like when i decided to host family movie nights. miracle-ear made it easy. i just booked an appointment and a certified hearing care professional evaluated my hearing loss and helped me find the right device calibrated to my unique hearing needs. now i enjoy every moment. the quiet ones and the loud ones. make a sound decision. call 1-800 miracle now, and book your free hearing evaluation. good day, everyone welcome to "power lunch. along with kelly evans, i'm tyler mathisen coming up, the biden budget. president biden speaking this hour on his budget proposal. the plan is to include $2 trillion of tax hikes, who will pick up the tab and what will the money be spent on. we'll break it all down. plus, jobs jitters

the big employment report due out tomorrow jobless claims jumping today for the latest week and word about gm, about pretty broad cuts they're trying to make before that, let's get a check on markets which are pretty much at session lows with the dow down 258 and so much focus on the banks in particular today. >> all right, for a little more granularity, let's bring in dom chu. >> we have a couple generals in the headlines today. kelly already mentioned one of them, but we'll start with general electric which is surging, up over 6.5%. and that's off the best levels of the session, by the way, so the industrial conglomerate which is in the process of breaking itself up into three separate companies is holding its investor day today and the ceo reiterated ge's full year guidance. here's what he had to say earlier today on "squawk box." >> i think we'll have high single digit organic growth. we'll more than double our earnings in our free cash should

be somewhere between 3.4 and $4.2 billion this year up nicely on an adjusted basis versus where we were last year with health care so in terms of the financial performance, we feel very good >> now, ge stock, by the way, has almost doubled yes, doubled in value since hitting 52-week lows back in july keep an eye on ge shares also, general motors, as kelly points out, gm stock is down nearly 4% on the session the automaker is offering voluntary employment buy-outs to the majority of their white collar employees to trim their workforce. gm expects to take a pre-tax charge of around $1.5 billion related to the buy-outs. this comes right after last week gm said it would cut 500 salaried positions globally. general motors and general electric both in the news. now let's send it over to kristina partsinevelos across the studio for more on the big moves in the banks >> thank you one of crypto's favorite banks is liquidating and the parent company stock is getting

slammed. silvergate capital plans to voluntarily shut down its bank following a series of financial challenges, government investigations in the aftermath of the collapse of ftx shares right now are down 20%. but since silvergate bank is or was a traditional bank to crypto exchanges, that has investors worried about the trickle-down effect across the sector the spider etf, xlf, is tracking for its worst week this year zion is down 9.5% right now. shares of svb financial, which operates silicon valley bank, are down, look at this, 58%. shares are actually just halted moments ago before going live. after it announced a $1.75 billion share sale to help with cash burn due to declining deposits it's shares hit a low we haven't seen since may 2020. >> thank you

>> let's get to the big story of the day. now president biden's budget proposal with us with the main points of what we can expect to hear is kayla tausche. what do we know? >> well, kelly, president biden is proposing to spend $6.8 trillion in the year that starts in september in his budget that includes the leftover 2020 promises and an even more aggressive campaign to tax the rich the white house estimates the federal government will receive $5 trillion in tax revenues and pay $769 billion in interest on its debt in fiscal 2024. that's a 20% increase from the prior year as the fed raises rates in a continued and persistent pmanner despite a pledge to lower the deficit over $3 billion in ten years, the fiscal deficit is projected to swell the treasury announcing its revenue, raising the corporate

tax rate to 28%. it would raise $137 billion this year taxing high income earners and pass throughs would double receipts to $107 billion a quadrupled tax on stock buybacks would raise an estimated $20 billion. that's up from $4 billion the government expects to earn this year and the administration's plan to restore and raise the child tax credit, that would cost the government $259 billion. now, of course, this is the administration's wish list it will serve as an opening offer to republicans to negotiate the spending cuts they have called for. the budget director said today, and president biden is expected to reiterate later this hour, there ball is now in republicans' court kelly and tyler. >> how much of what is in this budget specifically undoes what we would call the trump tax cuts of 2017? >> well, certainly there are a lot of proposals like specifically the increased

corporate tax rate from 21% to 28%. that's directly taking aim at one of the core provisions of the tax cut and jobs act from late 2017 that went into effect the following year but it's worth noting that even when that was proposed in the past, it didn't even have support for all of the then democrats. notably, senator kirsten cinema from arizona, who has since changed her registration to independent, was a key critic of any tax raises and went to bat against the administration, specifically for that. so just because the biden administration is proposing these things doesn't mean that they'll go anywhere in congress, especially since most of the time the budget originates in the house and of course the house is now under slim republican control tyler. >> kayla, thank you very much. kayla tausche reporting from the north lawn of the white house. for more on president biden's budget, let's bring in ben white, chief economic correspondent with politico, also a cnbc contributor.

and andy blocker, invesco global head of public policy and head of u.s. government affairs gentlemen, welcome to both of you. ben, let me start with you how much of this is really a legitimate budget proposal and how much of this is the beginning of the biden platform for re-election in 2024? >> good to see you, tyler. i would say zero percent essentially is a real budget document and 100% is the kick off of his campaign in 2024, as kayla laid out, none of these soak the rich proposals are going to become law in this congress the biden administration doesn't think they are, and tit's important to note here that the overall leftward shift of the biden administration as it moves toward re-election and its messaging, a lot of it sounds like pulled from the trump playbook without trump's rhetoric, but the protectionism and soaking the rich sort of stuff, some of that comes from

trump. but what biden is doing is saying i'm going to attack where people are upset, and that is on people making too much money and then not making enough money they don't expect any of these revenue sources to materialize in terms of raising taxes now. >> andy, how do you respond or react to what ben just said there? and second, let me advance the discussion by asking you how this complicates or helps or gets started the discussion over raising the debt ceiling >> i think ben is spot on. i think this is fairly pretty much a political document. but it does outline his priorities and it says hey, i can reduce the deficit without hurting medicare and social security and do it without raising taxes on those making under $400,000 those are his talking points what i do think it does and i think you hit this yourself, is

it starts the actual drawing of lines in the sand with respect to the debt ceiling debate we had meetings after the white house and different discussions but we haven't gotten into negotiations this is the first shot across the bow and it says, hey, i got my budget. over to you, republicans please show your hand. what are you willing to cut? >> so far, the republicans as i understand it, have not done that am i right, andy >> they haven't showed their hand even in the state of the union, you saw president biden call them out and say hey, do you really want to cut social security and medicare? i think they're on their heels and they have to come together look, i think they're going to try to do something. they have the house budget committee chair is intent on% putting forward a budget, and you'll also have the house republican study committee, the freedom caucus, all these different budgets from different republicans and the tough job is for speaker mccarthy to bring all those ideas together, get

the caucus together, and have the republicans get to 218 to vote on it >> speak to that point, ben. speaker mccarthy had such an easy time winning the speakership. this is going to be -- >> so easy >> very easy this is going to be no simpler >> no. yeah, tyler, it's a mess and they're nowhere on this, and republicans will call this dead on arrival and not an opening salvo that's worth anything. we're nowhere on that, and mccarthy has an incredibly difficult path ahead of him, partly because of the strictures he agreed to when he got the job, including basically one member can raise an objection to his speakership and bring him down somehow, he has to corral 218 to get a debt limit deal through. somehow, someway, 11th hour, it gets figured out, but it's going to be herding cats, snakes, whatever metaphor you want to torture to make it happen and it's going to make us all sweat and nervous in the meantime

because they're so far apart on this i think republicans have to back off huge spending cuts there's not much public appetite for that now that's more a tea party way of thinking but how they figure out the mix to get to 218, pop the popcorn i have no idea >> andy, what would you add to that we see, for instance, treasury bills pricing in a rather high amount of default for the u.s. government >> ben is spot on. it's hard to see how we get from here to there, how first republicans get to 218, but they need to get to 218 if they're going to have a negotiating position if they don't do that, president biden can really put the pressure on to raise the debt ceiling without that but if it gets to 218, that changes the game, moves it to democrats. they'll attack the spending cuts because they're not politically popular right now, but two-thirds of the senate are democrats up for re-election, and once that negotiation

starts, you're going to see a lot of republicans, tester, manture, sinema just to name a new, who are going to want to do a deal so i think pressure is going to be on both sides right now, pressure is on the republicans. >> you mentioned those three they're democrats who want to do the deal, right? tester, sinema, and manchin. >> right, but republicans put that pressure once they come together they're sure they can come together, agree on something, that puts pressure on democrats to play ball >> in many ways, i felt over the past couple years joe manchin is the most powerful man in washington anyhow, ben white, andy blocker, thanks dow down almost 300 points right now, at fresh session lows could it be headed for a three-day losing streak? our next guest says buyer beware he'll explain why he's not convinced a recession is fully priced in yet. >> plus, calling an audible. credit suisse delaying its 2022 annual report after a last-second call from the s.e.c. shares down 4% on the news but

they're trading under $3 we have the latest detailshe wn "power lunch" returns. conventional thinking delivers conventional results. at allspring, we break away with purpose. harnessing data-driven insights and boundless curiosity. we dissect the market from every angle. helping to build portfolios that redefine what's possible. because investing isn't one size fits all. allspring.

purposefully divergent.

welcome back as investors gear up for the jobs report tomorrow morning, jobless claims jumped to 211,000 today. also today, general motors offering buy-outs to salaried workers. a huge chunk of their workforce. as the labor market jitters start to go beyond tech, what does it mean for stocks?

david trainer, it's good to have you. and listen, i mean, when was the last time you were bullish, by the way? >> we're bullish, just in pockets. we're bullish around stocks with good fundamentals and attractive valuations we're just really disciplined abou we think are safe and smart investments. >> safe and smart. that's kind of what we heard from allen boomer last hour. are you similar looking for low valuations, high dividends, that kind of thing? >> yeah, we're not so much concerned with dividends as we are with core earnings and cash flow adjusted for all the things companies hide in the footnotes. we think diligence is coming back into favor. it's not just about chasing fads and fomo, but doing real work and gaining a competitive advantage. >> we're going to have to interrupt that conversation because the president is early he is announcing his 2024 fiscal 2024 budget in philadelphia. seen as an opening salvo in his re-election campaign

let's go to philadelphia and watch the president. >> we're going to get action hey, you know what tina, i wish you were here, i could meet you they say, they speak with an accent in southern delaware, talk at you like this, you know what i mean? they look at you and say you've done good with that boy. congratulations, mom congratulations. thank you. please have a seat well, you know, i don't know whether you know not because of the previous president, jimmy williams, the only reason i'm standing here is you guys, not a joke, when i was running with barack, things were slowing up a little bit. i asked for help

you guys got in a bus and got a bus and you're the reason why i'm standing here. i was vice president then and i'm president because of you guys and again, you know, i have told your son you got good blood my dad would say thank you all very, very much. and it's great to be here with josh josh shapiro, i predict he's going to be one of the best governors in the history of the state. that's in large part because he married up and i want to thank congressman brandon boyle for the passport to get in his district you have been a great friend from the time we have been together thank you, thank you, thank you. by the way, he now leads the

democratic part of the budget committee. he's the guy that is going to determine whether or not my budget gets passed but you know, while he couldn't be here, i wanted to thank jim kennedy. he's a good friend, mayor of philadelphia, and two great senators close friend bobby casey and john fetterman, who will continue to deliver for the people of pennsylvania, i believe. john, if you can hear this at all, we're with you, pal we're with you everybody asks why i ever moved from scranton. moved from scranton because we lived five blocks from the caseys you think i'm kidding. i knew as long as his dad was around, i would never be able to be a senator or governor in pennsylvania and then along comes bobby anyway, great, great family. great friends. folks, here's why i'm here today. for too long, working people have been breaking their necks, but the economy has left them

behind working people like you, while those at the top get away with everything get everything one of the reasons why i ran for president, and i mean this sincerely, you may remember when i announced the three reasons i was running. one, to restore the soul of america. restore some decency and honor to the system. two, to rebuild the backbone of the country, the middle class. and the middle class does well, the poor have a way up and the wealthy still do very well and the third one is to unite the country. didn't think we could do that, but as we have seen all the talk about we never get any cooperation from the other team, the la two years we pasted some pretty big things with bipartisan support i ran to grow the economy from the middle out and the bottom up and not the top down and i know when i grew up, my dad's kitchen table, not a whole lot trickled down to my kitschal table for my dad that's why i wanted to come here today and lay out the next part of my economic plan.

my budget, my budget i'm sending to congress today. if i could hold for just a second i want to be clear, and i'll be clear to the press as well the fact is that speaker of the house has been -- he's a very conservative guy and he has even more conservative group with him, but he and i met early on we said what are we going do about the budget i said, let's make a deal. let's meet i said, i'm going to introduce my budget on the 9th of march. you introduce yours and we'll sit down and go line by line and we'll go through it, see what we can agree on and what we disagree on and fight it out in the congress so i want to make it clear, i'm ready to meet with the speaker any time, tomorrow if he has his budget lay it down, tell me what you want to do i'll show you what i want to do. see what we can agree on what we don't agree on, let's see what we can vote on. now, i'm not going to lay out the entire budget. that would take the rest of the

day. but i want to give you the contours of what we're for and how it's in stark contrast to what appears to be what the other team is for. my dad had an expression someone would come up to my dad and say let me tell you what i value, joe he would say, no, no, show my your budget. i'll tell you what your value. i'm serious. an expression. show me your budget, i will tell you what your value. let me tell you what i value with the budget i'm releasing today. i value everyone having an even shot, not just labor but small business owners, farmers, and so many other people who hold the country together who have been basically invisible for a long time so the end of the month after working like the devil, they just have a little bit more breathing room, as my dad would say. after you pay all your bills, you're sitting at the kitchen table writing out the last bill.

you have just a little bit of breathing room so my budget reflects what we can do to lift the burden on hard-working americans and there's more than one way to do that. and that's what brings us down to everyday costs, how much do things cost? we brought down inflation seven months in a row. we're going to whip it, but in the meantime, there's other ways to take what is inflation in your budget. i meant i won't embarrass them by pointing out, i don't have permission, but i just met a woman who has health care costs that are $600,000 a year $7,000 a month guess what how can you possibly deal with that we just dealt with it, by the way. we just dealt with it. for example, prescription drugs. we pay more for prescription derogs in america than any other advanced nation on earth let me say that again. in the united states of america, whatever prescription drug you're buying, you're paying

more than any other nation on earth that is an advanced nation we're finally beginning to change that. i have been fighting that for over 30 years. because of a law i worked on for decades and that i just signed last year, we took big pharma on, and we won for the first time, we won >> the other team didn't think that's a good idea none of them voting for it they think big pharma should be able to make extraordinary profits, exorbitant profits at the expense of the american people that's a fact. medicare finally has the power now to negotiate for lower drug prices and by the way, they have been able to do that at the v.a., the v.a., they're able to say we're only going to pay x amount of dollars for this particular drug that in fact veterans need only place that was exempt was

medicare they docouldn't do it for medicare now they can here's the deal, not only, for example, the woman i just mentioned, beginning of 2025, she'll not have to pay more than $2,000 a year total amount for drugs. $2,000 folks, it's not just going to save people's lives and save people money so they don't have to go bankrupt to try to stay alive. it's going to save the government it's going to reduce the deficit, $160 billion. these guys keep saying how are you going to cut the deficit guess what, your tax dollars don't have to pay all that exorbitant price for medicare to drug companies, and it's rational, it's going to save $160 billion in tax dollars.

millions of americans have diabetes they need insulin literally to stay alive how many people know somebody who needs insulin for their diabetes raise your hand. well, they're paying somewhere between $400 and $700 a month now. were until last month. guess what, that insulin was invented 100 years ago, yeah, literally 100 years ago. you know how much it cost to make that insulin? $10. you know how much it costs make it and package it? $13.50 charging the kind of money they charge, guess what, guess what, now we have lowered the cost of that insulin to a maximum $35 a

month. i was at a town meeting in northern virginia last year. a woman stood up she was a little embarrassed to speak. she said, where have two daughters with diabetes. and i can't afford the insulin and -- and she talked like that, she said we have to split it sometimes. can you imagine looking at your son or daughter and knowing you don't have the money to pay for the insulin to keep them alive and healthy. not a joke talk about being deprived of your dignity seniors on medicare don't have to pay more than $35 a month, and guess what i thought we should cut it for everybody to $35 a month

but my friends on the other team knocked it out i didn't have the votes. i lost by a couple votes guess what, capping the cost for everybody at $35 a month, especially those 200,000 children with type i diabetes. well, here's what happened eli lilly, one of the world's biggest drug companies, just announced it's capping the cost of the insulin at $35 a month. now, how are the rest of these folks going to charge more than that when you can go to eli lilly and buy it for $35 a month? so folks, it's going to save a lot of lives but also it's going to give parents back the dignity that they have been deprived of because they can't take care of their kid. something that's so basic and so important. but again, the maga republicans want to take away the law. one of the things they have announced they want to do away

with is the inflation reduction act. okay, we have a different set of budget ideas, man. more than budget ideas, but anyway by the way, how many people, maybe even some of you, you know people who stared at the ceiling last night, wondering god forbid, if i get pancreatic cancer, my wife gets breast cancer, what's going to happen how are we going to pay the bills? i can tell the story, my dad would probably be mad at my telling it were he alive we lived in a three-bedroom split level home it was a nice home, we were a middle class family with four kids and a grandpa, and the bed my headboard was against, myself and my two brothers, it was against the wall of my dad he was really restless you could hear the bed and i asked my mom the next morning, what's wrong with dad he said his company said no more health insurance they weren't going to pay for it guess what, a lot of people are

lying in bed at night wondering what they're going to do, are they going to have to sell the house, what are they going to do if one of them gets really sick? thanks to the american rescue plan, which not one single republican voted for, that i signed into law as soon as i got to office, millions of americans, millions more are enrolled in the affordable care act. saving an additional $800 a year for better coverage and better prices my budget is going to make those savings permanent. we passed them up until now, but they're expire if we don't get them done again. my maga republicans all voted to get rid of the affordable care act. they voted to get rid of it over 50 times since barack passed it. 50 times well, it is -- i think it is shameful folks, no one can deny we have a climate crisis so we have seen more land, for example, i have been in more helicopter rides these last two

years, particularly from arizona all the way up to idaho, all the way on the west coast, more forests have burned to the ground than the entire state of maryland the entire size of the state of maryland look what's happening. colorado river has become a creek. you have all these environmental problems that are so profound, they're hard to deny and people are seeing them now along with extreme superstorms and droughts that's why i took the most aggressive action ever in all of history in any country, to take on the climate crisis. by lowering your home energy bills, which maga republicans voted against. we have now got to the point where it's cheaper to generate electricity from wind and solar than it is from coal and/or

fossil fuels and i'm from scranton. i'm not against coal per se. a lot of people made a living on that way, but we're providing for incentives for folks to make the transition we're providing you with a tax credit, tax credit and rebates if you buy new efficient energy efficient appliances heat pumps, the new heat pumps they can heat the whole damn house. no, i'm serious, not a joke. if you need a heater and you need to buy one of those heat pumps, you get a tax credit for doing it and water heaters, tax credits to winterize your homes. i gathered together leaders from american autoworkers on the south lawn of the white house, all the american manufacturers and two summers ago, guess what, they all agreed within the next month, they came to me and said we're going to go all electric we're going to go all electric and that's going to save

billions of gallons of gasoline running into the air it's not only going to save the environment. it's going to help good paying jobs we're providing tax credits for folks who buy electric vehicles to encourage them to do it we're still going to need combustion engines and oil for the next 10 to 15 years. they're not all of a sudden all going to go away, but all this is going to lower energy costs for families on an average of $1,000 a year and create good paying union jobs. jimmy, i told you where was going to be the most pro-union president in history, and i kept my promise i kept my promise. and by the way, when we're talking about the creating jobs, my buddies at the ibw were the strongest support i had this

year guess what they're going to install 500,000 charging stations all across america. and by the way, the things i'm proposing not only relieve the burden on families in america, it's also going to generate economic growth. that's not all support working parents, my budget expands access to fordable child care for millions of families and it's going to invest in paid family and medical leave. which all of you fought like hell for, so that the u.s. is no longer the only major economy in the world that doesn't have paid leave. folks, my budget also invests in elder care and home care how many of you are like i went through with my mom and my dad as they got older, they wanted to stay in their own home. it was cheaper to stay in their own home than to have to sell

everything and go into a home. fortunately, i lived close enough and they could move in with me, but my point is, it's cheaper if we provide for the ability for them to stay in their homes. it's not only the right thing to do, but it's cheaper on the taxpayer all the things are going to help folks go to work, generate economic growth in our nation, and still take care of their families the point is that every time i talk about things. people talk about like this is an overwhelming burden on the taxpayer this is going to save money for the taxpayers. no, it really does save money for the taxpayers. and generate growth. that's how the economy grows that's why i was able to create 12 million new jobs in two years. more than any president in american history has created in four years we have done in two years what

no president has done in four years because of you the point is, it's good for everybody. we're not hurting anybody. my budget also restores the child tax credit when that was in place during the pandemic, guess what, child poverty was cut in half to the lowest level in all of american history. and guess what, because moms were able to go to work, moms were able to go out there and make a living. folks, we can reduce child poverty and increase child opportunity. this is going to help millions of parents going to work knowing their children are taken care of, and yet, only a few republican friends supported it. you know, my wife jill, who is a philly girl, if i didn't root like hell for every philadelphia team, i would be sleeping alone. you think i'm kidding. whoa, whoa anyway she's in class today teaching.

she has an expression she uses for real any country that outeducates us will outcompete us let me say it again. any country that outeducates us will outcompete us for decades, we were the only country in the world, we led the world economically we were the only economy in the world that was moving that fast because we were the best educated public in the world we started before any other country. other had higher education with more sophisticated and private institutions, but we -- everybody in america at the turn of the 20th century said they would go to school for free for 12 years was a game changer. it was a game changer. but the rest of the world has caught up. we all know 12 years is not enough to succeed in the second half of the -- second quarter of the 21st century seriously, 12 years is not enough we want america to have the best

e educated work force, we need to invest in preschool. i'm not talking about day care i'm talking about school all the studies have recently shown, this is real, think about it now that you learn, you heard all these stories, if you come from a broken home where mom or dad has a drug addiction or there's a real problem or you don't have books in the house, et cetera. by the time a kid gets to first grade, they will have heard a million fewer words spoken not different words, just spoken they're not included well, guess what studies that children go to preschool, who go three, four, five years old go to school, not day care, they increase by nearly 50% the likelihood that they'll finish high school and go on to earn a two or four-year degree no matter what their

background is. guess what, your brain is still developing they're exposed to the same thing other kids are exposed to, they grow. we also know many families struggle to afford college for their children that's why we had these things called pell grants for families earning less than $60,000 a year, they get a pell grant to go to college to help them pay for college. for the last two years we have increased pell grants by $900, and my budget increases by another $820 used to be if you want to university of pennsylvania -- penn state or the university of delaware, state schools, the state paid a significant portion of tuition not anymore. they're not paying anymore they're paying some but not much because they have cut paying for it guess what try paying for college, even in a state institution where you can commute. it's expensive as hell especially if you have a couple kids in the family, making less $60,000 a year >> that's president biden

presenting some of the defails or highlights in his view of his 2024 fiscal 2024 budget in philadelphia our team of reporters have been listening and analyzing what we know so far, and we're going to break it down on all angles. kayla tausche at the white house, robert frank is here in studio to talk about some of the tax implications we have also got brian sullivan on energy, and morgan brennan on the defense proposals in this multi, mull-billion dollar budget kayla, give us some of the highlights and put it in a political context for us as if we need it >> well, tyler, president biden is trying to tap into the progressive zeitgeist by talking up this very aggressive campaign to tax the wealthy, tax high earners and tax corporations like big oil and big pharma, all while billing himself as fiscally conscious and pledging to lower the deficit by $3 trillion over ten years. he also opened those comments

with a call to action for house speaker kevin mccarthy, saying he has laid down his markers of the programs his administration wants to advance in this wish list of a budget, and now challenging republicans to put forth their budget as well, saying he would meet with the speaker as soon as tomorrow if their budget is ready. house speaker kevin mccarthy yesterday said because the white house took an extra month to release its budget that republicans would be delayed as a result they're still trying to figure out where there's unity, but of course, the underlying detail of all of this, as you were asking ben white before, is what this means for 2024 the campaign conjecture is in full swing, especially because of the location where president biden is speaking today, philadelphia that was the headquarters for his 2020 campaign. and that looked very much like a stump speech and a practice run if we're going to get this announcement fairly soon

>> kayla, thank you. robert, we turn to you to highlight some of the first comments he made he talked about eli lilly quite a bit on the diabetes issue. he didn't talk a lot about texas that i heard they could push that further down >> he said everyone benefits those who are paying are not going to benefit if we look at this, there are over a dozen tax increases on the weltiest companies you start digging into details and start putting the pieces together, you come up with one clear conclusion, which is that taxing ordinary income is just not enough anymore to fund these programs they have to start going after assets and investments and the big one is the capital gains tax. right now, it's 20%, it goes to 44.6% under the biden plan you add the 39.6% new top rate plus 5% social security tax, that brings you to $44.6% on

capital gains. that is a huge increase from the current 20%. then he's knot his billionaire tax which is of course a tax on those worth $100 million or more it had been 20%. it's interesting he increased that rate to 25%, upping the ante >> this is on their wealth or on their income >> the billionaire minimum is on their wealth unrealized gains so if you have $100 million worth of anything, if it increases in value over the course of the year, even if you don't sell the stock or sell your business or property, any increase during that year will be taxed at a minimum of 25% so you add these two together. capital gains and this tax on wealth, they're going after assets and investments, and ordinary income goes up a little bit, but the real money is in investments and assets >> everybody says this is a pipe dream that's never going to happen, but what you said is so fundamental to all of this

if we're running out of money for paying for stuff and they say taxes are a pipe dream, how do we fund these programs. at some point, i don't care if it's a wish list or not, we have to complete this picture somehow. >> right that to me is the big news here. to complete that picture, income and wage income, which has been the way we generate tax revenue mostly for years, is just not going to do it anymore whether it's the elizabeth warren, bernie sanders, biden, they're all coming to doing the math and saying the only way we get there is through assets and taxing wealth, even if you haven't realized it as income yet. >> maybe that's a good point, morgan, to turn to you i don't know jet what the republicans will propose, but you start to talk about cuts and this doesn't feel like the kind of environment where either party is talking about defense cuts, which i saw the numbers from kayla earlier, almost 50%

of the budget. >> yeah, so defense right now is proposed in this budget release that we got this morning to increase top line to $886 billion. that would be a 3.3% increase. it would mean a new record inflation adjusted it's actually negative if you look just at the department of defense, it's still a 3% increase. a little less than what analysts were expecting in terms of these proposed numbers this is exactly why defense stocks have sold off since the start of the year, because there's so much uncertainty about the trajectory of defense spending into fiscal 2024 and beyond that being said, we know the world is more dangerous, more uncertain place. the joe opolitical risks have continued to mountd. the tensions with china, especially from a national security standpoint, and a technological standpoint, have continued to mount as well so there does seem to be this growing sense that defense spending will continue to increase

the question now is by how much, how much when you adjust for inflation, and where specifically is that money going to go? we don't get the defense budget breakdowns by service and program until the beginning of next week, but this top line number does seem to be a little disappointing, at least to investors which is why you're seeing shares turn lower with the release earlier today. >> brian sullivan, the president seems in terms of corporate structures to have two boogiemen, although i should use a more gender neutral term these days one would be big pharma, the other is big oil he says he's going to go after federal tax subsidies for oil and gas companies. he says companies have failed to invest in reduction. fact check him here. >> how long do you have? >> long as you need. >> you know, again, i want our viewers to understand this is just publicly available information. i was listening to the president, with all due respect.

much of what he was saying was either confuse me or i just wasn't sure. i would like to know better where the information is coming from a couple things he did say that we need oil and gas. he repeated state of the union, so we're going to need oil and gas for another 10 or 15 years by the way, no estimate that says we'll need less than 70 million barrels a day globally over the next 25 years that i can find talked about when he uses the term subsidy, and i haven't seen the full budget so i want to get it right as well everything i have seen and people i talk to say he says we're going to end oil and gas subsidies. what they're referring to is the tax deductions for investing in drilling new wells, which that's an investment credit which would be available probably to almost everyone industry, where you invest in building a warehouse or research and development. most investment costs are deductible on your corporate taxes.

so it appears that he's interchanging the term subsidy for deduction, but fine, but it looks like it would carve that out for oil and gas. most oil and gas firms last year paid about 35% effective federal income tax pfizer paid 9.6% i only know that because i looked at it a couple days ago and he said we're lowering home energy bills i hope that is true down the road, but i would ask any of our viewers if they have found a bill that has come down. all we have talked about is how nationally how bills have gone up maybe they're talking about a longer term thing, but yeah, energy is a big part of this by the way, he has this huge decision about this alaska project. that decision is due any time before friday night. i think with energy there's a lot of ways to sort of tell the story, and you know, look at the numbers and et cetera.

>> congratulations on last call, which debuted last night we'll be checking in tonight as well brian, thank you >> i want to turn back to you, robert, because i'm not understanding how we get from a 20% capital gains tax rate on sold assets where you're measuring from the basis to what you sold, to a 44% tax rate. >> yeah, so right now, technically, the very top rate is 23.8% because you have that niit tax then, what he's doing is saying look, capital gains should be taxed add the same rate as ordinary income. he's raising the ordinary income rate to 39.6%. that gets you to the 39.6% then he adds the frosting on the cake, that new 5% tax which the 3.8% to 5%, so you go 39.6% plus the extra tax. >> the medicare tax.

he's fundamentally saying there would be no distinction between capital gains? >> and he said all along that wealth should be taxed the same as labor and work should be taxed the same as wealth that's putting his budget where his mouth is and same but shoul subject to that 5% medicare tax so that gets you even above the top income rate of 44.6% for long-term -- >> golly, if you taxed and i have long actually felt this way that income should be income, okay >> yep. >> i felt this way very strongly, so if you made all income equal in the eyes of the law, wouldn't you then be able to reduce the rate of tax on all income if you took all of it, dividend income, capital gains income, carried interest income, salary, w-2 income, business -- and you threw it all into one

pot why would the tax rate still need to be 44% couldn't you lower it? >> no, because like you said it would all be taxed the same. no extra incentive not to sell your stock for a period of time. essentially work would be taxed as wealth and many people for years have believed that as incentive for us to invest we should tax it at a lower rate. >> well, that's the argument for capital gains tax. rating being lower. >> this could have huge implications this is happening when federal and state revenue is still at all-time highs what is going to happen if the economy really turns south, revenues start and we have to raise taxes. >> folks, we'll have to leave it there. i digress. >> inflation helped a lot with the deficit and grown our way out -- it's all upside down right now. it's all upside down but thank you all. we appreciate it guy, truly, brian sullivan, robert frank, kayla tausche

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pippa stevens is there pippa. how are you doing? >> reporter: hey, tyler. one of the most hotly anticipated conferences here at ceraweek was jennifer granholm's address. in a room packed with energy executives she praised oil and gas companies for their work over the last year saying the u.s. has become a global energy powerhouse, but she did say there is more for them to do on the clean energy front take a listen. >> we are still encouraging them to keep production up. they have been -- they have exercised capital discipline as they say, although they have been doing an awful lot of shareholder buyback, the majors have and would love to see some of that be invested in taking advantage of diversifying their energy portfolio >> reporter: she pointed to european majors that have diversified beyond hydro carbons. they have the capital,

knowledge, and skill set and need to and can play a key role in the energy transition she pointed to the i.r.a. calling those incentives irresistible and said she hopes it will, quote, provide the impetus for them to pursue a clean energy strategy. >> president biden meeting with president of the european commission, people down there focused on that, pippa >> reporter: yeah, it's a huge topic of conversation, and, you know, tensions have been rising ahead of the meeting tomorrow, around some of those provisions in the i.r.a., more specifically on the measures that call for use of domestic content which european officials say will come at their expense but secretary granholm told me she thinks that the administration is working to avoid an all-out trade war, but she said that part of the conversation is bringing some of those supply chains back to the u.s. and she said that other nations are simply jealous of the i.r.a. but that it's not an either/or scenario she said that other nations should implement similar

legislation and that really it should be a race to the top. guys >> pippa, thank you. credit suisse delaying filing its annual report after a last-minute call from the s.e.c. let's bring in cnbc.com on this. >> it's never a good sign when you can't do basic things. it has more to do with things historical in nature, in their statement they said this has to do with certain accounting measures they did -- which with potentially incorrect for 2019 and 2020 they're saying there's nothing wrong with their 2022 figures but they have to go back to the drawing board to release an acceptable 10kfiling that will take time and certainly that hasn't done the stock any favors. >> elsewhere it's sort of a least scathed bank today, hugh what are you hearing about what

is happening at silicon valley bank and the fact that we've seen banks with a lot of losses from fed rate hikes across the portfolios of treasuries and mortgage-backed securities >> yes, so silicon valley bank do you ang astonishing 55% the last i looked. you know, there is a lot of pressure and take a step back. what i see happening is essentially, you know, the banks with the most exposure to the frothiest asset classes of the pandemic, that would be start-ups and crypto, are under the most pressure, so you saw that obviously earlier with silver gates saying they were basically throwing in the towel winding down operations and in this case, silicon valley bank is under pressure because, you know, their main source of funding is the d.c. community, obviously they're burning cash, they're sucking up reserves causing a hole in the balance sheet of silicon valley bank and essentially forcing them to sell acids they would prefer not to sell because you're underwater, bonds have decreased in value.

this is increasing pressure on silicon valley bank and a few other names highly leveraged suddenly out of favor. >> also news affecting jpmorgan chase, a banker who worked there with apparently some ties to jeffrey epstein, what's the brief thumbnail on that, and how much tarnish is go to attend to jpmorgan chase or its ceo jamie dimon? >> it's hard to say. certainly, you know, this marks a turn in their case in which for awhile they were actually defending their private banking chief, head of investment banking and head of wealth and asset management for awhile so he was a long tenured mu multidecaded jpmorgan executive and certainly it looks like that they've suddenly decided to turn and basically, you know, say that he was actually the nexus of the problems, he should have

escalated, you know, the reality of his relationship with epstein earlier and as a result he is exposed to all of the financial downside of this >> absolutely. >> and i'll say up to $80 million in financial clawbacks. >> thank you so much hugh son, we appreciate it. the dow down 400 points as we hand it over. thanks for watching "power lunch. >> "closing bell" starts right now. >> kelly, thanks so much welcome. i'm scott wapner from post 9 here at the new york stock exchange in the thick of it all. this make or break hour begins with stocks down sharply as we look ahead to the most important event of the week. tomorrow morning's jobs report, only hours left now to trade ahead of that and so much potentially riding on the release. take a look at our score card with 60 minutes to go in regulation the majors as you see are all in the red even as bond yields fall today dig a little deeper, though, in the market and take a look at the russell 2000 that is where the real damage