full team coverage. good evening, everybody. i'm larry kudlow. this is "the kudlow report." berkshire hathaway ceo warren buffett has been diagnosed with stage one prostate cancer, not life threatening and my one-on-one exclusive interview with mitt romney. unflinching on pro growth tax cuts and the stock market rally. that up 54, s & p up 21, dow up 194. and america heading for a 5$5.3 trillion tax-mageddon, that will sink the economy, unless congress solves it right now. we begin with breaking news. warren buffett says he has prostate cancer in a letter to shareholders. he found out a week ago there was a problem and he received an mri today to confirm the test results. we have full coverage of the story. "squawk box" anchors becky quick

and andrew ross sorkin and chief science correspondent bob bazell. thank you. you spoke to mr. buffett today, is that right? >> that's correct. he reiterated a lot of things he put out in the release. he feels great, is he not worried. this is survivable and doesn't change any day-to-day activities at this point. he said that the succession plan, one of the huge questions. the succession plans are not changed at all, and, larry, we talked with him, a cnbc interview with him back at the end of february, and at that point, he told us that the board has had chosen a successor, but that successor did not know they were the chosen one. that has not changed. that successor is the same person and that person still doesn't know. >> can i stay on mr. buffett's health for a moment. how was his energy level? what did he say to you? >> he sounds the way he always did.

usually when he says to him, he says never better. but he says things are going great, i have 100% energy, and he feels very confident with his decision. he has chosen with his doctors to wait until the middle of july to do radiation treatments. his doctors feel comfortable with that. it wouldn't have mattered if if he pushed it to october or beyond. the reason he's doing that, he has a lot of travel plans between now and then, and he doesn't want to miss any of his engagements. >> did you speak to mr. buffett. >> i spoke to a number of people who gave him high marks simply for coming forward. steve jobs didn't come forward with the pancreatic cancer, it became a big issue, most corporate government experts said this wouldn't necessarily even need to be disclosed. stage one, the doc will talk

about it in a sec. warr warren buffett will die in time, but it won't be because of this. most investors not shaken by this announcement. >> do they understand that he will most likely be in the office most days running berkshire hathaway? >> he made it quite clear in his letter that he planned to and after the during the radiation treatment over the summer, he plans to continue to work. it's a two-month long process and i don't think there's a sense this is going to set him or the company back one iota. this will create a larger question about the sucnames. and the annual meeting is coming up. this will be an issue that will at least be talked about it in the media, but some investors will talk about it as well. but not in the context of oh my goodness what will happen to the company. >> larry, i actually asked him that. why are you putting out this

release right now, if it's not a life-threatening issue? he said normally his standard would be if you are hospitalized or incapacitated. but he says cancer has all kinds of konotations. and he has 600,000 to 700,000 employees that are his partners, and because the word cancer, he thought it wornt he come out and tell people. >> i'm trying to hear something in my ear, but i'm not sure what it was. let me go back to your phone conversation with him. >> sure. >> all the medical stuff happening in nebraska, that true? in new york? >> i believe it's all in nebraska. >> and he's okay with that, and the doctors okay with that? that's where he's doing all his tests? >> i think he feels very comfortable with his team. i believe he's getting top notch. i know he's been in nebraska the whole time. >> did he talk about not life threatening, an important phrase. a difficult phrase. i assumith a correct phrase. >> he feels very comfortable

with that, and his doctors do too. >> when you were talking to people about succession and business, so forth, did the sprays non-life-threatening come up? >> it came up repeatedly. anyone who follows stage one cancer, prostate cancer, knows it's a treatable disease if you get it early. prognosis always very, very good. while people talk about succession, i think we're talking about succession in a very long time, warren is somebody who said that he would like to be the ceo for a very long time. i think he's going to get carried out of office ultimately and i imagine it won't be a function of prostate cancer. among the names that do keep popping up, and not a conversation that has a lot of substance right now, given what's going on. you hear it over and over, becky might have a view. greg abel, mid american, somebody we hear about it. the insurance guru, the genius

behind a lot of the big trades that the firm has made. matthew rose at burlington northern and tony nicely from geico is a name that we hear back and forth. but we will never know who that person is, probably for a very long time. >> but, you know, becky, just as a last thought, i appreciate the business angle to all of these things, that's life. life must go on and cnbc has to be first in reporting all these things, more interested in buffet's health and the fact that mr. buffett believes strongly that he will make it through this for a bunch of years. >> he sounded upbeat about this, didn't sound overly concerned at all and actually if you think of pep in your step, but -- he a little bounce in his voice, and that to me spoke volumes. >> thank you very much, becky quick, andrew ross sorkin, great to help us on "the kudlow report" and god bless warren buffett. i hope he gets through this with

flying cloor ining colors. more on "squawk box" tomorrow morning. i want to switch gears to a major market rally. happy topic for investors. other news to report. markets, powerful uptrend, positive profit reports, fears over europe seem to have diminished, stock surged, and the buffett rule was defeated. i thought would help stocks and it did. naz up 55. let's turn to highly distinguished investors, barry math, head of u.s. portfolio strategies at bark lay,'s, and art fusion, and art hog an. and you on this program when stocks were correcting lower, and everybody turning bearish and the world was coming to an end. you said buy, you were right, where do we go from here? >> it's interesting. we had the conversation, it wasn't that long ago, the sky was falling, and it's not faug

today. >> about a week ago. >> about a week ago. >> the funny thing is, major concerns still us with. the ones we don't have to focus on today, italy and sovereign debt, because spain got a successful auction off. probably will have another one later this week. and i don't think anyone at ecb has a death wish. right players in play, and it will be a pain in the neck. >> better confidence out of germany. interesting confidence numbers out of germany. some people saying germany not in a recession at all. let me go to you. a lot of today was profits. i think profits drive the stock market every day, coke did better, j & j did better, will profits outperform the extremely low expectations? >> it's interesting. the current quarter marked down considerably. the bar for the current quarter is really low.

14.25, where the market was at its peek. pricing in a 12% year in earnings gain. we have a problem with guidance and we don't think that guidance, much probability of guidance getting pushed higher, some risk it gets pushed lower. margins in the industrial sector and the discretionary sector. >> industrials, materials, energy, tech, and banks. the risk on trade, cyclicly that said growth, the economy is okay. >> look, i think there are four marry-term issues over the next quarter. >> throw one at me. the biggest one. >> the public policy outlook. four candidates debating how much to cut taxes, how quickly they could balance the budget, that was very favorable narrative for the market. we're getting into a much less favorable narrative. capital gains and dividend taxes. >> i have to go to josh grant. the buffett rule which would

have doubled capital gains taxes in effect from 15% to 30%, capital gains tax is a stock market tax, the investor class tax, defeated in the senate and stocks rose up today and roared. >> u.s. a great correlation. >> don't tax me. leave me alone. don't tax me. >> a great correlation. >> i just throw things at you. >> i love the spirit of that. let's not pretend anyone had any intention of passing that. this is an election gimmick. not an economic issue, political issue. it's obvious, this was designed to trap and get us back into this skinned of pop populous w. a big rally in a bear market for industrials, materials, i would not be hopping on the stock. >> you think the correction will continue to correct? >> larry, a quick checklist and let's realize the fact that

there are some really things happening in europe. >> forget -- >> spain is the big worry. china is the next big worry. >> i'm bored with spain. give me something here in the united states. >> you can take every ugly thing -- every ugly thing and realize we can't get too far to the down side, because everyone knows qe 3 could be waiting in the wings, and central banks around the world are you cutting. >> qe 3 is not waiting in the wings next week and inflation is a bigger issue. >> 2.7% cpi, running ahead of wages which may box the fed in. a great point. >> clearly appears to. between the minutes, beige book, a number of speeches, they are not in a position to precommit to any energy policy and push past june. remember how the markets reacted on the back side of qe 1, qe 2. very sharp sell-offs. >> the fed wants to wait until it's forced. >> mitt romney in the interview said the fed should not do qe 3.

art hog an, let me ask you, for what it's worth, this an old-fashioned slog. no fed, no sugar high from the fed. no additional sugar high from the fed. an old fashioned slog based on profits if i'm wrong about profits, i'll be wrong about stocks. >> we don't want qe 3. we want the fed to look at the economy, say it's okay. 2% to 3% gdp rates. not exciting, but it's fine. at that rate we can have the s & p 500, 14%, 12%, but we do 8% or 9%, put a 15 multiple on that. >> have you noticed. made me think of this. the fed qe 3, that will destroy the dollar and gin up energy prices. but have you noticed that aaa prices of gasoline have stabilized? >> we very seldom get that

before we kick off the driving season. and $30 billion consumer debt by the mild winter. >> so unfortunate. >> not ab offset. and johnny john, johnson & johnson missed on the consumer piece and part of that is crowding out -- >> i got a miss here because of warren buffett, let me apologize to all of you, approbbreviated. obama calls for a crackdown on oil markets. investors are the new target of the president's very old blame game. and coming up later, my exclusive interview with mitt romney, all ahead, and don't forget free market capitalism is the best path to prices and the best path to prosperity. it's the best path to energy prices, free markets will set the price on "kudlow." we'll be right back.

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here we go again. the president launches another attack on investors. on this tax day, the president wasn't talking tax policy or offering any kind of reform fix, he went after business instead. cnbc's eamon javers joins us

with details. >> good evening, larry. high gas prices a political problem for the president on the campaign trail all year this year, and that may have had a little something to do to announce a whole suite of initiatives designed to clamp down on market manipulation in the oil market. the president chose a sports analogy to explain what he is thinking. >> these markets have expanded significant. chairman ginsberg had a good analogy. imagine if the nfl quadrupled the number of teams but didn't increase the number of refs. would you end up having havoc on the field and it would diminish the game. it wouldn't be fair. >> what is the president proposing specifically? talking about more funding for cops on the beat at the cftc and he would like to see technology upgrades for regulators so they can compete with some of the high-speed traders on wall

street and look to boost civil and criminal penalties for market manipulation and raise margin requirements in oil futures markets. larry, a big suite of initiatives from the president. most of what he proposed today would have to be approved by congress and with republicans in charge and on the house of representatives. not very likely all of this would move any time soon on the hill, larry. >> eamon jaifers, thank you very much. later in the show, i'll bring in my exclusive interview with mitt romney. take a listen to what governor romney had to say about speculators. >> speculators have long -- investors in futures or people guessing the future of stock prices or of gasoline prices are playing a role in our market. what are they saying? they are saying as they look out, they think the policies of this administration and policies around the world are going to lead to higher prices in gasoline and oil.

>> joining me now dennis kuchinich and senator corker. i don't know about blaming speculateors if demand for oil exceeds supply, isn't that enough to drive up prices? >> exactly. and a lot of people think it's cresting right now and that, you know, supply is caught up and may be reaching this year's highs right now, and prices will diminish. the fact is, even though you and i both know this is a bull market, many americans are concerned about the price at the pump. the president is very vulnerable. he knows we haven't done the thins we need to do to produce american energy. is he changing the subject. >> mr. kuchinich, i would ask you, if you would drill more on foreign -- on federal lands, drill offshore, in alaska, put up the keystone pipeline, we probably would have much lower oil prices today? >> not so.

about 85 million barrels that are produced worldwide a day, that's not all the barrels that are traded. about a billion barrels traded, so 90% of the barrels that we're talking about, price of oil, are paper barrels being pushed by speculateors driving up the price of oil 15% to 30% per barrel. >> why have natural gas prices have come down while oil has come up? you have the same market investors or traders as i prefer to call them, or could it be supply for natural gas is above the demand and price falls. >> this speculative market is that commodities futures trading was supposed to deal with with dodd-frank. they knew oil was a problem. we haven't seen the same kind of speculation in the price of natural gas. but we do see it in oil.

>> you know, look, you have to take delivery at the end of these contracts and if you look across a long range of time, these things, what the congressman is saying, just is not so. the fact is, it's a supply and demand business. we've had less supply than we need. we've had crises out there that -- or perceived crises that have pumped up the prices. this is not about speculation. we've gone down this road before. the president is bringing this out solely to change the subject to cast the blame on someone else, and -- and everybody sees through this. >> with all due respect, senator corker, supply and demand is distorted by speculation and that's what we're looking at here and the president is right to step in and say, look, we'll put more police on the beat, we'll do something about the information technology that to

track these speculateors better. we'll get commodities futures trading commission to put a cap on future positions. >> what are they going to do? all they are going to do, senator corker, probably make the oil markets and the natural gas markets even more volatile. remove liquidity. so many studies down the years, senator, looking for villains in the oil markets and never found them this strikes me as one more attempt to shift the blame by president obama. >> and that's fair. look, i have not seen every detail of what he leased today. i know the five major points. are you correct, larry. if do you things with margins that make trading less liquid, you actually drive up prices, so, you know, the fact is, back to the congressman and all due respect, i mean, you have to -- you have to be taking delivery and hoarding the oil in order to do what it is that you are saying and there is nothing that shows, except in little limited

instances that is occurring, so this is a total political move. >> senator, if we can't see that there is real manipulation going on in key markets, the country is in trouble and what president obama is doing, he says there is increased civil and criminal penalties. >> we have done this for years, the federal trade commission, the cftc, and nothing has ever been proven. one small tiny goofy case in the last ten or t20 years. why not let markets work? drill more, have the right pipeline infrastructure it will take care of themselves. >> markets work, but not speculators. >> senator corker, i thought a speculator was a trader, investor, might be a pension fund. aren't they betting on supply and demand, just like everybody else, senator? >> i have to give you the last word. >> that's exactly right. what we should be focused on, the president is not doing things our nation needs him to

do to create energy security. he knows he's vulnerable. this is all about changing the subject. as a matter of fact, we're spending too much time on it, this is never going to happen. this is being put out solely for political consumption. >> it's good the president is standing up against the oil companies and oil speculators. >> thank you very much for coming on the show. thank you, gentlemen. >> thank you. >> coming up, my exclusive interview with gop presumptive candidate mitt romney. he sounds off on slashing big taxes and spending cuts, coming up. [ woman ] my boyfriend and i were going on vacation,

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♪ before you run out to the post offices to mail your returns and your checks, get this. some aren't in much of a rush to pay as the rest of us. tax delinquents, pamela anderson otherwise $524,000. joe francis, girls gone wild founder, owes $794,000 to the state of california. and lionel richie owes $1.1 milli million. and cnet founder and his wife owe more than $10 million. the biggest bunch of tax dead beats may be federal employees. there is a new bill to collect

backs taxes for there 98,000 employees that owe more than 1 million. coming up, my exclusive interview with mitt roll knee, we talk about everything from tax reform, big government spending, the fed, even his tax returns and the stock market. mitt romney, coming up next. this is $100,000.

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welcome back to special tax day edition of "the kudlow report." mitt romney spent the day with voters in pennsylvania. he took some time out to join me for an exclusive interview. please take a listen. governor mitt romney, welcome back to "the kudlow report," sir. >> thank you, larry. good to be with you again. >> happy tax day. i want to ask you a whole bunch of tax rife headlighted questionheadlighted-related questions. let me ask you this. president obama, vice president biden and others are taking to calling it the romney rule. not the buffett tax, the romney

rule. wealthy, success elf people like yourself don't pay their fair share in taxes is what they say. i want to get your initial response to that please. >> well, you know, these kind of gimmicks that they talk about, the so-called buffett rule, if they want to change the name, that's fine too. and they couldn't get it through their democratic senate. this won't create jobs. this will have the opposite effect of creating jobs. someone calculated the revenues that would come from the so-called buffett tax would pay for government for 11 hours. what we really need to do is simplify tax code, lower our rates at the same time eliminate or limit some deductions or exemptions, particularly for high-income folks and by vir tuf doing that, you can keep the progressiveity in the code and make it more likely for small businesses to start.

larry, the number of new business startups has dropped by 100,000 a year under president obama and costing a lot of jobs. >> senator chuck schumer on your case, won't release tax returns, wants ten years leased, hiding stuff. and conservatives are asking this question, strong enough, tough enough, will you defend your great business success against these class warfare attacks? >> the answer, of course, we have to stop apologizing for success here at home and have a president that stops apologizing for america abroad. this is a nation that celebrated success and encouraged people to reach for their dreams and people who achieved their dreams are not making other folks poorer but lifting the entire nation. if people in america want a president that will look around forscape goats to punish, you have that president now. that's not who i am. >> why not release your tax

returns? why not go back ten years? >> well, we've had people run for president before, and they have released two years. john kerry released two taxes. john mccain released two years of taxes. i've released one already, put the estimate out for the next year and we'll have two years of taxes and what democrats want to do is try to and pick through any part of taxes to show i've been successful, and i'll already acknowledge that. of course i've been successful. that's been leased already. people know that. they want to divert from the fact that the president has been a failure when it comes to creating jobs and turning around this economy. they want to make this election about trying to pick at me or other republicans as opposed to saying how come this economy is not working and how come president obama has failed? that's what i will focus on. >> with all that, governor, you yourself have been an investors. are you surprised how well the stock market has done? up about 25% since last october,

early october. actually today as we talked, it's up quite substantially. you surprised how well stocks have done? what does that mean? what is that saying? >> never been one to try to predict the stock market or explain what's happening in the stock market. i think investors look at american industry and say that entrepreneurs and managers and inventors in america have continued to defy the odds, made businesses more productive and able to achieve higher levels of profitability, despite if you will, declining revenues from the peeks of 2007 and before that. you have to look at american business people and the american worker and say they are doing a heck of a good job, despite the fact that government has made it more difficult to start a business or expand a business, right now what you are seeing in stock prices is the fact that businesses are profitable. >> bullish or bearish? a great riff on the causes of the rally, and i think you are

right. profits are the key. i call them the mother's milk of stocks. bullish or bearish, sir? >> i am not going to predict the direction of the stock market. like to quote the yogi berra line which is that yogi berra said in effect he doesn't like making predictions, particularly if the future is involved. i am not about to tell you which way the market is going to head. >> stocks and the economy, do you think the federal reserve would apply more stimulus or quantitative easing, more money creating in order to speed up the economy? a lot of people on wall street do. what do you think? >> i think as you look back at the qe 2, the second round of stimulus, very little positive effect. i don't think there is a reason for us to -- to further inflate our money supply. our own view, this is time for the fed to pull back a bit. let the market recover on its

own, more quantitative easing isn't what's called for. >> let us paul back to tax day. you told a florida group, a fund-raiser, don't know if you meant to put this out or not, talked about eliminating income tax deductions for upper income earners, you said second home, second home mortgages, some state and local taxes, what can you tell us about that? it sounds pretty sensible. are you staying with that? >> i have put a number of things on the table and you understand that virtually all of the deductions and exemptions, particularly for high-income taxpayers will be on the table. because we're going to have to eliminate -- limit rather, eliminate. for high income individuals some of the exemptions to compensate for the reduction in rates. this is the way bowles simpson laid out the rates, so

businesses have an incentive to hire again and pay for that in part by limiting the deductions and exemptions on high-income folks. it is my intent not to reduce the burden paid by the top earners, but to main tin it at current level and bring the rates down. >> so are you sticking with it, not pulling back? a story in "the new york times," some aides saying don't take that seriously. it sounds like are you staying with it some deductions have to go. and i want to ask you, are you staying with the sharp spending cuts for hud, you mentioned your father ran hud. maybe eliminating hud. department of education and i was going to ask you, why not get rid of the scandal ridden gsa while we're at it? >> well, i can say this. i'm standing by and i said this from the very beginning, limit deductions and exemptions, particularly for high-income

individuals. as to the specifics what income levels, that's something which time will tell. we'll work that out with congress. but we have to broaden the tax base and limit some deductions and exemptions if we'll compensate from the reduction in rates. >> would you get rid of hud if it came down to it and abolish a bunch of agencies. i have a list of a bunch of my own. the labor department, commerce department, energy department. wondering what you are thinking? this is all very new, and it's interesting to us. >> i expect that we'll look at all of the departments and agencies. combine some, some agencies or departments may find their role much smaller. i don't want to communicate that we won't have policy relating to housing or policy related to education, but those agencies and departments could conceivably be consolidated with others and again, i'm not going to give you a specific department or agency today. i don't have one those, but for

purposes of discussion, a number of agencies can be made smaller or can be combined with others. >> last one. tax-magaddon. i guess 5$5.3 trillion tax hike on the table. the bush era cuts rolled back. amt abolished, payroll tax cuts taken back. all of that. if there were a president romney, and you had to deal with this tax-mageddon that could destroy the economy right after the election, would you roll up your sleeves right then and there during your transition and get involved? >> the answer is, of course. what i would be looking to do is to reform our tax system entirely and make it far more broad based, with very low rates, pro growth. not looking to reduce the burden paid by high-income earners.

we want to say we are in fave of tax cuts for the rich. that's not true. i'm in favor for more jobs for everyone. i want taxed to be down, the burden to be reduced on middle income taxpayers and that will be -- i think one of the advantages of having this tax event. this tax-mageddon, this will focus a lot of attention on changing the tax system. >> do you have one or two key characteristics are you looking for in a vice presidential candidate? >> well, that's part of the process to look at the history of vp individuals and who served as vice presidents and look at the qualities most effective and most helpful. i can tell you, one quality that comes to mind immediately, you want someone who without question could lead the country as president if that were necessary. i think all the political

considerations pale in comparison with who has the capacity to lead america at a critical time and i hope if i'm the president, that ooefeventua will never occur. >> any hesitation to put a woman on the ticket? >> no, anyone who meets the constitutional qualifications to be vice president, but i want someone without question that could be president. and there are women who meet that requirement as well as men. >> governor mitt romney, thank you very much for your time, sir. appreciate you coming back on "the kudlow report." >> thanks, larry. good to be with you. >> he didn't rule out getting hud or the education department. severe spending cuts. and now the gsa government waste scandal continues. it gets worse. get this. the official in charge of the $1

million las vegas boondoggle defied congress and didn't even show up at the hearing. we'll get back with the chair of the congressional committee. stay with us. we're kudlow.

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the gsa scandal, the gift that keeps on going. the official seen here literally in hot water at a million dollar over the top vegas conference pleaded the fifth in front of congress yesterday. get this. jeff naturalkeneely supposed to another hearing today, but he didn't even show up. >> i guess taking the fifth for another committee and not appearing today, against the -- one of the requests that at least i made for him to be with us, i guess the only way we'll get to see him is on a video in the hot tub. >> here is the chair of council of transportation and infrastructure committee. welcome back.

anything done ththat can be don this guy? >> absolutely. in fact, the inspector general has already sent information over to the department of justice. there have been criminal actions gone on during this investigation, and i think keneely has a reason to hire a lawyer and plead the fifth. >> let me tell you something else i learned from the hearing today. this gsa, i'm calling it a rogue agency. they didn't even have a consolidated budget that oversight regulators like yourself could inspect, so number knew what was going on in the pacific west coast area, like this las vegas thing, or anything else. they didn't even have a real budget. that's incredible to me. >> that is incredible. using this slush fund. all of the rent paid by these agencies, going to this slush fund and they've been spending lavishly.

>> will they change practices? >> i don't see how you and congress can do oversight without a budget. why should any of these people survive. they should all be thrown out. >> i agree. and i think that gsa, do we really need gsa? not controlling our vehicles well. certainly not selling the properties that are outlived their usefulness. why not get rid of them? >> my question to you, about a week ago, i don't understand the agency, i don't understand why we need it. let private developers run the buildings and sell off the real estate? >> they sold 82 properties in a decade and have 14,000 vacant, underutilized properties today and not moving them. >> congressman jeff denham, talking about the gsa rogue agency. maybe mitt romney will put the knife to it. up next, tax-mageddon, we're

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all right. today is tax day. but the single biggest issue in front of us is not the buffetturn tax. it's tax ma gedon. what does it mean, a $5.3 trillion tax hike comes january

1, 2013. and if congress doesn't extend all those tax cuts, i'll tell you, the economy will be destroyed. let's talk to cnbc contributor howard dean, former vermont governor and dnc chair. and welcome back kevin haas set, director of economic policy studies and a mitt romney adviser, i think that the buffet tax is goofy and it's dead. but this one, with all of these tax cuts expiring, and that includes, by the way, not just the bush tax cuts, the amt tax cuts, it seems to mekong should be focusing laser like on this right now to assure people and remove the uncertainty. >> yeah, that's right. they won't do that. they can't even give us a budget. three points about tax -mageddo. it is 100% president obama's fault. they did extend the tax cuts,

but they are now expiring. they could have extended them longer. the uncertainty is likely to be bag negative in the second half of the year. there is a new study out of the university of chicago that finds that last year, we lost maybe about a percent and a half of growth because of all of the tax policy uncertainty. worse this year. and final thought, it's a great opportunity to do something right. all of these things are expiring and we could go in there and have a fundamental reform. time to fix our big problems and stop ignoring them. >> howard dean, you probably don't agree, but since president obama signed off on extending all of the bush tax cuts, almost two years ago, he owns the issue now. when kevin haslet says we lay it out -- i think we should have an extension until we can have some reform, howard, you own it, the president owns, it, and it could ruin the president's

re-election. >> well, he demanded that we extend in exchange for unemployment for a whole lot of people who didn't have jobs. i believe the biggest threat to this country in the long run is the deficit. and however we ought to address the deficit, we ought to do if. and it's been kicked down the road by both parties. we ought to let tax cuts go by the boards and let those spending cuts go into effect. neither party in the congress has the guts to do the right thing. and if we're not going to do the right thing, we need to deal with the deficit. >> i understand. i definitely want to deal with the deficit. >> no, you don't. you want to cut taxes some more and create a larger deficit. that's what republican position is. >> what i want to do is slash spending, which is something you never talk about. >> i agree with that. we are splashing spending, that is happening too. >> you have $5 trillion of expiring tax cuts and what will that do? the whole economy is $15 trillion, $16 trillion coming

up? >> that's nonsense. that's over a ten-year period. let's get that right. >> the tax rate will change. all the rates, up and down the income. not just for rich people. >> including dividends, all expiring. and not factually incorrect to attach it to president obama. they have a supermajority in the senate, put it off to the end. and scott brown was elected it was harder for them. if they really want them to expire, every minute, every day, they could have done it earlier in the year. they own this issue. >> we'll -- the american people will decide who owns the issue, whether they want mitt romney in charge with the kind of fiscal policy that causes these issues in the first place. i don't believe in the nonsense that comes out of university of chicago and supply side economics, never been approved to work. and largest deficits in the last three presidencies has been caused by both bushes and ronald reagan and kept cutting taxes

and increasing deficits. and you want to cut taxes, you have to cut spending. nobody has done that on the republican side. >> does anybody thinking about the spending increases of recent years, kevin? >> absolutely. the spending increases in recent years have been astonishing. the governor is right, larry, and you i on your show, many times, i guess we are starting to be old men, criticized president bush for cutting taxes. president obama has increased it a heck of a lot more. it's true we need a big fiscal consolidation, get your budge net order, but don't need to do it by having a contractionary tax increase. president obama wanted tax-ageddon to come. >> 25% gdp. >> let's get spending down to where bill clinton had it and then have taxes up to where bill

clinton did. the only president since lyndon johnson balance budget. only democrats balance budgets, do you know that? >> will they fix this tax hike before the whole thing dooms the economy? real quick. >> no, they will put it off and in december, they will probably extend it three months or something. >> that's it for tonight's show. thank you for watching. tax-mageddon. washington, you have to do something right away. [ male announcer ] this... is the at&t network. a living, breathing intelligence teaching data how to do more for business. [ beeping ] in here, data knows what to do. because the network finds it and tailors it across all the right points, automating all the right actions, to bring all the right results.

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