Transcripts For CNBC The Kudlow Report 20131029

If you like your doctor, you will be able to keep your doctor, period. All right. There you have it. President obamas broken promises, and misleading statements about obama care are now in the pantheon of international slugs. Every newspaper in america are filled with documented proof that millions of americans are losing her to doctors, are losing her to plans and we know the white house knew this would happen all along as much as three years ago. All that sets the stage for what should be a hot and controversial hearing on capitol hill tomorrow morning, featuring hha secretary Kathleen Sebelius and the congressman who was chairing the committee that will be grilling sebelius is about to join us. Dont let all the obama news cry out, we closed at a new all time high for the dow and another all time high for the s p 500 t. Ramally keeps rolling along. All those stories, much more coming up on the kudlow report beginning right now. Now, before we get to obama care. We got to show you the markets, because it was a record day on wall street. Kayla joins us with all the key details. Goef. Good evening, larry the dow closing at an all time high, if it feels like de ja vu, it is, a day with mixed economic data, the big catalyst hopes for more stimulus from the fed, a read on the economy will come tomorrow. The s p 500 got in the game, hitting a new high today, its been doing that nearly every day, it seems. Finally the nasdaq nearing a 13year high, larry the dow transports and russell 2,000 hits new high, we will do that to the market. Back to you. There may be more of that easy money on the way, kayla, thanks, so much. Now, obama care is taking center stage on capitol hill today the administrator of medicare and Medicaid Services testified before the House Committee on ways an means. For that, we turn to political reporter and cnbc robert costa of the national review. He joins us live from washington. As always, goef, robert. Robert, give me a read, all right, i have spoken to chairman fred upton who will be on in a moment. In your political read, what do they want out of sebelius, will they all call for her to be fired . Are they going to jump on her . How is this going to work . The republicans will grill the secretary on the rollingout of healthcare. Gov the central portal for obama care. What theyre really looking to do is put her on the spot ahead of 2014, to talk about things beyond the website to grill her on the policy. All right. Are they going to point out this incredible president ial gap, which we now think is in the pantheon of president ial falsehood that they said repeatedly, the president sold under false pretences this plan by say figure you like your Insurance Company, you dont have to leave it. If you dont like your doctor, you dont have to leave it. It turns out that is completely untrue, there may be 15 Million People to leave it. Now, do you expect the house members to make a big deal of that with sebelius . Very much so. Larry, i walked over here for the capitol, they tell me they want to move the argument on obama care from the right beyond making it about glitches on a website no something about hip pock ricci and the administration being hypocriticalal of what it predicted and what it promised. Is there any talk now linking about delay . Delay means many things to many people. Delay could mean delaying the final enrollment six months. It could mean delaying the tax penalties if you dont enroll or delay could mean not doing anything on the individual mandate. How do you read that . Republicans sense weakness. When you look at senator joe manchin of West Virginia and others are pushing to enter into the obama Care Exchange for the individual mandate, so democrats are pushing for a delay on that front. Republicans, of course, are pushing for a delay of the entire individual mandate. They would like to get inteegious on the record on those fronts. Robert costa, thank you very much. We appreciate it, as always. Health and Human Services kathleen inte k Kathleen Sebelius is set to testify tomorrow. Going back to the office of management and budget during the reagan years. Chairman fred, thank you for coming on. I appreciate it. Look, a very embarrassing politically devastating moment for obama, this whole business about false promises and you are not going to be able to keep at least 50 wont be able to keep their Insurance Plans what can you do about it, fred . What can you do about it . Well, we are doing a number of things. We have studied this quite a bit. We know that there are millions of americans right now, in fact, more people are being told that theyre losing their coverage, than actually have signed up for coverage under obama care. And so i introduced legislation yesterday. Its been cosponsored by more than 50 folks already, 50 colleagues. It says this, if you have a private Insurance Plan that you liked last january, you can keep it. You are not going to be told you have to shelf it. This will help the millions of folks told they lost their coverage. Maybe they physical out how to get on that website. Obviously, there are a ton of people that have not figured out how to do that. It was down again today as it was yesterday, as it was over the weekend. So lets give them a break t. President gave businesses a break when he delayed the employer mandate for a year. This does the same thing on the individual mandate. But, fred, let me just ask you right off the top, lock, okay, if those private Insurance Plans dont meet the standards and the mandates of obama care, which seems to be the whole issue here, thats why everybody is losing, getting their cancellations. If they dont meet it, how can you enforce it . Thats the part i dont see. Well, what were seeing is, let the individual have that choice. Maybe they dont want that particular coverage. Maybe as it relates to their own income level, and how it relates to their own health care needs, if they like it, why are you telling them that they got to lose it . Let them, the individual, make that choice on their own, particularly knowing that this rollout has been delayed beyond belief. Well, okay. Beyond belief. You will have secretary sebelius tomorrow. I presume you will talk about this. What if she simply says to you, chairman upton, that this is the law . You know, they have this whole thing, this is the existing law, this is the current law that passes the supreme court, blah, blah, blah. This is the law, and worry not going to change the law . Well, how did they change the law for the employer mandate for a year . It happens, thats the way it goes. They are given lots of waivers. Lets see regulations, delayed or imposed that say, hey, if you like the Health Insurance and you were insured earlier this year, can you keep it, worry not going to impose that penalty on you later on. I am staggered to lead, there are tweets about this, fred, and other things that valerie jared, the top adviser and jake carney are now blaming Insurance Companies for can selling plans within they are forced to by the obama care mandates. Are you exactly right. It not their fault and, you know, we knew early on, private and mutual, cancelled a million policy, i think they announced that a year, a yearandahalf ago Something Like that for people across the country. So they knew what they were getting into. The Administration Made the promise all along that if you liked your Health Insurance, you could keep it. Even in the documents that weve seen already, we know they knew three years ago that, in fact. People were going to be forced to lose the policies that they had, that they may have liked. What do you expect from miss sebelius tomorrow . Weve read her testimony that was released. It is not apologetic in the least. It looks like shes going to stonewall, in particular, where do you want to go with her . Well, i have not read the testimony yet. Ill look at that later on this evening. I know that we had a republican meeting earlier today. We talked about a lot of questions. Were going to be asking, how many people have signed up . We asked the contractors last woke. They told us they probably could figure out they werent at liberty to give that information out, unless hhs had gave, in essence, a signoff on that. We will ask secretary sebelius if she can tell us how many people have signed up . How much has this cost the taxpayer . What is, you know, if they think they can have it online by the end of next month, how much additional money is that going to cost . We want to have them be as trajz parent as they can. We got some good questions. We want some good answers. Do you believe she owes the American People an apology . Well, somebody sure does. I mean, this is hundreds of millions of dollars. Remember, if administration testified before our committee, wrote the letters, everything was going to be just fine. It was the rollout was going to work. Dont be worried. They looked us in the eye back prior to october 1st. Nothing could be farther from the truth. Do you believe she should be fired, fred, do you think she should be let go . You know what, you and i worked for a great president at the white house, we both knew it was a priflogy to work there. If somehow we let him down, with ewouldnt be there the next day. I would presume that because shes there, the president thinks she is doing a good job. You think she is doing a good job . I dont believe so. The president must believe so. I guess are you right. Congressman fred upton, chairman of the energy and commerce committee. We appreciate it very much. Once again, its great to see you. Now, it was a special treat for me to moderate the jack Kevin Foundation dinner last night a. Highlight of that waspy interview with congressman paul ryan, the chairman of the house Budget Committee. He had a lot of things to say about what we can do about this obama care disaster. Thats next up here on kudlow, later on in the show, we have more details on this rally that wont quit. The dow up 1,100 points, new all time high. This is about easy money, corporate profits, the fed wants reinflation. Worry going to try to get some answers from our distinguished expert panelists later in the show. Please dont foerlg, free market path to capitalism. Ill say it. This obama care plan has nothing to do with free market capitalism or personal choice. Im kudlow. Well be right back. Welcome back to the kudlow report. The nasdaq suffered a major glitch today for 44 minutes this afternoon, the nasdaq composite and other nasdaq indices were frozen, trading in individuals stocks was not affected. Nasdaq did fix the problem, which it blamed on human error. Larry, having the word glitches, as we know, not good for anyone reputation, perhaps a coincidence twitter listed on the nyse. Thank you. Very much. You will see larry in the show. Lets get to my one on one interview with house chairman paul ryan last evening at the Kevin Foundation dinner. Heres what he had to say about the obama care debacle that could be helping the future of the gop. This socalled civil war, its really quite overstated in the media. Tactics. Weve had disagreements with each other on tactics. Your tactics. These arent principles. I dont know a republican that does not hate obama care because of what its doing to our country, what its doing to health care, what its doing to knock people off what they have. I dont know someone who doesnt support replacing healthcare. We had differences on tactics. Thats different than principles. We will be putting out spec ideas, like tom coburn and richard burn and i did if 2009, hsa tax credits, patient centered health care. Are you in charge of your health care, not some distant bour krat. We want those proifrs competing against each other for our business as consumers, as patients, not hoping the government will cut us a deal through their bour rockcracy. I want to talk for a second about this Democratic Party panic over the unveiling of obama care, which in my humble opinion is not really about a lousy computer work. Thats right. Its there. I understand that. And obama may fire sebelius and the information we got is they knew for three years, they knew for three years about the shall we say elevated degree of cognitive dissidence they have been spreading regarding a simple thing like can selling an insurance contract. They knew it was coming and they talked about it. Now, what i want to know is, are you going to let them off the hook with some kind of delay . The question is answered already in that the House Republicans passed and sent to the senate delaying defunding the law, delaying the entire law, delaying the individual mandates. They voted those down. So theyve already made that choice. Theyve decided not to do that. So this law is him quoing into place. Why is it we advance those ideas . The Collateral Damage is the men people t. Collateral damage are the people seeing huge premium increases. The Collateral Damage are the people losing their 40 hour workweek t. People losing the jobbased insurance nay have. The Health Care Providers who are seeing ipad and this stuff typed in medicare putting them out of business. Thats the Collateral Damage t. Point is, we already passed this in the house. The senate rejected them. Thats over with. Now, we are here with the law. Those of us in the majority of the house, who had oversight hearing all year long with he had Kathleen Sebelius come to our ways and means. Its like pulling teeth. She wouldnt come to the Budget Committee for two or three months. She has yet to answer the questions on the oversight. Can i go on and on about that. The point is, they came, said everything is fine t. Law will be okay. We are ready to roll it out. There wont be any problems. They came to congress and said, no problem here. When we knew better, because we saw the same kind of analysis that nbc news is now reporting. Yet, they said, were good to go. Everything is fine, look whats happening. Its more than a website. Its because this law, itself, is born from an architecture, a foundation that is not workable. So let it sink of its own weight. Thats going to happen. And wait, there is a Midterm Election in 2014 and this should bring out people in droves. Let the people decide. Thats fine. Let the people decide ask thats whats going to happen. Itself the way i wanted to. I dont want to let anybody off the hook. People know. People should know, we tried to prevent this from happening in the first place by fighting the law in 2010. Then we tried to give people relief from this law in 20 thrown. That was rejected. So now we are living with this law and then we owe the American People an alternative about heres what you do if we win elections, we want to win an election by acclimation we want to win by saying this is not working for our country, this is not working for you, and there are better ways in keeping with our countrys principles. That puts you in charge of your future. Not some bour krat in washington. Congressman ryan had some important things to say, amidst all my pestering questions, he assured everybody in that room, there will be no new taxes and the budget spending cuts is the baseline policy for the gop. We will get more from congressman ryan a little later in the program tonight. First up, could j. P. Morningens 14 billion settlement deal with the Secretary Department be in jeopardy . We will have that story next up. Please say with us. Could save you fifteen percent or more on car insurance. Everybody knows that. Well, did you know that when a tree falls in the forest and no ones around, it does make a sound . Ohhh. Ohhh. Oh boy im falling. Everybody look out ahhhhh. Ugh. Little help here. Geico. Fifteen minutes could save you. Well, you know. Anybody . In a world thats changing faster than ever, we believe outshining the competition tomorrow requires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. Welcome back to the kudlow report. The settlement talks between j. P. Morgan and the Justice Department hit another snag, the nag is question whether j. P. Morgan or fdic should be on the hook for loans that have gone sour. The two sides now dispute whether it came with immunity for j. P. Morgan. You can see it hit the stock early this afternoon. Stocks slid on heavy volume. The bank and the government had a tentative deal which 16 off the table, but it could be if they cant get those details worked out, larry. May i ask . This is a very important story with ramifications, bank wide ramifications, when you say the deal could get koed. Part of this deal, i thought, 5 billion goes to this Housing Finance agency to be spent on various consumer loans. That was agreed. That was announced on friday as far as we know. So now the hassle is the argument with the fdic and whether theyre going to pony up any money . Ive never heard in the history of the world that the fdic gave money back to banks. Well, the issue here, larry, is what kind of language was in the deal documents by which j. P. Morgan bought Washington Mutual. Of course, the fdic, because Washington Mutual was in receivership at that time. Fdic basically was the custodian and said they had to work that out with the bank. J. P. Morgan is saying, look, we shouldnt be in a loss, that was the deal. The fdic says it wasnt. It comes down to the minutia when that deal happened. The maximum it could save j. P. Morgan 2. 7 billion. Barn fifrank said this morning i cant imagine the bad publicity theyre getting is worth more than 2. 7 billion. They should just settle. Great for barney frank. Its not his money, hes probably not a shareholder, kayla, thank you very much for walking me through that. Folks, the news that millions of americans could lose their Health Care Plans came to a surprise to a lot of people. Those inside the white house knew it for three years, even though the president insisted if you like your plan, you can keep it. They are losing their plans. It will hurt the president s credibility and warning republicans warning about this for years. We will talk about that with our panel coming up. First, take a look at this. This bill does nottiol costs. This bill does not reduce deficits. Instead, this bill adds a new Health Care Entitlement at a time when we had no idea to pay for the entitlements we already have. People who are paying premiums now are going to see rate shocks come into play, we have small business, ploy i dont see, looking to see how they are getting covered. It will be a real challenge, this administration. I think we got a lot of rom for improvement on that. At a time when the economy is barely eeking along, wages arent increasing, new jobs arent available. What are we doing . We are putting more costs and inconvenience on the American People. Right now the ceo says up to 20 Million People will lose their insurance as obama care goes into effect next year. Likewise, a study of american businesses said 30 of them are anticipating dropping people from coverage. Any insurance that you currently have would be grandfathered in so you could keep. Jerry, just remember, its not a lie if you believe it. At a ford dealer with a little q and a for fiona. Tell me fiona, whos having a big tire event . Your ford dealer. Who has 11 major brands to choose from . Your ford dealer. Whos offering a rebate . Your ford dealer. Who has the low price tire guarantee, affording peace of mind to anyone who might be in the market for a new set of tires . Your ford dealer. Im beginning to sense a pattern. Get up to 140 in mailin rebates when you buy four select tires with the Ford Service Credit card. Whered you get that sweater vest . Your ford dealer. They always have. They always will. Thats why you take charge of your future. Your retirement. Ameriprise advisors can help you like theyve helped millions of others. Listening, planning, working one on one. To help you retire your way. With confidence. Thats what Ameriprise Financial does. Thats what they can do with you. Ameriprise financial. More within reach. Welcome back to the kudlow report. Im larry kudlow. My top story tonight the Obama Presidency may be facing the most serious political crisis with millions and millions of americans wake up to Health Care Cancellation notices, the president , himself, said would never happen. How can mr. Obama defend the indefensible, our other top story this evening, a new all time high for the markets. The dow closes up 111 points. The s p makes another new high at 1772. We will take a closer look at your money just ahead. First, president obama not once, but repeatedly assured his fellow americans if you like your Health Care Plan, you will be able to keep it. That itself what he said. Take a listen. If you are one of the more than 250 million americans who already have Health Insurance, you will keep your Health Insurance. Americans like their doctor, they will keep their doctor. If you like your Insurance Plan, will you keep it. Let me repeat that, if you like your plan, you will be able to keep it. If you like your Health Care Plan, you will be able to keep your Health Care Plan period. Well, we now know 50 to 75 of the 14 Million People can expect insurance cancellation pink slips. Exactly, what the president swore they would never do. Is this president obamas read my lips moment . Lets talk. We have cnbc contributor former governor of pennsylvania ed rendell, we welcome hayley heath, senior analyst, one of the 14 million whose current insurance will be cancelled under obama care. With ebring along cnbc contributor robert costa. Did they tell you why they cancelled your policy . They told me, here are instructions for signing up with a different plan that is compliant with the Affordable Care act. So the Insurance Company didnt beat around the bush. They told me this was a direct result of the obama care. Ed rendell, welcome back, as always, former dnc. Former governor to the great state of pennsylvania. Former mayor of the great city of philadelphia a. Man of immense political experience. Will you tell me how president obama is going to squirm out of this . He said it wouldnt happen and pink slips galore could be up to 15, 16 Million People before this is over . Well, its a horrible mistake and an unnecessary mistake. What the president clearly should have said is for over 90 of americans who have health care, you will be able to keep your plan. You will be able to keep your doctor, et cetera. Some of you have Health Care Plans that dont meet the standards that we raise. Over the course of time, it may cost you a little bit more to get on the exchanges, a new plan. Over the course of time, because that new plan will cover so many things that your current plan doesnt cover, you will actually wind up saving money, which i think will be the case, for example, most of the cancellation policies cancelled dont have Prescription Drug coverage. Thats okay if you are healthy. As soon as you need a statin or some Prescription Drug that you have to take to maintain your health, boy, if you dont have coverage, your bills rock. Thats why so many people wind up in bankruptcy court. Okay. Robert costa, a little bit more, were getting reports from all but a handful of states, a massive increase in premiums. I mean, there is sticker shot. In fact, you got a double here. You got people losing their insurance and then being offered a second package that is much more expensive than the first package. Now, i dont see how that plays politically much less in terms of the actual insurance. Democrats do feel like theyre in a good position on capitol hill when they look at states like tennessee. Republicans will focus on tomorrow when sebelius comes to capitol hill and elsewhere, is talking to individuals about the disruption of their own Health Care Plan. Thats a salient, political point. Let me stay with that for a second, a salient political point. Who is to blame . Who is to blame, robert costa . In other words the president , he aint talking. His routine is i didnt know about it until i read it in the papers. Thats what he always says. Im not being sarcastic. Thats what he always says, robert costa, do the republicans have to drill down, miss sebelius, when did you know these pink slips kould would come and the premium rate hikes have to kick in . Dont they have to drill down on her . The question is, is sebelius the right target . Politically the president is at the top of the administration. Republicans have to grill sebelius, in terms of a political face, in 2014, shes not the most the best person for them as a target. So i think theyre going to try to find a way to make this a hypocriticalal argument against the president and tie in the president , himself. Let me just ask you on this point. Im looking at it in political points. Thats the point of this segment. Is it enough to really generate grass roots support, tea party, whomever, to renovate the Republican Party in 2014, is the sticker shock of the higher premiums and the pink slips, as i call them the cancellation of the insurance, is that going to be sufficient to rile up the Tea Party Types as was the case back in 2010 when this all first surfaced . You know, this new story about all the people losing their insurance due to cancellations that, is one of a long list of broken promises that go along with obama care. I do believe this is a transformitive law. With esa that you if 2010. If you want to know who is to blame for the failure of the exchanges, for the failure of the law. Its every law maker who voted for it. Its the president that signed its. Its that simple. Its a message that will resonate at grass roots and across this country. What would you advise the president . Hes in a sticky spot. Everybodys got him. You got him with prior statements. Its not true. By the way, its not just Insurance Companies. Its doctors, also, a lot of people will lose their doctors. What would you advise the president to do . Id advise him to say basically what i said, look, i made a mistake when i said that, but the people who are getting the cancellation notices, were can selling you, your plans dont provide enough coverage to make you safe. We want you to go on the exchange. Those people are looking at increases. A lot are eligible for subsidies in the exchange. So people have to look into it and see whether they are subsidy eligible. If they are subsidy eligible, they will wind up paying less. Over the course of time, if theyre covered for Something Like Prescription Drug, they will wind up paying less, larry, for all of the bad news, there is some good news, there are some employers with 80 employees who went on the exchange. All of a sudden, theyre finding that i can offer their employees better coverage for a lower price. Its a balance. There are winners and losers. The tea party will focus on the losers. I have no doubt that thats the case. So its a big plus for the republicans politically. What are you doing, larry . Look, i got to disagree with that, because of somebody who had my plan cancelled. I cant tell you how paternalistic it sounds for the president or somebody else to tell me what insurance is best for me. I was happy with the plan before. I feel a lot of americans will feel. A real quick point, on governor rendells point, governor rendell brought up a great point here, a lot of democrats privately say what the governor said. The Administration Needs to get ahead of expectations on this law, to lower them, that emplemtation will be perfect. Coverage, everyone will keep access to their current plan. Thats what democrats are talking about. Can politically the administration start to get frank . Do you think he will . Robert costa, follow through on this, first of all, part of him keeping ahead of the curve, whether he likes it or not is secretary sebelius, shes the curve tomorrow. Well see how the gop handles that. But in other areas, where the president sort of denied any knowledge, can i name them the irs, benghazi, all that other stuff, he has never been one to get out ahead of the curve. Hes always wanted to say, i didnt know, i didnt know, as the circumstantial evidence piles up, which is it going to be this time, bob costa . I think this is the administration signature law. A lot of republicans today on capitol hill were telling me, were going to see if secretary sebelius apologizes, thats not the question. I think governor rendell is bringing up a lot of valid points democrats are privately talking about. Can the administration not only lower implementation, can they own this as a political project . As it continues to roll out, they can raise expectations and lower them accordingly. I never figured out why governor ed rendell is not the chief of staff. I never figured that out. A successful governor of medium, middle ground state. You know what you talk about. You made sense tonight. Hadley heath, thank you, former governor ed rendell, bob costa, thank you, as always. The other political story in washington the budget negotiations about to get started again, heres part two of my budget chairman congressman paul ryan, he is coming up, the latest nonnegotiable baseline promises. You will hear all about it next up on kudlow. With budget talks set to begin tomorrow, should republicans keep the all important spending cuts and the sequester in place without raising taxes . Last night at the kevin foundatifound kemp Foundation Dinner, i asked paul ryan those very questions. Here are his answers. If we spend our time focusing on our differences we wont get anything done. If we talk about some big grand bargain, which means the energy policy, balancing the budget, getting the debt under control, reform you are our entitlements going bankrupt. That itself to me a grand bargain. Io eng we will get a gran bargain. With renot talking about getting a grand bargain because one party will require the other to compromise a core principle and wont get anything done. Dealing with the entitlement programs, that are hurting growth today, if we did something to deal with that, having smarter entitlement reforms to replace this crude across the board sequester would do a couple things. It would show the credit markets, the bond markets, show the world america is getting ahead of its problems. We are seeing a bipartisan consensus and the crony capitalism and get more competitive so the American Economy can grow. Those things we think are encouraging. So we want to have an agreement that fosters these things, Common Ground on spending cut, entitlement reforms, a crude across the board cut and focus on pro growth policies. I dont believe you can get anything like the deal you are talking about. I think, in fact, if there is some relief in the sequester, the democrats and the senate particularly and the president will wish to use those savings for more spending. So, we are not interested in doing Something Like that. Thats what they want. Unless this involves net deficit reduction. You want to put it. Unless this involves smarter entile. Reform spending cuts to replace these cuts. The country will deal when titlements. The question is, do we do it before or after we have a debt crisis. With ewould like to get ahead of the problem. In the absence of serious pro growth tax for, i would take the sequester. You have current law on your side. I agree with. All you have to do is pass a clean bill. Thats all you have to do. Thats it. Bomb. If we cant get anything better than a sequester, we will keep the sequester. No two ways about it. Thats our base case to begin with. Im a growth guy. I am never obsessed about spending or deficit, to tell you the truth. Its the kind of thing, i guess when you get older, you take what you can get. If thats what we got. Yeah. From two years ago. Yeah. I would take it and hold on it to and kind of when they come in, harry reid, come on, harry reid wants a trillion dollar tax hike. The point is, were not going to sign up for a tax increase. Look, if people see this effort as an excuse to raise taxes, its not going to be successful. Thats not what were here for. We didnt come here to raise taxes. Two huge tax increase thes. Were interesting in reforming the tax code. Not as a measure of raising tax revenues. We think you can get more revenue through more economic growth. Thats the kind of thing were in favor of. We also want to get auto the drivers of our debt. So they want up front stimulus, which is not what were going to do. Because it didnt work the last time. We believe in pro growth economics, point one, point two, the reason i like the budget control act is it did put spending caps. Right. Now the sequester is going to lower spending caps. The question is, is in the interim, in this moment we are in, can we get even smarter an better deficit reduction that actually helps us get the debt under control to hem us grow this economy . Would you take a deal . A revenue deal to get some, some changes in the sequester . No. Raise taxes we have been really clear about this. Were not in this business to raise taxes. We are not here to raise taxes. So the only condition. Well take the spending cuts we v. Well replace them with better spending cuts. Were not in this business to raise taxes. So the only conditions, i want to get this right, im a reporter. The rule is, i dont negotiate with the media. Im not the media. Im kudlow, its a different game all the together. You and i have known each other well enough over the years. I have been really clear about this. If people see this as an exercise to have tax increases to replace the spending cuts we already have in why would we do that . Why are we doing this . We are doing this to help improve peoples lives, what does that mean . That means upward mobility, that means opportunity. That means economic growth. That means, get out of the rut we are in, in this country. If we can do that through this divided government, great. If we cant do that to this divided government, we in the minority party, the Opposition Party owe it to the people of this country to show them how we would do that . What are our ideas . What are our ideas for upward mobility and fighting poverty . What are our ideas for pros period of time, for economic growth, for reigniting the idea that jack kemp so thoughtfully did. That is what we are all about. Look, i dont think he could be any clearer. I kept pestering him, he kept coming back, no tax increases, nada. On the zwefter, the budget caps, if there is a better way, hell do it. My point is there is never a better way to do it. Stay with the spending caps. Shrink government. That will help the private economy to grow. That itself my teenage. My thanks to budget chairman paul ryan. That was the jack kemp Foundation Dinner last night. It was a great treat for me to be able to help them. Lets talk money. Lets talk markets. The markets are surging. The dow set a new all time high today. We talk about what two top investors believe and actually we have a third investor coming up, stay with us. Were kudlow. Its a growing trend in business do more with less with less energy. Hp is helping ups do just that. Soon, the worlds most intelligent servers, designed by hp, will give ups over twice the performance, using forty percent less energy. Multiply that across over a thousand locations, and theyll provide the same benefit to the environment as over 60,000 trees. Thats a trend we can all get behind. Therell be the usual presentations on research. And development. Some new members of the team will be introduced. The chairman emeritus will distribute his usual wisdom. And you . Well, youre the chief life officer. You just need the right professional to help you take charge. Welcome back to the kudlow report. The dow industrials closing at yet another all time high today, 15,680. Investors are looking ahead to tomorrows fed decision. They say thats not likely until probably march. For the dow, ibm was the big boost adding 30 points. The board okayed a 15 billion increase to its existing stock boy back plan. The s p closing at a record high of 1772. The nasdaq where near its record, getting close to 4,000 for the first time in years, that despite an index glitch. Thank you so much as always. All right, its a record rally day on wall street. We got easy money, rising profits. That makes me bullish on stocks. I tell you this, if the fed believes it wants a 6 inflation rate, which came out in the newspapers over the weekend. Count me out of this whole story. Last night, i spoke with former fed chairman Alan Greenspan who told me hes bullish. Take a listen. Equity premiums are close to their highest level in 50 years and equity premiums as you know are essentially the measure which says what is the rate of return required on equities . And that number is very high. That means that the Downside Risk of the market is limited. All right. Michael holland, michael zany, emmy awith regard winning tv personality. Its a great show. Grown span right . What is an equity premium for our nighttime viewer what is he talking about . You attractive or expensive or inexpensive stocks are. Im afraid, i have been optimistic if last four or five years as we have been speaking. Right now, i am no longer irrationally exuberant. Because i think the chairmans history is not great in terms of predicting these things. Having said that, i truly believe that janet yellen following on ben bernanke will continue doing what she is doing. Inclusive of all the things you said a moment ago, i believe the market has much higher to go. Are you not as optimistic. You think the market has much higher to go. There is a contradiction there. There was only an allen grown span. Michael zany, i want to go to you, easy money is generally good for stocks. It isnt a short run. But, but, but, New York Times lead story, im still stunned by this, sunday, lead story, the fed wants much more inflation. This assumes they can do it. They have been putting all this money in. So far, the inflation rate has gone down, not up. That tells me, they are going to be easy for time and memorial. Is that easier . Is that why you are on optimist . Absolutely. The biggest reason is corporate profits. Thats the mothers milk. I see corporate Profit Growth through the remainder of this year. I dont see where they get the 6 inflation from. Its running less than 2 . I want to figure this guy, he wrote with carmen ryanhart about how financial panics are damaging to the economy. Of course, hes a harvard professor. Only a har record is professor would want america to have a 6 inflation rate. A bloody fool will go there. That assumes the fed can do it. In other words, what matters is not rogoffs dumb 6 inflation numbers. What matters is the fed will be easy, easy, easy for a long time. All right. The whole game has changed right now. Were talking through the end of this year. We may be talking through the end of next year. Thats how easy the fed will do it. I think eventually, though, what will happen with corporate Profit Growth is it will stall. I think this could even happen in the Second Quarter of 2014. Some of the signs we are seeing right now are worrisome. You look at the spot index, you know, thats the weakest its been since november. That bothers me because youve had the dollar weakening. Usually that goes up, you know, when the dollar. If the profits slow to larrys point, we will get the fed accommodateing. The money is not going into the economy. Have you all these excess reserves. Thats why the stocks are going up. Greenspan said that, he is a brilliant man. Whatever you think of his forecasting, he is a very brilliant guy. So it isnt economic. We had mediocre retail sales today, not awful. Mediocre. We had very good home price incase from yesterdays news, Consumer Confidence fell. I still think its a 2 economy. Can you get the profits you want out of a 2 pshsz economy . You can have margin stability for the next couple quarters. Not the next year. Where is the Consumer Spending coming from . People are exiting the work force. That doesnt happen during a recovery. During a recovery, people enter the work force. Mike, you know, the boom over the next 12 months. Where we had this current quarter, s p up approximately 4 . Yee. Sales are up approximately 2 . If they continue doing that, the fed has said, we will do just what you said, larry, which scares you. They said they will continue to be, they will taper. Thats cutting back some purchases. I dont know if they will taper. Wait. I believe. More important, they said theyre not going to tighten. Theyre not going to tighten in my lifetime. I think were running out of time. Theyre not going to tighten. I think there is a limit. There is a statute of limitations on the utility event. Here again, i think theyre both bullish for the moment. So am i, so is greenspan, thats it for tonights show. Thanks for watching. Why dont i get such bullish politics . I never seen so dreary politics. Kudlow will be back tomorrow night. [ male announcer ] staying warm and dry has never been our priority. Our priority is, was and always will be serving you, the American People. So we improved Priority Mail flat rate to give you a more reliable way to ship. Now with tracking up to eleven scans, specified delivery dates, and free insurance up to 50 all for the same low rate. [ woman ] we are the United States postal service. [ man ] we are the United States postal service. [ male announcer ] and our priority is you. Go to usps. Com® and try it today. [ male announcer ] and our priority is you. Narrator in this episode of american greed. In grand rapids, michael vorce has money to burn. He was going to bars and tipping 1,000. He was buying expensive clothes, up to 20,000 at one visit. Narrator he drives fast cars and fast boats. Hed load the boat up with girls and go out and party. He was living the lifestyle. Young guy, lots of money, throwing it around. Narrator he says he has a fleet of more than 50 luxury yachts. He has the papers to prove it. Thats