tv On the Money CNBC January 21, 2017 5:30am-6:01am EST
hi, everyone. welcome to on the money. i'm contessa brewer in for becky quick. what could cost you more and what could cost you less and why. >> the plan to repeal and replace the affordable care act. will it happen and what could take its place? >> i was worried about my health care. >> the president's tax plan no matter what bracket you're in. it matters. and the first place donald trump called home. the beginning of a real estate empire. no gold here. ""on the money"" starts right now.
we begin with president trump and your money. america's new president wants to put policies in place that will have a major impact on taxes, regulation and trade for every american. now, some proposals may sound abstract, but they could greatly affect what you buy, how much you pay, and your retirement. the trump economy is cover story. >> under our plan, the economy will average 3.5% growth. >> president trump will reduce the current seven tax brackets to three. on the business side he wants to cut the corporate tax rate from 35% to 15%. >> a trump administration will change our failed trade policies, and i mean quickly. >> trump also believes current trade deals are hurting american workers. ettes out of the trance pacific
partnership or tpp, a planned trade deal with asia. and he wants to renegotiate the north american free trade agreement or nafta. that's a trade agreement that was enacted 24 years ago with canada and mexico. trump has proposed a moratorium on new regulations and plans to roll back existing rules on industries from banking, mining, and manufacturing. >> i am going to cut regulations massively. >> joining us is ben white, politico senior economic reporter. and from washington, sarah fagan, a former bush/cheney aide thank you both for being here today. >> thank you. president trump talking about trade cuts, tax cuts. when we look at the overall plan, how much is he likely to be able to accomplish especially considering the republicans control both the house and the senate? >> he will be able to accomplish
a good deal of it. he will start on the trade front, the immigration front, with some of the executive orders as you mentioned indeed your setup piece. he will start with building a wall with mexico. he will pull out of the tpp agreement right away, renegotiate nafta, reopen nafta. the bigger ticket stuff that will impact everyday americans, that will take a longer period of time. corporate taxes, disagreements between house republicans and trump on that. eventually that could create faster economic growth. it could mean more corporate profits if taxes are lower. that means higher stock prices. it will be good for retirement accounts. it could mean inflation. and the trade stuff could mean in the short-term higher prices for consumer products. look to that. >> when we talk about what he is able to accomplish, do you think some of this is going to have to be done through executive action, or is he going to have full support from congress? >> a lot of what he wants to do early will have to be done through executive action.
and quite a bit of trade can be done through executive action, particularly 1/2 attachment so i would look for his administration to take action on nafta pretty quickly. as ben said on the tax policy, it is going to be a longer process. there is a big disagreement between house republicans and the trump administration on the border of adjustability tax. it is the republicans's plan to tax imports. that would raise prices on consumers. >> just this week, president trump said, hey, look, that's a little bit complicated i want something that's super simple when it comes to equalizing our trade wars with other nations. but is in cut in free trade likely to affect what consumers pay for tv. you go to a big box store, are you going to pay more for it? >> yes, you will, if we get into a trade war with some of these countries president trump has talked about being unfair to the
u.s. if he puts tariffs on can chinese imports, mexican imports, it could lead in the short-term higher prices for electronic goods and cars. a lot of u.s. manufacturers who make some of the lower end in mexico because the margins are so thin for them. it could make that market much less competitive and they could stop making them entirely. you can see that. but the trump plan is longer term to incent people to make them here. they have to balance the two things out. not start big trade wars but encourage domestic manufacturing. >> when trump was on the campaign trail as well, he also went to coal country, steel country. he said he would reduce regulation. he said that kills jobs. how would that affect small businesses to see a reduction in regulation, sarah? >> i think it would have a huge impact on small businesses. right now you see small business hiring fewer people because the
costs to maintain an employee is high. and if he rolls those back, these small businesses will hire more people. it will be great for the economy. >> of course if he is able to cut back corporate tax rate to 15%, it will make a huge difference. thank you both for being here. if republicans repeal the affordable care act, what will they replace it with? the answer will affect millions of people whose coverage could change and who are worried about rising costs. bertha coombs has more on what could happen after obamacare. >> alex didn't have health insurance for years after getting laid off from g.m. >> i didn't have any major health issues in that time, but i did have to go see my doctor every so many months. >> with obamacare subsidies, he pays $50 a month for an exchange plan. >> it works for me very well. i get good care. i get to see my doctor
regularly. >> he's worried he will lose his care when the republican congress repeal the affordable care act. >> to take away these benefits from us i think at this time this borders on criminal. >> this week the congressional budget office suggested that it could lead 30 million americans without coverage within 10 years. >> the democrats have traditionally focused on expanding coverage but not really paying attention to costs. the republicans are focusing on on costs but not really focusing on coverage. >> the trump administration and republicans promise their obamacare replacement plan will provide access to coverage is and be were cheaper by offering more options. they liken to a fixed price buffet with required health benefits for plan, tax subsidies and big premiums for those who aren't subsidized. republicans want to provide an a
la carte menu with cheaper, skinnier plans for people who don't consume a lot of health services. a flat health tax credit. and using savings accounts to pay for expenses and premiums. for people who require a lot of care and prescriptions, consultant carolyn mcclenahan said that shift requires careful planning. >> if they have a chronic illness and need continuing care, their ongoing expenses year to year will be pretty extensive. so so they need a lot of money set aside. >> alex worries with little cash to save, the new plan may mean going without insurance again. >> the declaration of independence. life, liberty, and the pursuit of happiness. if we don't have health care, i don't have any of that. >> on average, premiums in the individual market on the exchanges rose 22% nationally. even more in some rural areas
where insurers pulled out because of big losses. that's something that the trump administration and the republicans in congress say they want to fix. >> bertha, thank you. up next, we're "on the money". is the trump economy going to be a recipe for success? we'll head to detroit and get answers. president trump pledge on the campaign trail to lower taxes and simplify the tax code. will you keep more of your money under the new president's plan? first, a look at how the stock market ended the week.
their highest levels in nine years in 2016. they increased by 11% in december to an annual rate of 1.23 million units. that's higher than economists had expected. but the number is a volatile one. stocks were flat most of the holiday shortened week. the dow trade anything a fairly narrow range. s&p is 500 and nasdaq were choppy as well though they closed higher on friday. if you're looking to fly for less, add american airlines to your list. but he will get less. american will start selling basic economy fares. no choosing your seats, no flight changes. paul mccartney is asking for help. he is suing to try the get back the copyrights to 200 beatles songs. they were sold to sony after michael jackson's death.
small businesses are the big engine of the american economy. they are responsible for a majority of the new jobs created every year and are a vibrant path upward mobility. some are pinning their hopes on the new administration to help give their dreams a jump start. kate rogers has more from detroit. >> reporter: joe spencer has seen economic booms and bust. owning his louisiana creole gumbo. >> last year we had our best year. we had $1.2 million in sales. >> he expanded to a second location and plans to open two food trucks. but one thing is on his minds
these days. donald trump will impact the economy. >> business owners have varying opinions across motor city. in recent years, over $3 billion has been invested in detroit's downtown more more than 100 small businesses have since launched. tom augusta opened his restaurant as the session took hold. he is concerned. >> small businesses are the ones that bear the brunt of things that happen in washington. people talk deregulation, i get worried. it doesn't really help the common persons. >> the college dropout launched ellis island tea in 2008 after perfecting her especially family's recipe. today she retails 300 stores across the midwest, including whole foods. >> there is a spirit that the city carries, and that is
resilience. all entrepreneurs know that it is extremely tough journey. there are times where we want to give up. and so we need a motivation to keep pushing in those tough times. i'm not just in business for myself. it is to give back to the community as well. the way i give back is by providing jobs. the more the economy grows, the more i can provide. >> she has just one ask. >> if i had one wish for the trump administration, it would be to strengthen the economy. >> so that's a pretty broad ask, strengthen the economy. when you were talk to go all of these small business owners, was there a running theme they would like to see from a trump presidency. >> the economy, whether pro trump on or anti trump, everybody is very concerned
about consumer confidence. when you talk about big asks, joe was really impressed with trump's direct negotiation with big automakers he is worried about detroit's economy. that area thrives if the auto industry thrives. so they are thinking big picture economy but definitely had specific asks. on the whole are optimistic and trying to keep an open mind. thank you. >> thank you. up next, "on the money". if some tax deductions disappear, will you lose money? what stays and what goes in president trump's tax plan. you won't find any gold or marble in this suburban tur home which may surprise you since trump once lived here.
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all on the go. you can even download from your x1 dvr and watch it offline. only xfinity gives you more to stream to any screen. download the xfinity tv app today. tax season officially begins next week. it was one of candidate trump's biggest promises. now that the trump presidency is under way, will the tax cuts happen and when? tim, great to see you. thanks for being here. >> thank you. >> first of all, he said he wants to reduce them to 3%. currently they're at 7%. when might we see that happen. and how would families in each
of the tax brackets feel the impact? >> well, it's interesting. so we did some modeling. and households that would have incomes up to 50 to $100,000 in the proposed plan end up in just about the same place as the tax law present today in 2016. when it would be effective, it could be signed october, november, which means 2018. >> would deductions disappear? i know president trump wants to were cap the amount of deductions you can take. >> yes. so there would be a basket of what everyone has now as itemized deductions. many are deducting home mortgage, real estate taxes, state income taxes. that would be capped in a basket at $200,000. >> especially the biggest deduction most people take is what they pay on interest on their mortgages. >> correct. >> would that remain unchanged?
>> it would except subject to in all the itemized deductions the $200,000. >> if you're paying more than $200,000 in mortgage interest, that might be change. >> yes. >> there is a lot of concern about charities and the overall limit on deductions. >> that's right. >> how would that come into play? >> well, presently, it is. that's a big public policy issue. think about it. you're a charity. you're trying to support children, education, health care. hypothetical you could see contributions decrease. >> also, something that doesn't affect the vast majority of americans is the estate tax. president trump wants to appeal it. yes, he does. he wants to have no estate tax. right now a married couple can shelter $11 million. however, if the heirs go to sell in the future, they have
whatever the cost basis was. it's a switch. the government will get the capital gain tax the revenue. they just won't get the estate tax revenue at the front end. >> thank you for coming in and breaking this down for us. >> great. thank you. donald trump's humble beginnings. we take a look at the first piece of real estate he ever called home. defy expectations any day with always infinity. made with flexfoam, absorbs 10x its weight. rewrite the rules. always.
here are the stories coming up that may affect your money this week. on tuesday, existing home sales numbers are released for december. and cheers! we can get behind this one. canned beer went on sale on this day back in 1935. another occasion for celebration. in 1905, a diamond discovered in south africa. it weighed 1.3 pounds. robert robert frank toured president trump's childhood home in queens, new york. its history may now put a premium on its price. >> this is the first place donald trump ever called home. >> he was born in 1946, june
14th. this address was listed on the birth certificate as his home address. >> the modest tudor was recently sold at auction. the winning bid is still undisclosed. the fact that the donald lived here is expected to add a significant premium to the price. >> it went on the market for $1.65 million back in july. some expect it is worth three to ten times the original price now that he is president-elect. >> even the real estate mogul himself suppressed interest in buying it. >> any fond memories from this house? >> well, i have great parents and brothers and sisters. i had a great childhood. >> that's sad to look at that. i want to buy it. >> it was built my trump's father in 1940. >> we're on the second floor of the home now. this could have been the room the president-elect slept in as a child. >> there are five bedrooms and four and a half bathrooms. >> everybody associates the trump name with gold, glitzy, large penthouse style living.
and this is much more humble. >> and, contessa, that house did sell tuesday at auction. the is seller is still ironing out details with the buyer. we don't have the new owner's name or the price. but that sale likely will happen. you know, incident was a big bet by the sellers. 1.65. people say it could fetch 5 to 6 million. >> that is quite a premium. rocket, of course trump tower behind you sevenededed as the residence for the trumps in new york. is he planning to spend a lot of time in the city? >> 33,000 square feet compared to the 5,000 square foot house we just showed you. trump loves new york.
of course his wife melania and barron will stay here. but new york is in his blood. it's part of his soul. i expect he will be the first dual resident president who will share time both here and d.c. >> rocket, thank you. >> absolutely. thank you, c contessa. next week, free college tuition. that sounds great. but who really is that helping? each week keep it here. we are "on the money". have a great one. we'll see you next weekend. honey, aren't we having friends over? it reeks in here. i know [goat noise] i stole the other team's mascot for good luck. we need to wash this room. wash it? yeah, wash it with febreze. for all the things you can't wash, use febreze fabric refresher wow [inhales] it really smells great in here.
we're taking a look at the trump at the viewing stands of the inaugural parade there. closest to us, jared kushner, ivanka, barron and the 45th president of the united states, as well as the vice president, the military salute as marching bands walk by. this is "options action". we are monitoring all of these events on this very historic day. so let's talk about this and the impact. you know, not surprising was on the floor of the new york stock exchange erupted in applause and cheers at the he was sworn