Cspan 2. Next, gary cohen talks about the passage of the tax bill and the foridents economic agenda 2018. This event was hosted by axios. Thank you for coming in. We were just saying upstage where you are in the private sector, you had a rule about meetings. I had rules about everything. Mike was asking about the private versus the public sector. In the private sector you shorter have a memo than three pages, but you couldnt have a powerpoint longer than 10 pages. It forced you to get to the point relatively quickly and forced the conversation to get to where you want to go. Gary this was supposed to be the morning after. Tax reform has one more who to jump through. Oop. one tinyh when can we stop worrying . Gary im almost stopping worrying now. If you put this in perspective, you think about what we got done over the course of the year, you go back and read what everyone wrote where we were a year ago today. A year ago today we were starting down this tax path. We were talking about a corporate rate in the 20 with a 20 handle on it. People said you couldnt get below. 5 no matter what you did below 25 to matter what you did. If you think about what we did, we have a corporate rate down to 20 . We made it permanent. Brought down the passthrough rate. We have got it below 30 , and all of the other rates down with that. This has been a historic achievement. Didg with that, we something that people in this town have been working on for 40 years. For drilling. Nwar there is enough oil up there to replace a lot of things. And, we appealed the individual mandate. Wewhen we think about what accomplished last night and yesterday, and we will finish it off around 12 30 today, it has been an achievement to think about what we got done and how hard it has been to get it done. Given the list you gave me, why has this bill been so unpopular . I dont know. I think we have done a very good job of creating middle income. Ax cuts we are going to deliver them to hardworking families real tax relief. You take the typical family of four making 75,000, and we will at it in half, from 4000 m 2000. You look at the distribution tables, and they are out now, and you look at the tax savings, the tax savings is going in that broader distribution, that 20,000 to 50,000 earner. Group. After that they are getting the largest percentage tax savings. We are clearly going to communicate, and the Treasury Department says they will have the withholding table out in and for february paychecks, so they will catch up for january, and they will see more money in their pocket. When workers in the United States see their check, their takehome money go up in february, i think there will be a huge change in sentiment. Ok, gary, you were with cnbcs john harwood. You said it was not our intention to give the wealthy a tax cut. We did not gary golub we did not set out to give the rich a tax cut. Gary we do not set out to give the rich a tax cut. The senate had may be two votes for border adjustment tax. We had over those many, many months, lest that group into a concise plan. We created a group of six. We created a broadbrush outline major points, and one of those was major income tax relief. We had to achieve midland come tax relief. That was for us in their. Give middle income tax relief. That was for us in there. We delivered middle income tax relief. Growth . Together. Go when we are looking at this bill, and we are to look back on or many years, we are highly, highly convinced, for many years, we are highly, highly convinced. It has been interesting to look at economists. Former industry. When it was going through the havess, they said it would no economic impact, and amazingly, as we started getting closer and closer to final passage, and they had to start advising their clients on how to do it best for 2018, 2019, and addingly, they started growth forecasts, up to 5 10 of growth, because they could not be misinforming their clients. So we have swung that pendulum. People have not realized. When we get ourselves competitive with the rest of the world, and that is what this is about. It is about competing with the rest of the world. Having a tax rate for all businesses that allows us to compete with the rest of the world, when we do that, we feel that, number one, we will grow the economy. Businesses will relocate back to the United States. Invest, we when they know how they are. They look at tax returns, and e, theook at roi, ro United States is now going to score very well in that equation, so when you do that, you will start investing. Ceo who will invest half 1 million next year. Products,ricanmade that is happening because of the tax legislation. That will drive gdp. But more importantly, when he spends that money, he will be driving jobs in the United States. We are at about a 4 unemployment rate, so we have job creation going on. We have been creating 170,000, 180,000 jobs. We have not created wage growth. No one has had a raise in this country. It is really, really important. We feel that we can for the first time in a decade create wage growth. Hey need to hire labor they need to go out and compete for the incremental worker. We will get workers back into the workforce, and we will do that by driving wage growth. So the success of that. What would failure be . Gary well, failure is not an option. Look atwould be if you what happened to 31 years ago in the bush tax cuts, we succeeded by lowering our tax rates low enough that businesses did migrate back to the United States, and we became very competitive in the world, and the rest of the world had no choice, like we did now. They cut their rates to get very competitive with us. The failure would be if we do not capitalize on our competitive opportunity, and we allow the rest of the world to catch up to us. A wall street Journal Council was asked if they would increase their capital expenditure, and then, what happened . Not want to be mean to the wall street journal when you go through who is in the audience. In theere not be ceos group. When i asked them to raise their hand, they were the right to ceo s. I talked to a ceo of a megacompany. Startinge 500 million january 1. We are going to get the investment. We are going to get money repatriated. I think you will have to judge us on what actually will happen. Than by the chairs and the bottom line . Gary the economy is doing really well. Im going to disagree with your prior guest, and why not . When i look at what is going on in the stock market, i do not think a lot of the tax reform is in the stock market. Stockk what is in the market right now is what is going on in the economy. The economy is doing well. We have had two consecutive quarters, and i think we will have a third consecutive quarter, of growth. Holiday sales, people are shopping. People are buying. You look at some of the fedex data, people are shipping packages. Is doing well. When we continue to grow on the solid economy, the companies will make more and more money. The stock market is requesting what is the reality going on today, and if you look at what the tax plan is going to do, i dont think that is factored in. Askcan take an interesting it of high tech stocks and low tech stocks, and they are not doing what you think they would be doing. You would think the high tech stocks are outperforming, but they are not. Basket the spastic say . You think that there will be a tax cut rally . Gary i think there will be continuation for a rally in the equity market based on real underlying fundamentals of the economy. The u. S. Economy as well as the global economy, which is continuing to strengthen, as well as companies having more earnings power because of lower tax rates, being able to expand their business and create more profits because of the incentives we have given them in the tax code, some of the other accented incentives, and become even more profitable. Have an idea of the psychology and of the plumbing of the stock market. Are you worried . No. i get worried went market valuations decouple from fundamental earnings. What i am saying is when you look at what is going on in Real Companies today, their earnings are in line. We do not have huge p e multiples. It is not like multiples are out of sight. It is not like volatility is out of sight. On. Tility is going nobody is worried about what is going on. The economy is strong. Please are doing well. The stock market is reflecting that companies are doing well. They are reflecting that we have a positive business environment. The deregulation we put in is having an effect on the psychology of corporations. By the way, psychology in the board room is probably one of the most important things that affects word mentality, and capex andality drives growth, more than i want to talk about, but, really, at the end of the day, how you feel about the economy and the environment really drives investment. How high is too high . Is not a number. It is a decoupling of company fundamentals. It is a decoupling of fundamentals. This morning, when the senate had what was close to the last word, you were on the floor. What was it like . It is the senate floor. It is exactly what you would think. Just not run at a brisk clip. What was it like . You said some people were missing . Mike, it was funny. Twoe were two votes, backtoback votes, and the first game right around 12 00. There was nothing going on in the senate. The vote ended up taking about 20 minutes or so, and to get the last votes in, where are people i do not want to tell you who the last boat is, but you can go back and watch to the last boat was. Where are they . What are they doing . You would think at this time, they had heard every minute of the day, and they probably want to go home, and 20 minutes later, vote number 99 so we can , andon to the second vote then the final vote on the tax plan, they did not even call the roll call. People just swarmed the desk. Planthe democrats just swarmed e desk, voted no, and left. a question from evan, who is here. If you could make one change, what would it be . a question fromgary we wouldd interest the at we have tried to cut carried interest probably 25 times. We would have cut carried interest. We have tried to cut carried interest probably 25 times. More specificity on the opposition. It is the reality of the political system. Take a minute and explain why it cannot be done. Gary we got a Holding Period elongated from one year to three aars, so now there is threeyear Holding Period, and i believe carried interest the president strongly believes, and he ran on this, that carried interest is a loophole. You are basically getting paid a preferred rate of return on someone elses capital. Explained the benefits and why. It is hedge funds, private equity, capital, the compensation you get from running that money. The burden you take with other peoples capital. We are all into getting preferential rates of return on your capital, risk capital, but when youre getting paid on someone elses risk capital, it does not make sense to us. Look, the reality of this is that constituency has a very large presence in the house and the senate. Have really strong relationships on both sides of the aisle. This, 31 lived through years, 2048, before somebody does this again . I dont know. What i do know is that this is hard. This is really hard. Difficult. Having control over the white house, the house, the senate, you literally have to align the and the moon, the stars make sure everyone stays healthy to get this done, and so these are really difficult things to do, and when i came here a year like, look, i have done some of the most crazy deals that have ever gotten done. You know, i have had tiny b andy a buy mega Company Leverage it to death, and people say, that is crazy, and that it cannot be that difficult. I have sat through screening s inrooms and put two ceo a room and said, one of you will not be here, but nothing compares to trying to get a tax deal done. President like on this . We know he is not a detailed guy. How did he weigh in . Gary the president was phenomenal on this. What did he bug you about . And bugser needles you. He loves you. The president love you. Loves you. The president cared about the business rate. Probably the single biggest topic the president cared about was the corporate what about the red line . We more than met the red line. We could have been 20 . For those of you who do math, that is a neutral swap. What else did he insist on, ask about . Integrally involved in lots of the details he cared about. He cared about carried interest. We had a conversation about it monday. Monday, he wanted to know how to take it out. He was, how does this keep surviving . He wanted to know if i was doing my job. I explained it to him that we have done our job, but the corporate rate was very important to him because of the competitiveness. He spent at a normas of time on the passthrough rate he spent and a enormous amount of enormous amount of time on the passthrough rate. Intricate playoff between double taxation, single taxation, and the ultimate range. We spent a lot of time talking about that. We basically went through the swap code and how many things we could do got. Remember what we did here. Trillion of. 5 reductions in this tax code. Ofre is 4000 4 trillion base. When you take out 5. 5 trillion, and you do that eliminating issues and issues and issues, the president was involved, state and local tax issues, and we had a whole list of things we took out of the code. M, you do all of these lines that no one has ever heard of, and everyone is affected by something we took out in the tax code. In those 5. 5 trillion that we took out, 60 of those went to the personal side, so we really try to simplify the personal the vast,ng it that vast majority of americans could do the tax return on what the president cared about, a big postcard. Ofyou think the majority taxpayers can pay on a postcard . So. we think we think 90 are going to use the standard deduction. And for corporations, the tax code is now more complicated, right . Gary i dont know if it is more complicated or less complicated. I dont know. I said i dont know. At the Corporate Tax system has been beyond complicated. An and enormous amount enormous amount out. Goes from the floor to the ceiling of the tax code. I do not know it has gone from the floor to the halfway. A tax return in a year. Days before christmas, is the government going to shut down . Gary no. What gives you that confidence . Gary we are going to get a cr in the next couple of days, and they will be on their way home by the weekend. We will probably end up with a twoweek cr, spending next year at current levels, and we will and all theps spending issues, military issues, and all of the other issues at the beginning of the next year. After the Senate Passes the peace, we can expect a celebration at the white house. We canes the piece, expect a celebration at the white house. After the house vote, we will have senate and house leaders at the south lawn. And what will the message there be . Gary the president is going to thank them for all of their hard work and congratulate them for their effort and remind them that we still have a lot of work to do, that it is going to be a celebratory atmosphere. The technicalities, it will not be ready for him to sign christmas. Will it be before or after new years day . Gary we will see what happens. There are a couple of technical things that have to be dealt with. What would stop it from being signed in the week after christmas and before new years, with what the white house sources say . Love white house sources. A favorite line. White house sources. There is a technical issue on something called a go. Paygo. Waived, theet paygo president can sign it. Going to bedent is at maralago. Can he do it . Gary that is too much information. January 3, youre going to have a meeting about infrastructure. Agenda,to next years you plunge right into infrastructure, but you dont have any money, honey. Gary we do. We do have money, honey. Overn be leveraged to well 2 trillion. Infrastructure is a phenomenally interesting topic. It really is, and i can talk about infrastructure for the beenday, and we have spending more time on infrastructure, and i will start spending more and more time on it. When you think about infrastructure at the federal government level, think about this. Basicallyl government regulates all of the infrastructure in the United States. None of it. Ally those are over significations, but it shows you. The biggest single thing that we can do for infrastructure in shortenntry is we can and improve the approval process. Talked about has this, the nine or 10your approval process for a highway. By the way, the approval process is long for pretty much everything. It is longer than your and my age combined. Is a long time. There is things in there from the 1920s that are still waiting for approval. So the number one thing we can we can do and, look. There is a Congressional Group going down to australia. Out. Alia has figured it we can streamline the approval process from years two weeks and months, to weeks and and if we can do that, there is money. There are a lot of cities and states and counties that actually have money in their budgets. Taxes forpassed infrastructure. We just need to get them approved. We have got funding available. Theseitting there to help states and counties build their infrastructure. The problem is they are all tied up in approval processes. You are not going to propose and Infrastructure Bank an Infrastructure Bank . Gary no, i am not going to Infrastructure Bank. We have to stop talking about our crumbling bridges and roads and start fixing them. Basic,ly have some fundamental things we have to do, but more important than the base, fundamental things is we have to think about what this country is going to look like in 20, 30, 40 years as technology and automation and Autonomous Vehicles take over. We cannot keep building cities for the 1950s. We have to build cities for the 2015s. 2050s. A couple of examples, you have talked about highspeed rail. Tell us about tunneling. Gary well, think about the United States and the size of the economy and the per capita gdp. We dont have highspeed rail. We have amtrak. They have got these rail lines that curve around, because when they were building the rail lines, you know, we had to go around this city. We had to go around that puddle area we had to go around that set of trees, and so the train we had toe this go around that puddle. That set of around trees. So the train tracks go like this. Been looking at how to solve the Straight Line problem. Well, go underneath. Tunnel. Down 70 feet and tunnel, and nobody knows you are there, you can go Straight Line from point a to b. We will have some issues that we have never dealt with in this country. People own mineral rights down and property rights. We think those are very solvable issues, but we can revolutionize the transportation system. You can put highspeed, mega highspeed rail in tunnels, and you can do it unbelievably efficiently. Is Tunnel Technology today so superior and so quick that you can do this relatively cost efficiently, and most importantly, you can do it without a dollar of government funding. This in theto do private sector is there. We just have to give them access to the rightofway and figure out how we deliver to them the right of ways underground. The president will start projects on the same track. Which will go first . Gary that is a good question. It really is. We are working on that right now. We have got a meeting with house and Senate Leadership the first week back to plot out the legislative agenda. Those are the president s top two, but in there, we have got a lot of things going on. Reform got a banking bill making its way through the senate with bipartisan support. The choice act has already run through p and we will bring those two bills together, modernize the banking. The choice act has already run through. And we will bring those two bills together, modernize the banking, but there is a lot that has to get done. Really quickly, what reform l include job training what are the other key elements with how you get democrats . You have to have democrats, right . Bey it is going to bipartisan. It would be a 60 plus vote. I would hope it would be 100 and that we could have something to get everyone involved. We have got to do job training in this country. Most interesting phenomena or frustrating phenomena in the country. 6. 1 million unfilled jobs in this country every day, every day. People 6. 1 million jobs that need people to feel them. We have got that many unemployed people. We have to solve that problem. We have to get the skills gap closed. Andave to go out there invest in people and train them and give them the skills they need. If we were to build the keystone pipeline, we do not have the welders. Salary is welding substantially above the median in the United States. Quickare going to do a dan primack,rst, what did we miss . Bills, thehe democrats did not matter in this process. York, but whow stopped it from going in . Gary well, look. We just did not have the support for kerry interest. Republicanlenty of house members in blue states, as well as in you have to understand there is a house and a senate. We need to hundred 15. That number is indelibly tattooed on my brain right now. A quick round right now. Do you own it going . Gary no. Would you . Gary i believe we will have a digital currents effect will be widely accepted, but it will have more transportation, less transaction how it works. Have your views on china changed while you have been and the administration . No. What will our posture be next year . We will continue to work with china on geopolitical fronts. It is a important ally. We will continue to work on our relation ship with them on trade and trade balance. Understanding that the chinese controlled at a central level. E on Companies Come eapet unfair terms. That said, we would love to open 1. 3 billion consumers to u. S. Companies. Leveling the Playing Field there open trade is somewhere we want to go. A year from now will we be in a trade war . Three months from now we work at the white house . Yes. [laughter] how come . The last year of my life has been the most fascinating i have had. I always consider myself one of the luckiest people in america. I am one of the luckiest people in this country. The last your has been fascinating. The opportunity and the pleasure to be part of President Trumps economic agenda. To infrastructure and welfare. It is a once in a lifetime opportunity. So youre staying . Im staying. The Tech Companies deserve the criticism they are getting right now . No. How come . Newech companies are the wall street. Wall street probably did not understand it either. Your world need someone to beat up here they need a race to shame. The Tech Companies have in a huge catalyst Economic Growth in the country. They have created real Economic Growth and prosperity. We are forcing entrepreneurs offshore. I dont think we want to force entrepreneurs offshore. We want to beat the driver of capitalism. These companies have invented products that you and i cannot live without. By the way, that is pretty enviable to have a product that you and i cant live without. What is an example of that . Uber. Ok. I win. I wont say how come to this one. How much tv do watch compared to the president . I watch zero tv. How come . [laughter] i just dont watch tv i have never watched tv. I just never watch tv. The only thing i watch as live sports. I will watch live sports on the weekends. I should not lie. And ifwatch live sports there is ohio state football on, i wont miss it. You have three daughters in their 20s, they are not trumpists. I thought you said they were not trumpeters. How do i deal with it . , my family has been so unbelievably supportive of what i am doing. They all called me and congratulated me on what we got done last night. They are proud of what the country is doing. The economicin growth. They believe in the economic agenda. They are proud that i am down here working. But you are a democrat and you are one of the most in rental noises in a conservative administration. I think that is exactly represents who the president is. All day long. He knows i am going to have a different opinion on a lot of topics and he allows me to speak. Ago,re in a meeting a week and he said gary, you have been quiet. You must have an opinion. He wants to hear if there is an opposing view in the room. That is a unique characteristic. And a golfer. Kier when the president is in maralago where you going . To aspen. No no and very cold. Of yount to thank all for coming out. I want to thank the bank of america for making these conversations possible. Happy new year. [applause] [captions Copyright National cable satellite corp. 2017] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org] the headline from the wall street journal, sweeping tax bill heads to trump but uncertain when he will sign. This comes as the house passed a one point 5 trillion tax cut package earlier today. From politico, chaos and confusion as new tax rules take effect. The most sweeping tax overhaul will soon head to President Trumps desk. Now the new turmoil. It will go into effect in 12 days and the Payroll Companies are bracing for confusion as they figure out new withholding rules that will affect millions of american paychecks. Up next, we will hear from President Trump at the white house. Then, reaction from Chuck Schumer and nancy pelosi. Later we will bring you some of the house debate on the bill. Sunday on cspans q and a. Edwards foundations lee chronicles his 60 year involvement in the conservative movement. I met joe mccarthy. He was a hell fellow well meant. Fellow well met. He was very serious about that. He was someone who did not take advice very well. He consequently said things and even dead things that hurt the cause. Things that hurt the cause. This weekend on American History tv on cspan3. Saturday at 8 p. M. Eastern, American University professor aaron bell talks about civil rights leaders. William sullivan, shortly after the wash on the march on washington. King now as the most dangerous the growth in the future of this nation. At 4 30 p. M. , reflect on Lessons Learned and ignored during the year. That the limits of military power during the vietnam war. We learned that as a society and a culture that you