the cbo basic assumption is the sequesters cuts last 10 years and here is the cbo projections under the because they are too deep and will harm the economy. either the cbo or the president. gerri: but maybe the president doesn't have a right. is there any other way to get big cuts? what is the right thing to do? >> they have a retreat right now in maryland and virginia with the retreat. but we have to get serious what drives the deficit. it is health care cost for the president is not serious about making spending cuts he honestly thinks we can raise taxes and lower the deficit. but the president does not want to touch it and tell he is serious we will continue with astronomical deficits. gerri: i look what the cbo says about the economy. >> i agree. the depressing number is one .4%. >> and one point* 9% last year. >> you talk about 8% employment again and it is up 3% next year. bad is optimistic projection but why wouldn't you expect the economy to grow greater than 2%. [laughter] that will create a political problem for the president if the unemployment rate is above 8%, democrats wil

the cbo always expected some people would get bumped off their plans. now it projects that number is actually double the august estimate of 4 million people. now, looking more like 7 to 8 million americans will lose their benefits trat work. here to help us sort all this out,r. peter morici and dr. lee van nokia cure from louisiana sleeve period of time. the from the beginning the math never added up, right. >> no it never really added up. health insurae will be much more expensive. employers will let go, pay the penalty and have their employees into the state exchanges and buy their own insurance. in some places that's what the employees want. restaurants that have a lot of young wait staff and so forth, they don't want to be forced to buy health insurance. melissa: lee, is this a surprise to you? or is it a surprise you that the number keeps moving? >> no, it's not a surprise this would happen and the problem with these exchanges, i have a friend who is an executive at, at a health insurance company and they're just pulling their hair out because they

cbo sees real gdp growing 1.4% in 2013, the sub died growth limits businesses to hire more workers, cbo projecting unemployment rate to stay near 8% this year, also expecting unemployment rate to remain above 7.5% through 2014. debt and deficits will be larger, the cbo says, if current laws were modified and rising health care cost and increased federal health care subsidies, spending cuts and higher taxes with offset deficit increases long-term says the cbo. over and over again this report talks about those short-term budget decisions on the horizon including march 1st, the automatic spending reductions, sequester. what does congress and the white house do about the expiring continuing resolution in late march, funding for the operations of government and, divorce, the next round of the debt limit debate due to happen in may. tyler. >> hampton, thank you very much. now to john harwood at the white house. we will get specifics, i gather, on what the president wants from a short-term budget deal. any hints? >> we're not going to get specifics, at least that's the guidance i've gotten fro

. >> all right, the cbo estimated today in the fiscal 2013 budget $850 billion will be the deficit and we looked at the charts. people will argue, probably the man here, that it's going to be down in the long term because of increased revenues, economic growth, sequester, higher taxes. but kimberly, if you look to 2013, it shoots back up. how can the president hold a press conference when he talks about cuts using the word smaller. >> there's so much shrinkage. the problem is the middle class is the working poor. that's what's the norm. people are so used to it now they don't realize it should be fixed. we could focus on cutting back on spending, thinking about how to stimulate jobs and the economy. we're so used to the stagnation, it's become acceptable and people aren't critical enough to say there's a better way to do this and a smarter financial way to make sense. >> is this the new normal? before we get to that, the white house scrambled after the cbo announcement to cobble the press conference together. what did you think? >> one of the things, if ear going to call press conferen

gregg: according to the cbo. by the end of the year the federal debt held by the american people will be 76% of the gdp and it doesn't get much better from there. martha: the cbo also predicting unemployment will be with us for some time to come. here is the director of the cbo. >> under current law we expect the unemployment rate will remain above 7.5%. that would make 2014 the 6th year in a row with unemployment so high. the longest such period in 70 years. martha: the unemployment rate has been above 7% since december of 2008. and most recent monthly number ticked up from 7.9% from 7.8%. not a good trend. when you look at some of these numbers it makes it a tough argument for economic recovery. but the president remains convinced we are starting to see it. gregg: poverty is up. incomes are down. so the arrow is going the wrong way. in the meantime president obama is asking republicans to delay spending cuts with more tax hikes. there are some liberal democrats who say republicans just want to gut the social pr

the most honest look we have gone from cbo in years now. i want to show you one more thing on deficit reduction. this is the three scenarios. if you increase deficits by $2 trillion, long-term, by 2023, you start to slow down if you had no deficit reduction. look at how much growth increases here. you take a short-term hit for next year, in the long term, you are adding almost two percentage points to gdp. back to you. lori: that was just about as helpful of a visual as you can get when it comes to understanding this math. melissa: that really breaks it down. what is the cost of reducing the deficit. if only we would have done that before. a great report. thank you. lori: troubling, at best. let's continue on. reversing yesterday's pullback and continuing to rally through the start of this year. will this continue? >> i am pretty optimistic going forward. i do think you will hit about 1675 on the s&p as the year end target. the housing recovery will continue. i think overall, you have stabilization in europe and individual investors returni

the biggest picture was one with a sepia -- cbo's said we have growth.antly, they marked down the long-term prospects for the ited states produce significantly. here at going to grow a decade from now very fast indeed cannot fix these problems without robust growth. troubling statements. the second being that the good @%ws, the back of the deficit is getting smaller as the economy recovers is really coming so slowly, and we have solved none of the long-term problems. we are playing with, you know, ten billionaire, 5 billion here. that larger than the economy, and it will stay that way for decades. lou: until everyone understands that there has to be a prudent, rational, fiscal policy pursued by both parties, we are on the verge, and seems to me, being a detonation in perpetuity. when you talk about growth, the only way to read at least deal with the problems that face us now is to restore growth. as you said, the big issue is growth. at think some of the most optimistic projections i have ever seen from a president whose economy is contracting combat lea

the cbo reports the dollars continue to go higher and really what it comes down to, we cannot afford this. small businesses can't afford to keep medicating their people and keeping them insured and at the end of the day this is just another sign of big government coming in with big plans that us, the taxpayers, just can't afford. >> well, steve, does it matter that we're losing employer-based health care plans, if more people are actually getting covered? >> yes, exactly. this plan is going to cover just about everybody. it makes me difference whether they get their health insurance through an employer or whether they get it through an exchange or some other way, through medicaid. as a matter of fact, having employer-based health care is bad for american business period. it hurts our international competitiveness. we would be better to move away from that system and replace it with something else, with guaranteed coverage for everybody. >> brenda: okay, john layfield, tell me what you think about that? >> i think free pizza for everybody. let's just get the rich kids to pay for it, i

i thought -- i found the cbo report supportive of what i'm saying.t the deficit. >> i want your reaction to something dave camp told us, chairman of the house ways & means committee. he said we need an equitable approach to cutting and spending. i want your reaction to it. >> sure. >> what we need now is the ekd part of the balanced approach the president called for in december. the beginning of reigning in debt and deficits. on the president's commission, they said when the debt gets to this level of the economy it costs us millions of jobs. >> yeah. so there is not a hint of evidence that the deficit or debt for the u.s. economy now. you want to pay down your debt but not at a time it will lead to sharply higher unemployment which will happen now. this is a myth. we have overwhelming evidence that slashing government spending when the economy is depressed significantly deepens the depression. this is a convenient myth. >> we have seen what happens in europe. we saw the debt strangle countries in europe. you're saying we need more government spendin

the cbo reports the dollars continue to go higher and really what it comes down to, we cannot afford this. small businesses can't afford to keep medicating their people and keeping them insured and at the end of the day this is just another sign of big government coming in with big plans that us, the taxpayers, just can't afford. >> well, steve, does it matter that we're losing employer-based health care plans, if more people are actually getting covered? >> yes, exactly. this plan is going to cover just about everybody. it makes me difference whether they get their health insurance through an employer or whether they get it through an exchange or some other way, through medicaid. as a matter of fact, having employer-based health care is bad for american business period. it hurts our international competitiveness. we would be better to move away from that system and replace it with something else, with guaranteed coverage for everybody. >> brenda: okay, john layfield, tell me what you think about that? >> i think free pizza for everybody. let's just get the rich kids to pay for it, i

the cboys our economy will grow by only 1.4% this year. unemployment will hover around 8% this year. we will add another trillion dollars to our debt. that is the news we have received. further down the road things get worse. the cbo says will add 10 trillion dollars to our debt by the end of the budget window. it will weigh down our economy like an anger. by 2018, the economy will grow by two 0.2%. when people cannot find jobs, many stop looking altogether for work. this report is a warning of what is to come if we do not get spending under control. we will hit 76% of gdp by the end of this year. that is the largest share of that since 1951. in the 1950's we pay down our debt and our economy kicked into high gear. these days we still haven't gotten a handle on spending. total debt already exceeds 100% of gross domestic product. we are in the danger zone. investors might begin to doubt our abilities to pay obligations. they might demand higher interest rates. if they did that interest rates a

>> no, i think the cbo report is pretty reasonable. and it says that we wish we had lower debt, and if we look at the long term it would be nice to pay down the debt but it does not show a crisis. and trying to slash the deficit right now will deepen the clear and present danger which is a very high unemployment and ongoing economic slump. so i actually -- i found the cbo report supportive of what i'm saying, that right now our priorities should be jobs and not the deficit. >> i want to get your reaction to something that dave camp told us, the chairman of the house ways and means committee. he said that we need an equitable approach to cutting and spending. take a listen. i want to be get your reaction to it. >> sure. >> what we really need now is the second piece of the balanced approach which the president called for in december which is beginning the reining in of the debt and deficits. on the president's xigs they said when the debt gets to this level of the economy it, again, kos us millions of jobs. >> yeah. so there is not a hi

i believe the cbo has done a report on the effects.is it unique to wisconsin or total job increases across the country because of those investments because of those-- because of those investments? >> there were more jobs and more output produced because of the recovery act. >> what kind of number of job? >> it varies because the spending and the tax reductions from the recovery act have varied. at the peak affect of the act, in 2010 and 2011, there were between half a million and 3.5 5 million.-- 3.5 million jobs. >> were there additional jobs since then since the peak period? >> there continued to be slightly more employment. most of the money from spending side and tax cut that has been spent. the effects are dwindling. >> it reduced the unemployment rate during that time.>> yes, congressman. >> how about the affect on economic growth? >> it boosted economic growth in 2009 and 2010 by considerable extent and brought down the unemployment rate in 2010 and 2011. >> as we look at what we are talking about, so often people talk about rai

do we know 3 million more people, jump about 75% from the cbo's original prediction will not be able to stay on the employer based plans? >> yes, for two reasons. reason number one, that there are penalty for employers who do not provide generous enough health care plans. you have to have a health care plan as an employer that meets the department f heof health an human services criteria if not you get whacked. aside from the money that you save, you might avoid a penalty. on the other side the federal government is opening up the new health insurance entitlement program that the president authored in his 2010 law. so there's a place for these people to go. and as the employers see the financial advantages of this, more and more of them are indicating, yeah, it's going to be time for us to shove these people out into the government program. >> see, chris, here is the maddening thing. for the past four years the administration has said something completely different. they said over and over again, if you like your current plan, if you like your current health care system, health insur

and that's what the cbo -- it's one of the things the cbo said yesterday.t they said was absent the sequestration which by the way is 85 billion in 2013. not to mention other things congress has done. including taking the payroll tax cut out of the economy. that's over a hundred billion right there. cutting the gdp growth in half. it would be closer to 3%. instead, it's closer to 1.5%. if gdp is growing at 1.5%, the unemployment rate won't go down. it will slowly tick up. >> indeed it will. dana, no gdp report is all good or all bad. in this report, there are good points. for instance, deficits are decreasing. however, all i ever hear from republicans is the president needs to get serious. from speaker john boehner. that's the best impersonation i can give you. >> it's not bad. >> wasn't very good, nothing personal. >> but dana, is that it? >> well, that was a little raspy, your john boehner. but i think you've captured the sentiment, more or less correctly. and yes, the cbo report shows that the deficit is shrinking. but it is also showing the efforts to s

doug elmendorf, director of cbo said, no, we are not certain.r forecast and models are showinging us. when you look at forecast from 10 years ago, boy, it is tough to do this thing. liz: david is right and thank you very much, rich edson. >> the president meeting with labor and business leaders on capitol hill to discuss his immigration plan which we had already have spoken. this includes a pathway for citizenship for illegal immigrants already in the country. liz: one of the business leaders at meeting greg brown, chairman and ceo of motorola solutions joins us now. greg, what happened inside the meeting? and without giving away anything that is supposed to be proprietary? what is the president's vision of immigration and are you alongside it? >> not only am i alongside it? i think the business community is alongside it. one those rare instances in a town like this people from both sides of the aisle can get around and issue. the last immigration reform that was done in this country was over 25 years ago. the president spent almost an hour with

we have one article in investors daily today the cheapest plan by 2016 is going to be $20,000 and cboays that 7 million americans are going to lose their health insurance. what happened? should i be upset over this or just accept that promises aren't fulfilled here? >> i don't see how it's any promise broken. i think everybody knows the affordable health care act is going to be implemented in stages, sean and just like social security when it started and medicare, medicaid, they have some difficulty in their starts. what the cbo was saying not everybody is going to sign up right away so some cases you're going to have situations where the lack of coverage or increase in cost of coverage, that's why there's an individual mandate and takes time for that to be put in full place done over several years. >> michelle, seems to be one good excuse after another and all broken promises unfulfilled. why do i expect the media if it was george bush, we might have a different reaction? >> because double standards are the reality in washington and they have been for a long time and of course, all t

i work with cbo a couple of millenniums ago. we used to worry about deficit to gdp ratios of 5.5 to 6% because that is the range they could start to spiral out of control. we have not seen anything remotely close to the deficit to gdp ratio of 6% the last four years. and, by the way, even under the best assumptions of cbo, we are looking at another 2-3 years before we get below that 5.5% rate. i think we need to cut. the cuts need to be made. and they need to be prioritized. because those cuts across the board are going to affect some industries more than others. the defense industry is going to be impacted more than others. we have to make a decision how we want that to play out. we have -- do not have that discussion. just obviate the need with across-the-board cut. it is not good public policy. i think the cuts are necessary. i don't think the cuts are so large that if they were instituted, if the congress were to sit down and pick and parts as the approach. cut, that those would lead to an economic downturn. the forecast tha

he usually cbo shows. as government spending grows in coming decades, gdp will be suppressed more and more. it will sort of be like a fiscl death spiral in coming decades unless we make major reform. so those are the big picture problems of federal spending, and these are often discussed by budget wonks and others in washington. however, all federal spending is spending on particular programs. spending is not just bad because it leads to these overall macro economic problems. spending a many hundreds of particular federal program caused damage to society and harm individual freedom and grid all kinds of other problems. so the issue with federal spending on the federal budget is not just the question of whether $3.6 trillion is too much to spend this year. but the problem is whether spending on the hundreds of particular federal programs causes damage to society and the economy. and that's why think the libertarian critique of the budget is different. of the normal critique of fiscal conservative of budget

those are not cbo numbers. >> yes, they are.es, they are. >> and what is happening is that in ten years we are going to return, as long as we don't have wall street send us into another economic meltdown. >> can i ask you another question. if this is such a horrible thing, why is it that the house has passed two bills to get rid of the sequester and replace it with more sensible cuts, the senate democrats have done zero and the president has never put forward a proposal. if this is such a horrible thing when are they going to introduce legislation and do something? >> the senate democrats, first of all, the progressive caucus has come out with something that will increase jobs and reduce the deficit. >> is there legislation that the senate has actually undertaken? >> and secondly -- >> no. >> i'm dealing with the house. the house democrats have actually come out with a plan that would close corporate tax loopholes, that would get us, you know -- >> these are great talking points but they are not action. there's been no action by

either the cbo has it right or the president has it right, you can't have it both ways.ri: i would assume the president doesn't have it right here. is there any other way to get big cuts, and we have to take the sequester, what is the right thing to do here? >> senate democrat says democrat over right now. the senate house democrats are going out in virginia. they think there's a way to do this but we have to get serious about what is really driving the deficitdeficit and that is heale costs and right now the president is not serious about making spending cuts. he thinks he can raise taxes and lower the deficit, but at the end of the day we all know what is driving the entitlement and the president doesn't want to touch it. we will continue with these astronomical deficits. gerri: astronomical deficits, but i look at what the cbo is saying about the economy, it is really scary. >> i agree. growth for this year 1.4%? that is rarely the heart beating at all. 1.9% last year, and talking 8% unemployment again through this year and up to 3% next year, but i think that is a ve

. >> reporter: and advisor to the cbo those without insurance can get subsidies but only to buy coverage the government specifies. >> why shouldn't workers take advantage of the federal subsidy. they paid for it too. >> reporter: they call the report oversimplified. >> on january 1st, 2014, an insurance marketplace will be up and running and consumers will have more access to quality, affordable health coverage. >> many won't be able to use the subsidies, unions must pay insurance foreindividual workers but not their spouse or children. >> if the employer pays for the workers share of that, say $4,000 to $5,000 but says to the family you have to pay the other $10,000 and family only makes $30,000. that is third of their income. they may not be able to buy insurance. they may not be eligible for subsidies in the exchange either >> now the family is caught in limbo. >> and they may lose the insurance they. >> have the coverage you have now isn't going to exist for most people next year or the year after. >> reporter: in fact the law is full of incentives. employers were less than 50 worker

we just had to call you when we saw these numbers from the cbo on obamacare because they are shockingare will cost over 1 trillion over the next year, the next ten years, and harry reid told us it would not add to the deficit. the president even tried to call our fears about the increased cost saying that, you know, really the spending will be under control. we will cut our cost. what happened? >> well, it did not pan out that way which is one of the things that happens when we pass a really big deal, a couple of thousand pages long without giving people adequate opportunity to review it and figure out what the implications will be. so we are adding over a trillion to the debt of the next ten years. he will also be adding, according to this report, 12 million new beneficiaries to medicaid. this is a problem. gerri: right. it is astonishing, and remember when nancy pelosi said we will know what is in the bill when we read it. now we are finally finding of commands that me tell you, it is frightening. one of the things of the cbo found call entitlement spending, obamacare, medicare, med

cbo expecting real gdp growth, fourth quarter to fourth quarter, 3.4% next year, averaging 3.6%. unemployment rate expected to be 8% this year. 7.6% next year. the sixth consecutive year at 7.5% unemployment. that's the longest run in 70 years. getting back to the entitlement programs, the cbo director says health care costs eventuallily swamp the federal budget. >> it's possible to keep the policies for the large benefit programs unchanged, but only by raising taxes substantially for a broad segment of the population. >> he says on the flip side, the ben fits are the same, but raise taxes on the other end it. you cut benefits dramatically if you keep the taxes the same, something the u.s. has to figure out. he said sooner rather than later. talk about the budget cuts, liz, about to hit on march first, the sequester, you include that and the tax increases that it counts for a loss in gdp growth of one and a quarter percentage points, half because of the higher taxes, half because of the lower spending, and that translates to 1.5 to 2 # million fewer jobs. while decreases in spend

take a look at some of these new numbers coming from the cbo detailing cost curve bending here now onof medicare and medicaid. cbo saying in 2020 medicare and medicaid spending is expected to be $200 billion or 15% less than projected. that means the rate of growth is coming down. health care experts don't understand what's driving those costs lower, although part of the pespeculation here is the recession, coin and wealth, people for going medical treatment. any slowdown in medical costs might make the president's job tonight easier. back to you. >> thank you very much. when we come back, brian shactman with a very tough assignment. he'll be interview "sports illustrated" swimsuit model kate upton, the first to appear on consecutive issues since tyra banks in 1996, '97. the teleprompter says i'm supposed to say, and i guess you can see why. >> she's a good looking girl. >> yes, she's beautiful. >>> welcome back to "power lunch." i'm josh lipton, shares of 3m trading historic high. dow component up 20% in the past year. today the company announcing it has received certification for it

cbo scoring is what the referee says, what cbo said one would be able to reduce the deficit. they did not say that it slowed or reduces health spending in fact it reduces the deficit even though it increases government health spending and it reduces the deficit because it's got tax increases that are bigger than the increases of spending. so to the extent that our medium and long-term problem is driven by demographics and the growth of health care spending, a lot has made the second of those worse. >> that's not, you're right, there's no question that we expanded coverage to millions of americans do i think the number was 32 million people will have health insurance that didn't have it before. that is not free. that comes at a cost but everyone understood that that came with a cost. it was paid for in part by tax increases and in part by cuts in other government health care spending. so it was not all on the revenue side. the other thing i think that is so important is the congressional budget office only said it would reduce the deficit in the first decade, which is what the

. >> he said the cbo over simplified it. >> isn't that interesting? i read it. i read through what they're saying. this he have every figure carefully conceived for the next decade and they're impartial. it's so convenient to say that when you don't agree with their results. the fact of the matter is not will you not be able to keep your plan, you don't get to keep your doctor because your doctor is not taking that insurance because he's moving to a hospital and going on salary because he can't afford the fees being cut and all the expenses going up. that's one of the most ridiculous statements the president ever made, that you get to keep your doctor. we're learning now you don't get to keep your plan. you never could keep your doctor. >> not that we didn't talk about it for the better part of two years. >> doc, we have to leave it there. dr. se siegel, thanks so much. >>> amid all of this, the cost of the president's new health care law is also rising. the new estimate from the bi-partisan cbo we just heard from, 1.3 trillion dollars over ten years, up from 1.

cbo says sequestration will cost 750,000 jobs.rt seeing the impact in the job market? in the march job numbers, april, when? those are my questions on sequestration. >> the 0.6 on gdp growth is a cbo number. we get similar results to that. i think it's a reasonable estimate. in terms of whether or not rearranging the cuts would be beneficial, it could be beneficial from the point of view of more efficient allocation of the cuts or cuts that are more consistent with the preferences of congress, but that, of course, is a congressional decision. i have no input there other than to say that i think the near-term effect on growth would probably not be substantially different, if you did it that way. in terms of the effects on jobs and employment, the spending implications of the sequester take place over a period of time so i -- >> mr. chairman, you didn't answer the second one. i asked would it regardless of the political preferences that the congress might have, would the rearrangement if there's flexibility affect economic growth in

so the issue is routinely this cbo gets it wrong.bo numbers underpin tax and regulatory policy. such shaky numbers, and the big problem, it is hamstrung and by law has to look at these d.c. policies as if they're going to be in place year after year after year. in other words got they cannot predict the economy, but they're trying to predict the economy based upon this static models. cannot predict what d.c. policymakers are going to do or fed reserve officials. the reality check looks like it has massive cbo, but we do publish an alternate this scenario that you can look at. ashley: the real one. >> by the way, they also said that unemployment this year would be apt eight north of seven and a half. so i'm saying, wait a second. watch these numbers. we should not taken part so much. look behind the numbers for what actually happens. tracy: as my kids, and you will get better numbers out of them. [laughter] tracy: what do i know. ashley: coming up, the changing threat to u.s. banks. how financial institutions are adapting to drop in b

sandra: every media had line focuses on the drop in the deficit that the cbo is talking about.talking about is growth. projecting a one.7%, gdp growth in recent quarters versus we were at 2.4% which is not great. before the recession. we are once again a national conversation is not about growing jobs and growing economy in this country, we are focusing on one little statistic that doesn't reflect the united states coming out of this recession. stuart: media is a cheering section for the obama administration. charles: it has gone into overdrive. they were in fourth gear during the election. i thought there would be more neutrality. they have gone into overdrive, it is amazing. stuart: let me check the big board. we are an hour, half an hour into the trading session. we are down a little bit, not much but retreated further from the 14,000 level. let's get to nicole petallides. para --panera are keeping hold of their customers, boosting profits, the traditional fast-food restaurants are being little left behind. give me the stock this morning. nicole: looking pretty good. rainout

at it crazy for those of us who still believe the cbo. but for the republicans, most of them, they didn't believe the cbo numbers were right because they were mostly supply-siders, where the assumption is that if you reduce tax cuts it will stimulate the economy so much that it will actually come close to, if not actually increase, federal revenues. but when we heard that, it made no sense. now, here's where it really gets -- i think in some ways even worse. i'm going to find -- i have to say, mitch mcconnell does provide me with a lot of material. [laughter] >> in 2010, the two big tax cuts were '01 and '03. in 2010, mitch -- at a time when it was pretty clear that the first decade would yield revenue reductions on the scale of somewhere between 2 and $3 trillion over the first ten years. mitch mcconnell said to the press, july 2010, he confirmed the next day that what john -- senator john kyl said a few days earlier was accurate. mcconnell said there's no evidence whatsoever that the bush tax cuts actually dim minimum issued revenue. th