return for their $140 billion cash lifeline over the next three years. in germany, you spoke about angela merkel there, larry. chancellor today urging her own parliament to vote through berlin's portion of the bailout saying that it is a fork in the road and nothing less than the future of europe now depends on their actions. news of the murders in the bank and athens more investors therefore fleeing the banking sentor there. the greek market now down over 20% since april. the risk of contagion to portugal hammered home by moody's announcing the rising likelihood that it will ultimately downgrade lisbon's credit rating. spain's prime minister may have dismissed as complete madness and rumors he would ask for outside cash and it didn't stop madrid's stock markets being hammered and now down over 12% in a month and ominously, larry, the general cost of borrowing for banks, writers across europe, lehman's style, two of the biggest deutsch and germany and bnp paribas in france remained under pressure again. one bright light that we have this evening for the markets ahead of tomorrow's general election in the united kingdom on a 24-hour campaigning binge opposition leader, david cameron appears to be pulling ahead of the others in that poll. the pound, as you know, larry, has been under pressure for fear that no one party would have a majority in the london parliament to successfully tackle britain's ballooning deficit and outright win tomorrow could see a big positive reaction in the market when the ballot boxes are sealed in less than 24 hours' time. back to you. >> thank you, simon. that is a great overview of the big story and i appreciate the camera in london. i agree with you, the wind is at his back, but we will see and by the way, we will cover that here "the kudlow report" tomorrow night. we have steve forbe, the author of "how capitalism will save us." we have andy bush of bmo capital markets and uc irvine professor -- business professor, peter navarro, author of the coming china wars. gentlemen, this is a massive story. this is a business story. this is a political story and this is the stock market story. i want to begin with steve forbes. steve, you look at these militant union mobs with their general strike and violence in athens. three people were killed today. a cnbc installation was built up and completely knocked out. i want to ask your political judgment and former presidential candidate and longtime political involvement and so forth. how does this play with the german population? the big vote for the bailout package comes on friday. there's another regional election vote on sunday which may affect friday's voting. germans look at this and they go, huh? what is this all about? a broken entitlement stay that we in germany wouldn't have tolerated in the first place, steve forbes. what is your thinking on this? >> i think you've summed it up very well. greece went on a binge. as you know, the civil servants there get 14 month' pay for 12 month of alleged work. the government does not even know how many workers it has on the payroll. they have to do a census to figure it out. so this structural thing was a long time coming. the only really down side on it, larry, is not that they're going to have to cut back, but that these tax increases, they should be going in the opposite direction of putting reaganesque tax cuts so when thai tighten their belts they start to get a vibrant economy. >> they should have gone with some flat tax like the eastern european countries, along with the massive spending cuts that are really necessary to stop the entitlement stay. you know, margaret thatcher would say that the trouble with socialist governmentss is they eventually run out of other people's cash. that's what's going on in greece. these militant union mobs wrecking athens, okay. three people dead today. remember t.a.r.p. one, andy? remember t.a.r.p. one? >> right. >> i want to link the t.a.r.p. one, when the house failed to pass the bailout t.a.r.p. one, then we had a 700-point drop in the u.s. stock market in september, i believe, of 2008. correct me if i'm wrong. >> that's correct. >> if germans vote in friday's legislative chambers, fails to ratify the bailout, are we staring at a t.a.r.p. one 700-point loss potential for our stock market and i'm sure the rest of the world markets as well? >> it certainly would be a shocker. today the germans actually voted it positively out of their budget committee so the -- the majority parties are holding together, so i would anticipate if they can keep that through friday they'll be able to get it through the bundestag and merkel will be able to present it to the euro zone meeting that they're having friday night. >> but andy -- that's very buttoned up. that's the best case. okay, fine. listen, if that's your view that's a good view. >> or if they delay it -- >> the risk to invest. >> yes. you buy into that. the contagion effect will sweep through europe. it will sweep through the stock markets peter navarro, this is my biggest worry. i can't hardly predict an american election. i can't hardly predict anything, peter navarro, all i know is if this thing goes down on friday in the german legislature, in the german parliament we are all in a heap of trouble. what's your thinking here? >> let's be clear about what the "it" is. basically germany is getting its way in the sense of this bailout. it's going to take greece out of the bond market for two years, larry, and it's imposing fairly significant austerity measures on greece that the germans are demanding and merkel's selling this to the germans by saying that if we don't do this, then we're not going to have a euro in a euro zone. so i think she's going to make that sale. there's a lot of big questions though. the size of the bailout is huge, and if spain were to require the same bailout, larry, it wouldn't happen. so this is kind of a make or break legislation. it is not clear to me that it wouldn't be better just having greece default on all of the funds. >> the financial markets are exerting, peter, unbelievable discipline on this story. i mean, for example, a lot of the problems yesterday is if financial market, bond markets and credit default swap markets basically said this package isn't good enough, it isn't big enough or tough enough. i'm saying what about the discipline of the marketplace in contrast to bailout a nation which has become bailout planet? >> you know what's missing here, larry, is any restructuring of the greek debt. basically, germany, imf and europe raising a bunch of money and they're making all of the greek creditors completely whole. i'm not sure the whole moral hazard kind of thing and basically we're ratifying the whole bailout system and that's not free market capitalism and it's at its worst. so, the broader implications here, why do we care in the u.s.? the good news and the lipstick on this pig, right? is that our long-term bond yields are going way down and that will be a stimulus to our economy. we don't buy a lot of -- we don't sell a lot of exports to europe, but still, the stock market's reacting negatively, i think, for a lot of reasons that go beyond this greece story and raising doubts about the recovery. >> steve forbes, if you look at the credit default swap markets today, the insurance policy prices went way up. they went up for greece. they went up for portugal. they went up for spain. they went up for italy and they went up for ireland. steve, i want to ask you, regarding the contagion threat which could spread and even before they'd default, nobody wants to buy their bonds, across europe, across southern europe ones how far they'll go? steve, what is the risk to the united states' economy? i mentioned the risk, if the vote doesn't go through on friday to a possible stock market hemorrhage like we had at t.a.r.p. one back in september 2008, but is there a risk if the greece problem is not resolved favorably. >> the government of germany cannot get this thing through on friday, that can imperil the chance of merkel as chancellor and that would have a real ripple effect, more than a ripple effect on europe and indeed the united states. we have to remember, larry, as you well know, we have our greeces and portugals here at home. they're called illinois, california, michigan, new york and they'll have to do what new jersey's doing and what greece is going to have to do, and i think the key thing about the greek situation is they'll is to make significant cuts in the government sector. they're not slamming the rest of the economy. it's the government sector and granted a big part of the greek economy and they'll have to make real cutbacks and start to do restructurings. >> as i mentioned last night during our special edition of "the kudlow report" when the market sold off 225 points or whatever, the odd thing about this is except for greece, the rest of europe seems to be recovering. the purchasing manager's index throughout europe is up, what? ten straight months. germany is leading the charge, but all of the countries are sharing in a recovery. that's the tragedy. will this greece problem undermine the european recovery or will the european recovery surprise us on the upside just as i believe the u.s. recovery in the short run will surprise on the upside. >> well, i think, clearly the borrowing costs will hit these countries and if they increase taxes, obviously, that's not a good recipe. i would like to see -- i really would like to see the ecb do what the fed did. i would like to see them step in, cut interest rates and supply liquidity to this market. i really don't understand what their position is at this point. if this isn't a crisis, i don't know what it is for the central bank and they're failing here. getting to the point about growth, i would say that would aid growth for europe. >> well, okay, but andy, my friend, the ecb has already indicated it would be willing to throw out all of the ratings of the sovereign debt from greece and whomever also and take them into the portfolio. i believe the terminology for that is pump riding and the consequences of that is higher inflation, and i wonder, i'm going to ask you is that why the euro keeps falling $1.28 today. he's gone back on his pledge and he's now opened the door to buying every piece of junk bond sovereign debt out from. that can't be good. >> well, that calls into question what the fed did. certainly the fed took in -- the fed didn't, the federal government did, there are all sorts of things that the u.s. did that we didn't really like, larry, and it appeared to be working with the federal reserve pumping money into the system and that helped stabilize things and i think that's what the ecb needs to do. perhaps they need to buy more greek bonds. i'm not sure exactly what they need to do. what i do know is they need to do a lot more and even if they risk inflation down the road because they're looking at a crisis that can disintegrate the unit. they're just not doing enough. >> i can't see europe following our model, i mean, yeah, maybe we got out of it in the short run. we have a approximateliance sheet that are more than double and deficits that are shooting to the moon every time. the only thing that's different is that we're at an earlier stage of what greece is anything to. just to brings this home, there will be a big meeting on my campus at the university of california about what the heck to do with all of the pension obligations and the unfunded liability. >> that's a scary thought. that's a very scary thought. >> it's a very scary thought. >> what are all you cal liberals going to say? give more? >> don't feel sorry for any of the folks that will not get their pensions. >> i don't. >> but from a macro point of view, it's reduced purchasing power in a slower economy. >> we've got to take a break. all i would say is the nobel prize for this particular segment goes on steve forbes for bringing in the need for a flat tax in greece along with massive spending cuts to stop the entitlement state. i trumped my own final conclusion to the program, and it is not being mentioned anywhere, in any prant in any story on the atmosphere. hang on. stay with me. i'll cham inthe stock market which still looks wobbly today. is it the issue ginning of the end. john harwood have so thes later. and later, hip be onning rhys owe the hill and can you believe this they shorted stocks during the meltdown and i want to know if the house member his more inside information and then we'll look at a gao audit of the fed with bipartisan support from the left and the right. senator demint and senator sanders holding hands together to audit the fed. you're watching cnbc. we are first in business worldwide. all right. some breaking news here in our legislature, aka, the senate. it is in the sweeping wall street reform bill that might prohibit use of taxpayer funds to bail out financial firms. does this mark the beginning of the end for a bailout nation and too big to fail in cnbc's chief washington correspondent john harwood joins us with the details. hello, john. >> hey, larry. 93 members of the senate said yes to that question and this was an amendment worked out by chris dodd, the banking chairman, richard shelby and the rank rag republican on that committee and we know the senate works at its own pace and not only fast and they finally got movement on this major obstacle to the bill and richard shelby, when he took the floor to embrace that amendment said it's not the only one. >> beyond resolution and government powers in a crisis, this over 1500-page bill cont n contains a broad reach into the global financial system in the american economy. now that we're over this, hopefully with this particular hurdle, we will be addressing many additional concerns that we have in the coming days. >> so, larry, now that that $50 billion wind-down found is no longer pre-funded. the money will be raised after the crisis. what are the obstacles remains before that bill cash passed one is consumer protection and what is the shape of the agency and where is it located and what are the enforcement powers and who's covered by it? jewelers, orthodontists and all of those are on the table. secondly, proprietary trading what's the definition of what would be banned as what's come to be known as the volcker rule. some kind of prop trading that the administration continues to allow it and other kinds that don't. and finally the issue of derivatives swaps desk. the obama administration is not for the provision that's been moved through the agriculture committee by blanche lincoln. the question is who is going to stand up and take it out? because as you know, larry, this is not the season where anybody wants to be seen as doing a bidding of the big banks and it's not certain when. we do expect it to be passed in the next couple of weeks. >> what do you think that will take place? >> that's a huge vote. >> think that is the last piece to fall into place. we've heard mark warner suggest he wants it out. sheila bair would have it away from regulation and that was a boost to wall street firms that want that to come out. i think if you had a secret vote and you would have a clear majority of the senate, the question is what do you do when it's not a secret vote? i think it will come out in the end. >> all right. democracy rules, derivatives going to chicago. john harwood, thank you very much. let me give you some good news, we've had a lot of bad news on greece and what the threats and are if the germans don't pass the bailout in the vote on friday, et cetera. there is good news. let me turn to my v-shaped recovery theme and then we'll come back to our distinguished panelists who will be on the v-shaped recovery. we have the adp jobs report and it was up 32,000. that was payrolls and it shows private sector employment especially, private sector employment and it's a good number. 32,000. manufacturing producing up 29,000 and it is interesting just to have a look-see. you have a v-shaped pattern here and we're comparing the adp report with the actual non-farm payrolls from the bureau of labor statistics. they do tend to move together. we have, of course, a big jobs report coming up friday. non-farm payrolls and households. we will see, the adp today was relatively optimistic. now let me go to the next one. here's a good one. the layoff -- the layoffs have basically come to an end. this is the challenger gray layoff announcement chart ask you can see here, this is what i call a reverse v which is very good, after having a huge peak of about 2509,000 back in late '08 and early '09. the layoff measure has come to virtually nil and that is another plus for the v-shaped recovery and it is also a plus for jobs coming up on friday and finally today, although it may not have been gangbusters, the ism services report, the non-manufacturing report was holding high ground at 55.59, a and it too continues to show something of a v-shape red kofry. we had ism manufacturing on monday and that was a blockbuster number. so let's bring back our distinguished panelist steve forbes. >> at the risk of getting my head cut off, steve forbes, i do see a v-shaped recovery. i am asking by the way, whether greece debt contagion and the rest of that will undermine it, but what do you think about the american economy? >> well, short term it's going to take more than greece to undermine this recovery. we should get real growth in the second quarter of 5% to of of 6% and 4% for the remainder of the year. this, larry, is a natural snap back from the severe fall we had in late 20098 and early 20099. inventories are being rebuilt and cap-ex spending is reviving and you have to stay competitive. consumers who have jobs and most do realize the world is not coming to an end and they're loosening the purse strings. the real question, larry is not whether we'll get a recovery this year, but will it be sustainable? will we have the same pattern we had in the 1907s when you'd get growth and then hit the wall again. >> you have a lot of tax hikes going on and dividend cuts going to 70% and that puts it at 60%, upper income earners, including the distinguished member of the panels will pay higher taxes next year. we are tacking those who save and invest the most. steve forbes, will that choke off the recovery in 2011? >> if they don't do something that will make it like a 1970 recovery. you get a recovery and then it gets hurt. the other thing that will hurt, larry is the weak dollar. weak dollar, weak recovery. ronald reagan knew that and when he stopped the great inflation in the 1907s that's when we had the boom. >> it's soaring. >> only against the euro. >> it's soaring on the trade-weighted index and soaring against japan. >> the dollar is like a 98-pound weakling versus a 96-pound weakling and neither one will lift weights in the olympics and the other one is the price of gold and that's showing the price is still weak. >> the price of gold is holding high ground. it's interesting, because the dollar has gone up so much against the collapsing euro, we've seen a big downdraft in commodities and copper oil is back under $20 a barrel and we can throw out the horror stories for summer driving and at least that is my hope. >> are these investors deserving currencies. is there a global revolt against big debt and high tax and spend. we don't want paper currencies, we want gold currencies, peter navarro. is that the theme here? my thesis is that gold is the new reserve currency the world and will be over the next 10 to 20 years, particularly as the there are falls under the weight of its debt. >> i had this argument with andy when this greece thing first came out, i said at that time that the euro was dead as a reserve currency and there would be more people. i stand by that because the way germany is drawing lines in the sand. >> does andy think the euro is still going to be a reserve currency after this? this is -- >> i didn't say this -- >> andy is still defending the euro and andy is on to the european central bank to buy the lousy greek and country bonds. this is an amazing position, peter. i want you to finish your thought and i want and toe respond. >> let me tell you about the v-shaped recovery. the thing that concerns me right now is even though we're having robust growth now, we're underperforming by a large margin, previous recoveries out of these kind of recessions. we should be at 7% and 8% and not at the 4% and 5%. >> andy's got to respond. you heard this from peter navarro. >> we can play that tape. >> maybe the producers can play the tape, but we don't rekrim nato this program. we love you, too much, but the point i'm making is you defended the willy-nilly purchases with sovereign debt, greek or otherwise and you are defending the euro as a reserve currency. is peter navarro telling the truth or is he speaking with a forked tongue? >> it should be more aggressive in adding lick quiddity. it will stabilize the bond markets and it will bring back southern europe. the ecb has a credibility problem that they focus what's going on in northern europe and the rest of the european union, so they need to justify what they're doing here. the second thing si want to bring up a point of what's going on with the united states? the united states has a corporate tax here that is almost double the average. >> it's higher than greece's. it's higher -- greece's corporate tax is 309. >> and it will go higher after the health care plan. if we want to complete aga china, we don't have to do it with currency. >>o, this is good. >> and then we'll compete on an even playing field. >> one-word answer regarding the u.s. stock market. steve forbes, buy or sell? one word. buy. >> andy bush, one word. >> buy. >> peter navarro, one word. >> cash. thank you, gentlemen. steve forbe, andy bush, peter navarro, absolutely spend splendid stuff. let us move on. coming up on "the kudlow report," is it time to audit the fed? washington's newest odd couple, very liberal senator, bernie sanders and jim demind will join me next to tell us why it is time to audit the fed and later in the show, hyprocrisy and possible ethics charges on the hill. what else is new? we are learning congressional members were shorting stocks during the financial meltdown and the t.a.r.p. debate. did they have inside information? oh, my gosh. the kudlow report, we'll be right back after this short break. >> i believe that free market. >> capitalism is the best -- >> path to prosperity. a very interesting coalition between liberal and conservative. senators want to audit the federal reserve including the monetary policy. a short time ago i spoke with the unusual partners. please take a listen. >> all right. so is it time to audit the fed? there's growing bipartisan support for it in washington. a bill has already passed the house and now the debate begins in the senate. joining us now is washington's newest odd couple. vermont independent senator bernie sanders and south carolina republican senator jim demint. gentlemen, thank you for helping us tonight. >> larry, you know it's hard for us to stand this close together. >> you know, i was going to say mr. demint, senator sanders, i always thought down through the years i was your favorite conservative and now here you are cuddling up to jim demint. you don't have a vote, larry, that's the problem. >> senator sanders, let me go to you. you want the gao to audit the fed. in your judgment, what are the key points that investors should know about? >> well, it's not just investors, it's the american people. here you have a situation of where the fed has lent out over $2 trillion in zero interest or near zero interest loans to large financial institutions and you know what, larry? you don't know who received that money and i don't know who received that money and the american people don't know. you don't know what the terms are and we don't know how that money was used and i think that's basically insane. we have major arguments on the floor of the senate about $20 million or $10 million and now you have $2 trillion and we don't know who got it and how it was spent. i think the american people have a right to know. >> they should know about the emergency lending, the 13-39, and i presume the collateral as well. senator demint, let me go to you. am i correct that this bill would allow the gao to audit the fed's minutes and transcripts of their meeting including the fomc monetary policy meeting after a six-month gap. is that correct? >> as i understand it and as senator sanders is more informed on the latest version of this, but i believe that what's necessary to understand what they're doing can be done by gao, but lear, let me make a couple of quick points here. the whole world's economic system rests on our monetary system. the congress of the united states has given the responsibility to protect our currency and the value of our dollars. we want an independent fed, but we don't need a secret fed to do that. congress is responsible to oversea what's going on. so those who say that this audit is out of line are not looking at the constitution. this is our job. we don't know what they're doing and they're spending incredible amounts of money as senator sanders said and as far as we know, our whole monetary system could be at rick. we don't have any idea what's going on. >> for people like myself who for years have argued for more fed transparency. i've always believed, sir, that it's the people's money and therefore the people have a right to know about their money. in some sense it may just be that simple. senator sanders, let me come to you. am i correct, that the gao, the general accounting office, they can audit the fed minutes and the fed transcripts after a six-month gap right now. the fed transcripts of the open market meeting are not released for five years, so in effect, you would be truncating that for six months. is that the case, sir? >> i believe that is the case, but here's the point that i want to make clearly. the opponents of this amendment will get on the floor and they'll say what sanders and demint and others want to do is they want to have congress running the fed, and you want to politicize the fed and they want congress arguing or dealing with monetary policy and raising interest rates or lowering interest rates. that is absolutely not true. what is involved here is not only knowing how trillions of dollars have been spent and who received that, but it is also dealing with what to me seems like just pretty apparent conflicts of interest. for example, you have people like lloyd blankstein, the ceo of goldman sachs sitting in on a meeting where aig gets $185 billion in loans and then it turns out that goldman sachs gets $13 million paid back and 100 cents on the dollar. i think that's a conflict of interest. i don't think that's a good way to do business, but those are the kinds of issues among many others that the gao has got to take a look at. >> so senator demint, as you know, the fed has gone nuts over this, absolutely nuts over this. they've got the lobbyists up on the hill and they're allowing senators in to convince them and judd gregg has come out on this and others, do you know that in europe, the head of the central bank, jean claude trichet, he has a press conference the day after the montt tear meeting to inform the public. i don't understand why they can do it in europe and we can't do it here and i don't understand why the american people don't get ton six months later, not that day, not that week, but six months later what the monetary policy is and how the details and are who said what to whom? what is wrong with this? >> larry, the american people don't trust the federal reserve and we need a federal reserve that the american people can trust and the position i took with pern anky is this a way to give people confidence what they're doing and it does not threaten their independence and it just opens up their books and i think the reason they're fighting this is they've done a lot of things over the last year that most americans would not agree with and they wouldn't be so upset if it was above board at the federal reserve right now. >> you're not putting the gao in the meeting. they're going to wait six months in terms of the loans and discounts. it's not like you're going to release it the next day. >> despite what the opponents would say and they are saying it. this is not congress doing monetary policy. there is a difference between having an independent fed and having a fed that operates in almost total secrecy and as senator demint said, making decisions they think the american people would scratch their heads on, but the bottom line is here. we fight every day on what $ten million appropriations on the floor of the senate and now you have trillions of dollars being spent and we don't know where the money went. i don't think it makes sense. >> two quick questions. one is housekeeping. you're going to get a vote. how many do you reckon you have now, mr. sanders? >> it's hard to say. i think we have great support. what is really extraordinary about this is not only that people like senator demint and i that come from many different places and we have the largest and we have the aflcio. and we have move-on.org. you don't usually work with these groups? is that fair to say? >> i was looking at some of the stories here. you have the americans for tax reform, a very strong conservative group and the national taxpayers union and another conservative pro taxpayer group and dick army's freedom works and this is one heck of a coalition. i don't usually work with those guys and it is a very unusual coalition and we'll give it our best and i think we've got a shot. >> one last point. we saw what happened with our economy when fannie mae went under and that's small in comparison to problems at the fed. everything was okay, just a couple of months before fannie and freddie went under. we cannot afford that type of mistake for the federal reserve and we don't need to know what they're doing so that we can make sure that in any kind of reforms that are done that we are informed. >> gentlemen, i say this pointedly, i truly wish you all of the luck in the world. senator bernie sanders and jim demint, thanks very much for joining us. >> thank you, larry. >> i do wish them all of the luck in the world because i support this bill. i know the fed opposes it and a lot of senators oppose it including my friend judd gregg, but the public has a right to know. it is the people's money and a six-month gap is sufficient. after six months release the transcripts of the open market committee so that we can all take a look and have a well-informed discussion on interest rates and money creation with loans and advances. >> coming up on "the kudlow report," the very latest efforts to contain the oil leak on the gulf coast and later on, outrage on the hill. this is an unbelievable story. reports are exposing lawmakers who were short selling stocks during the heart of the financial meltdown and some of them were on very important committees so we must ask, did they have inside information about the mortgage and housing situation as they shorted stocks. "the kudlow report" will be right back. please stay with us. breaking news, the fcc will announce a plan tomorrow on net neutrality to overregulate the internet and the players involved. cnbc's julia boorstin joins us now with the breaking details. thank you, julia. what have you got? >> the federal communications commission will propose a plan to overhaul the regulation. the fcc enforced net neutrality regulates how brand providers like comcast and at&t managed capacity to ensure that all websites are equally accessible even if those websites use disproportionate capacity. this is in le action to a u.s. court of appeals ruling last month in the case fcc versus comcast. the ruling was in favor of comcast and against the fcc. the fcc says they're trying to, quote, restore the status quo that existed before that ruling, a ruling which allows comcast to prioritize certain broadband service. uncertainty is sure to weigh on broadband providers including comcast, time warner cable, at&t and verizon as well as broadband equipment suppliers like cisco. the fcc tells cnbc that channel chowski will walk the line between heavy regulation and regulating the internet. regulatoring under the rules written for phone networks would be considered a major crackdown, one that could prevent them in investing in new infrastructure and could encite lawsuits. larry, the fcc says it will not simply apply telecom rules to broadband providers so we can expect the chairman to try to get some new legislation through congress. back over to you. >> all right, julia, thank you very much for this important story. it will probably be front-page story tomorrow, this is my own personal view, this ain't free market capitalism. now, in some other news, let's turn to the crisis on the coast. joining us with the very latest on the containment efforts in the gulf coast, let's go to nbc news' jay gray. good evening, jay. >> hey, larry, good to talk to you again. the marina where the boats have been idle for most of the day, and the fishermen are frustrated as you might imagine. let's go to some pictures of the latest project to corral the oil of giant 125-ton metal and cement box that they put over one of the leaks in the deep water horizon. well, hopefully gather that oil and pump it to a waiting tanker on the surface, but bp executives and officials with the federal government are quick to point out that this is well, an out of the box project, if you will. this is all experimental and never been done before and especially at 59,000 feet below the water's surface. they are really trying to temper enthusiasm as they try and capture this oil, larry. >> jay, thank you very, very much. coming up next on "the kudlow report," senators and house members apparently sold short stocks during the very height of the financial meltdown and we must ask since they were on key committees that they have insider information during all of the debates on t.a.r.p. and whether they were consulting with the federal reserve, unbelievable. we'll be right back to cover this. stay with us, "the kudlow report." now to yet another story of hip be onning rhys ney washington, d.c., and outrage. "the wall street journal" is reporting several members of congress and their spouses were making short selling bets against the stock market in 2008 during the height of the financial meltdown, and the question is did these house members have inside information. here now we have politico reporter amon trader, the secret world of corporate espionage. i don't know, amon, this is congressional espionage. this story burns me up what can you tell us? >> some members and staffers may be trading on information they learned during the course of their daily operations. "the wall street journal" story today said they did not come up with evidence and they did find members of congress trading in their personal accounts and shorting broad measures of u.s. economic health. so that's one of the things that's got reformers worried here is that these folks on capitol hill know a lot about what's going on before the rest of the broad market does and insider trading laws have really never been applied to congress itself. >> you see -- >> it's a huge fire zone up on capitol hill. >> this was some of the stuff that use various mutual funds and index funds to go short. >> senator isaacson of georgia was in this story. i cannot confirm or deny, i'm just saying he was in the story. the husband of new york senator jill brandt, isaacson, the republican, jill brandt, the democrat, her husband and spencer baucus who is on the banking committee. here's my point. you know that the members of the banking committees and many other committees and the entire caucuses, the democratic and republican caucuses were meeting with bernanke, hank paulson, the treasury secretary. they had access to unbelievable volumes of information and they go out and then, what? call their broker and short? this is crazy to me. >> look, even in a sort of less calamitous time on a regular bill moving through congress, we've seen in in the past on asbestos legislation in particular. the asbestos stocks tick up and down based on the fate of those bills and you see that people are getting information off of capitol hill and trading on it before the announcements are made on capitol hill and you just see this explosion in washington, larry, of hedge funds doing congressional intelligence work, hiring lobists and former members of congress and former staffers to mind their sources back up on the hill to get information on the announcements. >> we're not allowed trade stocks and we're just lowly broadcasters. all these folks are bashing goldman sachs for shorting the mortgage market. they're out doing the same thing on the stock market side. >> i've got to get out. thank you ever so much for the update. we are going to continue to follow this story. coming up, tonight's kudlow nobel prize award. please stay with us. i've already awarded a nobel prize to steve forbes for introducing the flat tax as part of solving combrooes's problem. i want to give another nobel to senator bernie sanders for his brave stand for an order of the fed and get the secret minutes out in six months. that's my take.