>> oh, watch out, there's a lot of action this wednesday morning. let me layout the day for you. first off, lois lerner the head of the tax exempt division and the head of the irs scandal will be asked questions. she'll not answer any questions, she'll appear in person and plead the fifth in person and plead it every time a question is asked and you'll see it live. then we've got ben bernanke, he will answer questions today and we're going to act as interpreter for what he's got to say. the heart of his statement today will be the printing of money and when it might stop. a couple of fed officials have hinted he'll keep on going and

that's enough to send stocks to another record right at 10:00 eastern, we'll tell you exactly what he's going to say. back to art laffer, can't resist this and the irs scandal. obama's agenda, spend more, tax more, implement obamacare. we were talking about this a moment ago. can you tell me that any of those policies, tax more, spend more, obamacare, do you think they'll be reversed because of the scandal? >> they may not be reversed, but surely slowed way down. and this scandal, all of these things in benghazi and all of that will be to their detriment and the agenda that obama put forth i don't think it will get pushed through fast at all. >> i think something may happen in the area of corporate tax rates. >> yeah. >> you saw the apple hearing yesterday. >> yes, i sure did. >> and some support, maybe both sides of the aisle here for a reduction in that tax rate. what chance do you think we've got? >> i think we've got a great chance there. there are two congressmen, one

democrat, one republican. and darrell issa and jared polis, a spectacular proposal, stuart, the one area i think we can make some major advances and lower rates and broaden the tax base and really go along with what apple was preaching and practicing. and they've he got to pay taxes correctly. >> and listening carefully, art. what you're saying, i think, is very positive for the stock market. >> huge. >> because, yeah, look, if you get a corporate tax rate cut and they bring back at least some of the near 2 trillion dollars overseas, if he comes back here, that's a huge injection for the economy, and if we keep growing, even at 2%, you surely have a further stock market rally. >> you sure do and we will bring some of that money back. we should not tax foreign profits at u.s. rates. other countries don't do that, it puts our companies at a competitive disadvantage for working in other countries. for example, in ireland, the tax rate, as you know, is 12 1/2%

and yet our corporations if they bring the money back, 34%, not 12 1/2, but they can't compete against other countries corporations. >> so we should not tax foreign held profits at all and just allow them to come back tax-free. >> that's what we should do, we're not going that far? >> i don't know, i don't know, we might go way down and just do a token tax on them to bring them back, as you say, that would do a huge plus for the country. >> do you think president obama would go for that? i mean, at what tax rate has he ever cut in his four years in the white house? tell me. >> and he has not cut tax rates, that's for sure. >> but these scandals and-- >> some leverage to force that rate down, with president obama agreeing to it. >> that's exactly what happened with nixon. what i was saying before, the scandal actually pushed nixon into doing other policies he ordinarily wouldn't have done, trying to appease the liberals or whoever else it was he

thought were coming after him. so you may find that same type of policy mix coming out of obama as well. stuart: there you are, sitting there in tennessee, the retirement capital of the planet and you're wildly positive this morning, art. we like to hear this. >> well, i'm very positive. i think the world looks great going forward. i mean, i think that we're going to take the 2014 election. i think that 2016 we're going to get a new administration. i think we're going to move towards a flat tax and get spending under control. i'm excited about the next ten years in it country. stuart: you know, you might rewrite the prosperity handbook for the next generation. art laffer. and let's get back to the apple confrontation, if i can call it that. apple chief tim cook was on capitol hill, it was all about paying or not paying that 35% corporate tax rate. there was some drama between senators and started with rand paul. listen to this.

>> we should be giving them an award today. we should congratulate them on being an american company and not vilify them. >> it characterize that by one senator vilification, this is totally the target of what the function of the subcommittee is it and what congress is responsibility to do and does too far little of. >> i know no member in the united states senate that has accused you of bullying and harassing had a witness in the thousands of hearings that you and i have been part of over many years and frankly, it's offensive. we went out and asked people a simple question: how old is the oldest person you've known? we gave people a stier and had them show us. we learned a lot of us have known somne who's lived well into their 90s. and that's a great thing.

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♪ planted in my brain still remain ♪ ♪ within the sound of silence ♪ >> ah, yes, irresistible. the sound of silence will be coming from lois lerner in a few minutes, she's pleading the fifth. you're going to watch it here. all right, that's washington, that's politics. now, in 30 seconds, we're going to see the opening bell ring on wall street and i'll tell you now, stocks are going higher all over again. and let's bring in scott shellady. all right, scott, i say that ben keeps printing and i say that the housing numbers at the top

of the hour will be showing a modest recovery. what do you say? >> i agree with you. >> as long as we've got a 7 1/2% unemployment rate and no inflation, he's going to continue to print. the housing market is getting better. depends if you're looking from the top down or bottom up. i see no change. stuart: i hear them shouting behind you shall the markets have just opened. if i'm not mistaken we'll open on the upside, moving from 15,387. all right almost back to 15-4. here we go, the market is up again on the assumption that ben keeps printing. if he hints otherwise better watch out. in the early going, we're up 7 points as we said, right about 15-4 as we speak. now, a couple of stocks for you, lowe's and home depot, they're basically, they run the home improvement market and home depoe has been doing well and lowe's not.

nicole. nicole: it's true, but it's an up arrow. stuart: oh, it's up. nicole: it's interesting, home depot has been number one and lowe's number two. interestingly enough we saw lowe's jumping yesterday with good news from home depot and today we're seeing some results missing from lowe's, what's good news for both companies is they he both side they've seen an improved april and this is the height of their hot season, as people are mixing up their houses and spring and summertime. >> look, they're economic indicators. if both of them are okay and home depot in particular is doing well, that's an indication for the overall economy and the housing market, too, you've got to call it good news when those two stocks are going up. >> i think there are three things. i think there are economic indicators and i think it's seasonal and also related to natural disasters, such as hurricane sandy, tornados and the fixup afterwards. >> thank you. >> microsoft has the new video game console, xbox 1.

it came out yesterday and the sleek new features like skyping while watching tv and advanced voice and motion control. i own some microsoft stock and i'm dismayed to see it come down this morning, however, there's an element here of sell on the news. the new xbox 1 came out yesterday and there was some selling as it came down, but my stock is still up for about 20 odd percent so far this year. now, we showed you some fireworks from the apple hearing yesterday and the stock was down when tim cook testified and you just heard art laffer, maybe that testimony will help bring down america's corporate tax rate. this morning, apple has bounced back, 6, 7 bucks, 1 1/2%, 4.46 on apple right now. and let's get back to the hearings in washington. and politics, i want to bring in congressman david wrecker, miss lerner is not going to answer a single question. yesterday the top two officials

are evasive at best, our viewers want to know what you're going to do about it and how you're going to get to the bottom of what happened here? >> well, stuart, and your viewers understand this, too, is that this investigation has just begun. the first hearing was last week in the ways and means committee on friday. there was a hearing yesterday in the senate, two hearings today. the ig has just sort of wrapping up his audit. that was an audit, remember now. the investigation into who knew what when is just beginning and that's why you see people dodging questions. stuart: do we have an independent special counsel, an independent special prosecutor, call it what you will. an independent with outside authority and say you'll answer in? >> that's yet to be determined. as the committees do their work and do oversight and gain more information, we recognize the depth and the breadth of this issue and there may be a need for that.

right now the committees are working well together and i think there's very, very serious oversight for all the committees that have jurisdiction. stuart: now, just for the benefit of our viewers, from the -- on the other side of your screen now you're seeing ms. lerner, she's about to stand up, i believe, she's going to be taking the oath shortly. your 're going to wait for thato happen and we're waiting for her to stand up and take the fifth. and you're saying that this irs scandal drags through the summer. does it reach the point where it interrupts the president's agenda, specifically when it comes to obamacare? >> well, i think, of course, the president has a number of issues on his plate that distracts from his agenda and obamacare and when you look at who is going to be in charge of putting obamacare in place now in the irs, there is a huge problem. so, as we look at lerner, and ingram and marks, those are three key players in this

investigation. mr. miller last friday decided not to take the fifth. instead, what he did was not answer the questions. and you have inconvenient loss of memory. >> are you saying, do you think you've got leverage here? are you seeing any democrats waiver in their support for the president's agenda? again, specifically obamacare? >> well, i think what you're saying is democrats recognizing that there's a serious problem in the administration, that there's a lack of accountability. look, i was a sheriff for eight years in king county. i was in law enforcement 33 years, if my chief of staff knew what was going on and my legal council knew what was going on and they didn't tell me? there's he a serious problem from that chief of staff and that legal council all the way down through the chain of the irs and other, other parts of the administration. you don't have a targeting issue like we have occurring here in the irs and the chain of command not have any knowledge about it.

>> do you believe that the president's chief of staff, who knew about this investigation several weeks before he says the president knew about it, douk everdo you belie-- do you believe that the president was not told? >> i think that's a question that -- frankly, no, i don't believe that. again, if i was the sheriff, i would expect my legal counsel and i would expect my chief of staff to tell me what was going on and if they didn't tell me -- let's just assume they didn't, they should be out of a job. stuart: all right, congressman dave reichart on the ways and means committee. thank you. >> you're welcome, sir. stuart: we've got several outrage stories four you. since 2009, a in irs employee 8,500 worth of steaks, bacon,

romance novels or personal use and this is bad. the accused fort hood shooter still collecting his salary while on trial for killing 13 people and wounding 32. and nothing convicted yet so he's on the payroll. total tally, how much has he brought in? $278,000 since the 2009 workplace shooting and some of his victims scrambling to pay their medical bills. and we have saks, that's the retail company, okay? saks has-- goldman sachs to look at streaks option. nicole: did you stumble, you can't decide, saks, luxury, high end department store, you have a name for coach, is that what happened. stuart: high-end luxury. you set me straight, nicole. nicole: that's true. and they did well with numbers yesterday, but the reason why stock is popping dramatically now is because they've hired

goldman sachs to explore strategic options and alternatives which may include a possible sale and with that news, that's why we saw saks jump yesterday late in the day and today as well, up about almost 15%. >> i would be intrigued to figure out why a company that's doing so well at the top end of the retail market would wanttto put himself up for sale. i mean, i'm intrigued. i don't know why, do you? i don't know. >> no, i remember that saks used to always be and then a few quarters they were struggling, but they seem to be looking at the latest one, we shall see. >> check this out. you've got to check this out. it's a precision guided bullet. mark your target, pull the trigger, a bulls eye every time from a half mile away or more. even for total beginners who never shopped before. how can this be legal? we asked the company that makes it in our next hour. it's extraordinary stuff. all right, time for me to give

you the seven early movers, as the dow moves um. disappointing profits of lowe's, nonetheless, the stock is up 2%. hewlett-packard is reporting after the closing bell today. obviously, no movement right now. it's up 8 cents and then we have saks way up because they've hired goldman sachs to look into the possible sale of the company. that's a 14% gain there. and higher sales, a new chairman, at zale's? up 28%. i believe our producer was just right. that was one of charles's stocks, wasn't it? you're going to take a victory lap later on today. it's up 28% today. higher profits and strong demand at the home builders and toll brothers are up nicely 6%, disappointing profits at staples. i'm guessing it's down and it is down, not much. 8 cents. and soft sales hit targets's bottom line and that company has lowered the outlook for the future and the dow is now up 35 points. we're he at 15,423.

i'm not sure if this is a new intraday high. i think it is. 15,424 we will take it. check the price of oil everybody. where are we? $95 a barrel, up sharply, up a buck. it's another tax revolt and more and more states saying they want to abolish their state's income tax and now it's spreading to new england, can you believe that, of all places. find out way state to try that to do that in a moment. clients are always learning more to make their money do more. (ann) to help melan my next move, i take scottrade's free, in-branch seminars... plus, their live webinars. i use daily market commentary to improve my strategy. and my local scottrade office guides my learning every step of the way. because they know i don't trade like everybody. i trade like me. i'm with sttrade. (announcer) scottrade... ranked "ghest in customer loyalty for brokerage

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>> hold on everybody, we're waiting for magic moment when lois lerner is sworn in and plead the fifth. you'll see that. and chairman issa is making his opening statement and then the opening statement from the leading democrat on the committee and then you'll get that magic moment. stuart: right now i want to

bring you the great news of the day, that the tax revolt is growing. maine, the latest state that's looking at abolishing its state income tax. and travis brown is here, the president of "let voters decide." i'm standing next to a graphics board. there is the state of maine. they're proposing to get rid of income tax. now, why are they doing that? >> well, they're looking at the past performance. while the irs leaders may be quiet in washington d.c., the irs data-- taxpayer data-- >> the red lines are money flowing out of maine and you say it's because they've got an income tax. >> we see for every person that may be coming up from massachusetts, a higher tax burden connelling to maine, we see another taxpayer leaving maine on the coast, going to places like florida, places like las vegas. stuart: okay. >> dramatic difference over time and this is what governor lapaige is trying to do, he's

trying to rebuild the path to prosperity being more like new hampshire and support that-- >> your offices support that. >> absolutely. >> okay, which states do not at this moment have a state income tax? >> well, you had dr. laffer who moved recently from california to tennessee, tennessee is a state doing well in the middle of the country, no petroleum, no shale going on and states like texas dominating our economic performance of the day and then you have states very different climates that are not part of the sun belt economy like washington state, doing well with nearly-- >> sear he owe income tax. >> sire owe income tax and price on work. stuart: people and money are throwing in there. >> tech companies silicon valley choosing washington state. place more favorable. places like wyoming gaining billions, places like south dakota, where there's no personal income tax showing a gain and others are showing losses in the midwest and we're

seeing new states like kansas embarking on real tax reform, states like oklahoma, ttying to keep up and compete with states like texas. >> now, when you add it all up, the states which propose to abolish the state income tax and the states which already have no income tax, are we talking about what, a dozen states, 15? if they all get rid of the income tax, something like that? >> there's a record number of governors and leaders and state capitals considering a variety of state tax reforms now. you're talking maybe a third of america's population, covered within the states. >> wait a second, a third of america's population, may in the very near future have no state income tax levied on them? >> depending on the population of the growth states, that's what you're seeing. states like indiana cutting taxes in the middle of america, states like maine, trying to be more like new hampshire. >> and you're telling me that they all are doing better than

those states with a high rate of income tax in their states, all of them? >> we're seeing based on irs data in the past 15 years, the states with no income tax collectively adding to their roles, 146 billion dollars while also the reverse is true. taxpayers are fleeing high tax states, states with the highest personal income tax rate are losing the 9 states at the highest rate losing over 100 billion. >> i liwork in new york and liv in new jersey. it's coming up on 9:49. it's time for the gold report. where are we? up a little bit and well shy of $1400 a month, but we're up $7 as we speak. disgraced former congressman anthony weiner now officially a candidate for mayor of new york city. you won't believe who he says he is fighting for. next, we'll tell you the real reason he's running. of course, it's all money. and charles payne is going to join us. i'm sure he's got ideas how to

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>> look, i made some big mistakes and i know i let a lot

of people down, but i've learned some tough lessons. i'm running for mayor because i've boon fighting for the middle class my entire life and i hope i get a second chance to work for you. stuart: there you have it, the former congressman who stepped down after sending, shall we say, raunchy tweets? anthony weiner announcing he's running for mayor for new york city. i know why he's running. if he doesn't he has to hand back the 4 million in his campaign coffers. charles: he's running and he's got much higher nim recogniza--e nim recognition. he said he wanted to make new york city the middle class capital of the world. new york city? where apartments go for 20 million for the size? this is what you want to make new york city the middle class

capitals of the world. no thank you, you don't get my vote. stuart: democrats always struggle and he used that word, struggling for the middle class, always, always, always. charles: ironically president obama set the stage for this. i've never hear, none of these guys talk about the poor people of the world. stuart: no, never ever ever. and it's always working families, right? and you're always investing, you don't spend, you invest. you're benefitting the middle class not the poor. heaven forbid, certainly not, you can't do that. charles: what about the notion that now what? i'm working to make us all extraordinarily prosperous, extraordinarily pro prosperous. stuart: margaret thatcher said you'd rather have the poor and the rich a little poorer, too. charles: and never see that-- >> that would be raising for

votes, can't have that. all right, everybody, we're waiting for the moment when lois lerner is sworn in and then we hear, we know she is going to plead the fifth. and at this moment in that congressional hearing room they're still making opening statements and there you see ms. lerner. we understand that she is going to make a statement, but she will not testify. she will plead the fifth. we are going to bring you the action when it happens. you will see it, we promise you that. now, something completely different, you've got to see this to believe it. precision-guided bullets. hit a target from a half mile away, and you can -- and you'll hit it. you can be a total neophyte. we're going to bring you that g gun. back in a moment.

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one lot happening in the nextt two minutes. this you need to know. realtors? how many homes will you be selling this year? five million would be good, more would be better. the fate of the houssng market revealed in minutes. investors, watch out for ben. he keeps printing but if he just hints he is going to stop so will the stock market rally. later this hour, the you can't miss, you aim at what you hit, should it be legal? the man who is bringing it to the market place. the x box 1, it wants to your home's entertainment hub.

we are also waiting for that moment when lawless lerner makes her statement. then she will plead the fifth. this could happen at any moment. this is the lady at the center of the irs scandal, the lady who counts. let's go to peter barnes in washington who will tell us what is ben bernanke's headline. is leaking going to keep printing money. with unemployment above level levels and inflation subdued, fostering congressionally mandated objectives requires a highly accommodative monetary policy. whether we are going to taper he says, quote, considering whether a recalculation of the pace of the bond purchases is warranted the committee will continue to act, to assess the degree of progress made toward its objectives. back to you. stuart: he is going to keep clinton, no hint of it capering off. i am ok with that?

>> take that to the bank. stuart: probably will. charles payne is with me. you heard that. when peter started to speak the dow was up 44, now it is up 59. the market has taken that as a sign he keeps printing. charles: yesterday we had a couple of his colleagues more or less say the same thing, the market took off again. we have entered into a sweet spot if you willl a lot of people will be angry about this. is the sweet spot and ben bernanke said unemployment too high and inflation low, the way they measure it, that means printing along with moderately improving economy, maybe we're stuart: 16,351, we are up 64. we also got breaking news on the housing market. new sales, existing home sales up 0.6%, the highest level of sales. what was that again?

highest since november of 2009. the annual selling rate for existing homes is 4.9 million homes per year. not quite the five million a lot of people were expecting but that is a strong number. tanya market adjoining us, you heard that, i take this as a sign of housing recovery continues. it is modest, it is on a boom but it is a recovery. >> totally agree but modest is good because we are not hitting those high spikes and low valleys. it is steadily climbing and that is good for the housing market. charles: stuart: 1.9 million existing homes sold her year. in a really good boom year you are above 6,000,000 year. is that correct? >> correct and we would like to see the number at five million but we will get there and as long as it is steady and save that is a good thing for housing. stuart: stay there because i know you have the bargain half

of the week for us coming up and we like bargains. hold on a second. more market reaction from you about ben bernanke. charles, what do you at? charles: talking about housing, two areas the fed, you can debate the market but no debate in auto sales and housing market, told brothers released what i call the perfect quarter. not a good quarter, the perfect quarter. this is a luxury high end eerie at we will tell you about later. this is an amazing quarter, selling pricing power, inventory is up, contracts up, backlogs are up, demand is up, this was a perfect quarter for them. the wall fact ben bernanke is looking for may be starting because the ceo of the company says demand accelerated dramatically during the quarter. existing home number may have some people come later and that was low inventory. stuart: the number was good. back to the sweet spot you are talking about. ben is going to keep printing.

he will not a profs, that is the implication of what he said. a positive report on housing and the dow is up 70 points, 15457. charles: ben bernanke has been trying to treat your this virtuous cycle, things do well and people don't spend money and there are more jobs, few people with jobs and money, so for us we are looking at this, feels like an eighth inning but what we would like to see happen is the second or third. charles: stuart: we are up 80 points, the news is four minutes old, top of the 10:00 hour, clearly investors started buying and now we're up 415,472, dare i say 15,500 soon? maybe i am pushing it. charles: goldman sachs uped their target not just this year or next year, into 2015 they see the market go significantly

higher every single year. stuart: man of the hour. let's leave wall street and go back to the irs scandal. there's a hearing right now, we are waiting for lois lerner, when she is going to take the fifth. we want to hear her opening statement. there will be a statement from her that you will see and hear when it happens that i am bringing in a democrat from the state of maryland. always a pleasure and thank you for taking time out to be with us today, thank you. >> we had a hearing, said that finance committee on this. stuart: something i found out, the irs is going to find out we different offices to deal with the implementation of obamacare. thh irs scandal is going to go through the summer, will this implement obamacare, eight

offices using 1,037 agents for theeirs to police obamacare. the you think the implementation is in trouble at this point? >> no i don't. it depends on voluntary compliance for the tax code and that is true on the health requirements. there will be a difficult year go as we get into 2014 as far as compliance with the affordable care act and we are prepared to work with the small business owners, individuals so that works as smoothly as it possibly can. when you are implementing a new law there will be rough spots. the irs has an important but limited role in the affordable care act. stuart: i am passing along the concerns of our viewers. with any of their health care information. and what we have to deal with

that the near future. and you were involved in them. how did you feel when the thought two guys at the i r s basically didn't give answers to the questions. >> absolutely right about that. was not a comforting experience yesterday, the entire committee expressed its outrage about targeting any group by its philosophical beliefs. secondly when we asked how they made these decisions we didn't get the type of information we expected. you need to know how they went about doing their work if we are going to be able to correct and make sure this doesn't happen again still there were many questions. stuart: i will interrupt for a second because they're swearing witnesses in at the hearing. let me listen in. >> please take your seats. your entire opening statements will be placed in the record. we understand sometimes you aree

obligated to stay with your opening statement. if so keep it within five minutes. if you would like to use the time to add to or summarize that could be helpful for the members. to george, you are a first, welcome. >> thank you. stuart: mr george will give the first opening statement. i believe lois lerner will be the last of the witnesses to make that statement. we will take you back to that hearing when ms. lerner makes her statement. don't know what statement it is going to be but she will make a statement and we will bring it to you when it happens. what would -- i know ms. lerner is not going to answer any questions today. but if you had a chance to ask one question and have it answered by ms. lerner what would the question be? >> how did you select these

groups for scrutiny? and why would you ever allow a system to continue that uses the title of the group as a reason for irs special attention? i know that she has said it came to her attention late in the process and she took steps to stop at once she learned about it, but it went on for way too long. where is the accountability and what was the irs thinking about when they made these judgments? stuart: that will be a question we would all like to get an answer do. thank you so much for joining us. always a pleasure. we continue monitoring the lerner hearings throughout the hour and at 10:45 we bring you senator chuck grassley, republican of iowa. questioned the irs heads at the senate yesterday. two questions for him. as a special prosecutor going to be appointed and this, did the obama administration use its power to tilt the election? we will ask him coming up.

we're still here. i thought we going to go to a commercial break. we're going to nicole petallides. home builders moving the bike taken on those very good home sales this morning, existing home sales. nicole: existing homes sales moving to the highest level since november of 2009 bringing the group with it but the group has done so well this year but you can see told brothers is up 8%, pulte group also and what are gaining two%, told brothers to a new 52 week high as well but some of these names are up 50% and in some cases in 52 weeks up 100% and the group is running hot. stuart: hold on, charles, told brothers, a spectacular record. charles: the ceo says it accelerated significantly this quarter. it was the perfect quarter. i only saw one rushed wagon in the north, revenue of 40 from

has an, a 57% in the south, 50 present in the west, contract values of 57% of the contracts. the backlog up 70%, the company owns more lots, everything you could imagine for a home builder is absolutely perfect. stuart: quickly i will get back to you in a second but look, the dow is up 90 points, we are closing in on 50,500, a report from ben bernanke, he is not going to quit printing any time soon, a strong housing report so the dow is up 90. sweet spot according to charles payne. do we go back to nicole petallides for a second. you have the bargain home of the week if not the month. it is in phoenix. as i understand it, this house sold for $184,000 in 2006, right? height of the boom 184.

it is now going for $102,000, right? at it is four bedrooms, two bathrooms, 1600 square feet. >> exactly. stuart: is a bargain. >> what i did, we brought a lot of people great houses but what i really wanted to get back to basics. this is the $100,000 house, it will rent $11,000 and that is a money maker and when you are teaching people to make money and doesn't get better than this. stuart: with a voice like this, this fake phony foreign accent, would i get shot in the neighborhood where this house is? >> absolutely not. you have to realize these are communities that were built in 2000. these are new homes, good communities, quite a few ranchers in them but good renters. stuart: i have made you a ton of money, churning get out for you. >> i do appreciate it.

i do. stuart: thank you very much, good stuff. the dow is up 101 points would sound the trumpets. we are up 101, charles says we are in a sweet spot. obviously he is right, up 1005488, ben is going to keep printing, housing doing well, markets way up. now we got this. microsoft unveils its new x box. it is billed as not only a gaming system put a hub for all your entertainment, in your living room. willett recognize your living room? is this the next must have gadget? find out in a moment. it's a brand new start. with centurylink visionary cloud infrastructure,

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stuart: i want to interrupt this business brief and go to the hearing, ms. lerner making the statement. >> i became -- moved to the irs to work in the exempt organizations office and in 2006 i was promoted to be the director of that office. exempt organizations overseas, about 1.6 million tax-exempt organizations and processes over 60,000 organizations for tax exemption every year. as director i am responsible for 900 employees nationwide and that minister of budget of $100 million. my professional career has been

devoted to fulfilling responsibilities and agencies for which i have worked and i am very proud of the work i have done in government. on may 14th, treasury inspector general released a report finding the exempt organization field office in cincinnati used inappropriate criteria to identify for further review applications for organizations that plan to engage in political activity which may qualify for tax exemption. the same day the department of justice launched an investigation for matters described in the inspector general's report. addition members of this committee have accused me of providing false information when i responded to questions about the irs processing of applications for tax exemption. i have not done anything wrong. i have not broken any laws, i have not violated any irs rules

and regulations and i have not provided false information to this or any other congressional committee. while i would very much like to add to the committee's questions today i have been advised by my counsel to assert my constitutional right not to testify or answer questions related to the subject matter of this hearing. after very careful consideration i have decided to follow my counsel's advice and not justify or answer any of the questions today. because i am asserting my right not to set testify i know some will still my have done something wrong. i have not. one of the basic functions of the fifth amendment is to protect innocent individuals and that is the protection i am invoking today. thank you. >> thank you. stuart: she gave a brief description of her role and her work in government. she said she had been proud of the work she has done in government and she has been accused of offering false

information, she rejected that and said i have not done anything wrong, i have not broken any laws but i refuse to answer any questions, i will take my attorney's of vice and plead the fifth and that is what she's going to do. there are several huge stories developing as we speak. number one, ms. lerner, at the very center of the irs scandal will not answer any questions on it. ben bernanke testifying down the hallway on capitol hill, already said he is reading between the lines, he is not going to begin printing money any time soon, he is not going to taper off this money printing operation. number 3, a rip roaring stock market rally on our hands over again, down those thrills of 117 points, we crossed very easily the 15,500 level. in part that was because of ben bernanke, it was also in part due to a strong housing market report that we got at the top of

the hour just 18 minutes ago. when we got the housing report, up 40 points. and the man is right. what you are seeing now is ms. lerner wrapping up her appearance. and she will then say -- question is being asked, let's listen to how she responds with the fifth. >> tax-exempt status. as director of exempt organizations of the tax-exempt government entities of the irs you are uniquely positioned to provide testimony to help this committee better understand how and why the irs targets these groups. to that end i must ask you to reconsider particularly in light of the fact that you have given not once but twice testimony before this committee under oath

this morning, you made in opening statement in which you made assertions, you did nothing wrong, assertions, you broke no laws or rules, additional you authenticated earlier answers, at this point, i believe you have not asserted your rights but in fact have effectively waive your rights. would you please see counsel for further guidance on this matter while we wait? >> i will not answer any questions or testify about the subject matter of this committee's meeting. >> we will take your refusal as a refusal to testify. the witness and council are dismissed. >> we were not expecting that.

i was expecting mr. lerner to be sitting there, be asked questions and to say fifth, can't answer. the answer to the first question by chairman darrell issa shea set a refuse to answer any questions that which point he said you are dismissed. developments. >> she waived her right to fifth amendment privilege by issuing an opening statement. she will stand here and answer our questions. [applause] >> mr. chairman, first of all with all respect to my good friend i said i would like to see it run like a federal court. this is not a federal court and she does have the right, we have to a year to that.

>> thank you. we will pause for a moment. stuart: there is an argument going on here. should miss lerner have to stay and answer questions or -- albeit by pleading the fifth, or according to chairman darrell issa should she and her pals will be dismissed and leave the hearing room? -asking questions again. >> narrow the scope of questions in that there are some areas you will be able to answer any questions on here today? >> i will not answer any questions or testify today. >> miss lerner, would you be willing to answer questions specifically related to the earlier stevens made under oath by this committee? >> i declined to answer that question for the reasons i have already given. >> for this reason i have no choice but to excuse the witness

subject to recall after we seek specific council on the questions whether the constitutional right of the fifth ammndment has been properly way of. not withstanding that in consultation with the department of justice as to whether or not limited or use of unity could be negotiated, the witness and council are dismissed. the clerk will please rearrange the seating. stuart: this is a moment of high drama. this is political theater. ms. lerner is on her way out of the hearing room. the people in the hearing room are going to rearrange the seating of the witnesses. there's a brief pause, while they do that and presumably the other witnesses will be asked questions by committee members. what you just saw was an argument within the subcommittee, an argument between chairman neisse --issa

who wanted to get them out of the room and another member of the committee who was going to ask questions who wanted to keep asking questions. it was quite an argument and so the end result is you are out of here. subject to recall after we have discussed this among ourselves. if that is not high political drama i don't know what is. it definitely beats ben bernanke droning on about the supply of money. which actually is having a significant effect on your money right now all. look at the big board. the dow is up 130 points. they are not paying attention to ms. lerner and the drama on that side of capitol hill, they're listening to ben bernanke who is saying i am probably going to keep printing. up goes the dow up 131 points. here is where we stand. there is a brief pause in the iris hearings as they rearrange themselves and decide what they're going to do. ben bernanke is going on about

his pre-arranged testimony which we already know what he said. peter barnes has that the top of the hour. he will not quit printing any time soon and we have a strong housing report that came out at the top of the hour helping the market and we are up 126 points as we speak. we are following all of this simultaneously, juggling all of these, thank heavens i have charles payne with me. charles: mr. gotti -- stuart: i want her to answer questions. charles: by issuing an opening statement you have waived your right. i don't think he came up with that of of the cubs. he was lying in wait with this. we will find out if he was right. we may have some new constitutional interpretation here but he was waiting for this to happen and pounced on this vigorously. stuart: something happened before, that was congressman lynch, democrat, i repeat he is a democrat from massachusetts.

he said he told the world if we don't get answers, we want a special prosecutor. is comes from a democrat from massachusetts. this thing is out of control. charles: the republican national committee filed a freedom of information act request in all the documents involved in this lot of people say we have to go and officially get these e-mails and records and phone calls so visitors to the white house and all that stuff but it won't go away so pleading the fifth whether they accept it or not it is not going away. stuart: i think you saw the scandal break open another couple of notches actually. another couple of notches. we are following it for you. you can watch the dow and that bug at the bottom of the screen. we haae a nice rally. i want to bring in jerry mclaughlin. that story is microsoft. they can out with the x box 1. i want to make sure i got this right. the x box 1. it is brand new, very different, what they want to do, but

microsoft wants to do is make that the hub, the entertainment hub to our homes. i want your judgment. can they do that with the x box 1? >> they made great strides with the 360 which came out we years ago. a lot of numbers here, the x box 1, the first one cannot eight years ago, it has the processors which makes it faster and better than the computer at home, they wanted to run in your living room. is an interesting ploy. stuart: i want your judgment. does this make it as the new hub, the must have called for entertainment in your home? >> i am going to say yes it does. some great move to get entertainment already, the new one will go further. talking about live tv series just for this product. stuart: i am going to break away and go to ben bernanke who has just been asked the first question. i you going to keep printing? listen in. >> the purchase program, subsequent to that we are going

to follow the guidance we provided about interest rates, our principal tool for raising interest rates will be the interest rate on excess reserves that we pay which will induce higher money-market rates and higher federal funds rate and we will complement that with other tools including tools we have for draining reserves and we may or may not sell access. at this point it does not. is necessaay for us to sell any assets or securities to exit to endanger price stability. we are currently discussing our exit strategy and provide more information going forward but we are confident that we can exit over time in a way that would be consistent with policy objectives. >> roll off of the balance sheet to sell securities themselves.

>> we could normalize policy by simply letting securities roll-offs', and wouldn't disrupt markets so much, it would avoid as much irregularity in our fiscal payments to the treasury but we will see in the long run, the desire to get back to a treasury security portfolio but again in the exit process, allowing assets to roll off would be sufficient to bring us to more formal balance sheets in a reasonable period. >> when you expect this to begin? to begin this process? >> we are looking -- trying to make an assessment whether or not we have seen real and sustainable process in the labour markettoutlook and this is a judgment the committee will

have to make, if you see continued improvement and have confidence that that is going to be sustained, in the next few meetings we could take a step down in our pace of purchases. again if we do that it will not mean we are automatically aiming towards complete wind down, rather we would be looking beyond that, raise or lower the purchase is going forward. that is dependent on the data. if we have the outlook for the labor market improves and we are convinced that is sustainable we will respond to that. the recovery were to falter if inflation were to fall over -- stuart: this is ben bernanke answering some very key questions from a friend of this program, kevin brady, republican from texas. he was asked are you going to keep on printing money? reading between the lines his answer was essentially yes.

mr. brady then said our you going to get out of this money printing operation? ben's response we can do it in an orderly fashion. the third question from kevin brady was the most important. when are you going to do this? what you going to taper off and then's response was over the next few meetings we will decide what to do. we may increase our printing of money. we may slow it down. the dow is up 153 points. at the beginning of that answer to the questions. is now up 133. any mention of may be slowing down the money printing in the next few meetings took a little bit of steam out of the dow but charles payne knows more about this. this than i do. he is with me. go. charles: it sound like he made it more of a third-quarter thing. it kind of spooked the market a little bit. he try to be reassuring.

it is not even raising rates. the world does not go to hell in a handbasket. he made a promise to wall street, if things do not look good, i will get right back on the bandwagon. stuart: we are trying to interpret what he said. over the next few months, they would be looking or seeing whether or not tapeeing down the money printing. you have this initial reaction. charles: we just lost 30 points on the dow. he may have to redo that answer.

stuart: he wants the market to recover. we have to interpret what bernanke is saying. the market is trying to interpret it. we are up 117 points. they are reading between the lines. are we going to go back for more of this? are we going to do that? yes. yes, we are going to go back. we will interpret later. >> what we are trying to address here is the far more physical gap. we are seeing the economy operating at a level below what it is capable of operating at. monetary policy can help to help

put people back to work. >> i will just think you. i think monetary policy has limits. it has run its course. that just is not happening. fiscal issues from higher tax increases. the president's new health care law a great deal of uncertainty. i think those are the main roadblocks. i think the earlier the fed can begin communicating, though more onus is put on congress and the

white house. >> thank you very much, mr. chairman beard i was going to take the analogy that the chairman just made about the hospital. we are out of intensive care thanks in part to the fed's action. we are currently out of the hospital. we keep having to go back to the emergency room. i do not think that that helps. i want to start with that. right now the fed is working to spur the economy, as you just discussed with the chairmann at the same time, the congress is implementing across-the-board spending cuts. stuart: i think kevin brady is emerging as one of the most important and powerful

interpreters of what is going on in washington. he was very good in the iraq hearings. he just made his mark with that bernanke. maybe now it is up to congress to get the tax situation in hand, get things right on the side of the economic policy debate. i thought it was very important. we have to show you the dow industrials. the dow industrials have lost 60 points since bernanke started to mention the idea that he would tap on the brakes when it came to printing money. that the justin brought the dow up. come on, charles. charles: when the final bell

rings, we will be at the high of the day. what you said about kevin brady was absolutely amazing. he is asking direct, sharp, right to the point questions. you see the impact already. stuart: are you going to keep on printing money? when are you going to stop printing money? now we have to do something. charles: when kevin brady talked about congress and tax policy, i know bernanke is like, lord, please, yes, you guys are messing this up. take the weight off my shoulders. get your act together. please. stuart: at the end of this day, the market will be looking out

bernanke. i think the market says, you know, bernanke wants the stock market to go up. he does. if we are all making money, maybe you will spend some more money in the general economy. maybe you will get this economy moving. he wants a rally. charles: i honestly think he also wants to get out of the way. he is not a dummy. he has to be scared as hell about what he is doing right now. he is a little arrogant making he can flip a switch. secondly, i do not think that he is getting any help. stuart: their game has been caught more than half. we are up 65 now. i am sure this is all because of

bernanke mentioned it will be discussing how much money to print. i am sure that is the reason. let's go back to second. we will interpret for you. let's listen to what is being said. >> they do respond, i think, and participate to respond to physical conditions. again, i think our inflation record is as good as any central bank. there really has not been a sacrifice in that respect. >> last month we held a hearing about long-term unemployment during the recession. long durations of unemployment, of course, have lasting adverse

impacts. are you seeing signs of rising structural unemployment and is a high unemployment rate a sign of structural challenges? >> we are seeing evidence that employers are reluctant. >> we think at this point that this is not an irreversible problem. we are concerned about the long-run effects.

>> are structural unemployment problems different? >> monetary policy is not able to address long-run employment issues very well. our goal is to address cyclical unemployment primarily. stuart: the chairman is discussing rather technical issues. it is a rather technical discussion at the moment. it is my opinion that the news has been broken and the news has affected the market. bernanke well at least discuss and consider tapping on the brakes when it comes to printing a great deal of money. let's go back to 10:00 o'clock this morning. our all peter barnes is up

there. peter knew what was going to be said. he summarized it for us. there is no sign that we will stop immediately. we will keep on printing one. up went the markets. the very idea that it will be looked at as a policy took the dow from 150 up to 60. maybe in the next few meetings.

charles: words are very important. especially when it comes to bernanke. you do not have to worry about the confusing testimony that alan greenspan gave. i think he was there he delivered before that question. he really tried to be as gentle with this as possible. he is trying to reassure everyone. we will sell it into the marketplace. we will not disrupt anything. i think he was trying to, he knew someone was going to ask him about specifics. he tried to make it seem nicer or friendlier to the markets. stuart: bernanke has been buying paper, mortgages. when he talks about unrolling

those, he means he has now decided to sell the. when you buy them, you push money out there. when you are selling them, you are bringing the money back in again. that is what he is talking about. charles: the connotation is that it will be slow. it will not have any ripple effect with the market or the recovery. stuart: there is also drama a few hundred yards away from where bernanke is testifying at the moment. earlier this morning, lois lerner who is in the very center of this targeting conservatives using the tax-exempt office, she ran that office, she was testifying this morning before congress. there was a real drama there. there she is taking the oath.

the people on the panel, they start to make their opening statements. ms. lerner gave a statement where she ran through what she had done in government. >> i have not done anything wrong. i have not broken any laws. i have not violated any rules or regulations. i have not provided false information. stuart: then she said i will not answer any questions from this committee today.

at which point, chairman iso said, wait a minute, you are here to answer questions. if you are not going to answer any questions, you are dismissed. >> mr. cummings just that we should run this gay courtroom. she just waved her fifth amendment right to privilege. you do not get to tell your side of the story and object to cross-examination. she needs to answer our questions. [ applause ] stuart: obviously, a popular statement with the crowd there. the microphone went back to chairman iso.

they got up and as you can see, her and her counsel walked out of the hearing room. they rearrange the chairs for the witnesses. the subcommittee got itself together. charles: before she left, she spoke about protecting people. who were those innocents that she was talking about? p2 let's bring bring in another frequent guest on this program. senator from iowa, chuck grassley. we have been watching some real drama unfold. i suspect that this has broken open the irs scandal even more.

>> it goes to the very culture of this organization. i do not want to just say that the irs is the only one that has this problem, but intimidation by government is a major problem today. it is particularly acute in the irs and the questions that they ask is just an example of that intimidation. i think maybe we did small business, but we did not do it in the area of small profits.

stuart: before ms. lerner and her counsel were dismissed, a democrat said, look, if we do not get our shins answered, i want a special independent prosecutor appointed. if there is suspect of criminal activity, yes, you do need a special prosecutor. stuart: do you believe, sir, mr. senator, do you believe that the machinery of government was used during the election campaign to benefit the obama campaign? >> i do not have any evidence of

that coming from the obama campaign or from the white house there were democratic members of congress asking the irs to investigate this. they all tended to be from left to center. it brings up that suspicion that somebody had political activity in mice. let's understand this. this investigation cannot be about political act dimity or political advantage for anybody doing that investigation. this has to be about the intellectual dishonesty. stuart: thank you. breaking news all around today.

bernanke hands they will take a look at money printing. we have lois lerner dismissed from the room. a whole lot going on today including a stock market rally. back in a second. all statio comover to missioa for a final go.

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♪ stuart: it has been a moment or two of high drama for your money, investments and the drama unfolded in washington. lois moore at the center of the irs scandal has been dismissed from the hearing room. prior to her dismissal, prior to that, a democrat from massachusetts, congressman lynch said if you do not answer questions, we want a special prosecutor. that breaks open the irs scandal. bernanke under question from kevin brady. under his questioning, bernanke suggested they would look at how much they are going to print. how much money they are going to print in the future.

charles payne is with me. you caught another development. charles: he actually said, you know, you said there was no targeting. he did not have the full set of congress. they said it was not acceptable. there is no evidence of him losing his temper. i am sure that he was pretty upset. he is a democrat. obviously, everybody is getting upset about this.

march 2012, you said there was no evidence. you learned lot since then. stuart: okay. more varney in just a moment. double we gave people a sticker and had them show 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 much the official retirement age. ♪ the question is how do you make sure you have the money you need ♪

how long before he goes to clege? [ woman ] ...became a real question. are we ready to pay for college? [ woman ] so they came to see and we talked about ways to manage the money and save for college that fit their situation. so when little david -- well, not-so-little david

w ready to go to college, his parents were read too. we did i [ female announcer ] let's talk about smarter ways to manage and save your money. when people talk, great things happen. wells fargo. together we'll go far. obama, the hearing room for the irs, drama, political theater right there and the right questioning ben bernanke, drama for your money, the dow went straight up only 60 points, charles payne, there was an emotional connection to sooner rather than later but there was more momentum in the close. stuart: a fine performance. thank you, one and all. >> thank you very much. >> the stock market of an earlier highs, we don't want to

ms. too much of ernie said is questioning ben bernanke. charles: we will keep an eye on the markets as well. >> a reasonable fed, and many colleagues might not know of this, members, institutionals themselves, as we theaters are appointed by the financial institutions and three come from appointments by the fed. we have absurd situations where jamie dimon, ceo of the largest financial institution on america on the new york fed to regulate wall street, the fox guarding the hen house. i will reintroduce legislation to end and absurdity of six of