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like i say, there is always a bull market somewhere. i promise to try to find it good evening, everyone. i'm larry kudlow. this is "the kudlow report." our top sizzle story this evening, call this a victory for freedom. mayor mike bloomberg's slurpee food police defeated by a state judge who called it, quote, arbitrary and capricious. another defeat for government excess. senator rand paul's our watchdog on that and he just won another one. it's not just new york. ceo jeffrey immelt says the biggest threat to american business now is government, including fiscal and political storm, lack of corporate tax reform, and overregulation. they're all holding back economic growth. and the president and mrs. obama didn't have an executive chef for 100 grand a year or three full-time calligraphers for nearly 300,000 bucks or a dog's

chief of staff for 102,000 bucks. do you know what? there would be plenty of money to go around to conduct white house tours during the easter season and beyond. all that with "the kudlow report," beginning right now. first up, a new york state judge overturns mayor bloomberg's proposed ban on large sugary drinks. this is just one day before it was supposed to take effect. it's a huge victory for free markets, for individual freedom, and it's a slam against government excess. and i say bravo for the judge. but mayor bloomberg, of course not backing down. he insists this silly soda ban is a matter of life and death. >> we believe it is reasonable and responsible to draw a line, and that is what the board of health has done. as a matter of fact, it would be irresponsible not to try to do everything we can to save lives.

>> all right. there you have it. let's bring in our old friend mark wall. founder of the sirius radio show left jab. breitbart editor in chief joel pollack. and on set with me this evening democratic strategist emily sussman and guy benson of townhall.com. i want you all to have a slug of this surplus of this slurpee, whatever the heck it is. all right. my pal mark wall, i have not seen you for a while. arbitrary and capricious. it's enjoined and permanently restrained. obesity has no imminent danger due to disease. now, this does a couple things. this not only takes out all this nanny state bloomberg stuff. this also punches a hole in michelle's obesity -- michelle obama's obesity campaign. what's your take, my friend? >> well, first of all, i'm jacked up on sugar. so i'll be speaking really quickly tonight. as you know, sugar does that to me, larry. it is great to be back. but listen, i don't see why we would take a judge's opinion on health just for the first point here. but the second opinion is i love

these limousined libertarians who always say oh, we shouldn't be in people's health -- or people's personal freedoms to go out and buy a 72-ounce bottle of sugar and yet the very same ones want to get in my life about birth control and about teaching creationism in schools. listen, this mayor made a decision that's a goal that's a very good goal. you can argue with the tactics. but the decision is to make new york a healthier place. >> i don't think -- >> his tactics may be up for discussion but he wants to make new york healthier. you too larry. >> i don't think it's a good decision. i don't have a weight problem thank heavens. i've weighed the same thing for about three decades now. joel pollack, welcome back. i want to ask you, joel, i see this in terms -- very much in terms of personal freedom, individual responsibility, free markets. i see you sipping on a slurpee. i think mr. bloomberg has treaded where he shouldn't go. and the other thing, joel, i'll just put this out there. this punches a hole in michelle obama's obesity campaign, too does it not? >> not necessarily. i think michelle obama's campaign is about educating the public to make better choices

themselves. i think mayor bloomberg wants to make the choices for people. and i think that's where the objections come in. you know, this kind of thing is going to come around more and more frequently as government controls more and more of our lives. with obama care we're now each responsible for everyone else's irresponsible decisions. so we are going to see more of this. but i think you can take michelle obama's campaign on its face and at its word and say hey, this is a great idea. people could choose -- >> she's not pressuring -- now, i lauded her a week or two ago because she had good things to say about walmart and walmart was cooperating with her. so what you're saying is she's not pressuring businesses the way bloomberg is legally pressuring business. is that what you're saying? >> well, with walmart i think the obamas and the democrats have been after them for a while. so their compliance with anything michelle obama wants to do may be the result of some pressure. but you're correct. the pressure is not direct. it's not government sending a health inspector to your place of business and citing you for issuing drinks that are above 16 ounces. which reminds me, i'm very

thirsty. >> take another one. i'm going to bring in emily on this. emily, no imminent danger due to disease. that's how this judge characterized these slurpees and this whole issue of obesity. no imminent danger due to disease. so why would mayor bloomberg or any other mayor or any other government or any president for that matter want to create a law that says you can't do it? >> let's look at what's happening in new york city. the city that mayor bloomberg is presiding over. if you look at the obesity rate for new york city, in the last decade it's gone from 18% to 24%. that is a very serious -- so i'd say that we can actually go ahead and make that link. >> is that -- yes. okay. i don't know if those data points are right but because you said it i'm going to trust you. >> i appreciate that. >> but my point here is so what? in other words, if it's not a disease, if it's not an imminent threat, if it's not a chronic disease, as this judge said, then i have to say so what? honestly. because it's not the government's -- >> right. >> -- role to tell you how to

eat. >> when you have a population that has a very large obesity population, it does have a strain on the city and it is in the -- it is the purview of the mayor to be looking out for the people of his city and also be looking out for the public services that when you have a huge obese population it does have a strain on -- >> doesn't it go beyond, guy, what government is supposed to do? whatever happened to freedom? whatever happened to free markets? whatever happened to personal responsibility? >> personal responsibility being the key phrase there. freedom of course being another big one. look, if i want to down this entire thing, i don't know what this is. 32 -- this is a lot of coke. and this is not diet coke, by the way. this is the real thing. >> whoa. >> if i were to down this whole thing, tomorrow when i wake up maybe i'll go for an extra half mile on my run. because it's my life that i'm controlling. i don't want some bourque or in this case a very powerful bourque telling me what i'm allowed to consume in certain quantities because he knows better. the thing that really bothered me about bloomberg in particular is his cavalier attitude towards this. the quote of the year from him

is so orwellian. he said we're not forcing people to do anything. we're just forcing them to understand. that is a really creepy sound bite from -- to see him rebuked is great. >> mark walsh, i'm not here to attack mayor bloomberg on all counts. but i am here to criticize him on this count. i don't think he allows for individual freedom. i think the mayor knows better. i think the mayor has the attitude that in fact government knows better when it comes to behavior. and i find that attitude to be antithetical to my belief system. >> well, let me first make clear to everybody watching this show that mayor bloomberg has not denied anybody the right to go out and drink 72 ounces of coca-cola. he has limited those places in the city where you can buy them. you can still go to 7-eleven in manhattan if his law was enacted and buy 3 trillion ounces of soda in a giant cup. he has not denied anything. he has limited access. point number one. point number two. why, larry, are you listening to a judge's opinion on medical fact? he's not a doctor.

we don't know -- >> neither is mike bloomberg. neither is mayor bloomberg. and neither are 9/10 of these experts who have tried to make obesity a chronic disease. that's the flaw here. the -- >> mike bloomberg -- >> -- xmexperts don't know and e judge is doing it on the basis of freedom and personal responsibility because he sees no imminent threat. that's the key point you're missing. >> i appreciate you pointing out what you think i missed but i'm not missing it, larry. infrastructure, t in fact, the freedom still exists. you and anybody that lives in manhattan can buy a giant soda tomorrow. he's limiting access to it which is fair for a mayor of a city to do. and the final point about health is yes, the judge is not a doctor but mayor bloomberg did consult with doctors about this specific issue which your other guests mentioned which is sodas do have a direct link to obesity, the percentage of which has risen dramatically in manhattan over the last decade. >> joel pollak, if individual men and women are willing to put on some weight, why shouldn't they be allowed to put on some

weight? that's the question i ask. and how far is this sugary obesity imminent threat stuff going to go on in how far is government going to take this? >> well, i think they've taken it so far they've inadvertently created a new national patriotic drink. you know, we need a national beverage, and we have it. it's the 16-ounce-plus soda. and they're doing that because they're overreaching not just in nutrition but in every area of our lives. this is going to become the norm not just in new york city but in other places and not just in what you drink. it's going to be what you eat. it's going to be how much you exercise. the more government has responsibility, the more we each have responsibility for each other's bad choices, the more we're going to try to have people control each other's choices. the more politicians are going to seize the opportunity. i'd say let's drink to freedom tonight and stop it from happening. >> i want to drink to freedom. you know, mark walsh, it's interesting. you as a good solid card-carrying left of center guy, you would be the first guy to tell me that government

should stay out of the bedroom. you would be the first -- in fact, down through the years you've told me, government should stay out of the bedroom. >> correct. >> so now i'm putting it back to you, my friend. government should also stay out of the kitchen. >> yeah. well, government is staying out of the kitchen. again, i want to remind everybody -- >> not like this. not like this. >> they can still -- so let's go to the end of this discussion. i would argue the following. the fact that people are obese because they're drinking these types of sodas and eating incredibly unhealthy food does cost you and me money. because the structure of insurance and how these people are going to emergency rooms late at night when the obesity kicks into their lifestyle, that's costing you and me money. just like helmet laws and motorcycles. people that don't wear helmets on motorcycles are a self-correcting problem except for those people that get brain damage and you and i support them for the rest of their lives. >> i will just read the judge's point. "no imminent danger due to disease. there is no issue with controlling chronic disease. it is arbitrary and capricious consequences." joel pollak, mark walsh, it is a

pleasure to see both of you now. the markets and the economy still showing some good signs of strength. another record high for the dow with seven days left. corporate profits are still surging. but this economic improvement is doing nothing to slow the growth of food stamp dependency. that is a bad one. here we go again. the government just keeps pushing this benefit no matter what. they even advertise for food stamps during my radio show. just take a listen. >> would you look at margie? she looks amazing. >> yes, she sure does. >> i wonder how she stays so fit. what's her secret? >> well, she told me that food stamp benefits help her eat right and she stays active, too. >> we're going to talk more about this push for reliance on government and the possible buying of votes later in the show. don't forget, free market capitalism is the best path to prosperity. i welcome sponsors on my radio show and on this great tv show but i'm not real happy with the one you just saw. i'm kudlow. we'll be right back.

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i say profits are still the mother's milk of stocks. and i think profits look good. so stocks look good. and the overall economy may be stronger than many think. but my next guest says this rally is driven by a grand disconnect and the shock will start a long-term bear market. here's our old friend gary schilling, president of a. gary schilling and company. before we get to the markets, just on the economy, friday jobs numbers beat everybody's expectations. ism services. ism manufacturing. housing. is the economy actually stronger and are profits actually stronger? >> let's look at the job numbers. when you look at the household survey, full-time jobs went down 77,000. part-time jobs went up 365,000. and then you look at where the jobs were. 40% of the job gains were people over 25 who had less than i ahigh school education. that's five times the normal number. what it looks like, a lot of part-timers are serving soda at

mcdonald's. >> but i don't think it's a brilliantly strong -- this is one of the worst recoveries in modern times, going back to 1947. but all i'm saying is at the margin as these numbers come in they are looking better and better. and my second point is i believe profits drive the stock market. the profits are exceeding expectations also. >> and what has happened throughout this recovery is american business has done a super job of cutting costs. the profit margins are at all-time highs. they couldn't raise prices. volume growth has been limited. so what they did is cut costs. that's worked wonderfully. it's not working as well as it did. the productivity numbers recently aren't as strong as they were back in '09 and the first part of 2010. but that's been work. and of course foreign earnings in a lot of cases. >> what happens if we create a couple hundred thousand jobs a month and we create 5% or 6% growth in profits? okay? i know it's slower than it was

three, four years ago. if you have rising economy and you particularly have rising earnings, it seems to me given the position of the fed that's really a driver up for the stock market. i know corrections come and go. basically, it's a driver of the stock market. >> the problem is the quality of the job creation. because again, if you look at real wages are declining. we're creating more jobs. but as business is cutting costs, that means they're not paying out to labor, to employees what they were earlier, and that's really the basis of the decline in real wages which we've had for the last four years. so in other words, people don't have that income to really spur the economy in the way you would see in a normal recovery. >> would you acknowledge that the housing story, sales, starts, and prices, is better than you thought it might have been? >> yeah, it is so far. i still think there's a lost inventory out there. people who listed their houses earlier, they couldn't stomach the bids. they took them off the market. they still want to sell them.

and i think they may be starting to come back into the picture with putting those houses on the market. and this spring selling season will be really important to see if that phenomenon really works. >> and i think given the looseness of the fed, given the greater likelihood that banks are making loans, they'll probably be able to digest that and then some. >> that's right. but lending standards are still awfully strict and a lot of people run employed and -- >> you want lending standards strict. >> pardon me? >> you want lending standards -- >> oh, sure. the idea of having a zero down or even negative if someone got a piggyback loan on top of a mortgage, i mean, that was ridiculous. that's what got us into trouble. but i'm saying this is not a loose and easy housing market and it probably shouldn't be. >> so you're not predicting a recession anymore. is that fair? >> well, i think the risks are on the down side because when you have slow growth it doesn't take much of a shock to push you into negative territory. one of the things that we don't know right now is what's going to happen with the fiscal slope.

it's not a cliff. it's a slope. and of course we did have the increase in the payroll tax from 4.2% back to 6.2%. the congressional budget office says that will take about .6 off the economy. and they're saying that the sequestrations will take a percent and a half off the economy. >> do you buy that? >> well, i -- >> stocks don't seem to buy it. >> i don't know. but i'm just saying you don't have a lot of growth in the economy inherently. in other words, it doesn't take a lot on the down side. >> favorite investment right now. favorite absolute a. gary schilling investment. >> one that's working buhl for us is short the yen. we've been short the yen in the last three months. the japanese, the abe government is basically telling you come and get it, guys. >> reflation. >> yeah. >> and they're right, aren't they? >> yeah. they're trying to spur that economy. the second one is long japanese stocks because it's great for japanese exporters. so it's really a one-two punch. >> and wouldn't the third one be american stocks too? because we are tied to japan. people forget that.

we are very closely tied to japan. >> do we want a stronger dollar against the japanese yen, though? we do have exporters, you know, larry. >> i think that got out of balance and out of whack. i think it's just getting normalization right now. >> it obviously did. but i'm not sure that that really helped us in the export department that much. i don't think we're that sensitive to japan. much more so to china. >> all right. so japan, that's your favorite? >> right now it is. >> gary shilling. thank you very much. many, many thanks. now let's get some different views. we turn to our pal mike owes aynian, "forbes" executive editor. mike, do you see it the way gary shilling says it? >> i'm more bullish short-term than my buddy gary. i think he may be missing two things. one, there's been a huge sea change in washington. the republicans are standing up to president obama. i don't think we're going to see any more tax increases. we're going to get a slow doub in the rate of government spending. that means less government, more private sector investment.

i think that's very bullish. i think the market's sensing that. the second thing is i think we've hay tremendous increase in the power of the balance sheet of american corporations the last four years. they've had to get through the recession. they've had to fight through a hostile washington. if you look at the tangible book value you look at the things of goodwill to the s&p 500, it's up 80% since 2008 -- >> this is really -- you're going beyond kudlow. i argue that profits are the mother's milk of stocks. you're saying cash flows also are the mother's milk of stocks. you're saying pristine balance sheets are the mother's milk of stocks -- >> oh, larry -- >> -- and all that working and all those good reasons, not cheap money by the fed but all these good reasons are driving the market. >> absolutely. that's been paid down. if you look at net debt to ebidta it's gone from 2.6 to 1.9 over the last four years. you have companies like home depot, general electric, pepsi that are using their excess cash not just to buy back shares but to pay dividends. let's not forget, larry, the

payout ratio for the s&p 500 right now, in other words, the percent of earnings they're paying out in dividends, is only 34%. the historical norm is above 50%. so there's a lot more room for further dividend increases. >> so not only are the shareholders being rewarded by higher prices, because the fundamental profits and cash flow are good, but they're also being rewarded by better cash flow through dividends and buybacks. and you know what, mike, i like that story so much because i often think sometimes the individual shareholder who puts another hat on as an entrepreneur and may be starting up a business will take those dividends and take the proceeds of the buybacks and invest them more wisely than a lot of these big corporations will. what do you think of that? >> that's capital formation for small business growth. that's what's been going on in this country for decades. and that's where much of the new job growth has come from. and you know what? it's not priced into stocks yet, larry. if you look at the price to tangible book value ratio, it's 4.9, as we sit here today.

if you go back to 2008, it was 5.2. there's still a lot more room to run as far as i see it. >> and here's another thing i like. it's like you're interviewing me. gold flat to down. the dollar up. right now that's an ideal situation. >> love a stronger dollar. i think that, you know, what's happening in japan and so forth, i think if they're weakening their currency we're sort of pulling back a little bit on that. i think that's a good thing. a strong and stable dollar coupled with less government spending and more for the private sector, i think that's a case for a bull market, larry. >> democracy could be working in washington despite its critics. >> yeah. well, finally it seems like the republicans have grown a spine. and i also just sense a sea change in the mood of the public, larry. enough of this keynesian nonsense. it hasn't worked. let's let the private economy take over for a change. >> we'll leave it there. mike ozanian, great stuff, can't thank you enough. now, folks, here's another for

you. $1.4 billion. that's the annual household expense budget for the white house. and this includes expenses for trips, parties, calligraphers, dog care, you name it. and if the obamas led a more frugal lifestyle, then white house tours would never have to shut down. we're going to debate that proposition. speaking of smart spending, my special one-on-one exclusive interview with house budget chairman paul ryan. that will be tomorrow. it's his budget day. and we're going to talk just after he releases his whole new budget plan. i will be coming to you live from washington, d.c. please don't miss it. and stay with us this evening.

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the white house officially canceled its public tours. the sequester-driven cut that is reported to slash $18,000 a week. that's what they say. but what has critics firing back on this show of austerity on the remaining line items on the white house's outsized $1.4 billion household budget. all right? $182,000 per hour, for example, for air force one trips. 100,000 a year for the executive chef. nearly 300,000 a year for three full-time calligraphers. huh? another 100 grand for the chief of staff to the president's dog. and there's a cool 2.2 million

for obama's motorcade. if they could live with greater frugality, less pomp, they could easily pay for the white house tours during easter and beyond. and may i recommend a book for them? they could read the best-seller from my friend amity schlage called "coolidge." because it was president calvin coolidge who slashed white house expenses and lived as a simple representative of the people. emily sussman and guy benson are still with us. emily, i have a dog. i'm a dog person. i love dogs. i don't have a $100,000 chief of staff for my dog. and if i didn't, and if i were the obamas, that would open the tours for the white house, at least during easter. >> so we've seen a little bit of this discussion. but let me tell you why this story frustrates me. because it wasn't actually a white house line item for the tours. it was a slash from secret service. because according to the sequester, they needed to cut from every place in the budget. so secret service needs to cut too. so if they have to look at their entire budget and see where they're going to cut, from i'm

comfortable with white house tours being where they cut from. >> they could easily -- i know a little bit about this budget including inside the white house expense budget. the secret service thing is one argument. but they could easily get rid of the chef and the dog chief of staff and a lot of the pomp and circumstance. they don't need it. they could just do that voluntarily. it's their household budget, guy benson. >> could we maybe furlough two of the three calligraphers? what's that about, by the way? three full-time calligraphers? that's a pretty good gig, if you can get that. >> do you get the letters? are they writing you all the time with the calligraphers? or the envelopes for the invitations. >> i'm not getting too many letters from this president, shockingly. i'm getting occasional letters from the irs. not because i owe any more. i'm paying more than enough. look, i think sometimes republicans run a risk of seeming a little petty and partisan when they start focusing on the obamas' vacations or what the obamas are spending in the white house.

the problem is for the president he opened this door, he flung it wide open by coming up with the sequester and then trying to fashion the cuts in such a way that they did maximum damage and had maximum impact on the public themselves -- >> there is no need -- >> -- so kids get thrown out of the white house. >> this is the easter spring break holiday coming up. there is no need for this. in all seriousness, i doubt if most americans know that they have a $100,000 -- wait, three full-time calligraphers. it's close to $300,000. okay? i don't think that's necessary. every business, every family, every small business in this country has had to tighten their belts. why can't the white house provide an example? >> oh, absolutely. i'm not going to say that there aren't possible places for cuts. but i do think that we need to acknowledge that the white house is our public face for the united states. this is where we greet people. this is where we have state dinners. >> then opiaen the doors to the people -- >> and when the president

invited senate republicans to dinner last week, he did personally pay for it. >> that's good. he should do more about it. >> he set an example right there. >> he's a multimillionaire. his wife is very wealthy. i like that. i'm a millionaire guy. i'm a wealth creating guy. i'm a free market guy. let them pay let's say for the dog's care out of their own pockets. i pay for my dog's care out of my pocket. i don't have a dog chief of staff. why can't they? >> looking to the $100,000 chef. like are they going to be ordering pizza every night? like i just don't think that's the kind of decorum that we have in the white house. >> you could do it on a part-time basis, when they have special parties the chefs can come in. i've got to get out of here. they're screaming at me in my ear. it's taken over four years but the senate democrats are finally about to release a budget. guess what? big tax and more spend. that's my bet. you can look it up, folks. it's coming up next. believe me. more taxing and spending from the democrats' budget. nservativ. very logical thinker. (laughs) i'm telling you right now, the girl back at home would absolutely not have taken a zip line in the jungle.

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welcome back to "the kudlow report." so hold on to your hats. this may come as a big surprise. but senate democrats say they're going to soon pass a budget, something they haven't done since 2009 despite being required by law to do so. and you know what?

lots more spending and major tax hikes are coming. at least that's what i'm betting. for that let's join cnbc contributor robert costa of the "national review." emily sussman and guy benson are still here with us. all right, bob costa. what kind of budget is it going to look like? >> it's going to be a tax spend budget, larry. no big surprise. senator patty murray, she's the democrat from washington. also the budget committee chairman in this senate. she's going town veil this budget's going to have trillions in tax hikes, a lot of new stimulus spending. >> and is there going to be a deadline for a balanced budget? >> no. the democrats are not aiming for balance. they're eventually going to try to perhaps get there with a lot of revenue and tax hikes. but the key takeaway from this patty murray budget is that it's about democratic principles, democratic posturing. what i'm watching out for, larry, is how this democratic budget in the senate, which hasn't happened for four years, plays in 2014. i think a lot of moderate democrats may be scared away. >> do you think this budget, with that point -- that's a very important point. moderate democrats in the senate have to run in 2014.

do you think this budget will ever be voted on on the floor of the senate? >> no. that's the key thing to remember here. the house gop with paul ryan. tomorrow paul ryan's coming out with his budget. patty murray is coming out with the democratic budget. these things are never going to be passed. there may be a budget grand bargain of some sort that these eventual budgets could be reconciled but i doubt it. here on capitol hill, larry, this is about political posturing ahead of 2014. it's not about getting an ultimate deal. >> last one. quick as a rabbit. why did they finally decide to put out a budget? they've gone four years plus. i don't know that anyone's really missed it. why did they decide all of a sudden this year? >> well, it's real easy, larry. they had some pressure because of all the fiscal deals that have happened earlier this year. if the senate democrats did not pass their own budget, well, they'd lose their pay according to the fiscal cliff deal. so they're deciding to pass a budget or at least try to propose a budget this year. but i don't expect it to go anywhere and never reach the president's desk. >> we may never be able to read it. robert costa, appreciate it very

much. joining us from capitol hill is republican senator and budget committee remember ron johnson, who by the way was in the deficit dinner diplomacy meeting with president obama last week at the posh jefferson hotel. senator johnson, we welcome you back, sir. >> hello, larry. >> what do you expect from this senate democratic budget? is there anything in your thought that this is a serious document? >> well, it is definitely going to increase taxes. i mean, they're going to propose that. you know, larry, what's a real shame here is we're not even going to be able to see that budget until after we make our opening statements in the budget committee markup. so we're going to be expected to propose amendments to a budget we've never even seen. you know, in business, larry, i remember the budgeting process. we'd have to submit our budget on a $10 million business to management a month ahead of time so they could review it and so they could actually answer some relevant questions. this is awn serious process. >> do you mean to say that they're not actually -- like i won't be able to read it to

critique it? it's not going to be a public document? >> it will once it's presented. but we're going to have that presented to us during the markup. and we sent a letter. all republicans on the budget committee sent a letter to senator patty murray asking could we at least see it 72 hours before we have to sit down and start amending it? the answer was no. so again, that kind of tells you how serious this effort really is. >> senator johnson, you were quoted after the dinner diplomacy dinner with president obama, you were quoted i believe this weekend, yesterday, on one of the sunday shows, that we can do business, republicans can do business with mr. obama. this morning's editorial in the "wall street journal" said "trust but verify." >> they said verify, verify, verify. would be what i would do. listen, i think i appreciate the fact that president obama reached out. it's a necessary first step. larry, the other side's not going to go away. if we're going to actually tackle these very serious problems, we're going to have to do it on a bipartisan basis.

i'm willing to give president obama the benefit of the doubt. one important point he made in the meeting when he talked about the difficulty of reforming medicare. he said americans pay $1 in for every $3 they get in benefits. my comeback to that was mr. president, you're right, it would be extremely helpful if you conveyed that to the american public, if you laid the groundwork by describing in detail and in truthfulness the very serious nature of our problem so we can actually prepare the american people for the solution. i hope he does that. >> all right. senator, i introduce you to ms. emily sussman, who has a question for you. >> senator johnson, how are you? >> real good. >> so this is the first year that senator murray has taken over as the chair of the committee. she took over as senator conrad retired. so in your process of being in the senate, what have you seen as the big differences in her -- i know we did talk about this is the first year that the senate democrats have produced a budget in four years. so i'm willing to accept the answer that if you want a job done skai woman. >> listen, i've been on the budget committee on the united

states senate for two years. we've never even voted on a budget proposal in the budget committee. so right now senator patty murray saying she's going to bring one, at least for markup, she's not going to let us see it, maybe we'll actually get to vote on a budget in the budget committee and we'll be able to take that to the floor. that would be progress. i'd have to give her credit for that. >> i want to introduce if you don't already know guy benson from townhall.com. >> great to see you. i know you're talking about the president and saying you're hopeful in moving forward. i think this is the appropriate poft your for you. but from where i'm sitting i'm a little skeptical. here we have a president who's now twice missed his own deadline for a budget. first february the 4th which is his legal requirement to get it done. then the white house said march the 25th. then they said never mind, april 8th after the whole budget process is done on capitol hill. that is a really bad first foot for the white house to start on in this process, isn't it? >> it is. and let's face it, what we really ought to do is end these back room secret negotiation deals. >> amen. >> what we need to do is return to regular order, which is present budgets on time, pass

them in the house, senate, reconcile that. that's the blueprint for the committees to start their open debate on these very serious issues. i think the american public would really appreciate that. >> sorry. i interviewed speaker boehner. that's exactly what he told me last week. but senator johnson, let me ask you. in your opinion, is there one whit of evidence that the leadership and rank-and-file senate democrats wish to change, adjust, modify, or improve the entitlements? >> no. every time that gets brought up in one of these deals they take that immediately off the table. and of course, larry, that's the problem. 65% of our budget is not appropriated. it's out of control. until we actually start addressing the primary drivers, which president obama identified that. healthcare spending and medicare is the primary driver of our long-term debt and deficit. we're not going to get our deficit under control. we're not going to get our debt stabilized. so again, i'm willing to give the president the benefit of the doubt.

and the way he'll prove to me he's serious is if he starts telling the american people the depth of the problem and if he actually starts working with us first and foremost to figure out what we agree on. let's agree on the right figures. let's agree on the definition of the problem. that's really the first step. define the problem, then raise your hand and say we have a problem. they need to do that first. >> all right. we need some common ground. it's not going to be easy. as always, many, many thanks to senator ron johnson of wisconsin. >> have a great night. a quick programming note. house republicans will unveil their new budget proposal tomorrow. but will they be able to work with president obama? find out in our special one-on-one interview with house budget chairman paul ryan. i'll be coming to you live from washington, d.c. please don't miss it. now, up next, ge ceo jeff immelt says overregulation and fiscal storms are threatening business and slowing droeth. got that right. we're going to ask former gm chairman bob lutz all about it. please stay with us. [ lorenzo ] i'm lorenzo.

i work for 47 different companies. well, technically i work for one. that company, the united states postal service® works for thousands of home businesses. because at usps.com® you can pay, print and have your packages picked up for free. i can even drop off free boxes. i wear a lot of hats. well, technically i wear one. the u.s. postal service®, no business too small. so is washington's overregulation suffocating american business? well, jeffrey immelt says yes. in a letter to shareholders today the ge ceo cited major

political storms, saying the number of major regulations has exploded in the last few years. the result has been an additional burden on business. it's a great thought by mr. immelt. i'm proud of him for saying it. let's go to cnbc contributor bob lutz, who knows a thing or two about this. he's former general motors vice chair. he's also the best-selling author of "car guys versus bean counters." you know, first of all, bob lutz, it's a pleasure to see you. jeff immelt basically said there's this new classification in washington, what they call major regulations. if a reg is over $100 million in the pricing out by the committees, that's constituted a major regulation. and he said that those major regulations have exploded. now, that can't be good for economic growth. >> well, no, of course it's not. this is a creeping and additional burden on business. and you're right, it has exploded.

is and in my judgment we haven't seen anything yet. there's going to be additional environmental regulations. once they really get behind the climate change thing, we're going to see all kinds of c o2 regulations and dos and don'ts and additional taxes. and what happens when the cost of business goes up? oh, another one of my favorites is the minimum wage. minimum wage is just going to result in unaffordable labor being pushed out the bottom, and it's going to be counter to creating jobs. so the whole thing is just a cost burden. it's a bureaucratic burden. and it does very, very seriously hinder economic growth and employment. >> jeff immelt said -- he really cut right to the chase. that's why i'm so proud of him for this statement. he basically said it is inhibiting capital formation. he basically says companies will not invest capital. even though you and i know that businesses are sitting on a

couple of trillion dollars of cash and they probably have a couple of trillion dollars of cash overseas and there was never any corporate tax reform, which is what jeff immelt recommended to the president. jeff was a key adviser who recommended about corporate tax reform and it never happened, bob lutz. >> well, yeah. i know. and a lot of other stuff hasn't happened, too. and let me tell you, this is like a cancer. it feeds on itself. once you've got the bureaucrats in place in the safety area, in the employment area, in the environmental area, these people are in place. they have jobs. and they're not going to go away. so they need to justify their jobs by constantly coming up with layers and layers and layers of additional regulation. just look at the energy sector where the united states is now sitting basically on an island floating on a sea of natural gas and liquid petroleum.

and what are the regulators doing? they're finding every way possible to inhibit, to inhibit the exploitation of this bonanza. but you see it everywhere. and here's the worst thing. you see it at the federal level. then the states do it. the counties do it. the local communities do it. i have a friend who wanted to start a business, which was looking very good. he finally got prevented from launching it for really silly and -- really silly, unreasonable environmental regulations. >> but he can't launch that business. or if he launches that business, bob lutz, and he builds it up to 50 employees, he's going to be subject to the health care mandate from obama care. or if his individual employees, if they work 30 hours a week or more, then they're going to be subject to the individual mandate. either pay the fine or push the workers into the insurance pool. in other words, obama care, which mr. immelt did not single

out, at least so far as i know, is going to be one of the greatest job inhibitors we've ever seen in our economic history. >> exactly right. well, i have some friends in the academic field, and they are responding exactly to this regulation and they're actually going to reduce the number of i guess teaching assistants or associate professors or whatever it is because they're going to be over the 30-hour rule. so you're right. all of these things are probably -- i'm going to give him the benefit of the doubt and say they are well intentioned. and i always think liberal programs are always well intentioned, but they never, never consider the law of unintended consequences. which comes around the back end and bites you in the butt and it prevents the very thing that you're trying to achieve. >> all my liberal friends are good people and well intentioned, bob lutz. the trouble is their model is

just dead wrong. anyway, mr. lutz, as always, it's a great pleasure to see you. now, folks, no matter how much recovery we see in the economy, the number of people on food stamps continues to break all-time records. is this just the most blatant example of the government pushing dependency on the people, or is this just a naked vote buying effort? we're going to debate all that next. but first take a quick listen to what one republican senator thinks about all this. >> isn't it a better goal to help more americans find good-paying jobs, to have the pride and self-respect that comes from that? isn't this a superior form of compassion that has a more solid moral foundation? [ male announcer ] i've seen incredible things.

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guess what. despite a drop in the jobless rate, a soaring stock market, and an improving economy, however slowly, the number of americans on food stamps continues to jump. for the month of december a record 47.8 million americans were on that program. what is going on here? let's talk some more with our panel, emily sussman and guy benson. guy, it's about a 50% rise during president obama's term, roughly, round numbers, 31 million to 47 million, food stamp recipients. that's supposed to be a social safety net in a recession. what's happened here? >> look, you look at the number that is put up on the screen there for 48 million almost

americans relying on food stamps in the month of december, that's not just a political talking point. that is simultaneously a tragedy and a disgrace. it is an absolute disgrace that almost 1/6 of the country, of our population in the united states of america is relying on the government to help them buy food. and it's got to stop. and the way you do that is to get people into good-paying jobs. the problem is you run into this brick wall with the administration. they've had members of the cabinet say that food stamps are are a stimulus that create jobs. >> i like that. the department of agriculture is foisting these advertisements, for example, on my radio show and advertising for people to come on food stamps. you see, i think guy's right. if you have really strong growth and really good-paying jobs, you'd see a decline in food stamps. but if you have moderate growth, kind of weak jobs, you're not. people will just as soon take that money and be government dependent. and that troubles me. doesn't it trouble you? >> well, i also totally agree

that getting people into good-paying jobs would be the answer. people don't want to be going on food stamps. for the most part they're very embarrassed about it. and a lot of people who are in jobs are still needing to go to food stamps, needing to go to food pantries -- >> why are they advertising? why is the government encouraging -- the government is in effect running these ads to encourage people to go on the dependent dole. that's a different message than i think should be sent. >> well, i think the message is more about awareness. if you are looking for programs -- you know, the majority of people that are on these programs are families with children and seniors. those are the majority of people who are on the programs. if you look at s.n.a.p., it's 64% families with children. so i think the government putting it out there and saying these programs are available to you, like let's not forget they do still have very stringent requirements to be able to get on the programs. 1% fraud. >> i've only got 25 seconds. but haven't those eligibility requirements been greatly expanded, guy? >> they have. and the ryan budget, from what i understand, is going to bring

that back a little bit. they'll call that a cut. but here's the thing. it is not compassionate just to keep throwing money at a problem because poverty is still rising in this country. >> that's it. thanks for watching tonight's show. you guys are great. guy benson, emily sussman, i appreciate it. remember, tomorrow, budget day, we're going straight to the source. congressman paul ryan speaks to "the kudlow report" exclusively just after he releases his budget plan to balance the budget in ten years. that's tomorrow -- row -- working behind the scenes to provide companies with services... like helping hr departments manage benefits and pensions for over 11 million employees. reducing document costs by up to 30%... and processing $421 billion dollars in accounts payables each year. helping thousands of companies simplify how work gets done. how's that for an encore? with xerox, you're ready for real business.