know in about two hours whether grassroots voters in a state as midamerican as you can get, wisconsin, rise up against profligate government unions and out of control tax payer funded entitlements. for only the third time in american history, a sitting governor, courageous scott walker, faces recall. we're there live. also this evening, is bill clinton doing everything possible to sabotage president obama? first he called romney's record sterling. last night, a direct jab, clinton couldn't help himself by boasting his four budget surpluses. moments ago, in an exclusive interview with maria bartiromo, the former president advocated the extension of the bush tax cuts to curb a recession, another jab at obama. take a listen. >> i don't have any problem with extending all of it now, including the current spending levels. they're still pretty low, the government spending levels, but i think they look high because there's a recession. >> yep. he did say extend the tax cuts and notice, he said we are already in a recession. so is clinton in a sense an evil political genius setting obama up to fail? plus, new revelations that the justice department may have lied about the fast and furious gun walking scandal. will attorney general eric holder be held in contempt? might there be impeachment hearings? oversight and reform chairman congressman darryl issa joins me exclusively. first up, polls in wisconsin will close at 9:00 p.m. eastern. the outcome of the recall election to unseat governor scott walker is being watched in washington, on wall street and all around the country. cnbc's chief washington correspondent john harwood joins us live from madison, wisconsin this evening with all the details. good evening, john. >> reporter: good evening, larry. two hours left in this recall which has gone on for months. the candidates have made a huge final push here to try to get their voters out. we're talking about republican governor scott walker, who staked his reputation and record on curbing public employee unions, democrat tom barrett, the mayor of milwaukee, who narrowly lost to walker just two years ago, now is trying again. we know what the stakes are. the first is the implications for the national effort to curb public employee unions by governors many places and also entitlements around the country. the role of outside spending, you've had huge spending, most of it favoring walker coming in from outside the state. finally, the ability of republicans and democrats to turn out their voters. that is a sign of how obama and romney may fare in the fall. and of course, the late polls are something we've got to watch very closely. in different places, according to those polls, marquette university had one late survey showing scott walker up by seven points. that's the real clear politics average. but democrats say they've gotten a late surge of momentum and there was a democratic public policy polling showing tom barrett three percentage points behind. so larry, with two hours left, we may be bracing for an outcome that's going to be quite close tonight. >> john, i saw in earlier reports that the turnout is, in fact, large. what are you hearing? >> reporter: that's right. elections officials projected a presidential level turnout of about 60% of those eligible, and the wisconsin public accountability board has recently sent out a report saying turnout is heavy across the state. i think it shows that both parties have been engaged, their machinery has been engaged and it's a very big test for everybody involved. >> all right. many thanks to john harwood. we appreciate it. so if, a big if, if scott walker wins, i say don't blame obama on this one, folks. this is all about the battle for america, about the tea party and taxpayers versus government unions. if scott walker wins, it's because he cut property taxes, balanced the budget, grew the economy and curbed public union arrogance and excess. today's votes could have major implications on november's presidential race and the future republican or democratic control of congress. all right. joining us now from milwaukee, democratic state senator chris larson and with us from washington is wisconsin republican congressman, sean duffy. mr. larson, let me begin with you. i'm already hearing the blame game, that if, if tom barrett, the milwaukee mayor, loses, it's obama's fault for not coming into the state. i don't believe that for one second, state senator chris larson. i think it's because if scott walker wins, it's a grassroots movement and walker's done a good job running the state, balancing the budget, no taxes and curbing unions. how can people blame obama for this one if that happens? >> yeah, i mean, i don't know where to start correcting you, but the fact is, the only people who are worried about barack obama being in the state has been republicans. they've been trying to pick a fight with barack obama and make this about him. this is about style, this is about somebody, scott walker, who has decided to try and divide our state in order to conquer it, in his words. what you're seeing is an uprising because of that. if you had asked people on the street, i post on my facebook wall all the time, ask why are you looking to recall the governor? and you get 100 different responses with 100 different reasons, but a lot of them surround the fact that he has divided neighbor against neighbor, family against family, and that on top of that, on his policies, they're horrible. the worst job records in the entire country, cut education funds more than any other governor in the history of the state, and not to mention the john doe probe where he's had to put $160,000 into a criminal defense fund. he's got a lot of problems he's dealing with. >> let me get congressman duffy in here. welcome back. let me repeat this again. if scott walker wins, i'm going to argue on this one, it's not obama's fault, that scott walker has done what he set out to do by curbing union excesses, by balancing the budget, by not raising taxes and in fact, cutting property taxes for the first time, and it turns out that scott walker was right and the skeptics were wrong, the bureau of labor statistics and the department of labor said they are about 25,000 new jobs in the last 12 months in wisconsin. walker got all that right. so why should he be unseated? >> first, this has nothing to do with president obama. this has everything to do with leadership. someone who is willing to go vote, someone who has guts as a leader to do what is right for the state, to have pro-growth policies where you're not raising taxes, not laying people off, and you're balancing your budget. you can't argue with the results in wisconsin. we went from a $3 billion structural deficit to a surplus, and everyone's still working. we are open for business. and that's why the senator can talk about division, but you've actually seen a union fi indication of wisconsin, it's come together and say i am sick of the politicians who wring their hands, they talk loud, draw a crowd, but get elected and don't go big. scott walker is fixing the problems in wisconsin and i think this is a message to every legislator in every state, here in washington, every governor, every mayor, to say listen, fix the problems of your community and your voters will reward you. >> mr. larson, let me just raise this point. i know you guys disagree. i appreciate that. but look, already, the largest state workers union has lost half its membership just as soon as the mandatory wages were lifted and the increase in co-pay for pensions and health care benefits, people just walked away. isn't that going to happen all over the country if scott walker wins tonight and if his union curbs remain in place? isn't that going to be all over the country? >> what's amazing about the statistics that you just cited is that there are still half of the members that there were a year ago. scott walker went out to kill the unions and half of them still signed up even though he made it nearly impossible for them to recertify, a threshold that even he couldn't clear saying you needed 51% of all members in order to vote to recertify, making it extremely difficult for unions to continue to exist. and granted, i realize, i don't know what your beef is with the unions, but unions are what created the middle class and we recognize that here in wisconsin for the last hundred years. and the fact that he's making this a partisan issue is a big mistake and a big mistake for anybody that makes it a partisan issue. unions are what created the middle class and middle class is what's made america strong. so the fact that he continues to try and go after them with such fervor, it's only backfiring. he's the only governor in the country with the recall election last time i checked. >> but the thing is, congressman -- >> let me -- >> you've got to respond to that. i thought the unions with no co-pay, getting essentially free health care, free pensions, large salaries, huge cost of living adjustments, sean, i thought it was because they were bankrupting the middle class taxpayer. that's why there's a revolt against government unions. >> two points. i think the private sector is sick of paying for benefits that the public sector gets and they don't get the private sector doesn't. i think what's important to note here, when talking about unions, we saw this whole issue of collective bargaining come up a year ago but if you live in wisconsin, none of the ads have been about collective bargaining. they have gone to jobs. we went to jobs, scott walker pointed out he's created 35,000 jobs last year alone, then they went to this john doe issue. they are throwing everything against the wall against scott walker, none of it is sticking. here's why. the independents are going to decide this race. independents aren't listening to the radio ads, tv ads. they are asking their school board members, asking people that are involved in this process, saying has it worked or hasn't it. and they are hearing their school board say this is working, we are saving money, they have taken the shackles off. we're still educating our kids and moving forward. >> not true. not true. not true. you've got 70% of scott walker's money coming in from outside of the state of wisconsin. so if he was such a good reformer, he wouldn't have to go beg for cash from corporate interests from millionaires and billionaires who are out of state, so his reforms are not working in wisconsin, which is why he's trying to go to the upper crust to try and get their money to spend in this election. >> he's raised taxes -- >> 300 times more money in wisconsin, scott walker has gotten more than mayor barrett. the bottom line is, walker has been running for a year. so the mayor's been in for one month. so of course scott walker's going to raise more money. if you want to look at wisconsin money, three times as much money scott walker has received as compared to tom barrett. [ speaking simultaneously ] >> thank you very much. got to leave it there. we can go on forever. polls close at 9:00 p.m. eastern time here on the east coast. that was wisconsin state senator chris larson and u.s. congressman sean duffy. thank you. special programming note, by the way, for tomorrow evening. we've got two powerhouse guests. exclusive interviews with jeb bush and former world bank president, robert zoellick. coming up this evening, fiscal promiscuity, trickle-up policy. some of the low-lights of president obama's failed economic policies. how to turn this mess around. don't forget, folks, free market capitalism, still the best path to prosperity. looks like a strong dose of it is coming to wisconsin. we'll be right back. mine was earned off vietnam in 1968. over the south pacific in 1943. i got mine in iraq, 2003. usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection, and because usaa's commitment to serve the military, veterans and their families is without equal. begin your legacy, get an auto insurance quote. usaa. we know what it means to serve. ♪ welcome to the world leader in derivatives. welcome to superderivatives. welcome back to "the kudlow report." so you thought friday's jobs number was bad, well, that was just the icing on the president's cake. listen to this from investors base daily. there are now more long-term unemployed americans than at any time since the great depression. only 58% of working age americans are actually working. that's the lowest since jimmy carter. and the rate of new business start-ups, that is america's job creators, has plummeted to an all time low. these are just three of the 19 low-lights of obamanomices. our question is has obama failed america? i don't know. let's talk to our two very distinguished guests. here now is cnbc contributor, steve ratner, former obama auto czar, and tony fratto, former bush 43 white house deputy press secretary. steve, welcome. you know, steve, you're a market guy. you are a pro-business guy. you're a capitalist. i know all these things about you down through the years. so my question is, tonight on "the kudlow report," will you come out and endorse mitt romney? >> no, i don't really think so, larry. you and i have been having these discussions for a long time and we'll hopefully have them for a much longer time to come. let me start with the positives about president obama, then we can talk about mitt romney if you want because i heard your intro. my view is very simple. nobody is happy with the state of the economy today, but i believe very strongly that things would have been a lot worse if president obama's policies had not been implemented. i believe the stimulus has actually added jobs. i think that's been studied. i think the bank rescue saved our financial system and not surprisingly, i think the auto rescues saved that important sector. when the president took office, we were losing 700,000, 800,000 jobs a month. we have been gaining jobs since the beginning of 2010. not enough, as i said, but i do think things would have been a lot worse had we not implemented these policies. >> all right. i tried, steve. i thought you might want to come out for him tonight. maybe the next time, you'll come out for romney. let me go to my pal attorney, fratto. once again we saw the op-ed piece in "the wall street journal." this is the slowest jobs recovery in the post-war period, and i ask you, is the argument that things would be worse, does that have political currency, tony? >> no. but let me first apologize. i know president clinton wanted to be here tonight to take this side of the debate with us. but you get me instead as a surrogate. that's really the problem for president obama is that the two parts of the message. you just heard steve say very clearly that it really wasn't this president's fault and things could be worse, and the problem is that's not a terrific message to take to voters. voters don't vote on things could be worse. they want to know that things are better today and things are going to get better in the future, and it's hard looking at the data out there to sell that message with the american voters. >> steve, something that caught my eye from the investors daily editorial, food stamps, food stamps, 45 million. that's a record. half of the households in america are now on some form of federal assistance. that's a new record. now, don't those things trouble you, and how are we going to get out of this dependency that may become the permanent norm? >> of course it troubles me. of course it troubles me. it troubles everybody, republican or democrat, but i think the way we're going to get out of this norm would be to get congress out of its gridlock state of affairs, to grapple with our problems. no business, as you would well agree, would run itself where you don't know what your tax rates are going to be next year, don't know what your spending's going to be next year, where every six months we have a debt default drama. what's going on on capitol hill, i saw that in the background behind tony as he was speaking, i think is probably the most destructive thing going on in this country right now. >> all right. you know what, i would say fair enough to that. but tony, i want to come back, because speaker john boehner, i'm going down and interview him in a couple days, he asked president obama at the white house lunch, what, two, three weeks ago, why not extend the bush tax cuts which are really the bush/obama tax cuts, why not extend them right now this summer to provide the kind of certainty that steve ratner's talking about and obama said no. he said no. even bill clinton today said that's what he ought to do. so what do you do with that? >> just call it current tax policy and take the labels off it and just call it current tax policy and ask the questions, do you want these rates to rise in this economic environment, and the answer is probably no, you probably don't want to have a drag on the economy when it looks like the economy is going to be slowing down, especially going into the second half of the year. of course they should be extended and they should be extended maybe for another year, but at the very least, talk about the dome behind me, i agree with steve. trying to do these kinds of policies with grand bargains and during debt -- hitting the debt ceiling and when the continuing resolutions run out is not the way to have this debate and to make good policy. what we're going to get a chance to do if we get a republican senate, actually, we have a republican house and republican senate, is we're going to have regular order on the budget and these guys behind me are going to put forth a budget, they're going to have hearings, going to debate, going to talk about spending, going to talk about tax policy, and then we'll have a road map for the future and we haven't had one of those for a number of years now, so that's a great reform. >> i got to leave it there. we're short of time because of the wisconsin coverage. thank you, steve ratner, tony fratto. up next, kevin costner and stephen baldwin are going to trial over multi-million dollar business deal gone bad. later, is bill clinton sabotaging president obama's election? maria bartiromo interviews the former president. first, we will talk to the author of the best-selling book "the amateur." bill clinton rips obama in this expose. don't miss this. we'll be right back. high schools in six states enrolled in the national math and science initiative... ...which helped students and teachers get better results in ap courses. together, they raised ap test scores 138%. just imagine our potential... ...if the other states joined them. let's raise our scores. let's invest in our teachers and inspire our students. let's solve this. [ laughter ] ♪ [ female announcer ] each one of us is our own boss. ♪ and no matter where you are in life, ask your financial professional how lincoln financial can help you take charge of your future. ♪ in your fight against bugs. ortho home defense max. with a new continuous spray wand. and a fast acting formula. so you can kill bugs inside, and keep bugs out. guaranteed. ortho home defense max. welcome back to "the kudlow report." disney joining first lady michelle obama's anti-obesity campaign banning junk food ads aimed at children on all of its tv and radio networks by 2015. food makers will have to adhere to its new nutrition policy to advertise. fannie mae taps a successor to michael j. williams. he is fannie mae's general counsel and chief administrative officer. kevin costner and stephen baldwin battle it out in court. baldwin is suing costner, claiming he was forced out of a $52 million deal involving clean technology used by bp for the 2010 gulf of mexico oil spill. nasa receives a very generous gift from a government secret military intelligence space program. that's right. we have details. >> reporter: well, nasa had so many questions today, they had to schedule a second press call for reporters about this. they got two spy satellites from the national reconnaissance office, they said they were going to use one of those spy satellites to search the universe for so-called dark energy. i asked the nasa executives how they felt about receiving hand-me-downs from the national reconnaissance office and they told me that the agency doesn't have feelings. >> have a good night. thank you very much. when larry comes back, is president bill clinton's exclusive interview another jab to try to sabotage president obama's campaign? 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[ male announcer ] in here, the right minds from inside and outside the company come together to work on an idea. adding to it from the road, improving it in the cloud all in real time. good idea. ♪ it's the at&t network -- providing new ways to work together, so business works better. ♪ welcome back to "the kudlow report." i'm larry kudlow. in this half hour, is attorney general eric holder in danger of being held in contempt of congress? committee chairman darryl issa reveals new information that holder and his top aides knew all along about the fast and furious gun walking program. they claimed they knew nothing. so who's telling the truth? issa joins me for an exclusive interview. plus, we're monitoring what's happening in wisconsin with polls about to close, which could give a boost to the stock market, as the dow finally rose today on a better ism services report. first up, former president bill clinton might say he's on obama's side but he's also making a number of other choice comments that undercut his support like a razor sharp knife. take a listen. >> bill clinton does not want barack obama to win. >> all right. that was former clinton advisor dick morris. we got that part. is there another one coming? >> there's no question that in terms of getting up and going to the office and you know, basically performing the essential functions of the office, a man who's been governor and had a sterling business career crosses the qualification threshold. >> i think it is essential to re-elect the president if we want this country to have the kind of future that our children and grandchildren deserve. >> remember me? i'm the only guy that gave you four surplus budgets out of the eight i sent. >> with friends like that, who needs enemies. in fact, clinton was at it again today in an exclusive cnbc interview with maria bartiromo, mr. clinton advocated extending the bush tax cuts to curb what he calls a second obama recession already under way. take a listen to this. >> i don't have any problem with extending all of it now, including the current spending levels. they're still pretty low, the government spending levels, but i think they look high because there's a recession. >> yikes. so as i said before, with friends like these, who needs enemies. question. is president bill clinton sabotaging obama's campaign? here now is former clinton white house aide keith boykin, who's got his work cut out for him tonight, and edward kline, the "new york times" best-selling author of a great book called "the amateur." welcome to the show. all right. in your book, in the opening chapter, you basically, it's clinton who calls obama an amateur. that was roughly last summer. you used that as the title of the book. let me ask you, do you think president clinton with all these statements is sabotaging obama's campaign? >> i think the clintons and the obamas are the hatfields and mccoys of the democratic party. they have been at war with each other for at least five years, and clearly, there's no love lost between them, and when clinton makes these comments that are clearly against the interests of the president, i think he just can't contain himself. i think his sense of grievance against the obamas is so deep and so painful that no matter how much he tries to seem to be behind this guy, he really doesn't put his heart into it. >> and, all right, keith, i want to give you equal time. you're a clinton person yourself. what do you make of the former president clinton saying today we're in a recession and we should extend the bush tax cuts? two positions that run completely counterwh can heself not is he be what's up? >> i think he misspoke when he mentioned we were in a recession. clearly he knows we're not. he's been studying the economy. he knows that. but his point overall is that barack obama has a better economic policy than what mitt romney is offering. there's no daylight between bill clinton and -- >> what makes you say that? >> he said it in a speech last night. he said repeatedly, mitt romney's going to take us back to the bush economic policies and what barack obama is essentially offering is the same economic policies that he offered as president that provided 22 million new jobs to our country. of course, he didn't inherit the economy that barack obama did, but i really think that the two of them are on the same page when it comes to health care reform, to the stimulus, to home ownership programs, when it comes to investment and education. bill clinton is a guy who put 100,000 cops on the street and invested in education. >> you don't have to sell me. i thought bill clinton was a pretty good president. it's the one in office now that bothers me. ed, let me go to you. keith said bill clinton is setting up obama with praise and so forth. mitt romney had a stellar career, mitt romney is a good businessman, mitt romneyalifd t and -- >> these two -- >> how do you read that? clinton did not have to say it. i agree with keith. clinton's a real smart guy. he did not have to go out and praise mitt romney to the high heavens which, by the way, he did again today in his interview with maria bartiromo, praised romney. >> these two guys, clinton and obama, come from two different parts of the democratic party. clinton from the center left. obama from the far left. so idealogically, they are poles apart. clinton is much more pro-business than obama. we don't even discuss that. the point is that the days when he was called a racist by the obama people in south carolina, he never -- >> that's not true. the obama people never called him a racist. you had a few people who were concerned about what bill clinton said because he made the comments comparing obama's victory in south carolina to jesse jackson. but nobody ever called bill clinton a racist from the obama campaign. you should not say that. but there's a big distortion about this. hillary clinton is barack obama's secretary of state. they worked together closely. yes, they were rivals in the 2008 campaign but so was joe biden and joe biden is on the team as well. >> joe biden's not hillary clinton. >> no. but you know, i worked forilint and i also went to law school with barack obama. i understand who he is. i don't think the two of them are any different in terms of their economic policies. one is not far left and one is not center left. they are both centrist guys. they both have very far progressive views but they don't govern as progressives. they govern as centrists. >> not only does bill clinton see the economy different, but he sees his wife's role as different. i mean, in my book, i point out that only a year ago, bill clinton was urging his wife to challenge barack obama for the nomination of the democratic party. >> he did poll for her, did he not? >> he did. secret poll, showing that he was -- that she actually could beat him in the primary. >> that's the moment when he calls him an amateur. i just want to ask you about this amateur line, because i don't think bill clinton has given up on obama as an amateur. i really don't. i think he still thinks that and i think your book is as relevant today as ever. just think about this. has the bain capital attack by obama on romney backfired? has that backfired or not? has the catholic church mandate on contraception backfired? has the war on women backfired? in other words, all this stuff has backfired. >> has the election happened yet? >> i think davidshou resign -- >> the electnovember. >> this is amateur hour from obama. hold on a second. is this not right out of your book? >> it is exactly out of my book. and clinton has contempt for the guys who are around obama, for that chicago group, and he has contempt for obama as an amateur. >> you cannot read his mind. how can you say these things? i don't understand. if you talk to a few people, you think that you know exactly -- bill clinton does not have contempt for barack obama. he may think he's a better politician. he is a better politician. he's a very successful communicator and good politician. but bill clinton respects what barack obama's doing. they're in the same team. i don't care what word he may or may not have used. >> some of this stuff is backfiring. that's why i say, look -- >> some of romney's attacks have backfired, too. campaigns are about trying and seeing what works. you don't change your message just because something doesn't work. obama's message is the same as bill clinton's message. i was working the 1992 campaign. it's the same message. the democratic party message has been about health care reform, about jobs, about helping the working class. >> don't you think bill clinton is much more hospitable to business? >> no question about that. his friends are on wall street. bill clinton's real goal in all this, excuse me, is to position himself in the democratic party as a loyal soldier getting behind barack obama in 2012 in order to make sure that in 2016, when he hopes hillary will run, the party will be behind her. so i believe that his whole goal in this obama campaign is to show that -- >> jabs. >> that may or may not be true. again, i come with faint praise. >> hillary has a better chance of winning if she's going in an open race in 2016 with obama having been re-elected and not going against an incumbent. >> folks, a special programming note for tomorrow night. my own exclusive interview with former florida governor jeb bush, plus robert zoellick. coming up next, government cover-up. documents now prove senior officials at the justice department approved operation fast and furious. that's according to darryl issa, who joins me next. people with a machine. 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. the chairman of the house committee investigating obama administration's fast and furious operation has a simple message for attorney general eric holder tonight. we want the truth. this after new details from wiretaps suggest that high ranking justice department officials misled congress and provided false information about the flawed weapons sting. here now for an exclusive interview, we have house oversight and government reform committee chairman darryl issa. as always, mr. chairman, thank you for coming on. as i understand it, you've got this new information that says senior justice department officials knew about this fast and furious and actually approved it, contrary to what they have been telling congress. can you tell us more? >> well, absolutely. the whistleblowers very kindly have given us additional documents, exactly the kinds of documents we're not getting from the attorney general and from justice, that show specific signatures and e-mails back and forth to some of the highest ranking people in justice, including those that work directly with the attorney general like lanny brewer, like grindler, like weinstein. these aren't household names but these are people who are either going to be held accountable or we have to hold eric holder accountable for basically a continued cover-up of those people who are today responsible for brian terry's murder 18 months ago. >> and mr. chairman, six wiretaps as i understand it, and seven wire intercepts provided a lot of information to you and your committee? >> they did. and in fact, this is one of the areas that's very sensitive. we don't want to release the specifics of these wiretaps. these are really part of an ongoing investigation. they could be used in prosecutions. but what we do know is the people who signed them knew what was on them, and knowing now what i know, what the head of atf, former head of atf melson said, you read these things, it makes you sick to your stomach to realize that people who should have said stop this gun walking in fact were signing wiretap requests, you know, warrants, if you will, that were very knowledgeably knowing that you had these people doing it. they knew that weapons were going straight to mexico. they knew it for a fact and they knew who was moving them. >> the other side of this, though, as i understand it, you correct me if i'm wrong, i'm really reading from your statements today, mr. holder, attorney general holder, has said on a number of occasions that quote, unquote, senior justice department officials were not aware of the fast and furious operation. now this new information strongly overwhelmingly suggests senior justice department officials, maybe even mr. holder, were in fact aware. a complete, i don't know, falsehood, cognitive dissonance, i don't know what to call it. >> well, this is one of the real problems and eric holder and i are going to have another round with judiciary where he's coming before that committee, he would like to talk i guess about law enforcement in general, but he's got to answer the question of why is it they keep implying that they have to wait for their newest i.g. to finish an investigation, rather than act on people who clearly knew the gun walking was going on, they knew where these weapons were going, and yet they allowed them to continue. this is the question for holder. now, i take the attorney general at his word when he said he didn't know, but that begs the whole question of now that he does know, why isn't he doing something about it. >> well, in this story, i want to give credit to the daily caller, it's an excellent internet operation, it says attorney general lanny brewer, if i'm pronouncing that right, she authorized the wiretap applications on behalf of the attorney general. what does that mean? that sounds like it went right up the flagpole. >> you're exactly right. lanny brewer is in fact the head of, if you will, the criminal division probably considered to be number three there, and ultimately is responsible for all of these criminal investigations, including the wiretaps, and the people that work for him obviously all the way up the chain. this is one of the big questions we have, not just on behalf of brian terry's family, but also on behalf of the american people, aren't there supposed to be protections in the wiretap process. aren't there supposed to be checks and balances against rogue operations. they would like you to believe this was a rogue operation but then the checks and balances didn't work and the people responsible for them not working still are on the job and they're political appointees in many cases. >> that's the thing. political appointees. that's just where i wanted to go because it sounds like up to now, before you secured this new information, they were trying to protect the political appointees, push it down or push it away. i don't see how they can do that anymore. haven't you in effect broken this thing wide open in terms of, what, assistant a.g.s, deputy a.g.s and maybe the a.g. himself and how can you get that, how can you have them come up, 'fess up and tell the public what went on? >> on thursday, the attorney general's going to have to answer some questions and obviously for this committee, regardless of whether we get full discovery, our intention will be to bring these individuals that we now know had direct knowledge before the committee, and that ultimately, that includes cunningham, a gentleman who is retired, who was, you know, essentially right in the middle of this in arizona. so are we planning on doing more things, yes. can we hope that the attorney general realizes it's time either for himself to leave or to make sure those responsible are held accountable and leave. that's the least the american people should expect. >> that's what i want to know. there is a contempt citation coming, is there an impeachment proceeding coming? it just seems like it's all sort of in your face, the justice department just will not come clean. what happens next, sir? >> well, clearly my power on my committee is to bring people before the committee and hold them accountable. the american people i think want those people fired just as people at gsa are gone, people at secret service are gone. this is the only time in which probably the most hideous thing, the death of a border patrol agent because of this operation, and yet the people involved and clearly those responsible still are on the job. >> all right. we'll leave it there. many thanks to chairman darrell issa. we appreciate your time. up next, dow snaps its losing streak. some unexpected good news from the ism services index. and investors ought to keep a close eye on wisconsin this evening. if scott walker wins, that could mean a win for the market-friendly pro-business mitt romney in november. that could be very bullish for the stock market. we'll see if we can get a lift out of this. the economy needs manufacturing. machines, tools, people making stuff. companies have to invest in making things. infrastructure, construction, production. we need it now more than ever. chevron's putting more than $8 billion dollars back in the u.s. economy this year. in pipes, cement, steel, jobs, energy. we need to get the wheels turning. i'm proud of that. making real things... for real. ...that make a real difference. ♪ home protector plus, from liberty mutual insurance, where the costs to both repair your home and replace your possessions are covered. and we don't just cut a check for the depreciated value -- we can actually replace your stuff with an exact or near match. plus, if your home is unfit to live in after an incident, we pay for you to stay somewhere else while it's being repaired. home protector plus, from liberty mutual insurance. because you never know what lies around the corner. to get a free quote, call... visit a local office, or go to libertymutual.com today. liberty mutual insurance. responsibility. what's your policy? finally, some good news on the economic front. today's stronger than expected read on the ism services index points to growth and saves the u.s. economic outlook from a recession. bill clinton notwithstanding. momentum carried through in the stock market, the dow snapped a four-day losing streak. let's talk. we have michael lozanian, "forbes magazine" executive editor and managing director at lazard capital markets. i think the ism services, i don't want to get bogged down in this, but we needed a decent, better than expected number. did it stabilize the stock market at least for awhile? >> it sure did. i think one of the things we weren't used to coming into this month, and certainly for the month of may, was bad economic data out of the u.s. that's what caught us by surprise. i think we're used to bad news out of europe, certainly used to being concerned about the fiscal cliff but we weren't used to the pace at which we slowed down the economy. >> i think for three months, we have had lousy economic numbers, surprised everybody, and that is the backbone of this stock market correction. now, you, michael, are saying the dow jones is going to 11,000, if i read the numbers correct? it closed today over 12,000. >> i think president -- former president bill clinton was right. i think we're in a recession right now. i think all economic growth begins with capital formation. if you look at gross fixed capital formation in this country last quarter, it declined for the second consecutive quarter. we're $400 billion lower than we were at the peak in 2006. and if you go back to the reagan boom and the clinton boom, capital formation was booming. i think this is a result of the tax policies of the obama administration and the regulation of obama administration, same mistakes that hoover and fdr made during the 1930s. >> i knew hoover. i knew him. all right. art hogan, let me go to you. you believe that the outcome of the wisconsin election, if scott walker is victorious, that could be a game changer for the stock market. tell us more. >> it's a turning point. a turning point because it gives us a blueprint for what might be the outcome of the presidential election. another turning point here, though, something to think about, the only reason i disagree with michael and i hardly ever do, is that i think we've priced in more bad news than we've priced in good news. by that i mean i think we have more of an upside surprise in terms of reacting to news than downside surprise. we just talked about this. we have been concerned about europe for a couple years and are certainly hyper-concerned about it right now. we priced a lot of that in. what we haven't priced in is somebody doing something right. germany raising the hand and saying i've got your back, spain, we will fix this. we will actually do something right. we haven't priced in the ability to fend off the fiscal cliff. >> do you agree, wisconsin i think is a huge game changer. if walker wins, how do you see that? >> it's tremendous for two levels. one, i think it spells a good chance that romney can carry the state and also become president which also means we're not going to get the big tax hikes and possibly a pare-down in a lot of the regulations. i think that's really, really huge. even better, i think maybe we can get something closer to the paul ryan budget which i know the democrats are saying is armageddon but it wasn't even cuts in federal spending, it was a cut in the growth rate of government spending. we can get that back down to 19%, 18% like it was in the '90s, we're putting a good base in for growth. >> let me stay with this again. do you believe, art, that the stock market is rooting for mitt romney? >> i certainly think it is. i think that's the case. >> even though, let me just -- i don't mean to interrupt, but i hear this over and over, a lot of my conservative pals say that wall street is liberal and democratic. you're saying that at least the investor class and the investor community is not so liberal, not so democratic, and would like a pro-business guy like romney. is that the basic -- >> i think that's the basic concern. also, i think we have gotten to a point where we're not better off than we were three years ago. that's a major concern. i think the center, the independent voter is looking at themselves saying where am i now versus where i was three years ago and probably not feeling like they're much better. i think it is a misconception that republican administration is better for the market versus a democratic administration. if you look at the history -- >> not always true. not always true. >> absolutely not true. >> bill clinton is a perfect example of that. >> he did a great job proving that wrong. >> great point about better off. you look at gasoline prices and food prices, and they have gone up considerably over the last three years. >> even though the dollar is so strong. i fret the dollar has gotten too strong, too fast. there's deflation of commodities, including energy and gasoline. that sounds good, but why -- >> monetary base really grew a lot so it ticked down a little bit, i think because people really think it's close to recession. normally in this environment you would see something like the dow transports take off on the stronger dollar and lower fuel prices. that hasn't happened. i think that's a cautionary sign. >> are we in a recession? michael thinks bill clinton is a good forecaster. you think we're in a recession? >> i think no, but we get precariously close. we are getting close to stall speed. >> 2% growth is really -- anything goes wrong, you're in a heap of trouble. >> it takes one little blip to have things go wrong. >> we need faster growth to get this stock market growing. >> absolutely. the national income account shows profits from current production actually fell in quarters and profits are the mother's milk of recovery. that's a bad sign. >> very good, fellows. thanks. that's it for tonight's show. special programming note for tomorrow, my exclusive interviews, we have former florida governor jeb bush and world bank president, robert zoellick. thanks for watching. i'm larry kudlow. see you tomorrow evening. 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