dodd/frank. it's one of the most onerous pieces of legislation in my lifetime. it's shut down in terms of lending and capital. and we've gotten away from the principals. what i want to do is free capital up back in smalltown america where the jobs are. >> so we talk about obamacare. what about tax reform? what does that really look like in practice? >> well, i think frankly there are two types of tax reform. one, we need to clean up the code. they've been saying that for 30 years, no action. president-elect is talking about an individual tax reduction for potential growth. i'd like to also talk about cleaning up the deductions on corporate earnings and reduce the corporate rate to be competitive with the rest of the world. and finally eliminate the repatriation tax. >> and what does that look like in your mind and the minds of colleagues here? he's talked in the corporate rate around 15%. is that realistic? we had another guest on that said it could creep up to 20% or

25%. >> the repatriation tax. >> no, no. >> oh the corporate tax. if we get to the low to high teens we'll be competitive with the rest of the world. >> what about entitlements? that remained off the table during the campaign. but you're somebody that likes to balance the budget. you talk about the deficit and care about the debt this country's taken on. how do you do both? >> thank you for bringing that up. this euphoria we're in right now, by the way i don't see this as a mandate. to see if we can break the gridlock. we're not going to solve this debt crisis unless and until we save social security and medicare. both trust fends go to zero in 15 years. >> but do you have any sense that this is an issue that can be addressed in this administration? >> absolutely. paul ryan said that when he became speaker.

i think mitch mcconnell said the other dwa we want to get at saving social security and medicare. the very people who are going to get hit the worst are the people who need it most. when the trust funds go to zero, that means we can't pay out full benefits. we can save social security. it's not that complicated, it's just politically difficult. medicare is a little more difficult but it can be solved and we've got to do that right now. >> what about spending? donald trump's also talked a lot about spending. >> let's talk about spending. in 2000 last year in bill clbt we spent $2.4 trillion under the federal government. last year under this administration we spent $3.7 trillion. that's $1.3 trillion more. and when you look at the departments, you can see where it is. we've got to get control of that. >> thank you. great to see you. >> good to see you. >> joseph, you going to say hello to your golfing buddy here? >> he -- he's -- >> be careful, joe. >> that course, senator, you know the one that i'm talking about. >> i do.

>> is it me or is it just hard? >> it's you. i saw your swing. >> so that's what it is. all right. yeah, you did. we didn't play together, but we did share one of those great onion rings together. >> absolutely. good to see you. >> good to see you. >> and when we come back, joseph's going to have some breaking economic news. we are minutes away from the read. take a look at equity futures at this hour. you are watching "squawk box" right here on cnbc. tokyo-style ramen noodles.

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let's take a look at stocks to watch this morning. drug maker mallinckrodt beating estimates. also beating forecasts on strength of double digit sales. that stock though right now down by just about a half a percent. given an upbeat earnings forecast. that does come ahead of scheduled meeting with analysts.

it expects to earn 9.30 to 9.60 a share. up 3.2% right now. thor industries reporting a buck 39. well above estimates of 123 towable trailers were strong. all right. we're just seconds away from a revision to third quarter gdp. what was it before? >> 2.9%. >> futures right now are indicated up 34. rick santelli standing by at the cme. the numbers, please. >> our second time around the block on third quarter gdp. an extra 0.3%. so 3.2% versus what joe just reiterated 2.9% was our first look. let's go through the internals. consumption important number. but we gained a bit. 2.8% versus 2.1%. if we look at the pricing index, 1.4% versus our last look at

1.5%. 1.7% on personal consumption expenditures. and that is unchanged from our last look. if we look at corporate profits, i think we ought to, right? preliminary q3 up 7.6%. that's a big reversal from the last look which was down just shy of 2% at down 1.9%. now, many are going to say a bit better than expected. you have to average everything in. we know that certain quarters borrow from other quarters. so it all levels out. many including our buddy peter boockvar. great respect for peter. had him on yesterday. it is an old number. but what are the dynamics of the current rally. what are the assumptions about how congress both being republican, the growth. but there is still the foundation of what we can measure. in that regard we don't know how it always worked.

the yield for tense. should we close in the 230s. it should be the time we settled between 2.30 and 2.36. last time we had such a consolidation in a tight closing yield range was august and part of september all in the 1.50s. these are building blocks likely leading to higher rates. we want to monitor that. it's also about the eighth day in a row the dollar index has closed over 1.01. also 200 basis points on the difference. these are all important distribution consolidation. most likely leading the more trend in the same direction. melissa lee, back to you. >> thank you. looking at the market reaction just quickly. we've lost a bit of steam before going into the numbers. we had been up four on the s&p 500. up three right now. so really minor here in terms of the 10-year yield we went up to 2.42% on the back of the numbers. what do you think? >> well, i think it's a better

mix of things as you look that the consumer spending was up versus the 2.1%. less inventory bill that creates a little bit more potential for the fourth quarter. people only care about this because of what it might mean for the future. business investment, though, revised lower from 1.2% to 0.1%. structure is higher but spending is down when you talk about potential in the gdp and what can be done nap is clearly an area that has lagged. housing investment better than the minus 6.2%. another area of potential gains. you guys were talking about potential gdp. thought i'd bring a couple charts along to talk about it. you're talking about 4% growth. i can tell you, guy, if you could get 1% above the current and many economists think that that is almost the outside of how much you can raise. we're talking about this. not the ability of the economy to hit a single number in a

quarter. but the ability to raise the potential growth of the economy through two things. the potential labor force is one. you can see that there. that's steadily come down. i've included the reagan years. you saw that pop up in potential. this is potential, joe. >> okay. okay. >> you can hit a number in there, but that's not going to change the overall potential growth of the economy. then if you go to the next chart, there's potential productivity built in there. and that's really been -- you see that bumped up in the reagan years. it's come down steadily since 2000. so if you're going to raise potential growth in the country, you've got to raise the labor force or the hours worked and you've got to raise productivity. that's why janet yellen said whatever you do, focus everything you're doing on the productive capacity of the economy. things like business investment. stan fisher mentioned education. these are things the fed -- >> what was third quarter last year? >> third quarter a year ago? can i have a second on that

question? i didn't know right off. >> 3.2%, are we going to have this crappy first quarter again? >> you don't know. we know that they've tried to change it in a way -- >> it'd be funny -- >> if we did it again. >> no. if we did 3.2% then we were off to the races above 3% again. that'd be weird. >> i don't think anybody believes that the potential growth has changed a whole lot. i think we're in this 1.5% to 2% economy. >> it might. >> and i think there's potential. and i think there's potential for this economy to do 1 percentage point better. i'm a little bit wary that you start to budget 4%. then you have deficits that go along with the spending but only get 3%. >> but we decided -- i have -- >> you figured it out? you got it. >> no, no. i've decided that watching japan for 20 years and watching how

hard it is to engender some inflation that i'm not as -- i used to be volcker. i lived through that. 21.5% or whatever it was. but now i think that we could even export a little inflation and help everyone else out. >> that a not a radical idea. the idea that if the u.s. does better, it might be a reason, by the way -- this is outside my area of expertise, whatever that actual area may be. small but melissa's area here. if the u.s. does better and the world does better are they selling emerging markets? >> yes. >> you like that idea? >> well, actually -- yeah. i mean, yes, but with some caveats. a stronger dollar is very difficult. but if the commodities demand picks up because of economic growth, then yes a lot of these -- yeah. >> and i have no doubt that you could loosen up some of the dodd/frank regulations, loosen up some of the business regulations. which by the way, ask your governors about this. it happens at the state level and federal level.

if you don't get the state levels to get along with this, it's going to limit how much potential growth. if you start investing in education and raise the productive capacity of the economy, we have to focus on this like a laser. didn't end up making people more productive. i just want to tell you to be able to ask these questions tomorrow to none other than robert kaplan. he's the dallas federal reserve chairman. unfortunately that's at 11:00 which is a very good show at 11:00 but he was not available to come on "squawk box." i have to apologize. >> do you do -- exercise bike we've ruled out. >> we have a treadmill already. >> i don't think you've ruled that out. >> i like the idea in the earlier to get you the present for her. i heard that earlier. >> that is what i do. but you gave ms. leisman a fly reel? >> no. for our anniversary went out to a nice restaurant and went to see "hamilton."

>> that's an excellent idea. >> experiences. ask courtney reagan. >> what would you do for the holidays? >> look, i have this -- >> a fishing trip. >> they all come up together. i got to do all these things. it's not fair. i wish i could do that. but it doesn't work that way. >> your wife agrees to celebrate the anniversary? >> yeah. at least she puts on a good face. >> he's celebrating. >> at least she puts on a good face. >> all right. steve, thank you. >> yeah. thanks very much. >> you wore a red velvet thing on friday. >> did you see that? >> i heard about it. >> i was told it was a good look and i was told it was a terrible look. >> i heard about it. >> terry lundgren sent it from macy's. i didn't know it was hip. did you know it was in? remember what george on "seinfeld" said about velvet? he wants to be ensconced in velvet. remember that? >> yeah. >> which i had to give back

according to our conflict of interest rules. look andrew's waving. >> andrew joins us with a special guest in washington. >> i'm going to try to find a trinket in washington for you. so you got to think about what you want. >> a little donkey pin. >> i'll bring you that. >> you got a bunch of those anyway. >> i'm sorry. all morning we've been focusing on the trump transition, how it might impact the economy. one of the issues he promised to tackle is health care. to head the department of health and human services. for more on the future of health care and so much more, i'm joined by wyoming senator. you were in wyoming over the weekend. but in afghanistan for thanksgiving. >> thanksgiving with the troops. the wyoming national guard. we have our army national guard there. had a chance to visit with them, talk about what's happening

there. it was terrific to be with the troops and thank them. we want to make sure they have everything they need. they do and they miss their families. >> that's an amazing thing you do. eighth time you've been there. >> yeah. >> let's talk about health care and what you think can happen over the next hundred days and how it's going to impact the health care industry originally when donald trump was first elected health care stocks shot to the moon. then they've come back a bit. there's concern where it's going to shake out. >> number one is tom price has been nominated to be secretary of health and human service. tom price, a doctor who took care of patients for long periods of time versus who barack obama chose and when he put someone in and it was a lobbyist for the lawyers. so the contrast is huge. i want to congratulate donald trump on that decision. tom price knows how to do this from the standpoint of patience. he's going to go through

regulations alone help patients and try to relieve this huge burden that's been put on people all around the country. so he's going to be terrific. in terms of legislatively, we have a way to do the repeal which includes some replacement but not a full replacement immediately. we put on the president's desk last year through reconciliation, we only needed 51 votes. the republicans were able to do that. the way to repeal the health care law to try to get rid of the burden and president obama vetoed it. >> in terms of the timing, do you think you will actually have something to put on his desk on day one? >> we could potentially do that. we're going to work on a budget. you have to pass a budget first as part of this process. but it's the way to give relief to families struggling under the burdens of the expenses of the health care law. we want to make sure families are going to be able to buy insurance that works for them that's affordable and that really is families making decisions, not the government making decisions for them. >> and what do you think the transition period looks like?

>> what we put on the president's desk last year had a two-year transition. people's lives have been disrupted enough by president obama's obamacare legislation. we want to make sure it's a smooth transition with enough time so that markets aren't shaken by this in terms of making sure that people can actually get insurance. but what's happened over the last six years with health insurance, this isn't -- >> that's what i'm asking in practice. how do you make sure that people who have conditions, for example, that they are covered? how does that -- what's the mechanism that you see happening here? >> because obamacare's made it harder in some cases because states like mine we have a high risk pool. people with pre-existing conditions to keep the insurance they have. but so many people have been gaming the system under obamacare. we need to make sure that it's a fair level playing field for people. but you want to take care of people with pre-existing conditions. my wife's a breast cancer survivor. bobby's had three operations. as a doctor and a husband i know

how important it is for people with pre-existing conditions to continue to get care, have affordable insurance. but we also want to make sure younger people are able to be insured in ways that the costs are the right costs for them. so many of them are just opted out because it's much too expensive for them under the way this scheme that president obama put in place. >> one other topic i wanted to ask about, infrastructure spending. because we were talking off air about the different factions within the republican party. and how it's all going to play out. it's not one single block, if you will. how do you see the spending issue, if you will? >> that's the issue is how do you pa pay for this, who pays for it over a period of time. a public works committee that has a lot of involvement with infrastructure. and i think what donald trump has proposed in infrastructure is very important. it's also expensive. and the question is can we use money brought back from overseas with tax reform and how does

that play into the funding of this? there's lots of people on the hill who are concerned about the size of the debt, the issues related to that. and we want to make sure that it's responsible in the ways that what we pay for some of the infrastructure projects that donald trump has talked about. >> senator, great to see you. appreciate having you this morning. >> thank you. >> guys, when we come back, 'tis the season for shopping but can big box retailers keep up with the likes of amazon? we'll sit down with former jcpenney chairman allen questrom. that's next on "squawk box" here on cnbc.

welcome back to "squawk box." shares of tiffany rising this morning after the luxury goods retailer beat on the streets on the top and bottom lines. joining us now to talk about the consumer, allen questrom. always great to speak with you. >> great to be with you. how are you? >> i'm good. thanks for asking. given the new regime we're going to have come january in the possibility of corporate as well as personal tax cuts, i wonder if it's going to be a much better environment for the consumer overall. >> i believe it is. you could pick and choose what you like as president. but i like someone who has an idea of business. our country falls around business practices where you create jobs and create ideas. i think because he is a businessman, i believe he is a

pragmatic. he may not get all the ones everybody wants, but i think he really does want to see jobs created. you have to have demand in the marketplace. that causes wages to go up. it's not minimum wages. it's wages because you have more demand than there are people to fill them. i feel positive about him. i don't think he wants to go down as a loser because he's got a big ego. i feel very good. and i think right after the election, i think you saw people feel better. i think you'll start to see people. also saying that, i think the key to this holiday season for everybody is if we have a cold winter. because that's clearly what we didn't have last year. i think that would be very helpful. particularly for selling sweaters and coats. and coats this year are very much in fashion. >> all of those positive factors for the consumer which could create more money in people's pockets. i wonder if that is enough to offset the decline we've seen in the department store space. is that going to be enough to sort of throw a lifeline at the

struggling retailers? >> well, i think it's broad based but i think the internet has certainly been a major issue in terms of people how to deal with it. i think the other issue that department stores have to deal with is how to deal with the millennial and the why customer. this is a situation where many of our department stores have lived with a baby boomer. and their aspirations are different than what this customer is. they need to understand the millennial needs inspiration, not aspiration. they come from a whole different era. and i think many of the department stores have failed that. i also think many of the department stores have put too much emphasis on sale. sale cannot be the only driver. it has to be part of it. but product presentation, excitement in the stores, salespeople in terms of servicing the customer. i also say the department stores have to look at their objectives in terms of profitability. i think their objectives were set back before the internet and when you're dealing with internet players, they work at a

totally different margin. i believe that the margins and profit rates have to come down in order to compete effectively. you can't keep taking expense out of the stores, taking the salespeople and the people who take care of the stores and customers, can't take them out. >> i would imagine you walk the floors on black friday over this weekend. >> i walk the floors every week. >> you might be retired, but you haven't stopped shopping. >> i love to walk the floors. >> sales can't be the primary t driver. that to me seemed like what was a primary driver for black friday, 50% off the entire store. 30% off the entire store. >> the sale has become a cantor. when business gets tough, you add another sale. then you run out of days and discounts. there are people don't well in the bricks and mortar not always on sale. >> who? >> you look at the fast fashions, zarras. they're not building on sale. that doesn't mean you can't have

sales. you have to have the right fashions which is a lack of this year, and you have to be able to do it quickly and timely. it is one of the best examples. it's not -- they have very little internet business and business is well. h & m is doing well. look at tj maxx. costco is another store that's not doing a big deal. now those people who only have been an outgoing bricks and mortar and parkers and those are the people who have seen the importance of doing it. amazon sees for them to continue to grow, they need to be able to have a visual, personal space which is a store. i think stores will always be around. i think they'll always be the majority of the business, but the retailers of the past have to understand how to utilize it. they have to understand who their customer is today. it's different than it was 10, 20 years ago. >> allen, pleasure. >> nice to be a with you.

velvet is in. >> velvet's in, joe. >> is it ever out? >> it does, but it's now in. you look like you're in, which is unusual for you all. >> velvet boxers might be -- >> with the velvet on the inside. >> not a velvet tie, but a velvet jacket. >> okay. all right. thank you. have a good day. >> good see you. 1983, '84 it was 7.26. that was '84. guess '83. 4.63. >> how about '85, 4.24 and tax reform in '86, it was 3.5. it fell off. american express open cards can help you take on a new job, or fill a big order

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the new york stock exchange, we are going to talk stocks. the bengals are favored, are you kidding me? the bengals are favored? >> take the bengal ts. take the bengals. >> no way. you're in last place at 5-6. they're 3-7. >> against cleveland. >> i don't know, we're injured. we're brutal. we're tough to watch. i don't know.

>> stick with them. i have already transitioned to hoops and xavier. >> good idea. you can't -- if you watch the crawl underneath, philadelphia, the second team, and it's always a lower score. i can't look at the tape. i mean, advanced goes by and then et sixers. >> what else is going on, jim? how are we making money today? >> this oil deal. i still don't think it's happening, but there's always some minister that says it's going to happen. they're not for me. i continue to like the banks. >> banks. >> banks, it is. >> okay, man. bengals. >> take the bengals. >> i would never. i would never. i've learned. didn't you watch last week? i saw the last two minutes. turned it on and go watch this. see what andy dalton, immediately true. >> you're our sister city. >> we'll see you at the top of the hour. later this morning, don't miss "new york times" ceo.

10:30 eastern. stay tuned. we'll be right back.

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of gains. we have four. 26 now on the dow. s&p up 163, and the nasdaq up 3.5 points. so there's oil which is down now, 3.5%. just tim talked about it. you know what, you figured out what to get me for christmas. >> i thought you meant your birthday, january 6th. >> either way, combine them. >> okay, i'm going to get you a new pinky ring. >> get me a pinky ring. >> with if you can, with a diamond. make sure you. >> reporter: love that. >> don't do it, kidding. >> join us tomorrow, "squawk on the street" is next. good tuesday morning, welcome to "squawk on the street." i'm here at the new york stock exchange. coming off the worst day as the trump effect now transitions to the opec effect. futures are steady.

europe is mixed. the tenure remains in the tight range. although q 3 gdp on good consumption and home