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How Involved Will Trump Be in Tax Bill Negotiations?

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Bloomberg Jun 30 22:01 · 24k Views

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  • 00:00 How much should we expect him to be involved in the arm twisting here in order to meet his deadline?
  • 00:05 Well, we saw
  • 00:05 quite
  • 00:06 clear public evidence of this arm twisting over the weekend when he went after
  • 00:12 Senator Thom Tillis of North Carolina, who had objected to some of the Medicaid cuts that Eric Wasson was just talking about.
  • 00:19 And what did that get him?
  • 00:20 That got him the threat of a primary challenge
  • 00:23 by Trump.
  • 00:24 He would back somebody, Mark Robinson in North Carolina against Tillis.
  • 00:28 And it was strong enough that Tillis decided to announce his plans to retire from the Senate.
  • 00:33 And that's a signal to other Republican senators who may be on the fence, as well as House members who are going to have to vote on this package once more before it gets
  • 00:42 to Trump's desk, that if they stand in the president's way,
  • 00:46 they may pay a price for it.
  • 00:48 And yet we do see, as Eric outlined for us so helpfully, the signs that not everything is united with
  • 00:54 the GOP caucus right now.
  • 00:56 And there are a lot of differences both on the moderate side, concern over some of the health safety net programs, but also on the conservative side, the actual size and expense of this package.
  • 01:05 So the president will have to do a lot of work
  • 01:07 over the next.
  • 01:08 I don't know how many hours Eric was saying it could go till dawn,
  • 01:12 really burning up the phone lines trying to get at least five of those 8 holdouts we've identified on the Republican side, Kaylee.
  • 01:19 Well, and as you point out, concerns over costs, that obviously factors into ultimately the debt and deficit
  • 01:24 of the United States.
  • 01:25 And the president, of course, is thinking about interest costs when he continually puts pressure on the Federal Reserve.
  • 01:31 In fact, earlier today, White House press secretary Caroline Levitt detailed a note that President Trump penned to the Fed chair, Jerome Powell.
  • 01:39 The president sent this note to the Fed chair.
  • 01:41 It says, Jerome, you are as usual, too late.
  • 01:44 You have cost the USAA fortune and continue to do so.
  • 01:47 You should lower the rate by a lot.
  • 01:49 Hundreds of billions of dollars are being lost and there is no inflation.
  • 01:55 And he actually showed
  • 01:57 on this chart essentially of global central banks
  • 02:00 rates, Mike, where he would like the rate to be.
  • 02:03 It's a whole lot lower.
  • 02:04 It's a whole lot lower, really among the lowest charged by central banks anywhere in the world
  • 02:09 and multiple
  • 02:11 percentage points lower than where we are right now.
  • 02:15 And Kelly, there really is, as you identified, a Nexus between what we're seeing on Capitol Hill
  • 02:20 right now in this debate over the tax package and the president's concern
  • 02:24 over borrowing costs and interest rates.
  • 02:26 Because
  • 02:27 as we have seen now,
  • 02:29 borrowing costs are one of the biggest budget items now for the federal government.
  • 02:34 It is the fastest growing area of federal spending, and it's one now that annually outstrips what goes into
  • 02:40 U.S.
  • 02:41 government defense and national security programs.
  • 02:43 So it's a huge concern.
  • 02:44 And the president, he's a real estate guy.
  • 02:46 He understands
  • 02:48 to the core of what borrowing costs can mean for his agenda.
  • 02:52 And in this case, he is seeing
  • 02:54 it potentially weighing not only on the cost of this package in the long run, but also perhaps weighing on the economy as well.
  • 03:02 And yet, from Jerome Powell's perspective, he has another pillar of the president's economic agenda to worry about, and that is tariffs, which the Fed has identified as potential potentially a risk for inflation and therefore a reason to either maintain interest rates where they are or raise them even further if there is truly a spike in prices.
  • 03:20 Kaylee.