Happen until the gop agrees on a tax hike. Senator dick durbin saying no deal on the debt without a tax hike of the wealthy. I cant tell you, i dont want to do it, the president doesnt want to do it, but we need to solve the problem been we cannot allow the reckless position to drive this economy into another recession. Some suggesting that it might be better to cave to the president now on taxes and keep up the fight on spending. If we were to pass, for instance, raising the top two rate and thats it, all of a sudden we do have the leverage of the debt ceiling and we havent given that up. Meantime, one influential voice says enough is enough. Thats like betting your country. Theres something terribly bizarre and juvenile about that is to think your party comes ahead of your country. I dont go for that at all. That, of course, was alan simpson, the other half of simpso simpsonbowles. Erskin bowles will join us this morning, as well. If you have the democrats quoting him, the republicans quoting him, well very where he comes down and where things stand right now. You do simpsonbowles now instead of the bowlssimpson . I looked it up on going. The more often cited is simple is sonbowles. The journal has an interesting piece. They dont like corker for breaking rank. They say why are republicans negotiating this themselves . They say let boehner do the negotiations. Anyway, you would be hard pressed to find something who sdn have aen opinion on the fiscal cliff. This weekend, the ahead of the imf said the United States is more vulnerable to its domestic trouble more than anything else happening in the eurozone. Christine lagarde says a balanced approach is needed and she says dont kick the can down the road, which is rich coming from a european. European trading the lower this morning. Italys Prime Minister mario monti, yes, the same one that is famous from all the antitrust things back in the was that the 90s . The 90s, yeah. Monti announcing hell step down before his term ends. The decision comes after the party of Sylvia Berlusconi withdrew support for montis government last week. Berlusconi has indicated he will run for leadership again. Cnbcs carolin roth will join us from italy with the latest in a few minutes. When i was over there, i had to have the all the political signs translated because theres a picture of monti sitting under a beach chair drinking a drink and all the text was send monti to the beach. They already didnt like him. He had very high disapproval ratings. I remember last summer i had seen that somewhere. They want to send him to the beach. The major european averages at this hour, there they, theyre all down. Not great in france, but germany down about. 7 and the ftse down fractionally. Other news out of europe, debt tieback for from an day to receive additional buyback offers. Those would be at deeply discounted prices and that would help lower the countrys debt lead. In asia, stocks touched a 16month high and closed mostly higher on the session with good gains, as you can see, with the kospi up the most, 1. 5 points. Strong nebs out of china which suggest maybe the economy is rebounding more than expected. The exports. Yeah. Among the catalyst in asia trading today, economic stats out of china. Export growths slowed sharply to 2. 9 in december. That news j underscores the global headwinds dragging on the economy. But the chinese economy is showing solid signs of a pick up in domestic activity. Industrial output was stronger than expected. The country has been saying for years it needs to shift a little bit from the export model the internal consumption. Let their middle class grow and not be nearly as dependent on exports. And chinas oil demand in november surpassed 10 Million Barrels per day for the first time ever. The countrys crude imports rose to the second highest daily rate on record. Analysts say this is further evidence of the chinese recover. And i saw this story on every once in a while i check tweeting. I saw it on google, too. Kayla tausche reporting kayla beat nick dunn. Nick dunn was quoting kayla. Is that right . Corporate news that were talking about, ingersollrand is nearing a deal to spin off its Security Technology business. Cnbcs Kayla Tausche is reporting that the news could be announced as early as today. The spinoff comes after months of negotiations with an activist investor. Ingersollrand is planning to announce a Buyback Program and a nearly 30 increase in the share program. Also, aig is considering selling its plane leasing firm to a Chinese Group for up to 4. 8 billion. Plus, listen to this, mcdonalds is going to be reporting november sales today. Look for the numbers at about 8 00 a. M. Eastern time. Analysts are expecting global comps to decline. 1 . U. S. Sales are seen falling by. 8 while europe is expected to tick slightly higher. This was a big deal last month when they came out for their comps. It disappointed for the first time in years and years. People will be watching this number very closely to see if the consumer is still feeling good, to see if mcdonaldss managed to get that mix right. There were concerns that they put too many things on the dollar menu. They said last month they would be changing that. Whole see what happened. Shares of mcdonalds yeartodate, they have come down quite a bit. You only read two. Why do i have to read this . I read three. Weight watchers, possible cases of Insider Trading. Reuters say i resemble this. Reuters say authorities are investigating hedge fund for Insider Trading in Weight Watchers. S. A. T. Had taken a sizable position in the stock. Cohen fund briefly held 2. 1 million shares under scrutiny by authorities. At which time the stock price roughly doubled. In other huj fund news, john paulson said friday that his funds experienced mixed returns in november. We got wind of this. Softer gold prices weighed on some portfolios. Not much time for the predictions to be right. Some will do well based on housing, right . Yes. Everybody said gold was going over 2,000. It didnt. The merger, arbitrage focus Partners Fund climbed 1. 4 in november and is up 6. 7 for the year. The firms biggest portfolio, the Credit Opportunity Fund was flat for the month. It is up 5. 6 for the year. I like that. Yeah b, i got Weight Watchers and twinkies. If you want to see the twinkies table, this td is it. This is the official drop dead date for those making an offer for the baker. There are nearly 200 interested parties, but sources close to the process are anticipating a few dozen real committed bids will emerge. Kayla tauschis will join us in the next hour with a look at twinkies and the other hostess brands, the products buying attention for buyers. Apparently the products that are most wanted, the brand that is most wanted is not twinkies. I dont know what it is. Id like to know what it is. Ive tried them all. I was reading through overnight notes and im dying to ask kayla this. Funny bones . I dont like Peanut Butter ones. I remember them being too dry. Too dry . I had some of those orange cup cakes. Oh, yeah, those are good. Cream filling. The same one as the regular ones, just orange, right . The regular ones are dork chocolate. But these are the orange. All we got were the orange ones. So were going to find out which one is drawing the most. Well get that one from kayla in the next hour. By the way, you know libor and the scandal surrounding the anticipated of it. Have you heard of the euro bor . Its the euro interlibor rate. And the euro may accuse banks of setting the euribor, as well. By submitting incorrect data and collaborating with each other were widespread. Probably not a surprise if you knew it was happening with the libor. This will bring the tally even higher in terms of the expected fallout for any litigation that could follow on this. Also, the United States and britain teaming up on a global strategy to handle too big to fail banks. Today, u. S. Regulators are outlining a deal on both sides of the atlantic to take losses and ensure efficient capital exists in the banks headquarters to protect taxpayers. The bank of england and fdic are suggesting the plan would reduce financial stability. Too big to fail. I have to admit, im a little bit concerned because he was supposed to be back today. He was. In a foreign country. And i dont know this for sure, but have you ever seen midnight express . I have. You have seen that movie . I dont know. Hes on a bus. Hes got stuff taped to him. Andrew was supposed to be here. Now, i dont know whether anything happened as he was trying to exit this run. And i dont know what he was trying to bring back. But it is a country known for he was probably bigging back a gift for you. Maybe so. But all i know is hes not i can go to Washington State for that. I dont need andrew to bring it back. But im a little bit concerned. Do you remember . I think hes okay, i hope. Although i did hear some weird things about the plane. Have you ever been to a turkish prison . I think thats lt from airplane, right . Actually, i have nodenc support this that he was busted trying to leave the country. Have you ever been in a prison . There it is, the turkish prison. I made that up. No, you did make it up but i am concerned because of the plane issues. Hes a nervous flyer as it is. Thats right. If theres plane issues but you dont think they went in and stormed the plane and dragged him off . I dont think so. But he will be back tomorrow. Okay. Back here in the United States, there is a key Senate Vote Expected today on extending a financial crisis era blanket guarantee on nearly 1. 5 trillion in deposits. The fdics transaction guarantee program, or t. A. G. , expires at the end of the year. Small banks are making a last ditch attempt to try and persuade congress to extend it. T. A. G. Sdpofts make up many of the banks total deposits. If congress doesnt take action, the fdic will stop making guarantees on zero Interest Bank accounts and services. The guarantee will revert to the normal 150,000 for insurers at any given bank. If socalled t. A. G. Money leaves these banks, then the troubled list might find a lot more names on it. But, again, these were all temporary things put out there. It has been four years and counting since the financial crisis. At some point, you expect to see these things reverse. The Federal Reserve dominates this weeks calendar. The fomc will gather for a twoday meeting tomorrow. The fed is expected to maintain its bond buying at 85 billion a month, replacing operation twist with purchases of longer term treasuries funded by new money creation because theyre running out of these longer things to twist into. Theyre going to have to start creating money or twisting money, whatever you want to call it. Chairman bernanke will meet on wednesday afternoon to cover the Federal Reserves positions. Well cover that live. Right now, dow futures down by 35 points. S p down by 45 points. Oil price these morning, they are up slightly. Theyre up 39 cents to just 86. 32. A lot of concerns about the consumer, though. Its still pointed out that theres a story of the front page of the wall street journal about weakness. Well continue to watch a lot of these numbers that come out, though. You take a look at the tenyear note this morning. Right now, the yield is 1. 605 . The dollar this morning is indicated down across the board. Euro is at 1. 2911. And gold prices, which weve talked a little bit about this morning, are up to 1,710. 40 1, ourls ounce. And you did have the contrarian call last year. Yes. You went against the grain. Time for the Global Markets report. Kelly evans is standing by in london. What did i say, the ftse was up a little. Nothing to write home about. Joe, im sorry, its nothing but a sea of red overhere. Mario montis decision to resign over the weekend is having quite an impact on markets. I want to show you those who are most affected. I know carolin will join us with the political details been but here are the markets verdict. Youre seeing the eye toolan tanks taking it on the chin. A couple of them were halted in trade earlier after being down more than 5 . Now, this, of course, is one reason why the ftse mib, which we can show you is the weak performer today. Down 3. 4 . So pretty damming indictment of this decision over the weekend. The ibex down over the weekend. So spain and portugal, seeing its index down over more than is is showing its concern. Joe, the ftse is at least holding up relatively better. Its down only. 3 today. These losses follow a trading session that was setting up to be relatively strong. We saw asian stoxx doing decently well, so just kind of underscores how unhappy the market is this morning with this news out of italy. Look at whats happening with debt. As we check in with bond markets, the italian tenure is seeing its yield rise. 4. 88 . I know it doesnt seem that high, given some levels we were at last year. But if you consider that weve risen, i dont know, in the range of 30 to 40 basis points or. 3 Percentage Points just on this news, it is pretty significant. Spain, same thing, were seeing 5. 67 about the level there. Other bond yields are benefiting as a result. Back over to you guys. Im sure carolin, too, can help us try to understand now what this all means with mario monti potentially still involved with the next eye toolan government. That may help reassure the markets somehow. Thank you very much, kelly. We are looking forward to that. Right after this, we will be getting that live report from rome. Thats where people are starting to figure out, the politicians are out in force campaigning for life after mario monti. But first, today is forecast to be the busiest shipping day of the year for fedex. Yikes, thats a reminder that i am way behind on my shopping. Courtney reagan is spending the day at the companys center in the bronx. Are the packages flying . Not yet, but the big sort happens in just about 15 minutes. The kre o fred smith thinks this will be a record day in fedex history. I have the details as fedex fills in for sana clause up next. Toward all your financial goals. A quick glance, and you can see if youre on track. When the conversation turns to knowing where you stand, turn to us. Wells fargo advisors. Monarch of marketing analysis. With the ability to improve roi through seo all by cob. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. Im going big. [ male announcer ] good choice business pro. Good choice. Go national. Go like a pro. I heard you guys can ship ground for less than the ups store. Thats right. Ive learned the only way to get a holiday deal is to camp out. You know weve been open all night. Is this a trick to get my spot . [ male announcer ] break from the holiday stress. Save on ground shipping at fedex office. Welcome back, everybody. Take a look. 234 our headlights this morning, new york city mayor Michael Bloomberg is considering whether to make a bid for the new york times. The fts publisher is about to lose two of its top executives, raising speculation that the newspaper could be up for sale. Eric fisher joins us from the Weather Channel this morning and, eric, it was not cool out here today, but i did see a lot of rain. Is that around the country, as well . It is. Were watching winter storm caesar. This is what it left behind. Blizzard conditions around South Carolina and north dakota. Over in minnesota, we have anywhere from 8 to 17 inch snowfall totals. A lot of cold air behind the system. Eventually that will get over towards the eastern seaboard. 12 in minneapolis. 8 and below in international falls. You get over towards chicago and into des moines, st. Louis, gusty winds bringing those windchills way down. Winter finally showed up here across the upper midwest. Here in the northeast, theres the rain we were talking about around boston. A little bit of a break this morning. The biggest storms across the south, places like atlanta, into birmingham, nashville, jackson and new orleans all dealing with some very heavy rainfall. Also had a Tornado Warning earlier on today in mississippi. So Severe Weather is our our minds here. Southern tennessee. We could see damaging wind gusts, isolated tornados and certainly quite a bit of rain. The last note for this morning, snow in texas and oklahoma. Around dallas, it is moving into the city. A quit hit of snow around the Early Community time, so folks have to be careful on the roads there. Back to you. Thats a little weird in dallas. What about bring it down, bring it down to colorado. Can you is that expected, snow there . I mean, this is a good sign, right, 8 or 9 inches this early in minnesota . Is that a good sign, eric . It is a good sign. It was the fourth biggest december storm on record in minneapolis and then in colorado yesterday. They got over a foot of snow . What did . Ski areas, they are finally seeing a little bit of good news. That is good. That is good. All right. And its headed here. All right. Excellent. At least the cold weather. You know, rain, raw days, 38 degrees. This time of year, im happy about that. Id rather have snow. 48 degrees with the horrible rain, it chill tess bone. But the snow comes in early in the morning. My backyard, three dogs and a muddy backyard. Today is expected to be the busiest day for shipping for the Holiday Season. Fedex will have 19 million deliveries. Courtney reagan joins us live from the Distribution Center in the bronx. They havent asked you to pitch in or anything, yeah . Not yet. Im not sure im totally dressed for that, so i hope that request does not come down my way. But in a couple of minutes, youll see this mornings big sort come down the layer belt. It will be loaded foup for delivery toes be made in about two hours on what the company expect will be a record breaking day. We publicly forecast a couple weeks ago that on the 10th we would move 19 million shipments through our networks. Thats up about 11 year other year. Ecommerce is causing a significant amount of growth. Retail sales are going to be up some place in the 3. 5 and 4 . So as fedex fill necessary for santa claus, its more than 300,000 workers will start loading up packages. More than 200,000 per second to be delivered today. And fedex counts today as its bus is heist day of the year because of any orders in the system at any point. That includes packages being shipped today that were from cyber monday. As well as orders that come in today from those green monday orders. This is a little bit different from u. P. S. , which counts its busiest day as december 20th because it measures busy by the number of deliveries that are being made. Now, we should note that it is also green monday today. So a lot more shopping will be done today. And as history proves, the trend has continued. Come course chairman dan figoli expects more than a billion dollars in sales will occur today marking the third busiest shopping day of the season and, in fact, the year. Courtney, thank you. If it was a little darker, your outfit, it could be a u. P. S. Thing. But thats a fedex khaki thing. But if the trucks tell you to do something, no, youre there for a reason. I am here as a reporter. Im not that strong. We dont want anything to happen. Good point. Thanks, courtney. Well see you later. The moral turpitude, the soelt has declined. Google, commemorating linda lovelace. Oh, wow. I dont know. Thats what really . Oh, wait a minute. Wait a minute. Ada lovelay. You tricked me into that. Is that different . Yes. Wait a minute. This woman was yeah, yeah. No. Totally different. Shes the author of the first computer algorithm. Oh, my bad. My bad. Yeah, she helped she would be 197. She helped the design of yeah, she would have been 197 today. Do you know who augusta aida king, countess, have you heard of her that much . I see lovelace and i dont think of the countess of lovelace necessarily. But google is like that. And i got you. And you got me and i fell for it and i should have known. Oh, man. Coming up, a live report from rome. I should know better. How long have i been sitting next to you . Why europe is paying close attention to who will follow mario monti as italys Prime Minister. But here at home, a very big difference between president obamas first inauguration and the one being planned for next month. Details when we run. Twins. I didnt see them coming. I have obligations. Cute obligations, but obligations. I need to rethink the core of my portfolio. What i really need is sleep. Introducing the ishares core, Building Blocks for the heart of your portfolio. Find out why 9 out of 10 large professional investors choose ishares for their etfs. Ishares by blackrock. 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Andrew ross sorkin hopefully will be back tomorrow. Well get an update throughout the show. Among the top Global Market stories this morning, italys Prime Minister, mario morety announcing hes going to step down after his countrys budget is approved and before his term ends. Cnbcs carolin roth is in rome with the latest. And congratulations and hello, carolin. Were always the last to know. Joe, its actually been a couple months, but thank you very much. Thank you very much. How come we havent seen you . Weve live in rome today all day because were covering you may not have seen me, absolutely. So were seeing a big selldown in italian assets today. Banking stocks are down to the order of around 5 . And theres a clear negative reaction to the news that mario monti unexpectedly resigned over the weekend. That is after the budget law has been parsed in parliament. At the same time, controversial former Prime Minister berlusconi said he was staging a comeback and thats why markets are worried, specifically because they dont know whether the next government after technocrat Prime Minister monti will continue with his tough austerity measures. I would say that some of the fears in the market today are overdone. If you look at the latest opinion polls, youll see the Democratic Party under bersani, they would win the elections if they were to be held today. Theyre pro europe, pro austerity. So berlusconi doesnt even have a chance of winning at this point. Back over tow. All right, carolin. Thank you. Yeah. She hasnt been on at all. No, we havent seen history in a while. Thats why were the last to know. And you finally did it. Congratulations. All those guys you had been dating, she had called them euribors, until she met this guy, right . This guy, roth, stole your heart, right . Whats his first name. He did, he did. Ill tell you off air. Is that okay . All right. Thats fine. Thank you. Thank you very much. Back here in the United States, president obama and House Speaker boehner spending a sunday together to talk about the fiscal cliff. No word on any progress and the president will be in detroit today to speak about the economy. Joining us right now is cnbcs chief washington correspondent john harwood. John, you had a great column over the weekend in the in, times whether you took a look back at what happened in 1990 where things were set up for a grit debate but maybe things were easier at that point because you didnt have the 24hour news cycle. You had other things that made it easier the last time around. What does that lead us to think this time around . Well, there are ways in which it was more difficult, as you just alluded to, becky. But there are a lot of similarities, too. There are warnings that the economy is going to take a huge hit if a multi year budget deal was not enacted. You had a Republican Party led by a president who had made a no tax pledge and who was trying to figure out a way out of that. When he finally did that, thats when the negotiations took on a faster pace. And i do think here the fact that boehner and president obama met yesterday on a sunday is an indication that there is a prospect for a deal. The question is going to be what does the white house give john boehner, offer john boehner in terms of entitlement cuts that he can use to bring along his caucus . Its pretty clear from the cracks in republican ranks, becky, that republicans are going to give ground on tax rates for some group of wealthier americans, maybe half Million Dollar incomes, maybe Million Dollar incomes. But boehner to the speaker to bring along his caucus has to say here are the spending concessions that i want and i think thats what this set of conversations is about. John, it was interesting to hear it from senator corker saying, yeah, we should hold the fight on spending. You about he did it on the assumption that youre going to have this debt ceiling crisis that comes up again and these concessions that come up in i guess february. The president in his initial offer laid out something that he had to say the debt ceiling would be part of that, too. Would he have back down and say we could have this conversation again in six weeks . Thats a really hard issue. He said in the same definitive rates that he said tax rates have to go up on people at the top, he said im not playing that game on debt limits. But thats a tremendous amount of leverage for republicans. Arguably to the detriment of the country, we saw what happened in 2011 when we had a sail mate over the debt limit. We had a downgrade of u. S. Credit. The president has also said, through his aides, that he doesnt believe he could do it unilaterally with executive authority. So then the question is going to be, what does it take to get republicans to agree . And if john boehner needs a concession from obama to get his people to go along wax rate increases on Million Dollar incomes, hes going to need more of a concession to get them to go along on a permanent extension of the debt limit because people see that as the one tax stop lever they have to put pressure on democrats. So i saw some of your tweets. Did you almost start crying . How scared were you with the are you talking about the ball game . Yeah, im talking about the knee. Yeah, well, i was scared. Petrified. It looked bad. What happened . Rg3. Its not a serious injury, right . Not an acl or the redskins did an mri last night. They came out and said his acl and mcl, neither was torn. So, you know, it appears to be a hyperextension, which, you know, i would guess it would keep him out there week and maybe another week, but i dont think its a catastrophic injury and you might have noticed, joe, we had quite a good backup quarterback, a rookie from michigan state, kirk cousins. And weve got johnny football, freshman. Freshman, won the heisman. He could win four heismans. I was hoping your bengals were going to help us out yesterday. You know what, john . I was hoping you were not going to bring that up. Ive heard people say this, i want my three hours back. I want my three hours back. They were leading until zero time. They were leading until zero. I mean, thats if youve been a bengals fan for 20 years, nothing surprises you any more. They were so much better than dallas through the entire game. I feel okay because dallas wag was dealing with some stuff and maybe they won it for the guy that unfortunately lost you know, i could see they were playing a little bit inspired. Its better that the bengals do it now than in the first playoffs game. The jets won yesterday keeping their playoffs alive. Here is my question about the bengals. Do you see them as still on the rise . You didnt see the game . Because they were i mean, they got a great defensive line, they sacked toney romo. They had him under pressure. A. J. Green, who is great, dropped a bunch of passes and they had about three or four dropped interceptions that would have turned it around. They didnt convert some third i watched the whole game and as i said, it was devastating for just a regular season games. Ive been a bengals fan, seriously, since ken anderson. Gregg cook. Yeah, craig cook from the university of cincinnati. I remember those guys. I loved them. Bob trumping, chris collinsworth. John harwood, thank you. And i was happening that rg3, no real damage, hopefully. Comments, questions on anything you see here on squawk, email us, squawk cnbc. Com. Still to come, one of the most cited voices since the fiscal cliff, Erskine Bowles. He he loves the rise above. First, were going to head to the futures pits in chicago and see which stories are most likely to drive todays trading. As we head to break, some of santas friends dawned swimsuits this weekend to take part in the santa claus run in budapest, hungary. They did their best to keep moving in below freezing temperatures. To the best vacation spot on earth. all the gulf it doesnt matter which of our great states folks visit. Mississippi, alabama, louisiana or florida, theyre gonna love it. Shaul, your alabama hospitality is incredible. Thanks, karen. Love your mississippi outdoors. I vote for your florida beaches, dawn. Bill, this louisiana seafood is delicious. Were having such a great year on the gulf, weve decided to put aside our rivalry. Now is the perfect time to visit anyone of our states. The beaches and waters couldnt be more beautiful. Take a boat ride, go fishing or just lay in the sun. Weve got coastline to explore and wildlife to photograph. And theres world class dining with our world famous seafood. So for a great vacation this year, come to the gulf. Its all fabulous but i give florida the edge. Right after mississippi. You mean alabama. Say louisiana or theres no dessert. This invitation is brought to you by bp and all of us who call the gulf home. Welcome back, everybody. U. S. Equity futures at this hour show the dow futures down by about 28 points. Nasdaq off by close to 7 points. S p futures are magically weaker, as well. In our headlines this morning, the average price for a gallon of regular gasoline falling over a dime in the last three weeks. This follows a drop in crude oil prices and a output in refinery output. Joe. Lets get to the futures pits. Jeff killberg of killer capital. You know, you spelled capital wrong in your name. I guess that was inadvertent. How should traders position themselves . I hear some of the people that are a little mover reactionary, they say Capital Gains rates could go up so much between now and the end of the year, many stocks could make advances because people will be selling. Joe, although im very distraught at manteas loss to the height man, i see sellers remorse. A lot of people are worried about that and rightfully so. But additional measures as well as we see some type of resolution out of washington, you could see a nice pick up here in the s p and that could catch some shorts on the run. I wonder about that. With boehner was at any time we could hear that maybe a deal is close or a deal gets made. But, i mean, Capital Gains no matter what are going up, arent they . Thats inevitable, right. And youre seeing one things in the bits here behind me, which will be very loud here this afternoon, the treasury pit is an overcrowded trader now. That was opposite of the last year and a half. Being bullish on bonds was lonely. But right now, folks are being very its very confusing to go to the dollar index. Its going to be devalued. Right now youre seeing the long end of the curve. Thats the focus were looking at. The long end of the curve should let out. The front doors Balance Sheet is clearly expanding, but the duration, we want the clear end in duration on a big bet on wednesday. And i wonder what i mean, i think about this now that there are some companies that have said the plan for the first half of 2013 has been tempered by debt ceiling worries, fiscal cliff worries. We know there will be a little bit less money in the economy because even if we get a deal, we know tax rates are going up. So i wonder, even if a deal with done, i wonder how much umph the market it really gets from that knowing that were headed into just troubled waters for most of 2013, i would say. Theres this notion we have all this trillions of dollars on corporate Balance Sheets. And its just going to be unleashed. I wonder how much thats offset by the damage already being done. No, certainly, and that may be priced in just like you said. But i do think we will see a bump up here on the equity markets and some thin volume. Hopefully we see santa claus reality, but to speak specifically to be shorter investment, if you see some type of resolution, there will be a knee jerk reaction. Look at the s p level, 1460. We could go test that in two days, joe. Its not that far away from where were at right now. You just look at whats happening in apple, all the people that have gains there, theyre almost ignoring valuation and whats going to happen. It seems almost simple right now. Well, the apple trade is more like the new vix. Thats the barometer. But if i had a big gain, and if i just did the math and i had a big gain versus whatever it is, 20 versus 40 or whatever, do we even know where its going to go . Well, we have that conversation with clients all the time. You check that out, are you going on a 1. 6 tenyear yield right now . Its per flexing. But i think this trade will be on in the treasury pit behind me. Jeff, thanks. All right, joe. See you later. When we come back this morning, Kayla Tausche will join us on more with a story she first broke this weekend. Ingersollrand to break off its security business. But first, the ceremony was held in washington, d. C. This weekend. A candlelighting took place near the white house. Wooohooo. Hahaahahaha oh. There you go. Wooohooo. Hahaahahaha im gonna stand up to her no youre not. I know. You know ronny folks who save hundreds of dollars switching to geico sure are happy. How happy are they jimmy . 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Its kind of late that you had the scoop and he had to follow along with chat kayla already said. It was interesting. There was a story in the journal on friday which initially sparked me to write the story, basically, back in august there was a story saying he had basically reached a deal with the company to keep the firm intact. And my sources were saying that that wasnt necessarily exactly what was in the pipeline and that actually we could see as early as today an announcement that the company will spin off its Security Technology business. So this is the smallest whole business segment that ingersollrand has. It has been selling off pieces of that business. Looking at the filings, it has about 1. 5 billion in revenues for the trailing four quarters. Its still a relatively successful business. It makes things like locks, and, you know, steel door frames for things like hospitals and schools. And so it makes things like that. It hasnt done as well because of the choppy recovery. Those are technologies that companies and residents and consumers arent necessarily investing in right now. But that could all change with the Housing Market recovery. Stocks up this year so the rationale that peltz had originally for a full breakup doesnt hold as much water. But ingersoll is committed to returning capital shareholders. How big is the Overall Company in terms of revenue . Its about i would say probably 20 of the overall. Thats pretty significant. So it is a significant spinoff. Ingersoll is also expected to boost its share Buyback Program by about 2 billion, and also increase its dividends. So, an interesting story that we could see come out of the pipeline as early as today, maybe tomorrow. Proof that investors still have quite a bit of clout. Exactly. Exactly. What are you i was looking at a couple of stories. First of all, we talk about the fiscal cliff all the time. We know its a big deal. But maybe there are some signs that its an even bigger deal at this point. Theres a story on the money section of the usa today talking about investors peering over the cliff at this point. The markets have kind of hung in. Now there is this concern that if theres not some sort of movement, or some signs of movement pretty quickly, maybe the market also react. And then theres also the story on the front page of the wall street journal talking about how Consumer Spending is finally showing some signs of cracks. Now we know that when first we first saw things starting out right after thanksgiving it was pretty strong sales. Now the reports have been more mixed. On friday there was a preliminary measure of Consumer Sentiment from the university of michigan that showed a big drop after four months of gains. I cant help but wonder if thats because of all the coverage of the fiscal cliff and how much it plays into the news media. At this point maybe thats a sign for washington, guys, hurry up and get something done, because this really is starting to matter. Cant emergency until maybe just recently did anyone really said, wow, am i going to get junior this gift . Everything we talked about is how consumers were still hanging in. But its twothirds of the economy. A couple weeks ago, consumers and businesses alike werent really investing. They were only spending exactly what they had to to sort of get themselves to the end of the year and that any longerterm investment really wasnt happening. They were putting it on hold. Where are you on the aussie discharge . Oh, no. The ones who called up and crank called well, i do believe that, you know, they had to think that they werent going to get through. I made a prank call in my day and most of the time they find you out or hang up on you right away. Initially there was the piling on, and its the twitter sphere and really, its very sad that this individual no one could have known that this would be the outcome. Thats what i mean. People get crank calls and you think maybe theres goat to be a Little Something that was there before the crank call that would position it seemed that the palace wasnt even that angry over it. Prince charles made a joke about it. You know, Prince Charles you know and the corgis. And you call up, oh, shes got a tummy bug. I just think they big and theyre both crying, supposedly the female, the mel or whatever her name is, shes like suicidal now from what happened. And you would almost if you thought that you were responsible for that. Ive gone back and forth on it. You look at what howard stern pranks he plays, and any of those could go wrong at any time. You know. And the public craves that. Thats what gives ratings to these guys. So, anyway. I just wondered. All business all the time. Industrials to the fiscal cliff. Exactly. A quick break now. The mornings top stories when we return. Thats what well have. Plus the man of the hour, Erskine Bowles. Find out whether he thinks washington can avert economic disaster. The courage to rise above when skwaux box returns. Try running four. Fortunately weve got ink. It gives us 5x the rewards on our internet, phone charges and cable, plus at Office Supply stores. Rewards we put right back into our business. This is the only thing weve ever wanted to do and ink helps us do it. Make your mark with ink from chase. You wont take our future. Aids affects us all. Even babies. Chevron is working to stop mothertochild transmission. Our employees and their families are part of the fight. And were winning. At chevron nigeria, we havent had a reported case in 12 years. Aids is strong. Aids is strong. But we are stronger. And aids. Aids is going to lose. Aids is going to lose. Made a retirement plan, they considered all her assets, even those held elsewhere, giving her the confidence to pursue all her goals. When you want a Financial Advisor who sees the whole picture, turn to us. Wells fargo advisors. Cmon, michael get in the game [ male announcer ] dont have the hops for hoops with your buddies . Lost your appetite for romance . And your mood is on its way down. You might not just be getting older. You might have a treatable condition called low testosterone or low t. Millions of men, fortyfive or older, may have low t. So talk to your doctor about low t. Hey, michael [ male announcer ] and step out of the shadows. Hi how are you . [ male announcer ] learn more at isitlowt. Com. [ laughs ] hey can i still ship a gift in time for christmas . Yeah, sure you can. Great. Wheres your gift . Uh. Whew. [ male announcer ] break from the holiday stress. Ship Fedex Express by december 22nd for christmas delivery. Working the weekend to rise above. President obama getting together with House Speaker boehner. No word on progress. Just want to tell you good luck. Erskine bowles of the simpsonbowles commission is our guest. He wants both sides to get their act together fast. We cant have anyone freak out out there, okay . Weve got to keep our composure. Weve come too far. Theres too much to lose plus, reaction from California Republican congressman kevin mccarthy. This aint over yet. And who has the best shot at getting twinkies back on the Assembly Line . We have the latest on the hostess saga as squawk box begins right now. And good morning, welcome back to squawk box on cnbc im joe kernen along with becky quick. Erskine bowles. Erskine bowles will join us in just a minute of simpsonbowles, bowlessimpson, take your pick. Futures right now this morning have been relatively weaker all morning long. Things in europe, sort of setting the tone for the markets. Here are your morning headlines. The planned resignation of mario monti, the italian Prime Minister, is whats weighing on european markets this morning. Monti says hell step down as soon as the 2013 budget is approved, and that sent stocks lower and borrowing costs in italy and spain higher. As you just heard from kayla, we were in chairs, ingersollrand is planning to spin off its technology business. The Security Technology business in a deal that could be announced as soon as today. Kayla tausche of cnbc reports that the deal would follow pressure from activist investor and squawk box guest host nelson peltz. Kayla also says that the company will likely announce a 2 billion share Buyback Program, and a 30 dividend hike. And the newest James Bond Film skyfall remained at the top of the u. S. Box office this past weekend. It took in 11 million in north american ticket sales also became the highest grossing movie in the history of sony pictures. All right lets get straight to our newsmaker of the hour. He is one half of the simpsonbowles commission and he wants to fix the debt before the end of the year. Erskine bowles is the cofounder of the fix the Debt Campaign and cochair of the National Commission on fiscal responsibility and reform. And erskine it is a pleasure to have you with us this morning. Thank you, becky. Becky, can i ask you a question . You may. Was that a picture of joe running a santa claus race over there . Ahha wheres your button . Do you have your button on today, erskine . I have it on my coat. I didnt wear my coat. Ive got it on my coat. You wear it everywhere, dont you . I wear it everywhere. You seeing any of that, erskine . Look, i think the atmospherics are getting so much better. Weve kind of got down to the kabuki theater and moved on to, you know, dancing the tango with the guys. Any time you start to tango you got a chance. When weve talked to you in the past you said that theres probably about a 33 chance that we go over the fiscal cliff. You are sounding a little more optimistic. What do you think the odds are now . Oh, gosh, i probably, you know, i probably think its more like a 40 chance well likely get it done before the end of the year, probably 25 chance well get it done right after the end of the year, and then theres that horrible 35 chance that well still go over the cliff and have real chaos. But i think the chances of getting it done now are better. And i think thats and there have been so many people who have been citing you, erskine, as the authority on why their view is correct. Weve heard this from democrats. Weve heard it from republicans. Everybody is citing you as saying, see, this is why my plan is the best. Which is why id love to hear from you what you think about all the plans that are out there right now . My guess is you think that there needs to be more spending cuts that are put on the table. There needs to be. You know, we got to have revenue. We got to have spending cuts. This is arithmetic. Its not that hard to figure out. Look, im more encouraged. The president has, you know, he has made it clear hes drawn a hard, red line, if theres got to be some increases in rates. But the good news is hes turned right around and said, look, next year i will sit down with chairman bachus, chairman camp, and see if we can negotiate a tax package that will broaden the base, simplify the code, wipe out some of this inefficient, ineffective spending in the tax code, and use that money to reduce rates, and also hopefully reduce the deficit. And you know, the speaker has had, you know, rates on the i mean, revenue on the line for a long time. But again, if you look at his proposal carefully, theres no mention in there of premium support or block granting medicaid to the states or huge cuts in the income support programs and the president on the other hand said look im willing to talk about doing the right thing on these entitlement programs. Cuts there. So again the atmospherics among the two guys is better. And then if you look at the people on the outside, theyre republicans talking about rates. That will help the speaker. Democrats like senator durbin, very close to the president , talking about the fact that he can live with means testing in medicare. Thats number one. On senator mcconnells list of things hed like to see done. Nancy pelosi is even talking about, you know, its not about race. Its about revenue. Its about getting the money we need to reduce the deficit. So atmospherics are better. Weve got a chance. It sounds a lot better. We also try and figure out what the plan actually looks like just in terms of the ratio of spending cuts to tax increases or revenue increases. And thereve been a lot of people whove gone back and forth. It started out where we were probably closer to three to one back last summer. And i thought that was what simpsonbowles laid out. Then ive also seen something that was circulating last week, suggesting that the simpsonbowles plan really called for a onetoone ratio. Is that true . No. What we did is, we took current policy at that time. Current policy at that time and bush tax cuts from the top 2 expiring and we took that as the baseline, and then what we did is we reformed the tax code so we could broaden the base, simplify the code and we got about 1 trillion of new revenue coming in, and we got 3 trillion of spending cuts. That gave us our 4 trillion package. We didnt have any Monkey Business or any gimmicks in there like drawing down the troops in afghanistan and iraq. We had a real, 4 trillion. And the reason we had 4 trillion in there is thats not maximum amount we need to reduce the deficit over the next decade. It sure isnt the ideal amount. It is the bare bones minimum you need to red the deficit in order to stabilize the debt and get it on a downward path. Well, can i just clarify that because the number i was going back to was something that ezra klein of politico had written last week that ive seen reprinted in just about every newspaper across the country. He said cbtt calculation comes down to . 9 trillion in spending cuts, 2. 6 trillion in tax increases and thats 1. 1 to 1 in terms of that rash crow. Is that wrong . I dont know how he gets to that. Ive seen people, you know, count it as 1. 8 because they count what we had in the baseline before we reformed the tax code. You know, that might be fair to include, but again i think thats about as much as you could possibly say is in there. Im going to call it bowlessimpson. When youre here i call it bowlessimpson, and alan goes back to simpsonbowles. Does that make sense if you could use ert, erskine . No, we really dont like to call it bowlessimpson. Everything in washington identifies with initial, we better go with simpsonbowles. Who would ever characterize anything in washington as b. S. Thats such a stretch. You know, i wonder whats more anathema to the president or to the left, whether its the 2 rate, or whether its some of the entitlement cuts that are in bowlessimpson . And i think both are deal breakers, to really get that done. Do you see that differencely . You know, i think this i think there is a hard, red line on this raising rates on the top 2 . And i couldnt tell you if hes got collectability there or not but i would almost guarantee you that rates are going to go up for the people in the top 2 . But is the person erskine, that represented the you know, youre the bipartisan, you got alan and then you have you, do you make the case that broadening the base and lower rates with fewer deductions, is that the type of policy that would be good for growth . Because weve thrown i dont even think people believe that anymore, that theres any merit to the argument that if you go lower and broaden the base with fewer deductions and loopholes that thats actually progrowth. They seem to just cast that aside and say nah, were not interested in that. Look, i think a lot of people are still interested in it. You can just look at the math. You know, we netted 1. 3 trillion of income tax income coming in last year. About a trillion one from consumers, about 200 billion from businesses, and people always ask me, how can our nominal rates be so high and when net such relatively little amount of money . And its because we have that 1. 1 trillion of back door spending. If you wipe that out, you will have a much more efficient, much more effective, and most importantly, a much more globally competitive tax code than we have today. All the sacred cows in there, and the deductions, make people think that you need to go back on the 2 , you need to go back to 39. 6 and you need to get rid of a lot of deductions just to get to the numbers that the president wants. Well, i think tom coburn makes a good point there. Gives you much more money to work with in order to broaden the base and simplify the code and bring down rates. Are you, erskine, this is kind of a hard question, and you might be touchy about this, but and im going to be politically incorrect because im using the term reservation. I guess its a native american allusion. Are you on the reservation with this white house . Or are you off the reservation . Because youve criticized them for not immediately being more serious about adopting the findings of their own commission. You feel like you get as much respect . Do they listen to you . All can you get through . Will they say yeah, put them right through . Oh, yeah, i talk to jack frequently, i talk to the president several times. You know, we dont agree on everything. But, you know, again, you know, i go back to giving these guys a lot of credit. Theyre the ones that appointed this commission, theyre the ones that gave people like me and allen a voice. Then they told you to shut up. R well, they never tell me to shut up. But we dont agree. And you know, im not trying to get a job anywhere. Im not running for any kind of office. And so what i can do is say what i really believe, and what we need to do for this country. You should get a job. It should be treasury secretary. No. No, you should. Im down here in north carolina. You should. I bet the markets would go up 1,000 points if that happens. Might be good for me. But i dont want to see that happen. Look, i feel like that old saying, i enjoyed about all i could stand in washington. Yeah. All the b. S. In washington. Thats right. But we got all the s. B. You know, erskine, when you look at what the odds are, the argument in the past has always been, i needed to talk about this a little earlier this morning, the idea that we will get some sort of higher rates now. The argument from the republicans has been if we agree to higher tax cuts now and agree to spending cuts later were going to get the short end of the stick because that never happens. What do you think is the fair way they should be thinking about this, and a realistic way . I think if they agree to higher rates now in some form that youll see these others fall into place really quickly. The president has signaled hes prepared to do some things on entitlement cuts now. I could envision some that he would do. You saw, as example, i dont think durbin would have been out there saying that he could live with Something Like means testing if he wasnt serious about it. Mmhmm. I would like to see, you know, id like to see something done with this dpi. I think thats something that could be done before the end of the year. I think age is probably harder to get done before the end of the year. You mean pushing retirement out to years later, maybe . Yeah, yeah. And having the right kind of protections in there for people who have these backbreaking jobs. Right. Yeah, as we recommended in our plan. Thats a little harder to do with Supreme Court rulings, and the availability of insurance from some of these exchanges that may or may not exist in the states. You also had, yesterday, senator corker making the rounds on the sunday talk shows, too, and his statement was this idea that he could see going ahead and giving on tax rates now, as a republican thats a big deal for him to break ranks and say that. But he also says that weve got the debt ceiling talks that are coming and we should hold their feet to the fire with that in terms of getting the spending cuts we want. But the president s first plan laid out the entire idea as the debt ceiling has to get done with this now, too. Can you see a deal getting done and then having the debt talks coming up, or the debt ceiling talks coming up about six weeks down the road . Oh, boy, i tell you what, if i were to what i care about is reducing these deficits. I think if we do that, the markets will look at it, and not only will we have explosive growth in the markets, well have explosive growth in this country. The only thing standing between america, i think, and really growth is having a longterm fiscal plan. What i would like to see, and i really like bob corker, he is a great guy, hes the kind of person we need in the u. S. Senate, but id like to see some of these cuts locked in now, and id like to see some of this entitlement reform locked in today. I dont want to see all of that wait for six weeks. Hmm. Whats the right level for dividends and Capital Gains, do you think . Should they be lower than ordinary income . Look, i think what you will see is i think theyll both probably go to 20 would be my guess. I dont think youll see dive dinds go back to ordinary income rates. Is that okay . Thats part of bowlessimpson or simpsonbowles, put it back at ordinary rates. Whats ordinary rates coming down to . We brought ordinary rates down to 23 . You know, thats a horse of a different color. Ordinary rates are going to be is it 23 or 28 . Thats another thing we always hear. Well, what we put out is what the zero option was, which got it down to 8 of 70,000. 14 up to 210,000. And a maximum rate of 23 . We also put out an alternative proposal which shows what it actually costs where we kept the earned income tax credit, the child tax credit, the mortgage Interest Deduction and on the charitable deduction and on the health care deduction, and that we took rates to 12 of 70,000. 22 up to 210,000. And a maximum rate of 28 . It was kind of just to show people that these deductions arent free. You might not have been off the reservation. But theyre watching now. You are off now, my friend. You are so gone. Erskine who . Anyway, we i cant believe that could actually be done. Weve heard everyone say that thats just theres no way that the math has to be so fuzzy that, you know, that two plus two would have to equal eight or something to do it that way. Joe, mathematically it can be done. The hard thing is can you really get these guys thats what the president worries about. Will they actually get rid of these expenditures . Thats why he wants to raise rates now. He wants to lock that revenue in, make sure its actually there and then hes willing to talk about, you know, how we can reform the tax code. But i think he justifiably is worried, will these members of the house and senate actually do something about charitable gifts . Will they do something about the mortgage you can knowledimagine that house guys, if someone said were going to have the obama tax rates go into effect, 39. 6, all these things that are happening, and if you had, you know, the president say let me do this now and well talk to you later, would you if you were a house republican, would you sit there and say, okay, go ahead and do that, and then i mean thats thank you, sir, may i have another . Theyll never get back down. But you know, i actually dont agree with that. I really believe that if, you know, if they can get that revenue base he gets by raising rates now, that you could actually do Something Like that we recommended, you know, depending on what politically bract cal to get done, what we can actually eliminate. But you can eliminate a lot of these tax expenditures, broaden the base, simplify the code and bring down ritts. Who in the base would go for that . That would be have you heard anyone in the president s base that would go for that . Yeah, they would. Not to say its not difficult, its not hard. We proved that people like dick durbin would move forward. I know. Thats great. I know. Durbin has risen above. Hes risen above. He really has. Yeah. We thank you very much. Thank you for having me. I enjoyed it. We appreciate your helping us navigate what is an incredibly difficult thing for us to understand but you make it seem very, very easy. Thank you, erskine. Okay. Good. Stay at it. Lets rise above. Thanks. Using 23 from now. Thats zeroing out everything. Earned income credit, the im going to stay 23, and im going to have a sound bite. You have questions, or comments, about kayla, youre back . Shes talking twinkies. Oh, my god. Shes like, wow. Kaylas talking twinkies now. Anything you see on squawk tweet us squawk cnbc is our handle. Still to come this morning, twinkies could be one step closer to finding a buyer today. The same could be true for devil dogs, ding dongs, funny bones. Orange flavored cup cakes. Some of your other favorite snack cakes. Snow balls. Plus yes, theres even an app for that. For that. The vatican is releasing the pope app. Oh, my gosh. Hes just on twitter, too. He did. Its available free from the apple store and offers alerts of pending homilies and video footage from web cams around the holy see. Really getting hits. The app is part of the vaticans attempt to embrace new media, along with a twitter account, a youtube handle and a website. [ male announcer ] citi turns 200 this year. In that time thereve been some good days. And some difficult ones. But, through it all, weve persevered, supporting some of the biggest ideas in modern history. So why should our anniversary matter to you . Because for 200 years, weve been helping ideas move from ambition to achievement. And the next great idea could be yours. Today marks a key deadline in the hostess bankruptcy kag ga. Cnbcs Kayla Tausche joins us now. Will we be able to buy twinkies forever . Do you know that yet . You actually can today is the deadline to submit your interests. So ill send you the theyre not going away. Someones going to buy them. Right. That is the hope at this point. Based on the level of interest, its hard to see how that wouldnt happen. Im told 160 parties have been in touch with hostess over potential bids for separate brands that a fullblown going out of business sale is being run to sell literally everything but the kitchen sink at hostess. Even extra inventory of flour and chocolate. Thats up for grabs, too, if you want that. Today is the ked line to submit initial bids. While everyone focuses on twinkie, its interesting, one of the biggest priority is selling the bread brands, wonder bred and merita. Wonder breads revenue is 500 million. It represents a bulk of overall hostess sales. In total the brands bring in about 2. Billion a year. Since the plants have been idle, there are no longer concerns. In a court hearing, advisers thought the sale may fetch about 50 of revenue so roughly 1 billion. Sources say for all the interested parties they only expect about two dozen real bids to emerge. Those are expected to be cabled by power house snack food companies. Also interest has been said to be strong from regional bakeries like chicagos alpha bakering, and walmart and kroger could bid. And financial sponsors. The difference between 150 interested parties and 12 or 24 real bids is evidenced by Something Like this letter. You could zoom in on this really quickly. This is from a guy named don sheridan in wellesley, massachusetts. He wrote this letter in cursive and submitted it with the Court Last Week to buy all of hostess. Theres hope, joe. Thank you. When we come back, barrons top ten stop picks for 2013. And then run kevin mccarthy. Well ask if hes ready to accept the call to rise above. 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And new york mayor Michael Bloomberg is reportedly weighing a bid for the Financial Times group, thats according to the new york times. Analysts have been speculating that owner pearson plc will put the f. T. Up for sale. The news is out on ingersoll. Oh, on the ingersoll . On the ingersoll deal. We thought wed be hearing about that this morning, after we saw it over the weekend. And we said kayla reporting on it quite a bit this morning. Enhance shareholder value and Company Value through two major initiatives, taxfree spinoff of the security business. And 2 billion share repurchase. Looks like all the details are basically what weve heard but it is currently confirmed by the company. Bar rons named its top ten picks for 2013. If you want to know if you should pay any attention to it the magazines ten stocks for 2012 have outpaced the market by 4 Percentage Points gaining an average of 17 . Now to the picks for 2013. There you go. Apple, jpmorgan, royal dutch shell, barnes noble. Blackrock, general dynamics. Marathon, novartis, viacom and western digital. Might want to flip that so you people can see what i just said. Marathon, novartis, royal dutch, viacom and western digital. Five on each page. The fiscal cliff dominated the sunday talk shows. Senator dick durbin on meet the press yesterday saying no deal on the debt without a tax hike on the wealthy. I can tell you i dont want to do it, the president doesnt want to do it but we need to solve the problem. We cannot allow their reckless position to drive this economy into another recession. And senator bob corker argues it might be better to agree with what the president wants to do now on taxes, and then fight later on spending. If we were to pass, for instance, raising the top two rates and thats it, all of a sudden we do have the leverage of the debt ceiling and we havent given that up. Joining us now House Majority whip kevin mccarthy. Not everybody, i dont know, depends on where youre sitting i guess, congressman, the wall street journal says republicans shouldnt be negotiating with themselves. They ought to be talking to spoorker boehner. Is it helpful . Is it helpful what the others are saying . Look, is raising the rates going to solve the problem . The answer is no. The best way to look is were two months into this new fiscal year and if you look at the numbers that come back, were already 292 billion in a deficit for the year. Now, there are some good news inside those numbers. Do you realize that revenues have increased by 10 . Thats 30 billion. Thats 1 billion less than you get if you raise the rates in the first year. You only get 31 billion. But you know what the sad news is . Spending has increased by 16 87 some billion dollars. The problem is spending when you look at this. And for those who want to just give the president more money to continue the spending, i think thats wrong. Thats not rising before. Weve got to solve this overall problem. Thats why right after the election, we proposed a plan to the president , we took three weeks to respond back to it. Ive been frustrated with this administration. Every action ive seen from them, they just want a slow walk us off the cliff because they think theyll blame the republicans. Weve been willing to negotiate and weve been putting our plans out. But i agree, you cannot negotiate with yourself. Because nothing comes to the end. Do you have you spoken to Speaker Boehner since he had his meeting with the president yesterday . Im going to talk to him a little later today. I knew he was having the meeting. I know there wasnt staff in the room so well see how that meeting went. But thats the first. You have no idea . You havent heard anything from anyone about what was discussed, or what the tone was . Ive heard some things, but can you tell me . Oh, can i tell you, sure . I wasnt in the room. Weve just had a lot of people proposing, and im just wondering, i asked Erskine Bowles whether he thought the house would go along with it, give the president all of the tax increases he wants, and then well be in a position to talk about cutting spending later. Is there any way that Tea Party House guys are going to go for that . And what does that mean if they dont go for it . How are we ever going to get a deal . Isnt that how we got in this mess in the first place . Were always going to talk about the tough stuff, the spending cuts later . We spend too much now. That is our challenge. When you really look at the numbers and people argue why dont you go back to the clinton time . The real core of what clinton had was they cut spending. Their percentage of spending to gdp was so much less, and thats where they got out of it. That agreement in 97 cut taxes and cut spending, which spurred growth. And we need a progrowth economy. Thats how were going to get out of this mess. What were talking about today, of just raising the taxes, does not solve the problem. I dont see it passing the house. Now, republicans have not sat back. Weve put revenue on the table. But the president has always said it has to be a balanced approach. If you can choose, if you could choose, whats i mean weve heard weve heard from their side, from the other side, and im talking about from your viewpoint, secretary geithner. Yes. Has said, we if we dont get the 2 if we dont get the rise on rates on the 2 well go over the fiscal cliff. In your view would it be better to go over the fiscal cliff than to get the back to the clinton rates on the high end . I think the best thing we dont go over the fiscal cliff. You do . Youd rather do some kind of deal . Yes, id rather thats why we proposed from right after the election. Everything weve heard from the other side has been silent until yesterday like we said, no way, unless we go to 39. 6 on the top 2 . Would you vote no to that and go over the cliff . Look, hes not im not going to negotiate right here on the tv. Id rather sit and negotiate with them. But the one thing i will tell you, what theyre asking for is revenue. Republicans have put revenue on the table. The president s own words a year ago in 2011 said he could get 1. 2 without raising any taxes. And think for a moment, if you close loopholes you get a fairer process. For those who dont have lobbyists, or highpriced attorneys or accountants, they get a very fair system. And no longer are we making an investment based upon what the irs code is, its based upon what the economics should be. That is a fairer system for all americans. It, to me, is more efficient. Thats a better place to go. It gets you what youre asking when you say taxes because youre saying revenues from a standpoint in a more efficient manner. Most all economists agree. It does less destruction to the economy. But the most important thing for anybody to look at, we spend so much time on revenue, is what is the spending . Just like the first two months. Revenues gone up 10 with us doing nothing. Spending has gone up 16 . All right. One thing that i knew that 800 billion number, i knew that sounded familiar. I wouldnt really quite place it. So thats ten years of raising the rates on the high end, but we got we spent that with one little stimulus plan, didnt we . Just boom. Wasnt that 800 billion. Thats ten years of the high end and we spent that in the first year of his Administration Like it was i mean that was gone before i mean i wish we had that back then we wouldnt need this 800 billion. Exactly. And look at this. The president s proposal, we get 31 billion from the high end this year but he proposes a 50 billion new stimulus package next year, as well. He will spend more. Hes asking for more taxes to spend more. That will get us in a worse situation. The best thing to do is end the uncertainty, do what republicans said, wed extend all the rates, there is more money than in cash on hand than at any time in 50 years in america. We end that uncertainty wed have the biggest stimulus with his own money from government. Congressmen there are already people in your own Party Breaking ranks, including bob corker saying lets give in. If you have to give on one to get the other, would you agree to that . Yeah, but what im hearing corker say, hes just going to give on one and hope for the other some other day. I think, in a real negotiation, you get a standpoint where the president says he wants to balance the budget. But would you give on one if you could get on the other for that . Well, corkers not getting the others. I think no, but would you . If you could i would give this president revenue. Not a tax increase, revenue. What if he needs a trillion dollars like we just heard from Erskine Bowles. He wants a trill you put 800. You dont know that until he would get in a room and negotiate. Im more than willing to sit down and negotiate with him. But im going to find one that solves the problem to be able to rise above just as you say, but i want to solve the problem. I dont want to be back here next year or ten years from now getting the same question. I think this country is better than that. Lets do what is right, now. And lets not play political games. Lets not do this by polling. Because thats what got us in the place. Lets stick to our principles and solve the problem. Youre out in california. Youre at ground zero from what can happen. Okay, look at california. I ask you this question. Should any american pay more than half of their income to government . So you go to 39 . Right . Add obama care. Then add 13. 8 in california. And youre a small business, running as an s corporation, should you really pay higher than 50 of income into government . Thats before any sales tax. Thats before paying the cable tax to watch this show. Thats before paying the water tax when you take a shower. Think about that. And people want to just give more . And hope spending cuts will come at some later today . Congressman, we hear you. We appreciate it. And thanks for appearing this morning. Thanks for having mean okay. When we come back, the headline number on fridays jobs report shows better than expected payroll gains. But there were sceigns of weakns in the Participation Rate and downward provisions to earlier reports. Steve liesman joins us next with more on how economists are reacting to those numbers. Tomorrow, squawk box is kicking off a special day of fiscal cliff coverage. Rise above mission critical. Becky quick and jim cramer, live in washington. 33 special guests, grover norquist, congressman jim hencer link, senators from both sides of the aisle, corker, warner, johnson, conrad reaching Common Ground on the debt deal. To the best vacation spot on earth. all the gulf it doesnt matter which of our great states folks visit. Mississippi, alabama, louisiana or florida, theyre gonna love it. Shaul, your alabama hospitality is incredible. Thanks, karen. Love your mississippi outdoors. I vote for your florida beaches, dawn. Bill, this louisiana seafood is delicious. Were having such a great year on the gulf, weve decided to put aside our rivalry. Now is the perfect time to visit anyone of our states. The beaches and waters couldnt be more beautiful. Take a boat ride, go fishing or just lay in the sun. Weve got coastline to explore and wildlife to photograph. And theres world class dining with our world famous seafood. So for a great vacation this year, come to the gulf. Its all fabulous but i give florida the edge. Right after mississippi. You mean alabama. Say louisiana or theres no dessert. This invitation is brought to you by bp and all of us who call the gulf home. Customer erin swenson bought so, im happy. Today. Sales go up. Im happy. It went out today. Im happy. What if shes not home . together she wont be happy. Use ups she can get a text alert, reroute. Even reschedule her package. Its ups my choice. Are you happy . Im happy. Im happy. Im happy. Im happy. Im happy. Happy. Happy. Happy. Happy. together happy. I love logistics. Welcome back. Futures are now down where they were earlier. Making headlines, president obamas Inauguration Committee is accepting corporate donations to help fund the parade and other events associated with the ceremony, which will take place on january 21st of next year. The move is a shift for obama, who didnt accept corporate donations for his first inauguration in 2009. The change comes after tappedout democratic donors spent huge sums helping him get reelected. And General Motors wants to draw more buyers into its show room so the automaker is doubling Cash Incentives and sweetening lease terms on some vehicles, including the malibu, the cruz, and the silverado. Also gmc pickup trucks. The goal to reduce inventory of unsold cars and pickups. If you want to head home for the holidays you better book soon. The website fare compare warns you should expect to add 10 a day to airfare booked after the second week of december. And prices are forecast to rise sharply on the 19th. The cheapest days to fly, christmas, and new years day. Hmm. Most expensive are the sundays before those holidays. Those payroll numbers for november came in stronger than expected. Joining us right now with more on how economists are viewing fridays jobs report, especially when it comes to the upcoming fed meeting this week is our senior economics reporter Steve Liesman. Steve, good morning. Good morning, becky. Thanks. The stronger than expected jobs were not making believers of many economists. They continue to expect weak Fourth Quarter growth after that number came in at 146,000 with an expectation of around 85,000. Fourth quarter growth estimates range from a low of below a half a point, 0. 4 . That coming from morgan stanley. The high from what i could gather this morning, 1. 5 at jpmorgan. Remember that Third Quarter growth was 2. 7 pfrs. A lot of this, though, is going to be inventories. Suggesting the growth back drop a little bit stronger than what the number might imply. But the declining Unemployment Rate fell 0. 2 to 7. 7 complicates the job for the fed which is expected to place operation twist, where it sells shortterm securities and buys longterm ones, with just outright asset purchases on the long end. Heres the fed forecast for the Fourth Quarter. Notice the actual there, at 7. 7 . Its now at the forecast for the end of this year,. 1 . Its now averaging you can see there on the left 7. 8 and its just above the level forecast for 2013 already. The quality for the fed is how much of the decline to believe. Jobs have been growing. Thats the blue line. And Unemployment Rate falling. But the Participation Rate, thats the green line, thats the percentage of americans counting themselves as part of the workforce, thats been on decline. In part due to aging in the upon lags, but also because of the back drop of the economy with americans being discouraged if theyll ever find jobs. Another factor this month, economists think people might have counted themselves out because of the hurricane. Still, Jim Osullivan finds the Unemployment Rate for real, at least the decline, and says the fed is going to have a tough time holding the line on the pledge to keep rates low through mid 2015. Lets see if we have that quote . The likelihood that officials will be able to or will need to keep the funds rate near zero for almost three more years has declined significantly. Were going to have the official Market Forecast tomorrow in the cnbc fed survey. I didnt look at it. Because, i was afraid, joe and becky were going to quiz me on it and id have to give it away. Well get a new round of fed forecasts from the fed along with Monetary Policy statement wednesday. The trouble with the Unemployment Rate underscores why, by the way, is the fed is having such a hard time figuring out whether to use economic rolls like the Unemployment Rate im going to have a big conference with you. On what . On what you just said. I read a journal editorial over the weekend and i want you to explain this to me. In light of phil lebeaus report people not finding jobs. Yeah. Because theyre looking for people to work for 16 an hour and a lot of people are choosing not to. 16 an hour because they can make you sent me a good piece on that. Right. The journals point was, okay, we have a Participation Rate when the recession ended it was 65. 7. Weve been adding jobs ever since, its gone from 65. 7 to 63. 6. That, unless you really assign a lot to baby boomers retiring that doesnt its illogical that as jobs are being added the jrnlg points out if you add up food stamps, Unemployment Insurance, and youve seen the studies that even romer and others did about extending alan krueger. About extending unemployment and how that is detrimental to the jobless rate, if you add food stamps, which are way out you add Unemployment Insurance and disability which has skyrocketed, disability payments and then you take, you got a job offering you 16 an hour, and you got this social safety net paying you 30,000 a year, if you decide to work you got to drive to work. That costs you money. You got to get child care. You got all these other things you got to do to leave the house. Id be discouraged, too, i would stay home for 30,000 a year in government subsidies rather than go work running on, sweating, running some manufacturing facility. Id rather stay at home and thats a problem. Is that true . As far as i know the Economic Research that ive seen suggests that the Unemployment Rate may be a half a quarter to a full point higher on the other end, because of jobless claims. Thats the first thing i see. The second thing is, joe, i dont think everybody gets 30,000. And the piece you sent, which i thought was really interesting, was this idea that it allows you, at least for awhile, to try to find a similar job. If youre a guy who made 30 an hour, that you can at least not take the first job that comes along at 15 an hour. How long is that . They keep extending it . I think its been out for as long as two years now. Do you believe im very surprised by that. Watching these numbers for a long time. They go no one even is applying for the job. For some of those jobs. So heres the question, joe. If netnet you make more or at least you are you can get by on the sub sid dwi, and you can keep looking for work at your current or around the current thing, you should try it for awhile. Now, im in favor of the safety net being out there for awhile. But you generally have to draw it away. With Unemployment Insurance now what alan kruegers work showed is that as you near the end of your term of Unemployment Insurance, your job search increases. Because you get more frantic. You get a little more frantic and youre more likely joe, peoples standard of living and their wages are sticky. And when you mack that point, which i very much appreciate, ask yourself the question, your own willingness to go to work for less than you make right now. But i think its an interesting point because theyre also talking about you dont have a choice. The jobless benefits right now. The big you know it goes back to american enterprise, earn success, doesnt even matter how much money you make, if youre earning your success learn helplessness where youre remember the person from africa who said thank god were not giving aid to africa anymore so we can do this ourselves . When we make moral choices to give people unemployment it may not be the most economic choices. You dont want to be something that is insent viced. Look at all the eurobors. We dont have trhat system. Thats supposedly Something Like libor. I dont want to im not boring european people. Eurobor. Coming up. So, this board gives me rates for progressive direct and other Car Insurance companies . Yes. But youre progressive, and theyre them. Yes. But theyre here. Yes. Are you. . There . Yes. No. Are you them . Im me. But those rates are for. Them. So them are here. Yes you want to run through it again . No, im good. You got it . Yes. Rates for us and them now thats progressive. Call or click today. How theyll live tomorrow. For more than 116 years, Ameriprise Financial has worked for their clients futures. Helping millions of americans retire on their terms. When they want. Where they want. Doing what they want. Ameriprise. The strength of a leader in retirement planning. The heart of 10,000 advisors working with you onetoone. Together for your future. That works. If you request, they play. Lets look at some stocks to watch. Ingersoll has announced what weve been talking about with kayla over the weekend. Spin off of the Security Technology business. The unit is the smallest of the Business Segments but it announced a 2 billion Share Buyback and a 31 dividend increase. Information Management Solutions provider, intermeck is being bought by honeywell. About a 25 premium. Apple, Jefferies Jefferies cutting its price target to 800 from 900. So, you know, i dont know if you can use that in your analysis of what to do with it but jefferies no longer thinks that it should be 900. Now looking at 800. I dont know, i guess finally figured out what the quote was and hid it into his machine and said wait a minute, 900 . Lets go to 800. And expedia is among the latest batch of companies to declare a special dividend in advance of the end of the year. Also, Washington Post accelerating all its 2013 dividends. Big supporter of the president , but not above paying their dividends to avoid the taxes. When we come back, the path to fiscal compromise. South dakota senator boone thune is making his way to the squawk set. Also the ceo of Starwood Hotels on the impact to his business if we actually go off the viscal cliff. You wont take my life. You wont take our future. Aids affects us all. Even babies. Chevron is working to stop mothertochild transmission. Our employees and their families are part of the fight. And were winning. At chevron nigeria, we havent had a reported case in 12 years. Aids is strong. Aids is strong. But we are stronger. And aids. Aids is going to lose. Aids is going to lose. Aids is going to lose. Aids is going to lose. Why they have a raise your rate cd. Tonight our guest, thomas sargent. Nobel laureate in economics, and one of the most cited economists in the world. Professor sargent, can you tell me what cd rates will be in two years . No. If he cant, no one can. Thats why ally has a raise your rate cd. Ally bank. Your money needs an ally. Can i help you . I heard you guys can ship ground for less than the ups store. Thats right. Ive learned the only way to get a holiday deal is to camp out. You know weve been open all night. Is this a trick to get my spot . [ male announcer ] break from the holiday stress. Save on ground shipping at fedex office. Standoff on the fiscal cliff. House Speaker Boehner meeting with president obama at the white house. But what will it take to get a compromise deal . Republican senator john thune will be our guest host for the hour. Plus Starwood Hotel ceo Frits Van Paaschen on the effects of the fiscal cliff and avoiding the european recovery model. We know big ben. Parliament. The third hour of squawk box begins right now. Welcome back to squawk box here on cnbc. First in business worldwide im joe kernen along with becky quick. Andrew ross sorkin is off today. We have a big lineup this hour. Sitting in andrews seat our guest host, senator john thune. He is with us for the hour to talk about the fiscal cliff. Talk about jobs. And a lot more. Were also going to speak to the president of Telemundo Media. Emilio row mano. Were going to convene an economic summit to tackle americas debt crisis and outline growth scenarios for 2013. In addition to solving our budget problems and the fiscal cliff, were also going to figure out how it affects the Hotel Industry with Starwoods Hotel ceo Frits Van Paaschen who will join us on set. First, though, is that mcdonalds . Yeah, mcdonalds blew expectations out of the water. This is the opposite 6 the report that we got last time. The exact opposite . Yeah, the exact opposite. They beat on every level. In their global comps, they came up 2. 4 . Street was looking for down 0. 1 . What . In the u. S. They were up 2. 5 versus the down 0. 8 that the street was expecting. In europe they were up by 1. 4 . Street was looking for up by 0. 1 . And in asia pacific, middle east and africa they were up by 0. 6 versus the drop of 0. 4 . Now, digging through this release very quickly, theres a weird language that they have in here. They talk about how the number of week days and weekend days can impact reported comp store sales. In november of 2012, they say that the calendar shift adjusted consisted of one less tuesday and wednesday and one more thursday and friday. I wonder if they sell a lot more mcdonalds on fridays. I remember we used to go there as kids because you could get the fish fry on fridays. And analysts cant figure that out. I dont know how were off by this much if its not that. Did our guy don his names don . He said its a destination for more than 69 million customers every day because we offer greattasting, high quality food. All true. Now heres the important part about what he says. Remember last time he said they had too many things on the dollar menu and they were going to shift some of those things. He said we are strengthening our focus on the global priorities that are most impact 68 to our customers, optimizing our menu and broadening accessibility to our brands and business, whatever that means. I think what it means is theyve been moving more things off the dollar menu to get people to come in and get a few things on the dollar menu, a few on the regular bryce. Maybe thats helped them out. But this is a huge shift from where we were just a month ago. It is. Amazing. So again that dow component is indicated higher on that news. We thought it was up by about 2 . In europe, shares have been lower in early trade this morning. Some of the reasons for this are political uncertainty. In italy you had the Prime Minister mario monti announcing that hes going to be stepping down after his countrys 2013 budget is approved. And before the end of his term. That decision comes after the party of former foreign minister Silvio Berlusconi withdrew its support for montis government last week. Berlusconi has indicated he will run for leadership again. The major european averages at this hour, you can see some red arrows still but some moderate declines. Particularly the ftse which is only down by about a tenth of a percent. In france the cac is down 0. 3 . And in germany the dax is down 4. 5 tenths of a percent. U. S. Equities have been dow. A little improvement on the dow futures because of mcdonalds. S p futures off by 3. 5 and the nasdaq down by just over seven points. Overseas in asia you did see some green arrows. Part of this was because of news on sunday which Shows Positive news with some of the numbers theyve been watching in the chinese economy. The shanghai composite ended up by about 1 . In korea, kospi up by 1. 5 . Also ingersollrand is spending off its Security Technology business and announcing a 2 billion share Buyback Program and a 31 hike for the dividends. Our Kayla Tausche first reported that story this week. The deal comes after activist investor nelson peltz to try to break up the company. Some significant moves. The stock is up by about 1. 8 . President obama and Speaker Boehner meeting at the white house yesterday to talk about the fiscal cliff. Neither commenting about the meeting. Earlier this morning we spoke to Erskine Bowles, who is cochairman of the president s deficit commission. Heres what he had to say about the progress of the fiscal cliff negotiation. I think the atmospherics are getting so much better. Weve kind of gotten out of the kabuki theater and weve gone to, you know, dancing the tango with, you know, those two guys. And any time you start to tango, you got a chance. 40 chance well actually get it done before the end of the year. Probably a 25 chance well get it done right after the end of the year. And then theres that horrible 35 chance that well still go over the cliff and have pure chaos. But i think the chances of getting it done now are better. And i think thats whats key. Have indicated a willingness to compromise. Whats interesting there is he did say 40 , thats a little better, that the odds are we get something solved and dont go over the cliff. But hes still looking at a 1 in 3 shot that we end up going off the cliff. So its that part in the middle thats kind of evened out a little bit. Lets get to our guest host for more on the fiscal cliff negotiations. Joining us now for the rest of the show, senator john thune, chairman of the Senate Republican kovrns conference. A member of the budget, commerce and finance committees and the third ranking republican in the senate. And, tall, great suit. Youre like 62, arent you . 61 . Actually more like 64. Youre sitting down. Im sitting down. Didnt want to give you credit for those extra anyway. You cut i like the cut of this mans jib. Anyway, senator, you have made the point that the debt ceiling is another place where the gop might have some leverage. You heard senator corker. Does that speak to you . Does that make sense to you to give on the 2 , and then use the debt ceiling to really extract some entitlement cuts . Ideally, joe, i think what wed like to see is a deal right now that includes a restructuring entitlement programs. Thats what drives federal spending. We cant solve this on the revenue side. And, you know, weve got colleagues right now that are san diegoing out, making some comments about various positions. The bottom line is they all agree on one thing, that is that in order to get the countrys fiscal trajectory back on track, to achieve some sort of fiscal solvency for the future its got to involve dealing with entitlement programs, and so far thats been the thing that the president has been unwilling to come you think he would, if he did gave him what he wanted now, do you think he would be willing to do that in good faith after the first of the year . Well, i would like to think that. But so far, at least, all weve seen is this rhetoric about taxes. Hes even gone double where he was during the campaign. He said 800 billion in revenues. Now hes talking about 1. 6 trillion in tax increases. The president seems to have an obsession the raises taxes. Anybody who studies this knows full well that that doesnt solve the problem. Even the 800 billion, which would include income tax rate increases on marginal income tax, as well as Capital Gains and dividends, gets you 800 billion which funds the government for about a week. Do you believe, you believe secretary geithner when he said that if they dont get 39. 6 on the top 2 that theyll go over the cliff . Do you believe that . Well, you know, i think that i 40e7 thats all bluffing. It would be a big mistake in our view to go over the cliff. You look at what all the economists are saying didnt sound like a bluff. I saw the interview with steve where he said absolutely were willing to do it. You dont hear republicans talking liberally about going over the cliff. If your choice is to raise the to go back to the clinton rates on the top 2 , either do that or go over the cliff, would you go over the cliff or would you do that . Well, i think it happens either way. I would prefer not going over the cliff. I think thats a big mistake. If you look at what that means so you say, okay, then youd vote for something that would i would vote for something that would address the issue and solve the problem. Which really is, weve got restructure entitlement programs. Which is why its so important that the president come to the table with a plan. Republicans are at the table saying were putting revenues on the table, which is a hard place to go for most republicans. But the president hasnt met us there with what he knows and what we know ultimately has to be fixed. You get to 1. 2 trillion in revenues if it meant you got the spending cuts you were after right thats going to be a really hard sell. I think that the 800 billion number is something that the house republicans, the leadership, put forward last week, as you know. That represents, i think, for most republicans, something that is sort of a high parameter. And thats assuming, again, that you arent raising rates, that youre doing it through some sort of limitation on deductions. Thats a killer point for you, though . It sounds like the president s bottom line is we are raising rates, at least on the wealthiest americans. That your line in the sand, as well . I think our line in the sand is, a deal that fixes the problem. And so most republicans are going to be very reluctant but the reason republicans dont believe rate increases is the way to do this is because thats what gets hardest to Small Businesses. The joint committee on taxation says its going to be a million Small Businesses who employ 25 of the workforce that get hit by this rate increase. And if youre talking about jobs and the economy, which is what the president said in his postelection News Conference he wanted to be his number one priority, the opposite thing to do would be to raise taxes on the people who create jobs. We just fuddly believe this is about spending. Its not about taxes. The president obviously believes its about taxes and these rate increases are really important to him for some reason. But we think theres a way you can get revenue into the equation, but do it, but you got to have youve got to have something. The president has a bigger bully pulpit. He has already laid out what he wants to do, and polls seem to indicate that most americans are okay raising rates on only those who make 250,000 or 500,000 or more. Because its not going to affect most of them. He has managed to lay this out as something where, if the republicans dont go along with his plan, they will be responsible for raising taxes on all americans when we go over the fiscal cliff. How do you avoid i think that thats one of the reasons that the president and his people like to unite. Congressional democrats are saying well go over the cliff. They get the policy they want, which is higher taxes, moren inny to spend, defense cuts and they think that the political plan gets put on the republicans. Check mate. What do you do . If you ask the question differently, people say yeah we want to raise taxes on rich people. If you pose it as do we want to raise taxes on Small Businesses or raise taxes on or do something on deductions, people would much rather do something on deductions than raise rates on Small Businesses. Again he has a bigger bully pulpit so he gets to decide how this really gets played out for a large part in the american public. How do you counter that . I think hes got the bully pulpit and their rhetoric that its concerning in my view that theyre talking about going over the fiscal cliff. But the president right now, thats where the line hes drawn in the sand, we hope that at least is going to draw a line in the sand, that hell come with capital and im glad to hear discussions with Speaker Boehner and talk about a balanced plan, which hes always said he wants. But to have a balanced plan youve got to have these entitlement programs but whats the balance . Is it one in one to cuts . One in three . The president himself kourg the election said 2 1 2 to one. Now his proposal last week has 1. 6 trillion in tax increases, 400 billion in spending cuts and another 200 billion in spending, plus an unlimited ability to borrow and raise the debt limit youd be okay with 2 1 2 to 1 . The bowlessimpson was about 3 to 1. Frankly i dont think its a revenue problem. I dont want to go over revenues. But you know, if we could get a deal that would put the country on a sound fiscal footing and change this trajectory that were on, there perhaps could be some republican support for it. Im not sure where i would come in. The part of the cliff that bothers you the most is that youd like to do something with the sequester . Or, if we were to sunset all the bush tax cuts . That would that would go republicans want to get rid of the deficit. That almost cures the deficit. And that was the rates that we had at one point. And they were supposed to sunset. And i guess theres never a good time. But what if they all sunsetted and you didnt do the sequester . Well, if you didnt do the sequester. Youre talking about allowing the rates to go up on everybody. On everybody. Then youre talking 800 billion. Thats a tenyear number. So youre talking about 68 billion next year that it increases the revenue in the out years. But 68 billion is not that much money. Relative compared to the deficit. Well, exactly, so it really doesnt do anything, and when people realize, okay, give the president everything he wants. Give the rate increases. The fact that youre giving the rate increases on just the top two rates which is what he said he really wants thats 442 billion over ten, or about 40 billion a year. That doesnt fund the government for half a week. This is not the problem. The problem is we have gotten spending to where its completely out of chak and weve got to start doing something about deleveraging the amount of debt but it is part of the object where you expect people to give up on spending, people give up on entitlements and give up on the other end. I think that we are where we are, the president won an election. We acknowledge that. We recognize that. Thats why republicans, i think, are talking, in a way that probably a lot of republicans are uncomfortable with. Were outside the comfort zone when we Start Talking about revenues. Theres one good thing about the fiscal cliff, its increasing big mac sales. Yeah. Senator is going to be with us for the rest of the hour. If you have any questions, send them in to us at squawk cnbc. The president of telemundo is ringing the opening bell at the nasdaq today. Well sound off on squawk box first. Emilio romano will join us when squawk box comes right back. Still ahead this hour the impact of the fiscal cliff on the hotel business. Starwood hotels ceo Frits Van Paaschen on the companys preparations for the end of the year. Twins. I didnt see them coming. I have obligations. Cute obligations, but obligations. I need to rethink the core of my portfolio. What i really need is sleep. Introducing the ishares core, Building Blocks for the heart of your portfolio. Find out why 9 out of 10 large professional investors choose ishares for their etfs. Ishares by blackrock. Call 1800ishares for a prospectus which includes investment objectives, risks, charges and expenses. Read and consider it carefully before investing. Risk includes possible loss of principal. And his new boss told him two things cook what you love, and save your money. Joe doesnt know it yet, but hell work his way up from busser to waiter to chef before opening a restaurant specializing in fish and game from the great northwest. Hell start investing early, hell find some good people to help guide him, and hell set money aside from his first day of work to his last, which isnt rocket science. Its just common sense. From td ameritrade. Welcome back to squawk box, everyone. The futures are dawn, but not by a whole lot. Those dow futures at this point only down by about 9 points because of mcdonalds and the news that we saw out of them beating expectations with their same store sales for the month of november. Also European Union leaders gathering in oslo, norway, this morning to receive the nobel peace prize. The Nobel Committee is awarding the prize to the European Union for fostering peace on a continent ravaged by war. Spanish language Media Company telemundo is celebrating its 25th anniversary this year. The company is ringing the bell at the nasdaq this morning. Joining us right now acceptle yae romano. He is president of Telemundo Media which is owned by our parent cop comcast. Emilio, thank you for joining us this morning. Pleasure. Part of the things that youre doing this morning is unveiling a new logo. Getting away from the t but also a celebration of the growth of the company. Thats exactly right. Were reflecting what our viewers have said to us about the duality of being hispanic and being in the u. S. So our new bold and very good brand that shows the duality that they live here in the u. S. Is going to be the new way were going to present telemundo. Were doing that having the best year ever. Our ratings have been the highest ever from 11 to 12 and yearend and we are experiencing growth. Our sales were over 20 yeartodate with our best offer ever as well. Were very excited in the future of the company. Its really looking very compromising. When you look at hispanics in america, the growing part of the population, im guessing that helps with your viewishship, as well . Yes, having hispanic being the second largest market of spanish, largest market of spanish next to us makes it a huge growth opportunity. Were expecting the hispanic market to be 1. 7 billion in purchasing power in 2017. Thats a very exciting market to be in. One of the things thats always impressed me about telemundo is it has not just looked at people in this country, hispanics speaking spanish but also tried to wrap in people who maybe dont speak spanish as fluently as their parents do or others. You have closed captions in english. How wbig of a draw has that bee to the network . Its very interesting. Weve been doing that for almost eight years and we get good ratings. About 4 of our viewership we have documented that they see it through closed caption. And the most important of it is that we have the most compelling content in spanish. We have the largest hayispanicsn air because were the largest producer of primetime spanish content in the u. S. Our content is sold in more than 50 languages. Resonating not only closed caption in the u. S. But around the globe. I know some of the big draws have been the novellas that you run at night, the original content that you have. The news is a big zeal. Now youve got big deals coming in with sports. The world cup coming up in 2015 . Thats absolutely right. Thanks to support of comcast and Nbc Universal telemundo is the home of the largest, most important sports media asset which is the world cup. The fifa world cup starting 2015. And with that and the help of our parent as well, viewers saying, being partners with nbc news, the largest franchise of news in the world, we also have grown quite a bit in news delivery, and we can see that this is just the beginning of a very good trend. Okay. Emilio, we want to thank you for joining us today, and congratulate you on ringing the bell. Well be watching later this morning. Thank you so much for having me. Zblemle yo romano. In spanish terms, you remember my spanish . No, but i remember mine. My spanish teacher used to yell at us. [ speaking spanish ] it means shut up, you have nothing in your head. Mine is [ speaking spanish ] welcome to the parking lot. Anyway, coming up, much more from our guest host, senator john thune, and planning for 2013, what you need to know about jobs and Economic Growth in the new year. Then Starwoods Hotel ceo Frits Van Paaschen how the fiscal cliff, the impact, what its doing to his industry and what solutions hes hearing as part of the fix the Debt Campaign. Try running four. Ning a restaurant is hard, fortunately weve got ink. It gives us 5x the rewards on our internet, phone charges and cable, plus at Office Supply stores. Rewards we put right back into our business. 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This proposal also won the backing of russia and china at a conference in dubai. The pitch for direct regulation came as an unwelcome surprise to delegations from the United States and other countries that have supported the Current System of regulation for the internet. When we come back, the nearterm Economic Impact of americas debt crisis, well convene our squawk economic panel. Nathan sheets and Ian Shepherdson on growth in 2013. Right now, take a look at the equity futures. Down by about 13 points. The s p futures down by 3 points. So as you can see, geicos Customer Satisfaction is at 97 . Mmmm tasty. And cut very good. People are always asking me how we make these geico adverts. So were taking you behind the scenes. This coffee cup, for example, is computer animated. Its not real. Geicos Customer Satisfaction is quite real though. This computeranimated coffee tastes dreadful. Geico. 15 minutes could save you 15 or more on Car Insurance. Someone get me a latte will ya, please . Welcome back to squawk box, everyone. Lets get a look at some of the stocks on the move in this mornings trading. Wait until you hear this conversation around the table. Dow component mcdonalds says same store sales were up by 2. 4 . Thats huge because analysts had only been looking at sales that would drop by 0. 1 so this was a big reversal on what we heard a month ago and a big surprise to the street. You can see that with Stock Movement right now. That stock is up 2. 25 to 90. 50. Well hear more about mcdonalds during the day. Ingersollrand is spinning off its Security Technology division. Kayla tausche reported this story over the weekend. It came in official an hour or so ago. Ingersoll also announcing a 2 billion stock Buyback Program and a 30 increase for the dividends. Honeywell is buying intermec for 10 a share, a 25 premium about above fridays close. Also nearly 50 above the november 1st close. That was the date that intermec announced it was obtaining bank of America Merrill lynch. Yes, everybody were up for sale. Lets get back to the Economic Impact of the fiscal cliff and Growth Prospects for 2013. Joining us on set is nathan sheets, he is Citigroup Global head of international economics. Hes also a former fed director of International Finance and Ian Shepherdson, chief economist from pantheon economics, and our senior economics reporter, Steve Liesman rejoins us again. And we did, we were interrupted our conversation by this tv show, which always seems to do that. We were having like a great conversation and boom, the cameras are on. But ian, the latest thing i asked you about next years growth. You said 2 . Then year after that, 3 to 3. 5 . Then we got to basically to say we shouldnt be doing any tightening of any kind right now, fiscally, no tax increases, no government spending, we dont need to right now. Let it all rise. The economy, in your view can i say what you said . Euro friend . Im in favor of trying euro trend. Thats fine. Misery loves company. We can have it all forever, like greece. Were not greece. And thats the whole point. Neither is britain which is pretending its greece, and look where its getting them. Britains not growing at all. Would you do some stimulus . I probably would, yeah. What kind . Theres a ton of infrastructure that needs to be done in this country. Then do it. And borrow money its free. We can borrow money for free for 30 years in real terms. The market is not telling the u. S. To tighten fiscal policy. Its telling the u. S. To borrow some money. Can you make sure we only do things were not going to fill high speed rail lines between cities no one wants to travel to . If you spend a billion dollars i cant guarantee that every last cent of it is going to be spent properly. How moan solyndras will be in that balance . Only two. You have to deal with the issues that krugman never deals with. I love the explanation we should spend spend spend. What happens when Interest Rates rise . Two is youre talking about trillion dollar deficits as far as the eye can see. And three youre talking about what is now 16 trillion in debt going to 17 trillion. How do you and the population growth. Yeah. But tightening right now will just make it worse. The debt numbers are high. But its coming down. The deficits declined in the last three years and tax revenues are rising. Spending has been flat for the last two and a half years so the pressure is moving in the right direction. The worry for me is if you raise taxes and cut spending now youre going to knock back growth and prevent that acceleration in revenue. Youve got gdp growth up to 3 or 3. 5, the revenue implications are enormous. Because revenue tends to spike and nobody believes it. Thats the problem. Were into this world where we may spend, and we may even have a pop from government spending. Its never sustained. And all it creates is this huge discussion which underminds Business Confidence of how were going to pay for the debt. We have exposed, i think, the achilles heel of keynesian economics. I broadly agree with you. In 2008, 2009, i think the fiscal stimulus made a lot of sense. But i think that were at a point now where the economy is Strong Enough that we need to get started on the fiscal adjustment. Weve got to make sure its not too many. Id Say Something on the order of fiscal drag next year on the order of 1 to 1. 25 of gdp is the right way to go. But if we come out with another fiscal resolution package, that says were doing nothing in 13, nothing in 14, nothing in 15, oh, but were going to adjust like that in 17, 18 and 19 the markets are going to laugh at us. The Credit Ratings agencies are going to laugh at us. Its time for us to get serious on fiscal. Thats the problem. All these guys making all these decisions. My producer, whose father is a real estate attorney, hes turning business away because everybody right now is selling their homes in anticipation of next years rise in taxes. And so, you have to work around this. Great idea. Government taking the place of business when business is not spending. But it creates unintended consequences. But unintended consequences, theyre probably only a year or two out. If you put in changes that were actually permanent changes, instead of having this constant, okay, this is the plan for the next three months. This is the plan for the next six months the way its being done is crazy. With this we lurch from one crisis to another. Its almost as bad an outcome as a fiscal tightening which i dont want. Its the uncertainty of what we night do. Thats damaging confidence and you can see that in the surveys. Clarity to be good but with less spending cuts and less tax increases would be better. Senator, is there a way we get to that point where were not living quarter to quarter or half a year to half a year . Id be curious to know what is the impact in this quarter on gdp of all the uncertainty associated with the fiscal cliff . I mean whats it costing us . Were going to see a pretty grim Fourth Quarter. Some of that is sandy. You cant disentangle it. Im sure it would have been better if it werent for the uncertainty. We saw how bad it was in the summer of 11 and it will be the same now. I very much agree with ian on this point, that the uncertainty is associated with the fiscal cliff is at least a percentage point on the Fourth Quarter. And could be more than that. Its just a lurking weight on the business sector. And if we are going to get this growth, i think weve got to have a little bit more certainty on taxes, on regulation, and the trajectory of fiscal policy going forward. What i hear you both saying, though, and youre talking about spending issue, and not worrying so much about that, but i also hear you saying it would be a big mistake to raise taxes. Absolutely. Yeah. But the top 2 , is that the least deleterious people to raise it on . Yeah, it would be. But right now id prefer not to raise taxes on anybody. But if youre going to do it, then the people at the lowest propensity to consume you dont buy that Small Businesses fall under that . No, most Small Businesses dont earn anything like that. But the ones that employ more than half the workers are big Small Businesses that do pay those rates. Well, i dont think it will make any difference to the higher end. Theres no evidence to suggest that there would be a would you be somewhat corporate . How about cutting Corporate Tax rates . U. S. Corporate tax rates are beginning to look uncompetitive. I have no problem with rearranging tax rates to make the system more efficient. The u. S. Tax code is ludicrously complicated. Dont you want us to be disadvantaged compared to Great Britain . Im on to you. Youre destroying us over here and trying i just hired five people in this country. The accents got me real suspicious of you. The fed, wednesday, twist is coming up for expiration. Theyre selling shortterm, buying longterm. Twist ends. Whats the expectation . Whats the number . Well, bottom line with bernanke, hes not trying to fool you. The fed has been quiet as Market Expectations have coalesced around an extension of purchases on the order of 45 billion of treasuries. I think that is clearly where theyre headed. And my personal view is theyre going to be buying 45 billion of treasuries and 40 billion of mbs. 85 billion . A month until well into 2013. And it wouldnt surprise me if they were still buying by the end of next year. 7 , fed has forecast 8. 1 . In fact it forecast 7. 75 for 2013. Yeah. So, the Unemployment Rate doing better than the fed had forecast. Cos that change policy at all . I dont think so. You know, i think they look at the labor market, rather than that one number. That number is so distorted. The survey which it comes from is so wild, so volatile, they look at the broad picture. Pay roll is 150 a month, thats not good enough. We should point out ian has a new company. He used to be at another company. Pantheon you just started. Yeah. And just hired five americans. What was it High Frequency . We cant even say that . I didnt want to doesnt even exist anymore . So its not exnay on the no ones ever left here. They poof. When they leave cnbc, never to be seen. Right. So this was your first you just got here . Youve never had another job, pantheon started here . I just learned it. All right. Gentlemen, thank you very much. Thank you. When we come back, well have more on the surprising samestore Sales Numbers from mcdonalds. Were going to be talking to an analyst who covers the stock. Also avoiding the european model and our solution to the fiscal cliff. Frits van paaschen on how to strike a deal that wont lead to lackluster growth. [ male announcer ] you are a business pro. Monarch of marketing analysis. With the ability to improve roi through seo all by cob. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. Im going big. [ male announcer ] good choice business pro. Good choice. Go national. Go like a pro. Well, having a ton of locations doesnt hurt. And a santa to boot [ chuckles ] right, baby. Oh, sir. That is a customer. Oh. Sorry about that. [ male announcer ] break from the holiday stress. Fedex office. Welcome back, everybody. How will the fiscal cliff impact the Hotel Industry . Joining us right now is Frits Van Paaschen. Worldwide president and ceo of Starwood Hotels and resorts. Frits is also a member of the fix the debt leadership council. Great to be back. We know that the Hotel Industry, the tourism, the travel industry, seems to have been doing fairly well for awhile. How have things been holding up as youve been getting into the holiday . Id like to say so far so good. In other words we havent seen a real effect yet around the uncertainty. But about the fiscal cliff. If we fall off the cliff, i think that could change pretty quickly. But right now its steady as she goes. The front page of the wall street journal today lays out that consumers, there are some concerns around the edges. You start looking at consumers and fridays preliminary university of Michigan Consumer confidence showed a huge plunge. Do you think thats because of the fiscal cliff . It could very well be that. I think that from a business perspective, uncertainty is very costly. And so the longer we go without understanding whats going on. The worst we get. If you look at europe, weve just been lurching from crisis to crisis. The level of uncertainty there has definitely pulled back economic activity. We do see the same thing here if we dont get a sustainable, clear, credible solution to americas fiscal problem. What does that mean . Sustainable, clear, credible solution . Well, i think what it means is, when you have to solve 4 trillion worth of spending everybody has to give somewhere. So there has to be some work on raising taxes, but most importantly, making sure that entitlements dont run away in future years because people are going to look at projections looking out into the future. As i travel around the world, and visit sovereign wealth funds, theyre looking at trillions of dollars and where to spend it, as they look at the u. S. , what they want to see is a stable environment to put that money to work. If we can get that capital into the u. S. That will be a Stimulus Program by itself. Frits, we pending on how you look at the numbers there are peel who say these two proposals arent that far off. If you look at the numbers on each side and maybe try to find some Common Ground in the middle, maybe get to 1. 2 trillion, where do you go on spending cuts is the big question because that seems to be a little easier. Do you think this needs to be a three to one when it comes to revenue versus revenue increase or three to one when it comes to spending cuts versus revenue increases . Do you see one to one, what would make you feel good looking around the globe and looking at what im not a tax expert so i cant give you a precise ratio. What we need to do is see a program where, if you look at reasonable numbers, you could see that the debttogdp ratio comes down over time. As we go from 16 trillion, as we cross that 100 mark, we start looking more and more like countries in europe. Weve got to avoid that. The issue is, and the opportunity is, theres nowhere to put capital to work around the world as attractive as the u. S. So if we dont solve this, its our own fault for not being able to bring that money here. Is it attractive right now . Have you been putting money to work over the last two quarters . I think if you look at the tenyear treasury its clear the rest of the world is still coming to the u. S. To put their money. How do we know thats not the fed . How do we know thats not the fed . I think you have to look at where the investments are coming from. We talked to sovereign wealth funds theyre still buying treasuries. Right now the spread between yield and real estate versus treasuries is as big as its ever been. So, theres an opportunity here to put money to work. You think that, you know, we havent even talked about regulation, obama care, any of that stuff, so fixated on the spending cuts that are coming and the tax increases. Thats not going to be an issue for Foreign Investment . This is still the best place . We can get through all of these this regulatory environment, this increase so much and its going to continue to look for all the regulatory challenges that we have, we still have the most transparency, the clearest rule of law, the most proven record of succession of power of anywhere in the world. Yeah. So the confidence level can be there. In terms of being fixated on tax increases, i think senators have been very clear about that. The proposed tax increases are actually pretty small in the scope of the Overall Program that were talking about. Let me just, and i appreciate the work, frits, that you and others are doing. Ive met with members of the fix the Debt Coalition and the advocacy that youre providing for a balanced plan. But weve encouraged members of your coalition to do is to impress upon the white house the importance of acountriesing entitlements. The president s last proposal was four to one revenue increases to spending reductions. Which is completely out of whack. Isnt being taken seriously anywhere. And actually when it was voted on, which was pretty closely modeled to the budget last year, didnt get a single vote in the house or the senate, but my question is, on the tax issue, youve since the Great Recession got a pretty nice runup in your stock. If you get to next year, and dividend and Capital Gains tax rates go up, does it become harder to finance in the equity markets . I mean are people going to start looking at this and saying, do we really want to be investing in stocks . You know, its interesting. One of the most striking things for me in the last year was being in a room full of business leaders, and talking about the simpsonbowles program. And having are, to the person in the room, people say, they would endorse a program like that. Do they know whats in it when they say that . I always wonder. I think sufficiently. Because what were saying here in basic terms is, federal spending today is 24 of gdp. Collecting 16 . We have 8 of gdp the gap. That needs to be closed credibly over time. You cant do that just by cutting spending. The short answer to your question is if all we were doing was raising taxes on dividends, that wouldnt be a great thing. But if that happens in the context of a credible program i think we all end up. This is a time where both sides need to give. The Business Community has been very clear hat what they want is compromise. And the business the Business Community would be willing to give two things like accelerated appreciation . Youd be okay with letting that go . Absolutely. Okay. But my assumption, too, is its a better scenario for business generally and i think for the economy when you start making all these decisions that its done in the context of a progrowth tax reform policy. That lowers the Corporate Tax rate, lowers individual tax rates, hopefully at the same time because of all the passthrough businesses we have out there. And does something to broaden the tax base. I mean, what were concerned about right now is if you take all these tax rates go up, even limit on deductions occurs now, it really impairs our ability to reform the tax code for next year. Which ultimately, in my view, is what needs to be done if were going to fuel Economic Growth and get jobs going. I think simplifying the tax code, especially for corporations, is a very good thing. The amount of energy thats spent on trying to optimize your tax payment, as opposed to managing your business, is a tradeoff we shouldnt be making. So i agree with you entirely on that. I think the other piece of this is getting to entitlements. Hmm. Frits, want to thank you very much for coming in. My pleasure. Coming up were going to talk to an analyst about the surprising samestore Sales Numbers that we got from mcdonalds. Plus jim cramer on other stocks you need to watch. Twins. I didnt see them coming. I have obligations. Cute obligations, but obligations. I need to rethink the core of my portfolio. What i really need is sleep. Introducing the ishares core, Building Blocks for the heart of your portfolio. Find out why 9 out of 10 large professional investors choose ishares for their etfs. Ishares by blackrock. Call 1800ishares for a prospectus which includes investment objectives, risks, charges and expenses. Read and consider it carefully before investing. Risk includes possible loss of principal. Welcome to the world leader in derivatives. Welcome to superderivatives. Welcome back. Lets get down to the new york stock exchange. Jim cramer joins us now. Which is a real mcdonalds. Jim, last month, to this month . I think theyve made some changes and i think theyre positive. I think this matters. I like the course of recognition of things that screwed up. Im saying this is the real one. We could be in for a couple of good months of run here. I saw pg e had a good one, too. Are you onboard yet . Yes. I think for a while, mcdonald finally got tough and hes generating a great amount of cash flow. I think he had been too soft on the company and now he is delivering army ranger. Didnt expect him to be too soft to begin with. He didnt realize how many firings hes had to do, how much money there was to be saved. Jim, do you think anyones selling apple because they have gains and they dont it makes so much sense from so many people. No one does it because of that, at first, i saw this thing last week, i got to hear from it again because i say one thing about apple . Apple is a strange stock. It is actually owned by people in discretionary accounts. This is not viewed as being an i. R. A. Stock, 401 k stock. It makes a lot of economic sense when you meet with a tax person and say, whats going to happen . Give your property to your kids, theyre going to change that, you ought to take some Capital Gains if you have them. Apples always in the crosshairs. You have jeffreys today lowering their price targets. I think this is kind of a research of, i cant take it anymore, the stocks gotten low, im at 900, got to go down to 800. I think the apple story for an investment is intact. But it makes the taxes grg up. No matter what, those taxes are going up. Say, yeah, ill take some off the table. Exactly. Do the math. It is the math. If youve got a lot it could be thousands of dollars. You can buy it back, right . Joe, it is the answer. Everyones got a capital gain. The greatest capital gain generator of our time. There isnt a tax accountant or economic adviser in the world that wont say, take half off, you can revisit it. Thats a compelling logic. I wouldnt go against if. I love the Washington Post, president , big backer of the president. Theyre even paying their dividends out. Wouldnt it be nice if they said, heres your dividend, mr. President. Do they have to go around the tax man, jim . Does that seem right . Everybody does. Patriotic, i know. Makes too much sense. Thank you, jim. Thank you. Ill see you down in washington, jim. Of course. Were working together. It will be great. When we come back, our guest host this hour has been senator john thune. Well give him the last word. Squawk box will be right back. Squawk box is bringing jim cramer live in washington. Special guest, grover norquist, senators from both sides of the aisle. Reaching Common Ground on a debt deal. It all starts tomorrow at 6 00 a. M. Eastern. Tdd 18003452550 you shouldve seen me today. Tdd 18003452550 when the spx crossed above its 50day moving average, tdd 18003452550 i saw the trend. Tdd 18003452550 it looked really strong. Tdd 18003452550 and i jumped right on it. 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How you deleverage that, you do it by budgetary restraint and budgetary growth. Tax reform has to be about growth. Thats why im really concerned about where we head on tax policies. The balanced idea, we hear this from both sides that it has to be a balanced deal. If youre looking at a balanced deal, whats a number you could live with, just in terms of revenue increases versus spending cuts . Well, again, i i know you dont want to give a ratio, but something you could live with . I think what the speaker put out last week is something he feels could pass the house. What the speaker put out and what the president put out were both opening offers. We know thats not the real negotiating behind the scenes. My guess is they had real numbers they talked about yesterday. Hopefully they did. Maybe well hear more about that. What concerns me, i guess, when you go above the number that the speaker put out there, i think youre going to start doing real harm to the economy. Because you are raising taxes, and you can say you arent, but youre hitting a lot of Small Businesses. Youve got s corps and llcs that pay at the individual tax rate. There are millions of Small Businesses that employ more than 75 of the work force. Do you think those businesses will get hit anyway . I think they will. And you dont want a bad deal. I think theres a deal in the making but the president and his folks have to realize there has to be something in there that they want. And i think thats amt, death tax, things that debt limit
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