tv The Kudlow Report CNBC December 3, 2013 7:00pm-8:01pm EST
speculative one, epizyne. no, what you do is buy the one you know and like and don't necessarily go for some sort of long ball. you have the ground game. pick them on the first down and that's what this is about. first downs. there's always a the daily dose of obama care failures and embarrassments keeps rolling on. yet president obama still holds another pep rally today for his ev ever faltering health care law. this time the pep rally had no pep. a new report says about a third of all the obama care enrollees may not be enrolled. that's the reported failure rate on the so-called back end information that is sent to insurance companies. in other words, thousands of the nation's fast food workers are set to strike tomorrow.
they want a $15 minute wage but don't they know that would essentially kill theiras the move to automation moves ahead. which country is the most charitable? it's the good old usa and thanks to free market capitalism. i will explain all those stories and much more coming up on the kudlow report beginning right now. good evening, everyone, i'm larry kudlow. this is "the kudlow report". we're here live 7:00 p.m. eastern, 4:00 p.m. pacific. it's getting harder and harder for grab to put a happy face on obama care. new problems keep popping up every day. maybe that's why the president seemed so subdued at an even if meant to rally the troops.
eamon javers has all the details. >> reporter: good evening. it was billed as a speech beginning a three week push here by the white house between now and the end of the year to get people to sign up for obama care. they need to hit that beginning of the year deadline in 2014 to get a critical mass of people on the obama care website. the president today giving a speech inside the white house complex where he made the case again that the white house has hit its deadline for fixing the obama care website and now safe for people to sign up. take a listen. >> this law is working and will work into the future. people want the financial stability of health insurance and we'll keep on working to fix whatever problems come up, any start up, any launch of a project this big that has an impact on one sixth of our economy, whatever comes up we're just going fix it. >> reporter: meanwhile on capitol hill republicans kept pound being away with their criticism saying that obama care ultimately is more than just
this website. >> the president's health care law continues to wreak havoc on american families, small businesses and our economy. it's not just broken website. this bill is fundamentally flawed. causing people to lose the doctor of their choice, causing them to lose their health plan and if that want isn't enough having to pay much higher prices at the same time. >> reporter: also today, larry, inspector general that oversees the irs says the irs may have some proble some problems implementing the health care in refunds. the treasury said they are aware of the problems and been on top of them. they say they will have it under control and be able to prevent massive fraud inside the irs piece of the affordable care act roll out, larry. >> what's going to happen with
this back end business called, what is it 836 i think it's called, section 836. 834. it connects the websites to the insurance companies. okay. right. you got by some accounts 44,700 people out of a total of about 150,000 people who may get involved in this thing. they may think they are on track to get insurance and not going get any insurance. how will that fix that and how long will it take? >> reporter: this is one of the stunners we heard on capitol hill testimony. they said they hadn't even build the back end of the website where they can take payments and process those people through all the way to the insurance companies themselves. that's something that they are still working on. it's not entirely clear when that's going to be totally finished at this point. i'll tell you it's obviously crucial to getting this affordable care act working and getting those people fully sign
up. what we know is a lot of people have signed up for health care but the deadline for payments wasn't until this month. so it's not clear how many people have gotten all the way through and have actually been able to make those payments. that's a crucial threshold. >> last one, regarding the irs and their record keeping, a lot of people say, you know, you can hack right into it. fire walls are never put up properly and security wasn't done, never tested. one thing for the irs to keep track. but quite a another to have that personal information get out. what are people saying about that? >> reporter: the question here today that's being raised by the inspector general is what happens -- if you're the irs and trying to make these enormous amounts of payments across the country to these individuals who are entitled to tax credits how do you do that to make sure people aren't submitting fraud. do you have an ain't fraud system, what the inspector
general said today they think maybe the system is going need some work and beef up security in order to prevent massive fraud here. whenever money is going out from the federal government in big numbers, they found this out in medicare as well, you have to be very careful about fraud because a lot of people will take advantage. >> eamon javers, thank you very much. now, even while the obama care failures and embarrassments continue to pile up, when will the administration finally admit that it's time to hit the pause problem until all the problems are fixed or maybe the pause button is not set to work until november 2014. that may be closer to truth. here former obama campaign aide, he was briefed by the obama white house on the health care and grace marie turner, she will be testifying tomorrow on obama health care. what's the thrust of your testimony going to be tomorrow? >> the president has said that oh, we don't need to worry about
those 5% of americans, 15 million americans that are losing their health insurance because of individual coverage. he said 85% to 90% of the rest of americans are fine nothing changes for them. what we're talking about is how many changes there are to those in the employer market, 150 million people have coverage through the employer market. and for small businesses and big businesses many of them are going to lose coverage, see much higher premiums, higher deductible, fewer doctors in their network. there are many, many changes to come. as many as 35 million people could lose their health insurance next year who have it through small businesses because small businesses decide they just can't afford it and they are going to pay the penalty instead. >> mark, what were your talking points today to deal with grace marie's 35 million people? some of those estimates run as high as 90 to 100 million people. what are the talk points?
>> listen, larry, i don't have any talking points. i came in to answer your questions directly. i want to address what grace marie said, this anticipation that companies will start getting rid of people's health insurance because they want to pay a penalty. they will go from paying your health insurance and not having a penalty wielded to paying a penalty and gets rid of your health insurance because of obama care. i don't know what the competitive interest in doing that exists. it seems far fetched to me and far fetched to most of the people who have been supporting health care reform including people who work for insurance companies. i don't have any idea where these numbers are coming from -- >> wait. i want grace marie to answer. i thought this was economics, dollars and cents. >> absolutely. >> the premiums will go up. companies don't feel like being in that business and cheaper for them to pay the fine and let people go on the exchanges many of whom will end up on the
medicare exchange. isn't it a sense of dollars and cents? >> shareholders are looking at this and looking at a company that has health costs of $11,000 for one of their employees and they can pay a $2,000 fine instead? of course. their employees will still get health insurance. >> they can get rid of their health insurance right now without paying a fine but they don't do it because they want to stay competitive. >> there's no place for them to go. >> this top notch health insurance. if they do shed these people guess what, there's high quality health insurance. they will have health insurance for those times in between jobs as well. >> that is absolutely what we need, individual ownership of health insurance that's are affordable from job to fob and
that people decide what coverage they want instead of being told what coverage they have to have much more expensive than most can afford. 95% of the policies. >> the exchanges are based on choice. >> there's four different choices of the same thing. >> this is private. grace marie you get your funding from the pharma companies. >> stop that. >> look, when you -- >> independent. >> obama care exchanges you're buying for the most part private insurance that's provided by private companies. >> private insurance that's being -- >> competing for your dollars. >> dictated by washington. >> the pharmas may not be doing that well. insurance companies may not be doing that well. but mark, i'm going to make a concession. i'll saw question. to me, it's utterly embarrassing for the president not to have put together the right technical website operation. i'm going to put aside i think it's a lousy product.
you know that. i oppose obama care. but i want to go back to this whole technical issue of the screw up around the website. question number one, mr. deinz has come in as the savior and putting this back together in some shape or form. why didn't they go to a guy like zients to quarterback this operation in the first place because, as i'm sure you would agree, the political catastrophic downfall of obama because of this website has been just completely off the charts. if they had done this right with a quarterback, you know, zients is a talented guy. why didn't they start there? >> you got me, larry. i agree with you completely that the past two months -- my job has been much more difficult because there that's been significant political fallout from fact that this website has been a mess.
that the launch has been riddled with and made all our jobs much more difficult on the side of people who support obama care. no question whatsoever. i think what we see now, those is the president has taken ownership of this. he fixed the problem. you called it a pep rally before. seems much more a pragmatic speech he was giving on how he was going to fix the individual problems. now what you see the white house wanting to talk about obama care every day until december 23rd. i have a suspicion you'll start seeing republicans trying to change the topic, change the subject because the president finally realizes that once americans see the product, once they go to the website which is quite beautiful if you go the site, they are going to realize that these options -- >> they fixed the front door of this site. the site is not able to give reliable information to the insurance companies that people who are desperate for coverage are signing up for. >> thousands of people are signing up every day. >> were they getting health
insurance? i don't think so. until they pay that premium they are not going get their coverage until their identity is verified. we're about to hit the wall with millions of people who are desperate because they lost their coverage, they cannot get it through this website, they can't get it because this website doesn't work and they have admitted they have focused on front door not the back door. >> you both are terrific. the back door stuff, i think grace marie is right but mark you may be right too. it may be getting fixed. i'll leave that open. because i'm impressed what i hear and read from this guy zients. they need somebody's 9-year-old nephew to do this in the first place. now they got a real adoult run it. i'll say this to you, mark. your next challenge, i know you're in favor of that. i get that. your next challenge is grace marie's very important point that once the employer related pink slips come out and the
cancelations come out both large and small that's going your next challenge. not just for the health care system, not just for the health of the participants but for the whole bloody election in november 2014. that's where we're going. >> if that happens. that's the big if. if companies, major companies that have been bearing the cost of health insurance at their volition since, you know, world war i, decide that this is somehow in their interest to start kicking offer their employees -- >> world war ii. >> exactly. world war ii, start kicking off their employees because they want to cut savings, they are going realize if they are working for a newspaper, their staff -- >> larry, i have to say, identify talked to small business owners who say that just paying the fine will more than soak up their profit margin opinion they will have to close their doors, lay everybody off. they are cutting back hours. paying the fine is way too much
for them. they can't possibly afford this. >> i have to get out. very good discussion. i think the real winner is this guy zients. i think if obama had him around whatever three, four, six, 12, i don't know 36 months ago he would have been in better shape today than so. mark, grace, appreciate it. folks, car sales are booming. you know they are up to an annual rate of 16.4 million in the month of november nonetheless stocks had a mild selloff again today. my question is suddenly good news bad news regarding the fed? heck, why shouldn't good news just be good news for america. we'll ask our investors and later on, you keep hearing about all the nightmares of obama care, will the courts now begin to step in again? we'll talk to the attorney general of oklahoma who is leading a serious court challenge to the health care law that could affect 36 states and frankly destroy the fiscal
underpinnings of the entire program. as always don't forget free market capitalism is the best path gross peter. free choice and free capitalism would have made this health care story a whole lot better. i'm kudlow. we'll be right back. just by talking to a helmet. it grabbed the patient's record before we even picked him up. it found out the doctor we needed was at st. anne's. wiggle your toes. [ driver ] and it got his okay on treatment from miles away. it even pulled strings with the stoplights. my ambulance talks with smoke alarms and pilots and stadiums. but, of course, it's a good listener too. [ female announcer ] today cisco is connecting the internet of everything. so everything works like never before. a confident retirement.
. welcome back to "the kudlow report". it was a tough day on wall street as markets finished lower the third straight day on losses over concerns over tapering. dow jones industrials average lost 95 points, nasdaq off eight points and s&p 500 dropped by six. gold and silver also understand pressure as the metal settled at five month loss but the same cannot be said for oil as the commodity popped more than 2% in today's trading session topping $96 a barrel. larry, back to you. >> many thanks. let's talk about this whole story go straight to our investors. we have founder and ceo of kkm financial and chief investment officer at nations shares. jeff, let me go to you. gold and silver got whacked again. i know oil went up a little bit. oil has been falling, gold has been falling, silver has been falling. they are all disinflationary
signals. disinflationary as in no inflation. why isn't that a good thing? >> it's not a good thing because i think it all ties into where the stock market is. there's no inflation like you said, larry, but seeing gold sell off, seeing the movement down in oil, we're actually getting prepared, getting focused on the fed. the big number on friday the jobs number that will dictate the path for fed. the fed has had sensational gains. it started over in europe this morning over in germany and france. there's a little bit of nervousness. there's an undercurrent that people maybe it's time to get out. it's been a fantastic ride. >> there's nothing wrong with book and profits. but jeff didn't answer my question. the federal reserve looks at employment and the federal reserve looks at inflation. now i may not like that. okay. i just want a strong $. that's the way i am and enough liquidity.
but, the fed knows that the inflation rate is about zero. okay. and we've all been around. i don't know how many times we could have said that in the last 30, 40 years. why should the market be worried about the fed with an inflation rate that's zero and a little bit of growth? the car sales good. ism is good. the retail thanksgiving story not that great. it's a mixed bag. in other words, i can't stand this idea that people are selling stocks for a couple of days because they think the fed will slow down its bond purchases. i can't stand it. i hate it. i don't think it's true. >> larry, let's look at a couple of different things. first of all they are selling stocks at incredibly high levels. it's tough to say you're unhappy where the stock market is. let's look at gold. the fed -- for gold prices, the taper is what people are afraid of because qe was like jet fuel for gold prices and oil prices to a certain degree.
but gold and silver prices in particular. the fact that gold and silver prices are coming undone a little bit there's nothing wrong with that because they were at high levels only because of the federal reserve. oil is a different story. oil had lower loss lower highs lower consumption, lower demand from china and more supply here. gold is fine. stock market is great. and the fact that oil is coming down is a good story. >> don't forget lower oil prices are a tax cut. they are a tax cut for consumers. they are a tax cut for businesses. that is good for the economy and, therefore, that's good for the stock market. >> agreed, larry, but we had a $4 pop in crude oil. so i think they cut a lot of shorts on hand. it's all about this pipeline, this connection from cushing down to port arthur coming online in january. it caught these shorts on the
run. now we're seeing this movement up. lower prices are better for the consumer but right now it seems like we're going test out and see if we can get back to 100. >> that's going change. that's just technical stuff. that's pipeline stuff. that will change and get straight end out. whether the keystone gets built or not is a different question. look, i don't think -- scott, i don't think this is goldilocks because to me goldilocks was 4% growth and 2% inflation. it is kind of mini, mini goldie lock, 2, 2.5% growth and 0% inflation. in that environment, long run investors which is the only kind of investing makes stones me, hang in there, ignore these blips and stay with it because the situation is not nearly as bad as professionals and others say it is. >> if you're a long term investor in the stock market, larry, absolutely agree with
you. the s&p pe, that is how much you pay for each dollar of earns at not quite 17, we'll call that fairly priced, maybe fully priced but not egregious. bonds are a very different story. i don't know why any long term investor would want to be an owner of u.s. government bonds right now. why? bond yields, ten year yields bottomed out at 2.5%, made this nice rounded bottom in ten year yields and going nowhere but up and i don't think anybody would be a long term investor happy to collect say 2.75 even 3% annually just because you got money invested in ten year government bonds. >> jeff, i acknowledge that when the fed slows down and stops its bond-buying, i acknowledge there will be another rate pop and i acknowledge there will be a stock market correction. i completely get that. whether that process starts, i
would say march some people think earlier. then i'll tell you this, jeff. unless i'm dead wrong about the inflation story that's going to be a great buying opportunity. so the long term ten year goes to four. 4.5%. you look at that historically that's a great number. that's a number that could be consistent with 18, 20 times earnings on the stock market which means we have a lot of ways to go on the upside. again, if people are sensible and long term investors. you get the last word. >> agreed, larry. let's look at the velocity of that move in the ten year. the fed is focused on the short end of the curve. when stocks do cool off people get scared. they go the treasury. maybe they are smarter and leaning on to because they will have buyers come back into the treasury, the cool, that
velocity when the stock market -- >> it won't be that big of a deal. very good point. by the way, the percentage of treasuries owned by the fed in a global basis is a lot smaller than people think. the idea if the fed runs long into the market i take exception to it. scientific studies show that. the fed does not control long term interest rate. >> not any more. >> that's all they control. when they start raising the fed funds rate which is going to be, i don't know, not for another 12 to 18 months. let's talk. >> they are trying to control long term rates right now. >> they are flunking. they failed. their forward guidance was backward looking. it's all a lot of nonsense. if the economy is good, profits are rising, inflation is down i say buy stocks. thank you both. we'll do this again soon. talk about the federal government and left wing economics. all rolled into one. i'm talking about detroit. that want city got the legal go ahead to file for bankruptcy
today. government pension, government benefits are going to get slashed as they must. now the unions are already in full outrage mode. we have a live report on that developing story just ahead on kudlow. in a world that's changing faster than ever, we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities
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it's a small scale deal but what main zbool to replace the sequester spending cuts with other less painful savings in the budget. according to politico a compromise deal with set federal government spending at $1 trillion next year. they want to get a deal done by december 13th so congress can go home for the holidays without a potential government shutdown looming. larry. >> you're absolutely right. nobody has an appetite for a shutdown. i do pretty, we'll talk about this another time, i do pretty they will break the budget caps and break the sequester forever. that's my only concern. >> we'll have to see. >> you're dead right about the lack of a shutdown. a judge says detroit can go ahead with its chapter 9 bankruptcy filing. unions, already planning to appeal. nbc news john yang joins us now with all the details. good evening, john. >> reporter: good evening. the bankruptcy judge in detroit said detroit does meet the
eligibility requirements under chapter 9 of the bankruptcy law, mun mall bankruptcy law. he said they can't pay $18 billion worth of long term debt. they are insolvent. he did say interestingly that detroit did not negotiate in good faith with their creditors but said in this case he was going allow the bankruptcy to go forward because that was practically impossible, there were so many creditors about 100,000 that he said negotiate ad settle, out of court settlement was virtually impossible. the other interesting thing is that he said that pension cuts were on the table. that despite the michigan constitution which has a clause protecting pension benefits, the judge said that made them essentially contract rights, that pension rights under the michigan constitution were contract rights and that contract rights are routinely impaired and modified in
bankruptcy so that the pension rights would be, could be modified. now the next step is that the state appointed emergency manager of detroit kevin orr will come up with a proposal, a plan for restructuring that $18 billion worth of debt to present to the bankruptcy court. he says he wants to do it by january. he says he wants to see if he can reach a deal with the unions in that plan but that's hard to see how that's going to happen since the unions are against this agreement, the ruling today. and are appealing. larry? >> john yang thank you very much. we'll watch this carefully as we go along. thanks again. now get ready for a big nationwide protest tomorrow. unions are pushing thousands of fast food workers and other restaurant employees to rally for a $15 per hour minimum wage. well president obama want as $10 wage. currently the thing is only 7.25. hey if raising the minimum wage was that good for the economy i
would say let's go straight to $100 an hour. it doesn't work. we'll have that story and minimum wage debate just ahead on "the kudlow report". [ paper rustles, outdoor sounds ] ♪ [ male announcer ] laura's heart attack didn't come with a warning. today her doctor has her on a bayer aspirin regimen to help reduce the risk of another one. if you've had a heart attack, be sure to talk to your doctor
louder and harder to ignore. but there will be consequences. good evening, again. >> good evening. a huge protest is planned for thursday, fast food workers at restaurants in 100 cities are planning to walk off the job. we've seen this before but this could be the biggest demonstration yet. the organizers want to more than double the federal minimum wage from $7.25 to $15 an hour. what they call a living wage. but they should be careful. many restaurants are testing taking orders on tablet devices at the table. appleby said it will have tablets at every table at every restaurant by the end of next year. could it be the wave of the future and seems like it could happen pretty easily hat a fast food place like mcdonald's. >> thanks very much. i just can't imagine people walking off the job, holiday season, jobs are scarce, wages are scarce. i mean for god's sake.
anyway, i appreciate it. joan let's get straight to this whole question will a higher minimum wage lead to a decline in jobs? here now is cnbc contribute josh carol roth and ben white. okay. obama wants 10 bucks an hour. >> i think it's nine. >> i stand corrected. >> nine, ten, 25. >> 7.25 is the actual wage. these crazies want 15. i ask you before we get to the analysis, politically could there be anything stupider than this? >> into a lot of things stupider than this. there's a wide bipartisan support for an increase. 75% of the country would be fine with some increase not to $15, not to $100. but to keep it up with inflation. if you have minimum wage, if you agree with the idea that a minimum wage should exist should it not keep up with inflation,
it's where it was in 1968. let's give people more purchasing power. will there be some job loss? yes. will it raise people's pay chaex lot? yes. >> that's the keynesian view. more government assistance. i want creates more demand and all live happily ever. i ask this in good faith if it's all that good why stop at 15. let's go to 100. >> not only that why is it the same in new york city that it is in iowa city. there's no distinction here anywhere depending on where you live and not only that, your situation. if you're a kid coming out of college, working for the summer. you're a stay-at-home mom creating a part time business. it's arbitrary and treating everybody the same regardless of the circumstances. my biggest challenge here is i'm a big fan of empowerment over entitlement. these minimum wage jobs are not meant to be life long jobs. you're supposed to get your foot in the door and get skills.
we have a skills gap and a skills issue in this country. so we need to foster having more jobs and we need to foster innovation, people starting businesses. if you increase the minimum wage you put a damper on both of those. you create less opportunities for jobs for people to come in the door. >> lower profits. >> you make it harder for people to start businesses. >> the problem is our country is not that we have too low corporate profits, we have enormously high corporate profits. we do have different minimum wages all across the country. we're talking about setting a floor of which states can go above but not below. >> setting a floor, you're not really -- this isn't about the teenagers. the teenagers live at home. that's what -- >> unfortunately help some of them. >> you're going to help the middle income parents who make upwarp upwards of six figures opinion you're raising the whole wage
base. that's why i say over time it becomes a threat. >> there's no empirical data to suggest database >> there was a study done for american action group. in new york they raised the minimum wage to $15.50 to 6.75 they lost 20% employment. he said in california they are going to lose 200,000 jobs. >> you're forgetting the economic -- >> most academic profession doesn't like the minimum wage. >> that's not true. >> think about who are businesses in this country. talk about walmart and mcdonald's, big businesses, 18,000 of them in this country. 28 million small businesses, 6 million of which have employees and the others we want to encourage them to get that first employee. so while everyone is punishing walmart and mcdonald's you're punishing a few big businesses
at the expense of small business owners. it's harder to hire that first employee or next employee. >> i would tend to agree with the small business angle if i saw any data that they are hurt badly when the minimum wage is increased. there was a study when they increased the minimum wage very little impact on the job. >> that study has been discredited so many times by so many economists. i want to get back to this point. what about productivity. look wages will go up automatically if productivity goes up and profits go up. if capital investment goes up and productivity goes up then there will be more incomes for the families. that's the best and healthiest way for a normal natural market oriented way. these arbitrary -- you don't even know by industry how it will impact, by geography how it will impact. this is the part i don't get.
>> it's an imperfect way. you can talk -- >> i'm for cutting taxes. >> let me finish a thought. >> lower corporate tax rates and wait a second. hear me out. and workers. >> maybe. >> because, remember -- no, no. corporations don't pay tax ben white it's the worker who pace the tax. i want comes out of his or her wage. that's the key points. >> two things to think about that. the idea of expanding earned income tax credit is a good one. all the welfare state send people check for some level makes some sense. >> where you start you say it's an imperfect solution and we need to stop with imperfect slugs. it's not better than no solution. but what is going to -- one of two things happen. a business owner is not required to have an employee and at some point just like happened to
manufacturing you're going to lose your job to at that robot. >> no idea that robots is going replace individuals. >> it happened in manufacturing. >> it won't happen because new crease the minimum wage. >> people with less skills will have a harder time getting into the workforce. >> that's true. i will say this in all seriousness if you drop the corporate tax rate honestly that opens the door for more wages. that's a very important points because i'll say this once again. corporations collect taxes we the people pay the tax. >> why don't we create an incentive. >> i got to get out. corporate tax cut. i'm telling you that's the deal. go $100 an hour. now, what makes america the most generous nation in the world. not the minimum wage.
one reason free market capitalism. we're good people in the u.s. we'll explain why with a new cnbc report on charity just ahead. so you can see like right here i can just... you know, check my policy here, add a car, ah speak to customer service, check on a claim...you know, all with the ah, tap of my geico app. oh, that's so cool. well, i would disagree with you but, ah, that would make me a liar. no dude, you're on the jumbotron! whoa. ah...yeah, pretty much walked into that one. geico anywhere anytime. just a tap away on the geico app.
welcome back to "the kudlow report". the united states is number one on the 2013 world giving index. put out by the nonprofit charities aid foundation. here are the stats. 77% of americans help a stranger, 62% donated money right over here and 45% volunteer their time. here we go. now those are significant improvements helping the u.s. jump from fifth place in last year's survey and today, larry, is giving tuesday after black friday and cyber monday charities came up with this one to encourage information giveaway their money, not just spend it. >> all right. one more point. i wasn't sure where you were going with that one. i love this stuff. i think it's great. by the way going from fifth to first is terrific. being fifth is terrific. our free market capitalist system creates the resource be generous and charitable.
need i remind his holiness pope francis charity is a gospel value and that puts free market capitalism on the right side of the lord. i say this with great respect. you got to have capitalism to have the resources to donate the time and money that makes us number one in charity and the other great countries that are all in the top group as well. i think it's a wonderful thing and i think it's the best system there is. i'm sorry we don't have more time. thank you very much. >> i got to say with all the focus how wealthy americans spend money it's great to know they are donating time and money. >> fabulous. the time and the money and helping folks just go out and helping folks is great stuff. now a wave of new court challenges to obama care is coming and the one from oklahoma may stop tax penalties and subsidies in the 36 states that did not create their own health care exchanges. the state attorney general of oklahoma is going to join us next and tell us all about it.
i'm larry kudlow. it found out the doctor we needed was at st. anne's. wiggle your toes. [ driver ] and it got his okay on treatment from miles away. it even pulled strings with the stoplights. my ambulance talks with smoke alarms and pilots and stadiums. but, of course, it's a good listener too. [ female announcer ] today cisco is connecting the internet of everything. so everything works like never before.
democrats say it's law and told republicans to get over it but is that really the case? legal challenges to obama care persist. next year the supreme court will take up a challenge to the law's birth control mandate. perhaps an even bigger deal an oklahoma lawsuit challenging the laws insurance subsidies which are essential to make obama care's plans affordable in the first place. let's go to oklahoma attorney
general scott pruitt who is leading the charge. thank you for coming on. you base your argument from your op-ed piece you're basically saying look the only way you can have these tax penalties and subsidys is for the states to run the exchanges. but if they don't then the federal government can't interfere, is that true? >> that's the case. congress was very clear from the beginning they wanted states to be involved and they wanted to incentivize that saying these carrots would flow through state exchanges. 34 states said no. irs said we'll fix that and adopt ad rule and say whether a state adopt as change or not they will issue subsidies in all 50 states and corresponding penalties. the law doesn't say that. our lawsuit is about giving meaning to the statute. congress knew they could not require the states to set up the
exchanges. they had to provide this carrot. because of this miscalculation by the administration on the number of states that would participate they now come in to the administrative to fix it. >> you're saying section 1311 of the affordable care act and you also say by the way that could be worth up to $700 billion which is a big number and would cripple the whole operation. basically, basically, you're saying that the courts should step in and enough of this regulatory, you know, what the administration does they changed deadlines one, they change rules one, it's high time we had some legal order restored. >> yes, absolutely correct. you have an attitude twin administration that says what's the difference whether it's a federal or state exchange. the difference is the statute says there's a distinction. the reason the distinction is there because they knew they could not require the state to set the exchanges.
they sneneeded the incentivize states. you have other agencies, epa and environmental context, hhs with other portions this attitude amongst administrative agencies they should improve upon the law is inconsistent with the structure of our government. >> that's amazing to me. let's just take some of these mandatory deadlines that have been waived. congress didn't vote on them. the courts didn't rule on them. nobody did anything. administration just said yeah okay we'll go from thus and such to thus and such. your point i think is a larger point. you tell me, you're the attorney general. judicially speaking, your point is codified, you can't change what's codified. >> that's right. great civics to your point. if the law needs to change, congress needs to do it. administrative agency exists to administer law not to change it, not nod guy it, not to improve
upon it but to administer it as congress has passed it. administration in many instances has taken unilateral steps, the removal of the employer mandate to delays as you indicated. the removal of cap of out of pocket expenditures. it's estimated that there's five instances that the president unilaterally changed through. that's not our system of government. this lawsuit is about giving meaning and effect to what congress passed in dealing with the irs ignoring that. >> just one other thought here. this is not strictly speaking legal this is politically legal. do you think the courts will overturn -- let's say they go with you. let's say they stay with you and say you are correct, attorney general for state of oklahoma, that would really cripple the financial part of the whole obama care act and could in effect as you write in your op-ed take the act down just for financial reasons. now that would overthrow the
roberts court basically that ruled that this thing was right and it was a tax hike. do you think the lower courts would dare do that at this point in time, let's say before an election or let's say before anything else changes? knowing full well if you win the entire affordable care act may go down. >> i think that judges recognize the rule of law matters. and that our system of government works. the checks and balances only work when congress is the entity that's legislating. to give meaning to that is very important. i encourage where we are in oklahoma, there are other states, state of indiana has fold our lead. private lawsuit in d.c. others are following this. and actually implementing their own laws or starting their own lawsuits. so this is something that's very important to the structure of the aca but the rule of law as well and i'm hopeful the courts will recognize that. >> you're kind of in lay terms, you're saying let's put our foot down. enough of this administrative discretionary stuff. the law is the law and we'll aed
by -- abide by the law. >> that's right. we'll leave it there. oklahoma attorney general scott pruitt. thank you, sir. appreciate your point of view. that's it for tonight's show. we'll see how these and other court decisions out there and we'll try to follow all of them. i'm larry kudlow and we'll be back tomorrow evening with another episode of the kudlow report. [ male announcer ] this december, experience the gift of true artistry and some of the best offers of the year at the lexus december to remember sales event. this is the pursuit of perfection. if every u.s. home replaced one light bulb with a compact fluorescent bulb, the energy saved could light how many homes? 1 million? 2 million? 3 million? the answer is... 3 million homes. by 2030, investments in energy efficiency could help americans save $300 billion each year.
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>> narrator: in this episode of "american greed"... a pharmaceutical giant is accused of putting profits over patients. pfizer pharmaceuticals goes beyond fda limits and pushes a pain pill called bextra to the masses. >> this was about putting bottom line above the patients' lives, and that's wrong. >> narrator: the illegal marketing has already cost some the ultimate price. [ monitor beeping ] and later, in southern california, jeanetta standefor convinces 600 investors their cash is rescuing homeowners from foreclosure. >> it felt like everyone was going to win. >> narrator: the would-be marketing mogul relies on