[phone ringing] hmmm. good stuff. we'll end it right gerri: hello, everybody, i'm gerri willis. right now on "the willis report", the obama administration is going after a once-off limits pot of money. concrete proposals now afoot to raid your retirement. also, a bombshell multimillion-dollar lawsuit over "american "american "american idol." are stars like carrie underwood and kelly clarkson getting ripped off? ♪ the hidden dangers of processed meat. what is really i your hot pocket? we'll watching out for you tonight on "the willis report."

gerri: well, if you watch the show anytime at all i've been warning about this for some time. now it is taking a step closer to reality. listen to this. the government wants to raid your retirement account. that's right. in his new budget to congress, next month the president will propose a broad range of new tax hikes specifically targeting people who have spent years saving fo retirement. probably like you and me. ric edelman, from edelman financial will be here in just a second to talk about that. but first, the white house has officially thrown in the towel on defic reduction. the psident's new budget contains morepending and mor tax hikes. the center of the president's plan to reduce the deficit, a cut in social security benefits, now gone. here with the latest is heritage foundation's romania. great to have you here. we're talking in the show tonight how the government wants to crack down, have people save

less money for retirement. my question was, what do you want to spend that on? now i understand that the president's budget will be far, far bigger than the last. how big will it be? and what does he wan to spend on? >> we're looking at several tens of billions in additional spending on education, on manufacturing centers. i mean if you're thinking about it, big government, government knows best and those kinds of programs that the president is trying to put out but this is no surprise. i mean the president hasaid in 2012 when the deficit was a trillionollars, that he didn't think we needed to worry about the debt. so this budget just basical shows his priorities for the next year and beyond. gerri: here's what we hear. 56 billion in new spending slated. and i have to tell you, it is same old-same old. they say they want to spend it on educati, i.e., teachers, important support group for t president.

programs for stimulus spending that didn't happen. how would you grade the ppesident on his spending bits? how effective is we our tax paylor dollars? >> this president has presided over the largest peacetime deficits in u.s. history the debt, the pubc debt, what we borrow in credit markets has doubled during the president's first term in office. so there's a lot o spending. we have this massive stimulus package and this is another budget that tries to double down on that failed stimulus and exnd government. so the preside wants to increase spending immediately and his successor will have to have, will have to d deal with n even bigger mess and clean up a bigger budget mess we already have. gerri: we're spending more debt that is absolutely true. you have that right. but i bet thee might be new tax increases in this as well. what are you hearing? >> absolute certainty. i mean his last budget had about a trillion dollars in tax increase so it might be around same amount, perhaps it could be even more. i mean the president really wants to double down, especially

on retiremen accounts. which isnteresting because the president also had this myra proposal. on one hand he wants to encourage retirement savings. on t other hand he puts disincentives in place for people on upper end for their retirement. so what is it going to be? gerri: i coin agree with you more. we'll bring in ric edelman, elman fincial services to weigh in on this conversation. and r, i was so excited you were available today to talk about this because when it comes to t retirement crisis in this country i believe the last thing we need is the government, the federal government sayg, hay you know what? end a little less. save a little less. invest a ltle less for your retirement. that what we wou e. what is your view? >> you're absolutely right, gerri. you dodon't strengthen the caboe by weakening engine. it is bizarre point of view and i really don't get it. the notion is we need to be creating incentives for people

to save for retirement. not putting ceilings on them to encourage -- discourage them from saving gerri: i know lot of people out there, both of yououlday, oh, but, gerri, the rich people, they will save no matter what. it doesn't really matter. to you first, does that logic hold water? >> i think -- >> it does to a certain degree but here's the real problem. if you have rich people without incentiveso save, you know what they're going so do? they will kill retirement plans at work which means lower paid workers won't have a retirement plan to contribute to at all. that is t concept. gerri: you next. >> yeah, another problem is tt you will have double taxation. the reon why you don't want to tax savings is that when you have these tax deferred accounts, that money gets taxed at end when people take the money out of 401(k)s in retirement. if you tax them now and tax them again later, u have double taxation which discourages savings. we ought to be encouraging savings.

gerri: absolutely right. i covered this for, i don't knowhow long, 20 years. no one ever sai to me, you know, gerri, the problem with this country people save too much money for rirement. rick, to you as i look at this, what i see is the government saying, you know, really a 1% solution. really there is is income inequality. they're introducing political rhetoric into financial policy. i think that is big mistake. what do you say, ric? >> yeah, it's a real problem. we need to keep politics away from personal finances of ordinary everyday americans. if we are going to put limits or restrictions within policy, do it in a simple, easy to understand, palatable w, not confusing and complex the way the president's propol is. so not only fails on its thesis, it fails on its execution as well. which we've seen happen in other areas of the obama administration. gerri: speaking of execution, you know normally when you say to somebody, i will take away your t break or raiseour taxes and here is what we're

gog to do with it. in this caseou would expect them to say, we are going to raise taxes on wealthy peoe who already sve for retirement and give that people to people who are undersaved. that is not wh we're saying at all. we'll use it in the big kitty and use it however i want to use it. am i correct? >> some programs the president wants to boost like head start, his own administration put out a study that it had no real effect on those children t wasn't even helping. it is very expensive federal day re program. we ought not to be wasting money on failed government programs any longer. gerri: rick, do you think it would make more sense, and i had people suggest this to me recently, quite a bit in fact, to raise limits on how much people can set aside for saving, instead of bringing it dow i mean that has bee the policy for years now, as you say, okay if you're over 55 you can save even more. evy year we seem to raise the limit. 17,500 for most folks you can set aside. why do we have limits? why not let people set money

aside? let's face it that money goes back into the economy. they're investing through mutual funds in companies all over the country, frankly all over the world? >> you're absolutely right, gerri. we have to remember why we left the europe and came to america in te first place. it is becauset is the land of opportunity. there is unlimited pential in the united states. you can be anything that you want to be with no restrictions, no ceing, no limitation. why on earth would the government want to create programs that put aeiling on the american opportunity? gerri: and you? >> the one ceiling we do need is a debt ceiling but congress actually handed the executive a blank check. so while american families are cutting back to live within their means, the government has eliminated, raised debt limit for entire year. that is real problem. if we have one ceiling it should be on the national debt. gerri: that's areat point. before you guys go i want to show some number here. avage 401(k) balance according to fidelity, $89,000. center for retirement savings,

retireme research atoston college says it is far lower, 42,000. not enough money. we need all the help we can get from the federal goverent to save me. we don't nee barriers. great job both of you. thank you. >> thank you. gerri: and now we want to know what you think. here's our question tight. are retirement plans under assault by greedy politicians? log on to gerriwillis.com. vote on the right-hand side of the screen. i will showhe resultst the end of tonight's show. another example of the crisis in the public pension systemthe public pension system. troit today filed its plan to dig out of its 18 bell dollars debt. the city's -- $18 billion debt. the plan which the court must approve before it can get out of the biggest u.s. bankruptcy in history. fire and police officers take 10% cut. city employees take 34% cut and

bondholders would recover only 20% of their money. kevyn orr rewriting all pension rules. did sony steal from "american idol" contestants? we warned y about the recall of hot pkets with meat describeds unfit for human food but are there hidden dangers in the mt? details coming up. [ male annouer ] hands were made for playng. legs, for crossing. feet...splashing. better things than the joint pain and swelling

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gerri: do do you really know what is in your meat? nine million pounds of beef in hot pockets across the nation. there they are right now. well the slaughterhouse responsible for food uit for humans, that is what it is called is being bought out by another meat company. is there ever a good reason to eat processed meat or have we having a cow over nothing. we have attending physician from winthrop university hospital. doctor, thanks for coming on the show. i've been laughing because we've been laughing about this story but it is not funny. i know people who eat these products all the time. is it concerning that the folks who produced this thing, that it is changing hand in the middl of what i a huge investigation? >> i me absolutely, it's a huge concern, gerri. i'm so glad we are actually

talking about this topic, processed meat, fried foods, saturated fats is huge health concern. there is huge study that came out earlier last year looking at 10 countries, that were thousands of people in the study, 13-year follow-up, red meat, processed meat, particularly saturated fats, all of these rult in early cardiovascular deaths. a huge number of cancer are linked to eating red meat. gerri: in this country we find lack of inspection isne of the big props. in fact the agriculture department apparently has a shortage of inspectors in meat and poultry plants all over the country. we're hearing reports, that it is not that they don't have the positions open, they do. they're just not filling them. at end of the day work is not getting done. is this concern to you as wel >> it's a concern. of the big problems it is about access, availability and costs. unfortunately processed meats tend to be much cheaper tan

organic meats, healthiereats. there is lot of problems with meat. we don't know what is in meats there are very toxic chemicals that are linked to a number of caers, breast cancer, prostate cancer. bowel cancer in particular. gerri: i hear what you're saying but if you make me stop eating my bacon it is over. here is what the company that is really in the cross-hairs of regulators, here is what the ceo of this company had to say. we will not do any previous practiies. we're starting a new operation with new usda license and new protocols from scratch. they're promising to do better. but a lot of people are skeptical how this stuff is processed and put together. what is it about processed meat inarticular thats so harmful? >> on this subject, gerri, it words are cheap and all in action and regulation of course. the problem with processed meats, a lot of chemicals are added to meat to result it being processed. cured meats, smoke meats. any meats in plastic packaging

contain a lost salt and chemicals. gerri: they're preserving it in part, right? >> that's right. essentially the processed meats are processed in order to make the food have a longer shelf life and also potentially to make the food more palatable. these are not high quality meats. we also need to make the not just processed meats. alled meats increasing risk of cancers. gerri: can it be all things in moderation? >> absolutely. the study that looked at this, huge study looked at processed red meats, they are advising patients who ate more than 1 off grams a day at great etf risk.% gerri: how much is that? >> that essentially equals two sausages and rash ofacon. that is 160 grams of processed meat. gerri: sausage and baconn one day, that is not nothing >> they said you shouldake 20 grams or less. a rash of bacon will get you

20 grams of process meats. anybody more than you're exceeding government guidelines that came out of the study. gerri: so to get down to kind of brass tacks because you talked about the diseases i could ultimately get, right? >> sure. gerri: i would over tim develop, so what is it that these processed meats do to your body? >> well these processed meats ntain chemicals called carcinogens. carcinogens are chemicals that result norma cells changing into cancer cells. we know there are many chemicals like that. organic meat carries much less of a risk. these checals are in processed meat. there is lot of hormones in procesd meat as well. they're not controlled. half the time we don't know what is in there. the salt, the resulting in the preservative process, those could also add to cancer-causing cells. it's a big problem. it i a big problem gerri: try to keep my bacon consumption under control. dr. phillip --

>> stick to broccoli. gerri: so boring. thank you for coming on tonight. appreciate your time. >> you're welcome. gerri: later in the show, is the left encouraging a nation of slackers? housing numbers continue to disappoint but is it only weather to blame or is something else going on? ishe "house of cards" about to collapse again.

gerri: takes another hit. will bad numbers bring down the rest of the economy? expert advice for buyers and

gerri: another hurdle for housing today. of sales of existing homes plunging to their lowest level

in 18 months, dropping over 5% month t month so are more serious days ahead for housing or is this just a bli on the radar? joining us with advice for buyers and sellers is brian from halsteadroperties. thank you, brian. this is not pretty. this is not what we led to believe would happen. we thought housing would go through the roof. here we are at 16% down. how do you explain it? >> there is n max market. we all know that. gerri: yep. >> i think this is more of a blip especially in certain regions. what we've seen, there is no inventory out there. people's incomes have not increased way we want them o. gerri: no. >> but housing prices and homes value have. people have more equity to dip into but still hard to get those loans. it is really tough right now. gerri: so there is a lot of headwind. >> there is. gerri: experts said, gerri, that winter weather it just killed the market. we can't get

>> that is part of it. some. numbers we've seen. these were sales done two months ago. so that november-december. >> christmas shopping and all of that, gets colder. people go inssde but the fact is, certain markets, houston, new york city, i'm in it every day, through the roof. gerri: really? >> there is just nothing to buy. gerri: so the prices drift ever higher because there is no inventory? >> that's it. it is really, you know, that is what is driving it. gerri: i want to hear from an economist we talked to the other day. >> all right. gerri: this is fellow is optimistic about the u.s. economy, american economy and believes housing will drive it forward. this is jason benerly. listen to this. >> sure. >> we're optimist for housing for a fundamental reason which is we're underbuilding housing the adult population is growing in the u.s. growing by a million and a quarter per year. there are teardowns in housing at are roughly 300,000 per year. so just to keep up with underlying demand, we need to

build housing at about a 1 1/2 million rate and we're not. other len oy building it at half -@of that rate. gerri: so there is jason and he is saying hey, i'm so optimistic about this market i think housing alone pretty much is going toropel the u.s. econo by 4% this year. 4% gdp growth. do you see that? >> that is a lot of growth. look, some ssy te howing market got us io this mess. gerri: yes. >> and getting us out of it too. gerri: that is big thinking from the government and this is why government always supported housing right. >> sure. gerri: once you get peopl buyingousing and they're buying furniture and rugs, upgrading. >> absolutely. building of homes which we don't have enough o right now. everyone said we would have this big second wave of foreclosures. gerri, where were they? thank god. >> still a lot of inventory on bankers books. 've seen that. but you know we talked about the housing starts number. builder confidence is also dow and those sm to be people that you're relying on in your forecasto get this party started.

gerri: but look at builder stocks look atoll brothers. look at those stocks. people are putting their money into these stocks. this blip is not an indication that the recovery s halted. it's a caution but every market is different. new york city is very different. hoton, los angeles everything is local in real estate and that is the thing. gerri: what is your takeaway advice for people, that want to by first-time home or second home? >> sure. gerri: where is the market strong and fundamentally sound and gre place to buy now? >> i like vegas, i really do. vegas, baby, i really do. you can't time aarket. i tell my buyers all the time you can't time a market. if it makes sense for you and your family -- gerri: it is about your own finances. >> it is about your own finances. others are not in position to buy a second or third e home. international mon is flooding they believe in our economy, i got to tell you that is not a

bad thing. gerri: not ad ba ink this. would i rather see americans believing. >> heck i would. i get many, many more americans than i do foreign buyers but i welcome all types. i'm a sales guy. at the end of the day you can't time markets and real estate i'm very bullish on it, very bullish. gerri: i'm not surprised. you better be. >> that's it. >> brian, thank you. >> my pleasure, gerri. thank you. gerri: happy weekend. >> and you. gerri: coming up "american idol" falling out of hamon any with sony over unpaid royales. our legal eagles weigh in. we debate the connie that the economy is not suffering from underemployment, but listen to this, over employment! [ male announcer ] if you suffer from a dry mouth then you'll know how uncomfortable it can be. [ crickets chirping ] but did you know that the lack of saliva can also lead to tooth decay and bad breath? [ exhales deeply ] [ male announcer ] well there is biotene. specially formulated with moisturizers and lubricants,

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rri: since the recession and millions of americans have dropped out of the

labor force. is this the end of worker? liberals say this may be a good thing. here to discuss it is ever credit strategist and american of surprise institute scholar. i think this is fascinating with growing sentiment of economists state and commentators who say at the end of the day that it is a good thing so they can do other thingse can rewrite the tax co to make sure they have money for food and a roof over their heads and drive a car. what do you say? >> that is of the probm with 6.6%nemployment rate that is a problem. but we became the greatest country on earth because we've rewarded hard work. we're not doing that anymore becaus they are not paid wages they can lve on.3 elizabeth warren has the

best idea to reward productivity. tie it to the minimum wage at would be $22 per hour instead of $7.25 instead of $10 and cents. gerri: wait. isn't this the most productive nation on the planet? or tweet already the most productive? >> we are very productive. i don't think we should raise the minimum wage but with the earned income-tax credit or other subsidies. gerri: wage subsidies? what are you talking about? >> talking about the earned income tax credit a more direct subsidies to direct benefits to workers this is better than the minimum wage

we have a problem with knotty enough jobs -- not enough jobs and. gerri: but the reason is because we have offshore jobs, technology has improved and people are unemployed or underemployed. the specific economists look at the problem to say that is the way the world is supposed to be. if we ke that money fro the 1% and give it to others then they will be free to right symphonies and make the world a better place. i think they are incredibly hopeful and i don't really understand their thinking. it seems like you said the court ethic of america is hard work pays. >> right to. but we're not paying for hard work people of working two or three jobs working 60 hours a week and they cannot

afford the basics. even wal-mart is considering raising the minimum wage was then that will open the door for everybody. that is what is great we consistently reported hard work so people could make a living. that is why we don't have the middle class we used to and the economy is lagging with no consumers. gerri: first of all, wal-mart told us they always look at the minimum wage issue and caps said they would raise those above the minimum wage. what makes more sense? finding more job oprtunitie and expanding the economy so people hire more people or give out money as wage subsidies? >> i certainlyhink is the economy improvesore people will go back to work. with 20% unemployment with young workers and 10% with

adults that are at minimum wage jobs it seems to pay 40 percent more for every hour is not the best way. gerri: that is not worth of wanted to go with the whole nversation but the idea to redistribute income in order to allow of large portion of the workforce to sit on their keister does not make sense because our history is they use work as the organizing force and with out its people have problems with no motivation. why do you think you are here and what do you want to do? >> where you hear this argument is in europe for there is much higher unemployment rates and in the united states we are

high. we need to get back tohe basics to create more jobs and employ more people andrew for those people. gerri: more jobs. michael? >> we need to reward work. she launched businesses to employ those minimum-wage workers and i think all of society needs to do that the earned income tax credit but not minimum wage expansion which would cost jobs. gerri: have a great weekend. ank you for your time. transcripts released by the federal reserve show a rare behind the scenes lookout the officials stilts with the crisis. >> the fed released transcripts of 14 scheduled an emergency policy meetings held 2008 as the crisis unfolded. it is standard policy th

is to be released after five years. back then the fed policy meetingn september 16th 20081 day after lehman brothers went bankrupt the officials were struggling to figure out the magnitude and bernanke said i'm decided the confused and a model but i think the policy is lookinpretty good. i think the current fed funds rate is appropriate. but by december it was sinking it was the bad. the bid meeting bernanke said at the start " ayou know we're at a historic juncture for the economy and federal reserve the crisis is severe despite extraordinary efforts not only by the fed but other pocy makers aroundhe of worl

it is noa normal financial downturnn now janet yellen what does she think ba then? at the september 16 policy meeting she was the president of the bank of san francisco and was present on her outlook but she said there was potential for more turmoil and downside risk but back home "plastic surgeons and dentists know that patients are deferring elective procedures ". she goes on to say reservations are no longer necessary and high-end restaurants and at the silicon valley country club with a $250,000 entry fee with an eight year waiting west new members struck at 13.

gerri: pulling back the curtain athat pep talk -- that tough time. have a great weekend. for what you need this to know for the tax season and royalties for the american idol seniors but is it lega next. announcer: where can an investor be a name and not a number? scotade. ron: i'm never alone with scotade. i can always call or stop by my local office. they're nearby and ready to help. so when i have questions, i can talk to someone who knows exactly how i trade. because i don't trade like everyby. i trade like me. that's why i'm with scottrade. announcer: ranked highest in investor satisfaction with self-directed services by j.d. pow and associates. ♪ [ male announcer ] a car that is able to see,

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what i'm really looking for is -- i got two words for you -- re-wards. ♪ there's got to be better cards than this. male announcer ] there's a better way with creditcards.com. compare hundreds of cards from all the major banks to find the one that's right for you. it's simple. search, compare, and apply at creditcards.com. first round's on me. gerri: allegations of greed and corruption in rocking the innocent -- and music business american idol sings the blues suing sony for not cough -- coughing up enough money many stars claiming they are not making enough moneoff the digital stream but do they have a case? we have our fox news lel analyst. explain why somebody is getting sued.

>> because sony says they're selling them but they are not their licensing of brilliant that is important because if they get three sets of the dollar needed to pay $0.50 so rightfully so they are saying that you're counting is wrong. gerri: is this a difference? >> in terms of the interpretation but basically this is the of love-hate relationship they cannot get the product to market without a distributor they say it is just like a record. you make it and we sell its. >> but it is licensing when you download they only get it for the certain amount of time. >> tt is not the way the company looks at it. >> with a more precise

contract to link wage if at the time. >> they build not know that. gerri: there is a lot of contract language so why does this happen over and over and over? >> they're not winning when they negotiate the agreements. >> exaly. they are being exploited. kelly clarkson now we know her name but she did not know the contracts. even her lawyers are not sophisticated the enough. >> this is the company that supports "american idol" so to say that all of these artists are basicly getting shafted. but the company gets the revenue that comes from at. gerri: so that was where i

was going. so the background is complicated in to i don't know but do the hardest typically gets the shaft? >> yes. said they are coming forward to say we are smart enough to reaze you drafted the contract a certain way sales verses' licensees deducting royaltie. >> the point i want to make of was not the effective consumer it is millionaires versus billionaires'. [laughter] but it is the age-old probm. if you think back to the of petrolug this is how long people fighting for royalty is. gerri: we have all streaming of music how does that impact that?

>> and buses -- in this sense not the consumer you still pay for that licensing but it will come down to who gets the money from all of the sites and it should be 50/50 with the artist and distributor. >> contract between the internet or sony it is really at the artist. gerri: why not 50 percent? >> every betty tries to make the of money that they can make. they do advertising. >> they know how to make money. >> we don't have the little guy working in the street they are millionairertist. >> but they hire other people to do other things to

bring up other artists. just be fair. >> is a contract drafting issue. that is not exciting i know. [laughter] it is a real show about the law. [laughter] gerri: great job. period underwood. carry under rare. [laughter] if american idol is of launchpad with the top five check this out. number five is out albums sold over 1 million. number four thanks to his heavy torrey and. number three is the type. the debuts on of homes sold more than 40 million copies. but lambert cashews soon to

bring live jobs. number to t original "american idol" and the number one top burner 2013 there she is. pulling in $301 billion to endorsement deals. over the past five years. still too, mig $0.2 and how do you do that to protect youelf a and your money? stay with us.

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gei: this diems and schemes anand frauds and the irs is what you are suitted to way you release your errors submit your tax return. here with the dirty dishes and one bastardy doesn't with the national taxpayers union executive vice presiden there are always seems to be aware of but said new ones and old ones. what is the most nefarious outtthere right now? >> identity theft because what they will do is read as though last four digits of your social security number that is not all that hard to get. maybe you give them the full social security number with more dtails suddenly eighth

fraudulent claim has been filed and you have headaches because the identity theft unit is strong but they take too long to resolve the case and if you have this problem the best piece of advice is to go to use taxpayer advocate service they have to rsolve within 90 days irs could take up out of one year. rri: 90 days sounds like a lot of for that case it is short. the irs has paid 4 billion in fraudulent refunds that they will kill somebody else your money. that is scary. another big problem out there is phishing. >> irs never initiates

contact by e-mail. if you get something that sayst is from the irs do not even open it because you open yourself to tuble. gerri: what about frdulent fund scams? people ask for your social for the last digits but are there other ways? >> there are ways where you aremisedyou will get a bigger refund and you are entitled. once you buy into the scheme on like anywhere else where you are out of your money, it inflates the refund the irs finds out not only is the preparer responsible with due diligence bu so are you to pay the extra tax but nalties. remember if it sounds too good to be true it probably

is. gerri: in reality once they find an agent preparing tax returns doing bad things they will not just get one client but all of them. so if somebody is preparing tax filings for everybody they are aggressive don't sign up. could be a problem down the road and you will get in trouble. not just the person making the false filings. >> with the arguments come and go this is what tax protesters use to get out of paying taxes but many of them are sold as infmation ki such as the 16th amendment was never ratified

so you don't have to pay taxes or leaf while this form to declare yourself as a sovereign entity or even worse file your own than 99 to understates your id, but all of these e begging for trouble. if you have the beef how yoyour t dollars are spent protest through the citizen grp if not mind then go to another organization but don't make those mistakes. gerri: d iirs is not kidding. some people were coming to their dos i they don't pay the bills. up they can take anythin they want. great to see you. have a great weekend. real threat would dash be right back our riremt

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gerri: was finally the idea of the obama administration courage retiremt savingsge, the president is seriously proposing a the government cap tax benets asigh yen, . when is the last time you heard anybody say you are savi too much money for retirement? retirement policy is the last place we need to hear the rhetoric of the economy quality here in new york $200,000 in annual income is middle-class not 1%. it is not like the president is proposing to use the savings to help those or

understating but just go to uncle sam to bankroll a project. the idea stinks'. th >> i go to the university of california irvine, >> louisiana state university. >> virginia tech. >> guatemala. >> university of sou dakota. >> university of -- [inaudible] joh a special edition, 1500 college students from all over the world gathered here to debate what makes for free society. these are our future leader learning about liberty. students usual don't learn about that in school. tonight, what you ought to know about conomic freedom, free speech, personal responsibility, drugs, privacy, nd america's