tv The Kudlow Report CNBC February 27, 2013 7:00pm-8:00pm EST
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stock markets continue to roar on the strength of ben bernanke's second straight dave easy money testimony. dow soared another 175 points and just 89 points from its all time closing high. you know what else? i still believe stocks like the budget cutting sequester. limited growth is good for stocks. chris christie brings online gambling to new jersey in order to throw atlantic city a life line and collect some revenue sos they can cut tax rates across the board for everybody. this is "the kudlow report" and we begin right now. before we jump in let me give you my continuing optimistic view of this market. yes the fed remains easy. that's huge. you know what else? the there are is strong. no interests in gold.
good numbers on homes sales, consumer confidence and core capital goods. profits are rising modestly and finally my contrary view that the budget cutting sequester which will limit government is pro growth for the economy and winds up being pro wealth creation for stocks. i think the sequester is part of the market's rally and that sequester is only two days way. the markets know all about it. so i'm still playing this from the optimistic side. let us get into focus on that very sequester. cnbc contributor robert costa joins us live from washington. he has the latest news on the sequester. there's some weird stuff going on out there. help me. first of all, a sequester is due on friday whenever the president signs it or whatever and he decides to wait until friday to have a meeting with the republican and democratic senate and house leadership, i don't get that. why didn't he meet today? why didn't he meet yesterday? why didn't he meet six months ago?
>> reporter: single player on the court can see that clock ticking down. no one wants the ball. this impasse continues. they will meet at the white house on friday. the top congressional leaders. my inside sources on capitol hill tell me they don't expect any kind of a deal to come out of that meeting. >> this is show horse stuff. >> reporter: that's right. they will run out the clock and hope the president blinks. that's the republican perspective i'm hearing here on capitol hill. they won't, republicans add any kind of revenue to a sequester deal. as long as republicans hold their ground this impasse will continue. >> the democrats will have let's see two votes i'm told tomorrow, two senate votes. they are both going to go down. more show horse stuff with tax revenues. >> reporter: harry reid will allow two votes to come to the senate floor tomorrow. both are expected to fail. the president can replace the sequester cuts with his own cuts. republicans have their own reservations about the republican plan because they
don't want the president picking his own cuts. >> i'm going to get into that with jim demint. i don't like the sound of that at all. this is unbelievable. white house denies it. then they blame the homeland security. department so napolitano denies it. they have released hundreds of illegal immigrants, okay. they just released them in order to save money for the sequester. now they are denying it. a, somebody must have released them and this is one of the dumber things in a dumb scenario. >> reporter: a lot of republicans think the white house or the administration in general is leaking out this information that illegal immigrant physician the sequester happens will be released. they feel this is another white house scare tactic. i'll say this for the president. he's running quite a pr campaign on the sequester and republicans fear they are losing that messaging war. >> they are going to get the sequester on friday aren't they? the future holds i don't know but they are going to get it.
that end game is over. >> reporter: larry they are listening to you. they said let the sequester happen. they see your show and they say the sequester is a drop in the bucket. >> it is. it's a drop in the bucket but even little drops of spending cuts are good. i thought we believed that. our team the free market conservative team. thanks buddy we appreciate it. now we really have a distinguished panel tonight joining us on set for the full hour. democratic strategist, a former clinton adviser. dick morris, co-author of "here come the black helicopters" and returning star parker founding president of urban renewal and education. welcome. dick morris, explain to me this. detainees being pushed out. the world is going to hell in a handbag. the military can't function. kids won't eat, they won't be able to go to school. what is obama thinking he's
accomplishing with all this gloom and doom. >> he knows he'll lose the sequester fight because congress does better than nothing any other institution on earth. the sequester takes effect. the reason he's making a big fight or sequester he knows his $300 billion of tax increases are going to mess up the economy. he knows that your optimistic projections are not going to happen because of his tax policies. so what he's doing is inventing this boogieman, 85 billion of sequester. it won't be 300 billion of taxes or 200 on payroll or 70 on rich or capital gains. 85 million of cuts. >> spending terms 45, less than that. so small, it's so small it is one quarter of 1% of gdp. so you're saying he's going to blame a double dip recession on
this? >> we're all to discussion on who wins the blame game the president corning. that's not the issue. the question is what your blaming? i believe obama's concern is not to blame the cuts, not to blame anything but to blame the bad economic news that his tax increases are going to force on the poor little old sequester. >> i'll give you equal time. >> i don't know what you all are talking about here. >> sequester. >> i know you're talking about sequester. but the president, you know, the president i think is handling this perfectly. if you listen to this show, this is the only place in america where you're raising these kind of concerns. >> a couple of other shows. i don't want to name them. >> this is the only one on a respectable network. >> seriously, all this doom and gloom, all these dire projection is getting goofy. today there were news reports that the cbo and own omb do not agree with these dire numbers that are coming out.
>> we don't know what will happen. >> this whole business of bringing the undocumented illegals, leaving them in detention centers that's scare stuff. what does that accomplish? >> first of all i think the white house said today we don't know what will happen. that some of this will happen over time, it's not going to be like friday evening all of a sudden, you know, terrible dramatic things will start to happen. things will start to happen, you know, it may not be a lot of money in the context of the entire federal budget deficit but it's going to affect programs. i think that, you know, you saw the immigration folks doing some good planning around early release on some people otherwise -- it's good planning. if they don't that have money. it's not a catastrophe. a lot of these people -- >> i'm totally in favor of lightened immigration reform. i feel sorry this whole thing is falling on their head but it is. everyone is pointing fingers like a circular firing squad.
star parker i got to go to you. i'm from the old school. i think lower spending the good. i think limited government is good. and, therefore, i think ultimately if this thing goes through it will help the economy. what do you think? >> think you're right. the scare tactics we've seen before. dick and i just were talking in the green room when we met which was during welfare reform. we heard these same things. people will be starving and dying in the street. what will happen after the sequester which will happen, people won't notice. we borrow this type of money every 28 days. people will not notice. we're not going to see the sky fall. what will begin to happen the republicans will finally be in a position as they move into crs and as we move even further into the year to start getting into entitlement reform. that's where the big problems are. that's where -- if we get it right on this one. >> people will notice. >> how will they notice that two
people now are not tethered to one tree. when you think about the washington monument still be shut down after two years. people still come to washington and they do something else. >> the people that notice are president obama's speech writers. i want to talk to my next guest, jim demint. mr. demint as always it's great to see you. may i ask you a question as a former senator. there's this stuff circulating now in washington as though it's not complicated enough, republican senators want to abandon the sequester at the last minute and give all the authority to president obama so he will make the cuts and if somehow he doesn't do what they want him to do they are going to mount a two-thirds majority in order to overturn it. now to me this is in a field of nutty stuff this is one of the nuttier things. do you think the gop should hand
the sequester over to president obama alone? >> no, larry. and they won't. they know the president's claims are laughable. you have a graph prepared by the heritage staff that shows spending is almost going to double over the next ten years. it doubled over the last ten years. the little red line at the top of that graph, the tiny little line is the difference the sequester makes. you can see from the graph there's no cuts in spending. in fact it will continue to increase in a rather dramatic pace. dick morris has this spelled out exactly right, larry. the president is trying to make a case that the problems that we're going to experience with the economy is because we've reduced government spending. but the real cause is his policies, dodd-frank, tax increases but he wants to do what the europeans are doing. complain about any cuts in spending are going to hurt the
economy. you've got it right, larry. cuts in spending and planned cuts in spending will help the markets grow. >> think so. this is a small $45 billion. this proposal, i don't want to dwell on it too much but this idea that i got wind of today about ending the sequester and turning the entire thing over to president obama and if you don't like it you can come back from an obama veto and got to get a two-thirds vote to overturn it. it will never happen. do your economists at the heritage foundation predict what dick morris is predicting that if this all goes through there will be a double dip recession. including tax hikes. >> i don't predict any more. designee suggested it. you've had some good shots and some bad one. seriously. do your people at heritage see a recession coming? >> no.
we have not projected a recession. there are grave concerns because of the policies in place, the tax increases that we are going to have at least slow growth or s stagnant growth because of these policies. the president expects this and wants to blame it on spending. he's trying to discredit capitalism over the last four years and now trying to make a case that the only way to grow the economy is to continue to grow spending at a rather dramatic pace. we've got to counter those arguments. i'm going to be trying to do that all over the country. all you have to do is look at the graph to realize his claims are laughable at this point and i'm just amazed that some in the media continue to talk about these dramatic cuts when there are no cuts at all. >> if you had your druthers, jim demint, if you had your druthers, what would the heritage plan be right here and now you going to go on the road. you're going to talk about that. what do you want to see happen?
what's the ideal policy reaching out to conservatives and independents and democrats around the country? >> we want to see the country on a ten year path to a balanced budget that want crates financial stability. obviously we would like more rules based monetary policy. and we need -- we need pro growth policies like good simple tax reform and entitlement reform to give some certainty out over the next ten years so the business world, investors, folks will know what the government is going to be doing. right now they don't know what to expect and most people expect us to bankrupt the country in the next ten years. >> let's get together on the basic facts of this. the senator is quite right with that graph. the fundamental fact is that in 1980, one-third of the federal budget was spent on entitlements. now two-thirds is spent on entitlements. but the sequester affects
discretionary spending which is 1.03 trillion out of 3.5 trillion dollar budget. now when those sequesters go through on friday, they will have the effect of rolling back defense and discretionary domestic spending to the levels they were at when obama took office. now people were not dying in the street then. kids were not being denied an education. the world was not falling apart. we've not had inflation over this period of time to render the pokey 970 billion we'll still be spending. >> even after the sequester a lot of these agencies will have a higher budget. >> absolutely. >> let me finish this point. one other point. the sequester has been in large part is being nullified by the sandy bill, storm bill had 30 billion of increase discretionary spending. >> this discussion is crazy.
let me inject a little reality. we'll have the sequester and see what the effects are. sitting around the table here tonight and debating whether the effects are dramatic or not we'll know. but the main issue here -- >> no. >> he's trying to say to americans there may be some real hardships and we shouldn't go about this. maybe we should reduce spending and come up with a plan that want raises revenues. >> they just came up with a plan. >> let's not do it haphazard or automatically but to have senator demint here say it's all part of the president's plan so we can follow a european system, i mean that is just like crazy rhetoric. he's suggesting it's a conspiracy to make us a socialist state. it's crazy talk here. >> got to get out. all it says, jim demint is saying by the way these are real cuts. these are reductions in the
growth and i agree with that and the numbers show that. by the way, senator deminute it's only 45 billion in spending that's all it is out of $3.6 trillion ln and $16 billion. our panel will hang out with us. much more work to do. we're about to talk about the stock market rally. another big move on the back of ben bernanke easy money but i have a small suspicion budget cuts may be a part of the positive stock market story because i don't want any of you to forget free market capitalism is still the best path to prosperity. that's limited government. i'm kudlow. we'll be right back. i know what you're thinking...
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putting the dow jones industrial now just within 100 points of a record close. we're look at 14,164. it was a broad based rally fueled in part by ben bernanke on capitol hill signalling that the federal's bond-buying program will continue perhaps into 2016. we saw all three indices move up 1%. financials were the strong point le led by jpmorgan. bouncing back today after an italian bond offering saw good demand. materials got a boost from mining equipment maker joy global which reported better than expected first quarter profits and was up today nearly 6%. apple ceo tim cook should shareholders at today's annual meeting elves their pain with the stock continuing to decline this year. didn't help. apple shares sat out today's rally now off more than 16.5%. bucking the trend as well in a
different way the defense sector in that hitting an all time high today ahead of the big budget cut deadline on friday. sequester? what sequester, larry? >> you know what? you're right. com bertha coombs, many thanks. let's talk to equity strategity at seaport group and chief investment officer. abigail this is a minor point. i think the military budget cuts are going to be scaled down if not eliminated and, therefore, the defense stocks are on a terrific ride, abigail. i don't know about the domestic budget cuts i hope they leave those in place. but i think the military it's a 30 day sequester that's all. what's your take on that. would you be buying these defense stocks? >> i haven't taken a close look at the defense stocks so i can't offer much of an opinion. with regard to the sequester
this is much ado about nothing. shame on republicans and democrats not being able to figure out how to cut out $85 billion. as the country survived the original sequester in 1986 so we'll survive this one and relative to investors they are almost laughing this off. this is another piece of uncertainty we're seeing in washington, politicians not being able to come to a good decision. it reminds me a lot of last year and year before. we had deja vu all over again. artificial stimulus coming from the fed, uncertainty on the other side when you put the two together it create as lot of volatility. that's what we've been seeing in the last month now. >> let me get to don luskin. you're a fed watcher. bernanke couldn't have been clearer the last 48 hours it's been easy money, easy money, easy money and i'm saying easy money with some profits is very good for the stock market.
>> look, go back to september 15th or september 13th when the latest qe round was announced. the stock market is less than 2% higher today than it was then. so what's he going to have to do, buy 185 billion a month to make any difference? honestly we're so deep down the diminishing returns curve as far as fed action is concerned it doesn't matter. you want to look at great central bank policy look to japan. there's a country that's been in deflation for 15 years. they are bringing in a new central bank governor, a new deputy governor. you got to love this deputy governor. talk about rules based monetary policy. he wants to set inflation targets and have a law that the govern of the bank of japan will lose his job if they don't hit the targets. that's accountability. when you start with 15 years of deflation and start inflating that's a huge bull market.
>> the boj liquidity will help the fed. i think it's already helped the fed by stopping deflation. let me just ask you, go back to abigail. abigail, if you and pending home sales. new and pending home sales and for that matter housing starts have done pretty darn well. consumer confidence is up substantially and today for core capital goods business investment very strong number. i mean is this economy, if washington doesn't screw it up, actually in better shape than folks think? that may be why all these cyclicals, the growers are growing. it would be bold to say the economy is in better shape than most think. gdp is scuffling along the bottom, the employment situation remains mediocre, velocity of money, all this liquidity pumped into the system isn't moving through. so i think we actually have an economy that's closer to potentially moving into a recession. let's not forget japan that you were just talking about has been
in a recession for three quarters now. the eurozone has been in a recession -- >> you sound like dick morris. dick morris you found an ally here. you found a tremendous ally here. >> i want to point out about the fed liquidity program. the fed is the only place that the u.s. government can sell its bonds. the entire -- >> they don't sell directly. >> what's happening is the fed is printing it, buying these mortgage backed securities, giving them to banks and bore roger it back at 3.5. federal deficit is around 700 or 800 billion right now. does the number 85 billion a month sound familiar? it's basically they are printing enough to lend them to the federal government. >> don luskin that sounds like a latin style central bank policy. do you agree with mr. morris? >> yeah. i kind of do to be honest with you. the fed unfortunately has
started using fiscal instruments to carry out monetary policy. it's lost its independence. it's going to be v-very difficult for the fed to get out of this. they have to find somebody to buy these products. >> up don't think there's any upside to stocks? i beg to differ. i think profits are good. fed easy money not my favorite thing in the long run. what about budget cuts don luskin. >> i am for budget cuts but please forgive me for pointing out this contradiction you can't out of one side of your mouth and not say this isn't budget cuts and say the stock market is going up because they are budget cuts. >> they are smaller growth rates. you're right. i made the same point myself. got to get out of here. now big layoffs and i mean big layoffs are coming at one top wall street bank. we got that story and we'll tell you why my name came up on the u.s. senate floor. oh, my gosh. that's next and we check headlines right after this.
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snack cake brands which includes twinkies. there's one bid for 410 million. jpmorgan cutting jobs by the end the year coming from the mortgage banking unit. with fewer borrowers falling behind on their mortgages the bank doesn't need as many employees to help in that department. and you got a shout out from senator jeff sessions. he was discussing the nomination of jack lew as treasury secretary. >> he only got that bonus if he was going to the federal government, kind of crony capitalism that larry kudlow has raised questions about. mr. kudlow's vision is why did citigroup allow him to have a bonus when he departed the bank, when he led one of the worst divisions in the history of any banking department, any bank ever? >> i bet mr. session would have
preferred to be nominating you. however an hour ago lew was confirmed by the full senate. that wasn't the only mention you got. business insider naming you one of the best dressed in the business of business news journalism. they think your french cuffed shirts and pin stripe suits are sharp. they love your glasses and pocket square and american flag lapel pin that you wear as well. several other of our colleagues also making the list, courtney regan, andrew ross sorkin, sue herrera. >> i'm in good company. i appreciate it. bertha coombs thanks for helping out. our panel will be back and we have a comment on a bunch of things. up next one of the most talked about political decision out there. this is a move not to invite
chris christie to the big cpac conference. we'll talk to the man who runs cpac and ask him why because i think that's huge mistake. that's up next. i'm with christie on this one. [ kitt ] you know what's impressive? a talking car. but i'll tell you what impresses me. a talking train. this ge locomotive can tell you exactly where it is, what it's carrying, while using less fuel. delivering whatever the world needs, when it needs it. ♪ after all, what's the point of talking if you don't have something important to say? ♪
welcome back to "the kudlow report." i'm larry kudlow. in this half hour everybody believes the budget cut sequester will go into effect friday. the question is will it just be a 30 day sequester and will the military budget be completely restored? those are real possibilities and we'll try to explain and debate. online gambling about to come to new jersey but will it save the casino business in atlantic city. this is courtesy of chris christie. we're going to clicks to find out. first up many are still down right stunned by the news that new jersey governor chris christie will be left off the list of this year's speakers at the cpac conservative conference. i believe it's a mistake too. but now let's take this question straight to the man who apparently made the decision. joining us now, chairman of american conservative union which sponsors cpac. our panel is still with us.
al, thank you for coming on. by the way i love cpac. i've spoken there. i got invite this to speak at the thursday night dinner. it's not about that. christie, budget cutter, tax cutter, went after the union, school choice, pro life how can you guys leave him off the list? >> remember this real quick we're a conservative conference not a republican party meeting. number two, we receive hundreds of requests for main ballroom speaking slots and we have maybe 30 for the whole three day conference. then lastly we judge people on two ways. one is how relevant were you during the past year and two did you adhere to conservative principles. not republican principles. chris christie spoke last year, as a matter of fact he was a keynote speaker because he did great for all the reasons you stated. this past year, you know, he advocated the $60 billion, you
know, pork fund. it included only $9 billion for the disaster relief program. he really put a lot of pressure on the leadership of the party at a time that we were advocating fiscal restraint in the midst of a fiscal cliff. >> i won't defend everything chris christie says. i won't do that. regarding this money for the hurricane, which was just a total calamity, any president in his or her right mind would have done the same thing. it came at an awkward time on the eve of the election. may have ended up hurting mitt romney i get that. i just read chris christie's budget speech. his budget will be where it was in 2008. and he's coming straight back with 10% across the board tax cuts. and he broke the teachers union and he repaired the health care problem. this is a guy -- you got to reach out, al. that's what i'm saying. conservatives have to reach out and be more inclusive and a guy like christie, this guy is just
the kind of material you want. >> well, look, larry, for all the reasons you stated we invited him last year. this year we felt other people were more deserving for one of those 30 seats. maybe he'll be the most deserving next year and we'll invite him accordingly. imagine the problems we would have if every single slot we filled had to go through this kind of query. we do the best we can. we have more people paying and registering to come this year than we ever had. they love the conference and the panels and the speakers we have. talk about the future, the whole theme of this year is about the next generation. >> i'm going to give my slot. i give my slot. dick morris has a question. >> chris christie's speech yesterday, his state of the state speech was a betrayal of the republican party and of the conservative cause. cpac made its decision before that horrific speech was given.
>> utilizes it a betrayal. >> he announced he would play in the obama medicaid expansion. as you know the roberts court gave the states the opportunity of opting out. >> a lot of states are. >> not a lot. only three right now. >> chris christie knows that he's got to be a moderate. >> let me explain. >> hang on. i don't want you to be left out. give me your take on this christie cpac business. >> the republican party are at a crossroads. they tried this big tent experiment and it's backfired. what they are trying to do is find out who will be consistent with the principles of the party. the principles of lincoln, the principles of reagan. we haven't seen that. chris christie is all over the map and not dependable many conservatives are feeling right now to the conservative cause. so i'm glad to hear that al and cpac are starting to say let's see who is really conservative
and consistent with those principles. >> i just got to tell you this medicaid thing. i know there are very high risks but in a big blue state like new jersey -- >> that's not true. if you're going to do it then be honest. don't say you're doing it for the poor because that's the last thing they need. >> they are doing it for all the citizens of new jersey. he's not getting in activitied to this thing is the best thing to ever happen to christie because he's a moderate governor. he's a republican but he's governing as a moderate in a very moderate state, in a state that votes democratic -- >> i want to come back to this point. >> all right. >> he can stay in new jersey. >> it may not be perfect. i agree. the conservative scoreboard for chris christie may not be perfect. i get that. wasn't perfect for my former boss ronald reagan. you got a guy who has fought for lower spending and lower taxes, fought the unions, fought for school choice and is against
obama care. to me as a conservative, as a reagan conservative, al, you got to reach out. you got to be as inclusive as possible. he may do things in jersey that you don't want him to do. but if the conservatives and the republicans expect to take ever again a state like california or a state like new jersey or a state like new york you're going to have to give some allowances. >> larry, look ronald reagan was not about pastel colors. we've been losing elections because we're a pastel color. we're defining conservatism. we think it's a winning formula for america. we'll have leaders 30 some years old coming to hear for the first time. people who are speakers of the house in oklahoma florida and say this is your future. leaders already national leaders in their 40s. bobby jindal, marco jourks rand
paul. we got a great bench. >> i'm making a mistake not coming. >> he's coming. >> come on, larry, you got to come. you're the best dressed guy in tv. >> i'll try like hell. i love cpac. i don't agree with you on this. >> we love you so come. >> just take a vote up or down should christie speak at cpac. >> no. >> dick morris. >> he's lucky he wasn't invited so i would say he should not speak. the influence of cpac -- >> exactly. when he just voted to double the size in new jersey. half of obama care is medicaid, half of it -- >> romney didn't make any other mistake. but romney care and next thing you know he had to say i'm against obama care. >>ing thank you. thank you very much.
see you in washington. now the budget cutting sequester -- boy did i get slammed. the budget cutting sequester is coming. is it just going to be a 30 day wonder? will the military be completely exempt. will even the domestic cuts be completely watered down? this worries me a lot on conservative principles of lower spending and limited governments. stay with us, i'm larry kudlow. clients are always learning more
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the sonata turbo. from hyundai. a lot of rumors out there that after the threats, dire predictions, political fist fights and unpleasant politics over this budget cutting sequester the whole thing might only last 30 days until the next continuing resolution which is due march 27th. the question is will congress have the guts to stand up and cut spending permanently or not? our panel is richard and dick morris. star park her to go and catch her train. i want to start with you richard. the continuing resolution is what we're referring to that will finance the government through the end of the fiscal cliff year. there are rumors all over the place the sequester levels will be 30 days. the military cuts will be taken away. many domestic cuts will be taken
away. president obama may be completely in charge. what do you think will happen here? >> i think we can't know is the truth. i think that anybody who predicts now what is going to happen 30 days from now, you know, is pretending to know. i think that this debate we're having, this battle, this fiscal gridlock that we got in washington now is going to continue for the next two years. i think it will continue at least until the next congressional elections. i think we'll have the same kind of conversation over and over again. it will take -- it's going to take place in the context of different legislation, different ideas, the continuing resolution we'll see. >> this is a really big thing sfwheem have this debate. >> dick more rirks i'll pause on this to get your take. if the continuing resolution, let's talk about the house, hal rogers, if they forego these budget cuts, military and nonmilitary, i would argue the republican party is just going to split in two and
self-destruct. >> first let me explain what the cre is. the last budget the congress passed was four years ago, three years ago. >> that's correct. >> the senate hasn't pass ad budget in three years. house has senate hasn't. the result is the government operates under a continuing resolution which says spend next year the same amount you spent last year. the question is when the new continuing resolution comes up, will it reflect the lower levels of sequester or not. >> that's the key. >> the real question here is john boehner speaker of the house of the republican majority or will he be in effect a coalition speaker? pelosi's people plus 30 or 40 people boehner loyalists. >> that means in effect they water down the budget cuts. >> yeah. >> substantially. >> if boehner does that he essentially is changing his position from being speaker of the republican majority to kind of a coalition speaker. that's what he was on the fiscal cliff. leapt me finish, richard.
that's what he did on the fiscal cliff. he took the house, the senate version which was a watered down deal. he put it up in the house. he got 40 republicans to vote for it. 170 voted against it. all the democrats voted for it and passed it with democratic votes. if boehner does the same on sequester, he is functionally losing his republican tether. >> it didn't happen the last time and i think some people would say he's trying to govern. he's trying to move the country forward and govern. just because he upsets the crazy right-wing of the republican party doesn't mean there's going to be chaos. >> i want these spending cuts to stay in place. i want spending cuts to stay in place. all they have to do is use this budget cutting sequester and keep that baseline down, keep it down -- >> larry, everybody believes there should be spending cuts. people believe they should be responsible. they should be paired with
revenue. >> i want smaller government. >> i got to go. we got more to do. governor chris christie, now we're back on this but a different subject. he brought online gambling to new jersey. think of it. can that save the casino business in atlantic city? can it save new jersey? will it become a national business as well? well he use it to slash marginal tax rates? we'll ask a gambling gaming expert when we come back. real estate in hong kong, and the optics industry in germany? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 75% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing.
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locked in a fierce fight for gambling dollars after governor chris christie went all in yesterday signing the bill making new jersey the second state to legalize online betting. my question tonight is will online gambling help save atlantic city or the state of new jersey. might even provide revenues for a statewide income tax cut. joining us now on the phone is tom delandcy, president of the borgata hotel casino in atlantic city. our panel is still with us. tom, thank you very much. is this going to save atlantic city? let's start there. they had a rough time. the casino business had a rough time. will online gambling save atlantic city? >> larry, i don't know atlantic city needs saving but online gaming is certainly going help. you know, we've lost some 40% of our gross gaming revenue over the last five years in atlantic city primarily to convenience
gaming markets, you know. local casinos in pennsylvania and new york and delaware. so online gaming gives us the opportunity to really lead the way with what is the ultimate in convenience gaming. so we think it's a great opportunity and something that will help out. >> okay. look, i think this is a brave thing by christie myself. one of the big houses they just filed bankruptcy, a couple of gambling casinos were sold for peanuts. you do need something. i want to ask you how will this get that economy moving. in other words do you think people will move to atlantic city in order to go online because that's what the law, the federal law stipulation you can take advantage it but you got to live in that domicile. is that what will happen? >> what will really happen, larry, gaming as you said, you have to be in the state of new jersey in order to place a wagger on new jersey online gaming. but what we'll be able to do is gelt some online gaming activity
from customers who are closer to our borders that have, you know, possibly defected to pennsylvania or new york because those places are closer to them. if we can get those people to join the borgata online gaming community they are basically entering the borgata community. so we can reward them and i think it creates an opportunity for us to grow our brick-and-mortar business and also appeal to a whole new market. >> richard, let me ask you. what's your gut instinct? gaming in general online gaming in particular? is it an economic savior or not. >> christie was against it then for it. you got to try it. >> the federal law was changed last year or a year and a half ago. >> whenever you are trying to make money by being the only one in the country that want does this, or the first one in the
country to do that, you get an immediate shot. but then 50 other people copy you. it reminds me of a great story with bill clinton. he was talking about having a lottery in arkansas. he was against it because people would gamble out of addiction. only a liberal like you would be in favor of taking their money at gunpoint by taxes. >> new jersey is losing business. do you think there will be enough rerenews from this online gaming to help him elsewhere in his budget? >> you know, larry, the estimates that different analysts have relative to what online gaming in new jersey could be are all over the board. we don't know that we have any target that will generate but sure it's going to help. >> we'll see you. thank you very much.
tom balance. gambling addiction is something to think about. >> they add ad provision. >> that's it for the show. we'll debate gambling addiction some place else. i'm larry kudlow. we'll be back tomorrow night. [ male announcer ] i've seen incredible things. otherworldly things. but there are some things i've never seen before.