mui in washington, covering this breaking development ylan >> obviously, this is a big shake up at the white house. here are the tweets that donald trump put out. he said that john f. kelly will now be white house chief of staff. he called him a great american and a great leader he also said he has done a spectacular job at homeland security and he has been a true star of my administration. now, one interesting question in all of this will be how kelly will be able to handle what is clearly a politically potentially toxic environment for him going forward. when he worked for leon panetta, who was secretary of defense, one of the questions that he had was that he didn't want to go into an environment where there would be political infighting and political sniping. leon panetta even telling cnn at one point that that was the last place that he would want to be but this is now something that he will have to grapple with going forward. president trump also just tweeted, now i would like to thank reince priebus for his service and dedication to his country. we accomplished a lot together an

, thank you very much ylan mui at the white house. let's bring in cnbc contributor jimmy petrocoukos. what do you think the impact of this whole issue with jeff sessions is. what happens if the president fires him? >> reporter: one problem with his administration is there's been all these sorts of other issues i think just gobbling up sort of people's time, intellectious bandwidth week after week and month after month and now we're sitting here without a health care bill, and let's be clear there is no health care bill we're sitting here without a tax bill that. bill doesn't exist, and -- and anything that happens with jeff sessions, he's fired, again, another distraction. i think, you know, further occupying that administration and making it harder to get anything done. it's not early in the process at this point. >> what did you think of john mccain's speech? i assume you heard it. >> yeah. >> and does it move the legislation forward if anything? they may sound too idealistic, but does it nudge us a little bit towards some sort of a

ylan mui has the details ylan >> president trump has removed reince priebus as his chief of staff, replacingland security secretary, john f. kelly. he announced this in a tweet, calling secretary kelly a great american now, obviously, reince priebus has been the source of some blistering criticism over the past 24 hours or so. new white house communications director, anthony scaramucci, had some very choice words to say about reince priebus they had been locked in a power struggle clearly, it seems now that anthony scaramucscaramucci is ts winning that, with reince priebus now being removed from his position he was a longtime lead of the republican national committee, head of the rnc, an establishment figure now on the outs. we are still, obviously, digesting this information and we'll pribring you more as we h it, kelly. >> ylan, thank you very much ylan mui there's the tweet from the president, saying, i'm pleased to inform you that he has named john kelly by the way, the president about to deplane after making that trip up to long island to talk about cracking down on ms-13 he's coming ba

i want to talk real quickly about what, you know, ylan was talking about.ering, one of the big questions is when will the fed begin this balance sheet reduction. and i didn't hear anything ylan said that gave us that insight she said it's going to happen this year. i don't know that the matters a whole lot. jim let's come back and talk to you about whether july, september matters a whole lot. whether they end up -- you on your way out right now >> i don't think it matters that much i really don't i think did she say any words like appreciably, and if they weren't going to commence this, you know, it's kind of like saying i'm going to be aggressive but oh, we're not going to do it until next year i think they're going to get it done this year, steve. i don't think it roo ellie matters when they start the process. >> and we do have a little tickdown in the 10-year note and in the 2-year note i want to put that up in the back there and i think part of it is this notion, set yesterday, repeated today by janet yellen, that we don't have that much further to go w

ylan mui, another super woman. >> the fed flagged the problem in the monetary policy report to congress which was released ahead of yellen's tim on the hill next week, and it says that despite the broad-based strength and measures of employment wage growth has been only modest. the federal also called out inflation which it says has softened some in recent months now, this recent report was put together before the june jobs numbers came out but that underscored the report on wages. they linked it to low productitivity growth but not just in the u.s. but around the world. a few potential explanations that the fed dives into the report, the robert gordon theory that today's technology isn't that transformative, that the global financial crisis has kept workers from moving into more productive firms and forced companies to cut r & d spending. maybe it's the slowdown in global trade whatever the reerng the fed still is he is tabt to say that this is the new normal, but it warned if this trend continues, it could halfer the fed's ability to stimulate the economy even in a shallow recession.

ylan mui has more on that story. >> reporter: the house revealed a budget that balances over the next decade including $203 billion in cuts to mandatory spending programs like medicare and like food stamps, and that is drawing fire from moderate republicans, but the gop right now is under pressure to get something done sometime this year the budget is important not just for funding the government but also because it creates the legislative vehicle that republicans need to pass tax reform without democratic support. earlier today house ways and means chairman kevin brady tweeted republicans will be moving forward on tax reform regardless of what happens on health care. now in addition to all of this, lawmakers still need to reach consensus to raise the debt limit. treasury secretary steven mnuchin has called on members of congress to raise the debt ceiling before they leave for august recess in a clean bil with no strings attached, but still no consensus on capitol hill for exactly how to move forward. unlikely that lawmakers will meet the time line that mnuchin laid out however, what

ylan, thank you very much. ylan mui in washington let's get to our "closing bell" exchange, a down day except for the russell which is up, so no records at least right now for the major averages cnbc contributor peter bookmahr. >> steve grasso, it's not an opec meeting but they had a meeting of the opec ministers and oil has popped and you've got a fed meeting and a lot for the market to try to digest. there's a lot to digest and oil has definitely bounced and oil is starting to stabilize around those levels we heard from halliburton, they beat the stocks down bad conference call and if they are changing their ways on cap "x" being that oil is having a hard time breaking above 50 and if you believe that the company will have a hard time and oil will have an easy time breaking above 50 so that's the crude angle. the problem is we don't know how to play those companies because they are lag yards riggards rigd if you think you want to hit a home run in the next six months you have to sort of swing for the fences a

ylan mui is in massachusetts with the speaker as they tour a new balance factory and kayla tausche is in washington. >> reporter: bill, the president is just about to host a roundtable with the ceos of corning, of merck and of pfizer. we're told by the white house that it's going to be a pharmaceutical initiative that the white house says will be creating jobs in this country and will be a significant backer of the administration's made in america program. we're told the president has just begun speaking. when we learn more details about what exactly this initiative is, we will bring it to you, but it is day four of the white house's made in america week, and at least for another afternoon they are trying to get back on message to talk about manufacturing and production in this country guys >> all right kayla, thank you our kayla tausche and ylan mui showing off some google glass. >> reporter: safety glasses. safety first paul ryan is conducting that tour here inside the new balance sneaker factory in lawrence, massachusetts. right now we're waiting on him to make some remarks on tax

ylan mui, the budget is crucial to get to tax reform. >> that's right, michelle.his budget actually ties tax reform to major changes in popular entitlement programs like medicare and food stamps. it does include increased fund ing for defense, $621 billion in total for next fiscal year it also includes $203 billion in mandatory spending cuts. diane black calls these crucial. house budget calling it a pathway for tax reform that's why it's so important obviously republicans want to pass a budget so they can keep the government running you need a budget before you can get started on taxes right now it's unclear whether or not republicans have the votes to get this through the house. on one hand you have the conservative house freedom caucus that says we want to see more aggressive cuts to mandatory spending programs and n the moderate tuesday group saying $200 billion in cuts is already too much even assuming that this can get through the house, the politics will get even harder once you reach the senate in order to pass a budget through the upper chamber. guys, if

. >> ylan mui with washington's breaking news. >> reporter: hi, tyler the administration is out withatest estimates for how long the social secure and medicare trust funds will last for social security, no change from its previous estimate that fund is expected not to be depleted until the year 2034 however, for social security disability insurance, that fund is expected to be able to go until 2028 that is five years longer than the government's previous estimate also just to be clear, depletion means that is how long that fund could continue paying out full benefits for medicare part "a," the fund that covers hospital visits. that the fund is expected to last until 2029. one year later than previous estimates. medicare part "b" which covers doctors' visits and medicare part "d" which covers prescription drugs, those are funded through general revenue so they can be paid for indefinitely however, the administration is out with new estimates of how much those programs will cost. they are expected to cost $3.4% of gdp in the year 2037. that is actually slightly better than the previous

ylan, thank you. a lot more to get to the other big political story, senate republicans failing to win support for their healthcare reform bill. now president trump and majority leader mitch mcconnell are calling for a vote to repeal obamacare without an immediate replacement. john harwood has the details on that >> good morning. this is something that ted cruz warned about when he was trying to prevent obamacare from bein implemented in the first place in 2013. he said if we let the exchanges and the subsidies get put into place, it's going to become almost impossible to repeal obamacare. that's because people tend to like benefits given to them. you had 20 million people through medicaid and the obamacare exchanges who have gained coverage under this law the rate of people without insurance has declined precipitously. to come in and do something that takes that away through a bill that changes medicaid, through a bill that reduces subsidies, is just very difficult to do. s what happwhat's happened t

ylan, thank you. let's get more on how this is affecting market behavior today, and our "closing bell" exchange from hightower is with us at most nine and so is kenny polcari and rick santelli checks in from chicago at the cme there. kenny, we were talking about this earlier it would be pretty clear that the algorithms read the headlines about the release of the e-mails and down went the market and it left the humans scratching their heads wondering what the big sdeel about. >> that's absolutely true. technology is fun and cuts both way. you have smart a lg os that do nothing but read headlines and if the word is perceived to be positive then they initial buy orders and if it's perceived negative they initial sell orders everybody said what really happened, and was the headline at all even that negative? i'm not sure that it was so, so negative, but what happens they kick it into high gear and they take advantage because the market is out of line from where it should be and look what happened they sup

thank you, ylan. ylan mui on capitol hill. >>> joining us to talk more about this is cnbc contributor larry kudlow. >> already waving the checkered flag. >> first of all, i really like this statement and maybe we'll try to read between the lines, but the v.a.t. tax was holding things up, and we've buried that several times. kept coming back speaker ryan actually in recent days mentioned it again, i go, hu there's nobody there for you, and now they have made it official so that's really good now let's get on, you know, to the main chance, and some interesting things they real singled out not rates yet so much, but small businesses are going to get a business tax cut that was a very important part of the trump plan that steve moore and i and others drew up, mnuchin and so forth they talked about an interesting statement about expensing. they will have unprecedented write-offs. >> i know you were pushing for this. >> always. it's very important from a cost of capital standpoint, and i'm assuming that mea

for more on the budget, let's go to washington and ylan mui >> under president trump's budget, it woulde 1.9%, which is less than the 3% forecast that translates to 3.6 trillion in revenue over the next decade and one of the reasons why the cbo says that the president's budget does not balance. it would reduce the budget by a third over the next ten years but doesn't eliminate it entirely in 2027, the deficit will still be 720 billion it also estimated that the debt to gdp ratio will reach 880% by the end of the next decade there is one piece missing and that's the impact of the president's tax plan because the white house's proposal, quote, lacked specificity, it could not provide an estimate of its impact also, unlike in previous years, the cbo is not going to be providing a follow-up economic analysis back over to you guys. >> all right just really quickly, we had a short debate here at the desk about what the headline will be out of this and what strikes you? >> well, i think there's a key difference here, which is that the cbo score is static and the administration says they are us

ian ylan, what should we expect? >> a factory in wisconsin is expected to create about 3,000 jobs right now with the potential for that number to grow to 13,000 jobs in the future local media is also reporting that foxconn will likely use about $1 billion to $3 billion in government incentives to make this project happen. that is very big deal for both wisconsin and for foxconn. n now, you can see there sitting in the front rows of the press conference treasury secretary steve mnuchin, wilbur ross, energy secretary, rick perry we're also expecting that the chairman of foxconn, terry go, will be there as well. this was a deal that was negotiated in part with the help of donald trump's son-in-law, jared kushner. and so we will be expecting that announcement to come down very shortly. >> there was also some announcement by soft bank. didn't he introduce terry go to president trump? is there any financial involvement, as well >> what we're told is that this is a deal that the president was very personally involved in. th

ylan mui joins us with more. >> the committee will be marking up the fiscal 2018 revenue and spendingl. the biggest slash point will be the $203 billion in cuts in mandatory spending programs. democrats are planting to offer 28 amendments. that is the maximum that is allowed. and among their key issues are made cade, medicare, pell grants, the border wall, immigration, and of course health care. meanwhile, some members of the house caucus are refusing to support this budget until there is a more detailed plan for tax reform another point of contention, the budget's economic growth the proposal prejekts 2.6% over the next decade. that's less than the white house had promised of 3% growth but both democrats and budget hawks say that is still way too optimistic that growth rate is important because the budget committee estimates an extra $1.le trillion in revenue over the next ten years most of that money would go toward reducing the deficit. but the budget carves out about $300 billion to help pay for tax reform without that rosy growth estimate analysts say the house budget probably wo

you've covered presidents who use salt ylan garage. against the chief of staff and against the president's chief strategist and used worlds like self-fellacio, it's not like something i've ever seen. >> you're smiling. >> norah's being diplomatic. a sex act on himself. >> what are you talking about? >> a post. >> i know. >> how is it physically possible, number one, but when you hear it are you offended or disappointed or saddened by it? this is something where we're listening it, children are listening it, and for the united states of america to use that kind of language on the record of a high-ranking official. >> it's embarrassing. it is just embarrassing for the represents the president of the united states. i mean, look, my standards are not too high, but i've got some. that kind of talk, you don't hear that behind the chuts at the ft. worth rodeo. >> and you've been behind the chutes at the ft. worth rodeo. >> i beaver on the a lot of places, charlie. we're going to look back on this week and it's going to be a turning point. >>

. >>> new plan for the economy with the details in washington >> hi ylan mui >> reporter: the big mistaketalking with working class voters and laying down the vision for the economy today, they go to the tonight any town, senator chuck schumer was there. he says that president trump is better at messaging but he says voters are being disallusion >> donald trump was not the champion working man that he claimed to be. we democrats can answer the calls of millions of americans like these folks i sat next to by offering them a better deal [ applause ] >> a better deal, that's the name of democrats' new economic platform it includes an independent agency to take on the cost of prescription drugs and scrutinizing corporate mergers and cable companies and senator amy klobuchar of minnesota says we have to bring down the prices >> we have to pass down stronger laws so they cannot merge and make things work for the american people. we'll introduce a stronger standard under our antitrust laws >> it is a rural town that went for trump and democrats have been trying to turn it blue for years. guys, 2

regularly on kmcapitol hill so, guys, this would be a very public split in policy back over to you >> and ylane saw the reporter on a short time ago, he tried to emphasize, look, the white house would say, we put this issue to rest a couple of mance washingt months ago, but his report suggests that steve bannon keeps bringing it up i suppose he can raise the issue as much as he likes, it's about whether it will gain any broader traction >> that's right. not cutting taxes on the wealthy is something that is obviously going to be politically popular. however, it could cause problems for the republican party you found that over 200 republican members of the house and something like 46 republican members of the senate had signed on to this tax pledge for americans for tax reform not to raise any taxes. so even though amongst the base it could be a really good selling point, you know, when it comes to republican establishment and republican orthodoxy and principle, this is something that is just a nonstarter >> all right thanks a lot >>> meanwhile, the u.s. making a push for foreign airports to ins

i'm ylan mui in washington the treasury department has sanctioned the president of venezuela nicolasaduro using some aggressive and harsh language the treasury department called marudo a dictator who disregards the will of his people now this comes a day after venezuela had voted to establish a new national assembly to rewrite its constitution the treasury department warns anyone who participates in that process could be exposed to sanctions down the road. another excerpt in announcing this decision. he said maduo has been long involved in abusing human rights and has been involved in systemic corruption. this was a statement made in consultation with the state department we'll bring you more when we have it. >> on any other day this might have played higher in our program but not today. welcome back we've got 29 minutes left in the trading session with a mixed day on wall street the dow up 87 points the s&p up a point and nasdaq down 18 as tech sdwri continues to struggle, and the russell is down as well our "closing bell" exchange, quincy crosby is back with us, the chief market st