coming up here tomorrow judiciary member, randy forbes. john ron's ski on the -- lonski on the economy, good stuff. thanks for being with us. we'll see you tomorrow night. good night from new york. neil: well here's the good news on the president's budget today. he finally discovered entitlements are out of control. now here's the bad news. his hatred of the rich is now even more out of control. welcome, everybody, i'm neil cavuto and i guess i should be grateful and i am that president obama has finally admitted we have an entitlement problem in this country, not that rejiggering the inflation peg used to calculate social security benefit increases changes everything but i do think it is the start of something. what's been nagging at me this whole day is it is this rich bashing, same ol' thing. the president once again insisting they pay their fair share. never mind he already hiked their income tax rates and

curtail ad lot of their deductions and leaving them to pay the lion's share for the health care mess. taxing the rich on plans he deems excessive and sticking to them yet again when they sell their homes with a 3.8 medicare surtax he doesn't find remotely excessive that is not enough. now he wants a guaranteed minute 30% tax rate on those making more than a million bucks. all tax breaks entirely for retirement plans north of 3 million bucks. i could go on about his other surcharges and fees but what the fee. the rich already know they are roiled fed. i don't know what point the rich are finally paying a fair share but they're not there yet. they're not even close. mr. president, what will it be to let rich folks be? if not a combined top rate of 50% now, what will it take? 60%? 70%. back to the good ol' days of 90%? hard to say this much is

not. you say you don't want to fix our spending problem on the backs of the middle class. so you clearly decided to keep hitting up the rich and kick them in the ass. at least while you still have them because at the rate you're going, mr. president, you won't for long. none of this is surprise to hear house speaker john boehner tell it, reacted this way. >> he does deserve some credit for some incremental entitlement reforms. they outlined in his budget but i would hope that he would not hold who stands these modest reforms for his demand for bigger tax hikes. neil: somewhere boehner has to cobble together or somehow, some sort of a deal with the president who simply won't budge on those taxes even as the speaker already has. so what is the speaker to do? we thought we would ask a former speaker who knows what mr. boehner and republicans are generally up against.

former house speaker denny hastert joining me right now. speaker, always good to have you. what would you do? what would you do? >> first of all, you look at the situation and constantly escalating the punishment on productive americans. you know, you can't do that forever and i think boehner and company are certainly have to draw the line there. i think the president has taken some positive steps. entitlements do need to be changed and looked at and modified, but, there are other ways to get capital, to raise revenues and, it doesn't have to be on the backs of the people who work. and one of the things he is trying to do and put minimum 30% on people over a million dollars, most of those are small business people. you're taking away all deductions on small businesses. that's, that's expenses. that is buying the pickup trucks and computers. that is really detrimental to our growth. neil: but it seems he is also saying he knows the rich are savvy enough even at a top rate of 39.6% and

deductions and write-offs, and like they can cut the obligations in half. when he is talking about a minimum rate of 30% of a million and over club, he is essentially saying, i'm not limiting what you can write off but i'm even finding if you do, you will always have to fall back that as a minimum that is a game-changer, is it not? much as the amt was that eventually sucked in a lot more folks, right? >> oh absolutely. it really put as real penalty on people that take the risk and go out and, are the entrepreneurs and make jobs in this country. and so that's --. neil: what do you do? in other words if he will go this route to say by and large i'm closing loopholes and credits and allowances, something by the way a lot of republicans including speaker boehner were open to. i guess that was before the rate hikes. but is that off the table now for republicans? because they agreed at the

rate hikes and will not give anymore at the office? >> i'm not going to speak for speaker boehner. he has to do his own thing. neil: well that seems to be what he is saying. that seems to be what he is saying. >> there are ways to find other revenue to bring in. some people are trying to hold revenue increases, for instance, stranded, capital overseas as engine to draw, to bring tax reform. but i don't think you're going to get decent tax reform with this president. it is just not going to happen. you have to look at some other alternatives i think. neil: now republicans feel a little buoyed, speaker, you and i were charting before the who whole sequestration nightmare. that they actually got the better of the president. that he was trying to fear-monger american people. there would be hell to pay. we would all be eating horse meat and meat inspectors would be fired and sequestration came and went and nothing was felt. the president warned today it still could impact us and be bad but by and large it wasn't.

do the american people, much less republicans call the president's bluff? >> i think so. if you will are back home and you got more bills than you've got income, you have to cut something. people understand that. and that's exactly what the federal government has done. i think most people say, why don't we cut more? neil: i think the president doesn't think there is a problem. i don't think he is faking that. i think he genuinely feels spending isn't a problem. i hear from a lot of prominent democrats, dennis, we don't have a spending problem here. they honestly feel that way. how do you argue with people who, i'm not taking sides here, if you don't think there's a problem, you just don't get it? >> well, look it, the president has said he doesn't think there's a spending problem. when you start to look at the trillions and trillions of dollars we're in deficit, there is a spending problem. so that's where, that is what congress is about. that is why there is two, three, divisions of government. so somebody can draw the line and say, this is where we're at. one of the problems that i

think the house has to deal with, is all the dealings that are going on in the senate. the senate even cuts and dries. cuts a deal and the senate, the house comes back to the house. they got to start creating some of their own ideas and lay them out. and start passing legislation. neil: yeah, they may have to do that always good having you speaker. thank you very much. >> my pleasure, thank you. neil: well the markets are not worried about any of they sure had a funny way of showing it. look at that dow. it is another record and man, oh, man, it is on a roar. what if i told you they're putting faith in a federal reserve that might not have a clue and today proved it. woman: what do you mean, homeowners insurance doesn't cover floods? [ heart rate increases ] man: a few inches of water caused all this? [ heart rate increases ] woman #2: but i don't even live near the water. what you don't know about flood insurance may shock you --

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beef prices soaring and chicken prices and vegetable prices and pasta prices and whole bunch of other prices. everything from the airline ticket to the next time you fly to the resort you're headed to once you land. why this continuing confidence in a fed that doesn't seem to get it on something so basic? and why this dow reaction to a fed that traders are very much convinced does get it? what happens when reality of these prices hit? are we all going to get hit? to sandra smith and gretchen hamel and julian epstein. sandra, that is what worries me. i'm not fan of going into grocery stores outside the bakery products section but i could seen see prices going up rather markedly but not showing up at the fed or the fed view of inflation and that worries me. should it be? >> well, absolutely. and evidence of that is seen every single trading day day

on the down here at the chicago board of trade. every day we're seeing historic price levels for wheat and corn and soybeans. while you might not think that affects every day. that goes into pretty much everything we eat all the way down to coca-cola we enjoy at night. corn syrup prices skyrocketing. you're looking corn prices above $7 a bushel. it used to be a big thing to say beans were in the teens. soybeans were in the teens a long time now. they're above $13 a bushel. this is skyrocketing prices at grocery store. it doesn't look like there is an end to this anytime soon. you have a growing population. you have the fed printing money, weakening the u.s. dollar and that is spiking demand for grain worldwide and making it price he iser for all of us to eat every day. neil: gretchen, the fed steps back which act floge some of the stuff sandra is talking about in various commodities and acknowledge

what neil sees passing by the counter in the backerry section. but given caveat with in overall scheme, housing prices rather subdued despite recent gains, computer prices, affordable, things are hunky-dory, so don't worry. what do you make of that? >> this is something unsustainable. the fed has been dumping or buying $85 billion worth of assets every month. 40 billion of that going into the housing market. it is just not sustainable. there is no end in sight. at some point this bubble is going to have to pop. neil: julian, do you worry about that? leaving politics aside i want to focus on the fed. ben bernanke, helicopter ben he is called, keep providing money and low interest rates via a lot of bond buying and the like gretchen referred to but are we placing our faith in the wrong entity? >> well, i think this kind

of cheap money policy there is limit how long it can go on for. i think there is no question about that. on the flipside when you're coming out of recession and still in an economy about 1 1/2 to 2% growth, one of the big problems is getting credit available to small businesses. in terms of an inflation problem there really isn't that big of an inflation problem. the inflation is less than 2%. best indicator are the treasury yield, the treasury bond yield. it is true for some commodities like food you're seeing some price increases. that is in large part because of the drought that occurred. what you're seeing in other sectors, things particular to the sector. not overall --. neil: affecting aluminum and tin and platinum. i don't want to get too wonky. >> they're related. neil: the concern seems what if the fed is getting it wrong? sandra, what if the fed is relying on data that is lopsided unreal listic? >> that could be, that is certainly a reality of the situation. when you look at gas prices

you don't have to look at nickel and aluminum to understand this. consumers at home, small businesses that need to support their goods i i'm sitting in the city of chicago they're paying over $4 for gallon of gasoline the highest in the country. when the fed says that inflation is tamed, drivers in this large city in the u.s. would disagree with that. neil: gretchen we hang our hat on the fed continuing to be sort of like the only adults in town. with all political bickering on both sides. we hang our hats on the fed. to our detriment? >> of course to our detriment. the problem with the fed they have created this stimulus that has no end in sight, at the same time a government that is spending with no end in sight and nearly $17 billion debt. we have spend and spend and spend policy going on by the fed and congress and this white house where you just

don't know what is on the horizon when it comes to the economy. and comes to, are we ever really going to see real growth? he talked about 1% growth. a lot of people say that is because, you know, because the government spending has been getting in way. the economy hasn't been freed up to move forward. we're being dragged down by the debt. there is so many different things at factor and at play, inflation will be something that will hit it country at some point in the coming few years if not sooner rather than later. neil: so we can keep avoiding. >> it is not true we're spending as far as the eye can go. we have had $2.5 trillion budget cuts since august 11th showdown. >> don't get knee started on that. neil: let him speak. >> if i can finish the point. i think you can isolate industry and talk about inflation in food that is related to the drought. you can talk about oil. that is related to the peculiarities the international market. and i don't think it is particularly competitive

market. fact of the matter you look at treasury yields. we're still looking at situation with very low inflation. i think focus on inflation is kind of like shooting at a decoy. the two numbers we should be worried about right now are long-term prospects for gdp growth and long-term prospects in all analysis don't get us much above 3% next 10 years. that is the problem. the second number we need to look at is middle income wages which are stagnant for 12 years. the other problems fix themselves. neil: the yields you talk to being forcibly kept down to the low levels, right? >> yes. but that still shows the point that inflation is with the exception of a couple sectors not really a problem. neil: you settle down yourself to manufacture that, that is not reflection of reality, right? >> correct. neil: well it -- >> it is a complicated subject, neil. it a reflection of reality. we're not seeing inflation in most industries. the point you're making are you building in structural problems in the long term and i think that's a

worthwhile discussion having in terms of how long can we have the free money policies from the fed coming out. that is different discussion. the fact of the matter inflation is not a real problem today. neil:. we'll get you guys back a little bit later. meantime they say those evil rich pigs can handle more than the price of bacon but what about americans not bringing home the bacon, middle class, minorities, the one the president says he is protecting? what happens when the protected say he ain't protecting? when minorities revolt. remember when more than a few did with our sean hannity. why allen west said they spoke more than for a few. this is america.

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>> this presidency was supposed to herald hope and change. a new era.

>> he has a war against black americans. >> this administration shamelessly played the race car. >> look at the unemployment rate. look at failed high school dropout rates. >> we need to fight in these communities against overregulation and policies killing black people. they control your needs. they give you literally, whether the government cheese to the tax return. >> the job of the congressional black caucus is to keep them uneducated unarmed and addicted to government. neil: man, oh, man, that was ever fascinating segment on my friend sean hannity's show the other night. african-americans who were onboard with this president tired of being called uncle toms because they didn't agree with this president. now many in the media call the whole thing a farce and hannity's show a setup. to allen west to say, it is more a reflection of growing minority anger that is just pent up. allen, welcome. good to have you. what did you think of that? >> always a pleasure, neil. well it is absolutely right. i think when you look at the

black community, they have to see a failure in these liberal progressive almost socialist policies. you know when you have someone like melissa harris perry over at msnbc talking about how we have a collective responsibility for our children. then look at what the statistic is in the black community. only 30% of black children have mothers and fathers in the home. look at these inner-city communities like detroit. look at what is going on with the gun violence and gang violence in chicago. my own neighborhood in atlanta, georgia, which of course was exact same neighborhood that dr. martin luther king, jr. grew up, if you walked down auburn avenue which used to be a thriving center of black entrepreneurship and small business, it is just a shell of itself. so, we have to be very concerned. and we have to start breaking away from this dependency society and get back to an opportunity society and, promoting the right type of policies that enable that to occur. neil: allen, i was thinking of you today when i heard the president mentioned as he released his budget, very

late, i might add, didn't want to do anything that would put pressure on the backs of the middle class and poor, by inference minorities. because that would be unfair. so, tax the rich or have the rich pay their fair share of, a theme he repeated again and again. even on top of taxes they have already paid. as an african-american yourself, on just that level, and, thinking back to this group that, sean was talking to. how does that make you feel? >> he will well, first of all, it is a false argument that the president is bringing forward. if you continue to tax people as he has done, close to 1.3 trillion of new taxes in affordable care act. proposed 1.2 trillion taxes in his new budget. he got $600 billion new taxes from the, quote, unquote fiscal cliff deal, what you see happening is, the lessening of on students. you don't see small businesses being able to

grow and expand. the fact that you have a caveat in obamacare that says, if you go over 50 employees you're going to be, you know, fined or you have a mandate to provide certain type of health insurance. so we see people being taken off of full-time equivalency and being put on part-time. so these policies are affecting what he calls the beloved middle class. i don't believe there is a class or caste system in america but look what happened to median family incomes and especially black family median family incomes. they are absolutely dropping down to the, to the bottom. furthermore, you look at teenage unemployment, especially in the black community. it's atrocious. the real unemployment level in the black community is not just what it is reported between 13 and 14%. it is probably closer to 20%, neil. neil: why as a group, are african-americans, you could argue by extension hispanics in almost lockstep with the president, despite those very high unemployment

numbers among these demographic groups? why so disproportionly democrat. >> there are two factors. when you look at the president specifically everyone wanted to quote, unquote historical moment of having a first black president. people came back around and they wanted to have the first reelected black president. but if you put that aside. of course you have the emotional argument that the liberals are always, these contrary liberal progress serves are able to make demonizing policies that could help people, that is why you see the black community being so overwhelming, 90% plus voting for democrats. but i believe, slowly but surely we're starting to see the failure. look, it was former chairman of the congressional black caucus, emanuel cleaver out of kansas city, missouri said if there was anyone else in the white house that they would be marching on the white house. so for whatever reason, they think they can give a pass

to this president because, because of his skin color i think that can be racist in and of itself. we should look to have a good president, not just a president that is the first black president or the first woman president or the first hispanic president. that will continue to see us going down the path of politics and gimmicks and not good policy. i think you know exactly what i'm talking about. neil: that is very well-said. congressman, always a pleasure. thank you. >> thanks. you got it, neil. neil: allen west. all right, tim cook, jerry brown, barack obama, they're all afraid of offending china but, have you been watching what these guys have been doing, tiptoeing around china? "the donald" on the suck-up that has got to stop. >> china wouldn't exist without us. frankly if we ever tax chinese products coming in, they would virtually go out of business and they would have to depressions like you haven't seen depressions before.

neil: the donald going full throttle on the chinese. >> look what they're doing for example, in north korea. they could stop that problem in one phone call. neil: why aren't they? >> pause they're taunting us. because they think we're not the smartest folks on the planet. they're not flummoxed. they love we're spending time working on this problem. so they're in afghanistan taking out all the raw materials. so they're in iraq taking

the oil and lots of other places and libya, taking the oil. neil: man, did that get a reaction. i always get a lot of e-mails when my friend donald trump cops buy by to chat on fox news show but a thousand in an hour? maybe this time it was issue that was even bigger than the dond. or more specifically, how the donald would all but tell the chinese, you're fired!. craig smith says that is exactly what we need to do regarding the chinese. get more in their face, i get, right? >> donald is absolutely right, here, neil. think about it. take afghanistan for example. afghanistan is the saudi arabia of lithium. they're cutting deals left and right on lithium fields. what about the first oil deal? $700 million they struck. they just bought a copper mine. $2.9 billion outside of kabul. the chinese are clearly taking advantage of what we have done in afghanistan.

they're getting ready to buy the oil contracts out from exxonmobil in iraq. and "the donald" is spot on this one, neil. we should sit down, look, we should have, mr. obama goes to beijing moment where he sits down and says, we're your big trading partner and we're going to be fair but we're not going to lay down for you. we're not going to let you manipulate the currency anymore. we're not going to let you steal all the rare either materials around the world. we'll not let you set up a pipeline in deepwaters of brazil. we'll sick down and work together as partner. neil: here is what i think he is saying. we're always on defense. he certainly doesn't agree with that. we feel because they own so much of our debt and emboldened an entitled to them. he brought up a very good point the neil, they actually need us more than we need them. if we stop buying their stuff, their great global stature falls apart. we always are on defense and we're always afraid of offending, hence you have tim cook at apple writing a

letter of apology for infractions he never committed in a country that rips off his technology and even his stores, with reckless abandon and then you have the governor of california going hat in hand to the chinese begging for investments in his state that businesses are leaving in droves. like, even he has to. what is going on? >> political correctness has no place in trade, neil. i agree with the donald on this one. you and i talked about this before, neil. if you helped me a million dollars i'm at your mercy. lend me a trillion dollars, neil, i hate to break it to you, you're at my mercy. if i can't pay you back you've got problems. they need us. look, import, export, we do 3.8 trillion a year. they just surpassed us at 3.87 trillion a year. so "the donald" is right here. we need to get tough. you just said it. they rip apple off and tim cook says, i'm sorry?

this is ridiculous. now, look, we shouldn't be a bully. we should sit down and have good, fair trade relationships with them. but we should let them know enough is enough. they ripped us off to quote "the donald" enough that it is time to stop manipulating your currency, stop stealing our intellectual properties. and if we're going to compete for rare earth metals and resources around the globe, let's compete on a level playing field and not have you go in the back door and put us out of the equation. neil, "the donald" is right on this one. i don't agree with him all the time but he is right on the money on this one. that is probably why you got a thousand e-mails. neil: you know, if you're a i am with you will never get any respect. >> amen. neil: thank you american trading corp chairman, craig smith. look under the hood did i. what this kid billionaire is planning for your phone. let's say, scary.

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[ male announcer ] yes, you could business pro. yes, you could. go national. go like a pro. neil: zuckerberg moving in, carnival slashing prices way down in tonight's biz blitz segment. facebook finding a new home on your cell phone? new concerns that facebook turns your four screen to mark zuckerberg's new billboard. dennis neil says facebook needs to get out of his face and john any hoenig ready to kowtow to the kid billionaire. but i joke of course. >> facebook is everywhere and given whole takeover of the htc phone, you want to ask why you're doing this now? because customers are dying for more of the features or you need a way to get more mobile phone revenue? i think it is the latter. i think it is a bad sign for facebook whiches with

created on simple desire desire of mark zuckerberg to meet attractive women. that is why he started it. this is invented to go get more ad revenue. i don't want to give up icons on opening screen in favor of a facebook feed. i hate my facebook feed. i lost control of facebook. a whole bunch of people i barely know at all. i don't care what they have to say. i want them to listen to what i have to say. neil: jonathan? >> mark zuckerberg isn't taking over anything. and dennis, if you don't want to be on facebook, don't be on facebook. they're offering a value. yes, this is the story of facebook. they're in it as a business and they're in it to make money. the screen that is most important is that mobile screen. i tell you i don't think it is over just yet, neil. think back to the '90s telecom boom where cable companies were valued by subscriber, 5,000, $6,000 per subscriber. same thing goes for facebook when it comes to your screen. dennis night might not like the service but the stock likes it and they happen to be in attractive part of the

market which is consumer orienting thing. neil: hold on guys. google ace mayday could be yahoo!'s pay day. after larry page bailed out of apple, marisa my-year is going all in, courting tim cook for partnership with the next iphone. yahoo! shares at five-year high on this news. dennis what do you think. >> this will not be the be all turn around. this is interesting for couple reasons. for marisa meyer, this is a betrayal. you're going after a company, that will do, make google kind of mad. i'm kind of surprised she is doing it. i like it. i don't think it will do a whole lot for yahoo!. i don't think it will do a whole lot for apple. kind of nice she is trying to do something. neil: it is pretty bold. what do you think, jonathan. >> dennis follows tech like no one i know so i defer to him to the interpersonal relationships. marisa meyer is doing one thing jerry levin and every ceo at yahoo! couldn't, she

is making stock go up. she sup 60% since she took the role. i wouldn't fight the tape. she could turn around this company the same way jobs turn around apple back in the day. >> oh, my gosh, that is a huge leap. that is a little hyperbole. jonathan, i wish i had done that. apple has fantastic products. yahoo! ha no, sir real purpose. yahoo! and aol is basically the same. yahoo! is website you look at at time when everyone has gone mobile. this is good time to try it. everyone that does business with apple i feel they come out on the short end of that. neil: does apple get the benefit here? does apple need yahoo! more? what do you think, john? >> i think apple can certainly benefit from yahoo!. i disagree that yahoo! doesn't have a value. neil, media oriented stocks in today's stock market are extremely strong. companies that have consumer eyeballs like yahoo!, i think are good plays right now. neil: all right. finally, number three.

after fires and crashes and stranded passengers carnival is trying to woo travelers back well, with motel six prices. it is offering a caribbean cruise for as little as $38 a night after an italian judge handed down $1.3 billion fine for the deadly sinking of the cost at that concordia ship. jonathan hoenig is ready to jump on board. what do you think?. >> you want to go? 38 bucks. i would go. >> not in a billion years. neil: not in a billion years. >> neil, they're buying eadvantage gelists. they're trying to get people on the ships to go tweet and talk about what a good time they have had. they had terrible press in the past like of course whether toyota after the pedal scandal or united airlines after service scandals in the early 2000s companies are trying to offer value to win back customers and i bet they do it. >> i got to admit when i saw how cheap the price was, i was startled and maybe i ought to go.

i'll go on your cruise when you guaranty personal helicopter on the roof top top of that thing anytime that your plumbing system shuts down. neil: you should have a feces provider, rider on the policy, that i'll go if you make sure there are no feces in the hallway. but, jonathan, the price is low enough, it seems like you will settle for anything? >> yeah. neil, listen, i'm not going to be happy if there is feces in the hallway. neil: who would be? >> i just don't think it's going to happen. carnival had terrible press right now. that is why they're offering incentives to get people back. i think they recover and the stock seems to think so as well. neil: $38 seems their way of saying $38 you can put up with feces in the hallway. >> would rather stop referencing that. their earnings outlook is down 30%. stock got killed. all they need another thing to go wrong before it gets killed. i don't know if you invest in the company any faith. things keep going on wrong

with ships. neil: we'll keep up to date on even stories that stink. meanwhile you know how wall street was jumping today. did you ever wonder why the fat cats doing all the buying feel they had a bull's-eye painted on their you know what today? so let's break down this play. charles? uh, charles couldn't make it. his single miles card blacked him out here and here. he should have used... the capital one venture card. he's coming to us from home. hey fellas... hey baby, you want mama to iron your undies? nice tightie whities. i didn't know mrs. barkley made quilts. really? looks like a circus tent. is that the best you got? now if you put this, with this, you have a sailboat. what's in your wallet?

neil: all right, a fox biz alert. dow, s&p 500 and all 10 s&p 500 sectors were rallying. several dow companies blasting to all-time highs. as stocks are crushing it, president obama's budget laced with measures some argue will crush the rich, the very folks doing the buying. so-called "buffett rule", taxing millionaires at least 30% of their incomes, so it would limit their deductions sharply, over a million bucks. tax deductions for folks

making $250,000 a year, also capped. retirement accounts with the wealthy dramatically curbed. to one of his biggest backers, 32 advisors ceo robert wolf on how the president sells this to, well, robert's buddies. how does he sell that? >> all right. so, nice to be on, thank you. neil: same here. >> going to ask you to close your eyes for 30 seconds. neil: no. >> $4.3 trillion reduction over 10 years. that is where simpson-bowles was. okay? it is $2 of cuts for every dollar of revenues. if i told you that --. neil: i don't buy that math. >> well that is the math. neil: well, go ahead. >> okay. it is the spending is on energy infrastructure --. neil: the original cuts at beginning of year it was like one-to-one ratio. now 40 to 1? >> two to one. that is what it is. neil: all right. go ahead. i interrupted your fine thought. >> you can interrupt. energy infrastructure

spending. if you look at the cuts, it is entitlement reform, both medicare and social security. and it is itemized deductions and revenues. so i mean --. neil: look -- >> overall foundation is something --. neil: i want to speak to a guy, you are an important link for this administration in de facto role, i always call you a kitchen cabinet guy. you're close to the president. you're close to the administration. you're a link and crucial one he needs all the friends he can get to wall street. >> i've been a wall street guy 22 years. neil: i understand that. you have to go back to a lot of wall street friends and republican and democrat and say not only did your rates go up, he will close a lot of loopholes and allowances effectively raise your taxes even more. i don't think they're going to be happy? >> listen, i don't think that the top 2% is ringing the bell and says, this is what i want to do. neil: no i. i think they get -- off when

hear they have to do their fair share. they say a, i think we've given at office. >> let's move away from the red rick and talk the facts. neil: he said that. >> forget that. neil: how will you sell it to them? people that feel they given enough? >> 10-year war hasn't been paid for. first time in american history, since 1776, that war has not been followed by taxes. neil: you got to pay more because we thought the rate increase was enough to cover it but it's not? >> it's not. neil: i understand that they're going to come back at you why is it always on me? >> listen i'm not raising my hand to pay more taxes either but let's look at. on itemized side, you said it earlier. boehner put up 800 billion in december of itemized deductions. overall plan is two to one. you can not say a two to one plan, is unfair. neil: focus on this. the president proposed 600 and got 600 billion in tax increases.

>> right. neil: in the last deal. he is getting another 600 billion in this deal. so 1.2 trillion in tax hikes. >> on $4.3 deal. neil: careful. i'm talking about your friends. >> yeah. neil: i'm talking about your buddies who will hear on that and also know about the 3.8% ned care surtax when they sell their pricey homes or investments and all the other tax, medical device taxes, all the other other little surcharges and they're looking at this and saying, enough already. >> i'm not disagreeing there. i think the following. if we say where the spending is going, okay, on infrastructure and energy and education, --. neil: by the way first folkses to say you better go there and never does. >> people would say i would sign up to pay more for those plans. if the president has enlightment on the table which he does now, which you know the left is yelling more than the right today. neil: he didn't do a lot. he is swapping a formula.

it's a start, you're right. >> it is --. neil: don't act like he is all of sudden nailing himself to a cross here. >> let's be clear here. on the 4.3 trillion, okay, $2 of it is spending cuts. that's a fact. i mean that isn't fiction. neil: i do disagree. >> talk about the itemized part. neil: i just wanted you to say, his, his link to the wealthy, the successful the job creators, seems to be getting weaker and weaker and weaker, to me. >> yeah. neil: what do you say? >> i would tell you that the 30% "buffett rule", it's diminimus on the wealthy because a disproportionate of the wealthy pay over 30%. a disproportionate. neil: this is it make sure those that pay after deductions, want to be clear. those who end up payings, i don't know, 25%, when all is said and done, that they will have to pay, at a minimum, 30%. to avoid that, right? >> i think most people would say i'm okay with that.

i think, here's where the problem i think the wealthy is going to have. the 28% itemized hits the following three things it hits charity. they won't be happy with that. it hits state and local taxes, which is new york, california, the northeast. they're going not to be happy with that. neil: are you happy with that? >> well, --. neil: do you think benefits outweigh whatever discomfort -- >> this is what i would love to have but i'm idealistic up and down vote on every loophole how people vote. have a tax of 25%. if we cap loopholes it goes up. but we'll never get that vote, okay. that would be idealistic but i think actually this is a great starting point. it is 4.3 trillion. neil: i think, here's what i think. i think you're so obscenely rich you won't even miss this money. you're happy to pay it. like many of tens of thousands hundreds of thousands i've given in taxes you won't even miss. >> neil, i don't have a second home. neil: because you're one covers two zip codes.

>> i don't this so, pal from our mouth to god's ear. neil: we'll watch closely much robert thank you very much. >> always a pleasure. neil: robert wolf, a vital link on this stuff. watch him closely. meanwhile now we know the president's goose is cooked. the guy cooking it just got canned. why do i feel a lot of taxpayers are still on the menu? we went out and asked people a simple question:

how old is the oldest person you've known? we gave people a sticker and had them show us. we learned a lot of us have known someone who's lived well into their 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed: the official retirement age. ♪ the question is how do you make sure you have the money you need to enjoy all of these years. ♪

♪ >> the people i feel for our people who are directly feeling the pain, they're hurting military communities, middle-class families, children, seniors, the people who can least afford it. that is what this so-called sequester means. neil: he is still going on about the sequestration cats. no devastation yet saved some weird things on the chopping blocks including doors at the white house, and now apparently they guy who cooks is now cut.

the president will now go hungry. i'm not crying. plenty of food. but it just seems like another case of weird cut, we're timing. what do you make of it? >> i think we're is a good way to describe it because before it was all about cutting things that would affect the children, the easter egg roll, the tour's at the white house that would affect students. now we're talking about cutting back to where it would affect the first family. i don't know that there will get a lot of sympathy because, first of all, it is very ambiguous as to what this furlough means because he wears a lot of different hats. he is a nutritionist, gardner. apparently he gets to keep all those other roles. but at the end of the day, the most important thing here is, this is a drop in the bucket, and manufactured crisis that the president is trying to make out. it is just a really weird cat. neil: i guess what i could see,

look, a voluntary 5 percent. federal workers are enduring right now. and i have even dropped my chef, i guess. but i don't know if that strikes americans as suffering. >> i think it is important that he lead by example. if the cut funds for the white house staff, cut his own salary, i think it is leading by example neil: chances are you have three. you know unsaying? >> it sets and in pop -- an important example because other people will feel the pain. major cuts with air traffic control, major cuts to a defense capability. major cuts to the doctors that take care of your parents and my parents. neil: when? >> probably by mid year, probably by june or july. the second important point i think here is the sequestration could shave it gdp.

and the important point is this. deficit reduction is not the north star of what we need to do. giving middle-income wages up is important, but if you want to do deficit reduction you have to go to where the money is. he proposed just under 2 trillion in additional deficit reduction on top of the two and a half. 600 billion is coming from entitlement reform. everyone agrees that it want to get the deficit -- neil: fair enough. fair enough. >> but the republicans -- here's the point. they don't touch current entitlement beneficiaries 1 cent, social security. neil: that means -- i don't know about that. what i am worried about is how firing your chef or taking a 5 percent pay cut works in with some of the other presumably more substantial figures. >> like he said, it was an

example, a talking point, something that will point to, the white house will point to to show that the president is feeling the pain. this afternoon the white house came out and said 468 white house staffers would also be furloughed. whether that be for one they were a few, but these are the necessary -- neil: how many? >> 468. neil: i didn't even know he had that many. >> apparently buried like he was saying, they supposedly have cut this over the course of the past 20 months, we're talking about feeling the pain. if they had truly really made real cuts, don't you think we would be feeling a little bit more pain? we are not. neil: later on. talk about that later on. okay. that could happen. >> the number of -- neil: they're protesting. you're right. it could happen later. i sure hope, springs eternal.

>> here's the problem. neil: i want to get to this. will we ever get over this sort of the middle stuff to make a point or to a the image of a point and not do something very substantial on both sides? >> were talking about setting an example. we need to move beyond that. many to make real effective cuts they're going to make a difference in balancing of this budget. need to do something that actually matters right now. right now is not the time. neil: and you think that the president has done both? >> the deficit is not the central problem in the economy. not the short term. neil: the prerogative of both sides. >> it is important that they lead by example. symbolism is important. if you want to talk about real numbers, to your question, everybody in the deficit reduction business agrees we have to go after entitlements. the president does that by going