we're also hearing that saudi arabia is cutting orders to customers. it's raising prices in an effort to continue to implement the opec pact as it moves forward. remember, you have a dollar index backing off today post fed minutes as well, dollar index at about 1.0150, supportive of crude prices, too. all of these elements are lifting us higher. the dow is lower but mixed action in energy stocks. halliburton and philips 66 is trading a little higher. at this point, crude trading $53.57. just waiting for the number to come out from the d.o. looks like it's down 7.50 million barrels, almost in line with the api from last night. you can see we're slightly off since i started this report but still supported here. carl, let's get over to you and "squawk alley." >> jackie deangelis, thank you. it is 8:00 a.m. at ces in las vegas, 11:00 a.m. on wall street, and "squawk alley" is live.

♪ good thursday morning. welcome to "squawk alley." carl quintanilla with kayla tausche at post 9. our jon fortt live at the consumer electronics show in las vegas. a lot to come from jon later on this hour. joining us at post 9 this morning, elevation partner co-founder roger mcnamee and jonathan, barclays head of u.s. equity strategy research. good morning to you both. big story is the senate hearing under way this hour on capitol hill, top intelligence officials facing questions primarily centered on russia's purported hacking of the u.s. presidential

election. senators john mccain, elizabeth warren, tim kaine among the committee members. eamon javers has been watching this all morning long. fascinating headlines. good morning, eamon. >> reporter: good morning, carl. there is an enormous elephant in the room here, and that is this classified intelligence community report on alleged russian hacking of the u.s. election. we know that that report has been delivered to president barack obama and he's had an opportunity to review it today. we're also told that the members of the committee, members of congress will get a briefing on that at some point in the coming days, and donald trump himself will be briefed on it tomorrow. the problem here for the intelligence community members who are testifying today is that they have not released the report yet, so they are very circumspect about what they can say about what's in it. what we do know is that they say they will ascribe a motive to vladimir putin for alleged russian hacking of the united states in this. and there's also been this really interesting moment here between the director of national intelligence, james clapper, and

john mccain, who is chairing the committee. john mccain suggested that no one here is saying that russian hacking switched the results of the election. director clapper appeared to push back a little bit on that by suggesting that that's simply an unknowable thing, despite mccain's suggestion that, in fact, it was knowable that it didn't swing the results of the election. here's clapper part of that exchange. >> did not change any vote tallies or anything of that sort -- >> yeah, i'm just talking about -- >> we have no way of gauging the impact that -- certainly, the intelligence community can't gauge the impact it had on choices that the electorate made. there's no way for us to gauge that. whether or not that constitutes an act of war i think is a very heavy policy call that i don't believe the intelligence community should make, but it certainly would carry, in my

view, great gravity. >> reporter: john mccain making it clear what his own feelings on all of this are. here's what he said to open up the hearing. >> every american should be alarmed by russia's attacks on our nation. there is no national security interest more vital to the united states of america than the ability to hold free and fair elections without foreign interference. >> reporter: guys, one of the things that we learned about this classified report is that there will be an unclassified version of it that will be released next week, so all of the citizens of the united states will have an opportunity to gauge what's in this report and decide what to make of it. back over to you guys. >> eamon, thank you for that. eamon javers on capitol hill. roger, this is a tough one, because there's so much politics int intertwined with real implications for business -- >> huge. >> -- that are going to last for decades. >> actually, carl, i think it's been going on for a decade already. i mean, i think having it focused in the political arena has got everybody's attention on

a problem that has been plaguing us in business, and frankly, i think it's a huge national security threat. if you sit there and look at cybercrime, it is now a gigantic busine business, and the internet is not architected to prevent that kind of stuff, and we have not had any national policy for addressing what has been an increasingly large, increasingly dangerous problem that's now tipped over into our political system. so, hopefully now we will get a national consensus, but one of our problems is that most of the elected officials in our government are not even remote experts, right? i mean, our president-elect is talking about effectively using flight couriers to send things around because in theory, that's more secure than e-mail. and i'm sitting here going, seriously, we need to get some adults in the room and really take this seriously, because you know, we have real challenges to the economy if these

vulnerabilities cannot to be exploited at the rate they've been exploited in the past. >> well, it seems somewhat ironic, too, because on the one hand earlier this year you had the government saying apps like telegram and end-to-end encryption were like carrying a swiss bank account in your pocket. but now once their information is out there, of course, their supporters and proponents of encryption, of some of these newer technologies to help keep some of that information out of the public eye. >> and i think the scary part of this is a lot of this crime happens without the victims being aware of it. you know, much as what happened with wells fargo and creating fake bank accounts, that it's relatively easy to cover your tracks in this world, and they can drip money out of accounts so people barely notice it. and i just -- i look at this and go, i think it is such a good thing that we're having this conversation now. i don't know how it's going to turn out relative to the political side, but it's really clear to me that we need to make this a national priority. there is no point in building, you know, new aircraft carriers and new submarines if for

$10,000 somebody can bring our electrical grid to its knees. and that's the problem. it's the asymmetry, the fact that it costs very little to do huge harm. >> all right. i mean, theoretically, you could make a case that there is a hidden liability, a black swan liability, for markets, right? not just u.s. equities, global equities, if something were to go terribly wrong, jonathan. >> i think that's absolutely the case, and it's something that everybody should have on their radar. but i would argue it's certainly not a priority right now in terms of where the markets are going. i think there are some very important themes and trends driving the equity market right now, cyber policy not being one of them, but earnings absolutely being critically important. we are on the precipice of a real earnings recovery for the s&p 500. we're calling for earnings growth of at least 7% in 2017, and perhaps as high as 12%, if tax cuts come through, which is going to be some of the best earnings growth you've seen in years. and we think that is what's

really going to propel stocks higher going forward. >> contingent on what getting done? and do hearings like this detract from the focus on those things? >> i don't think so. the 7% eps growth is supported just by the momentum we have currently in the economy. >> absent new policy? >> absent any policy changes. and that's what we've kept as our base case right now, because we don't know for sure that these policy changes are coming through. so, the way i think you should think about it is you have 7% growth in earnings if nothing happens. if you do get tax policy change, your upside is as high as 12%, and that could drive the market to a significantly higher level over the course of this year. >> that's an interesting point, roger, because especially in tech there's been this growth versus value debate going on for some time, and it really depends on how much you believe any given company in that space, regardless of whether it's a growth stock or a value stock, will benefit from the things that jonathan's talking about. >> well, and i think the other challenge that everyone faces in

this environment is that we have come to see, partly because of the election process, that large corporations are now competing with countries, you know, so that you've got these issues where, you know, exxon is conducting its own foreign policy, sometimes in conflict with the state department's policy. and so, you see in europe antitrust measures being brought to bear against some companies in this. and it seems to me that the fly in the ointment globally is that there are going to be countries that want to assert themselves against large businesses. china's been doing it aggressively. we see apple today pulling "the new york times" app due to pressure from the chinese government. and i think this conflict between states and large enterprises is something we're going to see a lot more of in '17, and it may not get in the way of the earnings story, but i'll bet you anything it gets in the way of people's outlook beyond 2017. >> you mentioned -- we mentioned apple. the company is confirming a new $1 billion investment with

softbank's vision fund, working to develop new strategically important technologies for the future. and then of course, as roger said, that request from chinese authorities -- apple's removing "the new york times" app from its app store in china. authorities there say the app was in violation of local regulations. the "times" website has been blocked in china since 2012. are you surprised by that at all? >> no, but i do think we have to look at the pattern of what's going on here, that countries are less tolerant of business practices than they have been for the last ten years, and it's not just europe. you know, china's obviously very active there. the russians are very active there. and apparently, trump is going to be very active there. and i look at that and i go, you know, no matter what the next 12 months will going to be, people are going to be discounting a future beyond that. and to the extent that something that feels like a substitute for antitrust enforcement against large enterprises, or at least restrictions on the flexibility

of large enterprises to do their business, that seems to be a risk that we weren't looking at a year ago that looks to me at least, a lot more serious than it did. >> but companies do seem to be willing to do that in order to operate in china because of the population, because of the economy there. >> absolutely. but i think that the problem is, you've got to please china, you've got to please the united states, you've got to please europe, you've got to please russia. and my guess is, if you're a global company, one of those things isn't going to work out for you, and some market may not be as available to you as you'd like it to be. again, i view that as a risk, not as -- you know, it's a hypothesis as opposed to a conclusion. >> jonathan, softbank announcing it would create this fund a few weeks ago. it was reported that apple would be contributing to it. i would like to know where that fund is domicile, because apple has some $200 billion in overseas cash and some have said this morning that maybe this is a creative way for apple to invest or put some of that cash to use ahead of any potential tax holiday or repatriation policy.

i mean, do you think we're going to see companies pursue overseas mergers, pursue more creative investment vehicles, rather than just counting on all that money coming back to this country? >> i think you're bringing up an important point with all this offshore cash. the way we've thought about it is what does it mean for the potential for buyback activity in the market this year? so, we've had this call that the big growth you've gotten in corporate buybacks has run its course, and that's largely because companies have taken on too much leverage and they need to stop levering up. but the wild card in it is what if you do get a repatriation holiday? and like you mentioned the $200 billion that apple has and the $2 trillion that exists across the s&p 500, comes back onshore. do companies take that money and use it to repurchase shares, driving buybacks higher and potentially driving the market higher? i think that's a big wild card this year. like you mentioned, companies can get creative with that money, but do they get the opportunity to bring it back onshore? and if so, what do they spend it

on? i think buybacks are near the top of the list. >> but you know, i look at that whole issue and i do not understand why if you're a global enterprise bringing money back into the united states is that attractive. and you know, if i'm apple, if i'm any large american enterprise, at the margin, my big-business opportunities are outside of the united states. so i agree that for political purposes people will cooperate with that to some degree, and there's practically nothing else to do but buy your stock back. but i look at that and i suspect that that is one of those things that we're going to talk a lot about, but when the dust settles, it's going to turn out to be a smaller deal because the people with the huge pools of capital are mostly tech companies who don't have a good reinvestment opportunity in the united states. and so, we'll see what happens, but i'll tell you, in my own sector, their opportunities are not to pile the money into the u.s. yeah, apple builds a plant here, whoop-de-doo. the money they're putting into the softbank deal is like the

change they found in between the cushions of tim cook's couch in his office, right? it just doesn't move the needle. so, it will be fascinating to see, but there surely are a lot of banana republicans who are counting on capital being repatriated to the united states to trigger some kind of positive thing, and i'm sitting there going, if you're the company, okay, so you bring enough back to please the politicians, but i don't get it. >> yeah. that's a big discussion, not just in tech. i mean, questions were asked about ford's long-term innovations, too. >> and all of this stuff, it's nuts what's going on right now, because everybody's doing this kabuki trying to figure out what trump really believes, right? and i think he's shown you, right? which is, if you're in business with him, he loves you. and if you're not in business with him, well, your choice is either do business with him or get out of the way, right? and i look at that and i go, wow, that's banana republicanism and that's apparently where we are now. >> we're going to find out beginning in about 15 days. roger, it's always good to see

you, thanks. roger mcnamee, jonathan giliana. we had jackie give us crude inventory numbers. turned negative briefly after the numbers came out. we'll watch that and how it drives the rest of the market day. kayla? we're continuing to monitor developments on capitol hill, but another story that's above the fold this morning, shares of macy's and kohl's getting hit hard, both reporting dismal holiday results as e-commerce giants like amazon continue to grow market share. our courtney reagan is on site outside one macy's in elmhurst, new york, with more. courtney, they told us a month ago they were perfectly positioned for the holidays. >> reporter: i know. that is true. and we only got more gloomy news out of the department store sector from macy's and kohl's, but that doesn't mean the consumers are spending less in general. they just spent less at macy's and kohl's stores over the holiday season. so, for november and december, both macy's and kohl's said that their comparable sales fell more than 2%, leading both retailers

to lower their full-year earnings forecast for this year. and macy's expects that that same-store sales trend will continue through 2017. the consumer, though, is strong by most economic and financial measures. shoppers are spending less in stores and more online. barnes & noble's holiday comps fell 9% but online grew 2%. adobe, in fact, just out with new data saying online sales in total for the holidays grew more than 11%, almost $92 billion. that's stronger than adobe's initial estimate. macy's online sales also up double digits and the ceo reiterated to me that macy's has the third highest sales in the categories that it competes in online. still, macy's online sales aren't enough to offset the weakness in the stores as a total. and remember, online sales also come at a higher margin. then if you look at amazon,

slice intelligence, which scans e-mail receipts of more than 4 million, says that amazon took 38% of all online sales over the holiday season. that is very impressive and it's going to be very, very hard for retailers to compete with going forward. they're only getting bigger. back over to you. >> all right, courtney. thank you very much, courtney reagan. when we come back, we'll continue to monitor developments of the cyber threat hearing on capitol hill. a lot more from the armed services committee. plus, house speaker paul ryan delivers his weekly press briefing in about 15 minutes. we'll bring that to you live. later on, a lot more from ces with our own jon fortt. dow session lows down 76 shortly after those oil inventory numbers. we're back in a minute.

ford scrapping plans for a $1.6 billion plant in mexico just one day after the president-elect criticized gm for importing mexican-made vehicles into the u.s. joining us now for his take is former gm vice chairman and cnbc

contributor bob lutz. bob, it's great to see you. >> good to be here. thanks. >> so, we have ford appeasing the president-elect. meanwhile, gm pushing back and saying most of its chevy cruze models are actually made in the u.s. why the difference in approaches? >> well, i don't know what prompted this, you know, sort of somewhat inexplicable attack on gm, because the percentage of cruzes that come back out of mexico is like 2% of total cruze production. but i think this whole focus on where the economic automobile industry is sourcing parts and cars misses the main point. and the main point is, yes, imports are a problem! yes, imports have more than 50% or close to 60% of the u.s. market and continually increasing. but why this focus on the three remaining u.s., or in chrysler's

case, semi-u.s. producer, when nobody is talking about toyota, nissan, honda and all of the european brands? i mean, that is where ownership is outside the united states, a lot of the engineering and design is outside the united states, the profitability flows out of the united states. and you know, to my chagrin, the president-elect isn't talking about that at all. >> but interestingly, and you know, for those of us who remember the financial crisis and the bailouts, i mean, the taxpayers still remember that. they know that they paid toward those bailouts. the feeling and the wound is still open. but bob, you mentioned parts. and what i think is interesting is that the market to import parts is so much bigger than the imports of whole vehicles that we do, and i'm wondering why you don't think that that's the industry that's getting targeted, instead of whole automobiles? >> well, look, automotive trade

today is a very global proposition. i mean, the japanese source a lot of parts to china, to mexico, and all over the place in an effort to get the best possible parts at the lowest cost. u.s. producers do the same thing. and if you want to kind of totally renationalize the automobile industry, it would take a considerable effort, and it would be a logistical nightmare, which would take at least three years to complete. but i want to say one thing, and that is that a chevrolet cruze that is assembled in mexico with a high percentage of u.s. parts, like engines and transmissions -- by the time you've shipped all of that stuff down there, assembled it with mexican labor, which arguably is a little bit less expensive than u.s. labor, but not that much. besides, the labor component

today in an assembly plant is only about 11% of the total cost. so by the time you've got it assembled in mexico, put it back on the rail cars and ship it back to the united states, you really haven't saved anything. now, about ford canceling that plant, that was kind of interesting, but that was sleeves under their vest. i mean, ford was probably, with the state of the demand for small cars in the north american market right now, which is, you know, the demand for small cars has basically evaporated, i'm sure ford was telling themselves, you know what, this might be a really good opportunity to back out of that commitment, because we don't need another plant producing small cars. >> it's funny you say that, because some suggested that when you think about long-term mobility, shared riding, all of those things, if they really needed that capacity, bob, they probably would have kept it. >> yeah. i don't think they needed that capacity at all.

so, it was politically expedient to say, you know, we bow to the wishes of the president-elect and we're going to cancel that plant in mexico. >> i wonder, bob -- phil lebeau was talking about this this week. he was thinking back to an auto show maybe ten years ago. i think it was under your leadership, in which trump was selling a limo. was it not a limo, a trump-branded limlimo? >> yeah. he worked with cadillac marketing at some point to create what was called i think the trump executive limousine, and it was trump badged and it had an extended wheel base and a large video screen and everything. i think three were produced and sold, and i would not be surprised if they didn't all wind up somewhere in the trump organization. >> this is -- i don't know if you have a monitor, bob, but this is a picture of you and trump, 2006. i just wonder, does it say anything smart about trump's allegiance to brands or how to

stay or get on his good side and remain there? >> well, i will tell you, i think trump is a lifelong cadillac fan. he grew up with cadillacs. his father always drove cadillacs. and he is a loyal cadillac driver, owner and supporter. and for instance, cadillac advertised on "the apprentice" and so forth. it was sort of an informal contract or informal relationship. i don't think any money passed hands either way. but it wasn't a very deep relationship. it was between donald trump and the cadillac marketing people, which is sort of, you know, midlevel in the gm organization. i would imagine that to avoid the appearances of favoritism, president-elect trump felt the need to make a comment about general motors or about the imported cruze hatchbacks. and you know, it's conceivable,

conceivable, and i'm not accusing anybody, but it's conceivable that one of our competitors said, why are you picking on us all the time? why don't you ever say anything about general motors? and maybe he decided he'd better do a general motors tweet. >> well, bob, i'm wondering just quickly before we go what advice you would have for folks in the public affairs roles at automakers, at industrial companies, at government contractors who are getting a new education these days? >> who are what? >> who are getting a new education under the way that the president-elect is dealing with industry. >> well, i think he's saying a lot, putting a lot of pressure on this trade issue, which is fulfilling what he sees as an election promise, but i think once somebody has -- and that's why i think this business forum on which mary barra, the ceo of gm, will also be a member --

once that starts meeting with the president and his staff, i think he'll become much more knowledgeable and much more understanding on the benefits of nafta. now, portions of nafta have to be fixed, without question. >> right. >> but the point is, nafta and the connection with mexico does help the u.s. automobile business preserve jobs in the face of the japanese and korean innovation. >> that's an important point and it's one that we'll leave on today. bob lutz, former vice chairman of gm, we appreciate it. we want to take you back to the senate armed service committee and listen in to senator graham. >> in our election and what they're doing throughout the world and be more aggressive than president obama if i chose to. >> that's your choice, senator. >> do you think he was justified in imposing new sanctions based on what russia did? >> i do. >> okay. so, to those of you who want to throw rocks, you're going to get a chance here soon. and if we don't throw rocks,

we're going to make a huge mistake. admiral rogers, is this going to stop until we make the cost higher? >> we have got to change the dynamic here because we're on the wrong end of the cost equation. >> yeah, you got that right. could it be republicans next election? >> this is not about parties per se. >> it's not like we're so much better at cybersecurity than democrats. >> right. >> now, i don't know what putin was up to, but i don't remember anything about trump in the election. now, if trump goes after the iranians, which i hope he will, are they capable of doing this? >> they clearly have a range of cyber capability, and they have been willing to go offensively -- both we've seen that in the united states and the one -- >> so, if trump takes home china, which i hope he will, are they capable of doing this? >> yes. >> okay. so, we've got a chance as a nation to lay down a marker for all would-be adversaries. do you agree with that? >> yes, and i'd be the first to acknowledge we need to think about this broadly. >> and we should take that opportunity before it's too

late. >> yes, sir. >> do you agree with me that the foundation of democracy is political parties? and when one political party's compromised, all of us are compromised? >> yes, sir. >> all right. now, as to what to do. you say you think this was approved at the highest level of government in russia, generally speaking. is that right? >> that's what we said. >> okay. who's the highest level of government? >> well, the highest is president putin. >> do you think a lot happens in russia big that he doesn't know about? >> not very many. >> yeah, i don't think so either. >> certainly none that are politically sensitive in another country. >> okay. now, as we go forward and try to deter this behavior, we're going to need your support now and in the future. so i want to let the president-elect know that it's okay to challenge the intel. you're absolutely right to want to do so. but what i don't want you to do is undermine those who are serving our nation in this arena

until you're absolutely sure they need to be undermined. and i think they need to be upli uplifted, not undermined. north korea. let me give an example of real-world stuff that he's going to have to deal with -- trump. do you believe that north korea is trying to develop an icbm to hit the united states? could be used to hit the united states? >> that could be, yes. >> do you agree with that, admiral rogers? >> yes. >> so, when the north korean leader says that they're close to getting icbm, he's probably in the realm of truth? >> he's certainly working aggressively to do that. >> and if the president of the united states says it won't happen, he's going to have to come to y'all to figure out how far along they are, because you would be his source for how far along they are. is that right? >> i hope we'd be. >> i hope we'd be the source. >> yeah, i hope he'd talk to you, too. and here's what i hope he realiz realizes, that if he has to take action against north korea, which he may have to do, i intend to support him, but he

needs to explain to the american people why. and one of the explanations he'll give is based on what i was told by the people who are in the fight. and let me tell you this, you don't wear uniforms, but you're in the fight. and we're in a fight for our lives. i just got back from the baltics, ukraine and georgia. if you think it's bad here, you ought to go there. so, ladies and gentlemen, it is time now not to throw pebbles but to throw rocks. i wish we were not here. if it were up to me, we would all live in peace, but putin's up to no good and he'd better be stopped. and mr. president-elect, when you listen to these people, you can be skeptical, but understand, they're the best among us and they're trying to protect us. thank you all. >> would you have any response to that diatribe?

>> microphone. >> senator graham and i have had our innings before, but i find myself in complete agreement with what he just said and i appreciate it. >> thank you. >> senator -- chairman mccain, if i might just pick up on a comment of yours, and that has to do with the information fight, if you will. and this is strictly personal opinion, not company policy, but i do think that we could do with having a usia on steroids -- united states information agency -- to fight this information war a lot more aggressively than i think we're doing right now. >> you know, i agree, general. and i think one of the areas where we're lacking and lagging more than any other area is social media. we know these young people in the baltics are the same as

young people here. they get their information off the internet. and we have really lagged behind there. senator gillibrand. >> thank you, mr. chairman and mr. ranking member for hosting this very important hearing. i want to follow on some of the questioning that senator ernst started concerning the national guard and cyber. i have been pushing dod to use the guard foree years -- >> going to take you across the hill here to speaker ryan, addressing, we hope, perhaps some cyber issues or aca. let's listen in. >> do you view this as kind of like, okay, this is the first, you know, potential break on this? how are you going to combat those inevitable types of breaks when they come from senator paul or people in your own conference here? >> i'm really not concerned about this. this is a repeal resolution. our members fully understand that. we've been planning for this for quite some time, and our members realize that. the full budget resolution, the

traditional budget resolution, will occur this fall, like it always does. and our members understand this process. >> you're going to have folks say i can't go for this, i can't go for that. how do you -- >> again -- >> i know you don't want to dictate. >> no, again, i believe our members know exactly why we're doing what we're doing. and this is a repeal resolution, meant to give us the reconciliation instructions we need to do our job to keep our promise. our members get that. and they realize that a more comprehensive, complete budget will be coming in the fall, like it always does per the way our budget process works. casey? >> do you have full faith in the united states intelligence community? >> well, they don't always get everything right. we've seen that, clearly. but i do have faith that our men and women in our intelligence community are doing an incredible job sacrificing for our country, but there's always room for improvement. look, we overhauled this about a decade ago, after 9/11, when we realized the intelligence community wasn't getting things right. so clearly there is room for improvement. >> do you have any doubts about their assessment in russia

meddling in the united states? >> no, russia clearly tried to meddle in our political system. no two ways about it. let me say a couple of things. first of all -- and i think this is what the president-elect is legitimately upset about -- there are attempts to try to delegitimize this election. that's just bogus. he won fair and square. he won clearly and convincingly. russia didn't tell hillary clinton not to go to wisconsin or michigan. they didn't put the server in her basement or put this stuff on anthony weiner's laptop. he won the election fair and square, clearly and convincingly, okay? now, having said that, do we ever condone any foreign actor, any outside interference from trying to mess with our elections? of course not! we've been saying this all along. but let's just put this in the proper perspective. and that is, let's deny those who are trying to delegitimize the presidency before it starts while doing what we need to do to make sure going forward that outside actors don't interfere with our political system. >> but doesn't it --

>> i'm not going to call on you. josh. >> in -- >> penalty box, man. >> 2009 process that did aca, democrats used reconciliation. you railed against it. republicans had the talking point that it was jamming things down americans' throat. "a," you guys are using it this time, so how do you square that? and "b," the fact that you have two budget resolutions, including one whose numbers are worse than obama's budget last year, and two reconciliation bites. does that signal a deterioration in the institutional legitimacy? >> not at all. >> of the budget? >> i actually think we should do reconciliation each and every year. i'm excited the fact that we're getting a shot at doing two -- we're going to be doing two reconciliations this year. that's a revival of the budget process, if anything. what i've been concerned about in the past is when we go a year or two without doing any reconciliation. so, doing reconciliation frequently is exactly what we

should be doing and is exactly one of the better aspects of the '74 budget act. with respect to what they did when they passed obamacare -- we ran on what we're going to replace obamacare with. we made it really clear to the people of this country what we want to replace obamacare with. but let's take a step back. this law is hurting people right now. i mean, look at these premium increases. this year, arizona, 116% increase in premiums. tennessee, 63% increase in premiums. oklahoma, 69% increase in premiums. illinois, 43% increase in premiums. north carolina, 40% increase in premiums. nebraska, 51%. pennsylvania, 53%. these aren't statistics, these are real lives! these are real families facing huge premium increases. and on top of this, you've got a massive deductible, so it doesn't even feel like you have insurance in the first place.

so, i think what's happening now are democrats, for ideological reasons, are trying to save their failing law, which was an ideological pursuit. the law isn't working. it is failing. it's nothing but a string of broken promises. remember, if you like your plan, you can keep it? if you like your doctor, you can keep it? it's going to lower costs? it did none of those things! but what's worse than the fact that obamacare is a series of broken promises that have been thoroughly debunked is this law is what the actuaries call a death spiral. plans are pulling out. about a third of the counties in this country have only one choice. that's not choice, that's a monopoly. so, the law is failing. families who live paycheck to paycheck are getting hit with double-digit premium increase after double-digit premium increase with massive deductible increases. we have to provide relief. we have to step in front of this

chaos and provide relief for people. that is why we're moving to fix this problem. our goal here is to improve people's lives, is to have a health care system that actually works. it's to have a health care system where families actually have more choices, where they have freedom, where they can have more competition and lower prices. and so, this is why we're doing this. stop the damage from getting worse, because it is getting worse. all the insurers tell us it's going to be even worse in 2017. and what is important to know -- and i think the scare tactics started with the democrats yesterday -- i think they're trying to make americans think, like, some day this february or some day this march you're going wake up and you won't have a health insurance plan. that ain't happening. that's not true. what we're doing is we're going to be methodical, we're going to be deliberative, and we're going to do this the right way. we're going to get this law epeeled. we're going to get this law replaced. and we're going to have a transition period so that people do not have the rug pulled out from underneath them while we get to a better place.

obamacare has failed, is getting worse, and we have to provide relief, and we will have a transition period so that people don't get hurt. >> but if you're going to argue it's a failure, don't you also have to deal with the record-low numbers of uninsured as well as the lower -- >> we can do a much better job -- look -- >> cdo has said it's coming down. >> i said -- if your deductible is $12,000, doesn't feel like you have insurance. if you don't have a choice other than the one plan you're stuck with, it doesn't feel like a choice. this law is failing and we have to fix it. yeah. >> mr. speaker, switching gears here, there is a controversial painting that was chosen by congressman clay that has to do with portraying police officers as pigs. and you were called upon by several police associations, your letter -- i don't know if you got it yet, to -- >> i haven't seen it yet. >> well, essentially, they want to know whether or not --

>> where is this painting? >> it's over in the tunnel outside. >> i'll have to take a look. oh, you mean the one of the kid -- >> exactly. >> i haven't seen it. i'll have to take a look at it. >> they're calling on you to have some response to it. >> i haven't seen the letter. allow me to look at the letter and see it. jake. >> do you believe that you'll be able to insure as many people as currently insured under -- >> look, i'm not going to get ahead of our committee process. we're just beginning to put this together. we haven't even gotten scores from cdo yet on these things. but let me say this, can we in this country have a health care system that gives us access to affordable health care in this country without a costly government takeover and death spiral, which obamacare's giving us? and the answer's yes. and that is exactly what we intend to deliver on. >> so, you do believe -- >> speaker ryan, can you tell me how and when you're going to pass legislation to defund planned parenthood? >> well, planned parenthood legislation would be in our reconciliation bill. yeah? >> over in the senate, grassley has reintroduced a criminal

justice reform bill to reduce mandatory minimums for well-behaved prisoners -- >> a discretion on mandatory minimums, you mean. >> yes. and obviously, let well-behaved prisoners potentially out early. you had talked before the election about doing something like this in the lame duck. >> yes. >> are you planning to bring something like this up? >> yeah, i do support criminal justice reform. i think it's a long time in coming. i've asked our committee to pick off where they left off on this. bob goode let passed six or eight bills out of committee, i'm not sure exactly what number, and i've asked them to pick wlup they left off. this is something we wanted to get done last year and we ran out of time. we plan to pick up where we left off and get going in criminal justice reform. i think it's good policy, the right thing to do for lots of reasons and a priority of ours. last question in the back. >> thanks, speaker ryan. i appreciate it. can you commit that the congress will have completed a repeal and replace of obamacare by this session? >> yeah, our legislating will occur this year.

our legislating on obamacare, our repealing and replacing and transitioning -- the legislating will occur this year. what date all of this gets phased in on is something we do not now know because we're waiting for the trump administration to be stood up, we're waiting for tom price to be confirmed as secretary of health and human services. the question there is how long will it take for markets to put in place, for markets to adjust. that question we don't know the answer to, but the legislating on obamacare will happen this year. thank you. >> speaker ryan addressing a couple of different topics on the issue of cybersecurity and the senate armed services committee hearing, reiterating that donald trump, in his words, won the election fair and square, also talking about the resolution getting fast-tracked, resolution to begin the repeal of the aca. interestingly, all of this, kayla, feeds the notion of more friction on the hill. dow's down 123. a lot of the trump trades unwinding today. the dollar down.

goldman sachs, the worst dow stock right now. financials lagging. >> well, it does seem that any prioritization of dodd/frank will be pushed later in the year. he just said that obamacare legislation will take place this year, although it depends on how long the markets that were set in place several years ago take to adjust. making comments on cybersecurity as well, denouncing any foreign actor who tries to meddle in cyberspace here in the u.s. but also said russia had nothing to do with the outcome of the election. >> certainly none of the strategic campaign choices that hillary clinton made, in his view. 10-year, by the way, is now at the lowest level since december 8. we're watching that, along with oil, which did go negative after the inventory numbers. when we come back, we'll go live to ces in las vegas, where our jon fortt will catch up with the founder of mobileeye, talking self-driving cars, new partnership with bmw. and coming up on "the half," omega's lee cooperman, interview at 12:00 eastern time. don't go away.

take a look at where we are in the markets now. we began the session mixed, but after the crude inventory data at the top of the hour and crude retreated, we did see that take the market down a leg with it. dow currently down 115 points, s&p down 9, nasdaq down 9 as well. from uber's driverless cars to google's, the road is being paved for a future with more autonomous technology. bmw group, intel, and mobileeye are testing autonomous vehicles on the road in 2017.

jon fortt joins us now from the consumer electronics show in las vegas with a cnbc exclusive. jon, out to you. >> reporter: thanks, kayla. i'm here with amnon shashua, the cto of mobileeye. and this announcement about 40 driverless cars, you made this along with bmw and intel. what exactly are you going to learn in 2017 from having this fleet on the road around the world? >> well, jon, this is the beginning of a five-year plan, where in 2021 we are going to launch thousands of vehicles that are autonomously driven. now, tens of thousands of vehicles that will be autonomously driven on highways and thousands of vehicles that will be autonomously driven inside cities. and within this five-year plan, we are starting 2017 with 40 vehicles that are fully equipped with all the sensing cameras,

scanners, high-performance, the computing that are necessary to ingest the sensing information, built-in environmental modal, understa understanding the understanding. all the code to program the car, to path plan dense traffic. all of that will start in 2017 with 40 test cars, and we'll peak with several hundred of test cars as we move forward. >> tell me where we are with the technology. seeing the road is one thing. a toddler in the car can see the road, but it takes an adult, usually, to actually know how to drive. so where are we between being aware of the environment and the car technology actually knowing what to do? because we see uber cars in san francisco blowing stoplights, and sometimes, you know, the problems that tesla has had with driverless cars, which you guys have commented on are well-known. >> well, it's a great question, jon. i think there are three basic

elements to building an autonomous car. one is seeing, sensing. the second -- and the sensing part is relatively mature today. it's relatively mature because of the many years of driving assist. driving assist is all about sensing, all about interpreting sensing to prevent collisions. so over the years, there is a certain maturity and we're not that far away from getting to the place where we need to be. but there are two other elements that are much more complicated. one is logistical, about mapping. you need to map your surrounding at very, very high detail. high-definition maps. it's a matter of how you do it efficiently, lower the cost in order to build an economy. without it, you'll not have driverless cars. but then the third element is to the point that you have raised. it is about the reason we take driving lessons. and as you said, we don't take driving lessons in order to train our sensing. we know how to see. we take driving lessons in order to understand how to merge in

traffic. there are rules, and there are norms, there are codes, kind of rules on how to break the rules. and they change from territory to territory. in boston, people drive completely different than when we drive in california. we don't negotiate by signaling, talking to the other road users. we negotiate by motion. our motions signal to the other road users our intention. whom do we want to give way, whom do we want to take away, and some of them are very, very complicated. and this is what the robotic computer software is about. >> well, we're counting on companies like yours to teach cars, figure out how to drive in new york traffic, as well as other places. cto of mobile eye, thanks for joining us. carl, back to you. >> jon, thanks for that. we take you back to the senate armed services committee. this is senator ted cruz of texas. >> a component of the strategy. we have got to ask ourselves, how do we change this broader dynamic. to go to the point you have heard repeatedly today, how do we convince nations and other

actors out there, there is a price to pay for this behavior. that, in fact, it is not in your best interest. >> and what should that price be? >> it's a wide -- it's a wide range of things. there's no one silver bullet, which is another point i would make. if we're looking for the perfect solution, there isn't one. this will be a variety of incremental solutions and efforts that are going to play out over time. there is no one single approach here. >> and your point about manipulating data, about a month ago i chaired in a different committee a hearing on artificial intelligence and our growing economies growing reliance on artificial intelligence and one of the things the witnesses testified there was concern on the cyber security side of a hack that would modify the big data that's being relied on for artificial intelligence to change the decision-making in a way nobody is even aware it's been changed. and i think that's a threat, i hope, that you all are examining closely. and it's the sort of threat that could have significant repercussions without anyone even being aware it's happening. let me shift to a different

topic. director clapper, you have testified before this committee that cuba is an intelligence threat on par with iran and listed below only russia and china. and there are reports that all rightis, the russian operated signal intelligence base in cuba will be reopened. and russia and nicaragua struck a deal to increase military and intelligence cooperation. and resulting in an influx of russian tanks and an agreement to build an electronic intelligence base, which may be disguised as satellite navigation tracking station. to the best of your knowledge, what is russia's strategy in the western hemisphere, and how concerned are you about the russians expanding their influence in cuba and nicaragua? >> well, the russians are bent on establishing both the

presence in the western hemisphere. and they're looking for opportunities to expand military cooperation, sell equipment, air bases, as well as intelligence-gathering facilities. and so it's just another extension of their aggressiveness in pursuing these interests. and with respect to cuba, cuba has always had long-standing, very capable intelligence capabilities and i don't see a reduction of that -- of those capabilities. >> thank you. >> thank you, mr. chair. and thanks to the witnesses for today and for your service. and mr. chair, i appreciate you calling this hearing. i think this hearing is a test

of this body, the article 1 branch, congress. this hearing and others to follow. i was chairman of the democratic national committee for a couple of years. and we had a file cabinet in the basement that had a plaque over it. it was a file cabinet that was rifled by burglars in an invasion of the democratic national committee in 1972. it was a bungled effort to take some files and plant some listening devices. that small event led to one of the most searching and momentous congressional inquires in the history of this country. it was not partisan. one of the leaders of the congressional investigation was a great virginian, caldwell butler, my father-in-law's partner before he went to congress, played a major role. it was not an investigation driven because something affected the election, the 1972 presidential election was the most one-sided in the modern era. but it was a high moment for congress, because congress in a

bipartisan way stood for the principle that you couldn't undertake efforts to influence an american presidential election and have there be no consequence. the item that we'll discuss and we'll discuss more when the hearing comes out is different. that was a burglary of a party headquarters that was directed to some degree from the office of the president. but this is very serious. the combined intelligence of this country has concluded that efforts were undertaken to influence an election by an adversary. an adversary that general joe dunford said in testimony before this hearing was in his view the principle add verify area is of the united states. in addition, it was not just on the party headquarters. the october letter you have referred to talked about a tax on officials, current and public officials with significant positions and also attacks on state boards of elections.

the letter of october 7 traced those attacks to russian entities, russian companies, and didn't ascribe at least in that letter directed to the russian government. but i'm curious about what the full report will show. it is my hope that this congress is willing to stand in a bipartisan way for the integrity of the american electoral process and will show the same backbone and determination to get all of the facts and get them on the table as the congress did in 1974. there was another congressional inquiry that was directed after the attacks on 9/11, and there was a powerful phrase in that report that i just want to read. the commission concluded, quote, the most important failure was one of imagination. we do not believe leaders understood the gravity of the threat. and that's something i think we'll all have to grapple with. did we have sufficient warning signs? i think we did. and having had sufficient warning signs, why did we not

take it more seriously? that question is every bit as important as a question about what a foreign government and adversary did, and how we can stop it from happening. three quick points. one, is the report next week that's going to be issued not solely going to be confined to issues of hacking, but also get into the dimension of this dissemination of fake news? will that be one of the subject matters covered? >> without preempting the report, we will describe the full range of activities that the russians undertook. >> i think that is incredibly important. i had a little role in this election. i was along for the ride for 105 days. >> just an indication how busy next week is going to be. donald trump's press conference on wednesday. the president's farewell address on friday and now this report made available to the public by the intelligence community. not to mention what's happened

today. dow down 106. those inventories, kayla, as art cashin said, did spook the equity bulls. >> in the earlier session, most activity in the treasury market and in the dollar and in gold. so we'll see whether equities can recapture attention. >> lee cooperman on with the half. let's get over to hq. >> all right, carl. thanks so much. welcome to "the halftime report" i'm scott wapner. we will keep our eye on that hearing in the nation's capital, watching what the markets are doing, today, as well. we do want to begin with a halftime exclusive interview today. one-on-one with the hedge fund legend, leon cooperman of omega advisers. mr. cooperman giving us his view on the markets for the year ahead today, while continuing to defend himself against insider trading charges. mr. cooperman joins us live today from florida. lee, happy new year. welcome back. nice to see you. >> thank you. happy new year to you, scott. >> thank you. you know i want to talk about the markets. but, you know, there's no doubt the elephant in the room remains this s.e.c. issue. so i would lik