think they're going to turn it around. that stock was an overreaction. speaking of overreactions i thought disney was an overreaction. like i said, there's all a bull market. it's somewhere. i'm jim cramer, and i'll see you tomorrow. it's 7:00 here in east. 4:00 on the west coast and we're live on "the kudlow report". here's what's happening right now. house speaker john boehner say it's time for the president to start negotiate on a continuing resolution to fund the government and the debt ceiling. boehner also asked why president obama is willing to negotiate with vladimir putin but not with congressional republicans? but a government shutdown seems even closer to reality that may have caused ben bernanke not to taper yesterday and senator ted cruz says he's ready to filibuster if necessary to stop any bill that funds obama care. senator harry reid is furious with the gop but will any of

this affect stocks and the economy? and syria has missed one deadline to give the u.n. an inventory of its chemical weapons. the second deadline is coming saturday. are they going to cheat and retreat once again? john kerry is pressing the russians to finish a u.n. deal on syria that has real military teeth. all those stories and much more coming up on "the kudlow report" beginning right now. good evening everyone i'm larry kudlow. this is "the kudlow report". the house is expected to approve a short term spending bill tomorrow. it will lock in the sequester savings and defund medicare. democrats warn the republicans are forcing a government shutdown. it could be 11 days away. let's get the very latest from nbc's steve handelsman who joining us us live from washington, d.c. >> reporter: the plan tomorrow is to defund obama care and john

boehner is pushing it. he's the one who has said that he was opposed to any notion of a so-called government shutdown, and any notion of a government debt default. boehner lost an internal house republican squabble over tactics. tonight he's pushing the tea party plan to defund and kill obama care to keep the rest of government alive. here's boehner's key opponent on that, senate democratic leader harry reid and boehner today. >> when it comes to the health care law the debate in the house has been settled. our position is very clear. the law is a train wreck and it's going to raise costs, it's destroying american jobs and it must go. we'll deliver a big victory in the them to and the fight will move over to the senate where it belongs. i expect my senate colleagues to be up for the battle.

>> reporter: harry reid said there will be a battle all right but he says the republicans will lose that battle. here's harry reid today talking about the republican plan to defund obama care. >> any bill that defunds obama care is dead, dead. pass a clean bill to fund the government or shut it down. >> reporter: kind of a preview of the fight to come over the biggest of issues came a vote in the house today to cut the spending on the food stamp program spending that's risen drastically since the start of the recession to cut you want 5%, $40 billion often years and it was a strict party line vote. not a single democrat, larry, voted for that and harry reid says it will die in the senate anyway. back to you. >> lots of acrimony. now let's get right to our special guest tonight, tea party

congressman tim huelskamp. you moved the leadership in your direction on the defunding of obama care. okay. question is, what did you really win? in other words, you know the bill is dead in the water in the senate. and as president obama said once again today if it ever got through he will veto it. in other words, why do it if you know it's not going to ever pass anything? >> well, larry, the senate hasn't produced anything to keep the government open. this schaer reid's biggest nightmare for his democratic majority. they've take some votes they don't like. that's why he dislikes. obama care is unlikable, unaffordable. as days go by it becomes less popular. we have an opportunity in the house to say we're serious about defunding obama care. harry reid, is he going to shut the government down just for their one particular program

they recognize is not work well. >> do you actually think -- i'm asking a serious question, when you do the vote count, i don't see how the republicans can win this. i don't see it. you tell me. i just don't think the votes are there. >> the question is, is the president and harry reid, are they going to stick to the red line? i think the recent history on numerous topics is sometimes they are willing to negotiate and right now harry reid and the president are not willing to negotiate at all and that's not the way things work in the government or work in the real world and sending a bill over to the senate requiring harry reid to come together and deciding what to do about obama care is not popular. they don't want to vote on this because they know how unpopular it is at home. i'm optimistic the senate will do the right thing. i don't know what will happen. if we don't defund it it's going disappear to a lot of republicans and hurt our ability to get things done in the future. >> last one. i want to bring our investors

in. i want you to stay with the investors. we appreciate your time very much. let's talk about a possible game of ping pong. a possible game of ping pong. as you say no one can predict the voting future. let's assume for the moment the democrats strip out the obama care defunding provision and send the house back with a clean cr, clean continuing resolution. what happens next? >> well it depends on what the spending level might be. one of the things that the house democrats are saying they will never support a bill that includes a sequester. is the senate position going to be funding obama care and raising spending above the sequester level? i don't think that passes the house at all, what will be the president's position. we'll see if they will send that back. we'll send that to them on friday. they are not staying in during the weekend to do their job. they will wait until next week. they will have a difficult time voting for these things. >> the cr stays with the

sequester spending levels for 2014, is that correct? >> sequester plus a little the current sequester position, harry reid said he wants to restore that, the president wants to restore the sequester he proposed. a lot of things are up for negotiation. what's not up for negotiation in the house today is continuing this unpopular, unworkable obama care. it's costing jobs. we want the economy to grow. delay your bill for at least a year. >> i'm with you in spirit. i'm with you in philosophy. i'm just not sure about the legislative tactics. let's talk about this. you'll stay with us for a second. let's bring in some of our investment professionals, alan young, brian kelly, and let me start with you. what did you hear mr. huelskamp say. did you hear shut down? >> heard they are going to try to negotiate and some type of temporary resolution. to me that's the best outcome for the markets because markets

can then look through that and say hey you know what? 2014 if we just can get through this like we got through the sequester it's going to be fine and what ben bernanke told us yesterday by his non-action if things are messed up in washington he's there to help us out. >> that's great news he's there to help us out. alan young let me go to you on this. if there were a shutdown, i'm not predicting one, congress is not, we'll see. let's say three, four, five, six, seven day shutdown, okay. does that matter to stocks? does that matter to the economy or is it much ado about nothing >> it matters. the markets have been conditioned, investors have been conditioned to think no matter how much acrimonious things get in washington, they always come up with a deal at the last minute. if we got to a point where we had a shutdown for a week as you suggested that eventuality would

be a shock. >> do you think that would be a great buying opportunity? a deal of some kind will come. tim huelskamp a cr holds on to the budget sequester is a fiscal victory. doesn't end obama care. obama hates the sequester. the democrats hate the sequester. they want to raise taxes. they don't want to cut spending. i think if you got a cr with the sequester it would be bullish as all hell for the stock market. >> with the cr it's for 2 1/2 months. i've been up here for three months. we have yet to have a full fiscal year of 12 months. this doesn't get to the entirety of obama care kicking in on january 1st. labor union, we saw a letter today they don't want obama care. there's plenty of reasons for obama. keep the sequester, give us a little bit back but let's push back obama for a couple of months. we have a debate over the debt

ceiling. >> that's where i want go. that's key. brian kelly, the debt ceiling. you got different ramifications on the debt ceiling. it did affect the stock market in 2011. they have to get through this in the next two weeks. first two weeks the cr and treasury department now saying october. if the debt ceiling doesn't get raised what happens? >> i think if the debt ceiling doesn't get raised, or if we get some sort of grand bargain which it doesn't seem we're close to that but let's say we do, i think that's a negative for the stock market because if you don't have the debt ceiling raised or you get a grand bargain you've put a permanent fiscal ceiling. >> what kind of grand bargain are your thinking about? >> anything that caps fiscal spending. i'm not advocating one way or the other. i'm talking about market perspective. >> that's so bullish for the

economy. >> listen -- >> you sound like ben bernanke. he's afraid of spending cuts. >> you have to separate economics from the financial markets. the financial markets have not priced in any type of agreement. the financial markets are betting the fact that there will be no agreement and they will get continued quantitative easing. >> i see. at the bottom of that it took him a while to get that out. what he's angling for is no deal so the fed will ease. do you agree. >> there's a hedge against this mess in the fiscal situation in washington. so i think it's nice have that bernanke put in your back pocket but if the question that you're asking was do you think we're going to default, you know, i don't think that's going to happen. >> we'll never default. >> markets expect a lot of wrangling but at the last minute a deal, the way i look at this late october is key.

if we get into november and still don't have, you know, a debt ceiling increase, i think it starts to take a toll on the markets. they are expecting something, hopefully a little before then. ultimately if we do get volatility around this i would view it as a gift as you said before because actually -- >> tremendous buy out. tim i'll ask you, in the debt ceiling part from what i gather from speaker boehner, okay, identify not spoken to him but i'm reading his various comments, you got the keystone pipeline, you have a one year delay of obama care, one year delay of obama care and the possibility of more spending cuts. that would be in the debt package. let me just ask you, is it possible the cr and the debt package, the debt ceiling package come together as one, or do you have to passaic two different ones because the clock is ticking as you know. what happens. give us a sense of how this plays out. >> they could come together. i'm not in favor of doing that. the october 15th date from the

administration is imaginary. it probably end of thanksgiving before we really have a problem. there will be no default. washington has agreed on that. the specter of that is something the white house likes to talk about. one thing you have to recall and the president must understand this the house republicans are convinced we got at least try to balance the budget in ten years. in ten years. that's how far we're off the track where we need to be and to balance in ten years you got to do a lot more simply delaying obama care for a year. you got to make sure medicare doesn't expand. you need a growing economy and tax reforms. all those things are on table and we'll discuss that early tomorrow morning and what we'll do on the debt ceiling even before we finish the cr. >> the debt ceiling stuff adds another dimension to it. more risk, maybe more opportunities. congressman tim huelskamp thank you. brian kelly, alan young will talk about stocks and gold and the dollar and a really dovish

fed. this could be the janet yellen fed ahead of the time. later on a world renown hospital that president obama has praised twice in big speeches, that hospital is now saying it needs to cut thousands of jobs and $330 million out of its budget because of obama care. my take? other hospitals are going to follow suit. don't forget, folks, free market capitalism is the best path to prosperity. that's going tested with government spending restraint over the cr and the debt limit coming up in a couple of weeks. i'm kudlow. please stay with us.

side-by-side, so you get the same coverage, often for less. that's one smart board -- what else does it do, reverse gravity? [ laughs ] split atoms? [ flo chuckles ] [ whirring ] hey, how's that atom-splitting thing going? oh! a smarter way to shop around -- now that's progressive. call or click today. help the gulf when we made recover and learn the gulf, bp from what happened so we could be a better, safer energy company.

i can tell you - safety is at the heart of everything we do. we've added cutting-edge technology, like a new deepwater well cap and a state-of-the-art monitoring center, where experts watch over all drilling activity twenty-four-seven. and we're sharing what we've learned, so we can all produce energy more safely. our commitment has never been stronger.

all right. a massive rally in gold, big drop in the u.s. dollar. i think it's a signal of a lack of confidence in the fed's guidelines or lack thereof. bernanke turns out to be more dovish than we thought and the queen of the doves, the new queen of the doves, janet yellen, she's going to be nominated to be our fed chair person next week. perhaps even monday according to my source. so get ready. i'm back with alan young and brian kelly.

alan, you raised your forecast of the stock market substantially because you probably figured that with janet yellen running the fed, the fed funds interest rate which has been at zero for five years probably won't go up for a little less than 100 years, 2103 i tweeted it today. you're expecting easy money forever and let's buy stocks. >> have to say, i think there's less concern on our investment policy committee about tapering and that hawkishness. although there's a lot of things we look at, there's no question that, you know, a slightly more incrementally more dovish fed outlook allows you to assign higher pe multiples and a big part -- we were at 1780 for a target on the s&p a year from now. we went to 1845. >> by when? >> september of '14. >> okay. still be doing quantitative

easing and the fed funds rate will still be zero. but, brian, will there be economic growth and profits because i still believe profits are the mother's milk of stocks. >> well, profits are the mother's milk of stocks but remember corporations can buy back their stocks and artifacts fishally boost up those profits. >> walk me through this. i hadn't been in this game in a while. you borrow cheap because the fed's interest rate, you borrow cheap and go out there and buy back everybody's shares so you bid up the price and you improve the earnings -- >> earnings per share. >> there's fewer shares. >> exactly. it's already happening. jpmorgan did a great report and said about 60% of the earnings growth over the last two years has been due to buy backs. that's what's happening. that will continue to happen. so, again, it's very hard to get real bearish on the stock market as long as there's that easy money out there. it's not great economically.

i do believe it will end badly. from the market perspective it looks like it still wants to go up. >> in terms of earnings there's a few fundamental things that i throw in there beyond the fed that can drive healthier profit growth which is pretty anemic and that's a better global picture. we go 9% to 50% of s&p 500 revenues coming from overseas. we have a china slow down and got a recovery under way in europe. >> ben bernanke pumping money out to the rest of the world. he's trying to increase the u.s. money supply. i noticed our own bob pisani showed emerging markets are coming back and have been. they sniffed out -- >> the fed's easy policy money help stimulates economies all over the world. >> existing home sales were

good. the leading indicators also quite good. philly fed manufacturing i don't know what that means but that was quite good. is the economy, does the economy have maybe more life than we think, maybe more life than the fed think? >> it's probably a couple of data points. you look back at the jobs numbers we're not creating a lot of jobs. that's what's important. will we get positive sim, positive pmi prints, probably. will we go back to 5%, 6% growth not any time soon. we're looking at a 2% growth. >> repatriate all those foreign earnings. defund obama care and obama care and taxes that go with it. >> sounds like we need you to run for president. invest in gold. you got to love gold. listen we're talking about until 2103 easy money. >> queen of the doves, janet yellen. >> look at gold.

global equities i still think you like them. look over to asia. look to some of the emerging markets. and i actually think for a very short period of time, the next three months buy u.s. bonds. >> really? >> yes. >> single best investment. >> i think just to echo risk asset, you covered a lot of things. >> easy money, risk on trade. >> i would include bonds opportune mix. there's less of a threat to the fixed income world right now in light of what we saw. >> the fed showing absolutely no spine and absolutely no back bone means quantitative easing goes on longer and they will never raise the short term fed fund rate in my lifetime. >> they admitted tapering is tightening. that was the first line they said. >> important point. >> they can't do it any more. >> bull and bull. am i right? >> yes. thanks. folks, you may want to stock

up on those forever stamps right now. cnbc's josh lipton has the latest call for help from the postal service. more headlines up next on kudlow. i put in the hours and built a strong reputation in the industry. i set goals and worked hard to meet them. i've made my success happen. so when it comes to my investments, i'm supposed to just hand it over to a broker and back away? that's not gonna happen. avo: when you work with a schwab financial consultant, you'll get the guidance you need with the control you want. talk to us today.

over 20 million drivers are insured with geico. so get a free rate quote today. i love it! how much do you love it? animation is hot...and i think it makes geico's 20 million drivers message very compelling, very compelling.

this is some really strong stuff! so you turned me into a cartoon...lovely. geico. fifteen minutes could save you fifteen percent or more on car insurance. >> the economic data doesn't provide sufficient confirmation to warrant a reduction. >> the fed chairman is saying read my data. >> the dow and s&p 500 close at all-time record new highs. so let me get this right. the london whale loses $6 billion for jpmorgan and the

bank still has to pay the government another $920 million in penalties. josh lipton joins us with that story and much more. good evening, josh. >> reporter: good evening, larry. that's right. $920 million. that's what jpmorgan will pay to three regulators here in the u.s. and one in the uk. this will completely settle those charges that jpmorgan had insufficient risk controls in place to prevent a loss this big and that the bank didn't properly inform regulators but jpmorgan still the subject of several other investigations by u.s. regulators and prosecutors dating back to 2008. post office, it's getting dangerously low on cash. post master general saying that we need emergency increase. he says the cash balance will only cover expenses for about five days next month. the post master general has tried to end saturday delivery

and other money saving steps but hasn't gotten congressional approval. grand theft auto-5 did $800 million of worldwide sales. it amounts to 13 million copies of the game and new one day record. not just for video games but across all forms of entertainment including movies, stock rising in today's trade. the company hadn't released a new version of the game since 2008. >> is the u.s. government waging war on jpmorgan? they seem to be in the papers every day for some new infraction. are they waging war? >> reporter: $920 million, but as we pointed out this doesn't get jpmorgan out of the woods. there are sorry investigations ongoing, larry. we're not done yet. i would expect more headlines. >> thank you very much. now switching gears, john kerry had some more tough talk to the assad regime today.

syria is about to miss the first chemical weapons inventory deadline. will they once again cheat and retreat and why won't russia agree to a u.n. resolution with the u.s.? we have the latest on that developing story this evening next up on kudlow.

welcome back to "the kudlow

report". i'm larry kudlow. we're live with these stories in this half hour. senator ted cruz says he's willing to filibuster any bill that funds obama care. are the other senate republicans be with him? we'll talk live with one of them. later on do the republicans have an alternative to obama care? they say they do. but we're going take a close look. the u.n. report confirms that chemical weapons including the nerve agent sarin were used in syria. we know the assad regime possesses sarin and there's not a shred of evidence, however, that the opposition does. so there you have it. sarin was used, sarin killed. >> all right.

that, of course, secretary of state john kerry today addressing a u.n. report confirming the use of sarin gas in syria. kerry went on to urge the u.n. security council to pass a resolution next week. this as the assad deadline looms for syria to produce a formal declaration of chemical weapons in its possession. will all this rhetoric produce any results? joining us now michael rubin and peter brooks. welcome back gentlemen. peter brooks i go to you first. kerry wants to complete the u.n. resolution regarding syria, identifying their chemical weapons and then destroying them. what is holding up that so far? >> the russians. quite simply, my understanding is that kerry would like to have some sort of automatic trigger there for the use of force if the assad regime doesn't comply with providing paper work, timelines, things along this

line but the russians are against that. the russians want the use of force off the table as they have for some time. now they will take to it the u.n. and that battle will continue. >> michael rubin, as i under it to pick up on peter's point, these u.n. resolutions if you violate them the charter says something called chapter 7 you can use or take military action to enforce them and the russians do not want any military action whatsoever from the u.n. or from the u.s. on syria because they are still protecting assad. is that right? is that fair? >> that's absolutely fair. the russians see international relations as a zero sum game. if there's no such thing as a win-win situation and on top of that the russians see allies not as friends like we see them but as client states and there's no way the russians are going to agree to any compromise which might loosen their grip on syria or their proxy, assad's grip on

syria. >> peter brooks, let me go back to this deadline issue because syria has cheat and retreat as i understand it, their by words. the original deadline for their inventory of chemical weapons of mass destruction was due today. state department spokespersons say they will stretch it out to saturday. what are the odds that if anything comes to syria, comes from syria by saturday it will be a pittance, like 10% or 20% of their inventory or maybe nothing at all. what do you think? >> the obama administration is in a box like it's been from the time they put down that red line. they don't want to strike syria now. they think they got an agreement and probably try to extend this to allow the syrians to comply. the syrians want to comply because they don't want cruise missiles coming through their windows and the obama administration doesn't want to strike them. they will find a way

diplomatically to find out what's going on here. you can expect over time it will become more and more difficult for the administration to focus on this side show which is the chemical weapons while 100,000 people have died over two plus years and the bloodshed continues. >> assad feels he doesn't need chemical weapons to win this war with the rebels. all he needs is for the united states to stay out of the way and not bomb his runways or command and control facilities. >> i get that's. syria is not going to fess up. they are not going to show us their whole inventory. they might give us a couple. they won't show their whole inventory. why doesn't the united states take out their air force or their airport? force is going to be the only way to enforce this s-it not? >> force will be the only way to enforce this if that remains the goal of the obama administration. you know, it's really quite amazing while the animosity

isn't the same, in the obama administration is like the george w. bush administration. secretary of state john kerry laying out red line and red line again, the curious thing is to see whether president obama actually backs him up or once again throws secretary of state john kerry under the bus. one thing is certain, not only are the syrians watching but the north koreans are, the iranians are. rogues and allies alike are watching what transpires in syria. >> peter, with or without military action, i think that the slippage of these deadlines to show their inventory of chemical weapons is a very bad thing. a very bad thing. they made an agreement. assad has said the agreement is okay, the foreign minister said. and we're letting the deadline slip. i think that's bad first of all for the u.s. and second of all bad for assad and third of all i

guess i'll throw in i don't think putin and russia care one iota. >> you want red lines? come on. >> i said thursday, that's today it didn't happen. now they are saying saturday. you want a bet, i'll talk to you on the radio on saturday and see if they show up or if the inventory is there i'll say it's 10% or 15%. >> is it accurate? the u.n. inspectors have to get in there. the syrians say we're in a civil war. how will you do this? there's so many things in the future that will be difficult. in the business world you call this a moral hazard if you let somebody's bad behavior continue to let it happen you'll see more it. that's what we'll see in syria. >> we've seen it in the past, we'll see it again. all right, gentleman, thanks very much. speaker boehner challenging his republican senate colleagues to hold the line on defunding obama care. take a listen. >> i expect my senate colleagues

to do everything they can to defund this law just like the house is going to do. we're having the fight over here. we'll win the fight over here. it's time for them to pick up the mantle and get the job done. >> david vitter will join us after the break and talk about whether the house budget bill is dead on arrival in the senate. we'll be right back on kudlow. i was made to work. make my mark with pride. create moments of value. build character through quality. and earn the right to be called a classic. the lands' end no iron dress shirt. starting at 49 dollars. (announcer) at scottrade, our cexactly how they want.t with scottrade's online banking, i get one view of my bank and brokerage accounts

with one login... to easily move my money when i need to. plus, when i call my local scottrade office, i can talk to someone who knows how i trade. because i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. awarded five-stars from smartmoney magazine. and then another. and another. and if you do it. and your friends do it. and their friends do it... soon we'll be walking our way to awareness, support and an end to alzheimer's disease. and that? that would be big. grab your friends and family and start a team today. register at alz.org

you filibuster this on the house floor, is that the only choice you have right now? >> i will do everything necessary and anything possible to defund obama care. >> filibuster? >> yes and anything else. any procedural means necessary. it's easy to focus on the political back and forth. >> that was conservative texas senator ted cruz vowing to pull out all the stops to get a senate vote on the stop gap spending bill which would lock in sequester savings but also defund obama care. all right. question does any of this have any hope of passing in the

senate. louisiana senator mr. vitter. i don't know if you saw the karl rove op-ed piece in today's "wall street journal" but he had some interesting polling numbers. crossroads his group that polls. the country basically hates obama care. independents, 60% of independents oppose obama care. however, by 58-30 the independents oppose the defunding of obama care if it risks even a temporary shutdown. 58-30 independents desert republicans over defunding even if it's a temporary shutdown. isn't that a risk that that's going to happen and that the republicans might blow whatever advantages they may have on obama care? >> look, larry, good, bad or indifferent i don't think there's going any government shutdown for a day or an hour. i don't think it's a big risk.

certainly i understand the concern. i'm going to do everything i can to support the house bill. obviously that's uphill in the harry reid senate but i as a conservative will do everything i can to support the house bill. >> with that said if senator ted cruz who is a friends and frequent guest on this show, if mr. cruz filibuster, then the date for the continuing resolution will slip by and there will be a government shutdown with substantial political consequences against the gop. >> i think there's all sorts of things that could go back and forth and could happen. you need to take it a step at a time. the house can pass another short term resolution as we continue debating these bigger issues including obama care. i do wish the house had included something else in the cr, something you and i have talked about, larry, which is my language with others to make sure there's no washington exemption from obama care. i think that would have created

enormous additional leverage in conservatives direction in the senate in dealing with this. >> that's an interesting point. that's right. the congressional exemption from obama care and their staffs, very unpopular and i'll give you another one. this came out of the poll today in karl rove. people out there really want, they want, these are independent, they want to delay the individual mandate. they want to delay it. and for the life of me i don't know why that wasn't the battle. let's say you had a one year delay on the mandate and you had some kind of delay on the exemption you're talking about. to me you get half a dozen democrats and win those votes in the senate. >> well that's exactly what we tried to convince speaker boehner of. many of us went to him and suggested essentially just that. put in the cr no washington exemption language and a one year delay and then the message has nothing to do with the government shutdown. then the message is a lot more of a clear winner, which is look

one way or the other washington needs to be treated just like america. so either washington loses its exemption or all of america gets a one year delay which is need because this law is clearly not ready for primetime. >> so, president obama says that you never negotiate on the debt ceiling with so-called nonbudget issues. now "the washington post" took a look at that and gave it four pinnochios for, shall we say not telling the truth on any of this. what's going to happen with the debt ceiling? there's a pipeline, the pipeline is attached to the debt ceiling. other things are attached to the debt ceiling. is that going to be held up also? >> well, every significant debt ceiling debate, larry, as you pointed out, has had other issues attached to it. that is the norm. that's not the exception. so president obama was just flat out wrong as "the washington post" not exactly a conservative

blog or something pointed out. so there's clearly legitimate demands attached to increasing the debt ceiling. and i agree with that. look, my attitude i think is pretty typical of conservatives. if we're going to do anything about the debt ceiling, we need to do something about the debt. the problem is not reaching the ceiling the problem is the debt. to me it's like having a brother-in-law with a spending problem and he comes to me and says i that have solution i just need to you go down the bank with me to get a ninth credit card. that's not a solution unless tied to that is a real spend down plan to get you to fiscal sanity. >> last one, it just occurred to me here we are the house will vote tomorrow for the cr that defunds obama care and then it goes to the senate and whatever will happen will happen. nobody knows. on the debt ceiling speaker boehner is saying part of his requirements to raise the debt ceiling is a one year delay in obama care.

so, if the first vote is to defund obama care, and the second debt ceiling has a one year delay it sound like the house at least expects to lose the defunding vote, is that a fair interpretation? >> well, larry, there are all sorts of plans and quite frankly they seem to change by the hour so it's pretty confusing. i think we would aldo a lot better to come up with a basic simpler game plan and stoikt and i hope we do that. >> senator david vitter thank you. we know the republicans are fighting against obama care but do they have a positive message of their own? we're about to debate the key points in a new gop alternative plan coming up next on "the kudlow report". ready to run your lines?

okay, who helps you focus on your recovery? yo, yo, yo. aflac. wow. [ under his breath ] that was horrible. pays you cash when you're sick or hurt? [ japanese accent ] aflac. love it. [ under his breath ] hate it. helps you focus on getting back to normal? [ as a southern belle ] aflac. [ as a cowboy ] aflac. [ sassily ] aflac. uh huh. [ under his breath ] i am so fired. you're on in 5, duck. [ male announcer ] when you're sick or hurt, aflac pays you cash. find out more at aflac.com. [ male announcer ] when you're sick or hurt, aflac pays you cash. maestro of project management. baron of the build-out. you need a permit... to be this awesome. and you...rent from national. because only national lets you choose any car in the aisle...

and go. you can even take a full-size or above, and still pay the mid-size price. (aaron) purrrfect. (vo) meee-ow, business pro. meee-ow. go national. go like a pro. sleep train's besdon't miss your chanceay. to get sleep train's very best mattresses at the guaranteed lowest price. plus, pay no interest for 3 years on beautyrest black, stearns & foster, serta icomfort, even tempur-pedic. and rest even better with sleep train's risk-free 100-day money back guarantee. but the best rest event ends sunday at sleep train. superior service best selection, lowest price, guaranteed. ♪ sleep train ♪ your ticket to a better night's sleep ♪

welcome back to "the kudlow report". i'm josh lipton. the cleveland clinic one of the country's best hospitals is cutting jobs and slashing its budget because of obama care. back in 2009 and again last year president obama praised the hospital. >> the reason i visited the cleveland clinic is because along with the mayo clinic they have been able to drive down costs more than any other health care system out there while maintaining some of the highest quality. so at cleveland clinic, one of the best health care systems in the world, they actually provide

great care cheaper than average. >> but the cleveland clinic now says it has to save money because under obama care it will get paid less for treating medicare patients. larry, back to you. >> thank you, josh. that's a really point the reimbursement rates will undercut these hospitals across the country. now, the bad news, piling on against obama care, can republicans come up with a credible replacement, something positive. here now is igor volsky and ovik roy. the gop should have something positive to say, optimism beats pessimism. what can you tell us about this new plan developing? it's coming out of the house of representatives. what can you tell us about it? >> the plan is fairly similar to a plan that george w. bush proposed in 2007. what it would do is equalize the

tax treatment for employee sponsored coverage and individually purchased coverage. the biggest inefficiency in our health care system is people are dependent on the employers or government to provide them with health care. >> if i want to self-insure this gop plan would give me the tax break whether a deduction or a tax credit and allow me to shop around, is that the basic idea? not obama care. not boards. not central planning. >> whatever you want. it's not prescribed by the government. >> i can go across state lines. igor, that sounds like better tax treatment and second of all more competition. now a guy like yourself who is a distinguished capitalist ought to like this what the republicans are coming out with. >> well, larry, it's one thing to go shopping for health care on your own if you're a healthy person and you have really no problem, no pre-existing condition, you can find

affordable coverage and birring coverage across state lines may work four. you're someone who has a pre-existing condition who is now possibly going to be dropped by your employer because the deduction changes you're out of luck. that's the problem with this plan is that there's no real solution for people who need care, who have pre-existing conditions. they use something called high risk pools which obama care tried briefly as a pilot program and it didn't work very well because a lot of sick people are very expensive to insure. this is an old plan something bush tried parts of it are from mccain's campaign proposal in 2008 and there's nothing in terms of coverage expansion. >> respond to that. >> igor is thinking about it backwards. the reason we have a pre-existing conditions problem in this country is because of employer sponsored coverage. people get pre-existing coverage when they are uninsured.

how does that happen? you lose your job or switch jobs and you have a gap in your coverage because you're not covered while between jobs. >> is that cobra? >> if you have cobra you're okay. if you lose cobra you're uninsured. that's what causes the problem. if you allow information buy insurance for themselves from the beginning, then there are no pre-existing condition problems because the whole reason you have pre-existing conditions you weren't insured in the first place. the key is to give people that opportunity. maybe you need a transitional period. once you have that system you're good to go. >> igor, i'm not the expert that you guys are on this but i think this idea of self-insurance which gives you market forces, competition, patient power is so badly missing in obama care and is so important in this republican proposal, self-insurance and let the individual and the family get the tax break. so they run it, the government

doesn't run it. >> the government isn't running the new exchanges either. these are going to be 50 state based marketplaces of private insurers competing for your business. >> tell them what's in the plan. tell them. one size fits all. >> insurers have a history of cherry picking people who are healthy and designing their plans in such a way so that they only attract healthy people. if an insurance plan doesn't cover things like chemotherapy and the person has cancer he's not is going to pick that plan. that's the way insurers are designed to make sure they only get the profitable people that may the premiums and don't use the health care. that's how they make money. >> it's not about profit for the insurers, it's about lower rates for the people who need the insurance. you're healey you don't want to pay a super expensive price for health insurance because you're healthy. if i'm a 25-year-old person who

has never been sick why should i spend $3,000 on health insurance until i become sick. that's what catastrophic coverage is for. a 25-year-old who is healthy can by catastrophic coverage for a couple hundred bucks a year that protects him getting hit by a bus or a stroke or other catastrophic medical illness and yet be protect. that's what you do in singapore. you have universal catastrophic coverage. they spend one seventh of what we spend on health care. >> to me, all right, i'm an amateur at this. i try to follow it a little bit. there's competition and market forces and individualism that's missing from the obama care plan. i'll give the last word. we got 25 seconds. >> the competition is in the exchanges. that's where people will start shopping october 1st and they will have comprehensive coverage that's going to be there when

they need it. that's the key. coverage works but only until you get sick then it doesn't work. >> if you can shop across state lines, why skimpy coverage? if i can buy something good in georgia i'll buy it in georgia. >> there's a professor at the university of minnesota that will expand to 9 million. >> thanks. that's it for tonight's show. i'm larry kudlow. free market competition and health care will work if we let it. today, that's easy. ge is revolutionizing power. supercharging turbines with advanced hardware and innovative software. using data predictively to help power entire cities. so the turbines of today... will power us all... into the future. ♪ ...amelia... neil and buzz: for teaching us that you can't create the future...

by clinging to the past. and with that: you're history. instead of looking behind... delta is looking beyond. 80 thousand of us investing billions... in everything from the best experiences below... to the finest comforts above. we're not simply saluting history... we're making it. some brokerage firms are. but way too many aren't. why? because selling their funds makes them more money. which makes you wonder -- isn't that a conflict? search "proprietary mutual funds." yikes! then go to e-trade. we've got over 8,000 mutual funds, and not one of them has our name on it. we're in the business of finding the right investments for you. e-trade. less for us. more for you. the fund's prospectus contains its investment objectives, risks, charges, expenses, and other important information and should be read and considered carefully before investing. for a current prospectus, visit etrade.com/mutualfunds. before investing. it's been that way since the day you met. but your erectile dysfunction -

it could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph like needing to go frequently or urgently. tell your doctor about all your medical conditions and medications, and ask if your heart is healthy enough for sexual activity. do not take cialis if you take nitrates for chest pain, as this may cause an unsafe drop in blood pressure. do not drink alcohol in excess with cialis. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, seek immediate medical help for an erection lasting more than 4 hours. if you have any sudden decrease or loss in hearing or vision, or if you have any allergic reactions such as rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a 30-tablet free trial.

>> narrator: in this episode of "american greed: the fugitives" -- money manager spiro germenis has charm galore. >> he was very intelligent, very good-looking. >> narrator: but now he's gone. >> he was just the type of guy that -- i don't know. we all seemed to like him a lot. >> narrator: germenis' investment fund, oracle evolution, appears to work miracles, with market-beating returns. >> i was telling my friends about it. i said, "look at this. look at what this guy's doing. my god." >> narrator: what this guy is doing, the fbi says, is ripping off his investors. many of them are retirees, and he spares no one.