Transcripts For BLOOMBERG Bloomberg Markets Americas 20170830

Volunteers to assist with Recovery Efforts in at least 50 counties across texas. Safehouses. As the water starts to receipt, recede, this is where rs need to volunteer. To get people act in their homes the very baseline level. And sustained them there. The administrators is the number of people seeking shelter will continue to grow and the work will continue for two years. The Texas Governor says catastrophic rains have moved east from the houston area, to the region around beaumont, texas. He warns that the worst is not yet over for the southeastern part of the state. Governor abbott added 14 more counties are now under a federal declaration. He says the number of National Guard troops aiding in the disaster has it been increased from 12,000 to 14,000. Sunshine is in the forecast for the houston area today, but the worst is far from over. Straight days of rain brought more than 50 inches of water to the area, at least 20 people have died, 15,000 have been rescued come and 70,000 are seeking refuge. Floodwaters are still rising in some areas, and many hardhit regions are still in accessible. Harvey is estimated to make only a slight dent in the u. S. Economy. Reconstruction efforts are likely to be substantial enough to boost growth later this year, going to a survey of economists. They estimate the storm will lower the third quarters annualized gdp by 2 10 of a percentage point. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. I am mark crumpton. This is bloomberg. Scarlet u. S. Stock markets close in two hours. Riggs,heck with taylor and taylor, it looks like we are building on yesterdays recovery. Taylor we are, and we are day,ng at highs of the scarlet. And the consumer is really gdt, growthrowth in coming in a 3 for the Second Quarter, versus estimates a 2. 7 , thanks to the u. S. Consumer. Also, the s p 500, above its 50 day moving average. On the nasdaq, gains about 1 , and all the companies you would think of, facebook, cisco, pushing the nasdaq higher. Want to talk about banks because you are doing an interview and looking at that interview with warren off it of berkshire hathaway. I am also looking at bank of america. Strongest dollar in week, and higher yields that are helping some of these bank stocks that we are looking at. And we talk about bank of america and berkshire hathaway, when Warren Buffett was speaking to bloomberg news, at least with berkshire hathaway, he said they are improving every quarter, and it is unlikely they will sell any of that bank of america stock. Purchased shares worth about 11. 4 billion. Quite a good profit for him, there. Bank of america, trading higher. Story, that is something we continue to follow. Some of the Insurance Companies are trading lower. Now,ve losses right estimated for 10 billion. That number is going to change many times throughout the next few days. But there was a report from accuweather, saying that harvey could be more costly than katrina. That is definitely weighing on the insurers here. Some of that would be covered by the government, for Flood Insurance, but anything else like the wind and the storm, that is on the insurers. Up, on thethat bloomberg we look at some of the losses that insurers like aig, allstate, travelers have faced. You can see mostly, it has been steady over the past few years. We have not had major losses, as a percentage of premiums. That number is going to rise, as we see some of those losses come in from harvey. That number is going to change a lot in the next few days. It is something we are looking at. Julia thank you, taylor. President trump has just arrived in springfield, missouri, where he will kick off his push for sweeping tax overhaul. Trumps taxitch pitch is expected to focus on populist themes, and why taxes need to be reformed, as opposed to how. He hopes to have an overall sign before the end of the year. Joining us from chicago is republican congressman peter roskam of illinois. He certainly he currently serves on the house tax ways and means committee. Congressman lets focus on the how, here. We have a broad consensus across the gop that you believe can get past this . A broad consensus that the status quo is indefensible. We want to lower rates, simplify the code, i make it a transformational moment. It is interesting, there is nobody in the republican party, nobody in the democratic party, quo is defending the status of the Internal Revenue code. That is a different enterprise than what we have seen in the health care debate, where some people feel strongly in favor of the Affordable Care act, some people feel strongly against it. So, to take advantage of this national Inflection Point, we say, look, we can drop this code that nobody likes, and lets updated, modernize it, simplify it and get these rates lower, and as a result get real growth as a result of this. Scarlet we could say lower rates is the number one priority. A big question though, is, what tax rates should be canceled in order to offset lower rates. The white house wants to preserve charitable donations, mortgage interest, retirement savings. So, what are the sacred cows . The blueprint we have , thatlated in the house ways and means republicans and Congressional Republicans put forth a year ago, keeps the mortgage interest deduction, keeps the charitable reduction, and proposes to refashion retirement savings, refashion education savings, refashion the Child Tax Credit in ways that make it work more for people. We propose to double the standard deduction to get rid of the alternative minimum tax. But think about the other aspect of our own lives that we want to simplify. We yard for simplification, and yet we have 70,000 pages, many of which, in our tax code, are inconsistent. So, there is a consensus that develop it says, lets simplify, lets harmonize. We have made a proposal that gets us in that direction. Todays speech by the president is a good income of using the authority of the president to draw together the National Debate that says, lets take advantage of this Inflection Point that we have . Congressman, has some submerge consensus emerged about whether this will be revenue neutral . It has to be. My own state of illinois in financial distress based on avoidance behavior. Illinois kicked the can down the road and now it is coming home to roost. Lets not do that at the national level. If it is paid for, you get permanent tax policy, and think about how influential permanent policy is, as opposed to temporary policy, that expires periodically. Policy. Ave permanent and i think we need to move forward on that basis. But there is an open question, saye are other voices that dont worry about it, just cut the taxes, and they dont care about the impact on the deficit. I think that would be a mistake. Treasury secretary Steve Mnuchin set in may, there would be producers would be procedures that only small and medium sized businesses would qualify for the lower pass through rates. What is the subcommittee thinking on passthroughs . To get the pass through rate down. We oppose to get the passthroughs down by the same proportion, and we are proposing that the business income rate would be at 25 , down, obviously, eight points from the top individual rates that we proposed, at 33 . That is all to say, we represent , and i represent an incredibly throughpassed constituency. Most of my constituent companies , a lot of small manufacturers and so forth. We have to be sensitive to getting their rates down. Scarlet we talked about consensus among republicans. Republicansts do and democrats on your subcommittee find Common Ground . Try to speaknt to for those members of the congress, but let me say this. I will get back to this original point that i made earlier, and it bears repeating. Nobody likes the current tax code. Here is the threshold issue that republicans never concept to navigate together. We have got to decide, do we want the tax code that is going to create growth as a top priority . Im strongly in favor of that. If so, lets pursue it. If, however, the tax discussion becomes a discussion about redistribution, it limits growth to do that. Crossing the rubicon, one way or the other. If we decided to pursue growth as a top line matter, simplicity follows, permanence follows, dealing with a base erosion problem follows, all of those things follows. If, however, this just devolves into redistribution, you really need a lot of growth on the table. And i think that is a threshold discussion between the political parties. Julia congress will have to deal with financing Recovery Efforts of Hurricane Harvey. Do you believe that is going to impact the timetable for getting tax reform done by the end of the year . And ultimately, if, in order to get tax reform done, the timeline would be pushed back, would you be in favor of that . Just doing it when we can get the best deal done . Anybody wants the best deal. My fear is, if you are turning the corner and too much into 2018, the environment shifts fundamentally from a political point of view, and it gets harder to get to yes. Reform,the year for tax and i will be strongly proposing to move forward on that basis. You dont want to leave good tax reform on the table. If there is something you can pursue by waiting, it is worth considering. But i think that is a little bit of an allusion. In houston,e event while incredibly significant that that is, it does not slow down congresss capacity to operate on a dual track. I dont think you are going to see this slowing things down. There could be a dynamic with ande is a sense of clarity maybe even eva near of bipartisanship that can come out of such a difficult thing, like the hurricane in houston. Lawmakers return next week and face a daunting timetable, the debt ceiling, the budget. At the same time, we have seen tensions, tweets between establishment members of the gop, i just want to know what kind of mood you think lawmakers will return to work in, in light of all these things. A lot of people, whether lawmakers are not lawmakers, are ve idle these days. There is a lot of tension. If we see some progress in the senate, for example, on health care alternative, i think that would help enormously, our capacity to deal with the debt ceiling and funding the government appropriately on a timely basis. A timely basis goes a long way toward taking the drama out of this. To driving prelude the debate about tax reform. But in answer to your question, i think a lot of people are idle, andove want to get things done. Congressman, thank you. Stay tuned for President Trumps remarks on tax reform. That is coming up this afternoon at 2 30. Meantime, breaking news on uber. The new ceo is said to expect an ipo of the company, in 18 to 36 months. More details about when we hear it, but it is reported that the ceo is saying to expect ipo in 18 to 36 months. From your, this is bloomberg. This is bloomberg. Julia bloomberg markets. This is bloomberg markets. On julie chatterley. Scarlet and scarlet fu. The full Economic Impact of Hurricane Harvey is still unclear. The president spoke at a meeting with state officials in texas. There is never been anything so extensive in our countrys history. Anything sover been historic, in terms of damage. And in terms of ferocity, as what we have witnessed with harvey. Scarlet according to david atens, and insurance analyst Imperial Capital coming damage from harvey could exceed 100 billion, when all is said and done. David, lets talk about how you got to that 100 billion figure. Give us a break down here, what is insured and what is not insured . Other i have looked at extreme events that are in some ways. There is no perfect comparison. But we did have hurricane katrina, which had similar flooding, at least a similar magnitude of flooding. And the Economic Cost of that billionnged from 120 to 160 billion dollars. We had Hurricane Sandy not too long ago, in the new york area, which generated economic losses estimated at 70 billion. I considered the relative size of the local economies, houston is about five times the size of new orleans, and maybe 40 the size of new york. So, there is no way thats perfect, of doing this, but i looked at orders of magnitude in the relative size of the local economies. And, the extremity of the event. One of the headlines i have seen is that less than one third of the people will be insured, here. What will be the damages to the hone odors, the homeowners, and what about the commercial property owners. And again, where the insurance lies on both of the sites . These sides . Of one your estimate third on the homeowners front, seems to be of the bit high. I think about 50 of the people in Harris County are insured. There is a little bit of good news there, in that, the people that have Flood Insurance are generally people that live in a onein100year floodplain. This hurricane dumped 30 inches of rain on geography, allaround houston, about the size of rhode island and massachusetts. Int is probably a one, 1000year event. Typical Homeowner Insurance policies from private Insurance Companies specifically exclude Flood Insurance. So, there wont be a lot of private coverage, and people are generally going to be undercovered in the houston area. There will be commercial claims. That is what makes it so sobering. We should mention that you are looking at this from the perspective of a credit trading onk analyst whose focus is global insurance. You make the point that harvey will be and earnings event, not a credit or capital event. What is the thinking about a earnings event, like harvey, versus something that is a credit or capital that, like katrina or 9 11. David who knows what the ultimate loss will be am a but lets assume the number is 100 . 20 of the loss might be picked up by private insurers, the publicly traded companies and the Mutual Companies that i look at and that other securities analysts look at. Those companies, the u. S. Propertycasualty industry, has about 700 billion of capital. So, 20 billion out of 700 billion is not a terrifically large number. Plus, there is another 600 billion of capital in the reinsurance market, which will probably pick up about 40 of the losses. The companies that are involved will probably have bad earnings in the third quarter. They may have no warnings in the third quarter. But they are not going to be losing 25 percent, 30 , 50 of ther equity capital, Like Companies did, particularly in katrina, and to a lesser extent, 9 11. Andrew it inse of 1992, some companies were completely wiped out. Figure of 100 billion, if you compare it to other analysts, the figures their figures are around 30 billion to 40 billion. What are other analysts missing, that you are talking about with us here . What are they getting wrong . David there is probably some confusion. What some analysts at looking at are looking at is the insured loss. And the insured losses only a percentage of the total economic loss. Little really there are bananas spoiling on store shelves in houston, and they are medical for a ones metaphorical ones that are spoiling. There is a whole economic sense that is going to emanate from this storm. Houston has a new economy of 500 billion 500 million, and it is paralyzed. Houston is a port city that connects all sorts of other logistics in the country. That business is not getting done, as the port is closed, the interstates are closed, the rail lines are closed, people are not going to work, there is infrastructure damage. There is just a whole host of things, that are contributing to the number. Julia very different, i guess, then other storms that we have seen. David, great to have you on. David havens, an analyst at Imperial Capital, thank you for that. Ahead, President Trump kicks off a campaign to overhaul u. S. Tax policy. We will bring you trumps remarks on tax reform, live, in just a few moments time. This is bloomberg. Julia welcome back to bloomberg markets. Is time for the Bloomberg Business flash. To frankfurt for its trading headquarters. After brexit, the bank could lose jobs. Ubs would follow firms like morgan stanley. The Consumer Products safety more than 2800 recalled items between 20 to robin 2016. That is your business flash update. Atsident trump goes on stage any moment, in springfield, missouri, to make his pitch to overhaul the u. S. Tax system. From new york, this is bloomberg. Is bloomberg markets. Im scarlet fu. Texas Governor Greg Abbott says catastrophic rains from Tropical Storm harvey have moved east from houston, to the region around beaumont, texas, and he warns, the worst is not over. Are dealing with what is now receding waters, in Harris County, and the ongoing as safetys, as well rescue processes in Harris County. We are now also dealing with, catastrophic conditions in southeast texas. Abbott added, 14 more counties are now on the federal disaster declaration list. He warns flooding could be a threat to life and property. The u. S. And south korea today called on the International Community to work together, to resolve the crisis with north korea. At a United Nations disarmament americaneneva, the ambassador to the talks said all u. N. Member states had what he called a collective responsibility to commit to isolating pyongyang. The United States does not seek regime change, the collapse tothe regime, or an excuse send troops north of the demarcationreement line. We do not seek to be a threat to the kim jongun regime. To the, we must respond serious threat it makes to the United States and our allies. Mark the ambassador added that north korea should know that the United States has the unquestionable ability and the unbinding will to defend itself and its allies. Has put the names of 350 people on its terrorism list. The nation is on a separate watchlist and grants authorities the right to freeze their assets. Authorities are launching a severe crackdown on Muslim Brotherhood members since the former president s removal from power in 2015. A man sent a letter to the editor urging him to a man sent a letter to the president urging him to pardon michael milken, one of the most notable junkbond figures on wall street. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. I am mark crumpton. Julia President Donald Trump is expected to start speaking any moment now. He is kicking off his longawaited campaign to overhaul u. S. Tax policy. He will be speaking in springfield, missouri, and will be joined by his daughter ivanka, National Economic Council Director gary cohn, and senator roy blunt, of missouri. Tell us what we will get from donald trump today, two on rate the economy, and reform main street. We are not going to get any new details on the white house tax time, because there is no white house tax plan. Very much subcontracted the writing of tax legislation to congress. Today, hes going to make the case of why the u. S. Needs a tax overall, not how to do it. Toughthink it is a pretty case for him to make, with the economy doing pretty well right now. I dont really know what the argument is, for a big tax cut. That is a good point, that he will be focusing on the why, rather than the what and the how. You can argue there is not much of a dispute, if you are a business, looking at lower tax rate overseas. Overseas. Ax rates what is the significance of making the announcement in springfield, missouri . There is some talk of route 66 and how that is tied with main street. Miseries and important midwestern state that trump one last year, and it also has a democratic senator that is up for reelection. Mccaskill is up for reelection in 2018. So we will be watching to see if you presented jibes to see if he throws any jibes at her. And he will be looking for the positive reaffirmation that he has sought at other rallies, and ratherse to the people the lobbyists, or the corporations, or people who are already on board with tax reform. What they need to do now is convinced voters that this is something that should be republican priority. Julia how does he justify these tax cuts . There is a suggestion of trying to focus on redistribution and something that will support ,rowth, but the headlines are repealing the estate tax, lowering the top rates of tax, lowering Corporation Tax as well. It is a tough message to sell, here. What little we know about the president s tax priorities thomas suggest he is much more interested in reducing rates for big businesses and wealthy people, then for middle income people. The only middle income benefits that we have seen articulated by anybody in the white house are regarding childcare, by the president s daughter. Make. Is a tough case to i think he can find some Common Ground with democrats on the Corporate Income tax rate. He wants to cut that from 35 to as low as 50 . At agues that we are competitive disadvantage in the u. S. Because our rate is so high. 35 is a high rate compared to other industrialized countries. Democrats would probably go along with that, but thats probably where cooperation will stop. You mentioned a 50 Corporate Tax rate. Is that still alive, at this point . , no, itically know dont think that is possible at this point. We are hearing numbers in the 20s. But we dont know what number they are signaling, as an end point. Powerline does the white house with paul ryan and Mitch Mcconnell . They put out their statement of principles, with white house aides and the main people in congress responsible for tax reform. It did not have a whole lot of detail. It just got to the border adjustment tax that paul ryan champions, but was very controversial. So, were looking for now is, what are they going to do with capital expensing, what theyre going to do with interest deductibility, all kinds of elements that could going to tax reform. Things that they can tweak, in order to fit in this budget reconciliation legislative vehicle that they want to use. The rate is probably going to be one of the last things decided, because theyre going to see how much room they have, to take the rates as low as possible. It would love to have a Corporate Income rate of 15 percent. But, the problem is, that would add to the deficit. So they need to find a way to either pay for that, or to temper their expectations of what can be possible in terms of getting that rate down. Julia you raise a great question, financing of this. Is there any consensus about whether this is going to be revenue neutral . It is critical to whether these are going to be temporary or permanent tax cuts. That is a good point. In order to use the budget reconciliation process, which they want to do in order to not seek democratic votes in the senate, to get around the filibuster, and be able to use the fast track process, it has to be revenue neutral over 10 years. So that is when the question of temporary versus permanent cuts in permanent comes in. Temporary rates are difficult because businesses plan there ir businesses over the longterm. But we could see Something Like the bush tax cuts put in place, and then maybe extend those later, in a future congress. Me about theo timetable now, because we have the fallout from Hurricane Harvey. Do you think that will push back the timetable they keep reiterating, the end of the year . In a worstcase scenario, what is the likelihood that we end up with a package of tax credits, in order to offset the accusation that they did not achieve anything on tax reform . For a watered down option in order to get something done politically . Yes. Politically they need something done that people will see other will seerms t by the and ofrns, the year. If they dont get anything done by the end of year, it will be moot. They wont be able to boast about a tax cut in the election. I think, yes, if it looks like they are getting stalled on some big wreckage, some grand tax overall, i think you definitely , a smaller, never or bill narrower bill, fringe tax cuts that members of congress can take to the voters. Julia should be look at the fact that donald trump is making this big speech . If we compare this to the aca be far there seems to greater enthusiasm from donald trump this subject, compared to healthcare repeal. Is that important when it comes down to banging everybodys Heads Together and reached some kind of consensus . I think he has learned some lessons from obamacare repeal. He was not terrifically engaged in that debate, partly at the request of congressional leaders, who found that when he did get involved, things tended to get messy. He also was not much of a student about health policy. I think he knows a little more about tax policy. So, he is handling this much differently. Scarlet alex, and anna. Thank you. Were going to take you to springfield, missouri, to the lauren cook company, a company that makes fans and exhaust systems. The trump the president is making his page on the need for tax reform this year. Trump thank you very much. It is so nice, and we appreciate it. And all the people outside, who were waving the american flag. Thank you im a we appreciated. I want to thank steve cook, steve bernie, and all the tremendous employees here at the lauren cook company, for hosting us today. Where is jerry . Where is jerry . Thank you, jerry. What a job. I have heard so much about you. It is a great honor to know you, jerry. Thank you. Veryo want to welcome the distinguished guests with us. Secretary of the treasury, Steve Mnuchin. [applause] thank you, steve. Secretary of commerce, wilbur ross. [applause] Small Business administrator, which by the way is a very large business, i what i you that, linda mcmahon, a friend of mine. [applause] , from the purely political world, a really great friend who did such an incredible job with his beautiful wife, at the inauguration, senator roy blunt. Thank you. Thank you. [applause] thank you, roy. Greitens, is here. Thank you, governor. Lieutenant governor parson. Lieutenant governor, thank you, lieutenant governor. And our great members of congress, thank you all for coming. There are so many, i was asking the governor and roy, do you think i should announce them all . But im honored that they are here. Representative sam graves. Representative the key parts to, who has been terrific representative vicky hartzler, who has been terrific. My friend, billy long. Where is billy . Right billy . Right from the beginning. Luetkemeyer. Thank you, blaine. Representative jason smith. Jason, thank you for everything, jason. Representative and wagner. High, and. Good job, and. Hi, ann. Ann. Job, thank you very much, we appreciated. And to the congressmen and congresswomen, thank you very much, we appreciate you being here. [applause] i like to take a few months to discuss the deeply tragic situation in texas and louisiana. Know, our gulf coast was hit over the weekend with a devastating hurricane of historic proportion. Torrential rains and terrible flooding continue to pose a grave danger to life and to property. Our First Responders have been doing absolutely heroic work, to shepherd people out of harms way. And their courage and devotion has saved countless lives. They represent truly, the very best of america. [applause] we must be vigilant. We must protect the lives of our people. I was on the ground in texas yesterday, to meet with governor abbott, who is doing an incredible job, and local officials, so that we could coordinate the very big and unprecedented federal response. And difficult times such as these, we see the true character their american people, strength, their love, and their resolve. We see friend helping friend, neighbor helping neighbor, and stranger helping stranger. And together, we will endure and we will overcome. [applause] to those affected by the storm, we are praying for you, and we are here with you, every single step of the way. And i can speak, i know, for the people in this room. Every step of the way. [applause] to those americans who have lost loved ones, all of america is grieving with you, and our hearts are joined with yours forever. The citizens of texas and the gulf coast need all the prayers, support him and resources our communities have to offer. Recovery will be tough. But i have seen the resilience of the american spirit, firsthand, all over this country. To the people of houston and across texas and louisiana, we are here with you today. And wewith you tomorrow, will be with you every single recoverr, to restore, and rebuild. Our thoughts and prayers remain with the citizens and our fellow great, people, great, people, all affected by this tragedy. We are also glad to be back in the heartland, with the very, very fine folks of missouri. [applause] and i said to senator blunt, and i said to billy long on the plane coming in, can i say missouri or should i say missourah . And they said, say whatever you want, and i said ok. But im especially proud to be here in springfield, the birth place of the Great American icon, the legendary route 66. Who would have known that . This is the place where the main street of america got its start. And this is where americas main street will begin its big beautiful come back. You are seeing it right now. This is a comeback of historic proportions. You are seeing it happen right now. [applause] right . You are seeing it. We are here today to launch our plans to bring back main street by reducing the crushing tax burden on our companies, and on our workers. [applause] our selfdestructive tax code costs americans millions and millions of jobs, trillions of dollars, and billions of hours spent on compliance and paperwork, and you have seen what is happened with regulations. They are going fast. We need regulations, but many of them are unnecessary. And, they are going fast. [applause] foundation ofe is tob creation agenda, fundamentally were former tax code for the first time in more than 30 years. I want to work with congress, republicans and democrats alike. On a plan that is progrowth, projobs, proworker, and proamerica. [applause] there is no more fitting place to launch this effort than right here, in the american heartland, surrounded by hardworking men and women whose skill, determination and drive are truly second to none. [applause] and by the way, before i start, ivanka trump, i see my beautiful daughter in the audience. [applause] stand up, honey. [applause] she is working very hard. I am very proud of you. Route 66decades, captured the american spirit. The communities along this historic route were a vivid symbol of americas booming industry. Truck drivers hauled made in america goods along this vital artery of commerce. Family passed through bustling towns on their weight to explore the Great American west. And highquality manufacturing jobs lifted up communities, dave americans a paycheck that could support a family, mr. Cook is a great example of the people that do it, stand up. [applause] i think they like you. And, provided millions of our fellow citizens with the pride and dignity that comes with work. Millions oft years, americans have watched that prosperity slip away in the rearview mirror. And it wasnt pleasant to watch, especially for me. Back, i was in business, and i conceive what was happening. It wasnt good. If we want to renew our prosperity, and restore reducenity, then we must the tax burden on our companies and our workers. [applause] in the last 10 years, our economy has grown at only around 2 year. If you look at other countries, and you look at what their gdp when it ise unhappy 7 , 8 , 9 . And i speak to them, the leaders of the countries, and i say how are you doing, and they say not well, not well. And i say why . Is down to 7 . P, and we were hitting 1 until just a few months ago. So we are going to change that around folks. That i can tell you, we are running change that around. [applause] i very appropriate day that this should happen, we Just Announced that we hit 3 in gdp. It just came out. [applause] and on a yearly basis, as you the last administration, during an eight year. , never hit 3 . So, we are really on our way. 3 growth, that means 12 million new jobs and 10 10 trillion of new Economic Activity over the next decade. That is some numbers. [applause] to be one that we can go much higher, than 3 . There is no reason why we shouldnt. [applause] so, this is our once in a Generation Opportunity to deliver real tax reform for every day, hardworking americans. And i am fully committed to working with congress to get this job done. And i dont want to be disappointed by congress, you understand . [applause] , congress, i think congress is going to make a comeback. I hope so. Ill tell you what, the United States is counting on it. [applause] here are my four principles for tax reform. First, we need a tax code that is simple, fair, and easy to understand. [applause] that means getting rid of the loopholes and complexities that primarily benefit the wealthiest americans in special interests. Rewrite wasor tax 31 years ago. It eliminated dozens of loopholes and specialinterest tax breaks, reduced the number of tax , andets from 15 to two lowered tax rates for individuals and businesses. At the time it was something special. Since then, our taxes have tripled in size, and the tax spans 2600 pages, and most of it is not understandable. Tax rates have increased, and specialinterest loopholes have crept back into the system. The tax code is now a massive source of complexity and frustration, for tens of millions of americans. Form35, the basic 1040 that most people filed had to simple pages of instruction. That basic form has 100 pages of instructions, and it is pretty complex stuff. The tax code is so complicated, that more than 90 of americans need professional help to do their own taxes. This enormous complexity is very unfair. It disadvantages ordinary americans who dont have an army while benefiting deeppocketed special interests. And most importantly, this is wrong. [applause] thank you. First and foremost, our tax system should benefit loyal, hardworking americans and their families. [applause] that is why tax reform must dramatically simplify the tax code, eliminate specialinterest loopholes, and im speaking against myself when i do this, i have to tell you. And i might be speaking against mr. Cook, and we are both ok with it. Is that right . It is crazy. We are speaking maybe we shouldnt be doing this, you know . But we are doing the right thing. [applause] its true. It is true. And, allow the vast majority of our citizens to file their taxes on a single, simple page, without having to hire an accountant. Second, we need a competitive jobsode that creates more and higher wages for americans. It is time to give American Workers the pay raise that they have been looking for, for many, many years. [applause] in 1986, Ronald Reagan led the world by cutting our Corporate Tax rate to 34 . That was below the average rate for developed countries, at the time. Everybody thought that was a monumental thing that happened. But then, under this proamerica system, our economy boomed. It just went beautifully, right through the roof. The middle class thrived, and median Family Income increased. Success,ntries saw the they look at us and said what is america doing, what is happening with the United States . Swiftly, byed very cutting their taxes lower and lower and lower, and reforming their tax systems, to be far more competitive than ours. The the past 30 years, average business tax rate among developed nations fell, from 45 to less than 24 , and some countries have an unbelievably low tax, including, by the way, china, and some others that are highly competitive and really, doing very well against us. They are taking us, frankly, to the cleaners. So we must, we have no choice, we must lower our taxes. And your senator, claire mccaskill,mccaskill, she must dr you and if she doesnt do it for you, you have to boat her out of vote her out of office. [applause] pres. Trump she has to make that commitment. She has to make that commitment, just cant do this anymore with the obstruction and. If we dont get tax reform approved, the biggest ever, jobs in our country cannot take off the way they should and it could be much worse than that. But at a minimum they wont take off the way they should. Dems are looking to obstruct tax like theyax reform obstructed so many other things Like Administration appointments and health care, not one vote to try to Fix Health Care and get rid of obamacare. The strategy of our economic rivals has worked. They made taxes lower and are lower in many cases than ours and jobs left our country. Large corporations changed their Business Models i exporting jobs to other countries by exporting jobs to other countries and exporting goods back to the United States or they would make massive profits and wouldnt be paying taxes to us, either. We lost jobs, taxes, they closed elting, plants, factories. We got nothing but unemployment. Other businesses, even classic brands switched headquarters to foreign countries, because of like weakther reasons borders, american remains stuck in the past. Although, we have general kelly here today and we stopped 78 up to 80 on the border traffic coming through in just a short period of time. [applause] pres. Trump he has done some job. Whole different world out there right now. Today, we are still taxing businesses 30 and way more than that in some cases way above 40 when you include state and local taxes in various states. Behindted states is now france, germany, canada, ireland, japan, south korea, and many other nations. With these countries and almost every country we have massive trade deficits, numbers he would not believe. But this administration is going we arethat one by one fixing it. We are working right now on nafta, the horrible, terrible nafta deal that took so much business out of your state, cities, and towns. We are working on it. Lets see what happens. [applause] pres. Trump mexico is not happy, but as i told them you made a lot of money for a lot of years and everybody left you alone. We are going to change this deal and hopefully we will renegotiated, if not we will terminate it and start all over again with a real deal. [applause] pres. Trump when it comes to the business tax, we are dead last, can you believe that . This cannot be allowed to continue any longer. America must lead the way, not follow from behind. We have gone from a tax rate that is lower than our economic competitors to one that is more than 60 higher. We have totally surrendered our Competitive Edge to other countries. We have totally surrendered. We are not surrendering anymore. [applause] pres. Trump ideally i say this for the secretary of the treasury, we would like to bring our business tax rate down to 15 , lower than most countries, but i know means by no means the lowest in the world, but will make a highly competitive. Foreign companies have more than a 60 tax advantage over companies. They can pay their workers more, sell their products and services at lower cost, and still make more money than their u. S. Competitors. We cannot restore our wealth if we continue to put our businesses at a tremendous disadvantage. Somust reduce the tax rate they keep jobs in america, create jobs in america and compete for workers right here in america, the america we love. [applause] pres. Trump thank you. Thank you very much. Because one businesses compete for labor, your wages will go up. Lower taxes on American Business means higher wages for American Workers and it means more products made right here in the usa. [applause] when i was growing up i always used to see the signs stamped on the product, made in the usa. You dont see it anymore. We are going to go back to made in the usa. Made in the usa. [applause] the third principle for tax reform is crucial, tax relief for middle class the emilys middle class families. [applause] have trump in a way they sort of been the forgotten people, but they are not gotten any longer, i can tell you that. [applause] we will lower taxes for middle income americans so they can keep more of their hardearned paychecks and do lots of things with those paychecks, and that means buying products ideally made in this country, but that means they will go out and spend their money and it will be a beautiful thing to watch here to this includes helping parents afford childcare and the cost of raising a family. That is so important to you want the trump so important to ivanka trump. Very important to everybody in this room, but very important to my daughter. She is very committed to that, right, ivanka . We believe that ordinary americans know better than washington how to spend their own money and we want to help them take, as much of their money as possible and then spend it. [applause] pres. Trump so, they will keep their money, spend their money, buy our product. Our factories will be moving again here it companies will move back into our country, jobs will prosper, and our country is going to be just like it says on that beautiful red hat. Make America Great again, that is what we are going to do. [applause] fourth and finally, we want to bring back trillions of dollars in wealth part overseas. Because of our high tax rate and horrible, outdated, bureaucratic rules, Large Companies that do business overseas will often part their profits offshore to avoid paying a high United States tax if the money is brought back home, so they leave the money over there. The amount of money we are talking about is anywhere from three to five trillion dollars. By making it less punitive for companies to bring back the money, and making the process far less your craddick and difficult, we can return trillions and trillions of dollars to our economy and spend inlions in new investments struggling communities and throughout our nation here at it is time to invest in our country, to rebuild our communities, and to hire our Great American workers. [applause] pres. Trump my administration is embracing a new economic model. It is called very simply the american model. Under this system we will encourage companies to hire and for in america, raise wages American Workers, and help rebuild American Cities and communities. That is how we will succeed and grow together, with one sense of purpose, and one glorious american destiny. [applause] today i am calling on all members of congress, democrats, republicans, and independent to support. Roamerican tax reform they have to do it. It is time. They have to do it. It is time. Im calling on congress to provide a level Playing Field for our workers in our companies to attract new companies to our shores and put more money into the pockets of everyday hardworking people and also into the pockets of our companies so they can continue to grow and expand. [applause] what could possibly be more bipartisan than allowing families to keep more of what they earn, and creating an environment for real job and wage growth in the country that we love so much . [applause] so, lets put or at least try to put the partisan posture behind us and come together as americans to create cut thatcentury tax our people deserve. [applause] pres. Trump if we do this if we unite in the name of common sense and the name of common good, then we will add millions and millions of new jobs, bring back trillions of dollars, and we will give america like competitive give america the competitive advantage it so desperately needs and has been looking for for so long. It is time. [applause] made withp products american hands, american labor, and american grit will once again be delivered throughout. He world that is true. It is time. Instead of exporting our jobs, we will export our goods. [applause] pres. Trump our jobs will both stay here in america and come back to america. We will have it both ways, millions of struggling citizens will be lifted from welfare to work. They will love getting up in the morning. They will love going to their jobs, love earning a big, fat, beautiful paycheck. They will be proud again. [applause] pres. Trump that is the future i want for our people weird that is the future i want for america, a nation where we are proud, prosperous, united, and free. Every citizening to join me in dreaming big and bold, and during things, beautiful things for our country. I am asking every member of congress of which we have many with us today to join me in unleashing americas full potential. I am asking everyone in this room to join me in demanding nothing but the best for our nation and for our people. If we do these things and if we care for and support each other, and love each other, then we will truly make America Great again. Thank you. God bless you. [applause] pres. Trump god bless you, everybody. Thank you. Thank you very governor, thank you. Thank you, governor. Thank you, senator. Thank you, everybody. Ending on a message of love, that was President Trump speaking in springfield, missouri, quite an impressive performance. I have to say. The tone was totally different, his body language was different, it has been a good week for President Trump. President trump has been in his element this week. He has and you heard it there that he wants a tax rate that at ts the people here he said he wanted to bring the rate down to 15 . Ideally he said. Ideally, exactly. He talked about the gdp reading as well. The question is did they rely on that Going Forward to offset arer tax cuts as well they hoping to calm through, too. An open question, but a competent performance i would say. We will discussing further later in the program, but in the meantime we want to talk about finance. Worn buffet Warren Buffett became bank of americas biggest shareholder. Here is what Warren Buffett told david westin about Brian Moynihan. Are doing finey currently, they had a lot of trouble in the past. Some were expensive to solve, some were timeconsuming, but i knew he would get the job done. Take you to the bank of America Financial Center where Brian Moynihan joins our editor at large, Brian Moynihan is ceo and chairman of the of a of b of a. Thank you so much, scarlet. Brian, good afternoon. Brian good afternoon. Nice to see you. Were as my colleagues just mentioning, Warren Buffett has just become your largest shareholder, imagine from your point of view that is a good thing. Lets start off with the issues of the moment. I think our thoughts and prayers should be with our friends in texas, now you see the storm moving to louisiana and other places. It is not over at all and we have been working hard to make sure they are safe here to lets make sure our teammates in america and no america know we are pulling for them. ,avid what has it meant Hurricane Harvey, so far for bank of america . Have you had to do a Damage Assessment . Brian we have a strong team working on that. This goes on in mumbai, also. We have several thousand teammates and we have started to make sure they are saved, taking an accounting of them, making sure our facilities are safe, making sure the people have what they need. And we have a very sophisticated method to be in contact with them to make sure if they need anything we can get that to them. We have to rely on the same resources the rest of the world does, once we get a hold of them, if we need housing, we will put up housing. We have thousands of teammates that want to go, make sure the teammates are safe, make sure they have what they need and get back in business when it is appropriate to do so we can help to minorities recover. Retail customers in south texas, perhaps hundreds of thousands in houston. You have corporate customers, institutional customers. What specifically have you decided to undertake on behalf of of customers in the way over relief . Brian on the consumer side we announced that as we have done with other natural disasters, you basically tell people to get order, if you in dont pay on time, we will not hold it against you. We did for years for sandy and others where people were dislocated. That is the first order of business. They have to take care of lateelves and make sure on their payments we just say forget about it, we wave all of ive their fees wav waive their fees. Houses back,here cars back, there process their insurance checks. A large volume comes in quickly, so you have to be prepared to do that. Yet to make sure on the business side, the businesses are ready to operate. Every Business Needs cash and coin. We make sure they are ready to go. Mr. Buffet is now the largest shareholder, he has long at wells fargo where he has been a longterm shareholder, what kind of input are you hoping to get . Brian he has owned our stock in the last six years, not something in the last four hours. Last 24 hours. To him once in a while, he likes the way we run the company and i dont think he would invest if he didnt like what we were doing. Our job is to keep doing a good job and he will be happy here. David how is business . Brian it is good. We are going to reflect the and as more and as warren said earlier, youre seeing 2 . Consumer spending a strong, stronger than last year or the year before, but still consistent with the 2 growth. David what is the biggest headwindtail wind . Brian if you think 2 growth isnt what they want, people want faster, but you are seeing unemployment levels alltime lows, wages growing faster than people thought. Even when you think about houston and recovery, unemployment is so low, can we do that and do whatever we were doing . Youre worried about having capacity to do the work. And then you think about is everything solid, and that is what we like your loan demand is with 2 . Stent david single biggest headwind . Brian overtime if we dont find out ways for people to be enthused. You have to find reasons for people to be optimistic. That is coming up in front of us and if it doesnt go through it will not change the course of history, it will show we can invest in our future by changing tax laws. David you described it as a 2 economy, Second Quarter came in at 3 . Is there anything you see in the banking pipeline that suggests the economy can sustain a 3 growth . Brian i would say it just almost did for a quarter, but the measurements david im thinking about it on a longerterm basis. Brian the population of the United States is not growing that fast, because we have different policies on immigration and that sort of thing. If you think about the meadow of the in the 90s in period of time in the 1990s populationd a larger growth, the demand for houses, food, cars, everything, we have a good solid economy. If we see population growth at a higher rate we are going to see between two and 3 . David so this may have consequences for growth. Brian i think we need a reasonable immigration policy in this country. David of all of the things you keep tabs on, internal indicators, not unemployment, not gdp growth, not wage growth, but stuff you can only see inside bank of america, what is going on under the surface . What is green, what is flashing yellow or red . Brian if you sort out all of what youre thinking about, about the economies, you come down to the largest economy is the u. S. Economy and two thirds of that are consumers. We asked what our consumers spending on . 40 billion to 50 billion on credit cards, if they are spending more, they are spending more money. David what do you see . Brian it is up 5 . Consumers are spending money, that includes cash coming out of atms are basically flat every year and that is good compared to drifting down. They have a job and are confident of spending. If i watch that i know that will probably leave the economy, you saw them adjust up Consumer Spending again. I think our numbers have shown consistently they will be a justin met up. And they have been almost every month, not a lot higher, but a little bit higher. David it sounds like you see signs that may be Economic Growth can accelerate beyond its current trajectory . Growthwe are seeing wage we see our employees get paid more every year, they spend more every year, but i think it will take more enthusiasm and drive to get it up to 3 . From the rest of the world you are seeing europe grow little better, China Remains the brazil growth rate, and starting to work its way up, if those happen the rest of the world will, long. David the president made his pitch for tax reform today. From where you sit, opposite me right now, are you counting on any meaningful progrowth halle see, reform from this administration . If so, what, and when . Brian lets talk about tax reform and the need for it. We just moved our operations in europe to dublin. Dublin has a tax rate half of what the u. S. Rate is, and you are trying to get competitive. Two basic principles, competitiveness and territorial is him. 30 years ago when we talk about tax reform, they Global Economy wasnt what it is. Build at raw materials, car or something and sell it outside the United States. Much less demand was outside the United States david democrats and republicans agree on some type of tax reform, the question is when is it going to happen and what will it look like . Do you have any confidence in this and administration trying to get tax reform done by the end of this year, by the end of next year, by the end of this term . Brian i have confidence that of all the issues they have faced so far, there has been multiyear agreement that this with the issue of the moment. We wanted to get tax reform in the Obama Administration going back into the bush administration. It is still hard work, the devil is in the details. Allowing the deficit to expand, all of the issues that have come up so far, this has a more unified group of people saying we have to do it, because it is so obvious we are not competitive. We also have to do something for personal rates so people can take more home. David can you bake it into your planning yet . Brian i dont bake too much in my planning. David how would you rate the president s stewardship of the economy so far . Brian i think it will be driven by more of what the consumers are doing and i think the economy is growing. Would people want it to grow faster . Absolutely am a but the reality is the economy looks a lot like 6, nine months ago and will look like that until something changes. Respect, weall due cannot sit here and say the president doesnt have a consequence. The decisions the administration makes do have consequences to the economy. Brian they are made as policy matters. Without any decisions made we see the economy grow and i expect that to continue. David you have been less outspoken about the presidency than some of the other see you other ceos, how come . Brian we have a set of values in our company, a set of principles, and we live to those. Art of that is being sustainable. Approach the environment, webillion over 10 years believe the paris accord was a deal that should have been signed, but it happens your that doesnt change how we run our company. Andtalk about hb2 charlotte, we came out because it was our heart quarters and so we came out hard on that. In other jurisdictions, making sure similar laws didnt impact business. So, we come out hard on the issues but our employees know where we stand. And we drive our Company Along those principles. To have a courageous conversations, about what goes on. At lunchtime, i was with one of our teammates who was in charlottesville. Next week, theyre having a conversation where they are people from the university of virginia, to talk about what went on and what the implications are. Everything starts at home. We have to make sure we run our company the right