intel lowered expectations. i think they start creeping up and will be very good stocks for 2014. they may not be good stocks for tuesday, but for 2014, i think they will be. i'm jim cramer i will see you tuesday! president obama lays out his plans to scale back the nsa surveillance program but here's the remaining questions. do we really need these changes? are we less safe tonight than we were yesterday and where are the complaints from any supposed injured parties? we are going to have a full debate. and the obamacare care story changes to the explosion of medicaid, the quality of doctors for that program, and the deterioration of emergency room services. then, a new study ranks all 50 states based on their fiscal health. their results are a stark divide between red and blue. and wait until you hear which

state came in dead last. oh, my gosh. all of those stories and more coming up on "the kudlow report" beginning right now. good evening, everyone. i'm larry kudlow. this is "the kudlow report." we are live here at 7:00 p.m. eastern, 4:00 p.m. pacific. our top story tonight, president obama ordering changes to how the national security agency moves forward with its one secret phone monitoring program. cnbc's own eamon javers is joining us from washington. good evening, eamon. >> reporter: the u.s. government will no longer be able to query the database of telefony metadata. they are not going to be able to look finto that database anymor

without a court order. the president also said that he thinks the united states government shouldn't be in the business of holding on to that data in any case. the question is who is going to hold on to that data? will it be private companies? because the president said this has been a very valuable program and linked it to the history of surveillance throughout the course of history. take a listen. >> we can not prevent terrorist attacks or cyberattacks without some capability to penetrate digital communications. whether it's to intercept malware that targets a change or to make sure that control systems are not compromised or to ensure that hackers do not empty your bank accounts. >> now, we got some statements here from a couple of technology companies as well. interestingly, yahoo! and google both put out identical word for

word statements. the commitments outlined by president obama represent positive progress on key issues and fisa court reform. what they like here, larry, is the fact that they are going to be able to disclose a little bit more to their customers about what it is that u.s. intelligence is asking those companies to turn over. the question is how much more? we don't have a lot of detail on that and whether or not these companies will agree to take a hold of this massive database of what they call metadata. that is all being determined. the president asked the attorney general and director of national intelligence about how to do this by march 28th. larry? >> eamon, i can't help myself. so we're supposed to turn over this information. you're not going into the e-mail. you just have the phone numbers. what, are we going to give this to target? look how well target did with

their own credit card stuff. you're telling me that putting this stuff in the private sector is going to mean one hoot of security? >> that's the question. the other proposal out there is to create an independent third party of some kind, some sort of blue ribbon commission that would have access to that data and control. it would be outside the government. that also raises the same kind of problems that you're talking about here. they are going to try to figure out how to do this and at the end of the day it's going to be a very difficult challenge to come you up with something that the industry and privacy advocates all like. >> eamon, as always, appreciate it. does president obama seriously understand this nsa and national security business? i want to get reaction from our free market friday panel in just a moment. we have columbia associates professor warren, mark simon and cns news editor-in-chief terry jeffrey. first, let's bring in our panel frank gaffney, president of the

security policy, former reagan official in the senior reagan official in the defense department. all right. frank, let me start. in your judgment, with whatever the president said today at the news conference, i'm not sure i understand what he said -- are we safer as a result of the president's announcement or not? >> i think we're less safe tonight, larry. i think we're going to find ourselves less and less safe, especially as his attorney general sorts out what has just been decided and they make up answers to problems that didn't exist before tonight. but the president has now said he doesn't have an answer to but we'll get by the 28th of march. i mean, this is national security fraud, in my judgment, and bob gates has gotten a lot of ink lately because he had a book that says, surprise, surprise, the president's been playing politics with national security. well, this is a textbook case of doing that. and i believe he split the baby.

and unfortunately, a split baby dies and i'm afraid some americans will as well. >> tell me what you mean by split the baby? >> well, about two-thirds of the speech speech, larry, i could have given. a person could have said what he said in about two-thirds of that speech. the other third, though, he was pandering to the left. and to the kinds of people that he selected to give him these crazy recommendations in some cases like giving privacy rights to foreigners, including people who are clearly, i think, going to be in the category of people who may wish us harm because sharia, their doctrine dictates jihad against us. two-thirds together with the one-third, it is incoherent, it is incomprehensible, and i believe it is going to make us more at risk and, frankly, the rest of the free world, too. >> you've got the left.

i get that. you've even got the libertarians in the conservative wing of the republican party or maybe it's not conservative. i don't know. but i never understood this. let me just take this back. he said today, i believe, that he's not going to -- or no morm more monitoring surveillance of allies or friends. whatever that means. maybe it means we will no longer monitor angela merkel. first of all, why is that? they monitor us. and what does allies and friends mean. the real danger here is phone calls from over there wherever the foreign may be to here because that's how we get into trouble. that's how the boston marathon stuff, that's how the whole 9/11 stuff if you attract the phone calls in those days and fbi and cia and how do we single out and

how do we fence and segregate? let's start with overseas? that angle. >> first of all, i think you're absolutely right. let's give you, as an example, the president's closest foreign counterpart, so he says, one of his closest friends, friends and allies, to use his current phrase, the prime minister of turkey, this is a man who is enabling the iranian nuclear bomb by helping defeat sanctions. he is aiding and abetting al qaeda and the muslim brotherhood in syria. he is trying to undermine the government of egypt, which i think is rightly described as a terrorist organization. this is a friend? this is admittedly the leader of a nato ally. this is a guy who you want to have the nsa all over, larry, not fenced off from. >> i tell you, i couldn't agree

with you more, frank, and i think the president is very confused. you're the specialist in foreign policy for years. one last one, real quick, before i go to my panel. fisa, the foreign intelligence surveillance, hasn't fisa always had to report for some kind of oversight to congress and the justice department? haven't they always had to do that? what's changed today? >> well, i think that is correct. what we have certainly seen is the president intends to make public the secret deliberations and rulings of the court and intends to put in -- >> are you serious? >> -- a public advocate -- >> if they have a discussion with judges and fisa, that's going to go public? that's insanity. >> larry, look, i'm sure there will be some effort made to redact information and otherwise protect it. but, look, let's face it, the

whole thrust of what the president has said here, not the need for a robust national intelligence and dangerous war and all of that, the third that talks about what we're going to do to dismantle our national security capabilities in the intelligence area particularly, he introduced some areas that i think are going to create a culture in which collecting insurance, analyzing intelligence, arriving at sensible conclusions from the intelligence like, for example, muslim brotherhood and islam and his friends are part of the threat we face. all of that is going to be much more difficult as a result of today's decision and therefore we're at much more risk. >> all right. terrific stuff. just print it in "the new york times." frank gaffney, you're the best. thanks for helping me out on a friday evening. i want to go to terry jeffrey. first of all, where are the complaints? in other words, i keep hearing this threat that the government should not know that a called b. government has not read the e-mail, has not tapped and

listened to the e-mail unless there's extenuating circumstances. where is the complaint? why are we even doing this? >> because snowden looked it after -- by the way, people should know that the justice department did provide an explanation of this to congress. congress knew about it -- >> always. always. >> before they voted to authorize it. let me emphasize something here that i agree with frank that it's outrageous for the president to suggest there's some kind of civil liberty of a foreigner overseas when we're gathering intelligence. what this program was about was gathering data within the united states. now, let me give you some perspective of why that happened, larry. we found out after the northwest airlines flight almost blew up in christmas '09, that our government had a policy deliberately allowing terrorists into the united states. they have a database of 500,000 people, the terrorist screening

database. of that, there are maybe 15,000, the latest numbers i've seen, of people on the no-fly list. the rest of those folks, they can get on a plane and fly into the united states. mike k michael lighter testified in congress, testified by tom coburn in 2010 trying to explain how they distinguish between an al qaeda terrorist that they let on a plane and come into the united states and one that they don't allow in. part of that is some people are already under surveillance. so if you let a terrorist into the united states, which you do -- >> and we should track, every step, every place he goes. >> if we have a stupid enough policy to let terrorists knowingly into the united states, then we've got to track them. >> i totally agree with that. doran, do you disagree with that? we know the guy is in the country.

why shouldn't we track him? if he makes calls to, i don't know, his hairdresser in detroit, whatever, why shouldn't we know that? the government should know that. >> larry, i agree. i think the problem is, i'm not sure that that's actually what the president said because part of the speech was so vague that we actually still don't know what is going to happen. so i think the big point here is he did -- the one thing he did right, he raised the question about the tension between defense and civil liberties. now, i think he's going to disappoint everybody in terms of how he answers that question, whether it's those on the left who are already complaining as well as those -- we already heard from senator rand paul. >> we've got rand paul factored in and the libertarians. >> one thing that we do which is important in terms of the fisa court is there will be an advocate that has to argue the other position. >> i'm okay with that. that's right. that part i'm okay with. >> that's going to take congressional action to make that change.

>> okay. impressionistically, do you think you were looking and listening today at a guy who actually knew and was comfortable with his knowledge and his judgments about the issue? >> no. >> that's the key point. >> no. >> i'll go further. bob gates, defense secretary, said obama basically had a disdain for the military, didn't believe them, want to listen to them. what i'm saying is, what about these national security guys? what about the surveillance guys, electronic guys, high-tech guys. they are in the military. is this part of it? >> the white house said the president was never fully aware of this. he, not being a hands on manager, wasn't aware of all of this. and i don't like how the president has the whole nation listen to him speak and says this is a huge problem and no idea what i'm going to do about it but look into it and who does

he put in charge of it? modesta? how about a statesman like george mitchell sort of a figure to look into this. >> or george schultz. do you think that obama knew about the lane closure? >> neither was he involved. we have proof he was not involved because it was a very efficient operation. >> i'm going to come back to that in a minute. go ahead, terry. >> the mistake is a permissive policy. having made that mistake, the government tries to make up for it by threatening the civil liberties of americans by putting unwarranted surveillance on us or collecting information that i believe the framers would have said under the fourth amount you need to have a search warrant. >> all of this data is frightening to begin with but we pictured james bond, sean connery, edward snowden, a

contractor brought in with not much of a background check. people like that have access. >> we have to close down. so i call you, so i e-mail you. if somebody tracks that, i'm okay with that. but i'm not aware that they read the e-mail. first of all, most of our e-mails are very boring. they are about dinner the next night or whatever it is. scott said this is the age in which we live. just deal with it. somebody is going to know. somebody is going to know. the issue is, how to get into the content. that's the step with regard to fisa and i don't have a problem with having advocates on fisa. that part is okay. but i don't know, i just don't want "the new york times" -- i think the foreign stuff is unbelievable. let me get out of here. dorian, mark, terry, jeffrey, thanks. stick around. we've got lots more for you guys to do, including the george washington bridge. but right now, we have to talk obamacare and medicaid. the white house continues to

boast about the millions of people who have signed up for medicaid but those numbers are wrong. we've got three pinnochios from "the washington post" and we still don't have an i.d. system that works at the back end of the process but we have dr. bill grace. he's going to join us with a lot of answers. later in the show, a new study rates the fiscal condition of every state in america and it's a real red state/blue state divide. wait until you hear which state came in last. meanwhile, from my standpoint, don't forget free market capitalism is the best road to prosperity. we need the rule of law but we also need to be security. national security is part of capitalism. i'm kudlow. we will be right back. ♪

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. a fundamental promise of obamacare. that won't likely be the case if the trend continues. so far, older sicker and medicaid so called young invincibles, already 40% more to use the emergency room than the

uninsured with obamacare. a study just gave emergency rooms a near failing grade. d plus. with the prognosis that e.r. care could drop to an "f" by year's end. here to discuss all of this, founder of grace oncology, new york medical college, look, this medicare thing is very disturbing. we have no idea whether renewals or people should have been in there in the first place, we have no idea it had anything to do with obamacare. but the main point is, the disposition of medicaid is now not a low, low income program. what happens here? how do you see this? >> the average wait time in the emergency room is five hours and is getting bigger and bigger and

bigger. there are two studies. one from hollywood and one from another independent analysis that shows that people on medicaid and now we have the supermedicaid which is going to be the obamacare which is the medicaid plus. it's going to jam more and more people into the emergency room and the reason for that is they are not giving a living wage so the doctors who take care of them know them well. for instance, if go to the emergency room with a head cold, as many patients do, that costs $1100 in an emergency room. a headache, $1757. these numbers were published last february. >> how is that going to be paid for? >> you're paying for it now. >> it's not -- they are not going to be reimbursed. it cost the hospital $1750 for a headache. >> that's right. >> who is paying the hospital back? >> they bill medicare and medicaid. >> let's just stick with medicaid for a minute because

that's where the bulk of this is coming. my understanding is that the reimbursement rates for medicaid are prophetically low. >> for doctors. >> but not for hospitals? >> not for hospitals. this is about big unions and for hospitals, big unions get paid well. >> so the emergency rooms are clogged because what? >> because medicaid patients use them because they don't have a primary care doctor. these people go and use primary care in emergency rooms so the head cold is $1100, head aid is $1757. >> that's their best bet. why should they pay higher premiums for obamacare to see a doctor? they are better off going to the e.r. >> they get very good care in the emergency room. >> and the american college of -- let me see if i got this right. the american college of emergency physicians ramnked ita d plus? >> that's right. because they are waiting a long time to get that care and if you go to -- i don't know if you've

ever been to an emergency room. >> yes, i was, sick as a dog three, four, five months ago. >> and you can wait a long time if you are not a celebrity. >> they wheeled me right in. got bless them they took care of me. this is no longer a low, low income program. it's going to be a popular program. 16% of the total health care right now. it's going to keep going up and up and up. do we have the doctors, the specialists to handle this? >> you're going to have the doctors to handle this but not private doctors to handle this because reimbursement is much too low. because the reimbursement, the people who should be screening these people for head colds but maybe a 40 or $50, this is an enormous waste of money. >> all right. let's move on. let's just talk about this lousy enrollment story.

>> yeah. >> 2.1 million. i've taken medicaid out as "the washington post" did. we don't know anything about that yet. 2.1 million people, the demo graph particular does not look good for the young, healthy ones. but here's the thing. the back end of the websites that have the payment and the i.d. card for the insurance companies is still not fixed. okay? what happens here? they haven't even structured it. >> it's already happening. people who go to the emergency rooms today in 2014 with chest pain and find out they are not covered and they leave the hospital, god help them if they've had a heart attack because they may be -- the people may get worse, they may die if they have a heart attack and are not covered. they are trying to protect their family but they are not covered. in fact, yesterday they had a -- there was a study where they asked the head of obamacare

whether or not they were collecting -- who was actually paid. so we have no clue of what is going on. >> therefore, they don't get i.d. cards. >> that's right. >> therefore, they don't get anything. >> that's right. >> but the insurance companies are going to cover some of this. that's my impression, they are going to do that. i guess there's going to be a limitation on that. >> that's right. >> last one, just real quick. a lot of talk about bailing out the insurance companies. some of it is the reinsurance rate, which is really a fee on the insurance companies themselves. >> right. >> but the other part, the risk corridor is if the insurance companies take a loss, let's say because of the lousy demographic, uncle sam stands ready to bail them out. should that be repealed or stay in place? >> the risk card is that we're not going to pay everything, 50, 75% of the losses. it was a risk card, not a reward card number one. and number two, some estimates

may be that's a trillion dollars a bailout. >> senator rubio and many others, or at least some others want to eliminate that. eliminate the risk corridor and eliminate the reinsurance. >> there's going to be a lot of insurance companies losing big time. >> three year -- it's a three-year finance. >> that's right. my feeling is that the people on the risk corridor are going to get nothing but risk and i don't think they are going to get that trillion dollars. should they keep it, i don't know? i think we all need health savings accounts. >> i think we need a fuller, additional discussion of this whole thing. bill grace, thank you so much. >> thank you. we're learning that the hack attack against target may have been a coordinated attack from russia against many of our retailers. seema mody is about to join us after the break.

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welcome back to "the kudlow report." i'm seema mody with this cnbc alert. the hacking on target may just be the beginning. there has been found six attacks on retailers still ongoing. the attackers used the same malicious software. intel has alerted law enforcement and the retailers about its findings but isn't releasing those names publicly. the new ceo of general

motors will get paid $1.6 million a year. mary barra will i eligible for 2.8 million in intensives. she's worked at gm since she was 18 years old. we end with a tough story for california. check out this huge wildfire burning on 1700 acres in los angeles county. it was reportedly started by an illegal wildfire. a tough time for california. >> seema, are these russian hackers in target? >> i don't know. >> which leads me to ask, are they russian mobsters? >> we don't know. >> i don't like russian mobsters. >> sure. i don't know who does. >> seema mody, thank you so

much. many of my friends and colleagues from the conservative talk show world are furious about the budget deal but i personally believe paul ryan's 70% solution, as i call it, saved the gmt op from itself and puts republicans in a position for landslide victories in november. our political free market friday panel back to debate that and much more. stay with us at "the kudlow report."

all right. now, the gop can make the case to independent voters, 42% of voters are independent, according to the latest gallup poll. and democrats are the party of obamacare. that sounds like a landslide. now, back with us, columbia university professor dorian warren, and terry jeffrey, cns news editor-in-chief. you probably hated this deal. i'm just going to guess that my -- i call this the 70% solution because ryan got 70% of

the sequester budget cuts and no shutdown. and now it goes away for at least a year and two years and we'll live happily ever after. >> he agreed to spending by 44.8 billion. digging a little deeper, you mention those numbers. you've got to get independents. 38% of has been growing from 28 back in 2006 to 35% now. i think what that shows is the self-identified conservatives is moving out of the republican party and saying, hey, i'm an independent now. >> do you agree with that? >> i've got to think that independents and everybody else in the world is so pissed off at them for the shutdown this

summer. whether they deserve the blame, we can debate that. but it happened. i think the key point was ryan wouldn't let this happen again. >> but just in terms of actually looking at independents on both sides, some are democratic leading and both peartsz have been losing support from their own parties as well as independents and there's a bigger point to this. about what republicans need to do to capture independents. and so for the tea partyiers that are upset with that budget deal, republicans have to figure out a strategy to win independents in the primary process. >> i think it's a 2014 general election strategy. i think there will be isolated tea party support. i really believe the tea party is going to go along with bill buckley, that you vote for the

most conservative in the race that can win. >> this was the democratic story. there's some war of the republican party. the democrats have a bigger war. they have the very moderate middle of the road andrew cuomo governor of the far left, very far left. >> that's true. but we have examples of tea partyiers, primary and -- >> who? >> senator luger. we have more examples of this happening. >> this is a great point. led by deblasio and elizabeth warren. >> no relation, by the way. >> a lot of time in cuba, never announced it. he wants to attack the rich,

give one hoot about economic growth. unfortunately, if obamacare wasn't good enough, obamacare is catching the disease also because he's been talking about inequality and punishing successful people. you are going to have a huge war here again he was at 39% and they should be against obama, against the welfare state. >> that's why if you would just listen to me, save the republicans from themselves. i know it cost $40 billion but the level of discretionary appropriations is still less than 2009. sometimes, terry, you've got to give a little in order to get the grand prize.

that's all. you're here because i knew you would disagree with me. >> they cannot do that. >> watch the message. economic growth and pink slips to cancel policies from obamacare. >> even leading towards a socialist state where the government is going to redistribute to somebody who does it. >> paul ryan, you're in so much trouble -- paul ryan saved himself from the gop, as i said, and gives now plenty of running room for the new sandinista wing in the primary because the extremes always -- hell, elizabeth warren giving speeches left and right, stop businesses,

stop banking. >> larry, you started the question out about the republican strategy for 2014. >> so far, so good. >> i don't think the u.s. chamber of commerce would come up and say, we are now going to publicly start looking for candidates that are more moderate than the tea partiers if there wasn't a serious issue. >> you can't fight the budget panel right now. they just want to get things working again. >> the gop takes the senate in 2014 and white house in 2016. we have much more to do but let's take some time out to talk stocks and the economy. economic news this week, pretty good. but as always, i say corporate profits are the mother's milk of stocks. so how have those profit reports been looking so far? seema mody has those numbers and much more. please stay with us. i'm kudlow.

welcome back to "the kudlow report," i'm seema mody. earnings are in full swing and here is where we stand. so far, 50% beat street

expectations. 13% have come right in line and 37% have missed earnings estimates. this morning we heard from general electric. g.e. profits rose 5% as it saw growth in industrial business, thanks to strength in the u.s. and what the management called a mixed environment in europe. next, we've had a lot of focus, of course, on financials. let's take a look at which companies will be reporting. 70% of the s & p 500 companies and pharmaceutical firm johnson & johnson on monday. then we get a read on the consumer from starbucks and mcdonald's. technology is also on the spotlight. expert earnings from ebay, microsoft, and netflix. that's a sector to watch next week. larry? >> seema mody, thanks very much. good news is good news, period. today, manufacturing, strong. housing starts, solid. the government's job index shows

more job openings and a higher quit rate. those are positive signs. stocks are up 10% reporting. they are up 16.4%, roughly 10% reporting. they are up 16.4% and the so-called blending earnings is up 7.1%. so warren, economic stuff looks pretty good. i know that the street is reserving profits. but actually taken as a whole, the numbers are good. >> i think they are looking not bad. i can't say they are spectacular at this point. we're very early into this earning season so it's hard to say. >> what's spectacular. what is going to make people -- >> i would say if you can get earnings and revenues to start beating estimates. >> the revenue story. >> here's the positive. this is what we've seen so far. earnings have not been spectacular. they have been 50% beat thus far and revenues have been up a

little bit more, or more so than the last few quarters. it's easier for ceos in companies to manipulate those earnings. it's harder to do the revenues and the fact that we are seeing a little bit of an uptick in the revenues right now is positive. that shows signs that consumers are spending a little bit more, corporations are spending a little bit more and that's a confidence level. >> i'm sure you're right. i don't think revenues are that important. revenues go with nominal gdp. real gdp plus inflation. now, that is rising. that is rising. we're moving back into the 4% zone and that's pretty good and that will take care of itself but i think profits are everything. you go back to the beginning of this rally, the bottom in profits and the bottom in stocks versus today, almost identical. they are productive, cost cutting, buybacks, dividends, i don't want companies to hold all of that cash. i don't know if they can spend it. of course, most of the cash is

overseas. let me just ask you this. year to date best performing sector is health care, 2.6% year to date and tech is 0.2. now, that's in the ten sectors of the s & p. health care, number one, financials, number two, tech number three. >> last time i've been on you've asked me areas of sectors that i thought would do the best and i've been saying financials for quite some time and they will be a leader going forward. i think if you have financials you have both tech doing well. they can move the economy and the markets. you need really both of them to take off. those two, health care included, are three at the top. >> you're not worried that big banks because there's a war against banks and give money to consumer mortgage fixes, justice department, to the housing agency, giving money to social

security organizing groups, they have voted for obama. i mean, really. $50 billion. >> i know it. it's unbelievable. i agree with you there but i think we are slowly getting into an area where interest rates are going to be rising and that's going to be very helpful for the banks. >> last point. the fed point. now, the fed is not removing cash. they are just not injecting cash. they are slowing down their bond buying. they probably won't start removing cash as in raising their target rate and selling bonds till 2015. >> i would say at the earliest. >> but that's so far away. all right. when does that he begin to -- that's real fed tiding which we'll call snugging. when does that affect the psyche of the stock market? >> probably not until the third quarter of this year. maybe give it a quarter ahead of time before everyone think it is will stetake place.

>> buying or selling? >> i'm a little bullish. >> thank you, as always. now, just about time to reveal the names of the states in the best and worst fiscal shape in america. it's all part of a new study that shows a stark divide between the red and the blue states and guess which state came in dead last. you've got to wait. the answers and more are coming on "the kudlow report." please stay with us. you can separate runway ridiculousness... from fashion that flies off the shelves. and you...rent from national. because only national lets you choose any car in the aisle... and go. and only national is ranked highest in car rental customer satisfaction by j.d. power. (natalie) ooooh, i like your style. (vo) so do we, business pro. so do we. go national. go like a pro.

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a new study released by george mason university rates each state by its fiscal condition. no surprise, all five states are republican red states that are cashing in on alaska and north and south dakota. the worst blue states are california, connecticut, and dead last is new jersey. my friend chris christie as though he needs another headache. why don't these liberals try a little fracking to get their economies booming? do you think it's possible, particularly on the fracking front, that the lanes were closed in ft. lee because they were looking for oil and shale? do you really think that's the missing link in maybe ft. lee in particular? is that what christie was doing? >> governor cuomo here in new york has created a lane closure on fracking. he said, let me do a study.

now they figure out there was no study. he's put traffic cones all over fracking until his re-election. i notice new york is sixth from the bottom there on the list of worst states. all democrats. i guess we can count christie as a democrat. >> no, we cannot count him as a democrat. we absolutely cannot. dorian, why is it there's a red state model -- we've talked about this with lower tax rates, deregulation, fracking is really the icing on the cake. there's no big fracking going on in south dakota and some of these other places. what don't the liberals understand here. what don't they get? >> larry, there's the amount of federal government welfare that goes to red states, which is the highest relative to the blue states. >> wait. i thought christie said that he pays much more in taxes to uncle sam than he gets back.

that's the old pat moynihan -- >> it's a blue state, as you point out. red states get more in federal -- just to stay on christie, if one nail in his coffin is bridgegate, this is the second nail. he's going to have a problem in a republican primary. his opponent is bringing this issue up. >> especially with the speech he gave, the state of the state speech he gave, this study makes a lie out of all of that. >> if you have to follow governor jon corzine and all of these other guys, your state would be in deep doo-doo just like new jersey is. >> well, my old state, california, is an honorary state, larry. but i would say this. >> they should frack in california, they should.

>> people go out there in the prairies, south dakota, nebraska, they have to be totally independent. that's what made america free and great. that map proves it still. >> go west, young man. go west. >> are these people becoming honorary, europe has become part of the east coast. >> it isn't that hard. take the guy in illinois. connecticut. okay. this is tax and spend. tax and spend. tax and spend and give away any pensions, if any, pensions, medical care, the guy in illinois, i can't think of his name right now. all it does is raise taxes. this is not a secret. you should put texas in there. they've got the risk motto, too. >> they were devastated in the last year by a hurricane. a great portion wiped out. >> they did begin to cut back on

pensions and benefits, he did take on the teachers union. it's not complete. he's got more work to do. i still believe he wants a 10% tax cut. >> he also accepted the obamacare medicare/medicaid expansion. >> well, if you lived in new jersey, would you, too. >> and he had his own dream act. >> terry jeffrey, dorian, thank you friday panel. chris christie. i'm larry kudlow. so ally bank really has no hidden fees on savings accounts? that's right, no hidden fees. it's just that i'm worried about, you know, "hidden things."

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>> in this episode of "american greed," >> he was a very brilliant businessman. richard marin scrushy, the visionary behind "healthsouth." >> richard is-- uh, at once the american dream and the american nightmare. he's horatio alger gone mad. >> he's a superstar ceo. >> we had a lot of energy. we had a lot of spirit. we had a lot of desire, a lot of vision, a lot of hope. >> a nashville wannabe. and when federal prosecutors accuse him of masterminding a $ 2.7 billion fraud, the singing ceo becomes a tv preacher. >> the only way we're going to stand perfect before god is being washed in the blood of the perfect lamb. >> it's a tale of rags, riches, and redempti