Practices that created the wealth in the first place . New Yorks Cardinal Timothy Dolan about to tell us in an exclusive cnbc interview. All those stories and much more coming up in the kudlow report, beginning right now. Good evening, everyone. Im larry kudlow. This is the kudlow report. Its a pleasure to be back after the christmas vacation. We are live here at 7 00 p. M. Eastern and 4 00 p. M. Pacific. Obamacare coverage begins in just two days according to hoyle. Now about 2 Million People have enrolled in the plans, half from the federal and half from the states. But the question to ask is how many are actually enrolled and how many have actually paid . Only about 75,000 apparently has paid. And thats a long way from the administrations goal of 7 Million People that are enrolled and paid up. The question is will the Insurance Companies be pressured to cover everyone, paid or not, on january 1st . Nobody knows the answer to that. So lets talk. We have dan mendelson, avalier Health Founder and ceo. And John Cochrane, Professor University of Chicago Booth School of business. Gentlemen, welcome. Were hoping to get roy. Hes the numbers guy. I know neither of guys are the numbers guy. But let me begin with you. John cochrane, you have written extensively, that obamacare as it is presently constituted is doomed to fail. These numbers would suggest youre right. Tell us why and give me a sense where we should go. Well, i think its not it depends what you mean by fail. Its doomed to create a Big Government bureaucracy that then manages our health care through three or four big highly protected institutions and give us bad care at high prices. So thats where we head it if we keep it. So bad care, high prices. Youre talking about, what, limited networks for doctors and hospitals. Youre talking about higher premiums. Youre talking about higher deductibles. Thats what youre referring to . Yeah. And just a market that is missing the innovation that other markets that we have in this country have. You know, you want innovation. You want bending down the cost curve. You want all these fantastic things that theyre inventing to bring to our healthcare. And thats going to be really slowed down if its all run by the government. Dan mendelson, give you a chance to respond to the famous free market professor cochrane. Im going to disagree. I meani think already what you see is that this is a very vibrant private market with the same names in Health Insurance offering insurance under the exchange that are being offered to private employers. Youve got wellpoint, aetna, all the blues in there offering product. And in fact the premiums came in much lower than anyone expected. And the fact they have 2 Million People now enrolled in this benefit i think really shows how are the premiums dan, with respect, ive got to challenge you. Why are you saying that premiums are coming in lower . Almost everybody reports that the premiums are actually coming in higher. The premiums actually came in lower than anybody estimated prior to the passage of the law. And the fact is when you look at the types of premiums that are available, particularly for people with chronic illness, they are significantly lower. And a lot of the people who had their policies canceled are actually finding lowercost options in the exchange because theyre just lower expense policies. With all again, with all respect, ive got to disagree with some of your numbers. But i dont want to get caught up in these numbers. I want to go back to John Cochrane. John, rather than employerbased system, you write we should have an individualbased system. Can you tell us more . Yeah. On those numbers. I mean, the question is where is the money going to come from to lower everybodys premiums . Yes. Individualbased system. You can have a free market in Health Insurance and a free market in health care. And one of the ingredients of that system is that your Health Insurance should be like your Car Insurance or your Home Insurance. You buy it. It sticks with you when you go from job to job so you dont have a preexisting conditions problem. Lets see. You have to reform the tax system if you do that. Can the tax credit or the Tax Deduction go to the individual rather than the company . Would that hasten . Would that help this kind of free market reform . Yeah, one of the reasons we have this preexisting conditions problem is we gave a Tax Deduction for employerprovided group insurance. Only group insurance. If your employer contributes to an individual plan you that bought ahead of time and it sticks with you, you dont get the Tax Deduction. Well, then people who lose their jobs or leave their jobs can have preexist conditions. So why dont we treat those equally or only give the tax credit for employer contributions to an individual plan that follows you. Let me just clarify before i get to dan for a response. What do you do about sick people, John Cochrane . Just that niche. Because Republican Party and conservatives in general have been accused of not caring for the sick. President obama i think sold this thing in two major ways universal access and it would help socalled preconditions, you know, sick people. How do you take care of the sick . Well, they buy insurance when theyre healthy. That helps a lot. Second, we open up this market, we open the market of supply so, that being able to get treated is just a matter of money. And then its much easier to provide insurance. Lets go back to dan. Dan, you want to respond to that. In particular, i want to ask you, why not open up this thing completely . Using John Cochranes individual model. But i want to ask you about the plans themselves. Why stipulate plans . Why should the government tell us i dont need lactation services, with all due respect, at my age, i dont need it and i shouldnt have to pay for it. Im being serious, though, on this. If a consumer wants a plan that an insurance provider can supply, why cant you just do that . You can have minimal state insurance. Why cant you have dozens and dozens and dozens of different kinds of plans to shop around . Look, i think a lot of what youre describing and what john is describing is completely fine. And in fact is the basis of this law. Because what this law does for the first time is create a marketbased system where individuals can purchase insurance. Now, you can do it in a less regulatory way. And i think thats a good idea. I mean, so you can basically edge back on the requirements on the insurance company. I think the idea behind the law was if you set certain rules that there would be a floor beyond which people wouldnt go and thats typically what the government does, its what the republicans passed in Medicare Part d, where there in the medicare drug benefit where there are very specific rules about what the drug list should look like and what they cant look like. John, whats your Quick Response to that . Its kind of the opposite. Were still in this crazy system where Health Insurance is supposed to pay for your oil changes and getting your house repainted. We need to go back to a system where you pay mostly for stuff and then insurance is just a simple thing for catastrophes, just like your Home Insurance is. This is not obamacare, the Current Health law mandates all sort of care is covered. I think it wants to crowd out and ultimately destroy the individuals in this marketplace. I think individual care is what they want. And that includes the doctors who service them. I want to bring in obrick roy, who we have on the telephone. Hey, larry. Better late than never, buddy. First of all, merry christmas. Happy new year. Let me ask you on the numbers coming out of the white house, 2 Million People, about a million for the registered and about a million for the much smaller state administeredr those real numbers . No, theyre not. Because theyre numbers of people who have, quote, selected a marketplace plan. As you know, you arent actually truly enrolled in a Health Insurance plan unless you have paid the premium to the insurer and the insurers received the premium. And your estimate, the estimates of cnbc reporters dan mangan and jody i forgot her last name, excuse me, theyve estimated that 75,000 people who have actually paid for the premium. And more important than that, actually, is the white house wont tell us whether or not these are healthy or sick people signing up for the plan. All the indications are that these are elderly people and sicker people who are signing up but the white house wont give us any indication of that, which would suggest theyre very concerned about that problem. The demographics may be very costly for the Insurance Companies and may be very costly for the federal government, who im told is going to back up the Insurance Companies. If the Insurance Companies back up the individuals who want to enroll but we dont know if theyre enrolled, who want to pay maybe but we dont know if theyre paid. So theres kind of a catch22 in this, avik. Yeah. The basic thing about obamacare is it makes Health Insurance really expensive for Healthy People in order to make it somewhat more expensive for sick people. Thats obviously a great deal if youre sick. Its a terrible deal if youre healthy. So were not surprised to see that a lot of sick people or people who rell jibl for the subsidies are going to sign up for these plans, but a lot of healthier people who are going to pay double or triple for their premiums, theyre not happy about it. And just to contradict what dan said, dan said these premiums are coming in lower than what people expected. Thats absolutely not true. The president promised that every family in america would see their premiums go down by 2,500 per family per year. Its the opposite of that. And thats a big problem. I mean, dan, old buddy, were happy to have you on the show. We want your perspective on this show. Believe me. We always have both sides of the aisle. But youre pulling numbers out of the sky. Im sorry, i can back that one up. But you know, the other thing that i want to point out here is that this is generally very highdeductible insurance. The average silver plan has a deductible of 2,500. The average browns plan has a deductible p 500. This is high deductible insurance and it is going to require individuals to assume a lot of the burden of their care. And i think to aviks point the fact is also if you have chronic illness in this model and you come, in you have multiple sclerosis or Rheumatoid Arthritis youre going to be paying a lot out of pocket and its a very significant level of cost that is going to be put back on the individual. I dont think thats a bad thing. I think thats the only way that you can afford to put this kind of system in place. But this is a competitive market with the same Insurance Companies that are giving care to the employed population, offering insurance in this market. Avik, let me get your Quick Response. And i just want to add one thing. At this stage of the game from what we know, and i know its a big estimate, the federal governments not helping us at all, are there more uninsured or insured . Here we are new years. Which is higher . Well, we have about 6 million cancellations. And if you go by the administrations definition of enrollment, its 2 million. So thats still negative. But lets get to this point about the high deductibles. Look, highdeductible plans are great. Narrow Network Plans are great. That gives people the choice if that results in lower premiums. The irony of obamacare is these tools like high deductible and Narrow Network which are designed to actually lower your premiums are being delivered in plans that actually double or triple your premium. So the design of the benefit is not terrible in terms of deductibles for the network. Whats terrible is how high the premium is. And that has to do with a lot of other things the obamacare does to deform the insurance market. Weve got to close down. John cochrane, i want to gf you the last word on this. In your free marketoriented plan you want to run it through the individual. And would you in this plan take business out of the business of health care . I would let employers contribute to your individual plan, but it should be an individual system. And we havent even talked about care. These are not competitive markets. Theres three or four big Insurance Companies which are like the three or four big banks that carve up the market. We need new competition where new insurers come in and new suppliers come in, where you can go to a hospital and actually get a price and a quote on what its going to cost and new sort of walmarts and Southwest Airlines of hospitals come in to deliver us better care at lower prices. And john, just on another point, theyre knocking off doctors left and right. I dont know whether you followed it. United health care, which by the way im going to say is my insurer, theyve taken 25 , 30 of the doctors right off the list. What about the people who use those doctors . But who can afford if you want more people insured, i would want more doctors, not fewer doctors. Thats exactly what they should be doing, though. I mean, they should be narrowing these networks so they can have more control over the physician thats are providing care. You agree with that, John Cochrane . Ill give you the last last word. I think my dollars and the doctor is what controls who gets care. Go shop for whos going to give you the low price and the kind of service you want. Free choice, free markets. Im sorry, ken. Dan, i tried, but buddy, im not for the Big Government top down. But you did a great job. Were glad to have you. Avik, wherever you are, thank you for helping us. And professor John Cochrane at the university of chicago, very interesting free market stuff. Now, while the pope speaks out against capitalism, catholic leaders still have to ask the rich for major donations. Hows that working out . Timothy Cardinal Dolan spoke exclusively with cnbc today about all that as he asks new yorks top billionaires to help rebuild st. Patricks cathedral, which needs a lot of help. Were going to hear from Cardinal Dolan next up. And later in the show the new year brings in a raft of new obamacare taxes. You probably dont even know about them but youre going to know because weve got Grover Norquist coming on the show. Hes going to talk to us present, future, and current taxation. The most egregious thing ive seen. Dont forget, free market capitalisms still the best path to prosperity. Go back and read professor John Cochranes wall street journal oped piece. It is about Free Market Health care, which is what i favor. Im kudlow. Stay with us. Well be right back. [ male announcer ] what kind of energy is so abundant, it can help provide the power for all this . Natural gas. More than ever before, americas electricity is generated by it. Exxonmobil uses advanced visualization and Drilling Technologies to produce natural gas. Powering our lives. While reducing emissions by up to 60 . Energy lives here. Comments about the socalled evils of capitalism sitting with some very wealthy capitalists who are also big donors to the Catholic Church here in new york. And in the process of 180 million renovation of st. Patricks cathedral. Our Michelle Carusocabrera spoke to Cardinal Dolan of the archdiocese of new york. Michelle joins us now. Good evening. This all comes from this whole story starts at the 180 million renovation of st. Patricks. Weve seen the scaffolding in new york city now for a very long time. Spearheading this effort is a man named ken langone, frequent guest on cnbc, founder of home depot, and a billionaire. He tells cnbc exclusively that there is at least one sevenfigure donor, potential donor, hasnt written a check yet, who has expressed concerns about the popes recent comments about capitalism and he says, ive told the cardinal, your eminence, this is one more hurdle i hope we dont have to deal with. You want to be careful about generalities. Rich people in one country dont act the same as rich people in another country. The pope has put out this 224page teaching about his views on the world. A lot of it is what he thinks about the free markets, what he thinks about what the wealthy should be doing. I sat down with Cardinal Dolan, the leader of the archdiocese of new york, to ask him what he thinks about all this. And what did he say to ken langone when ken langone asked him about this issue . He did pass on to me, he said, one person said, you know, you come to us who have been blessed, who are wealthy, and yet we sense that perhaps the pope is less than enthusiastic about us. And he said we need to correct that. And i said, well, ken, that would be a misunderstanding of the holy fathers message. The pope loves poor people. He also loves rich people. He loves people. All right . And hes not into the condemning game for anybody. His famous renowned statement now, who am i to judge. So i said ken, thanks for bringing it to my attention. Weve got to correct to make sure this gentleman, whos the only one ive heard, understands the holy fathers message properly. And then i think hes going to say, oh, okay, if thats the case count me to n. For st. Patricks cathedral. Ken langone also thinks theres probably a misunderstanding or a lack of knowledge about american philanthropy, larry, which is far more generous than what you see from the wealthy all over the world. He has said, americans are more, you know give more. There is no nation on earth that is so forth come or so giving koechlt Cardinal Dolan also generally agrees with this. All right. Unlike other countries in the world we dont have these centuriesold wealthy people. We dont have an aristocratic class. We have people like ken himself who came up the hard way and worked very hard with immense industry and diligence and now is a man of wealth. And those people by their nature want to help those who are now coming up. So there seems to be as part of the american chemistry a desire to give back. So larry, thats some of it. Well have a lot more on squawk box tomorrow. If you want to see a lot more of the interview and details of the story you can see it on cnbc. Com. I think Cardinal Dolan spoke very well. I think defending some of the popes remarks look, im a sunday churchgoing catholic convict for that matter. I dont want to sit around criticizing the pope. But on the issue of the economy he had some very bad things to say about markets and he wants the state according to this exhortation, he wants the state to run the economy. We tried that in some dictatorships in the soviet union and it didnt work so good. So i think he should give a little more credit to capitalists. What im told, theres a whole group of them in new york, very wellknown businessmen. They are each willing to put up in the neighborhood of 5 million. But they want some relief from what the pope has been saying. I pressed ken langone on that. He would not talk about any of that or suggest he said he had this one donor. But we have heard, yes, within that circle that there are concerns about these comments which are very extensive. I urge everyone to read this commentary from the pope. Its 224 pages. Theres a lot in there. And its very clear, larry, hes not an economist. I mean, hes clearly not an economist. And what a lot of people have said, and i think this may be true, hes from argentina, larry. Which is a mess. And if you think argentina that isnt capitalism. No, it isnt. If he thinks it is. If he thinks its free market capitalism, its a combination of socialism, crony capitalism, et cetera. So thats probably part of the issue. As the world bank has chronicled with great detail, in the heyday revival of capitalism over the last 20, 25 years, literally hundreds and hundreds of millions of people have left poverty and come into the middle class, particularly in china but also throughout asia. And lets not forget brazil. And the pope gives no credit to that. He sees all the negatives, none of the positives. This is the kind of thing he has to say. One last point. Theres allegedly going to be another meeting of these catholic contributors in about two weeks, and theyre going to see if theres any progress in the discussions. Im not going to name names. I know the gentlemen some of them by the way, there are two noncatholic donors in this in fact two jewish businessmen, very successful who are willing to pony up because st. Patricks is such an important part of new york city. But theyre waiting because theyre both capitalists. I asked Cardinal Dolan if there would be some message given to the pope if he would approach the pope. He laughed and said absolutely not. That he would talk to donors to suggest that they misunderstood the popes comments but that the dialogue would not go the other way. One quick final on this. I am told from the original meeting that the suggestion was made that several italian cardinals come to the usa and sit down with free market types and talk about capitalism in the hope that they would carry the message to the pope. I asked specifically if any cardinals would coming to the United States because i had heard that as well, and i was told by the archdiocese Pr Department absolutely not. Absolutely not. No. Things may change. Michelle carusocabrera, great report. Thank you. God bless you. You too, larry. One catholic to another. Another day another serious terror attack in russia. The kremlin says its chechen terrorists looking to do what they can to disrupt the upcoming winter games. Were going to edit good an experts take on whether this is going to escalate further. Next up on kudlow. The ocean gets warmer. The peruvian anchovy harvest suffers. It raises the price of fishmeal, cattle feed and beef. Bny mellon turns insights like these into powerful investment strategies. For a university endowment. It funds a marine biologist. Who studies the peruvian anchovy. Invested in the world. Bny mellon. Ed. Joining us now, Michael Rubin from the American Enterprise institute, author of the upcome k book dancing with the devil the perls of not gauging rogue regimes. Who are these terrorists undertaking this bombing raid . The terrorists according to the russians are chechens. Chechnya in the 1990s of course fought an independence struggle, ultimately unsuccessfully, against the russian state. Its part of russia today. But it really became al qaeda central back in the 1990s. And we have this concept, we have this phenomenon called the black widows. Basically, the women, the wives of those who were killed, chechens in the struggle, and the russians are accusing both these suicide bombings as having been perpetrated by socalled black widows. Black widows from dagestan. Thats right. Or chechnya. Some speculation in the press, especially after the second bombing we just had today, that theyre trying to disrupt, terrorize, and so forth all of russia to stop the Olympic Games. The olympic committee, the officials wrote a letter to putin and said no, no, were still behind you. Do you think the terrorists want to stop the olympics . Is that whats behind this . Well, absolutely without a doubt they want to stop the olympics. Theyve said as much quite bluntly. The problem is this isnt just about the olympics anymore. One of the Untold Stories is that while theres always been terrorist attacks in and around chechnya and dagestan and also in moscow theres been a steady radicalization in the center of the country, too. So what russias really looking at is a real plague of islamist terrorism in the next decade to come. The problems been getting more severe. Its not going to stop with the passage of the olympics. The center of the country is that volgograd . What are you talking about . Im talking about tartarstan and kazan a little north of volgograd. But volgograd is only 400 miles away from where the olympics will be. And the situation for security gets even worse as we go down near sochi. Ive been up on the dagestan border, in this case with azerbaijan. Its almost impassable. Its not the type of place that Russian Troops are going to easily function. And as you get closer to the olympic venue, its going to be even more difficult. Remember, the olympics chose sochi because of the mountainous terrain. Thats actually going to work in favor of those who want to disrupt the olympics. All right. Do you think there will be any particular changes . Were not going to cancel the olympics. Putin would never do that. Hes going to show off, i reckon. Does putin have the security guards, does he have the Security Forces to guarantee a safe Olympic Games . Because as you noted, you know, these terrorists are pretty tough to stop. Well, the chechens or the dagestanis have already in many ways gotten what they want because thats all people are talking about when it comes to the forthcoming olympics. Yes, the russians can probably secure the olympics. However, russias big problem is going to be the internal corruption. Putins going to be mightily embarrassed if theres an attack during the games. Many thanks, Michael Rubin. We appreciate it. The democrats are betting that raising the minimum wage and extending job else benefits are going to be big winners for them in 2014. But fellas, what about obamacare . Think about that. Larry sabato is about to join us with his predictions on the year and much more on the kudlow report. Across the country has brought me to the lovely city of boston. Cheers. And seeing as its such a historic city, im sure theyll appreciate that geicos been saving people money for over 75 years. Oh. Dear, ive dropped my tea into the boston harbor. Huhh. I guess this partys over. Geico. Fifteen minutes could save you fifteen percent or more on Car Insurance. 2013. The year of obamacare. Also a very small ball budget deal and a Government Shutdown. And a Government Shutdown avoided. Question is whats up next for the legislative strategy in congress in washington. Here now to give us his 2014 playbook, political reporter and cnbc contributor extraordinaire robert costa. Happy new year, bob. Thanks for coming on. What i see what i read. You tell me. Is that senator harry reid wants the first order of business in the senate when they reconvene to be an extension of the jobless benefits. The Unemployment Benefits. Is that the case . And wheres that going to go . This is the first step in what i call the great progressive shift for the Democratic Party looking into 2014. The Democratic Party is really concerned about the obamacare stumbles and they want to pivot to some new issue. And thats economic inequality. So theyre going to focus on the jobless benefits in early 2014 and then the minimum wage. Where do you think the minimum wage goes . I think this is much more about democrats trying to come up with an issue in 2014 that excites liberal democrats and the democratic base. This is about getting the white house and Senate Democrats on the same page on something other than obama care. Right. I get that. Let me just swing back, though. On unemployment. Will the republicans fold as they often have in the past . Theres a threemonth extension, which you know. Jack reed and dean heller. Jack reeds a republican from ohio, jack reed from rhode island. I think theres a block of republicans like senator rand in kentucky ideologically opposed to extension of benefits. They think the government should not make these benefits some sort of Entitlement Program or longterm Government Spending program but i think Speaker John Boehner has articulated he will allow this vote to come to the floor at should point. Hes just looking for a legislative trade. What will the republicans come up with . I know that obamacare is the dominant issue. I get that. And were going to talk about obamacare later on some more. But on these smaller issues, as you say, theyre trying to change democrats are trying to change the subject. Republicans have a counter. They have an Economic Growth counter. Do they have a wage subsidy counter, in other words, something that makes them out not to be nasty grinches hurting people . Im not hearing a major Economic Growth push yet, larry. What i am hearing is some buzz about piecemeal immigration reform. Republicans feel like they need to do something on that in 2014. And looking at the debt ceiling in february, to not have a major standoff on that issue. Its much more of a tactical approach right now, debate over strategy, rather than having any kind of big growth push. What do republicans want in return for raising the debt ceiling . I think republicans as ever will be looking for spending cuts. Theyll be maybe looking to play the president out on chain cpi, some smaller forms of entitlement reform, but beyond that theyre really undecided. This is a Party Without a leader. Its a party thats very confused right now by where exactly it wants to go. Look for some active debate within the party. Theres going to be an alternative health care plan. But then again, some republicans im told just want to fix obamacare. Thats going to be part of the debate too. Robert costa. Thank you ever so much. Again, happy new year. Happy new year. So lets move on. Whose strategy is going to come out on top in the 2014 election . Here now is larry sabato, director of the university of Virginia Center for politics. Larry, welcome. Happy new year. As always, great to see you. Let me just ask you this, just sort of continuing this. The democrats want to get off the subject of obamacare. Its easy to see why. And they want to talk about income inequality and Unemployment Benefits and minimum wage. Do you think that strategys going to work for them . Larry, if they have a card to play in 2014, its got to be the economy. Its improving whether people recognize it or not. Maybe they will recognize it in ten months. But were talking about Midterm Elections and were talking about the second midterm of a twoterm president. The socalled sixyear itch. The structure of these electionsize that the out of power party, the white house out of power party tends to pick up seats. At least in the house of representatives and often in the senate as well. Theres only one mod everyone exception in 1998 when the republicans went too far in trying to impeach bill clinton and it caused a backlash. Sought line that im taking as we move into 2014 is whether were talking income inequality or obamacare or some other subject that comes up during the year the republicans are very, very, very likely to hold the house, probably add a few seats, and in the senate the republicans are going to gain seats. Its just a question of how many. Karl rove put it 50 or 51 gop seats in the senate. You want to comment on the rove prediction . This is so much fun. Well, my view of it is as we move into the new year republicans are likely to pick up either three or four seats. Well, they need six. It turns out that six is the average for sixthyear elections since world war ii. What does it do what is needed for the republicans to go from, say, four seats to six seats . A tiny little wave in october. Some negative news coming out of the obama administration. Maybe some other disaster connected to obamacare. It doesnt take much in a sixthyear election for the out of power party, the republicans, to pick up a few extra seats with a little wave. I think theyre going to hang their hat on expectations of a continued disaster on obamacare. They might talk about Economic Growth, but im not hearing it yet. Let me ask you this. Civil war inside the gop. Civil war. A lot of stories just in the last week or so. The chamber of commerce representing big business here in washington versus the tea party. The chamber of commerce says it might spend as much as 50 million in republican primaries to defeat tea party candidates. There is a rupture. There is a war. How much is that going to complicate the republican race for the senate . Actually, i think less than people think. Of the seven republicans who are ib extent senators being challenged by tea party candidates, ill be shocked if even two lose. Im not even sure one is going to lose. All of those incumbents may be renominated. And then because again its a Midterm Election and because the focus, as usual, in a Midterm Election is going to be on the incumbent president , i think the republican factions will come together. Larry, the danger for the republicans once again is in 2016 where you have a much larger turnout and where factional disputes, which are vicious in the Republican Party, could deprive them of the white house again unless they can resolve this during the nominating process. One last one. In the next ten months or so, between now and november, whatever, 2014, do you think the gop this sproepz its own completely Different Health care plan, or do you think the gop should patch and tweak and change parts of obamacare but keep the whole in place . As you may know, theres a debate inside the Republican Party now and some important republican senators, kelly ayot ayotte, for example, ron johnsons and others, theyve already proposed lindsey graham. Theyve already proposed to fix obamacare rather than to scrap it and repeal it. Which do you think they should do . This year, this coming year, nothing. Thats up to the republican nominee for president. And that nominee is going to have to come up with an alternative that keeps the parts that are popular from obamacare and moves on from those unpopular pieces into a republican plan. Thats a president ial year issue. All right. I get you. Larry sabato, university of virginia. Again, happy new year. Thanks for helping out. We appreciate it. Happy newer, larry. Now, obamacare isnt functioning properly but thats not stopping the government from collecting an entire raft of new obamacare taxes. You might not even know about them. But Grover Norquist does. Hes about to join us next with all the ugly details. Please stay with the kudlow report. I wanna spread a little love this year [ male announcer ] this december, experience the gift of true artistry and some of the best offers of the year at the lexus december to remember sales event. This is the pursuit of perfection. The energy in one gallon of gas is also enough to keep your smartphone running for how long . 30 days . 300 days . 3,000 days . The answer is. 3,000 days. Because of gasolines high energy density, your car doesnt have to carry as much fuel compared to other energy sources. Take the energy quiz. Energy lives here. [ male announcer ] this december, experience the gift of exacting precision and some of the best offers of the year at the lexus december to remember sales event. This is the pursuit of perfection. Welcome back to the kudlow report. Im seema mody with this news alert. The millionaires tax officially going into effect in france. It was approved by the Constitutional Council yesterday. Companies will pay a 50 tax on wages above 1 million euros. Nearly 500 Companies Including frances top soccer teams will be hit by it. It is expected to raise nearly 300 million next year. Larry . Great. Thats all i can say. Great. Seema mody, youre great. This tax is not. Anyway, many thanks. Now, lets turn to the tax problems coming up right here in the usa. As a result of obamacare americans are going to pay an extra 100 billion over the next ten years at least. Here now is Grover Norquist, founder of americans for tax reform. Happy new year, grover. Thanks for coming on. The wall street journal calls this a large new tax on Small Businesses. But it really is going to have a big ripple effect, is it not . Absolutely. There are 20 different taxes in obamacare. 16 of them have already taken effect. Tanning taxes. Taxes on charitable hospitals. On medical devices. Those sorts of things. The taxes on higherincome people. The taxes on investment income. A whole bunch of taxes. There are three that hit this year. Two of them the president s been sort of delaying or promising to delay. Those are the sort of specific taxes on individuals and businesses not buying insurance. The thrd one hits Insurance Companies. Now, if you can imagine, your insurance is going to go up maybe as much as 2 in terms of cost or 100 billion over the next ten years because of these taxes on Insurance Companies. And its targeted because of the regulations that obamas team has put together on smaller businesses. The National Federation of independent business estimates all 150,000, 250,000 jobs will be lost, more than half of those in small companies. What was one of the original intents here, that team obama, which is obviously antibusiness across the board, particularly Drug Companies and Insurance Companies, that theyre basically saying to these companies youre going to get a lot more customers because were going to have 40 or 50 million new uninsured people get insurance. Youre going to be the recipients of that, so we want you to pay up, pay this little tax to cover the various odds and ends. And the Insurance Companies and the pharmas and some others in my opinion stupidly went along. There was some very big mistakes. When you get into crony capitalism, the government promises you benefits but they cant give you anything they didnt steal in the first place. And so this idea that somehow the government is going to tax Insurance Companies, tax hospitals, tax the producers of lifesaving drugs, and then somehow redistribute the money at some point. In point of fact its going to make our drugs more expensive, charitable hospitals more expensive, insurance more expensive, and at the end of the day it does kill jobs because you cant raise the cost of employing people without reducing total employment in the country. But speaking of crony capitalism, this regulation, selfinsured companies and selfadministered Big Companies. Companies, these are the big guys. That includes the labor unions, or at least a lot of them. Theyre exempt. So let me get this right. The big guys, business big business and big labor once again are the winners, and Small Business is the loser. Is that fair . Is that true . Thats exactly what theyre doing. What youll hear in the next several days is democratic congressmen and senators acting as if big Insurance Companies and Big Companies are going to be paying this tax because theyll have to deal with the fact theres this tax coming this year starting in 2014. But theyve written the regulation so that labor unions dont pay it, about 80 of larger companies, insurance for those companies doesnt bay it. It really is targeted at Small Businesses. Youve already seen them attack the individual market with taxes on Health Savings accounts and flexible savings accounts and your ability to insure as an individual, making that difficult. Those are the people being pushed out off the edge of a cliff and promised some sort of deal in the future. Theyre now going after small companies. Thats right. I think two things, grover. Weve got to get out. One is its a war against individual insurance. Plain and simple. They want to crowd them out and kill them off. Very clear. And two, they know that Small Businesses are not obamacare fans. They know that Small Business on the whole, men and women who own Small Businesses are not obama voters, theyre not democrats, they tend to be free enterprises. Heaven forbid tea party. And they want to go after them. And theyre using this tax to do that too. Thats my political take. They see the Small Business community as a bunch of kulaks and they dont like them. Thats a great metaphor. I might use that myself. Happy christmas, merry new year. You too. Economic projections for 2014. Im starting to get more and more optimistic. So what might that mean for your money . Im kudlow. Please stay with us. [ chainsaw whirring ] humans sometimes life trips us up. Sometimes we trip ourselves up. And although the mistakes may seem to just keep coming at you, so do the solutions. Like multipolicy discounts from Liberty Mutual insurance. Save up to 10 just for combining your auto and Home Insurance. Call Liberty Mutual insurance at. [ thump ] to speak with an Insurance Expert and ask about all the personalized savings available for when you get married, move into a new house, or add a car to your policy. Personalized coverage and savings. All the things humans need to make our world a little less imperfect. Call. And ask about all the ways you could save. Liberty mutual insurance. Responsibility. Whats your policy . What a year weve had on wall street. Take a look at these gains. Dow up 26 in 2013. S p 500 surging 29 . The nasdaq up a whopping 38 . So of course big question for investors, does the rally have room to run in 2014 . Whos going to tell us . Well, jeff kilburg, founder of kkm financial. Jack barujian, chief Financial Officer of index financial partners. Gentlemen, i dont want any sugarcoating. I dont want any hedging at all. Jeff kilburg, i begin with you. What are your estimates for 2014 . A year from now where are these markets going to be . I think the market will be in the same area. Flat to possibly up a few points, percentage points. But honestly, larry, we cannot sustain this rally. I know jack is a big milie cyrus fine. Im going to put 2014 in this light. We are certainly not going to see the wreck ball but we are anticipating a lot of twerking. Jack, im going to leave the metaphors alone and just ask you, what is your opinion . A year from tonight, lets say, where are these markets going to be . Larry, were going to be seeing a 2050, a 2100 s p. Last year i sat here exactly at this time and i said wed see 1750. People thought it was outrageous. As it turns out it wasnt bullish enough. The reality is that if the rest of my predictions come true, and ill get that into a little bit, of china and japan coming back online because we did this without the benefit of china living up to their expectations. They were in a slowdown. So if they get back online. If we start to see business start to hire again. And thats the other prediction ive got. 300,000plus on the payrolls on a monthly basis. We are looking at 2050, 2100 in the s p, an expanding bottom line and an exmanneding top line on a revenue basis for corporations jeff kil urg, where are Interest Rates going . I mean the tenyear treasury note. Let me just step back. You basically have a multiyear gradual process of Federal Reserve tightening. Thats whats going to happen. How fast, how much we dont know yet. But we know theres a tightening cycle that started with the socalled taper, buying fewer bonds last month. Earlier this month. So why is Interest Rates why arent Interest Rates going to go much higher . I dont think they can go too much higher because that whole taper, they didnt really taper. They extended qe. They added about 400 billion, 500 billion in that qe infinity. Interest rates will go up. These bond vigilantes, they dont have a lot of wind in their saltz but they do technically have a chance of going up there. Its all about the speed, the velocity of that move. But once we do see it go above 3 1 4 and test that 3. 50 that is when we see equities come off. And that will push people back into the long end of the curve and that will sedate this move. Jack bouroudjian, if you get your strong growth, which you were talking about, Capital Spending and jobs, then the tenyears going to 4 . Thats the kudlow prediction. You can count on it. 3 growth. I think the tenyears going to 4 . Whats that do to the market rally . I think it helps the market for the right reasons. And the other area thats really going to benefit is the commodities space. Look at companies that have struggled this year. They are commoditysensitive stocks. Commoditysensitive currencies. Would you buy gold . Now is when you want to buy it. At the end of the year when people are selling their dogs, theyre selling everything thats losing on their portfolios, this is an opportunity. Its like the gates of opportunity opening you. Look at oil. Look at the Energy Complex as a whole. There are going to be jeff, ive only got 20 seconds. Id be a seller of commodities. Real fast. Well, oil is going lower. To push back on 4 , larry, i think you know you walk on water but a 4 tenyear that will put people in the hurt locker and really cool off housing you never know. Thats if the economy goes. Jeff kilburg, jack bouroudjian. Thats it for tonights show. Well be back live tomorrow. And im still larry kudlow after i great christmas holiday. Well see you tomorrow night. S e a saturday crowd. [ male announcer ] the parking lot helps by letting us know whos coming. The carts keep everyone on the right track. The power tools introduce themselves. All the bits and bulbs keep themselves stocked. And the doors even handle the checkout so we can work on that thing thats stuck in the thing. [ female announcer ] today, cisco is connecting the internet of everything. So everyone goes home happy. 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