valley. addressing that trend will need the help of more willing to protect the past aljazeera.com has all he the stories and more. learnt a tough lesson. opportunity necessarily trickle down. i challenge the man who probably has more influence over your taxes than anyone you voted for. plus, president obama uses the power of the veto pen to rejects a bill authorising the keystone xl pipeline, the political implications, and where the pipe line battle goes from here. i'm ali velshi, this is

"real money". congress at it again pushing us to the brink to score point. this time lawmakers fighting over funding for the department of homeland security, the agency that polices airports and borders. if democrats and republicans don't agree on a spending bill, the agency will likely shut down. rub quantities to block -- republicans want to block president obama's order halting the deportation of immigration. three times the republicans tried to strip the funding. they failed to get the votes. policy aside, scraps over spending by lawmakers - who gets what and how much - are as old as politics itself. the military is a programme that is an exception.

democrats and nosethose on the left thing the government need to fund programs that might be left behind by the private sector. the government should get a grip on spend, but needs to focus the spending on public programs that give taxpayers minimum returns. whatever your spending priorities, there's two things the federal government can do to balance the budget - cut spending or raise taxes. whether to do one or the other or both are political choices that lawmakers debate in congress. the politics breaks down along party lines, democrats willing to raise taxes, especially on the wealthy americans. but contours of today's debates have their roots with ronald reagan, and the success or failure of economics.

>> the u.s. economy was suffering from high inflation and an unemployment rate of 7.5%. together the response will do what has to be done. work. >> to bring the economy under control, a theory, enabled supply side economics was invented. it calls for a massive cutting of taxes, coupled with large decreases in spending for social services. regan lowered the tax rate for the wealthiest americans were 70% to 28%. the theory went that corporations and the rich would stimulate the economy by investing their new tax savings back into the economy, sparking spectacular growth. some called it trickle down economics. critics called it view due economics. regan had to sign increases into law, and despite what george

h.w. bush said... >> read my lips. no new taxes. >> reporter: bush raised faxes and the rate for wealthy individuals too. the dye had been cast, and a conversation around supplies side economics and tax cuts would continue to dominate american domestic politics for the next three decades. perhaps no one person epitomizes the ex-tax movement than grover nor quist. his organization came up with a tax payer pledge. it is has become an influential document of the 20th century. to date, 1,358 lawmakers, including most republicans have taken a fledge not to raise taxes. it made

nordquist powerful. critics charged the iron clad pledge which contributed. some republicans distanced themselves from him. rich to what house speaker john boehner said when asked about nordquist. . >> not often i'm asked about a random person. >> kansas governor, sam brown, a poster child for trickle down economics has become a pariah for the g.o.p. because his massive cuts didn't produce the promised jobs. >> the sun is shining in canvas, different. >> they plagued kansas with a $279 million deficit and a credit rating downgrowed. critics are key to point out that brown's troubles are emblem attic of the movement, tax cuts without the growth, and it could

be a signal that trickle down may be starting to fizzle out david shuster join us now. this is an economic battle. it's almost ideological. it's emotional. if you are identify as a politician, you want taxes lower, democrats are okay with tax increases many want lower taxes, this is almost more emotional. >> they tend to talk past each other. the government - if they spend a dollar you know it's going back into the economy. if you give someone a dollar. maybe they spend it or put it overseas or in the mattress. with democrats, it's better economics if you know the government is spending the money than giving it to individuals. for the republicans it's not just about economics, but morality, and people should have the option. >> you mentioned grover

nordquist. we described him as a powerful ub elected member of politics. how powerful is he? >> 85% of republicans in the senate - nothing is done in the kaub suss unless grover nordquist agrees with it. everyone agrees that for him to sign off on a policy, that policy can be done. if he doesn't give the okay, forget about it. >> the power of americans reform in a presidential election, if jed bush gets the nomination and ... >> that is something i'd see. proof that trickle down economics doesn't approach, i put it to the powerful

antitax advocate. grover

as we saw in david shuster's peace, kansas has been dealing with short falls since a march to zero taxes by governor brownback. he insisted state will be on course. he has proposed a tax increase to stem the tide on alcohol and tobacco. it has grover norquist reasoningry. he is the founder and president of americans for tax reform. i cracked a smile. you hear people say how powerful

you are, i'm curious to your response. people say republicans are not elected if they don't sign your pledge, is that true? >> the pledge is an important tool in communicating with voters where you are on taxes. the tax issue is important and powerful in the united states throughout the history. we were founded as a nation in a tax revolt against imperialism and threatened increases. the federalist lost power after washington and adam. they raised taxes and democrat republicans under jackson v monroe, the party disappeared because of tax policies. it's a powerful, powerful issue, before the civil war about slavery, we almost had a civil war. so, taxes matter. they are where people come into contact with the government. it is the most powerful issue.

>> you shy away - it's american - about how powerful you are. people say you are powerful. they talk for you. let's talk about sam brownback. you don't support the increase, because you say it disproportionately impacts the poor. governor brownback cut spending on social programs, which wouldn't you say affect the poor and working class? >> kansas's challenge has 50 years of overspending. they had a gore or only in the last two years. the argue the problem is conservative republicans, they were conservative republicans recently getting into office. what did happen was that brownback attacked for cutting taxes and phasing out to zero. he won

re-elections, republicans won re-election. kansas legementd the democrat that wanted to slow the move to zero. and they chose to continue. what they need to do is rein in hikes. >> the reality of tax cuts hitting budgets is true. let's talk about ronald reagan. his director david stockman changes that the 1981 tax cut apply a bigger hole in the federal budget. and ronald reagan agreed to raise taxes 11 times, undoing half of the 1981 tax cuts. it had before, happened under ronald reagan, will it not happen in kansas? >> no. what you are looking at. look at all 50 states and the national government. we have a ronald reagan republican party, he was the only regan it in washington d c.

the other piece in your earlier piece, you said that ronald reagan started supply side economics. leaving john f kennedy out who put forward a dramatic rate reduction, enacted under johnson, and in the 1920s after world war i, taking the rate from 75 to 25. and under hoover, we had the collapse in the economy when we raised taxes. when we cut tax in the united states, there's. growth. economic growth is the way to get more revenue for the government, and to reduce the cost of social welfare programs by having more people work and at work. the difference between regan's economy and obama administration. regan's recovery. if president obama grew, 4% instead 4.3, 10 million

americans more would be at work. >> taxes are higher. >> what are you talking about. >> income tax is higher. >> the total tax burden. >> the reduction that ronald reagan involved was greater in the beginning than president obama has been able to do or ever suggested. >> yes, and that's why we this more growth as a result of ronald reagan's policies, when rates - top rate went from 70% to 25%. >> by extension, if you don't have the top rates, can you see a repeat of what happened under ronald reagan. we can't go from the rates now percentage. >> as a percentage, perhaps not. you can reduce the regulatory burden. obama not only spent too much, regulated, but stalled the efforts to get free trade, slowed down the ones that bush had in line and we are thinking about european and asian ones that could have been done.

there's a series of things that obama did wrong to be damaging to the economy and not have the growth that ronald reagan did. >> what he has is remarkable growth under the obama administration. let's go back to kansas. brownback had a target, 2,000 a month that he hopes the state will add. the state added 12,800 for all of 2000. that is well blow the national average. you did say that kansas took a long time to get where it was, and will take time to undo. how long do you do the plan. brownback doesn't have time. >> brownback set in motion a phase out of the income tax. every time revenues come in higher than 2% growth, the rate is ratcheted down. this is not a kansas phenomena. north carolina is on the same trajectory. the governor of maine,

republican governor wants a constitutional amendment to do the same thing. the governor of arizona is looking for a phase out. the governor and legislature in louisiana, mississippi, is embarking on this as well. you have a number of states. what have we learnt? the 10 highest income tax states in a 15 year period lost 2.4 million. the 10 lowest tax state. in my opinion of them have no. they grew 3.8 million. people leave high tax states and move to low tax states. >> a lot of the lower income tax states have lower incomes, like texas. jush refused to sign the -- jed bush refused to sign the anti-tax pledge. doesn't? >> everywhere running signed the

pledge, made a commitment not to raise taxes. jed bush has not been in office for 10 years, he's pre tea party, didn't raise taxes when he was governor, and had some tax reductions and didn't raise taxes. it's awkward for him to make the commitment, because his father broke it. heap has -- he has to decide thou run as his own person, not fix dad assist mistakes. >> today republicans are threatening to defund the department of homeland security. you are a supporter of immigration, and you called immigration into america our greatest asset. are republicans making the right move? >> have you a challenge: 2007 when bush pushed for comprehensive immigration, it

was president obama who killed it with key votes, and came in with a letter saying this is over, it's written up in "the washington post" at the time. for the first two years of obama administration's presidency. he had superchoices. for two years, every day he wok up, didn't do it, went to bed. >> i'll not challenge you, you are never wrong. now we are today, it's 2015. are republicans doing the right thing, threatening to shut down homeland security. >> the president is not signing legislation to fund homeland security, he can blame who he wants. we need to do h1 b visas. there's bipartisan support, we can pass it in the house and senate. the president threatened to veto the reform, because it didn't

give him anything he thinks he wants. i don't trust him, neither does the congress. he fibbed to us for too long want. >> that will not get his anywhere. >> it's not, which is why he needs to sign the h1 b visa reform. that can pass. >> grover norquist, the founding president of americans for tax reform. one controversial thing we did not talk to - president obama vetoed the keystone xl deal. republicans are angry. the fight is not over. tell me what is on your mind by tweeting me at ali velshi. keep it here. >> you know how they say that everybody has a pupose in life? well at one time i felt that selling cocaine was my purpose. >> we was starving just looking for a way to succeed.

>> the first time i seen rock cocaine was 1980. >> the murder rate was sky high... >> south of the 10 freway, was kind of a no man's land... >> ...you know... we're selling it to the blacks... so you go into these neighborhoods there's no cops, you can sell where you want, and when they start killing each other, nobody cares! >> i was going through like a million dollars worth of drugs just about every day. >> ...like gold... we can make a fortune... >> he was maybe the biggest guy in l.a. >> freeway rick was getting his dope from a very big operator... i think we're into something that's bigger than us... something we really can't deal with. >> they had been trafficking on behalf of the united states government. >> she could prove what she was saying... >> crack in the system

president obama made good on his word today and vetoed a billion the keystone pipe line. it's the first veto. the president will decide whether to approve the pipeline from canada to nebraska after all the environmental and regulatory reviews are complete. in vetoing the legislation the president said it was an attempt to circumvent a process to determine whether a cross-border pipe line serves the national

interest. it is opposed by environmental people. joining me to talk about in is david shuster, and diane francis, an author who wrote a lot about keystone, and environmental issues. no surprises, david. the president was clear he would do this. >> this is the president saying it's the administration that decides whether it's a good or bad idea, and you can't use executive authority acting the way congress did. does that mean it's done. >> it's not congress's decision. the president will have to wait. before making a decision on the merit. >> do you believe there's any likelihood that he might approve the keystone. >> john kerry at the state department will say don't do it.

the president will follow the recommendation, they'll have cover and say the experts looked at this. it doesn't help the u.s. economy at all. by the way the environmental concerns are too great. he needs the cover first. lot. >> it drags on. >> there's lots of pipe lines across the continent. i don't think people realise how many there are. it's weird. the oil is flowing, and the net result is that oil is flowing on rails that are more dangerous. >> exactly, there's 51 pipe lines crossing the border, this is the 52nd. it's a biggie, there's no question. until the environmentalists convince everywhere to make it illegal, oil will get to the mark, and at these prices oil is getting to market. environmentally this is more dangerous than any pipe line, because we have something in the

order of 3 million barrels a day in tank cars going through the center of cities. you've covered them. you know, this is the environmentalists' fault. when you look at the other parties, and i include the canadian government and the energy companies. no one foresaw this. this looked like a deal that would happen. if we could rewind the tape and do it again, what would the differently? >> that's a good point. it's a very audacious gigantic project across the lands. you are acting a lot of people from a lot of justices to say yes. the republicans leaped on it and politicized it. it could have quietly happen, like the better -- alberta clipper, obama agreed to that.

why did they judge on it, the coke koch brothersare the recipients. they lobbied, it shot it in the foot. i think this is a cautious president. let's not forget times changed. there are concerns. i get that. >> imagine that. there are something got politicized and didn't happen in washington. this is par for the course. we talked to grover norquist earlier. the fact is that everything is politicized. will happening. >> i don't think so. there may be stop gap bills. you may see other issues punted, but you will not cabinet long-term solutions pass the. >> they may break more, but we will not see fixes. >> exactly. >> what are we asking. >> they don't have the votes in

the senate or the house. all they can do it take it to 2016, assuming the president decides it's a bad idea. it's legislation for the future, and hold it over members of congress and a"look at this guy. he doesn't care about the economy or oil prices and could be a tool. >> except that oil is $50 a barrel, which takes the wind out of those sales. do you think oil will go up? >> i think it will. it's a lot to do with keeping it around the table. saudi arabia did that, keeping it down for that reason, to keep iran out. there is a proposal to take the oil sands gunk, it would require presidential permit. by pipeline to valdez. >> by ship. >> to anywhere in the world. seattle, mexico, china, japan. >> and the canadians have to

spite themselves. >> great to have you here. thank you so much. diane francis and david shuster. here is a taste of what is coming up tomorrow 10:00 pm eastern. [ ♪♪ ] just when you thought we were done with cuba, not cheese. rum wars are heating up as the