always a bull market somewhere, and i promise to find it just for you right here on "mad money." i'm jim cramer, and i'll see you next time! . welcome to the new year's eve live edition of the kudlow report and what a year it's been for stocks. you can call it the buy and hold boring rally or rodney dangerfield get no respect rally. call it what you like. this was the best year for the dow since 1995, 18 years ago. washington didn't have a thing to do with it. our resilient economy, a free market economy was the big driver. tonight we ask what will the new year bring? now with obamacare kicking in for real in just a few hours washington is going to be interfering more and more in health care and our personal lives in 2014. are america's hospitals, doctors and patients ready for a year filled with medical land mines?

i can predict the term income in equality will be the obama democrats chief election year mantra. they say the successful rich are to blame. nonsense. i believe it's family breakup and poor education. we'll debate it later. we got those stories and much more coming up on "the kudlow report," beginning right now. good evening everyone. welcome to "the kudlow report". i'm larry kudlow. we're here live this new year's eve. thank you for joining us. we're wrapping up what was a great year for the stock market. bob pisani has been covering it for us. good evening, robert. >> reporter: a year for the record books. all over the world, the s&p 500 was up 29%, best performance since 1997. japan logged its best performance since 1972.

germany since 2012 and uk since 2009. there were a few laggards. gold was down 28%. inflation was a non-event. one of the few losers for the year. once again small cap stocks in the u.s. outperformed big cap stocks with the small cap russell 2000 up 37% versus 29% for the s&p, even mid-cap stocks outperformed. two questions i've been asked. number one what about those high yielding interest rate sensitive stocks i invested in during 2013, the telecom, theit the ut and the reitss. these groups historically may have underperformed the market as rates rise. emerging markets countries like brazil and china got clobbered this year with negative returns as global investors pulled out in favor of the u.s. and europe. this is a tough call but many believe a pickup in the global economy will benefit emerging markets but the fact is they are

very cheap right now. a pe ratio half that of the u.s. and that might be the most compelling reason for investing in emerging markets in 2014. larry, old friend, here's wish you a healthy and prosperous 2014. >> and right back at you bob pisani. thank you, buddy. fortunately this year i've been a bull on the strength of rising profits, a friendly fed, no inflation and maybe even an improving economy. all right. that's my very quick take. we'll get into it more. here's are our ace investors. founder and analyst at peak theories research. o'neill securities. chief investment strategist. and founder of kkm financial. let me ask you something kenny, right off the top. you can comment on my analysis. it just interests me that gold this year fell by about 30%, the

worst performance in three decades. and the s&p 500 rose by about the same. 30%. give me a point on either side. why is that? what does that mean to you? and to investors? >> what i think it means is people are less fearful thus you see how gold backs off. certainly at the beginning of the year we saw when people were much more fearful we saw what happened with gold. as soon as they started getting more comfortable you saw charge right into stocks and saw them take money out of goal. i want makes a certain amount of sense to me especially if you think 2014 will be a better year, if you think the economy is turning around, the european economy and the opportunities are out there better it makes perfect sense. >> jeff, it's a funny year because the bears were utterly and totally wrong and that includes a lot of famous hedge fund managers. nobody is perfect. i get that. this is a rough year for bears. it interests me this gold stock

market thing. no end to the world. no to end the dollar. no high inflation which is what people were worried about. and no double dip recession. so, i ask you, is this a portent and a signal that this coming year may be a darn good stock market year? that's my real question and that's my gut reaction, it will still be a good stock market year. >> larry, you know i love you, but i tend to believe to be optimistic in twoush. look at the vix. up until two days ago the vix was down 35% year-to-date. kudos to ben bernanke. but i think volatility will rear up in 2014. right now we have to see where these interest rates move, next

week we see three and a quarter potentially. >> john, i want you to straighten him out. on the way, john, i just want to note i think the ten year treasure note is going to 4%. going up another 100 basis points. it went up 150 basis points this year. i know corrections come and go but john what is your view as a supply cider and free market guy do you see it in a positive bullish way as i do or do you have reservations? >> this whole thing to me is like the snake swallowing the egg. the egg is $2.5 trillion of excess reserves that's being printed and still being printed and as it moves along through the banking system it creates loans and supports asset prices. we had huge gains not only in stock prices but in home prices over the last two years. i think 2014, you see more of both of those, stocks up ten, 20, real estate up another 10%.

you see the economy north of 3% growth. this is just money pushing through the different markets and that's not going to go away. people talk about the fed back being off of the taper but the stimulus is still going up. stimulus is the amount of unloaned reserves still in the system. it still rising $75 billion a month. as long as that wall of money is there i'm long in the stock market and in the stock market i want things that benefit from liquidity and leverage like private equity stocks. >> the fed rights the market. abigail, nobody is perfect, certainly not me. we love having you on the show. but you really had it wrong this year. you were a bear. interesting because you've had good calls down through the years and i want to know what went wrong, in your model, in your view, why did the market go up 30% instead of think you called for a 20% correction. why? what went wrong? >> i think the short answer here

is often market reactions, things in life go longer and further and in this case faster than you think. so the way in 2008 and 2009 seemed like we couldn't go lower, i think that's what we're seeing here on the opposite side. when i look back at 2013, i think it's going to be what i call a false initial reaction, and it was driven by the federal reserve support of qe3 back in september and jcv and extension of the twist all the central support banks have put investors out on the risk curve. >> money has been loose all year and progressively so in europe and fed and japan. china not so much now. but that's my point. the fed was so friendly this year but all the central banks were friendly. i don't see that changing. >> i think it's too much. i talked to some guys on the buy side who have been doing this for a number of years.

it reminds them of 1987 of the volatility in the foreign currency markets they are seeing the same things today. >> you are still bearish? >> i'm still bearish. i still think it's going to happen and take people by absolute surprise especially at this point. people are so complacent. >> ken, i don't think, the fed is not going to change that much. >> no. >> there may be an inflation issue way down the road. i don't know how the hell they will unwind this thing but it won't happen in 2014. what are you focused on as a bull, what your focused on? what are the tell tale signs or tell tale sectors. >> what i'm looking at next year are financials. as long as the fed doesn't lose control of interest rates. financials are a good play. industrial names. infrastructure names. if you believe in global turn around and improving economies

you got to think infrastructure names and industrial names, telecom names will do well. i think housing is a little bit overdone because i think if rates start to go up housing is going to get capped out. i don't necessarily see as way john said it housing going up another 10% or 12%. i hope i'm wrong. if rates go up and lose control i think housing gets stopped out. >> john. >> if the rates move sharply, i think that's definitely the case. but real estate has been bid up for a number of reasons. some of it is the backwash from the financial crisis. some of it is we got very strong rents out there. we got private equity buyers. i take the long side of that. but, you know, economics only really says one thing, larry, if people are confronted with a price of something they will buy low and sell high. the biggest buy low sell high are banks are earning 0.25 on their assets and in the asset

markets we have been talking about, people have been making 15%, 20%, 25%. that's too big. >> jeff, let me make two points here real quick. number one, back to the fed's liquidity. very friendly fed. you know what bernanke did this year. i think this year was it. because of housing prices and because of the punctuation of stock prices bernanke ended the deflationary psychology. he showed us that asset prices can go up. we're not heading for a double or triple dip the way europe was. that's bernanke's main contribution. he has negatives. now my question to you is, my question to you is, why wouldn't you own cyclical stocks, industrials, we talked about banks already, consumer cyclicals, the stuff that would benefit from economic growth and i might add a better europe, a better looking europe, better

looking japan, china some people said. these foreign markets may actually help the american market. >> larry, that's more applicable a year ago september when bernanke came out with qe and the ecb came out with do whatever it takes. right now you need to look at the growth. look at the stock market gains. produced 3.7 trillion in wealth. the stock market did. what's the fed's balance sheet? $4 trillion. that's an eerie coincidence. i'll back up abigail. there's an unexpected hiccup. we're seeing the fed to stick with their policy. there's something coming around the corner. a lot of people are getting nervous. we saw 11% jump in volatility. this is a melt up, larry. look at the moves -- >> i don't deny that. corrections come and go. >> i don't have my bear hat on.

>> kenny, let me ask you this, though. the fed will not be any friendlier this year. okay. in some sense they will be less friendly. okay. fine. i come down to prochts with the mother's milk of stocks and that's why i think this is more of a grind year, 5%, 10%. that's my take too. profits right now are at a record high. gdp profits, the irs, as a percentage of the economy and level. so, that's fundamentally really positive. >> that's right. >> another 5%, 6%, stock multiples can go as high as 18 types. >> what we have to start seeing we have to start seeing growth in top line revenues. we haven't been seeing that. profits have been going up but top line revenue has not been growing as it should and meanwhile they have been boosting earnings. >> you know what?

companies have excess revenues they spend it badly. i rather they spend it in buy backs. people have told me in this great building and all my great colleagues and all the great guests we have on the shows that we can't get a better market unless we get better top down revenues. what happened? we had basically mediocre at best revenues and the stock market exploded anyway. profits are more important. it's how you manage your company, abigail. not just giving you buckets of money as a ceo, it's how you manage the money. >> i think that is true. that's a great point. >> people hate this argument. they call me names. >> but you can only manage the bottom line for so long. and so far. >> and they will be punished. >> we go back to tissue of qe, the federal reserve pumped this

$4 trillion not on to main street, not into the economy, but clearly into wall street, into the financial markets and if we look at the velocity of money it's at a record low. all of that money is not moving. >> there's a rise in interest rates could change it. money will circulate at some point. that's when the inflation warning comes. that's not this coming year. >> but it means deflation in a way because the money isn't moving and it also means that this m ira ge of an economic recovery is just that. it's smoking mirrors. >> home prices are rising again. >> it's up and down. >> if i were president obama, which i most assuredly not nor does listen to my advice built if i was obama i would take credit for this whole stock market. it doesn't get any better than this. jeff where do you go? you're on the bearish side. you got the last word. >> i think you buy volatility. ate neutral sideways market in

2014. great trading opportunity. be careful here. lock those profits. take some chips off the table, larry. >> you know what? i can tell you this, my wife and i have done just that. we took some chips off the table from all our index funds but we're very long the market. we are. john, i want to buy and hold. i do. i want to buy and hold. can't i? i can have permission to buy and hold? >> bless you, larry, you may buy and hold. >> thanks to all of you. happy new year. now, obamacare starts tomorrow, yep, not a happy new year. higher premiums. much lower sign ups than predicted. fewer payment sos far. is this country ready for this? i don't think so. later on the obama democratsn new rallying cry. income in equality.

they got it wrong. family breakup and poor education blocking social mobility. don't forget as always free market capitalism is the best path to prosperity. stocks went up and the economy went up because we are mostly a market economy. and that is a winner. i'm kudlow. we'll be right back. bny mellon combines investment management & investment servicing,

giving us unique insights which help us attract the industry's brightest minds who create powerful strategies for a country's investments which are used to build new schools to build more bright minds. invested in the world. bny mellon.

all right. we're just hours away from the start of obamacare coverage. only 2 million people signed up so far. signed up. far short of the goal which the administration is now backing away from. listen to this. >> i think success looks like at least 7 million people having signed up by the end of march 2014. >> well, that was never our target number. that was a target that have put out by the congressional budget office and has become the accepted number. >> you know, unfortunately, that ain't so because she said that at least in front of an nbc news interview and maybe abc as well. they should quit this fibbing. still can't say how many people paid for plans or how many young people are enrolled. here's what they had to say

about all those cancelled plans. the number of those who are getting coverage certainly outpaces any of those who may have lost a plan or not signed up for new coverage. that is just either fishy or down right wrong but let's bring in our experts to break it down. what really happens tomorrow. is this another lie? here now is health policy expert and a radiologist. betsy, i'll read it again. the number of those getting coverage outpaces those who may have lost plans or not signed up for new coverage. >> as of midnight because of this law, millions more people will be uninsured than before midnight. 6 million cancellation notices went out to people with cancelled plans. in addition 3.8 million workers on so-called mini med plans that will be considered illegal.

fast food workers and the like who get very limited coverage. >> i didn't know that. that's very interesting. >> add that on one side of the ledger. on the other side 800,000 new medicaid enrollees definitely covered. 2 million people that signed up on an obamacare exchange. signed up is not the same as paid. the administration haven't told us how many paid. the industry suggested it could be as little as 10% or 15%. >> a third or half. for hundreds of insurance companies. basically they are wrong. what they said in this preconference is wrong. >> yes. let's just go one step further and see what's going to happen during this year. two things will happen. employers looking ahead to the employer mandate which starts a year from now are going to do just what they did in the first half of this last year, 2013. they are going start pushing down their workers to part time status. that means more people will lose on the job coverage and hours at

work. all right. so it is possible that you could have many more millions uninsured by the end of the year. >> 20 million people. >> 20 million. that's quite plausible. >> doctor, you heard what betsy said. can you weigh in for me. weigh in on the insured versus uninsured number one which i think is a fib but i want your view. secondly whether we'll have a massive volume of uninsured because they will lose their plans when the business side kicks in. what's your take. >> sure. i agree with betsy. i want to go further and say what's going to happen this week now that we are finishing up with the capitalistic phase of health care in this country's history. we'll have absolute chaos next week. patients coming into offices who will be startled by the amount of their deductibles. when they find out they have a $6,000 deductible now they will forego getting treatment and

inherit these patients in our hospitals when they are stage one cancer is now a stage three or stage four cancer and wine up needing surgery and chemother y chemotherapy. what employers might wind up doing and i think this goes back to a report from a couple of years ago you might see employers dumping tens of millions of americans off their insurance roles and that's something people don't under right now. right now we're in the phase of lost insurance coverage, can't get on the website. next phase is going forward with massively high deductibles and patients foregoing care on their own accord because of financial reasons. next phase is hard-working americans who always had insurance by their employer being dumped by their employer. not that the employer is mean -- >> i want to interject. here's what obama would say. i'll leave higher premiums and higher deductibles. the obama team would say that if

the employers lose, they push them out, they will be pushed into the exchanges. and that they therefore will get subsidies and live happily ever after. >> that's right. first of all it means an enormous increasing burden on taxpayers. somebody pays for those subsidies, changes the cost of the law. secondly, those exchange plans are much lower grade than the insurance that most people are getting at work. at work you have a whole network prove vieders, doctors and hospitals. you can be on a trip and go to a hospital. you can go to a fancy cancer hospital. you can't do that on most of these plans. >> the big guys won't pay the tax on the insurance. >> exactly. >> the point the doctor was making, mackenzie estimated a third of their clients would drop coverage even the congressional budget office making a low ball estimate said that 7 or 8 million additional

people will lose coverage when their employers turn against it. only in washington would they create an employer mandate that reduces the likelihood you will have coverage. >> i get that. >> larry, let me address the question you asked. the question you asked what's wrong with obama saying all right they will get coverage through us. what's wrong with it is what betsy said. what's wrong with it is that these programs are awful. the platforms are way too narrow in terms of the providers and who is getting coverage and all that. think of the cancer patient who is getting cancer care at a reasonably good hospital. they are now not going able to get cancer treatment. what i find disconcerting is the lack of empathy from anybody in this administration talking about those people. it's those people like you and i, any of us are subject to that

potential outcome and i find that very disconcerting. >> again, this is what obama is going to say. he's is going say i gave you a year to renew your cancelled insurance plan. and that year should, you keep your doctor, keep your hospital, keep everything you got and you can finally have enough time to pick something else. >> the political reality is this individual mandate is history. because democrats in congress facing re-election will not be able to take the heat. if you're going to provide an exemption for people who lost coverage how about for people who could never afford coverage to begin with. >> that's what i thought the debate should be get rid of the individual mandate. happy new year to both of you. very kind to come on tonight. one of the biggest stock winners of 2013 is about to make a move that will anger lots of its customers. we'll have that story and more details on a big snowstorm that

could be coming your way. please stay with us. ♪

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just by talking to a helmet. it grabbed the patient's record before we even picked him up. it found out the doctor we needed was at st. anne's. wiggle your toes. [ driver ] and it got his okay on treatment from miles away. it even pulled strings with the stoplights. my ambulance talks with smoke alarms and pilots and stadiums. but, of course, it's a good listener too. [ female announcer ] today cisco is connecting the internet of everything. so everything works like never before. . welcome back to "the kudlow report". i'm seema mody with this news alert. netflix is pulling more than 80 movies and tv shows for 2014. so if you were a big fan much classics like "titanic," brave heart and top gun you may want to cancel your plans and watch them tonight. netflix will begin testing a cheaper streaming service for

6.99, a dollar less than its cheaper plan. the difference is you can only watch one screen at a time. netflix shares flat today but quadrupled in 2013. a big portion of the country will ring in the new year with snow. the huge storm is expected to start tomorrow in the midwest hitting chicago and detroit. moving to new york and boston. and the new mayor of new york says he'll do away with those romantic horse drawn carriages. he says it's not humane for the horse so it's over. the handsome cab derives are promising to fight saying the government can't come in and shut down a legal regulated business. we end with one more new york city free market story. the appleby's is charging $375 for its new year's eve celebration tonight. that includes a buffet, open bar, and a dj. $375 for appleby's.

larry does it sound appealing? >> it does. is it just one appleby's? >> the one in times square. >> we can take a horse and buggy and go to the appleby. last time we can do that. >> there you go. >> seema mody, thank you very much. now you'll hear it every day from the democrats. their constant yelling about income in equality and how it is allegedly killing our economy. not so fast. we'll debate the facts about what's holding back wealth in america and how to fix it. next up on kudlow.

all right. the new big issue for the obama democrats is income in equality. they think they are going to win it in the november elections, they are wrong. their whole analysis is wrong and more government taxing and spend cigarette wrong. instead it's family break up and poor education that is the real problem. i hope the republican party gets that message out. now, we'll talk, debate. we have democratic strategist and economist mark levine, and

c-nbc economist. jimmy why won't democrats acknowledge this family break up instead of tax the rich. >> maybe they are uncomfortable with tissue. remember they did that, life of julia cartoon where it showed the single mom and her daughter and government had all these services, making the point that gee it would being a great if she was in a two parent family. that would be much better. if the president is going to say the income in equality is a defining challenge of america, not the weak growth, not fact we have 4 million fewer full time jobs, if he's going make that statement it would be fantastic if there was some evidence that, you know, it is a defining challenge for the u.s. economy and that evidence just isn't there. >> see, mark, look, one thing. i don't favor obama's policies in the main. that's no secret. but i'll say this. he's a darn good family man from everything i've seen. he's a good father.

right? he stays with those kids, stays with his wife. he does a lot of really good things. he should talk like that. he should be a role model, like bill cosby tried to be a role model, like juan williams tries to be a role model. i don't understand why the president can't argue that two parent family not single mothers and so forth as the solution to upward social mobility and other problems. >> two parent family is a great thing. we've had family break up issues since the 1960s. the issue is income in equality because it's worse now than it's been since the 1920s. there's 72 issues with more equality in the united states. we're ranked up there with ghana. the reason other countries are doing better and doing better economically. there's a moral issue. pope francis talks about that clearly. i don't want to throw away half of america. there's an economic issue.

the reason why corporations are hoarding cash is because not enough information buy their products. when middle class people aren't making money while the top 1% own 38% of the nation's wealth, they would spend on products. >> look at the relationship that income in equality and economic growth or income in equality and income mobility it's not there. i can make a stronger argument income in equality is better for growth than the other way around. it's just not there. it's a political convenient issue for the president to use. the statistics are much stronger that for example breakdown, income in equality. i would like to see more mobility so would people on the left. income in equality is not the problem. >> look, taxing rich people or whatever you're going to do, punishing success that's not the problem. it's the successful who make the investments for the rest of us.

this is to me a political and economic nonstarter. again, i want to go back to the moral case, i want to go back to the family case because i think jimmy is right. there's a lot of evidence, a lot from charles murray all the way down to many academic guys. you can almost predict sornl and economic mobility by taking a look at the kids' family. a two parent -- there is correlation. you can predict it's going to go bad. mark, this is such an important issue. i want goes to the heart of america because it goes to the heart of the family which is the heart of america. >> larry, poverty causes family breakup. there's correlation there because when people are poor they can't afford to keep their families together. they can't afford -- >> why is that? >> they get homeless. >> tell me why that is? why is that? >> if you're homeless very hard to keep a family together. if your kid can't get a decent education because they can't go

to college -- >> did you google billionaires. are the google billionaires causing those economic problems or forced by technology and globalization. they want to talk about bush tax cuts and unions. >> they and their kids and great, great-grandkids never have to work a day. >> they may have a daughter who has a cure for cancer but if she can't get food to eat -- >> what is the magic high marginal tax rate. >> how about making mitt romney may the same amount of taxes as middle class people. >> actually if you look -- >> rich pay their taxes. >> i think, mark, this may be a politically convenient argument --

>> it's not politics. >> i don't think this is going to wash. that's not what america knows or wants. look, jimmy p., i'll go to you. i don't think a problem of homelessness, there could be isolated problems and i'm the guy that gives them five bucks on the street when i see them, my heart goes out. i still believe you can predict an awful lot by looking at the structure of the family. you can predict what the kids are going to do and not do. whether they have discipline, whether they have responsibility, is there a father role model, as a friend of mine has said and written do they know how to wear a tie and show up on time for a job interview. it's that kind of stuff that we think is corny, it's absolutely essential. you've written about it. we can't solve it tonight. happy new year to you both. go to jim's website and you'll see the work he has done recently on this whole issue of income in equality. here's an easy prediction i can make right now for 2014.

the do was at will shrink. the budget deficit. on the other hand we won't get any tax reform, i think. go live on this new year's eve on "the kudlow report" and we're talking budgets and taxes with two top experts, what is the outlook? the ocean gets warmer. the peruvian anchovy harvest suffers. it raises the price of fishmeal, cattle feed and beef. bny mellon turns insights like these into powerful investment strategies. for a university endowment. it funds a marine biologist... who studies the peruvian anchovy. invested in the world. bny mellon.

fiscal policy in 2013 will be primarily remembered for the government shutdown, 16 days and there's the extravaganza spending on obamacare and the ryan-murray budget deal that avoid a shutdown. this coming year we have a debt ceiling to deal with and democrats are pushing for higher minimum wage and jobless benefits. will we get tax reform in the meantime? first of all, stan, happy new year. you look great. i want to ask you a key question. the deficit has been coming down, and spending has been coming down. both as a share of the economy and actual level terms. these are positive trends in my humble opinion. will they continue? >> almost certainly.

the deficit in 2014 will be closer to 3% of gdp than 4% and projected to go further down after that. as an economic issue the deficit will essentially cease to exist. >> are we in for a bolled budget. >> we may accidentally not because anybody in washington did anything. one of the most underreported bit of good news this past year was the fact is that for the second year in a row nominal government spending has declined. i don't know whether you want to give credit for obama. probably not. it's not that republicans did that much either. good news is gridlock meant government didn't grow as fast and that's the key long run fiscal policy. if we can keep that up -- if we limit the growth of government to 2% a year we balance the budget by 2018. >> you had budget caps.

i know they were loosened in this last deal. at least they got 70%. overall sequester didn't kill the economy. the economy looks like it's getting stronger not weaker. let me go back now. stan, what'spects for tax reform which would rejuvenate the job market and whole my. >> i'll give you a number. the percentage of tax reform in 2014 is zero. you and i talked about this. i think the earliest you'll see comprehensive tax reform in any form is 2019 or thereabouts. >> so you're saying we have to go through one presidential election and probably dan mitchell do you have to have two houses of congress. in 1986 we have a democratic house, reagan was president and we had a republican senate and they managed to get a good tax reform bill. is that not possible any more because of the divisions?

>> back then in the 1980s you had democrats who believed in lower marginal tax rates. they weren't so completely wrapped up in this class warfare hate and envy politics you get out of modern democrats. without some new gephardt and bradleys coming it's hard to see a consensus. i didn't think there was much form of tax reform before senator baucus announced he's leaving and less today. i hate to be agreeable with stan but 0% sounds good to me. >> stan, wrap it up for me. democrats want to extend unemployment insurance, republicans say you can't unless you pay for it. all right. what are the pay fors? is that possible or will we loosen budget caps even more? >> first all, there may be some loosening of budget caps

reversing pension caps for veterans. there's a chance unemployment gets kind of paid for in a typical way as you saw from your days in the government there's way to pay for things that looks like they are paying for it. this last ryan-murray plan, the deal that wasn't much of a deal use ad lot of the easy pay for. it's not that simple to come up with something. >> i have more low-hanging fruit. i became an expert at that. dan mitchell real quick. debt ceiling battle i don't see an appetite to shut the government down, do you >> republicans are telling me on the hill that they want to keep all the focus on obamacare. they are still a little bit gun shy after the way they felt they got the blame for the government shutdown fight even though in the long run it did solidify in people's minds that they were anti-obamacare so they wound up with a silver lining. almost certainly there will be some fight but nothing big like some sort of new sequester driven way of controlling future

government spending which is really what we need. >> all right. at least wait until the 2014 election, maybe 2016 as well. dan mitchell, stan, happy new year, gentlemen. >> happy new year. >> folks let's talk about politics at the ballot box. here's the essential question for 2014. can the republicans win enough seats to take over the senate? that's the topic of our final debate for 2013. it is new year's eve. right here, live on the kudlow report. i am personally going to turn the lights out. please stay with us for one more segment.

>> 2014 hours away. we're getting closer to the mid-term elections. will republicans take the senate or will democrats turn around the obamacare disaster? so with our 2014 predictions we welcome back march levine and mike slater. mike, i'll play devil's advocate with you because this should be a great republican year. they should win eight, ten seats and take the senate easily. is the gop prepared for let's say fixed websites for obamacare which may happen as the year goes on? the economy looks like it's doing a little better. housing prices, you saw today's numbers are rising. the stock market is soaring. i mean what if all that good stuff comes out of it. what should the gop do? >> i don't see that scenario being the case. i don't believe there will be that big of a change with any of

the seats in the house or senate. we have a problem in america where everyone hates congress but everyone loves their congressman. if that's the case nothing changes. we say on our show all the time we have an out sourcing problem in america. we out source which too much responsibility to d.c. we out source education of our kids, retirement, health care and personal responsibility. unless there a societal revolution we won't see a political revolution. i don't see any major house changes. >> mark, the obama team may want to offshore this whole obamacare deal. i mean people don't like central planning. they don't want more entitlements. how will the ds get out from under this fix. >> just show the people that are signing up. this guy in kentucky who picks tobacco and makes minimum wage, 48 years old, he had a health care problem, he went homeless. now for the first time in his

life he can get health care. this was a red state. this is a solid republican who switched to a democrat because he recognized all those lies about obamacare weren't true and now for the first time in his life he can afford health care. happy new year to mike. we agree. i don't think the senate will change hands and i don't think the house will change hands and more gridlock for another two years. >> there's a difference between health insurance which is what this gentleman can finally get and health care. last time i was talking to larry it was found out 70% of doctors in california are not seeing obamacare patients. so that person you're talking about will have a rude awakening in 2014 when there are no doctors willing to see him. >> the person i'm talking about couldn't get hearth before. there were tens of millions of people that suffered because they could not get health care. >> why didn't he go on medicaid >> he can't get on medicaid. medicaid only applies to children and pregnant women. men can't get on medicaid except they can now under the

affordable care act if the governors allow it. in virginia my home state poor people just have to suffer. they can't get health care. but the government is changing. we'll have a democrat who will allow virginians to get health care. >> the low end benefits from this and the high end might benefit from this but they don't need it. it's the middle class that will be upset with the higher minimums and higher deductibles. >> make, does the republican party have a growth message as in a rising tide lifts all boats as let's bring in latinos, let's bring in young people, let's bring in women. the gop can they reach out, change their stripes? >> we actually have a new year's resolution on our show and that's to get out of the echo chamber that is talk radio. and some other forms as well. and talk to more people than we're reaching right now. yes we need to do that.

>> all right. mark, mike you're both great. that's it for tonight's show. thank you for watching. wishing you a happy horksly and prosperous new year. i'm larry kudlow and we'll see you the day after tomorrow. [ male announcer ] here's a question for you:

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