is an investment, it's not a trade. don't have any apple, maybe use the weakness to buy something. it's an investment, people. i like to say there's always a bull market somewhere and i promise to for the first time mitt romney is tracking at 50% in the newest "washington post"/abc poll of likely voters. romney leads president barack obama 50-47. this is just further evidence why i believe he will sweep the midwest and win this election going away. i'm now predicting a 330 electoral vote landslide. that's right, 330 electoral votes and i'm going to show you why later on. but first up tonight, with elections 12 days away, then the lame duck congress, including

the fiscal cliff, we call on leon cooperman, chairman and ceo of omega advisers, one of the 40 businessmen behind the open letter, a critical choice for america advertisement that ran earlier this week in "usa today." lee, thank you for coming on. i appreciate it very much. i have to ask you, you've had a fabulously successful career. this has to be a tricky moment. you have an election in 12 days. you have an unsteady market with earnings dropping and so forth and so on. what is your advice to investors? how do we get through this between now and year end? >> thank you, by the way, for having me on the show. i think the stock market presently is in a zone of fair valuation. so i wouldn't call myself aggressively bullish or bearish. we have been quite optimistic for the last three years.

but the rise in the market from the lows of '09 has put the market now in a zone of fair value. having said that, to your viewers i would say that i don't think there's a better alternative amongst financial assets than common stocks because i think the federal reserve has created an environment where when you look at the alternatives, they're very unappealing. you can keep your money in cash because you're negative and you'll earn zero. keep your money in u.s. government bonds which yield about 1.7 or 1.8%, adjust it for inflation and taxes, and that instrument doesn't long at 1.7% and 1.8%. >> so you're not a big seller? you know the issues as well as anybody else. you have a sluggish economy, housing may be doing a little bit better, but business is not investing right now. you have earnings way below what people expected. you have revenues way below. the stock market in the throes of a 3% correction.

even before we get to the election-year politics and shenanigans, just right now, how long do you think this earnings correction in stocks will go on? >> well, i think the main reason why we have moved into a zone of neutrality in our investment view is because we think the profit cycle is peaking. having said that, basically the stock market is still relatively undemanding in its valuation. i don't want to sound like a statistician. to some extent, all of us in the stocks business has to be. but the p/e averaged about 15 for the s&p. in that same period, the u.s. government is 1.8% and the multiple in the market is about 14 or a little bit less. so we're below the historical multiple at a time when interest rates are almost a quarter of their historical average. so the market is relatively undemanding in its valuation. that's the result of people

de-risking and being very much mindful of what happened to them in 2008 and also some of the uncertainties you talked about, the election, et cetera. >> let's go to those uncertainties. you've written an open letter to president obama. you expressed your criticism of him. you call it divisive class warfare aimed at the successful people in business. you signed the letter today. lee, let me ask you first, if obama is reelected, how does that impact your investment thinking? >> well, i would think it would be a negative because basically it would be an amplecati catioa his policies. i respect him and the office of the presidency. but every bone in my body tells me we need a change in leadership. i wanted the president to do well when he was elected because if he did, the country would do well. he's not improved on the

situation and in my opinion, has made it more difficult. there's a lot of suffering out there. and i'm sympathetic to that suffering. i'm not a fat cat basically on the republican ticket. i'm basically pro choice, pro gay rights, i'm for aggressive income tax structure, i'm a strong believer in the safety net for the disadvantaged. i think the carried interest for hedge funds and private equity is ridiculous, it should be eliminated. and i think romney should not have had a tax rate of 14%. but it was legal. and i would only point out that the president controlled congress and the executive branch of the government for two years. if he didn't like the tax structure, he could have changed it. and i've taken the giving pledge with warren buffett and bill gates. i'm going to cycle back what i've made in 45 years. >> you accused the president specifically in this note of too much debt, overspending and overregulation. so i guess in view of your points -- i appreciate your other aspects on social policy and so forth. but just on the hard economic and investment strategy points,

lee, if the president is reelected, is that a sell signal for investors, in your judgment? >> i don't think the stock market at the present value is discounting either a romney victory or an obama victory. i think the stock market is kind of, like i said, in a zone of neutrality. the country will do okay either way. i heard warren buffett this morning on cnbc and he said he thought the economy would move ahead under either president. but i think it's a question of leadership, one is more confident in the policies to be pursued. i think mitt romney has been accomplished in everything he's tackled in his life. and i think he has the capacity to bring the country together, to bring the various self-interest groups together to move us down the road. and the president has unfortunately been unable to do that. and i don't think we want to

give him another four years to move us in the wrong direction. what made this country great was everyone had the ability to achieve. >> right. >> and now we're going down a path where everybody has the ability to receive. and i think that's the wrong path for the country. we all have aspirational. we believe in exceptionalism. i want to give everybody an opportunity to achieve but i think -- it's the old line, it's worked over by believing it. if you give a man a fish, you fed him for a day. if you give that person -- >> teach him how to fish. >> right, you've fed him for a lifetime. >> i love that, lee. i always have. let me ask you this, there's another hurdle. if romney wins, you still have a lame duck congress and you have the prospects of whatever, $400 billion, maybe $500 billion tax hike. that would weigh heavily on the economy. how do you get around that has an investor? >> because basically there is no way that they will let the cliff hit. everyone's worried about it

because the last round of debilitating discussions that sent the market down dramatically. i believe at the end of the day, these people in washington are not that irrational, are not that foolish. they won't put the country through that kind of problem. i think the cliff will go to something closer to $150 billion. it will be a drag on the economy. but it will be kicked down the road and we have to start dealing with the problems and i'm pro-romney because i think he's more likely to bring together the various factions to fashion a -- >> he'll go across the aisle. he'll walk across the aisle. he said that in the debates. i think that's been a big reason why his polls have gone up. lee cooperman, if kudlow gives you a romney reelection, a much milder fiscal cliff and some kind of bipartisan debt deal next year, if i give you all that because of my respect and affection for you, how high can the dow jones go in the next couple of years? >> first, i would thank you for

that gift, a wonderful gift. i will prosper even more. i would say 1,555 minute s&p. make no mistake about it, no matter what is elected, we have wood to chop in this country. we cannot continue down this path of trillion-dollar deficits year in and year out where the fed is buying the deficit, that the federal government is printding. that's not going to wash down the road. >> we must have a change otherwise we're going to go bankrupt and we will not be the same country. lee cooperman, you are terrific. thank you very much for your time. we appreciate it. coming up on "kudlow," the 12-day countdown to the election. is it all about ohio? folks, i have to tell you, i'm thinking mitt could sweep the entire midwest. and i'm going to try to show you how. later in the show, experts warning the entire east coast that got slammed by sandy. full details coming up. and don't forget, free market capitalism is the best

path to prosperity. you heard it from distinguished veteran investor lee cooperman who wants to see some changes and so do i. "the kudlow report" will be right back. [ male announcer ] how do you trade?

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we need to make sure that ohio is able to send a message loud and clear, we want real change, we want big change, we're ready. this is our time. i need your help. we're going to win on november 6th. thank you, ohio. let's take back america. >> conventional wisdom has the road to the white house going through ohio. but ohio is just one of many states that i believe romney is actually going to sweep. but should the unthinkable happen and president obama

actually wins ohio, there are still ways for romney to get to pennsylvania avenue. so let's talk. here now is the director of suffolk university's political research center and bill whalen of stanford university's hoover institute. dave, let me begin with you. what's the path for romney if he doesn't win ohio, in brief, what's he have to do? >> well, he has to win colorado, nevada, wisconsin. and then either iowa or new hampshire. ohio is really key for him. and i think he has a shot to win it. in our poll that we released on monday, we have it 47-47. >> i look at that -- this is my little rant before i get to bill whalen. 47-47, that's an incumbent president well below 50. that is bad, very bad. that means he's a loser. you've already given romney florida, virginia and north carolina. i follow your work very closely. now, i'm saying -- i want to get

bill to weigh in. i'm saying when you look at all these midwestern states which are toss-ups, ohio, iowa, pennsylvania, michigan, wisconsin. they're all basically toss-ups and the president is below 50%. therefore, bill whalen, i think romney is going to sweep all those midwestern states and blow this thing right out of the water and can grab as much as 330 electoral votes. what's your take on that? could romney actually do that? >> i'm more bullish on romney winning but i'm a little bearish on getting to 330. i think high 280s to low 300s is more like it. you have a storm going up the atlantic seaboard. romney's had one surge in the last three weeks which has made him competitive to ahead in several battleground states. the question is does he have a second surge come the final weekend of the election. what happened in 1980, reagan

had one surge after the debate but then he had a gigantic surge the final weekend. reagan upon 50.1% of the popular vote in 1980. and he won 90% of the electoral college because all these midwestern states tumbled to him. >> right. the first debate was a blowout for romney. the second and third debates, it's possible president obama won on little technical points, although it was very close. look at these polls coming in. "the washington post"/abc poll today, for the first time -- they've switched to likely voters for the first time, romney gets his 50%. i believe obama's 47%. that tells me obama's going to lose, david. he's going to lose. and all those midwestern states are given the same message. if obama can't get to 50 in the next couple of days as the last independent undecided split, they are going to split against the incumbent. that's how it works. this election is virtually over already, david. that's my point. >> larry, i'm going to have to side with bill on this one.

i'm a little bit more -- you have to look at the numbers here. and you're also assuming that barack obama needs 50%. and he doesn't need 50% to win. and the reason he doesn't and suffolk university is the only university that lists all of the candidates on these respective ballots is he could get 49.5% or 49% and win in colorado. there are 17 presidential candidates in colorado. there are 12 candidates listed on the florida ballot. seven candidates on the ohio ballot. so you're talking about states like pennsylvania, wisconsin, michigan, where barack obama's teetering under 50%, 49.5%. that could be good enough in most of these states to win -- >> but most of these states are tied like 47-47, 48-47. i'll grant you what you said. you're the expert. i'm just saying, to some extent

the handwriting is now being written on the wall. those debate which is introduced mitt romney to the whole country as a presidential leadership-type guy, stable, a lot of good ideas, a guy that can go across the aisle and solve the problems that president obama has had four years to solve and can't, even now he hasn't paid any attention to the fiscal cliff. bill whalen, that stuff has taken a toll. and i just see romney not losing ground in the polls after the debates but still gaining ground. isn't there a message there? >> this again is why we get back to the concept of the surge in the final weekend. what is the president doing right now? waving around a job plan which is his warmed-over leftovers. surrogates are out there talking about birth control for women. trying to tie mitt romney to a senate race in indiana. these aren't the positive actions of a positive incumbent. by the way, talking about getting romney to 270 electoral votes, that scenario takes him to 269.

but he only needs 269 electoral votes to win because in a 269-269 tie, it goes to the house and the house will be all republican. >> i did not know that. david, did you know that? >> yes. >> bill whalen is such a smart guy. he's so smart. you knew that, too? >> he is indeed. i'm an admirer of his work and his political experience through the years. but i'm not one of those people who would be easily giving nevada to mitt romney. if you look at the core growing county, it's clarke county. in 1996, it was 50% of the total vote. in 2008, it's gone up ten points to 67%. that one county, las vegas county, could be 70% of the statewide vote in nevada. and it's rich with core constituency for barack obama. >> i agree with that. i'm pessimistic about nevada.

much more optimistic about colorado. but to close the loop, given what you know now, you were the first guy to give him florida, virginia and north carolina. given what you know now, is mitt romney the leader in this race today right now? >> i think if you look -- if you add to those three states ohio and new hampshire and in both of our suffolk polls, we have the race dead even in both states at 47, you mentioned the ballot test number at 47, that gets him to 270. but i'm not willing to just willy-nilly give michigan, pennsylvania, wisconsin, nevada -- i think those are potentially -- they could stay blue based on the ballot test numbers. now, as in polling, polling's a snapshot, everything can change. and if that happens, and obama were to drop, then obviously -- >> we'll be watching very carefully. david and bill, thank you, gentlemen. i appreciate it very much. up next on "kudlow," hurricane sandy takes aim at the east coast with meteorologists saying it's likely to cause $1

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transform your investing with the e-trade 360 investing dashboard. the northeast is beginning to batten down the hatches for hurricane sandy and that's expensive. seema mody joins us now with the first estimates of the storm cost. good evening, seema. >> good evening, larry. the estimates begin at a billion

dollars and head north from there. based on the cost of irene at the same time last year when power was out in new england. we get the latest on the storm now from bryan norcross at the weather channel. what's the latest? >> this hurricane is in the bahamas now. and it is heading north. and the big concern, i think it's going to dominate your lives starting this weekend there in the new york city area and all of the northeast. let's take a look at this graphic here. there's the hurricane moving north through the bahamas. it bends offshore but over the weekend, it's affecting the carolinas with pretty good winds right along the coast. and then early next week, it bends in to the northeast. we have never had a storm come out of the topics and bend in like that. so the thinking is that somewhere from props the delaware bay area, south jersey area north, this is going to drive water all along the

beaches. and this has the potential to cause tremendous damage along the coastline and the whole scenario we had with irene in new york city and the transportation problems and the power potential problems and all of that could be played out in this storm. it is not certain yet that it will be as strong as the computers are indicating. but right now, they are indicating an extremely strong storm with winds extending all the way to new england, coming ashore either on monday late in the day or early on tuesday. a lot more to talk about here on this. >> thanks so much, bryan. we'll see a lot of you over the next several days. mindful of the damage that happened last halloween and the potential for a frankenstorm, utilities and local governments across the northeast are putting crews on standby to deal with fallen trees and damage to power lines and making plans for shelter. power companies are asking employees to cancel planned vacation. >> halloween used to be just a pretend scary, not last year. probably not this year either. seema mody, thanks very much for the report.

coming up on "kudlow," leon panetta, defense secretary, he continues the white house cover-up over benghazi and he tries today to worm his way out of protecting our people in the consulate. that story up next. ♪

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welcome back to "the kudlow report." i'm larry kudlow. in this half hour, how bad is europe? american companies are laying off their euro workers and closing down their euro plants. worldwide exchange host kelly evans is going to join me in a little bit. another group of ceos now trying to pressure washington to fix the fiscal cliff and keep us out of bankruptcy. but i see a lot of talk and no action from the ceos and the politicians. but first up, defense secretary leon panetta now joins the obama cover-up of benghazi. take a listen. >> basic principle is that you don't deploy forces into harm's way without knowing what's going on, without having some realtime

information about what's taking place. this happened within a few hours. and it was really over before we had the opportunity to really know what was happening. >> respectfully, i think that's just a lot of nonsense and hooey. last night, we learned and reported of another e-mail that said they were still under attack and holed up for at least six more hours. and panetta had realtime information much earlier than that. if he had acted immediately, we could have sent fighter jets, commandos to protect our consulate, the navy base is not far away. so this burns me up. let's talk. cnbc contributor david goodfriend is with us, former clinton white house official. ben webber, republican strategist and mitt romney senior adviser. and emmy-nominated actress janine turner, founder of constituting america. we wait for janine to get strapped in. ben webber, i want to go to you,

i know that governor romney has stayed away from this issue, at least during the debate. i don't know what he's saying on the campaign trail. but we no from report, we know that panetta was in an oval office meeting with the president and the vice president at 5:00 p.m. on 9/11. we know that. we also know those e-mails came in as you well know at 4:05, 4:59, 6:07 and later on in the evening, another e-mail said that they were still fighting it out six hours later. i don't understand how we didn't send ach weapons, help and assets help as we could. i do not get it, ben. i'd like your opinion because i think panetta is covering his behind because it's part of a political cover-up. >> larry, i think that you're probably right. what's emerging is a picture of the administration basically watching this happen and doing nothing about it. we had assets in the neighborhood an hour away in italy, as you point out, we could have done something about it.

there was e-mail traffic within the administration. there was advance warning. why we did nothing about it remains a great mystery. i don't think, larry, that it's going to be litigated in this campaign, though, because this campaign's going to end up being a referendum on the disastrous obama economy. as soon as the election is over, watch congressional republicans demand an accounting from this administration on what is rapidly emerging as a genuine scandal. >> janine, i have to bring you in on this, from the great state of texas. janine, we had significant military assets as vin weber said an hour away. to me, it is criminal that panetta and the joint chiefs didn't rapid deploy those assets and get them to the consulate of benghazi. in an hour, they could have had fighter jets, run commandos in a couple of hours after that. how sit possible we did not defend the ambassador and all the support staff? how in this country, janine turner, is such a thing possible? >> i don't know how such a thing is possible.

it's also amazing to me that it's not a bigger deal and being covered in a way that watergate was. this is a benghazi-gate. i hope that it will be covered with the dignity that it deserves for the four lives that we lost. i don't know. incompetency, they were afraid, paralyzed to make a mistake. were they thinking about the election and that al qaeda is still alive, terrorism is still alive? whatever the excuse is, it's unexcisable. it's one thing when the cia and our wonderful military is doing a great job, to sit back and say, yeah, okay, go ahead and get bin laden. but it's another thing when he has to make a real decision on the spot and obviously president obama didn't make it. >> david, you can laugh and giggle as much as you want. but i'm telling you, this is a major mistake. it is going to be investigated after the election as it must be, as vin weber suggested, by democrats and republicans alike. and it sends the worst possible

signal of american weakness to the middle east and to groups and terrorist groups that hate us all around the world. we should have had military assets in there pronto, as soon as they learned it on 9/11, in that oval office meeting, david. >> larry, my conservative friends might like to think this is watergate. but when things are unfolding very quickly, it's not always easy to know what's really going on on the ground. and to my mind, the really important question here is about how information was collected. it's probably better to let the relevant government body dos their work i have . those are not my words. those are condoleezza rice's words today on fox news to her interviewer, greta van sustern. condoleezza rice said it and she's right. and today, colin powell endorsed the president of the united states. you argue with them.

all you conservatives who want to make this -- >> i will argue with them. what i don't understand sand what i think a majority of americans as this story unfolds on the public stage will never understand --ened i want to ask about the mainstream media, too -- how we could not have taken actions to defend the people in benghazi. we had plenty of information. i'm sorry. there's a lot of voices out there, vin, that are very modest, dovish voices. i don't like that one bit. >> this is a scandal. david's trying his best to cover it up. but it's not going to be covered up. i would make this point as well. while all the administration officials, susan rice and everybody else were saying, oh, this was the tape, it was the riot, not everybody was fooled. congressman mike rogers was asked almost immediately and he said, this looks to me like a terrorist attack. this is when all the administration people were saying that there was no evidence of terrorism. they couldn't prove it. why did mike rogers see immediately that it looked like

a terrorist attack and the administration couldn't see it? this was not something that was unobvious to the average person in possession of intelligence information. this is something that was denied by this administration and we haven't had a good explanation of why yet. >> janine turner -- >> condoleezza rice, condoleezza rice. >> janine turner, i want to go to a separate but related subject, that is the lousy mainstream media coverage of this whole story, including in the last 48 hours over these e-mails. janine, are the mainstream media in the tank for obama? are they swallowing this phony video and spontaneous protest thing hook, line and sinker? they hardly reported it yesterday and the day before. are they just going to go along with everything obama wants to get him reelected? >> i think they do just want to get him reelected so they're staying silent on it. can you imagine if this were reversed and a republican had

did this, they would be all over it. and they're not. where's the bob woodward and people out there investigating what's really going on from the liberal press? they're just not doing it. they're putting it on page eight and nine in "the new york times," barely touching it in the news. they'd rather talk about the pop culture. >> they should be grilling him. >> they should be. >> the mainstream media should be grilling every single obama surrogate, i mean grilling them and they're not doing it. >> and one of the reasons why is because the bigger picture to this is this will take away our freedoms. we are in danger here. our liberties are in danger. and the freedom of the press is going to go away. >> larry, i would like to join your criticism of the mainstream press. i'm going to shock you here. actually the big story that the mainstream media is missing is the fact that alleged fraudulent and criminal actions by a company called strategic allied consulting in florida, in

virginia, across all of these swing states, so much so that the rnc has had to distance itself from this republican contractor, there is real voter fraud going on -- >> i don't have any problem with that, david. but you're blowing smoke. i don't have any problem with that. you're blowing smoke on me on this particular issue. and i must say, with the greatest respect to condoleezza rice and with the greatest respect to general powell, the greatest respect, two friends of mine, with the greatest respect, i believe they're wrong on this issue. and i think people have to stand up then as a former house member -- you were in the leadership -- i want so much for the gop and you'll find democratic hawks, vin, i want bipartisan condemnation of how this would handled. i want republicans and democrats, vin, the democratic hawks are out there. i want condemnation of this. >> i don't think there's any doubt that's going to happen. but i have to say again it's not

going to happen before the election. >> well, all right. >> david's got to defend it now because we're just days away from an election. as soon as this election is passed, you're going to find a virtual consensus that this is a disaster and a scandal. >> take me out, janine. you had something to say? >> yes, i do. not the mention, i just believe it's absolutely un-american for president obama and his administration to go around saying that this was because of a tape, a videotape that someone did in america. we have freedom of speech here and it's absolutely -- that's criminal in itself. >> read the transcript. the president called it a terrorist attack. >> we did not protect the men and women on the spot with rapid deployment. i don't know how we're going to live this down. david goodfriend, thank you. vin weber, janine tuner, thank you all. europe's weak economy is wreaking havoc on u.s. multinational companies and our stock market. so the question is, is the worst yet to come? that's coming up next on "the kudlow report."

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companies are finger-pointing the eurozone's economic woes. take caterpillar, 3m, ford, dupont, dow chemical, all identify europe as the weakest link in the global economic chain. the question is just how bad is business over in europe and how long is it going to stay bad? noble better to tell us firsthand, london-based, than cnbc's own kelly evans, host of "worldwide exchange." welcome back to the show. >> larry, thanks. great to be here. it's hard being five hours ahead of time. now i'm back here in the u.s. we can talk europe. it's been a big trouble spot for a lot of these companies. >> i think that there's a big wake-up call here and i think it's affecting the stock market. a lot of these multinationals who operate in europe are not only reporting earnings misses, which happens, but they're reporting lay-offs and production cutbacks. i want to ask you, are you getting wind of that in your reporting and how bad is it? >> first of all, it is bad. if you look at just the numbers coming out of europe, it's clear there's no topline growth. sales are down.

a company like caterpillar, they're down 1%. may want sound like the end of the world. ibm down 9%. whirlpool with europe, middle east combined, down 19%. kimberly clark which says it's going to stop selling or producing diapers, ford said they're going to cut 18% of their european capacity and 5,700 jobs as well. if ythat's lay-offs upwards of 10,000 to 11,000 across europe. >> and these are european workers. >> and it's bad for these companies for the u.s. multinationals but it's much worse for europe. >> is it compounding the european woes? >> of course because where did the woes ultimately start, if you take a country like spain, portugal or greece. it's about competitiveness. debt-to-gdp ratio has two factors. when the gdp is shrinking, that's when the debt starts to

increase. greece has gone from 180% to 120% debt-to-gdp ratio. >> because it can't possibly support the debt story. >> exactly. >> as you look around, whether it's britain or the continent, is there any hope? are there any positive signs? >> just today there's actually several. just today we had the uk report that its economy expanded in the third quarter. it was a surprise. gave people some sense -- >> how much? >> .4%, if i recall. that followed an earlier contraction. there's been a lot of confusion over the data because the employment figures have been much stronger than the output figures. maybe the economy isn't as weak as expected. then flip over to europe where the macro situation is grim, there's a sense the stock market has priced a lot of this in. >> euro stocks have been doing well, to be fair. >> exactly. because that's when you get -- this is an issue both for europe and for the u.s.

if we're not in a 2008-2009 period, what exactly are we in? it's a complicated question from an investing point of view. it's easy to rattle off the weakness we're seeing in the talk of europe being through recession through the end of next year. but if you say what's the investment case? does that mean you steer clear, stocks are priced in -- >> they're exporting. the euro is pretty cheap. what about the better countries? you have germany, the netherlands, sweden, one of my favorites. the northern part of europe has an economic life. i don't know about the southern part. >> i was waiting to see if you were going to put france on that last. france is the pivot point. >> i won't. if he's going to raise taxes to 75%, forget about it. he's a total socialist. >> what's interesting about france is it's been on the verge of -- no one's been quite sure whether they should consider part of the core or part of periphe periphery. if it's not part of the core, if we can't rely on growth, if we can't rely on it, meaning its

deficit projections to a certain extent or just needing more assistance to get spending going again which is capped because there isn't much desire to do the kinds of things that hollande is going, to raise taxes and revenue, bottom line is this, focus shifts to france. if france is vulnerable across the eurozone, it makes the eurozone more vulnerable, complicates relationships between france and germany when they need to negotiate with regards to continued efforts to -- >> we look forward to your reports. >> there's plenty to discuss. >> kelly evans, operating outside london. used to be a regular on this set. don't forget to catch her, "worldwide exchange," it's every weekday from 4:00 to 6:00 a.m. up next this evening, more than 80 major ceos are pressuring congress to reduce the federal deficit with bipartisan reform. some of them apparently really want to raise taxes, another lousy idea. think of france. it's all next up on "kudlow." in america today we're running out of a vital resource we need

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whoever wins the election, i think they there will have to be a compromise. i think the other side is not going to go into a funk. >> people say business leaders should be more vocal. look, we're vocal. this is a complete distraction -- an important distraction at a time when the country doesn't need it. let's get it done. >> it's going to get done. the american people won't stand

for it not getting done. >> big name ceos on cnbc this week saying, it's time for both political parties to act on the fiscal cliff. today at the new york stock exchange, more ceos rang the bell and joined in the call for action as part of the fix the debt campaign. ceos from more than 80 major american corporations are pressuring congress to reduce the federal deficit with something called bipartisan reform. let's talk about bipartisan reform. we have cnbc contributor and former auto czar steve ratner and steve ovlin. former chairman of office depot and autozone. bipartisan reform, on the budget deficit, and i guess the fiscal cliff, the top of "the new york times" website today is playing this as, ceos want deficit reduction by raising taxes. do you think that's the best way to go about this, steve? >> well, i think what we're

trying to get in the business community and the community for economic development is attention from both sides of this critical issue. we're running over trillion-dollar deficits every single year. we now from over $16 trillion in debt and it isn't easing up. we have to have reform here. we simply have to have a package that cuts spending and deals with tax reform. >> but that's not what they want. >> it's not just about raising rates. >> it's tax reform. >> it's tax reform. the issue right now is we have the highest corporate tax rates in the world. and so if we just simply raise tax rates, we're going to make ourselves even more uncompetitive in the world. we have to have reform that raises more revenue with a pro-growth policy. >> i like that part. steve rattner, i want to go to you, these ceos -- everybody's against the fiscal cliff. they don't want tax hikes and they don't want spending cuts. if they don't want tax hikes and spending cut, they're all a

bunch of hypocrites as far as the long term is concerned. >> if these were true, i would agree with you. but i actually think the group of ceos who we've assembled want a balanced approach of spending cuts and of increased revenues, hopefully through tax reform. but revenues have to go up. not as much as spending has to go down. spending going down is going to bear the burden of this. but both have to happen. the ceos i've spoken to, the ceos we've signed up as part of the committee to fix the debt understand that. >> where is the spending cuts, steve rattner? why don't they -- it's all very vague. i don't expect the head of ge to go through a budget exercise like omb. i get that. but for example, i want them to say, we have to keep spending down to about 20% of gdp or even less. i'd like him to say what steve oddlund is saying, when you're talking tax revenues, not talking about raising tax rates. but i don't hear.

that makes me think these ceos like to do good and say good things but it will come to nothing. >> i hope you're wrong. i think you're wrong but time will tell. our committee has not endorsed a specific plan but it has endorsed the general principals in simpson/bowles that do include spending reductions and do include revenue increases in the con detection of tax reform. the key to this is to get the debt-to-gdp ratio to stop going up. that is the key test in our minds of any successful package. >> i agree with you on that. 100% agree with you on that, debt to gdp. and i think the way to do that -- steve, i think we spend too much. i don't think we're taxed too little. i do agree about tax reform. but i think we spend too much. what concerns me in these exercises is everybody starts talk about revenue before they start talking about spending. further more, when you say $3 of spending cuts for every dollar hike in revenue, you never get it. you get 1 for 1 or you get no spending cuts and you get lots

of revenue increases. that's what seem to happen with these crazy deals. >> that's why we have to be careful and make sure we have a balanced package. in the business world, you can't just say, we want sales to go up, therefore we're going to hike prices up through the roof. that's the equivalent when you're talking about rates. you have to have a balanced package in the private sector by putting in zifs. same thing in the economy. that's why the committee for economic development has led three of these kinds of endorsement campaigns. we need to have reform. everything needs to be on the table. we need to look t it and reform this in a fundamental way to get this economy growing again and start creating jobs in this country. we have a $16 trillion pile of debt that we need to grow this economy into. >> steve rattner, it's funny, the debt doesn't bother me as much as the lousy growth and the economy. that to me is the absolute key.

you and i may agree on some of this and disagree on others. but if this becomes a hunt for more taxes and the spending is always taking second place to so-called spending cuts, we'll flunk this again. we need serious spending cuts. >> i don't disagree with you. as i said, i think the package to fix the debt is behind would have far more coming from spending reductions than would come from revenue increases. but i don't believe -- i think it's just math. i don't believe you can get the deficit down to that gdp ratio that we talked about without some revenue increases as well. i agree with you that growth is the most important thing. but the best thing we could do to achieve growth in this country, in my opinion, would be to provide business and consumers with some certainty, both as to the fiscal plans, as to the tax plans and as to what's going on in washington. >> i agree. we have to lower those tax rates. incentive effects for lower individual and corporate tax rates offset by caps on the loopholes or elimination, that's

the way to do it. that's the pro-growth way. >> that's the exact way. highest tax rates in the world from a corporate standpoint. 75% of the top individual payers are small businesses. we need to make our businesses competitive. >> thank you, gentlemen. i appreciate it very much. that's all we have for tonight's show. thanks for watching. free market capitalism is the best path to prosperity. that includes spending reductions, spending reductions is part of it. if we want to improve our schools... ... what should we invest in? maybe new buildings? what about updated equipment? they can help, but recent research shows... ... nothing transforms schools like investing in advanced teacher education. let's build a strong foundation.

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