tv Power Lunch CNBC August 30, 2017 1:00pm-3:00pm EDT
after getting tanked and look at it today, huge call activity there as well. i'm not so much talking about that i think this acquisition was key to the future for gilead. >> thanks. that does it for us on the "halftime report." we want to hand it over to my colleagues at "power lunch". >> here's what's on the menu texas picking up the pieces trying to find out how much harvey's devastation is going to cost now the storm has a new target plus, happy birthday buffett oracle of omaha going one on one with becky quick and weighed in on harvey, bank of america and economy and more we'll go in that interview straight ahead president trump hitting the road to make the pitch for tax reform he's expected to say the american economy is rigged against workers and middle class. we'll carry his speech live when it happens power lunch starts right now
>> good afternoon. stocks steady despite jobs and gdp data financials and tech the best performers and telecom and energy the biggest laggards. bob evans farms soaring, beating sales estimates and raising outlook and chico's taking a hit. comp store sales also missing the mark. >> let's get you caught up on latest headlines on har vixt the government-run u.s. flood insurance program now says it has already received 35,000 claims, as of noon today and as of midnight, dumped 21 trillion gallons of rain, and it's enough to fill half of lake tahoe. and the storm is hitting louisiana now. the state bracing for tornadoes and flooding
we've got you covered. let's go to team coverage on the ground in texas. brian sullivan live in pasadena with the latest on the refineries contessa brewer still in houston where businesses are continuing to get back to business. let's start with you. >> all right, sara, thank you very much. we want to look at these refineries and show them to you. right along the buffalo bayou, this is the ship channel/river that goes through houston. sort of a bad news, good news story here the bad news is that harvey is not done harvey is still active it just swung east obviousry a lot of people being hit. they are under water and struggling from a financial perspective, you have 1.4 million barrels a day of refining capacity there the biggest refinery in america shut down this morning exxon-mobil, total and valero all shuttered, taking more
refining capacity offline. here closer to houston, a bit of a different story. that's the petro pasadena facility behind us, 100,000 barrels a day. currently offline. this water guys is about 9 feet higher than it should be and you can see that water went in see where those sort of sleds or whatever they are called, there's water in that and there should not be water in that. there should be a wall that you see here but the water has overtopped the wall. that is one of the refineries shut down here i guess the good news is the water is -- and contessa as hey better view, it's beginning to recede down. you can clearly see the high water mark and unfortunately the high water mark is marked by a lot of garbage the water here slowed down but i think this is probably representative of a lot of the cleanup that is to come, this is
just one small sliver. we'll come back in a few minutes and talk about the chemical plants, not just oil and gas. >> thank you very much for that. now to contessa brewer in houston where some businesses are starting to reopen contessa >> reporter: yeah, and the businesses that are reopening are seeing a lot of people lining up for their services we're at the walmart now south of houston, a packed parking lot here, steady line of traffic then look at the line of customers waiting out in the hot sun, waiting to get inside first day of sunshine so probably a lot of people are grateful for this opportunity to be out in it and feeling it. if we go inside, the first department customers are hitting, grocery of course, as we walk inside you'll see here there's lots of choices for fresh fruit, even though the supply chain has been all but shut down for days on end. then look over here, pallets of water. what we've been told by walmart, more than 1,000 trucks have been
sent out through the distribution centers, more than 900 of those with bottled water alone for walmart and sam's clubs and lots of shelters including the convention center. we talked to the manager about how he's going to provide the supplies that the things people need in this neighborhood so badly are here for them when they get inside the store. >> our bread vendors might be coming from a different location our milk vendors might be having a different roult to get in. they are working diligently to get supplies and keep them safe at the same time. >> the manager told me an amazing store rix the associates and customers were here and started to evacuate as flood water around the neighborhood started to rise. then some of them got stuck here about ten people, associates and customers spent the storm, rode out the storm inside the walmart and yes, they opened up boxes of air mattresses and used them here and they were able to get them out
the people who were here working today, some of them have lost their own homes and lost cars. i talked to a lady who saw the water rising and was scared for her safety but ready to get back to work. an amazing situation here and we're seeing it repeated at businesses all around this area. >> it's certainly impressive the store is very well stocked not having trouble with supply chains at this point it doesn't look like at least. >> reporter: he says that they do have trouble with the supply chains in that they've got the trucks to distribution centers and still closed because of flooding and when they have the trucks they have to make sure that one the roads are passable to get to the places they need to be and two that the stores are still open if they send those trucks there again, the big one is they are not only supply gs the stores, walmart and sam's club but also the area shelters as well, big ones and smaller ones. >> all right, thanks, contessa now to the economy, news that we're growing at the strongest clip in over two years
steve has the details. >> this is not unrelated to the harvey story because this is -- it will work into it there's some excitement that we may have shifted to a stronger growth path and with a still strong forecast for the third quarter. here's the data, september quarter gdp coming in at 3%, here are all of the components in how they were upwardly adjusted, 3.3, consumer. business investment, a nice showing there, 6.9%. that's almost 2 points better. housing doing a little bit less bad, government coming in with a surprise negative there, downward rejustment of 21% behind the larger than expected upward revision to the second quarter, real gdp growth is a more positive feel about economic growth. that's not an official economic term the cnbc rapid upbeat, running at 2.8 for the third quarter and
better growth numbers come along with good jobs numbers we got this morning jobs are a jumping 237, much better than the forecast out there july adp up by 23,000, good showing in the good sector with construction and manufacturing both doing well. i'm not seeing much change in the nonfarm payroll estimates, 179,000. a major cloud is the impact of hurricane harvey and it's the bun one economist cited for not raising forecast today jp morgan calling it wake of the flood and saying net impact on q3 and q4 should be positive but very small we're not changing our forecast. here's how these things work growth impacts goes negative at the beginning then positive on the outside on the back side of it along with reconstruction. >> and net-net. >> net-net gdp does no measure happiness.
it could be slightly positive but one would not to go through hurricanes to get a net positive. >> that requires the the reconstruction to be funded. if it doesn't fall on insurance companies we will need -- >> the expectation there will be federal, private sector as well along with the insurance money. >> good jobs too though, reconstruction. >> here's my worry about this. i know these are early days to worry. we have an existing deficit of construction workers we're going to need another boatload of these construction workers in order to rebuild parts of the fourth largest city in the united states. >> let's talk about the issue of the cost of the storm and enormous cost of harvey, on the news line is chuck watson, director of research and development. good to have you here, mr. watson looking at estimates on costs. on monday you were at $30 billion. tuesday at $40 billion
today between 48 and $$48 and $ billion, is that because of the flooding >> it's the flooding there's a separate issue the computer models we normally use to do estimates for hurricanes don't really work that well for thiskind of storm. this is more like a big broad flooding low pressure type thing and over such a large area that a lot of the normal assumptions that you build into the system start to break down. another big issue is there's a lot of human decisions and factors that go into this in the early stages we don't noef the controlled releases from the reservoirs, depending on what decision the court engineers make on that it would be a $1 billion impact, $2 billion impact or if they do nothing in the same sales, it's a $10 billion impact that's why we earned up with these wide ranges of estimates. >> wilfred hit on an issue that will become very big
what percentage of those losses or costs do you think are actually going to be uninsured because so much of the impact comes from flooding, which historically, flood insurance penetration rates for maybe 15% at best. >> exactly for a typical hurricane, you get between 30 and 40% coverage by private insurance. for this storm our current estimate is around the even 20% range, maybe even under that a little bit it's going to be a huge hit to the flood insurance program. but we're currently saving as much as 70 to 75% of the losses will not be insured. >> one thing i know firsthand from the whole sandy episode we had here, is that the cost of flooding are not immediately apparent you can come in and look at your ground floor which was flooded and think it looks okay, you take off a little bit of that
walling and you find out the whole ground floor has to be redone sometimes you don't get to that point until a month or two later and figure all of that stuff out. >> exactly and the public infrastructure, that's a huge hit here because even things like trivial stuff like street signs and traffic lights and flood control structures, a lot of times you don't realize and south carolina we had bad flooding two years ago and some of the roads didn't realize had been undermined until several months until they had inspectors go by and then the truck is driving along and drops into a sinkhole. those are the kinds of impacts from flooreding you don't ee sean don't know about until somebody trips then you get into mold and secondary imparts, that's another reason why our numbers are going up the longer an area is inundated, the more chance there is for these things getting undermined or hidden damage doesn't show up
until later. >> almost too hard to contemplate how far the effects go the other thing that makes this a little unusual, chuck, and different in terms of determining the economic cost is this storm has struck the energy capital of the country, refineries are shut down so are oil and production -- gas production facilities and pipelines. how do you factor that >> the short answer is you throw a dart at the wall the longer answer is you try to figure out whether the damage is disruption or actual damage. a lot of what we're seeing is disruption workforce came in, done precautionary shut down. assuming there's little to no physical needs at the refinery, they spin back up in the next couple of weeks to do that and a month, three months later you resume production and you've caught up with your backlog. those are complex pieces of
equipment. if you break something, there's very few companies that are involved in going in and doing these kind of repairs. a specialized piece of equipment is knocked out of commission and you're talking months of down time the ripple effects could be quite substantial. now, we're not seeing that yet but -- >> it's definitely a possibility. chuck, thanks so much for your expertise. we appreciate it. >> okay. >> you too, steve, you're insightful too. >> thank you very much. >> don't forget to watch steve's interview tomorrow at 11:30 a.m. eastern time here on cnbc. >> promises to be insightful. >> especially after the president's tax reform speech. >> that will be a principal discussion of the speech. >> it's warren buffett's birthday and he spent it talking to cnbc and got a cake as part of it. we'll share his thoughts on his major stock holdings and why he thinks it doesn't feel like a 3%
buffett has been watching too. the personal devastation there is incredible. he also said when it comes to insurance losses, it's going to be huge. uninsured losses as well we threw a couple of numbers, we heard 10 to $20 billion in insured losses maybe up to $150 billion in uninsured losses and still early he said the numbers doesn't sound crazy to him berkshire has exposure to, primarily through geico. >> we probably have 500,000 or so cars in that area for geico, which would be 10%, probably 5 million cars in that area. we don't know at this point -- i wouldn't be surprised if we had 50,000 losses and most of them will be total losses >> now buffett says geico is in the process of trying to get tens of thousands of replacement vehicles into the area to make sure that people have a car they've lost so much with their
homes already. it's very important they have those cars and also in the process of moving big tankers of gasoline into the area as well because they say not only do you need a car but you've got to have a full tank of gasoline to go with it how an inyou asurer performs tes you whether they are doing their job or not they'll be measured by how they do in situations like this we also got the chance to talk with buffett about the gdp numbers earlier today. second quarter revised gdp was revised up to 3%, and better than most were anticipating. i asked if this feels like a 3% economy to him >> no. it's been about 2% a year now for since the fall of 2009, you know, eight years. and been remarkably close to that most of the time. the way they report those quarterly numbers, they take the quarter and mul pli by four, not year over year it gets a little tricky that way if you're off by a tenth it
makes it four tenths in the annual figure they report. with seasonal adjustments, you never want to take any quarter too seriously. i would guess we're in a 2% growth economy now >> now the other big berkshire news overnight was that berkshire hathaway converted the warrants it held in bank of america in shares. as a result, they are the largest shareholder in bank of america. buffett had signaled this was coming but this makes that news official being the largest shareholder that's something that buffett says isn't going to change at b of a any time soon. >> we're very happy, 700 million shares and i like the business and valuation and i like the management very much so that -- i think you'll see that for a long time in our holdings. >> wells fargo the other big
bank, berkshire hathaway i should say, he's standing by that company despite the troubles that have emerged at wells fargo. >> becky, it seems like as you said he's happy in terms of being shares of both of those banks, but more happy than bank of america than wells fargo. what did we learn about his holding in apple >> in apple, he talked about how he looks at this -- we kind of compared apple and ibm because last time we talked to him he told us he was selling shares of ibm. when he looks at apple versus ibm, has a easier time trying to do valuation on apple and understands it and likes it better as a result and he talked a little bit how berkshire increased shares one of his lieutenants eithered to or ted sold shares of apple he said he personally increased his holdings in berkshire of
apple through that entire thing so berkshire's holdings went up as a result. todd and ted have $11 billion, he didn't say it was a loss of faith. but when they have $11 billion to play with and i say that in a very light tone only, only $11 billion to play with, buffett was buying those shares as either todd or ted was selling them. >> thanks very much. outstanding stuff. >> thanks, will. >> still ahead, golden state warrior kevin durant takes a shot at under armour what he said coming up on "power lunch. riiight. and that means...? i'm the money you save for retirement. i help you get organized so your money could multiply. see? got it. who's he? he's green money for spending today. you know, paying bills, maybe a little online shopping... makes it easy to tell you apart. that, and i am better looking.
welcome back to "power lunch", kevin durant taking a shot at underarmour saying young players don't like the company's shoes. the stock falling 3% yesterday down a bit more today. that was on top of the finish line disastrous guidance of the durant making those comments during a podcast went on to say that quote, nobody wants to play in under armo armours, the kids don't because they all play with nike. steph curry is the face of under armour you know i have a lot to say because i cover these companies because the first thing is the sneaker wars, this was the wrong match-up now it's adidas, morgan stanley came out and cut the price
target of nike saying they have lost its core sneaker enthusiast customer to adidas, they haven't been in the sneaker game since -- >> if he was going to trash talk, he should have trash talked somebody else. >> they all endorse positively their own company they have endorsement good what's the motivation? is he doing this because he has a rivalry with curry >> to be fair, the question on this podcast had to do with university athletics programs, including maryland, saying -- the question why isn't maryland attracting top talent and he referred to under armour being a sponsor of that school, kevin plank went to maryland and so that was sort of the context that was in. >> embedded in the question. >> correct. >> this is always going to be an issue, i went on the asia trip with steph curry before the season started where kevin durant and he were going to be teammates.
we knew there would be a rivalry. kevin durant had a good season and perhaps that helped nike adidas is killing them both in sneaker wars in north america. >> next podcast get that right. >> coming up, hurricane harvey may be the most expensive hurricane ever to hit the mortgage industry. first back to brian. >> how important - hey gary. oh. what's with the dog-sized horse? i'm crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. isn't that right warren? well, you could get support from thinkorswim's in-app chat. it lets you chat and share your screen directly with a live person right from the app, so you don't need a comfort pony. oh, so what about my motivational meerkat? in-app chat on thinkorswim. only at td ameritrade.
hello, everybody, i'm sue her ra ra, here's your cnbc news update fema holding a briefing in washington saying additional shelters are opening up in texas as thousands continue fleeing the floodwaters from now tropical storm harvey. >> the life sustainment mission is huge. it's going to grow we have over 230 shelters operating in texas with over 30,000 people but i don't want to get fixated on numbers because those numbers are going to change.
>> officials in bosnia detained one person associated with affiliation with islamic extremists and terrorism part of an operation launched by the state's prosecutor's office. and here at home the fda approved the first gene therapy in the u.s. along heralded move for a promising method to combat cancer it approved for children and teens who suffer from an acute form of leukemia setting the price for a course of treatment of $475,000. that is the news update this hour, michelle, i'll accepted it back to you. >> thanks very much, sue warren buffett said kraft heinz would not buy the company. auto nation getting a pop after announcing a buy back. sprout farmer's market popped on heavy volume but shares still down 18% since amazon announced
it would lower prices at whole foods now that it owns it officially not just refineries and oil business getting hit hard, chemical industry severely impacted brian? >> reporter: michelle, thank you very much. we have a couple of different stories with regards to chemicals. i'll go to the industry in just a second i want to first provide you an update on an important story we've been following since late yesterday. in crosby, texas, ten miles that way, there's a chemical plant that is at likelihood of exploding, that's not media hyperbole it's a publicly traded company based in france with significant operations in the united states. without getting too detailed into what they make, it's a chemical unless it's kept below freezing, it has a likelihood of exploding and causing great damage they lost power like so many else did but their backup generators also lost power because that is one of the areas
that received the most rain. they had no power. they had to rescue 11 employees and they evacuated a 1.5 mile radius around the factory in crosby, texas because the plant could explode. now the situation has not changed since then it's been 24 hours or whatever later and nothing has changed. in fact literally got words moments ago that the president and ceo of the u.s. division will hold an updated 3:00 p.m. eastern time they still call by the way critical literally a mile and a half radius around the plant we'll follow that for you. chemicals as you know pretty boring conversation, stuff we never want to talk about extremely important in fact 70% of all edge lean production is done in the state of texas the estimates are 40 to 50% of
ethylene production maybe offline and you think why do we care from an investment perspective, dow chemical, seatexas, all of these companies make the stuff you have to watch them but the reality is, that's the stuff that goes into all of the other stuff that we buy. look at this garbage behind me here on the high water mark. these plastic bottles and paper packaging and automotive plastics, anything made with a chemical compound is probably at some point touched by this area. so it's not just oil and gas, it's chemical refining as well a lot of that remains offline and a lot of that is right around here and again, i'm going to show you the high water mark, the good news we're receding a bit. there's going to be a lot of cleanup and some of that cleanup will be chemical as well, i guarantee it. >> we'll have to be careful with the chemical cleanup i would imagine. we'll see you in a bit. >> harvey's impact outside
houston has been particular lly devastating, in beaumont major flooding has worsened every body of water surrounding the city overflowing. becky ames, madam mayor, thank you for phoning in tell us about the conditions on the ground in beaumont >> well, obviously as you said we have major flooding throughout the city. it's not localized, it's all over the entire city one of the problems is as you mentioned is that we do have a lot of water surrounding us, bayous and rivers. and what happens when we have a flood like this, after a day or so or actually it's starting now, it will start to rise we have flooding conditions that we already have and then we have the water that rises after the storm. >> it looks like population of about 120,000 people in beaumont how do you account for all of those people
and what sort of rescue operations do you currently have anyway >> we actually opened our emergency operations center last wednesday. we started getting heavy rains on sunday so this has been going on for several days. so that the rescue operations are not just today they have been ongoing starting last weekend for people with high water or that had water in their homes. we have them more or less separated in two different types. of course the emerge ent needs and nonemergent needs and we have a hotline set up so they don't clog up the 911 system so the people with true emergencies can get through. and we are just working those by how life threatening they are. i mean, for instance, if we have someone in a home that's disabled, we want to get to them before someone that maybe could
leave on their own if they had to we're prioritizing those we have been doing exercises for years regarding -- actually i was the mayor during hurricane ike in 2008, and it's basically the same emergency management team this is a little bit different because it's so widespread not like a hurricane where it comes and goes, this is stalled over us for many -- >> went on for days and days. >> is it too soon to talk about the rebuilding process at this point and if you are talking about that, what kind of planning do you do when it comes to flooding? do you start rethinking about building codes or how you're going to structure sidewalks and drainage. >> we have very good drainage it's just there was so much water nothing could have handled it we're not anticipating right now any major damage to our drainage system that doesn't mean in the future
we may not find something. our sewer system is still operational and working. our water system is still operational and working. there have been a few little small issues with that but nothing -- it's surprising that it is so little. and in addition to that, we have had some flooding in some of our city owned buildings but nothing anything major but it's really a little soon to tell because we have not had the opportunity to assess the situation because we began nonemerge ent rescues at daybreak this morning and that was our first priority. and then of course the emergency rescues have been going on all through the night last night so our assessment teams have not really gone out. this is just information we have been walking our insfra trukt to from a structure to make sure we did need a water breach, we need
to let the citizens know not to drink the water or anything. that is not the case at this point. i can't say that for the surrounding cities around us i understand some got hit very hard but we have spent a lot of money on infrastructure over the last ten years,more than ever and i think it paid off for us on that i'm not going to say it's not devastating because it is but we're fortunate that we do have water and sewer right now. >> that's super impressive considering the video we're showing people right now we'll let you get back to work we know you're so busy we appreciate you taking the time when you're in the middle of all of this. >> you're welcome and we appreciate your support. thank you so much. >> with more than 500 auto dealers in the houston area, the auto industry is one that will be impacted by hurricane harvey. joining us on the phone now is steven wolf, chairman of the houston automobile dealers association and vice president of healthman auto group, a
number of dealers in the area. thank you for joining us, mr. wolf i guess a lot of the discussion has been whether or not people's home insurance includes flood coverage does that apply to their auto insurance because it's important for gauging when we expect demand to come back for some of these damaged or permanently lost items >> first of all, thank you very much for having me these are trying times in houston, texas but the community is coming together and the franchise dealers of this -- of houston and surrounding areas that are affected are working together to try to get the city back going again transportation is such an important part of this city and texans love trucks and automobiles and we need to get the cars back on the road as soon as possible to answer your question, automobile coverage is typically a separate policy from your homeowner's coverage and the insurance companies like in the past will step up send more down
there to help with claims. many of these cars will total and estimates half a million cars will be flooded in this disaster area. so the insurance companies are going to step up and do the right thing and get these claims handled quickly. >> do you feel that's already happening? are you seeing demand come back already or is no one able to operate as yet when do you expect that to start flowing in >> it's hit or miss. some stores are open all of our stores are open right now. our stores are dry there are a lot of stores that got significant damage and i would think that those stores are going to be a while until they open but there's also the human toll many of our employees that are so vital to our organization many of them are here today but many of them still have issues with their homes, whether they flooded, whether they could still flood with the rising bayous coming out of the reservoirs so many of us are open we're here working and trying to
get our people back to work again. >> steven, in terms -- you mentioned insurance companies hopefully will step up to the plate and help individuals, what about yourselves the dealerships and also the automakers themself are there going to be incentives to help people through the crisis. >> many of the manufacturers, ford, chrysler have already stepped up with disaster relief bonuses for customers and in addition for dealer employees going to do some things to help them nada stepped up for dealer employees and giving emergency stipends to help them with cost of repair of their homes. >> what about the used car market what impact do you think you'll see there? any impact on pricing? >> you know, it's supply and demand obviously there's going to be a tremendous demand for vehicles i think that you're going to see some price pressure on used cars
i think new cars are going to maintain because of the additional interest sent tifs that the manufacturer will offer. you know, the banks are buying extremely deep and manufacturers even predisaster were offering incredible incentives and i think they will even get better down here. >> thank you very much for joining us. >> i'd like to thank the outpouring of support from all over the country it's been incredible, boston, california, thank you all so much we need the help down here. >> thank you. >> harvey could be the most devastating hurricane to hit the mortgage industry, more on that straight ahead first though, the bond report. >> michelle, you hit it. we had a 7-year note option that went very well yesterday the reason i bring it up, that's around the same time line as an average mortgage with regard to length and indeed it's going to correlate with lower rates you could see yesterday we
dabbled with would have been a new year low, we averted it. hovering on the shore, the year to date you see the low in june. yield curve, here's a one year, we're close to the flattest in one year what's fascinating is open this chart up to precrisis in '06, not only are we close to one year flattening but a flattening we haven't seen since before the great credit crisis and of course we all know that things have improved a bit, maybe tax policy and reform will improve that more which means you want to stay tuned to power lunch the president will be talking about taxes and potential legislation from missouri. we'll cover it "power lunch" will return in two minutes. whoooo. you're searching for something. like the perfect deal... ...on the perfect hotel. so wouldn't it be perfect if... ....there was a single site... ...where you could find the...
you give us comfort. and we give you bare feet, backsweat, and gordo's... everything. i love you, but sometimes you stink. soft surfaces trap odors. febreze fabric refresher cleans them away for good. because the things you love the most can stink. and plug in febreze to keep your whole room fresh for up to 45 days. breathe happy with febreze.
welcome back no question harvey is a housing disaster and for now, with the storm still in parts of the area, we could only use comparisons to assess what will happen diana olick has numbers on how harvey could hit the home loan business, diana? >> sara, in the houston area today, there are more than twice as many mortgage properties with nearly four times the unpaid principle balance than louisiana and mississippi counties hit by katrina. the majority of these homes do not have flood coverage. if you take katrina as the model, over 75,000 houston borrowers could be unable to make a mortgage payment within the next two months and 45,000 could become seriously delinquent on mortgages within the next four months all of that according to black knight financial services, fannie mae and freddie mac have said they will offer loan forebearance for 90 days the interest does acue and that
does not solve the problem long term if the house is totally destroyed or a borrower loses income because of the store. katrina barrorrowers had 20% of borrowers there less than 10% equity in their home not so in houston. today only 4% of borrowers have that little equity so houston homeowners should have more incentive to stay and pay. but if the amount of losses a borrower suffers are considerably higher than the equity in the home they could walk away. one note, they have launched a whole help page for homeowners, you can link to it in our story. >> thanks, diana let's talk more about the issues she raised 10% of assets in the houston area, cheryl palmer is chairman and president and ceo of taylor morrison good to have you here. let's try that one more time we couldn't hear your mike can you hear me now? >> yes, can you hear me?
>> perfect how are your employees everybody okay >> you know, that's most critical and everyone is every day we've been able to get a full report in accounting and as of this morning one more day everyone is safe and that's really what's most important right now. >> that's terrific news, great to hear everyone is safe so viewers have context. 10% of assets, you do a lot of home building in the houston area how many homes have you built in the area and what impact are you seeing as a result of harvey >> well, you know, we're getting daily reports and like you said, correctly, it's about 10% of our assets and i'm quite delighted, even on the way over here this morning, i've continued to get good news. we have had very few impacts in our communities. as we've looked at our models and sales offices and construction trailers and homes under construction, in our darling business, we have only two or three models we have not
confirmed do not have any water. and i'd say we have about the same in our taylor taylor morern business when i look 15% of our employees that have had to leave their homes, a very small percentage of that that have actually seen flooding in their homes. >> you know, that is so sad to hear i'm very curious though, i bet our view eers are wondering -- we're showing so much damage in houston. what is it about where you guys built that the damage sounds like it's much lower are there higher areas, lower areas? talk to us about the breakdown in the region for houston and maybe what lessons that teaches us about how rebuilding should go. >> yeah. you know it's a great question i am so pleased obviously that
our team members are safe. and that even the ones that have been in, you know, pretty difficult areas have been able to get to safety but you're right when i look across our communities and it is such -- it is so area specific. even within communities you can't even really talk about parts of the city because there's areas that have been more exposed within, you know, blocks of each other i think the beltway area has certainly been hit pretty hard we don't happen to have any communities there. but when i think about the planning, i just couldn't be more proud of our team members and developers in houston because clearly they have done a very, very nice job. >> okay. >> still too early to tell yeah. >> got it. that was terrific. cheryl palmer, thanks. >> thank you president trump getting ready to give a big speech on tax reform in springfield, missouri he says cutting corporate taxes will help the middle class but is that really true?
we separate fact from fiction next here on "power lunch. what did you have in mind? i don't know. $4.95 per trade? uhhh and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissions back if we're not happy. so can you offer me what schwab is offering? what's with all the questions? ask your broker if they're offering $4.95 online equity trades and a satisfaction guarantee. if you don't like their answer, ask again at schwab.
springfield, missouri. he's set to talk about how cutting corporate taxes will help the middle class. but is that really so? our wealth editor, robert frank, took a closer look at that question what did you fine out out? >> well, the corporate tax cut is a tax cut for the middle class, but almost all of the credible economic research finds that the main beneficiaries will be the wealthy and affluent. he's proposing cutting it from 20% to 15% and the congressional budget office says 75% of the corporate tax is now assigned to capital. that would be more affluent investors. 25% is assigned to labor or workers. put another way, the top 1% pay about half of all the corporate income taxes while the bottom 60% pay only around 10%. so this is a very top heavy tax. now, conservative groups have published a lot of papers arguing that lower corporate
rates would benefit workers through increased investment and in wages but at the same time, ceos like randall stephenson of at&t he said for every $1 billion in saving on corporate taxes that creates 7,000 jobs also the conservative american enterprise institute found that quote wages are significantly responsive to corporate taxation but that study was based largely on what happens when corporate taxes are increased. on the contrary, we have the federal reserve saying quote there's little evidence that it boosts economic activity except during recessions now, keep in mind we haven't had a corporate tax cut since 1986 so the past may not be a guide we still don't know what the rate going to be but all the research shows that this is a tax borne heavily by the taxpayers. >> i know if we had larry kudlow he'd argue with you. just note that there's a lot of division there.
>> i noted kevin -- that was from kevin's paper. >> gary coen has stepped into the tax debate, right? >> so gary coen is meeting with congressional democrats. the estate tax that he and others want to abolish he said only morons pay the estate tax, and some took it as a leona helmsley comment but those who actually pay the estate tax has declined 75% and that's partly because the rates have gone up and because of trust planning makes it so easy to avoid so why not get rid of it >> if it's not effective anyway. robert, thanks we are about 30 minutes away from t bheig tax speech by president trump. we'll cover it live as soon as he begins. don't move causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain
and how much could be shut down and what hurricane harvey could mean for food prices "power lunch" starts right now let's get a check on the markets at this hour the nasdaq is leading the gains right now. financials and technology are the best performing sectors. tell com and energy are lagging. h&r block is lower airlines also in the red as hurricane harvey grounds flights across texas and apple hitting another all time high. our own becky quick spoke with warren buffett about his stake in the company. >> i looked at it and then i bought considerably more in the last quarter, the one we reported here not long ago i never sold a share and i bought the stock. >> are you continuing to buy
>> i don't think i'll tell you that much. but i certainly was buying last quarter and i don't pay attention to the calendar what i'm buying. >> nice try. strong endorsement berkshire is one of the largest apple shareholders with a 2.5% stake in the company. the big event we're waiting for, president trump in missouri let's get to eamon javers. >> yesterday, we had a preview of speech and what we should expect is a bit of a populist speech tax cuts will be the solution to the problem, but that presents some rhetorical challenges to this particular president who has been arguing all year how great the u.s. economy is. take a look at some of the things that the president has said during the course of this summer about the state of the u.s. economy he said what's a going on is incredible we had the best jobs report in 16 years he said corporations have never made as much money as they're making now he said that business is looking
better than ever with business enthusiasm at record level and the stock market at an all time high all those comments from the president within the past month or so. now today, here's the tone that we're expecting from the president according to those white house officials yesterday. they said that the president's going to say that shared prosperity is slipping away in this country he'll say that the economy is a rigged system. and he's going to say that the tax code needs to allow all americans to access the american dream. what it looks like is going on, the president will argue there's significant problems in the u.s. economy and the tax cuts are needed to fix them but that doesn't square with the president's rhetoric on how great the economy is that he's been using all summer long almost appears as if he's campaigning both as an incumbent and an outside at the same time. using the rhetoric, incumbents say how much progress we're making and the outsiders say it's not good enough, elect me, i can fix it the president rhetorically here if he gives the speech we were
briefed on yesterday seems to be doing both of those things. >> thank you for that preview. we look forward to that speech coming up. now, despite today's strong gdp number, the markets are in a sort of standstill what's making investors cautious we have the chief investment officer of henan & walsh, ron insana and ron hower kevin, i'll start with you jim cramer said earlier that he felt if the president sticks to the script on his tax reform speech the markets will rise they'll take confidence from that do you agree >> markets seem resill yents at this point we had a good jobs number, we saw a positive upside revision to gdp growth and while i can make the argument for more overseas rather than in domestic markets i think there are certain themes that should play out well for the rest of the year e-commerce, innovation and
biotech. those are areas that still have upside potential. >> rob, we saw an extraordinary rebound yesterday during the course of the session despite a lot of bad news. august also has been framed as a cautious month and also been lower volumes. that can lead to big accentiations of bigger moves, but we'll finish with less than a percent of declines. do you take a big positive step out of that, that the markets are well supported if we get tax reform do we see a big jump from where we are >> i think it's positive that the market's held up really well so far this month. we think there's probably a little more caution to be had in the market we have a number of risks that we're facing that we need to get through. debt ceiling, questions about the legislative agenda the fed is headed to taper their balance sheet. while they're not falling off because of the solid economic numbers as we just pointed out, solid gdp growth in the second and probably in the third quarter, the -- i think they're
probably a little more cautious as we head into september. we think the longer term is probably better but the near term may not be as strong as we've like. >> ron, the president gives a speech on tax reform and poof, 12 points. the moment we're waiting for it. >> it's not a tax reform - >> it's a reform because all of the issues that we worry about go away. >> it's not individual tax reform what the president is talking about and what larry kudlow after having consulted with the white house it's skinny repeal you'll get lower corporate taxes, you get the immediate expenditure on the manufacturing. >> look at him nodding. >> i'm not arguing it's not good, but it's not the type of reform that people have been talking about vis-a-vis 1986. >> it sounds like enough to push
the market higher. >> potentially if we get it. there's a question as to whether or not we'll get it. given that the deductions will hit individuals and help corporations the exact opposite of what the president is promising >> what does it do to growth and corporate earnings if that's what we get? >> i think it will be a nice near term boost but in the longer term it's not as helpful as we like because you have the fed normalizing policy, reducing their taper and so i think we each got fiscal stimulus coming in just as monetary stimulus is heading out. and it seems like we're in a low and slow growing economy that's going to be here for some time it will be a struggle to get much acceleration with tax reform. >> you're nodding your head, but even if we get that, but do you prefer that the outlook in some international markets at the moment >> i do. i think there's more upside in the international markets, and that doesn't mean i'm bearish on u.s. markets but there's enough momentum in the u.s. economy we can see the fed start to taper in september
and potentially one more rate hike in december. >> ron, we heard from warren buffett earlier. still got his big holding in apple. is that something you agree with >> this is more of a stock picker's market. i don't know that you'll get much macro push, assuming tax reform comes in 2018 we have to wait on that and for a variety of other issues like infrastructure build and things like that. so i think when you look at an apple of a mcdonald's, stocks that have delivered on their promises that seems to be the place to be. i'm relatively agnostic about the market itself given where we sit. i tend to differ with the other two guests about what the fed is going to be doing. i don't think they'll get to tapering but i think it will be delayed somewhat because fiscal stimulus is not coming as quickly as people think. >> the president has been waiting for it. >> never made a speech on health care ever. >> i'm not sure the market is convinced or baking this in at out all. also before this, he created a rift with the members of the
congress and picked a fight with mitch mcconnell who he needs to get tax reform done. >> those guys need to run for re-election. they have to get something done and they have incentives to achieve something. by the way i have been listening for years and years and despite all the doldrums on set, everybody screams that we need corporate tax reform because we're not competitive. i find it hard to believe that doesn't give juice part of the way is why we have 6.9% business investment in the numbers that steve liesman told us about earlier. >> if you look at the amount of money that the u.s. corporations pay about $400 billion annualized rate versus $1.8 trillion in profit. >> look at all the junk they do to -- all the garbage. the little guys don't. >> they won't get one. >> but it's still going to be paid for of course the speech from the
president doesn't mean - >> they have to avert a shutdown. >> we have to leave it there. >> such downers today. >> we have just been following the ins and outs we'll wait to see what the president has to say here's what's coming up on "power lunch." the president set to make that major speech on tax reform we'll bring it to you live as soon as it happens. plus why hurricane harvey could have a devastating impact on farmers in texas and throughout the country and talk to the manager of a store who is literally taking boats off the shelves and giving them to emergency workers for rescue efforts. let's go out to brian sullivan. >> yeah, speaking of water in texas, when you talk to the locals texas floods easily, but texas also recedes easily. after the break we'll try to give you a glimmer of hope we'll show you dramatic video ouhow fast the water that came quickly may leave maybe some good news right after this short break since the first stock index was created,
as a benchmark for average. yet a lot of people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? why invest in average?
welcome back to "power lunch. harvey's impact is still being felt as the storm making landfall what western louisiana hitting lake charles and headed towards new orleans and we find our own brian sullivan brian? >> reporter: thank you very much i have a couple of pieces of breaking news, out of beaumont, texas. the marine corps is going to be
headed to beaumont beaumont and port arthur hit hard by harvey which is by the way is still a very active storm. so the u.s. marine corps literally they're sending in the marines to bow -- beaumont, texas. other headlines crossing coming from the houston mayor saying he had a conversation with the ceo of exxonmobil's darren woods and that the ceo was confident that they would have gasoline so the mayor of houston is saying he is confident they will have an adequate supply of gasoline obviously with all the refining down around here, guys, that is a concern. just a quick anecdote when we filled up, outside of galveston, there was only only 89 grade there was no premium or regular. so that gas station that we were at today also had some supply issues by the way, 14,000 national guard members have been activated. here's the problem there are right now a reported 32,000 seeking beds and shelters and right now there are 30,000
beds that is not good math. let's leave you with a bit of good news which is this. texans will tell you they flood easily, that i recede easily i didn't necessarily believe it until we randomly stumbled into this spot. this is the high water mark from just yesterday just garbage everywhere but it does provide a look at how far the water in 24 hours has already receded. now, locals tell us it's still about eight or nine feet above normal but it is down eight or nine feet from yesterday speaking of yesterday this is more dramatic. do you remember the live scenes that we showed you in dickinson, texas with the roadway flooded people being rescued out of cars, by boats by jet skis. by any kind of watercraft they could. that was yesterday this is today. you can see the difference literally between a completely flooded roadway that could accommodate a personal watercraft and literally a
semi-bone dry piece of pavement that people were driving on. it's definitely not back to normal, guys, but something else good news as we await the port of houston to hopefully reopen at some point. we saw a boat go by. normally that wouldn't be a headline, hey, a boat goes by, except it's a busy shipping channel. first boat we have seen. looks like a harbor pilot. maybe it's a scouting run. perhaps some good news at the port of houston. maybe getting ready to reopen. a lot of ships out there in the gulf of mexico and there's a lot of clean-up as you can see here to be done back to you. >> but little signs of progress, thanks speaking of houston, news alert. the mayor has asked the houston astros not to cancel the baseball game slated for friday against the new york mets.
we're talking about the pitcher and the player matt harvey is going to pitch for the mets a weird coincidence. the floods continue to have a devastating effect on the vast farmlands. millions of acres are in complete or near ruin. let's bring in dwight robert, president and ceo of the u.s. rice producers association rice being one of the biggest crops in texas and louisiana good to have you here. >> thank you i appreciate it. >> how important is the rice crop to texas and what can you tell us about the impact of harvey >> well, the rice crop along the gulf coast has a long history in texas, very important. not just to farmers but all of the affiliated businesses. our rice mills and affiliated businesses lined with the trucking, fertilizer companies everything from "a" to "z." >> and the impact is a result of the storm, do you have any data at this point or do you know what's going on or where were we in the harvesting cycle at this
point? >> well, fortunately, we had harvested about 80% of the rice crop in texas. so the remaining 20% was a total loss we do have a second crop that we're analyzing, you know, in texas and south louisiana. you can get a second crop, a second cutting off the very first planting so we're trying to find out, you know, make an assessment but the numbers are staggering this could be 50, $60 million total economic loss just to rice and of course, you know, you add in cotton, soybeans and particularly the cattle business and you're looking at astronomical figures you've got to take into account we have no port. no rail, no airports no trucking so this is going to increase costs, increase logistics and make it very complicated. >> and dwight, what is done with most of the texas output of
rice is it consumed all domestically in the u.s.? are we going to look at food price increases across the country or is it exported away to other countries >> well, about 50% of the rice crop is exported texas most of the texas rice stays in the domestic market our large export market is moved out of the port of lake charles and out of new orleans texas does rail some rice to mexico and of course containerized rice goes out of the port of houston and that's come to a halt so what is going to affect prices i will say this. that the storm headed in the direction of arkansas which is the largest rice state in the united states, that's really what people are looking at, the traders and the buyers and sellers of rice. the impact this storm will continue to have you grow rice in texas from around victoria all the way across to lafayette, louisiana,
and east of there so this is having a devastating effect and on other commodities as well. >> dwight, thanks so much for joining us and giving us an update on what's going on with the u.s. rice producers. >> thank you very much one company stepping in to help with assisting in the texas rescue efforts is bass pro shops. they provided more than 80 tracker boats to rescue organizations in houston and surrounding areas and they donated truck loads of relief supplies joining us by phone is steve dooley, general manager. in katy, texas, located outside of houston thank you for calling in to cnbc we have been following some of the business stories about ways companies in the area are pitching in. tell us about the effort to get boats out on the streets and into rescuers' hands
>> outstanding thanks for having us here at bass pro i was contacted sunday afternoon by johnny morris or ceo and owner. and he had been in contact with the governor's office here in texas earlier that day and they were having a discussion after looking at the news that some of -- at some of the devastation and things and asking what can we do? so that prompted johnny and his daughter megan to give me a call here saying, hey, steve, you guys are there, what do you need so we started to talk about the boats, life vests, various items. you know, i asked johnny, now, what do we need to actually give them he said, what they need, let's get it done. i said are they coming in to buy, loaning, how it is being worked out and you know johnny he was gracious, steve, at this point we're not worrying about the profits. the sales. we're worrying about saving lives so that was pretty humbling for me hearing our
owner having that take about the situation here in houston. and wanting to step up and make sure that the opportunity to save lives was the first thing we put on our plate. >> yeah, some of the most dramatic images that we have seen on social media and what the cameramen have shot have been the rescue operations on your boats, authority's boats. are they getting out to all the places, all the areas that are evacuated and under water? >> well, we have had actually distributed at least 80 boats to this point and there is still a need you know, there are more boats being shipped here from our facility up there in base camp and, you know, we've got volunteers that are stepping up and it is just a tremendous, tremendous community effort. the national guard is heading up
a lot of this and my hat goes off to the men and women i mean, they're working tirelessly around the clock. you know, lots of times they're the ones behind the scenes a lot of the glory and whatnot doesn't go to the efforts but they're working. they're barely eating or sleeping they're sleeping in their vehicles and, you know, just to see them putting that type of effort forward to save lives, you know, it's inspiring you know, in relaying some of that message to johnny and, you know, his daughter up there, you know, that just -- you know encouraged them to let's do what we have to do. they continued to get boats rolling. we had a shipment of 43 more boats yesterday. that they were able to take and directly put out and start saving even more lives it's just been a fantastic, you know, effort it made me very proud to be associated with the company like bass pro that, you know, they just stepped in and they want to save lives >> there are a lot of acts of
heroism. thank you for joining us to talk about the efforts from bass pro sports steve dooley, general manager there. you heard about cheaper salmon and avocados, but how much did amazon cut prices at whole foods? we'll tell you. plus, president trump set to make a major speech on taxes we'll take you live to springfield, missouri, when "power lunch" continues. don't you mean dad kind of ruined our hawaii fund? i thud go to the thothpital. there goes the airfair. i don't think health insurance will cover all... of that. buth my fathe! without that cash from - aflac! - we might have to choose between hawaii or your face. hawaii! what? haha...hawaii! you might have less coverage than you think. visit aflac.com and keep your lifestyle healthy. aflac!
hello, everyone. i'm sue herera here is your cnbc news update. greg abbott held a briefing earlier today saying they have activated the highest numbers of national guard members ever deployed >> i last announced we had 12,000 national guard members activated. that number has been increased to 14,000. the reason for that is because some members have come back from deployment overseas. others who were unable to participate because their own homes had been subject to flooding or damage, they are now able to help participate a washington, d.c. grand jury has indicted 15 turkish
security officials on charges of attacking protesters during an incident outside the turkish ambassador's resident last may the security officials however left the country before they were charged. prince william and prince harry paid tribute to their late mother, princess diana, by visiting the garden created in her memory their visit comes the day before the 20th anniversary of her death. and that is the cnbc news update president trump getting ready to speak on tax reform. we'll have that speech on the other side of this break it's time for the biggest sale of the year with the new sleep number 360 smart bed. it senses your every move and automatically adjusts on both sides to keep you effortlessly comfortable. and snoring.... does your bed do that? the new 360 smart bed is part of our biggest sale of the year where all beds are on sale. and right now save 50% on the labor day limited edition bed, plus 36 month financing. ends monday!
whuuuuuat?rtgage offer from the bank today. you never just get one offer. go to lendingtree.com and shop multiple loan offers for free! free? yeah. could save thousands. you should probably buy me dinner. no. go to lendingtree.com for a new home loan or refinance. receive up to five free offers and choose the loan that's right for you. our average customer could lower their monthly bills by over three hundred dollars. go to lendingtree.com right now.
welcome back to "power lunch. i'm phil lebeau. some breaking news regarding some of the airports in houston, houston hobby tweeting out that starting this afternoon, at 4:00 p.m., it will resume limited operations guys, i wouldn't expect a lot of flights going in there of course this is the airport where southwest has a sizable presence but it is certainly welcome news after being shut down for a couple of days houston hobby will begin limited operations starting at 4:00 p.m. this afternoon still waiting to find out how long houston international will remain shut down at least until noon tomorrow was the expectation.
let's see if that changes as well guys, back to you. >> all right, thanks phil. president trump set to speak about tax reform and warren cook, a company that would benefit from what the president is expected to propose. >> let's bring in our ylan mui this should benefit the middle class. >> that's right. he's out stumping for tax reform something he didn't do for health care and one reason that many believe that failed expect to hear the president talk about tax reform boosting middle class families by making american companies more competitive, leveling the
playing field and in turn creating jobs and growing wages. trump will use some of the same catch phrases that the democrats have been employing, that the tax code is broken democrats have already started pushing back against the president's speech here. highlighting a report that found millionaires in missouri would get 45% of the tax cuts in that state under trump's proposals. democrats have also vowed to oppose even quote one penny in tax cuts for the wealthy but guys, several red state democrats are under pressure to break ranks on tax reform here senator mccaskill is one of them so it's no surprise he is giving the speech in her home state. >> let's bring in two -- from the american enterprise institute. what do you think, james, going to see a democrat go along with this whatever it turns out to be? >> i would be surprised at this
point. i think they're going to be scrambling to get enough republican support for this bill this is going to be different than traditional successful tax reform or tax cuts where they cut taxes for rich people but also directly cut taxes through expanding or creating a child tax credit for middle class people that's not what president trump is talking about he's talking about a triple bank shot, where i'm going to help you middle class worker by actually cutting taxes for your boss and then it will help you trying to do it when we have big deficits makes its harder. >> ben white, eli highlighted there's some democrats in states where maybe they feel pressure to go along and of course we don't know at this point what he's proposing. >> right i can tell you i was texting with a senior administration official who said that president trump has made significant changes to this speech just in the last day after it was written so we could be in for some wild cards here
we're not exactly sure what he'll say. but he will as ylan talked about trying to pitch it as populist and directed at the middle class through that bank shot that is good for corporations, good for the bottom line and also expanding the deduction for taxes and he wants to cut on the middle income earners too. he wants to cut off republicans who are going to say you're just giving goodies to the rich. >> you did a story not long ago when you survey people how they feel about corporate tax cuts they're not that excited about it to some degree does he have to cloak it in something else to sell it? >> right, he has to connect it back to why this is important for everyday americans a tax cut for businesses is not going to work and not going to sell politically if it's not paired with the taxpayer cut for households as well, so how do you make that connection between what's happening in corporate america and what's happening for the average person and the way they're trying to do is to say
that the majority of the corporate taxes is borne by the workers and that's something that economists have disputed in the past so they're hinging their argument and hinging that connection on that type of economic analysis. >> well, president trump is set -- >> how do you do both of those things i mean, how do you do both those things and not have -- you know, blow a hole in the budget? i mean, that's -- that's a very hard thing they have made it harder by not doing this border adjustment by taking the interest off the table. now all the other pay forces, mortgage, changing 401(k) plans is really hard they have a lot of constraints to do those things >> that's where i wanted to go, ben. the hard work is being done on the president's team by treasury secretary mnuchin, gary cohn, selling this to congress working out some of the details, the pay forces and the loopholes that have to be closed how's that going two ex-goldman sachs bankers going to members of congress to
craft a comprehensive tax reform. >> they're stuck on the details and jimmy brought that to life, how do you argue for reducing the mortgage interest deduction or the 401 ks and pitch that as good for the average americans politico has a good story on this up now, a lot of stuff is temporary because they won't have the pay fors. you'll see a bunch of temporary changes, maybe a temporary reduction in the corporate and they're stuck there. >> hold on a second. we want to alert everybody if you're just tuning in once again we are waiting for president trump in springfield, move, to make a speech. first speech he'll make on tax reform what his plan is, what he hopes to achieve >> and guys this is why -- >> -- in missouri to make this speech or would he have stayed separate from the whole process, like he did from health care so if it went wrong, he could blame
it on congress >> i would point out here, this is why this debate over revenue neutrality versus deficit neutrality is so important it's kind of in the weeds here but if you're deficit neutral you don't have to pay for it with additional revenue. you can pay for tax cuts by reducing spending in other areas so that could be one way to get around this whole debate and pass it through their own conference and caucus once on capitol hill. >> how are they going to include all this -- what we expect will be more federal spending as a result of houston, ylan? does this have to go in with the budget discussions, et cetera? >> this could make both the government shutdown and the debt ceiling debate a whole lot easier so you pair it with something that has bipartisan support, like hurricane harvey and you can clear that out of the way faster you can get to tax reform sooner. but it remains to be seen whether or not they do attach hurricane harvey aid to some of
these must pass measures >> but if i could speak to wilford's point for a second there is a debate within the republican conference on how much donald trump should be involved in selling tax reform there's the argument that health care failed in part because there wasn't a case made by the president. but there are congressional republicans who look at his approval rating, very low. his tendency not to stay on message when he goes out to talk about these things, he gets sucked into other controversies. >> this is something he knows. he's a business man. this is a key pillar - >> right. >> this is totally different than health care. >> totally different from health care, but there's a risk you have with donald trump out there. and republicans they're not uniform in their desire to have him out there hard core selling this. >> there was one of the most authentic moments in all of the debates. he said it almost under his breath amongst all of the things that he said, he said, let me be clear. nobody has ever run for
president before that knows the tax code better than me. because he spends so much time avoiding taxes, right? this guy knows - >> he knows the tax code nobody is debating that but can he stay on message on that the republicans are good at cutting taxes. there's an argument that the republican congress could do this without donald trump barnstorming the debates and possibly running into political trouble. they might prefer to do it themselves >> what did you think of ylan was saying when it comes to pay forces and getting it paid for isn't necessarily as important quickly. because we're waiting for the president to come out. >> up to the point, there's -- the senators want it paid for in a dynamic basis. >> all right here comes president trump on to the stage in springfield, missouri, at the headquarters of warren cook. big international exposure first speech he'll make when its comes to tax reform. one of the key pillars of his campaign let's listen in. >> thank you
thank you very much. it's so nice and we appreciate it and all of the people outside that were waving proudly the american flag, believe me, we appreciate it very much. i want to thank jerry cook, steve bernie and all of the tremendous employees here at the lauren cook company for hosting us today. where is jerry where is jerry thank you. thank you, jerry what a job i have heard so much about you, it's a great honor to know you, jerry, thank you i also want to welcome the many distinguished guests who are here with us for this very important event. secretary of the treasury, steve mnuchin. thank you, steve secretary of commerce, wilbur ross
small business administrator which by the way is a very large business i will tell you that, linda mcmahon, friend of mine. and from the purely political world a really great friend who did such an incredible job with his beautiful wife at the inauguration, senator roy blunt. thank you. thank you. thank you, roy governor greitens is here. thank you. special. lieutenant governor parson lieutenant governor, thank you, lieutenant governor. and our great members of commerce, i want to thank you all for coming there's so many i was asking the governor and roy, i said do you think i'll announce them all, i have so many, but i'm honored they're here representative sam graves.
representative vicki hart her. my friend for a long time and just somebody that he liked me from the beginning and i liked him, billy long. where's billy? right, billy right from the beginning blaine lute ken meyer. thank you. representative jason smith jason, thank you for everything. representative ann wagner. hi, ann. good job, ann. and we have so many more anybody i forgot right? everything okay? good, i got it you i remember more than anybody. thank you all very much. i appreciate it. and to the congressmen,
congresswomen, we appreciate you being here thank you very much. before we begin i'd like to take a few moments to discuss the deeply tragic situation in texas and louisiana. as we all know our gulf coast was hit over the weekend with a devastating hurricane. of historic proportion torrential rains and terrible flooding continue to pose a grave danger to life and to property our first responders have been doing absolutely heroic work to shepherd people out of harm's way and their courage and devotion has saved countless lives. they represent truly the very best of america.
we must be vigilant. we must protect the lives of our people i was on the ground in texas yesterday to meet with governor abbott who is doing by the way an incredible job. and local officials so that we could coordinate the very big and unprecedented federal response in difficult times such as these, we see the true character of the american people, their strength, their love and their resolve. we see friend helping friend, neighbor helping neighbor and stranger helping stranger and together we will endure and we will overcome. to those affected by this storm, we are praying for you and we are here with you every single step of the way
and i can speak -- i know for the people in this room. every step of the way. to those americans who have lost loved ones, all of america is grieving with you and our hearts are joined with yours forever. the citizens of texas and the gulf coast need all the prayers, support and resources our communities have to offer. recovery will be tough but i have seen the resilience of the american spirit firsthand. all over this country. to the people of houston and across texas and louisiana, we are here with you today. we are with you tomorrow and we will be with you every single day after to restore, recover and rebuild. our thoughts and prayers remain firmly with the citizens and our fellow people -- people.
great, great people. all affected by this tragedy we're also glad to be back in the heartland with the very, very fine folks of missouri. [ applause ] i said to senator blunt and i said to billy long on the plane coming in, can i say missouri? or should i say missouri okay they said whatever you want is okay so i said good but i'm especially pleased to be here in springfield, the birth place of a great american icon the legendary route 66 who would have known that? this is the place where the main
street of america got its start and this is where america's main street will begin its big beautiful comeback that you are seeing it right now. this is a come back of historic proportions. you're seeing it happen right now. right, you're seeing it. we're here today to launch our plans to bring back main street by reducing the crushing tax burden on our companies and on our workers. our self-destructive tax code cost americans millions and millions of jobs, trillions of dollars, and billions of hours spent on compliance and paperwork and you have seen what's happening with regulations. they're going fast we need regulations but many of them are unnecessary and they're going fast
that is why the foundation of our job creation agenda is to fundamentally reform our tax code for the first time in more than 30 years. i want to work with congress republicans and democrats alike on a plan that is pro growth, pro jobs, pro worker and pro american [ applause ] there is no more fitting place to launch this effort than right here in the american heartland surrounded by hard working men and women whose skill, determination and drive are truly second to none
and by the way, before i start, ivanka trump i see my beautiful daughter is in the audience. stand up [ applause ]hard i'm very proud of you, ivanka. for many decades, root 66 captured the american spirit the communities along this historic route were a vivid symbol of america's booming industry truck drivers hauled made in america goods along this vital artery of commerce families passed through bustling towns on their way to explore the great american west. and high quality manufacturing jobs lifted up communities, gave americans a paycheck that could support a family -- mr. cook is a great example of the people that do it [ applause ]
stand up stand up stand up [ applause ] i think they like you. and provided millions of our fellow citizens with the pride and dig any it that comes with work but in recent years, millions of americans have watched that prosperity slip away in the rear view mirror. and it wasn't pleasant to watch. especially for me. i would sit back, i was in business, and i could see what was happening. wasn't good. if we want to renew our prosperity and to restore opportunity, then we must reduce
the tax burden on our companies and on our workers [ applause ] in the last ten years, our economy has grown at only around 2% a year. you look at other countries and you look at what their gdp is, they're unhappy when it's seven, eight, nine, and i speak to them, leaders of the countries, how are you doing? not well not well why? gdp is down to 7%. and i'm saying, we were hitting 1% just a number of months ago so we're going to change that around, folks. that i can tell you and we're going to change it around fast [ applause ] and today, a very appropriate day that this should happen, we just announced that we hit 3% in
gdp, just came out [ applause ] and on a yearly basis as you know the last administration during an eight-year period never hit 3%, so we're really on our way. if we achieved sustained 3% growth, that means 12 million new jobs and $10 trillion of new economic activity over the next decade that's some numbers. [ applause ] and i happen to be one that thinks we can go much higher than 3%. there's no reason why we shouldn't. [ applause ] this is our once in a generation opportunity to deliver real tax reform for every day hard-working americans, and i am fully committed to working with
congress to get this job done. and i don't want to be disappointed by congress, do you understand me? [ applause ] do you understand? [ applause ] understand congress i've named congress that's -- i hope congress is going to make a comeback i hope so. i tell you what, the united states counting on it. [ applause ] here are my four principles for tax reform first, we need a tax code that is simple, fair, and easy to understand [ applause ] that means getting rid of the loopholes and complexity that primarily benefit the wealthiest americans and special interests. our last major tax rewrite was
31 years ago it eliminated dozens of loopholes and special interest tax breaks, reduced the number of tax brackets from 15 to 2, and lowered tax rates for both individuals and businesses at the time it was really something special. since then our tax laws have tripled in if size, and if the tax code itself now spans more than 2,600 pages, and most of it is not understandable. crept back into the system the tax code is now a massive source of complexity and frustration for tens of millions of americans in 1935, the basic 1040 form that most people file had two simple pages of instruction.
today, that basic form has 100 pages of instructions and it's pretty complex stuff the tax code is so complicated that more than 90% of americans need professional help to do their own taxes. disadvantages ordinary americans who don't have an army of accountants while benefitting deep-pocketed special interests. and more importantly, this is wrong. first and foremost -- [ applause ] thank you. first and fore most our tax system should benefit, loyal, hard-working americans and their families [ applause ] that is why tax reform must dramatically simplify the tax
code, eliminate special interests loopholes, and i'm speaking against myself when i do this, i have to tell you, and i might be speaking against mr. cook and we're both okay with it is that right? it's crazy we're speaking -- maybe we shouldn't be doing this, you know, but we're doing the right thing. and allow the vast majority of our citizens to file their taxes on a single simple page without having to hire an accountant second, we need a competitive tax code that creates more jobs and higher wages for americans it's time to give american workers the pay raise that they've been looking for for many, many years
[ applause ] in 1986, ronald reagan led the world by cutting our corporate tax rate to 34%. that was below the average rate for developed countries at the time everybody thought that was a monumental thing that happened but then, under this pro-america system, our economy boomed it just went -- it just went beautifully right through the loop the middle class thrived and median family income increased other countries soar their success. they've looked at us, they're saying what is america doing what's happening with the united states and they acted, very swiftly, by cutting their taxes lower and lower and lower, and reforming their tax systems to be far more competitive than ours.
from 45% to less than 24% and some countries have an unbelievably low tax including by the way china and some others that are highly competitive and really doing very well against us they are taking us, frankly, to the cleaners so we must -- we have no choice, we must lower our taxes. and your senator, claire mccaskill, she must do this for you and if she doesn't do it for you, you have to vote her out of office [ applause ]
she's got to make that commitment she's got to make that commitment if she doesn't do it, just can't do this anymore with the obstruction and the obstructionists. if we don't get cut taxes and reform approved, potentially the biggest ever, we're looking for the biggest ever, jobs and our country cannot take off the way they should. and it could be much worse than that, but at a minimum, they won't take off the way they should the demes are looking to obstruct tax cuts and tax reform just like they obstructed so many other things, including administration appointments and health care. not one vote we got not one vote to try and fix health care and get rid of obamacare. the strategy of our economic rivals has worke