and we are not getting enough bad news to stabilize him we had two good numbers today. be careful. this is a different kind of market. i'm jim cramer. i'll see you monday! the big story tonight, a strong sell-off to end the day, the week and the month on wall street. the dow fell 209 points, don't forget the month of may was still positive making six monthly gains in a row. today looked like late session profit-taking and maybe some rebalancing. the other big story, new trouble, new questions tonight for team obama on the irs scandal. it turns out, former irs chief doug schulman did meet with political operatives like stephanie cutter in at least some of his 157 white house visits. also, schulman's wife worked for a left wing group trying against campaign spending. these stories and much more

coming up on "the kudlow report," which gins right now. begins right now. if you blinked, you might have missed it. stocks tanked more than 200 points today. most of it came in the last 15 minutes. my message, don't panic. it looks like profit-taking and some portfolio rebalancing, but someone that really knows, seema mody joins us now with the real scoop. good evening. >> good evening, larry. you know, it seemed like a normal trading day. traders reacting to the latest consumer sentiment, hitting a nearly six-year high. pmi data topping wall street expectations. then in the last 30 minutes of trade the marks took a nosedive t. dow closed down triple digits. the s&p and nasdaq also ending lowerment the reason, traders pointing to rebalancing at the end of the month. the fix shot up 12%.

the treasury, no climbing higher above 2%. that being the big story this woke. in response, high yielding sectors, energy, consumer stap him, health care ending the day lower. speaking of health care, several pharma stocks getting hit as the oncology industries asco conference kicks off in chicago and if fearing the worse, down 5%. pfizer moving lower on heavy volume. now, fluctuation in the price of commodities continue to raise on the newfield, pioneer and cliffs natural down sharply, three major indices closing out the month with sizable gains, making it six months of consecutive change. some said we would see a sell-off. some saying the major correction has yet to come. the new saying will be sell in june an head to the moon.

>> seema, that's very good, by the way. i think the interest rate factor and the fed factor is weighing on the market. i know it was just the last 15/20 minutes. somehow, i'm getting the feeling all week long investors are worried about rate. we'll worry about the fed. >> absolutely. i think the continuous chatter on fed scaling back on monetary support. that continues to be the major headwind for the market. some say that will then, of course, be a factor for trade going forward. you will see tease panic swings because of that. >> indeed, it will. we appreciate it. now, the latest information on the irs scandal, surrounding former irs chief doug schulman who met with the white house and his wife's connections through a left wing finance reform group. some very bad news on that front. let us not forget lois lerner. okay. the now suspended irs official who was in charge of the 26

overseeing tax exempt groups, refused to resign, refused to answer questions with the congressional hearing last week. just why did she stake the fifth? could it be because lois lerner repeatedly lied or at the very least misled congress? the question is, is she guilty of criminal charges and might she actually go to jail? all right. there is a great new piece by ileano johnson that laid out this perfect review. ace reporter contributor robert costa of the national review. robert, if you were lois lerner, how worried would you be? >> reporter: lois lerner should be very worried right now. the national review has been deeply reporting this story. why did she take the fifth? she probably took the fifth because she wants to eliminate criminal liability for evading congress, especially when the house oversight last year was asking question she didn't seem to give direct answers. >> all right. one of the points that comes up

here, dishonest communications with the committee. on a number of occasion, robert, as this article points out and as we saw, they asked her, number one, were there any target of political groups and she said no. >> reporter: that's exactly right. here's the by question for lois lerner, she said before corporation already house oversight, shelves not involved with tea party groups, jay seculo now has documentation that lois lerner signed off. so with these new documents coming to light, lois lerner has a lot of questions to answer. that's why she took the fifth. that's why congress will push her to answer these questions. >> and she denied anybody in her shop asked the question, tell me your donor, in other words the tea party group. she denied that. we found out subsequently that wasn't true, either. >> that's exactly right. ileana johnson, national review has been reporting this.

she has sources inside the office of the irs. even inside the office of the irs in cincinnati. there are people that work there, that tell national review the questions were invafs, they were intrusive on these conservative groups. they went over the top. now for lois lerner to shrug it off is making people if washington raise their eyebrows. >> also on this story, she was also asked if the criteria for these tax exempt groups were ever changed. we found out 16tally it was changed, but ms. lerner said it was never changed. >> ms. lerner took the fifth. we don't know what she said, except what she said last year when this wasn't a hot issue. now she continues to not answer questions to congress. this is not going to settle down for lois lerner, congress feels they have been lied to. they want to press this investigation. this is a problem for the white house. unless lois lerner comes clear about her involvement, this could go to the top. if she was directed perhaps by someone else within the

administration to do this. >> robert costa, thanks very much. we will see you later in the show. it turns out former irs commissioner douglas shulman was in meetings with political operatives like stephanie cutter. she admitted as much on cnn a short time ago. check this out. >> many of those meetings were for health care implementation. i was in them with him. so there is nothing nepharious going on. >> we will get to the nepharious part in a second. on top of that, we learned schulman's wife work ford top group against campaign spending. the story moves on. let's talk to radio host, conservative commenttator mike gab and joining me on set democratic strategic jimmy lynn. mr. graham, stephanie cutter says glibly, oh, she was in meetings with shulman talking

about obamacare. stephanie cutter was a leading political operative in the white house and later on in the campaign. what in god's name is she doing talking to the head of the irs? >> look, you can't have an easter ec hunt without stephanie cutter there. tile tell you that straight up. is keechl everything about the obama approach to public policy is plil politicized. it's not the outcome, it's how to we keep this political coalition together? it's no surprise you have the political wing and policy wing sitting right there. now we know. look, you can dispute how it happened. the policy actions were to promote attacks on president obama's enemy, on his opponents. i wrote a book on the tea party if 20 so. i thought they were being cookie about the pressure from irs. i wish i had paid for attention, because it was really happening. so can you trace it back to stephanie cutter in the white house? who knows. we know they did what the white houseped. >> the important part is it does establish a link to the white

house, an important link i'm sorry to the political end. that's the new information. she is trying to say it was all about obamacare. i worked in the white house many years ago, policy decisions did not have political operatives. all that stuff was done some place else. what is your take here? does this open a new door in this irs saga? >> no. >> no? stephanie cutter, no? >> he went to the white house 11 times out of the 157 tiles, he was clear. 11 times, we know that. that's a fact. >> how do we know that? >> the white house released the rorksdz unlike the bushes. >> he went 157 times. >> he was cleared. does not mean he went to the white house. >> where do you think he went? >> it doesn't mean he went to the meetings. two times in 2009, he when to the the white house. five times in 2010, two times in 2011 and two times in 2012. that's how many times. >> who did he go to see? >> all that is sitting out there in the public domain. >> no, we don't know that. >> we dochl it's on the

internet. you can fine it. >> we check in on the west wing gate. you go through the gate now. the officer is there, secret service officer takes your name. then says, where are you going? >> right. >> where is the where are you going part? >> the where are you going part is he when to the the oeob the eisenhower executive office building. it's across the street. it's where your office was. >> that's correct. >> you had conversations 11 times about obamacare. stephanie cutter would leave her office and go to the oeob and have meetings. a lot of political staff did. understand, the white house has political staff. >> i understand that, michael graham, by the way, i want to tell you, something has important as obamacare, a huge new policy initiative with a huge tax angle to it that's being handed over to the irs. those discussion had nothing to do with the political people, unless, unless political people

are coming in to tell shulman to check out, to stack up, to attack these tea party groups, defund them. do this, here's your roam. otherwise, who knows? i don't know, maybe he talked to axelrod? i don't know that. who knows where he talked to in other words, there the a difference between political operatives and policy people. okay. i was on the policy side. we did not have political operatives in our meeting, never. >> imagine carl rove sitting down repeatedly with the head of the irs and then months later finding out that by sheer coincidence, by total happenstance, exactly what carl rove wanted to have happen, which was obama's political opponents forced to fight the irs, instead of working on the compaign, happened to happen. what a wild coincidence, be i the way, other break news in the last while, 88 irs employees reportedly were involved in this, the target and actually handling the target. you don't get 88 people doing

something unless management is directing them to do that. that's the only way it happens. >> i want to address that. those 88 people that had anything to do wit. they should be fired. civil service protections be damned. i don't care. the politically is a huge mess for the white house. we will agree on that. anybody that had anything to do wit should be fired. however, i don't seem to recall conservatives being extremely upset around mad when the bush white house and the bush irs investigated the naacp for two years. >> his irs commissioner never went into the, wait, i'm sorry. went into the white house once. once. one time. >> i would like to know what the heck he was doing the rest of that four years. here's my point my point is it was political then. they're political now. if you are going to say that the obama administration, the president -- >> you are defending him. i don't know the facts on the naacp. >> how about one fact. one fact?

>> 501(c)(3) vs. 501(c)(4). that's a key fact here. i'm sorry, when you are using protected money that's not supposed to be for political action. you are blatantly using it for political action, which the naacp did. that's completely dishonest. these were 501(c)(4)s. they had special permission. they said, we are here to impact public policy. that's what they said. >> what the the status of american crossroads? >> a c 4. a c 4. >> what is crossroads? >> we already said that. there has not been an issue. >> no, no, it's not a revelation t. question is under the law they are not allowed to engage und up to a certain percent on political activity. did they or did they not do that? >> they did not. >> they did. they ran hundreds of millions of ads across the country. >> carl rove can speak for himself. that has never been an issue. has never come up remotely as an

issue. >> i think it is an issue. >> i'm not sure they were investigate. be i the way the liberal groups. >> they should be investigated as well. >> the naacp was a c 3. c 3s are not permitted to do -- what did the bush irs half-two years determine that naacp did? nothing wrong. >> all right. so they let them go. no one complained for two years when they were being vecked. >> listen, they didn't go after tea party group after tea party group. >> a black group vs. a tea party group, what itself difference? >> you have other stuff. go down the list. the irs first of all was targeting anti-abortion groups. they negotiated with unf them. please don't picket on the planned parenthood group. what is the irs group doing telling them that. that's crazy. a retired army officer the irs challenged his church tax exempt donations because they found out he was contributing to conservative causes. the irs challenged a group involved in voter registration,

which, by the way, is exactly the social welfare thing that these c 4s were supposed to do. it looks to me, if it's 88 people or 100 people, i'm telling you, this group ran amuck. >> we will agree on that. >> and the fact that shulman is in meetings of the white house with political operatives tells me we have a clear link to the white house now. is a new opening. i got to get out of here, michael graham, thank you very much. jimmy will stick around. we have to talk about that major sell-off at the end of the trading day that has people asking whether the rally is over. i don't think so. folks are asking. by the way, remember, bond funds got hit hard too. bill gross just wrapped up one of his worst months ever. you have the latest on all this wild stuff in the markets. please don't forget, free market capitalism is the beth path to pros period of time. i will apologize in advance. you will hear a lot of stuff directly contrary to free market capitalism. we will point it out.

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. as we reported earlier, it's a wild day, a wild week for the marks. let's bring in our investment pros that maybe can tell us what

about in the last quarter, 15 minutes. the big sell-off came. jack, what exactly happened? >> it's called profit-taking, larry. you know what, you got six straight months of profits in cases. you see people taking profit. we saw it happen three days ago with the settlement. today, of course, we had the market positions which really marked the market right at the end of the day. look, may has been a very unique month. let's face it. this is the first month all year where we have seen bonds and stocks go in opposite directions. it's a question of whether we are starting to see the great rotation that everybody has been expecting. >> jim, i ask you the same question. i want to add to it a little bit. a question i have been asking this week, does the sell-off in japan, which is big correction, long overdue after an 80 percentage point rise, does that have anything to do with

sell-offs an corrections here in the usa? like, for example, today? >> absolutely, it does, larry. i agree with everything that jack said. we come a long way without a correction. the market is looking for a lot of excuses to correct. we had a little bit today. but the japan thing should not be ignored. here's why. the japanese central bank lost control of interest rates and there is a fear now that the fed could do the same thing. they could lose control over interest rates over here if our own qe programs run amuck, like they are in japan. so they're worried about the fed, at the same time, we're seeing interest rates start to track up a little bit. so the bond market is saying you should be worried about the fed. larry, i'm not worried about the fed. we haven't hit our unemployment targets. we haven't hit our inflation targets. the economic data, we got some traction. we have to momentum. all the economic momentum has been elusive -- >> they had big numbers today. a big chicago manufacturing number, consumer confidence revised up. >> look at new york, philly, the

rest have not been good. >> i understand. i understand. you are right. it's mensa, menska, jack the federal reserve on the other side of the coin never controls long-term market rates. the market controls. that some people are saying i'm in this camp that rising long-term interest rates, jack, is mostly a real interest rate effect where it is producing a stronger economy. what's your take? interest rates a help or hindrance? >> larry, let's face it, we're talking about a 2.2% tenure. this is historically still ridiculously a low yield. if we look at the 30 year, still at 3.3%, you know, these are rates we would have laughed about ten years ago. here we are worried about maybe another quarter of a point or a half a point rise. the bottom line is this, yes, what you said is absolutely right. we need rates to go higher. is indicative of everything the

fed is doing working. more importantly, what we will see is that money work its way into equities, thus, we are going to see the multiple expansion and, more importantly, it explains what's been happening over the course of this last month. again, this last month, what's happened? that tenure has gone from 160 to 220. huge! >> roughly, 50 basis point move. most of it was real interest rates. you can see it in the inflation protected security, to be fair to the position, jim. i want you to talk some more. i think one thing that's happened this week, just this past week is a lot more nervousness and a lot more jitters and a lot more discussion about the fed reducing its bond purchases. now, people are calling that a fed tightening. i think that's a misnomer. i think the interest rate story is beginning to weigh more heavily on stocks than i might have thought a week ago. what's your take? >> oh, it absolutely is, larry.

look at the copper and the lumber markets. if we were really seeing economic traction? wouldn't copper and lumber prices be trading up, too? they're not. we're looking at a bond sell-off worried about the fed, worried about what the fed is going to do. >> the dollar is very strong, knocking down gold, knocking down silver. and i think holding down combhodities, the dollar. in fact, oil got hit again today. oil is down 92 bucks. >> that is good for our economy. we are mostly a consumer-driven economy t. fact of the matter is, these were global commodities now. it's a global economy we are worried about when we look at our own corporate profitability and we're not seeing these prices improve at all. we're not even seeing the housing market create a lot of jobs. we're not seeing consumers have any traction. we don't see enough economic data points that point to real momentum. all we're seeing is bouncing along the lows. i would point out, larry, that

interest rates ticked up the last two years and then came right back down. >> i understand. i got to get from you guy, one word, yes or no, jim le camp, are you going to buy this correction, yes or no? that's all we got time for. one word? >> on the bigger dip? >> sorry s. that a yes or a no? >> on a beggar dip. >> also, jarring buy or sell? >> buy store, sell bond, larry. >> it's a little like pulling teeth. i think we got it out. anyway, moor dangerous weather hitting oak okay right now. we'll have the breaking news next up on "kudlow." ments [ male announcer ] this is george.

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. >> all right, we have breaking news. >> there are emergencys in oklahoma right now. you are looking at like video of a tornado hitting the town of el reno. we have reports of storms bringing up to four inch of hail and damaging winds, gusting that could reach 80 miles per hour. we have no reports of casualties yet, of course, we will keep a very close eye on this, larry. >> many thanks, seema mody, appreciate it. folks, here is yet another potential scandal that could spell trouble for team obama. health and human services kathleen sebelius accused of

breaking the law for an independent obamacare project. three senators are now calling for an investigation on this. we are talking to one of them next up. .

s. the health and human secretary services kathleen sebelius, did she break the law over which she has regulatory authority, all about setting up obamacare. lamar sal sander, orin hatch want to know if sebelius crossed an ethical or illegal line. they are calling for investigations by the inspector general. lamar alexander, senator, alexander, thank you very much. has miss sebelius broken the law in your judgment? >> that's what we want to find out, larry, we have asked the inspector general what the facts are, three in the senate, three in the house, three committee chairman have asked the government accountability office, is she raising money for people she regulates, number

one, number two, maybe more important, is she making an end run around congress by doing with private money and a privatenty what congress refused to do? >> let me ask you, those are great points. number one, as i understand it, sir. she is raising money to finance the health care exchanges in states that refuse to participate? they've basically run out of money. so she's going through insurance companies and others who will be involved in those exchanges. therefore, with collarity, she is raising money for people she is regulating. i don't see how you can do that. >> you can't if that's what she is doing. that's what the washington post and new york times said she appeared to be doing. we haven't accused her of doing that. we have asked the general accounting office and the inspector general what the facts are. if she is doing that, that's unlawful t. other point is a bigger point you can't make an end run around congress, that's what got oliver north in trouble

25 years ago. if congress says, you can't do it. the obama administration can't set up a privatenty and do it anyway. that's what wide also ask about. >> so this is the, i may be mistaken, from my budget days this is the anti-deficiency act? >> you are exactly right. exactly right. >> if you have an allocation, you can't bust that allocation bypassing the hat in the private sector, so you are running your own budget? >> no, that's exactly right. styles, i've said, ian contra people said that has to be different. there was no iran contra committee 15 years ago. it made a specific point it said if a president can create a private entity and raise private money for a domestic agency, it said, to do what congress says you can't do, why then, you don't need a congress. i mean, our founders didn't want a king or at least most of them didn't. they created a congress and gave them the exclusive power of the

purse. making an enrun in that way is also unlawful. >> we'll leave it there. thank you, senatorial sander. we appreciate you very much. so is this sebelius flab yet another scandal? it's going to bog down the obama administration the sebelius flap, that is. we are back with jimmy williams, syndicated radio host, michael graham. obamacare falling apart? here's secretary sebelius former kansas governor who ought to know better passing the hat for the companies she is going to regulate to fill in the gap. i think this is another problem. a major problem. >> in boston, you know, it's business as usual. it's not uncommon for the guy who shows the liquor license to go down and say my son has a fund for college education. we know what it is, open grab and the corruption. i don't know how much more open grab and crucian, they rely on this money, they say, give us

money. by the way, this person will decide whether or not your specific plan meets the requirements of obamacare. >> with a gun to the head, of the very insurance companies that she wants to set up these state insurance exchanges. you can't do. the perception of this looks bad. i would like for the ig at hhs to do what he or she supposed to do, withcy to go and investigate. now that these three senators asked for that. that will happen. that's great. here's where i get in trouble with the white house. i worked in the senate for seven years as you know. the congress is job is to have hearings and investigate. includes the purview of the executive branch. they tell them how to spend their money. >> congress does. she can't go out and pass the hat and spend her own money. it's like creating her own budget. >> she can't. exactly right. i am a fan of a weak presidency and a strong legislative branch.

that's the congress' jovent let them do their job. let the ig do his or her job. let the congress investigate and have hearings on this. if they come up with something wrongdoing. >> she will have to testify on this and clear herself. michael graham, a big story today up on drudge and elsewhere about the california situation. california used to have fairly low premiums for health insurance because they had a pretty competitive private market. now, it turns out that with the advent of obamacare in which california is participating, the story is that premiums are grand jury to rise 64 to 146%. 64% to 146%. that's the range o. higher premiums because the benefit packages they have to finance are so huge. what do you think about that? >> well, look, i live under the front leans of this we have romneyware care, with i is obamacare 1.0.

massachusetts already had the most expensive health care. it's getting more expensive on top of that only faster. it's one thing to have rises when you are so low. obamacare screws the market up so badly, even when you are at the top of expenditures, you find your costs are going up. something else, larry, people need to know. right now in massachusetts, we get a subsidy in our hospital costs because all the other hospitals in the country are paying a little more to subsidize us. subsidy is coming to an end. which means the already most expensive state in the country willnet get more expensive. everybody loses. >> here's the thing. there's here's an example, in my opinion, where free market capitalism should be resubstituted. because california has a pretty good, pretty competitive health insurance system. their premium costs are a lot lower. you got to give them credit. their costs have been coming down. because they have competition. now, obamacare is going to wreck that competition and nobody is going to be able to afford it. >> i hate to point out the obvious to you and everyone

watching. i don't know an insurance company that has lowered a premium. let me know. >> they were going down in california. there is a story on forbes.com how actually rates were falling but these were the private plans, not the obamacare. seriously, i'm not making this up. >> where in obamacare are there government-run plans? >> the government is mandated, mandated. >> yes. >> many additional services in this insurance plan that you have to buy. >> that's right. >> and that costs a lot of money. so that's where the state interferes with the market costs therefore the price is going sky high. >> the obama ma administration is saying you have to have breast cancer screenings. that's an awful thing. that's terrible. >> larry, this is why your guess is wrong. when the government sets what you have to sell, of course, it's government run. if you can't have a low high deductible low service policy, ten what do you got?

>> have you bad health care. >> the point is, what you have is choice. let me explain this to you. breast cancer screenings may be a very good thing. >> i would assume so, i don't have breasts. >> but a 21-year-old woman might not care about that at age 21 or age 23. >> right. >> therefore, she will shop around for probably something that is more downsized and cheaper. the trouble with obamacare is you can't do that. it's one size fits oul all. it's where statism interferes with the marketplace and as a result the price goes sky high. that's what's happening in. ka. it's happening all over the country. >> it is good. >> guess what, how does an insurance company get the go ahead every single time they want to raise the costs of someone's insurance? how? >> they have -- >> a state insurance commissioners. yes. they all rubber stamp it every single time. >> but they don't have to operate that way either. >> i agree, but that's what they do. >> the point is you don't have

to force an insurance company. create a package and force people to boy it. that itself whole point. >> in this country -- profits hand over fist. find me a health insurance company losing money. i can't find one. >> i'm in favor of the profits, michael graham. >> so am i. >> i'll give you the last word, real quick. >> sebelius went before congress. she said, what are these plans where people get very low coverage an have a high deductible for young people. that's not insurance. insurance is guarding against that horrible outcome. this is a prepaid medical system you pay in advance for the care you get anyway. it drives price up. >> people will stay out of it unless they get sick t. whole thing in nutty. stick to the marketplace. anyway, michael graham, thanks very much, jimmy lind will stick around more. president obama tried to move away from all the scandals today with a rose garden photo op with college students. he wants congress to guarantee

lowstudent loans, his is a forgiveness plan as well. that's going to jack tuitions up even higher in colleges. that's going to put taxpayers on the hook. it is another blow to free market capitalism. even though the president is trying to cloud the issue with hard nothing -- heart tugging comments like this. >> higher education cannot be a luxury for a privileged few. it is an economic necessity that every family should be able to afford, every young person with dreams and ambitions should be able to access and now is not the time for us to turn back on young people.

. the house of representatives has passed a student loan bill, unfortunately, it fails to lock in low rates for students next year. that's not smart. it eliminates safe guards for lower income families. that's not fair. >> all right. that was president obama today slamming the newly-passed house bill that will prevent student loans from doubling and make rates more market-based. in fact, i want to say this, a market-based interest rates on student loans could save

taxpayers about $4 billion over the next decade if it were done properly. will obama ma stop campaigning and let the free market work? the president of american action forum, kelly anne conway joins us president of the polk company. jimmy williams is still here. doug holts eakin, one thing in obama's plan, if i understand this right, forgiveness, there a 20-year forgiveness, takes this the heat off payment and puts it off on taxpayers. is that true? >> there is a steady strend trend for steching out period, using income based payments. larry the thing i found mystifying about today's photo op and fighting words, as you point out the house passed a bill. it's a market-based permanent solution. i saves taxpayers as you pointed out $4 billion. it's cheaper for every borrower right now. it's better than the price fixed

extension the democrats want. it's basically what the president called for in his own bucket. i know he is fighting with somebody, is he mad at the senate democrats or his own budget? >> that's what he asked. you are right. they are trading off the treasury bond, i understand that. he wants this income-based idea that you mentioned and he wants loan forgiveness, doug. i want to ask you this. let's step back a second a. trillion dollars of student loans or more, heavily subsidized, these stafford loans be i the federal government. now, hasn't that caused these colleges to just jack up the price of tuition and made education astronomically expensive? >> yes. we have two sectors in the economy that underperform. they're health care, they're education. both of them are characterized by an absence of competition and massive open ended federal subsidies. it's not a coincidence, these were our problems. so it would be a good idea to go

back to some basic principles of mortgage origination and apply them to student loans. find good borrowers. write a contract. stick to the contract. that's not what's going on with the federal student loan program. we have created the worst aspects of the subprime lending problem. people originate loans. they don't care who they give them to or the outcome and at the end we forgive it. this is not what you are looking for, larry. this isn't markets, contract itself. this is open-ended subsidies and forgiveness. >> this is no downpayment, all forgiveness, do you agree with that? >> i totally agree with that. plus, what about having a job? the best way is to actually get a job. of course the president doesn't mention today that he needs to have photo ops and fighting word, i love that, douk, in lieu of creating actual jobs. the unemployment rate may be 7.5%. for young african-americans,

it's about 38, 30%. so the fact is, if he, we asked that poll for generation opportunity last year. we gave 18 to 29-year-olds the choice, we asked, which would you rather have, more well-paying jobs in the economy or lower student loan rates? 2-1 they want jobs. they want to get out of debt, have their own play, continue ed kachlths you got good governors out there, too, basically saying not everybody is college material. they're expanding, not just funding, but if emotional component, making it more acceptable. >> you had to have been on this show last friday evening on this very point. what obama is angling for, is if you don't have an income, you don't have to repay the loan. >> right. >> that's what he's angling for. now, suppose you did what you are asking, suppose you do it, dougie, suppose they had real credit criteria for people. real fast. wooen college tuitions --

wouldn't college tuitions go down, if we stop these subsidies? >> if the learned told you what you were going to borrow, wouldn't you tell the college, that's what i can afford to play? it would be a little discipline on the process. >> thank you very much. >> thank you. a new poll shows hillary clinton's popularity is taking a hit, all thanks to the benghazi scandal t. question is, do the democrats have any other viable candidates for president in 2016? guess what, jeb bush among others is climbing the opinion polls on the republican side. we will get a lock at who is up, who is down in presidential politics next up on "kudlow. kwmplts do you want the long or short answer? long i guess. chevy is having a big -- huge, in fact -- event. the-great-deals-on-our-most- fuel-efficient-line-up-ever- for-just-a-very-short-time-so- you-better-hurry-extravaganza! so what's the short answer? awesome. [ male announcer ] the chevy memorial day sale. now, get $500 memorial day cash for a total cash allowance of $2,500 on a 2013 chevy malibu.

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. welcome back to "the kudlow report." i'm seema mody with breaking news. storm spotters from the kfor have spotted a tornado touching down near el reno, oklahoma. cameras have captured debris flying through the air. they are reporting a thousand people have evacuated into a tunnel at will rodgers airport, the main airport servicing oklahoma city. there are more than 1 million mooem people in the metro area t. state reeling from the may 20th stormy which killed 24 people in moore, including ten children. back to you, larry. >> a tough story. we appreciate the update. now, who will be the next president of the united states?

that's right a quinnipiac polling shows hillary clinton's favorably has plunged 9 points in response to her benefit geeze coverup. so can the gop win back the white house? well, the republican field remains staffed with top contenteder, one of who ran is delivering a speech tonight at the reagan presidential library. cnbc contributor robert costa is there live. what's the feeling out there, robert costa? >> reporter: greetings from the reagan library. hundreds are turning out in simi valley, california to see rand paul speak. he will be talking on foreign policy. i know it's 2013, larry, but 2016 is still on the horizon, rand paul is appealing to a lot of republicans right now. fooes he's a pressure the voice. >> we will leave it there. are you going to hang out and watch the speech? >> reporter: i'm going to hang around. we'll talk about it next week. >> we will talk about it tomorrow on the radio. will you give me a full report.

thank you very much. i come back to jimmy williams and kelly anne conway, kelly anne, her numbers have suffering, interesting. rand paul and jeb bush are showing very god number, particularly with jeb bush. rand paul has got 32% favorable and a 24% unfavorable. it's pretty good, right? he's a controversial guy. bushed a 29 positive, 29 negative, despite the last nooim name, he is running even. >> what i make of it people are getting to know folks like rand paul and ted cruz, some of the mid-west governors i think will have a lot to say come 2015 and 2016. hillary kwn clinton has a 120% name i.d. so i think the democrats, if they're going to do what the republicans always do, which is to go to the next in lean, hillary:t or joe biden, they will probably come up short.

plus, larry, i don't know if your andrew kwooum cuomo or mark o'malley, i don't know if you wait another ten years on the clintons? why should you wait to take your shot when you are 65 or 67. it makes no sense. if i were hillary clinton, i would not run. she is one of the post-admired women in america. she will go down as a good secretary of state, first lady, united states senator. that's a heck of a lot better than two-time presidential losers. >> right. jimmy, i want to add governor scott welker's name into the mix in wisconsin. a great politician. a great policy guy a. pretty god campaigner. but my real question to you goes to kelly anne's point, if not hillary, whom? 37% approval and a 44% disapproval. if not biden, two? >> your junior senator. pierceton gillibrand. i'm telling you. >> kirsten gilibrand?

>> you know the factual numbers? >> shulman went 11 tiles, he went in there. didn't go in the bidding? >> he's the most unremarkably united states senator in the whole body. >> she's won more than you have as a united states candidate and me too, by the way. >> i never run for the senate. excuse me, she was the third choice of new york's second choice, david patterson chose, he was new york's 2nd choice. >> she's since won twice. >> caroline kennedy said 123 times in the course of an hour oh my god i shoep hope she returns i do. >> i think rand paul would be a fabulous candidate for us to attack in 2013. >> it sound like you are nervous. if your bench is joe biden and hillary clinton, you are saying that we can't attract young people. you guys are going for hillary clinton and joe bodien, wow! the aarp ticket.

>> a 40-year-old senator. >> yeah, that's actually a joke. will you attack our folks, you are desperate. what about the governors and senators? >> i want one that qualifies. >> it all depends on what people think of the end of the obama years. >> the gop has a deep bench. thank you. we appreciate it as always, that's it for tonight's show, thanks for watching. i'm larry kudlow. we'll see you on mon. i've always kept my eye on her... but with so much health care noise, i didn't always watch out for myself. with unitedhealthcare, i get personalized information

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