tv Washington Journal Stephen Moore Discusses President Trumps Economic... CSPAN January 25, 2017 6:32pm-7:08pm EST
conway, senator joni ernst, and representative me a love. you can watch -- representative mia love. you can watch at c-span and c-span.org or listen live on the free radio app. announcer: next, a discussion on president trump's plans to lower taxes from today's washington journal. >> washington journal viewers are familiar with stephen moore from the heritage foundation. he joins us now to talk about president donald trump's economic and tax plans and specifically, a recent report from "the hill" newspaper that trumps team is considering cutting the federal budget by $10.5 trillion over the next 10 years. you wrote about this recently for the "washington times" and you called it a $10 trillion stimulus plan. why? guest: good to be with you and thank you for c-span. i am a regular viewer.
i was trying to be a little provocative because when the news came out -- this was a press report that the trump administration is looking at paying for the tax cuts and increased the military and infrastructure with offsetting cuts. one of the things donald trump did say on the campaign is he not only wanted to balance the budget but he wants to retire some of the $20 trillion debt , and who could be opposed to that? the point i was making is that government spending is not a stimulus to the economy. there are a lot of economists who believe the more the government spends, the better the economy works. i have the opposite philosophy. i think the evidence is on my side, that when you cut the government and the fat and the waste and inefficiency in the government, the economy performs better. a good historical reference to that was the late bill clinton years when you had a republican congress and a democrat in the white house, and you had very substantial cuts in government spending, and the economy did
very well during that period. i was making the point if we could get the budget deficit down, get the taxes and spending down, i think it would be a very positive thing for the u.s. economy. john: i want to clear up for our viewers -- last time you were on the program, you were an economic advisor for the trump campaign. do you still work with the trump administration? guest: i have not taken a position. i am still getting used to calling it the trump administration. i am just a private citizen right now working at the heritage foundation. i do talk regularly with the people who are brought into the white house. it is a great team and i am excited. i have said i think donald trump has done more for the u.s. economy in his first 48 hours in office than barack obama did in eight years in office. these executive orders -- you were just talking about some of them -- the keystone pipeline, these are very positive things for the u.s. economy. they will bring jobs. more importantly, one thing i discovered being on the campaign
trail, if you go to places like silicon valley or here in washington, d.c. or wall street, people are doing really well. but you go to places like york, pennsylvania, rockford, illinois, flint, michigan, those places have not seen a recovery. i think trump can be successful as a president and be reelected if he brings. . prosperity. to all these places, not just silicon valley and wall street. john: steve moore with us for the next half hour or so. numbers are on your screen to call. going back to the hills report -- the $10 trillion cut over the next 10 years, it is based largely on the heritage foundation budget plan that has been released. obviously, you work at the heritage foundation, a visiting fellow there. what do you expect will be the key things cut by the trump
administration if they go forward with the plan? guest: let me say one thing about donald trump that is relevant to this. one of the things that people -- especially your friends in the media -- don't completely get about donald trump is that he is a negotiator. his best-selling book was "the art of the deal." when trump puts something out numberike a $10 trillion -- and he has not done that, this was a media report -- but let's say it is. when trump does that, this is his opening bid. he is going to go to congress and congress will probably not take that trillion dollar budget cuts, but it is a way of negotiating and he ends up with significant cuts. what we are talking about at heritage is eliminating scores of spending programs you do not need anymore. serviceske legal corporation and programs like mohair subsidies that go back 100 years that are probably not
necessary anymore. there are hundreds of programs like that. we are talking about moving a lot of the entitlement programs and programs like transportation and health care welfare programs back to the states, and let the states deal with some of these problems because you get a lot more experimentation. states should be laboratories of democracy. we are talking about getting rid of redundancies in the agencies. two we really need 46 job-training programs? there was a report that came out by the federal government's own auditors about six months ago. as you know, it is called the gao. they found there is about $160 billion -- not million -- $160 billion a year in erroneous payment. medicaid, social security, food stamps, earned income tax credit -- that is just fraud, it is just ripping off the taxpayer. i think donald trump will be
very vigilant about going after fraudulent payments and making sure people are eligible are getting payments. john: you mentioned entitlements. donald trump says he does not plan on touching entitlements. can he achieve the cuts he wants to achieve -- with an opening bid -- without entitlement cuts? kenny get there? -- can he get there? that is not entirely true. it has become a mythology about donald trump that he said he will not cut entitlements. of course he is. what are we debating about right now? obamacare is one of the biggest new entitlement programs in four years. that will be rolled back and hopefully repealed and we will put in something that makes a lot more sense that will reduce cost for patients and makes health care affordable and allows you to keep your doctor and does not have negative effects on the economy, as obamacare has. it is this mythology that he will not cut these things. --t he did say, to be clear social security and medicare --
the two biggest programs other than national defense -- he said we are not going to turn to those until we get the economy moving again. i happen to agree with him on that. the american people have been clear about this -- what they care most about is jobs and the economy. when you get the economy moving, you get more revenues. then maybe down the road, we can deal with social security and medicare, which absolutely have unfunded liabilities. john: michael is waiting on the line for democrats. go ahead. caller: mr. moore, you always get on tv and talk about tax cut this, tax cut that. do you think tax cut is a form of entitlement for the rich? i am in favor of reducing taxes in very strategic ways. by the way, this is really the centerpiece of donald trump's economic revival plan, this tax
package he is now formulating, and i think in the next two weeks we will see how it shapes up in legislation. but the one thing i did work on with donald trump was the tax plan. the main part of the tax plan is bringing our business taxes down, because we have a significant disadvantage when we are competing against russia, china, india, mexico, european countries, because we have the highest corporate tax rate in the world. that puts u.s. companies at a very significant disadvantage. our plan is to go from having the highest business tax rate in the world to one of the lowest. i think ireland would still be lower, but we would be 15% to 20%. i believe if we do that -- it is not a tax cut for the rich, it is a tax cut for workers. what will happen is, a lot of the businesses that have been leaving the united states -- steel and auto and technology companies -- they will come back
to the u.s., it will be a more conducive place to do business and that is good for workers. if you have more capital investment by american businesses, which is what we need, not only will you have more jobs, but you will have workers earning more money, a big issue for americans. john: the caller is concerned, though, would that tax-cut benefit the rich the most? guest: there are two components of the trump plan, the business tax cut, which i just described. that is where a lot of the economic benefit comes from. donald trump also wants to reform the individual tax. here is the interesting thing that has not been reported on. buddyed with this with my and the incoming treasury secretary steve nugent. mnuchin. what donald trump said to us is, i don't want to tax cut for rich people like me. i want the middle-class. he said let's try to lower the rates and get the loopholes and credits and all of the special interest revisions in the tax cut. for people who make over $1
million, they are going to lose virtually all of their deductions. they will not be able to write off this stuff for investing in bull sperm and windmills in this. for every dollar of reduced the duction, they will have a lower tax rate. the amount ofbut loopholes will go down, so overall, the amount of taxes they pay will not go down. the middle-class, we anticipate the bill will save the average middle-class family watching this show about $1500 per year. john: peter is a republican, on with stephen moore. caller: i read you in the wall street journal whenever you have a column there. my question is about the federal reserve. i heard president trump say he wanted a stable dollar. every book i read, peter griffith, all talk about how the federal reserve is stealing productivity gains by
working-class people by creating a 2% to 3% inflation rate every year. according to janet yellen and bernanke, you need 2% inflation every year to have a health the -- healthy economy. but according to those gentlemen, all the inflation rate does is put people in a higher tax rate. if they get a 2% raise every year, it gets eaten up by the federal government and the government can pay back its debts with cheaper dollars. can you explain that whole concept and whether it is actually a farce and just the way of stealing revenue from working-class people? guest: a great question, i get asked that all the time. i can live with 2% or 3% inflation. i remember the 1970's when we had 15% or 16%. literally people would go to the
store and try to buy things before they were marked up again. 2% to 3% inflation is a reasonable estimate. that is about the growth of the economy, so i think most economists agree. donald trump has it right. what you want in monetary policy is a stable currency so the dollars in your pocket now will be worth what they are today in two or three or four years, that the dollar retains its value over time. i think we're going to have a new fed chairman in a year and a half or so when ellen's term is up. en's term is up. i think it will be a strong dollar person. since the election, an interesting thing happening is that the dollar has been rising. interest rates have been rising and the dollar has been rising. a lot of people ask why. normally, interest rates rising would be a negative thing, but i will make in this instance the
case that the rise in interest rates is a positive thing. there is a rush of optimism right now, in the stock market, and consumer confidence -- people want to invest again. they think that things are coming for the economy, and i happen to agree. if you want to invest, there is driving upeople interest rates because there is a demand for credit. in that instance, the demand for credit is a good thing. it means businesses will invest again. the same thing with interest rates rising a little bit. they are rising because people want dollars and they have to pay higher interest rate for it. have, andoblem we this is the thing people should think about -- if those interest rates start to rise, who is the biggest debtor in the whole world? it is the united states government. borrowing costs will rise. that will make it more difficult for trump to deal with the deficit problem because the deficit will go up because of interest rates. john: manassas, virginia, line
for independence. caller: good morning. this makes me a little uncomfortable because the heritage foundation are saying obamacare is a disaster. and that is not right. i think your guest should come out clean. second, the trump administration is saying they are going to re-create jobs. america, wake up. he is a fraud. he has been a fraud. it is all about your previous caller taking it very well. i cannot even articulate better than what he said. he is an absolute fraud. guest: i could not quite here the first part he said about obamacare. john: the history of the affordable care act and whether heritage foundation had ever supported a program like that. guest: no, never.
we don't want to nationalize it. we want the private sector and competition to work in health care. john: how does donald trump proved to folks like that caller that he is not a fraud? guest: let me finish this point about obamacare. in my opinion, it has been a disaster in every single way. it has to magically increased taxes. -- it has dramatically increased taxes. reports show it will blow a huge hole in the budget deficit. it has reduced employment because of the 50 worker rule saying that if you have more than 50, you have to pay additional costs. it has increased costs for the american family. i think that is the reason hillary clinton lost the election, people saw the reports about 20% increases in their premiums. people cannot afford that. the middle class is living literally paycheck to paycheck. they thought obamacare was going to save them money.
in my own situation, we are paying a couple thousand dollars a year or more for health insurance because of obamacare. about trump being a fraud, i would simply say -- such a general statement -- let's give this guy a chance. he has been in office for two days. let's see how it works. give him a shot. i think republicans gave obama a shot. what obama did did not work very well. let's see if it works. six months or year from now, if his policies don't work, i will be one of the first people saying, we need a change in policy. the american people clearly wanted change. it was very clear from the election, people wanted change in direction, higher incomes, more jobs. after two days, it is a little early to say whether his policies will work or not. john: one of his first actions in the opening days was putting out a hiring freeze on the nonmilitary parts of the federal government. guest: amen to that. john: you mentioned the gao
earlier. the government accountability office examined hiring freezes imposed by jimmy carter and ronald reagan and determined that hiring freezes were not an effective strategy. they had little effect on federal employment levels, and said that freezes disrupt agency operations and in some cases increase costs to the government. guest: i do not know about that report. i will simply say that is what you want to do. state governments have had hiring freezes and they have worked very well. that is what businesses do when they, tough times your it they do not hire more workers if they can't pay their bills. we are talking about a united states government running a nearly $1 trillion a year deficit. we cannot keep doing what we are doing. we have got to find every opportunity to cut costs and get rid of waste. surveys show the average american thinks washington waste s about $.30 for every dollar that government spends.
i think that is pretty accurate. there is a huge amount of waste in this budget, and one way to start trimming back is through attrition -- when a federal government worker retires, lower -- don't replace that person and lower the workforce that way. but that is only a small portion of the federal government. i think that is what the report might have been saying. what you have to do is get rid of programs. the main thing the federal government does today is send out checks to people. you are not going to reduce the cost of that by trimming the workforce. john: jim in north carolina, line for democrats, good morning. caller: good morning. glad you take my call. good morning to both of you. on the taxes -- why not take the money you're saving on these
programs and applied toward the national debt and pay the national debt down? obamacare did not work, the private insurers, they want 35% to administer medicare -- to administer. medicare can be administered for 1.5% to 3%. thank you. guest: on the national debt issue, i want to make sure people understand the deficit and the debt. every year, how much we spend versus how much we bring in. that has been ranging between $.5 billion and $1 trillion per year. the debt is the accumulation of these deficits. my point is, before we can reduce the national debt, we have to get rid of the deficit. we make it worse every year by barring $.5 trillion more per year. i agree with this gentleman. i would love to see reductions
certainly in the deficit and eventually the debt. one way we can do this is through using american energy. i just came out with a report where we looked in my book, we found there is about $25 trillion of oil and gas and coal resources under federal land. here is a way to reduce our debt, ladies and gentlemen. we can allow public companies to develop on non-environmentally sensitive federal lands. we can charge the company's andmoney through royalties lease payments and we can raise two dollars -- we can raise $2 trillion or $3 trillion for the government and use that money to return cash to return the debt. nation does not borrow $20 trillion. host: george's waiting, republican. caller: good morning. i presented a combined program of milton friedman and fdr to bill bennett years ago.
the petition went through and the senate finance committee and subcommittee on pensions etc. took it up. hatch did the right thing and obama did not. i would like you to check some numbers and start using them, that are part of this whole thing. the plan is to have everybody has an ira, which 30 countries have now, starting with chile. it would be backed by social security so you have milton friedman and you have fdr, and you don't spend the social security until or if the ira funds dropped or crash or whatever. the numbers are -- i understand we're spending $2.7 trillion a year on welfare, probably more. i did a calculation of $45 per week into an ira, 8% gain in the market over a working life, and you can also add 0-18 if it is federal money.
it gives you $1 million in the bank. i'm not sure we will have enough market to cover everybody to that extent, but i would like for you to check those two numbers and start using them. the second one is, i work in the oil industry and i understand from the american petroleum institute that we are putting about $1 trillion a year -- you -- a year into the american government in taxes. you have the multiplier effect on the market. the number of barrels of oil times the price times eight, and that is the positive effect on the economy of the oil industry. we cleaned a lot of things up already. if you would take those numbers, check them out, and start using them, i would appreciate it. my plan has the five parts all-in-one plan, all-in-one fund, that we are using now -- education savings, health care savings, down payment on a
house or help paying for a house, business start up, and retirement. i think that would fit right in to the positive things trump was doing and what you have promoted. guest: love it. i love iras. let's let young people under the age of 30 or 35 start putting money into the black hole of social security, where they probably are not getting money out. why not allow them to put 10% of their paycheck into an ira account and accumulate the money over 30 or 40 years of working. if they do that, your numbers are exactly right -- we estimate the average american would then over $1ith well million, many people $2 million or in that case, they could have $3 million. much more money than with social security. i love that idea and i think it makes a lot of sense. just one statistic on the oil and gas industry -- something for people to think about who say, we should not use our own gas in this country -- there are
almost 10 million americans in the oil and gas industry. and coal industry. when people talk about shutting down american oil and gas and not building pipelines, are we going to put 10 million people out of work? i don't think so. we believe we can add 6 million new jobs in the oil and gas industry. those are high-paying jobs. they pay $60,000 or $80,000 or $100,000 a year for electrician and construction workers. of coarse we should build the keystone pipeline. that is 10,000 jobs for middle-class americans need them in the midwestern states. the rest of the world is using oil and gas, why shouldn't the united states? john: a few minutes left with steve more of the heritage foundation, a visiting fellow and author of five books now? guest: the latest one is called "fueling freedom" about the energy issue and how america can become the energy dominant force in the world.
caller: thanks for letting me talk. my issue is what made america great is slave labor. it was 80% of the gross product in the united states. anytime -- that is what we have been searching for with nafta. we have been searching for cheaper labor. because you know you can't really pay a person a fair wage to make this economy to be great. we stood up and lie to each other about certain things when you was on point one time about the oil. you said it was $25 trillion worth of oil on certain land. why should we get only $2 trillion of that money? we should be getting more than half of money on land -- on our own government land. that to me is a product we can get out of the ground.
so once you start getting the product out of the ground, it is something you can depend on. you cannot depend on running around countries with this falsehood of cheap labor, you know? that is all i have got to say. thank you. guest: let me just clarify something. to dollar -- when i said $2 trillion or $3 trillion, that is the taxes we can raise on the oil. a lot of that will be going to the workers for pay, a lot of it will be going to the cost of excavating and drilling, the production cost will be high. you are talking about america being the energy superpower if we do that. the point the gentleman made about low wages and trade is a really important one. people are worried about nafta because they think all the jobs are going to mexico because mexico has lower wages.
what is interesting is united states -- if we can bring our taxes down, as trump has talked about, and reduce our regulatory costs -- i will give you a statistic i am amazed by and i think it will amaze your viewers. according to the national association of manufacturers -- a little bit biased -- they say the cost per worker of manufacturing is $18,000. that adds significantly to the cost of hiring a worker in the u.s. versus moving the factory to mexico or china, where you can cut those regulatory costs in half. a lot of the movement in the united states is not necessarily due to lower wages. it is due to the fact it is so much less costly to do business in china, india, germany. if we could reduce the cost of doing business in the united states through tax and regulatory reform, i think you will see a lot of the companies move that quickly.
you have party scene five or six major companies say they are going to invest in united states. john: we are not trying to compete for which prices. guest: we can do that. we are a high wage country because we are a productive country. the problem i think is more that we cannot go forward with the most onerous regulations with the highest taxes in the world, whether you loved barack obama or not, let's face it, this was not a president that was pro-business. donald trump will be pro-business. he will say, let's put america first and make american companies number one again. it is about time. john: good morning. caller: good morning and thank you for taking my call. thing sitting here listening to your show this morning. have lower taxes
as well as oil and gas. have added taxy in this country. that is where they make up their money to compensate for the lower business taxes. by producing the debt. -- tax structure in this country is out of sync and needs to be reevaluated. this gentlemand called. there is a big debate going on within the republicans about the issue of whether we should have a border of tax. i will not make this too complicated. in my opinion we have the dumbest business tax system in the world. not just because of high tax rates, but also what we do to simple, we tax
what is produced. whatever country this gentleman, those countries have added tax. the tax in american product when it comes into their countries. in a sense, what we do in the united states we tax what we export, but not what we import. i never understood the logic of that. somebody explain why we do that. why not tax that we import and not what we export, that when we and more american jobs, more factories will move to the united states and we will have a different -- disadvantage that we have in the world. do not tax anything that comes into the united states. -- just toggesting rethink the way we tax. there is a big discussion about this in washington. john: debbie, good morning. caller: good morning and thank you for taking my call. one of the things i wanted to -- when we talk about
bringing jobs back into the country, we need to get a better understanding of why they left in the first place. sending jobs out of the country can help you produce products at a cheaper rate, those things benefit corporations and shareholders. they do not benefit workers. even if -- what i am concerned about now is, if we spend tax dollars to bring jobs back, that will only benefit the upper echelon. the shareholders. as far as the workers are , when companies have tax breaks, the workers do not see any benefit spirit -- benefits. there is not new hiring or anything. when you put more money into the pockets of workers, that
stimulate economy. the notion of bringing jobs back for a cheaper cost does not affect the regular workers like it should. the same with regulations. a lot ofns protect families. what corporations should do. guest: i think there is a lot there. the woman makes a lot of sense in what she is same. -- ijust of the philosophy think we need to adopt this as a country. business or not, lawyers are not is not bad. rich if you want the jobs and healthy jobs in this country, have to have healthy is this is. the businesses are here in the united states are not creating jobs. i want to make this clear, i do companies tobing
come back into the united states. i do not favor things donald trump is doing. he is meeting with auto executives and saying if you don't produce in the united states we will punish you. i am not sure that is the right approach. we have to get serious in this country about how we make american companies competitive so they can hire more workers. those don't have base -- companies profitable, you will not get the high-paying jobs you want. to gett want the rich richer, i am in favor of that, but i want everybody to get richer. i want the middle cast -- class to see a pay raise. it has been 15 years since the average middle-class family has seen a meaningful pay raise in their paycheck. john: want to ask you your thoughts on congressman mitch maldini to be donald trumps budget director. outlook on his fiscal policy. guest: i am just got 80 have his
job. dealing with these enormous budgets. he will have to convince these people in the trump cap met and the people in congress that we have to cut the budget and make sure the expenditures -- it is a difficult thing to do. everybody in washington loves to play santa claus. likes a person that is trying to restrain them. he is a good man, he knows the budget, he has been in congress three or four terms. we should all pray that he gets this job. we cannot continue to borrow and borrow and think that will make america rich. john: with a heritage foundation, always appreciate you coming by. katrina joins us from new york. she is editor and publisher of the nation magazine. her piece ofabout
progressive resistance in the trump era. about the state of progressivism. what easy get is in the dawn of trumpism. guest: there is no question that is a tough time. we don't how much honesty in our politics right now. i do think that we saw in the campaign -- first of all, the sandersdores bernie spirit we endorsed hillary clinton. bernie sanders is a country that has a hunger for progressive majority positions on a range of , education, medicare for all. the democratic platform, which emerged from the campaign was one of the most progressive platforms in contemporary modern history. hillary clinton won the popular vote by some close to 3 million votes. i k