the economy is the opening mitt romney needs to win. the "kudlow report" just moments a i way. stay tuned. one company came out with strong earnings recently. reminds me of some of the best-performing stocks i've seen. and i think it's just getting started. want to know what it is? you've got to stick around because i'm talking to larry about it coming up next. apple, we heard about a guy getting uncertain about what's going to happen in the future. why do we like apple? because it's going to earn $53 a share in 2013. no one's disputing that, so therefore it's what matters. there's always a bull market somewhere, i'm jim cramer and i will see you tomorrow! hey, larry, what do you have for us? >> well, jimmy, dow ceo liveris saying natural gas is going to bring jobs everywhere. good evening, everybody, this is the "kudlow report." fueled by natural gas shale

gale. and andrew liverises here to tell me about it. earnings continue to beat and get this, the index of leading indicators up for a sixth straight month to a four-year high. that should tell you something. and what a fed tells community bankers today. we have somebody in that closed-door meeting. he's going to spill the goods. we begin with the war of words over the small business tax cut that passed the house. it could create 100,000 new jobs a year. in just a moment, we're going to get both sides. chris van hollen goes up against kay bailey-hutchison. >> good evening, larry, two days after the tax filing deadline for americans, the house of representatives stepped up with a proposal to cut taxes for business. they passed it on a party line vote in the house of representatives as expected.

now, here's what's in the bill. it's a 20% deduction from taxable income for businesses with 500 or fewer employees. that's about 99% of businesses in the united states. the one-year cost to the treasury for this proposal is $46 billion. and that's part of why president obama has threatened to veto this as an unnecessary give away. he's not going to have to veto it because it's going nowhere in the senate. this is a tax cut that would go to people who don't need it. >> how our colleagues across the hall can figure out more ways to help the very -- >> so larry, this is simply like the proposal that went down in the senate on the buffet rule earlier in the week. it is not intended to become law, it's rather an effort to frame the political debate going into the election season, and that's a debate that i know

you're right about to have, larry. back to you. >> john harwood, we welcome our distinguished guest, kay bailey-hutchison and chris van hollen is actually the ranking democrat on the budget committee. all right, chris, you voted not too long ago, i know you voted against the 20%, eric cantor small-business tax cut. can you tell me why? >> yes, i can, larry. this is one of those here we go again moments. what this does is provide a windfall tax break to big hedge fund owners, the wealthiest americans, and they don't even have to create one single job in order to get the tracks breax b which is why the nonpartisan committee says the impact is so small, so minuscule as to be incalculable, it's also why bruce bartlett, former economic adviser to president reagan said it would do nothing for the

economy. what does it do? it adds $50 billion to our national debt, produces no positive economic growth, only gives this windfall to people who don't have to create any jobs. it makes absolutely no sense. >> all right. senator hutchison, what's your reaction to mr. van hollen? and senator, i want to add one point. look, i like most tax cuts, but this one's only one year and it only covers companies of 500 employees or less, that's a little bit gimmicky as the "wall street journal" pointed out this morning. >> well, larry, all of us would rather see real tax reform. we would rather see the corporate rate lowered in general, we want to try to protect the individual tax cuts as we can. but i think anything we can do to help small business keep their head above water with the regulations that are being thrown at them by this administration with the constant talk of increasing taxes on our

job creators. and with the obama health care staring them in the face is another big cause. i think what eric cantor is trying to do is to say to the small business people, we do want you to hire people, we're going to give you a break, and your payroll and i think it will help for the economy. >> chris van hollen, look, i don't have any trouble with successful people getting incentives. my problem with this story is it's only one year and i don't think temporary tax cuts work. >> well, larry, i don't think there's anything wrong with giving successful people incentives if they're actually going to result in economic growth. and more jobs. again, we've got the nonpartisan joint tax committee saying it's so small and negligible they can't even calculate it. and the reality is, it won't produce jobs, it will increase the deficit. you know, larry, when we were talking about extending the payroll tax cut for $160 million working americans for one year,

our republican colleagues called that sugar high economics. at least the congressional budget office and other folks said that it would generate some economic activity by putting a little more money in people's pockets. this is one-year sugar high economics going to folks who are hedge fund owners increasing the deficit, doing nothing for the economy. which is why the "wall street journal" called it a gimmick. i mean, it's frankly worse than a gimmick because it's going to add $50 billion to our national debt, put on our credit card, which as all of us know means someone else is going to have to pay for it down the road. >> senator hutchison, i will say this, i have seen estimates from gary robbins, former revenue estimators, they say it would create 100,000 jobs. if it comes to the senate floor, senator, will you vote in favor of it? >> yes, i certainly will because i think everything we could do that cuts taxes. we did the social security tax cut, which chris just mentioned. i think another tax cut for employers would kind of smooth

the waters a little bit for all of the talk of new taxes on our business owners and keeping them from hiring people. i think this is a way to say, you know what? if you will increase your payroll. if you will keep your payroll, if you will just keep people on the job, you're going to get a 20% tax break. i think anything we can do to encourage employment in this environment is a good thing. >> chris -- >> larry, let me just say, this doesn't require anybody to keep anybody on the payroll. in fact, because of the one-year cliff, it creates this perverse incentive for some companies to actually fire people. they have more income to get the lower rate -- yes, it does. >> no, it's based on employment. it's based on w-2s. >> no, no -- it -- the house version -- let me be very clear. the house version and this is the reason the joint tax committee and others say it won't generate any economic

activity doesn't have any condition of hiring. in fact, you can fire people and still get this tax cut. >> but chris van hollen, what are you going to do, chris, with the $5 trillion tax cliff that comes in january? you've got the expiration of the bush-era tax cuts, the payroll tax cuts, the alternative minimum tax. you know there's potentially very damaging consequences for the economy. right now looks like the economy may be slowing down. jobless claims are rising again, employment came in only half as much in march. what are you going to do about the tax cliff, chris van hollen? >> well, larry, you're absolutely right. what i support is the kind of bipartisan balanced approach that simpson/bowles and others have recommended. so we deal with our long-term deficit. through a combination of cuts and reforms, but we also deal with in part through additional revenue. we do believe that we should

allow the tax rate on the folks at the very top millionaires to go back to what it was in the clinton administration. we do believe that as part of tax reform, we can lower the rates but also do what those bipartisan groups have done and take some of the revenue generated to reduce the deficit. if you don't it that way, you end up hitting everything and everyone else. that's why people support a balanced approach. >> senator hutchison, i'll give you the last word. on the tax cliff, what are senate republicans going to do? >> well, larry, i think we don't want the perfect to be the enemy of the good. i think every step we can take that stops the talk of tax increases by giving tax breaks, especially to small business, which creates 66% of the jobs in our country and i think it's s disingenuous to say -- well, many of the company expenses are more employees.

would i like to see a bigger tax cut? would i like to see a bigger long-term addressing of this issue? yes i would. >> i got that. >> you're mistaking this bill for something else. this does not require any kind of employment or hiring -- >> for large business, i understand that. >> i've got to jump out. you're both very, very kind. >> thank you. >> senator hutchison, thank you, we appreciate it very much. thanks. >> thank you. all right. coming up, dow chemical riding the nat gas boom. we're going to talk to the ceo about new plans for a multibillion dollar plant in texas that will create thousands of new jobs right here in the usa. don't forget, free market capitalism is the best path to prosperity. the natural gas miracle is part of the free market miracle. i'm kudlow. we'll be right back. [ female announcer ] it's time for the annual shareholders meeting.

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welcome back to the "kudlow report." today dow chemical announced its riding the natural gas boom into the state of texas. constructing a multibillion dollar plant with the potential of creating thousands of jobs. texas governor rick perry was onhand for the event and touted the state's job creation record. take a listen.

>> it's february 2011 through 2012, 331,000 private sector jobs created in the state, more than any other state in the nation. >> we welcome back to the "kudlow report" andrew liveris, the ceo of dow chemical. andrew, thank you very much. and you have some great new news. you're going to build a new plant down in texas. can you tell us about this good story? >> it's whbased on american sha gas, $1.7 billion. it's part of a $4 billion package that we're working on. we've announced now $3 billion of it, larry. it's going to create 3,000 to 4,000 direct jobs, 35,000 indirect jobs, 5,000 construction jobs. and it's right here in freeport, texas, where dow has been for seven decades. and we've just announced it. >> so as i understand it also, this is about the natural gas fracking revolution just as much

as the chemicals and manufacturing revolution. how important is the natural gas story? it traded below $2 today to your building this plant. >> well, clearly the discovery of shale gas is an american manufacturing, it handled well. it's critical, larry, to your question. in essence, the united states now has over 100 years supply of natural gas, but critical for us is the components called natural gas liquids ethane, propane, and extracting those and evaluating them, the domestic gas price, $2 is probably an artificial low. that gas price will probably find its way back up to $3 to $4. but even at those numbers, it makes america a low-cost jurisdiction for any energy-intensive manufacturing of the value-add kind. $1 of gas can create $8 to $9 of value add if we use this natural gas for manufacturing of the type we announce today.

>> i know you're passionate about the renaissance of manufacturing. you've written a book on it, you're talking about it, you and i visited it at the business round table. basically in brief, is it now cheaper to build and stay in the usa than it is to offshore and go overseas for these plants? have we reached that point? >> look, i really do believe we are reaching a tipping point thanks to the american oil and gas industry and the discovery of shale gas, the so-called shale gale. but we're not quite there to answer your question at the business round table. you saw us launch taking action for america, which was a swath of policies from tax to trade to regulatory energy policy and, of course, education. and when you put all of those policies together wholistically and say, can america compete for talent? can america compete in a business-friendly environment where we have smart regulations? do we have the right tax jurisdiction? and do we have the right energy

policy? we're still short of being the america we can be. as written about in our book and, of course, what the b.i.t. talked about. we're on our way, thankfully, due to the american oil and gas industry giving us cheap and abundant energy. and i think we've got to work on the others to answer your question. >> on the shale gale, you've closed plants in hungary, portugal, and the netherlands. now, is that because the economic conditions are so poor in europe? and are you going to bring any of those jobs back? any of those plants, any of those activities back to the u.s.? >> as you know, we're portfolio managing all the tim we're in 150 countries. western europe is in trouble. the oil price and the economy and what's going on over there has meant plant closures and we've made our announcements as you've referenced. the margins in europe for these sorts of products are almost non-existent as they are in asia where asia is also oil-price dependent. so the answer to your question is, look at the announcement

today. we are bringing back manufacturing to the united states, and this is the biggest announcement of them all. and we, in fact, will have more to do if the united states keeps marching down this policy regimen i talk about earlier. but long story short, western europe is going to take a while to recover. it may be several years. asia has got high oil price to worry about and, of course, the china issues you're reading and reporting on, the united states could become an investment economy quickly here if we handle our policy environment,

the lng price becomes the domestic gas price. smart energy policy, smart regulations. the administration has made good progress on that. these are all forward-looking. we need to go back on some of the regulations that are outdated and do reform around those regulations, especially in the epa, fda context. and third, tax policy. i think the president's put out some really good suggestions, that we've got to get to territorial tax. and of course, got to bring innovation back to the economy by having smart education policies. so these are the four that i would say in a quick hit way, larry, but energy polgs and what we do with our natural gas in my mind trumps those four in the here and now. it could bring around an american job renaissance in the next several years. it's short-term and we can do it. >> all right. andrew liveris, thank you, sir. all best on your new plant. >> glad to talk to you as always. >> all right. look, you want more proof about

the nat gas boom for u.s. manufacturing? well, ppg chairman and ceo charles bunch says it's making america competitive again with china and manufacturing products at a lower cost. take a listen to what he told jim cramer on "mad money" a short time ago. >> the china cost advantage in many energy-intensive industries is diminishing, and i think now the u.s. is going to be a much more competitive on the global scene in terms of manufacturing costs. >> all right. as we've discussed, this is a great story. we'll have more from jim in just a second or two, but next up on "kudlow," one of the scandalized secret service agents is reportedly threatening to sue. and we have the photos of the woman who brought down the secret service. they are coming out, that and other news headlines next up on "kudlow."

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>> evening, larry. microsoft has strong business spending. gave the numbers a boost. the company also lowered the full-year operating expense guidance and windows 8 is on schedule for intel and on-base chips meaning apple's ipad will have more challengers by the end of the year. and in other news, housing in phoenix is starting to find buyers. diana olick has that story. >> reporter: well, jon, the rebirth of the phoenix housing market is all about builders and bidders. the builders out here 40 miles outside of phoenix is taking advantage of the zero money down usda rural loan program. they just started opening up the model again. they're seeing folks coming through and they just permitted to build two new houses. back in phoenix, the story is about foreclosures and investors are rushing in to buy them up. we spoke with colony capital who expects to spend over $1 billion this year buying foreclosed properties to rent. they say they could see returns of up to 25%. jon?

>> thanks, diana. an attorney for ratings for egan jones, the company expects the fcc to file an administrative proceeding next week. they did not indicate what relief they are seeking from egan jones. and finally the new york daily news identifies the woman at the center of the secret service hooker scandal. posted photos of a 24-year-old single mom, it says she is the alleged colombian escort that called police over her $800 fee. so far the ouster of three secret service agents, eight other agents and several members of the u.s. military are now under investigation. there are now reports one of the outfit agents is planning to sue the government. larry, back to you. >> all right, john. thanks very much. coming up on "kudlow," jim cramer's getting stock ideas and he's got eagle eyes on ebay and paypal. what did the fed tell

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welcome back to the "kudlow report." i'm larry kudlow. in this half hour, jitters over the economy seem to pry the door open for mitt romney. a new nbc news "wall street journal" poll has come out and we are going to have it for you. jitters also on wall street about a spring stall. the dow closed down 69 points. but i'm going to tell you. there's one economic indicator that does continue to show growth. going to tell you what it is in a moment. shares of ebay trade about six times its normal buy. and one of today's leaders and jim cramer's going to tell us why. and we go inside the closed door meetings of fed head with community bankers with somebody who is going to spill the goods from that meeting. but first up, a trifecta of economic reports seem to unsettle stocks, jobless claims, existing home sales, and the philly fed manufacturing index. the dow closed down 69, the s&p

off 8. but let me say this, the index of leading economic indicators. nobody on wall street talks about this for some reason. it rose today. it is up six straight months and stands at a four-year high, probably sums to about 2.5% to 3% gdp growth. so talk of a spring-time economic stall. i think a little backup in jobless claims, it is overbaked. yeah? i'll watch the claims number carefully as you will. but right now, i think that's more ado about good friday than anything else. we will see. so let's talk, joining me now we have brian kelly, shelter harbor capital co-founder and cnbc contributor and brian green vice president of global portfolio trading with clsa. brian kelly, let me start with you. i am very old-fashioned. i actually look at the index of leading economic indicators and the -- >> crazy. >> which went up too. and i'm not ready to say the economy's stalling or going into

a double dip. >> no, and let's look at go down granul granularly. they missed expectations, but they say the reason why they're missing is because they are building out of factories to deliver more chips. that's a good thing. that's a leading indicator that says ceos are finally starting to get confident enough to say we're going to spend some money in the economy. as long as europe behaves, these are some very good indicators in the u.s. -- >> i'm going to come back to all of that in a second. withing back to the program. are you in the spring stall? in the double-dip camp? a buyer or a seller? >> i'm a seller. i have to differ from brian. i think there's a lot of uncertainty out there in today's market. i think that what's going on in the europe debt crisis, you know, there's a lot of known/unknown out there. and so, you know, between that and what's going on -- we have elections coming up, we have what's going on in india. we have also china slowing down. >> may i ask you about the

french election? >> yes. >> there is a socialist named oland. it reads like holland, but it's holland. he wants to raise the tax rate to 75% and stop the budget cutting austerity programs forced in place by the various eu authorities. so, i ask you. he's got a win on sunday and there's a runoff in two weeks. what happens is if he is the next french president. >> a lot of uncertainty out there. already germany's going out there and saying they are already having enough of more of the same. and i think there's friction that's being built between germany and the ecb. and -- >> no, no, no -- i want to know about this holland person. you raised the french election. i want to know is it going to sink the euro? >> no. sink the euro? probably not. it begins to accelerate the crisis when you have the potential that france might t of because france now needs -- they're going to say no to the

austerity, and they're going to need to inflate at some p point in time their economy, and you have to say, are the germans going to be stuck with the bill for this inflation? and i think germany says no -- >> what does that do to us? does that affect us? >> yeah. i think it -- well, it does if france and spain and italy can't inflate and devalue their way out of it and end up in a deeper type of recession if not something more than that. >> so holland is a risk? >> there's no doubt he's a risk. >> now let me turn back to the usa. >> sure. >> bank of america beat morgan stanley, beat the financials in general were coming in pretty good. verizon beat, dupont beat, ebay beat, actual earnings, not predicted earnings, not expected earnings, not blended earnings, not all that global baloney stuff. actual earnings rising at 10%, beating the estimates, is that the no bullish? >> on a micro sense, absolutely. on the macro sense and looking at where we're going in the

market for here the rest of the year, you have to -- you cannot ignore what's going on out there in what will be the future taxes going on. there's regulation risk that we have to be worrying about, affecting a lot of our different sectors, and i think that one thing that we need to do and focus on is that the biggest risk of anything is that we're ignoring it. we're just going on it's not being addressed some of these big things. volumes are down globally. and you can't ignore that. >> brian kelly, what's your strategy right now? what should we do? >> my strategy is to buy the things that were growing. one buying the u.s. economy. you could even buy the iwm, which is the russell 2000, companies that sell to u.s. citizens. even in the worst of times continue to spend their money. not only that, you can buy some asia, look at china. this is an economy that monetary policy is working. their loans shot up, credit's getting out into the system. you can buy china the way i like to play to the caf, which is the shares, an etf that trades the a

shares in china, you get exposure to the domestic chinese economy. >> do you stay with the growth cyclicals? do you play the economy? do you play the election? what do you think? >> yeah, i actually would play the economy regional banks. kre, and again, you get the regional banks that are out there doing the lending -- >> making loans -- >> banks are making loans, they -- they are making money. i mean we've even seen it from the big money center banks that are making money. and if the economy -- nobody seems to believe it -- >> even if vikram pandit is not -- >> is there anything wrong with that? anything wrong with that? >> they're the ones that own the company, they're the ones that set the rules. >> that's right. >> i don't know if you get the best talent that way. but for right now, if i own the company, i choose the rules. >> you know what president calvin coolidge said, they rented the money, didn't they? they'll have to pay it back. anyway, i'm going to leave it

there. calvin coolidge, holy cow. well, an unwm announcement came out of the fed today. that's the volcker rule. for months bankers and regulators have been haggling over it. banks will have a two-year grace period to bring their businesses align with the fine print of the rule that limits risk taking by the banks including trading with their own money. this was to calm the bank fears they had to scramble to get it done before this july when the rule actually takes effect. the banking industry is calling for a revision of the rule itself. they maintain it eats into profits and forces a revamp of trading operations. we will see. anyway, a new york fed held a closed-door meeting with community bankers on housing and economic recovery today and all sorts of things. what was said in that meeting? well, i've got somebody who was there. and he's sitting right across from me. an old friend frank sorrentino chairman and c.o.o.

what did the fed tell you? what to do and how to do it? give me a hint. >> no, larry, it was an economic seminar, an economic conference about the state of the economy. where things may be headed, how things look here in the new york -- >> bullish or bearish? >> realistic. what it means is, i think we are in a recovery. the fed seems to believe the economy is recovering. the fed seems to believe that things may be a little bit different this time. we looked at a lot of the relationships between things like employment and unemployment. things like housing formation and the number of new homes that are under construction. and why this economy -- why there is so much slack in this economy and not as much gdp growth. >> all right. that's all well and good and i'm interested in what the fed says about the economy. >> that matches up real well with what we see on the street. >> that's where i want to go. did the fed suggest to you that this is a good time to take some risk and make sop loansome loan?

and are you making loans because nationwide business lending is up 15% year-on-year. are you participating in that? >> larry, in the year 2011, our loans were up over 20%. >> wow. >> and our pipeline is quite full. we have a very strong pipeline of loans coming through for 2012. we are seeing additional lending being asked for at our bank. we've seen more construction loan applications. >> so the demand -- >> demand -- >> for loans, which is a very healthy -- >> demand is healthy at this point, not certainly not what it was three or four, or five years ago. but it is definitely stronger than it was -- >> did you have any sense when the fed's talking to you guys that they wanted you to pull back to avoid risks? is there regulatory jawboning going on? little hints across the table? i know how those guys operate. i started at the new york fed around the time calvin coolidge was president. >> no, larry, there was no talk

of any of that. the fed is definitely there to support community banks, make sure we do, in fact, help the economy the best way we can, and certainly that's making loans. >> is dodd/frank hurting you? is the consumer financial safety, you know, regulatory board -- is it impinging on your lending to consumers and/or businesses? >> larry, the consumer financial protection board certain lip doesn't impact bank-like hours. dodd/frank at this moment with 2,300 pages in the statute with less than 25% of the rules being written, i couldn't tell you if it would or won't. at this moment -- >> does the volcker rule -- do you do any house trading with your own money? >> we do not do any -- >> proprietary trading. really doesn't hurt -- >> so what's your biggest issue out there right now? biggest problem? >> larry, i would tell you that, you know, we're concerned about the economy going forward. there are certainly things, pitfalls in the road ahead of us that we keep an eye on. so --

>> if you're making loans and the demand for lending is up, that's a positive sign. absolutely. so this spring stall double-dip recession -- >> no, we don't see that, larry. we see things moving along at a nice, easy clip as we're moving along. we don't see a hockey stick coming out of this economy. >> right. >> none of our customers or clients are reporting a hockey stick growth. it's slow, steady -- >> good report. and those nasty guys in the new york fed didn't try to stop you from doing anything, is that right? >> no nasty guys at the new york fed. >> another discussion on that. frank sorrentino, great. great to have you on the show. stay with us.

are you still sleeping? just wanted to check and make sure that we were on schedule.

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active stock on the nasdaq traded more than six times its usual volume. it was one of the nasdaq gainers today and because jim cramer's kids used paypal, jimmy thinks there's upside in ebay. a lot of upside. good evening, jim. >> hey, lawrence, we have witnessed a remarkable transformation we bay. it has gone from being a slow-growing online marketplace to a fast-growing credit card company. that's what happened this quarter. that's why it went up $4.75 today after it reported a monster upside surprise last night and that's why it isn't done. i have loved the credit card division ever since i agreed to allow my kids to have credit cards and they said, okay, dad, we'll sign up for paypal. and like i knew apple was a great stock in the '50s. yeah, 50s because my kids wanted more than one ipod. i know that ebay is worth more than it is now. larry, paypal is visa. it is mastercard, hey, two of the greatest performing stocks

of our generation. and it's -- and ebay doesn't charge the retailers as much money as those two on retail transactions. which means the retailers have a predisposition to offer paypal along with visa and mastercard. the test at home depot, wildly successfully. it works terrifically on mobile. and when you use paypal, you don't have to enter your personal information into your mobile phone which means, look, let's say you get hacked, well, they can't hijack your identity. and the core business, the old online flee market enterprise, it's actually showing accelerated growth. out of nowhere. that's what makes this $40 stock worth $50 as either an earnings story or a sum of the parts breakup value. hard to beat even up here. back to you, lawrence. >> all right, many thanks, jim cramer. paypal, ebay. next up on "kudlow," mitt romney is in recovery and the numbers prove it. we have it for you next up. zap technology.

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welcome back to the "kudlow report."

presidential polling has tightened as americans fret over their finances and the economy. just moments ago, the latest nbc news "wall street journal" report poll was released. cnbc's john harwood joins us now with some of those details. good evening, john. >> good evening, larry, it's a fascinating survey that shows we can expect a very, very close election in november. let's start with president obama standing in a prospective general election match-up with mitt romney the likely republican nominee presumptive republican nominee, president obama leads 49% to 43%. that 49% matches his job approval rating in the poll, the 6% margin matches his margin over romney in the march nbc "wall street journal" poll. look at his standing among republican primary voters. 70% view him favorably now that rick santorum has dropped out of the race. 58% viewed him that way in march, so he's getting stronger there. and then on some key dimensions,

we've got a very interesting balance of forces. first of all, on likability, president obama's got a 3 to 1 advantage over mitt romney, that's a big advantage for him. but a much smaller advantage on who shares your position on the issues. the president leads mitt romney just 40% to 34%, now on the most important issue, who has good ideas to help the economy? mitt romney leads by that same 40 to 34% margin, and then finally on who will change business as usual in washington, mitt romney's got a 36% to 29% advantage over president obama. and, larry, peter hart, the democratic pollster who conducts this survey who you and i both know said president obama's standing is clearly stronger than it was last fall because the economy's improved, but only improved to having a 50/50 shot for winning reelection, no better than that, larry. >> all right. 50/50, thank you, john harwood. appreciate it very much. now "new york times" cvs poll makes the point that their doubts on the economy and those

doubts offer an opening to mitt romney. we have the correspondent for "the nation" magazine and tony fratto, former white house deputy press secretary. it's not just horse race stuff, people in these polls that worry about gas prices, worried about their homes, their mortgages, worried about their kids' college education. and i want to ask you, how vulnerable is obama? because romney is winning almost all these economic approval polls. >> welm, i think that one of the biggest things that jumped out to me was a long-range question a striking number of people saying they're changing their plans for where they want to send their children to college based on these hard times. you know there's always going to be a big gap between the numbers we talk about on air and what's improving in the markets, a strong market in the last couple of months comparatively speaking versus what people are planning for their lives, for their children's future, which is of course what elections are always about the future.

yes, there's vulnerability there. i don't think it's all a win for romney on policies. the other thing i'll point out briefly is a majority of americans still say the upper income bracket, which romney happens to be in and which he wants to further cut, people say that bracket is paying too little. not too much. >> no, i get that. just tony fratto, quinnipiac poll shows romney 58% to 36% on the economy. the rasmussen poll shows romney 49%, 39% ahead of obama. and as john harwood said a moment ago, 40% to 34%, romney ahead of obama on the economy. tony, let me ask you this, jobless claims are rising again and the non-farm payrolls in the march employment report a week ago were very disappointing. is that going to add to the angst regarding the economy slowing down the obama campaign? >> i don't think there's any question about it, larry, all of

those data points contribute to concern and unease among voters. also makes it really, really difficult for the white house and president obama to go out and tell a positive story, you know, every day like they'd like to be doing. they'd like to go out and say the economy's strong and improving and they keep having to temper their message and give a balanced message and you get the message that things, you know, could be, you know, they could be worse were it not for my policies and a tough message to sell to the american people. it keeps them on their back heels while romney gets to go out and continue to talk about, you know, the president's policies and whether they were successful or not and some of the very low-levels of economic activity that we still see in the economy. >> but you know what -- one of the things that strikes me in the whole discussion is so far in the polling data, to me polling is like the stock market. you look at the prices every day and every week and you try to figure out what the trends are. it's not so much what mitt romney is for, it isn't so much what barack obama is for.

it's a referendum on the current economy which is now obama's economy. that's what strikes me. so things like gas prices and falling home prices and the latest employment reports or jobless claims, whether president obama has anything to do with that or not, it's his. he owns it. >> i think that's right. and i agree with tony's analysis, although we come about it from different angles. when tony says, look, you own this and this is what people are seeing and it's hard to sell a counterfactual. it's hard to say, look at what we did, it would have been so much worse. and the big documentary, 17-minute video that the obama campaign recently put out to much fanfare made that argument in detail. but as you say, larry, people aren't looking back in hypothetica hypotheticals. and this is an economy that will be always associated with an incumbent president. >> i mean, i think that reason why romney has 10 or 12-point lead in most of the economic approval polls is because people are not happy with the economy. it's that simple. let me jump ship.

there's this big story out today -- >> don't jump ship, jump topics. >> unemployment plan, some of the states including georgia -- we'll have the governor on tomorrow, but ten states while you're working part-time or you're trying out a job, you're going to get unemployment benefits, see if you like the job, see if you learn on if job. seems to have bipartisan support, but i want to ask you, is this a controversy? or is this just some clever little reform? >> look, i think it ought not to be controversial, larry. i do think we need to think about creative ways to keep workers in the workplace. however way we do it. right now, we really don't have a very good re-employment policy or a policy for helping the unemployed in effective ways. and it goes across, you know, a lot of administrations, my administration, have not done a great job of dealing with this problem. other countries have good ideas of how to deal with it.

and i think it's worth looking for ways -- you know as a business, the most costly and difficult thing you have to do is to attract and retain talent. when you have to lay them off in a recession and then try to go back and do that costly work of bringing them back, it damages the economy. >> see, i get all that, but there is a controversy here. a lot of people who are working will not understand particularly why those who are working are getting unemployment benefits. they're saying, well, if you're working, then you shouldn't get unemployment benefits. we don't want to pay you twice. is there a controversy here? >> there is a controversy, and unfortunately, i think people who want to politic on it will muddy it. but the question is not about the paradigm or the branded words we're using. unemployment or not unemployment. the question is about stimulus and repairing the economy. and so i think absolutely what you want is job retraining. what you want is getting people back in the workforce. and anyone who had a job disruption in their life. whether it's because they couldn't get a job or disease, knows how hard it could be. >> all right. we will revisit all this.

thank you very much. appreciate it. tony fratto, as always, great stuff. >> thank you, larry. >> thanks. >> all right. i can see education and so forth is getting unemployment benefits, but i don't know if you have a job, you get unemployment, i'm not sure of that. anyway, that's it for tonight's show. tomorrow night, we're going to look at this test plan once again from georgia. each state has an economic recovery, eight months of declining employment. the governor will try to explain to me why we should pay people who are working with unemployment benefits. we'll see you tomorrow night. the chevy cruze eco also offers 42 mpg on the highway. actually, it's cruze e-co, not ec-o. just like e-ither. or ei-ther. or e-conomical. [ chuckling ] or ec-onomical. pa-tato, po-tato, huh? actually, it's to-mato, ta-mato. oh, that's right. [ laughs ]

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