Really mean is that we dont advertise very well what scientists and engineers do. I mean pretty much the job definition is one of optimism and wouldnt it be cool if. It drives everything we do around here. Everyone is like wouldnt it be cool if we could make an inflatable bouncy castle walk . Wouldnt it be cool if we could make Solar Energy Cheaper than coal. Thats inherently optimistic and beautiful. I think im imagining it more as a catch prize for the next generation. We need an awful lot of children in huxlys generation, in your generation, to grow up to think wouldnt it be cool if we did this to make the future a fabulous place to live. He thinks making the future fabulous is means radically changing our energy habits. Hes leading a group of scientists and engineers who are inventing the technologies to make that happen. Dedicating their lives to making alternative energy the fuel of the future once and for all, wouldnt it be cool if . Im dr. Sanjay gupta, thanks for watching the next list. Washingtons forced spending cuts now have the force of law. The u. S. Government needs a plan to roo deuce its debt. But is this the way to do it . Another deadline, another failure in washington by your elected officials. Fay yur to put your prosperity above their ideology and partisan political interests, someone even said the word [ bleep ]. We should not have to move a third bill before the senate gets off their [ bleep ] and begins to do something. And by senate, he means democrats. But boss reid tossed the hot potato right back at boehner. I think he should understand who is sitting on their posterior. Were doing our best to pass something. All of this while your financial future hangs in the balance. The forced cuts could cost 750,000 jobs. In a weak economy thats barely growing, a lot of smart people say this socalled sequester is stupid. Besides having adverse effects on jobs and incomes, a slower recovery would lead to less economic recovery. Republicans say democrats are fearamongering. Without reforming costly and growing entitlements like Social Security, medicare and medicaid, the cuts will be much bigger to some departments. This uses a meat cleaver approach to gut critical investments. But awe apparently you dont care that much. A new poll shows almost half of you arent following this boring but important sequel to a bad movie youve seen too many times. I get it, trust me, id rather be reporting on something else, too. This wasnt supposed to happen. This sequester is not something that i propose, something that congress has proposed. It happened, now what. You can cut less than 3 without all of these awful consequences. My kids could go and find 83 billion out of a 4 trillion budget. With the u. S. Economy growing at a rate of a smidge, these sloppy, potentially dangerous cuts are a sadistic and perverse experiment that could go terribly wrong. Costing america prosperity and jobs. Judge if you get a kick out of this sort of drama, the u. S. Government gets another chance to kick up the struggling economy when the current continuing resolution, the thing that passes for a federal budget in america expires. For what its worth, president obama and House Speaker john boehner say they are going to try to avoid that. I did lay out that the house is glg to move a continuing resolution next week. To fund the government past march 27th. Im hopeful that we wont have to deal with the threat of a Government Shutdown while were dealing with the sequester at the same time. The house will act next week and i hope the senate will follow suit. William cohen has served as the secretary of defense in president clintons democratic administration. As a republican, he served in both houses of congress. He heads the cohen group, a consulting group. David gergen has worked both sides of the aisle in washington, served as an adviser to nixon, ford, reagan and bill clinton. A cnn analyst and director for the public leadership at Harvard Business school. These two guests could probably solve the mess by themselves, with a little help from jean is a hadi, who somehow imagimanage make sense of the hysteria in washington. Let me start with you. 13 cut roughly across the defense department. There are some who say that is a Silver Lining. Prarly some democrats who say we would never be able to negotiate those kind of cuts. Its a black cloud thats hanging over the defense department. I think you can make rational. Responsible cuts. I think they will be made if congress can sit down and find a way to resolve it responsibly. Right now the way the acrosstheboard cuts. Youll be exempted. The president has exempted our military. In terms of our fighting forces. So personnel have been exempted. That means the entire cut of some 45 billion in the next six months come out of what we call o m, operation and maintenance, showdowns and repairs. Wont be able to repair aircraft. Well have no reduction in depot maintenance and have a pro ducks in procurement that will have a major impact on our readiness, thats not the responsible way to legislate this. Saying take 13 across the board it doesnt match up resources with our responsibilities. The president has articulated a structure and policy for shifting resources to the gulf and to the asia pacific region. All of these countries looking at us and saying great philosophy, great strategy, wheres the money. David gergen, i think a lot of people agree with the second that across the board, less than presize way of doing it doesnt work. Whats interesting is that republicans have suggested sledge legislation that would allow the president to decide how to apply cuts to different agencies and it seems that the president is not interested. Why would the republicans be offering that and why wouldnt the president want the authority to control those cuts. Thats a great mystery. If there is one thing that everyone in washington does agree on, a stupid way to cut a budget. A dangerous way. It was a pentagon controller, who estimated within a year, twothirds of army combat units will bed a inacceptable level of readiness. Every governor in the country who has been having to cut has been doing it with saens of whats important, whats essential. Why doesnt the president accept it . Woo i are the republicans pushing it . Obviously the republicans worried that there will be screams, by doing it in an across the board way, there are things that are going to happen. If we have long lines in airports, thats going to bring enormous pressure on the republicans. To, to give up and give the president the tax increases he wants. On the other hand, if you accept the smarter way of doing this. He may lose some of this leverage. Think the president has been right to try to find a better way to do this. But wrong in refusing to accept the more flexible way of cutting. Jean, you write about four minutes about this thing. Four making their way around. Number one, that the world will be different today. And number two, this one is popular with conservatives. That president obama is to blame. Number three, that its not hard 20 cut 85 billion and number four, that the cuts will hurt very badly or wont matter at all. Lets hone in on how easy it is to cut 85 billion, over a massive 3. 5 trillion budgets. You heard hailey say my kids could come up with those cuts. Were cutting over half a years funding for the smallest part of the budget. Were doing it primarily on the discretionary side. It accounts for little more than a third of all spending and were asking them to do it quickly. I agree with gafd that if in fact the president had more flexibility in how he makes the cuts, can they be smarter cuts but can they be that smart if you only have seven months to enact them. Cutting over seven months is a short period of time to do so in a prioritized way. I would encourage our viewers to read the stuff that youre writing on this. There are a lot of minutes out there. Jean sahadi a senior writer, david gergen and former defense secretary, david cohen. Will the cuts harm americas military spear yorety. The times you need to doublecheck the temperature on the thermometer, be ready. For high fever, nothing works faster or lasts longer. Be ready with childrens motrin. Carrots. Yes. Chicken wings. Uh ha, sure. Chips. Craveable. Celery. This is fun. Okay i love it, i love it. Chicken nuggets. Whats going on . Pita chips. Delicious. Sabra hummus dip life to the fullest. See lioutdoors, or in. Ight. Transitions® lenses automatically filter just the right amount of light. So you see everything the way its meant to be seen. Maybe even a little better. Visit your eyecare professional today to ask about our newest lenses, transitions vantage and transitions xtractive lenses. Experience life well lit. Ask which transitions adaptive lens is best for you. [ indistinct shouting ] [ male announcer ] time and sales data. Splitsecond stats. [ indistinct shouting ] its so close to the options floor. [ indistinct shouting, bell dinging ]. Youll bust your brain box. All on thinkorswim from td ameritrade. Welcome to a special your money from washington, d. C. , im here, most of congress isnt. The drama gone and the budget cuts and sequester went into effect on friday. But we could all see this moment coming. 18 months ago. Its a whiteknuckle drama played out not in days or hours, but in month after month. To understand how we got here today, rewind to the summer of 2011. We zbl we are just over two days away from the date when the United States may not be able to pay all of its bills. Congress is divided over how to raise the debt ceiling. Republicans demand some 2. 5 trillion in spending cuts. No one wants the United States to default on our obligations. But wu wont see real Economic Growth without a serious plan to deal with our deficit. Every american is being held hostage by the republican majority. The fight goes right up to the deadline. But late on sunday, july 31 z, i want to announce the leaders of both parties in both chambers have reached an agreement. The deal has been reached in the debt ceiling debate. A lastminute deal to raise the debt ceiling through the 2012 president ial elections. Agonizing and we all were up late, late last night. Emails flying at midnight. Congress agrees to about 1 trillion in cuts and the creation of a bipartisan supercommittee. Its job . To find another 1. 5 trillion in cuts. If the supercommittee fails, then indiscriminate acrosstheboard forced spending cuts would kick in in 2013. The geeky order for it in congress . The sequester. At first, theres relief in washington. You may have noticed that the cloud of uncertainty has been lifted. But the good cheer does not last long. September 2011, the Super Committee begins work. I approach our task with a profound sense of urgency, high hopes and realistic expectations. The weeks drag on, bargaining is intense and in late november the supercommittee wraps up work without a deal. We have to keep finding a fair and balanced solution. Theres the chat eng that divided us. A disappointed president obama urges lawmakers to do what the supercommittee could not do. Although congress has not come to an agreement yet, nothing prevents them from coming up with an agreement in the days ahead. The dli for forced budget cuts seemed far away. As i warned a year and a half ago they dont come to a deal, then the automatic cuts are very happ haphazard. Thats the past. Weve got the budget to deal with. At least the continuing resolution that substitutes for a budget ahead of us. The debt ceiling debate. We do not expect any socalled grand bargain on tax reduction. Is there a lesson on anything that has happened so far that might guide us . Im not sure there are very many good lessons, because no one has won or lost on the last round. It continues the slogging through continuing. I think if there was a Silver Lining yesterday, it was that both sides in effect declared a truce. Through the remainder of the fiscal year until this september and that is, that they both agreed if the continuing resolution to keep the government going until september would be passed without making it an occasion to revisit the sequester. And that, that would be helpful. If they could add this one thing to that continuation, to the cr as its called. It would be to give the president more flexibility and have him in a calmer moment sign it. I think that that would, it is, it is irresponsible for washington to make the public pawns in a political game in washington and make them feel maximum disruption and hardships in their lives when this could be done in a wiser way. For our viewers who dont know about the budgeting process and the continuing resolution and the crs, ill explain it in detail later so you understand it. Bill, let me ask you about this, discretionary defense spending. You described it well earlier. Faces a 13 cut over theers in seven months. The u. S. Spends 4. 7 of total economic output on the military. Almost double the average of 2. 6 across developed nations. Even chuck hagel, the new defense secretary is not so much concerned about the scope of the cuts, but more about the arbitrary approach to them. Listen to what he said. Leadership at pentagon, all of us, have two serious concerns. First, the abrupt and arbitrary cuts imposed by sequester and second, a lack of budget management flexibility. So david just talking about the flexibility. You mentioned that earlier. What are the ways in which we can cut the Defense Budget smathly. Its not how much you spend in defense, but how you spend it. Can you spend it consistently with your policy and strategy. So looking at the Defense Budget, dont just look at the top line, thats coming down. Where is the growth coming from . Personnel to be sure. If you look at our personnel costs theyre a third of the budget and youre looking at 9 growth for example of health care. When i was at the pentagon, the heat care bill was 19 billion, and its 32 billion and growing now. If youre looking at the costs for retirement programs on a different level, those have to be addressed. From the military, were trying to attract the best and brig brightest, we want to give them health care. Those add up to major part of the budget. Then theres procurement. You procure aircraft and ships and other equipment, we are the best in the world at this were going to start cutting back on that and try to taylor our procurement to see more of the faster force, more on drones and other im of technology. Youre going to see a shift of that to not only the middle east, but over to the asia pacific region. You can make serious and substantial reductions if you do it in a way thats consistent with fulfilling that policy. Roo right now were just cuttin policy is youll be people furloughed, forces who cant train and therefore you have people in afghanistan, men and women who are over there. They may not be replaced by the people who are training because they wont be training up to that level. Its a serious miscalculation, irresponsible and there is a responsible way and the Defense Budget will come down it has to be done in a serious and rational way. David. Can i just add to that, weve had two defense secretaries in a row, first class about bob gates and leon panetta who worked hard to already put in place, 500 billion of cuts in the pentagon budget, but they warned at the time. Do not go much beyond this. And here, the congress and the white house are mindlessly imposing another 500 or more upon the Defense Budget. Thats going to be a reduction in what is called our heart power. Our capacity to project force. But theres also something as you well know, bill cohen knows better than all of us, something called soft power. Americas attractiveness and its capacity to lead because others want to follow. Others want to be associated with the United States. You get a government that is dysfunctional, thats leaderless and our soft power slips away from us. And actually the secretary had said that when were off camera thank you for making it. A pleasure to see you, david gergen, cnn soer political analyst. William cohen, the former secretary of defense and the ceo of the cohen group. The federal budget needs to go on a diet. Both parties agree on that focusing on things like public broadcasting instead of focusing on the real budget fat. I may not be the first guy you go to for diet advice, but here in washington im one of these folks, one of the people that folks better listen to. A sensible way for washington to solve its battle of the bulging budget. [ male announcer ] now you can swipe. Scroll. Tap. Pinch. And zoom. In your car. Introducing the allnew cadillac xts with cue. Dont worry. We havent forgotten. You still like things to push. [ engine revs ] the allnew cadillac xts has arrived, and its bringing the future forward. Did you know not all fiber is the same . Citrucel is different its the only fiber for regularity that wont cause excess gas. Its gentle and clinically proven to help restore and maintain regularity. Look for citrucel today. Its gentle and clinically proven to help restore and maintain regularity. License and registration please. Whats this . Uhh, its my Geico Insurance id card, sir. Its digital, uh, pretty cool right . Maybe. You know why i pulled you over today . Because im a pig driving a convertible . Tail lights out. Fix it. Digital insurance id cards. Just a click away with the geico mobile app. Shaq 1, pain 0. [ male announcer ] new icy hot advanced patch with 50 more medicine. Pain over. In fact wont reduce the debt. The reason is that the big entitlements, Social Security, medicare and medicaid, that would be the belly, take up about 43 of the budget. Thats where the fat is and the budget will continue to gain weight over the next few years, the next few decades as americans get older and Health Care Gets more expensive. But your politicians dont have the will to cut from those areas. Theyre pretending not to see the growing bloat in their belly that is preventing them from seeing their own feet. So they argue about things like big bird and public broadcasting. In august of 2011, republicans and democrats agreed to give themselves half a year to come up with a sensible diet plan. They failed. So they gave themselves another year. Nothing happened so by law, the u. S. Needs to cut off budgetary body parts to shed 85 billion over the next seven months. Im talking about things like cutting food inspectors and reducing hours at National Parks, instead of making smart cuts, agencies are cutting off fingers and toes and knocking out teeth to lose weight. The little cuts dont add up to much, less than 3 of what the government spends, but they do affect performance. Take a couple of toes off your feet and see how that works. Agencies dont have a ton of flexibility. As much as theres the old saw about how the government is full of waste, sure, there is. Its still amounts to hair and toe nails when it comes to cutting the budget. Programs effective are subject to the same cuts to ones that arent. Is your right hand more useful than your left hand . Well thats too bad because under the sequester, we need to cut fingers off of both hands. The bottom line is its an incredibly stupid way to lose weight. Ken rogof is a harvard professor, former chief economist at the International Monetary fund. Nancy cook is an economic and fiscal policy correspondent at the National Journal and Christine Romans is my friend and host of your bottom line. Theres an old saw that people think were just talking about entitlements, medicare, medicaid and Social Security. But the truth is, im not advocating big cuts to these programs. They do need to be changed. They do need to be reformed, health care is at the top of the list. I think that both parties or at least members of both parties think that thats the case. Its just a question of how quickly that happens. Right. So a lot of the House Republicans think that that should happen in the next year. That Health Care Costs are out of control. Where as a lot of democrats think you can wait a couple of years, let the economy get back on its feet a little bit more and start to make the cuts at the end of the next decade. That does seem to be i think youve said many times, why wouldnt we just come up with a program that says dont cut things now or cut them less now, cut them more later on. Why have we not been able to agree on that . I guess the problem is if you say were going to do a lot of spending now and dont worry about the budget kbenss because in ten years well tighten our belts, nobody believes it. Theres a feeling you need to do little tightening now or put on the table what those cuts are going to be. Higher ages for Social Security retirement. Maybe means testing more for some of the oldage entitlements, put it on the table. Say its coming in ten years, but say it now and give a little credibility to what youre doing. Neither side wants to take the blame. For some reason, businesses in the market seem to have factored in endless government inaction, were used to seeing the situations go down to the last minute. How long is it going to be before business starts feeling the effects of these forced budget cuts in a big way . Its interesting. If you look at forced budget cuts, defense contractor, already people watching the stocks of those companies closely, the overall market, the stock Market Measures the performance of the individual companies. The market keeps telling us the companies are going to do okay despite this. Who is going to be hurt . People are going to be hurt. Low income kids in schools and some of the furloughs weve been talking about. The market is telling us it has disconnected itself from washington. That washington is you know, acting like a child and theyre looking just at the bottom line. Theyve got a lot of money sitting in the sidelines, right . These companies are doing as much as they can with the workforce theyve got and many of these s p 500 Companies Make 45 of their revenue from overseas. So the stock market is a proxy for overall growth in the world. Not washington in action. Okay. Were going to talk a lot more about the stock market and how you invest in this climate in a little while. No one thought the forced spending cuts would happen. But they did. Most likely your world is still the same today as it was yesterday. But washingtons next completely avoidable crisis would hit you hard, no matter who you are after march 27th. Ill explain that after the break. [ man ] ive been out there most of my life. You name it. Ive hooked it. But theres one. One thats always eluded me. Thought i had it in the blizzard of 93. Ha never even came close. Sometimes, i actually think its mocking me. [ engine revs ] what . quattro i work for 47 different companies. Well, technically i work for one. That company, the United States postal service® works for thousands of home businesses. Because at usps. Com® you can pay, print and have your packages picked up for free. I can even drop off free boxes. I wear a lot of hats. Well, technically i wear one. The u. S. Postal service®, no business too small. A talking car. But ill tell you what impresses me. A talking train. This ge locomotive can tell you exactly where it is, what its carrying, while using less fuel. Delivering whatever the world needs, when it needs it. After all, whats the point of talking if you dont have something important to say . Overmany discounts to thine customers [old english accent] safe driver, multicar, paid in full a most fulsome bounty indeed, lord jamie. Thou cometh and we thy saveth what are you doing . We doth offer so many discounts, we have some to spare. Oh, you have any of those homeowners discounts . Here we go. Thank you. He took my shield, my lady. These are troubling times in the kingdom. More discounts than we knoweth what to do with. Now thats progressive. Transit fares as in the 37 billion transit fares we help collect each year. No . Oh, right. Youre thinking of the 1. 6 million daily Customer Care interactions xerox handles. Or the 900 Million Health insurance claims we process. So, its no surprise to you that companies depend on todays xerox for services that simplify how work gets done. Which is. Pretty much what weve always stood for. With xerox, youre ready for real business. All of these madeup deadlines and manufactured crises are symptoms of the same illness plaguing washington, its been four years without a federal budget and were nowhere near getting one. There have been some political stunts to make it seem like budgets were being presented to congress and failing. But those socalled budgets were skeleton versions put forward for up or down votes, which is not how budgets do or should get passed. Budgets should be a compromise. If members of congress were willing to reach across the aisle, agreeing on a budget would look Something Like this. By law the president is required to submit a Budget Proposal to congress before the first monday in february. Once the Budget Proposal proposal gets to congress, committees work to hammer out a detailed resolution. The budget resolution must be agreed to by both sides, house and senate, it sends, it puts spending caps and revenue floors in place for the year. From there various committees Work Together an bills that lay out exactly how much money goes to which agencies and departments. The problem is, congress has been operating on funding bills devised years ago. Theyre able to get around passing a new budget every year by using something called a continuing budget resolution. You heard david gergen say a cr. Continuing resolution. Its basically an extension of the old appropriations bills. Most recent continuing resolution is set to expire on march 27th. If Congress Fails to do something about it, were looking at a full possible governments shutdown. I want to bring back my panel. Ken rogoff. Youre not given to his tearics. Jean said the forced budgets cuts are neither catastrophic 0 nor particularly beneficial. Were facing the upcoming budget battle. At some point does this dysfunction, the political dysfunction in washington actually hurt the economy . Or not really . It definitely hurts the economy, it hurts it now, it hurts it right away. But it doesnt necessarily hurt it dramatically in a crisis kind of way that can really energize everyone to do something. You know its hurting people who are vulnerable. It could be hurting our defense a a year or two from now. Its sort of a slow burn that makes it hard to feel it right away. That said, ali, i think each of the individual agencies, although theyre trying very hard to minimize the effect on the public, the fact is, if people are really mad about the National Parks later, theyre mad about air traffic, then those agencies are going to get protected more next time. So were sort of putting needles everywhere in the economy and seeing where it hurts. Nancy youre worried in addition to the budget thing, we do have another debt ceiling debate. Did might work itself out. It might not. But youre worried that that is one of those things that in the crisis fashion that ken talked about, could be disastrous to the economy. I think there will be no risk of a Government Shutdown, either party has any appetite for that, what theyre gearing up for is the debt ceiling fight. That will hit in jug and august, very similar to what happened in the summer of 2011, it will be like deja vu all over again. Changes to entitlement programs. The last time this happened, there was a big warning that Interest Rates are going to spike and they didnt. Theyve slowly been going up. Are you worried that at some point people become less tolerant of americas misbehavior . I think that thats true. I think that the general public is very tired of it and wall street and just the Business Community is very used to washington following this predictable script. And ultimately reaching a resolution, so the problem becomes if that script is broken and we dont reach a resolution, on Something Like the debt ceiling. Christine, no one thought they would let the forced spending cuts happen. They were designed to be so difficulty tasteful, we wouldnt swallow that bill. But we did. How likely do you think we are to either have the government shut down or as nancy talks about, a terrible damaging debate over the dealt ceiling again . I didnt think we would actually see the sequester, no one did back in august of 2011. They had the sequester so for sure theyre going to figure something out, they didnt. You cant predict what washington is or isnt going to do. One important point we need to make. When we say washington, theres congress and then theres the fed. Can you imagine what wed be talking about in terms of Business Climate or the overall economy if you didnt have the fed pumping billions of dollars into the economy every month. In a way the fed is sort of like the foam on the runway. And the fed is putting all of this money into the system. You know, i just wonder if if it werent for the fed, if this would be much more urgent, the reaction were seeing in the markets and whether you would see more urgency in washington from setting some budget priorities. Good point. Ken, wered former chief economist for the International Monetary fund. It is lost on most people mad about Government Spending how much of a role the fed has had in propping up the economy. Many times greater than the role of congress. Absolutely. In propping up the market bass the Interest Rates are zero and people dont know where to put their money. Its cushioned things, its kept housing going up. The government has had a role and its pulling out. With or without the sequester, thats hurting. Ken, stay with us. Nancy, good to see you. Nancy cook, the economic and fiscal policy correspondent with National Journal. Christine, stay where you are. Plenty of action on wall street, with stocks nearing alltime highs. What should you do about it . After this. Saw their biggest inflows ever last month. Despite the real or imagined threats to our economy. Investors do not seem too scared. But maybe they should be, ben bernanke issued this warning on tuesday. Given the moderate underlying pace of Economic Growth. This additional burden on recovery is significant. Moreover, besides having adverse effects on jobs and incomes, a slower recovery would lead to less actual deficit reduction in the short run for any given set of fiscal actions. Christine roamens and ken rogoff are back. Theres a disconnect between the markets and the real pace in the growth of the economy. Am i wrong . No, youre right. 2012 was gangbusters for the market. 2013 off to a stronger start. 81 billion moving into the market. Think of that, were talking about 85 coming out of the budget. 8 1 billion went into the market. Low Interest Rates, consistently strong corporate profits, a weak dollar have Retail Investors diving back into the market. You have to wonder if its based on reality. The fundamentals of the economy, they still have some cracks. The latest estimate of gdp growth was anemic in the fourth quarter. Rising. 1 . That is not a good performance. A personal income dropped. Saw the biggest onemonth drop in 20 years. But because the Housing Market is recovering, people might be feeling a little bit wealthier. Consumers are spending more, saving less, were nearing alltime highs for stocks, are we skating on thin ice . Thats good question. Ken. The one thing that stood out from what christine just said is the drop in personal income in february. The biggest in 20 years. Kind of alarming. We did have the higher payroll taxes that came into effect with the fiscal cliff discussions. We had higher gas prices, eating into our wallets in january and february. What else might be at play there . Well, i think people are seeing their housing wealth go up as christine said. And the stock market has gone up. Thats influencing their spending, too. Theres a question of is the sustainable, can you grow just out of this. Can you have it all be a consumerled recovery. Businesses are holding back. Theyre making a lot of money, but theyre keeping it on the sidelines. Lets take a look at the dow because weve been talking about this heres the dows alltime high. October of 2007. 108 points to go. Retail investors tend to pile into markets when they are topping off. Whats your sense, im going to talk very specifically about investments in the next block. Whats your sense of how people should think of or approach the stock markets right now . Im going to put my personal finance hat on. If youre starting to decide what youre going to do with stocks when youre 108 points from the high . Youre going to be chasing at the fumes of the full market. Youve got to have a plan way before markets are hitting highs. Youve got to be looking at sectors, be careful about sectors that could be sensitive to washington in action. Youve got to be rebalancing and positioned for your age. Especially now if were going to have one, two, three years of brinkmanship in washington, then youve got to have a strong plan here. Dont you think . I agree with you, christine. Christine, good to see you as always, ken rogoff, always a pleasure. Former chief economist at the imf and professor at harvard university. Im hoping that the whole discussion is not esso tehe i es tark. Im going to explain to you how to protect your money and possibly make some money. Just the right amount of light. So you see everything the way its meant to be seen. Maybe even a little better. Visit your eyecare professional today to ask about our newest lenses, transitions vantage and transitions xtractive lenses. Experience life well lit. Ask which transitions adaptive lens is best for you. Good afternoon. Chase sapphire. push button tone this is stacy from springfield. Oh whoa. Hello . Yes. I didnt realize id be talking to an actual person. You dont need to press 0, im here. Reach a person, not a prompt whenever you call chase sapphire. Why should saturday night have all the fun . Get two times the points on dining in restaurants, with chase sapphire preferred. And every day since, two years ago, the people of bp made a commitment to the gulf. Weve worked hard to keep it. Bp has paid over twentythree billion dollars to help people and businesses who were affected, and to cover cleanup costs. Today, the beaches and gulf are open for everyone to enjoy and many areas are reporting their best tourism seasons in years. Weve shared what weve learned with governments and across the industry so we can all produce energy more safely. I want you to know, theres another commitment bp takes just as seriously our commitment to america. Bp supports nearly twohundredfifty thousand jobs in communities across the country. We hired three thousand people just last year. Bp invests more in america than in any other country. In fact, over the last five years, no other Energy Company has invested more in the us than bp. Were working to fuel america for generations to come. Today, our commitment to the gulf, and to america, has never been stronger. Cue the hats and the confetti like we did in 1999. Thats when the dow hit 10,000. Watch it, its going to happen right there. There we go. Not so fast. The market had a roaring 2012. 2013 has started strong. But the stock market does seem disconnected as christine said from the broader economy. Games our meager personal income suffered the biggest drop in 20 years, i get tweets all the time asking me the same question should i buy stocks now . Ive got some thoughts, but lets ask an investing pro. David chkelly is a chief global strategist at jp morgan. The fed keeping Interest Rates low has made stocks disproportionately interesting. Since you cant money in the bank. You think the lousy gdp number we got. I thought there was an error at on the chart it almost look likes theres no growth there you think thats going to get better. And that things in this country will improve if theyre not improving already. My viewers are not invested in stocks right now. Should appropriate strategy for where they are in life. I would say the overweight stocks and the underweight fixed income. The big elephant in the room is the fact that the Federal Reserve is sitting on interest sitting on longterm Interest Rates and shortterm Interest Rates. That means you cant make good longterm money on the bond market. That is pushing toward the stock market. Thats really whats allowing the stock market to move forward here. Lets talk about that. Bonds are serving to not be a great investment at the moment. The interest you get from bonds, the yield is not as it goes up, the value of the bonds are going down. Interest elsewhere is not keeping up with inflation. Your home might be more than it was last year, but thats a slow and steady way to make money if it is a way to may money at all. You call this a t. I. N. A. Market. What is the t. I. N. A. Market . There is no alternative market. I think buying a house in the United States right now is great idea. I think thats part of a strategy. But you need to have liquid financial assets. Have bonds in it but just be overweight stocks. You dont want to end up in a situation where you end up going in the same direction all the time. Lets take a look at the dow. If you are fully invested in the dow, this is back a year. If you are fully invested in the dow or not just stocks, but the dow, should you be doing anything differently right now . No. If you got an appropriate amount of your wealth in stocks, you know, i think promote would be slightly overweight here, but i think you stick with it. The main thing to recognize is, yes, you know, the stock market is aligned appropriately with earnings. Stock the price of the stock really depends on earnings and Interest Rates. Earnings are close to record highs and Interest Rates are close to record lows. Thats whats putting the legs under the market. Thanks onetenth of 1 . Well see close to 3 in the first quarter. You average both of those, its still a disappointing economy. It isnt disappointing when it comes to earning as, which are pretty good and its certainly not disappointing when it comes to Interest Rates that are so low it makes it more valuable. Thats why i think people ought to be a little overweight stock. T. I. N. A. There is no alternative. Kellys managing director of jpmorgan strategies. Coming up, you know the drill, empty your pockets, rules, wait for that very slow family in front of you. The tsas Airport Security line stands in the way of you making your flight while making flight safe, so could private companies do any better . Ill introduce someone who says hes doing it better than your government can. The capital one cash rewards card gives you 1 cash back on all purchases, plus a 50 annual bonus. And everyone likes 50 more. [ midwestern chicago accent ] cheddar yeah 50 percent more [yodeling] yodelayeeoo. 50 more flash. [ southern accent ] 50 percent more taters. Thats where tots come from. [ male announcer ] the capital one cash rewards card gives you 1 cash back on every purchase plus a 50 annual bonus on the cash you earn. Its the card for people who like more cash. 50 more spy stuff. Whats in your wallet . This car is too small. We have obviously diverted resources and will divert resources from other areas to make sure that the checkpoints and check baggage areas are staffed fully. But the question then becomes the longer it goes on, at what point do we then have to start cutting back . The Transportation Security Administration will feel a slowed hit from the forced spending cuts that went into effect on friday. Unless Congress Strikes a deal, tsa chief john pistole says tsa workers will see their hours shortening in the coming weeks. To be fair, this forced austerity is no fault of the tsa. But this raises the question, if private screening could be done privately, could it be done more efficiently . He says yes. It screens passengers at the largest and busiest, stefan, good to see you. U. S. Homeland security Janet Napolitano says in order to deal with the cuts, theyll have to put a hiring in place. The tsas 50,000 screeners could be furloughed for up to seven days. They say safety will not be compromised but that wait times will be increased