The coming days. Before i get started id like to extend a thank you to our partners in making this event possible. [applause] good afternoon. Business roundtable is pleased to partner with politico for this event and introduced chairman kevin brady. Mr. Chairman, it has to be said, after decades of false starts and expectations, what an amazing accomplishment this week. Im speaking, of course, about the Houston Astros winning the world series. [laughter] on top of that youve crafted a pretty damn good tax reform plan. It provides relief for families, workers and businesses. We applaud your comprehensive approach. From the business employer, we have long believed successful tax reform must allow u. S. Companies to compete and succeed in the global economy, increasing investment in hiring in the united states. When the Business Roundtable surveyed our members who employ over 16 million people, willie surveyed them about how they would changed their plans , 82 of the ceos said they would increase Capital Spending at their firm. 76 said they would increase hiring. Yesterday chairman brady said the families who struggle the most have seen their paychecks leave for other countries and a 20 corporate rate would enable businesses to create jobs here in america. Business roundtable agrees. They wouldve retained 4700 companies that flood our borders in the past 13 years. We commend this process and support your efforts to deliver legislation to the president s desk this year. The house ways and means chairman, kevin brady. [applause] he did the introductions for us. We have time for more questions. The most important question i have, being married to someone from houston is where the did you watch this . Or did you watch it . We were. [inaudible] the wind was pretty exciting. We were finishing up the tax plan, working on white boards and i kept glancing at the tv but i was afraid, you know when you look at a game and you think you will jinx it, i was glancing at it but finally i said im all in. Lets start from 30,000 feet and zoom out a little bit. Jake and i have been covering congress for a long time. A few years ago, if you look back, republicans were saying they should cut taxes. Youve taken pains to to cut taxes on the middle class. Lets talk about an ideological shift that seems to happen. I think we deliver that relief at every level. Obviously its clear we are driving a lot to middleclass families because they needed, and, as josh said, an emphasis on growth and making businesses competitive is also going to drive those paychecks, as you know, and its strictly related. If you think about it, its a difference in the reagan era. They are all about dropping those rates. What you see is due is not only have a rate cut that every marginal level, but we do a lot below that number, clearing out the disincentives which are basically punishments as you work up, and, making great infosys to encourage more of that Business Investment in our passthrough areas. At every level there is tax relief. I think weve done a good balance way, but my advice to everyone in america, as you look at this simple postcard style approach, which in washington, we may be cynical of this. In america there is a longing for. You will see an awful lot of good work done to help get us out of your lives so you can do more of what you want. Are we going to be filling out that postcard and nothing else . No. [laughter] so here, when you add up your contributions and your saving plan, will you, if you have more than one added up on a worksheet, yes. Will you exclude some of your income like Social Security or your combat pay, will you use a worksheet and look at it and say write the number down to the postcard, yes, but the point is this. Can you imagine a code this simple so we all know what each others deductions are because we have exactly the same ones and we can name them. There is a power to that simplicity. It requires bold changes. Weve gone very bold on that simplicity and then well let the process sort of go forward from there. Some of your detractors would say you cut things like student loan interest, break some high medical bills, how do you respond to things like that, especially when people say you are cutting taxes on middle income americans and those are things that a lot of people use. I think we address those in a really good way. Most americans dont itemize. They are left out of tax reform usually. Now they are front and center to it. We lower those rates as well at every level. The family, you should look at this new family credit. Its pretty remarkable. It not only increases the child part of that but adds another 300 for each parent and another 300 if you have a child in college or parent thats moved in, and its not just a number which people are paying attention too. What we are to be asking is who gets to use this family credit. Today, child credit phases out those who make 110,000. We double that to 210,000. A lot of people will get help with their kids for the first time, and these are tough choices. When you look at whether its medical expenses, student loan , the adoption tax credit which is something near and dear to me because we are adoptive parents. These are tough calls and the call is this, do we want to tax code that has special provision provisions, you may use them once in your life or do we want to tax code that lowers rates and you get help every year of your life that you choose whether you need it for student debt or medical expenses or, as we used one to adopt our two children. It is a big change from the way we have the code today. Talk to us a little bit about as you change and take on these hard issues, some of the traditional allies and republicans are against this bill. What is driving that. I think its early. I think our tax reforms programs groups are strongly supportive of this initial step, we saw that pouring in yesterday as well so do we work to improve it at every step . Absolutely. Realtors and the homebuilders, i think it has great merit and we would love to see that considered in this process. At the end of the day, nothing drives home prices and home sales and home values like a strong economy. There is no substitute. When you take where we are at and you add another percentage point to that, you will see home sales and values in a very positive way. Having said that, we will continue to work with the homebuilders and realtors Going Forward to see if we can make that case. Lets talk about the nittygritty and where things stand. I know they want to keep the issues separate and there might be some issues helpful to you. Where does that stand. The president feels very strongly about this step. Weve asked for the updated score to see what everyone is talking about. There are pros and cons to this. The debate has consequences and one where the senate has yet to produce 50 votes on anything. There are all those considerations to debate. We are listening to the members and the president as well. Arent you concerned that healthcare could muddy the waters. Theres so much momentum saying we need to get tax form done and it could bog down the process. I dont know that it bogs it down but you are bringing in a whole new element to progrowth tax reform. Clearly we are getting more than tax relief. Healthcare in that mix, there are pros and cons. Lets take this bill issue by issue because there are a lot of things to go over in a short amount of time. Lets start with the state and local tax. You are gonna need these new york, new jersey republicans kit to get the bill passed. What is the issue and can you solve it. Every member says whenever theres a problem you have a solution to solve it. Look. Honestly i havent found a problem that isnt solvable. Heres the issue, challenge our space and keeps rates high on everybody whether we itemize and some use the same local income tax and then we all subsidize each other. Rural to city, middle income to higher income, state to state. Here is a question. Or do you want to lower tax for everyone. Thats your call. It is a big change from where were at. We are increasing it to twice the National Average for deductions. Thats incredibly helpful. Weve adjusted the income tax bracket and created this family tax credit and driven it way up into the middle class families. By the way, i dont know how they accept the level of taxation they do. It is just painful to see that, but we drive that the end result is that we are showing that families in high tax states are getting tax cuts, way up because of a combination of policies. Members from those states have now taken a second look at what we are achieving. Some still need more. They have a simple request. They want our families to be better off after tax reform them before. Thats a pretty fair request. So do we. Thats what were working toward. He wants a bumped up to 12500. He sat on the table. Bring the ideas. That is an idea. Bring the ideas and we will look at them. He said you dropped a bomb on him when you changed the mortgage Interest Deductibility from 1 million to 500,00 500,000. Which was unveiled to members on capitol hill. Talk about that and what was your decision, your thinking behind that . People from new york and new jersey, and theres not many, it doesnt take a lot to have a milliondollar home in a place like, a lot of other places across the country that would be a faroff thing. Talk about your decision. I dont think that was a new approach, i think its been may be new to him. I think theres been part of discussion on reform for mortgage interest for a while because youre trying to drive that deduction to the middle class, that halfmillion dollar mortgage covers 98 of americans so you really are driving to the average american family, and again, we thought fresh about every part of the tax code and how it works today, again because these deductions really focused on income. Why dont we try to drive those homeownerships incentives down across the spectrum. Thats part of the discussion. In just one more question, theres been some concerns from members from all over the country about the secondhome deduction which would seem to be a first world problem, a lot of big Vacation Home families, youre not movable on that . Youve eliminated that on second homes and thats here to stay. So ive learned to never say never in tax reform. But pretty close to never. Were trying to nail you down on this one. While youre not going too. That will be part of the discussion. You talked about hearing from President Trump on things that are important to him, individual mandate, other things have been the corporate rate. Thats been something you been very focused on. Take us behind the scene. Hes trying to get it to 20 . Ill just tell you, my experience has been terrific. Hes been engaged on tax reform issues, both in substance and where he wants to go, he calls regularly, more often now and just weighing in on these decisions. In fact, errors we are finishing out what this initial bill would be, we were on the phone running to these options to make sure we are all on the same page because the whole purpose of this was to not do what we did in healthcare. For the house and senate was never still may not be on the same page. Thats why we spend the money working with the white house and housesenate so there wouldnt be three tax plans are five tax plans, but one. Having that target drawn on the wall for the house and the senate to design two has been really helpful. The time spent what the president is really crucial to getting it to his desk. In terms of that, other efforts that he doesnt abandon you. So he knows so much more about the tax code. Healthcare for everybody is complicated for the tax code is as well, but we know our area. We know what we use, we know what affects our family and our business and we know it well. From that standpoint, he has been extremely valuable. We will go to a question from our colleagues. Collin is in the audience. I dont see him at the moment. Youve seen him in the hallway about a million times. There are so many great questions. How do you reconcile the house and senate. Whats been incredibly helpful is to have that framework we agree to and i think the senate will take some different paths to hit that target of the framework which i think is healthy. The goal is to reconcile this at the end in their challenge is to move that to the senate. I actually believe, having slightly different or maybe substantially different designs that target, thats part of the process. I also am hopeful, as we mark it up in committee next week and as we see there are areas we can improve, weve thrown a lot of new stuff on the international side, on the Small Business path. We expect to be incorporating those and finetuning it. There has been, one of the things weve heard from the outside groups is that theres a back door border adjustability tax that will hit consumers across the country in this bill. Why are they saying that . My back is still sore from the discussion over border adjustability. There is nothing coming any direction there. I think that is a silly notion. Tell us what is in the bill. When we move from a worldwide system, weve got to compete internationally, you have the potential for seeing your tax base and creating more open doors. Every countries that does this have to have a way, and we watched it here in america where companies can export their patents and pricing and import things inward. The way we address that are really two provisions, there are, nation of outbound exporting of profits and inbound deductions and interest in all that. I thought originally border adjustment was a way to address that in a simple way. Now we are back to traditional , how do we do these from the camp drive, we expect a lot of feedback from industry on that. That is a good thing. At the end of the day, youve got to have that equal treatment so that if its a u. S. Company whose real revenues and earnings are originating, they just look like their overseas or that foreign parent doing the same thing, you have to have a level Playing Field for that. We want industry to look at those designs and bring us back got. That is one of those areas we will continue working that through congress. Another lingering issue mentioned in passing, obviously its very difficult and if idea Small Business association, based on the way the rules are written a lot of advocates feel like they will be paying higher taxes. Our pastor businesses, in total, we are devoting half a trillion dollars in tax relief for those businesses. Somebody is getting that. Remember what were trying to do. In the past. [inaudible] we made early decisions that were not going to leave them behind, but to do that you have to separate business from wage income. Its complicated to do and we knew that coming in. The current design, weve given them two options. The short form in the long form for the short form is for businesses to say 70 of what you earn his wages and 30 is business. Will cap the 30 at 25 . You will get tax relief. The other is to say if you are a business, your billing your own. That you are truck and your equipment, youve invested capital, you can expose much more of that. We may need to have other options in their work change some of those. At the end of the day to make it more competitive, this is a great to discussion to have. We will go to a couple questions after this. This isnt something thats going to impact everybody in this room. Its something that ive heard a lot of members asked me, will these tax cuts be retroactive, meaning will they begin with, at the beginning of this. We want to accelerate the growth. Ask any accountant or any business or any family, when you go backwards, it creates real challenges fast. At the end of the day, i think whats being requested of, lets make sure this tax reform shows up in paychecks soon. The business have the incentive to invest soon, immediately. That is what we are looking at those options to see how we can deliver that. I think theres no doubt, you will see growth in jobs and paychecks and Economic Growth very soon. The question is could we deliver that tax relief for families. We will, we know families will be able to adjust their withholdings so they get a bigger paycheck starting in january, nec not next april, but is the more we can do . We are looking at that. It sounds like youd like to do it, its difficult but the priority is getting tax relief across the finish line and the quickest and easiest way possible. Yes. If we can make some adjustments to provide even more immediate relief, lets do it. Question from the audience . Wow. No questions. Thanks for having me. [laughter] i thought i was out the door. No way. Just for full disclosure, i am a tax lawyer. Now i have to go. [laughter] we were dealing with just reporters before. So i just have a very straightforward question, although i would like to ask you more, on your passthrough tax rate of 25 , it strikes me that this might be difficult administratively to police. Im wondering if you had thoughts about that. We have, and the reason for starting first with the 7030 was to create that simple option where youre not really haggling with the irs over whats reasonable compensation and all that. We try to find that simple form, a lot of Small Businesses that they would likely use and create that second option and really differentiate between the wage earner and thats why we got to these initial provisions. We are getting a lot more feedback on options. Professional Services Want to know if that option is available to me and the answer is absolutely, yes. Look at the doctor who got his own practice. They own that equipment. Theyve made those capital investments. It should qualify for that passthrough rate. We just have to make sure, if we stick with these approaches initially that they get relief as well. Its hard to do, but again, i think this discussion is something that we need to have if we are. [inaudible] take one more question and will go back to us. I just had a quick question about a political article that was written last night that said something about americans who made more than 1 million in taxable income would trigger an extra 200,000 they earn creating a 45. 6 tax bracket. So, from this standpoint, there is black in the current code and a bubble for earnings above a Million Dollars. It was done to try to drive more middleclass tax relief earlier in these rates where we really do well both for the family who makes 59000 and the Small Business. We are really successful there , but to finish the sentence, again the reagan reforms were about those rates. We are about clearing out underneath the rate. A family making a household making a Million Dollars today because they see it as tax relief at every floor, if the elevator goes up, they see relief there. At the end of the day. Theres tax relief at every level from the bottom to the top including the milliondollar household as well. Much of that comes from the investment in pastors and corporations, compensation tends to change and those hel households. You are seeing tax relief related to growth and investment which is again what we want to reward. Lets talk about the process. Its been a long time. [inaudible] what was the most surprising for you in this process . I think its been wonderful, this has only just begun. This is an amazing opportunity. I think about all the chairmans before me who i respect and work with. Getting these opportunities. This tax code has fears supporters and champions from the smallest provisions to the largest and very aggressive to defend that status quo, but heres the challenge. You cant lower rate and become more competitive. Youve got a challenge these provisions to get to where we want to get. Its not a surprise, its just an hourly part of tax reform and an hourly part of this discussion. A lot of people here have not watched a ways and means markup. As exciting as they are. You dont really mean that. [laughter] with this audience. Thats true. What is again a look like, how late are they gonna go, give us a flavor of what to expect. It looks like it will be long. Monday we begin at noon, first time in 31 years, and for republicans in the house weve led and initiated tax reform so its pretty historical. We work with our top democrat to structure this in a positive wa way. It wont be surprising at some point it goes later. We are trying to structure in a way that our democrats have the best access to make a case for their amendments and our members as well. I do expect to conclude by thursday of next week, before the veterans day holiday, with all these amendments in the tax code, i think we will let the American People see something they havent seen in a long time which is real debate. We invite you to read this bill. Unlike the Affordable Care act, this is about 429. This is easy reading. I didnt say easy reading. The tax attorney, she knows how to read this. But, its digestible, but its big and bold and i think it will be a fascinating debate. Do you expect to get any democrats actually support this . I hope so. Look, i woul always say this, but its true. They are seeing the same thing in their committee that we are seeing. Now their overseas, they are young people. There are a number of democrats that really think the status quo wont work. We been engaged for about a year with them. They brought their parities to us and i think weve hit them in a big way. If they are looking for middle class tax relief, going overseas and bringing them back, i think they will like whats in here. We dont expect any amendments on the floor. No. Why. There is nothing like changing the biggest economy on the planet, changing it in front of the world to see really bad things happen. The work will be done in the committee and before we take it to the rules committee and later in conference. So youre saying the house can be an unruly place at times. A legislative process tied to the complexity of the tax code, deliberate, thoughtful, and you listen to these members before you bring it to the floor. How do you anticipate trumps involvement Going Forward. Its been positive in a big way. He is using twitter to make the case. Hes been all in on the rollout yesterday and delivered a tremendous product. He will stay engaged. The cabinet is staying engaged while hes traveling. You need to make a case around the country for a dramatically different tax code. You know, families will be thrilled with that. You asked what surprised me, i think what surprised me in the process is the power of simplicity. I dont think we underestimate how frustrated people are with this code. When we ask, do you want something this fair and simple , are you willing to give up all this to get there, you have to be surprised that the answer is could we really have something this fair. The answer is we cant. We have to make some tough choices. I dont worry about that it finishes with a postcard like this. We ought to, as members of congress, make changes, whether we add, subtract or otherwise, but we get one shot every 33 decades to make some changes. Why not go for fairness that people have only dreamed about. Lets talk about that. The political impact. We are about out of time. Thats obvious something everyone tells us is incredibly important to republicans 2018 prospects. You agree . I d i do. Weve not delivered on our promise of healthcare repeal. Its critical we deliver on our promise on tax reform and do it in a timely way. We are on track to do that. This is the challenge of a lifetime. We know this legislatively. This wont be just an easy smooth, every hour is terrific. It wont be. It will be the process of washington which is never that way, in the day we achieve this or near to it. We have delivered on our promise in a big way. How soon does it need to get done. Right now we are on target for the end of the year. Do think that will hold. I think it can. You not feeling like the world ends if he goes down to january, february. True, but urgency creates decisionmaking. You know washington, its the deadline is midnight, they will start working on it at 1130 and work on it into the next day so having deadlines to bring people to the table to resolve things are helpful. Quick question. Do you think theres been a lot of chatter recently about turning to healthcare at the beginning of 2018. To these differences reconcile between the house and senate and all the different regional. On the healthcare things . I sure hope so. We want the senate to find some improvement we also know that having a stronger economy means you have more skilled workers. [inaudible] how do we get them to good paying jobs with the skills our businesses need. Its critical to growth in a big way. Chairman brady, unfortunately we are out of time. We thank you for joining us this morning and a special thanks to the roundtable for sponsoring this great interview. Thank you all for coming. Follow us online for updates on future playbook events. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] you can watch congressman bradys remarks to politico later today on cspan. Org. You can also read the republican plan on our website. There is a link to it on our homepage. That is at cspan. Org. Coming up monday, house ways and Means Committee chair will hold a full Committee Markup of the republican tax proposal. Live coverage beginning at noon eastern on the cspan network. Republican leaders hope to have the bill on the president s desk by christmas. Among the changes that congressman brady talks about, reducing the tax brackets from seven 4 while preserving the tax break limit the mortgage interest reduction to loans of 500,000 or less or nearly doubling the individual standard deductions. Also capping local and state property deductions at 10000 while increasing the child tax credit, it would no longer allow medical expenses or property loss to be deducted. Scott will be at the National Press club in just a few minutes talking about the agencys agenda and related issues. He has recently been back from puerto rico where he two word damage to pharmaceutical and medical facilities. He will talk about the impact the hurricane hat on the u. S. Drug supply. Thats live at 1 00 p. M. Eastern. You can also watch online at cspan. Org or listen with the free cspan radio out. Right now, some Senate Reaction yesterday after the tax reform plan was unveiled. The senator from maryland. Thank you, mr. President