Transcripts For CNBC The Kudlow Report 20130926 : vimarsana.

We have learned of two big new problems just today. Those stories and much more coming up in the kudlow report beginning right now. Good evening, everyone. Im larry kudlow. This is the kudlow report. We are live here at 7 00 p. M. Eastern and 4 00 p. M. Pacific. Right now here is the top story. With the possibility of a Government Shutdown now just slightly more than four days away, republicans are speaking out today. Take a listen to house leaders john boehner and eric cantor. On the debt limit, were going to introduce a plan that ties important spending cuts and progrowth reforms to a debt limit increase. For too long president obama and his democratic colleagues in the senate have chosen to ignore our looming debt crisis. And president obamas plan has been and is still more debt and no reform. All right. Cnbcs eamon javers joins us from washington, d. C. With the details. Big day, but not much progress made toward an ultimate deal made in washington today. And its starting to look like tempers are flaring on all sides of the aisle. Starting with this war of words that we had between the president of the United States and the speaker of the house earlier today. Both men digging in their heels, both saying theyre not going to cave in. Take a listen. No congress before this one has ever, ever in history been irresponsible enough to threaten default. To threaten an economic shutdown, to suggest america not pay its bills just to try to blackmail a president. The president says im not going to negotiate. Well, im sorry, but it just doesnt work that way. Were not going to ignore washingtons spending problem, and were not going to accept this new normal of a weak economy, a no new jobs and shrinking wages. Now tempers also flaring between republicans on the senate floor late today. Take a listen here to senator bob corker. He is frustrated with senator ted cruz of texas and senator mike lee of utah for delaying a vote. They thought they might be able to vote as early as tonight. Thats not going to happen. And senator corker not so happy about it. Take a listen. Its not the republican side that is asking to stall. We only have two republican senators that are wanting to push this off. So i dont want that to be mischaracterized. So at the end of the day today, were not going to have any votes in the senate tonight. It looks like, larry, theyre going to begin procedural votes on sending this bill back to the house tomorrow around lunch time. And then after that, the mechanical clock kicks in. But its anybodys guess here where were going to end up in terms of a final deal that House Republicans can sign on to and that president obama can sign on to in time to avert a Government Shutdown, larry. Eamon, just a quickie. Were really not going get final results on this senate stuff. Were not going to get them until sunday or monday morning. Thats right. Were going to go on for quite a while, are we not . Thats right. Theyre going to begin procedural votes tomorrow, but the senate has an automatic clock ticker. So they wont be able to vote on final passage until well into the weekend. At that point it has to go back to the house. Its going to be early next week before we see any real resolution to this. So were going to go right down to the wire once again on another one of these fiscal showdowns here in washington. All right. Thanks, eamon javers, we appreciate the update. Now lets talk about the continuing resolution and the dead ceiling. The cr comes first. Lets turn to our special guests tonight, house members paul tonka and nick mulvaney, republican from south carolina. Gentlemen, welcome. Mr. Null vanney, its good to see you again. I have a million things to ask you, but let me start with this. Im going to assume that the senate takes out the funding of obama care, throws it back to the house as a clean bill. Now, my question is this. If the house comes back with its own proposal, well get to the proposal in a minute, if they do, how can we avoid a shutdown next week . Because all this takes time. It does, larry, although one of the things were hearing today on the floor as we sort of hear the scuttlebutt is that the senate has every intention of voting tomorrow which is a little bit different than what eamon reported and then immediately leaving town, which i think is one of the absurd things we do up here when we try to politically posture. I do think there is enough time to get through this before monday. Im a little optimistic that Everybody Knows the deadline. We also we bumped up against the deadline ever since ive been here. Are we going to push the limit on it . Probably, but are we able to get something done by monday night, i think so. All right. What i was angling at, i heard today from a little birdie in the leaders operation that there is a possible sixday, a possible sixday continuing resolution, which would give you all in the house some opportunity to put your new plan on the table and then go through the whole process again. Just tell me. What a sixday cr work for you . And is it going to save us from a shutdown . You know, larry, thats one of those questions that if you really feel like youre making progress and the six days would be used to make a better deal, then maybe you should consider it. Its just we need six days because we havent done our job and we sort of pushed up against this deadline and didnt get our work done. Its sort of hard to go back and tell people that we changed the rules again. Well, thats okay. Were all late with our homework when we were kids. I get that. Mr. Paul tonko, welcome back. Thank you. A latebreaking development. Democratic senator joe manchin of West Virginia has just literally in the last hour or so i think come out and endorsed a oneyear delay in the individual mandate for obama care. A oneyear delay, which is something many republicans favor too. What is your response, paul tonko . Is that where the democrats would compromise or not . I think the health care bill, the Affordable Care act, obama care is law. It was passed by both houses of congress. It met the president ial test when the president was up for reelection. The highest court in the land, the Supreme Court gave it thumbsup as constitutional. And we ought not tinker with huge responsibilities here that is to make the government run, fund the government, keep the doors open and the lights on, and pay our bills. You know, working families understand that. They roll up their sleeves, they play by the rules, they work hard. They expect to taste success, and they pay their bills. We need to pay our bills. Paul tonko, i agree about paying bills. Later on in this show, were going to talk about something called glitches, obama care glitches. There are so many obama care glitches, many of them acknowledged by the white house or other people that this thing needs help. Thats the point, mr. Tonko. It needs help. The bill is not ready for prime time. You know it. I know it. Mr. Mulvaney knows it. The whole country knows it. Larry, there is a time and place to do Public Policy debate, and it is not in efforts like this. These processes need to be done straightforwardly. We saw what happened the last time when we tinkered with it and didnt even make it happen. We just risked, gave a very huge message of risk out there of not getting business done. And we saw what the Credit Rating bore. It impacted the nations Credit Rating. We ought not mess with the full faith and credit of this country to weaken our economy. Lets pay our bills and move on and have the debate, but not tinker with it in the midst of what are really basic discussion, decisions that need to be made to run the government and pay our bills on time. Mick mulvaney, i want to get to the debt ceiling stuff in a second. Sure. Do you think the House Republicans can sign off on a oneyear delay in the individual mandate for obama care . You already got one democratic senator. So you only need, what do you need . Four or five more to be in business. Would you do that . Might that be the republican position . Larry, you know, weve talked about this before. I dont negotiate with you because you dont have a vote. But i think were getting very close to finding that sweet spot. The real key here is where can you find that sweet spot in a compromise. I respectfully disagree with paul. Weve been trying to have this debate about how to fix obama care or get rid of it for three years. So the fact that were now bumping up against the spending limit, it is strange to be making the argument. If we can figure out a way to find that sweet spot to get changes to obama care, to get delays in obama care, i think folks might be surprised with what we can agree on. Larry, look i thought for sure you would om out with something tonight on the show, mick. Im so disappointed. Name the conferrees who will be at that conference table to get a budget done where we can cut in certain area, belttighten, reduce the deficit, invest where we must after we cut where we can. Thats the way we should have done business. And now to bring this about in the 11th hour and hold up the process, you know what your viewers are about. They want to invest in a market that is strong. They dont want to have the economy weakened. We should not tinker with this economy in that way, risking the full faith and credit of this country is uncalled for and unacceptable. And i dont see any particular appetite, i mean, correct me if i am wrong, i dont see any appetite for not renewing the debt ceiling. I think the issue is what happens around it. I dont see any appetite for a shutdown on the continuing resolution either. Then lets go forward with the straight votes. Lets keep them clean and do the public debate after that. We should have done the budget by now. This bothers me, now. With regard to the debt ceiling, you want to tie. The speaker said today he wants to tie to it a series of Economic Growth measures like tax reform and Regulatory Reform and so forth, the keystone pipeline. Okay. Im all for free Economic Growth, and that does help solve. But nobody talked about spending cuts today. On your side, and i want to note, as im sure you read the wall street journal editorial today, the spending caps are being violated. The house that sent the first cr over to the senate violated the spending caps by 19 billion. And now the Senate Democrats are going to violate those caps by another 70 billion. That is off the charts. If were going to have an extension of the debt ceiling, whatever happened to the idea of spending cuts along with it . Larry, youre absolutely right. Part of the reason that we technically violated the caps deals with the timing between the fact a fiscal year starts in october 1 and the sequester year starts on the calendar which is way too far down in the weeds. But youre absolutely right. One of the things we discussed with our Leadership Today both publicly and privately is listen, we like the ideas of nick chicago growth, thats what were all about. But were a little concerned about the lack of concentration on spending cuts. For example, if you want to talk about how to get to a balanced budget in ten years, which is what weve said were for as a party, you have to look at reforming entitlements. And this first sort of draft on a debt ceiling discussion is a little bit thin. Woefully thin on entitlement reform. So, again, were still hashing it out on our side of the aisle. I think youre right. We do need to look at spending as well as Economic Growth. I think so. Mr. Tonko, go ahead. I give you the last word. I think the American Families understand it. They want their government funded so that it can function and do the things that its required to do. And they want us to pay our bills on time. I dont call my bank when my credit card payment is due and say hey, i want a convertible and i want a puppy. Unless i get that, you dont get my bill. You dont pull these items out of the whim and say were going to change the rules here. People have said dont clut their vote. Get it done and pay your bills. Another news organization, bloomberg did a poll. 61 of those polled, 61 reject a clean debt bill, and they want spending cuts to go with it, even if that means that the debt court of appealing is violated. Did you read that . 61 . They dont even care about default. Thats how much they want spending cuts. Right now, Neither Party is talking spending cuts. Neither one. I think that we can sit at that table, get the budget done there is the fullest way to do it, the most effective way to do it when youre dealing with a full budget. You have the belt tightening that can be done. You cut where you can so you invest where you must and you reduce the deficit at the same time and grow the economy and create a climate that produces jobs. We will leave there it, gentlemen. Thank you very, very much, house members paul tonko and mick mulvaney. Thank you, larry. Now, this breaking news. Iran has apparently agreed to new negotiations on its push for nuclear weapons. The talks have tentatively been scheduled for geneva on october 15th and 16th. Representatives of the five nations from the u. N. Security council. Of course that includes the United States. Secretary of state kerry also just wrapped up a meeting with the Iranian Foreign minister. Kerry called that meeting, and i will quote, constructive, end quote. All right. We will see. Who trusts iran . Any way, lets move on. The u. S. Economy still just bumping along at a 2 pace. Cant we do better than that . Todays economic reports may be the drop in pending home sales. The Third Straight monthly decline. It raise as red flag. Were going to talk about the state of this anemic economy next up on kudlow. And later, look who showed up at the Justice Department today that is Jpmorgan Ceo Jamie Dimon. What is he doing there . Well have that story in just a few moments. And please dont forget, free market capitalism is the best path to prosperity. I think some spending cuts along with it are in order. Im kudlow and well be just back. Americans take care of business. They always have. They always will. Thats why you take charge of your future. Your retirement. Ameriprise advisors can help you like theyve helped millions of others. Listening, planning, working one on one. To help you retire your way. With confidence. Thats what Ameriprise Financial does. Thats what they can do with you. Ameriprise financial. More within reach. Welcome back to the kudlow report. Im Mary Thompson. We had several big economic reports out today. Lets start with gdp. Today we had the third and final reading on Second Quarter growth. The economy growing at 2. 5 . No change from the previous reading. 305,000 people filing for Unemployment Benefits for the first time in the last week. That is the lowest total for jobless claims in six years. And pending home sales falling 1. 6 in august, the Third Straight monthly decline. That of course coincide was the big jump weve seen recently in Interest Rates. Mary thompson, thanks very much. So we have to get used to this subpar subnormal recovery. Still the worst recovery in the whole post world war ii recovery. We have Morgan Stanleys managing director, our old friend vincent reinhart. Also a former director of the Federal Reserve Board Division Monetary Affairs. Also with us bill pulte. Gentlemen, welcome. Let me ask a couple of quickies on this housing. Third straight monthly decline in pending home sales and the year on year rate is only now its about 3 , down from 15 . New home sales also are showing some weakening. Are we seeing a problem here with Mortgage Rates or whatever . Mortgage rates backed up a percentage point. It is interest sensitive. But houses are still affordable given all of the price declines we had seen. House willing be a contributor to growth. It will . But in some sense, slowing from a 14 or greater residential investment isnt necessarily such a bad thing if youre really talking about sustained economic. And in some cases a lot of people have said home prices have rebounded too fast. Yeah. And they have to pull back a little bit. What is your take . You have seen in housing prices. At pulte we look at a number of factors. Things are trading at 14, 15, 2015 multiples. And so it makes it tough to get deals done in this environment. But in terms of the Housing Market, we think that job confidence, Economic Confidence needs to come back. You can the mortgages obviously have Interest Rates have a big factor on it. But if you dont have the underlying factor of job confidence, buying a house is going to be a tough thing. And i dont think were going see in the millions of housing start nice time soon. Stay with it. Jobless claims probably one of the best positive indicators way down to 300,000, the best since 2007 before the recession. And nobody is being fired. The firing rate is an alltime low. Now, tell me why the hiring side of that has been so lackluster, which is, you know, cheap incomes, people working in lowcost industries with parttime jobs. Its like the only thing theyre buying is replacement cars because they cant service them anymore. This bothers me a lot. It should. Because unless you get job creation, you dont get sustained Economic Growth. Part of it is uncertainty about government policies, uncertainty about Health Care Going forward. And environment of uncertainty, we do not build up capital, both Human Capital and physical capital. We think that uncertai