"24," used torture or enhanced interrogation and everybody cheered. >> i'm a huge fan of "homeland." i wonder if they portray it. i talk with cia operative in the green room, they very often don't show things in real life. they give wrong impression. maybe as society we're not becoming like terrorists. that we're using violence in important or strategic way, not because it is, makes us feel good. david: you're letting truth get in the way of a good plot line. that is not allowed. >> better not cancel "homeland." david: j.c., it is hypocrisy of hollywood. on one hand hollywood lib rails say it is terrible. on other hand they applaud it into movies. they want audience to stand up and cheer. >> it is entertainment. if you can't tell difference between reality and what you see on tv -- david: they can't tell the

difference. >> you blame the consumer. i like shows like "24 quote. that is not real life. if you confuse the two, its your fault. david: good to see you all. lori? lori: david, markets gave back a big chunk of their change earlier in the day. did government shutdown shakin' investor confidence? we'll speak with the the man who knows first-hand how difficult budget negotiations can be. former treasury secretary paul o'neill is our exclusive guest. the most could have vested award in college football here in our studio. check out the heisman being giving out this weekend. check out the only player in history given it twice. ♪

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lori: well the clock it ticking toward a midnight deadline that will lead to a partial government shut down if congress does not pass a new spending bill. david: with us paul o'neill, former u.s. treasury secretary and very importantly for our show, former alcoa chairman and ceo. more about that later. on the possibility of a showdown. is this just grandstanding until the final hour? will they come to some kind of an agreement? >> i certainly hope so. it's, disgracing themselves by extension they're disgracing us. you know, it has been some years since we had regular order budget processing where the

congress follows the rules established in 1974 and agrees to a budget mark in may and all the appropriations enacted by october the 1st. here we are in december and we're talking about, you know, the perils of pauline all over again for no useful purpose when we have unbelievable number of problems and issues we ought to be working on in a constructive way. lori: which leads me to act this follow-up, sir. why are we in this culture of spending showdown, and spending showdown? >> it makes no sense to me at all. one of the things that would really be helpful, for the president, who has nothing to lose anymore to, steak out the high ground things like and spill out details of fundamental, things like fundamental tax reform and one of the things i really object to in the bill that hope they're going to pass is that it is a continuation of the stupid things we've been doing as a

nation for too many years. we're talking about tax breaks for corporation and all that stuff. we shouldn't have a corporate tax. ought to have progressive, consumer tax and no deductions. no credits, no nothing and the congress could deal with business as, for the broader issues we need to deal with. david: some of those ideas were tackled by committee put together by the president himself a couple of years ago. >> which he ignored. david: which he ignored. and it seems clear that he is ignoring the results of the last election in november as well. so apparently what's happening is we have a congress that is trying to put together a bill that they hope will not be vetoed by the president. frankly if there is anything that makes sense in it, it will be vetoed by the president. >> his spokesman today said he would sign whatever they pass. so, you know -- david: do you believe that? >> probably. yeah, i think, he will have the high ground if he signs the

stupid stuff that they have included in this bill because he won't have shut down the government. you know, the idea of shutting down the government is a travesty. you know, it is a mockery of the idea of a democratic society where our representatives do intelligent things to make us a better society. i think it's really a disgrace. lori: how do you get rid of this so-called stupid stuff? these spending deals are chock-full of so many special interests and so much extra stuff? how do we streamline it? >> it is awful. again, if we didn't have a corporate tax, they wouldn't be able to get any benefits and credits and deductions. all their lobbyists could go home. that would save a lot of money. they could get real work, right? that would be wonderful thing for the whole society and we could focus on the things like infrastructure. you know the trust fund, the highway trust fund is running

out of money. all these things are going on. none of this makes any sense. david: let's talk about what's been happening in the business world and to economies around the world. which is the dollar has been increasing in value. other countries and other regions like asia and europe are going down in value. not only are their currencies going down but their economies are going down. you used to head alcoa. it has a lot of business overseas. aren't big corporations particularly vulnerable, one, to the high value of dollar and slowdown in economies around the world? >> the slowdown is a serious issue for large companies in other countries. we need multiple engines of economic growth in the world. so anytime we have a situation where major countries in europe are no growth or in a recession, it has a cross impact on us. you know i personally like the idea of a strong dollar because i believe currency relationships are related to the eninherrent

productivity potential of individual economies. david: so currency is reflection of the economy. if the economy is strong the currency -- that's what happened in the '80s. >> precisely right. that is how it ought to work. the idea of manipulating your currency is almost as bad as the stuff going on with our budget act at this time but i think large companies that manage to balance the cost of their inputs in the same currency as they sell in, they're okay. you know, because they're not, they're not buying resources in one currency and selling in another. david: dollar they earn today will be worth as much as it is tomorrow? >> precisely right. big corporations understand all that and they either do that or they take hedging positions that assures that they don't crater because of changes in foreign currenciries. so it is possible to manage your

foreign currency. lori: hewlett-packard, campbell soup, sales force, all warned currency headwind would weigh in on their results. so what is likelihood, we're talking about intuitive nature that all nations want a strong currency. when you hear about major companies warning about currency headwind, how do you reconcile in terms of what impact it will have on our economy, as you know, sir is leader of the rest of the world? >> those big companies need to anticipate and manage their hedge positions to assure they're not cratered by changeses in foreign exchange but i think, you know, as an example, people have called on germany, to inflate itself more and spend more money and take all kind of actions that are not consistent with their own best interests from the point of view of the german economy. to me that is all crazy. it is up to the other economies to get their own situations in order. so the french are fooling around

again, should we get rid of 35-hour work week? and some other regressive things they built into their own legislation that holds them back as a vibrant economy. they need to deal with that. we shouldn't be putting patches on somebody else's bad policy. so the good countries shouldn't beggar themselves because of bad policy of other countries. david: i hate to drag you back into what is going on inside the beltway, we're getting breaking news, the president himself is calling and vice president, according to ed henry on fox news, calling house democrats trying to scare up votes. if the president, do you think first of all the president still has the juice after the elections to do that, to twist a few arms to get them to vote his way? >> i hope so. >> but what do you think? that is what you hope. what do you think? >> i don't really know. i don't know how these members of congress can do the things they're doing in good conscience

and still say they represent the american people. when they're in some cases, doing what i think is acting against our real interests. i don't know how they can do that. you know, in the days when i was there, when i really enjoyed it back in the '60s and '70s, when i was deputy director of omb, the framing question everything, republican and democrat is, what's the right thing for us to do for the society. i don't think it is even, it is not even an afterthought anymore. david: wow. >> what is the best thing for the society. that's a tragedy. david: it is not public service. >> no. david: paul o'neill. very strong words. appreciate it, paul. lori: thank you, sir, very much. well, switching gears to much lighter note, the heisman trophy set to be given away in just a few days. coming up we'll talk to the one and only winner of the trophy twice. he is here with the trous volatg up in the markets here and many

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to some kind of arrangement to have a new budget. getting word on fox news reporters in washington, president and house leaders meaning john boehner and president basically agreed on things. the house, john boehner expects to be in terms of number of votes and defections. democrats aren't. the president and vice president are leaning on those democrats. after the 2014 election it is unclear that the president has the juice, the power to do leaning to get the votes. that is what is going on right now. we'll keep you updated. 7 hours, 11 minutes to go. lori: times of volatility like now, many investors expect their bond holdings to salvage their portfolios but they may be surprised not all bond protect against volatility. david: so what bond and bond fund should you be wary off, and how can you avoid investing in the wrong type of bond?

we have fran kiterring, vanguard investment group principal. good to talk to you. what the safest bond out there? let's start with what's good. >> the safest bond are those backed up by the u.s. government and you can quickly look at a bond lating -- raiding. so triple a, highest rated bonds and gowns down from there. lori: bonds had a tremendous day today. goes to show you, fran, how much demand there still is for government securities and flight to quality. so, what is the biggest mistake maybe, fixed income investors make when they race to hedge their portfolios like this? >> yeah i think the biggest mistake we see is that. a lot of funds may have bonds or in the name of a fund and quickly assume it is homogenous investment but really details

matter here. so, just because it has bonds or fixed income in the name, the performance can be very different especially if we enter into any type of contagion or rocky road in the equity market. lori: what is the dividing line? you say aaa, government bond are good. what is the point you should start to be wary of bonds in terms of rating or whatever intoday sees you use? >> first you have it broadly diversified. you don't want a narrow individual bond holding. certainly investment grade quality. whether they be investment grade taxable bond or investment grade tax-exempt municipal bond. when we look at history, we see that investment grade bonds, both taxable and tax except, have performed quite well in equity selloff. when you get below investment grade, that is when you start to see the performance really wane

when equities are under pressure. lori: fran, thank you for your insights. david: thank you, fran, good stuff. coming up next we'll talk with the only football player to win the heisman trophy twice. he will tell us about this year's finalists and how he is bringing the heisman trophy to high school athletes. you don't want to miss him. archie is coming up. >> hi, everyone, i'm gerri willis. coming up on my show at the top of the hour, being called the biggest revolution of sell phone prices in decades. the ceo of the cell phone company at the center of the revolution is here. that is one of the big stories coming up on "the willis report" in just a few minutes. you don't need to think about the energy that makes our lives possible. because we do. we're exxonmobil and powering the world responsibly is our job. because boiling an egg...

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>> big weekend for football fans, and winner of heisman trophy is announced. some best athletes around the country are competing for the heisman trough if i, we have archie griffin, the only athlete to win the award twice. the crew tells us buy in green room is good guy or not a good guy, you have a great reputation. if you are passed by the crew you know -- you are known as one of the humblest players to receive this ever. in the military it is always quiet guys who are really heroes. when you see all of the bravado

nowadays, we'll get to your story in a minute, when you see all bravado in the nfl, doing the little dances, does it bother you a little bit? >> you know it does bother me a little bit because the game of football is a team sport. when you do all of those dances and stuff bringing attention to you. but you got to realize that you could not accomplish those things without the rest of those players. so it does bother me a little bit. i had a coach who wasn't crazy about that stuff and i had a general manager when i was at cincinnati by the name of paul brown. and isaac curtis was one of our wide receivers. i remember when he used to go in the end zone with the ball, he would flip it behind his back and paul brown used to always say he acts like he has been there before. that used to always make a point with me. >> what do you think about the state of the league today? it has been a couple of tough mounts for the nfl. what are your thoughts? >> it has been tough with all

the things that are going on and things happening with the commissioner and the players. and i know that they are right now looking at a new disciplinary type of agreement. so it is, it has been tough, but i think in the end, that game is so strong that they will all come together. and the big things that i say about that is come together, meaning the players and ownership working together to make sure what's done is the right thing. you never moved far out of ohio. you were from ohio state with woody hayes. one of the best -- by the way, woody hayes, manager, extraordinaire. what was it about him that made him such a good manager? this is a business network. >> i would say the best thing i can say about coachwood did i hayes he cared so much about the players that coached and i say that because i never forget when i was recruited by him. never mentioned one thing to me about football. what he talked about education and importance of me getting a

college education. i remember i thought that you know, he really didn't want me to come play for him. i told my father that. my father looked me dead in the eye and don't you think he is concerned but as a person? he continued to recruit me. when i attended meeting for the first group, if you're in school for anything other than education you might as well get up and leave my meeting. that said a whole lot. >> speaking of education you're representing wendy's high school heisman award. you canvased and looking for outstanding male and female athletes. tell us about that and how go about selecting? >> wendy's high school heisman program was started in 1994. dave thomas, wendy's founder, he wanted to do something to recognize positive things high school seniors were doing. if he come together with the heisman trophy, wendy's and heisman represent excellence and

come up with a program that would recognize a male and female winner for the wendy's high school heisman. that would be good thing. to win a wendy's high school heisman you have to have a grade point average of 3.0 or better. you have to be a good athlete because you have to participate in one of at least 27 sports sanctioned by the national federation of high school sports. you have to be involved in your community. that was a really good thing. david: what you have done, i meant you hadn't lift to ohio. you went back to ohio. you've been working with the universities for decade now. we only have about 10 seconds left. >> okay. david: but you exemplify, you exemplify what is good about sports. can you pass that on to the high school students and college students you talk to? >> i think so. that's what we try to do. i'll tell you these students are doing so much that we're all so very, very proud of them and wonder how they are able to do as much as they do in small amount of years they have been on this earth. >> archie griffin, what a pleasure. >> appreciate it. thank you.

david: a really good man. "the willis report" is next. >> hi, everyone, i'm gerri willis. the $1.1 trillion spending bill hitting a hurdle in the house ahead of the midnight deadline. can lawmakers keep the government running? fox business's rich edson is live from d.c. with the very latest. tell us what this fight is about. >> good evening, gerri. depend who you are as far as the fight is concerned f you're a republican, there are dozens who problems with number of provisions in the bill. they want less spending. they want immediate response to president obama's executive order on immigration. republican leaders always knew they were going to lose a few dozen of these folks. the real surprise is democrats. they have a major problem with a