And states are blaming obama care for cutting their government worker jobs and work hours. This illadvised Health Care Law is likely to cut more private sector jobs than the budgetcutting sequester. All of that and more coming up on the kudlow report coming up right now. First up tonights speaker of the house john boehner says republicans will not shut down the government over obama care. Cnbcs john harwood has that story for us. Good evening, john. Reporter Congress Returns in just over two weeks to a huge fight over Government Spending and debt. With no agreement in sight between the white house and congressional republicans, both sides are trying to prepare the ground for the battle and the economic bus tour president obama today tried to rally Public Opinion against a possibility of a Government Shutdown aimed at his Health Care Law. Most recently theres been threats that we would shut down the government unless we agreed to roll back the Health Care Reform thats about to provide millions of americans with Health Care Coverage for the first time. And thats not an economic plan. On a Conference Call with fellow republicans, House Speaker john boehner says he plans a shortterm funding bill once the fiscal year runs out next month. In doing that the speaker aimed to discourage members from seek a shutdown because he and other Republican Leaders fear it would backfire politically. That still leaves the question of what to do later this fall on the debt limit which some conservatives want to use as leverage against obama care, too, but that raises a more difficult risk, not just political damage, but economic damage as well, larry. All right. Now, the other big market story today, maybe the fed taper isnt coming up so fast. That seemed to be the message coming from the big conference in jackson hole, wyoming. Steve liesman is live in jackson hole. He interviewed several of the Federal Reserve members. Steve, what can you tell us . Good evening, larry, from jackson hole, there are differing opinions from fed officials about the next steps for the central bank. We interviewed three Federal Reserve banks today and we got three differing opinions. One group, Dennis Lockhart from atlanta suggest many the fed could, in fact, taper in september. The way im thinking of it at the moment is im actually looking at the data and asking if they deny or in some way undermine the basic outlook that i have in place. On that basis, then i can get comfortable with the move in september of some time. I do think if the data continue to progress as weve seen, and i do agree that we should edge down or taper or purchase later this year. But jim from st. Louis, he had another opinion. He thinks the data is sht clear enough and he thinks the Federal Reserve ought to wait. I dont think we have to be in any hurry in this situation. If the place is running low and we have mixed data on the economy. So, you know, i would be cautious. I would notnt to prejudge the meeting, but i think we want to take our time, assess whats going on before we make a move here. Among the Research Papers is one by noted economist robert hall who said one of the biggest mistakes the central bank could make was to withdraw stimulus too soon. Theres debate over the effectiveness and no consensus emerged here, larry. Back to you. Great reporting and we appreciate all of that. Stay with us, please. Our question now is how does this impact your investment portfolio. Lets ask our pros and jim muriel director of tjm institutional services. Hes with macro chief investment rf and lets welcome cnbcs newest financial mastermind dominic chu. Mastermind. I have to work to deserve that particular title, larry. All right. Weve lost Steve Liesman at least for the moment, and i think there are storms in jackson hole. I want to go to my friend jim muriel for starters, because im on the camp, and the stanford economist and the National Bureau of research and i dont think theres any hurry and i dont see a secondhalf rebound and i dont think the economy is even remotely strong and therefore, jim muriel, i dont see what the rush is. Why not at least wait until december when they have a better handle on things. I think what we saw today that housing number was bad this morning and when you look at the housing which is arguably the most highly correlated to changes in Interest Rates and weve seen Mortgage Applications trend down while existing home sales have been doing quite well and some will tell you that Mortgage Applications is the most forward looking because there is a 6090day lag time in the indicator and now we see the new home sales which is terrible and makes us think that perhaps existing home sales will crumble fairly quickly, too. So i changed my mind today thinking theyll taper in september or october, but they dont make decisions like traders do. Im sure theyre looking at it right now thinking what are we supposed to do. I think theyll come to the conclusion that it is too early. You changed your mind today and you changed your mind on the basis of the new home sales, is that correct . That was a bad number. A little flimsy number. A little flimsy number for the existing home sales. I wouldnt normally hang my hat totally on the new home numbers and i was looking at housing because of the divergence between Mortgage Applications and existing home sales. Dominic chu. First off, does the stock market want the fed to wait, hold back on the taper or not . There is a debate about that. Of course, is good news good news or is good news bad news . Good news used to be this idea that maybe it would make the fed want to taper and take the foot off of the accelerator. You see Interest Rates start to cell accelerate and whats interesting is your comment and the inflation picture in this country is not there. Cpi is, what . 1. 2 , maybe along those lines and there is no real fear. The real fear for these central bankers all over the world is deflati deflation. What if we go into the price spiral to the down side. What does that mean for the markets . That could be devastating and what youre seeing for the stock market right now is an orderly decline. Were not seeing that panic that we see during the debt downgrade or anything else with regard to the market volatility and thats the reason why its important and this is not exactly a panicked selloff in the markets and theyre still doing pretty well. The corrections come and go. This one doesnt look like much of a big correction yet. But what happens if they hold back until december . I want to get to the Government Shutdown stuff, too, because i think thats going to be very important and just on the feds story, what about what robert hall said . The biggest danger is tightening too soon. Anybody can say that, larry, because thats just what the word too means. Theres a danger in tightening too, yellow, too green or come on, you dont have to make a ph. D from stanford to make a stanford like that. Go back to the beginning of 2009 when the fed started its first asset purchases and it started them, it stopped them and it started them again and its done different sizes and gone on hiatus, come back. You cannot find any robust, correlation that will satisfy anybody that any of this stuff theyve done other than the very first mortgagebacked security in 2009 have made any difference to anything. Ben bernanke started talking about tapering on may 22nd. The stocks had a 5 or 6 correction. Now theyve had a 3 or 4 correction. Oh, come on. This taper thing doesnt matter. The tapering thing does matter. If you were pulling the levers are you saying that they should move back quickly from stimulus and you wouldnt think that would cause some sort of panic . Theyve been talking about tapering since may 22nd. Theres no evidence that it makes any difference. I agree. Thats just the thing we talking heads can say and theres no evidence and any of the stuff theyve done. So did it bigger or do it smaller, who cares . You dont know the counter factual and what would have happened if they didnt do it. Dominic, ill just say this. I dont think the Federal Reserve affects unemployment and real gdp and those kinds of variables. I dont think thats what they do and those are tax and regulatory and fiscal issues, but heres what bernanke did. I think he poured in a lot of cash and i may not like the way he structured the portfolio, but whatever. The demand for cash in a deleveraging society, the demand for cash when people didnt want to take any risk and were totally risk averse, following the Great Recession and the selloff of 08 and i think bernanke finally figured out that we need cash, banks want cash. Consumers want cash. I think thats his singular contribution. The demand for cash. He supplied it. Its not just that. What we have is the supply out there for it, but now you have to see the demand for the cash pick up, right . What jims point about the new home sales it is important because it is one data point that this is a u. S. Housing recovery. Its modest and not gangbusters, but its going along. Will it continue if there still is this idea that Interest Rates are headed higher and there isnt that demand there. Will rates on the rise zap that demand. Actually, id be a bare of bonds now and nobody believes me. I would be a buyer of bonds for about 50 or 60 basis points and thats shortterm stuff. Im not a shortterm guy, but i think rates went way too far. Don luskin, no Government Shutdown and a very important point. Boehner made it very, very clear in a Conference Call to the republican conference and hes got the votes. Theres a letter circulated about defunding obama care and threatening a shutdown. Only 80 republicans signed it. 153 did not sign it, don, and even more now are saying argue for delay and not for defund. Stay away from the shutdown. Were going get through the end of the year with this. Thats got to be bullish for stocks. It is. Lets just say that its not bearish because i actually dont think that the stock market ever expected anything else. The republicans have done nothing, but kind of keep their lips zipped all year. Theyve had the opportunity to go ballistic about benghazi and the irs and the nsa, and theyve suspended the debt ceiling in february and they learned their lesson and theyll stop yapping about legitimate rate and shutting down the government and all of that stuff and theyll guide into a classic Midterm Election where theyll make gains in the senate and gains in the house and then theyll go into a classic president ial election in 2016 when history teaches us that pretty much, every two terms the white house changes party. It is the gops term and it is president christies turn. All they have to do is shut up for the next three years and that is their policy. They know that. Thats not bullish this year, that is so bullish for 2016. Okay. 2016. But jim muriel, ill just say this. Well have a more detailed discussion of obama care and the republicans fiscal policy later in the show, but ill say this. No shutdown means you will have an orderly situation come this fall. Thats got to be good. Boehner and cantor will not want to fiddle with the debt ceiling and thats got to be good. You know what else, jim muriel . My last point and i want to get your take. Boehner said today, it was not reported, but he said they are going to keep the sequester. The spending cut sequester. Me, i think lower spending is good for free market capitalism and its good for entrepreneurship. Obama hates the sequester, boehner said were going keep the sequester. Boehners playing with a good hand here. Hes got an inside straight. Obama will get whooped on this, and i think thats very bullish. Youve got the last word. Wait, was that a question because that was everything i said. I cant help myself. Just say yes, jim. Yes and the market does not act scared. The sequester was the end of the world if you would have sold stocks on that you would have lost. Sequester was bullish and it is a shared gdp is bullish and the Smaller Government is bullish and getting government out of the way is bullish. Free market prosperity is bullish. I have to get out of here. Don luskin, dominic chu will come back and give us news later on. We appreciate it, but now president obama doesnt seem to be at all certain to syrias use of chemical weapons. You know what on this one . I cant say that i blame obama. You know why . Americans do not want more foreign war commit ams and well get the latest on the syrian situation and what the president is saying just ahead and just in case you missed it. Let me repeat, free market capitalism is the best path to prosperity and that includes lower spending which happens to mean keep the sequester alive. Im kudlow, and i want to cut spending. Ill be right back. I am today by luck. I put in the hours and built a strong reputation in the industry. I set goals and worked hard to meet them. Ive made my success happen. So when it comes to my investments, im supposed to just hand it over to a broker and back away . Thats not gonna happen. Avo when you work with a schwab financial consultant, youll get the guidance you need with the control you want. Talk to us today. But you had to leave rightce to now, would you go . World, man oh i cant go tonight woman i cant. hero thats what expedia asked me. Host book the flight but you have to go right now. Hero laughs and i just go . This is for real right . This is for real . I always said one day id go to china, just never thought itd be today. Anncr were giving away a trip every day. Download the expedia app and your next trip could be on us. Expedia, find yours. The Obama Administration is still looking into whether syrias military used chemical weapons in an attack on civilians earlier this week. Lets bring in nbc news steve handelsman. Good evening, steve. What can you tell us. Reporter critics in washington are complaining that president obama delaying any u. S. Military response, if, in fact, he ever orders one and is giving a green light to syrias government to use chemical weapons again, but that wait might might soon be over. Here is a clue from former top obama adviser David Axelrod who is still wired in the white house from chicago. Axelrod said today he expects the president will take action. Maybe a Surgical Strike says axelrod, maybe setting up a nofly zone and maybe setting up a possible cruise missel strike and the president himself suggested that now, u. S. National security is at stake. He says if chemical weapons were used, the u. S. Forces in the region, not clear exactly which forces hes talking about might be in danger and the president cited a worry about proliferation, spreading chemical weapons. Presumably that could happen and by the rebels seizing chemical weapons and turning them over to al qaeda. Heres what he said on cnn. There is no doubt that when you start seeing chemical weapons used on a large scale and again, were still gathering information about this particular event and it is very troublesome. Still, the president is reluctant to act. Again, citing the lessons of iraq and afghanistan. Folks will call for immediate action, jumping in to stuff that does not turn out well. So, larry, the commander in chief met yesterday with his National Security team. Hell do it again in the future and the white house wont say exactly when and he will try not to make this thing look and sound too urgent. He has reportedly asked for targeting options and the pentagon would already have those. Hes asked that they be updated and the white house, no surprise in this, has said again, larry that even if an Inspection Team gets in and even if theres verification that chemical weapons were used and one thing the president will not order is u. S. Forces, Ground Forces to go into syria. Well, let me ask one quickie, steve, on this. Yes. If some military action is taken will the United States take it on its own or working with allies in europe or will the president insist on going through the United Nations where our own ambassador didnt even show up for a meeting a couple of days ago . You know, i think, and this is me saying this based on the president s previous performance on things like this, he is so reluctant and especially reluctant to go the ouz its own, to go alone. Youll remember in libya, the u. S. Military involvement was in concert with the brits, with the italians and with u. N. Mandates. Theres nothing like that now in syria. The russians who have a veto, you know, in the Security Council have sided with Bashir Al Assad and theyve put missiles in syria which would make it really tough to have a nofly zone, but lets put that aside. I think the educated guess from washington is, larry, no going it alone. No going it without some kind of a legal cover and absolutely no rush by president obama to make a decision. Back to you. No rush. Thank you, steve handelsman. Thank you ever so much. Welcome my free market friday panel. Im going ask you, are you satisfied with president obamas situation in syria so far. Here hoo is for the rest of the hour is aldin. Did i get it right . Roy, senior fellow at the Manhattan Institute and my good friend mark simone. Ahmed, what do you what do you want obama to do . Before we get into the prognostication of what he will do, what do you want him to do . I want obama to actually put his money where his mouth is. I want him to stop the empty rhetoric now for two and a half years. Hes been speaking and his words have gotten ahead of him his actions as well. I mean, come on in august 2011 we all saw he called for president Bashar Al Assad to be ousted and he had no strategy for that and he made that call and he said a year ago the gamechanging red line and its embarrassing that hes unable to act on that red line and for as much that were seeing that the russians are an obstacle and you saw them go into an independent probe. But he can work with people. I dont know why hes doing that. Let me ask you this. The red line. I never understood the red line. We can bomb assad. I dont know if we know where the chemical weapons are, maybe we can, maybe we cant. We can bomb assad and there will be plat cal damage and we can use drones and Surgical Strikes and we can do all of that stuff and then we get more involved and, i dont know, why not allow the civil war and syria to continue. Thats what it is. I know who the bad guys are. I dont know who the good guys are. Im not sure there are any good guys. A lot of people say thats one strategy and this is a proxy war and you see hezbollah and president bashar al a zad and al qaeda and different gups coming. General adris who is the moderate rebel commander and there are so many divisions amongst the rebels that theyre some of the more extreme elements. Obamas biggest flaw, not just in syria and also in egypt is hes not living up to u. S. Law. Theres a coup in egypt and were not suspending the aid. And you think president Bashar Al Assad is acting in defiance. He knows hes cautious and so when obama in that exclusive cnn interview says that, you know, people are criticizing me for not taking immediate action, 100,000 people have died. You know, the regional stability is falling apart. Let me just go around. We dont have a lot of time. Whats your quick take on this . I want to harken back to what you said about going it alone versus doing it with allies. The president got flack for what he did in libya, and i thought it was smart and here the problem is hes being reckless as ahmed said. He said there was a red line and now hes fumbling around. Say what you mean and mean what you say. If you want to work behind the sceneses with allies to take action, do it, but it doesnt look like thats what he wants to be doing. Think president obama is the perfect leader at this time. He has a leadership style and never doing a thing about it and thats the course here. What do we do here . We dont know who the good guys are in this . Just like when we saw the soccer games in england. I dont know which team im for. Ill be honest with you, im a National Security hawk, i guess, reagan guy, but im confounded by this whole situation and thats why im not attacking the president on this although i dont want him to have to wait for the United Nations. Im just not sure. I think this is different than libya. Im just not sure what i want him to do or what the right thing to do is. Doing nothing, inaction isnt an excuse for being cautious. When the worlds super power speaks in these broad, very bold terms you to act on it. Well, then well have to go after the chemical weapons and well have to find out, cia, whoever, go after it. Strongly condemn them and you cannot go in and find them. I dont know where they are. Assad is a stra teerjic enemy of the United States. And hes an active enemy of a stable lebanon and there are so many things that undermine humanitarian. Im done defending him. Thats for sure, and im trying to figure out what to do. Our free market friday panel will stay with me for the rest of the show. Cnbcs dominic chu is about to join us with tonights other headlines including the verdict in the fort hood shooting case. Good verdict. Were we on the tv at the time . No. Should we have been . Steve ballmer of microsoft is to retire. Theres an 8 premarket of microsoft shares on the news. The market is saying thank you. Of the available lexus enform,y including the es and rx. This is the pursuit of perfection. Right now, 7 years of music is being streamed. A quarter million tweeters are tweeting. And 900 Million Dollars are changing hands online. Thats why hp built a new kind of server. One thats 80 smaller. Uses 89 less energy. And costs 77 less. Its called hp moonshot. And its giving the internet the room it needs to grow. This is gonna be big. Hp moonshot. Its time to build a better enterprise. Together. Convicted on all counts. Cnbcs dominic chu has that story and more for us. All right, dominic. Thats right. Nidal hasan found guilty on 13 counts of premeditated murder and 32 counts of attempted murder. That makes him eligible for the death penalty, but lawyers advising him think he wants to be put to death. He represented himself at the trial, and didnt even try to make a case for his innocence. The sentencing phase starts on monday. Also huge wildfireses still burning outside yos empty National Park in california. Hundreds of people forced to evacuate their homes. Businesses shut down as firefighters work to get that fire under control. Governor jerry brown has declared a state of emergency there. And the big market story today, Steve Ballmer announcing he will retire from microsoft as its ceo at some point within the next 12 months and in a big insult to ballmer, the stock shot up on this news more than 7 on the day to finish it off, but experts say the list of internal candidates to replace ballmer is somewhat weak. So an outsider may be needed to help turn microsoft around, larry. Is microsoft turnable around . Its got a lot of cash and a big operation. Its a large operation, right. They have heft. It doesnt necessarily mean they have quality. There are a lot of these Tech Companies that were huge beheem olths in their day, think about hp and microsoft that are trying to reinvent themselves to be something more in this new te technological age and remember, everything revolves around mobile platform, tabths and smartphones and microsoft is trying to do that and it will take some time whether or not a new guy can come in there and make them that much more relevant in an age of pc declines. I understand the betting is bill gates will not come back to microsoft, but he will be on the Search Committee. Thats correct, the board of directors has convened to at least try to find a candidate now. Bill gates is going to be part of that Search Committee to find who the successor is going to be. There is no indication that ive heard or anyone else has heard that he will actually be the next ceo again. So no talk on that front, but he will have a hand in picking who that person is going to be. Dominic chu. We appreciate the update. Speaker john boehner says he will block any effort to shut down the government this year and folks, he has the votes. Greffer nor quist and the free market friday panel will be back with us in just a moment. 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. [ 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. Welcome back to the kudlow report. Im larry kudlow. In this half hour, more and more cities and states say obama care is forcing them to cut government worker jobs and hours. Obama care, turns out, is a bigger job killer than the budget sequester. Tax migration, where to live. Americans vote with their feet and their dollars. Well show you the states that are getting the money and those that are losing it. First up this evening, president obama blaming republicans and Rush Limbaugh of all people for the budget impasse in congress. Take a listen to the president talking about his republican colleagues on cnn. Sometimes they say to me privately i agree with you, but im worried about a primary from, you know, somebody in the tea party back in my district or im worried about what Rush Limbaughs going to say about me on the radio, and so you have to understand its really difficult. As if president obama is at his absolute worse and plain silly earns, i hate to say that, but thats my view. Boehner will be passing the continual resolution. Thats boehner. Hes got the story right and by the way, theres a powerful new conservative movement to delay obama care taxes and mandates and the gop frankly is in the drivers seat and obama is in trouble on this issue and he knows it. Thats why hes messing around and blaming Rush Limbaugh. Its just a dumb diversion. Lets bring in my pal, Grover Norquist, our free market friday panel, ahmed shihab aldin. And grover, good to have you back. Boehners Conference Call made it very clear. No Government Shutdown and theyll have a continuum resolution, and the interesting thing is, grover, delaying obama care, and not defunding obama care. I find that very interesting. Whats your take on it . Well, i think its the correct strategy that baner is quite correct. First, protect the sequester numbers. Dont let spending jump back up again. Dont punch a hole in those budget caps that were won in 2011. Second, what do we do about the train wreck which the democrats now agree, the train wreck of obama care and obamas giving delays to big businesses, delays to campaign contributorers and delays to the labor unions and delays to the Insurance Companies and what we say is why not delay the individual mandate for people for the american people, for Small Businesses ee because the president started to backpedal because of the failure of hisson bill and its reasonable for him to say get your act together and well look at it again. Ahmed, your take on this . At the end of the day, boehner seems to be drinking more merlot than he usually does. As in california wine. Yeah. I think thats what he likes. Thats what i hear. Maybe more of it or less of it, this is an illadvised step and i think the suspension makes more sense and the shortterm solution in terms of not completely going ahead of it, but the 80 votes in the Republican Caucus that we saw or the 80 members signing that letter. 80 republican members signed that letter in round numbers. This is the defund crowd and risk of shutdown, but heres the thing. Right. 153 or so wouldnt sign the letter. Right. And that means that tells me, a, boehner has the votes in his own caucus to win this, and of course, b, hell carry the house, and in fact, you were involved in this delay strategy that grover described earlier. Do you all have the votes to stop the defunders . The defunders, im not against defunding it and i dont want to shut the government down and i dont want to have the debt ceiling impasse because i think this hurts the country and the gop. First, there are two reasons why to go with the delay strategy, and they are its from a policy standpoint of the solution and its from a public sentiment standpoint of the right solution and the fact is the exchanges are not ready and kevin cunihan is not a republican, a democrat that says i wish i had another year and there are so many problems because there have been so many delays because of the regulations. And the securities and the verification. If you want the exchanges to work you should want a oneyear delay. And thats where the public is, too. The public doesnt want there to be fraud. The public doesnt want there to be privacy. They dont want a shutdown of the government and thats why its a much more attractive strategy than shutting down the government. Mark, does boehner have the whip hand here . And absolutely, hell have obama behind him because you will never live to see obama care and no one will ever see it. President obama knows its horrible and thats why he gave out 2,000 waivers and congress exempted themselves. Remember like the staff looked like they would go on it and the government moved faster than ever in history to make sure they didnt have to go on it it. Let me just ask you and clarify a point, do you believe that obama would actually give up his precious obama care . I thought he would rather march on syria before he does that. Hell pretend hes fighting for it, but as it gets toward the 2014 election and theyll put it off until 2015 and theyll realize why screw up the president ial election and put it off until 2017. It will be a disaster when it starts and they know that. Grover, let me just come back to you. There is one open point and i think boehner has the whip hand, and i think theyre playing their cards right, and greffer there is still some talk about defunding obama care and demutual funding and not even delaying. Maybe delay, but theres still loose talk about the debt ceiling and grover, ive got to tell you on fiddling with the debt ceiling you lose me, buddy. You lose me. You lose wall street and you lose the International Markets and you lose everybody. Its like committing political harry carey. Whats interesting is people talk about defunding. Im in favor of defunding obama care. Im just not in favor of having that be the only thing on the table and closing the government down if you dont get that today. Theres a letter written by a dozen senators and they said we promise never to vote for anybody budget bill, continuing resolution and appropriation unless it has a complete defunding now of obama care. But thats it. But, grover, much as i and i really respect senator ted cruz, and i agree with him on most issues and i agree with him on defunding, but thats an easy vote, grover. Thats an easy vote. With the budget bill in the senate its an easy vote, real easy. Senators are not allowed to instruct house members. You should do our strategy, why dont you go do that. Thats not having enthusiasm for ending and reducing and delaying obama care as much as possible, people dont appreciate what message they are giving be some else. I really quickly wanted to say that we can talk about theoretical arguments and there are divisions within the Republican Party and when we talk about defunding and even if the conversation is theoretical and its not going happen and i disagreed that the president has ever signed that. Larry, you know this. Hes not going to agree with that. I think hell never give up on it it, but ill say this. The work thing i like about the defund sers the idea of getting rid of obama care all together. Keep that hope alive. I do admire that, and i dont think strategically, no. Let me change that, and i dont think tactically its the right thing to do. On that sense, i think rubio and cruz and them are right. Most conservatives are repealing obama care in theory and the thing is with the senate controlled by democrats. Heres the difference between the house healetter and the hou letter signed by 80 republicans. It doesnt do what grover was talking about in the senate. If doesnt say that if you support anything other than defunding youre a bad guy. This is one of the things you want to push for and well support alternatives and well all come back. You signed the letter and grover, youre in the higgins letter and maybe you wrote the letter. Thats the delay strategy which is picking up a lot of the support and things have changed in the last couple of weeks. Because the obama care bite is starting to hit the public sector. This is interesting. Its actually turning out to be worst than the budget sequester. More and more local governments are announcing job cuts or and reduced hours worked all because of obama care. Weve got that story next up on kudlow. 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Awesome perfect save up to 30 plus an extra 12 off with coupon. Now until labor day. Only at hotels. Com so remember all those warnings we heard about the budget cutting sequester . All of the jobs that would cut, but whats really happening out there is that obama care is forcing cities and states and counties to either slash government jobs or cut back on hours worked. The Washington Post blog entry details how hours have been cut sharply to avoid obama care costs from cities and counties from wisconsin to texas to virginia to right here in new jersey. So could it be that obama care is the real job killer . We continue now with our free market panel. Ahmed shihad aldin, and mark simone of wor talk radio. Okay. Do you disagree with me . This came from a Washington Post blogger, so you know its a liberal point of view. My question is why do you need to actually do this. Why do you need to create more jobs at lower hourly rates and i dont understand that and i dont see the evidence people i remember seeing forever 21 and i understand they want to keep the manufacturing costs low, but this will harm the reputation. This is government. I understand. But isnt this going to harm their employes. Theyre going to cut employees. Heres the thing, theyre going to do both. They read carefully, reed wilson, and two things. Theyre cutting back on hours worked which have to pay the mandate and it costs them 10,000 per person more, but they are also, they are also cutting back on staff. Its both. Listen, i mean, companies do care about their public reputation, but they care more about being solvent and in a competitive environment they have to have the rightis prices for their products and the only way to have right prices for their products is they do everything they can to maximize that. What do they have to do in this case . They need to move people to parttime jobs and theyll be forced to offer Health Coverage to. In the case of Delta Air Lines. We know that Delta Air Lines will have 100 billion of Higher Health costs and not all of that is due to obama care, and the big chunk at least the majority and twothirds of it it is and its supposed to be the big, bad sequester that was going abolish all of these jobs including government jobs. Particularly government jobs. Well, i dont think so. I think its obama care. Its going to cost a lot of government jobs and it will cut government staff so finally some good came from obama care. That gives them an excuse to riff, in a sense, reduction and force. This is at the low. You see it more, i think, in the counties and the cities than you see. Huge municipalities cant afford to survive this, imagine what this will do to companies and imagine what it will do to Small Business when it kicks in. Nobody in the Mainstream Media in an interview with the president tell me why they gave out the 2,000 waivers. If its so good why dont you exempt these countries . Arent you admitting that youre exempting them by giving them waivers . Can i just go back . I want to violate the rules here. Ovid. Sure. I want to see a vote in the senate on delaying for one year obama cares individual mandate. I would love to see that, too. Tactically, with all of these democrats running in red states i would like to see that vote. Any chance of it . 60 of the people up in 2014 in the senate are democrats and its twothirds and harry reed controls the senate and hell fight hard not to have that vote and Mitch Mcconnell is clever at getting the votes he wants to get through. I think you have a problem. I think if theres a vote in the senate, all right . The delay for one year wins and since Mitch Mcconnell is so much smaller than harry reed, i think you might wind up getting the last word. All im going to say is the delay approach is smarter than the defund approach. So i would advocate your approach and it makes more sense even from just an opticses perspective because people dont want to be seen as vindictive especially considering what happened in the last election. People vote with their feet and they also vote with their dollars when it comes to choosing a place to live. Well show you a hot new study about tax migration. The three biggest winners are states, by the way, with republican governors. Thats next up on kudlow. For anyone who believes higher taxes help grow the economy, take a look at this. A new study from the Tax Foundation shows almost 100 billion in personal income migrated from new york, california, and illinois over the past ten years. Not surprisingly, these are also the states with some of the highest tax rates in america. Where will that money go . Easy, it went to florida, arizona, and texas and those are states with little or no income taxes. Owe will the blue states ever figure it out that lower taxes mean more growth. By the way, looking at this study, it turns out that eight of the top ten state that benefited from the income migration have republican governors . That is a fact. We are back. Grover norquist, i didnt know grover was still there and well get you in here. What do you think of this study, Grover Norquist . What do we learn from this . Well, in the next ten years youre going to see the two parts of the country move in different directions, the states you mentioned, illinois, california, new york, have all raised taxes in the last two years to avoid reforming their pensions and labor unions. The other states with states like wisconsin, North Carolina, in addition to the to florida, texas, arizona, have been cutting taxes. So the republican states are cutting taxes and reforming government. The high tax now led by democrat governor states are not reforming government and theyre raising taxes to avoid. Do that for ten years and you have a lot more difference between loser states and winner states. I hate to be so blatantly political, but lets be blatantly political. Lower taxes and lighter regulation and it sounds attractive, but as you know, no decision is made in a vacuum and no decision has moved into florida. As you know, but they have bad weather in florida and they have hurricanes, come on. You dont see the same migration patterns going to alaska where they have low tax rates. All im saying is you have to take that into consideration. However, in texas, for example, its not the coincidence that in more than any other state theyve created more jobs and i think that that is not a coincidence. Mark simone, youre an expert on new yorkers. Do you think new yorkers are moving to florida or texas or arizona just for the weather . No. Taxes, i know plenty that have done it for that reason. If you tax something, you get less of it. Tax smokers and you get less smokers. Governor christie had a study that he lost 17 billion because of the high taxes in new jersey. This study showed new york lost 45 billion in ten years. Theres some crazy statistic and Something Like 6,000 families in new york city pay 50 of the tax. So if you were to lose a hundred of them you would make a big difference in the revenue here. I dont think theres a purer example of the curve than this. You raise tax rates, they move away. I dont care, whether, whatever. Last week i meet with a guy named travis young who has done a comprehensive study and he has the whole interactive map where youve probably talked to him and you can go county by county and show where the migration and the migration is going in every county and every state in the United States and its very powerful and it shows exactly what youre talking about. Grover, i have 20 seconds and art lafer himself moved from california to nashville, tennessee, where theres no income tax in tennessee. Watch missouri where theyre about to override the governors veto of the tax cut there. North carolina, just cut taxes as well. I love that North Carolina story. That guy is tough. Thanks to my free market panel, amid, grover, youre also terrific. Thats it for tonights show. Im larry kudlow. Well be back with more free Market Economics on monday. From one of five lexus hybrids thats right for you, including the lexus es and ct hybrids. This is the pursuit of perfection. I put in the hourswhere i am today by luck. And built a strong reputation in the industry. I set goals and worked hard to meet them. Ive made my success happen. So when it comes to my investments, im supposed to just hand it over to a broker and back away . Thats not gonna happen. Avo when you work with a schwab financial consultant, youll get the guidance you need with the control you want. Talk to us today. The beach on your tv is much closer than it appears. 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