250,000 a year in social security. It will not be part of the fiscal cliff. So we are going to talk about the compromise. We have a congress and to talk about this with us. And you for having me cheryl or a little bill . We were waiting and hoping to compromise with its administration. But they they would just never come to the table. These democrats want to continue spending on social programs, republicans dont want tax cuts to be touched. You think we can have coromise from both sides on each of these issues . The rhetoric that we are hearing on a Television Screen is pretty negative. He did say that we want and the republicans will reach out to less. Cheryl after the last election, the november election, it was a referendum on many republicans. Some of them walked away and said, okay, we did not get the senate back, we are moving forward. Our republican candidates did not win the presidency were many officers. People were looking round the waist deep in seeing a lot of their friends have lost. Barack obama may have won the white house, but e republicans do have the house of representatives. The American Public is saying that we should stick to the principal principle message that we have said. Washington is running way too much money. There may be differences in want of other issues, t on this one, most americans agree that theres too much waste and fraud and abuse and lets eliminate that. Cheryl where do they fit nto this scenario . Fatcat ceos, those from honeywell, allstate, do you think that that is going to be a sitive conversation . Will congressional leaders listen . I would think that they have been listening to the ceos all along. And even lookng at wall street and main street and they all say the same thing. We want certainty out of washington. We havent gotten it from is administration, whether it is doddfrank and all the mess that the excessive spending. So i think that wall street and main street will say the same thing. Stoppending soso much, put your fiscal hou in order. Let me ask you about warren buffett. Warren buffett saying that theres no tax pledge doesnt work. Today, and i would like to play this to you over and over, he responded. Take a listen to this. I agree with part of it. Warren buffett really believe what he said, he could do it any other american who thinks that they are not paying enough xes, he could stop fighting the irs and just start paying for the irs says that he should be paying today. That is one thing. Cheryl thats true. If he believes that the federal government is the way we should be spending his money, then he should not have set up that chervil foundation and he shouldve written a check to the epa and to the federal government. You must inherently believe that its better that you spend money through Charitable Trust and have washington spent his money. Some of your collgues are turning against him. In fact, Saxby Chambliss is one of them. Bob corporal, lindsey graham, i have been in office for a number of years and i never see the need for raising taxes on hardworking americans. If you put a dime on the table in washington, they will find a dollars worth of spending it. Raising taxes to me is not the answer. It doesnt matter whether you sign the pledge to someone down washinon or not, you really have to make a pledge your constituents at home and what are you going to do for themo all those promises . We did some research and found out that if we dont tend the bush tax cuts, we dont have enough revenue to run the government for more than 8. 5 days. That is correct. Its a drop in the bucket. I think if you pass that one buffettax and thats only 4 of it. Thats not going to solve the problem. Its a spending problem, not a revenue problem. Well, tmorrow when he returned, it will be interesting. Okay, congressman, thank you so much and its great to see you again. He wants know what all of you to get home. Heres a question to tonight congressman barney frank said that voterasked congress to do the impossible. Do you agree with him . Logons gerriwillis. Com and vote on the righthand side of the screen. I will share the results of the end of tonights show. Meanwhile, if you think we have seen the worst of this economy, think again. Another recession could be just around the corner regardless if congss solves the fiscal cliff crisis or not. One of the top economists, Martin Feldstein of harvard unersity, joins me now. Its good to be back. Cheryl you were with ben bernanke last week. There were two questioners talking to mr. Ben bernanke. He has been very vocal in his call for congress to fix the fiscal cliff. You are a little bit more negative than your colleagues. Why is that . Well, what he said is if we gover the fiscal cliff, the economy will drop into a recession and the fed does not have the ability to stop that. Now the question is, what if we do not hold the fiscal cliff but some of the other things that are being talked about, like the president s plan, what would happen then . The president s plan to raise taxes on high income individuals, cutting deductions for high income individuals, raising the Corporate Tax ate read a long list of that sort. Eliminating the payroll tax holiday. That would take about 2 out of the gdnext year. We are struggling to reach 2 . As wwould basically be on the edge of an economic downturn we are sure to go into a recession if we go over the cliff and dont turn it around quickly. But even if we dont, if we have Something Like the obama plan, we could easily slide into recession. It is not nearly as much is going over the fiscal cliff, but it basically would offset the very weak growth, less than 2 growth that we are having right now. You agree with the estimate of gdp growth for 2013 . Again, ben bernanke, they are very optimistic about the ecomy. They say 2. 5 or 3 for next year. Do you agree that overall assessment of the economy . I think its possible. But i think its hard to see how we get there. This year from the end of last year to the end this year, we are going to be under 2 . We have defense spending at the end of the fiscal year which perked up a little bit. Exploits were surprisingly strong. If you look ahead to 2013, where is the strength of one come from . Households have maintained their spending only by driving down their savings rate to just a little over 3 . So there is not a lot more to come their, and Household Incomes are lower now than they were a year ago. So i think it will be very hard, even without an fiscal hit to the economy. Even without that, its going to be hard to have 2 growth next years. Cheryl Martin County mentioned that he will tax cuts. It seems that no one really wants to extend that at this point. But that is going to go away on january 1. I think that is right. Cheryl what does that mean you . Is a big number. Probably aut three quarters of a percent permanently comingout of the aftertax incomes of households. So most of that would be subtracted from spending. Maybe 1 of gdp . You have to grooth of gdp, it could be 1 . Is that what youre saying in this economy . Well, 70 of this economy. So if you do that and you do some other things in the name of avoiding t fiscal cliff, well, we are going to be right on the edge of an economic downturn. Let me ask you something. Do you advise Ronald Reagan, if Ronald Reagan were alive today and he was facing the fiscal cliff, what do you think he would do . Remember what he did in 86 . He sat down with tip oneill. They agreed that they could have very substantial reduction in tax rates across the board but particularly middle and high income tax rates and offset that base broadening. The result of that was taking the top rate down from 50 to 20 . The impact of bad was to have a significant increase in taxable income. People choosing to take more of their compensation in the form of taxable income and cutting back on tir tax expenditures andeductions and exclusions in working order. So i think that is what Ronald Reagan would do if he were here now. Leadership will be key to all this. Thank you so much for coming on the show today. Its wonderfuto be with you. Melissa cheryl Merrie Schapiro is stepping down. She helped lead the government and regulatory response to the 2008 financial crisis and took over after the sec failed to detect the Bernie Madoff ponzi scheme. Her last day will be december 14. It was an exit that many saw coming. The one i recently talked with her, she wasnt ready to admit it. Iont have any plans. You know, it amuses me that there is speculation about my departure being imminent. So i take this in stride as being more of the same. She is leaving december 14 red president obama is already choosing a lease water. Shes appointed by george w. Bush in 200. Coming up on the willis report. They called the obama report. I do care, thats right. As the fiscal cliff loons come will nutech still go over your 401k . Peter barnes explains what to expect for your Retirement Savings next year. And today is the day to shop for the internet. The. Cheryl it is back to court for Liberty University and their challenge the controversial law. Their challenge is the employer mandate and to fund what they call Abortion Related Services for thr employees. We have leaders well coming up with more. We know this case very well. Yes, tardy at the Supreme Court. Cheryl the argument, is this going to fly . With the Supreme Court said is the first time around, we said that wasnt right. That nobody had been hurt yet. And so the mandate had been in place. So really you cannot argue that. But now what they are saying is that it isnt just an issue about the mandate. It is out a right of religion and that may be right. Will they win . It is a fairly liberal cou area. I would be kind of surprised to see them win on these grounds. Yes. This could set the stage for another go around. If they win in a small area and they argue religious rites, vermont we have the hospitals doing that as well, the floodgates open. We are right back to the supreme ourt. I dont see it happening. But i can see this very narrow way, take a second shot at it. A right to free exercise of religion. Okay. Will this will be interesting to follow. Cheryl okay, we are going to fire you if you dont get a flu shot, that is what theyre saying. They did, they fired a number of employees for not getting flu shots. Can you do that . Legally, yes you can. If you are an employee out well, youre not part of the union,3 they can fire you for not following thr rules. There are certain exceptions if you have a religious aversion or if you have a disabili or something where you can prove with a doctors note that you are taking a fluhot can actually be dangerous to your health. If you are not any union, the court can a subject of these flu ot. Okay, so the to be fair, they gave in november 16 deadline. They said its a health care company. [talking over each other] [talking over each other] cheryl they are in a hospital and the idea is you could be making other people sick or the other side says even if i dont take a flu shot, i wont come to work as i have and i will always wear a mask. What they have also said is we have required all 10,000 did he prove tt you got your flu shot, u get her job back. No job, but images are mitigated. If youre in a union, you can negotiate this. Again, its very important. To make the distinction were talking about health care providers, hospitals and that sort of thing. I but i have to admit you, not as a lawyer, but it issa little strange to have employers that you must ingest something. A flu shot this part poison. It is partly being injected to you. You must take something into your body that you dont want its a little strange. All they have to do is say its against my religion. [talking over each other] [talking over each other] cheryl was well, thank you very much. My question is was it legal . But all right. A lot more to come during this hour. Including a major shift from the gop. Are they leaing their grand policies behind . Biker goodland gives us his take. And the fiscal cliff will be talked about. Stay with us this is america. We dont let frequent heartburn come between us and what we love. So if youre one of them people who gets heartburn and then treats day afr day. Block the acid with prilosec otc and dont get heartburn in the first place [ male announcer ] e pill eachmorning. 24 hours. Zero artbur cheryl lawmakers have a new cheryl we have been reporting a lot on what Tax Deductions may be on the chopping block. The latest tax break up for discussion. Onof the biggest ones. And that is your retirement plan. The amount of money that the irs allows you to contribute into your 401k is a 17,000 per year. That will probably change. Peter barnes joins us now with the details. Hello, thats right. Both republicans and the president is talking about putting all kinds of Tax Deductions as part of talks on tax reform and the fiscal clifff and, as you may recall, the president has already proposed doing this for higher income earners. He did it in his budget for 2013 that he released back in february. Some retirement tax breaks are expected to be on the table in these fiscal cliff talks. Each year, washington awards more than 100 billion in tax breaks to encourage americans to save more for retirement. 61 billion for 401k and similar plans. 46 billion for regular pension plans. 18 billion for other tax retirement plans and 12 billion for iras. Probably, is there any any restrictions on these, limits in these kind of things, it would affect higher income earners. But there is a new twist on this today. Some researchers argue that all these tax breaks dont make a fference in overall Retirement Savings anyway, which may give new ammunition to those who want to curb and limit these tax breaks. Researchers at harvard used savings data from denmark to study the impact of these kinds of breaks and researchers fond that the danishtax rates, which is similar to the u. S. , increased Retirement Savings, but that for every dollars that workers put into government incentives, they reduce the savings outside of plans that do not have government help by almost the same amount. So almost no increase in Retirement Savings. So those would be taxable accounts . Obviously, they are saying what is my taxable account look like. Let me ask you this. Yes, pretax versus postdocs. Cheryl you know washington so well are there different types of loopholes mortgage deduction loopholes, four o. One kays are now . Think of those will be the real deal . Do think those will be the types that will be truly the final deal that we get instead of the overall arching, everyone gets taxes raised . Yes, i think they will probably end up with a mix of limits on Tax Deductions. With some tax increases. But i think that those making over 250,000, those families are going to bear the brunt of all this. I know that everybody enjoys their mortgage deduction. Peter barnes, thank you very much. Its good to see you. Thank you. Black friday weekend, breaking records all over the place. Will cybermonday do the same . After getting a bad beating in the election, the grand old party may be trying to reinvent itself. The new face of the gop and we have answers next. Cheryl the numbers are beginng to come in. Her sonous and he ran up a 42 billiondollar bill on the empire state. The cost include 32 billion for small things alone. They are working on its request to draw up federal delegation made. Long island residents who spend weeks in the dark will not be getting a break on their electr bills. The bills have been sent off in the normal amount. Con edison, covering most of new york city, has said that they will get customers the money back from the days that they were powerless. Another one for the private sector, well, if you are con ed anyway, a growing number of Republican Leaders are saying that times have changed and the party is trying to reach middleclass voters. What do we make of this overall talk . Michael goodwin is here with us today. What do you make of this . I mean, it would make sense if they were nervous after what happened. But what you do about it . I think to find a solution, we first need to understand the problem. When we look at the numbers, the defeat of the Republican Party was not massive. It was not across the country. It was not wild. For example, in the electoral college, the president ran away with it. There were four key swing states that he won. Ohio, florida, virginia, and colorado, by a combined total of 300 30,000 votes. Now, had mitt romney won those states, we would be talking about what a genius he was. In fact, any other democrat would have lost this election. I think that baracobama is unique. I believe so. I believe that Barack Obamas record was a losers record, but he managed to win in part because romney was not a great messenger and obama wasnt a great messenger for his ideology. Cheryl i said this, ill be gentle is coming out and saying that the gop has got to speak more to the middle class. Is he right . Yes, i think there are always ways to improve wht you are saying and how you say it. But i dont think its a fundamental issue. I dont think that the reblicans should become more like democrats. Therefore, we dont have a twoparty system. We just have a Big Government party. I think republicans have to sharpen the message and i think that they have to practice what they reach. To many of the republican constituents are sort of clamoring for Government Programs rather than denouncing the Government Programs. When a capitalism, for example, there has to be a little bit more purity in the practice. That is wiping the republican governors are the future. There are now 30 of them. And they can show, its Chris Christie has shown, if they can continue to show improvement, even in blue states like wisconsin, that scott walker is doing, i think over time, that will resonate more. I would also add quickly that i think the democratic governing model is broken. We see with the debt and deficit the