where to find it. that stock is bristol-myers! i like to say there's always a bull market somewhere, i promise try to find it right here for you on "mad money." i'm jim cramer. see you tomorrow! good evening, everyone, i'm larry kudlow. this is "the kudlow report." best home prices since 2006, plus strong factory orders, all that boosted the dow 112 points, the s&p 500 just one point short of its all-time high. optimism, people. optimism. investors, not taxpayers, should pay the freight on bank failures. the cyprus plan could be a template for the europe and united states. and obamacare applications will act as a voter registration drive. if you can believe this. but get this. there's more. obamacare is not alone. anyone applying for public assistance programs in this country is asked to register too. are these taxpayer-funded entitlement programs being used to help boost democratic voter

rolls? "the kudlow report" begins right now. first up, another big day for the bulls. the dow logs a fresh all-time high while the s&p 500 finished the day within about a point of its closing peak. that magic number, by the way, is 1655.15. let's go right into it. we've got art hogan and dave malpass and seema global president, former reagan assistant deputy of the treasury. i'm full of good news and optimism tonight. let's start with this housing number, case-shiller. very good number. what do you make of that? that's a wealth-creator, all kinds of good things here. >> it's interesting. if you talk to the guys who created that number, shiller would say it's not good news. and i have to disagree. >> what's his argument? >> well, his argument is, we're not even close to back to where we should be. so remember, you know, we used to make over 2 million homes a

year. and with our demographics should be at 1.7 and we're two-thirds of the way there right now. i think what you have to look at is it's getting better. and it's getting better every month. so i think the good news here, in the entirety of the economic data stream, housing one of the strongest pieces and i think as we continue to see that do well, the automotive sector doing well, energy doing great. we're finding more of it every day. i think there is good news in the economy trying to reflect itself in the stock market. >> in fits and starts, david malpass, i have the same view art has. i think the economy is coming out stronger than we thought it might. i'm not sure i understand it except the resilience of business is phenomenal. >> that's right. and if we see it in orders, that's going to be very positive. we didn't see it in today's durable goods orders numbers. and if you look at the housing starts, the -- excuse me, the new home sales that we saw today is below the recession or at the level of recessions in 1990, '91 and also even in the '80, '82 recession.

>> coming up. >> coming up, but from such a low level that it's recession in the past. >> best two months in home prices we've had since june of '06. >> i don't want to put a cloud on. i'm positive -- i think the market has already got priced in quite a bit of growth in the first quarter and second quarter. so we're going to have to go above that, i think, to keep the rally going. >> factory order up 12.7% last three months. big number. you're right. the core orders fell in february but january a gigantic month. overall, numbers up nicely. if you i come to this point. when i look at this stuff and i know the fed is going to stay co accommodative for a while, better or worse oh, i see japan pouring money into their economy. i think that's good for global growth. it will stop deflation. i see the ism, which uses important current and leading indicators. i mean, i know there is a stock correction out there some place, but i think things are fundamentally better than we thought. >> i think that's right. i think one of the disasters we didn't go through was the china story.

so i think the chinese hard landing never came to pass. so if you can put that to the back burner. what we can't put to the back burner and we'll talk about in the next block is europe. but for the time being, you've got a gradually improving u.s. economy. china is not a disaster. and if that's the case, i think equity valuation is still -- >> fair enough. >> now, we've got issues, though, right? there's tax hikes coming down the road. we've got obamacare. we had a gallon this show last week, owns a bakery, 50 employees. obamacare is going to wipe out two-thirds of her profit. we have that issue and very iffy operations in washington, d.c. where there could be more tax increases. we got through the sequester. that's good. but, you know, government never leaves us alone. so how much do you think that is going to be reflected inside the stock market, has stocks become too you've forric? >> the health care problem is a big one, an uncertainty. but i'm going argue that fiscal policy has actually improved quite a bit. the reason is because on january 2, they passed -- a tax bill

that took away the uncertainty that had been hanging over the bush tax cuts. so they just made a lot of that permanent. and on the spending side, the sequester, as you've pointed out, actually turns out to be pretty growth-inspiring in the country. if you're in the private sector, you see the government finally slow down its spending growth. so on the fiscal side, i like what's happening. it's the monetary policy side that's bad and europe as art mentioned. >> what do you see for profits coming up? profits, the mother's milk of stocks, i regard them as more important than gdp. can profits continue to rise? >> yeah. so we're heading into the first quarter earnings reporting season. and what we have seen so far in terms of preannouncements has not been good. and that typically more negative preannouncements than positive and that ratio is usually 2 1/2-1. and caterpillar and track for and federal express. i think if you look at the

second quarter and third quarter, we're looking at earnings growth of 1.5 to 2% in the first quarter. i think the second quarter and third quarter earnings growth probably are going to be looking at, you know, the peak for the year. and if you put a multiple on what the s&p is trading at, almost an all-time high, we're trading at 14 times. remember the last time we were here? we traded 18 times. so it's a very reasonably priced new high for the s&p 500, corporate america is leaner, meaner, sitting on a pile of cash and found a way to make money in a difficult, slow-growth economy. >> i think -- i think the multiple -- not cheap as dirt, but still. you're talking about, what, a 6.5% 7% earnings yield on stocks, beats the other stuff out there. everyone talks to me about a correction. okay. i know corrections are going to come and go. the point, dave mal pass, do you buy it or sell it? >> buying the dips. so if we look back in 2010, 2011, 2012, every time there was

a pullback, you needed to buy that so i think that will be -- unless there is some big new negative, for example, actually movement toward a tax increase or a break-up of the euro that people begin to speculate about, unless we have that, i think people will be wanting to buy the dip for it, because earnings are still growing, the economy looks like it's actually accelerating. so that's a decent story. >> you might get your approximate 3% economy. >> i think if we go above 3% in the second quarter, equities will be higher than they are right now. if we're below that, which is both are possible, then we won't. i guess i'll take the up side from there. >> all right. you guys stay with me, art hogan and dave malpass more work to do. investors keeping a watchful eye on the cyprus bailout. i think it's a good market-based solution. investors, not taxpayers, should pay the freight on bank failures. and you know what? it could be a template for europe and the u.s. and bailout nation.

and later on, call it the obamacare voter drive. is the president's signature health care reform bill also a taxpayer-funded effort to help boost democratic voting roles. don't forget, free market capitalism is the best path to prosperity. it may not be happening in government but it is happening in the private business sector. and that's why stocks are doing well. i'm kudlow. we'll be right back. she's always been able to brighten your day.

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investors continue to closely watch the cyprus bailout situation. cnbc's chief international correspondent michelle caruso-cabrera joins us with the latest. good evening, michelle. >> reporter: larry to give a sense of how tense the situation is, look at this video we shot this afternoon at the central bank of cyprus. as the employees leave, there are armed officers from a special police operations unit there to make sure that they are not attacked. there was a protest there today, and you can expect there will be more, because one of the key elements of an agreement that this country signed with its lenders of last resort is they shut down one of the largest banks in the country and dramatically downsized the other. that means thousands of bank employees are going to lose their jobs, and this economy is

going to contract dramatically. additionally, we learned today that they are confident that once again the banks can reopen on thursday. remember, they were supposed to open today. that didn't happen. in the meantime, we also know that there are armored vehicles moving throughout the city, restocking the banks in anticipation of that opening. but when they do open, larry, there's going to be strict controls on how much money you can take out of the bank. it's going to be tough for the people of cyprus for a long time. larry, back to you. >> all right. many thanks, cnbc's michelle caruso-cabrera. so, question. can the u.s. learn from cyprus? let investors pay the freight for failed banks. not taxpayer bailouts. let's talk about this with ben steel, director of international economics at the council on foreign relations. he is also the author of the great new book, "the battle of brenton woods." art hogan and dave malpass are still with us. ben steel, welcome back. i know there is a lot of hardship in cyprus, most regrettable. but this idea that depositors,

they're the ones who have to pay the freight, the uninsured depositors, along with the stock owners and the bond holders. in other words, it's a private sector bail-in. i like this model. what's your take? >> i agree with you, larry. to paraphrase winston churchill, the eu will always do the right thing, but unfortunately, only after every other option has been exhausted. and they are exhausted the other options, larry. but the rule for uninsured creditors and failed banks should always be you fund it, you own it. that's the only thing that insures market discipline. >> i wish we had done this in the united states, okay? i wish going back to 2008 and 2009, we had given more thought. instead, we guaranteed all the deposits and all the debt. we didn't guarantee the stockholders, the shareholders, that's for sure. but i'm just saying, i like this template, ben. and can it be used other places in europe and the u.s.? >> i do like the template,

larry, i think we should have done it in the case of aig, particularly their uninsured, unsecured creditors in the cds market. that was ridiculous baling them out. but here's the problem with the cyprus bailout, larry. you remember, the bailout plan that was rejected last week, would have imposed a haircut on insured depositors. and we're seeing the after effects of this right now in the european equity markets. spanish bank shares are down for a second straight day. italian bank shares are down. deposits are almost certainly continuing to emgrate to germany. funding costs for banks in the southern eurozone are rising. this is a real problem. >> david malpass, if they had taken a haircut off the insured deposits, that would have broken the rule of law. >> that's true. and it would have caused huge problems. but even contemplating it is causing after effects. so i'm worried -- so i don't agree with you that there's a template here. the problem -- i want to avoid

taxpayer bailouts. i'm not for those. but the world has allowed banks to become giant. in europe, they have $40 trillion of liabilities. more than three times more than in the u.s. and so if you start shuffling deposits around europe, the weak banks are going to lose deposits and strong banks get it. >> i know. but i think there is bailout fatigue in europe. has to do with angela merkel's re-election in germany. i think there is a lot. i know there is bailout fatigue in the united states. you're right. we're changing the rules of the game. i get that. but why not? in terms of a market-based policy, which is sounder, art hogan. after all, in the 19th century, before we had all deposit insurance, when you deposited a buck in a bank, that was a credit investment. you had to be sure you would get your buck back. we now assume everything is going to be guaranteed and shouldn't be guaranteed. >> right. you also had to assume that bank was going to make a credible

loan with that. cyprus didn't happen this week. cyprus has been a problem for years. we've taken too long to fix the problem, but, you know, this weekend we came to our senses and said you can't have a bank or a financial systems seven times as large of a gdp, tiny island making terrible loans. i think, thank god, to your point, we didn't put a levy on insured investors. that would have broken the financial system. i think that would be chaos. i think the template has been set up and now we can try to take the next step and the next step is a fiscal unity in europe which is needed. and the only way you're going to get there -- >> yeah. ben steel, the other thing, though, uninsured depositors are going to wind up owing big chunks of this bank. the bank of cyprus, i guess, the surviving bank. and they're going to have to supply the capital up to whatever ratio, 9% is being discussed. what i want to ask you is this. is the european monetary facility or whatever it's called, the bailout machine, is that over, do you think? is that part of this story? the european stability bailout,

whatever. is that done? >> it's not over, larry. not by a long shot. as part of this bailout deal, the ecb has agreed to continue emergency liquidity assistance for the bank of cyprus through the cypriot central bank. so that form of bailout through the ecb is going to continue. i should also emphasize, larry, that we're continuing to see european monetary union really crumble before our eyes. one aspect of this bailout we haven't talked about yet is that a euro held in cyprus is now worth dramatically less than a euro held in germany, because of capital controls. you can't get euros out of cyprus. >> so is this -- wait, huge damage does this do to the euro? that's a very interesting point, ben. how much damage does to this do to the euro? >> i think it does serious damage. and i think the template they made last week, which they're trying to undo now, was sdas trous. that is hitting the insured

depositors. >> you agree with that? >> yes. but the damage is not only to the euro, but to the economies in southern europe. so the recessions are getting dramatically deeper, and ben makes a great point that you've got two different values of the euro. if it's in cyprus, it's different than if it's in germany. >> but it trades as one value. >> it trades as one value, but you can't get it out of cyprus. and so if you're sitting in spain or in italy, you're -- or if you're a u.s. company thinking of vesting, are you really going to put over 100,000 into a transaction that has to go through a bank in europe? >> why can't the united states, just in our last remaining moments -- why can't the united states at least look at this new model, where uninsured depositors are as responsible as anybody? i mean, we've punished the shareholders and the stockholders. we now have to punish the bond holders, we have to punish the depositors, they have to think two and three times before they go into these things. i think ben is right, this could

have been a solution to aig. american taxpayers have bailout fatigue also. >> we came darn close to realizing this. remember in 2008, we raised our insurance levels in our banks. >> we did. >> we thought we were getting to that point. so it's still in recent memory that there's that credible possibility. i don't think it's that much of a reach to say that couldn't happen. >> you could do it for new banks. the problem is the transition. if you've got an existing bank that's too big to fail, how do you get from here to there? and so i'm with you completely that we want to stop taxpayer bailouts. but that transition -- when you've already got overgrown banks, how do you turn it off right away? >> i will take the view -- i see this as bankruptcy resolution. this is the closest i've ever seen to bankruptcy resolution. it's what i've wanted for a long time. we'll have to discuss this some more. i admit it's a longshot in the usa, but there is bailout fatigue here too. ben steel, you're great. best on the book. art hogan, david malpass, thank you.

up next on kudlow, he survived the recall last year, and stood up to the state's public sector unions. but is conservative superstar governor scott walker actually making his move for an even higher office?

wisconsin republican governor scott walker has become something of a conservative rock star for his high-profile class with organized labor. he is now teaming up with the former bush speech writer for a new book. that will be due out later this

year. question, is this a prelude to 2016? well here now is the guy who broke that story, cnbc contributor robert costa, washington editor for "the national review." and with us for the remainder of the hour, democratic strategist, can i have co phonis and guy benson from townhall.com. all right, mr. costa, so he's writing a book. what's so important about that? >> sure, larry. it's years before the republican presidential primary actually starts. but we're in a period right now that i like to call the book primary. and if you're looking seriously at running for president, you better be writing a book, and it looks like scott walker is not only writing a book, but he's teamed up with mark thiessen, former chief speech writer for george w. bush, working with a heavyweight and someone we have to consider looking at 2016. >> all right. so just let me follow through on this. jeb bush wrote a book. what does that mean? >> jeb bush wrote a book about immigration and about immigration policy. interesting book. wasn't a big best seller. got a little bit of attention. but why scott walker's book is a

little more interesting from a political perspective is scott walker's book is much more an autobiography, talking about his experience in wisconsin, battling the public sector unions, battling it in the recall, and to me that tells me as a political reporter that walker wants to tell his story nationally, rather than in the jeb bush example, making a policy case. >> and you know, guy benson, in a sense, nobody has done what scott walker did to the unions up there and to balancing the budget and the way he did it and the fact that he had to win a second election in two years. really, no one has done what scott walker has done. >> that's absolutely right. and he's up for a re-re-election next year. and i think we can look past just the tea leaves of this book. i asked correctly -- i asked the governor directly at cpac, are you considering a presidential run in 2016. and he adamantly would not rule it out. he wouldn't even rule out the possibility of saying he wouldn't full -- do a full second term. if he won in 2014. so i think that there's -- >> very interesting.

>> yeah -- yep. there's a real indication here that scott walker has the tools to get the job done. >> if he runs and wins big in 2014, that is a spring board, launch launching pad, given the fact wisconsin is a state -- republicans have won in how long? >> would he would have won statewide office three times, which i think he is well positioned to do. >> chris, i'll come to you. there is a couple democrats that are contemplating books. i did homework to do. one of the names is hillary clinton, looking into it. another name is andrew cuomo. looking into it. what's your take there? is this serious stuff? >> yeah. i mean, i think it's serious on both counts. my guess is that, you know, secretary clinton is going to take some time off, obviously. and kind of evaluate where things are and decide whether she runs. if she runs, she's the proverbial front runner, i would say not only in the democratic primary but also across the field. >> she was in 2008 also. >> yeah, you still have to run a good campaign. you have to run a strong

campaign. but she has an incredible record. now that's not going to be enough. she'll have to have vision in terms of where you want to lead the country. >> what does she do as secretary of state? seriously. let me just say this. i respect her. i'm something of an admirer, but when i hear this business about huh she did as secretary of state -- obama called the shots and they bungled benghazi. that's not true. >> there were mistakes made. if you look in terms of her record and the middle east and the turmoil that happened there in terms of the withdrawal from iraq -- >> running egypt? and what's going on in syria? the whole sprint thing? so the whole sprint thing is falling apart. >> the majority -- overwhelming majority of americans think she has been a fantastic secretary of state. so that's a positive. >> robert costa, do you think hillary clinton has been a fantastic secretary of state? i want to hold that point for a minute. >> i think it's a fair question to ask. i think benghazi was really a mark at the end of her tenure that's really going to cause a lot of problems in she runs in the general election in 2016. the bigger question for hillary clinton is this. she hasn't been on a ballot in a few years. she is the clinton name, is the

country ready for another clinton. do they said another clinton, regardless of what she did as secretary of state. >> do we have a presidential front-runner in the gop for 2016? >> not really. you have a few front runners, but there is no mitt romney this time who is really taking it by the lapel and going to tell all the donors he's going to be the nominee. you've got rubio, walker, paul ryan on the ticket. but a lot of other names people aren't talking about like suzanna martinez in new mexico or kelly a yad from new hampshire. rising stars in the party that want to look hard and run. >> many thanks. robert costa, keeping an eye on the literary political scene in washington, d.c. chris and guy, you're going to hang with us for a while. up next on kudlow, is the republican party really developing a growth opportunity and empowerment the message for all americans? i'm asking republican national committee chairman reince priebus when the kudlow report comes right back. a tow or lock your keys in the car,

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welcome back to the kudlow report. in this half hour, boosting the democratic base. didtisa ambitions motivate the white house to use the obamacare application to register new voters?

first up, is the republican national committee's new project enough to bring the party success back in 2016. and does the so-called growth and opportunity project really send a message of economic growth, empowerment and opportunity for all americans? in other words, i ask, is there enough jack kemp in reince priebus and his troops in the gop. here now is the aforementioned republican national chairman, reince priebus. all right, reince, you heard me. i'm worried. i'm worried that gop is still the party of green eye shade. really the party of negativism. and that president obama's got the high ground on growth and optimism. >> you know, that's -- i think that's a good concern. i think it's a legitimate criticism in that we've got to be more than just bean counters and mathematicians. and so, you know, what the report focuses in on, though,

larry, is a couple things. and the first and foremost in my mind is we've got to have a national party that's year-round, that's going in the neighborhoods, that's granular, that's in hispanic, asian, african-american neighborhoods year-round. as we're speaking right now, there are obama supporters with clip boards going door to door receipt now taking surveys on obamacare. and right now we're it. so we have to grow, we have to be big, we have to be granular. and that's just one piece of what our plan is. but i think it's really important. >> yeah. i do like the sound of that. but i want to raise this point. i mentioned jack kemp in the intro. my dear late friend and mentor. jack kemp used to go to the housing projects. he used to go to the projects. jack kemp used to meet regularly with la raza and other hispanic groups as he was developing his enterprise zones, tax-free enterprise zones. the republican party establishment never really embraced that sort of thing from jack kemp. and so i'm skeptical that we're going to embrace it right now. can the gop do that?

can you really go out there and make good on your promises? not just to workers. i know you can get staff, reince. the question is, can you get political leaders to do that, and take that kemp model back? >> i think we can, larry. and i think it takes leadership to do it. i mean, i think you have to challenge, just like jack kemp did, where, you know, he would say and others have said, look, we need all of our congressmen fighting for the majority of every demographic in their district. if they've got 10% hispanic, you ought to get out there and try to win the majority. i hear your skepticism, and i don't think that you're out of place to be skeptical, other than to tell you that the proof is going to be in the pudding. and you're going to see a national party that either grows and gets into these communities that we haven't been to in far too long. not just with people, but with also reaching out to groups like you've mentioned, la raza, lieu rack, naacp, having a presence there. i think it's multifaceted. i think it also means we need to take our message of what our

party is about of equality, liberty, freedom, opportunity, and tell it to people that we haven't been to in a long time. the report, larry, talks about even going to historically black colleges and universities and telling people the history of our party. which we haven't done. >> i think the report has got some good stuff in it. my cynicism -- i don't know the leadership will back you up. i want to go back to this other point about economic growth and opportunity. ace pollster john mclaughlin, among the best pollsters in the country. so he got the gop, particularly in the house, but also in the senate, obsessing about deficits and debt. i mean, it's an obsession. it's green eye shade. as you call it, it's bean counting. so mclaughlin polls, the most important impact issue, the most important impact issue in the country, economy and jobs. 60%. okay? second, health care. 40%. you have to go down to third, deficit and debt, and that's only 33%. so the deficit/debt thing, i

think you're losing ground on that. and here's another one. i want you to hear this. only 6% of those polled want to cut medicare. and yet you've got a house budget that wants to slam medicare. i know entitlement reforms are necessary. maybe small ones. but people do not want to see that program depart. you all are running against the tide, even of the numbers of major republican pollster like john mclaughlin. >> my point has been in order to fix this presidential fix we have in our party we have to do a couple things. we have to do more than just, as you say, bean count and put on the green eye shade. i agree with you. we also have to get to the issues that get to people's hearts. certainly health care. school choice. charter schools. i mean, one of the reasons why i think the bushes have done so well in hispanic communities, and minority communities is that -- they are rightfully -- >> they go there! >> they're obsessed -- they go there.

>> jack kemp went there. they go there. they're the only ones that go there. >> they go there. and they're obsessed with education. and it gets to people's hearts. it's what their kids' future is, it's their ability to afford school, to get ahead in life. there's more than just the initial issues of math for us to deal with. >> right. >> but if you're not there -- >> it's got to be a growth message. reince pry prescribe us, thank you very much for taking the time to come back on "the kudlow report." let's continue the discussion. is reince priebus right or is the gop missing the message here? we bring back chris co phone us and guy benson. chris, i go to you on this. because i think that the republicans are doing exactly the wrong thing in a lot of places right now. you've got the chairman of the house budget committee, call paul ryan, a very smart guy, used to be a follower of jack kemp. he argues austerity. he says if you balance the

budget, the economy will grow. i say you will balance the budget if the economy does grow through lower taxes and lower regulations and more opportunity. i think they've got it back-assward it my point. >> listen, they have a lot of problems, okay? and you saw these come glaring out in the last electric. there is a demographic problem. when you have to do a report that says we need to speak to minorities more, you've got a problem. and i think in policy -- they have a significant challenge. the challenge is, the american people doesn't buy what they're selling. i think part of what you're saying is right. it's not just a tonal shift. that's too easy. it's a strategic focus. and the republicans are trapped, trapped by an old guard that wants to believe that the republican party of, say, 10, 20 years ago, can resurrect itself. and another guard that wants to be even more conservative, when the country is changing. when you look at the demographics, whether on immigration, gay marriage, the country is changing. >> i don't want republicans to become democrats. that's -- i don't agree with

that. but what i'm saying is, guy, that i don't think the republicans have the messaging right at all. and i'm looking at the people primarily in the house and in the senate. i think they're sending a root canal message. i think they're sending an austerity message. and obama, whose policies i completely disagree with, has much better messaging than the gop. >> well, messaging has been a big problem for republicans for a long time. but i'm going to disagree with you here, larry, on a number of fronts. to call paul ryan's budget the house-passed budget austerity, is playing into democrats' hands. the house republican budget increases spending every year by an average of 3.4% instead of 5%. >> only because of entitlements. >> that's not austerity. >> and he's got a problem with the entitlements. let me tell you, this is why the latest rasmussen poll was so hard to my friend, paul ryan. because paul comes off, and a lot of republicans follow him down this path, as wanting to rip apart medicaid, to cut it, slice it and dice it and then redo it. now, he may be right -- listen

to me. he may be right on some of the merits. but i've got to tell you, what's coming off here is an anti care message which is poison politically to the country. >> see, and i think that -- i disagree strongly with that. i think paul ryan didn't lose this discussion during the 2012 election, excuse me. he campaigned alongside his mother, who is a medicare senior, and said medicare's own ack tears say if we do nothing the program will be bankrupt. we're trying to save the program, because we're going broke. one more point about this whole thing about growth versus balancing budgetses. a poll came out last week, 85% of the public thinks the government should be required to balance the budget. and thinks it will create growth. >> i understand that's true. but i've seen those polls before. it's like american cherry pie. i don't believe a word of it. i never have. i don't think when it gets down to it people want to cut and cut into the budget. now i happen to be a guy for limited spending. but limb i'm also going to tell you this. if you have the right tax

policy, liberalize corporate taxes, liberalized regulatory policy. if you let business in this country and small business grow. if you have a dream, a vision, an idea of empowerment and ownership and opportunity for everybody, that's the way to do this. that's the growth message. now, your man has the message. he just doesn't have the policy. that's the problem on the democratic side. >> well, i mean, here's -- i think there's -- with respect to the republicans, i know they like to make the argument that we're right about the policies. and somehow we lost an election. they lost the election because the american people did not buy their message or the policies. >> i agree with that. it was a very negative, very pessimistic message. and the issue of, look, reaching out to immigrants, reaching out to hispanics, let's use that. the difference between what jack kemp does -- did and the difference between what the republicans do today, kemp didn't reach out for the sake of winning a vote. he said to them, i'm going to create enterprise zones that are

tax-free, so you will be able to build your small businesses into a big business. so you will have opportunities to grow and prosper. and they listen to jack kemp. today, my fear is the republican party, the message is, we want to make nice to you, and come to your dinner once in a while so you vote for us. >> not even once in a while. but look at in terms of immigration. >> rubio has the policy right. but whether he'll be followed, i don't know. >> you had ronald reagan who did amnesty. >> i was for it! i'm for it today. i don't care what the wing of the party said. it was basic amnesty. not really amnesty, but effectively. >> you have bush junior, who was clearly saying that we need to do something on immigration. you have rubio now trying to do something on immigration. >> 65% of the voters of this country favor rubio's plan. that was in mclaughlin's poll. 65%. where are the republicans on this? >> see, that's my point. as soon as rubio goes out and leads on it, he starts getting hit by the far right. >> that's why i'm still worried. >> i actually think he's done a pretty good job of selling this.

he went straight into the belly of the beast, talked to rush limbaugh about it and got treated -- >> you're right about that. >> wait until you see the far right come out. >> i think -- i think mark owe rubio right now is in a position to be the jack kemp legacy. i really do. i think he has that in his guts and has that in his belly. i've heard him, interviewed him, i like it very much. but the gop -- get off this austerity kick. get off this green eye shade. we want growth and lower unemployment. anyway, up next on kudlow, a crisis deal has warn bufrts berkshire hathaway on track. up next on "the kudlow report." let's have growth, not austerity. [ male announcer ] just when you thought you had experienced performance

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warren buffett isn't a big fan of wall street money managers, but he does love one of the street's best-known names. cnbc's own bertha coombs joins us with that and more in the headlines coming into the cnbc newsroom. good evening, bertha. >> good evening, larry. warren buffett on his way to becoming one of goldman sachs ten largest shareholders. would receive a large block of the investment bank stock in october. the result of that $5 billion cash infusion deal that helped to shore up goldman back during

the 2008 financial crisis. wells fargo says it was the victim of a cyber attack. the bank's website experiencing an unusually high volume of traffic today from what's called a denial of service cyber attack. in it a statement, to cnbc, the bank assures customer informing remains safe. and one new jersey man smiling want to after pocketing the fourth biggest powerball jackpot ever. i hope he has a good financial adviser. the former dominican immigrant chose to take a lump sum payment, $152 million after taxes. hopefully he won't put it in a cyprus bank. when asked how he felt, he said, quote, pure joy. and in political news, president obama today naming the u.s. secret service agent julia pearson to be the agency's new director. she would be the first woman to hold that post. and finally, larry, the president signing the continuing resolution today that will keep the government funded through the end of the fiscal year.

averting a government shutdown. the funding bill includes $85 billion in across-the-board sequester spending cuts. nobody wanted to do them, but here they are. >> guy benson, the great part of the president's signing today, as jay carney made very clear, they obds to the bill and they objected to the sequester inside the bill. they made that -- spent more time disagreeing with the bill they signed than supporting it. >> it's called a signing statement, which the president ran, saying he would never do. because it's a cynical ploy that only the past people do that sort of thing. and now he's president, surprise, these signing statements. but sequester is his idea, and this new continuing resolution, which funds the government through the end of the fiscal year locks in those spending reductions, which are minuscule, but they at least exist and are real. and i think that's a good thing. >> and i'll say this, chris. even though i want a pro-growth message, not a green eye shade message, i favor the sequester.

i think the republicans won this round. in fact, they won the sequester round and won the continuing resolution round. but kept the sequester spending cuts in play without shutting down the government. this is a gop victory. >> well, maybe in the short-term at best. here's the problem with the sequester. putting aside who is for and against it, which i think is kind of childish, this whole argument. but that aid soorside, when the start impacting and they're going to impact particular states, virginia, maryland, you know -- hawaii, alaska, where especially places where you have races going on, in a year or so. it's going to be, i think, very -- interesting to see -- >> let me get this right. government spending really boosted the economy. and now government's not spending is going to damage the economy. you can't prove either of those assertions. >> i don't think it's a question of cutting spending. i think it's how you cut. it's how you cut. and if you don't cut smartly, then you're going to put yourself in the position where you do undue damage in

particular states. >> it is not childish to point out who proposed an idea and signed it into law, first of all. and second of all, republicans twice passed smarter spending cuts and obama said he would veto them. >> more controversy coming up. up next on "the kudlow report," is obama care doing double duty? you're going to look at this. acting as a secret democratic voter drive. that's right. we're going to discuss this when "the kudlow report" comes right back. rettyconservative. 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. (screams) i'm really glad that girl stayed at home. vo: expedia helps 30 million travelers a month find what they're looking for. one traveler at a time. expedia. find yours.

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nasty story come up. question. is obamacare now doubling as a democratic registration drive? the online draft application for universal health care coverage includes asking the applicant if he or she wants to register to vote. but get this. it's also offered on every application for public assistance. i didn't know this. let me guess. if you're applying for food stamps or welfare or obamacare, are you really going to register to vote as a republican? i don't know. joining us now, louisiana republican congressman charles bu stanny. joins us now to share his concerns about this policy. chris and guy are still with us. mr. bustani, i believe you uncovered this and i want to ask you, what is up, did anybody understand this was in the obamacare bill? >> well, this is -- first of all, it's not in the health care law itself. the statutory language includes nothing directing that type of

questioning. i think it's completely inappropriate. and this is not the first time secretary sebelius has tried to do something like this, where she mixes political activity with actual official work. she has already been reprimanded for violating the hatch act on one previous occasion. it's completely inappropriate to have that kind of question in this application. >> is voter registration -- i mean, i don't even know what precisely the question is. but in order to become eligible for these insurance markets, do you have to actually put down something on voter registration, either asking one or worse, do you have to put down your party affiliation? >> no. i mean, voter registration -- designating your party registration is not necessary to fill out any of these applications, and it's inappropriate and going well beyond the scope of what's required in the health care law. so i really have to call into

question this. and we're going to stay on it. because i think secretary sebelius and hhs, whoever wrote this draft, are completely out of line with this. >> well, so let me just get this straight. you go in there, and apparently it's not just obamacare. you correct me if i am wrong, sir. voters can register with a driver's license, okay. but if they apply for medicaid, food stamps or any other public assistance, they either can or have to put down some kind of voter registration. now to me, the incumbent president or the incumbent party is the clear winner. because they're the one offering the public assistance. i mean, republicans have opposed all this stuff. so to me that is totally political. it reminds me of here in new york, when the immigrants came off the ships, the old town hall would be there signing them up for the democratic party. that's what this sounds like. >> well, that's what it sounds like to me. i will say this. there has to be a clear wall of separation between political activity and using taxpayer dollars for these applications

and for the official type of work. and to put this type of questioning in there creates a kind of linkage. and it does favor the incumbent, and i don't think that's correct. i think that's a misuse of taxpayer dollars. i think it's a violation of the hatch act, in effect. and so we're going to continue to stay on this issue. not only with this draft application, but i'll talk to my colleagues in the house about some of these other areas where that kind of crossing the line is occurring. >> food stamps, medicaid, any public assistance. guy benson, you've got a thought on this, a question for the congressman? >> my thought, maybe is this a secret plan to register democrat voters. i would argue that obamacare was a not-so-secret massive republican registration drive in 2010 and will be again next year when people start realizing what's in this bill and it collapses on the launch pad. do you agree? >> oh, this bill is a disaster. it's a massive tax hike. i had a hearing on this

recently, looking at some of the obamacare taxes. and how onerous they are, whether it's the vice tax or the 3.8% tax on net new investment, with a very low threshold. this is a massive tax hike on the american people, and as a physician who understands health care, i can tell you, it's a disaster for patient care. >> is this bribing voters, chris? is this voter bribery? i give you food stamps, you register democrat. i give you welfare, you register democrat. i give you obamacare, you register democrat. bribes? >> do you think the democrats have a problem with registering more voters than republicans? >> handing out government assistance from taxpayers? i have a problem with that. >> the whole idea -- this idea that somehow republicans are at a disadvantage -- last time i checked, the president's health care plan does not say that only democrats get health care. there are uninsured republicans that are going to be insured -- >> that's because the democrats voted for it.

>> oh, i'm not sure that's going to be the case after it goes into effect. >> congressman charles bow stanny thank you for uncovering this. chris co phonis and guy benson, not a controversy we couldn't solve. that's it for this evening's show. i'm larry kudlow. thanks for watching. we'll see you tomorrow night. [ male announcer ] i've seen incredible things. otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business. because planes use less fuel, spend less time on the ground and more time in the air. suddenly, faraway places don't seem so...far away. ♪ (announcer) scottrade knows our and invest their own way. with scottrade's smart text, i can quickly

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