seconds away on "the kudlow report," the great steve forbes tells us why stocks are rising despite the sinking economy. speaking of which, bad news on jobless claims. the philly fed, home sales and leading indicators -- sorry about that. plus, massive increases for food stamps and other entitlements are a sign of government dependency, not economic growth. that's a message to congress. i'm kudlow. "the kudlow report" is just moments awayment -- away. >> looks like google is taking it to everyone. strong story and inexpensive. there's always a bull market somewhere and i promise to find it for you right here at "mad money." i'm jim cramer. see you tomorrow. hey, larry, what do you have for us? all right, jimmy. a new poll shows a staggering number of americans -- more than half -- disapprove of the president's handling of the economy. afraid i told you so. good evening, everybody. i'm larry kudlow. this is "the kudlow report."

our top story tonight, in florida president obama says romney is bad for seniors. attacking republican plans to repeal his health care. huh? it's the most unpopular program in history. more proof that president obama's attacks on capitalism, the attacks on bain, the attacks on business have not paid off. the key point here is that on handling the economy, more than half disapprove of mr. obama. in fact, the president lost 16 points since the last poll. cbs news, new york timesle poll gives the president a paltry 36% favorability rating. let me point out something about this business. ronald reagan praised entrepreneurship into recovery. why must barack obama trash entrepreneurs into recession. it is showing up in his polls and people do not like it. plus, the number two democrat in the house says food stamps and unemployment benefits are the best way to stimulate the

economy. this is totally wrong. paying people not to work is totally wrong. we already have have the economy on federal assistance. this is wrong. we need growth incentives to get us out of recession and get folks working. finally, another gsa scandal breaks. the gsa spent a quarter million on a one night only event. $28,000 for drumsticks. really? $29,000 for picture frames. really? we'll have the details, really. up next, presidential approval in a slump. obama gets a 39 to 55% shortfall on his handling of the economy. he's down 16 points since the last poll pack in april. here's one more number for you. a 36% down from 42 in april on overall favorability. these numbers just out from a brand new cbs new york times poll. they say it all loud and clear. the economy is hurting obama badly.

no amount of mud-slinging over bain capital, over unreleased tax returns is going to fix that. mr. romney criticized the president for putting fund-raising ahead of fixing the nation's economic slump. taken a listen. >> for the last six months he's done 106 fundraisers. so i think you learn something about the president's priorities. the job he's interested in protecting is his own. the job that should be protected is the job of men and women in this country who want to get jobs, who want to go back to work, who want to have rising incomes again. >> i just want to say, once again, why is it that reagan always encouraged entrepreneurs into recovery while president obama seems to be crushing them into egs. we have jonathan cowan, former rnc chair and romney surrogate jim gilmore and republican

pollster john mclaughlclaughlin. you know this poll well. you ask me it was devastating after all the bain attacks, after all the cheap shots about swiss bank accounts, after trashing business people and saying an entrepreneur can't succeed without government he's falling further behind, obama. what does it mean? >> the new york times cbs poll is not always quote bid republican pollsters too often. >> why? >> it usually has a democratic bias or sometimes they undervalue republicans. what's amazing in this survey is mitt romney, on the top issue of the voters concerned it's the economy and creating jobs. romney is beating obama 49-41. this is a failure of the campaign's negative attacks because they can't outperform policy. the average person knows outside the beltway the economy is worse. you can't get jobs. economic pessimism and policy. there is a huge policy failure. >> growth. jobs. why is this so hard? jonathan cowan, i don't think

president obama frankly understands politics very well. or at least not current politics. instead of swiss bank accounts people are worried about growth in jobs. as the cbs new york times poll said. another one today. mr. obama in florida attacking romney for attacking obama care. why? obama care among seniors and everyone else is probably the most hated program in america. why would he do that? >> but, larry, let's back up. i agree on entrepreneurs and growth. it's got to be the focus of politics. i disagree on the fundamental interpretation of the poll. first, the economy is bad. voters aren't happy about that. romney should be killing obama in the horse race. absolutely killing him with these numbers with unemployment over 8%. he's not. it's still a horse race. >> it's 39 for obama. >> no, no. >> 55 for romney on the economy. >> i'm talking -- >> how much more -- get there.

>> romney should be able to translate that into a lead in the national poll and he's not. second, and this is key. there is really bad news here for romney. three pieces of news. first, on the middle class, obama kills him. 52-38 on who is better for the middle class. only 11% of the people in the poll, 11% think romney's policies would be good for the middle class. george bush. romney is tied to george bush. 65% said romney's policies would follow bush. third, on taxes, the romney position, don't raise taxes on upper income people to help pay down the deficit. only 25% of voters support it. bad news here. >> not many people oppose that either. jim, i want you to get in here. je jonathan cowan is digging deep to find good news. i think the trashing of bain capit capital, the trashing of international bank accounts and as karl rove said, there are a

bunch of white house staffers who invest overseas. almost everybody in their right mind today has money overseas. the trashing of that hasn't worked. i think at the same time the idea that businessmen and entrepreneurs need government to succeed -- in other words, the trashing of entrepreneurship. jim, none of that has worked. even the cbs poll shows obama is losing ground. >> absolutely. larry, the people of the united states expect the president to offer some positive leadership. he's been there for four years. we still see 23 million americans unemployed or underemployed. we are seeing low growth in this country. they are expecting to see something in the way of a positive message from the president so that people will want to put him back into office again for four more years and they are not getting it. the most important issue facing the people of the united states today is jobs and the economy and the future of their careers and their children's careers.

instead we are getting attack after attack on irrelevant issues. people of the united states are smart people. they understand -- >> let me read this key point. mr. obama has 39% economic approval. mr. romney has 55%. now that's the most -- >> exactly. >> that's the most overall statistic we have. go ahead. >> people do not have faith in the president that he's going to be able to solve the key fundamental issue, that he's in the white house to do. >> if romney is doing well -- >> hang on. >> when they were in the field the news story over the weekend was that the president was trashing small business. he was trashing business owners. >> right. the president with his own sound bite is driving these poll numbers. everyone missed that. >> but if romney is doing so fantastically why do only 11% of people in the poll think his policies are best for the middle class? that's a disaster. >> but romney -- >> hang on.

>> governor -- >> let mr. mclaughlin answer that. he's a pollster. please. go ahead. >> i was going to say because dressing the economic issues and the president is doing nothing but attacking, that's why you are going to see the numbers. the people's confidence and the president's economic handling is 39%. this is a president after being there four years. he said this is a chief issue yet he has 39%. >> i want john mclaughlin to answer this question. john cowan found a little miniature thing in the poll. tell me that. >> the middle class isn't a little thing. >> by the way, the president would be ahead but his policies are failing. this is a referendum on the president. obama is running against obama. his policies are failing. >> john, one more step before we leave. in florida today, i want your brilliant defense on this.

okay? obama is talking to seniors in florida. that's the late afternoon news. he is saying that mitt romney is a bad guy because romney opposes obama care. i want to tell you, seniors just like the rest of the country can't wait to repeal obama care. this looks like another big blooper mistake by your man, obama. >> absolutely not. seniors aren't significantly affected by obama care. they already have health insurance. most of them are on medicare or medicaid. this is not a problem at all for seniors. yes, obamaare nue serverle shall among parts of the electorate. i have said this before. this election isn't going to hinge on obama care whether you are for or against it. it will hinge on the middle class. right now the poll shows clearly romney's got a serious problem in reaching the middle class. >> many thanks jonathan cowan, jim gi willsmore and john

mclaughlin. now, switching gears. after attacking romney's finances the gop nominee has a big super pac ad campaign coming to his defense. take a listen to this one. >> what happened to barack obama? the press and even democrats say his attacks on mitt romney's business record are misleading, unfair and untrue. blowing smoke. too far. no evidence. so why is obama attacking? he's added $4 billion in new debt every single day. unemployment stuck above 8%. family incomes, falling. barack obama can't run on that record. >> that's the work of the conservative super pac american crossroads which has made nearly a 9 million dollar buy in nine critical swing states. joining us now is american crossroads president and ceo steven law. steve law, welcome back. why now, steve. what's the message? >> two quick things. first of all, one thing mitt romney is facing is a very difficult funding disadvantage

versus barack obama who has a 6-1 advantage in funding money that he can spend before the conventions. the second thing is we thought this was an opportunity to reintroduce obama to voters from the perspective of the person they thought they voted for was some leader above the fray. now we portray him as someone who's spent $100 million in negative ads that the press say are riddled with inaccuracies because he can't discuss his own record. >> that's a key point. steve, is this going to rebut the overseas outsourcing of jobs. the whole issue of foreign investment. is this going to rebut some of the bain capital, you know, when did romney leave, when did he sell his stock? looks like it is. that's what karl rove wrote in the paper today. are you going to try to right those wrongs? >> it does two things, both important. first of all, it undercuts the confidence people would have in all the ads that have been seen before that the press has said are laced with inaccuracies.

it makes another important point. this person they have trusted as a tran century dent leader is looking like another grubby washington politician running negative ads so he doesn't have to discuss his record. >> how long will the ads run? what's your reckoning now? >> these particular ads run for ten days and we look at what things look like and decide what to do after that. we'll keep the focus mostly on president obama's record and how he's failed to improve the economy which, as you said earlier in the segment is the reason why the numbers have gotten to be so bad despite $100 million spent trying to dust up his opponent. >> thank you very much. the crossroads super pac. coming up, tech turbo charges stocks again. oil is up, the highest since mid may. can the markets remain resilient despite a bad economic data day? we'll go to steve forbes and art hogan trying to tell us what happens. coming up, hank paulson warns of

dire consequences if congress doesn't fiiscal cliff. we'll show you what will happen step by step, give you a timeline. how bad is this massive tax hike really going to be? don't forget, free market capitalism is the best path to prosperity. mr. obama is fighting it. that's why his polls are going down. i don't spend money on gasoline. i don't have to use gas. i am probably going to the gas station about once a month. drive around town all the time doing errands and never ever have to fill up gas in the city. i very rarely put gas in my chevy volt. last time i was at a gas station was about...i would say... two months ago. the last time i went to the gas station must have been about three months ago. i go to the gas station such a small amount that i forget how to put gas in my car.

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markets logged a three-day rally. the s&p hitting the best level since may. today the kou was up 35, the nas up 23 and the s&p up 4. once again, tech led the way. my question is this -- with today's indications of a slumping economy, that whole bunch of lousy data points and frankly the prospect of a massive tax hike and fiscal cliff, i want to know why markets seem to be doing so well, at least recently. we have art hogan from lazar capital markets and steve forbes, media chairman and editor in chief. steve forbes, it looks like a lousy economy getting worse. the stock market seems to be shrugging it off. i wonder what your thinking was. >> one, the market is undervalued today. as you know it's gone nowhere

since the late 1990s. there is another factor. what barack obama said about business in the last few days. markets are realizing. people aren't reacting well to that. lit up the internet. when you get little bits of news that this guy might be in trouble, markets take comfort from it. >> oh, bad news for obama is good news for the stock market. is that what you are saying? >> that's the bottom line. people know he's bad for growth. he doesn't like business. he made that clear. business people have no impact on the success of their businesses. entrepreneurs don't matter anymore. people take great offense at that. the american people are not envious. they know individuals make things happen. that's what this economy is about. that's what the american dream is all about. >> a democratic poll like the cbs new york times poll coming out showing obama with a 16% loss of the economic approval, that actually is bullish. that might have been the turning point for stocks today. >> could have been. the fact that his ratings are

going down, it's not just the bad economy. i think it's his feelings that he doesn't believe entrepreneurs make the economy go. this goes against the whole ethos of the american tradition. >> do you sign on to any of that? a lot of people in the markets are talking about better an ex-they coulded profits. i don't know if it's true or not. what's your take? >> i would also say we are in the counterintuitive period where we look at the economic data calendar and say it's not that bad but bad enough to push bernanke over the edge. >> oh, bernanke put. >> we have the bernanke put driving it. also expectations were so low that it is extremely easy to beat. we have companies like intel coming out. we are not getting worst case in terms of guidance. we have certainly seen better than expected earnings but revenues have been disappointing. >> let's just do that.

a lot of tech companies had better earnings but the revenues were lousy. guidance was lousy. that's like a forecast of their world growth. they don't think much of it. why isn't it weighing more heavily? >> it should be. especially if you look at the makeup of what we think the year looks like. we are back end loaded on estimates for the s&p 500. most of the earnings growth is in the 4th quarter. if you listen to the guidance we are getting that's not the case. you will see the overall guidance coming down deeper into the earnings report season and the multiple won't look so cheap anymore. >> steve forbes, why is the economy slumping again. i had mr. geithner yesterday for an interview. every year we have a false up and it comes back down. he said because we don't have enough government spending. do you agree? >> ask japan. japan's been doing it for 20 years. their growth and national debt is 200% of gdp. what's it gotten them? what's hurting the u.s. economy? you have hit it before. the weak dollar.

weak dollar means weak recovery. you don't have king dollar, you have pauper dollar, it drags the economy down. what are stocks about? it's about future income streams. if you don't know what the future income streams will be denominated in, is it ten cent dollar, 50 cent dollars? people discount that. it has you going into things like land, commodities or sitting in cash that doesn't earn anything. >> you have won a lot of forecasting awards. let me ask you, are we going into another recession? >> we are going into the equivalent of a walking pneumonia or a bad flu. not enough to put you in bed, but people will feel punk. it's like going in a car 25 miles an hour on the turnpike. we should be going 75 and if no one was looking we could be going a hundred. >> buying or selling? >> i'm cautious. it's not the time to buy into this pop coming out of the earnings reporting season. if we are going to get a turn it will be in the fall. it's early. >> if you sell, where do you put

the dough? >> keep it in cash. you don't put it in the ten year for 1.5%. >> bernanke pointed the finger at congress for raising taxes. >> he did point the finger. he put it right in the face. >> i didn't hear him say -- >> absolutely not. >> it's already not been used. >> it's a game of chicken and he said, it's your turn. we can't do it alone. >> i liked bernanke this time. he was tougher than usual. he got it right on taxes. got it wrong on spending. steve forbes, thank you. art hogan, thank you very much. up next on kudlow, how much yahoo! is about to pay its new ceo. big job, big bucks. wait until you hear how much. it will make your head spin. we'll have the details when we check in with the cnbc news desk next up on "the kudlow report."

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yahoo! is paying the new ceo marissa mayers big bucks -- really big bucks. brian shactman joins us with more on that. all the latest breaking headlines coming into the newsroom. good evening. >> larry, the numbers are striking for a company that's struggling. yahoo! will pay her $1 million in salary, a bonus up to 200%, $12 million in stock and options over three years. follow me here. then retejs awards of $15 million in stock and another $15 million in options. then another $14 million for the

stock she left behind at google. the deal could top $70 million. speaking of google earnings after the bell profits up 11% to nearly $3 billion on a big jump in paid clicks. microsoft had its first quarterly loss in the 26 years it's been a public company thanks to a $6 billion write down for the acquisition five years ago. the stock up in after hours trading 2%. we have word that police in madrid are firing rubber bullets into a crowd of protesters. tens of thousands marching across austerity measures in 80 cities across the entire country of spain. walgreens and express scripts back in business. the pharmacy giant agreeing to once again fill prescriptions from esrx customers. walgreens shares up nearly 12%. the ceos of u.s. airways and american airlines met to discuss a potential merger. talks break down between directv and viacom over comedy central

that can't be seen now by customers. carriage fees and there is a special thing on directv. you can click on it with your remote and they air the grievances even with a video from the ceo. they are taking it to the public. >> who's hurt by that? >> we are. but content wins so directv will have to take it but at a lower cost than viacom wants. >> thank you, brian shactman. we appreciate it. coming up, economic data goes from bad to worse. sorry about that. plus, the looming fiscal cliff threatens to plunge america back into recession. i'm sorry about that. what we're going to do is walk through just how bad it can be if congress doesn't act now. we'll try to give you timing. try to give you benchmark numbers, try to explain the whole thing next up on "the kudlow report."

welcome back to "the kudlow report." i'm larry kudlow. in this half hour, minority whip sten stenny hoyer's idea that food

stamps stimulate the economy is completely wrong. we need to break that government dependence and get people working again. that's the way to do it. and spending nearly a million dollars on a party in vegas, an extravagance that got the gsa in trouble with congress at one time enough. now we learn the same agency spent more than a quarter million bucks on another party. what's going on here? first up tonight, disappointing news on the economic front. we'll turn to charts and walk through some of this stuff. first up will be jobless claims. let's see how we do. look, this is not a catastrophe. jobless claims have been trending up for the last couple of months. today's weekly number was up 20,000. that tells me we are not going to get big bang numbers in the next jobs report. number two. let's go to existing home sales. all right. this one has been up and down. as you can see, it's now rolling down on a three-month average.

it's disappointing. we hoped to see better home sales, hoped to see more stability. housing starts were up a little bit yesterday. the whole housing home situation, i still believe is bottoming. i don't believe it is in recovery yet, at least that's what the data shows. number three, an important manufacturing index from the philadelphia fed. this one kind of looks ugly, if we can get it up here on the score board. the philly fed index, this thing has dropped three straight months. it's a lousy indicator meaning manufacturing is just not as hot as it used to be. fourth, the index of leading indicators actually fell for the most recent month in june. but on a six-month basis here it had a good rise earlier in the year. now it's starting to come down again, if you're worried about recession, keep an eye on all these indicators. so, look. i don't want to be too pessimistic here. the world is not coming to an end. but we have seen the economic data in recent months go from

bad to worse right before our eyes. we have seen it with the slow down in jobs. we have seen it with declines in retail sales. factory orders are slowing down. business investment is slowing down. here's my point. we could see for the second quarter one, maybe 1.5% gdp growth. only about half of what we had in the first quarter. it's not a good story. now, is this fiscal cliff thing going to run us back into recession? take a listen to what two distinguished former treasury secretaries had to say. it comes from cnbc's delivering alpha conference yesterday. here it is. >> i think there is some chance under the circumstances of all the pressures that exist in the post election period that the two parties in congress will come together and work to seek common ground to address the long-term fiscal outlook of the country which as i said a moment ago is unsustainable, dangerous and even today is having substantial effect by undermining confidence.

>> i know they will come together and address them. so the only question is do they do it before the crisis or after the crisis? if they don't there will be a crisis. >> two guys who know about that subject. will it come before the crisis or after the crisis? that being a solution. maybe no solution at all. let's go to our guest. we have john riding, the chief economist at rdq economics, former staffer at the federal reserve bank of new york and the bank of england and an old froend. john, let me just take first scenario number one. let us assume there is no solution to the expected extinguishment of the end of the bush tax cuts. okay? they are going to expire december 31. it's about $440 billion. what happens, john? >> i think we go into recession. the economy, as you pointed out in these numbers is growing, but it's not growing fast enough to

take a $400 billion plus tax shock in 2013. i think right now if you look at the markets, everyone is assuming congress is going to get something done in december like they did in december of to 10. but the president said never again. so we're going to have to see if it is never again or whether we'll get some rational ti out of the political process at the end of the year. >> i will come back to the economic consequences. let me ask you about the second part of the wis fist call cliff and that's spending. it is slated to be reduced by 108 billion dollars. i know you are a limited government guy. i'm a limited government guy. can we take that hundred billion dollar spending cut? >> i think we can. you're talking about a 1.5 trillion dollar economy. spending trickles out through the year. so that spending cut of $2 billion a week through 13.the pe

anticipate the tax increase and react immediately. in fact, i believe that a lot of the slow down you have shown is people reacting to that tax uncertainty now and saying i've got to be a bit cautious. >> as you see the congress, the house is going to vote to extend all the bush tax cuts. that's easy. it's the senate. the senate is not likely to resolve anything. john, when would therefore the recession occur? let us assume you're rolling in, rolling through august, september, october. you go right through the election. nothing happens. when does the recession occur? >> well, getting time of a recession is right after they have begun is hard enough. this is a tough question. ironically as we would go into the end of the year, the more people think taxes are likely to

go up, the stronger the economy is going to get in the tail end of the year. people will want to do things now rather than wait until next year. the tax shifting effect will probably pinpoint it. if we thought the tax rates would go up, get stuff done now, get a more favorable tax treatment. i think that would put the economy into at least a mild recession in the early part of 2013. >> all right. so first half of 2013 is the maximum danger zone for the fiscal cliff recession. is that what you are saying? and might it be a 1% decline, 2% decline? what would you guesstimate now? >> let's benchmark it like this. the economy is growing -- i think probably we can do a little bit better. say the underlying growth rate is 2%. mark it down from the recovery pace.

we'll take a shock to gdp on the tax front of somewhere close to 3% of gdp. so that would be a minus 1% number. i'm not saying they won't resolve it or we'll have a recession next year. i think it will be hard to avoid a mild recession. the problem is you can't look to the fed. this is an interesting thing by chairman bernanke. you can't look to the fed with the tools available to offset a $450 tax -- >> which is what he's trying to tell the guys. don't look to me to bail you out. you've got to do it yourself. that's the right message to have sent. unfortunately we'll get congressmen squabbling over a basis point on libor here and there rather than dealing with serious tax increases. >> all right. so the major danger point for recession, john, is the first and second quarters of 2013.

>> i believe so. >> all right then. stocks may start to discount that ahead. >> yes. may start to discount the dividend tax increase going from 15% to 43.4%. dividends have been almost half your return on the s&p in the last ten years. >> we are on tenter hooks. john riding, thank you very much. i appreciate it. up next, make sure you're sitting down. house minority whip says food stamps and welfare programs are too best things to stimulate the economy. i just don't get it. it's why greece is in such great shape. house members on both sides of the aisle square off next. why don't we have incentives to work, not incentives for government dependency? i'm kudlow. we'll be right back.

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the scandal plagued general service administration, the gsa, finds itself in the cross hairs of congress once again, this time for spending more than a quarter million dollars on a single party. cnbc's eamon javers has the full story. good evening. >> reporter: good evening.

the new brass at the gsa discovered another lavish event sponsored by that government agency back in 2010 and turned the details over to members of congress. the details are just as embarrassing as the lavish event in las vegas that came out a couple weeks ago. in this case the gsa spent more than $268,000 on a one-day event. they flew in 49 staffers for this awards event that took place in suburban virginia back in 2010. they spent $20,000 on commemorative drumsticks. all of that's got members of congress outraged. >> in this instance rather than mind readers and clowns they have guitarists and violinists. they are classing it up but it is an abuse of taxpayer dollars. it's going to stop. >> some members of congress say that reveals a culture of lavish spending and that the las vegas event wasn't just a one-time thing but represented a state of mind of gsa officials.

they say that's a state of mind that has to change, larry. >> all right. many thanks. appreciate it. shocking revelations tonight about democrats' understanding about the true engines of economic growth. house minority whip stenny hoyer said, quote, if you talk to economists, they will tell you there are two things that are the most stimulative that you can do -- one's unemployment insurance. the other's food stamps. my goodness. i think mr. hoyer needs to talk to different economists. for the first time in our nation's history, 50% of american households are now getting some form of federal assistance. we are still at 8.2% unemployment. i would argue more government handouts are not ever a growth solution. we don't want to pay people not to work. we don't want to pay them for government dependency. let's talk.

we have paul tonko, democrat. i have a lot of respect for mr. hoyer. i wish he'd talk to me about this. i beg your pardon, the whole center of gravity whether it is food stamps, social security disability, all the dependents transfer payments, the center is shifting to government dependency. that's a bad sign, sir. >> i don't think it's shifting to that dependency. it's biding the tide, getting us through a tough time. i think there are many -- in fact, unanimity was the outcome in 2009 about what could jump start the economy. it was just that. safety net programs that spoke to a middle class, working poor community that was without work through no fault of their own and that would engage the local regional economies, which it

did. you could argue we are still at 8% unemployment but many theorists say it would have been double, two points higher if those programs weren't available. >> larry, look. the american people are throwing things at the television with this stuff. they know it is not dependency on the government that expands the economy. what expands the economy is certainty in the tax arena and making certain we free up the job creators and the job creators do things to create job. >> my good friend from georgia, i would say the job creators are the small business community and the tax cut we are talking about extending the tax cut for the middle class for small business, you're covering 96% to 97% of small business is the order. >> actually, you're going to increase the taxes -- >> no. >> you're going to increase the taxes on the job creators. the million small businesses out there that will see their taxes go up, 53% of the small business

income going to see an increased tax through your policies. in fact, what's changed over the last two years? two years ago the president said, you wouldn't want to do this in an economic downturn? what changed? >> the effort here is to provide the middle class the available spending power that provides contracts, business for the small business community and the industrial base. they need customers. the confidence that comes by empowering the purchasing power of the middle class is what this is about. >> can we agree -- hang on a second. can all three of us agree that tax cuts, however you determine that. of course i favor a full extension of the bush tax cuts. let's put that aside. >> larry, what did that inspire? >> tax cuts which create incentives to work, grow and invest are vastly better than robbing peter to pay paul, than paying people not to work, than expanding welfare programs. in other words, what hoyer said was so utterly wrong.

we do not want government dependency. we want work effort. >> so you're saying -- >> we agree, larry. >> -- the bleeding of the recession didn't stop in 2009 when we e did the stimulus package and there was great job growth inspired by tax cuts for a decade that preceded 2009 that gave relief to the upper echelon and saw their income grow and we had 8.2 million jobs lost. >> i am seeing the utter failure of big government spending and the fact that we are paying out so much in -- that's the real story why gdp. we are on the verge of another recession and we are talking about flushing out the most successful small business owners with tax hikes. >> it won't grow as long as we continue these crazy policies. the stimulus was actually prolonged the challenge that we have and deepen the crisis we have. it's time to get back to the wonderful american plins province -- principles of

allowing people to get the government out of the way, decrease the dependency the american people have, decrease taxes so they have more disposable income to go out and create jobs. >> regulations, too. i tell you, i've got to go. >> when you empower the middle class you empower the american economy. >> i want to empower all classes. i don't want to choose. i want to empower every single american. one of the greatest things done to empower this country was under bill clinton and newt gingrich when they put work requirements and limits on welfare. what we have done with food stamps and disability we have blown the categories open again. that's why the economy is underperforming with all due respect. >> larry, let's go back to the clinton years. >> we ought to follow clinton's example with gingrich. they got it right. up next tonight, syria is in deep turmoil. government forces unleash helicopter gunships, artillery

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but how many more will how many more will die

before the united states of america first speaks up for them? >> welcome back to "the kudlow report." you just heard senator john mccain speaking out in defense of a nation in turmoil, diplomatic efforts are crumbling, even as rebels seize control of syrian borders. absent intervention there are fears of a civil war brewing. it's a 16-month uprising coming to a head. is there hope for calming the storm? let's talk to helema croft, senior economic analyst and syndicated radio host john batchelor. is bashir assad alive? >> he is. the russians are happy with him, happy with the status quo now. we have a serious problem and it's not getting better with the united states doing nothing. >> let me ask you, is the united states going to stand by and let this u.n. resolution blocked by

china and russia preventing us from coming in or a coalition from coming in and stopping a civil war or just getting this murderous thug assad out? are we going to hide behind the u.n.? >> i don't think there is desire for military intervention in syria with the obama administration. they don't want another middle east conflict on their hands. i think the blood letting will get worse. it is not a civil war brug. it is civil war at this point. it will get worse before it gets better. >> john batchelor is there a libyan scenario that's possible? the u.s. provides cover for england, france, i don't know, arab league, turkey. is there anything like that in the cards? >> wednesday light, nar larry, the president called mr. putin and asked for the death warrant on military intervention. mr. putin gave him the answer today with the first of many vetoes to stop nato or the united nations from intervention.

the united states doesn't want on the ground. it wants turkey and france to do the action. it will not happen. the russian fleet is now on patrol between syria and cypress. that's air defense. we cannot intervene over russian air defense. >> what does russia want? how do you see their interests here? >> it is their only key middle eastern ally. russia will do everything possible to preserve the assad regime. they were unhappy about the libyan resolution a yearing a. they believe trerp tricked into supporting a humanitarian resolution that ended in regime change. they don't want it to happen again. >> john batchelor, terrorists are bombing everywhere. they may be the good guy terrorists. they are the ones blowing up assad's cabinet, his own brother-in-law was killed. that's going to continue no matter what the russians say. no matter what we do they will continue doing it inside syria.

>> syria is a surrogate battle field for rihad, saudi arabia, tehran, iraq. the other terror act over the last 24 hours, the terror bombing, the murder of bulgarians in bulgaria authorized by iran. right now my information is that the president of the united states is putting pressure on the prime minister of israel not to retaliate. my information is that israel will retaliate. that's the right thing to do from a senior romney adviser i have the fact that the certainty of israeli retaliation is the most stabilizing thing that can be done now. tehran must pay a price. >> is this retaliation against iran directly, do you think, by israel? >> three possible targets. hezbollah, and baca, iranian interests or iran itself. >> i will give you the last shot at this. >> it's likely to be a covert attack. we are likely to see something

like we have seen in terms of the iranian scientists. i don't think it will be israeli jets pounding iran. but i think certainly will add to instability and potentially higher oil prices going ahead. >> okay. higher oil prices going ahead. you're saying all hell has broken loose, john, and it will continue. >> the war is under way and we are leading from behind. >> thank you, folks. that's it for tonight's show. as always, thanks for watching. my volt is the best vehicle i've ever driven.

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