captioning sponsored by wpbt >> this is n.b.r. >> tom: good evening. i'm tom hudson. president obama urges house speaker john boehner to take his deal on t fiscal clif f calling it something republicans can be proud o >> susie: i'm susie gharib.ud the c.e.o. of manufacturer johnson controls says business is looking good for 2013, but going over the fiscal cliff could change that. >> tom: and the u.s. treasury speeds up plans to sell its stake in general motors. is the automaker ready to stand alone? >> susie: that and more tonight on "n.b.r."! >> tom: unr the threat of ar white house veto, the u.s. house of representatives is expected to vote tomorrow on the republican plan-b to avoid the fiscal cliff. house speaker john boehner

thinks the house will okay the package, trying to turn the heat up on president obama to steer clear of automatic tax hikes and government spending cuts due to take affect in 12 days. still, as darren gersh reports, there are some signs the two sides are narrowing their differences. >> reporter: house republicans say they're still working on plan a: a big agreement with the president to cut spending and raise revenues, but they were pushing plan b today-- a tax hike for those making more than a million dollars. >> tomorrow the house will pass legislation to make permane tax relief for nearly every american. 99.81% of the american people. then the president will have a decision to make. he can call on the senate democrats to pass that bill or he can be responsible for the largest tax increase in american history. >> reporter: hours befe thee speaker issued his challenge, sidesresident said the tw were not that far apart. just a few more steps the president suggested and republicans would have a deal in

hand to tame the deficit for a decade. >> that is a significant achievement for tm. they should be proud of it. but they keep on finding ways to say "no" as opposed to finding ways to say "yes." and i don't know how much of that has to do with it is veryt hard for them to say "yes" to me. >> reporter: there now appea to be two key sticking points: republicans want the president to offer up deeper cuts in entitient spending totaling several hundred billion dollars over ten years.sp in rurn the president is determined to get a long-term extension of the nation's debt limit.ur last year, the fight over rsing the debt limit brought the country to the edge of default.he but house republicans see the debt limit as a crucial check on spending. >> i think they are very, very reluctant to give up this leverage-- what they consider to be the last leverage they may have next year on trying to get real entitlement reform and i think that accounts for a lot of

it. >> reporter: but the president considers debt limit battles to be an irresponsible use of congressional power. >> i will not negotiate around the debt ceiling. we are not going to play the same game that we played in 2011, which was hugely destructive. hurt our economy. provided more uncertainty to the usinuss community than anything else that happened.s >> reporter: the house will vote on the republican plan b t orrow. veterans of washington's budget battles wouldn't be orrprised to see a plan c or d before a final resolution is hammered out. darren gersh, "n.b.r.," d washington. >> susie: the threat of the fiscal cliff was a big topic at an investor conference in new york today hosted by johnson controls. this wisconsin-based industrial conglomerate is a leading provider of products to make buildings energy efficient, and it's also the world's largest

maker of car batteries and automotive seats. c.e.o. stephen roell told me he's worried that uncertainty about the fiscal cliff could hurt consumer confidence, and his business. >> we don't do that. as the consumer, i products to costumers like the big three, that in turn sell to the autowa industry. my biggest concern is how it will affect the psychology of the consumer. i've been surprised, susie, that people continue to buy autobiles. thatouldar is change dramatically. >> sue:e steve, to what extent are the ups and downs impacting your business day to day. >> i think people are holding back on making captain investments. i see that particularly in the building side. from my standpoint, i continue to invest around the world. i'll invest make sure i'm buying the strategies we laid up for the next three years. the question is what it willes do, depending on what the outcome is, how is it going to alter my strategies if the out come

is different than i thght. >> susie: higher taxes is going to be a part of any deal. >> right. >> susie: are you open to higher taxes? how does it impact your business? >> i'm open to it. but i'm concerned and i don't want to be uncompetitive. i've got to make sure whatever tax structure works, i'm more concerned about how it impacts my ability to do business around the world. am i disadvantaged against other nations or benefit from other nations' tax structures. >> susie: you told analysts today that johnson controls is going to post higher earnings and sales in 2013. but if for some reason tse negotiations -- we don't have a deal and wese go over the cliff, how is it going to impact your forecast for next year. to it would impact our growth, obviously. g will manifest itself in how production changes. and that's the biggest issue. but i have so many issues. for example, we're still trying to figure out

europe and the depth and duration of that economy. that's just one of many. clearly i don't need another challenge coming from the uncertainty around the fiscal cliff. >> susie: you do a lot of business in china, and you're very bullish on china. can your business in china offset any during you might have in your business from what goes on in the u.s. economy? >> probably not. the autosh in business and the ilding trades, but that is not going to be enough to offset the fiscal cliff, a we're going to have too manage europe at the same time. >> susie: let's say there is no deal and the u.s. economy really slows down, or as some people say could go into a recession, how are you preparing for that possibility? >> we're trying to make those investments that are strategic, an holding back on our hirng becauseng we don't know the growth rates. we're probably looking at the different ways to reduce our points from a

logical standpoint, and we're trying to pull every lever to give us some latitude and leverage. >> susie: what deal would you like to see come out of washington? what would be best for your compeay? >> probably making certain that the tax increases don't go all they?ay down to theay middle class. i think we've just got to make sure the majority of people can still protect their net pay right now. my biggest concern is -- what the government could do is make sure that the middle class and the buying power of the u.s. is not impaired in any way. susie: do you think we're going to have a deal by the end of the ye s yeg. >> i think we'll have a deal, but my concern is it will be predicated on somee future action and we'll have to kick the can downur the road again. that's my fear as well. >> tom: if you're anxious about the fiscal cliff, you're t one, still ahead, how some americans are cutting back, and how the cliff is impacting both investor and consumer behavior.n

stocks headed south on wall street as debate over the fiscal cliff heated up in washington. adding to those worries, word that fitch ratings repeated its threat to strip the u.s. of its striple "a" credit rating if we go over the cliff. the dow fell 99oints, the t nasdaq lost 10, the s&p down 11.

>> tom: u.b.s., the big swiss bank, is putting accusations of interest rate manipulation behind it. the bank will pay $1.5 billion to sett charges of rigging a key international lending rate. the u.s. justice department also filed criminal charges against two u.b.s. traders, and a unit of the bank itself. the agency calls the senk's conduct, "simply astonishing." >> hundreds of trillions of dollars in mortgages, student loans, credit card debt, nknancial derivatives and other financial products worldwide are tied to libor, which serves as the premier benchmark for short term interest rates. in short, the global marketplace depends upon all of us ryingus on an accurate libor. yet u.b.s., le barclay's before it, sought repeatedly to fix libor for its own ends. >> tom: the probe into the libor interest rate manipulation involves more than a dozen major financial institutions including barclays, bank of america, and so.,ete generale.ne >> susie: uncle sam may soon be exiting the auto business. the treasury department said today it will sell is remaining

and controversial stake in general ms ors, in the next 15 months. as part of the deal, g-m willor buy back $5.5 billion in shares, and that will happen by the end of this year. g.m. stock revved higher on the news, climbing 7% to $27 a share. and, as suzanne pratt reports, some investors like the sound of an independent g.m. >> reporter: it looks like general motors may soon be hitting the road all by itself. four years after spending nearly $50 billion to rescue the struggling automaker, the u.s. treasury wants out. and, gm needed to shake off the stigma of being known as government motors. >> general motors to wanted do this. they wanted to get the government off its back so to speak and to prove to the people they can pay back the loan, part of the loan. >> reporter: other auto experts says everyone involved wanted to end this year on a positive news note. >> it helps the folks at gm and

the government e the year on a high note and send us into 2013 with a positive wind at our t sails. >> reporter: what's not very positive is that taxpayers stand to lose billions of dollars on the g.m. bailout. in fact, if treasury sold all of its remaining shares today, it would mean a net loss of nearly $13 billion, or about a quarter of the government's total investment. for its part, treasury argued today the gm bailout saved amile been lost if g.m. shuttered its factories. still, in order for taxpayers to recoup the money spent on gm, the stock would need to surge to about $70 a share. that's unlikely, particularly with g.m. currently trading at less than 30 bucks a share, well below their 2010 i.p.o. price of $33. nevertheless, while uncle sam is selling his stake in g.m., some au experts say investorsts should consider buying one of their own.

after all, the employment picture is on the rise in the u.s. and so is consumer confidence. and, g.m. is getting its financial house in order. >> we've seen that the company has continued to strengthen its balance sheet , it's making money, it's continuing to be profitable, it adding cash to the balance sheet. it should be in a positi position on a going forward basis. >> reporter: that's not to say there aren't challges on the road ahead for g.m., including serious softness in europe. but most agree g.m. can and will drive into the future on its own.on suzanne pratt, "n.b.r.," new york. >> susie: our "nbr-u" partners at wharton have new research showing how accounting for government loan guarantees, like the one given to g.m., is impacting uncle sam's bottom line. you can learn more on the web, d st heato: www.nbr.com and h loofor the "nbr-u" tab.l

>> tom: look for the dirt two fly in coming months. permits to build new homes in more than a four-year high last month as actual home building slowed down a bit. housing starts fell 3% in novembefrom the month before, but it has beenfr strong recovery, compared to a ye ago, housing starts up 21.6%. the building permit, jumping 3.6% in november, up to their highest level since july 2008. martin connor is the chief financial officer, and he joins us tonight from nnnsylvania. marty, welcome back to

n.b.r. have you been out there increasing your building permit for next year? >>ma tom, it is great to be with n.b.r. i do think t we are increasiwe our permits. we've seen dramatic ocreases in our sales through the first four quarterscrf our year, all four quarters of our year. they went from the mid-40s to the mid-50s to the mid-60s, to 75% growth, fourth quarter over last year's fourth quarter. so we're optmatic about 2013. >> tom: your boss, the c.e.o. of tol brothers, signed a letter to president obama and john boehner, saying, quote,"failing to reach an agreement on the fiscal cliff will shake the confidence of american consumers." so home building is a long tale to it. why take the chance with your optimism given there is still no resolution? >> we're a long land builder. we own the land well in advance of when we actually put it in use. so we're positioned for

the continued recovery. we have made those investments in areas where we operate, it is hard to get land. there is not a lot of land sitting around. having us puts us in a competitive v.. we're confident sensitive, though. demand is confident sensitive. and we have seen demand cover because consumers' confidence has improved, and their confidence that housing as a sound investment has improved, as they have seen prices se year-over-year here. >> tom: where is building best for you? where are you looking to put shovels in the ground come springtime? >> we've had a lot of success in texas. our urban products in the metro new york area have met with great success. and we're pleased to be between washington and boston with approximately 50% of our business because that market continues to be reasonably strog. >> tom: that isg. hot area. >> out on the west

coast -- the job markets -- i think texas seems to have its own economy. the job market in texas is pretty strong. i think cifornia has been reasonably strong for us as well. particularly up in the silicon valley area. i think the success of a number of the companies upn there is driving the market. and seattle is another pretty wels well-positioned employment base and we've seen good sales up there. >> tom: from the east cost to the west coast with toll brothers chief financial officer martin connor with us. >> susie: investors are trading on headlines, and the head is all about fiscal cliff. yesterday the dow was up 100 points. today own 100 points all because the headlines weren't looking at0 favorable. >> tom: just very sensitive to any of the rhtoric coming out of washington for the stock market here, susieco in our "market focus," we can see indications of that. from the post-election highs we had yesterday,

and the selling picked up a little bit as the day wore on today. here is the trade for the s&p 500. the s&p 500 slipped into the red within the first 20 minutes of trading, with the losses growing in the afternoon to end at the lowest level of the session, down 0.8%. tding volume was 747 million shares on the big board. just under two billion on the nasdaq.ol all 10 major stock sectors were wn. we telecommunications seccor saw the biggest drop, off 1.2%. health care fell 1.1%. consumer staples shed 1%. in the health care sector, intuitive surgical suffered the steepest loss. trading volume was very heavy, almost 10 times its average pace with shares falling 5.7%. s a research firm known for selling short stock, profiting when prices drop, voiced worries about certain uses for intuitive's robotic surgical equipment. we saw more selling in some cigarette stocks. as we previewed last night, the european union today proposed bigger health warnings on cigarette packages and a complete ban on strong flavors like menthol.

philip morris ares droppriro 2.1%. it is the world's biggest cigarette maker measured by revenue. in the dow, some analysts concerns hit shares of general electric and alcoa.. g.e. fell hard, down 3.1%. investment bank u.b.s. remoed the strek from its favored list thinking earnings growth will slow. i alcoa dropped 3%. moody's put the company's credit rating on review for possible downgrade, thanks to falling aluminum prices. fighting against the weak market was oracle. the database software reported a strong quarter last night. and shares responded, jumping 3.7%, taking the stock to its highest price since the spring of 2011. digital storage stocks rebounded. western digital was up four percent. seagate technology increased 3.3%. both received positive analyst comments. fed-ex delivered earnings that were down from a year ag but still stronger than anticipated. the drop from a year ago was

blamedr n customers using lower priced shipping options instead of the higher priced express shipping. shares gained 0.9% on somong volume. it pushed thonstock to a six week high. the company stuck with its previous financial outlook for the full year. d ter just five months on the job, the c.e.o. at martha stewart living omni-media is quitting. lisa gersh restructured the company's publishing unit, shutting down one magazine, whole living. after an initial sell off today, the stock rebounded to finish up 2.1%. volume was almost 10 times average. the wall street journal reports the company wants a c.e.o. with more experience in retail and merchandising. three of the five most actively traded exchange traded products were lower. the japan e.t. had the strongest gains, up 1.6%. heand that's tonight's "market focus."an

>> tom: while the economy approaches the fiscal cliff, some americans say the threat of higher taxes has them cutting back on spending. a third of those surved by bankrate.com have reduced their spending thanks to the fiscal cliff show-down in washington. those cutting back are more likely to consider themselvesed republicans or independent voters according to the survey.t and while the tax debate is over high income earners, it's those earning less than $30,000 a year who are more likely to reduce their spending. we recently spoke with two behavioral finance professors about the impact the uncertainty can have for consumers and investors. they are pofessors at the university of miami.

gentlemen, thanks for joining us. how do the fiscal cliff, the threat of the fiscal cliff, how could it bee impacting consumer behavior? >> right now it could generate a lot of uncertainty in the minds of consumers. different demographics might react very differently. specifically, the 1% or 2% at the top, where the democrats are proposing very large tax increases, or the repeal ofhe bush hex cuts to that group, it could affect the consumption decisions ahead of the holidays. they might choose to pull back or wait to see what the ultimate relution might be. >> tom: is that going to be enough to show up in economic statistics that we see in december? >> well, sure. iean, based on what i know, based on my previous research, given that, you know, especially looking et investor behavior, we know that investors are more likely to make mistakes when there is greater market-wide uncertainty, and we can

see thata in their decisions to trade and trade more actively, and make biggerra mistakes. they don't understand the implications of all of the tax cuts and so on. they're likely tre make bigger mistakes, which taken together could have an impact on the market. >> tom: what about from the company's perspective? because we've heard from a that have.o.s frozen plans until 2013, waiting for some kind of certainty, which may be unlikely to me. >> itm essentially tells us when there are high levels of uncertainty in the ecomy, the option to wait increases. where you have ir reversal investment, it makes sense to wait. >> tom: this will sound like a silly question, luke, but uncertainty is a fact of life. all c.e.o.s and investors have to deal with uncertainty. what makes this uncertainty any different from periods past? >> i don't think one is

any different, in my mind, at least. when people study the impact of uncertainty on people's behavior. this is, you know -- the difficulty is people don't learn as m ych from previous instances of uncertainty. they are likely to make single mistakes and repeat those mistakes, as a result of which every new instance is like a new one. >> tom: we'll leave it there, professors. jawad addoumand luke kuom with the university of. >> susie: tomorrow on "n.b.r." a check on the housing market, with quarterly results from k.b. >> susie: as you look at your gift giving list this year, you probably have toys and clothing high up. but beauty products ligs fragrances and skincare are selling even better.ra beauty is expected to be the top category this holiday season: up more than 7%. t's also the top rett'l category of the year. and as erika miller reports, it's not just women lining up at the cosmetics counter these

days. >> reporter: like a growing number of men, zach bruno is paying more attenion to the skin and gro ring products he buys.in >> i came from being younger, out of school, not really caring about that sort of thing, and as i became more of an adult, with a real job and my own apartment, i felt like okay, i need to take care of myself a little better, inside and outside. >> reporter: so, he recently bought a subscription to a service called birchbox. once a month, he receives a box of samples of grooming and lifestyle products tailored to his needs. >> i've only gotten two xes so far, and they range from skincare, haircare, i got a tie, which i thought was pretty cool. and the one kind of tie i don't have. >> reporter: if he likes the selections, he can buy more at the birchbox bsite. most of birchbox customers arebo still wen, llt katia beauchamp says sales of men's products are growing more quickly. >> but en you are able to show them how this is valuable howre this is something that is actually addressing their needs and explain to them, you are looking for this. this is what this product delivers. it actually helps them.

>> reporter: the increase in sales of personal care products may also be partly due to an aging adult population, wanting to look younger. it's also possible the strong sales of men's skincare products this year, may be tied to clothing sales last year. >> men's apparel was up all year last year. and now we're seeing this cometic or health and beauty up. so maybe their closet's full, and they're done replenishing their clothing. and they're working on other things that they need. >>meeporter: and holidays or not, we all love discovering a new product that makes us look anr: feel better: >> it's like a little present every month i get for myself. oe surprise! >> reporter: erika miller, "n.b.r.," new york. >> susie: tom, something for you to think aout. >> tom: shaving cream in shocking, maybe. >> susie: that's "nightly business report" for wednesday, december 19. have a great evening everyone, and you too tom. >> tom: goodnight susie, we'll see you online at: www.nbr.com and back here tomorrow night.

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