tv Institute of International Finance Policy Summit Gary Cohn CSPAN April 20, 2017 11:08pm-11:41pm EDT
businessperson would do if they were taking over a failing company. you would look at all these different things, no wonder we went bankrupt, let's find a way to fix it. that's the attitude we are taking in restructuring the government. we have another six months to get the president of final proposal. by this time left -- time next year, i hope you will be seeing some of the most sweeping changes you have ever seen in the executive branch. if you have a really good reason why you think nasa should be in the department of agriculture, now is the time to tell us why. i can't imagine why that would be, but nobody has ever asked those questions before. it is a very invigorating thing to me as a conservative republican to have a president want to look at government like that and say, you know what, it is not built correctly, let's break it into its component parts and build that. on that note, join me in
thanking rector mulvaney -- director mulvaney. [applause] thank you very much. it is a delight to see you. >> thank you. >> the board has never been the same since you left. i never thought of you as a government guy. public sector, how's the transition gone? >> the missions are similar. the private sector is trying to serve its clients and trying to achieve its objectives and its goal, and the public sector is doing the same thing. we are trying to achieve our ission and our goal, but it
a lot more difficult to get there in the process is a lot slower. i am adapting to the slower process. >> i see you as someone who likes to execute quickly and well. let's just start with the hundred thousand foot level and that is your policy, your questions, your priorities and what you want to achieve. you're close to 100 day mark. lots of expectations. i think there is something of a bad rep. it's stuff to do things quickly as you said so tell me where we are at the 100 day mark and what your agenda and what you see the next few months. >> the agenda hasn't changed. when we came in on day one, we talked about an agenda that revolved around jobs, job creation, employment, full employment, making the lives of citizens of this country better. that's our number one objective. how you do that, that's what we are working on, so we're
going to do it in a bunch of different ways. number one, trying to improve health care in this country and that's a staple of quality of life. number two, trying to raise taxes and tax reform. we had a panel talk about infrastructure. life, the live our way we get to and from work and school is really important. we have suboptimal infrastructure in this country. simultaneous to those, we're also thinking about the regulatory environment. the regulatory environment cuts through all that. i was listening to one of the guests who said approval process. the approval process is -- process and regulatory process of infrastructure is probably the most costly part of regulations. in slowing down the approvals, it just adds and adds to the cost of infrastructure. we have to understand the cost of regulation is slowing things
down, so we are simultaneously looking for all the different regulatory environments that we have. not just financial services. this crowd is concerned about financial regulation, but we got the regulatory burden in almost everything we do. we spend a lot of time on regulatory burdens as well. >> you heard on our first panel we had a lot of economists say the regulation pieces may be overshadowed by the tax discussion or healthcare but that's not something you link toward, you can do that yourself as an executive order. you can get your cabinet secretaries in place to move quickly on the deregulatory piece. >> a lot of it is personnel. a lot of it is interpretive personnel, getting our personnel in the position will help us on the regulatory agenda. the example i like to give, we in the united states have a stress test for our banks. europe has a stress test for their banks. the dialogue or description for a stress test is not that much different.
the interpretation of the regulators that interpret the stress test is so different that a bank in europe with three percent capital passes their stress test with flying colors, banks in the united states with 10% tier 1 capital, it barely passes. so personnel is policy. changing the personnel will change the policy, change the interpretation and we think that is important. so you are right, changing the personnel will have a big effect on a lot of the regulations we have in the system, even when you look at infrastructure. you look at the epa, bureau of land management, fish and wildlife, all these organizations and how they are running the processes, how they look at the approval process, how they schedule hearings, just getting those things done themealing with incessantly, that is all personnel. though we've instructed our people that we've got to get these things through the system.
were going to try to force a very quick deadline system into place that we make sure we get things through the system as quickly as we can. >> so some of that you can do on your own in the executive branch but you rely on other branches of government on pennsylvania avenue. congress is squarely in charge of taxes and appropriations. so tax policy. how are you approaching it? i know you are developing your set of proposals. you have one in the house now with speaker ryan and chair grady. how do you assess steps and do you have principles you are guiding by and talk a little about timetable. i know secretary mnuchin was here. he and i have spent a lot of time talking about taxes. so we are going to come out and in a unified, united tax proposal program. >> the individual as well as corporate. >> individual and corporate.
some of the corporate are exactly what the president said. people say we are difficult to be about what we are doing, we are ethical to operate. if you want to understand what the white house is doing, listen to what the president said on the campaign trail. he talked about low rates. we care about low rates. he talked about listening, guess what? we talked about using the tax code to make america more competitive, guess what? we want to figure out how you use tax code to make america more competitive. we talked about tax and reciprocity and making our tax code more aligned with the rest of the world, making us more equal. he talked about using taxes to make sure we are globally competitive in bringing industry and jobs back to the united states. those are the core principles, that's what we're trying to do, trying to do in the corporate tax code as well as individual. >> one of the proposals in brian brady plan is to eliminate the deductions in short corporate. leveling the playing field
between debt and equity, how big an issue is that for markets and maybe how do you think about that. with the impact to markets and the economy, is that a lot? -- is that a live proposal? we've got a lot of things on the table. we're working with all the different levers. and as you know, depending on where you end up in the rate spectrum, it depends on how valuable or not valuable that certain deduction is or isn't. we are continuously playing with the leverage that we have and we're working on coming up with a policy. >> am going to meet director mulvaney here later today but let me ask about one thing as we quoted ronald reagan say efforts don't matter politically, we're running $7000 deficit. when you think about tax bills, how important is it to have revenue neutrality and we heard a little bit about the importance of dynamic scoring. how big a role will that play? director said,
mulvaney will be here later. he'll have his very strong views on deficits. you can save your big deficit question for him. that said, we have a legislative process to go through in tax reform. you pointed that out. permanenceke to have to tax. when corporations are making long-term decisions and people are deciding to move businesses to the united states and open factories and make big capital investments, they need some permanence of the tax code. so the more permanent we can make the tax code, the more it makes sense to us. running a big deficit in the tax code would potentially make it not permanent. that said, if secretary mnuchin said it, and i will say it, using dynamic scoring they allow us to get to me place, we would like a permanent solution but again, we have to do what we need to do to drive job creation and drive the economy and we're committed to driving the economy. >> we were talking about
infrastructure backstage. i know it's an important issue, . i was making a joke about every time i go to new york, on amtrak, it's a harrowing experience. tell me about your plans for infrastructure and how are you going to divide between tax credits versus your direct appropriations. >> as you know, we talked a lot about infrastructure. our core basic plan when we started, we talked about healthcare, taxes, infrastructure in that order. part of our tax plan may be to use some of the repatriated money from an infrastructure fund or an infrastructure bill, so we know that we are going to fund some of the infrastructure . director mulvaney will tell you that his budget, we got a substantial allocation in infrastructure and government will have to be involved in the infrastructure. that said, we think bringing private capital in alongside with the government, or even
privatizing some of the infrastructure, makes a tremendous amount of sense. just building up the governance challenges for the sake of building up a government balance sheet doesn't make the most sense. if we got existing infrastructure that has direct revenues attached to it, we think there may be very interesting ideas in the for-profit or in the not-for-profit world to take that infrastructure and put it into corporations and use more of the capital markets to pay for that instead of putting it on the government balance sheet. we know that will create efficiency, it will create long-term better management, a maintenance program and will do the things that we need to do for an efficient, long-term infrastructure management program. we do not want to sit here as the federal government and just moneyiggy bank doling out here. we want to be a partner with donors, with mayors, with municipalities to help them and
totally invest along with them on projects that they want with capital. >> so there is a state and local component to this as well. >> as you know, i think as most of you know, there's a huge state and local component to this. the federal government owns very little infrastructure but we control almost all the infrastructure and we control almost all the permitting process. >> how do you ensure that to use an example, i'm for rural kentucky, the relations committee on the house, it's some of the worst highways in the world. how do you ensure that you are not building bridges and that you are putting these bridges where the population is? >> that's what i was alluding to. we don't want to be in the business of just doling out money to dole out money. we want to be in the business of investing infrastructure or other people, meaning the state, ,he cities, the municipalities
are going to put their money with us. knowing that they're going to need to get a return on their investment, they're going to get a return on their capital. hopefully it would make sense to bring in other partners, because we don't want to build a bridge to nowhere to say we built it in appropriations. we want to build a smart infrastructure where we are going to change people's lives, make getting to work easier, getting to school easier, flying across the country, those are the places we want to see impact. >> you talk about privatization, does that include the air traffic control system? do you have a list we will see coming outs and? -- coming out soon? >> we have a list . it's not a complete list. i have talked openly about the atc system. i think the atc system is sort of a bellwether example of something that can be done and should be done. we're not on the leading edge to do this. we are following what about a bunch of other countries have done. canada, over 50 countries have done what i'm proposing we do.
there's a direct attributable revenue stream already dedicated to air traffic control. if you put the atc components into a private business, whether it be for-profit or not for profit, build the technology, modernize the system, the revenue is there, the technology is there, the opportunity is there and it will change everyone's life. we will speed up time, you will not sit on the tarmac as long your flight time will go down. ,those of you that fly around know that you drop from 20,000 feet to 15,000 feet, 10,000 feet, you will have direct descent at airports. certain airports in the united states have built that technology. you will go from waypoint waypoints, you will go directly from point-to-point, you will save jet fuel in the process, saving jet fuel is cost-efficient and it will consume less energy and it's
environmentally very friendly. it makes an enormous amount of sense. that's why many other countries have done it. >> the last time i flew laguardia, we were 37 in line to take off and sat there for three hours. you have my vote. >> i won't even guess what percentage of jet fuel from that trip you used on the ground. because every time you start to get that hunk of steel moving again, it takes a lot of jet fuel. >> what's the timing, is there something we can get done in the second half of this year? me?hat does it get it done -- done mean? >> it is washington after all. >> you mention energy policy. what we are moving that one through the system, we've been working with secretary chow. the good news here is the house
members, they have enormous desires to do this. we've been working with many of the house members who this is an air transportation bill they had on the floor for a long time. we are working with a house who wants to work with us. there's very little opposition to what we want to do. that said, this is going to take years, not months to get done. >> we have a connection on the senate side. >> that's what i hear. >> you mentioned the energy policy, could you tell me how this was going forward. obviously the president was recently in west virginia. what are you doing about planet? >> we are supportive of jobs. we know that coal is a big job creator in the united states. the we have to allow it to compete. we are also a big supporter of natural gas, a supporter of fracking, supporter of energy independence.
we are supportive of the free market. those things have to work together and different feed stocks have different economics to them and we are allowing the free market to be the free market. the biggest issue for us is this administration in energy independence and making sure we can control our own destiny. americau.s. were north -- >> for the u.s. or north america? >> that's north america. we're most concerned about the u.s., but then we care about north america, imported oil, we are starting to export these things and building up more and more terminals in the united states and exporting more lng. we happen to have a feedstock or btu component that the rest of the world needs. more and more lng is needed and we have an excess supply of gas. we're going to permit more of these lng plants. we are going to let these different feed stocks compete in the united states and we are going to be supportive of them because part of creating jobs
and part of manufacturing in the united states is what is your competitive advantage? we have a big competitive advantage. we have to be energy in we need to keep and promote our chief energy. we have got to use that as a competitive advantage. >> we're still on oil for the transportation system, how do you think about weaning the transportation system -- oil, and i know there have been changes to the standards. is that something you have been looking at? >> we know that oil is going to to be a major component of everything we do. it's going to be a major component to the transportation industry. we're not saying it should be, is going to be. but when you're placing it into the energy sector and power sector, it's a marginal role of oil that sets the price of every oil stack everyday. so every marginal barrel that you don't consume is one more barrel of supply you have and you're affecting the price of the whole system which we think is good for the u.s. consumer, very good for manufacturing in
the united states. it makes us more competitive and we do very much care about the environment. we want to do this in a very environmentally friendly way. feldstein onty this morning. i assume that's not in the mix or it's not something you consider conversation is willing to take on? >> it is not in our mix. >> trade policy, you mentioned exports. there's lots of questions about the administration's trade policy. there are a cacophony of voices coming out of the administration. could you tell me a little about how you, what is your philosophy and what you think of this presidency? >> free, open, fair trade. free, open and fair. >> what does fair mean? >> it means we treat our trading partners the way they treat us.
the president calls it restraint. we should be reciprocal in the way we treat each other. we would prefer that no one had carrots, that we have free and open trade borders but if you want to insist on having a tariff on wheat for our product which we insist you did not the president believes we should treat you reciprocally and we should tax your product coming into the united states and that is free. that is open and that is fair. that would be the definition of fair. so the example he will use and , is cars.od example we manufacture a car in the united states and ship it to certain countries, they put a tariff onace -- that car. if they manufacture a car they can send it to the united states and get a small terrace -- tarrif. that's not fair. >> where you think they should
make the greatest gains, the foreign markets, i'll talk about imports in a second but are there places that are low increase that you can make a change? >> on our exports? we can increase exports everywhere. we are becoming a better and better manufacturing and we've got cheap energy , we've got better technology. as we continue to improve our infrastructure, we will improve those assets of our economy. we will be a better exporter but we've got to do it on a level playing field. >> the administration talks about manufacturing jobs. economy is manufacturing jobs. hear more from the administration about financial services as compared to -- as a comparative advantage for the u.s.? >> maybe we are not talking about it enough but we're talking about it. when we were in florida, two weeks ago talking with the chinese, we were talking a lot about them opening up more to
our service industry, getting out companies water access, allowing u.s. committees to own 100% of their chinese joint vendors. many of those companies have years, which-plus was the original rule that you have to be a joint venture partner for 10 years. many of our companies have been there for more than 10, we were talking about the ability for full ownership, to run bigger businesses which is more and more service. we are talking about it and we're talking about quite a bit. maybe we need to do a better job of making sure one of these is on the other side. >> the reagan administration is -- was incredibly aggressive with respect imports. their policies, putting terrace -- tarrifs on steel, textiles motorcycles, autos and sugar. given that we have put the reagan administration on a pedestal, is that the right
baseline? are you getting a bad rap because we are trying to judge you against the world, the theoretical world of the trade? >> i don't know what's the right baseline. the right baseline to judge us is do we grow the economy? do we create a better environment for u.s. citizens? do we put more people to work? do we give them better jobs? does their life get better? the more people end up getting a job they wanted, to more people have the quality of life they want, to more kids into going to the places they want to? their standards of life and their future is better than the day we got here. if we did that, that's what we should be compared against. >> what do you think is the most important tool for doing that? taking you back to kentucky. i grew up in a town where fisher-price had a twin factory. they shut down and moved to
mexico and china. the city never really recovered much. what can you do to help bring or keep those kind of jobs back in kentucky? provide the tax rates that make corporate competitive in this country. that's the first place we are going to start. we have a 35% corporate tax rate. the rate is 23%. there's tax domiciles where you can get substantially lower than 23%. the president has been constantly talking about rate matters so we've got to start with tax rates. because companies, the first thing they're going to make his build a business, i'm successful, what part do i keep and what part do i give my shareholders, what part do i give the government? let's start with that. we've got to have a labor force that is compatible to what we need to hire. you have heard a lot of talk about retooling of the labor force, reeducating of the labor
force. we're spending an enormous amount of time on apprenticeship programs and vocational education and tooling our labor force to the labor force we're going to need in the 21st and 22nd century. some are going to have to provide the labor force we're going to need. there's hundreds of welding jobs out there and no welders. how you build pipelines? you've got to weld them. it's a decent income level and grow from there. we've got to create the environment where kids coming out of high school are willing to go into a program where they become a welder. >> my father was a welder. >> my father was an electrician. this is how we started. >> he was so disappointed i went to college and become a welder. >> we've got to get the narrative back to what it needs -- it means to be successful in this country and how we're going to grow our economy and how we're going to create an
environment that is good for all. i think we can do it. there's a lot of opportunity here. as i was talking about before, the l and g opportunity is enormous. if you look what they need in japan and china and germany to feed their environment. japan and germany have given up on nuclear power. they need to replace that power with ldg. we could be and should be the g inst exporter of l.a. the world. we are going to permit the exported. those are huge construction sites and future operating facilities once again built. it creates enormous amount of jobs, good paying jobs. is a great market for you. >> the first thing we will do is permit export in the northwest. just think of a transport time for the northwest to japan versus anywhere else. then we've got to put facilities
on the east coast to get from the east coast to germany. >> that's a simple permitting process. >> the one place we are going to permit in the northwest, it's been turned down twice already. >> the second iif international engagement, you'll be traveling with the president to the g7, the g20. tell me about how you think about those engagements. what is your message when you sit down, and the president sits down with his counterparts in italy or germany later in summer? >> the message is simple. we care about the united states of america. we care about economic prosperity, we care about economic growth, the care about trade, we care about treated fairly. we want to be part of the global economy. we want to be part of the global universe but we don't want to be taken advantage of. and we want to work with each and every country out there and we want to treat you fairly and we want you to treat as fairly. we want to be a great part with each and everyone of you.
>> you were talking about china before coming out here. leading up to just a few weeks ago, i was very concerned about u.s.-china relations. china is an easy villain for us from economic rhetoric standpoint. the meeting with president xi seemed to have gone very, very well. how do you see u.s.-china relations developing? >> the meetings went great. we had 24 hours of pretty intense meetings. two big group meetings. then we split into two smaller groups, which was probably the most productive time. i was part of the very small group talking on trade where we really got down to nuts and bolts issues on trade. that was a meeting when we talk about service trade industry and opening up china for our service business, not only the ownership
, but what they would have to do with intellectual property rights and software and data storage and all their all the rules on having software stored on continent and data stored and localization versus international standards, and changing import/export rules. we've agreed to beef exports for a long time and they haven't happened. we've got to get it going in the next 100 days. they pledged to work with us on beef and rice in the next 100 days. we've talked to them about a bunch of other issues where we literally have laid out 100 day plan for each other where we're going to try to open up more bilateral trade with each other, both on service as well as manufactured goods. we are continuing to have those dialogs as we speak right now. i thought they went very well. the president got along very well with president xi. i think they forged a very good relationship. since then, i think it is been
reported actively that they had a follow-up phone conversation. president xi has extended a formal invitation to the president to come to china in the fall. i think the president would very much like to go to china in the fall. the big condition being that we need to continue to make progress on the trade negotiations. the president does not like our trade deficit. he wants that trade deficit narrowed, and he's happy to have it narrow by as exporting more to china. it doesn't have to be that they stop importing us, but we had export more to them so that trade deficit narrows and narrows quite quickly. >> we have a huge conference in beijing in november. we would love to have you and the president come speak to a great opportunity. >> i'm not sure that will be our forcing function but we'll see. ago, hank paulson and i launched a formal negotiation process for the chinese. do you foresee similar kinds of negotiation vehicles or is this
your 100 a plan, then come back and rethink what the mechanism looks like? >> no, no. the 100 day plan is a kickstart plan for things that have been sort of in the hopper. some of them are for four to six years that have just sort of been stalling around the edges. where we had to show each other that we can walk together, then we can start running. the 100 day plan is just a start. >> so it's a confidence builder? >> yeah, a confidence building. -- confidence builder. it gets some exports out of the united states into china. showing that we can decrease the trade deficit by exporting. but we actually set them and in response to was the one a day plan but we sent a longer term plan. not being decades. longer-term plan being a year , and the year plan had an awful lot on it. 100e're not saying it is and done. 100, and then we really start running.
>> my time is up. i miss you on our board. we wish all the best. think you very much for coming. a round of applause. [applause] ♪ c-span's "washington journal," live every day with news and policy issues that impact you. coming up friday morning, from the woodrow wilson center, we betweend comparisons the cuban missile crisis in north korea. then, we talk about president trump embracing a single-payer health care system. be sure to watch "washington journal," is at 7 p.m. -- 7:00 a.m. friday morning. join the discussion. ♪ >> we