you and me. [laughter] stuart: knock 'em flat. ms. colby, you're all right. and i want you to come back again. >> tax cuts. [laughter] stuart: i'm going to pass this over to neil cavuto, and in passing it over i'm going to say tax cuts! neil: you know, every time i hear jamie, and she's got this phenomenal show, i do worry about some of the people she talks to because i want her to say, jamie, come on down to the base, and, you know, i don't know, does it worry you? >> not yours. [laughter] neil: no, i just worry. i know you've got people and everything else, but i do worry. you don't know quite all the time what you're getting into. >> it's ste inheritance, neil, strange. neil: there could be a varney type all of a sudden -- [laughter] no? be. stuart: tax cuts! tax cuts. >> be counting the coins. basically. neil: there you go. thank you, guys, very much.

we are focusing on the president, he is going to outline tomorrow night what he wants to do, you can't put the cart before the horse x in this case that cart is obamacare and repealing and, ultimately, replacing it. but there are plans in his budget announcement tomorrow night to lay out a case for increasing the defense budget, already pretty heldty at about $550 billion a year by another $54 billion. just word of that has sent a lot of defense stocks soaring, and they're not the only group that could be baiting the fish for what the president outline tomorrow night before a joint session of congress. with more, we go to blake burman at the white house. hey, blake. >> reporter: two major, big ticket items under discussion here and really as the president set to med to capitol hill tomorrow night to lay out his vision before congress. that being the budget and to replace the affordable care act. talk about the details, at least

the thousand foot view stuff the president wants to focus on spending. officials at the office of management and budget said $54 billion increase as it relates to defense will be a top priority for the president. there is a little bit of discussion just how big that is. whether that is 3% or 10 peers depending how you look at the numbers. either way it's a an increase. the president unveiled the start of what is expected to be a major infrastructurealso his dee spending as it relates to law enforcement. on the affordable care act side, another day with the ceos coming in to the white house to meet with the president. it was health insurers earlier today. we believe they are still here with discussions. among the sees yes, sir here today the leaders of unitedhealth, aetna, cigna, anthem, just to name a handf or and when the president was speaking earlier today to the governors who are at the white house today, a busy one, busy day it is, the president talked about the kind of the

conundrum we've been talking about how to do health care while also cutting taxes. listen here to president trump earlier today. >> the tax cut is going to be major, it's going to be simple and the whole tax plan is wonderful but i can't do it until we do health care because we have to know what the health care is going to cost and statutorily that is the way it is. tax cutting has never been that easy but it is a tiny, little ant compared to what we're talking about with obamacare. reporter: by the way, neil, the burden for a lot of this will fall on mitch mcconnell and paul ryan, the republican leaders up on the hill and they too are set to come here to the white house later this afternoon. neil? neil: all right, blake burman, thank you very, very much. you hear often times the president having to do the health care thing first the argument you have to get that cleared out of the way legislate i havely addressing tax cuts.

that is often in the time of beholder, not all agree with that. the republicans are right in saying right now if the health care law the way it exists right now were to continue going forward, the money to pay for it would simply go away, would run out. 9 exorbitant benefits, inarguable benefits coverage for preexisting conditions and the like, that comes at a cost, with a lot of young people not participating and state exchanges spiraling out of control barely have half a dozen or so, a number of insurance companies opting out, the means which you finance this, that is what the president's talking about. so this is not a political statement on what you like or hate about the law that it is financially unsustainable going forward. i want to make it clear, when the president talks about doing nothing, go along, the money will run out. the best iç canal guise here --

cannal guys for it. but you have to way to pay for it. pretty soon they kick you out. bush 41 campaign manager and hadley heath manning and charles payne. that is what it comes down to, it is unsustainable the way it is presently going. >> it is more so after the insurers dropped out of it sooner. a lot of people knew this. this is not a major surprise it would implode at some point. the key, the president trump really understands if the republicans stepped away to implied it would be tough for them, because the american people put them in office to take care of this. now it is going to be tough. consider right now, we know that over the last year or so republicans have come up with five, maybe seven plans. right now there is not a majority for any of them. so you just mentioned

mitch mcconnell, and paul ryan a moment ago. they have a serious task of being able to find one that everyone can agree on and go with it. and that is going to be tough. neil: easier said than done. >> even nancy pelosi, listen, the dems have not thrown anything out there on sunday talk show, said she didn't think they would be able to repeal it which i found interesting. neil: that may be the case. there is not much wiggle room. hadley, one plais get a repeal vote going and dare republicans to reject that. that is the covered in the with sj and elsewhere, the thinking you don't want to put ourself out there against the party line in the hope you find replacement. the dirty little reality i say to democrats and republicans this thing is really not sustainable the way it is going. the costs are such that the money coming in can not possibly address that, especially with so many exchanges going kablooy and so many insurance companies

heading out. this by its own weight collapsing. people think it is republican argument or conservative, it is just a math argument. what the do republicans do? as soon as they touch it, the president is right on this, it is on them, right? >> that's right. you're talking about the public costs. we have to look at the private costs. so many americans paying much higher insurance premiums. higher out-of-pocket costs and high he die duckables from the government,. charles is right this is important issue and will be a difficult one for republicans to address. even harder than the job the democrats had in 2010 when they passed obamacare because republicans don't have the 60 vote majority. finding consensus i believe they can do. they should be reassured, neil, if you look carefully at public polling, many americans don't like the affordable care act as it is. many want major changes and many

want repeal. when you ask americans under the condition there is a transition program and provision for people benefited under caa whether or not they support repeal, support for repeal goes up to 70%. americans are unhappy with the law if republicans don't repeal it now, we will stay on the path to singgel-payer health care system. what democrats would like to do introduce a public option which ultimately would be the only option, driving competition out of the market. neil: i could be very cynical about that. fred, the one thing unarguable when people are polled on the subject, of course they love coverage for preexisting conditions. i have someone with preexisting conditions by all means, keeping your kid on the policy longer, assuming you like your child, by all means, by all means. what is lost here if this meant doubling in your premiums or dramatic increase in your deductibles could you still deal with that? even with all of that it is notç

sustainable costwise. what would have been the danger in your eyes for republicans to back away from this. i argue that eitr way, they would have been tarred with its undoing, dingsomething or not doing something. that is where i think the president was wrong in this respect by doing nothing, he could argue, let it implode be on the democrats, it would be on the republican, wouldn't it? >> it would be on the republicans. the american people elected donald trump and republican congress to change. the principle change you're looking at is obamacare. you're absolutely right on the cost structure here, it will fall on its own accord. preexisting conditions is not to have, if you had a car and could get car insurance after the accident, you would not get car insurance until you had the accident. who would give you insurance on something like that. it wouldn't work. it is not sustainable. here is the dilemma you have. while the american people expect quick action, it is much better to get this right than to get this fast.

keep in mind, we just had the secretary of health and human services confirmed. secretary price is now in office. the trump team is coming together. they're working at -- i know the house has been working on this very, very hard. i believe there will be a plan in place and it will be in the coming weeks, not months, but it is better to get it right than get it done fast. neil: by all means you're right about that. maybe that is something comes out of the health care ceo meeting with the likes of unitedhealth group, cigna, aetna, humana, anthem, on and on. meeting with the president. when they come out we'll be chatting with a few of them if they don't woman to the microphones first. charles payne, one of the things always been at issue here is keeping them involved. now there has to be incentive to get them involved. if they don't want to be, and this is delayed and it is not quick, that delays the tax cuts, that delays a lot of things, right? >> the incentive last time, they probably wrote this since they were really the authors of the

majority of the bill was american taxpayer would cover any short falls that they had. l: right. >> those shortfalls have expired. so, once those protecons expired, they walked away. i will say between those two things, preexisting conditions and younger people, you know, president already said he want to keep both. i would get rid of younger people one. 26 is too much. neil: some ceos coming out of the meeting right now. let's get a sense where they came from and where the president seems to be signaling he is coming from. >> two things, president trump, vice president pence were very clear they will work toward a smooth transition. they will continue the dialogue with the leadership in congress and the industry, to put our consumers first and continue to give all americans access to quality, low-cost care. thank you very much. >> good morning, i'm joe swedish, ceo for anthem as well

as chairman for the a him p, the health insurance plans of the united states. i would like to echo what dan said. the president was very engaging and clear around open about his intent to serve the consumers, to stablize the marketplace and to build a health care, health insurance model that works for all americans. we're very glad to be with him today to hear that message. certainly are willing and wanting to witness how this will all transition to a workable plan for the united states. thank you. >> i'm bernard tyson, chairman and ceo of kaiser foundation health plan, better known as kaiser permanente. i too want to thank the president for the invitation to come to the white house and to talk to him about something that is very important to all of us, the affordable care act and what's going to be next. there was definite alignment

that people want high quality care, affordable, accessible. and we talked about how we can make that happen and i look forward to learning more, to participating and being at the table to help to solve one of the pressing problems, making high quality, affordable care accessible to everyone in this country. thank you veryç much. >> thank you very. neil: all right. pretty short and sweet. we hope to have one or several ever these ceos a little bit later on, but to a man or woman he they have been complaining about, if you promise the sun, the moon and stars to people and not expect us to charge more for it, that is one of the big issues came up creating the affordable care act in 2010, then you have another thing coming. that was widely trumpeted. we're no apologists for insurance industry, but the math is not sustainable. the argument the administration made at time, the obama administration that enough young

people would sign up to offset the rising costs and covering those with other conditions or just older folks like charles and me. that did not pan out to be the case. younger people eschewed it. now we're in a world of hurt and now they're trying to come up with an alternative plan to save it. >> what i like, when the governors came out, you heard the governor of kentucky who tried to make the distinction between care and coverage, two ding different things. having care and not having quality coverage. we heard three ceos echo the same thing. we want to have stability and model works for all. another one said consensus for first-class access to low-cost quality care. a third ceo from kaiser saying there was alignment, he used the same term, people want, high quality care. so, there seems to be a focus back to what health insurance is supposed to do in the first place. now everyone is looking, they put their cards on the table. waiting for white house to get

back to see what can be put together. one idea being thrown out there, instead of premiums based on income, do something based on ages. it will not work if you don't get enough young people into it, most can opt out if they live in mom's basement is too much of a copout. it itoo much of a whole. that is a lot less political, i don't know, maybe, some say millenials vote. idea of going back now saying people with preexisting conditions can never be covered i think that is a tough one. neil: genie is out of the bottle. you have to find a way to pay for it. charles payne, thank you very much. we'll continue to look at this with our guests throughout the show. it is inarguable reality called math, the money coming in versus the money going out. that is something not new in washington of course. this is disproportionately out of whack even by washington standards. the money going out to keep this sustained is just not there. reality is that the president is right when he talks about the

fact this will implode of its own financial accord. if something isn't done. something kicking around, roll back benefits, make benefits portable, get rid of lawsuits or rein them in. you might not flip over insurance companies. i have had problems with them. i'm sure my buddy charles had problems with them. but they pay the bills or presumably charge you for the bills you're getting. if they're opting out, they're telling you something. it is not sustainable for us. it is not get business for us, that is what they have to business. simply imploding of its own weight and accord. they have to do something. trouble and details, they can't agree. right now republicans are trying to hold ranks, can we all agree we repeal this thing the way it is? yes, most of them can. you will get a couple holdouts, wait a minute, if you do something that worsens the deficit, i want no part of that.

if you come up with a gargantuan republican program, less gargantuan than the one we're replacing we don't want any part room of two votes in the senate and 22 in the house, that is the problem. that is one of the reasons this tax cut thing is held in abeyance until that is addressed. no easy problem, no immediate solution. hence the concern a night before president outline a budget we're told will go ahead and commit a lot more money hopes for defense. $540 billion a year budget right now. he wants to bring it up another $54 billion a year. a former homeland security dep sy secretary joins us now with his take on all that. admiral, we look at this thing, go back and forth with defense, does it really need more money especially when this president was the first to say, cost overruns from everything from the air force one contract to a

fighter jet contract, wouldn't it be wise to weed out that before committing still more money? what do you think? >> well i think it is a good point that you make. traditionally and correctly the policy pieces need to be on the table and you deal with the challenge of resourcing those policy decisions. the undertaking of this resecretary mattis is presenting to the president tomorrow will have an awful lot of that policy piece on the table. when decisions are made there, then to go bark and deal with the he resourcing against things that are on the table like the budget control act and sequester for against defense and budgeting campaign promises. the most important thing for the president and his new national security team once he has them in place, he lost his both

nominee to the army secretaryship and now the navy secretaryship. neil: right. >> the team needs to be at the table to develop the policy and direction in terms of where we're going forward. that in of itself is enormously complex review that secretary mattis and the rest of the national security team put on the table. we can deal with the resourcing once they're established there. neil: we have getting an indication the generals came up with a plan to ultimately take on and defeat isis. it will be announced later this week. could be next week. but secretary of defense jim mattis is planning the lead in isis meeting at the white house later this afternoon. what do you think integral to that? others attempted. isis became the force under the prior administration but it is what it is now. what do you think will be some points they'll pound?

>> key point that you just made, it is what it is now. that is what the new administration has to deal with. the first order of notion, this is not just a military decision to be made just by the department of defense. to get the right people at the table, including the ability to reach really key allies that goes off in the direction of the 2% obligation of the nato meeting for nato members. goes to turkey with regard to our opportunity inside of a strategic gameplan to arm or fail to arm the kurds who traditionally been or recently la been the strongest ally of the u.s. as a force on the ground, then to recognize it is not only iraq and syria in termsç of isis but the greater strategic plan has to be cognizant of what bows on in somalia and what goes on in

yemen and what goes on in afghanistan, the nasty neighborhood the middle east represent is the challenge that has to have the full spectrum of thoughts on the table and then develop tactically actionable plans against that overall strategic plan. so, i think whatever general mattis brings to the table should have those kind of elements within it, and allow the strategic gameplan to be pulled together. as we spoke just a moment ago, that in of itself will require a complex resourcing package to deal with the direction the president wants to take. neil: admiral, thank you very much for taking the time, sir, we appreciate it? >> yes, sir. you bet. neil: in the meantime the as the admiral was speaking here we are hearing from the house intelligence panel chairman he doesn't want to go on a witch-hunt investigating these trump russia ties who said what to whom and when, what was monitored, et cetera. this comes on heels of reports that darrell issa does favor an

independent prosecutor to look into this sort of thing t divided some republicans how far to go on this. donald trump thinks it is completely unnecessary and a waste of time, already a slight division within the gop leadership. some say it would be good just to get it out of the way, get an investigation going, not necessarily via special prosecutor, but at least hearings. it will be interesting. more after this. and why a pro football team chose us to deliver fiber-enabled broadband to more than 65,000 fans. and why a leading car brand counts on us to keep their dealer network streamlined and nimble. businesses count on communication, and communication counts on centurylink.

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>> this defense spending increase will be offset and paid for by finding greater savings and efficiencies across the federal government. we're going to do more with less. neil: all right. but not with everything. welcome back, everybody, i'm neil cavuto. as our debt closes in on $20 trillion, a promise from president trump, not everything will be cut in defense. he will up it by anoth

tax cuts. committee for responsible tax cuts, whether this increase in defense makes tense. mark, let me step back a second and explain, even if you you feel it does, i'm not saying you in particular but i always tell people and democrats grudgingly signed on to that, as long as republicans agreed to keep a lid on extra entitlement spending if republicans lift the cap, they will have to lift the cap on entitlement spending. doesn't this potentially open up a can of worms? >> i'm very worried what it will do to the overall debt as it actually plays out.

president trump proposed to pay for defense increases with non-defense cuts. those will be difficult. that is not really where the money is. neil: the money is largely entitlements. that is 70% of the budget. people enjoy the entitlements, they're entitled. not some give me programs, social security, medicare, et cetera, i understand that but it is what it is. that is where disproportionate amount of our spending is. largely that is off limits and off limits now still in this latest trump budget can. then what? >> that is exactly right. non-defense discretionary is 15% of the budget. it is 5% of spending growth. you can't do anything for long-term debt if we don't go after social security, medicare, medicaid, and other mandatory programs and make them sustainable over the long run. neil: mark, as you know, chuck schumer is saying look, if this is what you're going to do mr. president, you will hike defense spending, don't get into details whether the president

will offset the extra 54 billion, maybe he will, maybe he won't, the president is talking about a big boost in infrastructure spending. it is almost sure to bust the budget one way or the other. so what are we looking at? >> budget is already busted. the debt is higher than as a share of con i my at beginning of any presidency other than harry truman. trillion dollar deficits are coming back in a few years. if you add to that major defense spending increases, trillion dollars of infrastructure, trillions of tax cuts we'll speed up inevitable decline in our fiscal solvency. neil: the defense, i'm sure you're for a strong defense, mark. >> absolutely. neil: he has proven in two different contracts, air force one contract and fighter contract, he was able to shade hundreds of millions, even billions over course of 10 years on those two kinds of contracts alone, if there is room for that type of trimming why even

entertain increasing the budget? in just those two areas you were able to extract pretty significant savings? >> you know, i'm with you. thfirst thing should do find efficiencies within the defense budget. now that said, this sequester is scheduled to come back next year. nobody wants that. neil: right. >> some bump up in defense from the sequester level that is fully paid for makes sense but it needs to be fully paid for. really should being fully paid for with entitlement reforms that get the long-term budget under control. neil: easier said than done. the president eschewed that at least in the opening budget but let me ask you very quickly about your view of tax cuts. you hear many republicans want to score it through dynamic accounting, looking at potential revenue you get over the years, bang for the buck you get cutting those taxes. do you buy that? >> well i buy that tax reform can grow the economy and that can get us some extra revenue but tax cuts won't pay for themselves. maybe pay 10% of themselves or

15% of themselves. the rest we need to pay for cutting tax breaks, and there is by the way $1.6 trillion worth of them this year alone. neil: is that right if one other quick thought, mark, the, i think the treasury secretary, told maria bartiromo, i still believe that the bulk of the tax cuts should go to the middle class. obviously believes he is referring to the numbers talking about here. far more in the middle class than the upper class he also said in prior interviews although he dialed it back a little bit, the wealthy tax cut bringing down to 33%, from over 40% if you include obamacare surcharges, that will be offset by limiting writeoffs. i crunched numbers, i'm nowhere as good as you are, but that is impossible. take all t deductions away, that is significant tax cut,

that they will see a tax cut, right? >> if you look beyond just deductions, look at exclusions, look at the way we tax capital gains and dividends i think it is possible to lower the rate 33% an still have the highest earners paying the same or more but requires making tough choices. neil: just want to be clear, even with a 7 percentage point drop in their income tax rate, federal income tax rate and deductions, other allowances given you could arrive at a net wash for them? >> mathematically possible, certainly not easy. certainly not easy though. neil: i will defer to you, probably better at math because i was not great at it. thank you, mark. committee for the responsible federal budget. listen on right and left, it is about money coming in and out, i get overly simplistic, not red or blue or but green, what they

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neil: all right. look at facebook hitting another all-time high today showing investors are not too worried about any threat from snapchat. i think that is this week, is it not, charlie gasparino? >> i think so, massive ipo. neil: what is the allure? message disappears? >> if you want to do insider trading and use your iphone for insider trading it allegedly

goes away although i heard the feds still have a way of getting it. it is in some sort of cache. neil: can you take a screen of it? >> you i heard that too, but -- neil: i don't even know what a screen shot is? what is screen shot? shot of the screen. >> this snapchat thing is big on wall street among the traders because they think they can give proprietary information to each other and get around sort of strict insider trading laws were imposed they were like monitoring phone calls and things of that nature. same way you got calls. neil: pretty much where we got where we are. that is this week sometime. whether it is another facebook -- >> this thursday. ask ralph, i'm pretty sure. neil: i'm not really that interested. i wanted to use it as an opening salvo to talk about the markets. >> oh, okay. neil: are you, today notwithstanding, just last couple minutes of friday we broke positive. what do you think is driving all of this?

>> there is kind of two interesting markets, which the stock market believes everything donald trump says. i'm not saying don't. i'm just telling you. stock investors believe we'll get massive tax cut and everything is hunky-dory in terms of taxes, despite the fact corporate taxes down to about 35 to 20, 15, lower taxes for individuals and business is. massive regulatory cuts. neil: neil: saying it won't happen? >> bond market is sayi it won't happen. neil: explain that. >> stock prices are going up. bonn prices go up. stocks prices go up when you think earnings improve and economy will get better. you think there is a degree of inflation. bond prices go up when you think earnings won't be that great. inflation -- neil: in other words it won't be as robust. >> economy, that is by bonds because they're fixed income investments. therefore when you get the coupon payment, inflation is low, inflation doesn't erode into that coupon. neil: normally stocks are racing like this.

yields should be rocketing in treasurys? >> should be. neil: anticipating more inflationary environment. >> fiscal stimulus. neil: that is at doubt? >> the bond market is saying no. who is usually right on this? i can tell you bond buyers are generally smarter. neil: you're called a never trump per for a reason, you're mean and nasty and a hater. >> i'm a sometimes trump per. neil: right. you're fair and balanced trump per. >> i call that fair -- i'm not a cheerleader. if people want to cheerlead -- neil: others want to rip them, we have enough time to get into the good and bath. there is plenty of both, right? >> right. what i resent the mindless attacks on him. neil: right. >> you and i talked about this a lot where everything the guy does you sort of make it out, him out to be a joke which you know is wrong. neil: right. >> i also resent the cheerleading. i think that if you're a journalist, you have to be, youe "breitbart" does, that's really bad for the public.

neil: i let people decide. there are plenty good he is doing, 3 trillion in market value he added but mentioned some of the problems picking needless fights. constitutional battles. it is all out there. >> here is the thing. i tell people in terms of their investment portfolio, you have you have to see what comes out. state ofhe union, they don't quite call it the state of the ion. neil: addressing a joint session of congress or a session of congress having a joint. >> what some of those people want to do while he is speaking. if you look at it, he is talking about massive infrastructure spending. i would like to see numbers on that, and massive simplified tax cuts. neil: i'm glad you added that. we didn't think that was going to come up. now he gives indication what does that mean? >> what does that mean? i ask the questions. >> i don't think you can get both. markets will adjust.

neil: when he said, this is what interested me, charlie, the markets didn't respond, if i am thinking infrastructure is in the works here i'm happy to see it is not in the works. put cost factor in and ballooning deficit, all of sudden i hear, wow, it appears to be, wouldn't i sell off aggressively? >> he he is also having a tax cut. by the way, infrastructure is also a fiscal stimulus. the question is what is a better fiscal stimulus for the market? neil: to your points with bonds it would be hurting bonds and it is not. >> the reason why, they believe if he front loads the estimate laws package with infrastructure and as opposed to tax cuts, that won't improve the economy as much and inflation and economic growth will be tampered therefore you buy a bond. that's what they're saying. infrastructure stuff, generally, there is whole history to it. neil: i don't want to look at it.

>> from obama, to george bush's, it doesn't work. neil: bonds with the chiefs. >> i just cover just bonds by the way. neil: sure, who doesn't? does it bug you when you're this controversial called on the carpet, all the trump percent and all that stuff, how do you deal with it? >> on twitter -- neil: you tend to respond. >> i use an acronym. neil: ly? >> begins with a g, ends with a y. not giving you the middle. neil: he is his own man, he is his own man. whether agree or disagree he is always disagreeable, isn't he? >> everybody hates me equally. neil: equally. you're the best, buddy. dow is down 13 1/2 points, to charlie's point maybe with all the infrastructure stuff, maybe they are interpreting this, softness notwithstanding, maybe net-net we'll do fine, maybe we will, but only if you listen to us fair and balanced good and bad. if you're not listening to us

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>> i'm asking secretary price to work with you to stablize the insurance markets, to insure a smooth transition to the new plan and the new plan will be a great plan for the patients for the people and hopefully for the companies. it will be a very competitive plan. costs will come down and i think the health care will go up very, very substantially. i think people are going to like it a lot. il: all right, what we don't know what it is we're going to like or maybe not like. the president he holding another powwow with top ceos, this time health care ceos. i believe this is the third such meeting in various capacities and numbers. "the hill" national political reporter on that. kate, first on the health care thing, i can't stress you and i you enough, it is not political to stay this is unsustainable. i always tell my liberal friends and conservative friends, the way it is going, it will go

kerplunk. the money isn't there to keep it going. a number of young people are not signing up. a number of insurance companies are opting out and exchanges are going belly-up. something has to be done. there is competing argument let it implode. it would still affect them and i believe in their heart of hearts they would get the blame for it. but having said that is key in this health care debate, right? >> that is key, neil. donald trump met with the health care executives this morning and some of the executives part broadcast on tv showed they have their issues with obamacare and its sustainability. going forward they're going to have to figure out, even if they repeal and replace, which is definitely priority on the timeline, they're going to have to deal with it in the meantime. last week the house republican bill was leaked and shows there is changes to the replacement plan that will show that they will change tax credits to age, instead of income. might be scrapping some of

medicare expansion. there is this balance of how we'll deal with it while we repeel and replace. he will be blamed what happens with obamacare, even though it is still in place and wasn't his bill. neil: kate, i don't know how the questions are phrased in some of these polls, americans favor obamacare or affordable care act, i'm sure that everyone likes the idea of millions more having medical insurance. i think that is a great boon to them. everyone loves the idea of those with preexisting conditions be covered. i personally think that is wonderful idea. keeping your kids on policy longer, depending if you like your kids that is a wonderful idea, my point is, i wonder, i hope this is not the case when people are queried what they think of health care they don't look at goodies. they also look at sustaining this. of course everyone would like that until you look at the sobering cost of this thing or

that you might pay a higher deductible or premiums keep going up. republicans do have a case to make on that, i understand that, but how are they going to transition to something that will be free market choices and, the kind of stuff that i don't know at face value could address this widening gap between those covered and the cost to cover them? >> exactly, neil. you make such a good point there. a lot of these goodies may sound good and great to say having all people should be covered but yes, there is a cost associated with it. the fact this is ever more timely because the budget is, donald trump's budget proposal is coming out. they will have to figure out, donald trump has said he is not going to touch entitlements. he will not go for medicare and social security. these things are expensive. keeping it sustainable going forward, involving premiums increasing is going to be affected.

donald trump did announce that he is going to be affecting, getting rid of people joining when they're sick. they will change how they will have enrollment. so 2018 will be a real interesting year for that to watch. yes, they will have to transition in the gop, those are hard discussions. a lot of republicans had to deal with some of ese chaotic town halls, constituents at the end of the day how will it of affect people's bottom line, when they go to the drugstore to get prescription drugs for their children, will the premiums be rising or will they be lowered? as far as tax reform goes, will their taxes go up or down? as far as donald trump's big legislative agenda. a lot of these things they will he need a bit of a come to jesus meeting figure out how you can pay for these things. neil: it's a dirty little side issue for a lot of people. we love the bennies, have the government pay on my mortgage around my kid's college tuition,

there is little minor detail paying for it. it is front and center for republicans right now. very good having you, my friend. thanks as always. >> thank you so much. neil: you saw this once or twice. apparently there were the oscars this pricewaterhousecoopers behind this oscar flub, they took the bullet for this. i would have much rather they just blamed all the entertainers, but they didn't do that but now the entertainers are yelling at them, the accounting firm. think about it, these are really cool people and they're going after the nerds, not, not on my watch.

>> we left by the but you know, accounting firm of pricewaterhousecoopers is promising a full investigation into the oscars flub.

i think it could pretty much stop at the wrong envelope that was handed out. look, being, what it is, they took the bullet for this. it was ultimately their doing. then the cool guys, actors, actresses, stars, all that of hollywood came after them. there was something that pained me deep inside, the nerds fingered about i the cool people. now i have to talk to a ol person about it. entertainment journalist, kim serafin about the fallout. the nerds took the bullet, kim. i'm wondering if that is fair? or they always want to be there to do the oscars, what you do you think? >> well you know, i think you would be very upset if this happened, with "star wars" i know you're favorite film. tough put that all into perspective. no, look, i don't think hollywood blamed pricewaterhousecoopers immediately. if you look what happened -- neil: they waited a good 30 seconds, waited a good 30 seconds.

>> if you look how it unfolded from the stage, the producer from "la la land came out, this is not our award, this is "moon lite." jimmy kimmel came out and said it was my fault. it wasn't his fault. they made a joke about steve harvey. warren beatty came forward and explained what happened. he wanted to explain what was on the card, why he read "la la land. and why he thought "la la land and why fay -- fey dunaway. neil: but he did come out later on -- >> was unfolding in real time. neil: it wasn't me, i had the card. invariably it went back to the accounting term. it is always the nerds fault. >> right. neil: i'm wondering how the nerd should respond to this? because the nerds could easily say, if you see a best actress nomination on a crowd, that is obviously not the best picture.

so you guys are the idiots, not us. what do you think? >> here is the thing, everyone expected "la la land to win, it wasn't a surprised. if you watch the clip over and over. neil: more times than the zapruder film. >> exactly. he is a little bit confused. he is unsure. looks at the envelope envelope and passes it on to faye dunaway. if this movie no one expected to win, no red flags would have bonn up. since everyone expected "la la land to win best picture it was a surprise. look at procedures pricewaterhousecoopers go through. they have two separate suitcases. only two of the partners know suitcases. they are at separate ends of the stage. they take different routes, in case one gets stuck in traffic along the way, they want to make sure one gets there. they're on both sides of the stage. people from pricewaterhousecoopers are only two people know the results. they have them memorized. if anything happens to the suitcases they know what is happening.

if you're an actor, going up there and reading your lines you will depend on this firm doing this for 83 years is saying. neil: we all flub and we're all human beings. >> yes. neil: we'll see what happens, kim. if you need your taxes done you go to that firm as well. >> true. your insurance company won't replace the full value of your totaled new car. the guy says, "you picked the wrong insurance plan." no, i picked the wrong insurance company. with new car replacement™, we'll replace the full value of your car plus depreciation. liberty mutual insurance.

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unveiling budget details ahead of the joint session at the congress tomorrow. peter barnes with the latest on what is tucked in there. what are you finding out? reporter: that's right. the pr his address to congress, but he previewed a little bit in his meeting with governors today at the white house. top budget official telling reporters the blueprint well asked congress for a $54 billion increase in funding for the pentagon for fiscal 2018 which

begins this october. that would be a 10% hike. the administration wallpaper that in cuts and other discretionary spending such as foreign aid. >> we can do so much more with the money we spend. with $20 trillion in debt, can you imagine not come in the government must learn to tighten its belt. something families all entitlement spending, make cuts in social security or medicare to pay for the extra pentagon spending for veterans and law enforcement however are expected to be spared as well. look for very deep cut in every place in the government except those three areas. neil: thank you, peter barnes.

the president prioritizing tax cuts, the real deal and replacement. the devil is in the details. one idea bandied about by the administration and republicans in general is to force a vote in repeal and there anyone in the republican party to reject it. does not look over there. only two votes in the senate. gerri willis has the details on that. in-your-face type. reporter: you that. it is confusing because republicans don't seem to be on the same page. treasury secretary mnuchin same hands-off government title programs. medicare, medicaid and social security. he seems to be saying we won't be touching notes at all. draft legislation of that lake got over the weekend seems to show what may be some cuts to medicaid would be okay, let me show you what we're talking about here. when it comes to repealing up on the care and replacing them to do that the republicans scrapping obamacare subsidies

and about limiting medicaid spending. if they want to medicaid on a budget from a traditional medicaid on a per capita allotment so it's not an open-ended collar and taxpayer to a phase of the medicaid expansion by 2020. medicaid expansion for obamacare recipients of the big tax credit to pay for health care spending and presumably buying it from private offerings out there. i was watching the president this morning with his health care executives. none of the love that we saw with the executives for manufacturing. this seems much more serious. the president looking down a lot, not engaging with many as you see here. i think it's very possible that the executive office, the white house not on the same page with republicans on capitol hill. >> thank you very, very much.

nancy pelosis onding and put in a statement on the president's 20 budget blueint even though theargument accurately will come out of somewhere and she fears it will be these other programs near and dear to democrats, said rep. joe lieberman, vice presidential candidate of the united states. good to have you. >> good to be with you. neil: but jamaica was she insane? these are predictable battlelines with budgets in the

president wants the increased defense. the one thing i said is we are all for strong defense. this president allowed will be able to extract billions in savings. and a fighter jet contract. how we spend our money there as it is. >> we hope he keeps making phone calls as long as they are there. there is an end to it. in my opinion, the president will recommend a substantial increase defense spending, he is putting first things first. we live in a dangerous world that's obvious. isis, north korea, iran, it competitors in russia and china and e feral government to tax the american people from all that. the defense secretary mattis has said he's got some critical shortcoming in the number of troops, particularly in the army and marines. the trading of troops and the

equipment the troops have they are called into battle pretty quickly. can the pentagon use 54 billion more next year? why is late? you bet they can. you do if you got a 550, $60 billion annual defense appropriations now, maybe the problem is they have priorities and not doing that thing you alluded to. maybe that the issue. >> it is clear those three things i mentioned the secretary not have priorities. there's more we've got to do because of the range of the threats. i don't remember a time in my adult lifetime when we faced a couple of potential competitors, particularly russia, probably not china, but things like north korea and iran. i've got to be full disclosure. this is the beginning of the

process. what nancy pelosi said the spray. where do you get 54 billion that's where my friends still in congress have to argue that out. incidentally at some point, one of the fascinating stories about the term presidency is his commitment so far not to touch so-called entitlements. social security, medicare, medicaid. maybe medicaid. the republican position, and i agree with that as a democrat and moderate democrats agree with it that we got to not cut social security and medicare, but we've got to slow the increase in spending on those programs. train to the fact that he doesn't do that in the first year, he's got more than enough on his plate. >> it's got four years that resume. i don't expect them to do that now. he said during the campaign he wouldn't do it. at some point, the reality has to attend. if it's not the reality of the economic, it's going to be reality of republicans in

congress demanding the president do something about it and not taking out of what is called discretionary spending. >> leon panetta among others were responsible financial federal budget had proposed a woman what she can pay for and all you propose. they go on to say that this is a once in administration opportunity to send a serious message that you want to get control of this. sort of like a bill clinton moment. what do you think of that? >> there's no question that the outset of the presidency the presidency whether you agree or not, the first year of the obama presidency, he did the $800 billion stimulus. dodd-frank came along, et cetera, et cetera. the run of the table, senate,

house. >> that's right. remaining six years of the obama presidency you have to search for big domestic policy accomplishments. part of the problem and the president has got priorities and he will pursue those and right now, hard to imagine, but the politics in washington is even more delighted than it was before. part of what will have been right on the budget with what we talk about now, i don't know the president will be able to hold the republicans in the senate. neil: on what aspects? >> overall. the cuts for instae, in deep into the state department, let's say. maybe ebay and epa, although epa is widely beloved. he will need some moderate democrats at least. ultimately this is normally best by working across party lines.

neil: chuck schumer,-year-old colleague has indicated the idea of tax cuts and environment like this and budget like this, i am simplifying. not good idea. the president is still keen on across-the-board comprehensive tax cuts, corporate tax reform and will still stick to that. you are right to say some republicans go along. some of them are leery about making deficits work. where do you think this is going? >> may counsel it comes back to tax reform and some tax cuts for businesses into infrastructure. those are positive.

train to for everybody? >> publicly he's got to do it for everybody. frankly, the biggest payoff is to lower the corporate tax rate, get people investing, figure out a way to reward them for creating jobs. the other good thing about this, if the works while you can get democrats to support a package of tax reform and infrastructure. >>e think the infrastructure thing with the go anywhere. he did announce whether as part of his budget package, is that a way to get the democrat? >> normally, if you can agree on how to pay for it, both parties support because everybody, contractors support it, building trades union supported. generally, these investment pay off in multipliers for the

economy. obama cared what she do with it will be divisive no matter what. the president has to go forward on that. i don't really think they can do that. combat can focus on some being positive for tax reform infrastructure and make a specific reach out to democrats to join them. neil: i know you're an independent, but do find it a little odd all your democratic colleagues are suddenly concerned about deficit? >> well, i would say it is surprising. you know, we believe in repentance. now the question is, will the republicans stick to their traditional beliefs and balancing the budget? neil: with got almost $20 trillion in long-term national debt. neil: do you think tax cuts

should be paid for like spending? >> yeah, the danger is big tax cuts and they won't be paid for. some of the tax cuts will stimulate the economy, still have growth. they'll bring in more money but the net effect may be good for the economy, but actually increase the national debt and that is not good particularly for children and grandchildren. neil: thatepends if u like your children and grandchildren. >> at and put them over the weekend and today i really love them. >> always classy. thank you very much. neil: the president will give us a good idea. the media seems to be getting along famously with the white house and vice versa. time for a group hug after this.

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neil: by now you've heard tom perez will be the new dnc chair. bernie sanders tweedy not a warrant to the dnc that the same old isn't working. democrats at the risk of being the same old or will this be a totally different vibe you do know green, former dnc officials in the running for the top job. good to have you. >> hi, neil. thank you. trade to dallas and interesting

comment, he of course wrote at a party party leadership you sideways in the hip pocket for hillary clinton, donald tribe congratulating tom perez at this time. how do you think this will go? >> love, tom perez and certainly allah said where progressives and moving forward a letter to chairman tom perez to start up again as the democratic national committee and the same way he did at the labor department because we don't have the luxury of not being united. the unity or establishment versus outsiders is actually accurate. i think it's overblown. i think it is entertaining to some uncertainty drives ratings. the unity conversation is really about not just democrats, but

all americans coming together against this president, really attacking our values. when he says something like we don't fight to win about the military, that is not sent rain that is an issue democrats will be outraged about. that is an issue all americans will be outraged about. true to also, not going to go into politics too much, but what he's saying is that they make renowned as the piecemeal versus isis in other words. by the way the involvement in iraq as well. leaving that asi, i guess do you think that your party should take a hard left or be much more progressive or moderate, not so much with hillary, but bill clinton. >> i find that an odd question because if you look at the democratic national issues pop on, the democratic party flat

farm is the most progressive platform we've ever had. i don't think the problem is about moby lives. we have a problem about how we communicate. neil: maybe it's moderate a little bit. >> i think it's how we communicate heart burst with voters and really showed them and not just expect them to understand with our values with our policies. we need to do a better job communicating. clearly he had an assist in the media because 24/7 donald trump in 2016. when we do a better job communicating and build up our infrastructure and get out of d.c. in some of the ways we need to do will be all right and the resistance is happening organically is also a sign of how significant this fight is.

neil: jehmu green, we shall see. in the meantime, waiting to hear from sean spicer and his meeting with the president earlier today. so much more right after this. hi my name is tom. i'm raph. my name is anne. i'm one of the real live attorneys you can talk to through legalzoom. don't let unanswered legal questions hold you up, because we're here, we're here, and we've got your back. legalzoom. legal help is here.

neil: moments away from sean spicer, there were reports over the last few days that they've been checking with those working in the industry shin and they've been calling. much of that has been overhyped here, but it comes at a time when the white house and that defense officials. the national chairman including and it's good adding my friend that you are up for the army job. you aren't interested in it. i only thought of it and because it wasn't that long ago that

other names are being bandied about. the latest in the case of the navy secretary who also took himself out of the running i believe over financial consideration. what is going on here? >> the time wasn't right for me and my family and i let the administration know that you have. i support the administration and it does need good people. one of the problems with this week since so many obama holdovers in place. we hear right now the department of defense supplemental bill. we all know that readiness is a major issue. we have a readiness crisis in the military and we are already beginning to hear as far as the department of defense supplemental bill is concerned, there will be much lesser readiness because obama holdovers are breaking the dod supplemental bill for the trump administration. neil: is there a difference if they can't fill the spots right away. your whole foreign policy team

is not in place. >> that's a good point. you've really got skeleton crews in place of the department of defense, department of state. don't pay for the undersecretaries to be confirmed. we don't have an adept secretary secretaries have any departments. go ahead and name your people. get the assistant secretary's name. get the ambassador's name, and assistant secretaries and get your people in place. when you get your people in place, i bet you'll have fewer leaks and will have people in place who can execute a precedent trumps policies. >> do you think will ever find the leakers? >> meal, we will -- neil, we've always had leaks and will always have leaks. they were being linked to anti-lincoln media back in 1861. they had a congressional investigation to deal with that.

let me tell you, we haven't had leaks to disagree in this magnitude. it is a real problem in things i think we can do to minimize those leaks to begin with by getting good people in place. many good people out there not in the administration who supported the president very early and are called it to get the name. i'll do the job at the hottest back. neil: those good being my friend. thank you very much. we are waiting for sean spicer press conference. scott walker, his take on what happened at the white house today and not talking about repealing and replacing obamacare, the affordable care act. they are the frontline in all of this. scott walker after this. hey gary, what'd you got here? this bad boy is a mobile trading desk so that i can take my trading platform wherever i go. you know that thinkorswim seamlessly syncs across all your devices, right? oh, so my custom studies will go with me? anywhere you want to go!

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neil: welcome back. waiting for sean spicer. white house briefing. all the dust-up happened prior to that we'll get to that in a second. all the various meetings with the white house today. key governors and battle what's next for obamacare, repeal, replace. vernor scott walker from the beautiful state of wisconsin on all of that. governor always great to have you. >> thanks, neil. neil: on this issue, and i caught your comments when you came out of the white house the feeling seems to be like a dare moment that republicans are entertaining to put forth a measure to repeal obamacare once and for all. go to the president, he will sign it, it's a done deal but a

lot of republicans have problem with with that, seems this approach, we dare you to vote this thing down? is that the approach they're taking, and do you think -- >> we'll give deference to president's comments in front of joint session of congress. first after, great to have a president and administration wants to work with governors. president wants to take power out of washington send it back to the people. one of the way to do that work with states are more effective, efficient and accountable. on this issue more than others we see it, feel the citizens of our state. obamacare doesn't work. it is a collapsing enterprise right now. even my neighbor, mark dayton a democrat said last year, the affordable care act is no longer affordable. politically would be great to say keep it, keep it next two years, show the american people how bad it is, as people lose coverage. as the president said this morning to governors. that is the not the right thing to do. we need to fix it for the

american people, regardless whether it is politically better to show how wrong it is. that is what governors are doing, working with the president, vice president and administration. we'll get a first preview on tuesday, later in the week we'll roll out plan governors work on that can be part of not only administration's efforts but the house and senate bill as well. neil: is it fair to say the plan the governors are working on would apply to all states or tailored for each state? >> it would give the flexibility. just amo governor we have 33 republican governors. 2/3 of the nation have republican governors. some who took the expansion. some who inherited expansion. some like me did not take the expansion. we need to make it work, for all the hype and hysteria on the left, obamacare doesn't work. if you're watching right now, get your health insurance from your employer you will not be affected.

if you get the health insurance under medicare, you're not affected. only a sliver of people only got health insurance obamacare. it drove up rates in minnesota by almost 67%. that is unsustainable for those families and those people. we want to have access to personalized patient-centered health care that treat people like human beings, not like a number and statistic, we can do that working together. we have to replace and reform this plan to make it work. neil: how quickly between the two, governor, whatever you do to repeal it and then replace it, what is that gap? what do you think that gap should be? sounds to me, i could be mishearing from the white house they want to quickly get and recommend repeal vote, put all republicans on notice to repeal the thing and then come up with a with a replacements. >> the uncertainty we saw in 2009, obamacare first came

around, a lot of americans were concerned what would happen then. many americans are concerned what may or may not be happening going forward. it is not just enough to repeal. we have to have a reasonable plan to replace, equally not more importantly to reform things. neil: that replace, guess comes back to haunt folks, right? this is fairly expensive to provide 20 plus million with the insurance they do have, whether a sliver or not. whatever you replace it with, some conservatives argue within your own party, governor, with government albatross light. it is still the risk being potential government albatross. what do you say say? >> we can make it work, since the beginning of the year governors have been together. we get on conference calls sometimes two or three times a week. we were all together over the weekend. we've had our staffs working on it almost 24/7. we are problem solvers. we get things done. we have a plan that we believe help the administration and house and senate bridge this gap

bringing this together so we get moving forward and get on beyond the repeal. the repeal has to happen, not just politically because people made the promise. more important it is falling apart. if you left it the way it is right now, you would see thousands upon thousands of people losing coverage. we see provide every after provider, we have some states hardly have any areas people offering under the exchange. that unacceptable for the people of wisconsin or people across this great country. we have a better way forward. looks like things in wisconsin, my state, only state didn't take the expansion literally has in insurance gap. we covered poverty first time ever, republican, democrat, nobody ever done it before. for those above poverty we help transition them into the marketplace. with the new plan we help all the people gain access to the exchange can help them with alternative, credit, assistance they need to go forward, still long-term lower the cost curve, bend the cost curve going forward because for adults, not people with disabilities, not

seniors, adults in the workforce or under medicaid that is where we provide the real reform to get them back on their fight, back on the workforce no longer dependent on the government, that is true sense of independence. neil: governor, we're getting sense of president when itemizes his budget, $54 billion in defense spending. will not touch entitlements and medicare and social security. many get that, pay that argue, not entitlement to them, something they paid into, be that is 70% of the budget off balance for the president. what do you think of that? >> overall incredibly important. i was in afghanistan during the holidays to visit troops as i did in several other places around the world. folks from wisconsin as well as other troops i met know desperately we need a new commitment to our military to keep them safe and be able to fulfill their mission and get out and get back home and on with things. i love the fact, jim mattis,

general mattis is there. i think he has a incredible influence on this president and vice president. that is really powerful. the real area to look at is growth and reform. growth we talked about it with the secretary of the treasury this morning. a reasonable middle class tax cut, helping employers bring down the tax rates so it is comparable with the rest of the industrialized world, bring american jobs back from overseas, fair and free trade together so we can tde wh others. but they get the same deal going in. so it is truly he free so american workers can compete with anyone in the world. i think you see that kind of growth, 3, 4%, is not out of the reap of potential. reform that has to be collaboration with our states and our local governments to help people who previously on some form of government assistance like welfare, particular letter areas like medicaid, not touching medicare, not touching social security, but with medicaid, reform it to help transposition people in the work place. states can do that we've been doing that for years in

wisconsin, it can be done elsewhere in the country. neil: quickly, governor, i know you have to go, are you surprised the popularity president is enjoying with unions, teamsters, afl-cio official who was quoting that because of president trump, they have exacted concessions and ford is rethinking a lot of its priorities, so far, not across the board union leaders seem to like this republican president? i know you have had your run-ins with unions, but what do you make of that? >> neil, the funny thing i had it with the government government union boss. unmembers even in my recall election, nearly 40% according to one exit poll voted for me on recall. why? they want to work. we put people back to work. more people employed in our state last year than any point in our history of our state. unemployment at six-year low. you have a president looking out for the forgotten man and women in our country. certainly i saw in wisconsin felt abandoned by the federal government, feel they have a champion to put more americans back to work.

that is exactly with we need. we need the somebody get power out of washington send it back to the american people. that is why they elected president, more importantly hearing and seeing. actions speak louder than words. true judge of presidency work he gets done. as governors we're committed to work with the president and administration to get things done for people we represent. neil: governor walker, good to see you again. >> good to see you as you always. neil: we're eking out a lead in the dow, not a big one, if it holds the 12th straight record in a row for the dow jones industrials. more after this. deal with high... and low blood sugar. januvia (sitagliptin) is a once-daily pill that, along with diet and exercise, helps lower blood sugar. januvia works when your blood sugar is high and works less when your blood sugar is low, because it works by enhancing your body's own ability to lower blood sugar. plus januvia, by itself, is not likely to cause weight gain

or low blood sugar (hypoglycemia). januvia should not be used in patients with type 1 diabetes or diabetic ketoacidosis. tell your doctor if you have a history of pancreatitis. serious side effects can happen, including pancreatitis which may be severe and lead to death. stop taking januvia and call your doctor right away if you have severe pain in your stomach area which may be pancreatitis. tell your doctor right away and stop taking januvia if you have an allergic reaction that causes swelling of the face, lips, tongue, or throat, or affects your breathing or causes rash or hives. kidney problems sometimes requiring dialysis have been reported. some people may develop severe joint pain. call your doctor if this happens. using januvia with a sulfonylurea or insulin may cause low blood sugar. to reduce the risk, your doctor may prescribe a lower dose of the sulfonylurea or insulin. your doctor may do blood tests before and during treatment to check your kidneys. if you have kidney problems a lower dose may be prescribed. side effects may include upper respiratory tract infection, stuffy or runny nose, sore throat, and headache. for help lowering your blood sugar talk to your doctor about januvia.

neil: all right. sean spicer ready to kick off the session with reporters. let's listen in. >> talk to you a bit about the president's budget. when director mulvaney is finished, we will allow him to take a few questions, and then resume the briefing and all the fun that goes with it.

without any further adieu, director mulvaney. >> thanks very much. i want to talk a few minutes about the budget blueprint, that the president started speaking about this morning with the governors. talk to you about what it is and what it isn't and talk about where we are in the budget process and what it looks like from here. from what it isn't. this is not a full-blown budget. that will not come until may. you will not see anything in here with mandatory spending, entitlement reforms, tax pom policies or infrastructure plan. that blueprint was never going to do that, as i made clear in my senate confirmation hearing. this is top line number only. what it is these are the's policies reflected in top line spending. it is true america first budget. president keeping promises exactly what he said he would do when he ran for office. prioritize rebuilding the military including restoring our nuclear capabilities, protecting

the nation and securing border. enforcing laws currently on the books, taking care of vets and increasing school choice. it does that without adding to the currently-projected fy 2018 deficit. the top line defense discretionary number is $603 billion. that is a $54 billion increase. one of the largest increases in history. also the number that allows the president to keep his promise to undo the military sequester. the top line non-defense number will be $462 billion. that is a $54 billion savings. largest proposed reduction since the early years of the reagan administration. reductions in non-defense spending follow same model. the president keeping his promises president doing exactly what he said he was going to do. reducing money given to other nations and eliminates programs and that simply don't work. the bottom line the president will protect the country do so the exact same way the american family has to do last couple years, that is prioritize

spending. schedule from here, these numbers go out to the agencies today in process we describe as pass back. review from agencies due to omb next couple days. we'll spend next week or so working on a final budget blueprint. we expect to have that number to congress by march 16th. that puts us on schedule for full budget, including things i mentioned this does not include, all the larger policy issues in the first part of may. so with that i will take a couple questions. >> mr. director, in order to get to your top line on the rest of the non, rest of the discretionary budget, if you're not going to touch veterans benefits you need to slice 12% off rest of government. can you do that without affecting services that government provides for americans? >> that is part of what this process is this week. the numbers go out. each agency will get its top line number along with recommendations omb how we think they can hit the number, yeah, that is a good way to reach that

number. come back with us with other suggestions. that is the process. fairly unusual for us to be coming to you this early in the process. we want to know everybody talking where they were. >> we're not talking 2 or 3%. we're talking double-digit reductions. that is a lot. >> there will be a lot of programs, you can expect to see what the president said he would do. foreign aide, for example, president said we'll spend less money overseas and more of it here. that is the number reflected in the state department. >> thank you much. one quick follow-up of foreign aid, accounts less than 1% of overall spending. even if zeroed that out it wouldn't pay for one year -- budget increases being proposed right now. how do you square that? also why not tackle entitlements which are the biggest drivers? especially when a lot of republicans over the years said -- >> sure on foreign aid, same answer i just gave, yes it is a fairly small part of the discretionary budget but still consistent what the president said.

when you see the reductions you can tie it back to the speech president said or something the president said previously. we are taking his words and turning them into policies and dollars. so we will be spending less overseas and spending more back home. i forgot your second question. >> on entitlements. why not address entitlements which is biggest driver? >> very unusual this, is budget blueprint what some folks used to call a skinny budget. would not be all unusual for larger policy decisions including tax reform, revenue projections not included in the budget. >> down the line could we see -- >> full budget will contain entire spectrum of the president's propose policy changes. >> director, rebuilding military talk about more of the breakdown of that? can you go into -- >> no, i can't, where we are in this process is the numbers going to the dod today. over the course of the next 10 days to two weeks we'll be coming up with those types of details. time for one more. >> yes, sir.

>> military you will increase military budget, going to ask the people in the defense department to take a look at their budget, where can we cut and look to make sure we're spendingmount of money? part of that is partf the process. >> that is part of what secretary mattis and i already talked. he is interested in driving more efficiencies into the defense department. omb will be involved on procurement process. all of that is incorporated in the larger budget in may. >> not just like blanket, throw money. >> no, sir. last one. >> account for spending for president's wall, $30 billion for this year or 64 billion-dollar increase? is that assuming money for the wall, how to pay for the wall? >> more likely, a little bit of both. we do expect to include some money in a future supplemental for 2017 for the wall and 28 teach budget will contain longer term budgets. >> split between the two? >> i believe that will be case.

thank you very much. >> thank you, director. let me get back to, in a second, april. this morning the president dropped by the national governors association meeting where 49 governors from both states and territories joined cabinet members and senior white house staff to discuss where they can work together to rebuild the country and start the economy. while at meeting the president delivered a statement on forthcoming budget proposal he will submit march 16th as you heard the director mention. the president's budget will first and foremost keep americans safe. investing in the nation's physical and financial security. we'll rebuild the nation's military, including defense spending an creased funding for veterans and will be matched from non-defense programs. the budget comes from outdated and duplicative programs. the budget spending will be sensible and rational and tough with our nation's debt spiraling out of control we must look at

the way we're spending taxpayer dollars. families across the country make difficult choices for too long the federal government has not treated their money with the respect they reserve. national debt exploded in the lasted a administration from $10.6 billion on january 20th, 2009. to $19.9 trillion. sorry those are both trillions, the day before president trump's inaugural. every child born in america this year will inherit an average over $60,000 in debt that frankly is too much. our budget will restore respect for taxpayer dollars while funding all the necessary programs to keep our country safe and prospering. this meeting with the governors was continuation of weekend engagement between the governors and administration. president and first ladyovernort the white house for the annual governor's ball. the vice president yesterday had productive meeting with several governors. working with our nation's rebuilding the infrastructure,

reforming health care system and putting americans back to work. obamacare was put into place without a lot of input from governors. we're committed consulting and including them on this and some other subjects as we solve the nation's biggest issues together. later this morning the president had a listening session with some of our country's leading health care insurance companies. interesting on yesterday's abc this week, minority pelosi laid a great outline how to judge obamacare success based on what it was supposed to achieve. quote, it had three goals, one to lower the cost, the other to expand benefits and third to improve and increase access. so let's go through her criteria. lowering costs this year all four tiers of obamacare insurance plans are facing double-digit increases in average premiums. just to take a look at one set of premiums, for standard silver plans in the states, 63% increase in tennessee, 69% increase in oklahoma, and a staggering 116% increase in arizona. on expanding benefits, in

reality the new law's mandates led to mass cancellations corage, soing out-of-pocket costand declining enrollment figures. millionsre choosing to pay a tax over buying the government mandated insurance. increased access. with insurance fleeing the marketplace americans are facing a dwindling number of insurance choices with 17% of americans left with only one insurer option available in their exchanges. insurers will be indispensable partners in transitioning out of the obamacare the patients first plan the president will work with congress to put into place. president's plan will encourage innovation, modernize the health care system, provide relief and access to truly quality and affordable health care. president had lunch with vice president pence and ambassador haley. then has a meeting with speaker ryan and majority leader mcconnell and following that he will meet with secretary of state rex tillerson. the secretary is coming off successful trip to mexico joined

by secretary of homeland security kelly. the president is looking to discuss that trip with the secretary. also this afternoon the vice president will speak to extraordinary of 60 presidents of historically black colleges and universities. there is pool at top of the event and vice president's office will release the remarks an photos following event. can expect a meeting with the president with them as well. this evening president will have dinner with regional press affiliates in town for the joint session of congress. while it is traditional for representatives from the networks to meet with the president before his joint address this is the first time to my knowledge at least that the opportunity ththat's been expanded to include representation from 18 regional outlets from around the country. tomorrow the president will have the traditional lunch with network anchors. beyond so-called big five networks we invited outlets, telemundo, univision, cbn, pbs, c-span and tv-1 tonight the president looks forward his nominee of secretary commerce wilbur ross confirmed by the

senate. secretary-designate ross is important champion for u.s. struggling industries in the five sectors. pending his confirmation this evening will do the same post on behalf of the american people what he has done ithprivate sector. assuming everything goes according to the plan in the senate tonight we expect to have swearing-in tomorrow here at white house. also tomorrow the president will deliver his first address to both houses of congress. in his speech the president will lay out optimistic vision for the country, crossing traditional lines of party, race, socioeconomic status. as i said before the theme will be renewal of the american spirit. he will invite americans of all backgrounds to come together in the service of a stronger and brighter future for our nation. in addition to laying out the concrete steps the president already taken to make the american dream possible for all of our people he will talk about the bold agenda he wants to work with congress. this includes tax and regulatory reform to proyou vied relief to hard-working americans and their businesses, making the work place better for working parents, insuring the families who have suffered under obama

care's skyrocketing rates see it replaced with patient centered alternative, making sure every child in america has good access to education and rebuilding military and fulfilling our commitment to veterans which we owe a great deal of gratitude. you will he see a speech grounded firmly in solving real problems for every american. how can we make sure every american that needs a better job get one, get kids trapped into failing schools in better one, how we keep gangs and drug violence out of our fake hoods and community. let them know that help is finally on the way. with respect to the speech we'll have background briefing sometime this evening hire in the briefing room. we'll provide additional he details later in the afternoon. as you might already know the department of defense presented preliminary plan to the white house today to defeat isis. this plan has been deliverby secretary mattis who is currently briefing the principles on the options presented with options presented

seeing their input and feedback. president continues to be deeply disappoint and concerned by continuing vandalism at jewish cemeteries. cowardly destruction in philadelphia this weekend comes on similar accounts in missouri and threats made to jewish community centers around the country. the president condemns these and anti-semitic hateful acts in the strongest terms. we've been committed to protecting citizens rights to worship. no one in america should be afraid to follow the religion of their choosing freely and openly. the president dedicated to this preserve this originating principle past of our nation. i was talking about the story shooting in kansas, early reports out of kansas are equally disturbing. with that i would be glad to take your questions. john. >> sean, there is a report this morning that you reached out directly to the cia director

pompeo. did you directly contact director pompeo ask him to knock down "the new york times" story on russia connection? >> thanks, john. let me, kind of, if i may walk through the entire timeline. i think it is important as i mentioned a week ago "the new york times" published a story what they called contacts between members of the trump campaign and russian officials. the fbi, deputy director was at meeting here at the white house that morning. after the meeting concluded he asked chief of staff to stand back a second. he wanted to tell him that the report in "the new york times" was quote, bs, for viewers at home. you can pretty much figure what that means, but i will leave it at that at that time the chief of staff said thank you for sharing that with me. can we let other people know that the story is not accurate? throughout the day they went back and forth to see what they thought was appropriate. finally came to the conclusion they did not want to get into the process of knocking down every story they had issues with. we were informed that other people had come to the same

conclusions including at that time, chairman devin nunes, i've been talking this down, telling reporters. we shared a number with him of a reporter that had contacted us and again, when the reporters contacted us, no, that to the best of our knowledge that is not true, they were asking us can you point to anybody else that can substantiate this? i think we did a good job of saying sure, we will share with reporters other people who have come to the same conclusion. so i won't go into the specifics. i will say i think we did our job very effectively making sure that reporters who had questions about the accuracy and claims made in the "new york times," that we were pointing them to subject matter experts who understood whether or not that story was accurate or not. and i think just to continue to be very, very clear on this, it was about the accuracy of the reporting and the claims that were made in there, plain and simple. about whether or not a story appeared in the "new york times" was accurate. individual after individual

continued to say as far as they knew they weren't. i think most of you probably saw chairman nunes's comments this morning. he was very clear, number one he reached t to us, to say i've been telling people, reporters, that these allegations and descriptions in the "new york times" are not accurate. and then we shared that information with him but he came to us to share that he equally had that issue brought up to him. he was briefed and saw, quote, no evidence that the story was accurate. so the answer is, we have continued to give reporters information and sources that went to the accuracy or lack thereof of a report that was in a newspaper. i think you know, i think chairman nunes also equally said it is interesting how we literally were engaging with the press, saying if you have any question about the sourcing on this