Connecticut, where the first of the victims from the tragedy here were laid to rest today. This grieving town begins the process of saying goodbye, investigators continue their search for how and why it all happened here. Ill have more coming up. Devastation of Superstorm Sandy, but wait until you hear about all the pork loaded into this 60 billion sandy relief bill. Hardly any of it gets to sandy and the actual survivors. Well get to all that. The kudlow report begins right now. First up, 14 days and the clock is still running for a deal to prevent the nations economy from falling off the tax and fiscal cliff. President obama, Speaker Boehner, they huddled at the white house today once again, but are we really any closer to a compromise . We go back to cnbcs eamon javers who joins us from washington with all the details. Good evening. Reporter good evening, larry. Youre right, they did meet today. It was a surprise meeting not announced as the previous meetings between the two men have been in past weeks. So we know that the meeting lasted about 45 minutes and that treasury secretary tim geithner also attended. What we dont know is whether the two men came to any deal or not or advanced the discussions in any way today. What we do know is that up here on capitol hill, senator harry reid, the democratic leader, suggested to his fellow senators that they might consider coming back on december 26th, the day after christmas, to finish up the fiscal cliff which suggests to you that they might be heading down the path toward a deal, although that is not set in stone. Meanwhile, over at the white house, the press secretary, jay carney, was asked about where the president stands on the fiscal cliff. And he did his best to give as invasive an answer as possible and keep the negotiating wiggle room open. Take a listen. The president believes that the parameters of a potential agreement are clear. It is also the case that we have not seen a proposal besides the president s that achieves the balance that the president insists be part of a deal. Reporter now, larry, the big test is going to come tomorrow when members of Congress Come back to town. Theyre going to have to decide whether or not on the republican side, in particular, they can live with a near 1 trillion in new revenue that Speaker Boehner has proposed in his latest Public Offering and on the democratic side, theyll have to come face to face with cuts in entitlements that the president might propose that they might not like as well. So the key for both men is going to be whether or not they can keep their respective caucuses in line starting tomorrow, theyll have an opportunity to go off the rails, if you will, when they come back to washington here, larry. Eamon, im going to get to the merits and demerits of this proposal in a second. Let me ask you, did i hear you or did i hear jay carney say december 26th . Reporter yeah, thats what harry reid said on the senate floor earlier today. He suggested to members that they should be prepared to come back to the senate, go home for christmas, but come back the very next day and be prepared to work on a fiscal cliff solution. That seems to be telegraphing that they might get the terms of a deal perhaps this week and then bring these members of congress back after christmas to finalize it and actually pass it with some votes. Now, what harry reid said today isnt binding, so theres no guarantee, but he was at least telegraphing that as an option. Well leave it there. Many thanks, eamon javers. Is the gop after a caving in and giving up its brand . Or is the gop rising above partisanship and doing what the democrats apparently wont, and thats compromise . Here now, cnbc contributor ari melber and michael steele, former rnc chairman. I want to go to my pal, michael steele, whom i havent seen in so long. Millionaire tax rates, issues about the debt ceiling. Right. Certainly not enough spending reductions. I talked to conservative republicans. Theres a lot of back biting and talking and yelling and not happiness. Is the Republican Party giving up its base . Is it giving up the grass roots to make a deal . I dont think it is, larry, but i think its also confronting the new reality postelection. The president clearly has more cards at his disposal to play. Hes got the momentum of having the voters behind an idea that rates have to go up at least maybe to 37 or more for those who make 250,000 and above. So Speaker Boehners been trying to carry the water for his base, recognizing that the bucket may have some holes in it. But also bringing the pressure to the president that says, look, you know, were willing to go to that well if we have to on raising rates, but youve got to come to the table with spending cuts that are meaningful. And so i think what both of these gentlemen are looking for is the sweet spot. Michael, hang on a second. Okay. You may be right. Boehner may be a hero here. I happen to respect the guy, and he may be the compromise guy rising above partisanship, but you know as well as i do, youre former rnc chairman. You know the base is going to say and is already saying, the base and the grass roots, okay, have to turn out in 2014, you said we wouldnt raise tax rates, mr. Boehner. Now why are you raising tax rates . Yeah. Thats his conundrum. And you know, the rhetoric from before is coming back to bite, theres no doubt about it. But the question is, if youre not going to get at the table and put that on the table, then what are you going to what is your offer to the president thats actually going to get the deal done before january before december 31st . Ari melber, i think that president obama and the democrats are dr. No. All they do is say no. Boehner keeps coming in and making concessions, particularly on revenues. They may blow up the whole Republican Party for all i know. And president obama just says no. And harry reid says no. And Chuck Schumer says no. We want more tax revenues. We will not cut entitlements. Nancy pelosi said no entitlement cuts. You are the party of no. I dont feel like the party of no. I think a lot of democrats feel like the party of yes in the sense that the country gave a big yes to obamas plans. And to echo part of what chairman steele just said, elections do have consequences. I do think the republican base, however badly is wants a perfect plan, does understand theres time for movement. And to their credit, some Republican Leaders and conservative leaders have been saying to the base on two issues, on immigration and on at least part of the upper bracket taxes, theyve got to move a little bit. Not because its perfect but because they lost and they want to work with this president. And as we all know, the rates go up either way. Yeah, but i dont see one hint yet. I mean, boehner wants and i think boehner is right, i think its sensible, if youre going to give in on tax rates, marginal tax rates, which i think hurts the economy, but whatever i think, youve got to get solid spending reduction including the budget sequester which is being ripped to pieces, entitlement reform, including Social Security and cost of living adjustments and medicare reform. Ari, you know as i do, Democratic Leaders in both houses are badmouthing anything to do with entitlement reform. All they yap about is tax hikes. And thats one of the things slowing this thing down. We talk a lot on the show, larry, about growth. And the fact is that the relationship between the deficit and gdp is more important than a 30 or 40year projection about an aging population. I do think, in disagreement partly with you and partly with the chairman, i do think the president has previously shown an openness towards domestic spending cuts, and the democrats went along with, as you say, sequester. So right there that is shortterm domestic spending cuts. I dont think we have to do it on the backs of seniors, and i dont think thats what people voted for. Michael steele, doing it on the backs of seniors, look, everybody believes correctly that in 20 years or so, were going to go bankrupt. We know that. And in fact, were already on a cash flow basis losing ground. Thats right. The question i have, michael steele, is how far can mr. Boehner go on this . How far can obama go . Because the president has not commented, and his party is in revolt. Yeah, they won, but they didnt win on cutting entitlements. They won by leaving entitlements alone. The democrats are in denial, michael steele. Ill give you the last word on how you get them out of denial. I agree with that, larry, and i think thats part of the reality for the president right now. What boehner is saying is look, weve been in this room before where weve agreed, you know, to tax increases on the off that were going to get spending cuts. Well, put the spending cuts on the table. Lets put them out there together. Well agree to a rate increase, 37 , 38 , you agree to a certain percentage of cuts entitlements, well go in together, well both have bloody nose and black eyes from our base, but more importantly, the American People will see were serious and were moving forward. And the president still has yet to do that. Thats what i think. I think hes still dr. No, with all respect to my friend ari, i think so. Anyway, thank you, gentlemen. We appreciate you coming back on. What the government does with our money, congress began debating a bill for Superstorm Sandy relief today, okay . But its quickly being dubbed a super scam. Because the more than 60 billion bill is stuffed with millions in spending for things like museums and amtrak and oh, yeah, salmon fishing in alaska. Just what we need. So lets talk about this with Wisconsin Republican senator and Budget Committee member ron johnson. Senator johnson, i just want to read off a couple to you. I just love this. 60 billion bill. 8 million for cars and furniture for the fbi. 150 million for salmon fishing, 57 million to clean up tsunami debris from 2011, 336 million for the Amtrak Program thats never been done. What is going on here . The people in new york who are still suffering need direct assistance. None of this is direct assistance. Hello, larry. Of course whats going on is business as usual here in washington. Listen, i think theres bipartisan support to realize that this is emergency. We want to get money flowing to the people that need it. But lets get some information. Lets not create a Christmas Tree here and load it up with all kinds of different ornaments. Lets take a look at what the true need is, short term and then longer term. And lets do this in a measured fashion. So from my standpoint, i think it makes an awful lot of sense. Weve got nine months left till fiscal year 2013. Thats kind of the line of demarcation. We should be looking at what needs to be appropriated for the rest of fiscal year 2013. And then, you know, how about we pass a budget for fiscal year 2014 where we can consider the rest of the spending in a proper format where were actually getting the information on how this thing really should be spent. Im all for that, but i just want to say, look, the people in new york and new jersey, they still need help. Absolutely. Direct appropriation, financial assistance. And with all this stuff, did i mention 120 million in safe water drinking, 62 million for the weather forecasting and noaa, things like that. Because of this flotsam and jetsam and pork in this bill, the bill is being delayed, and the people are not getting the money they need. Thats whats infuriating. Larry, theres already 5 billion left in femas disaster fund. So that money should be flowing. We have money available through the flood insurance. That should be flowing. But youre right, listen, there are no republicans that im talking to that dont want to help the people that are in need now. We should be taking care of whatever is an emergency basis, get that money going. Again, we do need to be careful. We are bankrupting this nation. And 60 billion is way too high a price tag to be considering on an emergency basis. I saw one cbo estimate, about 9 billion would actually be spent during this fiscal year. Lets take a look at about a 9 billion package. Whatever the real information is, lets get that information, lets get the money flowing to people that actually need it. I dont want to hold anything up, and i dont think any republican does either. The club for both and the Heritage Action log has come out very much against that. Thats a call to arms to republicans. Thats not good. Thats going to stall things out some more. Right. Let me ask you about the final one. Theres a 13 billion 13 billion item here for mitigation of future disasters. Mitigation, i dont know what that means. That is not direct aid to the people who need it in new york and new jersey. 13 billion for mitigation. What in the heck does that mean . You presume thats actually spending to prevent damage in the future. But again, thats the type of spending that should be looked at in a budget process. In the light of day. And really offset against other things that would be lower priority. This is where Congress Really ought to be acting, prioritizing spending. And if that ends up being judged to be a highpriority item, weve got to find spending thats a lower priority item that wont be spent because we cant keep deficit spending the way weve been doing for the last four years. Well leave it there. Thank you, senator ron johnson of wisconsin. We appreciate it very much. Back to the fiscal cliff. Speaker boehner seems to be okay with a millionaires tax. Very interesting. The question is will taxing millionaires more really work . Me, i say heck no. But were going to have a debate right after this. Dont forget, free market capitalism is the best path to prosperity. How about flat tax rates and strict budgetary limits . Help those who need help and stop the boondoggles. Im kudlow. Well be right back. 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Call 18559991399 or visit exelonpatchoffer2. Com. Welcome back to the kudlow report. So with House Speaker john boehner proposing a millionaires tax, many believe washington could be inching closer to a fiscal cliff deal. But what we may be inching closer to is a millionaires tax that raises virtually no revenue and is antigrowth. What good is that going to do . I need to ask our cnbc contributor, Jared Bernstein, Jim Pethokoukis and they are both with me on set. Jimmy, millionaires are smart. Theyre not going to pay these taxes. And furthermore, its going to stifle Economic Growth at the margin. This is a policy intul jens by the obama administration. We have this huge output gap, were going to be raising taxes, when we tried this in 1993 under bill clinton, it only raised about a third of the forecasted revenue. Were not going to get nearly the amount of revenue. I wonder if jared could tell me exactly how many job this is going to create and how much Economic Growth its going to create. And could you round it off fo the nearest none. To the nearest zero. First of all, i agree with you guys on the revenue point. Weve been talking about the top 2 of households above 250,000. This is the top. 3 of households. At the same time, you cant make the argument that its not going to raise any revenue and its going to crash the economic. It could be. The cbo told us if we did the increase on the top 2 , it might lower the growth of gdp by. 1 . We could not growth by that much in this whole quarter. If you think its going to be a death nail for the recovery, youre way over the top. Its a step in the wrong direction. Its not growth im so sick of this. I just want a deal. I smell a deal. And i want middle class tax cuts to be extended. Thats the only thing thats going to really matter. It goes completely counter to tax reform. The president wants 1. 6 trillion or maybe 1. 4 trillion in revenues over ten years. This stupid millionaires tax, theyre scoring it as 40 billion a year. Theyll be lucky if they get 10 billion a year out of it. What have you got up your sleeve, jared . I sense many more taxes are coming. I can tell you about the deal that i understand representative boehner brought to us. According to his score, 460 billion over ten years. You dont get that on the rates alone. We have to be talking about other taxes, things on unearned income, on capital gains, on dividends on estate more antigrowth. But even that is well below the president s measure. So is the deduction still in there . Is capping the deduction still in there . Thats the only way you get to the numbers. As usual, John Boehners been vague about this stuff. But it has to be because the rates dont get you near to the 460 billion that he said youd get. If i make a million bucks a year, im screwed with my capped deductions and my marginal tax rate is going up from 35 to 40 and thats on the way to obamas 3. 8 additional tax you have to remember im either a Small Business or a successful individual like jimmy pethokoukis. Youre going to be so damaged, he wont be able to build a new house or start a new factory let me just say. These are marginal tax rates. The dollar that you make over 1 million is whats taxed at the higher rate. Lets not overdo that. Thats the first point. The second point is that, again, were talk about. 3 of households and. 5 not 5 ,. 5 of Small Businesses 20 of americans in the private sector work for