Tax Reform Discussion with Treasury Secretary Steven Mnuchin CSPAN April 26, 2017 10:44am-11:09am EDT
the speaker pro tempore: the gentleman yields back the balance of his time. pursuant to sclause 12-a of rule 1, the chair declares the house in recess until noon one bill on the calendar today to require senate confirmation for the director of the u.s. copy write office. a final vote on the bill is expected -- copyright office. a final vote on the bill is expected later today. and the current spending authority expiring friday at midnight. meanwhile, the trump administration is expected to unveil their tax reform proposal later today. treasury secretaries steve mnuchin and gary cohen will brief reporters at the white house. that's scheduled for 1:30 eastern. you can stream it on the c-span radio app.
we heard about the tax reform from steny hoyer. we'll hear about the president's tax plan, we'll look at it but if it gives a huge tax break to the very wealthy democrats, that won't pass muster with democrats. the treasury secretary talked about the tax policy this morning in an event hosted by the hill" newspaper. [applause] >> thanks. well, we timed this event quite well, i think. well, mr. secretary, thanks for doing this. you met with republican leaders on capitol hill about tax reform yesterday. is the administration and republican leaders, are you on the same page and how confident are you this can get done this year? secretary mnuchin: well, first of all, thank you for having me here this morning. it's a pleasure. we've been meeting weekly with chairman brady and people at the senate on tax reform. so since the president has been in office, this is something
we've been working on very closely. i think as you know we have over 100 people in the tax department at treasury who have been crunching numbers on different things on lots of different ideas. we had a very successful meeting last night, and i think it's clear that the house, the senate, the administration are all on the same page, that tax reform is a major priority to boost the economy, that the fundamental principles of making business tax competitive. we have a very uncompetitive system that's hindering the economy and jobs. we want to make business competitive, and we want to simplify the personal tax system, lower taxes and create economic growth. so this is going to be the biggest tax cut and the largest tax reform in the history of our country. and we are committed to seeing this through. host: now, does the plan include transportation provisions or is it just
strictry tax reform? secretary mnuchin: this plan is just tax reform. host: ok. does it include the house plan on border adjustment tax? secretary mnuchin: well, let me first say, we are going to release the details of the plan later today. so i'm not going to go through all the specifics with you. but i will tell you on the border adjusted tax, we've been talking to chairman brady and speaker ryan on this for a long period of time and as i said before, there's many aspects of it we like. there's certain things we're concerned about. what we discussed with them is we don't think it works in its current form and we'll continue to have discussions with them about revisions that they will consider. so that's where we are and it's been very productive discussions with them. host: ok. just between us -- secretary mnuchin: just between us. host: can you say if it's
legislative text or plan? secretary mnuchin: again, our objective is we're coming out with the principles today which is the plan and we are working very closely with the house and senate. we're meeting multiple times with them every week both on the staff level and the leadership level to reach an agreement that will turn into a bill for the president to sign. our objective is we will have a combined plan that comes out, incorporating the principles that we've all agreed on. bob: it's been reported that the trump plan will lower the corporate rate tax to 15% as well as for pass-throughs. i'm not going to push on those specifics but how do you pay for that? are there significant offsets? secretary mnuchin: again, let me say i am not going to go through it. but the 15% has been highly now in the press for the last couple of days. i will confirm that the business tax is going to be 15% . that is what the president said in the campaign.
he thinks that's absolutely critical to drive growth, and you know what i say, people talk about pass-throughs. what we think is important is small business. and we are committed that small business, owner-operators will have the benefit of the business rate. what this is not going to be is a loophole to let rich people who should be paying higher rates pay 15%. this is going to be for small businesses that drive the economy and they will have the benefit of this. bob: are you sticking with the so-called mnuchin rule there will be no absolute tax cut for the wealthy? secretary mnuchin: ok. we will get into the details when we release the plan later today. i will say our objective is simplifying personal taxes. for most americans we think they should be able to do their taxes on a large postcard. and we're very pleased at the i.r.s. with the number of returns that are coming in electronically. we think that's terrific.
but the average american should have simple taxes. and for a large part of people, they won't be paying taxes. there will be personal exemptions. for people who can't afford it won't be paying taxes. bob: initially said you want to get the bill to the president's desk by the august recess but then health care didn't pass and you adjusted that to sometime this year. just breaking that down a little bit, are you looking for the house at least to pass it by the august recess to show some movement before lawmakers get out of town? secretary mnuchin: again, let me just say, the commitment that came out of the group last night is we want to move this as fast as we can. so that's what we're committed to do. we're committed to working, getting this thing done. getting everybody in the room and getting this passed. so that's what you're going to see. we're working hard to get it done quickly, and i would say in terms of economic growth, the president and i and others in the administration fundamentally think we can get
to 3% sustained economic growth. that's very achievable. tax reform is critical to it. regulatory reform is critical to it. i think you should know we have been working hard on the president's executive orders and we are focused on creating economic growth. bob: and you said that growth will pay for the plan? secretary mnuchin: absolutely. bob: the strategy for passing this bill, as you know tax reform hasn't been done since 1986. that was a bipartisan bill. secretary mnuchin: 30 years. it's about time. bob: have you viewing that as the model or do you think there are things in the plan that democrats should like or do you think mostly republicans are going to have to unite and carry this across the finish line? secretary mnuchin: we don't start out with what the model is. we start out what we think should be passed. i'm hopeful that democrats will work with us on this. this is about tax cuts that are good for the american people and i hope they won't stand in the way of creating tax cuts for small business, for making
business competitive for simplifying personal taxes so we're hopeful that it's bipartisan. but as you know, there's multiple ways of doing this, and the president is determined that we will have tax reform. as a matter of fact, he called me at 7:30 this morning and we went over plans for the day. bob: how involved has he been? secretary mnuchin: he's been very involved. he's been very involved in the economic policies, as i said, for over the last year as we did on the campaign and he's been very involved. we spent a long time with him yesterday in the oval office going through the final details of the plan. bob: the tax cuts of 2001 had an expiration date. is the goal to make this permanent or would you accept some temporary tax cuts? secretary mnuchin: again, i would say the goal is to make it permanent. there's lots of levers here. and you know, if we have them for 10 years, that's better than nothing, but we'd like to have perm nancy to it but those will be details that will be worked out. said make president
america great again. the health care bill didn't have message. how will you sell this tax plan to the american public? do you want the president to go on the road to sell it? what is the marketing plan? some people say this is a jobs bill. secretary mnuchin: this is the difference between 1.6, 1.8 and 3% g.d.p. is staggering. it's trillions of dollars of revenues. it's tons of jobs. this bill is about creating economic growth and jobs and you're right. we should call this the 2017 tax reform for economic growth and jobs to make america great again. [laughter] secretary mnuchin: i just named this. possible: that's good. now -- bob: that's good. now, this is washington. there is speculation that tax plan is so hard to dooned that plan b would be going to tax cuts at some point.
how do you view -- what is the success model for this? you want the whole thing or would you accept something down the road? secretary mnuchin: the whole thing. we like hard challenges. that's where the president's here. he's taking on a hard challenge to make america great again and he's determined to to it. this is the center -- determined to do it. this is the center of his economic plan. we met with hundreds of business leaders since he's been in office. while we were on the campaign we met with thousands of business leaders, small businesses, big businesses. let me tell you, the one thing we heard more than anything else is people want tax reform. people want economic growth and people want less regulations to put people back to work and make american jobs. bob: white house press secretary sean spicer said the administration will be driving the train on tax reform. is that true, is the administration going to be the driving force with this plan that you invail this afternoon? secretary mnuchin: it's clear
the administration is going to provide leadership but this is going to be an effort working very closely with the house and senate and incorporating, but i think it was very important to the president that we put out the core principles. this is part of his big impact for the first 100 days. we've been working on this for a long time, and as i said, the core principles, we have fundamental agreement on what we're trying to do and the details of tax reform are still to be worked out but we're confident that we can work with the house and senate to get this passed and to get something on the president's desk to sign that's going to create economic growth and jobs. bob: have you reached out to any democrats, centrists, perhaps, maybe like joe manchin that supported your nomination, or something down the road? secretary mnuchin: again, i won't comment on the specifics who we reached out to and who we haven't. you know, this is a process where we're now starting listening groups. again, i think one of the
things that's very unique about this president is he's willing to listen. we've had lots of people into the white house. we're going to have people from congress at the white house. we're going to listen to what people have to say as we shape this plan. but the president's fundamental premise is, we need to make american business competitive and we need to simplify personal taxes. bob: people forget you traveled extensively with the president on the campaign trail. how does that experience help you craft his economic policies? secretary mnuchin: well, we've been working on this for the last year. the president did a major speech in detroit at the economic club. he made a major speech in new york at the economic club. the president has been talking about 15% taxes on businesses for a long period of time. he understands. he's a business man who understands how to create economic growth. and he's very focused on it. bob: on the debt limit, what's the latest on when congress must act to raise the debt limit, the debt ceiling?
secretary mnuchin: so the debt ceiling. so one of the fun parts of my jobs is i get to use these superhuman powers to manage the debt ceiling. so i would say in the near term, you know, there's nothing we're concerned about, we have the cash flow to manage the government -- as a matter of fact, we had one of the largest days ever of collecting tax receipts on april 18. it was huge. both the absolute amount of money and the number of things that we transacted. so i'm comfortable into the summer we're fine. this is a discussion we're having with the house and senate. do you think we need to raise the debt ceiling? there's no question about that. people agree. the full faith and credit of the u.s. government is the most important thing. and, you know, we're not going to let this become an issue. bob: should the debt ceiling be paired with spending cuts or do you want a hike?
secretary mnuchin: you're getting into a technicality. from my perspective we're going to raise it. so we're going to raise it. and i think that this is something that both democrats and republicans understand. we've already spent the money. this is not the budget process, and we're going to raise it. how it's packaged and what it's part of, i'll let the leadership in the house and senate work with us on that. bob: you brought in a lot of revenue this month, but are you saying it's definitely got to be done this year, it's got to be done in the fall? secretary mnuchin: the debt ceiling, absolutely. and by the way, we are not going to do one of these wait until the last minute either. so we'll get the debt limit done in plenty of time so there's no issues for the market. bob: so there won't be any crisis like there usually is? secretary mnuchin: absolutely. bob: would they lift the debt limit via the 14th amendment?
secretary mnuchin: we have not had those discussions long those lines. again, i am not concerned we are not going to get this passed. bob: ok. how best to deal with the nation's debt problem? at some point won't policymakers have to tackle entitlements like that was done in the balanced budget act of 1997? secretary mnuchin: well, let me just comment. the growth of the debt from $10 trillion to $20 trillion under the last administration is highly concerning, and the absolute debt is something that we're well aware of. again, going back to i think the best way of dealing with this is economic growth. if you look at the ratio of debt-to-g.d.p. which is one of the things that we focus on in looking at economies around the world, we can shrink our debt-to-g.d.p. through economic growth and that is the critical number to look at. bob: you said that the u.s. needs to get fannie and freddie
out of government ownership. what's your plan to get government out of housing and what would the affect be on mortgage rates? secretary mnuchin: well, so i talked about this a bunch. this is something we've had many meetings on. housing reform is a priority of mine. the exising system of having the treasury a gigantic line to freddie and fannie, we're determined to change that and not have that continue for the next four years. again i think the fundamental principles are, we need to make sure we have proper housing, finance in this country. we have had liquidity for the 30-year mortgage that's been very important for the middle income in terms of being able to have homeownership and homeownership and home building, as you know, is a very big part of the u.s. economy. so the number one issue is, we want to make sure that we have proper liquidity in the housing markets.
the other number one issue, because i won't even call these number one and two in any particular order, i'll just call them the top two. we can't put the taxpayers at risk. we can't have a system where there's a bailout of housing finance. so we're looking for housing reform. we have spoken to different people. i think there's a lot of different, good ideas. this is something we'll work on in the second half of the year once we get further down tax reform to focus on our housingpolicy. bob: you talked to dr. ben carson on those plans? secretary mnuchin: we'll work closely with him. although the major focus is on going to be on fannie and freddie, we're concerned with the growth of f.h.a. loans. and we want to be very careful that in fixing fannie and freddie we don't create a bigger problem at f.h.a. this isn't going to be -- whatever the solution is, it's not going to be repush down this and it pops up on the other side at f.h.a.
we're looking at this and working with h.u.d. on comprehensive housing issues to make sure we have liquidity and safety. bob: on dodd-frank, there are different approaches in the house and senate of how to revamp dodd-frank. do you support jep hensarling's bill which is subject of a hearing today? what's your timing on tackling that big issue which was also one of the president's campaign promises? secretary mnuchin: i have had multiple conversation was chairman hensarling. we very much support the fact that he's launched this bill and he's focused on these issues. i think as you know the president signed several executive orders that we have been working on very closely. the first report will come out in the beginning of june, and what the president has asked us to do is look at not just dodd-frank but even a much larger focus on regulatory reform. we'll be coming out with recommendations. again, we have had over 20 different focus groups in many cases, 50 to 100 people at each
one of these. we're taking an input from both banks, big and small, community banks, nonbanks. regulators. nonfinance companies. and we're going to come back with recommendations to the president. some of the things we can do will be through regulatory changes. i think as you know we have the right to appoint several people at very critical regulatory agencies. we're very close with coming out with the president has approved someone to be the next vice chair of the fed on regulatory reform. we'll be announcing that short. -- shortly. some of this we think we can focus on through regulatory relief and getting the regulators working closer together. some of these issues we'll focus on with executive orders and some will need changes to legislation and we'll be working with chairman hensarling and others on that. bob: some republicans on capitol hill have called for a new i.r.s. head, john koskinen, a hold over from the obama
administration, will a new i.r.s. be apointed? secretary mnuchin: his term is over later in the year. we have had discussions with several people. we're very close to a decision. i would say he's working very closely with us on specific issues now and we're looking forward to having a seamless transition. this is one of the most important positions that we will be appointing. again, we're close to making a final decision on that and the president and i have been discussing it. bob: you're a new york guy. spent time in l.a. what do you think about d.c. and what has been -- what -- what's been surprising about the job? secretary mnuchin: you know what most surprising about the job is how people say that washington is so different in how politics are so different. i actually think a lot of the things i learned in business carry over to this job.
that a lot of it is about consensus building and teamwork. it's about managing different constituencies. when you run a company you have shareholders, a board of directors, you have employees, you have customers. i think what we understand and this administration brings a practical business approach. again, we're -- we have an outreach to our customers, in many cases again on the economic side it's either the personal side and listening to what people want or small businesses or big businesses. working with our other constituencies in the house and senate. my surprise is there's been skill sets that are transferable into this job. i'd also say it's one of the most interesting things i have ever done. no matter how -- how many things i thought there were to do, there are more. one of the areas as you look at this job, there's demess finance which i knew a lot about,
international finance which i had experience in, and there's a whole other aspect to this job in the treasury which is very important, what we call terrorist financing and intelligence. as i like to say, i knew very little about this, i literally had a speed course ph.d. in the last 90 days about the sanctions programs and what we manage in treasury are some of the most critical functions. i think you saw this week we came out with over 250 new sanctions on syrian targets. we have been focused on sanctions on north korea. we have the sanctions programs that we're managing both in iran and on russia. this is a very, very important component of national security. and i have been spending a lot of time on this since i have been in the job, thrick everything that's going on. bob: is that about a third of your job? secretary mnuchin: probably been more like 50% of my job in terms of time. again it's been some of the most important things we focused on and they are very complicated issues. i came into the job with a lot
of experience on financial reform. when you talk about regulatory reform i can be very efficient in doing this. i was not an expert on the iranian nuclear arms deal. bob: you're starting today with tax reform plan that you want to get the bill done this year. it's going to be a topic that the media writes a lot about. as you know president trump has been a big critic of the media. in the coverage that you have seen so far in the job, do you see a media bias? how will you deal with the media going forward as you're trying to move this massive bill? secretary mnuchin: again i just comment the president has an ability to communicate directly with the american public. and even this morning he tweeted on economic g.d.p. so i think it's great. he is focused on these issues. he is communicating directly with the american public. now, as far as all the media in this room, i'm sure you're going
to completely give me perfect coverage of everything i say so i won't have to comment on the fake news. but i'll leave it at that. bob: well, mr. secretary, thank you so much. appreciate it. please thank the secretary. [applause] ecretary mnuchin: thank you. >> thank you, mr. secretary. bob will stay back for our next panel. continue our discussion on tax reform i now like to call on stage former congressman dave camp, who is a senior policy advisor at pricewaterhousecoopers and the former chairman of the house ways and means committee. jared bernstein, senior fellow of the center on budget and policy priorities. mia mcguinness, and grover norquist, president and founder of the americans for tax reform. over to you, bob. bob: thanks. so we'll start with you, what