people buying intel earnings. guys, kind of like a washington day. i just wish it were an earnings day. that's what matters. i'm jim cramer. i'll see you tomorrow! everything is on hold. still no deal in washington as house republicans look to force the preds, members of congress, and their staffs to sign up for obama care. but in just the last hour the gop plan seems to have broken down someplace. we're getting ever closer to hitting the debt ceiling deadline. we're about to get the very latest on this ever changing story from our ace political reporter, robert costa. his reports and his tweets on what's going on have become the number one news commodity out of washington, d.c. and we have leading conservative congressman jim jordan standing

by at the capitol to give us the inside scoop and tell us what he wants. meanwhile, the market rally came to a screeching halt. the dow fell 135 points on the day. the fitch rating agency has put the u.s. credit rating on watch which could send stocks lower tomorrow or maybe not, actually. could be a great buying opportunity. dominic chu is watching your money. the incomparable ann colter. question, does she think the gop should keep fighting or retreat? we'll hear from her in just a few moments. another dramatic breaking news report of the "kudlow report" is starting right now. good evening, everyone. i'm larry kudlow. this is "the kudlow report." feverish negotiations continue on capitol hill. we're getting closer to the october 17th debt deadline.

the house was set to vote tonight on a republican plan but that apparently is not going to happen. joining us now live from washington, d.c., cnbc contributor, robert costa. good evening, robert. what happened? why isn't the vote being voted on? >> speaker john boehner and others spent the day on capitol hill. the gist of the plan was to extend the debt limit through early of next year and to reopen the government plus have all congressional employees not have federal contributions but ultimately by late tonight the speaker was not able to get the vote so he pulled the bill. >> in your judgment or in your reporting what you hear, what the buzz is, why can't he get the votes for that bill? very important. very popular around the country it seems to me. certainly popular, the president, senators, house

members and their staffs should all be part of obama care and lose their very, very curby subsidies. now a lot of conservatives wanted that. why are the 218 votes not there for it? >> because inside the republican party right now there is almost a civil war when it comes to arguing how to proceed. the conservatives in the republican congress want to make sure they keep fighting obama care. they're not willing to accept a cr and debt ceiling increase. >> so as a consequence, we'll come back to all of these issues in a moment, the senate itself hasn't voted. i heard from some people up there that there's a chance that there might be a filibuster by mr. cruz. >> that is a possibility. senator cruz has been huddling with his friends and conservatives. the big news tonight is because the house gop is unable to get 218 votes behind its own plan, the action now goes back to the

senate. it reid and mcconnell cobble together a deal at the 11th hour. >> robert costa, stay with us. we'll come back to you in a minute. dominic chu, how are the stock markets reacting? not a great day. what's up, dom? >> stock futures are pointing to a flashish open tomorrow and that's because fitch, the ratings agency, put the u.s. on a rating's watch negative earlier this afternoon. stocks snapped their winning streak in the regular session with the dow closing down 133 points. you can see on this chart here the dow took a -- it went down after 2:00 p.m. when the senate put its own negotiations on hold to see what would happen with the house and what they could come up with. overall, larry, markets down today. we'll see how they react heading into tomorrow morning. >> thanks very much, dominic chu. we'll see you later. joining me now, syndicated columnist, ann colter. a new book "never trust a

liberal over 3". >> the congressman you were having on, i saw him on tv recently. i'm so happy when we finally have an articulate republican. >> conservative. what's your quick take on this story, strategically republican party can't seem to win senate elections, presidential elections. does this help them or hurt them? >> it helps. even if they completely pass the budget, pass it, raise the debt ceiling and by the way, those are two different things, this three weeks has been magnificent. it's inspired conservatives to see republicans are dead set on repealing obama care. by the way, how is that christine o'donnell race look now? how does the richard mourdock race against ruble look now?

all of these sacrificed senate seats, yeah, you had a lot of fun when it happened. going for a totally purist conservative. gosh, i wish we had a majority in the senate. >> does this polling trouble you? the polling has gone against the republicans essentially the country, quote, unquote, from the polls blaming the republicans for the shutdown. not so much the debt ceiling. i think people hate debt, but they do blame the gop for the shutdown. how does that play? does that get worse because if the votes don't come through -- >> right. >> they're going to be blamed again. >> well, two things. one is the gallup poll was complete nonsense. not because it's gallup, this is a completely irrelevant poll. all adults are 50% of the people who can't name the vice president. likely voters occasionally tune in. they're picking up the background noise.

that's 100% influenced by the mainstream media. >> you don't think this is a self-inflicted wound by the republicans? >> no, i don't think so. >> among analysts and among republicans themselves. >> what i say, two things. the polls of the likely voters split it 50-50. that's not that good considering it's 1% of democrats. switch the parties. if there was an unpopular bill, a majority democratic house were refusing to fund, how do you think the mainstream media would be covering that? that's not the way the conservative media is covering it. >> stay there. i have to bring in ohio republican congressman jim jordan. i think we have him strapped. >> good evening. >> you look great. we appreciate your time. we know it's a hectic night. can you tell us why the votes have been canceled on the house? >> larry, today we put a simple idea. fairness with equal treatment under law. a simple idea that says we'll do

the cr, do the debt ceiling short term, real short term, but we want to make members of congress and the president live under the law that we wrote. simple concept and the democrats won't even entertain that idea. that was something we floated out there today. we thought it made sense. we thought it was consistent with equal treatment under the law and fairness, an argument we've been making under the law and yet the democrats don't want to go there. we'll see what happens. >> when you say the democrats, are you including the senate democrats as well? the senate democratic leadership? >> that's what we heard. nancy pelosi said no. this is as reasonable as you can get they've been arguing, do the cr, do the debt ceiling, clean, clean, clean. okay. but at least make members of congress, make the politicians live under the laws. they said, no, we can't even do that. this is where we are.

we'll see what shakes out in the next few hours. >> what do you think will shake out in the next few hours? i want to add to this, heritage action, one of the conservative tea party nonprofit groups, they made this a major issue and want house members to vote no on this bill. do they have additional -- does heritage action have additional points that they want you all to put in the bill? do you as a former head of the republican study group have additional points you want in the bill? >> obviously you want to delay the whole law. we think that's the right thing to do. we think that's the fair thing to do and yet we're the ones -- the president says we're the ones who are terrible, we're the ones who can't figure this out. yet they had an influence, i think. the simple fact is the president said he would veto it. nancy pelosi said she was against it. harry reid said this was a nonstarter. even something as simple and basic as that, they won't entertain that idea. >> what would happen if mr. boehner then just proposes a clean bill?

does it pass the house with democratic votes or not? >> i don't think you'll see republicans want to support that. we want to do something fair. that's why we floelted this idea. we want to delay this thing. we thought this would help to get to that. it looks like that's not going to go. >> do you think any other provisions will come up as you all meet tonight? besides the car of ocarve out f federal government. delay is a hot topic. anything that may come into the bill? >> i don't know. you're right, joe manchin has been on record saying he supports it. the unreasonableness of the democrats to even entertain a simple concept like we put forward today, like we did the last five weeks. we're getting labeled as strapping bombs to our chest and this is so simple, so fair, so basic and they can't even take that. >> one last one on this whole

story. suppose this thing goes through. suppose this thing goes through. the cr, the resolution if i'm not mistaken, in your plan goes to december 15th. the debt limitation goes further, february 7th. that's not a lot of time. that's a couple of months. even if we roll this one through, even if you got the carve out fixed, you're still coming back for another round of drama and that could shake up the markets, could shake up the economy, who knows. >> well, but, again the underlying problem, as many times as we can get a chance to deal with the underlying problem, that's the $17 trillion debt. you can't keep maxing out -- a limit on an already maxed out credit card. you can't keep doing that. if we have to give it back, cut spending and put this country on a different path. >> thanks for hustling over, truly. >> you bet. >> we'll talk more with ann colter about the long-term

political ramifications of all of this. will republicans ever carry the senate or the white house again in my lifetime? we'll hear from her. don't forget, folks, free market capitalism is the best bet. obama care has nothing remotely to do with free market capitalism. i'm kudlow. we'll be right back.

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welcome back to "the kudlow report." at this hour all eyes on the house as it gears up for a vote on its latest plan to avoid default, but will the deal come too late and too little for a public that's ready to kick them all out? 60% want to kick them out. we've got cindy dated columnist ann coulter. her new book is called "never trust a liberal over 3." there's a big fat picture. thank you for staying around. your bottom line is, if the thing goes on beyond thursday this will not hurt the republican party and their chances to win back the senate in 2014. >> i'm not sure what will hatch. i don't want to be encouraging them not to have it go on.

the fact that the government is shut down and that democrats refuse to live under obama care. republicans would be sitting pretty. i'm saying i think there's already one and republicans should be proud and they shouldn't be angry at our elected republicans if they end up raising the debt ceiling because -- >> they'll never default. treasury i want to say this again to you and to our viewers, treasuries will never default, never. period. end of sentence. there's a $200 billion surplus per month per average that will cover the rest of the expense. the rest of the budget will suffer, yes. that might not be a bad thirng. i'm not for an immediate shutdown, nobody is. >> they should work harder in the 2014 elections to make sure we win elections even if you don't see christina o'donnell on the ballot, have you to vote for the republican. >> let's talk about that.

why can't republicans win these damn elections. i want to ask you this, years ago bill buckley, my former boss, coined the phrase in elections you vote for the most conservative candidate who can win. >> right. >> all right? it seems to me in 2010 and 2012 we republicans have not done that. we have ignored this and that's why the party's been hurt. >> in some cases there are a lot of reasons. it's a party that's not overly concerned with winning. it's a party that's overly concerned with making money, self-aggrandizing positions and running a purist conservative in a place where a purist conservative is not going to win. i like christine o'donnell. can you imagine what the democratic party would do to any democrat who tried the primary ridiculously conservative democrat mark pryor in arkansas.

they understand these are conservative states. we'll run john tester will fool the hicks, will get a democrat in, we'll have a majority in the senate. why doesn't our base understand that? >> where's the selection process in the republican party? i think this became an issue with the tea party rise, but i think it's been an issue for a long time. i think the party is right now in an internessian warfare. the ted cruz stuff has triggered a lot of warfare and bad blood. john mccain, peter king. >> right. >> how is the gop going to get around that for next year's election? >> they have to read my book and follow the first three chapters. i feel the pain and i'm one of them, a conservative who's constantly getting blamed. it's always the moderates, what are referred to as the establishment. it's almost fun seeing the

conservative republicans attack the establishment back, but that's not winning elections. >> right. there's a circular chute going right now. >> yes. yes. >> unfortunately whether this is right or wrong, this debt limit and continuing resolution budget stuff makes that worse. >> and no one, no one should be attacking ted cruz or mike li. we finally have bright, articulate republicans whom you just had it on. >> so let's get it over with. why not? this might violate some conservative banner. why not have him go with a clean bill and say let's get out of here. we've dug a ditch. some people are going to be hurt. let's just get out of here and then go for better budgets in the months ahead? >> yes. they still have leverage with the budget. they have 20% left.

they still have leverage. raising the debt ceiling would be fine. main point the conservatives should remember is we've done a lot already. to be able to have jim jordan say the reason the government is shut down is because democrats refuse to live under obama care, get that out. next time we have to take the senate. >> be pragmatic. >> be pragmatic about winning. >> can i say that, the sequester? gop gives up the sequester, they should be shot. >> the sequester is fantastic. >> go for tax reform. stuff democrats won't do. >> yes, that's very popular. it's very popular to be against obama care as we've seen with this rollout. they have gotten obama care in the news and everyone is talking about it for three weeks. be proud of them, republicans. >> you know, somebody e-mailed me, i won't mention his name, but he's a pretty high ranking guy in the senate. ending obama care, if such a

thing were possible, would be good for growth and jobs. >> absolutely. >> one thing is for sure, all of this has distracted from the anemic economic recovery which has plagued america. >> it would be good for health care. please repeal obama care, but this so far the three-week fight, we'll see how long it goes on, it's reminded republicans, we're going to repeal it when we get a majority. vote for republicans next time, americans. >> there he is a risk but it's a very interesting strategy. thanks to ann coulter. she'll be with us for the rest of the hour. the markets, dow off 100 points. might this be a good buying opportunity? i believe a deal is going to get done. we'll get some answers coming next up on "the kudlow report." please stay with us.

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the question is how do you make sure you have the money you need to enjoy all of these years. ♪ welcome back to "the kudlow report." i'm larry kudlow. stocks sell off. ceo of bull and bear partners and director of tjm institutional services. jack, i may not be a genius, but i know there's going to be a deal. there's going to be a deal. it may only be a three or four-month deal, but once that deal passes aren't stocks going to roar higher? oddly enough, might not this be a good opportunity to buy the dips? >> i don't think so, larry. unfortunately i think we're fully priced right now for stocks. the only risk i see right now is headline risk that could take us down.

if it does go higher from here, it's going to do so grudge beginningly. you take out the government shutdown, what do we have? we have anemic growth. we have a lack of pro growth policies coming out of d.c. all we've seen is an expansion. take us back to where we should be. where do we go from here? i see way too much risk in the last couple of months we've seen the market going sideways. it's been a roller coaster ride. something happened today which we need to talk about. it's the first time we've seen the market vigilantes coming out of the closet. we haven't seen them for a long time. we saw it on one headline today. we saw the market drop precipitously. >> what was the headline? >> basically the fact that we aren't going to get a deal. >> of course we are going to get a deal. of course. put that away. these are politicians. we're going to get a deal. >> if it takes longer -- >> it might take another day. >> you're going to see the stock market get hit. >> maybe so.

even better buying opportunity. come on, put some practical sense into this discussion. by the way, the only thing i saw about the awfulness of the deal, yes, two week treasury bills, stuff that matures at the end of october did jump up. any teensy weens si price change causes those yields to jump up. as you go further out to the curve they did nothing. >> right. >> in fact, the ten year is not collapsing. the ten year is over 270. so i don't get it. you know there's going to be a deal. i may not like the deal, you may not like the deal, the deal may not be a supply side deal but they're going to do something. >> there's no doubt there's going to be a deal. the more compelling standoff is between the government as a whole and the stock market. despiert the fact that the s&p lost 11 handles, it's rallied 11 handles. the stock market is saying this is no big deal. these 27 hours that are left in somebody's october 17th det l e

deadline, that's plenty of time. the best way to get on camera is to have these deadlines because then the cameras roll and everybody is watching them. i hate to say it. there's somewhat of a little bit of an egomaniac. >> somewhat? why did you qualify that with an adverb. they all are. they don't want their goodies taken away. they're all hypocrites. they don't want their goodies taken away. fitch puts u.s.aaa rating on the negative watch. what does that mean, jack? your knees are knocking tonight. does this make your knees knock even more? >> no, that doesn't make my knees knock. there are other things that make my knees knock. the fact that we are going to get a new fed chairman and the fed chairman is going to get tested, it's a matter of when. the fact that we have charter members of the i don't have a clue club that don't realize they're playing russian roulette with the american economy.

>> jack, they're not playing roulette yet. after tomorrow when we get into the gray area of when we may run out of money, that's when russian roulette begins. >> jimmy, they're doing it now. they're taking a notch from -- >> that's what they do. >> it's a rough night for reasoned discussions. i've got to jump out of this. i apologize profusely. we have breaking news. nbc news is confirming now that the budget discussions have now officially moved back to the senate. senate majority leader harry reid and mitch mcconnell spoke by phone this evening and agreed to restart their discussion. mcconnell spokesman says he's optimistic a deal will get done. i'm sorry, again, to jim urio and jack rousch. time to go to d.c. on the new, new stuff. where are we as the debt ceiling clock ticks down to zero. what's the senate going to do? the house looks like it's punting. i was made to work.

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. welcome back to "the kudlow report." live from cnbc headquarters in new jersey, we just had breaking news that the talks are back in the senate. harry reid and mitch mcconnell

are back in the driver's seat. let's go back to washington, d.c., with ace reporter robert costa. bob costa, does this mean no vote in the house? is that number one? >> speaker john boehner can not find 218 votes for his plan. i've kented with my top senate sources. they say that mcconnell and reid have re-engaged. they've had a positive conversation and they're taking the raips. >> i know it's speculative. re-engage, robert costa. what do you reckon that means? they have certain due dates for the continuing resolution and debt ceiling and the long returned budget. the rest of it is a clean bill, even includes the sequester levels for a few months. is that what they're re-engaging on? are they going to change that? >> senate republicans are playing against an aggressive harry reid in the senate. the real job for senate

republicans right now when you talk to staffers is to protect the sequestration cuts, protect the budget numbers. beyond that they don't expect to winch. >> boy, do i agree with you on protecting the sequestration. robert, last one. we'll see more of you later. at some point, correct me if i'm wrong as i recall from my days, the house has to vote on it. this is a money bill. >> that's exactly right. the problem for boehner the fact that he couldn't get the numbers on his own bill, he'll have to bring over the legislation from the senate. they don't want to accept any kind of senate deal. that's the kind of situation we're in now. >> ann coulter has given republicans in the house essentially an umbrella, a free pass to vote for a free bill from the senate. >> well, if it has ms. coulter's blessing perhaps that leans a little bit more than heritage action giving them trouble for

voting in that area. the problem is they don't have the blessing. >> rob costa is coming back. nobody has a bill. there's not even the threat of a senate filibuster. there may be. where's the end game going to be, when, where, why, how? let's bring in north dakota senator john hoben. welcome. how do you react to this news? the ball's back in the accesena? >> it's much better if the house can get a bill and bring it over. senator mcconnell and senator reid are engaged. i believe we will pass something. ultimately the house has to pass it. if they can start a bill and bring it over, it would be faster. we'll bring something. >> do you think the senate version, which we thought was going to be the bill, is going

to change? >> i hope not. i'm very concerned that the other party feels like they're in a negotiating position. we want savings and reform as part of the debt ceiling. we're in a tough spot in that regard as well as get a cr. and protect the budget level, the bca budget levels, protect those so we get a grip on spending. >> budget control act. you may only get those through december, maybe early january. that's the way it looks. i want to ask you another thing though. there's a lot of talk, there's another piece to this that hasn't gotten its due attention. in the senate bill, if i'm not mistaken, by the middle of december, which is only a couple months away, there's supposed to be a budget, a budget for 2014 and longer. it's supposed to be negotiated with senator patty murray of washington state and house budget chairman paul ryan of

wisconsin. mr. hoeven, there's talk of swapping sequestration for entitlement. do you believe that? do you actually think democrats will taken titlement reduction? >> well, that's the challenge. what they've said to date is they have to have tax increases to do it. that's a problem. we need to get the economy going. you have revenue from growth and combine that with mandatory spending reform, that's what's going to get us out of the hole. so that's the challenge we've got as we are in this negotiation. we want to get the government open and address the debt ceiling, but you have to get savings. >> i love your supply side analysis, senator hoeven, i truly do. i think the preponderant majority of them want the senate

out and they want to put in a lot higher taxes, maybe up to $1 trillion of offset tax deductions on so hr called rich people. that's their deal. they have no intention of reforming. isn't that where we're going? >> that's why people like myself are working so hard to get some kind of process to get savings and reforms as part of a short term debt ceiling agreement. we have to keep the push on. >> just to clarify, sir, we appreciate your time. at this moment as the action moves back to the senate because the house is not voting, you haven't heard yet what, if any, changes will come to what was the original senate bill? you don't know about any changes in your caucus? >> not at this point. we're concerned about any further backing up of the

equation. you've seen kind of the outline. we'll see where the negotiations go from this point. >> thank you, sir. senator john hoeven, nd ntorth dakota. we appreciate it. david callahan along with cnbc contributor of the american enterprise institute and ann coulter is still here. james, what do you think of all of this? >> i think we need to get to the process where the democrats are asking for tax increases as soon as possible. >> that's tonight, right? that's tonight. that's tonight. >> i want to hear it all. closing the loopholes, carried interest. let's get it all started right now. that's where all of this is leading to. terrified every time i hear about the budget gaps. >> at the end. day, what have we got? that's where this whole thing has ended up. stopping i think behind all of this, this is an odd thing, we started out with the ted cruz stuff, let's defund obama care, let's delay obama care, let's do

this, that, and the other thing to obama care, they were going to vote on the car of out. it's about not cutting spending. it's about shredding the sequester, which is the single only pro growth thing we've already had. isn't that what the democrats are angling for. the best thing we've done and they want to end it. >> this whole crisis, this was not a great victory for the republican party. it's been a disaster, here's why. it has a lot of problems with women, with young people, with hispani hispanics. obama won the postgraduate vote by 16 percentage points. the u.s. chamber of commerce, business roundtable, wall street, these people are waking up realizing they have empowered

these republican populists. i think that's going to be a big move away from -- >> your response, ann. >> -- republican party by business. >> republicans have historically been the populist party of the vast middle class. we are not the party of -- contrary you, larry. it's not the party of amnesty. >> not the party of immigration reform that helps the economy grow. >> amnesty, amnesty, amnesty. no, it's a disaster for african-americans, it's a disaster of the mexicans. great. let the chamber of commerce go and what's great is it shows they're willing to fight on obama care. this idea that we're going to trade the sequester to start arguing about entitlements?

no. we lose on entitlements. the american public doesn't want to have it smaller. then you name could we raise the age for social security? no, they never want their entitlements cut. >> she's raising a good point. there are many who believe the entitlement cutting, let's leave the cost of living adjustment out, that's minor stuff, but the heavy medicare entitlement, changes in medicaid, it really is a root canal. it will hurt middle income, lower income people. maybe they shouldn't go there, stick to tax reform, which is pro growth. what do you think? >> i think they should go there on entitlement and i don't think they should just do it. >> they should just do it? >> no.

very vigorous pro growth agenda. i don't know what anybody else thinks of this, but it's not for this, it's -- we'd be talking more about the failures. the number two story, number three story. we're talking about it. >> the catastrophic launch of obama care. >> yes, let's see from november 7th up until ted cruz launched his attack we weren't talking about obama care. >> we would be october 1st. obama care launch. >> it would be a one-day story. >> it would be a one day story. every day it's not working. this is the signature achievement. you can say no. it would be the signature achievement of obama's administration and it's not working day after day. >> mainstream media would be all over that.

they totally want to report on the bad things happening to obama every day. i turn on cbs, abc, nbc. >> hour by hour, they haven't -- >> like benghazi because the mainstream media was all over benghazi. yes, i count on the mainstream media -- >> real fast, i have to get out. boom, boom, boom. 15 seconds. >> obama care is a done deal. obama's going to go down with fdr and lbj for getting this big signature social protection. >> america. >> larry, it's not incompatible with freedom. >> sound budgeting. >> and sound health. >> everybody stay put because at the moment it's not incompatible with the panel. we would need to know what happens if this whole thing continues to drag on, whether or not it would hurt the economy or maybe, contra, contra, smaller government actually helps the economy. we are going to ask the great art laper about that next up on

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because now more than ever, the future belongs to those who challenge the present. welcome back to "the cud row report." we're supposedly just a day away

from hitting the debt ceiling. president obama and second lew want to scare us into thinking that would be a catastrophe and disaster, but we have the funds to service our debt. that's my point. here's some numbers. listen to this. serious stuff. in the first 11 months of 2013, average monthly revenues coming into the treasury, $225 billion. that's per month on average. interest expense? $21 million per average. that's a 200, roughly $200 billion surplus to pay the interest and service on the debt. how much cushion do they need? this isn't catastrophe. we will never default on our sovereign debt, never. not since alexander hamilton fixed it up in 1794 and i was there and i did it. by the way, he put gold behind the debt. let's talk to arthur laffer. politico is calling him the gop tax man. expert political panel is still with us.

no one can get a word in edge wise. let me ask you the extreme. let's put the treasury thing aside. we will never default on the treasury. >> i agree. >> suppose the government shutdown continues and suppose we have periodic shutdowns in the next couple years, which i think we will, and suppose the government was smaller by 1/3, what would that mean to the economy? >> surely would not mean anything. i guess they cut government spending that would stimulate economic growth. i go back to milton friedman's line is government spending is taxation. government doesn't create resources it redistributes resources. for every person spending money on the government there's someone from whom they're taking that money. it clearly would be good for the u.s. to reduce government spending. i would like to see it as you described earlier, larry, where we do a tax reform first and then get economic growth going. once you get that economic growth going, it's much easier to reduce spending.

that's what bill clinton had happen. he had a tremendously good economic -- he was able to cut spending a lot. >> there's no one talking growth. growth, growth, growth. >> growth is it. >> growth, by the way, lowers revenues. i mean, growth lowers welfare. growth does -- >> it does everything. >> growth promotes leverage. you take the bubbling get deficit down by tens of trillions of dollars. >> exactly. >> you have houses, jpmorgan, morgan stanley, they're all very pes sim miss city. if the shutdown lasts we'll lose 2% of gdp, americans will become greece. suppose we're shut down for another month. what happens? >> i remember when you were a little kid in the thomas jefferson days, larry, and, you know, honestly we've been to this barbecue many, many times. it's not going to hurt anything. this is a good, healthy discussion. i agree with ann totally that it's the discussion that should

be had. what is the agenda for the u.s. going forward? if voters choose to throw republicans out, let them throw them out. this is their country, not our country. and if we lay out our plans and policies, the low rate flat tax spending restrantd, sound money, free trait, minimal regulations, they don't want it, it's their choice, they can live with the consequenc consequences. i think the consequences of a good, solid pro growth agenda would be wonderful. i think the democrats would join us as well. the democrats know this stuff is nonsense. they know that they should be subject to the laws they pass. >> do you think they -- >> they know that. >> hang on a second. do you think the democrats know? >> yes, totally. >> do you think they understand growth and less government and tax reform? >> no. that's why i've been enjoying your promoting growth, but it's kind of an academic discussion right now. i want to correct one thing art laffer said but he agreed with

me so i hang on his every word. i did not say they throw them out, do whatever you have to do to win elections so we can enforce the growth policies. right now it's chitchat. >> i won't agree with that? >> arthur, your worst nightmare -- i know, you thought clinton did good. >> i thought clinton did a great job. >> clinton did a good job when he had a represent cap house and senate. >> john f. kennedy was the great. >> last supply side conservative pro american president that the democrats produced. all right. i really think that's fair. >> i do think so. >> anyway, i've got to get out of here, art. let me just ask you. let me just ask you. what about this deal that's coming down the road? republicans are going to give up budget cut squee questers. it seems obvious but that's a trap they're rolling into. >> i don't think so. i think they've done pretty well

so far, that's my view of the world. nothing serious will happen as a result of all of this. they'll kwom to an agreement and they won't give up a sequester or go for tax increases. >> i agree. >> i think what the house proposed made sense. why shouldn't the democrats and everyone in the house and senate be under the same rules. why shouldn't they postpone the tax on medical devices for two years? why shouldn't they require people to prove tra their income is this -- >> i got yeah. >> sorry. thanks, larry. >> terrific stuff. ann's new book rolling out today "never trust a liberal" out now. now we go back to washington and speak with representatives frank polone and david schreikert. the clock is ticking. tomorrow night's debt ceiling deadline. hang with us. we'll be right back. for over 60,000 california foster children,

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welcome back to "kudlow report." joining us, frank polone and dave schweikert. gentleman, you're tur good friends. i'm going to apologize from the beginning. we have breaking news from the house. i only have 90 seconds. i apologize to both of you friends. mr. frank polone, what do you make of it? the house is not going to vote. it's pushing it to the senate. what do you want? >> i want the speaker, speaker boehner to bring up a clean resolution and clean debt ceiling extension so we can, you know, open up the government,

pay our bills and then, you know, we can negotiate whatever we have to negotiate. i think keeping the government shut and the threat of a default is devastating to the economy and is going to create loss of jobs and a lot of uncertainty in the economy. i don't think it's a good thing. >> dave schweikert, it's not going to be optimal. what mr. pallone just said, a clean bill on the cr and the debt, is that what's going to finally happen in the final vote in the house? >> i don't think so but i think it's going to be something close to that. you saw today we were getting close to a bill where we had our 217 votes. i think we're going to be up late tonight running around the house here and even reaching out to our senate colleagues to try to find out what the package needs to look like to have the votes necessary. >> do you expect -- i've got to go to dave -- i don't know. both of you real fast. dave, big changes in the senate. do you expect big changes in the senate or no? >> no. no, i don't, because at this

point we need to find a way to just close this deal up. >> close it up. frank pallone, do you think they're going to make big changes, reid and mcconnell? >> no, they're very close. that's where it was. i was surprised the speaker didn't take it up. >> thank you, gentlemen. i appreciate it. i apologize. frank and dave, that's it for this evening's show. we'll be joined by special guest senator joe manchin tomorrow night. i was made to work. make my mark with pride. create moments of value. build character through quality.

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