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tv   Squawk Box  CNBC  April 17, 2018 6:00am-9:00am EDT

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"squawk box" begins right now. ♪ good morning, everybody. welcome to "squawk box" here on cnbc i'm becky quick along with joe kernen we are coming to you live from capitol hill in washington on tax day. we have a big lineup of guests directly responsible for allocating your tax dollars. >> like who? >> including house speaker paul ryan, kevin mccarthy, senator david perdue, treasury secretary steven mnuchin >> stop. stop more >> are more. mick mulvaney, kevin brady
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>> and we'll start with this -- >> we were in the rotunda before the echo it went up and down. >> we were in the rayburn building >> is that where that was? >> across the street >> nothing like that that's a -- i would like to take that home with me. i would need a truck amazing. beautiful. any way. let's look at the markets. look at that father of our country. he was something brave. never told a lie >> never told a lie. contrast that. let's not go there u.s. equity futures at this hour are showing triple digit gains, up 150 points.
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>> you said it >> i did i got accused of that yesterday by someone up 150 is pretty good. netflix is not hurting nasdaq up about 57 overnight in asia, we'll check those boards and the european boards nothing that significant happening. weakness on the hang seng. and european equities. i looked at these earlier. solid session we had yesterday treasuries, we were lulled into thinking we would go to 2.63. 2. 2.84 on the ten-year
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netflix posted earnings in line with expectations revenue for netflix was above estimates. we'll talk to an analyst at 6:20 a.m. eastern time. we were talking to cramer yesterday. he was saying everybody was raising estimates. he thought it would be gang busters. certainly the case stock up 7%, $329.50 that's a new all-time highs. i think 3.28 may have been before it was trading near an all-time high yesterday traded down, and then picked back up. >> sporting a hefty market cap >> do you know netflix has been in business for 20 years. >> i wondered how big it could get, shipping dvds in the mail, sending them back. and suddenly sort of snuck up on me, they don't do that anymore >> they do they still have part of that business kind of like their wire line business for the telcos, they have that part of the business, but they've been growing so
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rapidly. >> what makes me feel good about the business we're in, it's about content. this is delivering in a different way. old line media, cable, but the appetite for people sitting there watching dramas, watching comedies, watching documentaries, or whatever it is, on a 75-inch screen. >> and they spend more money like a media company >> did you see "lost in space? we started streaming that. the brand-new one that netflix has. amazing. >> wasn't there a movie with joey from "friends" called bomb? mike allen probably saw it >> he's nodding. >> you did see it? i was kidding. >> earnings out from dow component -- dow component >> united with a $3.04 a share,
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compared to 2.89 the health insurer increased its full-year outlook. all right. president trump is in florida today hosting a two-day working visit with japanese prime minister shinzo abe at mar-a-lago hopefully having better weather than the 30 degree misty thing we have. how about yesterday? >> the torrential rain storm >> yeah. >> among the planned discussion topics, north korea, trade and the investment ties between the two countries. all that being discussed today in a nice setting. we are in washington today as we have mentioned it's tax day this is where the irs is preparing to handle 155 million tax returns as they prepare to transition to the brand-new tax code
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ylan mui has much more on this transition great to see you >> great to see you. >> everyone loves to hate on the irs, especially during tax time. this agency is feeling the squeeze. so they have got to get through the final flurry of tax returns from 2017 that are being filed today. the irs expecting to process 155 million in all at the same time it's trying to implement that brand-new tax code for next year and more than 100 change, is that the irs has to oversee a report out this week projected the agency will need to hire almost 2,000 workers, and that implementation will cost about 4$400 million so far the irs has only gotten 3$320 million from congress also there is a bipartisan effort under way to modernize this agency. that bill would let you pay your taxes with a debit or credit card the irs would also need a strategy for customer service and need to look at improving cybersecurity. this is not earth shattering stuff which is why is has a
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chance of passing. david kautter will testify on capitol hill later this morning. he's the irs acting commissioner one more change, president trump nominated charles reading to lead the agency back in february, but no word yet on when he will get a confirmation hearing. >> the stuff you talked about, cybersecurity issues, rampant fraud that has run from there with people getting your refund before you do, to customer service, those are all things that i know kevin brady will talk to us about today it's very bipartisan, as you said >> the bill to reform the irs is coming out of the house, weighs and xheen means committee. the two congress people leading that effort are representative john lewis and republican lynn jenkins. so they did work hand in glove trying to update the agency. they stayed away from making
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major overhaul that republicans have talked about before >> what were the more -- >> there's some things such as democrats were very focused on insuring that low-income people were able to have a way to file their taxes more quickly and conveniently so there's some sort of technical things like that that were left by the wayside that they were able to ensure that this bill was more bipartisan and have a chance of passage >> all right thanks joining to us talk about the morning's political buzz story is mike allen, o-founder, executive editor at axios. we are a fim channel it's tax day we want to talk about things like that. with what is swirling around the beltway at this point, not just there, you look at the tabloids, "new york post." how many sources do you have, mike, if you were to estimate? >> always one too few. you all want one more. >> you hear from a lot of
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people the president is down there with shinzo abe anything but michael cohen going on >> sure. everybody was asking me this morning about the hang seng. >> wait a minute don't make fun of us you don't have to be here. >> we brought you here to set us up, mike >> you know, there's a lot of oxygen being sucked out of the air with this. i think rightly so you know -- have you heard is the president just beside himself at this point? >> that's just it. that's why it matters that it's consuming the president. that this is on his mind when he has these other crises going on. we're told that james comey may tweet about it, and they may obsess about it on the outside but that's a side show what they're concerned about are the two ends of the investigation, you could call it now the sell investigation
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you have bob mueller, up in new york, you have the feds going after michael cohen for providing information, and the "new york post" calling it curque de storm. >> other than that what if it's an illegal real estate transaction that is found in michael cohen's files from 2005. i know it was a lie that got bill clinton impeached that had nothing to do with white water could that present a problem here something illegal that happened in the trump business world that happened years ago didn't seem like that was mueller's -- that wasn't the objective of this whole special counse counsel. >> you're right. this makes you wonder is mueller
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going for a volume play. >> just to get rid of the guy? that's his end goal? get rid of this guy? is he a partisan guy that wants trump out? why is his goal to get -- to kill you with 1,000 cuts of things that don't relate to russia >> he's not a partisan guy this is a contrast to how james comey is presenting himself out there. this is comey day, the actual publication. but he has this great flair for the dramatic mueller very much more just the facts. but the facts are adding up. >> mueller himself has said a lot of what's been reported in the media is wrong >> i think he was relating a recent story that said michael cohen was in prague. that was the scuttlebutt, maybe don't believe everything you're reading. >> we don't know anything, but the other side in those mueller filings is there's always more it's always been bigger than we thought.
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lea he's always been more aggressive the mueller reports, and now we're hearing there could be more than one. that is going to be the reading of our time. it brings together questions about the election brings together how this government is run now. and the other person that brings all of this together and people close to the president say this may be why he's in such a sour, foul, stormy mood is -- >> really, stormy? >> michael cohen brings together the personal side, the finances, the business, the politics, the family for ten years he's been a rosetta stone to what's inside trump. here's what's driving him crazy inside the white house, they don't know what he has they don't trust him to tell them so the president has no idea what might be coming we know that michael cohen made tapes. >> tapes, that itself is weefir. the fact that you could make tapes without the other party knowing what you have, that you're taping them >> the president used to tell
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people he was taping or threaten tapes. a lot of times those turned out to be just something that he was saying it's something that in that world they were comfortable in talking about. >> all right ylan, i'll get to taxes right now. i saw another poll -- >> i was trying to make a bridge >> the latest poll on approval of the tax plan. 27% approve. 36% still don't approve. i added that up, there's like 45 people just going what there was tax reform where is the other 45% they're saying it's an unpopular -- >> less popular than in january. >> that's hard to believe. republicans are counting on this being helpful. is it? >> it's what they're hanging their has the on the amazing lineup of guests you have today will talk about this. the president has an op-ed in "usa today" saying the economy is roaring back.
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on the front page of "usa today," fascinating stat, they delved into every tv ad that's run so far in this election. we're 6 1/2 months out republicans have run 18,000 ads about the tax cut. and democrats now have come back saying it's helping the rich republicans have a debate on their turf, something where they have so many headwinds the outlook is so bleak. so many people said to me when paul ryan said he wasn't running again, they said this is going to be taken as the house can't be saved that definitely is the buzz around here. >> the latest is it's narrowed the generic favorability that narrowed from 7 points to 4 points from double digits, just the most recent one, right >> two polls yesterday both with a slight move in the direction of republicans >> with the president's temperament, yesterday he was able to stay on message, talking
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about tax reform in florida the question is how much does the comey/mueller investigation throw him off his game it seems in previous public speeches, at times he's literally tossed out the script. if he can stay on message, focus on that agenda of cutting taxes, maybe he can be the salesperson in chief that everybody on the republican party is hoping he will be. >> that's one day people around him are not optimistic about stacking up those days, but who knows. that's the occupational hazard of being a trump cabinet member, you go on a sunday show, you say what the administration policy is, by that night it might not be >> okay. i don't know about the house you handicapped that it was a better than even chance that the gop loses the house? >> i will tell you that republicans say better than even chance that there's once against -- >> it's still tough in certain
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districts, people that are up. now the senate on the other hand, i've seen that red state democrats are in serious trouble. manchin and heidi heigtkamp and others >> the numbers help out republicans, and paul ryan being gone, that helps mitch mcconnell on the senate side say i'm the only -- i'm the last bastion i'm the place you need to save that will help senate republican fund-raising you're right about the red state ds, and there's some fascinating fights everybody thinks washington is done for the year. we're not. one of the great fights coming up is can the current cia director pompeo be confirmed as secretary of state
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it may come down to a vote there will be pressure to be that vote. heidi heitkamp will make concessions and look for her to get some things in return. >> will you come back? >> we're here. or just text me. >> we're always around i love that "squawk" now has chambers >> we have chambers. that was one of your creations, "squawk" square? >> i now own squawksquare.com. sell it back to you at a reasonability price. >> squawk squatter >> ylan, thanks? are you hanging out? >> i'm here. i'm on the hill all day. >> excellent. when we come back, netflix shares soaring as we mentioned after the company reported that addition of nearly 2 million u.s. sububscribers
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we'll dig through the report next. and a huge lineup of guests still to come, including mick mulvaney, steven mnuchin and paul ryan. "squawk box" will be right back. we're live from capitol hill let's begin. yes or no? do you want the same tools and seamless experience across web and tablet? do you want $4.95 commissions for stocks,
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welcome back we are in washington, d.c. this morning. still watching what's happening on wall street netflix out with first quarter results after yesterday's closing bell the streaming service added nearly 2 million subscribers in the united states, much more than anticipated netflix issuing strong guidance for the second quarter joining us now to talk about all of this is the senior analyst at b. riley, and barton thanks for being here today what did you think on the net flick results? >> they had a strong quarter, wasn't the blowout of the fourth quarter. they beat subscriber guidance by 1 million additions, it was a
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great quarter. this is a business, in a stock that is a tiger that you're trying to catch by the tail. for my blood, it's a difficult stock to recommend putting people into for the valuation argument, but it does say so much about the threats in traditional tv you know, the better that netflix does, the more concerned you have to be about people like disney, cbs, stocks that are very attractively valued but don't team to haseem to have fit what the consumer wants like netflix has. >> netflix has the streaming service you can pick up anywhere, but also adding all of this new content which looks more like an old line media company. >> right what's amazing is that netflix has been able to go hockey stick vertical in their ability to come up with more impactful original content year after year we measure that -- one way to look at that is how much people are searching for netflix originals. searches for netflix originals were triple of 2018 than in
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2017 in the fourth quarter they were squad drup quadrupled they've been doing this for the past several years which i think is what's been propelling the stock >> i don't understand why -- you're making a case for content. >> right if you're disney, which has all this money, why can't they hire the same people netflix is hiring why can't one of the networks hire that talent and -- or how do you know that netflix doesn't go on a cold streak, like one of the networks that goes to third place for five years how do you know that won't happen >> those two things are the nub of the issue one is i thought for years the traditional media companies should have done what netflix is doing. they haven't >> talking about the streaming option >> the streaming option. not the dvd. >> they should have done 12 episode seasons. >> right >> by the way, you have three seconds to stop it before the
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next episode launches. they created the binging >> right they created a better way to view entertainment, everyone else is just catching up this was in their grasp. >> they also figured out the content. >> yeah. they have been able to pick shows right at the beginning, starting with "house of cards. and then since then they have been able to use data and great instincts to do something that no one else has done that's one of my concerns, what happens when they hit the cold streak everyone does in entertainment they haven't yet it's hard to believe they truly built a better mousetrap at that level for something as subjective as entertainment, but the data now says i'm wrong. they're unstoppable. >> if it just becomes a -- i sees it becoming more mod tized. it's a 1$135 billion company >> in the united states where they had better sub growth, they
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have 56 million subscribers. they are in half of all broadband households how long can you keep that growth up? the saturation it has to slow down. they're adding more subscribers this year than last year in the u.s. >> jumping ahead of that, your concern is if they hit a cold streak, people would eventually drop those subscriptions >> i think the sub growth will be disappointing, the stock will get whacked. maybe that's the point to look at it. right now everyone assumes that netflix can't miss that seems unreasonable. >> you wouldn't suggest shorting it >> life is too short to short netflix here it has too much momentum too many people are eager to buy it for my blood i look at it as a stock i'm not going to put meaningful investment capital behind as a guy who cares about valuation. but i won't wrestle the short end and i'll be concerned about the traditional media ecosystem because of how well they're
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doing. >> barton, thank you >> we're in d.c., feeling patriotic and everything >> historic. >> was he your great -- >> we share an uncle way back when >> really? >> yeah. we looked it up on ancestry. >> all right we'll check. futures pointing to another triple digit move for the dow at the open we'll talk strategy, no way, with michael farr. he will join us next and don't miss our interview with steven mnuchin. he's no michael farr, but he's coming up at 7:40 a.m. eastern and house speaker paul ryan coming up at 8:00 a.m. we'll find out why he's really leaving. "squawk box" live from capitol
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good morning, everybody. welcome back to "squawk box" live from capitol hill >> sounds like western music >> "the west wing" with martin sheen. i think that's what it is. >> is it >> i don't know. correct. >> was it really >> don't even say that martin sheen as president. oh, my god sorry. >> we are in washington.
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also watching wall street, watching the u.s. equity futures at this hour after the gains we saw yesterday you can see markets are building on that today. dow futures indicated up by 177 points above fair value. s&p up by 18 the nasdaq up by 64. >> charlie sheen would be -- >> winning >> yeah. that would be interesting. look at the broader markets. joining us now is michael farr, president at farr, miller in washington it has your name, where you're based. but -- >> there was a guy in washington >> related >> yes, he represents this guy and the society of the cincinnati >> wow >> he will turn 98 years old in a couple weeks >> michael, is this a pullback that has refreshed the bulls or is it indicating tremors in the overall market do you think? >> i think we continue to see
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tremors in the overall market what we' and what we're seeing is an adjustment to a new world with a new tax law and what will happen next to stocks the global scene with what's going on in syria, with our conflict with russia, what's going on in washington with mueller, the mueller investigation. we seem to be following headlines where we're waiting for the next shoe to drop. yet we have this terrific background of a reasonably strong economy, good earnings, and not ridiculously valued equity prices. >> or interest rates >> interest rates continue to be low. we keep looking for that whiff of inflation i think it's building and wage inflation which is encouraging i think wage i flags nflation i key to more economic growth. >> meaning you would tell people to i vest to invest at these levels?
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>> i think you need to invest at every level, but it's time to be careful more than ever for 20 years i've been telling joe that we have to be careful when we invest, look for companies are strong balance sheets we had a nine-year run where stocks have gone from 6600 to 26,000 stock prices have moved up a bunch. they have been led by a bunch of volatile stocks. the f.a.n.g. stocks have been doing extremely well by some stocks that maybe haven't done as well that have really strong balance sheets you know, you look at some energy stocks, even exxon for instance did not perform well last year. has a good dividend, strong balance sheet. stocks like that make some sense. where you know it's not a -- i don't think over the next couple of years it will be about how much money you've made, but how much money you've kept >> we were up 40% there for a while. it would be nice -- i can understand we need to consolidate gains.
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but i would like to know whether we're still in a secular bull. >> yes >> you never know why you're not until you do but looking around, i don't see the looming -- whether it's housing crisis or interest rates, inflation, any of that. you don't see that on the horizon. people say business cycles don't die of old age i don't know what it will be that throws things off the track. it doesn't seem like we're there yet. we have never liked -- russia, remember the cold war? we always have these -- how long has the syrian civil war been going on years and years. north korea has been a problem for five presidents or something. i'm not sure how you factor in those types of existential type things >> i don't think investors know how to factor it in either i think that's largely caused a lot of the volatility in the market the big news that i think investors have to be paying
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attention to is that the fed reversed course. for the last eight years, interest rates were going down not going down anymore old wisdom on wall street, you don't fight the fed. this has been a market that has feted the trough of cheap money for a long time. with those interest rates going up, the big question for markets is will the growth of the economy and the growth of corporate america be sufficient enough to withstand what ever jay powell will do with the fed and raise those interest rates that money is not cheap money. >> i don't think the markets would like a constitutional crisis i worry. i'm not sure where we're headed here >> this is the concern >> remember the brian ross report, he was wrong that there had been contact with russia before. market down 450 points the michael cohen raid, markets go down. if it looked like there was
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something serious -- we don't know the unknown -- that would hit the market again the market wants trump to stay president. >> what keeps driving the market crazy are all these kinds of disco diskdi this going on at white house and new things cropping up last week, we heard we would hear a saturday night massacre, we were hearing it from insiders at the white house, that they would be firing everybody at the justice department >> that just relates to the constitutional crisis. he can fire rex tillerson, he can tweet the market doesn't care the market cares when it looks like there's something that could be a big problem >> donald trump is the elected president of the united states he won the election. and he has a very different style of leading it's perhaps lead with bombast and back off a bit it seems to be working
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yes. i agree with you i think a constitutional crisis is very disruptive in markets. that's unexpected. we can't predict outcomes like that buy the companies with solid balance sheets people have forgotten, i think, that there are market periods through which you have to endure we have enjoyed a terrific run be careful >> yeah. all right. you're down here >> i am. i'm only available daily >> yeah. >> do you get the stockholm syndrome down here are you inside the beltd wway a the time do you get out there and breathe? >> i breathe a lot down in naples, florida. there's a lot of golf courses that i survey and make sure i can breathe a bit. >> it's already starting to hit me down here i feel weird scratching >> we all just talk to one another. we don't worry about anybody else >> a lot of money floating around down here >> there is. >> yeah.
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>> kudlow is here now. you know, you want to follow money, you follow kudlow >> michael, great to see you. >> thank ythank you. when we come back, former white house chief of staff josh bolton, house republican conference chair kathy mcmorris rogers, mick mulvaney, steny hoyer, paul ryan, senator david purdue, house majority leader, kevin mccarthy, house ways and means committee member kevin brady. "squawk box" returns after this. these zebra and antelope. they're wearing iot sensors, connected to the ibm cloud. when poachers enter the area, the animals run for it. which alerts rangers, who can track their motions and help stop them before any harm is done.
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welcome back to a special edition of "squawk box." u.s. equity futures at this hour are sharply higher either we have triple digit moves or no moves at all up 172 points indicated this
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morning. the s&p indicated up 17. the netflix heavy nasdaq up 63. >> last night it was close right around -- >> 1 $33 billio-- 13$133 billion company. i can remember when it was 40 billion, people were saying it's too late for us >> reed hastings is an amazing guy. i was shocked reading that it was 20 years that that company has been in business i remember ordering the dvds from them in red envelopes sending them back. that was a doomed dinner prize that was the blockbuster that came directly to you >> that was a good idea. >> the way of figuring out it would be streaming online and pouring money into content >> i still think that big media players that have the heft to do content are -- >> content is king >> distribution, too not talking about comcascomcast,
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talking about all of them. wouldn't just want to be cbs -- >> cbs is looking at viacom. all these mergers will put the big together and making them bigger >> by 2030, i hear everybody will be on ubi, universal basic income all we'll be doing is watching tv i think content is always going to be -- >> there's a bright future for us >> like wall-e, remember that? >> yeah. the chair that moved >> yeah. they don't even get out of it. >> good to be -- >> doesn't sound bad depen s dedepends on the food. at 10:00 a.m., the outcome of south dakota versus wayfair, that case could change the standard throughout the united states dictating when sales tax
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can be collected the current standard says a company has to have a physical presence in a state, like a store or distribution center to trigger the collection of sales tax on an item that is sold online to a consumer in that state. that decision was made years before e-commerce represented 10% of all purchases two years ago south dakota tried to rectify lost tax revenue and level the playing field in its own state passing a law requiring retailers to collect sales tax if they have more than $100,000 in sales or more than 200 transactions in that state, which is basically everybody south dakota sued online only retailers, wayfair, overstock and newegg over this issue those retailers are arguing they don't have to collect the state sales tax because of the physical presence test now it's up for the supreme court to decide. a decision is not expected until late june, but this is topical and timely because of president trump's tweets about amazon. amazon has been collecting state sales tax in every state that
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has a sales tax for over a year. but they don't collect it for third party sellers on their platform that's huge issue for the president. >> that was amazing, that read >> which read? >> that you just did that was like a three-minute read you didn't stumble >> it's an important topic >> it is but they gave it to you for a reason i think i would have stopped and said i need to take a breath >> i give up >> i give up sorry. dow component johnson & johnson just out with earnings the company coming in with a profit of $2.06 a share. that beat estimates by 4 cents revenue topping the forecast we'll talk about this later with meg tirrell. coming up, as we were just talking, dow component j & j, we'll talk more about that the company's cfo will join us next first on cnbc. later on this special edition of "squawk box" from capitol hill,
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♪ couple of stocks that are worth watching today including g it's going to offer espn plus. roku users now can get the new sports video streaming service just $4.99 a month 4 $49.99 a year. celanese up as well. posting solid earnings up almost 6% also increased its guidance. and lululemon appointing patric guido as new cfo
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i was on a track with the pants. >> don't have them on today? >> no. in a suit. they're stretchy that speaks volumes, doesn't it? >> dow components johnson & johnson just out with earnings meg tirrell joins us with more >> joining us now is the cfo of johnson & johnson dominic caruso thanks for being here. >> thanks for having me on the show. >> what was driving results in this quarter >> well, we had a strong quarter. we carried our momentum from 2017 into 2018 and our pharmaceutical business had stellar results. up 15% on a constant currency basis and really strong results. even across all of our businesses, our sales have exceeded analysts estimates in all three sectors. of course exceeded earnings estimates as well. >> one of the things you highlight here in your earnings release is the plan to invest
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more than $30 billion in research development and capital investments in the u.s. over the next four years. an increase, you say, of 15% because of u.s. tax legislation. tell us about the impact of tax reform on you guys >> sure. we're very proud that we're able to do that especially in the u.s. and the u.s. tax law provides now much more flexibility to use our capital on a global basis including in the u.s we plan to invest as we said this morning $40 billion over a four-year period in both r&d and capital. working on improved ways to help improve health care, but also manufacture with new technologies here in the united states we're proud about that >> how are you looking at the m&a environment especially where valuations have come back a little bit there's a lot of expectation that 2018 will be a big year for biotech m&a. >> generally we're always a buyer we had about 50% of our
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growth come from m&a activity throughout many, many years. we don't think that will change. we're always on the lookout for good opportunities, but it has to be at the right place at the right time with the right partner. >> where do you feel biotech valuations are >> i think they're a little stretched, to be fair. but depending on the technology and depending what we can do with the asset in our hands, we'll take a hard look at that and make a decision at the right time >> well, we know that you've announced your retirement. so we've always appreciated you going on every quarter to talk to with us you've been cfo for 11 years at j & j. you've been there for 18 years in terms of its reputation, all these issues about drug pricing, how do you reflect on that as you're preparing to retire >> that's a great question i'm obviously very proud to have been the cfo of johnson & johnson now, i'm in my 12th year
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and i'm going to miss the great people here and all the work they do to improve health care but think of the advances of health care over the time that i've been cfo here, they've just been remarkable. we're now talking about cures for diseases i know there's a lot of discussion about the cost of health care overall and the cost of drugs as you know, drugs or pharmaceuticals only represent 15% of the total health care cost i think sometimes what's overlooked is the benefit to patients and society of the drugs that we're developing. and i'm proud to say we're part of developing those drugs and pricing them very responsibly. >> what is your reflection been on how this administration approaches the pharmaceutical industry there was a lot of talk about pressure on drug prices. we're hearing there's going to be a speech soon about drug prices what's your expectation for how that will play out >> well, we've heard a lot about that and we haven't seen much action on that front and we believe that there's a real serious discussion and debate that needs to be had about what i just mentioned.
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the benefit and the encouragement to continue to innovate in our country. i think companies like johnson & johnson price our products responsibly. we just issued a report where our overall price in the -- down from the prior year. we invested more in research in benefit of price increase. it has to be looked at holistically and we're looking forward to engaging in a serious dialogue on the topic. >> we appreciate you joining us this morning we wish you the best in your retirement >> thanks, meg thank you very much. >> becky, back to you. >> thank you when we come back this morning, a huge lineup still to come from capitol hill starting with former white house chief of staff and omb director josh bolton that will be followed by house republican conference chair
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this a special edition of "squawk box" live from the nation's capitol in this hour, former white house chief of staff josh bolton, house republican conference chair cathy mcmorris rodgers, mick mulvaney, and steven mnuchin. it's the epicenter of news as the second hour of "squawk box" starts right now ♪
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good morning welcome back to "squawk box" here on cnbc we are live from our nation's capital. in fact, we're in the capitol in the capital, right >> capitol building. >> in the capitol building which is in the capital. and we're actually in the r rayburn room are we allowed to say that >> i think so. >> we're talking trade and -- nancy pelosi, that's her office right there. like, i could throw -- not that i would. and mccarthy's office i think is right over there it's really kind of cool >> first time we've done a show from inside the capitol. >> i'm joe kernen along with becky quick. futures are responding with all this nationalism up 183 points right now after a triple digit gain yesterday. nasdaq indicated up 60 and the s&p indicated up about
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16.5 >> the dow crossed above its 50-day s&p came within a point of it. >> people talk about consolidations, corrections aren't -- it's not just the points on the way down it's the duration too. time time you sort of see one group go up, the other goes down. nobody knows, but we were down at the lows 12% or 13% we'll see how this holds here's what's making headlines we have two dow components reporting this morning united health earned $3.04 a share. and the estimate was $2.89 so that was well above. and results were helped by a lower i guess maybe a medical loss ratio i won't know until you actually scroll up, but results were helped by a -- there you go. it's not hard. by a lower percentage of lower medical premiums
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i giuessed that. the health insurer also raised its full year forecast also out this morning, let me just -- that's what he used to do johnny carson. johnson & johnson, results from johnson & johnson. let me see what they are now quarterly profit in at $2.06 a share. 4 cents above estimates. helped by an increase in international sales. you ever watch johnny carson >> yes >> did you have any idea what his political leanings were? >> no. >> me neither. compare that to today. it's a sad day netflix share -- >> what are your political leanings i have no yed. >> mine are the opposite of all of theirs. suffice it to say. i don't know, fallon's okay. the video streaming services were inline with forecasts but subscriber numbers came in better than analysts anticipated. washington is looking ahead
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to the midterm elections with the key issue for both sides being the economy. for more on economic agendas, taxes, trade, all of these issues and what it means to the business community, we're joined now by josh bolton he was also white house chief of staff under president george w. bush thank you so much for being here today. >> thanks for having me. and what a cool place to have an interview, isn't it? >> it is hallowed halls as you walk through this morning the gleaming marble floors all the way through. >> it's terrific and your green room is the conference room of the ways and means committee. where the final details of the tax bill were worked out >> i did not know that we are here on tax day to talk a lot about what's happened with tax change policy. that's maybe something you could give us only insight, what the business community is thinking about this what changes have you seen what have you heard from ceos since this tax law change came into place >> it's still early days, but
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the reviews from the american business community are incredibly strong. we did our ceo survey. we do one every quarter. and we had the highest optimism rate in the history of this survey on both what those individual ceos are going to do with their capital investment and what they're going to do with their hiring. so the optimism is very strong so far 42 of them have announced wage and benefit increases of around $2 billion for over 2 million employees. so that's just early returns from a relatively small anecd e anecdotal sample but it's very big for the american economy >> we heard from some of the big banks, got their earnings just this last few days we've started hearing from some
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of them. some of the disappointment on friday was we didn't see more loan demand. maybe the answer is what you said that it's early days. do you expect to see that pick up >> yes we expect that across the whole economy. it's not just the big hirers that have optimistic plans it's all of their suppliers. it trickles down to small businesses all over america. then there's the individual side of the tax code. 90% of americans are getting a tax cut. all of that is still coming on stream and people are now focused on what they owed last year but i think when they see what they owe this year, they will see some much stronger optimism about an already pretty strong american economy. >> so early. i think we got spoiled a little when we saw all the companies with the bonuses that was, like, the day of the announcement it's april
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and we're talking about -- we're still doing last year. 2017 it's only april of the 2018 year, and yet people are like, where are the companies? you already hear the growling which is ridiculous because it takes time >> it does take time the early results are really good i mentioned the 42 of our companies who have done specific things the most important thing about the tax reform, though, is what it does for the long-term competitiveness of the u.s. economy. and that we won't see for years. but lowering the corporate rates to an internationally competitive level, shifting to a territorial system of taxation like the rest of the world is going to pay dividends for decades to come. for the first time now in 10, 20, maybe 30 years, the u.s. is an attractive place to invest and hire people and make stuff >> right >> and that is the big thing about tax reform not the bits and pieces that are
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happening as joe said just in the first three months >> and inversions, not only are they not going that way. they may come this way >> we had a study done by ey which showed that over the last decade-plus, if we had had the corporate tax rate that we have now, we would have prevented 5,000 companies from leaving the u.s. we can't get those -- well, actually we can get them back. but that's already happened. but going forward, you're going to see capital coming back to the u.s. you're going to see companies coming back to the u.s you're going to see investment and employment here grow >> you've seen -- i don't want to get too nasty it is demagogued, this issue and the public -- i have a lot of faith in the public, but i'm frustrated that you still see some of the plan is under water. and i honestly don't think it's the plan i think it's the way it's covered by mainstream media and
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the demagoguing by democrats some of whom should know better and have been for lower corporate taxes in the past but can't come out and say they're for it now it's very frustrating. i wonder whether the -- if the proof's in the pudding do the polls finally turn around it matters for 2018 for the election and it's not that far off. i know you can't worry about that you just do the numbers. you get it done. at least you're sure in your own resolve this is the right thing. >> it does matter. and we need to worry about it. >> there's lies about it, who's accruing i mean, i understand that some does accrue to the people that actually pays the taxes. if you cut taxes, the people that pay the taxes, some of the benefits will accrue to them but it is -- it's demagogued it's really not very honest, a lot of the -- >> it is demagogued. it is frustrating. we do need to worry about it
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because we need to make sure this tax reform is durable, that it lasts for years to come because that's critical. >> you think they'd try to repeal it, the democrats if they took the house >> they might. >> like obamacare. >> i think it'd be hard. but i think there'd be an effort the other thing is their credibility of a lot of folks in the business community is on the line and a good feeling about the u.s. economy is on the line. because as you know, a lot of these expectations are self-fulfilling. people feel good about the economy. they will spend. they will invest stuff will grow. and there is good reason to be optimistic at this point i can see why people who voted against the bill are looking for things to complain about but i would hope that as you say the level of demagoguery would
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come down. >> a big bonus just for fat cats and corporate krrnceos and all that stuff >> one issue you're concerned about and your ceos are concerned about is the issue of trade. that's another issue you could say has been demagogued. what do you do at this point you've just written an op-ed that said give trade peace a chance >> the ceo survey i just mentioned, about two weeks before president trump started the announcements of trade retaliation on steel, aluminum, and then the announcement of the -- of tariffs against the chinese in response to their intellectual property. a little bit later, the optimism
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would have been lower. there's a lot of concern in the business community about over-aggression on the trade side our ability to compete by doing politically popular stuff that says keep the imports out. a lot of those imports and a lot of our trade agreements are critical to maintaining competitive in the united states. >> many will say it's not a fair playing field. how do we get a better agreement? is there a point you would say we need to push on >> sure. in most places the field is pretty level it's been demagogued for a long time by democrats. now being demagogued by a lot of republicans as well. that's been a really good deal where the trade problem is really is with respect to china. here's where large parts of the
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community agree with president trump. there is a serious problem in china with their subsidizization of their targeting strategic industries for subsidies so those are all big, big problems in the international trading system the objective of addressing that we don't agree with a lot of tactics which have the appearance of shoot first and ask questions later. we think there can be a productive negotiation with the chinese to ultimately reform their system but it's got to be done with some careful preparation and prudence it's a very dangerous situation for the economy. >> comparative advantage if you got a subsidized industry. it's not a free market that's not what they were talking about with comparative advantage. it makes no sense. >> it's one of the rare occasions that i've actually --
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i've agreed with navarro i thought that was a well reasoned piece the question is then what do you do about it? you just haul off and impose retaliation on the chinese because that makes you feel better which could result -- you're cutting off your nose and it will likely result in retaliation but now that we're here and we have had -- >> over there they know exactly what they're doing we don't want to be patsies. for so long, right i just don't know how you do it without cutting off your nose. you don't let them run over. >> they've now threatened the nose and the question is do they actually cut it off. i think they -- the president has gotten chinese attention now he needs a really well developed strategy that has priority issues that we want addressed. what we want the chinese to do in what time frame
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here's the most important element. line up the friends and allies we try to do this alone, it will not succeed. >> josh, i want to thank you for being here it's a pleasure to see you >> thanks for having me. coming up, gop conference chair kathy mcmorris rodgers and then later, mick mulvaney drops in the job that josh is probably so glad he doesn't have anymore and then treasury secretary steven mnuchin will join us and will be here to talk u.s./china trade tensions, the dollar, and much more. stay tuned you're watching "squawk box" live from washington, d.c., right here on cnbc as a control enthusiast,
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him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. ♪ tax day is here again. many americans are looking forward to a different filing system next year joining us with what this means for businesses and individuals around the country, representative cathy mcmorris rodgers, a gop conference chair. it's great to have you here. did you get to hear our discussion with josh bolton?
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>> i got to hear some of it. >> we just heard a lot of the benefits and yet i don't know the message is totally out there yet. >> well, it's continuing to be implemented. this is the last -- >> it's early. >> today's the last time that individuals, americans across this country will have to sfiel in the old tax code. moving forward they'll see doubled expansion of the child tax credit they'll see this first hand, more money in their pockets. it's been rolling out. 90% of americans have seen their withholdings change where they have more money in their pockets. businesses, every day we're hearing about more businesses, small businesses, large businesses that are making decisions to invest, expand because of tax reform. and what encourages me the most is that it's bringing home and optimism to this country again we had seen years of stagnant
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wages, stagnant economy. and now people are optimistic again. i was just visiting a company in spokane. now, their employees are going to get between $70 and $300 in their paycheck increase. but it was the optimism that really inspired me as you hear people that are more hopeful again. they're dreaming again that's what we want for people >> you're in -- must be a rural part of -- i can't believe you were winning in washington and you're going to win again, right? >> that's right. >> is that where governor -- we've had him on he comes on and i'm blown away because i don't know what to say when i -- you know what i'm saying, right? >> yes i served with him in the house now he's our governor. >> does he have white house aspirations too? >> every appearance looks like he does have white house aspirations. i would encourage people just to take a second look there >> just read >> and what's going on in our
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state. my district borders spokane. just hard working men and women. >> the president won 52% in your district that's not a blowout that's not as safe as some of the other places necessarily i can't believe anywhere in washington is safe. >> well, i don't think any -- no one can take their re-election for granted. this is uncharted territory. i think when people see the policies we have put in with the republican majority, the economy is growing, it's more money in your pocketbook. the liftsing of the regulatory burden people feel they can go out there and explore the american dream again. people are believing again we got to just keep that momentum going and win hearts and minds and convince them that there's more that needs to be done. >> a big issue for your district is trade we were just talking about that with josh bolton as well obviously this trade tensions we've seen with china have come back on farmers like the farmers
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you represent. because that's where china is targeting things what do you do about that? how do you kind of see your district through this? >> i'm urging the president to lead with the farmers in mind. i have urged him to pull back from the across the board type approach that he was talking about with steel and aluminum. i was pleased to see him last week announce that he's coming back to the table on tpp i believe that is one of the best things we could do to be at the table, negotiate that would be our best counter to china and their dominance in writing the rules of trade and commerce in that region. tho we had larry kudlow come and speak to the conference and share his insights it was important to hear from larry as he comes on board as the new economic adviser to the president. he recognizes that we must have fair and free trade. but opening up these markets --
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in my district we export 90% of the wheat that we grow in eastern washington we export 50% of the potatoes. we want that -- we want those jobs here. we want to grow. we want to produce we want to manufacture here in america. but then export to the world 95% of the consumers are outside of america that's an important part to create opportunities for people. >> minority leader nancy pelosi over there november's coming. presidents always lose, usually, the incumbent president loses seats in the house are we going to have paul ryan out and kevin mccarthy on? will they have answers i know you're going to say you're confident are you really confident >> yes we have been united as a conference we've been united both on the policy agendas, the work that we have done.
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and now we just have to win hearts and minds americans need to see the impact they do see the impact of this majority, but we need to compel them to get out, to vote, to make sure that we do maintain this majority. and it's going to be race by race all across this country >> some improvement in the generic policy >> that was encouraging to see over the weekend >> you were watching that too? >> absolutely. that generic ballot is important. there's been a lot of noise, but we need to make sure that republicans get out to vote. that's what these races come down to. >> i don't think there's anything to get done between now and november it's going to be all about the election from here on out. >> we do have an aggressive agenda we're working on combatting the opioid crisis. workforce development. as we see this economy improving, record low unemployment there is highlighting the importance of the skills that we need right now and it's the economy. construction skills. health care. and the work that we're going to do on workforce development is going to be important. but continuing to build on the
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economic successes that we've seen that's going to be our priority. because that's what matters to americans. we want americans to have a job so that they have more purpose and dignity. it's the foundation for a better life >> thank you appreciate it. >> thank you >> here on our fancy set. >> it's great to have you here >> it's great to be here we have a big half hour to come here on "squawk box." mick mulvaney is our special guest followed by treasury secretary steven mnuchin you're watching "squawk box" live from the naonti's capital right here on cnbc
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still to come, mick mulvaney followed by a special interview with treasury secretary steven mnuchin. plus minority whip steny hoyer is our guest another big 30 minutes of news-making interviews starts right after the break. bigger and bigger, it took a whole lot more. that's why i switched to the spark cash card from capital one. with it, i earn unlimited 2% cash back on everything i buy. everything.
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♪ yeah jason. welcome back futures at this hour have crossed over the 200
quote
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now they're just barely below that on the dow. but they've been improving throughout the morning might have something to do with us maybe not. but there's good american stuff happening here we played a little lee greenwood. that makes me want to buy stocks and how about this this should be in the oed, mick. the oxford english dictionary. maganomics >> you like that one >> i think you coined the term let's work omb director mick mulvaney he also acts on the financial protection bureau. and as you know, 3% could never be done again because of -- >> never ever ever ever ever i was crazy for suggesting it. >> not enough people and productivity couldn't go up. now by a lot of people, they are conceding it will be done because of the front end loaded
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tax plan we paid everything forward but no way in 2019 and beyond. >> we're watching your show beforehand and sort of joking over all of the awful names we were called when we suggested we could get to 3% growth we didn't think we could do it until 2020 that was what the original projection was we came up with about a year ago and we're there ahead of schedule not only was it not crazy, we actually underestimated the potential of the american economy which of course people have been doing for generations. it's been a very successful year for us we've been pleased with what the president has been able to accomplish >> the notion that it's a one-shot deal for this year -- and mainstream economists finally are admitting it they're finally up to 2.8%, 2.75% for this year. >> then 1.9%, 1.86% after that no
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if this had been a one-time deal, we could have that argument we've fundamentally changed the way the economy is structured and the way we're going to tax wealth in this country and wealth creation. it's not only the tax code which we've reformed we've changed the tax code we've also changed the energy policy we've changed a lot of the way the economy works. this is a structural change in the economy for the better it's not a one-time thing. >> josh bolton suggested if the democrats take the house in the november election, that some of these changes, the tax changes in particular could come under assault. what do you say to that? >> under assault but that's what the veto is for. i'm not too worried about that what worries me more if the democrats take the house, the progress will stop we won't be able to do the types of things we want to do to infrastructure for example, we probably have less of a chance to get this next part of the tax cuts the president talks about done so, no the progress stops because the democrats, some of them don't
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believe it they don't believe it's real but a lot of them don't want it to be real if we could reduce taxes, we reduce regulation, we increase energy independence and the economy does well. all these people in this room get wealthier, there's a lot of democrats who don't have anything to sell after that. so they need it to fail. and that's what worries me if the democrats take the house >> the newly minted democrat deficit hawks. there's a lot of them. but there's a lot of newly minted deficit doves it's weird the way it works. but there's a worry that that's going to come back to actually hurt economic activity but we had someone on last week that already has a finite number that the growth has already generated in extra revenue that they said that wouldn't happen either i think you said 30% of the cost of the $1.2 trillion, whatever it was, that already 30% has
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been made up in gdp growth >> also what folks i think have overlooked is even according to the cbo estimates which we believe are low, the economy at the end of that window is $6 trillion bigger than it would have been without our tax proposal come back to your democrat deficit hawks. there are a couple of them i worked with them when i was here in the house. christopher van hollen and i worked together when we were on the house budget committee even those democrats who worry about the deficits with a fundamental disagreement over how to solve the problem we think it's great and they think it's higher taxes nap is a fundamental difference that's what worries me about democrat control they don't worry about the deficit as much as they say. but even those that worry about it want to solve it by raising taxes which is proven not to work >> hopefully the economy will
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grow faster and make up for the debt service we're going to have is that a concern? i mean, i don't know how much we spend now just servicing the debt but it makes it hard to spend on anything else. >> north of $300 billion this year, i think. no question. growth plus fiscal restraint -- listen we're never going to cut spending in this town. as long as you've got a 60-vote rule in the senate, you're going have democrat who is are going to get their pound of flesh any time the republicans want to do something like we did with this omnibus of increasing defense spending i feel good about that because i said that when the democrats were in control. the 60-vote rule makes no sense. we suffer because of it. >> that nobody actually takes responsibility for this. it's just a continuing resolution. >> can you do what we did in the '90s can you slow the rate of growth? can rerestrain the rate of growth and allow the economy to grow faster so your expenses are
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further. we can fix that. >> i saw a chart of entitlement spending, whatever i saw where bill clinton reformed welfare all it does is just flattened for a second it's never gone down >> 99 times out of a 100 when people accuse me of cutting, it's a slow growth >> are you going to miss paul ryan he kept that front and center. is that coming back? >> paul and i have had this conversation the entitlements are real. they are one of the long-term drivers of the debt. there is no question and money is money whether we spend a dollar we don't have on medicaid or a zlar we don't have on some research somewhere that means a lot to one member of congress, it's still just a dollar. and right now the deficit is driven as much by discretionary spending as it is by entitlement. we can't use that as an excuse the spending is the issue. it's not just entitlement spending
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it's all spending. we cannot sit there and say until we fix entitlements, we're never going to fix the problem no spending is spending >> director mulvaney, thank you for being here >> happy tax day, i think. >> oxy moron wilfred frost joins us with new numbers just in. >> as we said with all these banks they were coming in with raised expectations. goldman sachs has done that. eps $6.95 per share versus expectation of $5.58 so a decent beat if we look down the line, business trading is in line. but significantly up year on year they had much easier comps from last year. they've beaten them easily the big beat comes in investment and lending. the dividends increase to 75
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cents. stock down no in extended hours. guys >> all right, wilf thank you. coming up, treasury secretary steve mnuchin joins us after the break. tomorrow, it's a day filled with promise and new beginnings, challenges and opportunities. at ameriprise financial, we can't predict what tomorrow will bring. but our comprehensive approach to financial planning can help make sure you're prepared for what's expected and even what's not. and that kind of financial confidence can help you sleep better at night.
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welcome back, everybody. treasury secretary steven mnuchin is going to be joining ivanka trump today to tout tax reform but first he's here with us. >> it's great to be with you >> it's great to see you tax day is a big day we know that this is the last time people will be using the old system that people are already getting ready for the new system maybe you can tell us a bit about what you're seeing so far under this new system. >> we're seeing strong economic growth we literally have met with hundreds of executives, small companies, big companies, and thousands of workers we're beginning to see the impact of the tax cuts specifically people investing large amounts of money back into the united states. >> we know it's very early days, but maybe you could tell us about the tax receipts you're seeing again, we understand that the projections would be down at this part of the year from where we were a year ago based on these changes. what are you seeing? >> i think it's a little too
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early to predict but so far things are coming in as expected. and again, what we should be focused on is economic growth, not tax receipts i think you know we've front loaded the growth into the tax plan because of automatic expensing which is one of the most powerful parts of the tax plan, we will see lower revenue in the short-term because people are using the depreciation to encourage investment >> it's something when you look at budget deficits that's going to be something people take into account. again, understanding that projections are to drop initially. are they meeting your projections? >> they are. as mick just talked about, we're now at a point where we're comfortable with our 3% or higher sustained economic growth that's not about any one quarter. there already quawill be quarte we're higher and lower >> there are so many areas that
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you're involved in issues coming out of washington every day, issues like sanctions, issues like trade maybe we can focus on trade for a little bit we have seen trade concerns ratcheted up particularly with the chinese. but you've been kind of in the middle of saying, look, we could have a negotiation that works out. what can you tell us on that front right now? >> i think as you know, president's economic plan has always consisted of three parts. tax reform, regulatory relief, and trade. trade is an important component of that. i have the imf and world bank meetings coming up this week i'll be meeting with all my counterparts we've been talking about these issues for the last year we have complete transparency. the president believes in free and fair reciprocal trade. we're trying to get good deals for companies here this is what this is all about >> wall street has detected a change in tenor of these talks
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is there a change in the tenor or is this a continuation of the last year? >> well, again, i think it's a focused strategy that the president has been very clear on we've had an integrated plan we now have larry now on board secretary ross so these are coordinated efforts. again, as you know, we've been in dialogue with our counterparts in china about reciprocal trade there we're speaking to the eu so we have a lot of focus on this the president is determined to have free trade. >> in davos, the president said i'm thinking about tpp we went a few months and nothing was done people said see i told you nothing would happen then we have that he asked lighthizer and larry to look
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into it. has anything been done do you know anything about the reception that's receiving by the 11 members that are already in the tpp is it possible that happens? >> sure. again, let me say i think it was a big announcement in davos where the president said he'd reconsider entering, but only under better terms we quietly had some conversations with our counterparts about what the issues are the president's at mar-a-lago today. he'll be talking about trade japan is obviously one of the big participants and we're focused on our trade relationship with them that's a big part of the tpp right now. >> china have anything to do with the new interest in joining the tpp? >> no. it's independent and again, the president has
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been consistent he'll only join tpp under a different deal >> you handicap it at one out of three, two out of three? what are the chances we end up in tpp >> i don't really handicap it because it's not -- >> but is it better than 50/50 >> i'm not going to hannity cha. the real question is will we make the deal on trade we want and i'm confident we will. again, this isn't about protectionism. this isn't about, you know, tariffs. this is about making sure that we have free and fair reciprocal trade. >> we always got to talk to you about the dollar >> why not. >> the president tweets and some people say it's just a tweet when a president puts anything out, it's -- you got to take it somewhat maybe not literally but take it seriously. so he talked about russia and china both being currency devaluers. we put sanctions on russia the ruble's been -- we devalued
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the ruble. >> it's counter to what we saw from a treasury report last week where china was not labeled a manipulator. >> that sounds like the president wishes the dollar -- >> no. that's not the case. it was a warning shot at china and russia about devaluation china has devalued their currency in the past as a matter of fact, up to 2016, they devalued it significantly starting in 2017 right after the president was elected, they've used a lot of their reserves to actually support the currency. so, you know, the president wants to make sure they don't change these plans and he's watching it. >> although the treasury report from a few days ago said that china recently has been actively trying to prop up its currency and not let it fall below those issues >> it's a warning shot to make sure that china doesn't devalue the currency as they have in the past >> you're not handicapping anything for me. can you handicap the likelihood
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that some of the most punitive tariffs actually go into effect? or does something happen to solve some of these issues before then? >> well, i'm not in the handicap business. >> are you optimistic? larry kudlow seems to think -- larry has always talked people down off the ledge about trade wars are you optimistic there's a method to what's happening here? no one wants a trade war >> i am completely larry and i were together yesterday. we were with the president as i said, he's involved in these discussions and all the specifics. and, you know, as i've used the word i'm cautiously optimistic. you'll know when we have a deal. >> if you go anywhere else, we hope you don't, but you can say i'm optimistically cautious, if you want just in your quiver. >> the only place i'm going differently is next time you come to washington we'll host you at the treasury. >> really? >> absolutely. >> did you guys get that
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are we live? are we still live? good that'd be great. really >> we'd love to have you >> okay. >> secretary mnuchin, thank you for your time. it's a pleasure. >> great to be with you both when we come back, house minority whip steny hoyer will join us on the chances of winning in november. "squawk box" is live from washington, d.c. we'll be back after a quick break. coming up, another big hour of "squawk box." house speaker paul ryan joins us to discuss trade, tax reform, jobs in america, and why he's leaving washington plus the man he's endorsing to succeed him as house speaker majority leader kevin mccarthy joins us and then congressman kevin brady talks tax reform part two and much more. "squawk box" live from the nation's capital returns after a quick break. nobody's putting their money into equities.
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they're not investing in commodities or fixed income. what people are really putting their money into is what they hope to get out of life. but helping them get there requires a real refusal to settle for average. because when you approach investing with a tireless desire to beat the status quo, something wonderful can happen. those people might just get what they wanted out of life. or maybe even more.
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you know what's not awesome? gig-speed internet. when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. welcome back, everybody. one of the major points of contention in president trump's tax law has been limitations on the state and local tax deduction. at least for those states that use it heavily earlier this year our next guest called that a new double tax on families in his state and said it would increase the cost of homeownership as well. joining us now is the house minority whip steny hoyer. congressman, thank you for being
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here today >> always good to be with you and joe. >> we're here for tax day. we've heard a lot about the new taxes and how many of the republicans think that that is really helping out the economy you have some issues in your state. what are those issues? >> of course the so-called lostt and local taxes capping at $10,0 $10,000. for states that use a progressive income tax robustly, a lot of our taxpayers are going to pay for more money. their deduction will be decreased. the net, they'll be paying more. so a lot of people are going to pay more taxes >> a lot are 1%-ers though most democrats like that >> i think that's true for some of the wealthiest, but most of the wealthiest got a huge tax break in this bill as you know you know, paul ryan talked about
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the guy making -- the family of four, average family he said on the floor $59,000 we really need to take care of them and they get $23 a week. but the guy you're talking about gets about $1100 per week. so it was a bill that was skewed heavily to the wealthiest in america and to the corporations. we believed as you well know, that we needed to bring the corporate rate down. obama said that in one of his state of the union messages. we need to be competitive. so that was not at risk. frankly the folks making $900,000 a year, they did not need a tax break and it's not going to grow the economy. but what it did was take so much of the resources that the struggling families that paul ryan talked about on the floor are getting a very small sum which is not going to help them and bring our economy up as it should >> if the democrats win the
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house in november, what would you do to try and unravel or change the tax law >> well, first of all, we want to invest in growing jobs. we talked about infrastructure that's one way to do it. we talk about jobs skills for the 21st century that's another way to do it. i'm sure we'll look at some of those resources going to people who are not going to use them to grow the economy >> is that raising the tax rate back again on the highest income earners? >> i think certainly we'll look to have revenues opposed to simply creating more debt. this bill is going to create more debt than obama created or previous presidents created. that was certainly not the objective, but that's going to be the result the cbo says it is >> what do you think the chances are the democrats will retake the house? >> i think pretty good in '06 it was in our favor in '10 it was in favor of the republicans. that's the same kind of energy
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you see out around the country, in my opinion. i travel all over the country where you see democrats and independents really energized about coming out and voting and trying to p ing ting to put thia steady path. >> leader hoyer, i want to thank you for your time today. >> you said all republicans. that's why i'm quiet you got the whole democratic party on your shoulders. i'll just let you go and you did great. thank you. >> joe, thank you very much. i think the democratic party is doing very well because the facts are on our side.
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tax day in america "squawk box" is on the hill with washington's biggest power players. including the lawmakers that helped craft the gop tax law >> house speaker paul ryan will join us live plus tax writer congressman kevin brady and house majority leader kevin mccarthy. >> we'll hear from david perdue and democratic senator chris van hollen a special hour of "squawk box" live from washington begins right now. ♪ you're watching "squawk box"
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live from the nation's capital right here on cnbc >> good morning. welcome back to "squawk box" here on cnbc i'm joe kernen along with becky quick. it is tax day in america we're live from capitol hill this morning with a big lineup of news makers coming this hour including house speaker paul ryan who will join us in just a couple of minutes. house majority leader kevin mccarthy maybe is the next speaker or maybe not and house ways and means chair kevin brady who was instrumental in the tax deal. also democratic senator chris van hollen that kicks off in just a couple of minutes >> let's get a check of the markets this morning the futures have been sharply higher this morning even after the gains we saw yesterday at this point the dow futures are indicated up by over -- whoa what happened? up by 222 points right now s&p futures up by about 18
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the nasdaq up by 69. part of this was helped by some strong earnings reports that we got after the bell last night. if you check out what's been happening with the 10-year -- >> that's healthy. >> goldman sachs is helping this morning. that's up by $2. the 10-year is yielding 2.843% >> the reason for that move in goldman, the company reporting in the last half hour. wilfred frost is back at headquarters and he joins us now. i don't know if we return to the glory days for goldman, but a pretty good report >> it would be the glory days if they make this last every quarter for the year eps 695 against forecasts of $5.58. so a big deet. trading has been in focus over the last year. they have delivered. jpmorgan overall trading up 7% citi up 1% theirs is up 31% year over year. so 31% versus 7% a very big relative performance.
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much easier comps than the rest, but clearly they delivered where they didn't last year. that's the best for three years. breaks down to equities up 38% fixed income up 23%. now, the biggest area of this beat comes in in investing and lending. sometimes the area analysts don't value quite as much. that's $2.1 billion revenue versus forecasts that part of the business continues to grow. investment banking in line so perhaps the only disappointment, but still in line it's not behind. investment management is decent as well. $1.77 billion versus forecasts of $1.65 billion given softness in equity markets. it's not a small beat. return on equity is the best in five years forecast was 13.2% up really 7.6%, the share. people are wondering what you said at the top, whether this
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will last all year this quarter, very strong indeed >> pretty solid. that did remind me of some of goldman's numbers from the past, wilf we mentioned davos a couple times already. i can't help but think of lloyd. we had him on in davos and through gritted teeth, he said yeah a lot of the things that trump is doing are working pretty well. he didn't think it would have been as nearly as positive economically if his candidate had -- you know. it was big for him to cop to that and now i think there's some evidence a lot of that came true in these numbers goldman seems to be doing well >> it's a good quarter i'm sure he's smiling this morning and obviously will be interesting to see what his take is whether it's on the core or anything else. i don't think it's gritted a teeth with these numbers >> there's gritted teeth there's other reasons -- anyway. thanks, wilf >> my pleasure all right. let's get you caught up on a few other quarterly reports that
quote
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have come out this morning united health earning $3.04 beating consensus of $2.9. results were helped by a lower percentage of m premiums paid out for benefits the health insurer also raised its forecast and the dow is now trading up by 2.25 percent it's called on tax day america is stronger than ever in usa today. in it the president writes paychecks are climbing, tax rates are going down, businesses are investing in our country and most important americans are winning. >> charlie sheen >> house speaker paul ryan speaking of charlie sheen -- no. >> what? >> that's not a good -- >> can we just cut and start over >> yeah. house speaker paul ryan made headlines after announcing -- if there's anybody more opposed to charlie sheen. >> thank you that's a good recovery >> last week he said he wouldn't
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run for re-election and he came bouncing in here he's in a really good mood his retirement comes after a career crowned by successfully shepherding tax reform into law. joining us now, speaker of the house paul ryan. i believe you. because i know about kids and i know about weekend dads. >> yeah. we've talked about this for years. >> we have i can't imagine your life. not only that, as a regular congressman but a speaker which is just -- >> yeah. so when we have recesses normally a guy in congress goes home and spends time with your family i'm on the road. so it's a requirement of the job. >> it's hard work too. >> it's on honor to do it and i'm glad that three years is good >> you did it. you look like the most -- and i don't think that was an act. you were so reluctant. >> yeah. because i knew i knew what it involved. and i was -- i loved being ways and means chair. it's a great job and it's a job you can have a really good family/work life balance. speak ser is a different story. >> i could guilt you into --
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>> people use catholic guilt to get me in the job in the first place. >> i could guilt you into you're not done on entitlements we need your voice >> right so obviously tax reform, regulatory relief, rebuilding the military, we're about to do some workforce development issues i think are really good for labor market supply. entitlement reform is the one thing i've been working on pretty much my whole life. i'm really proud of the fact that every term since i was budget chair, we've passed budgets in the house that balance the budget, we form entitlements, that pay down the debt we pass the biggest entitlement reform bill in the history of congress in the country in the house last year. i hate the fact that that happened, but here in the house, we've done our work. we've still got a lot more to do and it really is entitlements and health care entitlements we have to get under control. there's just -- there comes a time when you're at a stage in life where you have to make these kinds of decisions that's the decision i had to
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make i didn't want to run for re-election knowing i'm not staying a full term and then hang it up after the election. which is what the political people say you should do i'm just not a political person. i'm a policy person. i didn't want to do that >> we've had a lot of discussions. i really do think you're -- you're like a choir boy. you're so straight laced about things i understand that trump might at times be a different type -- >> he used to call me a boy scout. >> you are a boy scout okay so i understand the times where you've chafed or he's chafed or i understand that relationship but who writes the piece that you're leaving because you don't want to deal with trump anymore? >> it really is. >> where do they get that? did they cite -- >> people who don't like trump say this. >> is that fake news >> yes, it's fake news of course. >> because i read that article but it sounds on the surface to be plausible >> look what his election got us it got us finally a unified government where we could take on these issues. >> so it's not anything to do
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with him. >> absolutely. i'm glad he's given us the chance to do fundamental tax reform that finally got done look at the regulatory relief. look at what the oil and gas industry is doing now that we have lifted the ban on exporting crude oil. look at all the fracking occurring. anwar now is back online we've been trying to get anwar, the arctic national wildlife for years. we are putting opec to the side. why? because donald trump got elected president with a republican congress and look what's happening. that's just one sector the basin, they have discovered oil fields as big as the saudi arabian fields in just one part of texas one sector of the economy has been locked. >> when are we going to see you again? >> what i'm trying to say is
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he's given us this incredible opportunity to get things done >> i want to talk about you. >> you're 48 >> i was going to -- you're in your late 20s now. >> i came into congress when i was 28 years old i've been here 20 years. i'm like one of the old bulls around here. isn't that funny >> 48 is -- >> that's the other point. i've been here 20 years. >> what else will you run for? >> you never say never but not any time soon. >> that's the same answer i've heard you give seven times >> but i have no intention of running for anything >> well, right now >> my kids are now at that age -- you have teenagers. well, you don't yet. >> i do. >> how old are you >> 15 is the oldest. >> all right so when you never see them and you only have sunday night dinners and sunday morning mass, it gets to you after awhile. it is what it is >> so is mccarthy going to be -- is he going to take nancy pelosi's job or your job >> my job. >> is it going to be mccarthy?
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>> i think it should be and i think it will be the last thing we want to do is have disruption of leadership elections in the middle of a term right now and also, there's so much more we can do to run for the tape. we've got to do our technical education bill we've got to do getting people from welfare to work we've got infrastructure bills more regulatory relief we've got our dodd/frank reforms. we've got more things we're going to run to the tape and get done and then we're going to go to the voters and show what a big difference -- today is tax day the average family of four is getting a $2,000 tax cut because of the tax bill. this is the last year of this old tax code and now you have a new year of lower tax rates doubling the standard deduction, doubling the tax credit these are good things. people know it people see it. and they know that having this unified republican government is making a big positive difference. >> what do you say to people who say you ought to leave now because you can't raise money. >> well, the answer is i am and i can and there's a lot more we
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can do >> no way you listen to that >> most of our members -- the vast majority of members say don't leave. there's so much more you can do. we want continuity we don't want to have disrupting leadership elections in the middle of this by the way, there's a lot more i could do i've raised $54 million since the first of the term here and i can raise more >> let me ask one question we're talking about news stories and whether they're true or not. yesterday i read a politico story that suggested your relationship with kevin mccarthy has been strained by your decision to stay because that leaves seven months -- >> total fake news that particular article. >> politico, really? >> look. i don't want to slam newspapers or anything like that, but he and i were joking about it last night. >> you were? >> oh, yeah. yeah, we're very close he's my partner. >> what happens because your party has been a difficult one to wrangle as most parties are you do have the freedom caucus saying, look, we don't like the budget deal that was just cut. we don't like the spending that
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was in it that was granted to the democrats to get their votes on board what does that -- what happens to your party? >> we're more unified than we have been in a long time look at all this stuff we passed over 500 bills here in the house since the first of this term. we've had the most productive congress house of represe representatives in decades the reason we've been able to pass all these bills is because it's unified i came in in 2015. we're so much more unified now that's one of the reasons i'm comfortable going. we have come together as a team. we've gelled we put together an agenda in 2016 we ran on it we're two-thirds of the way through getting it all done in law. so we've gotten so much of our work done. and because we're gelled, because we have a great leadership team that could have seamless transfer, that's why i feel comfortable doing this. something that i just feel obligated to do at this phase of life i'm in. and i'm happy. look i've gotten almost all that i wanted done done the only thing is the health
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care entitlements. enterprise zones, i worked on that when i was working for jack kemp so the critical component of our poverty fighting agenda, that's now the law of the land. rewriting the tax code, i've been working on that all my life that's now the law of the land all the regulatory relief we think are important to unlocking capital, law of the land by the way, the military -- when you become speaker, you get the same briefings the president gets so i became acutely concerned about the state of our military and its readiness crisis so i really took to that issue now that is the law of the land. so we've gotten so many of the things done that i sought out to do that i feel very content with the achievements and now i just have this focus on making sure that, you know, i can do the other really important parts of my life job which is family. you know being a good husband, being a good dad i feel like we've got an lot done i think we have a great team to pass the baton onto.
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>> you know, the economy as usual should be what dictates midterms and the presidential election the generic polling narrowed again. it's gone back and forth >> that's right. >> but still the polling on the tax bill still not -- if listening to you, it should be 80%. it's still 30% >> i think it's going to get there. here's my point. you said the generic ballot is at a good place. the republicans would keep the majority if you're down three or four, we'll totally keep it. there's that one poll i think it's your poll, it's msnbc or cnbc >> i think it's a "wall street journal" poll. >> they said who do you think is fwoes run the economy, republicans. i think communicating to constituents who see because of this tax bill they got their
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bonuses, increased benefits, an average $2,000 tax cut when people look and see, oh, the child tax credit got doubled. my standard deduction got doubled. >> no one's seeing that yet. >> what if it comes a year from now? >> our ability to communicate specifically with constituents in this digital age is very good so i'm convinced we're going to be able to communicate the benefits of this tax law to people this fall so not only do they right now say they want republicans in charge of the economy because the economy is growing well, not only do they want to say the republicans in charge of national security because they're better entrusted to keep us safe. and we have good polls right now. i feel confident we can keep this majority. what's going to happen is the national media is going to be doing this big narrative underneath that national narrative in our discreet congressional narrative. we know how to indicate to constituents here's what we said we would do, here's what we did, here's how it's making a difference in your life.
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we're actually improving people's lyes specifically and i think we have a good case. >> you know that judge in wisconsin? what about conor lamb. are any of these -- are these oneoffs? >> that was good he won my district fine. in madison and milwaukee he did well >> what's scott walker talking about? >> madison and milwaukee the turnout was elevated there so we have to make sure we turn out our voters >> you say -- i mean, i listen to you about the tax bill. and then we're going to have chris van hollen on. >> my guess is he's going to say -- >> he's going to say things that -- we just had steny on he didn't say any of this. can you hang out stand right here stand right here. >> i'll yell from the sidelines. >> just sit there and go -- just listen and do hand signals. will you do that you got to go do something >> yeah. i've got to run conference now. >> is that a big deal?
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>> yeah. it's running congress. >> okay. mccarthy, i heard it'd be easier for him to win as minority leader because you don't need as many votes >> we are more gelled than we were ever before one of the reasons why i'm here is because we had a fractured caucus we have mended those we are now working together to pass legislation i don't think the schisms exist like they did before i'm confident we have a good leadership team that is tried and true and has produced. it's going to be a much more seamless transition this time around >> i hear cantor is just knocking the cover off the ball. >> eric. >> and then there's boehner. you could go into the pot business or something. have you thought about -- what happened >> i just about choked on my coffee no, i will not be doing that
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>> you don't know what you're doing. >> my plan is to come up with my plan in 2019 in the meantime run through this i'm going to figure that stuff out later. >> all right just ideas for you >> thank you you know, we've been doing this for 20 years together. >> you've been on "squawk box" longer than i have he's been on here longer than i have you have you were before carl carl and i were at the same time >> pre-sorkin for sure joe, you and i >> i know. >> so this is full circle. >> look at you you still had that widows peak >> that's when i had the gumby hair cut >> that was not the beginning though >> that was last week. you haven't changed. >> you were guest hosting before i was on >> probably half a dozen times many times >> you did and we appreciate it >> back when you were in englewood cliffs now you're downtown. >> he's a contributor. >> another thing you can do. that'd be a feather in your cap. speak ser is one thing. >> great to see you.
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>> welcome to the capitol. >> i'm sad this is the end of an era. >> we'll see you around. >> thank you, paul great to see you >> you too when we come back, business meets washington senator david perdue is the former ceo of dollar general and reeb reebok he just got back from a trip to asia he's going to talk to us about it next. plus in the next half hour, a powerful duo the man who could succeed paul ryan kevin mccarthy and gop tax man congressman kevin brady, the head of he house ways and means committee stay tuned you are watching "squawk box" live from the nation's capcapit. we will be right back.
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welcome back our next guest returned from a trip to asia to examine the future of u.s. trade in the region joining us now is georgia senator david perdue senator perdue as you probably know is the former ceo of both dollar general and reebok. great to see you today >> good morning, guys. >> we have so many things to talk about let's start with this trip to asia it's very timely given the trade issues we're facing. what's your takeaway after touring the region and coming back >> two things. number one, they are very serious about developing they call themselves the largest
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developing country in the world. they're already a $12 trillion economy. adjusted, they're already almost our size already we met some of the top leaders over there in china. they are very serious about dealing with the united states, aboutgrowing their economy, an about protecting their homeland. so this is a country that's on the rise we have to deal with them. i think the president's taken the right attack he's gotten their attention. you sea the week after we were over there that president xi came in and voluntarily offered to back up on some of the tariffs that they now have against the u.s. >> autos in particular is one he offered. those are things they've offered in the past. you think they follow through this time? >> talk is cheap we all know that that's one reason why i think president trump put these tariffs on it. let's start the conversation south korea we did this about a year ago in the last year we've been talking to south korea look what happened we now have a trade agreement with south korea that puts us on
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more of a level playing field. >> do you think trade agreements should be one offs >> i was a fan of tpp and i still am for this reason but i think you can get better deals if you do bilateral agreements but you have to hustle to do that because we have so many to do that. we don't have a free trade agreement with japan, for example. but of the 11 that we were talking about in tpp, seven or to we have bilateral agreements with the problem is that china right now is re-establishing their intent to pull 16 countries together in their consortium that worries me. >> what does that mean for ceos of american companies? >> first of all, i think we want a level playing field. we met with several ceos and people who are operating in china, have been operating in china for two decades. some are doing well. some have to transfer technology in order to do business in china. we don't want that alibaba we met with for the better part of a day the ceo founder jack ma was
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gracious we met with the 70% market shareholder of all the drones in the world. so this is a very comprehensive trip visiting five cities. what we walk away with is the federal government over there is very much involved in their enterprise they spent $150 billion starting a chip industry. alibaba can do cloud computing in the united states but google cannot in china that imbalance has to be corrected. >> what's your next step if that's the case? if we're at the table and you think president trump has gotten their attention, do you think this is something that can be addressed? >> there's no reason why we should -- >> intellectual property too >> absolutely. we talked about that with the leaders of the china we also talked about the current tariff conversation. what they want to do is enter into a dialogue. as you said earlier, they've been doing this for ten years. but we have a new sheriff in town here. and he's not -- you know, he's not afraid to actually put
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things in play, for example, the tariffs. we know some of these tariffs would create imbalances in terms of impact on u.s. economy right now. for one, i was nervous about it candidly what i really wanted to do was let the changes we did last year in the economy have a run. let the economy breathe again for the first time in a decade i mean, what president trump did last year was phenomenal it was historic. what he did was job one was growing the economy. and to do that we focused on regulation, energy, and taxes. and we see right now, you know, over 3 million jobs have been created. things are moving. i'd love to see the economy take advantage of some of the $6 trillion we're going to see coming back into this economy. because the regulatory work, because of the dodd/frank bill we just passed in the senate hopefully it will pass in the house. and because of the energy work we've done the $6 trillion from banking and from the russell 1,000 because of the overregulation is a big
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impact >> we want to thank you for your time it's a pleasure. >> great seeing you guys, thanks when we come back, house majority leader kevin mccarthy and kevin brady will be joining us this is a conversation youon nto miss "squawk box" will be right back. once there was an organism so small
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no one thought much of it at all. people said it just made a mess until exxonmobil scientists put it to the test. they thought someday it could become fuel and power our cars wouldn't that be cool? and that's why exxonmobil scientists think it's not small at all. energy lives here.
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♪ you're watching "squawk box" live from the nation's capital right here on cnbc >> good morning and welcome back to "squawk box" here on cnbc we are live from washington this morning. president trump is awake and tweeting among several tweets he just said in his words, so many people are seeing the benefits of the tax cut bill. could he be watching everyone is talking. really nice to see what do you think? that sounds like -- >> could be. >> that sounds like it i'm going to retweet that right now. >> in the meantime, while joe is retweeting, we're going to get to two important architects of the bill joining us now is kevin
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mccarthy, also kevin brady thank you both for being here today. >> thank you >> tax day it's a little bit of a victory lap for you all to say this is the last time we're going to be dealing with the old system onto the new. what do you want to start with i'll start with you since this was a heavy lift on your part. >> this is the worst day of the year for most americans. and the week leading up to it probably including in our house it's great this is the last time you'll file under that complicated tax code going forward, people keep more of what they earn. main street businesses have a new discount off their taxes to invest and we've redesigned the international code our companies can compete anywhere in the world especially at home. >> why is the bill still so unpopular with voters at this point? >> i think because it's disappeared. because since its passage, very little attention has been paid to it. people still think -- a lot of people think they're filing under the new tax code today
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rather than the old one. and so that's really our responsibility what i do know is when attention is paid to this new simpler, fairer tax code, popularity rises in a big way back home people -- i know this. we hear it from families i heard it in home depot the other day from a part-time worker who said thank you. that extra money each paycheck means the world to me. >> leader, do you think that recognition from the voters comes before election day? because that's the big question. if people are waiting until next april when they really see these things, it's a little too late for the elections that are taking place this november >> i don't think it'll be too late because if you watch, the tax bill has gotten more popular you've got 5 million people who got bonuses. you've got how many more people that have longer maternity leave just because of this tax bill. you look at even your electrical bills in 39 states have come down because of the tax bill i mean, as people learn more
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about this and how many people people got a raise in their own paycheck because the withholding changed in this. it continues to grow and get more popular what people look at, look at where unemployment is. look at job creation then look at all these creations that brought the money back to america to invest. so as economic growth continues to go, i think come november april will be greater. this week we're passing 13 more tax bills on the floor that are changing the form of the irs and identity theft very important things that americans care about we continue to work. i think at the end of the day, you'll see this is very popular. >> we talked about that legislation earlier today. that is bipartisan legislation, correct? >> there are more than 200 bills sitting in the senate that have 100% out of this house i know we focus on all those things that divide us. but this is one thing that was
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different. remember, nancy pelosi said this was armageddon that it was crumbs when people got a bonus. there is a philosophical difference between the two of us and that's what the fear is why you don't want to lose the house. >> we just were speaking with house speaker ryan and asked him about his endorsement of you he's stepping down and has said that he would like to see you take his job we've also read in the press that maybe your relationship is frayed because he's not stepping down immediately >> i don't know where they got that article paul and i -- when we first came to congress, he's been one of my best friends i don't know if you remember, back in the minority paul and i and eric cantor created young guns one of the parts of helping us win majority. we've been partners all the way through this i'm humbled paul would say that. but what's most important, kevin will tell you and every member of this conference, we have to make sure a republican could become speaker in the next congress so we have a lot of work to do history goes against us. but remember, there's two times in history that all changed.
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and i believe that'll be the case this time as well >> thepolls right now have com in a little closer on just a generic ballot i think it's three to four points that the democrats are leading you by why does that get you to the point history is different this time >> if the polls say it's democrats for three points, we will keep the majority >> that's exactly what ryan said >> if it's plus six or less, republicans will keep the majority >> it's april. >> yeah, it is april. >> you just passed this thing. i think you had too much success right out of the gate in that first week what has to happen now is money goes into the pockets of normal people that spend more and that causes companies to see the command which then -- people are complaining companies aren't moving quick enough to invest in capital and corporate loans, et cetera they don't do it until they see the demand it's a chicken/egg thing it's april >> yeah. and as remarkable as the early signs having on growth and new investment and jobs coming back, the best is yet to come.
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because this was really redesigned to leapfrog america to the lead pack as one of the best places on the planet for that next new plant, facility. that takes some time so i think the best is yet to come and today besides this being the last time we have to file, look at what's happening. so we are proposing the first reform of the irs in 20 years. so we redesign, refocus, and really rein in the irs abuses. we do it in a good smart way that's bipartisan. we have a new tax code what a perfect time to have a new tax collector and redesign completely the way that agency works. this is important to the american people. >> customer service is certainly an area people are concerned about. cyber security is another. how do you beef up the cyber security issue there have been so many people who have had their tax identification stolen. >> that's part of the redesign so we require the irs to bring us back a new restructure in the whole agency within a year and a half we redesign their whole i.t.
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system so they can protect our personal, private taxpayer information better and then we really create a truly independent appeals process that puts taxpayers on the same level so they can be resolved more affordably that's just one part of some major changes to the irs. >> leader mccarthy, what worries you? if the economy is going along as planned, what concerns you that could change that picture between now and november >> i think the economy is going to continue to grow especially what we're doing you look around the world at people investing in america, the money coming back. i get worried about one, the divide in this country but more so what the world looks like i mean, the movements of different things happening i give this president a lot of credit he's got north korea back at the table. he's got a new trade agreement in south korea we're very close to finalizing a modernization of nafta this is a fundamental difference when you saw action that took
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place in syria which was correct, it wasn't america alone. it was the uk and france as well so i think we're turning the tide on what this world looks like and the dangers that was out there. i think that's the strength and the investment that we just made in the military. one of the saddest parts i have seen more of our men and women have died in training than in combat. that's a sign that our military was cut too far and we just made an investment to change that direction because this world did not get safer by 20% in the last little bit we're making great strides there's things people aren't looking at do you realize last week we signed into law something we've been working on for eight years. human trafficking. more than 100,000 kids are human trafficked and 70% of that is online. we just shut down back page by the legislation we were able to pass 87% of all that is now shut down so there's not only just economics, but the safety in your house and for your children
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we're making great strides that's why i think come november when people see the full aspect of what changed in just a new election, i think it'll be a different outcome than what people are predicting. >> take pride you can turn on this network and hear something totally different than what you're hearing right now on the other networks but you know what they're talking about right now. it's a sticky thing to get into. you're very close to the president. you're one of his favorites. i would say half the country, their greatest hope is happening in the southern district of new york that's their greatest hope what's happening with michael khouw hen. and the other half, their greatest fear. >> we're a rule of law country that believes in disturbing whei watch comey. he thinks he's above the law they're putting politics before the people i was just at dinner the other night with the president
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you would not know any of this other stuff is going on. he was focused on syria. he was focused on the economy. he was focused on right to try, that we change the fundamental that people still had an opportunity to try a new drug the end part of their life to save their life. this man works 24 hours a day in the process. he's not letting that get under his skin you know, in 1998, we saw this same scenario on a couple of different things where the democrats thought they were going to lose seats. you had great economic growth, the president at that time was under impeachment, and the democrats picked up five seats i think we just focus on the job, you watch what kevin and ways and means are going to do more. >> back then he stayed in office and finished his term and everything else. but then you could also look at that started with whitewater and ended up with a blue dress it went far from where it started. some people might say who knows what's in his lawyer's files what if it goes back to the
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mid-2000s and there's some kind of illegality? will the country -- when you start looking for collusion with russia and end up with a real estate deal that wasn't -- you know -- legal, is that an impeachable offense? >> if the question was about collusion, i think that's been put to rest. i've watched how many different studies -- >> does it matter for mueller it's been put to rest? you know that was just the starting point. now it's so broad. i'm not sure what it is now. >> i think people should look at the ig report. you know, it's just partial. just think about it. the number one and number two of the fbi, they were let go. i mean, they were fired by their own people they were recommended not by political basis but their own people looked at the situation and said these people need to be removed. and they were. i think the american people are smarter than that. when they see it, all this idea of the russian report was paid for by the democrats, we need to move beyond that, get this economy moving
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and keep the rule of law >> it was picked up by republicans that were running against trump though the opposition report. >> not to the point of where they look at the more millions of dollars they spent from the clintons and others. >> chairman brady is like, this is about marginal rates. i have no interest in it >> as i listen to all this, i thought everyone that watches all that is going to get a tax cut. >> i saw it. your eyes were just like, i have no interest in this. >> all right do you do next with the tax cuts you hear about this plan two where does that stand? what happens is it before or after the election >> you know what that is phase two is about changing the culture in washington. where in between we just do special interest rates it's about like our local businesses, we know our competitors aren't standing still. it's really about waking up every year as a congress asking how can we be more competitive as a country, how can we be more
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innovative, more family friendly through the tax code phase two is really about this year looking at how do we continue to improve just like our businesses do every day, just like our competitors around the world will be looking to get advantage over us. we're not going to let that happen >> the reality is when you have all of your members who are facing re-election, you're going to be facing a tougher challenge to get votes on the table before november >> sure. but i tell you what. most people here in the house and i think in the senate as well want to continue to grow the economy in a big way want to continue to make the tax code more family friendly. and grow so yeah, i think there's still ways we can improve the tax code >> how vulnerable is your new tax bill, your new tax code if the democrats take back the house? >> there's no doubt. they want to go back to old days higher tax rates on families and businesses and a tax code that keeps sending u.s. jobs overseas so i think november, it is april. we don't vote in april
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we vote in november. there the american people will get a clear choice do they want to go back to the bad old days where the tax code where washington takes more of what you earn. or do they want to keep more i think that's going to be the key request e. >> that's why we should move tax day to november 1st, so people could have a decision at the same time of what they think their government is doing. >> that i hadn't thought of. is that an actual idea >> yes it's actually -- i've got a whole package of bills that are going to be coming out i think there's an opportunity you asked about the democrats. the democrats proposed to raise your taxes, repeal the tax code. they don't think people should keep more of what they earn. and then passed a budget that not only raises taxes but adds to the deficit by another $3 trillion i mean, if you look at what they have planned, i mean, think about what nancy pelosi said she held every democrat to say no to this tax bill. so the 5 million don't get a
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bonus. your electrical bills aren't going down your maternity leave is not being extended, your minimum wage is not going up i think this is a healthy discussion we could have and a healthy debate end of the day, we're going to win it >> we're about 20 feet from nancy pelosi's office. >> right there, yeah >> yeah. is this a conversation you all are having back and forth? is there any idea there's going to be bipartisan work on these things i know you mentioned 200 bills but i'm assuming those are not the front and center bills >> let kevin talk about what he has on the floor today >> several years of work, great work by john lewis of georgia. >> the irs bill. >> the irs redesign, refocus, reform there it's really good work. these are solid reforms going forward. we did it the right way. i think working together in a big way. yeah, i think there is a lot of common ground here >> there's a lot of times that it can bebipartisan. but the leader of the democratic party, the minority leader, she puts a memo out don't even work on the farm bill together.
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you look at where unemployment is today, we're going to try to get people off poverty into work she's opposed to even talking about it she tells her members they can't discuss it in every aspect we've gone through this year, they've tried to hold to have things not happen then go across the street to the senate when you have a new administration and you have 1200 people that have to be confirmed. you could take the last five presidents and they've doubled the number they filibustered these people if you continue down this pace, it'll take 11 years before these confirmations can go through so when the question comes back and you think on what worries you in this country, the divide from another side that a minority tries to stop we just went through and had to do an omnibus even though we passed all 12 appropriation bills on this side it wasn't because the republicans on the senate didn't want to do it. those democrats stopped them from even debating the bill. not about voting against the bill but even debating the bill. that's the challenge that frustrates. >> i asked ryan to stay. he left.
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i've got to interview chris van hollen coming up can you hang out he's going to say the opposite of everything you just said. >> chris van hollen is the head of the democratic senate campaign committee >> can you stay? >> we have conference. >> oh, that's what ryan said conferences. okay leave him to me. >> we've got work to do. >> we're kidding. >> leader mccarthy, chairman brady, we want to thank both of you for your time today. we appreciate you hosting us here too >> thank you >> it's a beautiful room >> it is >> incredible. when we come back this morning, democratic senator chris van hollen will join us. we're going to talk to him about the party's economic agenda, how he sees things today as well that's next. by the way, here are the futures this morning you can see right now dow futures up by about 226 points thanks to some strong earnings reports both last night and this morning. s&p futures up by 20, nasdaq up by 76. "squawk x"ilbeig bk.bo wl rhtac [fbi agent] you're a brave man, mr. stevens.
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apparently a kouchbt down to the midterm elections started. our next guest has a big job ahead of him senator chris van holland is
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joining us now you were a wee little congressman. we've got a long standing relationship, as well. >> we do it's great to be back with you i know all my colleagues from the house were just on and a cull -- couple of senators. >> you look senatorial is it the suit is it working? >> is it working for me? i don't know the air is is a little more rather fied over there. >> better tables. >> yeah. it's about real estate, they say. as a new member, they start you in the basement. even in the senate. >> we have heard, as we many times 180 degrees on the issues about the benefits of the tax bill about the prospects for november how do you see the landscape right now? >> well, i see it, really, the american public is seeing it now. you've reported on the recent
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"wall street journal" nbc poll that says 27% of the american people think it's a good idea. that's a pretty low number for a big tax cut, and over 36% think it was a bad idea. despite the fact that the koch brothers and others spent $100 million plus trying to convince people it's the greatest thing since sliced bread it's not and people recognize that we're adding over $2 trillion to the national debt. in fact, the congressional budget office just, you know, put an end to any discussion it was going to pay for itself. they said it's going to be around $2 trillion and then if you look at where the benefits are flowing, they've flowed primarily to major corporations that have used $250 billion of that since january 1 on stock buy backs they couldn't find other productive uses for it and millionaires in this country are going to get an average annual tax cut of $70,000.
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that's not what people want. that's not what people bargained for. >> what does it mean for november >> i think it's going to be another example of how the republican party has gone all in for the very wealthy and big corporations at the expense of everybody else if you look at the republican budget, i was listening to my colleagues here, but they passed a republican budget that called for $473 billion in cuts to medicare over a trillion in cuts to medicaid if you look at the two things together, you see a tax cut that went overwhelmingly to big corporations the very wealthy being paid for by increasing -- >> it almost sounds like, you know, like class warfare what if we're 3% gdp growth. will that be a problem for democrats, if we do, finally, after eight years of not having a year of that, will it be a problem?
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>> joe, we all want higher gdp growth let's look at what the cbo came out with they said this year you'll essentially get a sugar high you borrow $3 billion and dump it into the economy. over 3%. by 2020, it goes back to 2%. by 2021, they project 1. 5% growth if you look at the obama years, the last four years, they have higher average gdp growth than in this bill once you get beyond the sugar high. >> we don't know. >> the cbo is wrong. remember the reagan cbo. they missed it by like, you know -- >> the cbo on target with respect to their debt projections. we've seen increasing deficits in debt. i've been on programs with you and paul ryan where he talked about the dangers of the debt. >> you're going to be on in 2021 if you're not right, i'm going tell you you're wrong. >> i'm just giving you
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as you know the cbo projections for the current year are actually more bullish than a lot of the private sector projections. >> so we don't want -- [ talking over each other >> you don't get economic growth by borrowing $2 billion and raising taxes on a lot of middle class families in maryland 370,000 marylanders will see a tax increase that's not what we're bargained for. >> senator, thank you. >> thank you we'll be back with what you may have missed from our big morning on capitol hill. imagine traveling hassle-free with your golf clubs. now you can, with shipsticks.com! no more lugging your clubs through the airport or risk having your clubs lost or damaged by the airlines. sending your own clubs ahead with shipsticks.com
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time for the stat of the day. >> over the past five years, the top performing sector during the first quarter earnings season have been materials, financials, and tech it's been a pretty big morning here on capitol hill here is what you missed. hopefully you didn't. >> very successful year for us i'm pleased with what the president has been able to accomplish. >> we're beginning to see the impact of the tax cuts specifically people investing large amounts of money back into the united states. >> frankly, the folks making $900,000 a year, they didn't need a tax break this bill is going to create more debt than obama created or in previous presidencies created. >> what i didn't want to do is run for re-election knowing i
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wasn't going to stay for another full term and be dishonest with everybody and hang it up after the election which is what the political people say you should do i'm a policy person. i didn't want to do that. >> all right are we done? >> we are. >> no bathroom breaks. >> he's got his bottle here. >> tmi join us tomorrow "squawk on the street" is next ♪ good tuesday morning faber is at 13 d we'll talk to jeff smith later on this morning. the dow looks to go positive for the year at the open for the first time since march 20th. a 200 plus-point gain. we have trade, earnings, and

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