chose for him or herself which provisions of the healthcare that they would like to have. Because obamacare forced them to buy on the individual marketplaces. A selfserving vote by congress right now, thats that, the healthcare vote will be after this. Allow them to vote on a new bill. Does that make sense, bottom line kevin does this pass healthcare repeal . Well you know, i think there are three key challenges to this legislation. Number one is that it has been scored by the co oh, so we doesnt know how much its going to cost on what the impact of the uninsured is going to be yet. Itll probably have an effect on the uninsured. The second is that we really dont think anybody can say what the impact on preexisting conditions folks are going to have, because while theres a fixed amount of money thats gone to be dedicated to covering people of preexisting conditions through the high risk pool, we dont know how many states may will b applying for waivers. If two states may be applying for waivers theres probably more than enough money. If 19 apply and are approved theres probably not enough money. And on insurance cost and premiums its a cost we have in our country, the real problem we have is healthcare cost. John goodman why are we talking about that . I tweeted out today heres with the gop says were doomed if we dont repeal obamacare and were doomed if we repooel it. Are they both right . Heres one thing the democrats got right, the republicans are taking 1 trillion for the next two years out of healthcare and they really are cutting tax for the rich and special interests, and most of those special interests werent asking for a tax cut. Heres something Neither Party pointed out, when this is all said and done if this becomes law hardly anything will be the infrastructure will be changed by obamacare. People will be able to move back and forth, premiums have nothing to do with their healthcare cost thats why we have the race to the bottom right now in exchanges. A worst of all the group market will continue to dump highcost elderly patients on the individual market and thats why we have a death spiral. All right you first remarked, are you referring to the means testing or lack of means tests for the tax credits, not enough subsidies are being pushed to the poor at the end . The democrats put 2 trillion on the table for Health Reform and ive always believed we should have used that money to reform the healthcare system. Paul ryan is into tax cuts so he give the money back to the special interest who helped give us obamacare, thats the Insurance Company, the pharmaceutical companies all those folks get a tax cut so it takes money out of the system. So the cdl is predicted by next years election well have 40 million uninsured and years out well have 20 million uninsured. Thats because theyre taking money out of medicaid. Im not sure i agree with that logic. I think one of the big issues here is the essential benefits mandate which i understands, and lord knows will now be handed over to the states to make share own decision. If you remove that, that opens the door for a massive reduction in premiums. Let me bake make a prediction to you. Hardly any states are going to ask for waiver and even if they do, no state is going to take away the couldnt for Mental Health and drug abuse. No state is going to take away a maternity coverage mandate and no state is going to take away the mandate for contra acceptive. Its hard to repeal a mandate. I know but this at least opens a door, it gives choice. Ryans a guy who believes in choice. I have to believe gentlemen, i just have to believe, this takes a major step towards dealing with the you know people who are ill. You cannot charge Healthy People the same as youre charging those with who are ill as i understand it larry if you are covered by an Employer Health plan which we all are uskt be effected by this because the employers Insurance Company can chose which state and then i will be forced even if i live in a tat does thats does not opt out youre insured. Exactly. Can i respond . John good day man theres a reason for that right. According to the foundation some states in the south. 33 of alabama, mississippi and kentucky have some falling under preexisting conditions while colorado has just 22 so those are nonsense numbers. Your foundation is nonsense. That vote is nonsense. Now before there was obamacare in the individual market, insurers could refuse to cover people who were uninsurable. Less than 1 of the United States is estimated to be ununusual bl. The kizer number is wrong. Whats the right way to handle this, create a market for sick people. We should have Cancer Treatment of america, md anderson, advertise to say if you have cancer we want you. The Diabetes Center should try to track diabetes patient. Right now if they all run uninsured people with copy existing conditions are unacceptable to me. Kevin let me ask you, do you believe that vast numbers of individuals who have preexisting conditions, not who is uninsurable, will they be better off, will they be able to get affordable coverage under this new law at the same rate that they did under the aca . I believe that we we dont know that number one, because we dont know how many states are going to be applying for waivers. I dont share jonathans view, that know states going to be applying for that. I think the fact theres a risk there could be a race to the bottom and thats something thats concerning. I think its an unknown question but real risk. The second, i also question johns numbers. That seems to be an kproird narl optimistic view of the number of uninsurable in the country. Whos just i just want to know this john goodman. When you create a mark for people with preexcessing conditions. Doesnt the federal government have an objects to subsidize those folks . Theyre at the low end john . I dont have a problem with the subsidy, the problem is every health plan has a decision to track the health and avoid the sick. We have a real race to the bottom thats going to continue with the republican bill. The city where i live, dallas, texas, ut southwest is not under any exchange plan. Childrens hospital next door not any exchange plans. Theyre leaving out the best doctors and facility because they dont want sick people. What im saying larry, if you had the right premium attached to the right patient there will be a real market to solve these problems. People will try to aattract people will problems instead of running away from them. Youre saying this doesnt do that . Notice at all. This continues all the centers already in obamacare. We got to leave it there guys. Thank you so much. John go johnman, goodman. Larry. I hope your skticking around. This tweet reads, republicans will be having a press conference at the beautiful rose garden of the white house after vote. Thats the treat right there. And thats one of the latest departure to new york. Hes watching it. Hes watching the vote thats for sure. It means a lot for his administration right, points on the board. Stakes are very high. I know were times but were all ad libbing here equally. Im going to state the fact that john goodman discounted the family members is unbelievable to me. Johns a good guy. I know i didnt get the response. All right apple making a major announcement with jim cramer. Were creating an advance Manufacturing Fund where initially putting 1 billion in the fund. You said you didnt know that. Were announcing it today. Youre the first person im telling well not the first person because we talked to a company theyre willing to invest in already but 1 billion to apple brlillion dollars of our u. S money we have to borrow to get, were proud to do it. By doing that we can be the ripple in the pond because if we can create many many manufacturing jobs around theres manufacturing jobs, create more jobs around them because you have a Service Industry that builds up around them. First investment from this fund later in the month of may. We want to let you know the house has begun voting on the ahca. So this is the vote that we have been waiting for all afternoon. Certainly this is one that is being closely closely watched by the trump administration, President Trump himself. The move to appeal obamacare whats the number the republicans can lose its 21. 21. Do you know how fabulous that is . A billion dollars its a big chunk of change. Chinese worried that u. S. Tax cuts will compete for investments. Yes. Yes. Of course. If you get a tax cut bill including the repatriation, these company wills take the cash pregnant it home and invest it one way or another. Thats exactly right. Hats off to them. The actual number is important because we havent had any Business Investments in years. How important is this for paul ryan politically . The healthcare vote. Thatll be a careersaving vote the speech he just gave. Thats a very important question. And its important to the gop to show were running a government and center right promarket reforms can be implemented and worked. The law line for ryan and trump. More for ryan good point youre making. Ctheres also an article saying Reince Priebus was calling around real hard for the passage of age. Do you see that . Do you think thats the case. I dont know if ryans job is on the line, i worked for baker years ago. And ryan says its particular connections on the hill. What youre saying is the Trump White House is pushing hard to get this done. Come back to your redemption point earlier, the great big bung let four weeks ago that got a Second Chance in life, get it done. Could this pave the way for tax reform in your view . Yes. Very important. Nothing else the legislative balance here is sucking all the oxygen out of the air okay. Yo i dont care about the numbers so much, growth is the most important thing. Yes, this will go the senate, im going to make a pet here i dont know, i think the senate will come back with something that is doable and i think it is something that will get done. Itll be tight, theres an hour left in voting. 208 votes for yes. Two democrats by the way. 18 votes for no. 187 democrats voting no. So its 210 211 now to 205. You said you need maybe 16 if one of the republicans didnt show up due to family emergency. I know your a bit cynical in american policies, sometimes in these bills, judgeship, bridges to nowhere, politics, you got to do what you got to do. I copy and pasted hr 2826. Literally. 19,266 words in this bill. So theres a lot of fine print, larry in this. I guarantee all 19,000 which ive not read are all related to healthcare. All i say get this gun i believe its good policy, its going in the right direction. But mostly i want to get to pro growth tax reform. 216 yay, 216 that gets it over the top i believe. I believe and those two democrats who were for have switched theyre vote now to nay. It looks like hr28 its not the policy, the election could call it. But for those numbers unless something were to switch it looks good for gop. They got the vote. And the time remaining at zero i believe that has reflected pass. Looking behind all this Political Drama and healthcare is the pro growth texas cut, the business tax cut. Thats the tim story about another billion dollars in private investment, thats the tax cut. This thing is taking the oxygen out of the air. Get this done, i think this is decent policy but the tax cut is behind it. We reached a positive on the s p and nasdaq moments before the house reached the number of votes and weve gone back into the red. But markets are holding in. So that is a pass correct . This one passes is other one passes. The actual bill will pass, goes to the senate, i think the senate will turn it back, you know pretty much similarly. Theyre working together right, many get your confidence, many get your vote. Its going to take a while, a couple months but it wont take forever. And get this tax reform more speedily done. Votes for stocks, votes for bill the chat. Later upon the table. In this business is the vote on the motion the gentleman from california suspended in pass hr, 1644 as amended. 181644, sanctions to republican the trans action ls relating to north korea and across the country. Republican healthcare pass for this bill. A major surge on what is going to happen with this, what does go to the Senate Already start to see some of the action pouring in from the mental Health Association of america was deeply disappointed in the result of the vote. It promise ls Better Healthcare to lower cost Political Campaign gave way to cold dark rlts according the mha. The real reason is this stems by allowing the state to opt out of certain provisions, each state to decide as to a lot of complexity. You dont know what states are going to opt out or in. What states might take advantage of the provision to be able to set up highrisk pools to move the people who are high cost, put them in a separate pool. The spending for those highrisk pools, a number of academics have said is not nearly enough if youre going to take out owl of the highcost patients and put them into special highrisk pools. A number of folks have been concern about the ability in the bill for insurers to charge those who have higher cost, preexisting conditions, more should their insurance lapse when they come back into the market. In fact, paul mark virtue the ceo of black cost of california el pasoed that provision and said this doesnt happen the problem for people who really need care. Insurers overall have been numb, they like some of the flexibility it gives them but theyre not sure this is the final version of a bill that is going to help this market. More immediately for the insurers in terms of what is going to happen for 2018 right now as they are trying to push together their weight request for next year. It has to be submitted over the next few weeks. They do not know whether some of the subsidies are beginning to be there. In particular, the subsidies that go to lower income folks in order to bring down the outofpocket cost. Theres still some concern here. Already bertha thank you so much. Lets no goto lieuwy who was following the vote. We are watching lawmakers as they leave the house floor and get on to buses that will be headed to the white house where the president has promised a big celebration and press conference in the rose garden now that this important bill for republicans has passed the house and lead the final count with 217 to 213. There are Big Questions though as it head to the senate, for right now theres a lot of optimism, hope and joy here on capitol hill. Back to you. All right e lon thank you very much. Quick comment larry . Very rare in american history, very rare to overturn an existing entitlement. Lets be clear eamon javers it has not been returned. If you dont know the answer, no worryings, do we have any idea where the senate might receive this, mark it off and vote themselves . We dont have any idea when the senate is going to proceed on this. Its not likely the version you just saw on the house floor with pass the house. Theyll strip out on provisions and send it back to the congress so each side can work out what the final bill will house on the senate and the floor. Nonetheless, this is a big win for the Trump White House. They were frustrated to get to a vote on the house floor earlier today. Today they got it. Democrats on the house floor, if you heard right at the end cheering that that that that north america north america hey hey hey goodbye to some republicans colleagues. They feel this was an death mark for some modern republicans that are going to tag them with the idea they have removed healthcare with many americans. Reminisce santa of the 1993 of the clinton bill which was chanted byebye. So those members who you just saw voting in capitol hill, a lot of them know their political careers are on the line with this vote. The winning side on its way over he here to the white house. If you see the president you got to imagine hes in a very good mood. I thought i heard them singing that song and i didnt know who it was. It appears to be the democrats. I thought it was the republicans say goodbye to obamacare. That was my thought. It appears to be democrats singing that to the republicans it was in 2018 lets not forget politically, these big nationalalize im going to call them nationalalize Healthcare Plans weather it was hilary care in 1993, obamacare in 2010, led to devastating losses for the democrats. Remember, the house and senate changed hands and the tax side changed hands again after 2010 well see what happens this time. Pictures were showing you of members of the house getting on that bus to the white house to celebrate what this has taken. Its a virkry for now even though the implications down the line are still unknown. Getting this done, removing this ball towards getting this done is very bullish because we are going to get a business tax cut that will rejuvenate this economy. And we can let the market decide what it thinks the neutral market, cardinal healthcare, hospitals seen benefitting under obamacare is mildly high. So the market may be saying you got to go through the senate, through congress perhaps, you could possibly go through the bird rule which is this thing where you can kill a budget recreation process if its considered ex strainuous or incidental to the bill. Lets bring back in john goodman, kevin and larry kudlow still with us. John youre reaction . Well i think how to reform a healthcare system, create a real market to people can attract people with problems, solve their problems instead of running away which they are doing now. And they missed the opportunity to protect people from a group market that keep dumping sick people on them. Individual markets are only 5 of insurance. The city of detroit says were bankrupt were not going to pay for our Senior Citizens any more. They dump 8,000 retired workers on the system. In texas we have 261,000 retired teachers. The posted time in healthcare is totally unfunded. Texas could end that plan, send all those folks to the exchange, thats a number actual to about 1 4th of the enrollment in the plan. If theyre allowed to do that exchanged are going to go into death john goodman, let me pose this question, the final government is going to put 140 billion into these precondition ill sick risk pools, via the state. Why cant this be done through doct without your system which is be proposed. Many people can shop around and strength private market exchange. It can be. We do that in medicare why cant we do that here . What happens with Medicare Advantage is no matter how sick you are youre attracted because federal government as to your premium and so you have special needs program, youre given 60,000 a year thats a win john. That deal with the issue didnt it . I push this in the sessions caddy pill and paul ryan ignored it. I hope this coming back in the senate and resolve real problems. Gentlemen were going to leave it there take a quick break. Well be right back. Blk 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. Switch and you could save 509 on auto insurance. Call for a free quote today. Liberty stands with you™ Liberty Mutual insurance. We are here with the live shot of the white house, members of congress are headed there by bus to capitol hill. The president tweeted earlier, the president would have a Big Press Conference at the beautiful rose garden immediately after if the vote is virk forruous. Lets bring back kevin and john goodman. Kevin it to get your response to this vote. The prior bill at a 17 Approval Rating by u. S. Citizens, i suspect this bill may beless popular. I think its going to be a challenge for the parties if they move it to the senate and that probably will not be lost on the senate. There are means within the current legislation that particularly allows Insurance Company that are attracting sicker people to be kon pen sated for that. With all respect, the risk adjustment, the risk quarters that stuff is bankrupting the bill, bankrupting the budget, there is no end to it. Thats part of the death spiral weve all been talking about, you cant do that. The congress cut that off, even obama gave up on that. You have to get more people into the system and the way you do that is by getting rid of the mandates and letting the cost of the premiums fall in a market and gendered approach. Thats the way to do that. You with all due respect the meaning the company with higher risk were paying those are lower risk. Way over budget so it was taken up in the last congress. The last congress it was so far over budget. May i Say Something on this . What the insurance this was designed by Insurance Company and what this adjustment mean to them if its larry and i are companies and he has losses and i have profits im suppose to write him a check at the end of the year, thats private sector socialism. What real adjustment means, market base real adjustment is what we do in Medicare Advantage. The patient follows the patient regardless of what happens to the profits of the Insurance Company. Kevin does anything this n this bill, hr286 do anything to bring down the cost of healthcare as oppose to figuring out how to pay for healthcare, why isnt anybody talking about how to bring why are we so sick . Why are medical medicalpractice driving doctors out of business . Does any of this do anything to address that . I think youve underscored an issue i tried to raise earlier, which is this the not just going back to the past, providing any medplans again, increasing the people having more bankruptcy, its really not address i think core issues. Some combs in our country is just to high. This is not becoming a issue for individuals, Small Companies and we cant keep kick g this can down the road. I take that you do not see anything in the kreuz market of obamacare which is that. It did nothing, it increased access to insurance but didnt do anything to governor rising healthcare cost . What i would suggest to you folks, thats a little bit oversimple fie case of the bill. The creation of acos and other thing and creating more risk barriers, that in fact tried to address that. Your point broadly in my view is absolutely correct. We have to address it. I just think though that mandates were the problem. You cannot mandate benefits. People do not want to chose the most expensive plan that doesnt work for them, Family Budgets matter. So this plan, as i understand it, lord knows, a, takes out the general mandate with Justice Roberts call the tax and b, open the door on the essential benefits mandate this is what was driving the insurers out of the state, the idea that more sick people came into the plans than they anticipated and that it was costing them more to provide the coverage. Some of which was the mandated coverage but most of the expense wait just a moment, most of the expensive coverage goes to 2 of insured people that is true. They do have fatal disease get healthier people didnt join this batch. So they couldnt make a problem. They were the years they wouldnt do it. Right. No amount of government subsidies is going to change that. Obamacare is designed to overcharge young Health People and undercharge sicker people. So of course the sicker people joined and the healthier people didnt. So thats always going to change if you get the prices wrong. Wheres what i dont understand politically, larry maybe youre the best person to ask this, in some ways to vote for profit the exact way it should of, if younger people are going to pay more and older people pay less in obamacare, and older people voted for trump who are going to raise their premiums. Well take a short break well be back after this. 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 . Why invest in average . All right were bringing in steve leach. Steve is theres a big Economic Growth to this is it not . There is. On the last conversation you had, i dont know if the guestes are still there but you had an interesting climb in growth since obamacare. Ill be first to say the experts that i know are not sure of the connection between obamacare and the decline in the medical services, certainly there was expectation to bring people into the system would raise cost, but at least so far the opposite has appeared. They ought to be sure what that connection is before they go in and repeal it. You could have a deacceleration in medical cost if somebody is doing that. The other issue out there, larry talks about growth, but the idea of fewer people have insurance out there, particularly when it was a key aspect for bankruptcies for many people and also created some ability to move from job to job without concern about snrps for some people struck mess as a negative. Point ability, point ability is in this reform package. But larry we have let me just respond because we dont know that. In the prior bill many people lost insurance. I understand, this is one of the reforms. Will it get through the senate i dont know. First point, theres a fundamental different world view thats all. The argument being made by ryan and company is that fewer mandates and regulations in laws, and greater choice will in fact in sent vise more people to much insurance plans at lower costs, thats what theyre saying. Theyre saying that t removal of the regulatory mandates will make premiums or permit premiums to come down in a market setting, which includes crossing state lines and take away the powers of the big Insurance Companies. Thats the theory. I think its a very sound theory. I think we ought to try it for a change instead of having the government run all this stuff. If i could respond to that . Theres a much more cynical view of this, which is that this is about giving tax breaks to a big bunch of people that didnt need it, for growth and taking insurance away from people. Thats the other explanations difference in tax cut by going away yeah but larry first of all owe need to defend this notion of how many people are going to lose their insurance because of this bill. We dont know. I actually am in agreement with you i think on the point. I feel the first republican plan, im just going to call it ryan one, gave far too many tax credits and far too few tax credits to the socalled working poor. And i made that point earlier. Guys issue the people in this sorry. President trm will be holding that conference in the rose garden at 3 30. We also have remarks on the vote at the white house at 3 30. The senate will also consider the Healthcare Plan after procedural and budgetary scoring reviews, trump senator mcconnells office. The word tack, or tax payer or taxable, that was used 179 times in the bill, i love those word counts, and tax credit deductions for insurance is 143 billion industry in the federal government. Its the single biggest Tax Deduction that are taken highly inefficient. But again just i think we have some Common Ground here. I have argued for a long time being this process. The original bill did not do enough in the system or tax credits and so forth, im going to say the 30 to 60,000 zone. Where most of those folks are on employerbased insurance plans. I felt that was one of the fundamental problems. I made the same case with obama who was given tax credits for people 100,000, we dont know that, thats not good. I think we have some Common Ground on that. I agree. Im going to just yes, im okay with that. All these governments im going to say ends of the line, free mark choices, free market capitalism is the best path. We can do this. Id like to debate the mandate with you some other day larry. Were going to drop it there. Steve i love where you are. When it comes to managing money it doesnt get any bigger and better in vanguard from the company ceo bill mcnabb. Hear about his outlook for stocks next. Most etfs only track a benchmark. Flexshares etfs are built around the Way Investors think. With objectives like building capital for the future, managing Portfolio Risk and liquidity and generating income. Thats real etf innovation. Flexshares. Built by investors, for investors. Before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. Nasdaq now in the green. Lets go to stock in the back of passenger the ach in the house. Bertha. Hey melissa. Couple of analyst notes on gupta says this could be positive for the larger cap insurers, united helts of the world,et that and others because it would role roll back the Health Insurance tax under the aca and if we see tax reform on the back of this they would see a lower tax rate overall. We are seeing some of them today. In the meantime, sheryl oh mek putting out a note about hospitals. The note says hca clears the house. She said this is how healthcare for the uninsured dies and she said as the house pushes this through Congress Gets out of the house giving the senators time to come up for an extension. More tough for hospital if Morgan Stanley will not force clients to liquidate holdings they currently have, but monday, its advisers cannot sell new funds from vanguard. Whether that puts a dent into the mutual fund giant is unlikely given the flow of money into the vanguard complex over the years. Nearly 900 million and counting. Roughly 8. 5 times more than others combine and 20 times more than the firm did a decade ago. Lets bring in the chairman and ceo to power lunch, bill, welcome back. Good to see you joining us from the ici, the conference in washington. Are you ready, and i know youre a humble guy, are you ready to declare victory, the victory of indexing and low costs over other forms of inveinvesting . Well, tyler, theres no question that low cost is winning. You know, its interesting. I sat through a couple sessions here this morning at the general Membership Meeting that were talking about active management, and the one thing that was constant in the conversation was low cost wins there as well, so i think whether you believe in indexing in the purest form of low Cost Investing or youre still interested in what active managers can do, the one theme is possibility matters to the end investor. You have four points to xtrillion in assets under managements. What percentage of that is in index products or funds, and of the money thats come in to the complex over the past couple years, what percentage goes into index products . Today Social Security a 70 30 split. In terms of flows, its 7580 index, and, you know, remainder on the active side, active came in in a couple places, and fixed income world, theres quite a bit of active flow, and in the equities side, its in a few specialized products. Why does a company like Morgan Stanley decide not to sell Vanguard Funds . Simply because they cant make money off them . They have a model to be compensated for being on their platform in one form or another, and thats something we wont do. It raises conflict. Other advisers do not require it. Weve been successful in that channel. You know, its interesting, i heard from a few individuals at the firm, hoping wed do more together rather than less. Well see how it plays out. They want to be paid by you to sell funds, and you find that a conflict of interest. Talk about if you see any inherent dangers or troubles with etfs or index products. Every dollar coming in pushes you got to go out and buy the stocks, and does that in and of itself push the prices of all stocks higher, some of which are getting pushed higher than they ought to be. If you look at trading, tyler, index funds represent 510 of all trading in equity, both in the u. S. And around the world. To say that index funds push pricing up, the data does not agree with that. You know, from our perspective, theres still tremendous price discovery going on. You know, theres much more activity from active managers. Its still, by far, the largest portion of management, active versus passage. Criticisms of etfs, some say being in etfs mutes performances because you have to be invested in a broad bath. Thats positive, but it could be a negative side if theres a lot of mediocre stocks in one particular index. Cramer came out against ets saying, quote, you want to be in the stock because its the best name in the sector growing, not a group of mediocre stocks pulling down the high quality stock youve chosen. What do you say to that . Investors, particularly individual investors, listen to cramer. Yeah, so i would say they, again, the data just dont support that. If you look at performance, if its that easy, active managers would be winning, and they are not. Reason they are not is when you add it up, everythings going to add up to the market, so all your active management together has to add up to the market just like all your interest together does. Then the real differentiator is the cost factor, and youre paying more on average, youre going to end up with less than an active product. Go ahead. Sorry. If you can identify those stocks that are mediocre consistently and avoid them, youre an allstar. There are a few who have done that over time. We have a few who work for us in our active side, but its very, very difficult thing to do. Let me conclude, number one, we reported on a competitor of yours coming out with a lever e leveraged etf that could go long or short. I wonder if you think thats a responsible product, joist, the kind of thing that ought to be out there for people to choose from. Others say, well, you want it, here it is. Make a smart decision about it. Basically, the question is, have we sliced the bologna too thin, and whats stocks and bonds markets . Sure. The first one, you know, tyler and i have talked about this every year at the conference, weve been together, i think its getting ridiculous. I dont think introducing leverage into these products is good for the end investor. I feel far too few people understand it. Im not a fan of those at all. On the outlook, as you know, we tend to look at things very long term, and over the next ten years, we expect equity returns to actually be, you know, 23 below the long term average. Fixed income we also expect to be a couple Percentage Points below its long term average. You see that in the yield and maturity. Take that together, balanced return is, look, less than has been over the last 30 years. The consequences for all of us, one, be really clear in educating investors about this, and, two, help people find ways to save more. Thank you for the time, bill. Bill mcnabb, chairman and ceo of vanguard. Well be right back. Our brains so we can share our amazing trading knowledge. Thats a great idea, but why dont you just go to thinkorswims chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders . I know. Your brain told my brain before you told my face. Mmm, blueberry . Tap into the knowledge of other traders on thinkorswim. Only at td ameritrade. Shis it dna or olay . Er than she should. New Olay Regenerist helps take years off your skin age so you can look younger. Who needs dna when you have olay . New regenerist. We should remind you the president is making remarks about the passed Health Care Bill in the house at 3 30 p. M. Eastern time. This is a live shot of the rose garden where remarks will be made. Members of the house were bussed in for the occasion. We are watching for that half hours time. Thank you for watching power lunch. Interesting couple hours. Absolutely. Closing bell starts right now. What an interesting couple hours it will be here. The stock exchange. In case you have heard, the house passed the amended bill to replace obamacare. Bill pass, without objection, the motion to appeal is laid upon the table. We will tell you whats in the bill, what it meebs ifs hospital means for hospitals and insurers, two stories, by the way, and the president s agenda and what the cost of the bill could be, although, thats still to be determined. President trump, by the way, will be speaking at the white house in less than 30