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Glenn Beck

The Economy in English; Bush Pushes for Offshore Drilling; Should U.S. Give Mexico Money for Border Control?

Aired July 15, 2008 - 19:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

(BEGIN VIDEOTAPE)
GLENN BECK, HOST (voice-over): Tonight, the fallout continues from the big-government rescue in the Freddie and Fannie fiasco. But what does this mean? What does it really mean to you? The stakes are high. And I`ll show you how high they are.

Plus, as Republicans and Democrats argue on who`s doing what about our energy problems, I want to know why they`re wasting their time and our money on political games rather than real solutions.

And what happens when Congress gives money to Mexico to combat drug violence on the border instead of -- oh, I don`t know -- our side and the sheriffs on our border? It will make blood shoot out of your eyes when I tell you this one, and it`s all coming up tonight.

(END VIDEOTAPE)

BECK: Hello, America. I have been trying to give you an hour of television that won`t make you scream at the TV.

Going to start here with Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke. They both testified in front of the Senate Banking Committee today in Congress. Jeez.

The discussion was about the dollar, which has declined to a record low against the euro as credit market losses continue to hurt the U.S. economic world. Blah, blah, blah, blah. It`s like a Charlie Brown teacher. I don`t even know what they`re talking about.

Too much of the news about the economy seems -- maybe it`s just me. Does it seem like it`s written in another language and doesn`t mean anything at all? Tonight, I`m going to try really hard to lay out the situation for you in plain English, because it`s pretty big, and we all need to address it.

Here`s "The Point" tonight. We`ve had financial problems in the past, but this one is different. The stakes are much, much higher. It is no longer bad business as usual. And here`s how I got there.

Lately, everybody has been talking about the failure of Bear Stearns and IndyMac and the shaky status of Fannie Mae and Freddie Mac. The real - - the reality is -- is that our economic crisis is not just about bank failures. Y

Do you remember back in -- where was it, in the late 1980s and `90s, there were all those closures and we had the big Savings and Loans scandals? Thousands of banks failed. What`s the deal? We`ve done this before. Well, if you only look at the banking problem, today`s problems with only a handful of home institutions seem pretty small. Not so fast.

I`ve been telling you for two years of the coming global storm, and here it is. The perfect storm has formulated. Today, we`re living in a different world. You must step back and look at the big picture.

Today, we work and live in a global marketplace. And you know what? It`s like we`re an irresponsible teenager with our first Visa card. America has screwed up her credit and continues to do so every single day in the marketplace. A lot of people borrowed too much money. A lot of banks got greedy and lent too much money. Individuals defaulted on their loans, which caused banks to default on their loans.

Meanwhile, the federal government is spending money on hookers and everything else. Well, that has sent a ripple effect across international financial markets, and it is about to turn into a tidal wave.

Take a minute. Let this sink in for a second. Foreign countries no longer think we`re the best credit risk. And if they haven`t caught on yet, they`re about to. Just like that careless teenager, you know, a bad credit rating results in what? Higher interest rates. When they try to go get a loan, it`s tough.

When you talk about a country with a bad credit rating, higher interest rates are bad for you. You try to go get a mortgage or a credit card, you know, home equity loan, that interest rate is high. And that means pretty much everybody in America. But higher interest rates, when you -- when you go out and try to buy a car, you can`t. Higher interest rates for America means you can`t finance the planes and the warships and the Social Security for our old people.

All of this means the American dollar is weaker, and we have less buying power. And it could get bad quickly. That causes inflation when our dollar becomes weaker. The government prints more money. It dilutes the value of the existing money. And guess who pays the ultimate cost? You do, as always.

Here`s what you need to know tonight, America. Our weak dollar is getting weaker, and it is driving up commodity prices, like corn, natural gas, electricity, oil, food. Have you bought cornflakes lately? I`ve been saying this for months: when oil goes up, so does the price of everything else that you buy. And, as importantly, as the dollar goes down, oil goes up even more.

To sum it all up, we`re in the perfect storm. There are a lot of steps along the way, but America`s credit rating with China or whoever else we`re borrowing money from, and the value of our dollar in Bangladesh has a direct effect on what you pay for a hamburger and gasoline and how long you keep your job.

And if the geniuses in Washington can`t get that through their thick heads and turn things around soon, forget about comparisons to Savings and Loans in 1989. We`ll be talking about comparisons to 1929.

Steven Moore writes for the "Wall Street Journal," and Bob O`Brien is the stocks editor for Barron`s Online.

OK, let me start with -- let me start with you, Bob. Draw the -- draw the road on how this bail-out that, really, nobody cares about -- you know, the average worker is like, "What do I care about, you know, Fannie Mae and Freddie Mac?" Draw that line from that bail-out to the price of diapers.

BOB O`BRIEN, BARRON`S ONLINE: Well, they are going to case about this thing, because it is just basically a straight line. I mean, effectively, what you`re talking about is a prospect of as much as a trillion dollars that ultimately comes out of the tax rolls. That means that the federal government is going to have to turn around, raise more money through the sale of treasury securities. The more they sell, obviously, the higher interest rates go, the more money that the federal government has to pay those people who are holding the paper.

That means that inflationary pressures are going to persist here. That means, you know, you`re looking at something like $4 a gallon a gas when you pull up to the pumps. You could be talking about something closer to $5 or $6. Corn prices likely to go through.

And the most pervasive problem that this represents is that that housing recovery that we`ve been looking for, for the last 18 months, that`s basically going to be pushed off to some point far down the road.

If you`re thinking the housing market was going to recover sometime late 2008, that`s a pipe dream at this point. Start putting the 2009 handle on that recovery. And it`s not even guaranteed that we`re going to see it last year.

BECK: OK. Steven, do you remember when we had dinner? I don`t even know when it was. Do you remember?

STEVEN MOORE, "WALL STREET JOURNAL": I do.

BECK: And you looked at me and said, "Glenn, I mean, I know you`re concerned, but you know, we`re fine. And I`m worried about the dollar just as much as you are, but it will never happen. The real concern is if it ever would fall into a freefall, but it never will."

I`m a bear. You`re a bull. Are we at that point yet? Jeez, Steven, how much more can they do to debase our dollar?

MOORE: Well, when we met a year ago, I was a bull, but I`m a bear with you now. And you know, the root of evil in this economy is exactly what you`ve been talking about: the collapse in the dollar. I mean, the dollar is starting to resemble the peso, for goodness sakes. It`s weaker than the Canadian dollars It`s fallen relative to the euro, all these other currencies. And it`s the reason that everything is so expensive.

BECK: At what point, Steven, does the rest of the world -- because we convince the rest of the world that we were going to be the gold standard.

MOORE: That`s right.

BECK: And so they pegged everything to the dollar. At what point do these countries say, "You know what? I`m getting out of the dollar?" And that`s -- then it`s over.

MOORE: Well, it`s happening right now. It`s one of the reasons that all these commodities are so expensive. It`s one of the reasons that the U.S. economy is going into the tank, because foreigners are not investing in dollars any longer. They`re investing in other things.

Look for example, at the -- Glenn, at the price of gold. Gold is nearly $1,000 an ounce. Just seven years ago, it was $300 an ounce. So what that means is people are selling their dollars because they don`t think it holds any value, and they`re buying gold. That`s what they did during the Depression.

BECK: Bob, you know, I saw something, and maybe you can help me out on this. I saw something, you know, Paulson was talking about the full faith in credit of the United States is behind these two institutions.

O`BRIEN: Yes.

BECK: And I, as a citizen, I`ve never, ever thought this before. And I thought this, this weekend, what the hell does that even mean? The full faith in credit in the United States? It means it`s damn near worthless to me.

When do you see other people waking up to that, globally speaking, and say, "You know what, America, I don`t think you`re a good credit risk"?

O`BRIEN: Yes. You know, what Steven said, I think it`s already started to take place here. And you have a full faith in credit -- that full faith in credit thing is something that we sort of adopted when we went off the gold standard however many decades ago and basically said that the dollar is going to be worth 100 pennies, because we simply say the dollar is worth 100 pennies.

BECK: Does either of you address this? The S&P, I guess, are the people that give the credit ratings for countries and everything else. So they said that if Fannie and Freddie fail, what will happen is they`ll have to downgrade our credit standing in the world, which means we`re going to have a harder time borrowing money and everything else to run our country. What does that -- when do you -- when do you guys start telling me, "Guys, we`re on the verge of 1929"?

MOORE: I was thinking when you were talking, you know, maybe if we had -- it would cost Congress a little bit more to borrow, it wouldn`t be such a horrible thing. I mean, they borrow so much money: $500 billion this year. And that doesn`t include the $50 to $100 billion that it`s going to cost to bail out Fannie Mae and Freddie Mac. Then they want another stimulus package? That`s another $100 billion.

This starts to add up to real money, and it`s all being borrowed or it`s all being financed by Ben Bernanke churning the printing process, which is what makes the dollar weak in the first place.

BECK: Guys, I`ve got to run. I just need a yes or no question. At this point, do either of you think that we`re headed towards the abyss of 1929?

O`BRIEN: No.

MOORE: No.

O`BRIEN: Not that -- not that desperate.

MOORE: No, but it`s going to be bad.

BECK: OK, thank you.

Coming up, President Bush continued his heavy push on Congress today to lift their ban on offshore drilling. Great idea, but why now? I`m sorry for being a skeptic, but is this a real energy solution or the same old politics as usual? Find out next.

Plus, which presidential candidate has a better tax plan? Between these guys? Neither. I`ll explain why both of these guys will have you digging deeper in your pockets. And the numbers are staggering. Don`t miss tonight`s "Real Story."

(COMMERCIAL BREAK)

BECK: I don`t know how they do it with a straight face in Washington, I really don`t. Coming up, Senate Majority Leader Harry Reid says the oil companies should start using the land they already have to drill for oil. Well, I heard that this morning. I was like, yes, that`s a good point, until I did five minutes of research.

The problem, Harry, is you can`t drill for oil where there is none or you won`t allow them to drill where there is oil. Crazy, isn`t it? What is it going to take for Congress to stop wasting our time and solving these problems? Well, find out in tonight`s "Real Story."

But first, good news. Been hard to find, you know, down in Washington, D.C., so Republicans have been practically doing cartwheels down Pennsylvania Avenue today when President Bush announced that, again, he was lifting the executive ban on energy exploration in the Outer Continental Shelf.

A reminder came to us today when he gave a speech about it.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The only thing standing between the American people and these vast oil resources is action from the U.S. Congress. They should match the action I have taken, repeal the congressional ban and pass legislation to facilitate responsible offshore exploration.

(END VIDEO CLIP)

BECK: If it was only that easy, huh? Well, not only does this move feel a little like a little too little, a little too late, but I have to ask myself -- my spider senses are tingling -- why now? I mean, it`s not like gas has been free for the last 7 1/2 years of the Bush administration.

Democrats are saying this move is nothing more than a political stunt. It`s going to take years to affect the energy prices, and that ban on drilling won`t be fully reversed, you know, until we take action.

And then my favorite, the oil companies aren`t taking advantage of the offshore leases they already have. We`re going to get to the last one in tonight`s "Real Story." Blood shooting out of your eyes.

So this move, did it mean anything?

Byron King is an analyst and editor of "Outstanding Investments."

Why so long, Byron? I mean, this -- oil, the price of oil is destroying wealth in this country like nothing else.

BYRON KING, ANALYST AND EDITOR, "OUTSTANDING INVESTMENTS": Why so long? I couldn`t tell you why. I suppose President Bush had other things on his mind for the last 7 1/2 years.

BECK: Well, why not a month ago when he originally said, you know, Congress has to move and move now? I asked the spokesperson at the White House, "Wait a minute, why didn`t he remove his?"

"Well, Congress has to -- two keys, you know."

KING: Well, here`s one. I can answer that one. You have to know how things work in Washington, D.C. I mean, the president might want to do something, but he`s got to staff it through all these different agencies. And everybody gets a chop on it. You know, people have to make sure that they all have their little fingerprints and sprinkle their holy water on it.

You know, I mean, it was a good idea. It should have happened a long, long time ago. I mean, it happened today. It`s about time. Thanks a lot. You know, now let`s move forward and, you know -- you know, let`s have an energy policy in this country.

BECK: Nancy Pelosi -- it`s on the bottom of this screen -- says the Bush plan was a hoax and that it wouldn`t reduce the price of gas. What does it take for people to understand, if you hate speculators, they`re all trying to get rid of speculation, if you hate speculators, they will speculate that the price of oil is going to go down if we, all of a sudden, have an energy policy. How do they not understand that?

KING: Well, Glenn, the futures markets, by definition, are all about the future. And if you look into the future and you see shortages, you`re going to bid the price up. If you look into the future and you see some sort of surplus or additional energy, you`ll bid the price down.

I mean, you know, talk about political hopes, you know, with Nancy Pelosi so is drilling the Strategic Petroleum Reserve. I mean, you know, it`s the strategic reserve, not economic reserve. We don`t like the price, but there`s no interruption in supply. We can get oil. We just don`t like what we`re paying for it.

BECK: Didn`t we just -- we`re starting to drill in -- off the coast of Alaska in waters that are 45,000 feet deep? Is that right?

KING: No, no. First Petroleum or BP, they`re about to drill wells that are 45,000 feet long. From the surface, it`s about 10,000 feet deep.

BECK: OK.

KING: But they`re driving eight miles under the ocean bed. The water is very shallow. There`s lots of ice. You`ve got all these problems. You can`t lay subsidy pipelines.

We needed ten years just to develop the technology, we in the oil industry and the United States. It took ten years to develop the technology just to be able to do this. You know, when they said, "How come you didn`t you drill this lease? You had it for all these years." Well, you know, it took ten years to get the technology to be able to do it.

BECK: OK. Byron, what does this tell you? This should send a signal to America that the easy oil, you know, the Jed Clampett going out and shooting and bubbling crude comes up, that`s over. If BP is spending ten years to figure out technology to bring this to the surface, the cheap, easy oil is over.

KING: Oh, yes. We`re on the backside of the oil curve on this one. All the good stuff -- I mean, I`m in Pennsylvania, the home of the American oil industry. Colonel Drake found oil in 1859 at 69 and a half feet. Now I mean, you`ve got wells offshore that are being drilled in 6,900 feet of water and, you know, then it`s a 30,000 foot well beneath the seabeds. So you know, you don`t do that if you can find oil cheaper and easier somewhere else.

BECK: You`re not against -- this is the part I don`t understand. I`m not against new technology. I want new technology. I want hydrogen cars. I want all of these things. We`ve got to have solar power, wind power, and everything else. But people don`t seem to understand even the meat that they buy in the supermarket is in a Styrofoam tray, plastic, Styrofoam everything, made with petroleum.

KING: Well, actually, the meat is made with oil, too, because you know, the corn was, you know, fed the cow, you know, grew on a farm that -- you know, where there was a tractor, and they had natural gas-based fertilizer and pesticides and everything else. So I mean, you know, we eat oil in this country. We don`t think so, and this sounds kind of gross, but really, when you boil it all down, that`s what we do.

BECK: OK, Byron. Thanks a lot.

KING: Now, we`re going to switch gears and go to Congress approving a bill that would send over $400 million to Mexico to help them combat the drug cartels along the border. But the question is how much money are they giving our own law enforcement officials on the border? Well, not even a doughnut. Cops like doughnuts. Not from Washington.

And as energy prices continue to be unstable at best, the value of the dollar is continuing to fall. You would expect both presidential candidates to try to find ways to save you money come tax time, right? No. You`re going to be paying a whole lot more no matter who you vote for this November.

(COMMERCIAL BREAK)

BECK: You know, I`m going to tell you, I wish the Morita -- the Morita Initiative was a summer Blockbuster with Tom Cruise or maybe a new Robert Ludlum novel, but it`s not. It`s a Mexican aid package that this year alone is going to send more than $400 million worth of training, equipment, and intelligence south of our border.

Now, according to one Democratic congressman, the program is going to help improve Mexico`s crime capability and their strengthening of the country`s judicial system. Yes, you know, here is the problem. It`s not like Mexico doesn`t need the help, but let`s share the wealth.

First of all, haven`t we Ben down this road before? And second of all, the same bill that gave Mexico $400 million denied U.S. border sheriffs a quarter of that amount.

Arvin West is the first vice president of the Texas Border Sheriffs Coalition and the sheriff of Hudspeth County.

Sheriff, let me start here. Didn`t we do this exact same thing before, and it didn`t go well? Those arms were turned against us?

SHERIFF ARVIN WEST, HUDSPETH COUNTY: Absolutely. I mean, we have done this a couple times. And we`ve seen it time and time again, that they -- they -- whatever we sent Mexico, ultimately, we end up having to combat on the border.

BECK: OK, so now you`re a sheriff. You have 15 officers, right? And those 15 -- well, 14 plus you, and you guys are supposed to patrol 5,000 square miles.

WEST: Yes, sir. That`s correct. Approximately 5,000 square miles with approximately 100 miles of U.S./Mexico border.

BECK: You sleep very much?

WEST: Well, as much as we can.

BECK: Yes. I know Laredo is down about 80 deputies. They don`t have it. Everybody -- you guys are screaming for what? You`re outgunned, right?

WEST: Absolutely. I mean, the only -- the only initiative of help that we`ve had is from Governor Perry of Texas. A year ago, he started helping us. And by giving us money, and able to put our officers on the street to work.

The only problem is, is that money has since -- has dwindled down, because the state can only afford so much, one. Two is the fact that the - - the officers that we do have out there working, they`re working on an overtime budget, and these guys are -- they`re just worn out. There`s no other way to put it.

What we`ve asked Washington, what we`ve asked Congress is to allocate some money where we can hire officers to put on the street, kind of like the cops program that was initiated for the larger metropolitan areas. But -- and when they were passing this bill, we were kind of excited about it, because it was going to be two-fold, even though we knew Mexico was going to get money and even though we were going to have to battle some issues with Mexico as time went on. We`d at least have something to work with. Well, as it stands, they`ve cut that -- cut us out from any kind of funding. And therefore, we`re still stuck with the same issues.

BECK: Do you have any allies? I mean, do you see any end to this? I understand that you`re a Democrat. Is Barack Obama the savior here? Who`s going to save -- who`s going to us?

WEST: You know, from my perspective, the only hope that I think we`ve got out there is with Senator McCain.

BECK: Holy -- holy cow. Really?

WEST: I had the opportunity to spend a little time with him. Now, keep in mind, we`ve been to Washington nine times trying to meet with the president, and he refuses to talk to us. We`ve had Senator Ted Post send him a letter. He refuses. I did have the opportunity to talk to Senator McCain. Although he supports the initiative, he still...

BECK: Go ahead.

WEST: He still -- he still is going to support us.

BECK: All right. Thank you, Sheriff. We`ll be back with the "Real Story," next.

(COMMERCIAL BREAK)

BECK: Well, welcome to the "Real Story."

After President Bush announced yesterday that he would finally lead by example and remove the executive ban on offshore drilling, we got the Democratic response. But this time, instead of citing ridiculous environmental concerns or another stat about how much evil oil companies are making the Democrats pulled out a new excuse out of their bag.

(BEGIN VIDEO CLIP)

SEN. HARRY REID: They`re not using the 68 million acres of federal land they`ve leased. We want oil and gas companies to drill for oil on the leases they have been given.

(END VIDEO CLIP)

BECK: Ok, the leases that they have been given, you mean the ones they`ve bought? Perhaps you should consider hiring a research, senator before you use this excuses in public. Yes, oil companies do have millions of acres leased from the government, but the real story is the vast majority of those acres are likely worthless.

And the ones that aren`t are wrapped up in special interest tape, and you know it, senator. Leasing land is great, but you can`t just drop a drill bit anywhere in the ground or just say, look. I mean the days of the Beverly Hillbilly`s are over.

You have to survey the land, you have to explore it, and it all costs money, which by the way, the government is trying to take away through your cute little windfall profits tax; an idiotic idea that would reduce exploration even further.

Here is the key difference between Harry Reid`s land and the outer- continental shelf. Some has oil. The other does have oil and gas. We know it does. But even when oil companies do strike gold on land that they`ve leased, they`re still not always allowed to exploit it.

Listen to this one, in 1984, Chevron leased the Destin Dome. Ok, this is a geological formation in the Gulf of Mexico. They leased it from the federal government. Now, over the next ten years, Chevron invested in exploring the Dome, and they found an estimated 2.6 trillion cubic feet of natural gas.

That is enough by the way, to supply a million homes for the next 30 years. But to get the gas, Chevron needed more state and federal approvals. Their land lease, it only allowed them to drill, not to actually take the gas out of the ground. How stupid are these leases?

So in 1996, they applied for approval. Tick-tock, tick-tock, no response. Two years. Florida finally decided, yes, we`ll answer. Application rejected.

Chevron appealed. Two more years went by. No answer.

Chevron had to sue, and that`s when they finally got their final answer, the government has decided to buy back the land and put a new moratorium on drilling at Destin Dome.

By the way, that last one was a present from George W. Bush. So Harry, I`m pretty sure that the oil companies would just love to drill on the land that they already have, but you have to give them land that actually contains some oil and some gas, and then, here`s a key point, you have to get the hell out of the way and actually let them bring that oil and that gas out of the ground and to the market.

Max Schulz is a senior fellow at the Manhattan Institute Center for Energy Policy and the Environment. Where do I have this one wrong, Max?

MAX SCHULZ, MANHATTAN INSTITUTE`S CENTER FOR ENERGY POLICY: Glenn, I don`t think you have it wrong at all, I think you have it entirely right. Someone who is very cynical about the motivations of politicians might say that Harry Reid and his colleagues are engaging in some gross demagoguery. But I`m going to be charitable and say that he just passes basics wrong about how this lease work about economics.

BECK: You know what Max, I`m not going to give this to the Democrats or the Republicans anymore. I`m a recovering alcoholic, former DJ, a self- educated man, and I can figure this out. Somebody who`s running this damn country cannot figure this out? And there`s no excuse.

SCHULZ: It really is very sad, I mean but I will say that if this is the best argument that opponents of drilling can come up with, it`s a very, very weak one. It only took a sentence for Harry Reid to explain what his opposition was that these companies aren`t drilling on the leases that they`ve been given.

And there are a number of fallacies involved there. For one thing, they haven`t been given this land. As you pointed out these oil companies spend billions of dollars to buy leases. And when you buy a lease, you`re not buying any sort of guarantee that there`s oil and gas underneath them. All you`re buying is a lottery ticket.

In fact it is more high stake gamble than that because these companies have to invest billions of dollars into determining whether there`s any oil and gas in them in the first place, and then they have to go through the permitting approval, go through the environmental processes, to see whether it`s going to be possible to extract these resources and get them to the market.

It`s very time consuming, it costs a lot of money, and a lot of times these leases don`t have anything in them. If the company isn`t drilling in a lease it`s not because they`re just sitting on it, it`s because they found that they can`t make any money off of it.

BECK: Ok, I`d like to know, is there any example of any country, let`s say Russia, with gas problem -- is there any example of any country that is not obstructionist, doesn`t have an obstructionist government that has an oil company where they just sit on gas and oil to make the prices go up?

If they have the land and they have the right to drill, do they pump it out? Is this a uniquely American problem?

SCHULZ: Well, I mean in most other countries where they have big -- you know, big oil companies, they`re government-owned, and the governments are often in the business of trying to maximize their profits. So they`re going to exploit the resources if they have them.

In the United States, our companies are privately-owned and they have to put up with all sorts of obstacles and obstructions that our policymakers both on the state and the federal levels throw at them. It`s an odd situation.

BECK: It kills me, Max. I mean it doesn`t make any sense. For what people are expected to believe, that big oil controls everything, big oil is really running the show, yet big oil has to spend ten years fighting for a lease that they can`t get.

SCHULZ: Well, they have to fight for these leases and then they go before the various regulatory bodies and (inaudible) ask for permits and they beg for permits. They come cap in hand a lot of times. And for the privilege of doing this, they pay a lot of money. And they pay money on these leases whether they produce. And they pay royalties on that oil and gas, but they also pay money on those leases in terms of rents, even if those leases provide nothing.

BECK: All right. Thanks Max.

Now I have to give credit where credit is due. Barack Obama announced yesterday a great idea. He would like to give small businesses a 50 percent tax credit for providing health insurance to their employees. Great idea.

Here`s the "Real Story." Obama`s tax adviser, I think is Cybil -- I mean serious case of schizophrenia. How is it that incentivizing small business through tax credits is a good idea when it comes to health care, but a horrible idea when it comes to virtually everything else?

Obama`s tax plans would hit America`s small business like a bag of bricks. From massive social security tax hikes to new CO2 permits and taxes to an increase in the actual tax rates. Obama`s plan will massively raise taxes on the most important business, successful small business.

Just to give you an idea, "Fortune" magazine estimated that someone making about $603,000 a year would pay an additional $116,000 each year in taxes. Think about that. On top of all of the other taxes that they`re already paying, Obama`s plan could mean that some people would walk away with just a third of what they make. You could be working for the government until August every year.

If you`re really successful in this country under Obama and you make over $2.9 million, you`ll pay an additional $700,000 more in taxes. And the worst part is our politicians will give all of that money to the people who are not working for that money. Instead of keeping it with those who would open up new stores, buy new equipment, hire new employees. Have you ever accepted a job from a poor man? They don`t create jobs.

It`s pretty important considering that small businesses are responsible for creating 60 percent to 80 percent of all of the new jobs in this country. Whatever happened to the idea that success, even outrageous success, is a good thing in America? These days it seems the more you dream, the more you realize those dreams, the greater penalty we make you pay for them. It`s wrong and un-American.

"Wall Street Journal" economics editorial writer Stephen Moore is back. Stephen, average person says good, screw the rich. But this affects the average person. They may not see their tax rates go up, but what are the ramifications for this for the average person?

STEPHEN MOORE, ECONOMICS EDITORIAL WRITER, "WALL STREET JOURNAL": First of all, Glenn, I don`t think the average American believes in the soak the rich philosophy. Most Americans don`t hate rich people; they don`t hate Bill Gates or Tiger Woods or people who are successful in America.

Americans want to be successful, they want to be rich, and they don`t want to pay 50 percent, 60 percent taxes if their ship comes in. So that`s, I think a fallacy of this Robin Hood Barack Obama strategy of soak the rich and then give the money to the poor.

The other problem, you just put your finger on it, Glenn, two out of three of these high-income people who would pay the higher taxes, two out of three of those people are small businessmen. If you raise their taxes, how are they going to create more jobs?

BECK: Let me ask you this. Right now as it stands, the top 10 percent of Americans pay 80 percent of the entire bill.

MOORE: Glenn, you don`t understand, they`re not paying their fair share.

BECK: They`re paying 80 percent of the entire bill to run this country; the top 10 percent. Under Obama, how much more are they going to be paying?

MOORE: Well, you know what? I`m going to make a prediction to you. He wants them to pay closer to 90 percent, but the history is very clear on this, Glenn. And you and I have talked about this. Every time we`ve tried to raise taxes on the rich, the rich have paid less tax. When Ronald Reagan and George Bush and John F. Kennedy cut tax rates, the rich paid more.

BECK: Because they made more.

MOORE: That`s right.

BECK: Yes, but he doesn`t understand that.

MOORE: He doesn`t.

BECK: You know, the other thing that nobody in Washington -- I don`t think John McCain even gets this -- we`re in a global market now. Who the hell is going to invest in this country when we need investment, foreign investment more than ever before? Who is going to invest in this country when you`re going to get soaked for doing it?

MOORE: It`s a real problem. I think it`s one of the reasons, Glenn, the stock market is down. I think it`s one of the reasons the dollar has been falling. You and I have talked about that many times on this show.

It`s the root of all evil, the collapse of our currency. And it`s because we have gone from 20 years ago being one of the lowest taxed countries in the world. Under Barack Obama, we would be one of the highest taxed countries in the world.

BECK: Well, we already are number two, are we not?

MOORE: Well, we`d move to number one.

BECK: At least, we`re number one in something.

Thanks a lot Stephen. That`s the "Real Story" tonight.

Coming up, the road to recovery for troops injured in war is tough, but our next story is true inspiration. This is a story we have been waiting to bring you for two solid years.

(COMMERCIAL BREAK)

BECK: I`m excited. Tonight, we have "Real America" brought to you by CSX. It`s something that we have been trying to bring to you now for two years.

I introduced you originally two years ago to Jake and Vanessa Keysler. Just five weeks after Jake lost both of his legs in Iraq, we have followed them over the last two years and we have watched as against all odds they have rebuilt their lives.

Remarkably, Jake got back into scuba diving, rock climbing, skiing, fly fishing. I feel like a head in a jar next to this guy. He`s gotten into almost every single activity he did before he got hit. Except for one thing; he wanted to get back on to a motorcycle.

Last year, I asked is there anybody that would be willing to help Jake recognize that dream. Well, Bill Hatten called. He answered that call. Bill owns a custom bike shop in a small Michigan town. He and his amazing staff built a custom bike from scratch.

Recently, they along with hundreds of veterans converged in this small town in Michigan to honor one man`s sacrifice and to celebrate another man`s incredible generosity.

(BEGIN VIDEOTAPE)

BECK: Some call this the sound of freedom. The sound of motorcycles, hundreds of them, fill the air on this beautiful spring morning as veterans, the Patriot Guard, friends and family gather outside. Cool city customs to honor two men, Bill Hatten and Jake Keysler.

UNIDENTIFIED FEMALE: Both of them are heroes in our eyes.

BECK: Everywhere you look, motorcycles, American flags and jackets worn with pride of past wars fought. You could say that this is the heart of America right here in this small Michigan town off a stretch of a country road aptly called Divine Highway.

UNIDENTIFIED MALE: These are our brothers.

BECK: Today is the day Jake will realize his dreams he`s had since he lost both of his legs in the Iraq war two years ago. Today, Jake is going to get back on a motorcycle.

UNIDENTIFIED MALE: I want to personally thank every individual that is here today to witness what we did for Jake.

BECK: This day wouldn`t have been possible without Bill Hatten. He`s the man who stepped up to the plate to build and donate a custom motorcycle for Jake.

BILL HATTEN, CUSTOM BIKE BUILDER: It`s my sincere privilege to have built this bike for Jake.

BECK: Today, Bill and his talented team are about to unveil this extraordinary motorcycle. There`s no better man for the job. You see, Bill is also a double amputee. He lost both of his legs in a tragic highway construction accident in 2004. So he knows how important it is for Jake to get back on a bike.

HATTEN: The wind in your face and the rubber on the road, and you`re riding with friends. It`s almost like a healing experience.

So without further ado, here we go.

BECK: The bike is beautiful and especially built for Jake`s special needs, right down to the kick stand.

JAKE KEYSLER, FORMER SOLDIER: When he unveiled it and showed it to me, it was like -- I can`t believe -- the picture came out of my head right onto the ground and it`s reality.

Time to go riding.

BECK: And here is one of my favorite parts. Before they set out on the road, they take a moment to bless the bike.

UNIDENTIFIED MALE: Father, I ask you to put a blessing on Jake and Vanessa as they ride. May this bike always be an example of this tenacious spirit that`s inside of Jake.

VANESSA KEYSLER, JAKE KEYSLER`S WIFE: It just feels like gratitude. Like every moment that we`ve -- that we`ve had to do kind of has culminated into today. It`s very powerful. Very powerful.

BECK: Watching Jake at this moment, slowly making his way towards the highway to take his monumental ride flanked by the Patriot Guard, by friends and family, this is one of those pivot points; a defining moment in a man`s life, a defining moment in Jake`s life.

As pivotal as the first time we met Jake just weeks after the explosion. As pivotal as the time we cheered for Jake as he learned how to walk in his prosthetic legs. As pivotal as the moment Jake and Bill met for the first time last December. And now this.

HATTEN: It was freedom from the second we pulled out. And I knew when I was riding neck to Jake today and looked over at him, and I knew he got it. You know, he got that freedom.

J. KEYSLER: It`s unbelievable. You know, I`ve gone through so much in the last two years. To be able to get back on a bike and motor on down the road, that bike`s got a lot of power.

V. KEYSLER: Bill is one of the most amazingly decent human beings I`ve ever known. I watched both of them today side by side. Not a leg between them. And just doing what they love to do.

BECK: Bill has given Jake the gift of freedom, a freedom to feel the wind on his face and forget for a while about what he lost in the war, what he lost in the name of freedom, as these two extraordinary men cruise down divine highway. The blessing given earlier in the day resonates now loudly, profoundly. May all their rides be filled with good roads and beautiful skies.

(END VIDEOTAPE)

BECK: You want to learn more about Bill Hatten and his incredible generosity visit his website at www.coolcitycustoms.com.

That is tonight`s "Real America" sponsored by CSX. It`s how tomorrow moves.

(COMMERCIAL BREAK)

BECK: Well, let`s go to the nation`s capital for more insanity. Washington, D.C., they just had that handgun ban that the Supreme Court says "huh-uh." So District of Columbia decided to craft a new emergency law because you cannot have responsible gun owners walking around willy- nilly while owning guns responsibly.

The new version of the law that they just enacted is, it`s crazy; not exactly pleasing to the lawyer who beat the original ban. He said, quote, "the semiautomatic ban is clearly unconstitutional because the overwhelming majority of handguns that people use in the United States are semiautomatic."

This new law, to me, seems an awful lot like the old law, meaning you can expect tons of lawsuits coming to a court near you. The law basically says that you can have a handgun in your house, but it has to be unloaded, disassembled or trigger-locked and you can`t go outside with it or on your porch or any outbuilding like a garage. So just take a note. Any murderers out there, you just want to make sure you assault your victims by their car or in their front yard, in the garage, but nowhere in their house.

In fact, they actually toughened the language from the original version. They say that the only time now you can have your gun loaded and assembled without a trigger lock, a.k.a. when it`s actually usable, is when there is a threat, quoting, a threat of immediate harm to a person in the home.

So don`t take that gun out if somebody is just torturing your dog in the next room. You just wait until they walk into your bedroom, pull their arm back to plunge that knife into the chest and say, hang on just a second, bend down, open your gun safe, assemble the gun, load it, carefully take off the trigger lock, cock it, then tell the murderer, okay, now I`m ready to fight you. What could go wrong?

Oh, these people in D.C., they`re brilliant. Already the brain trust that put this together is admitting -- and I quote -- "because we really haven`t changed the storage rule from the prior unconstitutional law and because of other features, I do agree this is a lawsuit waiting to happen. But we`ll be prepared."

If you have an uncouth constitutional law and you really haven`t changed, quote-unquote, an important part of it, isn`t it still an unconstitutional law? Perhaps that`s explained in other features of the law. Oh, I can`t wait to find out.

Remember, tomorrow I`ll be appearing on movie screens, believe it or not, nationwide. That`s on Thursday. Get your tickets and all the details at glennbeck.com. Believe it or not, it`s a comedy show.

From New York, good night America.

END