>> announcer: this is "nightly business repor with tyler mathisen and s taxed out. stocks stress out over the twists and turns in the republican tax plan, sending the dow down triple digits. we'll tell you why and we'll hear from the president's top economic adviser on what drove the whitho mouse of pain. disney misses estimates and investors initially react harshly, but then forgive. drilling for answers. what are these two americans doing in the presidential palace in venezuela? our investigation, coming up. all that and more on "nightly business repor good evening, everyone, and welcome. sue herera has the evening off. stocks went on a wild ride

today, all triggered by headlines about the gop tax plan. the big fear for the market, the steep cuts in the corporate tax rate may be pushed back until 2019. and with that, stocks sold off, though eventually they cut some of those losses. the dow finished the day down 101 points to23,461. the nasdaq dropped 39. the s&p 500 was off nine. the tax wrangling included, today, the passage of the legislation by a house panel. that paves the way for a full house vote next week according to majority leader kevin mccarthy. but what moved stocks today was not news but details from the newly released senate version of a proposed law. ylan mui has more. >> reporter: the senate releasing its long-awaited tax plan today. that proposal would delay the deduction in the corporate tax rate by one year.

it wouldn't get down to 20% until 2019 but it would stay there permanently. it would limit the companies's ability to deduct interest. there are big changes on the individual side as well. the senate bill would keep seven individual tax brackets but it would lower the top tax rate to 38.5%. it would completely get rid of the deduction for state and local taxes. but it would preserve some other very popular deductions such as the one for medical expenses. it would also keep a $1 million limit on the deduction for mortgage interest. and as for the estate tax, it keeps that in place but it doubles the exemplifies from 5 million to 11 million for individuals before that t kicks in. so there are still many long negotiations to come over this proposal. but for today, republicans making some real progress on tax

reform. for "nightly business report," i'm ylan mui in washington. before the craziness of today, john harwood sat down with gary cohn, director of the national economic council, to ask what were the driving factors for the plan. >> so the president had two really important principles. number one is, we had to deliver middle class tax cuts to the hard working families in this country. number two is, our corporate tax system just is not competitive with the rest of the world. we have to create a corporate tax rate. and along with that, a pa passthroh tax rate that makes us competitive with the rest of the world so we can attract businesses back to the united states. >> let me suggest an alternative principle. look at the components othe plan, big passthrough deductions for business, much more de for businesses than

individuals. you've got the elimination of the alternative minimum tax. what you have is a bunch of people, including you, including the president, who think, what i do is good for the economy, therefore taxing the things that i do less will be good for the economy and good for other people. instead giving direct benefits to those people, because middle class people in this tax cut do not get very much in direct benefit. >> i disagree with you. i just completely disagree with you. if you look at joint tax, a trillion dollars in net cuts for business. $200 billion -- >> okay, i agree with that. >> -- with the estate tax. and $300 billion for individuals. so four times as much in business tax cuts and estate tax as for individuals. >> yes. but john, if you look what we're doing for middle class taxpayers, the reality is kind of simple. the median income family in the united states, the family that earns about $60,000 in the

united states, the speaker talked about them getting an $1,182 tax cut. that family is now paying a margin tax rate of less than 1%. they're paying less than $500 of total taxes in the system. so $60,000 earner, family of four, is paying less than $500. we have cut their taxes significantly. you can't go further in the tax system. >> you're saying you can't give middle class taxpayers more of a tax break than you've done? >> unlessou want to start going negative tax rates and go into the negative world. >> so when people score this, you're scoring against the bound of zero. >> companies that benefit from passthrough rates are high because if they were middle income, they would be paying at 25% rate already. the vast majority of benefits go to wealthy businesses. >> i think you've got to wait until the whole plan is done and see where you end up and see where the plan comes out.

everything in our tax plan is meant to encourage investment. >> you're not saying, as you did a few weeks ago, that the wealthy do not get a tax cut under your plan? >> i'm saying there's a unique situations to everyone out there. everyone has their own story. it's not our intention to give the wealthy a tax cut. >> but they're getting one. >> i don't believe that we set out to create a tax cut for the wealthy. if someone's getting a tax cut, i'm not upset they're getting a tax cut. >> you're old colleague steve bannon in the white house, asked him why they didn't design a plan for trump voters. he said, look, they're doing what their money wants. >> they're entitled to tir opinion. >> why are they wrong? >> we've achieved our objective. we're delivering a middle income tax are you tt and lowering cor taxes to make ourselves competitive with the world. >> larry summers told me the country wants to spend more on

defense. we've got a whole lot of baby boomers retiring. we are going to need more money for government and not less. so the penn morton model run by a former bush administration economist, not a democrat, says that this plan by 2040 will lose $4 trillion. during that time, the number of people on social security is going to go from 45 million to 72 million. how in the world does that make sense? >> we firmly believe we are creating a model that creates economic growth in this country. >> you know no tax cut has ever paid for itself. >> the years that we increase deficit are years when our economy is slowing down and we continue to borrow more and more money. the number one thing we can do for the united states citizen is to grow the economy. this tax plan is meant to grow the economy. >> are you thinking that you'll deal with that social security, medicare, baby boomer retirement issue with entitlement reform

that reduces benefits? >> the president on the economic front laid out three core initiatives that we wanted to get done in his first couple of years. number one was regulatory reform. number two was taxes. number three was infrastructure. we're working our way methodically through regulaty reform, taxes, and infrastructure. i think when he gets done with those, welfare is going to come up. that's our near term economic agenda. >> and tyler, interestingly, though gary cohn wouldn't say so, paul ryan, the house speaker, said today that is precisely our objective, in the long run we're going to go for entitlement form. so the thinking of republicans is they will accept those higher deficits and go after medicare and social security to try to reduce those liabilities later. >> did you ever agree on anything with mr. cohn, john? it didn't seem so. let me turn to a question that was sort of implicit in what you were talking about with him, and that is the idea that by cutting taxes on corpo and businesses, that a lot of the

benefit then flows through, the old phrase is trickle down, to the middle class. did you probe that with him at all? or do people believe that that is what's going to happen? >> i did probe that with him. he said first of all, explicitly, trickle down is good for the economy. he also said that foreign cash comi back to american companies will help workers even if it goes to dividends and stock buybacks through that trickle down process. >> john, thank you very much, great interview. >> thank you. >> if you would like to see more of it, go to our website, nbr.com, the complete package is there. here to put today's market action into context and tell us whether investors should expect more days like this, i.e. up and down days, is david seeberg, david, always great to see you, thank you for joining us. >> thanks for having me, tyler. >> i don't know if you're a new guest to nbr, i can't remember, but welcome anyway. today was a seesaw kind of day,

down about 200 points on the dow, at one point ended up cutting those losses in half. should investors be ready for more up and down days as this tax bill wends its way through the sausage making process? no question there will be some volatility in the markets, we saw it today. i will say this to you, tyler, to keep it simple, tax is not priced into this market. to some extent it's going to move around in the headlines because you have tape-reading algos who are seeing the headline hit and reacting, so algorithmic trading that reacts. for the long term investor, the setup right now, the market is not pricing in tax cuts. so the s&p earnings, if you looked at it for 2018, the expectations are now about $146 in s&p earnings. the tax cut at the corporate level could provide an additional $10 of earnings power to the $146 for 2018.

>> that's a very interesting point, two interesting points there. one is, be aware, dear investor, when the market is reacting, it may be algorithms doing the reacting. but number two, that the market hasn't really priced in the possibility of tax cuts. follow that through for me. $10 more earnings on the s&p translates into what level on the s&p? >> right. i mean, it puts it up, you're looking at probably 150 more s&p points or somhing to that extent. ultimately you have to look at this and say this is a global growth narrative that's been pushing this market higher. the backdrop has been earnings. earnings have been incredibly strong,e've seen earnings revisions to the upside. we've got a backdrop or a pipeline, if you will, of approved corporate buybacks that haven't even been struck yet, so the bcks will continue. we're seeing top line, which is revenue growth, estimates increasing as well. we're in an environment where it's an earnings driven market. you're not seeing money come out of equities on the news that

tax, you know, may not be pushed through. if it goes through, it's a big deal, and the market will react positively to that. >> david, thanks for sticking around for ustonight, david seeberg with cowen and company. president trp's asia trip turned to trade deals. kayla tausche is in beijing. >> reporter: president trump's maiden visit to beijing, a year after anti-china rhetoric fueled his election victory, brought a change of heart. >> who can blame a country for being able to take advantage of another country for the benefit of its citizens? n chalked up the etary of state ballooning trade deficit to benign neglect. he said the two countries were far from fixing the underlying issues but were making progress for companies. more than two dozen companies joined an executive delegation. ceos like dow's andrew liberice

wants to be at the front of the line for access. >> key is turning up, which is why i'm here. you have to be part of the shift and understand it from their perspective. >> repor ge, boeing, and qualcomm among those signing deals in beijing's great hall of the people, after winning approval from presidents trump and xi. the administration estimates in total they inked deals worth $250 billion. though some are far from completion or had been previously announced. goldman sachs launching a new investment with china's sovereign wealth fund to back american manufacturers exporting to china. >> investment will be a win/win. we want chinese investment in the u.s. because it means jobs, it means opportunity. >> reporter: president xi put on a two-day tour de force, rolling out the red carpet, a luxury not afforded ttrump's predecessors. xi said the world's two largest

economies would move forward as partners, not rivals. the chemistry between the two leaders belies some difficult discussions to come, especially on north korea. china ref new financial sanctions from the u.s. secretary tillerson says they agree on the need to denuclear learize north korea. they just disagre on how. for "nightly business report," kayla tausche in beijing. coming up, disney falls short of investor expectat disney posted year over year declines in most of its businesses with media, its biggest division, falling double

digits. as a result the entertainment company missed wall street profit and revenues estimate. revenue came in at nearly $12.8 billion, that one a little light. as you might expect, shares initially dropped about 4% then started to reverse course. julia boorstin goes inside those disney numbers. >> reporter: disney's earnings results fell short of expectations. and much of that shortfall came from its media networks division including espn, with higher programming costs and lower advertising revenue, and higher fees for subscribers offset by a decline in the number of subscribers. this disappointment for disney's tv division comes as theompany prepares to launch its first espn app. ceo bob iger saying, quote, we look forward to launching our direct to consumer streaming service in the new year and will continue to take smart risks required to deliver shareholder value. i'm julia boorstin in los

angeles. in at&t's back and fo bid to buy time warner, at&t's ceo randall stephenson said he was never told he had to tell cnn to get approval for the merger. speaking at the "new york times"' deal book conference, he said the deal makes sense. >> one of the key benefits of putting these two companies together is to stand up a new advertising capability. so we have built an amazing distribution platform, 150 million mobile subscribers, largest pay tv base in the united states, a huge broadband base. there's a lot of information and data that we think can be used to stand up a new advertising business. pairing that with the turner advertising inventory is a really powerfu thing, we believe. that is what we aspire to do. selling cnn makes no sense in that.

>> at&t was higher by nearly 2% today, and stephenson also added if the issue goes to court, he's ready to litigate. macy's forecasts a cheery holiday season is where we begis market focus. the retailer says it expects to see strong e-commerce sales during the all-important holiday period. macy's said tighter inventory controls helped grow profit margins. shares jumped nearly 11% to $19.50 on the session in this otherwise down day. kohl's, the latest retailer to cite hurricane disruptions as the reason behind its disappointing profits. store sales edged higher, when no growth was expected. kohl's shares up to $41.17. after the bell, nordstrom said higher costs ate into its results. revenue came up short. same store sales fell more than

expected. shares traded lower in after hourut ended the regular session up 4.5% to $40.03. the chip maker nvidia reported results after the bell that easily topped analysts' expectations. the company hiked its quarterly dividend and said it plans to return more than a billion dollars to shareholders during its next fiscalyear. nvidia initially rose after hours. shares there ended the regular day down about 2% to $205.32. finally, sag therapeutics said its experimental drug to treat moderate to severe post partum depression improved patients' symptoms within a few days. the drug maker says it will file for approval with the fda in 2018. shares skyrocketed 53% to $96.65. equifax reported its financial results hard on the heels of the company's massive data breach that impacted more than 145 million people. after the bell, the credit

reporting agency said costs associated with that breach did hurt profits. nonetheless, results beat estimates. shares were initially lower in the extended session but did finish the regular day up more than a percent at $108.95. coming up, what does a small oil company in oklahoma have to do with the world's largest oil reserves? we oil prices climbed today as concern grew over recent political developments in saudi arabia. those include the growing power of the kingdom's young crown prince and steepening tensions between saudi arabia and iran. most of the world's major oil companies are trying to reduce their presence in

venezuela. but we found one small american firm that is eager to work there. horizontal well drillers in purcell, oklahoma. it recently won a contract to drill nearly 200 wells in venezuela. this seems liken unusual deal. we started asking questions. when it was clear the company wasn't interested in answering them, michelle can a bruce so cabrera went to oklahoma. >> reporter: two of the company's executives showed up in a lavish signing ceremony at the venezuelan palace in july. todd swanson made a speech. >> it's been an honor to meet you today and discuss with you and your team the strengthening and expansion of the relationship between our company and your country. >> reporter: todd swaon is addressing nicolas maduro, the controversial leader of venezuela, who was sitting right

in the room and seems pleased to . another thing that made the planning ceremony interesting, it occurred just 17 days before the u.s. administration announced that maduro was being added to the sanctions list, not even putin is on that list. >> maduro may no longer take advantage of then system to facilitate the wholesale looting of the venezuelan economy at the expense of the venezuelan people. >> reporter: it's not illegal for a u.s. company to drill in venezuela. but why would a small firm from oklahoma want to go into a country rocked by violent protests and saddled with a collapsing economy? listen to the company's spokesman. >> you probably gathered from some of the stories that horizontal well drillers is n doing a lot of interviews, i haven't done any about this

project. they just wanted to kind of keep a low profile. >> reporter: so after weeks with no answers, we traveled to purcell, oklahoma, population 6400, to try to get some. we knocked on door after door of executives and former executives of horizonta well drillers, finally showing up at the gated community where brent mills lives. >> i understand you have a crew outside of this house. i just talked to brent. he's not going to be available to talk to you in person. we were going to call and schedule a te to visit. >> reporter: that supposed visit never happened. we drove to horizontal wells headquarte where security took pictures of us while took pictures of them and their three visible rigs. i was wondering if there was anybody here from the company we could talk to. >> here you go. >> reporter: you were told to give this to me? media inquiries about horizontal well drillers are the

responsibility of russ florin. yeah, we talked to him but he hasn't really been that responsive. there's nobody here we could talk to? >> no comment. >> reporter: we tried to see russ florin at his office in oklahoma city. we eventually got answers via e-mail. thompany wrote a key reason horizontal well drillers got the contract, their rigs are, quote, uniquely qualified for the shallow horizontal wells and geologic formulations similar to those found in the oronoco belt and that their rigs have a large capacity but a small footprint so they can fit in difficult to reach areas. their contract is to drill nearly 200 wells in the oronoco belt, which is home to the largest oil reserves in the world. a corporate finance consultant who opposes the current venezuelan government used to sit on the board of venezuela's oil company. he has serious doubts about this deal. >> under no circumstances, a contract of this amount, would

go too a company of their characteristics. i question their credentials to do large jobs. >> reporter: the company has been financed by a canadian firm that provides, quote, funding solutions to companies that cannot access traditional lending sources. as for their finances, neither that company nor horizontal would comment. as to why they would participate in a signing ceremony with nicolas maduro in the midst of violent protests, horizontal told us the signing was required. why would maduro insist or require these two americans to come down and do a signing ceremony in front of him? >> they're trying to say we're not isolated, there are americans who are willing to come and be here and invest in venezuela. >> reporter: but having them there is about using them as props? >> absolutely. >> reporter: this isn't the only

time the venezuelan president has used americans in a photo op. americans were photographed meeting with the company's vice opinion because the department of justice says he's running a drug empire. the man on the left with his eyes closed is the executive. pedro borelli said hwas ambushsh this small company from oklahoma, they say their technology is perfectly equipped do this job. is it? >> i ske to two well drilling experts, they said any drills that worked in the basin would have worked in venezuela. so these drills may be perfectly adequate but not necessarily better than any others that could have been down there. >> michelle, great story. good tale to tell. that is "nightly business re for tonight. i'm tyler mathisen. thanks so much for watching. have a great evening, everybody. we'll see yo

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