Plus transaction. Really one of the reasons why the stocks are up to the degree they are right now. With the runup today, were very close to wiping out all of those losses from last wednesday. Only five days okay. This would be the third update deals major league bigley benefiting defense contracktores, theyre benefits of the commitments. Adam shapiro. Reporter it will be very busy week because the president is not here. Mick mulvaney roles at the desires of the Trump Administration, what were looking at potentially, more than a trillion dollars in cuts over the next 10 years to federal spending. The outline that the Trump Administration put forth through mr. Mulvaney, back in march, talked about, cutting the department of states budget, 28 . Cuts to commerce, ago culture, energy, transportation, housing all in there, but it is 800 billion in cuts to medicaid which are expected to be a part of this. That is part of the American Health care act which the house passed last week, that the trump budget is goingassume becomes law. Now on tuesday, secretary mnuchin will also, treasury will testify before the house ways and Means Committee, rather, wednesday he will be testifying, on tuesday, house ways and Means Committee will hold hearing on border adjustment taxes and other policies that boost jobs and investment and growth in the United States. On wednesday you get secretary mnuchin testifying on the budget and testify about a border adjustment tax. You have omb director mulvaney testifying before a House Budget Committee on wednesday about this budget and what the prognosticators say this budget is a perhaps outline for the administration. They dont expect, for instance, members of the senate who are republicans to buy into the massive cuts to medicaid but until you have the details on the table that has yet to be seen. Neil, back to you. Neil buddy, thank you very, very much, adam shapiro. Again on something adam touched on, socalled cuts to medicaid, 800 billion that republicans are looking to pare from spending over increase in spending. When all is said and done, medicaid will still get 5. 7 trillion. As things stand now, closer to 5 trillion if the cuts come in. So the rate of growth is what slows. Still means they get more money. That is the problem with this socalled misnomer these represent cuts. That is big issue for former reagan budget director, we lie when we talk about this stuff, right . Unfortunately the budget will be d b a, dead before arrival. All these cuts i left in the vault at omb 36 years ago. Neil is that right . They were rejected then, state department, epa, 30 , cutting back on education, reducing some of the waste in the National Medical research institutes. Getting rid of the neil small sliver of spending that you could touch. But that is the problem. Trump is basically ruled out medicare and Social Security, 1. 8 trillion a year. He wants more for defense which is already vastly more than we need. That is 650 billion a year. Interest we have to pay. Veterans he carved out, that is 200 billion a year. Homeland security he wants more of and walls, that is 65 billion a year. Law enforcement and so forth is 50 billion and he wants more of that. So the point is, theyre focused on a smaller and smaller tiny fragment of the budget. I would make the cuts myself philosophically but there are no votes for them. Neil when you were doing it back in the early 80s with Ronald Reagan you ran into buzzsaw of criticism, heartless, what happened in the end . What happened in the end there were tiny reforms to medicaid and food stamps and welfare. Then over time, most of that grew back. The difficulty today 36 years later, small ball budget surgery dies with a thousand cuts. They need a big idea, and the big idea is to say, washington takes care of work fare with earned income tax credit and anybody who get as job, even at mcdonalds, gets some additional help. The states are given responsibility totally for welfare, and that means a huge block grant forc medicaid, food stamps and the other cash assistance programs. Neil those days it is under umbrella of snap i guess, modern name for food stamps and yet 44 million receive this type of support for food. No one wants to take food away from people, but the fact it used to be 28 million as recently as 2008. 15 million eight years prior to that. If we have 44 million in this country who genuinely need this type of support, that is third world country problems, right . It is even worse. There are 110 Million People in this country, living in households, food stamps, medicaid or other means tested assistance. That is 1 3 of the population. Neil always portrayed youre killing off grandma and the grandchild. Welfarism run rampant. It will never be solved from washington, because washington is the swamp filled with lobbies of every kind and they always win. I say put it in a giant block grant, send it back to the states, let nevada compete against california to see what kind of welfare you have, how big the grants are, do you have to work or not and so forth. It is only way that were going to avoid National Bankruptcy is to bring the states back into a competitive order neil i think, youre the expert, i think it is simpler than that. We misstate things. It is sort of like the whole illegal immigration debate morphed if youre against that youre antiimmigrant. It morphed into that argument. Right. Neil it says cutting, cutting to me from 100 to 80. Right. Neil cuts slowing rate of growth. Not too long ago Speaker Paul Ryan wanting to curtail the growth of medicare, why the he was throwing granny off of a cliff. Even curtailing or slowing growth of these programs is the same thing as killing them. Well thats why if you do it in the trenches, year to year, program by program, as i say, budget surgery you never get anywhere. Neil so you would do what . I say put 600 billion worth of welfare or meanstested programs, medicaid, food stamps, cash assistance, ssi, one big block grant. Send it back to the states, allow each state to decide who is eligible, how much they get for how long, what kind of work they need to do. Neil you dont think that the possibility that the states run amok with this . It will be on their dime because the idea that i had neil they have to balance a budget. Yes, they have to balance it by their constitution. One block grant and we cut it 5 a year for the next 20 years. So theyre on notice that there is no cold turkey. You take over today, but over the next 20 years you better get this program disciplined, targeted on real need as your voters see it, or, youre going to die under the budgetary neil any politician, democrat or republican being acknowledge this is is not sustainable, immediately targeted or primaried to get then out. Someone has to have the chutzpah to stand up say, this is not sustainable, we cant keep going this way. They need more imagination too. We ought to say, go back to federalism. Go back to lewis brandeis, the Great American jurist, let the states be laboratory of democracy. Find a different way to pose the issue and to allocate the responsibilities. We are a overly centralized, bureaucratic, quasisocialist state. Neil what should the federal the federal government basically ought to take care of defense. It ought to take care of as i say, workfare, minimal involvement in the justice system. The rest of it should be states. Education is a stayed function. Community development, if you will waste money on as a government is a state function. Welfare, cant be managed from washington because the welfare lobbies and all of the people behind them make it impossible. Neil at least most of those states, 46 of the 50 states have balanced budgets. They do. Even beyond that, republican government today in the United States exists at the state level. 33 state governors are republican, 35 legislatures i believe. If you want to get welfare under control, give the function back to those republican and conservative governments that are responsive to the people. And let there be a competition. If new york loves giving handouts to everybody, let the taxpayers of new york pay and pretty soon the taxpayers of new york will be living in florida and nevada and texas and a lot of other places. It is the only way in the modern world, 21st century that we can deal with this runaway welfare state that basically driving us towards bankruptcy. Neil you criticize both parties for this. Right. Neil for example, the debate on defense, i get this all the time, adding more money to defense, 600 billiondollar budget, close to funding iraq war height, surely we examine where the money is going. If you tell me afterwards, infrastructure, we really do need more, because all accounted for, then fine, maybe. Im just saying we dont even do that. We i think it is ridiculous, okay. The Russian Defense budget is 50 billion. Sitting here in new york in your studio with you, i can he see russia from here. The gdp of new york is 1. 6 trillion. The gdp of russia is 1. 3 trillion, less than new york. 7 of the u. S. Economy. Its a pipsqueak backward economy that threatens us in no way whatsoever. If werec spending now 12 times more than russia, that cant really threaten us neil more than our threats combined, china. Yeah. Neil let me ask you about that. A lot of people have said that all this defense spending started under Ronald Reagan and you were his budget director then you could argue maybe the time was right to reinvest our defense commitments, did we go too far . Yes we did. I fought it tooth an nail. They lied at the time. Neocons said the soviet union was on verge of first strike threat capacity. It was totally untrue. They built up the top line neil but got russian empire to fold . The russian empire folded on weight of socialism and communism that never works t had nothing to do neil plowing more into their defense they were dying, in 1981 the soviet union was on deaths door. If we had more confidence in washington, in capitalism, in free markets and in the fact that the red ponzi in china soon are or later collapse on its own weight. If they want to build fan castles in the south china sea. Let them. A waste of their money. Neil you could argue you were there with the star wars defense initiative, that was grades sy with the soviets or they did come to negotiate because they felt this guy, this Ronald Reagan would be crazy enough to follow up and got them to star wars was a joke. No one ever believed it. Neil well the russians, came to the table they came to negotiate because they were going bankrupt. They were economically collapsing because they tried to run a socialist economy out of the kremlin and they proved that socialism is wrong. Given enough time, the threat from a socialist state will always cure itself. Neil you dont think Donald Trumps solutions with big tax cuts and all that is the answer, right, right . Youre saying we dont have money for any of the above . Back then we had a surplus out in the middle of the decade. We could cut taxes, even raise defense. Today, weve got 10 trillion built in. Youre talking about spending, there is 53 trillion of spending built in for the next decade. There is only 43 trillion of revenue under current law. Im all for tax cuts but you have to pay for them with spending cuts. Neil if we go from 2 to 3 growth maintain that, that is 50 potentially more revenue we get, right . No. If you, if, if dogs could whistle the world would be a chorus you agree with me on that. T cant whistle. I never heard any. The issue is not real growth. It is nominal growth. That drives revenue. If you try to send your taxes in based on inflation adjusted income you will be in jail real quick. What counts is nominal growth. And there is already built into the forecast 30 more nominal growth per year, nominal gdp, nominal wages than we have had in the last 10 years. When the white house and treasury says, well add another percent that is 70 more. In other words, 5 of nominal gdp. Neil already being rosy. We have rose is sy scenario in spades. Neil always good to see you. You are a great education on all this he knows his numbers. Some people disagree with how dire things are, but, it wouldnt be a segment unless stockman scared the hell out of everybody. It would not. All right. Neil thank you, my friend. Meantime, take a peek at the corner of wall and broad. Dow up 92 points. The defense biggest catalyst in this, a lot buoyed by the president middle east trip. More than 100 million deals with the saudis. Some are looking at numbers, you know what, defense contractors, northrop grumman, raytheon, General Dynamics are at alltime highs. Ok, lets call his agent. Im coming over right now. The newly advanced gle can see in your blind spot. [ dinosaur roars ] onboard cameras and radar can detect danger all around you. Driver assist systems can pull you back into your lane, if drifting. Bye chief. Bye bobby. And will even help you brake, if necessary. It makes driving less of a production. Lease the gle 350 for 579 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. So we need tablets installed. With the menu app ready to roll. In 12 weeks. Yeah. The world of fast food is being changed by faster networks. Data, applications, customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Fast connections everywhere. Thats how you outmaneuver. So new touch screens. And biometrics. In 574 branches. All done by. Yesterday. Banks arent just undergoing a face lift. Theyre undergoing a transformation. A data fueled, security driven shift in applications and customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Hello, mr. Deets. Every Branch Running like headquarters. Thats how you outmaneuver. Neil waiting for remarks from President Trump and israel Prime MinisterBenjamin Netanyahu. We dont know when that will be. It could happen any second. When it does my producers saying you got me. Anyway, blake burman in jerusalem with the very latest. Blake . Reporter hi, there, neil. That is the King David Hotel over my shoulder there where President Trump and Prime MinisterBenjamin Netanyahu are meeting right now. They have, they spoke very briefly both at top of the meeting that the two would discuss issues like syria, iran, palestine terrorism issues and in general issues between the United States and israel and so forth. One issue, seemingly been often to the backburner is suddenly reemerged as those two spoke. Turn your attention when President Trump had Oval Office Meeting with top russian diplomats. The white house has never confirmed or denied if the president spoke of classified information to the russians. However has been reporting of fox and others that the source of the classified information in question had come from israel, bringing up potential consternation, at least speculation among somewhat that would do between the relationship between israel and the United States. The president , the president and the Prime Minister were asked about this moments ago and both of them seemed to brush it back. Watch. I never mentioned the word or the name israel. Never mentioned it during that conversation. [inaudible]. So you had another story wrong. Never mentioned the word israel. How is visit so far, mr. President. [shouting questions] reporter if you could hear it there from Benjamin Netanyahu he said the intelligence cooperation been terrific and never been better. President trump before this meeting he visited several of the holyiest sites here in jerusalem. He was at the church of the holy sepulcher where was the crucifixion of jesus christ around western walls, the holiest sight for jews to pray around the world. He has had several public appearances besides that he is can get before the cameras. On each of them it seems he tried to make the point to rail against the iran deal. Iran should be very grateful to the United States because iran negotiated a fantastic deal with the previous administration. Iran will never have a Nuclear Weapon that, i can tell you. Reporter so inside of that hotel behind me, the king david, the president , the Prime Minister meetingc now together. They will emerge from hotel, joined by their wives in a little bit for dinner tonight. Neil, i got to say what is an absolutely spectacular evening in jerusalem. Neil that shot behind is stunning. Buddy, thank you very, very much. Blake burman. Reports that the president s 110 billion saudi arms deal isnt sitting well with everybody. Defense Companies Like it. Companies standing to benefit here are loving it. Saudi firms look a lot with american firms, jointer undertaking they love it. The former mayor of israel, david ruben, not so much. Mayor, good to have you. Why not keen on this . I didnt say i had any major problem with it. I think cooperation between saudi arabia and israel is, it is implicit cooperation. Not being spoken about that much publicly. You will never hear the saudis admit it but there is a burgeon be relationship going on developing between israel and saudi arabia. Most of it has to do with iran. Most of its has to do with support of irans terrorism support around the world and Irans Nuclear program which saudi arabia and israel are very much against. Neil i assume, mayor, there are bac