billion dollars is this a gross contradiction we're talking about you know we're facing this lou mean cliff that we're about to toss is the whole point that i think that we have to be this is the point the senate is living in fantasyland the people in the house know this is not sustainable there is more reality in the house and in the senate the senate is the political equivalent of a hollow in political terms united states they are remote from reality with very few exceptions and the republicans and democrats behave like a group of of drunks accusing each other of alcoholism in other words everyone is spending into oblivion it's going to stop because we can't afford it and it's really going to stop after we go off multiple cliffs and we can't borrow any more money that's what lies in the future so you're i mean what you're proposing doesn't seem like what a lot of lawmakers are assessing as is the impending doom that they need to to really realistically approach so how is this all going to play out when you run out of money you have to do something else look when did the british leave indi

means nobody gets 100 percent of what they want. lou: there are only ten days remaining tothe fiscal cliff.resident obama headed to value within actually minutes, and members of congress have also gone home for chrrstmas vacation already. in a news conference today, speaker boehner admitted negotiations wh the president ha, indeed, been difficult. >> until the president on monday, these are my bottom lines. the president told me that his numbers, $1 trillion in new revenues, 850 billion in spending cuts was his bottom-line. he could not go any further. lou: and he didn't. the plan be option collapsing last night when he failed to get republican support to raise taxes on only those making more than a million dollars a year. over in the senate majority leader harry reipounced on the very public embarrassing defeat. >> we knew the so-called plan b was no plan at al. it could not pass the senate. it turns out, it could not pass the house either. it is too bad speaker boehner wasted a week in his political stunt. lou: if there is no agreement, tas will go up on all american taxpayers and hundred

the president does not have that executive power meaning we headed for another show down with congress over raising the debt ceiling. lou: the fiscal cliffnd now a new ultimatum on the national debt ceiling. you suppose this is the last condition? >> it's going to be a wild couple of months, maybe everybody thought with the election over, there was going to be peace and figure all of this out, but i think we're just at the beginning of a long protractive battle, lou. lou: more on the stalemate of the fiscal cliff, the impasse, and tell us what you think about the so-called negotiations. vote in tonight's online poll. do you agree president obama's ultimatum on higher taxes are actually the cause? make him responsible for driving us off the fiscal cliff? go to our to be page at facebook facebook.com/loudobbs. we'll have results at the end. chris and steven joining us here next to address that question and more. ♪ ♪ [ engine revs ] ♪ [ male announcer ] oh what fun it is to ride. get the mercedes-benz on your wish list at the winter event going on now through december 31st. [ santa ] ho, ho, ho! [ malennouncer ] lease a 2013 e350 f $579 a m

this means physical activity can help your kids in the most important game of all -- life ♪ lou: house speaker boehner says the president is slow walking our economy to the fiscal cliffformer reagan white house counsel, financial crisis inquiry commission member peter wallace will join me here in just moments. let's take a look at tonight's "moneyline." the dow and s&p managing gains. the nasdaq weighed down by another bad day for apple and its investors. the dow up 81 points. s&p up four, the nasdaq fell leaven. just over 3 billion shares traded on the big board today. the dow up 1%, s&p slightly higher making three straight weeks of wins. the nasdaq down 1% for its first losing week of the past three. apple investors are having a rough time with the dow down. the stock down 9 percent this week. but even with that selling, the stock remains up30% year-to-date. wall street analysts say much of the selling can be explained by investors looking to avoid possibly having to pay gains on the sale of that stock at a higher rate next year. others simply taking profits. financial stocks strong. today j.p. morgan chase led the weight. news that it is expanding the numbers of

loued to expire, a typical family of four liability will go up another $2200 a year. >> eating and rent and bills and stuff? it's hard. >> no deal on avoiding the fiscal cliff meansabout 400,000 are set to lose their unemployment benefits extension. thousands of low income families whose programs relie on funding could see their services cut such as head children and domestic violence shelters its incredible to think what we'll have to do. this is compared to those who will lose benefits. >> california has cut much of the safety net. >> thank you. >> a new u.s. court out this morning says china will soon outrank the united states as leading economic power. findings show china economy growing in a healthier face than hours and forecast by year 2030 asia will surprise north america in terms of global power. >> well, bart passengers have just over a week to sound off plan to triple parking rates over the next two years currently drivers either park free or park $1 per day to park. this plan would allow 50 cents increases twice per year. >> bart does need to raise revenue. on the other hand, it can be a hardship. >> stations have pricing based on demand. just a 50% h

cliff, maybe the economic outlook brightens a little. lou: tell me what 1.83 on the ten year, what's that reflect? i meandoes it mean ben bernanke's plan is timely working? >> 1.83 is low, up a little bit, better than they were. lou: 30 basis points where where we were. >> that's true. part of that, maybe some of the green shoots in terms of the economic outlook and also, that, hey -- lou: positive indicator on the economy. when investors talk about green shoots, reach for the buy button. >> i don't know, but it's looking better than it has in awhile. lou: josh, thank you for being here, appreciate it. >> thanks. lou: the newtown massacre, spurring calls for gun control. in the "chalk talk" tonight, we look at what may be one of the largest and important problems in the society, and it's not gun. america's state and mental health and the cost of mental health care in so many dimensions, far more than price. president obama, his desire for new gun control laws, put in the hands of one of his most trusted members of the administration. we're coming right back. [ woman ] ring. ring. progresso. i just finish

means better health outcomes... and more quality time to share with the ones who matter most. i love you, grandma! [ male announcer ] humana. ♪ ♪ lou: the uncertainty over the fiscal clifflicting economic reports giving investors headaches and upset stomachs, at least some of them. to make sense of it all, wall street legend joins us and just moments. first, let's take a look and what caused all of the tanks in the "moneyline" tonight. unexpected weakness, an absence of leaders in washington creating anxiety, some volatility. adelle opening the month with a 60-point loss, s&p dropping, nasdaq eight, trading right on th average from monday, 3 billion shares traded on the big board. is in manacturing index of thing lows, declines in employment new orders, and exports. offsetting that negative news, construction spending moved higher. automakers posting strong sales performance is in the month as well. the government ten year notes slipping, the yield rising. continued that trading on wall street. obviously causes, nervous investors and traders with the dow hitting its low of the session just saw two minutes after the speer said his proposal to the white house. to give us

lou: there is not enough mney. let's be straight forwardere. $86 trillion. i mean, that's just about takes care of te world's gdp. and the fact is, this debate over the fiscal cliffu have gone throuthis the exercise and trauma before. 1996 as chrman of the house ways and means committee. a center stageposition. what counsel could you give te spker, the repulican leads president who has set the conditions for not oly what must be met in order to avid the cliff, but ha st the parameters of thedebate and negotiation if there is to be one itself. >> wl, you remember very we thate had a very different white house. president clinton had decided that he was ing to try to work with th republicans. he brought in a new chief of staff the name of erskine bowles, and in that has popped up again. and he immediately called me and said to my here to work with you and that enabled us to do al of things that i don't think the republicans today can get done with this obama white house. lou:and are you and i in agreement th the republicans are not innear sufficiently strong position, not with the lack of taent, there are ome quesonsabou that but because of the lack f power of the l

lou: good evening. this beakers failure to win republican support in the house for his plan the proposal on the fiscal cliff has embarrassed the speaker, but the speaker's failure means solution to the fiscal cliff s, if they're going to be one, now resting squarely upon president obama. arsine to be vacationing president alone cannot propose legislation that wins majority support in both the house and senate, and the decision to go over the fiscal cliff now depends on his ability to successfully negotiate and to forge a compromise that appeals to both republicans and the far left in mr. obama's party. the president met with senate majority leader harry reid this afternoon and talked with speaker boehner to begin anew that effort to reach compromise. >> averting this middle-class tax hike is not a democratic responsibility or republican responsibility. with their foes the american people have determined that governing is a shared responsibility between both parties in this congress laws can only pass with support from democrat and republicans, and that means nobody gets 100 percent of what they want. lou: there are only ten days remaining to the fiscal ciff. presiden

mean, it's their own fault, but they blame racists, white republicans saying they are going against herbecause she's a black woman and it's bad for the g.o.p.. lou: maybe there's a racial component to the fiscal cliff. i can't believe -- it's amazing how hillary clinton has been able to just skirt away, not have any accountability over what happened. >> i must say i think the real message tonight is with a tragedy like this, hopefully it renews calls for cooperation bipartisanship, and an ability to solve our problems. lou:ou think secretary clinton will show up on the 20th of this month, next week, and deas a rule j fully and -- deas avulge all the details? you think the day is dawning? >> i hope i does, but i tell you, lou, i doubt, given the politics of it, that she will. a tragedy rather than a political controversy. >> well, luckily, your wishes may come true some day. thank you so much. >> thank you so much, thank you. that's all for us tonight. we hope you have a very good weekend. it's a week coming at us, the fiscal cliff. i'm sure it's resolved tuesday or wednesday maybe? we appreciate you being with us tonight. as i said, have a great weekend. good night from new york. good night from ne

lou: getting the entitlement programs under control seems like a distant and remote fantasy with a president who is willing -- i mean, he has issued an ultiatum. he will be the cause of going over thefiscal clifft know what the republican leaders cannot hang onto that thought. they will be watching him, the reaction to the ultimatum, he will be sending the country over the fiscal cliff over what will amount to 8% of -- replacement of 8 percent of the deficit for fiscal 2013 it is mindless. >> as i said, i am quite nervous about this. i listen to speaker boehner say the day after the election, revenue is on the table the american people want to compromise and make wasington work. he said it again and put out a specific offer. all we have hed rom the president is a hard-line was no negotiation on the tax side and not one word about the entitlement reforms that would have to match that for this plan to make any sense. and it is that absence of lead on the spending side and unwillingness to make compromises that will actually get als done and have washington auction again that i think our marks against this lame-duck session. lo you have projected, the action form has projected 10 million prospect

lou. look, i mean, the amount of money, which is being created by the federal reserve system and foreign central banks to finance the u.s. trash -- treasury makes it a situation where americans cannot appreciate the fiscal cliffit. the deficit goes on as if there were no deficits because the banks are printing money to finance it. lou: with the projection that we're looking at a federal reserve balance sheet that will expand by a trail dollars over the course of the -- trillion dollars over the course of the next 12 months. that's significant funding into the monetary system. what do you think? is it a fore gone conclusion we'll see finally, and i'm not encouraging, but saying, finally, the true inflation? >> my own forecast for what it's worth is that the inflation will not really pick up until the unemployment rate falls much closer to 6%. the wages are so much under control that it's made, actually, the working people of america much more competitive with their competitive nations abroad which, i think, will be one of the surprises next year that we may do better next year, even under fiscal cliff arrangements. lou: can we do better if the working man and woman in the country is not doing better? it's not