for economic growth. plus, my one-on-one exclusive with former florida governor jeb bush. we'll talk tax cuts, the debt bond, and how he would do the one thing president obama has not, lead. day two of team obama in damage control mode when congress goes crazy over bill clinton's interview on cnbc. clinton got it right. the recession needs a tax cut extension. with "the kudlow report" moments away. >> the fellow over there, has something up his sleeve. i think u.s. a king. but if it's a six or something lower, we're going back to the macro salt lines, we careful. there is a bull market somewhere. i promise to find it somewhere. i'm jim cramer, see you tomorrow. hey, larry, what do you have? >> jimmy, public sector unions and democrats in wisconsin got spanked, and the markets loved it. good evening, everyone. i'm larry kudlow. this is "the kudlow report," the top story, scott walker

landslide. historic election was a grassroots, taxpayer tea party revolt to curb public union benefits and monopoly bargaining power, governors will heed the pull to hold down entitlements, and as rails, the dow had its best day of the year, up 287 points, and tmarkets love the s walker win. investors see balanced budgets without income tax hikes, see it going national. san diego and san jose, pass their own pension cutbacks. you heard art hog an last night. predict a scott walker rally. he has been prevent right. now what happens? he will tell us. also this evening, my interview with florida governor jeb bush. what does he think of the walker win? what does it mean for mitt romney's campaign?

tax cuts and president obama's attack on his brother's legacy and how he will do one thing that president obama has not. lead. plus, team obama has been in damage control most of the past 27 hours from an interview bill clinton did on cnbc, calling for a bush tax cut extension. the white house press corps went at it. bill clinton doesn't misspeak. he had the story right. first, scott walker's history-making wisconsin win was a slap in the face for challengers tom barrett. there you see it. first, we go to the aftermath of this election, cnbc's own john harwood joins us for a wisconsin recall roundup. good evening, john. >> a tremendous night for scott walker for republican allies in wisconsin and across the country and for those like scott walker who want to cut down on

entitlements and public employee unions. that bad for democrats, including the democrat in the white house, jay carney at a gaggle this morning said don't read anything into this beyond who is going to occupy the governor's seat in wisconsin, but everybody is looking at signs for november, and richard trumka, the labor leader, was forced to come out and say we're not done fighting in wisconsin or around the country. >> the nurses, teachers, firefighters, snow plow drivers and other wisconsin citizens that make the state great will continue to fight for an economy that works over a partisan agenda. >> a sense of disarray on the democratic side exacerbated when larry summers came out and said something similar to what bill clinton said to maria bart yiro

yesterday. he later backtracked in a subsequent e-mail, and president obama came out through jay carney and doubled down and said we're not going toeks tend the tax cuts. lines are drawn, and at this moment, politics are difficult for the administration. >> john, at what point does this backtracking, all these guys, and back to cory booker on the bain capital issue and clinton and larry summers on the capitalism issue, at which point is this totally counterproductive to push these guys to take back what they said. smart guys doing the talking. at what point does it damage the white house? >> i think the ladylines have damaged the white house already in the sense of confusion that's occurred. i think in fairness, bill clinton did say he does not favor the permanent extension of the toppan-end tax cuts and so did larry summers, but given the fact that the economic weakness that everybody is feeling is getting much more approximate and much more threatening, given

what's going on in europe, i think everyone is putting on the table in a way that that hasn't happened before, and, remember, president obama has done that before. extended tax cuts in 2010, where he thought there was a significant economic risk and the sense of economic risk is cleari inly rising. >> thank you, john harwood. next stop, washington, d.c. will the historic election help deliver a president mitt romney to the white house? that's a key angle to the scott walker victory. tea party supporter and radio talk show host tony katz and mike papantonio. tony, let me begin with you. does this help mitt romney? how much of a leg up does it give mitt romney? >> it helps mitt romney, it hinders president obama.

you can't engage what the left has been doing which is lying, about the importance of this race. the idea of from wasserman schultz, a dry run, jay carney saying it doesn't really matter after all, walker outspends barrett so much, which was disproved. this was the public unions and union bosses going after scott walker, going after the people of wisconsin, and the people of wisconsin stood up strong and tall and said, oh, hell no. this is going to be very bad for obama going forward. >> mike, papantonio. big winner scott walker. i think mitt romney was the big winner. he gave such a spanking to the public unions, they are the big loser and barack obama is the big loser, he is the union guy. this changes the presidential race. >> it doesn't at all. all of this big talk, big victory talk, let me tell you something. before the inher tense baby billionaires who went out and bought this election go out and

buy themselves a new gulf stream or serve up new caviar or start drinki drinking cristal, they need to be honest. this was a stalemate, not a check mate. leaving walker virtually powerless to accomplish anything, they took back the senate. >> that is ridiculous. >> he was down 12 points, tony, according to msnbc polls. mitt romney came out of this thing -- >> he doesn't understand economics. you don't understand economics. we want people buying gulf streams. we want people buying caviar and champagne. we want people buying things out of wisconsin. we want them spending and an economy that thrives. you can't do that with public employee unions that think they can suck off the people of wisconsin. too bad for them. >> met me ask you something. you really believe this was is a mandate? if it's a mandate, why did

cassic in ohio go down burning when he put the same mandate in front of the people. >> mike -- >> wait just a second. you want to read into this -- >> you don't understand what's happening. >> you want to read into this it's a huge mandate. >> mike, let me ask you this. hang on. tony, hang on. i want to ask mike a direct question. the exit polls, 55%, favor limits to collective bargaining for public unions and 38% of union households, 38% of union households voted for scott walker. now, if you can't -- i want to come walk to the original question. to mitt romney. the republican ground game, the turnout ground game on election day was fantastic. and, mike, that is going to be cranked up again in november.

now, that's got to make and you your pals think twice, does it not? >> let me answer what just said. let me answer what you just said, you don't think that there are any reservations and the unions not just in wisconsin, but all over this country, are energized, are you wrong. i got to tell you something. wisconsin has never been as organized in a grassroots level as they are right now. myth is goi mitt is going to get spanked in wisconsin in this election. >> i don't think the numbers show that. i don't think you're paying any attention. tony katz, let me -- >> all the numbers show -- >> tony katz, let me go to you on this last point. the point i'm trying to make. much mitt romney has a chance to climb on the shoulders of this victory, and the ground game so per vaif, that's where the unions lost. the unions are going to be on the defensive, tony. talk to me about the mitt romney

factor here on the shoulders of scott walker and wisconsin, a swing state giving romney a tremendous advantage? >> they told you you couldn't fight city hall, wisconsin proved them wrong, can't fight the unions, wisconsin proved them wrong, and we don't know whether or not romney can win the electoral votes in wisconsin. they are up for grabs, florida, wisconsin, pennsylvania, ohio, they want to engage clean coal. you bet you. one more number. brown county, that hosts green bay, gave ten points more to walker this time around than they did just two years ago, according to my sources. that's telling you something. >> don't break out the grey poupon yet. >> grey poupon is delicious. what's wrong with you? >> all the numbers show it. you can't ignore the facts.

>> you are so anti growth, you don't want people to have condimen condiments, that's deranged. >> are you on the shortened of the numbers stick. the public-sector unions will be on the run. the white house is on the run too. that's just my view. tony katz, thank you. mike papantonio, thank you. we're taking a flash poll right now. does scott walker's win in wisconsin mean mitt romney can win the 2012 presidential election? all right. please go to "the kudlow report" page on facebook and see the results. coming up, bill clinton has it right about the economy. that's my take. president obama has it wrong. why the house has to stop backtracking and face facts. and stocks love the scott walker win. wall street had its best day of the year after republicans win wisconsin. coincidence? i think not. why i think it's a sign of

things to come for investors. don't forget, folks. free market capitalism, the best path to prosperity. a pretty strong dose of the last night in wisconsin. i'm kudlow. we'll be right back.

now that bulls are back in town, for a day, all three indices surged well over 2% today. blue chips back in positive territory for the year. stocks love scott walker's landslide victory in wisconsin. spanked public-sector unions and the democrats why do they love it? a growth message and stocks love growth. and by the way, some remarks by global sense of bankers about monetary slim husband may have market. i don't deny it. i want to discuss the walker factory as well. former head of fixed income at bank of america, david goldman, and president of macro strategy, and since he was on the money last night. i brought back my friend, art ho began. ho hogan. here is what you said 24 hours

ago about a scott walker victory. let's go to tape. you believe the outcome of the wisconsin election, if scott walker is victorious, that could be a game-changer for the stock market. tell us about it. >> a turning point. a turning point. what might we the results of the presidential election in november. >> all right. you nailed it. you nailed it. i don't know, almost 300 points can be aattributed, i have no idea. supply side methods boost, and it opens the door wide for the market friendly candidate. where do we go from here? what is the thought from sustaining the rally based on the political an atsis? >> a business piece of it, we'll start paying attention to what will happen in november. focusing entirely on europe. we've been focusing entirely on a slowdown on the u.s. dmek data calendar. we haven't been focusing on a

change in administration and what it might portend. a step in the right direction if you will. and a confidence builder. we had seen two days in the row to the upside in 35 days. it didn't take much good news like we got last night. >> you distrust the market? you don't think the scott walker thing has anything to do with anything? >> i think we'll get a huge rally. the great investor strike against obama will end the moment romney is elected. a lot of room between now and getting there, we have to watch out for the spanish thing coming back to bite us. i have been saying, europe doesn't matter. is 1.3 trillion of the spanish banks will be wiped out. >> i didn't hear -- i want to understand this. i didn't hear anything specific

from dogdrage. i heard him say some of the board members want lower rates. i didn't hear anything specific. nothing specific from ben bernanke. some phone calls going back and forth. i didn't hear anything specific. what changed in europe in the last 24 hours? >> nothing chaz changed, larry. europeans are going through the usual rounds of effectless and deceptive diplomacy. a massive problem with spain and it will blow up with they get consultant reports about the spanish banks. that's a problem to watch out for, and the reason i'm still cautious, nonetheless, because everyone made massive amounts of money, shorting europe, and exactly as art said. people were positioned, we're in opposition for good news, and the slightest burp from drage will cause -- >> does it reflex in this

network, other networks, our guests, all good people. but the reflexes, cause and effect, always about central bankers tightening or easing. what about supply side tax cuts and entitlement cuts that would promote growth. there is a supply side growth analysis that the stock market loved. we learn thad during the reagan '80s and the clinton '90s is that honeymoon going to end soon because our market is not in good shape? >> you bring up a very good point and you only have to go back two days to listen to what fed governor fisher had to say on the very topic. his commentary very spot on, we can't do this with monetary policy alone. >> thank you. >> that's exactly the case. something ben bernanke trying to get out there. >> fiscal policy changes. that could change the growth outlook and that could change the stock market outlook. that's what i'm trying to say. >> that's exactly correct.

lynch tomorrow up on capitol hill. ben bernanke will reach out and pull that out again. it can't be done by monetary policy alone. he will try to get fiscal policymakers to think about what they are doing. can't carry the burden. >> that's an important subject. do you expect bernanke to break ground? everyone is talking about bernanke and qe3 back on the table. what do you think? will we hear anything tomorrow? >> i think we will get hints toward qe3. this is so disastrous, the banking system imploding. central banks respond. and liquidity. i agree with you, larry. the decisive thing. and the economy is pour and profits in question. we have the worst investment performance in ever so-called recovery ever in the post war period, and the moment we get a change in fiscal policy or the strong promise of one, floodgates, $2 trillion on cash and corporate balance sheets. >> one thing bernanke may say.

he has swap arrangements with the ecb in europe. he could give them a lot more dollars. give them a lot more dollars in return for europe. that's a possibility. now, let me ask you this. how about bill clinton pushing for an extension of the tax cuts to avoid the tax clip. how about larry summers? democrats are disagreeing with the democratic president who want to raise taxes on investors and rich people. how about clinton, how about summers? maybe clinton contributed to this brief stock market rally. >> it certainly pushes the conversation to the center, right? and the center, much like we saw in the election last night and what we'll see in november, not thinking what we have higher taxes, and i think we need to think about fiscal policy to stimulate growth, because we have run out of monetary policy and that's exactly where we're headed. >> the united states will not commit suicide. we'll elect a republican president, a rollback of regulation and improvement in fiscal policy and will have a

boom. how soon the market gets it is a big question, and how much bad news from the incompetence in europe will trickle to the short term is another question. >> art hogan said the wisconsin story is a piece of good news on the supply side. basically you don't like the market, that what i'm hearing? >> a lot of bumps in the road ahead. june will be a difficult month. i think we'll see a centrist politician -- >> what he said. what he said. >> makes it nice and simple. >> david goldman and art hogan gave credit to art hogan and bill clinton. up next, my one-on-one with jeb bush. president obama uses the bush tax cuts like an insult, and you will see what we have to say about that right after the break.

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i'm jackie deangelis at cnbc global headquarters with a news update. federal prosecutors calling for a maximum sentence of 230 years for convicted ponzi schemer alan stanford. linkedin confirmed some passwords stolen. the data breach may have compromised millions of users on the social networking site. stock not impacted by the breach. and many thousands of

americans fought their way to the shore of normandy in france. up next, larry's exclusive interview with governor jeb bush. "the kudlow report" returns in a moment.

welcome back to "the kudlow report," i'm larry kudlow. this half hour, maria bartiromo's interview with bill clinton is generating aftershocks more than 24 hours later. no sooner had the key point on recession and extending tax cuts hit the air waves that clinton and the obama white house tried to walk back the former president's remarks, saying clinton misspoke. let me tell this amateurish white house something. they probably already know. bill clinton is a professional. he never misspeaks. also tonight, greece running out of cash, literally, and spain in pain. and doesn't the eu have to guarantee bank deposits to avoid a financial tsunami?

an exclusive interview with robert zoellick, moments away. a national political game changer, scott walker's win. huge implications for the rise of mitt romney's presidential prospects. earlier today, i sat down with former florida governor jeb bush and began by asking for his take on walker's recall victory. take a listen to what he told me. >> courageous leader, and he was rewarded for courage. and in a world of dysfunction, it's really good that a guy like that, who had the courage of convictions and acted on them is rewarded with a victory. i don't even know why we had the recall to begin with, but if there was to be one, better to win by a bigger margin than he won in 2010, with a higher turnout. i think it's a leading indicator of one thing, which is the intensity of the conservative side of politics stronger than

the liberal side. >> that's it. let me go there. does had this show that the grassroots tea party, taxpayer movement, which was so predominant in 2010, has come back to life? we've seen this in other states. this wisconsin thing seems like a real illustration. is the tea party alive and well? >> yes, they are and they play a huge role in reminding people we're on an unsustainable course when it comes to spending at every level. scott walker takes the general belief and does something really novel, acted on it. changed pension structure in wisconsin, and it worked. within a one-year period, you began to see the benefits of people not being laid off and economic growth being -- being increasing over a year. >> balanced the budget. >> did all the things you would want someone to do. >> getting jobs. okay.

so how big a spanking was this for the government public sector unions? how big a spanking did they get yesterday? and is it a national spanking as well as just a wisconsin spanking? >> sure, it is. it's a spanking because they made it that way. they raised the stakes, they made this a national campaign. all of the leadership, debbie wasserman schultz of the democratic party and the union lead errs all said that all roads lead through madison basically as it relates to the national campaign. this was a national statement. >> does romney get this game-changing election last night with scott walker in wisconsin? >> i think he does. and he knows we're on an unsustainable track and his messaging is focused on that. how bold it will be and specific it will be in the putrid environment in washington, where anybody that expresses a creative thought is pummeled by

the opposition on both sides, may suppress some of that. but i think he understand that. and i know he understand it. >> all right. let's go on. you just testified before the house budget committee, and i want to stay with the theme. the cbo just put out an incredible report on the debt bomb that paul ryan has been talking about. debt to gdp 77% now. and 90% in ten years and high as 250%. you acknowledge that compromises will have to be made. in fact, you said if there was a compromise, hypothetically of $10 of spending cuts for $1 of revenue increase, what the republican candidates wouldn't agree to during the primaries, would you take that deal. first, will compromise be necessary to save america? >> it will, unless you have total domination of one party over another, which i don't anticipate happening any time soon. this isn't a political problem

this say question of the united states is going to be in its ascendency or abject decline. we're on an unsustainable course. the only reason we've been allowed to stay on the course is a monetary policy of 0% interest rates and the fact that europe has bigger problems than we do. so we're the -- we're slightly larger than the next midget basically. basically, we're not being punished for spending, you know, creating debt for every dollar we spend, 40 cents is -- we have to go to the markets to borrow. this is notnot sustainable. never in anybody's wildest dreams could anybody say that this is sustainable. so it seems to me that if you could -- if you're a? a position of leadership, you have to find creative ways to find dmon ground. maybe through the tax code, maybe looking at exemptions. >> that's what you meant with the 10-1. >> yeah, maybe you defer the

lowering of rates and -- and compared to eliminating some exemptions. a short-term revenue gain, but at the end, have you a simplified tax code with lower rates that will spur economic growth that will create more revenue than any tax increase could -- >> a bit of supply side. >> absolutely. so -- >> and entitlement reform. >> the fact is right now, absolutely that too. and that would be where you would -- that's the grand bargain. >> what would you give up? if you were running the house budget committee, running the senate, whatever, what would you give up? here is -- it's this this compromise thing. chris christie gave a speech at president bush's conference in new york a couple of weeks ago and christie said politics is about compromise. you can compromise without giving up principles if you lead. jeb bush, if you were leading right now, where would you compromise and what kind of deal would it look like? >> if you could get a cap on

entitlement spending in the out years, are you going to save trillions of dollars, not billions of dollars, and in order to bring people along, are you going to have to look at the tax code. and so dealing with exemptions in some way that might satisfy the left to deal with the unsustainable entitlement problems we face, i don't know what the impact deal would be, chris is right about one thing, it requires leadership. the president of the united states had a chance after simpson bowles had a chance to lead and he said i have a better chance of being re-elected in a close election, dividing the country, rather than trying to find common ground to get a bigger deal that would sustain our country over the long haul. >> christie very critical of president obama governor christie was, and just recently house speaker john boehner said, look, let's make some kind of

deal to extend bush tax cuts this summer to help businesses get through their uncertainties, let's look at the debt limit ceiling and make a deal. at a luncheon at the white house and president obama seemed to away. you've been a successful governor of florida. are you critical of president obama on this lack of leadership? >> i'm very critical, because that's his job. without a president. you can't find -- >> leadership is his job. >> to lead us in times of peril to a better place. and so he's viewing this from a political point of view. if you take away the so-called bush tax cuts, at some point, they are embedded in the tax code after 12 years, would you think that talking about raising taxes would be just that. but if he takes that off the table, then he's -- you know, he is missing the one key ingredient in a populous. >> he wants to raise taxes. raise taxes on the upper end. >> he wants to use it as a political wedge issue rather than to try and find common

ground. republicans had the president led as president on this particular subject, the republicans would have been in a box. he's never come close to putting him in a box, so we have -- we have divided government at a time when it would be great to find some common ground. >> you are the first guy -- first leading republican to say you would take a 10-1 deal. might change some ideas. might change some minds. >> i have been out of politics where common sense creeping into my body. >> let me finish up with this thought. last couple of days, president bill clinton has called phone an extension of the bush tax cuts. i want to hear from you. it is president bush's tax cuts they are talking about extending. do you think that president bush gets a bad rap on the economy? obama blames him for everything that the democrats blame him for everything. does your brother get a bad wrap on the economy? >> of course he does.

and there is a point. in the fourth year of your presidency, it becomes unbecoming to constantly be blaming the past for your failures. and it's just not -- i don't think politically -- it's helpful to do that. and so, yeah, i mean, i think my brother gets a bum wrrap. just the way it is. >> thank you very much. all the best. all right. a very smart guy if you ask me. anyway, a programming note. will there be a deal on the bush tax cut extension. i'll sit down with powerful house speaker john boehner. up next on tonight's show, greece, spain, italy, all turning to germany for help. where does germany turn? and when? i'll have an exclusive interview with world bank president robert zoellick, trying to prevent a financial tsunami. and republicans feeling like it's christmas in june.

>> i want to thank you for having president clinton on. the gift that keeps on giving. >> all right. that's right. senator john mccain. president clinton is the gift that keeps on giving. let me say this. president clinton is right on this issue. and the walls are closing in on president obama's financial policy. clinton has got it right. larry summers has it right. we'll debate the whole issue of the fiscal tax cliff. stay with us. i'm larry kudlow.

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welcome back to "the kudlow report" reports tonight that greece is literally running out of cash. literally going broke. spain can't borrow more at these high rates and germany can't figure out what it's going to do with the whole eurozone crisis. those are some of today's nasty headlines. let's bring out special guest who's can illuminate us on these problems. you have robert zoellick, president of the world bank, and after five years, mr. zoellick will step aside at the end of the month. welcome back, old friend. good to see you. you may be getting out just at the right time. i know you don't have every answer to every issue.

you see headlines, greece going broke, spain can't borrow, germany the hamlet of the eurozone. what's going to happen here? how do you see this? is there a vision? >> the problem, larry, so far, europe relying on the central bank to provide liquidity. that buys time. we're coming to a crunch point. the greek elections will determine the point they will go. and i'm watching spain italy. a banking issue, and a question of whether they can fund the reforms they are starting to make. >> any sense that angela merkel is going to somehow step up and provide more resources? have you rumors every day, robert zoellick. rumors and rumors and rumors, but i don't hear anything specific. what is her role ultimately going to be? will she save the banks? save the countries, save the currency? >> first, i do think the

germans, more than most americans recognize, are committed to europe, and i think they need to step up. the miscalculations and things getting out of control. you can see they get pushed to the brink and finally do something. and i will be watching now, first what they might do on the banking side with spain, and second, she put out an idea recently that was suggested by policy thinktanks about trying to support some of the debt of countries over 60% of gdp, and make sure you have a long-term financing vehicle. that could be one option to try and match the reforms that are being done with financing, time will tell. >> to me, it's -- what you want to avoid is a global financial tsunami. something like 2008. now, you have written about this in "the financial times." at some point, robert, doesn't germany, ecb, all the authorities, don't they have to

simply guarantee the deposits of the banks, the interbank overnight lending of those banks, the bank debt. this is what was done in the united states and the uk in late 2008. it went a long way toward stopping the hemorrhaging. don't guarantees have to be put in place to avoid another tsunami in the financial contagion world? >> governments are worried about bailing out banks and the piece i wrote was trying to suggest the break the glass moment which is like lehman in 2008. if you do get to the point where depositors run. so far, jogging, not running, then do you have to take steps to deal with the con statcontag. they have to prepare for the eventually, but better to try to anticipate and head that only. >> i heard references to guaranteeing deposits, of course, eurozone doesn't have an fdic for all of the countries.

i have not heard about guaranteeing overnight interbank lending or the rest of the bank debt. the reason i raised this, short term to avoid a financial tsunami, it seems to me, somehow, you got a guarantee the banks. that's what i'm getting at. deal with countries later. the banking system will bring down the world economy. not a default from greece. >> if you do get a run, a history of the developing countries that i work with, you have to take those set of steps, but obviously it would be preferable if you try to head off the break in confidence by putting capital into the banks and trying to assure these countries that are making reforms, spain italy, the big ones, pension reforms, budget reforms, labor market reforms, questions about whether germany will step up to try to reassure that. if they don't, confidence breaks, things you are talking about, things you have to be prepared about, just like the u.s. steps up. >> great to see up. coming up on "kudlow"

comments about recession and tax cuts have sparked a firestorm on capitol hill today. the white house keeps trying to walk it back. it won't work. why? bill clinton never misspeaks, he has the story right and we'll tell you why. mcallen, texas. in here, heavy rental equipment in the middle of nowhere, is always headed somewhere. to give it a sense of direction, at&t created a mobile asset solution to protect and track everything. so every piece of equipment knows where it is, how it's doing or where it goes next. ♪ this is the bell on the cat. [ male announcer ] it's a network of possibilities -- helping you do what you do... even better. ♪ four walls and a roof is a structure. what's inside is a home. home protector plus, from liberty mutual insurance,

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still pretty low, but i think they look high because there is a recession. >> former president bill clinton on cnbc talking to maria bart i roma. talking about fixing the fiscal cliff. they created a firestorm on capitol hill. take a listen. >> i would make the same argument. the same argument that former president bill clinton making. >> obviously bill clinton gets it. >> bill clinton's remarks. >> even bill clinton came out for it, before he was against it. >> yesterday, president clinton seemed to agree. arguing we should act now. not after the elections, to avoid the fiscal cliff. >> well, i happen to think president clinton right on the money. isn't it time to fix the fiscal tax cliff, get business some certainty, and stave off recession? here now, house members peter

welch, democrat from vermont. and nan hayworth from new york. by the way, at this point, half the major opinion makers in the democratic party agree with the getting rid of the tax cliff and disagree with their own president, peter. >> well, there was picking and choosing among the republican leaders delighted to hear tax cut on president clinton's lips. he clarified that, number one. number two, i think what we need to do is what president clinton did, a balanced approach. his budget vote that he won by one vote, raised taxes and it lowered spending. a balanced approach. led to $20 million new jobs in three years of surpluses, and that's what i am arguing for. we need a balanced approach where the pentagon contributes, where we cut spending and raise revenues which will give certainty, deal with debt and boost the economy and growth in

the economy. >> nan hayworth with all respect to peter welch, i can't think of a worse time to raise taxes on anybody at any point. this is why i admire clinton. sees the lousy 69,000 jobs number. he is saying extend this thing for a while until we can have tax reform. he gets it vutly gets it. why doesn't president obama get it, nan hayworth. >> president obama has a very different idea for the u.s. economy. the only way we are going to get growth is by cutting taxes and assuring the climate will get far better for businesses, small and large, and the only way to do that is to make to sure they know they are not facing a fiscal cliff in january 2013. a very different economy than we had when president clinton was president. we have massachusettsive debt. >> the point president clinton makes is balance. that's key here.

what we have in the ryan budget, more tax cuts. tax cuts weighted at the high end and that's not going to put -- that won't put money in people's pockets. things people will spend on the economy. we're having an argument right now, we could see student loans double. a hammer blow to the middle class. the kind of thing where we should be investing money. >> peter, the best thing we could do for the middle class is assure they can have jobs, and right now we have unemployment above 8% for 35 straight strait months. so-called stimulus has done nothing for our economy but damage it we need growth and assure businesses that the chicago mate will be friendly for them. it's not now. >> i'm with you on the growth part. that absolutely has to be a key ingredient to work our way out of fiscal situation we're in. but growth is a balanced approach. you can't have the ryan budget where you increase pentagon spending and break the deal. lower taxes, primarily for the

high end, not helping the middle class and where you are cutting things like student loans and making more expensive for kids to go to school and graduate with an albatross of debts around their necks. that's a prescription for middle class oppression, not middle class relief. >> you are absolutely right that students are facing an avalanche of debt without little prospect for jobs to get out of debt. we need to grow the economy and the dollars we don't take in taxes go g. to growth, and that's what we need. everybody needs no take that balanced approach, which is to relieve our taxpayers, make sure that those dollars stay in the economy. right now we're way out of whack, peacetime has never been higher as a percentage of gdp. >> i disagree with that. revenues lowest they've been since the eisenhower years. the real key i talk to business people about, where is the demand? consumers buying, money in the

pocket, have a job, you are right about that, nan. they will be spending money. making student loans twice the rate what they are now -- >> peter, all due respect, i have to tell you, businessmen, businesswomen, they all want certainty. they are pulling back on hiring. >> we are the problem uncertainty. congress is dysfunctional. >> this is not the moment to have an obsession which president obama has about taxing rich people. >> this is not right. this has nothing to do with an obsession. >> you can have your reforms, right now this is not the moment. are you playing with fire, and that's why bill clinton had the recession story right. playing with fire. >> this is where i agree with nan. we should be strengthening the middle class. they are getting hammered. they have been in the past 20 years. people have not seen take home pay go up. >> out of time. you guys are great. thank you.

>> thank you. >> does scott walker's win mean he will win the white house? you said yes by a 4-1 march begin. now that is cool. my exclusive interview tomorrow night with john boehner. that's it for this evening's show. thank you for watching. i'm larry kudlow and i happy eno agree with bill clinton's prescription for the economy. at least right now i do. this man is about to be the millionth customer.

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