tv Squawk Alley CNBC January 19, 2018 11:00am-12:00pm EST
good friday morning. welcome to "squawk alley." we're awaiting a white house briefing on a potential government shutdown. this was originally scheduled, we thought, for 10:30. so we hope to see it in the next few moments. as soon as it brings, we'll bring it to you live i'm carl cat quintanilla at pos nine american express after earnings last night and the senate is going to start deliberations once again this morning, begin debate at any moment to avoid a government shutdown for more on that, we'll get to eamon javers. >> that press briefing was supposed to start a half hour ago. dwoen we don't expect to hear a lot of particulars about how they're going to hand will a shutdown.
we expect to hear the politics vounldi voun surrounding this and the way forward wlachlt is t forward. what is the deal they prepare to put on the table i got the note that the speaker's office sent to a lot of members of the media placing blame on democrats for this potential shutdown they say first to the point there is no objective way to look at what is happening here other than democrats are forcing the government to shutdown whether you think that's good politics or bad politics, that's what they're doing and they're quite open about that so that's the republican position on. this the problem for republicans is that they will need a lot of democratic votes in order to pass this bill in the senate so the question is where are the 10 to 12 democratic votes that they think they might be able to get? there are ten democrats in the senate who are running for re-election this year in states that the president won that would seem to give the president at least some leverage over some of the democrats but they're going to lose some republicans so they might need a dozen senate democrats to vote with them here not clear what the deal is at
this hour that breaks that logjam and brings the votes across for the remembers we'll wait and see all right. eamon, we'll be coming back you to for background what could hop if the government shuts down. let's talk about the effect. >> carl, we are hearing from some government agency that's have begun to update their contingency plans in the vent of a government shutdown. roughly, 850,000 federal employees are expected to be furloughed another million workers who are considered essential would have to stay on the job but they wouldn't get paid and this affects every agency from the national park service all the way over to the military the department of the defense just this week updated its own contingency plan saying it would expect to continue operation that's are necessary for the safety of human life or the protection of property that includes continuing to prosecute the wars in afghanistan as well
as operations against al qaeda and against isis over here back in the u.s., this also could create headaches for the irs which, of course, is dealing with the start of a tax filing season as well as implementation of the massive new tax law. 57% of employees at the irs would have to stay home in the vent event of a government shutdown they would continue to process tax returns. but if you have a question about the return or new tax law, no one will be there to answer the phone. some other numbers that are coming out from other agencies, 83% of workers at the department of labor would get furloughed. half of those at the department of health and human services would also have to stay home six million small businesses could get hit by delays in processing some of the financing and some of the loans if the small business administration has to shut down back over to you >> all right thank you. we'll be continuing to watch that all day, of course. meanwhile, in tech, ibm in
the red despite posting revenue growth for the first time in 23 quarters a cautious forecast among the factors pressuring the stock this morning last night on "mad money," the head of ibm global markets explained to jim cramer how tax reform will impact the company's future >> tax is a head wind in 2018. the tax of our tax rate to go up is tax reform. we've been supporters and remain big supporters of tax reform because over the long term, right, ibm always manages over the long term, over the long term it's going to free up capital and gives us a territorial system so we can invest on par with our competitors. >> part of what is happening with ibm are earnings. they reported pretty unusual quarter. they got new main frame product out for first time in three years. and that's really good for revenues but on the whole, not as good for profits. the question is what happens in the second half when the year over year comps on main frames get more challenging i tried to hint about this a
couple days ago at the endst show, are the tech companies generally like tax reform but in the short term, a number of them are going to be taking a hit to profits if they have lots of cash sitting overseas because they're being taxed on that generally up front that's potentially a challenge to old tech titan who's are highly profitable and have lots of cash overseas but are still trying to convince wall street of their growth prospect >> still strategic comparatives. 50% of revenues was the target they got to 49 as we've seen as a sign of progress and then, of course, tail winds, 3% currency alone. >> it would have been 1% if not for the tail wind. >> i think just the fact they said they're on track to grow revenue overall for 2018 is, you know, pretty notable when you look at almost five years of declines for this company. >> we'll see it whether we book it, right? >> yeah. >> let's bring in eamon javers there is some discussion about the argument among republicans
that democrats are actually holding this up. does that get more difficult if they can't deliver a full 51 >> the republicans control the house, senate, and presidency. so the public expects the republicans run the government and will be able to do what they said they would do in terms of managing the government well the problem is that democrats will be needed to vote on this they're going to need 60 votes to pass this bill. so the expectation is they're going to need 10 to 12 democrats to come across that's why republicans are saying it's the democrats who are holding it up even though there are likely to be some republicans in the senate who don't vote for this bill they say that democrats are the ones who are blocking this by insisting on a daca measure that is the deferred action for childhood arrivals measure that democrats would like to see in this we're only talking about another short term funding bill. the house passed bill last night would just extend the government funding to february 16th so we'll have to do all this over ghen a monagain in a month
they're sort of legislating, keeping the government open on a month to month basis, not on a year to year basis anymore as thinged used to be when the appropriations process and the legislative process up on capitol hill worked in the traditional way. those days are gone. and now we're in a situation where we sort of lurch from crisis vote to crisis vote that's how it's going to continue as long as democrats and republicans are so deeply split over so many issues, carl. >> yeah. people joking, not very funny, but joking about funding bildz that ta bills that take us down to four hours, four minutes and then four seconds kayla, what's the possibility? the president tweeted different things since january 9th about daca in that meeting he said his positions would be whatever the people in this room came up with and then later, of course, said that the bipartisan daca deal was a big step backward. could there be evolution in this hearing today? >> that's swhaernl lawmakers are hoping they seem to be scratching their head about exactly where the
president stand. you remember after the home land security hearing, linlddsey graa said that the president was flip-flopping between meetings in a space of two hours he seemed to get bad advice from the staff and changed his mind last night on the floor the majority leader said that he wasn't exactly sure where the president stood on this. senator jeff flake, one of the bipartisan members who is leading that group on immigration talks also said that he also wasn't sure where the president stood on this and the only way to figure that how the is put a bill on the floor, pass it in both the house and senate and then see what the white house does it's unclear to lawmakers exactly where the white house stands on immigration. but it is clear that they feel, republicans feel like they're negotiating in earnest if they can just get the government funded for the next 30 days. the talks will continue but democrats are trying to call their bluff and say no we need a shorter window otherwise, this will go entirely too long and we won't get the deal that we want.
>> all right kayla, thank you we'll continue to monitor the white house briefing meantime, president trump's campaign and presidency has been marked by his use of twitter as his primary mouth piece. what has it meant for that social media platform? julia boorstin has that answer >> with 46.8 million followers from the 13 million he had before he was elected, he's used the platform as the personal mouth piece daily. sometimes tweeting over a dozen times or more in a single day. so how has twitter benefited from his use of the platform aenlt exposure that twitter gets from all the tv news attention to all of president trump's tweets twitter shares are up about 41%er since the inauguration a year ago but it's unclear how much the president has helped boost users or engagement.
as the end of the third quarter, twitter reported 330 million users. that's up just 4% or 13 million users from the year early ear quart -- earlier quarter. anthony noto saying of twitter's fourth quarter 2016 earnings, the quarter he was lekted, there was no quantity take theive impact from the president's use of the platform built he said the president's use of twitter broadened the awareness of how the platform can be used and shows the power of twitter now twitter, of course, has been called upon to ban the president aand certain tweets drew criticism for insighting violence among other things. but twitter officially said just earlier this month that it would not block the president or any other world leaders who use its platform saying that censoring them would hide important information that people should be able to see and should be able to debate so the president will continue to use twitter daily, i'm sure back to you. >> all right thank you very much, julia boorstin
still ahead, dallas and austin are in the running to be the home of hq2 for amazon the governor of texas is going to join us next. one of bitcoin's fixes here, yes says it's not an investment, it's a loaded roulette wheel as you know, we're waiting on vemepress briefing on the gornnt shutdown. we'll take you there live in a moment
amazon narrowed the list to 20 cities yesterday. the next guest is a governor of a state with two candidates on that list, texas governor greg abbott joins thus morning. governor, great to you have back good morning >> good morning, carl. great to be with you, thanks >> dallas and austin how do you choose between your two children in this case? >> they're both great -- listen, you and your viewers know that cnbc consistently ranks texas either at or near the top in your best states for doing business and there's a reason for it. that's because we have low taxes and reasonable regulations but here's what you don't know and that is i was at a ribbon cutting for an amazon facility in texas already and i asked the executives why is it that you want to keep coming to the state of texas and i thought they were going to tell me it's because of the low regulatory environment and low taxes and high quality of life and low cost of living, but what they told me instead meeldly was is because of your topnotch workforce. what people don't know about the state of texas is because of our
pro found universities, we are cranking out one of the very best workforces in the entire united states of america >> governor. i'm embarrassed to do. this we're going take viewers to the white house briefing on this potential government shutdown. hope to check back in with the governor >> still surprises me and i've been through some of these before, that the democrats and the senate are opposing a bill that they don't oppose they're for clean crs. they're for the extension to the chip program m support the delay and the taxes most specifically the medical device tax, cadillac tax, they don't oppose anything this the bill. but they're opposing the bill. i just want to let everyone know that we don't want this. we don't want a shutdown but mr. schumer insists on it. he's in a position to force this on the american people from an o & b perspective, we're involved in managing a lapse or
a shutdown and we want to make folks understand that we look very different than it did under the previous administration. one thing that i've learned since i've been in this office is that there's no other way to describe it but the obama administration weaponized the shutdown in 2013 what they didn't tell you was this they did not encourage agencies to use carry forward funds. carry forward funds, funldz they were sitting on. nor did they encourage agencies to use transer if authority that they could have made the shutdown in 2013 much less impactful. but they chose to make it worse. the only conclusion i can draw is they did so for political purposes so we'll look different this time around. we've also got -- we asked questions, taken questions about specific o specifics on that. mark short is here to give you a brief update and then we'll take questions for a few minutes. want to go ahead
>> thank you all for your time this morning as mick said, last night the house passed a bipartisan bill with 230 votes the president stands ready to sign that bill to deep the government functioning and afloat it appears unfortunately that senate democrats are entrenched in forcing a xwlounshutdown i think there is a lot of hypocrisy in this town there are ironies to point out as the director said nancy pelosi called them, "i call them legislative arsonists" in referring to those voting for a shutdown at the time, commenting that they're there to burn down what we should be building up in terms of investments and education and scientific research. chuck schumer said at the time, it's sort of like this someone goes into your house, takes your wife and children hostage and then says let's negotiate over the price of your house. in essence, that's the same tactic they're deploying last night i'm sure many of you
know, y'all asked senator feinstein her position and she said that the government shutdown, people will die. it's a question how is she going to vote? she said she hasn't decided yet. people are going to die, i don't know how i'm going to vote on this so here we are i think the reality is this is not about policy it's about politics. as mick said, we're not familiar with anything in this cr that the democrats are opposing in fact, they chapel ammon and support the chip program this will reauthorize it for six years, i believe new studies says there are nine million children getting health insurance through that program the reality is that we will jeopardize payments for our military and our troops and those serving on the front line of our country both at customs and border patrol, ice, those are trying to protect our borders and protect our country. this is a serious issue. we are frustrated, obviously, because mick's job is to submilitasubmit a budget to congress does he that in february
congress has months to complete appropriations process the fiscal year ends on september 30th we're now in mid january it is frustrating that we're in this position. but what's unclear is what is it the democrats asking in order to get out of a shutdown? it seems they're hell bent on getting to a shutdown. we want to make sure the troops and those on the front lines are continuing to get paid >> mark? >> so a couple things on that the democrats want a deal on dak yachlt the president on the other hand tweeted last year that our country needs a good shutdown isn't he getting exactly what he asked for? and was the president, as i'm sure you know, the last time we had a government shutdown he said the president's responsibility to lead he needs to get the players in the room he needs to lead so how is he going to lead on there? >> a couple points there one, the president was very
active yesterday in bringing together the house votes to get 230 votes. he was speaking to freedom caucus members i think that was where we had the best challenge yesterday and he helped get that bill accomplished i think he's making continued calls this morning he's called both bipartisan members today. he'll continue to do that. he is leading on this issue. on regarding daca, we feel that the administration has put forward our plans on this. keep in mind that secretary kelly a year ago went to congress and said we need a solution on daca we asked congress to fix you it. we knew what was going to happen when several states sued the federal government over obama's unconstitutional policy here we gave themplenty of heads up and warning on this back in the fall we submitted our priorities to congress in october. we then refined those at their request to say this is too much. we negotiated against ourselves and down the the list to say here are practical things to get to a deal on daca. we put forward that plan we think right now, you just saw a study a couple days ago that
showed 2,500 people on the terror watch list are trying to get into this country every year that is 7 per day. seven per day. we think it's time to fix the immigration problems in our country. we put forward a proposal to do that we're continuing to have conversations. i think we had productive conversations yesterday with leader mccarthy and steny hoyer, senator durbin and senator corbin i think they're making progress. what doesn't make sense is to say we're going to shut down the government just because you're making progress but i need something else >> mark? >> let me ask you a couple questions if i may did the president's comments about s-hole countries, what responsibility does he bear for the challenges to come to a deal >> go back to what the mark said what are the differences between where we are now and where we were in 2013 the president is working to try
to pro ventevent a shutdown that is dramatically different than what president obama was doing in 2013. i was there. i was involved heavily in. this it is my belief that president obama wanted a shutdown in 2013 because he thoughts republicans would get -- the president actively worked all day yesterday to try to get a bill through the house. and continues conversations today. so there's no way you can lay this at the feet of the president of the united states he is actively working to get a deal >> so why not bring leadership here >> i think the president's bipartisan conversations, i'm not privy to his -- >> why not have a conversation in person? >> i'm not privy to the meetings that the president may or may not be having. yes, sir >> mark, i know we're talking government shutdown. this is an important topic for the expected 100,000 people or more taking part in the march for life today i want to x. the 20 week abortion ban is fast track to the senate, when do you expect a vote why does the white house want a vote if it's likely to die >> i think this administration
is continuing to defend life from the very beginning. the vice president last year was the first vice president to speak to the march for life. the president is hosting people here to protect life it's an important issue for this administration you saw with reversal mexico city policy, the president looked to make sure that we're making sure that taxpayer dollars are not used overseas to fund abortions that is a commitment of this administration we don't have a date as to when the senate will vote as to your question whether or not it fails or passes, we think it's important for this administration to be on record in support of life if i could go back to second to last question about bringing the years over here. keep in mind that we had a bipartisan meeting here that the president organized with leadership to try to get to a resolution on daca out of that meeting, discussion was after the press departed, discussion was that the four leaders, mccarthy, durbin, cornyn and hoyer would be the ones organizing the meetings moving forward to get to a
solution that's what we've been part of so when you ask why isn't the president bringing members over here, he did he tried to reach the biggest issue they say is their question which is shutting down the government over illegal immigration. he is trying to solve that problem and brought them here for that conversation. >> you commented and said sh this was the schumer shutdown. how can it be the schumer shutdown when republicans control the white house, the house, and the senate? >> come on, you know the answer to that as well as anybody i have to laugh when people say that we control the house and senate and white house. why can't you get this done? you know as well as anybody that it takes 60 votes in the senate to pass a appropriation bill you know that. >> i know that >> so if you only have 51 votes in the senate, you have to have democrats support to keep the government open. that's the answer. >> the president asked congress to come up with a solution for the dreamers congress was in the room members of congress were in the room with the president last week seemed to be a fairly productive meeting. and then the whole process got
blown up and when republicans tried to -- if i may it seems the whole process was blown up by the president's comments >> republicans tried to add -- when republicans tried to add a discussion about obamacare to the funding process in 2013, we're accused by nancy pelosi and chuck schumer of inserting a nonfiscally, a nonfinancial issue into the spending process in order to shut the government down how is that not exactly what is happening today? there is no reason that you have to deal with daca this week. there is no reason you have to deal with daca before the end of february -- excuse me, middle of february daca doesn't expire until march 5th. this is an attempt by the senate democrats led by senator shumer to try to get a shutdown that they think this president gets blamed for >> you're saying that you need democrats' support in the senate. >> we got it in the house. >> are there any concessions that this white house is willing to make to try to get support from those democrats that you
need >> again, go back to what i said at the opening, they don't oppose anything in there they support chip. every member of the finance subcommittee, democrat voted for this exact chip extension. they don't want the cadillac tax to go in place they always supported clean crs. ordinarily we put up a clean cr. it worked in the house. >> it is take it or leave it on the bill that passed the house so democrats have to support the bill in the house for us to -- >> democrats should support the bill in the senate again, the house passed a bill the senate has a couple different choices. they cannot take it up either they take it up and pass it tea it up and don't pass it or change it and send it back to the house. the point of the matter is that there are things on this bill that they like they have nothing in this bill that they do not like. the only reason they are not voting for it is they want other things to be added to it and they want a shutdown that's the only explanation we have yes, ma'am >> they want -- the main thing
democrats want is daca and you said before, many of you said everyone agrees they want a solution on daca so what is the big sticking point on your end about including a daca fix in this bill >> i think mark mentioned that earlier. the bill is simply not ready you don't get to vote on a summary. there is a move work as you see with any other major piece of legislation. it doesn't come together overnight. there is no daca bill to vote on and there's no emergency in terms of the timing on daca. daca does not expire until march 5th. there is no reason to tie these two things together right now. >> i want to follow up it's important to remember that, yes, we're approaching the march 5th deadline built the president put forward what he asked for last fall. we've been asking congress to address this and jim back to your question, the reality is there is no legislation for them to pull up. they say there's this flake, durbin graham proposal there is not legislation to vote on so when they say we need to have
daca solved before you do a continuing resolution, there isn't a bill for them to even vote on which i think shows this is really about politics and not really about policy. >> i think general kelly will tell you that he mentioned this to the senators during his confirmation process this administration has been trying for at least a year now to get some progress on daca it's congress that is taking back >> let me start with mark and then i have a question for you you've been the one up there on capitol hill every day what i'm getting from the podium if it happens, it's the democrats' fault what is the practical matter can you do between now and midnight tonight to change the equation and get people onboard zblfr jo >> i think one of our challenges, it's not clear what the democrats are asking for i accept that you're saying they want a solution to daca. but there is not bill text that they're asking republicans to bring up so i think that they really believe for political reasons it's better for them to force a shutdown the president is continuing to reach out to them.
he'll continue to do so throughout the day he is actively on the phone. that's what he'll continue to try to do saying what is a solution you guys think will be necessary? we frankly think that giving the children's health insurance program, something the democrats asked for, reauthorized and for six years was something that would tract democrat votes it doesn't appear that's the case >> if i could you to the other big story is the cfpb and request for zero funding are you looking to reduce funding there? what is the current role for english and does she continue to draw a salary? >> six questions at once i won't speak to litigation with miss english we do intend -- he can asked for no money this quarter over at the cfpb we didn't think it was necessary. cfpb has $177 million nin the reserve funneled and able to operate off that that is the reason that we asked for no money this quarter.
we continue to ask for the fulfillment of the cfpb. we'll focus on the statutory mission and we have plenty of money in the bank to do that yes, sir last question. yes, sir >> thank you very much you mentioned that daca is not an immediate need now because of the march 5th deadline you know that is the sticking point for many democrats so for people who are sitting at home and they're wondering if there is a government shutdown, how long would this last could this potentially go weeks like last one was 16 days especially since you're talking about the march 5th deadline what is the realistic time frame of how long -- this is for either of you -- a shutdown could potentially last >> you all have seen and talk about immigration and y'all have seen the quote from mr. schumer from 2013 but i'll read it again. it's sort of like this, we could say we're shutting down the government, we're not going to raise the debt ceiling until you pass immigration reform. itwill be governmental chaos there are scam mexamples of tha bernie sanders, what they're
saying -- bay ty the way, there of me of the group trying to force a debate on obama care repeal what they're saying to the american people is maybe we have lost the presidential election maybe we lost seats in the senate and house this is sanders talking. it doesn't matter. we can now bring the government to a shutdown, throw 800,000 hard-working americans on the street and we're going to get our way no matter what this is exactly what they accuse republicans of doing in 2013 there is absolutely no reason to have to insert a daca discussion, immigration discussion into the funding bill today. >> the reality is it's there how long should people expect -- >> yes >> can you expand upon that? >> sure. a couple different things. again, omb is responsible for sort of managing the lapse, managing the shutdown. the military will still go to work they will not get paid the border will still be patroled they will not get paid fire -- folks will still be filting the fires out west they'll not get paid
the parks will be open people won't get paid. you can see the list there are a bunch of things when you look at compared to 2013, but don't lose sight of the fact that we're asking the military to work without pay. we're asking firefighters to work without pay t it's still harming the people zbl . >> what different? >> parks will be open this time. they weren't before. let's go down the list the parks will be open the way it works is that the parks are open but especially if the services are provided by third parties. but things like the trash won't get picked up. fannie mae and freddie mac will be open, post office is open, tsa is open but all these people are working for nothing which is not fair we'll manage the shutdown differently. we're not going to weaponize it. we're not going to try and hurt people especially people that have to work for this federal government we still need congress to appropriate the funds. look that's all the time we have.
we'll be doing this again. thanks very much >> all right obviously talking about the potential shutdown which mull vainy put the odds at 50% or 60%. he said there is no way you can lay this at the feet of the president of the united states who by the way, eamon javers scrapped his plans to travel to florida tomorrow night because of this. >> that feels like a press briefing from a white house that feels like they're heading for a government shutdown later on today or at least at this hour they feel like that is a real possibility. not a the love talk about additional concessions or negotiations they're going, to it sounds like, simply force the democrats to vote on this and see if they blink. while that was all going on, we got a new tweet from the president highlighting a comment from one of the democrats. the president about five minutes ago tweeting out a twoet quoquog
shutting down the government is a very serious thing people die accidents happen i don't he know how i would vote right now on a cr. so they're highlighting the idea that it's the democrats cha tthe going to cause a dramatic problem. nick mulvaney is saying a shutdown this time is less severe than last time. they said that obama administration weaponized the government shutdown and they're going to do a much more moderated version of a government shutdown by forcing government employees to show up for work without being paid. they'll be able to keep a lot of the essential government services open even though that will be a sacrifice for those thousands and thousands of workers and members of the military who won't be getting an immediate paycheck, carl >> eamon, i think it is short making the point that there is not daca bill stechtext specifi, but democrats are saying they want to avoid a shutdown what would democrats say to that what do they want that would
really end this shutdown discussion in the shorter term >> what democrats said is they want a long term daca fix. they don't want a short term extension or anything. they want a resolution to this and presumably they would argue that you could do that in relatively short order in terms of all the different legislative proposals hammered out over the past year or so. take one or two of those off the shelf and make that the bill republicans, as you heard, making the argument simply not ready yet. they're not ready to cut that deal dhoen they don't want to put daca in this deal because they don't want to do it with this time pressure and political pressure on a must pass bill. they would rather do it as an independent stand alone bill which gives them a lot more flexibility to negotiate all of the particulars inside that daca deal >> eamon, thank you for that to help us wrap that up, kayla is in washington >> i was listening in to what the senate majority leader is saying he's going to put this bill to a
vote soon and put senators on record saying who is in his words patriotic and actually willing to vote against this it's worth noting that some in the house leadership are suggesting members should stick around for the weekend in case there is any procedural back and forth. you heard nick mulvaney and the white house saying if they make any changes they could kick it back to the house and go back and forth in this little game. but many members of the house have already left for the weekend. this memo was sent fairly late in the game. we've seen people already leaving the capitol. so essentially if many republican members, if a sizable number of them have left, then the choices are either the senate can take up the existing bill and hope that it has the votes or the government shuts down we'll see whether the speaker and the deputy whip's office have been able to get enough republicans to stick around to actually potentially field any change that's were made. and we'll see exactly whether this vote timing comes n i reached out to leadership on the
senate side and still waiting on details on when exactly mcconnell hopes to bring there to the floor >> a lot of travel schedules in flux this afternoon. thank you for that kayla tausche. we were talking about amazon hq 2. i hope you don't mind fielding a question about how this could potentially impact your state. >> well, it would be enormous for the state of texas it would be transformtive with regard to not just where we are but where we're going. but look how seamlessly it fits into what we have. many people are familiar what silicon hill is austin, texas, and the dynamic high-tech workforce that we have there connected with the university of texas. but a lot of people don't know is there are actually more tech based workers in the dallas-ft. worth area to show you how seamlessly we could incorporate amazon in this -- they want to create 50,000 new jobs. in just this past year aloerngs the dallas-ft. worth area added more than 100,000 new jobs
alone. so this will be very good for the state of texas but also it would be very good for amazon to open the hq 2 in the great state of texas >> immigration a big topic for the state of texas are you frustrated to see that so intertwined with this spending bill? >> well, i think texans as well as our fellow americans want to see the immigration issue solved obviously texans as fellow americans want to see the budget solved and the spending solved i will add on top of that, we're fully expecting congress to step up and do its responsibility to provide funding for the state of texas in this recovery of hurricane harvey just as they did in the aftermath of hurricane katrina and super storm sandy. there is a lot of business they have to take care of and we expect them to take care of business >> governor, it's no the just amazon looking for new campus space. of course, apple already has a facility in austin they say they're building out
another significant facility over the next now years. have you spoken to them about that >> i have. i've spoken to mr. cook about what's going on here in texas as you articulated. many people don't know apple's second largest campus in the world is right here in austin, texas. you all may or may not know but oracle sl building a huge 27 acre campus in austin, texas again, we see tremendous tech growth in the dallas area. so the tech advancement in the state of texas is growing very rapidly. amazon would dove tail into that very elegantly >> what do you think you're going to have to do to get that additional apple campus? has apple given you any specifics on what they're looking for? what types of workers they're looking for for that additional campus they're looking to build? >> obviously, it's still early stages but they're looking for a well qualified workforce.
as we were articulating later, what amazon executives made clear to me is what i heard every ceo across the country when they move to texas, i say why do you come to texas the first words is the same thing. they have the workforce and they can accommodate the needs of apple and amazon >> governor, on another topic, the other day page one of the "houston chronicle" was all about the worries that are beginning to arise in your state about nafta. >> nafta is very important everyone agrees it needs to be updated. also everyone understands this has been very good for the united states workers as well as for the state of texas the state of texas leads the nation with regard to exports to mexico and i think to canada also so our export-import
relationship with mexico and canada has been very profitable to our bottom line we do want to see nafta updated. we want to see it continued. i believe when the sun sets on this it will be continued. i'll share with you this that is that i know from talking to my fellow governors especially in auto producing states, especially in midwestern states, the states that have the blue collar workers and the president is appealing to it, i know first hand from those governors, they share the same position the state of texas does that is they want to see nafta continued. again, i think when the sun sets on this, nafta will be continued. >> finally, one last thing on amazon there's an irish book maker that has odds on all the different cities austin is near the top 7-2. dallas, 20-1 your office is in austin everybody in texas loves austin. they all go to austin before back to their cities are you going favor austin >> listen, i'm going to favor texas. and i will support both the dallas area as well as austin.
texas is imcomparable. i think that the two final ifiss should be dallas and austin. >> governor, thank you for your time and patience today on this day where we're also monitoring potential shutdown good to see you. >> you too thanks and as we head to break, a quick check on stocks at this hour we've got the dow down slightly, about 48 points. the s&p 500 and nasdaq slightly in the posite.iv more "squawk alley" straight ahead. and the wolf huffed and puffed...
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let's get to the santelli exchange with rick >> hi, carl. thank you. i'd like to welcome my guest, dr. robert borrow. thank you for taking the time. >> glad to be here >> listen, what i want to talk about is the research that you did with i believe charles redlic regarding how tax cuts translate into gdp growth. before we get to that, there's a lot of talk. we just heard the probability by mr. mulvaney of a shutdown between 50% and 60%. your thoughts being somebody who monitors the economy and gdp and growth are there any lasting effects to a shutdown that you can point to >> i don't really think there are any serious economic effects. it should be a temporary thing it may have political influence and then maybe through the political influence that might affect some policies that are
enacted whether about defense spending, health care spending or other kinds of effects like that >> all right now let's go back to the tax cut. many believe that the problem with these tax cuts is that they create debt. my question is always been a question i want to ask i think you're just the man. when we get the growth and you think that for every marginal tax cut of 1% over five years you get a .5% increase in gdp. me question is then why don't we use the extra money to pay the debt directly? doesn't that make sense? if we generate more gdp and ignore the extra debt, isn't that a choice? >> on the individual side, it ended up being a pretty substantial cut in marginal tax rates. i do expect that substantial effect on economic growth from that as you outlined i think that part of the tax plan is going to be close to revenue neutral in the short run. there were things that raised revenue but also cut marginal
rates. i think there will be a growth effect i think that part will actually produce a move towards a surplus. i don't think there is an issue there about the problem of more federal debt >> okay. now what about the corporate side, on the pass throughs >> corporate side is different i think there will be a very important long run effect on capital accumulation, on worker productivity and wages but growth effect although it will be important, it will be spread out more over a longer period of time i think there you'll get a move towards fiscal deficit in the short run when you losing revenue in terms of accumulating money from corporations. i think in the long run, it will actually move towards a surplus. but that would be a very long run effect in terms of the corporate side >> so most of us that cover the markets are used to an expression that we're never going to pay off the debt but we're going to change the metrics in other words, the ratio of debt to gdp will move in favor
of gdp and lower the percentage of debt in gdp isn't that just synonymous with saying the debt didn't reall purposes your final answer. >> you know, i think debt relative to gdp is a good way to look at it i think if it gets large enough it can be a problem. we're not quite in that zone yet. the real question is how are we going to deal with a debt situation? are we going to raise other taxes? >> exactly listen, we're out of time, dr. barro. you basically said it. when we have savings through growth, we find other ways to spend it and that's never directly paying off the debt dr. barro thank you for your time jon fortt, back to you >> thank you, rick santelli. it has been a wild week for the price of bitcoin it's a wild day. up 4%. it's fallen more than 15% this week on fears of tightening regulation joining us now at post nine is jeffrey robinson, author of the
book "bit con: the naked truth about bitcoin. you're a brave man in this era of people hot on bitcoin to maintain your position welcome. >> the truth will always out listen in, the last 36 hours, some interesting things happened in the bitcoin world starting with the ceo of visa who when asked if they would go to bitcoin, he said, no, it's a lousy payment system and then yesterday the sec refused to authorize bitcoin to candy cotton investment stopping only short of selling the brooklyn bridge. that tells you what they think of bitcoin >> and yet, 2 1/2 years ago or so, you said, talking about people who have been holding bitcoin at that point, many of them will treat themselves to a vacation or a new computer with their bitcoins and they don't buy back in. there is no evidence of people who spend down their wallets will buy back in little by little
it will just atrophy because nobody is using it. >> nobody is using it. nobody is using it >> it's above $11,000. >> and that's a bubble i'll tell you something, i blame this network for bringing on the snake oil sellsmen that tell what you a great investment invt it is not a currency >> just be clear, we're only supposed to have you guys on >> yes, or let me face them. serious journalism requires serious skepticism you can't let them do cost on because they are trying to pump it everybody interested in bitcoin and these snake oil salesman who pump this stuff should google in quote the theory of greater fools because that is what they are all about. there is no use for bitcoin and don't tell me the block chain because all that development is done without bitcoin the block chain is a failed experiment it is not a currency it is not anning a s asset valu medium of exchange >> so what is it >> it's a bubble, a gamble
>> even visa ceo told jon it could be considered a commodity, splaek differen speculative commodity. >> and it is being taxed as a pretends commodity so they have explaining to do and money to pay in capital goods to the irs this is a loaded roulette wheel. you're better off in vegas, the food is better >> we are seriously skeptical as well, which is why i asked the visa ceo that question and yet people continue to trade in bitcoin. what should the government do with something like this that is technologically advanced, has a lot of backers, but is difficult to regulate? >> there is nothing of technology about bitcoin what should the government do? you kncan't legislate stupid it te tell people this is a questionable investment.
vegas, the house always wins the snake oil salesman will win. little guy will lose it is foolishness. look up tulip mania, it explains everything >> so who is getting it right? i know you say snake oil salesman >> people investing in the block chain. don't forget, 1849 the gold rush, the miners didn't make any money, it was the guy selling picks and jeans. wheelbarrows >> continued spirited defense of your position and your book. thank you for being with us, jeffrey robinson take a look at stocks getting closer to session lows down 61 here following the white house briefing about a potential shutdown which we'll watch this afternoon. more squad squawk alley returns in a moment. quad squawk alley r in a moment. uad squawk alley rei a moment ad squawk alley returnsn a moment d squawk alley returns
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with he wielcome back. pressure on big tech continues to pile up today, the cover of the economist is the new titans and how to tame them accompanyingorial is a pseudo memo on strategies to avoid pitfalls of potential regulations written by our next guest joining us now alexandra, good morning. >> good morning. >> so what do you think big tech should really do to avoid this wholesale product changes or
break up >> so i think the first thing to consider is what the real criticisms are and tech is an industry that really embraces a acronyms so we suggested there should be a new one called bad we say tech is accused to be too big, anti-competitive, addictive and destructive to democracy the solution to the problem depends on which of those you consider to be most serious. i think the big is bad camp wants to see the tech firms potentially broken up or shaken up our view is that that is too dramatic and if these companies will ultimately benefit from winner take all markets and the network affects that helped produce those, then breaking them up will only create another winner down the road so that is not a solution. we are more in favor of enforcing existing laws when it comes to competition so looking at m&a with much greater scrutiny, make sure tech
firms are not suppressing rivals in search results or on news feeds and really enforcing the existing laws before taking drastic steps. >> when you have an acronym like baad that you are working with and you take a look at the shares of these big tech companies, are investors taking this seriously enough? >> investors have so far considered the anti-tech rhetoric just to be political grand standing i don't think investors think that the actions taken by regulators are going to strongly affect the tech firms. you can look at last year's performance of alphabet, google's parent company, the european union levied $2.7 billion fine, the market barely blinked. i think that there will be more political pressure on the tech giant especially leading up to the 2020 election. i think whoever runs in 2020 is going to do so on an anti-tech platform and beat up the giants.
i think google, facebook and amazon are most at risk. and so it is something that wall street is waking up to more. rbc put out a note a couple weeks ago looking at the top ten internet surprises for 10 20 18 a 2018 and said regulatory action was number one, although it was unlikely that it was higher than the market suggested, the probability of it. >> does that get harder do when apple and amazon are holding beauty pageants, getting governors and mayors to line up at their door? we talk about tech under pressure, but it feels like mayors under pressure programs a bit more because people want jobs at these companies. >> that is a great point these are bizarre times. in one camp it pays off to barb big tech in europe, in america it really pays off with. uhe list bases in another sense, these services and these companies that produce these services and products are
incredibly particular. the thing to remember is that these giants do on not employ as many people as previous giants of other eras did. and so i do think that they are vulnerable i think the fact that they are promising jobs with amazon's new head quarters shows that they understand the vulnerability and it is a form of soft power and lobbying to try to create these job and distract attention from their quasi monopoly position. >> and when amazon can raise the price of prime with confidence, it shows that there is more than just the iphone that issed add t addicti addictive. alexandra, thanks for joining us dow down 60. we'll continue to watch the developments regarding a potential shutdown this afternoon and tonight. if we make it through that, next week is cholk full of earnings, nine dow components, 77 s&p
components ge on a wednesday, which has not reported on a wednesday in four years. never reported on a friday in four years >> and that will be one of the big ones to watch. s&p almost 400 trading days without a 5% reversal. no volatility here >> over to the judge thanks so much welcome to the halftime report our top trade, the bull case for stocks two strategists with two big targets with us today on why the rally is far from over they defend the calls with our panel and debate what risks could derail the outlooks. with us for the hour today to discuss where your money will work best is josh brown, jim laventhal and mike wilson says stocks are likely to
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