president. the president then slow jamming on late night tv. the economy is slow jamming on sxwrob jobless claims. house speaker john boehner called on the president to repay millions of campaign funds. >> this is the biggest job in the world, and i have never seen a president make it smaller. the president keeps attempting to invent these fake fights because he doesn't have a record of success or a positive agenda for our country. it's as simple as this. the emperor has no clothes. >> all right. joining us in studio in just a moment, house majority leader eric cantor. plus, tonight a top energy official on tape admits the administration handles oil companies like the romans going into mediterranean villages doing random crucifixions. take a listen. >> they crucify them, and then, you know, at that time it was really easy to manage the next three years. >> tonight senator james joins us to ebbing pose the obama administration's true energy policy. also, earnings send markets on a tear. all three indexes up on better than expected housing data despite disappointing hike in jobless claims. then later in the show, vice president biden says president obama is tough on iran. take a listen. >> i promise you the president has a big stick. i promise you. >> well, the double emt andra lost on the vice president. apparently. congress is raising a red flag that iran is mobilizing for a cyber war to destroy our economy. we have general barry mccaffrey joining us to talk about it. let's get right to our top story. republican leadership demanding presidential leadership. taxpayer funded campaign stops, slow jamming on tv, while the economy is slow jamming itself. joining us now to talk about all this exclusively, we welcome back house majority leader eric cantor, republican from virginia. thank you very much, as always. let me just ask you, speaker boehner, raise this issue. are all these college campaign trips, campaign trips, not policy trips on the taxpayer dime? >> i would think that anybody looking at these campaign stops would know that this is about politics. it's not about policy. it's not about the commander in chief of our country going out to meet americans. it's about a presidential candidate out campaigning. and really it's the problem that we face in washington. i think the american people want to see us get something done. they don't want to see us engaging in politics every day. >> just another quick one, if you would. pollster john mclaughlin is out in some of the swing states. he says he finds blue collar workers very annoyed at obama's lavish vacations. they can't do it because of high gas prices. they stay at home. he is going to hawaii. first class. what's your thought on that? >> i think it just reflects really a disconnected nature of washington because, again, people are struggling out there. really. it's anxiety filled around the country because the uncertainty of the future, people's inability to see any growth come back in the economy, and for anyone to sit here and in the president in particular, it's a role model. it's sort of like having a tin ear wrush know, we've got to be cognizant of the fact that there are tough times out there for people. lavish vacations right now is not what i think middle america wants to see in terms of an elected official. >> on politics again. to rolling stone magazine, president obama says mitt rom my is an extreme conservative. he cannot run away from that, and obama is going to hold romney accountable. now, is it such a bad thing to be a conservative, number one, and how should romney react to this charge? >> i think mitt romney should be mitt romney. he is a demonstrated leader in terms of job creation. he is the only candidate that has put forward a bold pro-growth plan to get this economy back on track, and when mitt romney's activision is compared to that of the president, there is hands down mitt romney is the winner. the public knows that the economy is not growing fast enough. what has made america the marvel of the world? it's our growth oriented as spirational society. mitt romney draws on that and sets us up, i think, for stellar growth in the future. >> all right. stellar growth in the future. in his election night speech tuesday night, mr. romney says it's still about the economy and we're not stupid. now, some people are saying he is just attacking obama and doesn't have he, romney, his own economic growth program. you seem to think he does. does he need to get out there with that economic growth program and a little less criticism of the president? how is that working? >> larry, there's no question. this is an election that is a referendum on the president's policies, and i think that the public has demonstrated they are dissatisfied with the policies coming out of this white house. i would say, though, that mitt romney does have a plan. he stands for free markets, for pro-growth economics, and for getting the engine of small business and innovation going again in america. that's who we are as a society. you know, people have come here to this country, ordinary people doing extraordinary things. right now washington is in the way and has made it too difficult for that to happen. mitt romney has a plan to address that, so we can get back to who we are. >> talk about small business tax to us. you have pretty spiffy 20% small business tax cut, and past the house, i don't know what's going to happen in the senate. what do you think is going to happen in the senate? why -- i had some people on this show, some democrats that say this is just, you know, tax cuts for rich people, tax cuts for hedge funds. eric cantor is back to doing that. what's your reaction to that some. >> i mean, i just don't understand why it's so difficult to get some people in washington to say, you know what, small business people should be able to keep more of their own money because they know how to allocate their capital, grow their business, not washington. and just because somebody who may be wealthy has a small business and is creating jobs, why can't i go home to richmond, virginia, and tell the folks that i represent they can get a benefit and have it easier. >> the president always says it's the government's money. he says tax cuts are like -- are like spending cuts, and we can't allow that. is it the government's money, or is it the small business's money? >> it's a fundamental difference of activision in terms of the direction of the country. i think most americans believe it's their money and the money is better spent with those that earn it. not to say the government doesn't have a function. we need to make sure that is a limited and responsible government that functions. it will come from the confidence in the private sector and most especially our small business men and women. that's what the small business tax cut is about, to create more jobs. >> on the path to broad based corporate tax reform, i certainly hope which may be the number one priority for growth. >> no question about it. you know, we can't get there right now because the president has insisted that any kind of broad based tax reform is tax hiked. we believe in lowering rates, broadening the base, simplifying the code so that capital can flow to its most efficient use without government and washington going and picking winners and losers to the tax code. >> last one, i love this, i read that you are supporting your fellow virginian governor bob mcdonald for vice president. is that true? mcdonald for vice president? >> listen, he is a fine gentleman. he is somebody who has steered our state through tough times. i think if you look at our unemployment rate, our growth rate, we fair a lot better than most, and bob mcdonald and i were seat mates in our general assembly, and he is a great guy. i think he would make a great vice president. >> have you talked to mitt romney about this? >> no. >> do you intend to? >> it's his decision to make -- >> you are serious about pushing mcdonald? >> absolutely. mitt, i think, again, mitt and his team know that it is their activision, it is mitt romney's leadership that's going to win the day, and i'm sure they'll make the right decision to say, look, we have a team in place that is going to be pro-american, pro-growth, pro-success. >> all right. we're going to leave it there. many thanks house majority leader eric cantor, as always, outspoken. now, we're going to ply move right along here. we have our friend david goodfriend, a former clinton white house official, and we bring in steve moore, the "wall street journal" editorial board, author of "return to prosperity." before i begin, let me play for you a remarkable soundbyte from last night's john harwood interview with treasury man timothy geithner. i'm going to get you on the other side of the bite. hang on, gentlemen. take a listen. >> glen harwood, who you know well, dean of the columbia business school, wrote a piece today saying that the president's spending commitments would require an 11% tax increase on people under $200,000 a year. >> that's a completely made up remarkably hackish observation for an economist. >> all right. we're going to bring back stooefr moore and david goodfriend. we're going to bring them both in. david goodfriend, i was really unhappy not that geithner doesn't agree with hubbard's analyze. i'll get to that in a minute, but mr. geithner, with the high office of treasury secretary, okay, he has become very political. he has become very partisan. he is attacking romney. he is attacking paul ryan. he called glen hubbard a hack. you know, treasury secretaries are not supposed to take that attitude. what's going on here? >> i think he is talking about a frustration with people spinning and not talking about facts. i mean, i would like to take issue with your previous guest, mr. eric cannotor. you know, he walked away from the table in a tantrum from a deal that would have balanced and, in fact, cut our deficit by $4 trillion. it was more cuts than it was tax increased, but because it had a single dollar of tax increases, he walked away. the hypocrisy on the republican side of the aisle talking about pro-growth. what were we doing in the bush years? that was not growth. >> i think that's fair. look, we could debate that until kingdom come, steve moore. i'm saying that traditionally treasury secretaries like geithner, like hank paulson, even going all the way back to james bake are, okay, you got to deal with democrats. they're going to have a debt ceiling bill come the end of the year. they're going to have a tax -- you can't be a partisan political campaigner, steve moore. this is what bothers me about kim geithner, who i personally like, while i disagree with him. he has gone way too far. >> i thought that statement calling him a political hack, glen hubbard a political hack was really beneath the dignity of the treasury secretary. look, the truth -- the main point here, larry, is that what glen hubbard said was true. you cannot get all the money that you need if you want to balance this budget or come anywhere near balancing the budget by just taxing millionaires and billionairres. everyone knows that. even if you took every penny from every millionaire in this country, you could only fund the government for less than three months. it doesn't work. if you have to raise tacks -- i think it's a very legitimate point to say, look, if the democrats win in 2012 in november, they're going to have to raise taxes to fund all of these programs. >> false. this is simply false. >> larry, have i to respond. it's simply false. >> how? >> the congressional budget office, the office of management and budget, all the bean counters in washington, the republicans and democrats look to for the answer, all agree the budget deal that was on the table that president obama put forward, with the tax cuts preserved for 98% of the population and cuts to medicare, that would have balanced the budget. that would have have reduced the deficit. you are not being honest. >> you know what, wait a minute. the president has never put a balanced budget or anything like it anywhere near being put on the table. what you're talking about is -- >> yes, you did. >> you're tag about what happened behind closed doors. we don't know all the details. what we do know, larry, is that pre president obama put forward a budget blueprint a few months ago and explained to me this. how did that get zero votes in the house, zero votes in the senate? not even nancy pelosi would vote for the president's budget. you can't say that he is serious about deficit reduction. >> all i know -- david goodfriend, you may not agree with hubbard's analysis. okay, get that. all i know is he is looking at the numbers. even with all the investor and buffett and upper end tax hikes, that's only $150 billion a year. >> that's right. >> they're spineding $500 billion a year. 150 is lower than 500, and that spells tax hikes for the whole population, david. that's what i know. whether you agree with hubbard's 11%, i don't really care. his math is pretty compelling, though. >> that's right. >> let me take a deep breath and try to step away from my own political talking points, larry, because i'll do that every now and then. >> that would be a first. >> let's actually look at the numbers and consider the following. we know for a fact that if congress does nothing, the bush tax cuts go away at the end of this year. that should be our baseline of reality. let's assume that that hamdz. in other words, all things go back to the way they were when bill clinton was president, and that was the longest economic boom in american history. >> all right. >> what the president has proposed is preserving those bush tax cuts for all but the top 2% and cutting medicare, defense, and the larger bigger budget -- >> i got to get out. with all respect. >> with all those taxes, how can you possibly grow the economy? >> bill clinton did it. i don't know. clinton did it. >> i got to get out. all i'll say is if you repeal all the bush tax cuts, that's basically kind of what glen hubbard is saying, that the middle class is going to get soaked. thank you, gentlemen. i appreciate it. up next on "kudlow" stocks hit it out of the park today. they had a triple digit rally. better than expected housing data. easy money from the fed. and excellent earnings coming out of the s&p index. and ahead on "kudlow" senator inhoff investigates the e.p.a. crucify them approach to oil and gas companies. crucify oil and gas. he has a high level official caught on tape and a remarkable story, and later on congress warns that iran is mobilizing a cyber war. attack our power grid. they want to destroy our economy. we're going to go to four star general barry mccaffrey for the lowdown. >> don't forget, free market capitalism, always the best path to prosperity. as eric cantor said, it is the people's money. please let them keep it. laces? really? slip-on's the way to go. more people do that, security would be like -- there's no charge for the bag. thanks. i know a quiet little place where we can get some work done. there's a three-prong plug. i have club passes. [ male announcer ] get the mileage card with special perks on united, like a free checked bag, united club passes, and priority boarding. thanks. ♪ okay. what's your secret? [ male announcer ] the united mileageplus explorer card. get it and you're in. guys. come here, come here. [ telephone ringing ] i'm calling my old dealership. [ man ] may ford. hi, yeah. do you guys have any crossovers that offer better highway fuel economy than the chevy equinox? no, sorry, sir. we don't. oh, well, that's too bad. [ man ] kyle, is that you? [ laughs ] [ man ] still here, kyle. [ male announcer ] visit your local chevy dealer today. right now, very well qualified lessees can get a 2012 equinox ls for around $229 a month. welcome to the world leader in derivatives. welcome to superderivatives. zeerchlts let's turn now to stock market work. break down today's triple digit rally. dow up 114 points. log a nice three-day rally. nasdaq up 21 blsh. the s&p 500 added nine closing just shy of 1,400. three strong market drivers. pending home sales, highest level in a couple of years. 72% of u.s. s&p countries have reported ber than expected profs, which are the mother's milk of stocks, as i always say, and last but not least,ize money from the fed. breaking news late this evening. s&p downgraded spain two notches. europe is not going wra with a. joining me now, michael farr, president of farr, miller in washington author of "the arrogant cycle" and andy cross. do you care about spain, or do you want to focus on profits and easy money in the u.s.? >> i want to focus on profits and easy money. mostly profits here in the u.s. although the spain news is interesting because starbucks, had when they reported today said that europe is going to be a struggle for them. u.s. doing well for a company like starbucks, chipolte, and maybe not quite as well in europe. >> at the margins, spain is new news. is that going to affect you tomorrow? >> i think it could. i think there's a greater concern in europe reason, larry, this election and a new -- that we're going to see, i guess, coming up on may 6. this is a move away from austerity, and basically if you can't get france to get in line with germany and you can't get the e.u. countries together as we have problems in europe, all of a sudden they might not be able to respond very efficiently, and, yes, that could cause problems. >> they're quibbling. >> they're quibbling. >> they're quibbling with marco and the central bank guy says we need growth, but nobody knows what the hell he is talking about. i know what growth means. it means lower marginal tax rates and limited government, but i want to ask you, michael farr, is one of the themes -- you have bernanke, easy money. interest rates are going to stay low, probably for the rest of my lifetime. profits are rising. inflation is not going lower, and we'll probably gradually move higher. question. is inflation a stimulant to stocks? let me put it differently. are stocks a good hedge against a gradual inflation rise? >> yes. >> tell me more. this could be a very key component of the story. >> i think it is. particularly, when you see interest rates so low and you wonder about where you can put money and how can you protect money in inflationary environment, so stocks, yes. stock prices will appreciate. the currencies, particularly for the mull-nationals, will appreciate, and participate in demand. so, yeah, you have to have some sort of goods that are going to appreciate with the value of the currency to protect you. stocks do that. >> andy cross, you're a bull on this story. is the inflation hedge part of your bullishness, or are there other more powerful reasons? >> i think there are a lot of reasons, larry. the inflation is really important because if you can find companies that can pass off costs and can monthing their costs, grow margins as they grow into growing markets, whether it's the u.s. or around the world, that's really compelling for a long-term investment. as long as it's reasonable level inflation, but really you want to find companies that can manage the expectations of their business and grow profits. like you said, profits are the way to go for a long-term investment. >> got to leave it there. michael, andy, thanks very, very much. coming up on "kudlow" jimmy cramer will tell us about a stock with a business model that just blows him away. in the words of jim cramer it's a buy, buy, and buy. that's next up on "kudlow." (female announcer) most life insurance companies look at you and just see a policy. at aviva, we do things differently. we're bringing humanity back to life insurance. that's why only aviva rewards you with savings for getting a check-up. it's our wellness for life program, with online access to mayo clinic. see the difference at avivausa.com. what do you mean? your grass, man. it's famished! just two springtime feedings with scotts turf builder lawn food helps strengthen and protect your lawn from future problems. thanks scott. [ scott ] feed your lawn. feed it. 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 full-size or above, and still pay the mid-size price. i'm going b-i-g. [ male announcer ] good choice business pro. good choice. go national. go like a pro. costco has been capitalizing on americans buy in bulk obsession, but you have to buy in bulk when it comes to the stock. gemmy cramer, my buddy, says yes, absolutely. what's up? >> our mutual friend carl quintanilla will be doing a -- i'll be watching like everyone else, even as i have had a sneak preview, but i want to take a moment to talk about costco, the stock. not just costco, the special. i've been ae believer in this stock for years and years. my charitable trust owns it, i think our viewers should continue purchase it. what draws me to the stock? first, its unique business model blows me away. because it is a club. people pay to shop there. the dues just went up for the first time, and almost no one blenked. netflix, their customer base revolted. second, costco offers the every day low price i used to associate with wal-mart. costco is wal-mart on stair roads. costco pai pays its associates well. it offers the best benefits of any company that i follow. that's allowed it to have the lowest turnover. why is that so important? because the biggest line item cost for retailers is training new employees. that makes the cost of doing business for costco amazingly low. enjoy the documentary, and after it consider buying the stock. larry, back to you. >> all right. thanks very much. jim cramer. now, that documentary mentioned is called "the costco craze." that's tonight 9:00 eastern and 9:00 pacific only on cnbc. coming up on "kudlow" caught on tape, a high-ranking e.p.a. official admits the agency's goal is to crucify oil and gas companies. this is incredible. it doesn't get any more outrageous. we're going to talk to senator jim inhoff who launched an investigation. if you made a list of countries from around the world... ...with the best math scores. ...the united states would be on that list. in 25th place. let's raise academic standards across the nation. let's get back to the head of the class. let's solve this. welcome back to "the kudlow report. "eye i'm larry kudlow. in this half hour, now, caught on tape the obama administration's war on fossil fuels is exposed when an e.p.a. official admits on the tape the administration handles oil companies like the romans going into mediterranean villages doing random crucifixions. then the senate passes an $11 billion taxpayer funded post-office bailout. one senator goes postal. he calls the bay bailout generational theft. isn't it time to just privatize mail delivery once and for all? and, later, congress raising the red flag that iran is mobilizing cyber warriors. they could destroy our economy. general barry mccaffrey joins us with more on that. now, new calls tonight for a full e.p.a. investigation after a top energy official admits on tape that the administration handles oil companies like the romans going into mediterranean villages doing random krus fictions. who talks like this? well, brian schachtman joins us now with all the details. good evening. >> you are going to hear, larry, exactly how he does talk. thank you very much. this is where the obama administration is not too happy, as you might imagine. the words of one person of the e.p.a. are being taken as representative of the white house's approach to the entire domestic oil and gas business and it's created quite a bit of a political firestorm. back in 2010 the echl p.a. administrator who oversees five states and 66 tribal nations told employees it would be useful to make examples of oil companies. how? well, watch this. >> it's kind of like how the romans used to conquer the villages in the mediterranean. they would go to a turkish town somewhere, and find the first five guys and crucify them. that town wassize to manage for the next few years. they make temples -- >> auz just saw, it was recorded and supposedly uncovered only recently, and yesterday james inhoff, one of the states overseas described the comments as exhibit a of an administration he says who wants to get rid of fracking, which would essentially derail the current production boom in the united states. >> they have the enforcement tools. they are able to scare people, intimidate people, and these are the very people who are working, hiring people, doing what's necessary to run this machine called america. >> today he has apologized, and the e.p.a., obviously, doing some damage control, but some are satisfying that the tape reveals what really is on the minds of the e.p.a. three congressmen have called for the official's resignation, so we will see what happens. mr. kudlow, back to you. >> all right. many thanks to brian schachtman. maybe we can get some sound on the floor. i think i lost my connection. all right. that's right. here now we do have the aforementioned oklahoma republican senator james inhoff. he is also laying this out with the new book "the greatest hoax." how the global warming conspiracy threatens your future. senator, you uncovered this extraordinary tape. what is this kid trying to say? is this e.p.a. policy? is it a crucifixion war on oil and gas or what? >> larry, we've watched the intimidation for so long now, and this is the first time we've actually gotten the audio on a tape where he is actually talking about it. this is the director of the sixth district of the e.p.a., so he has -- including my state of oklahoma. texas and other states. but to go through and pick up people -- well, first of all, let's start with the crucifixion. for him to make this statement that is -- i think you stated it very well. to go around the mediterranean like the romans did and they would find -- >> this is the most ludicrous thing. >> to crucify the first five guys so you can get their attention. >> it's remarkable. >> the rest of the thing. i had the whole statement on the -- i read is on the floor of the senate which covered a lot more than that, but the point is there. they want to intimidate people, and they want to actually -- the big picture there is they want to do away with fossil fuel. >> we're going to get to that in a second. let me read you what the man actually said. quote, "it was kind of like how the romans used to conquer little villages in the medicine terranean. they would go into a little turkish town somewhere. they would find the first five guys they saw, and they would crucify them. then you know that town was really easy to manage for the next few years. so you make an example of people who in this case are not complying with the law." is this a political and cultural statement of the obama e.p.a.'s war on oil, gas, and fossil fuel? is that what is really behind this? >> that's what's behind this. you know, he has been -- had this war on fossil fuels since before he was president, and he has done his best to stop it. if you stop and think about, we have produced more recoverable reserves in oil and gas and coal than any country in the world. our problem is they won't let us export our own resources. it would be very difficult for them to continue what he started out when obama was saying, well, we just don't want oil and gas and all that. so he went on -- if you remember, his last big message, a joint statement -- joint session. he praised natural gas, but then very quietly said we got to do something about hydraulic fracking. >> this is the e.p.a. regs. you think they're all bad for fracking. >> larry, you can't get one cubic foot of natural gas out of a tight formation without hydraulic fracturing, and the first hydraulic fracturing was in my state of oak ok. that was we back in 1949. there's never been a documented case of ground water contamination. look what happened. i named several of the companies, and several more have called us since then, but range resources, for example. that's one of the examples i use. they accused them of ground water contamination. they did not have the evidence there. they actually sent a letter to fine them $33,000 a day. for a year they had a barrage of accusations against this company, and then there was no evidence. what do you do very quietly to withdraw your accusations and your charges? you wait until friday night when it's a slow news day, and that's what happened. >> we're going to have to leave it there. i'm glad you uncovered this tape. i think it tells everything about the politics and the culture of the obama e.p.a. it's quite remarkable. many thanks to senator james innhoff of oklahoma. let's turn to cnbc contributor jared bernstein, former chief economist advisor for joe biden and texas economist joel bratdy, the vice chair of the economic committee. how shocked were you when you heard this crucifixion statement, and i want to ask, where is lisa jackson? do i have the name right? she's the e.p.a. administrator. has she yet disowned this horrible, dreadful statement by her suborder nat? >> she's not disowned it, larry, and she's not taking any action to discipline him or in my view i think she needs to replace him. truth of the matter is, we're seeing a war on energy manufacturing in texas and other energy producing states like we've never seen before. i think the statement wasn't just shocking. it was revealing about the mindset and truth of the matter is, we need regulators in every agency who take a balanced approach, who look at putting water and clean energy and clean air, but understand there are real jobs at stake. in this case that balance is no longer there. that fair judgment is no longer there, and he needs to be replaced. >> jared bernstein, this answer e.p.a. scandal. this guy who made that statement should be fired. if he doesn't get fired, you're going to have gsa overtones. you know that, jared. this is a political election season, and even if it weren't, that is a disgusting statement. you acknowledge that, don't you? >> i couldn't agree with you more. i agree with your point about lisa jackson. not only is it a rep rehencible statement and a ridiculous one, and here's where we disagree. it does not for a second, in my view, reflect either the energy policies of the obama administration, which have been very much in the spirit of drill and frack, and that's why. one thing that hasn't come up in this discussion so far, that's why our domestic production is way up when it comes to oil, and that for the first time in 60 years that's even older than you are, you have got america as a net export of petroleum products. it has nothing to do with the policy, but absolutely rep rehencible. >> okay. we could argue private land, federal lands. i don't want to go there. kevin brady, the senator says that the new e.p.a. regulations about fracking are going to be harmful. i would like to get to the bottom of this. what's your take? are the fracking regulations going to be bad, good, conducive, not conducive? >> i think they're going to be bad. mainly because the administration has launched an assault on fracking from so many areas, from the s.e.c., to the claims in pennsylvania, on ground water contamination, which proved false as well. they see this, i think. if they can stop fracking, they can stop oil shale development, just as they denied the keystone pipeline. this president hasn't developed these energy resources. the private sector has despite his policies. >> necessity don't want to stop fracking for a minute. i used to work for president obama, and i can tell you, he is excited about natural gas production. he has the same kinds of standards that congressmen brady appropriately argued earlier. you just don't want to do that sort of thing without checking the environmental impact. i hope we -- i hope we -- >> check this. >> he is not the energy president. >> please don't interrupt. i did not interrupt you. i hope we can all agree. i hope we can all agree on that point that you want an e.p.a. to evaluate the environmental impact of such an invasive procedure as fracking, and if it's fine, let's do more of it. >> i'll tell you within thing, one thing is utterly indisputab indisputable. keystone pipeline should get down done, and i want to ask you what you are thinking about it. it's going to come in with the senate vote. they only need a couple of votes. it's going to be part of the highway bill. this is another major obama blunder. this is a political blunder and economic blunder and an energy blunder. what do you hear on the next vote in the senate on the keystone pipeline? >> well, obviously the house is very aggressive about this. there is no just fekz for this decision. i think the fact that the president had to scramble to oklahoma to try to appear like he was supportive of the southern portion, which is encouraging, but that was built despite him because it could get around his permitting, and the truth is it still doesn't bring canadian oil from our ally to the united states to be refined here and used in america and so i just -- i appreciate the point that has been made, but these investments in energy manufacturing were made long before this president was in office. they're coming to fruition today despite his efforts. >> all right. >> so leave it will, gentlemen. i'm sorry. on the got to leave it there. jared bernstein and congressman kevin brady. mr. brady is vice claim of the joint economic committee. special programming note for tomorrow evening, the very outspoken former mississippi governor haley barbour will be here to visit. senate passes an $11 billion taxpayer funded, post office bailout, but the post office itself doesn't even want it. tennessee republican senator bob corker calls it generational theft. he is up next on "kudlow." zap technology. departure. hertz gold plus rewards also offers ereturn-- our fastest way to return your car. just note your mileage and zap ! you're outta there ! we'll e-mail your receipt in a flash, too. it's just another way you'll be traveling at the speed of hertz. the senate passed what amounts to an $11 billion taxpayer funded post office bailout yesterday, but get this. the post office doesn't even want it. the postal service is losing $25 million a day, and our next guest calls it generational theft. it breaks the budget control act, and he wills a much better plan. joining us now to talk about all this, we welcome back tennessee republican senator bob corker. mr. corker, thank you, on sir. this is going to break the budget control act, which itself was no great shape. this is irresponsible, and if i'm not mistaken, republicans voted for this along with democrats. >> the vote was 62-37, and in a bipartisan way this bill passed. i think the whole world certainly our nation watched as our country almost came to a halt last august it 22nd. a deal was made where we could agree to cut discretionary spending by x amount. we capped spending in 2012 and 2013, and this bill already violated that by $11 billion. i mean, it's hard for me to see how anybody can have faith in the senate when we can't even make it until may without breaking the budget control act chshgs we, by the way, did in a small way with the highway bill that was passed also. >> and maybe with the student loan bill also before that is all said and done. let me get this right. the post office -- mr. done high doesn't like this. he knows he has to take, what, $100,000 out of this thing before it's all said and done. you can't have first class delivery on saturday. there's got to be some structural changes for pensions and benefits, and i take it none of that is in this bill, and that is an outrage. >> this bill, actually, handcuffs the postmaster general more so than he was before, and, you know, i think most -- if we just gave him a modicum of the kind of flexibility that businesses have, he could turn this around, but we tell him he cannot close locations. we till him he has to deliver mail six days a week. we tell him what he has to do with regard to his labor negotiations. we tell him all the things he has to do. we won't allow him, by the way, to raise rates. you wouldn't believe the corporate welfare that takes place through the post office. i mean, the calls i was getting over an amendment to give the post office flexibility, which, by the way, would have saved the post office and taxpayers $21 billion. this is my amendment. we lay it out there, and, larry, you wouldn't believe the calls i got from the private sector who benefit so much from having the post office lose money and taking care of their mailings at a loss, and this bill, by the way, forces the post office to continue to take care of mailings for the private sector at a loss. >> at a loss. at the taxpayers' loss. it's e-mail versus snal mail. let me get this right. this is being hailed as a victory for the postal unions. they are stopping the layoffs. they stop the benefit restructurings, and they stop the dollar reductions. is that right? this is a union victory and a taxpayer loss that you yourself call intergenerational theft. >> i would actually call it a victory for many special interests at a tremendous loss to taxpayers, and, again, what we've done -- this is -- you know, larry, we're watching this movie play out across the atlantic. basically what's happened in western democracies is politicians have been giving set sflenz what they want without asking them to pay for it. >> for free. >> for free. that's exactly what we're doing with the post office. this is one of the things that congress does to keep itself popular at the expense of taxpayers. i just hope the house will be more -- >> we don't have a republican hall of fame. i want to check. i didn't get a chance today. i want to check and see which republicans voted for this because they ought to know better, and i bet you there are some good democrats that do know better, but this is an outrage. anyway, senator, thank you very much. he has a better bill that would save $21 billion, and that is the direction we're going in. >> all right. next up on "kudlow" the secret service sex scandal is spreading, unfortunately. we'll have full details ahead. plus, congress raises the red flag that iran is mobilizing for a cyber war. could this destroy our economy? four star general barry mccaffrey joins us next. welcome back to the kudlow report. i'm brian schachtman. there are new developments in the secret service investigation to put in question their conduct in columbia and that it wasn't maybe an isolated incident. anonymous sources have come forward to kiro tv saying they received sexual favors from strippers in san salvador and took prostitutes to their hotel rooms ahead of the president's visits in march of 2011. now the secret service is following up on these allegations with an internal investigation. homeland security secretary janet nap tall i don't even testified yesterday that there was no evidence of similar behavior to columbia and it appeared to be an isolated incident. two dozen officers were implicateed in the skanldz. so far eight have been removed from service. the expansion of the investigation represents another mark against the secret service which, of course, has been tarnished by this prostitution scandal. larry, back to you. >> all right. brian schachtman, thank you very much. now, another security threat to report this evening. congress is warning that iran is preparing for a cyber war targeting the american economy for disruption. today security specialists testified before the house homeland security committee and iran is spending billions recruiting a hacker army. their target? the u.s. power grid, water systems, and other vital infrastructures. maybe the new york stock exchange for all i know. joining us now to talk about both national security threats, the distinguished power stoor army general and military analyst barry mccaffrey. general mccaffrey as always, sir, great to see you. what can you tell us about this hacker army? how serious is this? does iran have the goods? >> good hearing, i think, by congressman lundgren and mckeehan. a lot of good testimony. the iranians have spent $1 billion as a weak adversary building cyber warfare capabilities. they think it's warfare that's already been initiated. i think if the gulf went bad, if they economically start strangling, if they have to try and constrain trade in the gulf, if the israelis attack them, then we'll see cyber warfare used. >> have we seen any evidence yet? >> they've gone after bbc. they tried to take down voice america. they use this capability right now. >> where are they getting this capability? >> well, you know, they're pretty sophisticated people. they understand computers. they're clearly capable. the heu nuded to create. >> pardon me. just with help from places like russia and china? >> i think there's only been an insinuation. the chinese and russians are obviously the cadillac standard here. they're the world class. the iranians are better than some people believe they should be on their own. they could be a surrogate, clearly, for either the russians or the chinese, but i think they're also capable of using their own surrogates. there's an argument that hezbollah may well be the surrogate attack agent if they had to use these weapons against the israelis or the u.s. >> okay. what should the united states do about this threat? what's our -- what actions should we? we've got the sanctions. it's all part and parcel of trying to stop the nuclear weapons development. what do we do with saber hacking? >> i think our defense capabilities in the united states are inadequate, and i'm not the lone ranger in that argument either. we have done an enormous amount. there's no question. general keith alexander, the whole national security agency team, we have a huge offensive capability ourselves, so i think the deterrents of the iranians right now is the principle tour we're using. plus, we have the united states navy. you know, at the end of the day, is f they actually took down our electrical grids, if they took down our banking system, they had a bank on something else that there would be a retaliatory strike, and it might not just be cyber warfare. >> just walk me through that. how does the fleet stop this? how does the fleet -- do they send different signals or have blocking segment nauls? this is kind of like a james bobbed movie or a modern updated high-tech james bond movie. >> when i mention the united states navy, i mean, you know, at the end of the day if they did a genuine damage using cyber warfare, they would have to count that the retaliation might not just be electrons. it might be fea teams and smart bombs. i don't think the israelis are going to attack the iranian nuclear capability. >> you rule it out right now? >> i wouldn't rule anything out. i think the israelis think correctly their survival is at risk, but for now we have to count -- we have to hope that deterrents keep the iranians in a box. >> just for my -- you believe that iranians have this capability many. >> oh, i think there's no question. the only argument would be when would they use it? if the israelis physically attacked them, if there's war in the gulf, then we should expect that to come out, but i think there's also an argument that they believe the attack on their centrifuge capability -- >> came from israel. >> with our help. >> with the united states ear help. i think that we already initiated. >> general barry mccaffrey, as always, that's it for this evening's show. special programming note. tomorrow night, the very outspoken former mississippi governor haley barbour. thanks for watching. i'm larry kudlow. we'll see you tomorrow night. nice morning, scott? aye, or...a mornin' of tiny voices crying out, "feed us -- we've awakened from our long winter's nap and we're peckish to the point of starvin'"!! i don't understand... your grass, man! it's a living, breathing thing. it's hungry, and you've got to feed it with scotts turf builder. that a boy, mikey! two feedings now...in the springtime strengthens and helps protect your lawn from future problems. [ scott ] get scotts turf builder lawn food. it's guaranteed. feed your lawn. feed it! what ? customers didn't like it. so why do banks do it ? hello ? hello ?! if your bank doesn't let you talk to a real person 24/7, you need an ally. hello ? ally bank. no nonsense. just people sense. [ male announcer ] while others are content to imitate, we'll continue to innovate. the lexus rx. why settle for a copy when you can own the original? see your lexus dealer. wanted to provide better employee benefits while balancing the company's bottom line, their very first word was... [ to the tune of "lullaby and good night" ] ♪ af-lac ♪ aflac [ male announcer ] find out more at... [ duck ] aflac! [ male announcer ] ...forbusiness.com. [ yawning sound ] [ male announcer ] ...forbusiness.com. how did the nba become the hottest league on the planet? by building on the cisco intelligent network they're able to serve up live video, and instant replays, creating fans from berlin to beijing.