with the speculation. i always like to say there is a bull market somewhere. i promise to try to find it for you right here on "mad money." i'm jim cramer. see you tomorrow! hey larry, what are you looking at tonight? >> hey jimmy, for mitt, it's michigan or bust. good evening, everyone. i'm larry kudlow. this is "the kudlow report." sizzle story number one, make or break in michigan. polls show it's too close to call, but mitt romney needs a w, as in a big win in tomorrow's primary. if he gets an l, all hell could break loose in this race. and sizzle story number two, koran rage in afghanistan. should the united states get out faster? and then is putt tin's power crumbling in russia? they're demonstrating. they're trying to assassinate him. and he is holding a phony election next week. distinguished four-star general barry mccaffrey will guide us through the flash points. and finally, transcanada will build a major part of the

keystone. transcan joins us for a first ever interview on cnbc. first up, it's a standoff in michigan. the latest numbers from rasmussen are right in the margin. romney, 38. santorum, 36. it looks like rick santorum's culture war versus mitt romney's tax and economic program. so who is going to walk away with the win in this very critical republican primary? here now for all the latest in the gop race, we bring in cnbc contributor robert costa of the national review. bob costa, is santorum overstepping on his culture war, religious war in the final, literally, 48 hours of this primary? >> santorum had a great economic op-ed in today's "wall street journal." but you're not hearing a lot about it on the campaign trail. instead you hear the culture wars, his fight against jfk's speech in 1960, contraception. it's not the closing message he needs in michigan. >> is this culture war assault which came over the weekend saturday and sunday, the jfk thing of course, is that aimed

directly at the evangelicals, or is santorum just freelancing? whatever comes into his head? >> it's a mix of both. santorum knows that romney is strong in the detroit area. romney grew up there. santorum is looking to the evangelical voters in the rural and western parts of michigan. but it's also an example of his undisciplined nature. he is very ex-temp rainious on the trail. he is off the cuff and off message. >> and bob costas, finally, is mitt romney selling his economic plan? his 20% tax cut? and i ask you, because the latest rasmussen poll in effect showed an even tighter race. romney looked like he was rising. the poll today says it's not rising. what is going on? is he making the sale? >> he is making an okay sale, not a perfect sale. not enough talk about his 20% cut across the board and personal rates. instead he is a little bit complicated. it's not a crystal clear sale. because santorum is distracted, an imperfect romney is still going to be pretty strong in michigan. >> all right, bob costa, thank

you very much for that update. joining us now, we have mitt romney campaign adviser kevin madden, chris chickcola. brad author and a rick santorum supporter. brad author, thank you for coming on. >> my pleasure. >> welcome to "the kudlow report." >> thank you, larry. >> look, it's so clear that mitt romney is aiming at the evangelicals, i think. i and others were very surprised he decided to bash john f. kennedy. maybe that's good. maybe that's bad. in fact, i think we have a tape of this. hang on one second. >> kennedy, for the first time articulated a vision saying no, faith is not allowed in the public square. i will keep it separate. go on and read the speech. i will have nothing to do with faith. i won't consult with people of faith. you bet that makes you throw up. >> all right. let me ask you, brad. that makes you throw up. now i know you're for santorum. >> yep. >> and i know you're going to defend him. do you believe this is the right

strategy? do you believe this were he should go? >> you know what? larry, you follow rick santorum around all day long, and guess what? you'll catch him talk about religion. family and faith is important to him. but if you follow him all day long, you're also going to hear him talk about economics and what it's going to take to get this company back on its feet. this is a leftish push to paint him as only a social conservative who can only talk on one issue. rick is very conversant in economics. his plan is very well articulated and makes a lot more sense than what we're hearing out of the romney camp. >> does it make a lot more sense, his economic plan posted in today's "wall street journal" as an op-ed? >> his plan is pretty good. what he had in "the wall street journal" today is a pretty bold agenda for economic growth. we think it is pro-growth. i do like that he didn't mention kind of his conception for manufacturers and trying to pick winner and loser. i don't know if he has dropped that provision or not. his plan is very pro-growth and something we can embrace. >> and kevin madden, rick

santorum is blasting your guy, mitt romney, because he says, santorum says that is, that romney is tinkering around the edges. do you think that's the case? >> i don't think that's the case. and i think voters don't believe that. and especially many of the voters in michigan who this week heard governor romney talk about a 20% across the board tax cut. we heard him talk about what he would do in rein in spending, spending that rick santorum was very much involved in over his time as a life-long politician up in congress. and as well as the reforms that are needed to entitlements. so you put all three of those together, and what many of the voters of michigan, as well as voters all across the country are seeing with governor romney is a very strong, bold, pro-growth economic plan. that's why i think that message is resonating. >> but nowhere near as much resonance has you guys thought it was going to. you thought you would spend 30 bucks in 30 minutes in michigan and walk away with it. that hasn't happened, has it? >> i think the campaign we're running in michigan is a good one. i think right now the closest of

the race is indicative of a very competitive of the nature of a campaign that we expected was going to be one that was going to be won over the long haul. so look, campaigns are tough. this is the part of the campaign where you go out there and you find the most persuadable voters and you try to get them to vote for you. we're happy it's a very spirited contest, but it's one we think will eventually result in a nomination of governor romney. >> before we bring in our special guest, i want to go back to chris chocola. their tax rates are very similar, 28%, 25 versus 17.5 on corporations. okay, santorum is significantly lower. the manufacturing zero tax rate, though, is opposed by almost every economist i know. what caught my eye, chris. let me ask you from your standpoint for the club for growth, free markets, santorum says he is going to cut $5 trillion out of the budget in the next five year. romney says he is going to cut

$500 billion. $5 trillion in five years, chris do you believe that? i was the former deputy in the office of management and budget under reagan. i know a little something about that numbers. i find that number to be incredulous, $5 trillion in five years. i think somebody just pasted that into the piece. >> well, larry, i think if you don't state it, you're not going to do it. i think it's a great intent, and i think he ought to try. i think that we have way too much government. we have way too much spending. >> but no specific. you were a house member. no specifics. in fact, he had no specifics on entitlements. in other words, i like the goal of slamming down government, okay. and rick santorum's got some troubles on that, having voted for no child left behind, and having voted for medicare drugs part d. but chris, i don't see how you get $5 trillion in five years. i had lunch with a prominent u.s. senator today. he just giggled over that. >> larry, you know what? both of these candidates are going to have to exceed our expectations to live up to the promise that they offer and they promise. so i think that bigger is better. if you say you're going to do

more and underperform a little bit, it's better than making a small promise. and i think the problem with mitt romney's plan is also pretty good, his economic plan. but the way he presents is almost apologetic. i think we need candidates who provide bold solutions. and i don't know if rick santorum can get $5 trillion. but it's worth a try. >> all right. brad author, i'll give you equal time on that before we go to our special guests. if you can do $5 trillion in five years, i'll all for it. i just don't see how the numbers work. i'd love to see it. i don't know if he is talking entitlements, nonentitlements, you certainly couldn't take $5 trillion out of the nondiscretionary defense. >> larry, if i'm a doctor and somebody comes in and they are morbidly obese, i want them to drop 200 pounds, not 5. let's shoot for that, make our plan for that. >> you know, brad author, i really like your spirit a lot. you're terrific. all right. thank you, general. kevin madden, chris chocola and

brad author. i want to go to a special guest, dave charney, a political director under george h.w. bush and is also involved in rick perry's campaign. welcome to "the kudlow report." you're really a truly objective observer right now the best i can tell. number one, let me ask you. has mitt romney made the sale on his 20% tax cut and his economic plan overall? >> i don't think so. i don't think the voters sitting home watching tv or reading the newspaper would actually be able to tell you much details of governor romney's economic plan other than his business experience, which he does talk a lot about. i don't think the economic details are getting through in the campaign. >> is that why in the days since he has put it out, okay, i mean he gave a speech on friday. he mentioned the debate on wednesday. he had all weekend. is that why his numbers have slumped a little bit, do you think? because people were let down? >> well, they certainly built the expectations up for the ford field speech. and all of the news that normal

people, activists saw, voters saw was empty seats and the talk about empty seats. and the process stuff, which the media loves to talk about. there was no comment on, really, on his economic speech other than increase in age for eligibility for medicare one month a year once he gets into office. the details were leaked in arizona on wednesday to try to compete with the president's own economic plan that he released on wednesday. and the voters are still -- i don't think they understand what his plan is. >>day, let me ask you, has rick santorum crossed the lane on the culture wars and the religious wars in particular, saying he is going to throw up over the john f. kennedy separation of church and state, and secondly, calling obama a snob. and sort of coming out against four-year educations, which surprised me. i mean, the unemployment rate for people who graduated from college is 4%. that's half of the overall unemployment rate. dave, in this and other areas, is rick santorum gone too far on the social issues? >> well, time will tell if

that's going to hurt him in the general election or not. he needs to win the primary first. he needs to win michigan or in super tuesday, some of the big states. that's their separate. >> they're going with, and the media is pushing him in those directions. he didn't bring up the jfk speech this weekend, the media brought it up, trying to get him to get off message. he does get off message extremely easily. the last time he mentioned his manufacturer discount on taxes, which as you say economists dent like, people working for manufacturers, it sure sounds nice to them. but you don't hear that you don't hear it in the media. you don't hear any of the information about any details of his plan. and quite frankly, there is not a lot of republican primary voters reading the "wall street journal" this morning. >> so let me ask you. santorum is trying to reach out to blue collar workers who are socially conservative, okay. and he has been a pretty hard line message on the social conservatism. but he has kept up the drumbeat. putting the details of the economic plan aside, dave carney, do you think santorum is

succeeding? in other words, he has a strategy, maybe it can work do. you think he can win tomorrow night? do you his his strategy is working? >> his strategy is working so far. we'll know tomorrow whether paid phone calms, the romney campaign is doing to turn out the voters or passionate home-based phone calls that the santorum troops are making today and tomorrow, which works. but clearly that populism, that authenticity that he has, that grittiness that he brings to the campaign trial, from his experiences in pittsburgh and pennsylvania, being able to talk to people who aren't hard-core republicans, that's his advantage. in michigan there is a unique mix of people trying to get people to turn out tomorrow to vote for santorum. he is doing the same thing, appealing to reagan democrats to come over and support him. and those people are not in any of the polls. it will be very interesting whether this ploy to bring democrats into the primary to vote for santorum gets him close to be a moral victory or actually puts him across the top. >> i think that's all well put. quickly, if you would, if mitt

loses tomorrow night, and i don't care if he loses by 1 point, 1/10 of a point, if he comes away with an l, not a w, the entire race rescrambled? and is the entire republican party rescrambled? >> well, it will be a gigantic, gigantic tactical nuclear weapon that santorum would have unleashed. it's not fatal because governor romney has massive resources that he can put into his campaign. in '08 he put a lot of his personal resources into the campaign. that's what he is going to need. i think funders and people who have been supporting him, particularly up and down the d.c. washington corridor will be very scared, and they'll be looking, trying to find a white knight somewhere to come to the rescue. >> that's it, a white knight. dave carney, thanks very much for your inputs. totally objective on your analysis because right now you don't have any skin in the game. >> appreciate it. >> coming up, folks, markets rallied today on better than expected housing data, the best in two years.

me, i continue to believe the melt-up will continue after this little consolidation phase comes to an end. and don't forget, folks. free market capitalism is the best path to prosperity. i think the republican candidates agree on more than they disagree. we're "the kudlow report." we'll be right back. americans believe they should be in charge of their own future. how they'll live tomorrow. for more than 116 years, ameriprise financial has worked for their clients' futures. helping millions of americans retire on their terms. when they want. where they want. doing what they want. ameriprise. the strength of a leader in retirement planning. the heart of 10,000 advisors working with you one-to-one. together for your future. ♪

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all right. let's do some stock market work. markets finished flat today, but the s&p 500 logged its best close since june '08. strong 2% read on january pending home sales. wow, best in a couple of years. continues to point to better than expected economic growth. let's talk. michael farr, president of farr, miller and washington, and "fast money" money contributor bryan kehly, the co-founder of shelter harbor capital. bryan kehly, bk, i love these pending home sales number. i think the whole housing sector has bottomed and is slowly improving. i like the fact that loews home improvement stock went up today. i like a lot of facts. you tell me. you tell me. we're going to melt up some more after this consolidation. >> the facts are excellent, particularly the housing. that has been the one thing that has held this economy back.

if you can get at least a stabilization in housing and maybe even we get some kind of uptick in housing, that is fantastic. look at what the banks did today. all the major banks did very well. look at sherwin williams, shw. that had a stellar day. that is all telling me that this is a real rally. the economy is better than i thought it was even three or four months ago. and if you can get any type of economic improvement, the bank stocks are really going to fly here. >> michael farr, i want to go to you on this. the european central bank is going to announce another big emergency loan liquidity injection, what, wednesday or thursday of this week. usa seeing i loans growing at better than 10%. the money is rising. the jobless claims are falling. the housing sector is improving. i'm looking at melt-up here. there may be consolidation, but there is going to be a melt-up after the consolidation. this is going to surprise everybody. >> yeeha! let's get the cowboy hats waving

in the air. i mean, let the party start. i mean, yeah, every time we've seen a shot of government money, we've seen markets go higher. we were really seeing markets fall after we had the end of qe2 in june. fell 14%. they come out with operation twist, it goes up. the europeans throw more government money at it, the thing goes up. i think it's good that the housing markets are clearing. i think that is beginning to happen. i don't think those price have quite bottomed yet. but yeah, there are encouraging signs here. if you're betting against the fed or any central bank anywhere, you're on the wrong side of this trade. >> by the way, i want to add to this little party, bk, the dallas federal reserve's manufacturing report beat expectations. manufacturing, despite what rick santorum may say, manufacturing is one of the strongest, maybe the strongest sector in this rebound. so bk, if i have 3% economic growth, 8 to 10% earnings, is that in the market, or is the market going to discount that into higher prices?

>> you know, i don't think that's quite in the market yet. i think there is still quite a bit of pessimism out there. and there is plenty of things to be worried about. now i agree with michael when he was saying that when you have every central bank out there easing, but the one wild card here that you can really throw a wrench in it is the european central bank. they came out today and said that they are no longer going to be buying bonds in europe, that they don't need it anymore. that's the type of think where you pull that liquidity away, just like michael said we saw in june here, that could really cause -- >> wait a minute, they don't have to, because the bond rates have stabilized and fallen. >> they stabilized because they're in the market. now they're going to do the ltr. >> cheap rates, unlimited, they don't care about collateral that so-so totally bullish. >> wait, wait, but, but -- >> investors -- >> what i'm saying is you have to be worried that people have been front-running the ec. so that trade is over. you pump enough money into any economy, and asset prices will

go higher. >> michael farr? forget about it. stop blaming governments. blame the resilient private sector of the united states business corporations who are making money. even small business are doing a wee bit better, according to the small business. get me a stock, michael farr. give me two stocks in the next 16 seconds. >> in the next 16 seconds, i continue to like cisco, the tech company, and i like johnson & johnson. there is a good barbell. but the market is up 20%. be careful jumping in here. this is not the time to get aggressive. >> brian kelly, i need a stock. >> u stocks are on the rise. >> you guys are fantastic. thank you very much. we appreciate it. as always. all right, folks. serious stuff. we have breaking news coming into cnbc. a plane has landed on its belly at newark airport. passenger, fortunately have been evacuated. thank god. you're looking at live pictures coming in from our affiliate, nbc. we're going to get a live report

and then check out all the latest headlines next. i'm kudlow. please stay with us. thank god this thing is going to be okay. i love that my daughter's part fish. but when she got asthma, all i could do was worry ! specialists, lots of doctors, lots of advice... and my hands were full. i couldn't sort through it all. with unitedhealthcare, it's different. we have access to great specialists, and our pediatrician gets all the information. everyone works as a team. and i only need to talk to one person about her care. we're more than 78,000 people looking out for 70 million americans. that's health in numbers.

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shuttle plane from atlanta to newark landed on its belly at newark airport. the nose gear actually collapsed. you're looking at live pictures coming in from wnbc. passengers were evacuated by emergency chutes. again, larry, no injuries reported. almost a year to the day since the japanese nuclear disaster. an investigation now shows officials drew up secret plans to evacuate the city of tokyo just in place. 13 million people live there. shares of the travel website priceline are spiking after hours after the online travel website beat estimates, posting fourth quarter earnings on better than expected revenue. genentech says counterfeit versions are found to have salt, salt and animal feed. they now know how an elevator crushed an advertising executive two months ago. the city says workers doing maintenance on the elevator bypassed the door safety circuit with a jumper wire. shares of micron technology

leveled after its rival filed for bankruptcy protection. it was japan's last maker of dynamic random access memory, or d-ram chips. the bankruptcy puts micron in a stronger position. california is expected to reap $2.5 billion in taxes from the facebook ipo. that's according to the nonpartisan legislative analyst office who says most of that money will come from capital gains tax. finally tonight, socialist presidential candidate francois holland says top earns will be taxed 55% if he is elected. critics say it will spark. >> god bless for that. and 75% tax rates in france. oh my god. frankly, i hope the socialist loses. thank you. jonathan dienst. coming up on "kudlow," more bloodshed in afghanistan today. a suicide bomber kills nine people in a military airport.

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welcome back to "the kudlow

report." i'm larry kudlow. at the top of this half hour, koran rage in kabul and elsewhere around the country has cast a long shadow on u.s. policy towards afghanistan. in just a minute, we'll be speaking with distinguished four-star general barry mccaffrey about it all. but first up let's get a live update from the area. joining us from kabul with all the details. first up, can you help us? tell us more about the suicide bombing at the nato military base, please. >> hi there, larry. well, this morning two suicide attackers rammed their vehicle laden with explosives into the gates at a military airport in eastern affidavits. they killed nine afghans and injured four nato service members. that wasn't the only thing that we saw today. what we also heard about was a possible poisoning at a u.s. base also in eastern afghanistan. the military says they're investigating the incident, that

it was a possible food tampering incident. the taliban say they had a chef within this u.s. base deal with the food there and poison the food, trying to injure and kill these american soldiers. >> and let me ask you again, atia. the chef was from taliban. was the suicide bombers alzheimer's or where they al qaeda? have they been identified yet? >> they haven't been identified yet. and we don't know if they were actually members of the taliban or if they were taliban sympathizers. if this has anything to do with the burning of the korans last week, last week at bagram air base just north of kabul. u.s. soldiers accidentally burnt korans and it caused an outrage throughout afghanistan. right now we're seeing many afghans who really didn't care for the taliban before becoming taliban sympathizers. and the taliban are using this to their advantage, sending out statements, telling the afghan people to come to their side to help them attack the westerners and get the westerners out, because they say the westerners do not respect their religion or

their culture. despite apologies, many afghans are beginning to listen to the taliban. larry? >> all right. many thanks to atia abawi. we appreciate it very much. how does all this affect u.s. policy in afghanistan, and is it a turning point for rethinking our strategy in joining us four star general barry mccaffrey. as always, sir, welcome back. how is this going to affect american policy? because obviously, things are happening that no one wants to happen. >> well, it's a very painful situation, obviously. look, we've got two superb leaders on the ground. ambassador ryan crocker is the best we've got in the foreign service. and general allen, a superb field commander, lots of experience in iraq and now afghanistan. they're trying to tamp it down. it is just thousands demonstrating in a country of 30 million. having said that, larry, look. we've had dozens of nato military personnel murdered by afghan police or army in the

last couple, three or four years. i think we're going to have to rethink the strategy. the president, understanding he doesn't have support for the continuation of the war, said we'll be out, combat troops in 2014. secretary panetta said no, we're going to have the combat forces out in 2013. we're going to have 35,000 troops out by this coming christmas, right after the election. it's not clear to me that you can leave thousands of small isolated detachments of americans all over this giant country, 800 miles from the ocean and the u.s. navy. >> all right. let me come back to that in a minute. i just want to ask you this. is almost housekeeping, but it has caused a big controversy on the campaign trail. the president apologizing to afghanistan and its president for the koran burning. this was obviously a gigantic mistake. no one intended to do this. was this a sign of weakness, as some were charging? >> well, i think, look, secretary clinton and panetta and crocker and allen are trying

to tamp this thing down. it's understandable. if i thought it would work, the apology would have been another useful try. i must admit, though, i would prefer to have accentuated that we deplore the actions of some unknown administrative group as opposed to taking on our shoulders apparent responsibility for it, instead of trying to isolate it. i notice when the two americans got murdered in the ministry of the interior, a pentagon spokesperson gave the response that it was unacceptable. so i think we ought to be more cautious about speaking to the mob from the united states. let general allen and crocker sort these things out. we ought to have hands-off the tiller sometimes. >> you know, u.s. forces, these two guys, military advisers in the department of the interior, as i understand it. how do we train and mentor and

advise whether it's in a government ministry building or out in the field when we know that so many of the locals now could be our enemies, might be coming to kill us. how does this play out? it seems like there is a loss of confidence here in the operation. >> well, there ought to be. you know, i was an adviser in vietnam a long time ago as a lieutenant. and a vietnam and we loved and trusted these guys. so this is a very unsettling situation to be out there with three or four dozen americans. to put it in context, though, larry, admittedly, most of these u.s./afghan relationships are pretty solid. our troops actually admire these people. they're survivalists. but again, you've got a situation where the strategy we've articulated is u.s. combat forces out. thousands of advisers and mentors remain. that's not clear to me that this works. look how shallow the penetration is of this society. we've been there for a decade,

and this is the kind of reaction to what was obviously an administrative error. >> but general, let me ask you, it's something that has been on my mind. i'm not the expert, you are, obviously, sir, always. but look, if we left faster, does that make it look like the al qaedas and the taliban and whomever are beating us, are pushing us out, or pulling our chain? in other words, it looks like american weakness. >> i think you're right. i think part of the problem was, the president didn't have an option it seems to me but to an articulate a withdrawal at some point. he picked 2014. the minute he said that, the taliban, the karzai government which is weak and has not controlled the government, the pakistanis, the iranians, said in the very near future, these people are gone. our allies are running for the exit right now. so that's already occurring. i think we're too far down the line now to back out without losing tremendous credibility in

the international community. but the american people, 2/3 of them don't support this effort. it's $10 billion a month. it's 16,000 killed and wounded. and it doesn't look like it's working to the american citizens. >> general mccaffrey, can i switch gears briefly? we're not going to have enough time. we never do. but it looks like vladimir putin's power is crumbling in russia there is reports of assassination attempt, there is growing protests and demonstrations ringing the city of moscow and elsewhere. and a whole lot of people think the election is going to be held in a couple of weeks will be phony as a $3 bill. is putin's power crumbling? >> don't ever bet against a former kgb government. the forms of repression in russia are pretty severe. he still controls the institutions of the state. having said that, pretty encouraging. these russians are brilliant physicists, mathematicians,

ballet, literature. they're remarkable people. they deserve some freedom to apply their creativity. and putin clearly is moving toward reestablishment of a totally authoritarian government. it's a great comment on the russian people that they're finally reacting to this. >> and if this happens, we've learned this in other places, not in russia, but we've learned in other places, although once upon a time we learned it in the old soviet union toward the end. if putin is losing control, if he is losing control of voters, if he is losing control of citizens, if the demonstrations grow, how much trouble is he going to be? how much will the army support him? how much will the military support him? what the chance of major unrest? >> remember, the army did finally support the people, yeltsin, the last time this came to a confrontation. but again, i think putin is a very clever, determined man. those institutions of the state will hang with him for a long time. i wouldn't look for an outbreak

of swiss democracy any time soon in the russian federation. >> all right. as always, sir, thank you for your wisdom, general barry mccaffrey. we appreciate it. programing note for tomorrow night. house majority leader eric cantor will join me live. he has a small business economic growth plan. and coming up tonight, next up on "kudlow," despite the setback for canada-u.s. gas pipeline, transcanada looks like it's making plans to build the lower part from cushing, oklahoma to the gulf coast. they have the right, but will they get the regulatory approval? right here for a first on cnbc interview, right after the break. carfirmation. only hertz gives you a carfirmation. hey. this is challenger. i'll be waiting for you in stall 5.

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and don't stop taking pradaxa without your doctor's approval, as stopping may increase your stroke risk. other side effects include indigestion, stomach pain, upset, or burning. pradaxa is progress. if you have afib not caused by a heart valve problem, ask your doctor if you can reduce your risk of stroke with pradaxa. today is gonna be an important day for us. you ready? we wanna be our brother's keeper. what's number two we wanna do? bring it up to 90 decatherms. how bout ya, joe? let's go ahead and bring it online. attention on site, attention on site. now starting unit nine. some of the world's cleanest gas turbines are now powering some of america's biggest cities. siemens. answers. take the privileged investing tools of wall street and make them simple, intuitive,

and available to all. distill all that data. make information instinctual, visual. introducing trade architect, td ameritrade's empowering web-based trading platform. take control of your portfolio today. trade commission-free for 60 days, and we'll throw in up to $600 when you open an account. despite an obama administration rejection last month, transcanada announced today it plans to begin building part of the keystone pipeline anyway. the company says it will gip the part that running from cushing, oklahoma to refineries on the gulf coast of course i say drill, drill, drill. of course usay pipeline, pipeline, pipeline. let's go to a first on cnbc interview by president and ceo of transcanada, russ girling. russ, welcome back.

as i understand it, let me just focus on the cushing to the gulf coast. you do not require a presidential permit, but you do require regulatory approval. is that true? and what kind of hoops will you have to jump through? >> we don't require a presidential permit, and that's correct. we do require a normal course permits, federal firmtpermits, permits. the environmental review is complete. we have acquired in excess of 9% of the right of way. the project is fully engineered and ready to go. the obtaining of the permits should take the next few months. but we would expect to be under construction by mid year. >> well, i sure hope you're right, because we're rooting for you. i just wonder, who has to approve this? interior in agriculture? epa? any unexpected obstacles that might develop? sometimes this administration speaks with forked tongue.

>> there is a water-air permits and it does require the involvement of several federal agencies. we will start to engage with those agencies in the next few weeks here, and like i said, our hope is that environmental review is done and that it will be able to expeditiously get the permits in hand. >> the white house press carney did give you a positive spin today. you're going to resubmit for presidential review the original pipeline area. and you're going to go up through montana into canada. where does that stand? >> right now we're still analyzing exactly what that reapplication is going to look like. but fundamentally, it will be exactly the same route as we originally applied for, with the exception of a reroute around the sensitive areas of the sandhills in nebraska. and as i said, we'll be able to use the environmental review from that process as well. you know, we've acquired

approximately 90% of the right of way for that route. so i wouldn't expect to see very many changes in that reapplication from the previous application. >> all right. well, we're glad you're going to reapply. let me just ask you. prime minister harper was over in china there was a memorandum of understanding. i actually read it. your consul general in new york city was kind enough to give it to me a couple of weeks ago. if you're still going to build north-south, can you build east-west at the same time? i'm asking you and your company transcanada. does one rule out the other, or can both fly at the same time? >> the oil sands is going to grow by probably 2 to 3 million barrels a day over the coming decade or two. as well we've seen significant growth in the williston basin both in montana and north dakota. that growth and production is going to require a pipeline to the west coast as well as a pipeline south, and potentially even a pipeline east there is

sufficient new growth volumes to fill a number of new pipelines. >> and sufficient export markets, is that correct? >> pardon me? >> i was just kidding, but i was saying sufficient export markets to sell that, what goes through the pipeline. in other words, i'm asking about china. you're about to do business with china. is that true? >> i think the asian market is going to be a primary -- it's a growing demand for crude oil, and obviously a place where, you know, they're very interested in the development of the sands, and investing in the sands and investing in the pipeline infrastructure and other required infrastructure to get there. >> all right. so why are oil prices going up so much, russ? >> i think it's a supply-demand, obviously. as supply is curtailed, as we've seen internationally there is fear of curtailing of supply, whenever you curtail supply, your prices tend to rise. >> so you're producing like crazy up there.

and even the united states is producing. we may not have the right pipeline, but we are producing. the shale production is astronomical. you're producing up in canada. iran hasn't done anything yet. think it's an expectation that the strait of hormuz is going to be blocked? is that the idea? >> i think that's -- obviously there is always threats of those kinds of curtailments. but at the end of the day, if you look out in the longer term, a demand for crude oil is expected to increase quite substantially over the coming decades. not just internationally, but in north america as well. and obviously that's going to have an impact both on short-term and long-term pricing. >> that's what i think. economic growth and demand may be driving this thing. people may not understand it. anyway, congratulations on the cushing to gulf. i hope you get through with all the right regulatory permits. thanks transcanada ceo russ girling. next up on "kudlow," get this. 3/4 of likely voters believe the

nation's top earners should pay lower, not higher. thehill.com poll. the american people has spoken. why isn't our populist president listening? we'll debate, right after this.

according to a brand-new poll out from thehill.com, one of my favorite websites, and it's a straight-shooting down the middle poll, 3/4 of likely voters, 3/4 of likely voters believe the nation's top earners

should pay lower, not higher tax rates. so americans have spoken. but the question is why isn't the white house listening? why do we want to still punish rich people, successful americans who own small businesses? let's bring in our special guests for a wee bit of a discussion. cnbc contributor jared bernstein, former chief economist to vice president joe biden and distinguished senator ron johnson, republican from with wisconsin. mr. johnson, welcome back. >> hello, larry. >> 70% in the poll say 30% or less. that's their tax rate. and president obama, if he has his way, would move the top tax rate on small businesses and successful earners to 44%. now what does the poll know that the white house doesn't? >> actually, they asked the poll question the right way. and i've seen this for years, larry. when you ask the american people how much should government take out of any american's paycheck, it's amazing. a very large majority, 60, 70% of americans come back and say

somewhere around 20%. people are fair. they realize it's just not fair for the government to take more than 20% out of any worker's pay, the fruit of their labor. that explains the poll pretty easily. >> jared bernstein, if you ask the question do you want the rich to pay higher taxes, people say sure. but when you get down to specifics and details, you get this kind of analysis. and the gallup poll and others are saying people want about -- about 60% want fewer government services and lower tax rates. do your friends in the white house, are they about to make a big political mistake? >> i don't think so. first of all, i'm glad the way you teed this up. the poll is a bit of an outliar. you got to compare to it the polls where they ask if the wealthy are paying their fair share and that poll is saying 60 to 70% where people are saying no. people think you should pay 20%. that's an average. actually it's pretty close to the average. but we have a progressive system. and i thought it was interesting

in this poll that they said 30% tax rate on rich people. that's actually the buffett rule. if you look at what a lot of very affluent people are paying, especially if their income can coming from capital, i'm thick mitt romney, warren buffett, you're talking 15%. that's clearly unfair. and i think tilted tax policy, most people would recognize. >> senator johnson, let me just ask you this. jared cites the buffett rule, 30%. nobody this day know what's the buffett rule as tax policy really is. it's never been spelled out. senator johnson, actually, obama policy would raise the top rate to 44. >> 44.8. >> where do you guys get that? >> i'll tell you. >> 39.6, i think. >> 39.6 plus obamacare. >> obamacare, you're exactly right. >> i think we're talking about income. >> larry, it's even worse than that. that's just the federal tax rate. tack on state and local property taxes that type of thing, we're going to be over 50%. and let's face it, larry, when

you're being taxed at 50%, you're only 50% free. and americans intuitively understand that. and again, it's all how you ask the poll question. if you do it the way obama wants it stated, you're ending up with this class warfare. americans, unfortunately side with president obama. but when you ask them how much should people pay, they're far fairer, and they say about 20%. that's all. >> senator, let's get a few facts on the table here. the president is talking about taking the income tax rate from 35% to 39.6. and i take your point about state and local there is nothing he can do about that. >> tack on obamacare, which makes it 44.8. >> okay, that's fair. but let me ask you this. you are a united states senator, and i have great respect for that. you know right now we're collecting 15% of gdp and revenue. and i hope you know that that is far insufficient for the challenges we meet. >> mr. bernstein, that is because -- >> we're, if you want to tax everybody at 20%, where do

you -- first of all, you're going to have massive tax increases on low income people and middle class people. i'm out here in st. louis at the livable lives conference. i'm telling you, there are squeezed people in the middle and the bottom. where are you going to get the revenue you need? >> by growing the economy. that's what president obama simply doesn't understand. listen, we can agree on all kinds of things. i think we can bring on the fact we spend too much money. we agree we need more revenue. but we should increase revenue the old-fashioned way, by growing our economy. and anybody who thinks it's smart to increase taxes on anybody should ask themselves a very simple question. how much will that tax increase grow our economy? how many jobs will that tax increase create. >> okay. >> and the fact of the matter is tax increases don't create jobs. we need more taxpayers, not higher taxes. >> back up. i'm all for -- we're all for growing the economy. >> there you go, good. the problem is the policies aren't growing the economy. >> hold on, with respect, sir. we're all for growing the economy. you and i well know that we're

looking at an economy that is going to be growing, at probably around trend. larry would probably back me up on this for the next few years, at least. we cannot meet our obligations, get our deficit in order, provide retirement security, health care security on 15% of gdp. the president's plan takes us back to the clinton era tax rates when we had a booming economy and a budget surplus. the bush kinds of tax rates that you're suggesting. >> lead right to the -- the booming economy was the holdover from reagan's tax cuts that created all these entrepreneurial success stories. and that's why clinton was able to get away with inching up tax rates for a brief moment in time. but part of the problems of the progressive tax system is when you hit a recession, revenue drops. and that's what has happened here. we have gone from 18 to 19% to 15%. >> true. >> so the progressive tax system really bitious when you have recessions. what we agree on is let's concentrate in limiting the growth on government.

that's something we can agree. >> those in the lowest income are the most militant. 81% of those making between 20 and $40,000 a year. 81% of them. >> aspirations, larry. >> that's right. >> larry. it's an aspirational economy. it's not a 1% versus 99%. >> larry, senator, you don't make -- >> senator ron johnson, thank you very much. free market capitalism will develop as many revenues as we want as the economy grows. house majority leader eric cantor coming tomorrow night. uh oh. should we be letting him p-l-a-y with our t-a-b-l-e-t? [ mom ] i think it's fine. it's the new element from at&t so it's w-a-t-e-r proof. cool. what else does it d-o? it's fast. it's 4g lte. 4-g-l-t-e? mhhmm. i think it's time to stop spelling?

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