yes. rates for us and them -- now that's progressive. call or click today. ♪ ♪ ♪ >> when the new year brings zen and the ball drops down. round two, well, it could be worse than round one. welcome, everyone, i am charles payne in for neil cavuto. the irs reported has a plan. house republicans saying that it's changing the rules to classify all activities of these groups as political. that would make it nearly impossible for them to get tax-exempt status in my next guest says that once again the administration is blaming political opponents.

we have katrina pearson here with us. we invited pete sessions in on the show as well. let's start with you, katrina. you guys have seen this coming, you know what is coming. what are you doing about it? >> that is why many of us have stepped up and actually run to fill some of the positions where we have entrenched incumbent politicians that are afraid to do what is right, that's the protect the american people in front of government. charles: by the way, why are people afraid? is not just democts and if so, why are they also afraid? >> absolutely. the thing is we have this thing called the constitution. and we have the administration and congressional numbers that are in the teens and the single digits and no one wants to do anything. no one has gone to jail, we can't even get people subpoenaed. there's no accountability in washington dc.

why are they afraid? that's a very good question. the american people are going to have to let people that are not afraid to governccording to principle and not let others dictate our policy based out of fear. >> but it's going to be hard to get that message across area and out in the open and out in front, how do you get around this? by the way, i know you are a big fan of the constitution. so where does this fit within the framework? >> well, this is the first amendment we are talking about. and that is why i'm gla to see people outtere who understand the constitution. this is nothing less tha an attempt that is included for extly this reason. our founders did not want a trainable governmentrying to suppress our free speech. this is in the first time that they have taken an attack like this. they have done this and you

c't preach politics fm the pulpit. ablutely untrue. there's a group sayg, oh, yes, we can. and come and get it. i ha a feeling that the knowledgeable conservative group being targeted is not going to be messed with in this way. i have a feeling they will come right back and be happy if that's what it takes. that the irs --hey're just not going to give away with this. charles: there will obviously be a lot of lawsuits. that you think may be they will stop the tea party delay elections are over? >> well, why not just implemented it even harder and go fther? this congress can't seem to put any reins on this administration from violating this to governing ad hoc. we have a congress that is just capitulating to the reign of this administration and gina is absolutelyight. we know the constitution and we no one writes, were going to fight to make sure that we can

keep those things. charles: john boehner came out tough against the tea party last week. why is it that they have made this calculated move, why do you think that they have made this calculated move and abandoning you guys? >> we are talking abo the establishment on both sides of the aisle, those who have serious problems. and that is where the fraction in the rublican party is coming from. they want republicans to govern and many have dictated this because they are afraito do it right. even my opponent is backtracking myth just ecause they didn't read the bill and they didn't know all these things were in there and they didn't know they would tack on fees capacitors. they got out there, they attack their own base and republicans are going to their own demise. charles: what can be done? because you are fighting to

parallels an the obvious attach on the white house administration keep everyone quiet. >> yes, hey could start a backbone along with the democrats understand that we do have a constitution and the bill of righs secures freedoms for americans. like this rule are trying to dismantle. if somebody out there would old speaker boehner accountable, it's tantamount to the existence of the gop. and there could be a hero in us. but the bottom line is that so seldom do we ever see the establishment gop actually rising up, seeking these opportunities to get these groups out there, those that are independent and more freedom minded. this is a great opportunity for them to say that that is what they believe in this is tyranny and this is whatwe believe. this is freedom and constitutional liberty.

and the can only go so far on that. but they probably won't do that because most of them are cowards. charles: very strong language. that's why we have even you here. we really appreciate it. >> thank you. charles: my next guest says that this could open a door for another round of lawsuits. the executive director for the american center of law and justice. representing dozens of groups. you know, this is absolutely amazing and i think what is interesting is the first time it was sort of out of the left field. you can say the administration is kind of talking about this with a determination, being upfront. what do yohave to say? >> yes, this is a second attempt to silence those who are trying to file for any kind of status for the coming elections, whether that be part of that, even if this is not the rule in place, if you look at it and say that this is the kind of scrutiny, certainly we are not going to qualify.

guess what they have accomplished again for this third election cycl? conservative potential tea party type groups, which is exactly what the administration goal has been. the president demonizing newsgroup support. the members of congress on the left. the irs officials. they were all democrats that were caught up in the scandal. once that have resigned, ones that have been part of the lawsuit. at the end of the day this is changing rules in the middle of the game and we have a lawsuit pending right now, we represent 41 groups and now just as he said, if you took what these new proposals were about, registering voters, doing general voter information, candidate cards, telling you about the generic issues, education on the constitution and constitutional rights. these groups get tossed out. but labor unions don't get affected under section 50125.

and neither do tde associations. they're not affected by these rules. >> first, it feels like you are going to win, you and the people who you represent when this. but what were you when won the elections have passed. and what will you have one for the white house. because it seems that they are in a no lose situation. >> they are in that situation. what outrages to the president and a criminal investigation, what was done being codified and they are -- if you look at what the irs is proposing, and by the way, this is a proposal in issue are comments and point out every reason lined us up to be due by the end of february. and they will affect not just conservatives. it will affect all groups. liberal groups as well. and yes, changing the game.

people have asked if this sops it. but by the irs in many yths, that it was so vague. and that they had these standards in place especially the last 60 years, that may assist our legal claims. but ultimately we still have groups, as you mention, who have not gotten a yes or no from the irs and would any quarter allow the irs to change the rules? that that is something we will see how far they get. but weill work hard to build opposition and congress can step in. the irs has rulemaking power only to e extent that they allow. many have been weary because it looks exactly like they are targeting the tea party based off of what they gotn trouble for doing. >> okay, it's time to stop being weary and step up to the plate.

thanks a lot. of course, we want to monitor your progress and is greatly us. we appreciate it. >> thank you. thanks for covering. >> coming up, imagine if the ceos figured out how to screw up something and next, the guy who

>> the health care hits keep coming. new reports showing that 15,000 applications never made it to insurance companies. so those people mig not be getting coverage as soon as they thought they would. all of this after a botched website and premiums skyrocketing. we have jo caruso. >> i think it's worse than that. the things that you look for when you are advising a public company, i think it's things like accountability to

stockholders and investors and the taxpayers and voters and that is what a disconnectomes from. so why would government, which is elected, in this case, making a parallel to shareholders as voters. absurd that it happens. >> my personal opinion is that it seems like the idea of the aafordable healthcareact getting pushed through andto have something go down in the history books and it doesn't seem like enough time is put into the planning stages of it in the testing stages of the exchanges and to the transparency o this user and the public. >> i don't think anyone would dispute that. and the point is that you can still have these things if you want a legacy or your name on it or wtever. but why wouldn't someone be accountable? a lot of people have called for

this and a lot of people have said this. so why would you be so protective one obviously they were part of this? >> so obviously he can't even have the smallest chink in his own arm or? >> that's right, the team is ttere, the question that i had when i looked into this was what is the credibility and what is the experience that is leading a? to me, a lot of it seems to be ust -- people with a political situation last 10 or 20 or 30 years. did she run an insurance company? which involves the level? >> you have been at this for a while. in corporate america, the ideology and the ego -- it has such a paramount sort of existence among all the other

things. so how can it just be so myopically focused on the president's ego more than anything else and you have seen. >> this includes the involvement of stockholders and those who elected to be there. including the impact of an ameran population who have no choice in e matter. and it's it's more widespread >> how do you think it plays out from here? just from a public relations point of view, there's not going to be in the form of a mea culpa

and they have already given themselves a pat on the back. and i guess it's in the rearview mirror? >> yes, it is. and i looked at it, you are looking at the situation that you are seeing. you are not going to see an apology and i believe that there are many who will tell you they didn't know about it and everybody just keeps talking about the website. and that's the foundation of the exchangesto unwanted health care plans and there's an ise with that website. and it isn't infrastructure. but i don't see a. >> the website might end up being this part. charles: the president's biggest supporters? democrats beware and it may not democrats beware and it may not be a happy new year after

life an everyday miracle of survival today the future of all life on earth hangs in the balance what happens next depends on us ♪ well you done done me and you bet i felt it ♪ i tried to be chill but you're so hot that i melted ♪ i fell right through the cracks ♪ now i'm trying to get back ♪ before the cool done run out i'll be giving it my bestest ♪ and nothing's going to stop me but divine intervention ♪ i reckon it's again my turn ♪ to win some or learn some ♪ but i won't hesitate no more, no more ♪ it cannot wait, i'm yours ♪ open up yr mind and see like me ♪ open up your plans and damn you're free you'll find that the sky'snd yours

♪ so please don't, please don't, please don t ♪ there's no need to complicate ♪ cause our time is short ♪ this ohthis oh, this is our fate ♪ i'm yours

the one that hits keep coming. more bad news for the president. giving him two thumbs down. 4046% approve of the president. that is down from a year ago. >> yes, young people are really part of that. because the administration sold obamacare young people and they said it would be affordable and possibly free. they didn't say that they would end up subsidizing older and sicker people. so they are shocked because they

are so betrayed and they have 16% unemployment and the average person has $35,000 in student loans. and it's unfair. charles: you think maybe this is a false alarm? >> that's right, i run campaigns for a living. the president's numbers have gone down with everyone. especially if you're running for a congressional race this year. but i'd like to point out that obamacare and the affordable healthcare act is more popular than the republican party and the same thing that we are talking about. if you really want to talk to people that will move them. and this will be the economic disaster of our time. if we don't get this under

control and help out young people with this enormous burden of debt that they have taken on. >> on that note, the administration was able to pocket $41 billion of his student loans and it's one thing to talk the talk. the two mitchell's point, if theyfind out how mch the administration makes they're going to come to the administration that they're not going to get any relief for matt. >> we need to make college affordable for everyone. no one should be profiting off the education of our young people. it is absolutely the difference in making our country prosperous. i don't care if you are democrat or republican. we should be doing everything we can to make college affordable for everyone. >> it seems like the llennial's are getting a mixed message. one says chill out, and your moms basement, as long as he needs you. get any kind of degree that you want, chill out, and then to your point to fulfill and be the

economic backbone for some of these policies. >> that's right. what he is doing is sort of treating millennial's late adolescence. that is what all his policies are doing. allowing young people to stay on their parents insurance over 26 years old. and young people need to sign-up in order for obamacare work. and i think that it's just going to be a disater. what he was saying about this, you know, every president has these low polling numbers and it's very difficult to bounce back from that, and going into the 2014 election, this is definitely going to be a liabilitfor democrats like kay hagan, mark pryor, basically running away from obamacare because they know that americans are going to hold them accountable and liable when it comes to the midterm election. charles: to michelle's point, you don't want to talk about obamacare, but the governor's race is only about 24 hours awwd

have been a democratic victory due to what have been part of obacare. this is a draconic problemor the president. >> i'm not going to say that it's not a problem. but to the point of this, not being able to bounce back, i run campaigns for a living and we put the republican party in the grave because of the shutdown. the poll numbers willis we have ever seen. the greatest thing that ever happened was the affordable care act. is the ac a problem? i'm a democrat, i'm the first one to say that the rollout should have been better. >> the rollout is just the beginning. people are very unhappy right now. not becae of eir premiums. many have not seen the premiums. they're upset because they can't access the website. wait until they see their emiums. people are going to be much more upset. >> i'm not talking about what other people are saying, but what i'm saying.

>> but i'm a kid, you're paying $300 a month, if i could just pay a penalty of $95, hat's what i would do. his guys, i really appreciate it. soon i think you. charles: the president wants to tax the rich even more. but what have i told you? what they are paying more than 100% of the tax burden? we have the numbers to prove it and it's coming up next. sonoma without double molto this is the quicksilver cash back card from capital one. it's not the "juggle a bunch of rotating categories" card. it's not the "sign up for rewards each quaer" card. it's the no-games, no-messing-'round, no-earning-limit-having, do-i-look-like-i'm-joking, turbo-boosting, heavyweight-champion- of-the-world cash back card. thiss the quicksilver cash back ca from capital one. unlimited 1.5% cash back on every purchase, everywhere, every single day. now tell me, what's in your wallet?

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>> americans paying their fair share. >> congress needs to stand up for the middle class and makes this fair. >> they need to pay their fair share. >> i believe everyone should have a fair shot and everyone should do their fair share.

>> while he is pushing for more, a new cbo report shows that the top 40% of earners are already paying 106% of income tax in the bottom 40% of paying less than nothing. let's try a negative 9%. cbo director douglas holtz akin. >> for most american families, the biggest is the payroll tax and they are not paying this at all. on almost bipartisan basis, they try to get them off the tax rules. charles: we keep hearing the notion of fair. and what i'm calling it, what i

think it is, it feels like 99%. in other words, hear me out in the spirit of working and i'm having to make 75 grand a year. all of a sudden, i'm jealous and envious. the presidentnt seems to span matt. >> does, he does. and it used to be thate saw the 75,000-dollar individual say that i can be that person. i can work a little bit more than i can make sure that we an get ahead and save a little bit. but now we see is them saying you n't have to do allhat, we will get that money and you deserve it. charles: where do you think we can go? let's just say that the president were to get everything that he wanted. i could tell you that economic data shows that the entire continent is rebounding except for france. probably instituting the idea is to lose loosen the administration's point of view.

>> the fact is that they could jack up tax rates on the rich and perhaps balae the budget. but that means over 90% at the top, 80% in the second bracket. crippng tax rates and here is the real thing. suppose that he did that this year. given the spending plans that people have, including the president, all that fairness, it would leave behind a burden on the nextgeneration that is immoral. or worried about fairness, let's pay attention to the spending. >> is there a sweet spot for word taxes could be? in other words, where can we go from here that is a number that creates opportunities so that everyone can get this to 200,000-dollar mark?

>> we went from a tax rate of 70%, the surtax up to 90, ad then with thatout, we got the top ras down to the vicinity of 28 or 35%. that's a good place to stay. then we could geback to that again. taxes are an important part of that. including broadening the base. that's what the house and senate is working on. >> it certainly would be interesting. douglas, thank you for bringing sensibility and mathematical formulas to the table. >> thank you. charles: remember when people who didn't deserve or can afford mortgages got them anyway? the same type of thing is happening again with health care. and you have those navigators to

>> a convict felon could be a navigator and could acquire sensitive personal information from an individual on the nose to them. >> that it's possible the. charles:. charles: more troubling news about the navigators. the house oversight committee saying that customers are probably giving wrong information, b urging people to commit fraud to qualify for tax subsidies. and we know how that ended. michael cannon says the health care mess proves more government means more problems. >> it feels like a government willing to turn the other way with this conduct. >> there will always be more fraud in government programs with the private sector because the government is spending

taxpayers money. so who cares? i mean, nobody guards their money and can see that in the administration's attitude. they decided that they wll not have to go through background checks. so in addition to all of this, we have people who are collecting personal information and financial information about applicants and we don't know including ifou like the law and to delay the employer mandate and reporting requirement in the law that is supposed to combat fraud. including claiming subsidies. and they want to get people enrolled in this and hope on the subsidies because that will protect the law. and it happens to increase the

burden on taxpayers. well, it's a small price to pay on their perspective. >> maybe this is why they waved all the requirements. that so many are from entities that we heard from in the past, like this or that, organizations, planned parenthood, organizations of people with ulterior motives, pushing those policies as well. >> that's why you have ll. >> that's why you have republicans calling so many of the approprations under obamacare as part of the slush fund because democrats did to him this money out of their friends. and they are very interested in getting people hooked on government subsidies, getting them dependent on health care. so they can vote for government spending.

charles: these people take your their information, they learn about you, they tell you and sell you on their ideology is pretty serious situation. >> it's very frightening. and it's going to happen and it's such a personal financial security type situation, no matter how u.n. role in obamacare. a navigator could help you out, you go to the website, security experts have found lots of potential security problems with the obamacare website. including this, it looks like the obamacare website. collecting your social security number as well. charles: before i let you go, have you heard of any plan and some form of accountability? because it's out of the back and maybe we can protect ourselves before it's too late. >> the only plan that i have heard of is theaverage to

repeal it in congress. the president makes an interesting case. protecting those from rampant fraud. he's only interested in getting more people and rolled and hooking them on subsidies. kathleen sebelius said once those people are receiving the subsidies, they will work with them to receive this as well. >> thank you very much. we appreciate it. let me be brief. if your company has a tank, don't get mad.

>> 's nights let me be brief. the employees of a financial firm talk about their 401ks

tainting. they say that that company should have known that it should've let people invest during the financial crisis. so do you disagree? why wouldn't you have a strong part of this? >> were dealing with a group of people who unfortunately lost a lot of money in their 401k. they had a big chunk in their own company. >> because they worked at the company? >> exactly. because they worked as a company. what they are saying is that you invest in this and clearly at is not an appropriate investment, but an unfortunate investment, they plunged into a lot of high risk loans. many including citibank and you know, others, that we saw with bank of america, all of them

plunged. but tey invested in their own company. >> videos the thing is is that you do have a certain friends. >> it must be pretty good? >> yes, that is the point. they need to believ that their money is being invested responsibly. we know that they can sue if their retirement account is being mismanaged. if there is a breach of that. charles: okay, so why are they soon? >> because of bad investments. the argument the company was involved in this very risky investment. they lost over 74% of the value

and that is where this lawsuit stems from. they continue to put their employees money into a company that wast great risk. and they did that in violation of their duties. >> the key is what did t actual people now? that they know that the company was going to tank? and then still continue? >> the ceo may have known. the people in the administration may have known and what do they really know. >> the shares he come back pretty nicely. >> is on employees who are putting their hard-earned money into the trust of these people who are organizing and. >> was at the match from the company? >> it was both. i had to buy the stock in the company wod match me.

>> usually pretax dollars, and that goes into the fund. it is being managed by organizers who have a duty under the law. to be responsible with those investments. >> the argument is that we were not reckless. we did withstand the bigst financial crisis since the depression. that is what the supreme court is going to do it. >> i think that they are going to make it somewhat easier for employees to sue when there is a clear misrepresentation or recklessness on the part of the plan organizers. >> in this particular case, what have they invested in? if i come in, and i say this is what you could've invested in, it was not a pretty picture. >> 82020 mac hindsight. but if your company is involved

in risky investments like subprime mortgages, which is what they did. >> it's very risky. that's a problem. >> tt's not true. >> yes, it is. so the point is that -- you know,. >> the united states supreme court has been a part of it. >> how should they be filed? >> they a identifying the level that they are going to talk about. >> are there financial rewards as a part of it? >> in this case i don't think so. sure, this is some of the banks. they are paying to mortgage holders based on improper mortgages and these are people who have the 401k plan. >> yes, they have a lot of impact. >> okay, we will think about what happens hits kate coming.

the house of cardsould be about that. what a knockout blow.

charles: golden globe nominations. is it too lateto get in? or is this netflix rally just getting started? >> that is a tough one. >> netflix has single-handedly changed the y that we consume entertainment. up over 0%. the stock prices. but we have to believe that people like this content and buy over the internet. the ratio of over 300. >> what about you?

>> one thing hat netflix has done is they have all of the consumer need and what they want and i think that they definitely have room to go. i'm just renting this to having the legitimacy at the table. >> it wasn't long ago that the stock was up. with th, now at 370. the long haul means they better put on the seagulls. >> yes, and have airbags all the way around. think about google back when the

ipo was part of that. stock went up. went back down. had the financial stamina to have this. and hold it for the long haul. >> so here is the individual that says that it could be like years from now. and harold is a genius. >> keystone is a lot like the bridge that goes nowhere.

what i love about the entrepreneurs is these great creative ideas and a problem that i have is a concern about safety. one thing that we have seen is it's very viable. but it's going through these small towns, there could be huge health and safety risks to those people and i think we will see symbolic elegy and also the oil sector. and demand is very high. but also so is the supplier. >> we have seen him go. >> if we don't build these sorts of things, and we'd love to fill

up our taxes and it's going to cost more. and includes paramount for national security. there are plays on transportation stocks. but we are going to have to build this pipeline.

charles: and means that we are transporting it across the country in the much dangerous fashion. >> at the worst thing we could do for our market long-term. and for our currency. the smart and vessel here it is take advantage. charles: are they talking about the junk assets?

>> woody watching quarter-mile. >> lots of interesting new smile. i'm focused on the homebuilders index and why that matters to them. we have seen this market tracking how the home sales go and so goes the market. there is a reading on this report expected to be 50 or higher. the one decision have a huge economic ripple effect and realtors and bankers and everybody benefits and upward to be a big determinant to see how far the economy can continue to go. charles: do thinkable common better or worse than expected? >> we have seen it wopected? >> we have seen it work in all

of those things weigh on the minds of investors. chchchchcharles: we will see. we appreciated and thank you for watching. kennedy: good evening. i almost belved the world's most lubcated propagated propaganda. well, we risk snapped back to reality. violating the fourth amendment. i hate to say i tod you so. ♪ ♪ ♪ kennedy: hello, i am your host, beset kennedy. along with matt