i believe it continues to move higher. >> qualcomm, news that the fts is suing them for anti-trust concerns. cheap stock that has that sort of news priced into it. i think this is a great buying opportunity for qualcomm. >> good stuff. see you on the set tomorrow. look forward to that. right now, "power" starts with michelle caruso-cabrera right next to me. >> here is what's coming up on "power lunch." florida governor rick scott will be with us. plus new developments in the big border adjustment tax debate. not the border tax, that's what president-elect trump talks a lot about. but border adjustment tax through the corporate tax code. douglas egan will weigh in. he's a supporter. and later exclusive access inside america's most expensive

house. wait until you hear the list price. it is astounding. stick around. "power lunch" starts right now. welcome to "power lunch." i'm melissa lee. here is your sign of the day. s&p 500 has not moved up or down more than 1% since october 11th, brian. >> here is what else is happening at this hour, home buyers are mildly less confident than they have been, the latest figure showing a drop down from an 11-year high. mortgage applications rising again last week. they rose just under 1%. that was mostly driven by refis, people rushing to lock in as rates continue to rise. also rising, consumer prices. overall, jumping .3%, mostly driven by higher gas prices. do take note that final reading for the year showing inflation

for everything for the year grew at its fastest pace in five years. tyler? >> thank you very much, brian. i'm tyler mathisen. welcome to "power lunch." busy on wall street, busy in washington between inauguration preparations, confirmation hearings and president obama's final news conference which we expect to take place during our second hour. let's kick things off right away with john harwood in washington, d.c. >> 42 hours to the inauguration and donald trump is trying to use the recent job investment announcements by major companies, gm, hyundai, walmart and convert that into support for himself. criticizing news organizations like nbc news, saying that they were biased, not giving him credit. he said these jobs have come back because of me.

you can see why he needs support. his approval rating is lower than recent incoming presidents. only 44% approval, down from december. barack obama at a similar point was at 71%. then when we asked who do you want to set policy for the country, fascinating split. 28% said donald trump. 19% said republicans in congress. those two sides are going to clash on policy since they control the lefl levers of power. 41% said democrats in congress should be taking the lead on policy. now, president obama, as he gets ready for that news conference, is undergoing a remarkable honeymoon at the end of a very turbulent presidency. despite all the controversy, 55% of americans now say, tyler, that barack obama was either better than most presidents or one of the very best. nobody would have predicted that a couple of years ago.

>> thank you very much, john, from cloudy washington. few days before the trump inauguration, lots of good vibes created by jobs coming back to america. these are big deal items for the incoming president. the other centerpiece has been repealing obamacare. that is the first big thing congress is taking up. many wondering if it is the right place to begin. let's bring in early beginning in to the trump roster and former health care ceo governor rick scott with us. appreciate this. >> it's exciting to be in d.c. and i have my good friend, donald trump and mike pence will be inaugurate this had friday. it's exciting to be here. >> i do understand a few people may be coming in to washington this friday, just a hunch on my part there. real journalistic credibility. let's talk about obamacare. many of the gop have said for weeks that repealing and

replacing obamacare will be job one. do you believe -- i know you're not on the hill, but do you believe from the people you've talked to that are in your health care contacts that the gop will not only repeal it but be able to find something to replace it? >> absolutely. let's all remember, obamacare was sold on a lie. it said you could keep your drchlt that was not true. keep your health care plan that. 's not true. and cost also come down. that was not true. we have to repeal it and come up with a program that will drive down costs so you, your employer and taxpayers can afford health care. i also care about state flexibility for my medicare program. i don't need the federal government telling me how to run a medicare program. i watched my brother struggle with insurance when he had a serious disease i want to make

sure people get good access to health care. >> michelle? >> it's michelle, governor scott, here in d.c. one thing i find that will be very difficult, the president-elect wants people to buy it when you need it. but if you don't buy it till you need it, you don't have the risk pool that the insurance says are very, very healthy and very, very sick people. how do you square those issues? >> coming up with a plan that really works and drives down the health of cocare cost s. giving as many options to the individual as possible. i believe americans want to buy health care as much as possible on their own at a price they can afford. they'll buy what they need, not

what some government tells them to do. a lot of ways you can drive down health care costs. you've got to create as much of a free market as possible. >> governor scott, obviously, you were a health care executive yourself, ran a big hospital company. how about the repeal and replacement of obamacare help? >> cost structure will do really well. no different in other industries where those have the highest quality have great patients, great service and great cost structures. they do really well. first off, that's what all of us want. if we want health care, we want it from a high quality place for the best price we can afford. it will be very successful for those focused on doing the right thing for patients. >> governor scott, certainly, this is a number one priority for congress.

as soon as they got in, they started addressing repeal and replace. is that the right attitude? there's a perception among average americans that, you know, maybe congress should have focused first on some type of corporate tax reform, what the markets have rallied on. that has given this sense of optimism, corporations and corporate boards right down to main street and small businesses. that is what's behind all the optimism and maybe that is the first thing congress should have addressed and not the repeal of aca. >> i got elected in 2010 i was a lot like donald trump, a business person never having run for office. i focused on job creation. one of the reasons we have issues creating more jobs is obamacare. it's made our companies less competitive globally. health care costs have sky rocketed under obama. i think we clearly have to focus on job creation, job number one in this country. but repealing obamacare and coming up with a program that's

cost efficient, that's high quality, make sure people have access to health care is something that we have to do to make sure, one, we have more jobs. because i want everybody in my state and in this country to get good health care. >> the idea that you went from being a nonpolitician, a business executive to the executive mansion in tallahassee. the incoming president will be making a similar move. what surprised you most about being the chief executive of a company and being the chief executive of a big government organization? >> first off, the big difference is how much media attention you have for everything you do. the rest of it is very similar. successful businesspeople have a significant focus and work their tails off for success. works in politics.

donald trump is successful because he works his tail off. he will be focused on bringing jobs back to this country, repealing and replacing obamacare. he will be very focused on building our military up and very focused on taking care of our law enforcement. all these issues are important to my personally and important to my state. >> let's say auto insurance. lot of focus on auto wrecks not a lot of focus on auto insurance. health care seems to be the opposite. we focus on the cost of treatment rather than prevention. when do we have a serious dialogue about addressing the fact that america is so sick? why do we consume so much health care compared to everybody else? >> clearly, in fact, we consume so much health care it impacts our companies, our jobs in this country and makes us less competitive globally. first of all, we have to reward the people who take care of themselves, eat right, exercise, don't smoke. as you do that, it's part of driving down health care costs.

and back in 2009 i organized a group, reward people for taking care of themselves. that drives health care costs down and we have to do that. >> governor rick scott, pleasure. enjoy washington, d.c. thank you very much for joining us. see you again i'm sure. >> it will be an exciting week. $5 trillion worth of investment advice. wall street's leading voices on where to put your money right now. later, why it could be gold, jerry, gold, for one red hot stock. first, biggest names in business and politics weighing in on key issues right here. trade, trump, the markets and much more. view from davos, straight ahead.

welcome back. joining us now, from blackrock, richa richard, good to see you. we have not moved much for the past month, month plus. where are we in this rally? what are we waiting for? >> we're still in the mid stage of this rally. markets are looking for confirmation. clearly had a big move in the second half of last year as we saw inflation gain traction in the economy and perhaps more importantly in the markets. data we've been getting lately has been extremely strong, true here in the u.s. and internationally. i think inflation theme is coming through, what we're learning is that there's quite a lot of that in the price and we're waiting to see

confirmation that good survey data, good confidence data. >> the earnings estimates for per share, on a per share basis for the s&p 500 basically has not moved since before the election till now, $133 a share. when does that budge? when do strategists get off the sideline? maybe we need to nudge this higher in order to not make this look so rich. >> downgrades for the last five years in a row, started the year with optimism. as the year has gone on, downgrade, downgrade, downgrade. the surprise that we don't get the downgrades coming through. seeing better economic datea in the confidence numbers, in the pmis, and what companies are

saying about their own businesses. track the big data signals about what ceos, cfos are saying. it's getting more confident. you need to see the earnings coming through for this mark to move materially higher. >> talk to us about the dollar. >> so the dollar has been moving, you know, consistently higher now for several months. if you look at it longer term context, bull market for the dollar for some time. it's hit a bit of a bump the last week. what's driving the dollar? they're still positive. at least two times, probably more this year. rates on hold both in europe and japan the rest of the year. that should be dollar positive. in addition to that, high expectations, closure of that very large current account deficit, should also be dollar positive. what you're learning this week, that is probably the most consensus view in the market

right now. a lot of investors, clients, dollar bullish view is very much, in many people's minds right now. >> what if they're wrong? >> which we've seen after the electio election. >> most of the time, everybody's view is incorrect. >> slight volatility is not a bad thing. the main risk is not dollar weakness. the main risk is a very significant rally in the dollar, a spike. what most people, including us, anticipate. actually, modest dollar weakness is good news for the u.s. >> for exporters. >> and it's good news for asia. relieve some of the pressure on the asian currencies. it's good news for commodities. relieve some of the pressure there. modestly weaker dollar or dollar

stability not bad. value areas of the market do very well both in the u.s. and globally. that's what we've been seeing for some time. apply that to sectors. financials have done very well. >> still upside to oil stocks as a result of that. and in addition, some of the more cyclical areas. we can do further. >> nonincoming president, noninauguration. what is the most important thing you and blackrock are keeping your eye on? >> i'll say two things. in the short run, attitude to trade and what extent do we see trade barriers increasing, increasing protectionism? there's a lot of anxiety

globally. i was in asia last week, talking to investors. that is absolutely top of mind. we'll be watching that closely. secondly, no surprise, tax cuts. the biggest potential impacts on the u.s. and global economy are to the extent we see corporate and individual tax. >> both of those fall into my part but we'll give you a pass. thank you, richard, for coming on, from blackrock. thank you. appreciate it. coming up, an exclusive look at america's most expensive home. our own robert frank has been the only reporter allowed inside a $250 million home. robert, where else would you be but los angeles, my friend? [ inaudible ] >> along with the price they'll get a full-time staff along with a chef and chauffeur for the next two years. we'll take you inside the house and meet the owner, coming up on

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flirting higher than yesterday's range. open the chart up to the first

week in january. all last week and all up to this week, eight trading sessions. all look to be closing between 232 and 239. back to that data, year over year. headline cpi. this is the first time it's popped over 2% going all the way back to may of 2014. look at year over year, up 2.2, this is the 14th month in a row going back to november 15, 2% or higher. if you're looking for a lot of growth reasons to sell bond this is adds another corridor to sell. sully, back to you. >> rick, thank you. as evidenced by the animation, it is now time for the good, the bad and the ugly in today's trade. first to the good, which is very good, colucid pharmaceuticals. migraine treatment. on to the bad, cameco, cutting

120 jobs at three mines and saying its profit for last year will be significantly less than what analysts were expecting. it is a downright ugly day for gigamon. it lowered earnings and revenue forecasts for the fourth quarter. when you do that in this market you get a 30% drop of $30.76. josh lipton has a news alert. >> brian, some news here just dropping on oracle specifically, that the u.s. department of labor has filed a lawsuit against oracle america, inc., subsidiary of oracle. the allegation that they had a systemic practice of paying caucasian male workers, it says, more than their counterparts in the same job title which they say led to pay discrimination against female, african-american and asian employees. orafter the cle receives hundreds of millions in federal

government contracts. looks like they're saying if oracle fails to provide relief as ordered, all its contracts be cancelled and debarred from entering into future federal contracts. i reached tout oracle for response. we'll get that to you as soon as we have it. back to you. >> josh lipton, thank you. still ahead, donald trump in his own words right here on cnbc. 15 years of hints about how he will lead the country. we're digging into our archivs.s you'll see it coming up. first, back to michelle in washington, d.c. >> hey there, melissa. donald trump tweets about a border tax. house gop is talking about border adjustment taxes. what on earth is the difference? why is there so much controversy about a bill that isn't supposed to be discussed until the summer? more on corporate tax reform and how important it is after this break. don't move. "power lunch" next.

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>> hello, everyone. i'm sue herera. here is your cnbc update this hour. speak in davos, mohammed zarif

said he would reserve judgment on donald trump until his term begins. >> the jury has not even convened so we will have to wait and see what president-elect trump, once inaugurated, will try to pursue as his policies. so i'll reserve my judgment. >> merrick garland returns to the bench today, d.c. circuit stopped hearing cases last march after his nomination but the gop refused to hold hearings. george w. buh.w. bush was admitted to the hospital in houston. he is resting comfortably, we're told. in addition, mrs. bush was admitted to the hospital after experiencing fatigue and coughing. and that is the cnbc news update at this hour. we'll go down to washington, d.c. and michelle.

michelle? >> thanks very much, sue. let's turn now to the big controversy over the dramatic changes the house of representatives is planning for the corporate tax code, something called border adjustment taxes. earlier in the week, donald trump called it too complicated. then yesterday, he told mike allen it's certainly something that is going to be discussed. so no one really knows where mr. trump will land on the issue. we know where some on wall street stand. bridgewater founder told the gang on "squawk box" earlier this morning. >> i think the real question is what is a trump administration -- is it going to be wise and thoughtful and well calculating? so when you have something like the border tax, is the border tax on, off? how will the $1.3 trillion that was supposed to be raised in the border tax and then paid for by other taxes, where will they

come through? >> president of the american action forum and chief economic policy adviser to john mccain's 2008 presidential campaign joins me. he has written a lot about the border adjustment tax, which is different than the border tax. everybody is going to figure that out at some point. border adjustment tax, people read it and say you're going to tax imports but exports will not be taxed. >> right. >> larry kudlow, a conservative, says this is the government picking winners and losers. you're a conservative but you like this. explain. >> i love larry. he's wrong. this is a very common tax practice. it's a piece of tax policy. what it does is say, okay, when american goods are exported they'll be relieved of tax so when they're said in, say, germany, they pay the german tax like others there. same thing with imports. imports come into the u.s., pay the tax. so do domestically produced goods. so far from picking winners and losers, the idea is to get the tax system out of determining who wins the competition.

best product wins. >> this sounds like trade policy not tax policy. >> it's about the tax policy in particular for the house proposal, what the border tax does is it gets implemented not with a bunch of guys standing at the border with money changes. it gets implemented when they file their taxes. a firm looks at their taxes and says i'm going to exclude any cross-border transaction. if i sell goods into germany, revenue gets excluded. if i buy goods from germany, i exclude that from my deductions and that's how i impose the tax. that is an important piece of tax policy because if you exclude the cross border transactions it doesn't matter how you value them. transfer prices to move money to low-tax jurisdictions no longer has any payoff and you protect the integrity. >> when we watch companies move their sales all over the world. >> that game is over. >> that goes away. wouldn't it be easier to cut the corporate tax a lot?

>> it would help enormously. and let's be really clear. if you get the tax rate to zero, it doesn't matter what the base is. >> right. >> i would say the main virtues of the house plan taken as a whole is, number one, it's progrowth. number two, it changes our tax system from favoring foreign production over domestic to being neutral. >> does it risk the whole thing because people think it's too complicated? all these institutions are lining up on other side and does it kill the whole thing? >> welcome to tax reform. it's always hard. this is the most dramatic thing in business taxation ever proposed in the united states, period. if you want growth in the u.s., you have to make dramatic changes. there's no surprise that firms are reacting strongly to it. it will have big implications for how they run their businesses. >> doug, thank you so much for coming in. >> sure. >> back to josh lipton with a

news alert. josh? michelle, we just told you that the u.s. department of labor has filed a lawsuit against oracle america, inc., alleging pay discrimination against female, african-american and asian employees. oracle firing back in a statement to cnbc saying the complaint is politically motivated based on false allegations and wholly without merit. oracle values diversity, inclusion and is a responsible equal opportunity and affirmative action employer. legitimate business factors including experience and merit. sharply worded statement from oracle. back to you, tyler. >> josh, thank you very much. less than 48 hours from now, president-elect donald trump becomes president donald trump. one of the things that has taken mr. trump so far is the negotiation style. he even wrote a book about his

prowess. here now is donald trump in his own words over the years here on cnbc on what he calls "the art of the deal." >> you negotiate, you work hard, you fight hard. in the end, you do well, you do badly. some of the great deal makers have made terrible, terrible deals but you have to go on to the next one and you have to learn, above all else. you can't make the same mistake, because then you're basically stupid. >> i wouldn't be a great negotiator if i was dealing with computers. i'm not in computers. i don't particularly like them or find them interesting. you have to know and love your subject. i want to brainwash them, that there's so much competition. that's important. know your subject, create competition, be confident in yourself. don't oversell. >> let's bring in cnbc suzy welch, author of many books including "winning" and

professor william urie, who has served as a mediator in conflicts from corporate merger s, middle east wars and soviet nuclear talks. if that doesn't qualify you, professor, i don't know what would. how do you react to what you just heard from the president-elect about his negotiating for parameters? >> it's a big challenge. he likes to think big, play bag bigg and will be able to do that. he will deal with congress, china, russia, iran, north korea. you name it. >> it's more long term relationship. it's more like a marriage. in marriage if you keep on asking who is winning this marriage, your marriage is in serious difficulty. >> suzy, i'm not sure what the

digression on computers brought to the party here. what i walk away from is the idea that mr. trump likes to make his counterparty feel that there is competition, that there are others out there who want that particular deal. can he do that when he's dealing one on one with the leader of another country? >> well, you go right to the exact right point, tyler. really, what happened in his business negotiations, they weren't as transparent as what he's going to face when he starts negotiating with people in government. a lot more is going to be known. he can't make up that there's other competitors or bluff anymore. he is a lot bigger hammer. he used to be able to threaten with lawsuits or threaten with the fact that there was somebody else out there who wanted the deal. now more will be known. but he has the united states' power behind him. one thing i take away is how much he just loves negotiating and there's a whole cottage

industry of people who debate whether he was as good as he says at it. but he loves it. >> let's listen to more on mr. trump over the years on "the art of the deal" and play number tw two. >> face-to-face can be a very big asset if you know how to do t have you to size up your opponent. i call them an opponent because when they're on the other side of the table they're the opponent. if you can't do that, get a job. i'll say ad naseum during the negotiation, you think you're the only one? i have ten people that want this de deal. sometimes it's so. sometimes it's a little less than so but i always create competition. it makes the other side a little nervous. i have had my own people coming up to me and said, mr. trump, you shouldn't tell them there are other people interested in the deal. i said let me negotiate. >> it bears back to what suzy

was talking about, the idea that you want to create sometimes the reality of competition, sometimes the illusion of competition. there's a bit of misdirection. maybe there isn't competition but i'm going to say there is because that's going to get me where i want to go. >> negotiation, it's true that there's real power in having what we call good knowledge. you're creating alternatives for yourself so that works. in politics, particularly in international diplomacy, like he's going to face, it's harder to walk away. you can't walk away from russia. you can't walk away from china. he's going to have to up his game as a negotiator and face tough challenges. he is going to have to follow his own advice about learning.

learn something so important in negotiation. he will have a steep learning curve. >> i've had my own people come up to me and say you shouldn't tell them there are other people. some see that as an artful bluff. >> yeah. >> others see that as he's making it up and lying. >> yeah. >> distinguish between the two in the art of the negotiation. >> well, look, i think the bluffing is going to have to stop. there will be too much information, too many people who know the facts. you can bluff when you're alone with another business person or your teams are alone in a room and nobody has complete information. it's going to be very difficult to bluff in an international diplomacy kind of situation. that having been said, having said before, he has bigger weaponry behind him this time, literally and figuratively. that kind of blow hardiness is going to have to come to an end. it doesn't work in this setting. he likes to make a big, opening swing. some people think it's strong

and some people think it's bullying and that's where people will divide on his negotiation style. >> you have just set up passage number three beautifully, suzy. let's go to it now. >> when you have a bully, i learned a long time ago, you hit the bully right between the eyes and you hit really hard and really fast. the bully is basically afraid. it's a person who is afraid. >> in order to keep the american dream a reality, we have to look at the big picture. if we're just going to focus on one little aspect, it's not going to work. you want to do something that's special and people start following. and when they start following, you've built yourself a brand. >> suzy, how do you react to that, that if you're confronted by a bully -- certainly, he will be on the international stage, from time to time, at least bullies in their own lands -- you punch them right in the nose. >> yeah. you know, one of the best articles ever edited for the

harvard business review sorlt of believe that everybody has common ground and donald trump comes from the same school of thought, there are bullies in this world and punch them right between the eyes. this is partly why he got elected. it resonated with people. sort of a schoolyard view of the world. and he will encounter bullies. you know, he will find them and he's going to come out like that. he's not going to be the kind of diplomat we've seen before. my reaction is, you know, he's going to try it and he's going to find out quickly whether or not it works. i do think, actually, he will walkway from some of these countries. >> so, professor, let's flip it. some may perceive mr. trump as a bully and punch him in the nose. what happens then? >> it starts to get dangerous. these people, these countries playing with nuclear weapons and

one of his quotes is, you know, i like to protect the downside. the downside here is really serious. if you go head-to-head with the russians or the chinese or the persian gulf, he needs to be cool. in some ways we could be our own best enemy. when angry, you'll make the best speech you'll ever regret. >> william, thank you very much. professor appreciate it. suzy, happy to see you. melissa? jerry seinfeld could be a big boost for this company. we have that story straight ahead. s av

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have zpli you'. >> you're in the car with the president. back it up. >> yes, sir. >> these kind of headlines are so common. it's like yada, yada, yada, netflix, whatever. when netflix releases their earnings tonight. netflix has capped large cap growth picks. >> subscriber results as always. in this case, particularly the outlook international in terms of additions for the first quarter. i expect they're going to talk about the profit ramp in 2017. that will be important. they won't give guidance but qualitative framework for what to expect for the year. >> what's a good subscriber number, what's a bad subscriber number? >> yeah. i think the consensus setup for the international paid net out

look, if there's one key metric, that's the key metric. the consensus is about 2.1 to 2.2 million. that, i think, is an easy bar for them to clear. i'm looking for more like 2.8 million. anything in between would be viewed as positive. >> increase in original programming hours, which is pretty amazing. you think that could continue to fuel this draw for subscribers and this virtuous cycle for netflix. the flip side to this huge increase to original program something cash burn, isn't it? >> yep. very levered model. it's a very big investment that they're making in content. and the bear case would be simply they don't scale up to generate the positive returns. you know, subscriber driven ramp, very confident that they're in a very good place and have been very good at predicting the pace of

expansion. there's still a lot of open-ended opportunity. bear case is that they simply don't get the scale that they're looking for. >> we won't know that till it happens? we won't know if that spending will bring in a subscriber until it stops happening? >> that's fair. we can take some comfort in looking at s curves. lot of examples of how things scale up. most markets they're at the front end of this s-curve or somewhere in the middle. s-curves don't hit a wall overnight. there's a plateauing and slowing. they're very far from stalling. >> very quickly, is netf lichlt x the video version of sirius? they spent all that money on howard stern and a lot of people said what in the world are they doing? build subscribers, build subscribers. ultimately, that seems to have paid off. are they following that xm

model? zblie wouldn't equate it to that. sirius spent a lot of money to get into cars, lot of subsidization. so maybe even a bigger gamble over time. netflix is not having an aggressive spend. it's the big aggressive in content and the other big difference is that they're going global without the cost that it takes to run a satellite radio network. >> appreciate your time. thank you very much. >> thank you. up next, inside america's most expensive home. the cost? $250 million. being the only media with access to the home, priceless. >> forget the ten-car garage. today's super rich want auto galleries. the $30 million worth of cars that come with this house. we're going to meet the owner and developer who is reinventing luxury real estate. you're not going to want to miss

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just a reminder, you are moments away from president obama's final news conference. we'll bring it to you live as soon as it begins.

the room is getting ready. right now, tyler, have you something really cool to give us. >> we've got a house, white house to the most expensive house never photographed or filmed. you can't even find a single image of it online. cnbc has exclusive access, priced $250 million. robert frank is standing by with the person who made it happen. robert? >> tyler, bruce makowsky became a california real estate developer and set the record for the most expensive home ever sold in beverly hills now a bigger record with the most expensive listing in america, $250 million house. bruce, thanks for joining us. >> how are you doing? boy, am i excited about today. after four long years we're able to unveil this masterpiece. >> 200 man hours. how could it be worth $250

million? what set this is apart from everything else out there in the market? >> first of all, i'm a disrupter. i spent massive amount of time on mega yachts, private aircraft and these boats sell for $2 million, $3 million. i'm personally trying to redefine -- >> you're comparing this more to like a $300 million mega yacht, more comparable to 250 than the house, most expense east of sold in america is like 150, you are a disrupter. everyone out in california said who is this fashion guy from new york? he thinks he can reinvent real estate. what have you seen in this market that no one else saw before you came here? >> after being on these big boats and you see how every inch is curated, i wanted to take eight important ingredients and put them all in the house. you have the best location, i think, on the planet. southern california. you have an amazing view.

you have water features everywhere. there's over 125 art installations. >> $30 million worth of cars. i have my favorite feature. what's your favorite feature? your favorite thing in this house? >> i think it's the feeling. when you're in this house, that you just feel like you're sitting on top of the world. >> yeah. >> you have everything at your fingertips, amazing home technology. it's an amazing place. >> but let's be real -- who is going to buy this house? you have already shown it to eight or ten billionaires. who will buy it? >> somebody who wants to either -- lives in this town or wants to come into this town and really enjoy life. this is an ultimate party house. it's a home. it's really comfortable. everything you could ever want including seven full-time staff to take care of you that i'm supplying for over two years. >> my favorite feature, the technology in this house, most

of it you can't see. one theng that you can see is a 20-foot tv out of the infinity pool that you can sit and watch los angeles and your 20-foot tv. that's a $2 million tv of the is somebody going to pay for that? you bet a lot of money on this house. >> absolutely. i think because this home is in southern california and we have 365 days of beautiful weather, an indoor theater, outdoor theater. we have every imaginable, amazing thing in this house. >> you heard it, every imaginable thing in this house. $250 million. if i had it, i think i would buy it, guys. back over to you. >> can you imagine what we would look like on that giant tv? i don't want to know. tune in for the secret lives of the super rich tomorrow at 10:00 pm eastern and pacific time. moments away from president obama's final news conference. we'll bring it to you live as soon as it begins. "power lunch" will be right

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down 50 points to 19,776. benchmark ten-year note continues to climb, seven basis points. 38% jump in the ten-career yield in the last 90 days. dollar index up .6%. steve liesman the only man in d.c. not for the inauguration. >> thank you very much. the federal reserve says economy at a moderate pace. economy seems to be changing as the new year begins, labor markets were tightening across most districts. job growth changed from slight to moderate and pricing pressures intensified somewhat. 8 of the 12 districts saw modest price increases. however most of those fellowses appeared to be at the retail level rather than at the -- sorry at the input level rather than the retail level. wages increased modestly. we'll talk more about that in a

second. pushed up in many districts by a minimum wage hikes. several noted problems recruiting less skilled workers, something we haven't seen too much of. election effects throughout the 12 federal reserve districts. cleveland, dallas banks reported a positive outlook due to expected regular regulatory and tax relief. boston said uncertainty about the impact of possible policy changes, including affordable care act as well as potential trade restrictions. also mention, by the way of higher interest rates. also talk about the stronger dollar. boston tech companies, st. louis and dallas manufacturers all expressed concern about the stronger dollar. san francisco steel manufacturing was said to be suppressed by it and beat exports also slowed. manufacturers cited a turn

around in manufacturering versus 20 did note a disappointing holiday season. guys i want to read you this one quote that came from the chicago report here. i've never seen anything like this before. one manufacturing contact reported such difficulty finding high-skilled work ers that they had traded in expensive, sophisticated machinery for cheaper, less sophisticated equipment that was easier to operate. they could not find the skilled workers to run their sophisticated machinery. this notion of a tight job market runs throughout this report. brian? >> wow, what does that mean for productivity? >> we call that negative delta g, right? negative change to the -- negative change right there. that would be going backwards in terms of productivity. output of the machine is less efficient than the old one.

i went back and looked at the old one. there were reports of scattered concerns about less skilled workers but certainly the language this time around seems to suggest we better get to work training our workers because we're running out of them, but quick. >> bottom line on that report, steve? >> i think it goes along with the notion that the fed raised interest rates in december and that they would be on track to raise interest rates a couple more times, maybe two or three more times because of this very incipient -- it's in the out of control. it's not a big deal. minimum wage went up a bit. that will be an issue. tight labor markets. initially at the input level and then also a little bit later you could expect at the retail level, depending upon competition and pricing pressure. you saw a little bit hotter cpi this morning. so it has the fed's attention. i think they're going to think they're right on the curve here, that there's no particular rush here. but that it does include an

outlook for greater increases. now it does raise questions what we've been debating for a very long time here. what does that mean if the new administration comes along with massive stimulus that makes job markets even tighter? puts additional pressure on wages. >> steve, thank you very much. >> showure. >> let's go across town to check in on michelle. >> fed's latest view of the economy from steve. in two days president-elect trump will be in charge of fueling america's economic engine. there's optimism among businesses there's also concerns among possible trade wars and also his tweets. what's a trump economy going to look like? with us now, executive chairman of colony north star, tom barrett. lately he's been on because he's chairman of the presidential inaugural committee. good to have you here. >> thanks for having me. >> i'm going to do something that will make you laugh. i'm going to quote a poll. that's worked really well for journalists the last six monts.s

52% of those polled from this wall street journal/nbc poll say they disapprove of the way that donald trump has handled the transition. what do you say to that? >> go back and look at the election results and see who was elected president of the united states. we have been through this for so long. it's just tiring, right? what you like to do, for america to say, you know what? we've been through this very decisi decisiverous election. this is the beauty of america, the way that it works is after the election, we all come together, hurt feelings, wounded a bit, some elated, and say it doesn't matter. we're going to bind together as america and give this man and his team a chance. so, polls are irrelevant. number one, in the election they were irrelevant. look what happened. >> that was the point of my

opening comment, right. so, the foreign policy elite, the leaders of europe, many of them are very concerned about donald trump. we've got to teach him about france. we've got to teach him about germany. big event last night close to the press where all the city's ambassadors came to meet donald trump. how did it go? what do they think of him? >> you have to ask them but i think it was absolutely an incredible success. first time in history that a president has reached out to the domestic diplomatic corps this way. the reason he did it he knew there was trepidation amongst the community and said what can i do to establish my interest, my culture adaptability in knowing that we need to buy into these strong partnerships? so he found a venue. mellon building. in 1949 where nato was sign ed.

nato was signed by one of the greatest diplomats ever, dean asher. and he picked that venue and said invite all the diplomats. 166 diplomats. >> u.s. diplomats who work overseas or foreign diplomats, the slovenian ambassador to the united states? >> foreign diplomats based in washington. of course, 166 of them had never been to an inauguration. none of them ever met the president. he showed up himself and he rocked it. it was amazing. there's never been an evening like that, that any of them have experienced and changed their view of this man's culture sixth sense and his interest in aligning with those partners. >> do you think he has eased the trepidation that a lot of them -- that the chinese have, mexicans have? >> the trepidation is there's a new sheriff in town. that's the trepidation for everybody. he hasn't coalesced his team. rex tillerson, mike flin flynn, steve minuchin, gary cohen.

the entire band that they'll deal with are new people on street, not part of the washington establishment. it terrifies everybody. that's why he was elected. this is a president that is so in tune and so smart, drawing clear lines. there's nothing to worry about. except now we'll have bilateral discussions. we have outsourced all our trade policy to these third party enti entities. the trepidation is we have somebody who doesn't have a handle on the bureaucracy yet. >> doesn't owe them anything? >> doesn't owe them anything. by the way vice president-elect pence knows how to weave that tapestry with those individuals. >> two big issues that they want to get done. reform obamacare and the tax code.

individual tax code and the corporate tax code. you expect criticism from democrats, right, because he's a republican. health care is a quagmire. they should have done corporate tax reform. why are they gumming up corporate tax reform with this border adjustment thing? it's so complicated. a year from now are those two things going to be done? >> yes. they're going to be done because, look, the bureaucratic machine knows one thing. they have outwaited every president in history for the last 70 years. a president can come in and say here is my vision. then the difficulty is, you have to find your way through this quagmire of bureaucracy in order to get it done. every one of the 535 individuals, who are all well meaning individuals, have another constituency. that's their main -- to be elected again is their main theme. what they're all going to learn is that if they don't get

together, they are going to be irrelevant. just as what's happened in the past. so it doesn't seem that anybody learns. my hope is that the -- the system is so amazing. technology is so amazing. >> only 9% support him tweeting according to this poll. they don't tliek. >> sure. it's very difficult in 144 characters to explain the complex -- your brilliant. you curate a news story because you have history, experience and you can calculate in a vision for normal people to be able to understand and do it in 144 character, however you can communicate instantly in that regard. >> right. >> conditioned daandidate to pre going to see something different. he has a team, rex tillerson, general mattis, a cadry of expe experts in the field, who will

explain to congress and the american people. give him a chance. 100 days, what can he get done? start aligning those relationships, quell the fears abroad, start taking the low-hanging fruit. as you say, of things that can get done, and lay the basis for what can get done over the next year and he'll do it. >> tom barrack, thank you very much. border tax on goods made outside the u.s. or border adjustment. will it happen? we'll ask the person who heads the committee, that writes the tax law. representative representative brady chairman of house ways and means. we're waiting for the final news conference of the obama administration. it would mean all roads lead to hamilton one last time. we'll teach him how to say good-bye.

we'll take you there as soon as the president starts speaking one last time.

we will bring it to you in its

entirety, live. let's shift over a couple of blocks to michelle. >> thank you, brian. proposed border adjustment tax. not the same thing as a border tax that the president-elect tweets about. it's part of a controversial republican tax plan to essentially tax imports but not exports. joining us is house ways and means committee kevin brady who says the plan is not going away, in part because it's his plan. sir, good to have you here. >> thank you, michelle. thanks for having me. >> president-elect trump two days ago in the journal says this is too complicated, doesn't like border adjustment. today he doesn't disavow it in an interview but certainly doesn't embrace the idea. why are you so committed to dramatically changing the corporate tax code? >> yeah. so because we know what our competitors do. we know china, europe, mexico, canada, others all border adjust their taxes. as a result, we don't, but we're about the only country left that doesn't, of major size.

as a result today, a chinese steel has a tax advantage over american steel. mexican beef and autos has an advantage over domestic. it's powerful in the way it works. >> larry kudlow, you know him well, says you're picking winners and losers. you're subsidizing exports and taxing imports and that shouldn't be the role of government. >> yeah. let's tackle that. i love larry kudlow. in fact, as a list of his top five admirers, i'm probably at the top of that. this is a very simple policy. is it consumed in the u.s.? is your product or service consumed in the u.s.? if it is, it's taxed equally. foreign country it's developed, taxed equally. so for the first time, we'll be on a level playing field with china and our competitors. for the first time we will have

eliminated any tax incentives to move jobs, research, headquarters overseas. it is so simple to implement for a business. it's sort of crazy. it is just that simple. >> congressman brady, brian sullivan back in inglewood cliffs. your name came up. have you personally met with donald trump or any senior members of his administration? >> we have. we're having terrific discussions about this. because we are very much on the same page. we know we get one chance a generation to fix this broken tax code. we are determined to leapfrog into the front, most pro growth places to add that new job or make that new investment. that's why the discussions we're having are so critical and while a border adjustable tax -- once

businesses understand you don't have to track it transaction by transaction. at end of the year, you add up your export sales and you don't count it. >> do you have the votes in the house with republicans? do you have democrats in the house on your side? >> so we have begun the process of inviting our democrat colleagues to bring their best ideas forward on how to make u.s. competitive, how to simplify the tax code so much most americans will be able to file using the postcard style system. we hope they engage. but right now we have a lot of work to do. the exciting part is finally america will get their businesses back in the game so they can compete and win anywhere in the world including here in the u.s. >> chairman brady, i'm going to press you on that question, is donald trump on board with border adjustment? >> we're having these discussions with mr. trump and his team. they are deeply engaged in this and, again, i think they understand that this is not just

a powerful policy. it is simple to apply. in fact, let me predict this. if we pass this blueprint, working with the trump administration in a very bold way, we'll re-establish america as a 21st century magnet for new jobs and business investment. >> mr. chairman, when the president-elect says the plan is too complicated and says any time i hear border adjustment, i don't love it, because it usually means we're going to get adjusted and in a bad deal. that doesn't necessarily mean that this plan is dead on arrival? >> absolutely not. >> and you're still on the same page? >> still having discussions with him. >> doesn't sound like it. >> yeah, we are. from tax reform, health care to security, cyber security and national defense. i'm amazed he has been able to dig this deep into tax reform.

as we go farther at the end of the day, taxing products and services equally in america, being able to compete and win, ending that made in america tax around the world is going to be critical to our growth. >> lobbyists have lined up on either side to fight this, chairman. there is a concern that larry kudlow, beyond what he feels about the policy, if it's too complicated, maybe just lose the whole opportunity and -- >> michelle, let's go back to this. let me explain it to you. i got kind of interrupted there for a moment. at the end of the year it adds up its export costs doesn't count them. adds up the import and doesn't count it. by doing that simple but powerful thing for the first time, exports and imports are

taxed equally in america. we're no longer taxing our exports around the world. now we're competitive again. >> you're not worried that the change is so dramatic that it ends up killing tax reform in general because some people can't get their arms around it? >> no shall i don't. here is why. it's important we look at these bold changes we're proposing and understand we don't expect things to change on a dime. we're going very bold so we can be competitive for a long time, working with importers, fobs, to design transition on border adjustability, accommodating their concerns. we want imports and exports to be taxed equally in america. we think they're equally important to our country. at the end of the day without it, america will continue to have incentives for jobs and

manufacturing. >> i beg their pardon, my colleagues. i've asked this question so many times they're probably sick of hearing it from me. i'm confused about the simplicity, to use your word, of how to assess a tax on, for example, a toyota automobile made in tennessee by an american plant by american workers that has parts that have to be imported from all over the world but is sold in the united states to an american consumer. >> yeah. >> how does that work? how is that going to change the price of a toyota camry. >> all those countries where imported products are coming from border adjust tax as well. toyota is very familiar with how this works. at end of the year, toyota will -- which exports a lot of cars and vehicles as well, will add up its export sales and not count it toward income, will add

up its import costs, not count it as expenses. they could move it back and forth across borders a dozen times if they wish in their global supply chain. at the end of the year it's a simple addition and sub traction. the reason i don't believe prices will go up, in more than 100 instances the economy and currency adjusts. i'm confident that will happen, as it happens every day in our economy. >> congressman, sorry to jump n we're running out of time, waiting on the president. you are from houston, effectively, north of houston. >> yes, sir. >> if you get this done, would it be very good for companies who produce, drill and refine oil and gas products in the united states and maybe bad for any refiners that have to import it? >> at the end of the day, it will be very positive, tied with our lower tax rates, full and

immediate expensing, no longer taxing worldwide and taxing equally in the united states with that strong u.s. demand, with the adjustment in the currency, economy, and trade flows, they will all be better of off. >> chairman, thank you so much for your patience and walking us through what on the face seems complicated. >> pretty simple. pretty powerful. >> john harwood is monitoring the walk up to president obama's final news conference. john? >> we're waiting for president obama to come out. there he goes. >> good afternoon, everybody. let me start off by saying that i was tempted to wear a tan suit for my last press conference but michelle, who has fashion sense,

told me that's not appropriate in january. i just want to say a couple of quick things before i start taking questions. first, we have been in touch with the bush family today, after hearing about president george h.w. bush and barbara bush being admitted to the hospital this morning. they have not only dedicated their lives to this country, they have been a constant source of friendship and support and good counsel for michelle and me over the years. they are as fine a couple as we know and so we want to send our prayers and our love to them. really good people. second thing i want to do is thank all of you. some of you have been covering me for a long time. folks like christy and lynn. some of you, you know, i've just gotten to know. we have traveled the world

together. we have done a few singles, few doubles together. and i have offered advice that i thought was pretty sound like don't do stupid stuff. and even when you complained about my long answers, i just want you to know that the only reason they were long was because you ask six-part questions. but i have enjoyed working with all of you. that does not, of course, mean that i have enjoyed every story that you have filed. but that's the point of this relationship. you're not supposed to be sycophants. you're supposed to be skeptics and ask me difficult questions. you're not supposed to be complementary but cast a critical eye on folks who hold enormous power and make sure that we are accountable to the people who sent us here. and you have done that and you

have done it, for the most part, in ways that i could appreciate for fairness even if i didn't always agree with your conclusions. having you in this building has made this place work better. it keeps us honest. it makes us work harder. you have made us think about how we are doing what we do and whether or not we're able to deliver on what's been requested by our constituents. and, for example, r time you asked why haven't you cured ebola or why is there still that hole in the gulf, it has given me the ability to go back to my team and say, will you get this solved before the next press conference? i've spent a lot of time in my farewell address talking about the state of our democracy. it goes without saying that

essential to that is a free press. that is part of how this place, this country, this grand experiment has to work. it doesn't work if we don't have a well informed citizenry. and you are the conduit of which they receive information from what's going on in the halls of power. baseline of facts and evidence that we can use as a starting point for the kind of reason and informed dough baits that ultimately lead to progress. and so my hope is that you will continue with the same tenacity that you showed us, to do the hard work of getting to the bottom of stories, getting them right. and to push those of us in power to be the best version of

ourselves and to push this country to be the best version of itself. i have no doubt that you will do so. i look forward to being an active consumer of your work rather than always the subject of it. i want to thank you all for your extraordinary service to our democracy. and with that, i will take some questions. and i will start with jeff mason, whose term apparently is not up. i thought we would be going out together, brother, but you're going to hang around for a while. jeff mason, reuters. >> thank you, sir. are you concerned, mr. president, that commuting chelsea manning's sentence will send a message that leaking classified material will not result in and related to that, julian assange has offered to come to the united states. are you seeking that, and would he be charged and/or arrested if

he came here? >> well, first of all, let's be clear. chelsea man has served a tough prison sentence. so the notion that the average person thinking about disclosing vital, classified information would think it goes unpunished. i don't think would get that impression from the sentence that chelsea manning has served. it has been my view that given that she went to trial, that due process was carried out, that she took responsibility for her

crime, that the sentence she received was very disproportional -- disproportionate relative to what other leakers have received. and that she had served a significant amount of time that it makes sense to commute and not pardon her sentence. i feel very comfortable that justice has been served and a message has still been sent, that when it comes to our national security, that wherever possible, we need folks who may have legitimate concerns about the actions of government or their superiors or the agencies in which they work, that they try to work through the established channels and avail themselves of the whistleblower protections that have been put in place. i recognize that there are some

folks who think they're not enough. and i think all of us, working in big institutions, may find themselves at times at odds with policies that are set. but when it comes to national security, we're often dealing with people in the field whose lives may be put at risk. the safety and security and the ability of our military or intelligence teams or embassies to function effectively. and that has to be kept in mind. with respect to wikileaks, i don't see a contradiction. first of all, i haven't commented on wikileaks. the conclusions of the intelligence community to the russian hacking were not conclusive as to whether or not

wikileaks was the conduit by which the dnc e-mails were leaked. i don't pay a lot of attention to mr. assange's tweets. that wasn't a consideration in this instance and i'll refer you to the justice department for any criminal charges, indictments, extraditions that may come up with him. what i can say broadly that in this new sieb beer age -- cyber age, we're going to have to work to make sure we protect the hallmark of our democracy but also recognize there are adversaries and bad actors who want to use that same openness in ways that hurt us.

whether that's trying to commit financial crimes or acts of terrorism or folks who want to interfere with our elections. we'll have to continually build our architecture to make sure the best part of our democracy is preserved, that national security intelligence agencies have the ability to carry out policy without advertising to our adversaries what it is we're doing, but do so in a way that still keeps citizens up to speed on what their government is doing on their behalf. with respect to chelsea manning, i look at the particulars of this case in the same way i have with other pardons and i felt that in light of all the circumstances, that commuting

her sentence was entirely appropriate. margaret brennan? >> mr. president. >> there you are. >> thank you. the president-elect has said that he would consider lifting sanctions on russia if they substantially reduce the nuclear stockpile. given your own efforts at arms control, do you think that's an effective strategy, knowing this office and mr. trump, how would you advise his advisers to help him be effective when he deals with vladimir putin? and given your actions recently on russia, do you think those sanctions should be used as leverage? >> couple of things. number one, it is in america's interest and the world's interest that we have a constructive relationship with russia. that's been my approach throughout my presidency. where our interests have overlapped we have worked together. at the beginning of my term, i

did what i could to encourage russia to be a constructive member of the international community. and tried to work with the president and government of russia, in helping them diversify their economy, improve their economy, use the incredible talents of the russian people in more constructive ways. i thiching it's fair to say that after president putin came back into the presidency that an escalating anti-american rhetoric and approach to global affairs that seemed to be premised on the idea that whatever america is trying to do must be bad for russia and so we want to try to counteract whatever they do, that return to

an adversarial spirit that existed during the cold war has made the relationship more difficult. and it was happened home when russia went into crimea and portions of the ukraine. the reason we imposed the sanctions, you will recall, was not because of nuclear weapons issues. it was because the independence of sovereignty of a country, ukraine, had been encroached upon by force by russia. that wasn't our judgment. that was the judgment of the entire international community. and russia continues to occupy ukrainian territory and meddle

in ukrainian affairs. what i have said to the russians is as soon as you stop doing that, the sanctions will be removed. and i think it would probably best serve not only american interests but also the interests of preserving international norms if we made sure that we don't confuse why these sanctions were imposed with a whole set of other issues. on nuclear issues, in my first term we negotiated the start two treaty, reduced our stockpiles, russia and the united states. i was prepared to go further. i told president putin i was prepared to go further. they have been unwilling to negotiate. if president-elect trump is able to restart those statalks in a

serious way, i think there remain ace lot of room for our two countries to reduce our stockpiles. part of the reason we've been so successful on our nonproliferation agenda is because we were leading by example. i hope that continues. i think it's important to remember that the reason sanctions have been put in place against russia has to do with their actions in ukraine. and it is important for the united states to stand up for the basic principle that bigger countries don't go around and bully maller countries. i expect russia and ukraine to have a strong relationship. they're historically bound together in all courts of cultural ways but ukraine is a separate country. this is an example of the vital role that america has to continue to play around the

world in protecting norms and values, advocating on behalf of human rights, advocating on behalf of women's rights, advocating on behalf of freedom of the press. the united states has not always been perfect in this regard. there are sometimeer times by necessity by dealing with allies, friends or partners who themselves are not meetth standards we would like to see met when it comes to international rules and norms. but i can tell you that in the g20, g7 the united states typically has been on the right side of these issues and it is important for us to continue to be on the right side of these issues because if we, the largest, strongest country and democracy in the world are not

willing to stand up on behalf of these values then certainly china, russia and other also not. kevin corke? >> thank you, mr. president. you have been a strong supporter of the idea of a peaceful transfer of power, demonstrated in the rose garden. yet even as you and i speak there are more than five dozen democrats that are going to boycott the inauguration of the incoming president. do you support that? and what message would you send to democrats to better demonstrate the peaceful transfer of power? if i can follow i want to ask you about your conversations with the president-elect previously and without getting into too much of the personal side of it, i'm just curious, were you able to use that opportunity to convince him to take a fresh look at some of the

important ideas that you will leave this office with, maintaining some semblance of the affordable care act, keeping dreamers here in the country without fear of deportation? were you able to use personal stories to try to convince him and how successful were you? zbl >> well, i won't go into details of my conversations with president-elect trump. i will say, they are cordial. at times they have been fairly lengthy and they've been substantive. i can't tell you how convincing i've been. i think you would have to ask him whether i've been convincing or not. i have offered my best advice, counsel about certain issues, both foreign and domestic.

having won an election opposed to a number of my initiatives and certain aspects of my vision to where the country needs to go, it is appropriate for him to go forward with his vision and his values. i don't expect there will be enormous overlap. it may be that on certain issues, once he comes into office and looks at the complexities of how to, in fact, provide health care for everybody -- something he says he wants to do -- or wants to make sure that he is encouraging job creation and wage growth in this country, that that may lead him to some of the same conclusions that i arrived at, once i got here. i don't think we'll know until he has an actual chance to get

sworn in and sit behind that desk. and i think a lot of his views will be shaped by his advisers, the people around him. which is why it's important to pay attention to these confirmation hearings. i can tell you that this is something i have told him, that this is a job of such magnitude that you can't do it by yourself. you are enormously reliant on a team. your cabinet, your senior white house staff all the way to fairly junior folks in their 20s but are executing on responsibilities. how you put a team together to make sure that they're getting you the best information and are teeing out information from which you will ultimately make

decisions, that's probably the most useful advice and constructive advice i've been able to give him. that if you find yourself ease lated because the process breaks down or you're only hearing from people who agree with you on everything or a process that is fact checking, probing and asking hard questions about policies or promises you've made that's when you start to make mistakes. as i indicated, reality has a way of biting back if you're not paying attention to it. with respect to the inauguration, i'm not going to comment on those issues. all i know is i'm going to be there. so is michelle. and i have been checking the weather and i'm hardened by the fact it won't be as cold as my first inauguration, because that was cold.

jenna rodriguez? >> thank you very much. you have said that you would co -- are you fearful for the dreamers and all immigrants within this country and what do you mean when you said you would come back? would you lu lobby congress, explore the political arena again? and if i may ask, why do you take an action dry foot, wet foot a week ago? >> well, let me be absolutely clear. i did not mean that i was going to be running for anything any time soon. what i meant is that it's important for me to take some time to process this amazing experience we've gone through, to make sure that my wife with whom i will be celebrating a 25th anniversary this year, is willing to reup and put up with me for a little bit longer.

i want to do some writing. i want to be quiet a little bit and not hear myself talk so darn much. i want to spend precious time with my girls. so those are my priorities this year. as i said before, i'm still a citizen. and i think it is important for democrats or progressives who feel that they came out on the wrong side of this election to be able to distinguish between the normal back and forth, ebb and flow of policy. are we going to raise taxes, are we going to lower taxes? are we going to, you know, expand this program or eliminate this program? how concern rd we about air

pollution or climate change? those are all normal parts of the debate. and as i've said before in a democracy sometimes you're going to win on those issues and sometimes you're going to lose. i'm confident about the rightness of my positions on a lot of these points but we've got a new president and a congress that are going to make their same determinations. there will be a back and forth in congress around those issues and you guys will report on all that. but there's a difference between that normal functioning of politics and certain issues or certain moments where i think our core values may be at stake. i put in that category if i saw systematic discrimination being

ratified in some fashion, i put in that category explicit or functi functional obstacles to people being able to vote, to exercise their franchise. i would put in that category institutional efforts to silence dissent or the press. and for me, at least, i would put in that category efforts to round up kids who have grown up here and, for all practical purposes, are american kids and send them some place else. when they love this country, they are our kids' friends and

classmates and are now entering into community colleges or in some cases serving in our military. the notion that we would just arbitrarily or because of politics punish those kids, when they didn't do anything wrong themselves, i think would be something that would merit me speaking out. it doesn't mean that i would get on the ballot anywhere. with respect to wet foot-dry foot, we underwent a monumental shift in our policy towards cuba. my view was, after 50 years of a policy not working, it made sense for us to try to reopen diplomatic relations, to engage a cuban government, to be honest with them about the strong

disagreements we have around, you know, political repression and treatment of dissenters and freedom of press and freedom of religion, but that, to make progress for the cuban people, our best shot was to suddenly have the cuban people interacting with americans and seeing the incredible success of the cuban-american community and engaging in commerce and business and trade. and that it was, through that process of opening up these bilateral relations, that you would see, over time, serious and significant improvement. given that shift in the relationship, the policy that we had in place with wet foot-dry

foot which treated cuban emigres differently from folks from el salvador or nicaragua or guatemala or any other part of the world, one that made a distinction between whether you got here by land or by foot, you know, that was a carryover of an old way of thinking that didn't make sense in this day and age, particularly as we are opening up travel between the two countries. and so, you know, we had very lengthily consultations with the department of homeland security. we had some tough negotiations with the cuban government. but we arrived at a policy which we think is both fair and appropriate to the changing nature of the relationship between the two countries.

nadia. >> reporter: i appreciate the opportunity. i want to wish you and your family best of luck in the future. >> thank you. >> reporter: mr. president, you have been criticized and even personally attacked for the u.n. security council resolution that considered israeli settlements illegal. do you think you should have hold israel more accountable? >> i am -- i continue to be significantly worried about the israeli-palestinian issue. and i am worried about it both

because i think the status quo is unsustainable, that it is dangerous for israel, that it is bad for palestinians, it is bad for the region, and it is bad for america's national security. and i came into this office wanting to do everything i could to encourage serious peace talks between israelis and palestinians. and we invested a lot of energy, a lot of time, a lot of effort. first year, second year, all the way until last year. ultimately what has always been clear is that we cannot force the parties to arrive at peace. what we can do is facilitate, provide a platform, encourage,

but we can't force them to do it. but in light of shifts in israeli politics and palestinian politics a rightward drift in israeli politics, a weakening of president ability to move and takes risks on peace. in light of the dangers that have emerged in region and the understandable fears that israelis may have about the chaos and rise of groups like isil and the deterioration of syria -- in light of all those things, what we at least wanted to do, understanding that the two parties would not actually arrive at a final status agreement, is to preserve the

possibility of a two-state solution because we do not see an alternative to it. i have said this directly to prime minister netanyahu. i have said it inside of israel. i have said it to palestinians as well. i don't see how this issue gets resolved in a way that maintains israel as both jewish and a democracy. because, if you do not have two states, then in some form or fashion you are extending an occupation, functionally you end up having one state in which millions of people are disenfranchised and operate as second-class occupants -- residents. you can't even call them citizens necessarily. and so the goal of the resolution was to simply say that the settlements, the growth

of the settlements, are creating a reality on the ground that increasingly will make a two-state solution impossible. and we have believed, consistent with the position that had been taken with previous u.s. administrations for decades now, that it was important for us to send a signal, a wake-up call, that this moment may be passing. and israeli voters and palestinians need to understand that this moment may be passing. and hopefully that then creates a debate inside both israeli and palestinian communities that won't result immediately in peace but at least will lead to a more sober assessment of what the alternatives are. so we -- the president-elect

will have his own policy. the ambassador, the candidate for the ambassadorship, obviously has very different views than i do. that is their prerogative. that's part of what happens after elections. and i think my views are clear. we'll see how their approach plays itself out. i don't want to -- i don't want to project today what could end up happening, but obviously it's a volatile environment. what we have seen in the past is, when sudden unilateral moves are made that speak to some of the core issues and sensitivities of either side, that can be explosive. and i -- what we tried to do in the transition is just to provide the context in which the

president-elect may want to make some of these decisions. [ inaudible question ] >> that's part of what we have tried to indicate to the incoming team in our transition process is, pay attention to this, because this is volatile stuff. people feel deeply and passionately about this. and as i have said, i think, many times, the actions that we take have enormous consequences and ramifications. we are the biggest kid on the block, and i think it is right and appropriate for a new president to test old assumptions and reexamine the old ways of doing things, but if you're going to make big shifts

in policy, just make sure you've thought it through and understand that there are going to be consequences and actions typically create reactions. and so you want to be intentional about it. you don't want to do things off the cuff, when it comes to an issue this volatile. chris johnson. i'm sorry, where is chris? >> reporter: right here. on lgbt rights, we've seen a lot of achievements over the past eight years, the "don't ask, don't tell" repeal. assuring marriage equality and other things. how do you think lgbt rights will rank in terms of your legacy and how confident are you that these will continue and endure under