cut back, then the market will get hit. i'm not trying to minimize that. i'm saying when that happens we want to be ready with the stocks we talk about that we like. because that's going to be the last buying opportunity of the year. i believe, like to say there's a bull market somewhere. i promise to try to find it for you right here on "mad money." i'm jim cramer. i'll see you tomorrow. >> tonight we have breaking news on everything from the budget to obama care. first, the house has just voted to pass the bipartisan budget deal. we have a live report coming up from capitol hill. earlier today house democrat leader nancy pelosi backed the deal, and even used a mild obscenity to encourage fellow democrats to vote for it. next, team obama continues to move the goalpost on obama care. now they want to delay the deadline to enroll again and make it okay to just make partial payments to enroll. obama care is starting to look like a subprime loan.

but is president obama really setting up the insurance companies for all the blame? and stocks sell off once again. another 100-plus point drop for the dow. strong retail sales, and the expected nomination of the mensch of the hawks, stanley fisher to the fed may be convincing investors that tighter money is on the way. all those stories and more coming up in "the kudlow report" beginning right now. good evening, everyone. i'm larry kudlow. this is "the kudlow report." we're live here at 7:00 p.m. eastern and 4:00 p.m. pacific, and we are loaded with news. we start with breaking news on the budget deal. the house votes to pass the bill and sends it over to the senate. eamon javers in washington with all the details. good evening. >> good evening, larry. in the end it was an overwhelming vote of 332 to 94 to support the budget deal in the house. that's going to send it over to the senate. the expectations are now that this budget deal will pass. just 62 republicans oppose the

deal, and only 32 democrats opposed it as well. but during the debate leading up to that vote, larry, both sides made it plain that they don't necessarily love this deal despite the overwhelming vote. take a listen. >> that's how it works in divided government. that's the nature of compromise. in a divided government, you don't get everything you want. but i think this bill is a firm step in the right direction. >> this agreement is far from perfect. it is not the budget agreement i or many of my colleagues would have written. but i do believe that on balance -- >> larry, it's clear that wall street does in fact love this particular deal. jpmorgan's jamie dimon was in washington today. he sent patty murray and paul ryan, the two architects of the bill yesterday saying thank you, thank you, thank you. >> eamon, that's because he doesn't want them to fine him

another $15 billion. >> that's right. he's had a tough run in washington. >> i don't want to be cynical about it. but i think there is a lot of thing going on there. but i appreciate the point. eamon javers, thank you very much as always. >> you bet. now to the big story on obama care tonight. all right. it's not working. not enough people are signing up. so the administration once again changing the rules of the game, and now coercing insurance companies to go along with it. dan mangin joins me now with all the details. good evening. >> good evening, larry. >> what have you got? >> a bunch of news today late in the day. secretary kathleen sebelius announced that she is mandating insurers accept payments as late as december 31st for coverage to kick in january 1. before it was up to them whether or not they're going to accept that. she also raised the prospect that they'll extend the deadline to sign up for the insurance from december 23rd to some date in the future. and there are a bunch of other

ideas. the idea is to get as many people enrolled as possible by january 1. that includes either partial payments that the insurers would accept, or also by letting people retroactively cover people if they sign up on january 8th and retroactively get covered january 1. >> let me ask you a couple of questions. >> sure. >> i'm no expert. first of all, they are extending the preexisting conditions for the poor -- for the sick. that's very interesting. >> the pool. the federal pool. >> they want to delay it for the month of january. i'm okay with that. i've always been okay with that. where i do have a problem is that word you used, mandate. >> mandated, right. >> the insurance companies have basically played along and cooperated where the state commissioners have let them do it. some cases the state commissioners won't let them do it. but i don't see how the administration can mandate. mandate has legal connotations. that's what troubles me. >> we were talking about this before the show. there is an open question about whether it's legal. let's assume that it's not.

i don't think very many insurers are going to go to court to try to block this because there is too much money at stake. i don't think they're going to get on the bad side of the administration. they've gone along with all this to date. they haven't squawked too loudly. i don't think they're likely to squawk loudly than. >> let me ask you about some other stuff coming late in the day. out of network providers. the administration wants insurance companies to treat out of network providers as though they are in network in order to extend what coverage you may have had before. >> that's right. >> will that fly, dan? will that fly? >> you know, there is already -- this was asked repeatedly about in the conference call today. and there is already the case in the insurance history the use of this where they will make amends for people that if they're used to having certain kinds of prescription drugs or having certain kinds of providers, you were used to these for a month or so or whoever long, we'll use to it faze in. they'll bend over backwards for them. i don't think that's that unusual or that unlikely to fly in this case. i think this is all about getting people comfortable, at least in the first month with the benefits that they're

receiving, to make sure they don't wake up and say look, where did my cancer doctor go. >> one other thing that gets my goat, this partial payment business. >> yes. >> i have a real problem. i remember not so long ago there was no income verification and no documentation for people in the housing business. everybody had to have a home. when you went for a mortgage, you didn't have documentation, you didn't have income. you didn't have to say if you had a job. they don't have set up on these websites yet proper verification procedures. they do not have that. nor do the insurance companies have the forms. >> there are serious doubts about the insurance enrollment. >> there could be 10% error factors going on. that's for both enrollment and payment. so therefore, i don't understand how you can have a partial payment when you don't even know what the whole payment is going to look like. >> it's a valid concern. as are the other aspects you just mentioned. i'll tell you this. the image that i got in my head when you were asking about this is the image of a marathon

runner trying to run across the line and a bunch of people trying to drag him across. this is the administration trying to drag as many people as possible in any way they see fit. they're considering other steps to take as well. they're doing everything they can to get these people across the line, to get these bodies signed up to create enough ininertia that it's inevitable. >> i think there are ulterior motives here. i think the financial risks to the insurance company and to the american taxpayers are quite substantial. and for me, people may disagree, i don't know why they don't just waive the whole thing for a year that was my position right at the beginning. we should have delayed the individual mandate program for a full year. and that's what you're getting, drip, drip, drip, drip. it's the oddest story i've ever seen. anyway, cnbc's dan mangan, we appreciate your info very much. >> thank you. there is other news. hhs has told contractors working on the problem-plagued obama care website not to release

documents to congressional investigators. and now in this letter to the department, the house gop's chief watchdog is accusing secretary kathleen sebelius of criminal obstruction. here now to explain is house oversight chairman darrell issa, republican from california who is fast becoming everybody's hero representing the taxpayers. chairman issa, thank you. first of all, she has been stonewalling. but it really is obstruction. and that does threaten the criminal procedure, does it not, sir? >> well, certainly for those that were conned into signing these letters at cms on behalf of hhs and the secretary, they're in a pickle. they've ordered a contractor not to comply with lawfully issued congressional subpoenas. more importantly, the whole question of what they're trying to have not released is absurd, larry. you understand 73 days ago, the site went live. there were vulnerabilities. the documents we want are related to the vulnerabilities

of 73 days ago. we said we're happy to redact anything where there is still a vulnerability. but we need to be told what haven't you fixed in 73 days if these are not fixed? the american people need to know that hackers can still penetrate your information. if they are fixed, great. then these many flaws that were open to hackers at the time of the openings up of this site are fixed, and that's all we need to know. we have this obligation. it is absurd to say you can't see problems that you would like us to believe are fixed and your claim of why we can't have a them is they might be a road map to hackers. hackers don't need road maps. they find these vulnerabilities. >> isn't that an interesting point? they don't wait for anything. they just go in and do it. we were just reporting, chairman ice sack, we were just reporting that the administration now wants the insurance companies to take partial payment on these packages. well, hell, how can you take partial payment when the errors are so large, you don't even

know if the full payment will be verified, if the income is there, if the job is there. this reminds me of the liar loans in the mortgage crisis. >> well, you know, larry, in many ways it's worse than that because the government has the right to pull back those partial payments if it turns out that people aren't entitled to those subsidies. here is what we heard today in our hearing from medical doctors. if in fact the insurance company then verifies that somebody's insured and you give them care, under the affordable care act, they have 90 days to take that money back. so as a physician, as a hospital, you've got 90 days exposure of thinking somebody is covered and they're not. so the ripple effect will not be the taxpayer, necessarily, it will not be the insurance company. the real ripple effect will be your doctor who suddenly finds themselves upside down because a host of people came in that weren't covered, never even paid a single premium.

>> chairman issa, regarding the issue of criminal obstruction, what are you thinking about? can you share with us what your next move is going to be? >> well, we're always slow to assert criminal referrals. what we will be doing if we don't get the documents is we'll be calling in under depositions the individuals that asked or ordered them not to comply, and even individuals that might enter in the other companies. what we need is to get to the truth. are the american people safe going on this website? is your personal information safe that is already there? or is there more work to be done? if we can get those proper information by any means, we can back off. if we can't, we really do have an obligation to look over the shoulder of this administration after such a colossal failure to launch. >> i mean, it just seems to me, okay, if you dent get the information, tell you the truth, sir, i wouldn't hold my breath. they won't tell you, for example, they won't tell you the payments. they won't give you the numbers. they won't tell you the

demographics, how many young people are signing up. it seems to me that is part and parcel of a cover-up. and the cover-up is trying to say to the american people we're fine. we're fixing this. the reality is because they won't give you any information, they haven't fixed it, and the problems are still gigantic. and to me whether this is a criminal case or not, i say it's a political cover-up. >> there is no question, it is a political cover-up. there is an attempt to say it's fixed and not give you the information until it's old news and then say it's old news. the problem for the american people is every day people are really losing their health care. every day they're finding that their doctor, even their oncologist while they're going through cancer treatment is losing the ability to treat them and get reimbursed. those are real problems that they can't hide from. that's what we discovered today before real medical doctors. that's what we'll be dealing with on monday in dallas in a field hearing where we're looking at the whole collection of felons collecting your information at government expense. all of this is part of what is

happening in real-time. while secretary sebelius is saying it's okay, trust me, i won't give you the information. >> trust me. congressman darryl ooiell issa, you for your great service sir. one of the most galling aspects is real americans are losing their insurance and their doctors, even after president obama's false promise that they were told they could keep it. all right. here now to share his difficult story jim hoft. the founder and blogger for gateway.com. he just found out he is losing the health insurance and possibly the doctor that have saved his life. thank you for coming on. i'm reading your story. and this is a brutally tough story. just tell us. you thought you had a cold, and it turns out to be a heart problems and stroke problems. and you're going to lose your insurance. can you just fill us in briefly on your difficult heartbreaking story?

>> thanks, larry. yes. this was back in august of this year, just three months ago. i thought i lad a cold. after three days, i was taking cold medicine, i lost vision in my left eye and went blind in my eye. soy checked into the hospital here in st. louis, missouri. they ransom tests, found out i had actually bacteria that had poisoned my blood system. it ate a hole through my heart the size of a dime. it caused five different strokes on both sides of the brain. it caused me to lose my eyesight in my left eye. i had my left nihad to be taken out. a prosthetic knee, and i had open heart surgery they thought would be four hours, it ended up being 12 hours. i had exceptional doctors here at st. louis university hospital who actually save mid life during the surgery. and this was three months ago. so i'm very pleased with how i'm doing today. obviously, it's been traumatic, as you can imagine. but the last thing i wanted to

think about was switching insurance at this time. and that's what i found out i'm going to have to go through next. >> so in the middle of this awful -- by the way, god bless. >> thank you. >> you're here. you're alive. you look pretty good. so good bless on that. the middle of this story you get a cancellation notice. now, what can you do? can you negotiate? they are renewing some of these things, jim. can you keep your doctors? can you keep the hospital? what is happening? fill us in. >> well, larry, i'm still not sure how this is going to end up. so i'll have to fill you in further in the coming days. but what i know right now is that the individual market and ezekiel manuel told us this, that all these companies were going to get out of the market and it was going to be taken over by the government. that's what i'm finding out. and the company that i had that actually paid over seven figures for the surgeries i had here in st. louis, and i still have a major surgery coming up at the

end of the month, they're pulling out of this market. so now i have to find a different company. and it looks like i only have two options here in st. louis. one of the options does not carry the barnes system, the barnes hospitals, which is an exceptional program. i'm not yet sure about st. louis university hospitals. you know, i pray to god that i can still see these doctors because they saved my life, as i said. >> will they -- as part of your hope here that you can discover a new plan that will essentially pay for all the new operations going forward? i mean cover the catastrophic costs? is that still apt? is that still an option? >> well, you know, what i have left is i have to get a knee replacement. i'm still in a wheelchair. and so obviously that isn't as big a surgery as some of the other ones i've had. but that will be carried under the current insurance i have. but then soon afterwards, i have to start looking for a new plan, which i need to start looking for now rather than focusing on

my recovery. i have to start looking for a new plan. >> do the obama care options, i don't know if you know this, because a lot of people can't get this information, but do the obama care options so far as you know cover the problems you're talking about, not only the cost of the operations, but also the doctors that have been working on you? is there is an obama care exchange option that will fit your need? >> well, i did -- i did glance at some of these options from the obama care network. it looks like i'll be paying higher premiums. it looks like i'll be paying a higher deductible for the same coverage. i'm not sure about keeping the same doctors. i pray that i can. but today politifact said obama's you can keep your health care is the lie of the year. bravo. they were right on. >> jim hoft, i'll just say god bless you. god bless you. >> thank you, larry. >> i think you're a miracle and i hope you can work this out

you. take care. we'll be right back with more on the late-breaking house vote on the budget. that's a very important thing too. please stay with us. i'm larry kudlow. we'll be right back.

so you can see like right here i can just... you know, check my policy here, add a car, ah speak to customer service, check on a claim...you know, all with the ah, tap of my geico app. oh, that's so cool. well, i would disagree with you but, ah, that would make me a liar. no dude, you're on the jumbotron! whoa. ah...yeah, pretty much walked into that one. geico anywhere anytime. just a tap away on the geico app.

frankly, i thought it was my job and my obligation to stand up for conservatives here in the congress who want more deficit reduction, stand up for the work that chairman ryan did. they did good work on behalf of the american people. it's not everything we wanted. but our job is to find enough common ground to move the ball down the field on behalf of the american people who sent us here to do their work. >> all right. despite some conservative opposition, the house just passed the ryan-murray bipartisan budget deal. now it's sent to the senate where it is also expected to pass without much difficulty. joining us now, missouri republican anne wagner, who serves tonight republican leadership team. ms. wagner, welcome back to the show. let me ask you this question. it is a political question. but i want to ask you, did paul ryan, who negotiated this thing pretty cleverly, did paul ryan just save the republican party from itself? no shutdowns, no shutdowns, no tax hikes. now the focus will remain on

obama care. did ryan save the gop with this? >> i think he saved the american people. frankly, they're tired of us managing crisis to crisis. this is a two year budget that will allow us in congress now to get back to the normal appropriation process where we have the control. we truly have the purse, instead of advocating that to the white house and to the administration with these temporary kick the can down the road continuing resolutions. this was not everything we wanted, larry, as the speaker said, and as many, along with congressman ryan have echoed. but we did manage to get real deficit reductions. we did not raise taxes on the american people. and you know what? we began to address the permanent savings that we need on the mandatory side of the ledger. so, you know, on balance -- >> in a little bit. in a little bit. >> you got your talking points down very well. but with all due respect, the can got kicked down the road.

but ryan was up front about that. he knew that was going to happen. you knew that was going to happen. i mean, the point i guess i'm making is this was not a catastrophic outcome for the gop. i'm surprised frankly the democrats went along with so many provisions. they didn't get the unemployment extension, the unemployment compensation. >> that's right. >> and they didn't get the tax hikes that they wanted either. remember, the original democratic package was about a trillion dollars in so-called loophole closers. plus, they wanted at least $25 billion for unemployment. i'm surprise they'd went along with it. i know what paul ryan is doing. i think he saved the party from itself. but let me ask you one thing. this is an honest question. paul himself is saying, and i spoke to him earlier, about 70% of the budget cap sequester, 70% is saved in the 2014 and 2015 fiscal year. 70%. >> that's right. >> he is arguing that if i have this right, the ten-year period, about 92% of the sequester will be saved.

let me ask you, do you buy that? because the conservative criticism is that they lost the caps. they lost the sequester. it will never return. it was a signal achievement, but it's gone. what is your response to that critique? >> congressman ryan is absolutely correct. really we have kind of leveled off into 2016 the sequester levels. we have saved 70% of it in the short-term, 92% long-term. and the permanent mandatory fixes are actually the gifts that will keep giving, larry. this is beyond the ten-year period of time. once you make them permanent, these kind of pension reforms that are included in the mandatory side will also continue to reduce our deficit and make savings well into the future beyond the ten years. >> more copay. which is fair. i think that's right. so you're saying digging in a little bit on the smaller entitlements may set a precedent for the larger ones. >> we've got to win a few more

elections here. well want to get to the big things, larry. we want to get to real entitlement reforms, the drivers of our true debt. and we're going to do that. but we also i think made a major step forward in terms of our defense readiness and modernization. this was important. and there are many in our conference and across america that this was very important to. we have averted a shutdown. we've got two-year peear perman. i think in 2014, i'm hoping it's going to be a good year for the gop. and maybe we'll take back the senate, increase our numbers in the house. and then we can actually attack the debt drivers. >> i understand. well, it's not nirvana, but it is something. let me ask you finally, ann wagner. how big is the rupture with some of these conservative activists, political action committees, heritage action, club for growth and so forth. they did a lot of squawking. i'm going to reckon that we'll see more squawking on the cable shows tonight and tomorrow. how big is the rupture on this?

>> you know, i don't even pay attention to it. and you shouldn't. you have to represent your district, your constituents. it's my vote. my voting card. it's time that we pay attention to what the american people are saying, which is to come together, get things done. yet preserve our conservative principles. and even if it's incremental advance, even if it's a small step in the forward direction, at least we're going somewhere that is positive. and, you know, certainty is so important. they're tired of the dysfunction. they're tired of the crisis management. and at the end of the day, what matters is who we represent. >> it's not exactly fiscal paradise. but it is something. it is something. i think, i'll be honest with you. as an old budget guy, i think this was a political fix and a very good one. that's the way i look at it. >> it's a positive outcome. we're pleased to support it. and i appreciate being on the show tonight to talk about some of the specifics. >> you're great. well appreciate it.

representative ann wagner, terrific stuff. now, the general markets were down. but have you looked at the twitter stock price lately? cnbc's own seema mody has the latest on that story and more talk headlines just ahead. and please, folks, don't forget, free market capitalism is the best path to prosperity. that means shrinking government, and that means pro-growth tax reform. all that is still in front of us. we'll see how that turns out on "kudlow." please stay with us. ♪ [ male announcer ] this december,

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welcome back to "the kudlow report." i'm seema mody with this news alert. it look like the protester mace have won in the ukraine. president are still camped out in the public square using snow and ice barricades to fortify their position. meanwhile, in neighboring georgia, a huge fight broke out in parliament while considering a resolution to voice support for the anti-government protesters in the ukraine. and let's switch focus to stock prices. take a look at shares of twitter, the stock making a big move in today's session. it's now more than double from the offer price of it's ipo, and up nearly 50% from the low it hit about two and a half weeks ago. and a big frenzy is starting for tomorrow's mega millions jackpot, which now stands at $400 million, but will likely go even higher. but if you win, we hope you don't end up like this guy, pablo won $338 million in march. he got $152 million lump sum. he has already spent or lost $80

million. and get this, larry, his girlfriend is suing him, saying she deserves a cut. this is just not the right story. it's not what should happen. >> where did he blow all the money? >> i don't know. that's a good question. cars? i have no idea. i'm not sure. >> all right. >> take note, audience. that's what you don't do. >> i think that's a great story. okay. another question real quick. in a down market, twitter is having this great run. why? what is going on at twitter? >> there has been some positive commentary from sell side analysts about upcoming earnings, and that could be a driver or a catalyst for shares of twitter. aside from that, there just seems to be more momentum in these social media stocks over the past couple of days. we have a seen facebook as well outperforming, which is interesting, right? because we've seen somewhat of a drop in the market right now. our first three-day sell-off since october. >> that's why it's so interesting. you know, i think these stocks are making a big statement. >> sure. >> they're making a big statement.

seema mody, thanks very much. question, is the baby boom generation responsible for our economic and political woes? i don't know. i'm a baby boomer. author and humorist p.j. o'rourke just wrote a whole book about the baby boomers. and i want to ask my pal p.j. what is his real message? what is he telling us? he is next up. so please stay with us on the baby boomers. in

welcome back to "the kudlow report." here is a question. did the baby boom generation help or hurt america? how will they be judged? and what about the prosperity that some people think they ushered in? all right. joining us now, p.j. o'rourke, author of the new book "the baby boom: how it got that way and it wasn't my fault and i'll never do it again." he also wrote this article for this month's aarp magazine, how the boomers saved everything. and p.j., as always, welcome back to the program. i read your great essay in "the wall street journal" review, the boom or bust. i have not read the book. nobody sent me the book. >> i got to talk to a publisher. >> they didn't send me the book. so i just read the article.

we've known each other a long time. >> yeah. >> tell me, tell me, p.j., what are you saying here? what is your bake message about the baby boomers? >> oh, i mean, we saved the world on saturday night. and then on sunday morning, ouch. no. you know, i honestly don't think the baby boom is responsible for any of the problems that we've got at the moment. that was greatest generation, and people -- and lost generation and silent generation people who created these huge social programs with the idea, and i think you and i can agree on opposingness that everybody should die at 65 1/2. social security, medicare, even medicaid is predicated on everybody kicking off the minute that they turn 65. and they neglected to imagine that there would be a generation like the baby boom who is going

to live forever. >> so you're not really beating up the baby boom, that right? >> no, i'm not beating up the baby boom at all. on the other hand, baby boom takes credit for a lot of things like the civil rights, like ending the war in vietnam, which only took 15 years. for gay liberation, feminism, all sorts of things we didn't do. that was also the older people. it was the older people who did the bad stuff. it was the older people who did the good stuff. baby boom has been -- we weren't the team on the field. we were the tailgate party. >> i would be the first to acknowledge, including myself, that the baby boomers had certain moral and cultural deficiencies, okay. i'm willing to admit that, all right. i'll come clean. i believe it's called sex, drugs, and rock 'n roll. so that may be not the best thing in the world. but the other thing, p.j., that occurs to me, and i'm being very

serious here. >> yeah. >> there is tremendous prosperity. this is baby boom driven. the prosperity of the '80s, the prosperity of the '90s and most of the 2000s before the crackup, steve jobs was a baby boomer. >> yes. >> okay. bill gates was a baby boomer. >> right. >> i use those as representative leaders of our generation. so how bad can they be? >> oh, no, it was great. >> a lot of economic growth occurred with the baby boomers. >> really, the baby boom did cause this, though maybe not intentionally. we caused it in part by being this wonderful big demographic lump going down the snake of the economy. so when the lump hit like the key working years, there were a tremendous number of people out there working. the other thing is the baby boom is greedy. and i mean that in a good gordon gecko sort of way. we grew up comfortable. we grew up optimistic. we grew up during a period until

the war in vietnam of peace and pretty much unlimited prosperity and growth. and we wanted a lot more of that. and we set out to get it. and i think we were pretty successful. and the reason we were successful was that while we're not a terribly inventive generation, really we are a brilliantly adaptive generation. we didn't invent rock 'n roll, but i mean, rock 'n roll, we made it happen. >> okay. fair enough. >> we didn't invent computers, but we figured out something to do with the darn things. oh, there is one thing i just wanted to tell you, why twitter is up. i know the answer to the question you were asking earlier. >> yeah. >> it's because i'm tweeting. i just started tweeting about a month and a half ago. i think people looked at that. even if p.j. o'rourke can tweet, the dog can do it. this thing could be huge. >> p.j., i'm a technological dinosaur. >> me too. >> but i've been tweeting for a couple years. i love the tweet. >> it's fun, isn't it? >> but there are some nasty people out there. look, i want to read you a line.

this is from your "wall street journal" article, which was a great article. >> thank you. >> stupid notions of central planning, nationalization and protectionist trade will fall by the wayside. now what are you saying here? that the baby boomers are basically free market type people and that they have convinced the world a these things that obstruct free markets and obstruct prosperity will go away, or what? what are you saying there? >> i wish i were saying that the baby boom is free market, but we were all steeped in econ 101. so i don't think we know anything about free markets, really. but what we do know about is individualism, the sanctity of the individual, the fun of the individual. to some degree, the responsibility. we're a very, very individualistic generation. and all that central planning stuff, all the socialist ideals or fascist ideals for that matter, they don't stand up to the kind of individualism that

the baby boom represents. >> right. >> we may not mean to destroy them, but we will. >> one last one, and it's got to be quick. >> yeah. >> one last one. barack obama is a baby boomer. your thought, p.o. o'rourke? >> he is such a statistical outlier. he is technically a baby boomer, but hippie mom from iowa, partially raised in indonesia, absent kenyan dad, grew up in hawaii. the guy is so different from the rest of the universe that i don't want make any general comments based on his extremely specific case. >> all right. we'll leave it there. p.j. o'rourke, as always, great stuff. >> thanks. >> the new book is "the baby boom: how it got that way, and it wasn't my fault, and i'll never do it again." thank you, p.j. you're terrific. now, folks, looks like the endless extensions for jobless benefits have finally hit the wall. the left is crying foul over that. but aren't we already paying

people more money than ever not to work? the man who says we're making it much too easy to stay home is about to debate a top liberal. that's next up on "kudlow." stick with innovation. stick with power. stick with technology. get the new flexcare platinum from philips sonicare and save now. philips sonicare. ♪

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as hard work is increasingly replaced by government handouts, some would-be workers were happy

staying at home in the hands of the u.s. taxpayer. one of my next guests says president obama's policies have created incentives not to work. and in effect, have raised taxes on the poor, thereby keeping them poor. here now is dean baker. he is co-director for the center for economic and policy research, and casey mulligan, economics professor from the university of chicago and author of the important book "redrabz recession." casey mulligan, welcome back. president obama talks about redistribution as a good thing, i guess. you're saying we're paying poor people too much, and if they go back to work, we're taxing them too much. that right? >> for sure. we had a number of new programs expanded programs to give additional help to people who are having tough luck. they're unemployed, than we ever used to give before. and the funny thing is we're going ratchet it up one more

time in about 20 days when obama care comes into effect. there is going toby a whole new set of cash help for people who are unemployed, people who moved to part time. pretty much anyone who doesn't work is going to -- only the i'm who work are going to have to pay for stuff these days. and i think if we're going to have new programs coming online, let's at least let the old ones expire. >> let me real quick, before we get to dean butler for rebuttal, casey, how does obama care fit into this? >> well, basically, the only people who had v to pay full price for their health care going forward are people who work full-time and get insurance on their job. they're going to have to continue to pay like they always have. and pretty much everybody else are going get heavily subsidized care and relief from penalties and so on. >> all right. so that's -- okay, another incentive not to work. dean baker, i don't reckon you agree with casey. what is your response? >> well, to me, this is kind of obvious. we sort of have the dead body, the person standing with the

smoking gun over it and you and casey are running around to see what happened. we had a housing bubble that collapsed. it cost us over trillion in annual demand. pretty well explains it. the same thing has happened all over the world. everyone didn't suddenly get real generous to poor people. the partly agree casey, and i'm going to say it's a good thing. he'll say it's a bad thing, i guess. we will see fewer people working because of obama care. we have a lot of people in their 50, early 60s waiting for medicare. they're struggling at a job. the only way they can pay their health insurance is going to work every day. some of the people will drop out of the labor force. i'm going to say it's a good thing. casey might think otherwise. >> don't we need a strong labor force? population growth is part of economic growth. >> right. and let's not forget that working people support everybody else. and if you push people out of the workforce, that fewer people to support the majority of america that is not working. >> casey, if you make $30,000 a

year, is that the cutoff? in other words, below that, you're okay. you're going to get the government benefits. above that, however, you're going to get taxed so much, it doesn't pay to work? is $30,000 the cutoff point? >> no. there are actually many, many cutoffs. it takes a computer to figure it all out. but you can be getting government assistance up to $70,000, $80,000 a year starting next month. >> that's the obama care. that's the obama care. >> right. >> but excluding obama care, that's the earned income tax credits, about $30,000. and many other benefits are right around there. >> a number of them are. although the unemployment program pretty much anyone, any income level can get that. >> dean baker, do you think the democrats made a mistake in this latest budget deal where they did not push for an extension of unemployment benefits? >> well, i would like to have seen them push for extension benefits. i think people need that the jobs aren't going to come out of nowhere. we do need people working be.

the problem isn't that you don't have people looking for work. you have three people looking for work for every job. i would have liked to see them extend benefits. i don't like to see people miss a check, but what i suspect is going to happen is early next year you're going to see congress come back because most republicans think we should extend benefits. i think there is going to be a lot of pressure for them go to go ahead and do it. i know that's going to make you unhappy, but i think that's what is going to happen. >> casey mulligan, i think republicans can be just as guilty as democrats. a lot of people argue when you give benefits, let's take unemployment benefits. but there are lots of other benefits that the government provides, food stamps being one of the major ones where there has been tremendous growth you. give the government benefits, and it's good for the economy. that's the argument. it puts money in people's pockets, and they'll consume more. and businesses will provide more goods and services. and the economy will grow. and we'll all live happily ever after because we're getting more food stamps. do you buy that, casey? >> actually, that's backwards.

you got it backwards, larry. what happens is you're moving money from one guy's pocket to another guy's pocket. of course the guy who is receiving, he can spend it. but what about the guy who is financing that? he is lending the money to the government. he can't both lend that dollar and spend it himself or invest it in a business or invest it in something that actually creates value. and what you're doing here is you're destroying value. you're paying people for not being productive. and look, if you're going to pay to destroy value, you're going to get some void value. you're not going to create it. i don't understand mr. baker when he says the way we're going create jobs is to pay people not to work. it's crazy. >> well, my point here. >> real quick. >> the point is just right now we're short of demand. we need something to create demand. it's that simple. casey seemed to miss it be. but we had a collapse of a big housing. >> we'll do another one. we got to get out. dean baker, thank you. good luck on the book, casey. appreciate it. markets sold off again today.

stocks were down. gold sharply down. i still say investors are preparing for tighter money. now that stanley fisher is likely to join the fed. we're going to find out what our top investors and seema mody think about it, next up on "kudlow."

the dow dropped 104 points. the nasdaq and s&p also in the red today. take a look at gold. posting its biggest loss since october.

gold tumbled 30 bucks. it's been weak for a long time. so question, is the market throwing a taper tantrum on stronger than expected economic signs and a hawkish stanley fischer joining the federal reserve. here is jim iuorio. so jim, one point i want to make right off the top, retail sales a big number this morning. a very big number. heck, half a percentage point at its core. up 6% in the annual rate for the last three months. that feeds into gdp. what does that tell you? >> no, i definitely think the numbers over the past few weeks have gotten significantly better, particularly out of the labor market. that number today we're hopefully giving excuses with the thanksgiving day holiday. but other than that, the numbers have been pretty good. i do think there is concern in the stock market that the taper is coming. now keep in mind, by the way, the taper is not a huge deal to the market. it will grow to live with it.

the problem is more of where we stand. we sit in a position where we probably need a 4 to 6% correction anyway. people are bulled up. we haven't trimmed the hedges in a long time. so they're using that as an excuse. an appropriate excuse? sure, i guess so. >> let's look at this now. another factor. i mentioned this last night. i'm going to mention it again tonight. stanley fischer, a brilliant professor formally at m.i.t., the governor of the israeli central bank, he slayed inflection. he kept the currency, the scheckel stable. he is more hawkish. he is a bit like larry sommers who might have been a student at fischer. but he is more of a hawk schoechlting on the federal reserve it looks like as the vice-chairman. he is going to offset yellin's dovishness. here is the scenario. you have a pretty strong economy. stronger than people might have thought two or three months ago. you have a more hawkish federal reserve board now with stanley fischer coming on, and the whole business about slowing down the

bond buying, the so-called taper, all that may come online a lot sooner and a lot faster than people think. how do you play that? >> well, i do think rates are going higher in the first six months of 2014. and to say that stanley fischer is more hawkish than janet yellen, you and i both know that's not the greatest hawk compliment in the world. yes, it does get a little more hawkish with him on board. but i do think that rates are going higher because the fed even independent of stanley fischer wants rates to go a little higher i do think you want to be short ten-year futures. but i also like in that situation banks. banks love a steep yield curve. i'm hoping that some of the banks will think to themselves that a lot of the regulation, perhaps overregulation is behind was the exclamation of the volcker rule being voted on. hopefully the banks can do pretty well. i think people will walk further out the risk spectrum. >> all right. we're due for a correction. we're due for one. >> oh, sure. >> i'm a long-run bull. i want to say that you may be

too. >> as am i. >> but we are due for a correction. >> no doubt. >> this fed stuff plus the -- i mean, i love a strong economy. but maybe in the short-run, it's going to affect the market. i don't know. got to get out of here. jim iuorio, the best of the best. we appreciate it. that's it for the show, folks. thanks for watching. i'm larry kudlow. we'll be back tomorrow night. there's a saying around here, you stand behind what you say. around here you don't make excuses. you make commitments. and when you can't live up to them, you own up, and make it right. some people think the kind of accountability that thrives on so many streets in this country has gone missing in the places where it's needed most. but i know you'll still find it when you know where to look.

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>> narrator: in this episode of "american greed"... >> he had millions and millions and millions and millions and more millions. >> narrator: ...matt cox and rebecca hauck... >> matt says, "i got to get out of here. i got to leave," you know, "you want to come?" >> narrator: ...the bonnie and clyde of mortgage fraud. >> his plan was to get as much as he can and go somewhere else and do it and go somewhere else and do it. >> now, at that point, i really did, i thought, "they'll never catch me."