The Government Shutdown, the failed bowct rollout and a congress that seemed unwilling to do anything. Consider this, a year filled with political disasters. Will 2014 be the year that the American Public holds its politicians accountable . Will 2014 be as prosperous in the financial world . Also, marvel looks to continue its box office domination. Well tell you what movies to get excited about this year. And from the olympics in sochi to world cup in brazil 2014 is shaping up to be a big year in sports. Happy new year, im antonio mora. Things got especially bad in the summer with a scandal at the nsa. A Government Shutdown in the fall. And then, the dismal rollout of obamacare. Yale Universitys Library gave its top spot on the list of quotes of 2013 to the president s apology on health care. With respect to the pledge i made that if you like your plan you can keep it. The way i put that forward unequivocally ended up not being accurate. And the first session of the 113th congress now holds the dubious distinction of being the least productive in recent history. It has all laid the groundwork for the important mid term elections that come up in 2014, so what should we expect in our new year . Joining us is michael shuer. A correspondent for al jazeera america. And here in our studio is tom daugherty, a political strategist, and political contribute to governor pataki. We do have the debt ceiling coming around on february 7th, thats the date were looking towards, very close tot gop primaries that expect in march. Do you expect any drama . Yes. Because paul ryan, the chairman of the Budget Committee in house, said we cant get nothing for raising the debt limit. Well excuse me, what youre not getting is putting the full faith and credit of the United States at risk and youre averting a world financial crisis. Thats your civic obligation as a legislator. Thats the way to drive a cries i and we could see another one, if he intends to carry out that threat. Well, lets look at exactly what congressman ryan had to say about the debt limit a couple of weeks ago. Were going odecide what it is we can accomplish out of this debt limit fight. Tom with him threatening another battle over the debt ceiling as bill said, what do republicans help to accomplishment . That crisis does not work very well for them. Their numbers have steadily gone up as we focus on obamacare. We got through a nice budget deal with murray and ryan, theres a lot of talk and hopefully it will move quickly. Do you think it will happen . I do think it will happen. Boehner has had enough with the far right. He recognizes, that for many months, the full faith and credit of the American Economy is on the line. We wont have the drama we had last time. Well talk about boehner in a bit, bad for republicans boy, because of the Government Shutdown, they improved because of obamacare. President obama those numbers are ugly. Starting the year with the lowest Approval Ratings of his presidency. Performance. Do you see him turning around those numbers in the new year . Heres the thing antonio, its hard to get much worse. I think of his perception with the launch of obamacare with the rollout are going to be its hard for him to go lower than that barring some crisis that we cant foresee. But if we keep the context where it is right now at the beginning of december, john podesta came on board at the white house. I have a feeling we are going to see a big difference the way the white house messages. I see podesta taking charge of the way they spin this. And i think listen the president s Approval Rating is going to be largely dependent on his signature piece of legislation, so signature it has got his name on it. Election year is at least a good way to get it bashed or sell it. On that signature piece of legislation the numbers are even worse. Only 34 approve of the way he handles it, 62 disprove. The numbers are clearly very low. The Republican Party is going okeep pressing the president on this. How do you see this pressing over the next few months . This is the gift that keeps on giving. The Obama White House should not have are thrown that magic 7 million number on it. Its the ratio between healthy and sick enrollees. If thats out of proportion that will keep driving costs. Rates shouldnt go up for a period of time, because its the reinsurance of the insurance industry, based on obamacare. But they have put such numbers on themselves theyre going to find it hard themselves. The political liability, a time bomb, rate hikes for install businesses will start in october just before the mid term elections. The timing couldnt be any worse for democrats. That is certainly true. Whats going to happen is that some Small Businesses are going to see their rates shoot up for insurance. They kept their plans for an extra year as the president allowed them to do. But in october theyll find their new rates, blame it on obamacare, a lot of Small Businesses will be paying more, some will be paying less. But you know what . We are only going ohear complaints. The business is whose rates are going to go up are going to have a hue and cry. Have a big impression on voters. The people whose rates are not going to go up or maybe go down theyre not going osay a word. Dealing with obamacare its already being widely used against democrats. Senator gene she shehen. It will promote competition. The the facts, more than 20,000 New Hampshire patients have had their coverage cancelled and obamacare offers only one insurer. If you like your are legislator you can keep her. If you dont, you know what to do. Almost every race in 2014, jean shehe rvetionheen may faceg competitor. Again michael, obamacare will be the weapon that republicans are going ouse until the november elections its pretty clear. Yeah and what the democrats really have to work on and i think tom would probably agree is separating the obama from the care. These challengers are going to have to talk about how many people will be insured under the Affordable Care act, and i would guess you will see lots of democrats refer to it as the aca rather than the obamacare. You are not going omake it go away, youre going to have to embrace it. Were getting ahead of the game, antonio, what exists now with obamacare is what exists come election time and weve seen deadlines extended already. Who knows if that october Small Business deadline is knot going to be extended to the following march, to keep it out of the election. There are things that could happen as well. What democrats have to charge themselves with, is mary landrie uf, is soabl who has put forth,. She is one of the more embattled senators run running r reelection. Do democrats have a solid chance of regairchg control of the senate . Louisiana, west virginia, just to start of a, arkansas, alaska, north carolina, there are seven, six or seven races, republicans need to win 7. I think marylandrieu is in real trouble simply due to the fact they do not like the president down there. Typical republican state, he voted for obamacare, its going to come down to a race or two, i think the senate is 5149 either way. Bill, what do you think . This is the third or fourth licks where obamacare is the central issue. It doesnt go away for a large reason, its a large part of the American Economy and affects everybody. I think what well see is probably republicans make some marginal gains in the house and theyll come very close to winning a majority in the senate. I agree it will be within one or two seats. Michael, your prediction. I disagree with bill as far as the house, really astute observation that this is obamacare for the Third Straight time. When were talking about obamacare i think its going to be a really tight senate. I think montana is a senate race you have to look at now, it could actually come down to small senate races that they wouldnt ordinarily pay much attention to. Its not just about michigan mcconnells race here. But the smaller states in montana, where there are open seats, democrats are going ohave to work a lot harder than they thought they were going ohave to work at this. In october we thought this was a slam dunk because of the way the Republican Congress was behaving about the budget deal and about the debt ceiling. These things change very, very quickly. We have 11 months to work this out. And the republicans face some internal battles, including mitch mcconnell, who faces a challenge from the far right of the Republican Party and a lot of the races this year will deal from the fallout from the very public internal gop fight that House Speaker john boehner famously ripped open in december. They pushed us into the fight to defund obamacare and to defund government. Most of you members know that wasnt exactly the strategy i had in mind. If you recall the day before the government reopened one of the people, one of these groups stood up and said well, we work. Are you kidding me . Are you kidding me . Tom, what do you think, guide these tea party challenges, do you think the Establishment Republicans are gaining the upper hand now . We needed the voice, the Establishment Republicans if thats the new term for myself, we needed to stand up and say, enough is enough. When we consider that john cosh and the senator from why texas isnt a conservative we shake our heads. When the senator has been there for ten years says, i dont need a 32yearold staffer telling me im not a conservative, when he should look at my conservative vote being record. Boehner is leading a charge and the republicans are acting in a responsible way and thats good for the Republican Party. I want quick predictions on many of these. Michael, do you think theres any chance for Immigration Reform . I do think theres a chance for Immigration Reform because it behooves the republicans to do something about Immigration Reform. It bee loofs the senators to start getting traction on this so i do think so. Bill . Do you agree . It play not be citizenship, it may be a legalized status, a moderate position. Tom, the minimum wage . I dont see movement on minimum wage. I think these have and have not conversations are going to continue but history has shown us that every time its come up there are a lot of hardworking people that say i work very hard for what i have. It continues to divide. Do you agree . I agree. You see frank wolf leave, youre not going to get the progress on those have and have not issues, thats right. I want you guys to make bold predictions. Bill starting with you. Anything happening this year . The economy will begin otake off but he may not have much political effect because of obamacare. The Health Care Law will remain the problem because a lot of young people are just not going to sign up until the last second. Theyre not going ohave to pay a penalty to have to pay a penalty until april of 2015. Way down the line. Theyre not worried about that. Tom. My prediction is like bill said, towards the election its actually going to be a little bit better. But i think based on what i saw murray and ryan doing adeal together, chaos doesnt work for republicans, it doesnt work for democrats. Theyll try to get Immigration Reform done next year. Eric molder will leave his job early next year and that will change the Affordable Care act as well. That will make republicans happy. Bill mike and tom, its great to have you on the show. Have a wonderful new year. Coming up. 2013 was strong for financial institutions, what might 2014 judge the u. S. Economy has been struggling to recover from the recession, unemployment is dropping, at 7 now, but the fed says it could go as low as 6. 3 in 2014. To add to the optimism, an independent provider of economic forecasting, moodys, thanks to the financial collapse of 2008, why all the optimism, lets ask the chief predictor for moodys analytics. Mark zander. Lets start with job growth. You actually think that faster job growth would, 5. 25 by 2017. That means an awful lot of jobs. How many jobs every month is the u. S. Going to have to add to make that happen . Yes, right, i am optimistic. I think well create on average 250,000 jobs per month over the next several of years. Of course current job growth is about 200,000 per month so i do expect job growth to accelerate. In coming months. And in big part of that is related to my optimism about housing and housing construction. I think there will be a lot more jobs coming out of that part of the economy. Lets talk housing then. The Housing Market has rebounded but there are still hundreds of thousands of foreclosures that are still out there. How big a part of the recovery is housing going to be . Its key. Youre right. The only drag on housing at this point is that theres still a lot of loans that are in the foreclosure process. Just to give you a number 2. 25 million homes are in foreclosure, over 90 days delinquent and will probably go into foreclosure. Thats high. You would expect a million homes in that kind of predicament. We have to work through those. Rapidly doing that, Strong Demand for those homes, investors are scarfing up those homes. Thats why housing is strong. But the reason for optimism is that the current level of Home Building is well, well below what we need just to house the households that are being formed. Every year we get households formed from population growth and theyve got to live somewhere. And for the last several years we havent been building enough homes. So a year from now, certainly two years from now our big problem isnt going to be too much homes its going to be a lack of housing. But an important part of housing recovery too has been that long term Interest Rates have stayed very, very low. Thats helped the economic recovery in general. Do you think the Interest Rates will continue to stay low . Thats an interesting question. The key part to my optimism is rates the Federal Reserve has to manage if increase in Interest Rates consistent with the unemployment, and rates to rise in general. If they can pull that off and i think they have all the tools and the will necessary to do that, if they can pull it off, were fine, my optimism will come to pass. But you put your finger on the most significant threat to my optimism, that the they wont handle this as gracefully as im hoping. They started to taper back the quantitative easing, which means they are pumping money into the economy. They lowered it from 10 billion from the 85 billion of bonds they were purnsin purchasing every month. That has been a very important part of keeping rates low and getting the economy going again. Right antonio, i do expect the job market to improve and unemployment to decline. That would allow the Federal Reserve to ease down the quantitative easing bond buying. I think by 2014 their bond purchase he will be over and the economy will be in good enough shape that they will start to allow short term Interest Rates to rise. Hopefully the economy sticks trowfl that script and the fed is going to be able to manage Interest Rates as well. Hopefully they will be able to do that, that is the crux of the matter, they have to get that roughly right. You brought up one other matter. Consumer confidence is still close to all time lows. About 80 of Americans Still think were in a recession. How big a bump in the road is that Consumer Confidence going to be . In general Consumer Confidence reflects the economy, doesnt drive it. Whether you are going into a recession, or coming out of one then Consumer Confidence is very important. My sense is as rates go down, as we see i expect of continued improvements in house prices and stock prices that Consumer Confidence will steadily believe and return to something close to normal. Having said that, one of the long term problems we have in our economy is the folks in the top third of the distribution program, are doing fabulously well, they have jobs and income but the folks in the bottom third of the distribution, obviously struggling and so even in a good time Going Forward were going to have that dichotomy and thats a problem that i think we need to address as a nation. I know you have some concerns about whether politicians will continue to behave and that that could be a problem to slow down the economy but you also bring up an issue that only the future will be able to give an answer to, the Great Recession undermined our economys long term potential. Big question, yes, it did damage right, when you asked me the full Unemployment Rate before the recession, i would have said 5 , we would have to get to 5 before we thought we would be at full employment. As you noted from the first part of the conversation, i expect it to be 5. 75 . I dont think the recession has fundamentally affected the economys ability to grow. I do think we will be able to grow as fast in the future as we have experienced historically so i dont think that the underlying productivity growth or labor growth has been m