Please welcome them. [ applause ] good morning, thank you very much for being here. Thank you for joining us. So the topic of this session is taxes, taxes, taxes so well start off talking about alabama. Original, original, original. We had a lot of discussion about taxes with your colleague the treasury secretary but i want to get in more detail and ask you some of the more detail. Let me start off with something i said with s. E. C. Theecretary. This is a one and a half trillion dollar Immediate Tax cut. Federal debt is already at 78 of gdp total federal revenues is at 17 , quite low by historical standards, the economy is close to full employment. This is this seems an unusual time historically to be adding such a huge amount to the deficit. Why now . So let me take that question to pieces because you ask a lot of different pieces in there and lets start with the core issue here. When you look at whats happened to the u. S. Work force since the recession, yes, weve created jobs. Were at 4. 1 unemployment right now. Were at a 16year low in unemployment. But even if you look at last months unemployment report which was a good report we had zero wage growth in the United States. Weve had many, many years of zero wage real wage growth. Wages have been growing basically in line with low inflation. One of the big drivers of our tax reform policy is to get real wage growth back into the United States. And we think thats really important, something that American Workers deserve. That they deserve real wage growth in this country so when we talk about lowering taxes on businesses, small businesses, big businesses, every business in between one of the results of that, we believe, is that businesses are going to be able to pay their workers more, theyre going to be competition for labor and when you compete for labor as you expand your business were going to drive real wage income in the United States and we believe that is very important and the effects of driving real wages are pretty dramatic on the economy. We know that individuals know how to spend their money much more efficiently than government does. The Multiplier Effect of individual spending is substantially higher than the Multiplier Effect of government spending. But isnt surely the way that wages are going to rise through a Competitive Labor market. Youve seen as you said, unemployment is down 4. 1 . There are issues about Labor Participation rates but clearly the pool of available workers is drying up. That now, that hasnt had the effects of dramatically increasing wages as the way it has in the past but the general expectation is, and janet yellen has said this and others, that the wages are going to start rising. As the competition for labor increases wages will rise. Why does it need a tax cut addressed to business to help do that . We havent seen it. We keep talking about what should happen and what could happen and what might happen but we havent seen any of that happen. What we have seen is we have seen companies acting as good fiduciaries for their shareholders and weve seen Small Companies thinking about how they can drive their earnings and weve seen them use international models, weve seen them use outsourcing models, weve seen them move employees overseas, weve seen them move revenue overseas because thats rational Human Behavior so we need to combat that and we need to make the United States competitive where we can drive wages in this country. One of the biggest reasons the Bigger Companies arent able to provide wage increases is because they do have good earnings and we have had relatively good earnings during this cycle but all of those earnings are trapped offshore and the penalty to bring that money back on shore is too high so Companies Just leave that money and it builds up offshore so in spite of good earnings, it hasnt really made its way down to the workers. Why not just, though, again, if this is about raising wages, why not just raising disposable income, why not just have the middleclass tax cut and why not the bulk of the tax cuts be directed at the personal level instead of what youve got which is both the house and senate plan have the tax cut is a Corporate Tax cut and the personal side roughly balances because of eliminated deductions and various other things. Why not direct all of the tax stimulus at the workers . This is where i think theres a lot of misunderstanding and people really arent getting the details. So if you take the tax cuts, the tax simplification apart, and this is not sophisticated data im going to give you, this is readily available data and you look at whats in there, there are close to 6 trillion of tax cuts in this plan. Thats 6 trillion. Sure. There are close to 4. 5 trillion of base broadeners in there. That nets to the trillion and a half dollars that Everyone Wants to talk about. When you look at the close to 6 trillion of tax cuts, many, many, many of those are in the middleclass. So the way it works the when youre moving all of the different pieces of tax around, a lot of that is going even just the increase in the child tax credit, the ctc as we call it, when youve got slightly different plans in the house and senate thats i think its 700 billion or 800 billion by itself just the increase from a thousand dollars of refundable to 1650 and the extra 650 being nonrefundable, thats 800 billion by itself. So right there we talk about theres no must be going to the middleclass, right there is 800 billion going to hardworking middleclass families. There is no question someone on Median Income under these measures den, it varies house and senate and you have these effects in the house where that tax cut someone gets immediately does start to fade away as these other effects take place but there is a reasonable size tax cut for someone on Median Income. Well remember in the house plan, just so i dont want to let that point drop. So the house plan in there to get in their Budget Constraint window, they have a they looked at it as a fiveyear window and a longer window. They have two things that disappear at the end of fiveyear windows the, immediate expensing and the 300 credit for taxpayers for spouse and dependents. Those disappear at the end of five years. Its the assumption of the house members that if our plan creates the economic stimulus that we believe it will create that those plans will get elongated and that 300 will become permanent so when people show you that cliff in 2023 which everyone loves to show you your paper is one of many that loves to show it, we believe that cliff will disappear if and when we get the Economic Growth we think well get. Let us talk about the economy growth. Youve again, u. S. Growth has been about 2 for the last ten years, disappointing by historical standards, thats true and the president said hed like to get it to four but certainly he believes your economists believe he can get it to three. But lets understand whats been going on. A large part of the reason why growth has dropped, the trend growth seems to have dropped from 3 20 years ago to 2 today seems to do with demographics, right . Theres an aging work force. There are fewer people coming into the work force, theres the birthrate 20 years ago was lower. And by the way that is a global phenomenon, not just in the u. S. How does a tax cut change what and by the way, the other phenomenon is productivity, growth has been weak. But thats a global phenomenon. You just answered the question for me. But thats a global phenomenon. Productivity has been weak everywhere. Europe had week productivity growth, japan. Even china started to see productivity growth slow. How does the u. S. Whats going to go on here with this tax cut aimed at business thats going to raise productivity out of the trend weve seen for the last 20 years . Its about productivity. If you look at the last time our economy took off it was a productivity boom in this country. We need to get productivity back growing again in the country and we believe we can do that. One of the big components of the tax bill is a fiveyear day one immediate no matter which plan we end up going with is day one immediate expensing for Capital Expenditures. We do believe theres an enormous amount of Capital Expenditures that can be spent in the system that will really enhance productivity in the system. We need to get workers producing more per unit of labor and we feed to become more productive and more efficient in our system your question before on Artificial Intelligence is really interesting as we continue to develop Artificial Intelligence we get more companies to invest in automation we will create more and more productivity so that five year window of immediate expensing, thats aimed at jobs, number one, but really productivity equally as jobs around trying to create productivity gains to get the economy growing. But weve seen this extraordinary expansion of the technology sector. This enormous investment theres been in technology in the last 25 years and in the revolution in peoples lives and the way businesses work, theres been no increase in prukreecrease in pr. Productivity has declined. One of the mysteries of modern economics so that investment youve seen, automation, increasing use of technology is not improving productivity. Again, thats a global phenomenon, weve seen this weakness in productivity everywhere. How is that going to change . I would argue its a multiple factor model. We would argue the Regulatory Environment has had a huge impact on productivity and the fact that we have overburdened companies with regulation and that companies are spending so much money on what we would consider nonproductive regulation and the cost associated with that nonproductive regulation is chewing up enormous amount of their earnings that they cant reinvest that into what is really productivity and product of assets. That matters so i know you talked about this last night and we continue to talk about rolling back some of the regulations thats may us less effective. We need to consider to roll back that regulation. We need to make our businesses more competitive. Im not looking to deregulate our businesses, were looking to make our businesses efficient. Were looking to have them properly regular gaited but were looking to allow them to compete around be more productive than businesses around the world. That could be a Competitive Edge of ours. The government should not be stifling growth. The government should be encouraging growth but with proper guardrails. What data are you seeing right now that suggests to you that business in the United States is not competitive, is not productive . Youve seen you see profit share as proportion of gdp is close to an all time high. Way, way up to where it was 20 years ago. Stock prices are up 30 in the last year. Shareholders have done extremely well. The companies are making profits. Investment is down, its true. Theyre giving those profits back to shareholders. How is it again im not sure what it is that Business Needs right now that is actually answered for by a big tax cut thats going to somehow make them invest more. Look, again, we Want Companies to invest back in the economy, not give money back or sit on money because they dont think theres anything to do with it. We think there should be enormous amount of opportunity in the economy right now to invest capital into our economy and thats what we Want Companies to do and the reason theyre not doing it is because its really hard. If you want to go out and create a new mine and theres a company in the United States thats been trying to create a new copper mine for over 15 years and its literally tens of thousands of jobs in arizona, they just cant get permits. But thats a regulatory issue, i get that. How is cutting the Corporate Tax rate to 20 no, weve got to fix the entire system. I was talking about productivity, i was talking about deregulating. On there, the ability to expense all of your things capex, if t makes sense 15 years ago, it makes more sense today if you can expense in the first five years. So the economics to do that, to make that investment today when youre looking at aftertax returns or roae or roi or whatever you want to look at, the ability to expense up front and the ability to look at that with a lower tax rate, even when you pay your employees more money, which youre going to in a tight labor market is going to make more sense which is going to drive Economic Growth. Lets quickly take a poll question which we have here. You know the drill by now. Open up your app, here we are. The question is will Congress Pass a major tax reform by the end of 2017. Were only seven weeks away now. Yes, no, it depends on who wins in alabama. Some people are voting many times. A little bit of pessimism in the room there. That surprises me. Youre very confident, we were just talking about this backstage. Theres a lot to be worked out. You have to house bill different from the senate bill, there will be amendments to both, there will be reconciliation, conference but youre really confident this is going to get done now . So lets take a real look at where we are today. Last week we got the house bill through the ways and Means Committee with 24 votes, 2416. This week were in the Senate Finance committee, i think there are 355 amendments filed, they had to be filed by sunday at 5 00, washington trick, file them by sunday at 5 00, there were 355 amendments filed by sunday at 5 00. The Senate Finance committee will work all week to get through the bill out of the Senate Finance committee. So i assume i assume that before they go home for the thanksgiving recess and, by the way, theyre scheduled to leave thursday night for thanksgiving recess only in washington do you get a week for thanksgiving. I assume they will get the bill through the Senate Finance committee so that would be thursday or friday of this week, the house is scheduled to vote on the full bill again on thursday. I am pretty confident that the house is going to vote on the full bill before they go home for the thanksgiving recess. Again, theyre scheduled to leave on thursday. So by the end of this week before we get to the thanksgiving recess which start this is week, we will have the whole the bill through the house, we will have the Senate Finance committee done. The only thing left to do is to get the full senate to vote on the bill. Then at that point, we need we may need to go to conference committee, create a bill that both can agree on and send it back to both chambers to be voted on again so i think theres a lot of people you ask that question four weeks ago, by thanksgiving would we have both bills out of committee you probably would have gotten similar results. Is it really important to have it done by december 31 . I think people in the house particularly want it done so you can have a bill in place for the new tax year or youll settle for it if it drifts into the new year a bit . I think its really important to get it done. Weve got to get taxes done this year. In fact, the legislative calendar is going to get very crowded come the first, second week of december. There are a bunch of irk shoes that got punted for a few months into the first and second week of december. December will get very, very crowded in the legislative calendar. Theres a few potential wrinkles here and by the way i asked the treasury secretary about it and the president tweeted about one of them overnight and i want to ask you about that which is this plan by senator tom cotton, supported by a lot of other people to roe introduce the removal of the individual mandate, the obamacare individual Health Care Mandate requiring people to sign up for health insurance, that would because of its affects on medicaid and other aspects save significant amount, give you a lot of additional revenue to play with, 340 billion, cotton saying hes going to do it, the president supported in the a tweet last night, said its time to get rid of it. There are concerns once you start pulling on that string which is called obamacare, as weve seen for the last ten months, all kinds of difficult things arise but do you think its would you welcome that . Were highly supportive of it. It comes down to whether the house and senate have the votes and i think its more of a question does the senate have the vote. The house would tell me look, weve already voted on obamacare. Weve shown you weve delivered the votes, can the senate deliver the votes so tax reform is really important to us in the administration. I think its important to the house and senate, we have to get that done, if we can get the individual mandate revealed as well and incorporate that into taxes that to us is a real windfall and wed love to see that happen but were still plotting ahead on tax reform whether it happens or whether it doesnt happen. A few specifics on the tax reform then i want to open it up for questions, too. The state and local Tax Deduction elimination, a lot of republicans in high tech states are very upset about that. The house has a at least some allowance for deduction on property taxes. Do you prefer the house measure or Senate Measure . There are going to be some pete who are going to be hit very hard. I dont think thats a proper characterization, the question should be do the bills deliver middleclass, middle income tax relief . And the answer to both is yes. How they get there is different. Remember the house went with four tax braekts, the senate went with seven tax brackets so remember the 7 has a 10 bracket, the house you go to a 12 tax bracket so theyre finding different ways to compensate for the different issues. The only way to grade whether its successful or not is to literally look at the tables, look at the descriptiistributio does this do what we want it to do . Does this deliver tax relief to hardworking American Families . And the answer to both bills is yes, it does. So yes theyve attacked it different ways but they get to the same answer. So your message to those republican congressmen in new york and california and illinois and new jersey who are worried about there is sorry, too bad, youll get middleclass tax cuts and those people will get hit in your detectiveistricts, take yo. Is that your message . Were delivering middleclass tax relief to people in your district and were running tax returns for people in your district. Weve run literally i dont know how many weve run. Weve run a lot of returns for people in what you would call those salt districts. Let me ask you about housing. The bill the house bill again and the senate bill slightly different would cut the allowable mortgage Interest Deduction to half a Million Dollar loan rather than a Million Dollar loan. The doubling of the standard deduction will for a lot of people mean theres no point in deducting their mortgage interest because they have something thats below the standard deduction so theyll take standard deduction. Theres a lot of concern in the housing sector, lots of lobbying is going on that this could really cause a lot of damage. I know people think between half a million and a Million Dollar loan, maybe that only affects the wealthy but theres a huge number of people who have loans in that range in some way outside the Upper East Side of manhattan and Silicon Valley and beverly hills. Theres concern that this could do really quite significant damage to the housing sector. Do you worry about that or do you think the bills more or less as they are are going to be fine and we can live with it. The answer is woi i worry about everything but when you look at the data and the reality, people really dont buy houses because of deductibility of interest. People buy houses because theyre bullish on the economy, theyre gainfully employed, they think theyre going to be employed for a long time, they think the business theyre working for is solvent, they think their pay is going up not down, potentially their spouse is getting a job and is in the same fundamental characteristics. Thats when people tent to buy houses. Dont they make a calculation of what they can afford . The Historical Data will show you that what Interest Deductibility does is it allows people to buy a bigger house, it doesnt allow them to make the fundamental decision should they buy a house. I thought the first thing you do when you go for a mortgage is how much can i afford out of my income and part of that is that a significant amount is tax deductible. Theres plenty of countries with robust Housing Markets that dont allow you to deduct. Im hold enough to remember, though ive lived in this country for 25 years, i lived in england. You might have lived in one. I did and remember when the chancellor of the exchequer abolished mortgage interest completely it led to the biggest collapse in the Housing Market almost immediately after it went into effect between 1988 and 1993. It was catastrophic. You should have bought every house in the country. Well, eventually those prices turned around. You should have been a contrarian. But i tell you it was over a fouryear period which is an awkward cycle in american politics. Lets get to some questions. Questions from the audience. One to your left, right here. Im interested in the excise tax and particularly its impact on Foreign Direct Investment in the case where the foreign direct investor plans to export from the United States to another country. In give me more context of what youre worried about so i dont go off on some tangent left field. The concern is that if youre a Foreign Company and you have an option to either supply a market in, say, mexico from your foreign headquarters or from your u. S. Operations, is the excise tax going to create an incentive to supply that market from your foreign headquarters . So what was attempted to be done here and this is an area where the house and senate are not exactly in line with each other and i think there will be some type of compromise worked out here in the end. What the house and senate are trying to do is theyre still trying to deal with the whole base erosion issue and really what theyre trying to deal with is transfer pricing within companies. We have a unique history here with multinationals being able to put literally intellectual property and licensing into the lowest Tax Jurisdictions in the world. We wont pick on the irish, we wont pick on the singapor n singaporeans, we wont pick on hong kong, but they use jurisdictions like that and then they charge their u. S. Companies very jai alai sensing fees so the u. S. Company makes very little money by licensing the ip or licensing the chemistry and then the subsidiary in the low Tax Jurisdictions makes the money and then they end up paying singledigit tax rates. The house and senate said look, we want to level that Playing Field in some respects. We dont want to continue to encourage base erosion. And we want to make sure companies are paying the u. S. Their fair share understanding we live in a Global Supply chain and Multinational Companies have operations around the world so they took an attempt at doing that. I think they came out in a relatively fair place. This is very difficult, almost every other country does Something Like this that has a tax rate in the 20 rate. If you dont have a tax rate in the low tens or Single Digits youre always worried about this and i think the house and senate both spent time worried about the whole international side. Other question for gary cohn . Can i ask you all a quick question . If the tax reform bill goes through, do you plan to increase investment your companys Capital Investment . Just a show of hands . The tax reform goes through . Why arent the other hands up . Why arent the other hands up. John, i have a question for gary quickly. One way out any question i think economists could agree you could improve productivity and some Economic Performance you could probably raise wages, too, given the jobs that would be involved, is a big investment in infrastructure. I dont think theres any person in the room who doesnt think this country doesnt need an upgrade anybody flies out of major airports in the new york metropolitan area will be familiar with the scene of harrowing misery and disaster before you can get out of the taxi. [ laughter ] i was there yesterday. The president made a huge deal of this on the campaign, said were going to spend on public funds, private companies to accompany it yet he came straight in and went straight up with the republicans after obamacare, obamacare repeal. We spent nine months doing that process and failing to do it now were on to taxes and we have skepticism about whether hell get that done. He could have come in, he could have worked with former colleagues of yours, democrats. Democrats would have supported it, republicans would have supported it. It would have raised investment in the economy. When are we going to get around to it . It is the very next thing on our agenda. Literally if we get the house to vote taxes out of the full house well be into them. Well talk talking infrastructure with them. Realistically its probably jan 1 because we have a bunch of funding issues to deal with. But literally the next thing on our agenda is infrastructure. Rib remember in some respects our hand was played for us before inauguration speaker ryan went down the repeal and replace path. That happened in early, early january. That was in motion before the Trump Administration came to town. That started playing out in the house. The president made a Firm Commitment that taxes would be done year one. Were doing regular reform. We spent a lot of time on health care, we spent a lot of time on taxes i have a team that spent an enormous amount of time on infrastructure and we have good ideas on what to do with infrastructure. Weve had bipartisan meetings on infrastructure and i think there will be a lot of great ideas that come out of infrastructure and youre right, that is an area where there will be pretty broad bipartisan support. Im sure you dont want to preview although if you do wed love to hear it. In broad outline, for example, is it going to be will it be definite neutral . Weve obviously got this issue of the deficit with tax reform, tax cuts. Is it going to be deficit neutral . Remember in the current budget we continuously cr and keeps muddling along theres a 200 billion allocation in there so right now weve got a 200 billion allocation to the infrastructure plan. Were working within the realm of that 200 billion. Were going to meet with the president week after next and lay out the broader plan on what to do with infrastructure. The good news is there are a lot of different alternatives on how you go about infrastructure and how you pay for it and what are the payfors and theres revenue attached to a lot of it. Final question, this is not even on tax or broader economic issues, its a more personal question for you gary. Back in the summer when the president when we had the protests in charlottesville and the counterprotests which tru resulted in the death of a young woman, the president came out and made remark which is were widely regarded as controversial to say the least. Some people were disappointed by him. Including its been widely reported that you were concerned he hadnt condemned as forcefully as he should have done the people who were responsible for the violence and it was widely reported that you were unhappy and that it wasnt clear whether you were going to be able too st stay in the administration. How, can i ask you, did you reconcile yourself to it and has the president reassured you and reassured the country that he does have the an approach to these issues which is unifying rather than divisive. I have had numerous conversations with the president on this topic and he and i are working very very well together. Were unified on what were doing on the economic front and im excited to serve on his team and driving the economy and think of what were getting done on the regulatory front. I know you talked about with secretary mnuchin last night about what were going to do for small banks and think about what were doing on the regulatory front. Two consecutive quarters of over 3 gdp growth with hurricanes involved looking at unemployment where it is. The stock market is an interesting barometer of how people feel about the economy. Looking at whats going on with tax reform. I dont agree with your poll, i think well get something done, i strongly believe we will. To have the opportunity to serve on his Economic Team and drive policies with the president is a unique once in a lifetime responsibility he and i have talked about the issues and were working well together. Youre happy his tone through the tweeting and the other things he does, you dont think its too divisive . Hes the president of the United States. [ laughter ] does he have a responsibility to be a unifier . Of course he has a responsibility to be a unifier. Does he execute that responsibility . I think he he look, the president won the election relatively convincingly and the president is doing the same things today that he did to get himself elected and the country surely liked it on november 8. Ladies and gentlemen, please join me in thanking very much gary cohn. Thank you for that. [ applause ] so republicans control all three the house, the senate, and the white house. What is the democratic agenda given the control that the republicans have over policy making now in washington, d. C. . And what exactly is the democrats message to americans . How are they going to differentiate themselves in 2018 and 2020. Joining us to discuss that is amy klobuchar, the senator from minnesota, democrat, and mark warner, a democratic senator from virginia. Theyll be interviewed by paul becket who is our Washington Bureau chief. Please join me in welcoming them. [ applause ] thank you. Good morning, everyone, thank you both very much for being with us. We will get straight to it. Social media has been under scrutiny because of its use by the russians in the meddling of the election last year. Senator klobuchar, you are the response or with senator warner and senator john mccain of a bill that would require the same disclosure for political advertising on social media as it would for other media and television. Whats behind that and does it have any chance of passage . Everything can pass in wra wa, as you know, after a while. I think it does have a chance of passage, i also think that you really have to step back. First of all theres the obvious National Security issues with finding out that russia used rubles to buy ads on facebook but its bigger than that from a perspective of our democracy and our country. 1. 4 billion was spent on these online ads by political campaigns, by issue groups just in the last election. And the predictions are thats going to go up and up and up. So if a candidate or issue group runs an ad on radio or tv or print they have to put a disclaimer prepared and paid for by whatever it is and then they have to disclose it which is key because that means journalists, opponents, everyone can see whats going out there. That isnt true right now on the internet. These ads can flash up, maybe theyre against companies, maybe theyre against opponents but they are political ads of what we Call National legislative importance which means they have to be disclosed if you are in print, radio, or broadcast. So to me this isnt about regulating the internet, this is about acknowledging the fact that these are Media Companies that have huge adselling departments and the same rules should apply and that way at least were going to have another set of eyes to ferret out where they came from and wed also like these companies to rise to the occasion here. Theyre the most Brilliant Companies with the most brilliant people and if the Thief River FallsRadio Station in minnesota can figure out what an ad is of National Legislative importance and keep it on file i think these guys can. Senator warner, youve had many of these social Media Companies before the Senate Intelligence committee as part of your russia probe. Do you think they get it . How do you think they describe the attitude towards what were looking into. First, amy and i teaming up with this on john mccain and i think it is a National Security issue i would argue more than a Campaign Finance issue and i start with the premise and many of you, i can claim i was in business longer than politics. I was cofounder of nextel, my business was in technology. Im very pro tech, im very pro innovation. And i think as mamie mentioned these are great iconic american companies. They have fundamentally changed the way we communicate. But i think while theyve created this ecosystem that is changing our lives theres a dark underbelly and i believe the companies were slow to recognize and acknowledge the challenge. What i somebody who has a background, i didnt fully appreciate it if we accept just what facebook has discovered, the fact that for 150,000 and the ads are a small part and then the ability of roughly 50 to 60 trained hackers in russia creating at this point they say 470 fake accounts which is a little curious since facebook discovered 30,000 plus fake accounts that the russians were involved with in the french elections. So a little bit of money, a relatively small number of hackers combined with a few hundred thousand bots were able to touch 126 million americans in the Election Campaign and that is before there was revelation about even more fake ads and fake accounts on instagram. So, yes, i think the companies it took them a while to understand to appreciate ill grant them because this was kind of early season in the american elections and by the time the french elections and dutch elections came along they were understanding it. Are you going to invite them back . I think they need to come back. It was great to have the general counsels and we got great legal answers. What wed like to hear, though, is their policy answers. What wed like to hear is a willingness to cooperate. Lets face it, if we try to legislate this alone without them chances are well mess it up. So we do need the active clap ratings of these entities. Do you want to ceos to come . Pardon me . Do you want the ceos . Id love to have the ceos. Id also argue what amy mentioned as well. This is the notion weve seen a more than tripling of Digital Advertising in the political sphere from 2012 to 2016 that would i would wager would go up 10x between 2016 and 2020. This is the future of political advertising, i can target you to an individual basis and the notion you can target that individual to an individual basis and then have that communication if its a paid ad particular disappear just doesnt seem right. What were trying to do here is the lightest touch possible. Were not getting into the question of fake accounts, that is something we have to work with the companies on. This is an area that i would argue goes beyond political advertising for all of you who rely on Digital Advertising for your own brands. I think the same manipulation that was used in the political effort particularly amongst bots and others are used in your Digital Advertising space. Well get to our poll question in just a second. I can take from that that you intent to call the ceos . I think theres many more questions that need to be answered. Thank you. So our poll question is the government should force greater disclosure about political advertising on social media. Its a quick referendum on what youve just heard. But not on us, i hope. Well, was that that may be the first person who just came up. Oh, we were so good. Well take the early returns. Well give it a minute while were letting everybody answer that. Do you feel there has been a senator klobuchar, let me put this to you. Do you feel theres been a change in washingtons view of the Technology Industry . I think for a long time it was hands off, let them grow, theyll be world dominating companies. Do you think with issues over data collection, over privacy, over net neutrality, even antitrust, has there been a shift . I think so but i think part of it is because they have shifted, their Business Models have shifted, they now have huge adselling departments. Thats fine. They should be able to make money but when you go into that realm where people are manipulating you to get what they want and theres no rules of the road in place of course theres going to be a response to that so i think there has been a change and if you remember back in time that fight where im on the Judiciary Committee and we were trying to do something about people stealing content and putting it out on web sites and the government should be able to take those down, we were thwarted completely by those companies and the bill wasnt perfect, things had to be changed but after that everyone did nothing and i remember admiral mullin coming up to me saying im afraid after that happened no one is going to do anything about Cyber Security on the military side, on the business side. And weve been stymied as weve seen company after company hacked. The victims here are not just politicians. Were talking about business hacking, the government, Election Software so i think we need to be putting a much bigger focus on this and making sure whatever we do isnt stagnant in time but allows us to do more to protect our Cyber Security. This is becoming a form of warfare in the modern age. Lets look at our results. A whopping 4 dont like what youre doing and 96 do. Would you all come to the senate and vote . It should be a result that gives you reassurance as you go on about this. Lets talk about the economy more broadly, we had secretary mnuchin and director cohn here, they sounded optimistic about getting tax cuts through, that will give the republicans momentum going into 2018 and an economic stimulus and achievementment they can tout. What is the democratic message to counter that . Let me start. Ill be the first to acknowledge that we need substantial tax refo reform that having the highest nominal corporate rate does not keep us competitive. I would argue a couple points, though. Number one, many in this room, i had an opportunity to Work Together on the Simpson Bowles plan, there was the socalled gang of six. Remember the framework of that plan. It was tax reform. It had lower rates but remarkably it included two things. One, those lower rates were paid for and, two, there was a recognition in that effort that american netnet against our competitors was needed additional revenue. Id point out and you folks would understand this better than most of my colleagues, 35 oecd nations, america is ranked 31st out of 35 in terms of total taxation state, local, and federal. So we relative to all of our competitors are a recommerelati tax nation. Now how do they do that . They have a vat or something that allows them to bring those rates down. This plan has a couple flaws. It starts with a bogey of 1. 5 trillion of Additional Debt when were already 20 trillion in debt. Thats not a good scenario. I wont quote some wildeyed guy here. Alan greenspan last week said when you do tax cuts when youre at relative full employment which we are with borrowed money you may get a quick sugar high but the growth projections that are coming forward i think are grossly overoptimistic. And i think theres a way to do this, but it should be done in an open fashion, bipartisan, lets take time, argue it through, not something that is going to create a whole series of new Tax Advantages that we dont fully understand because this bill has not seen the light of day. Last point is i and, again, i believe that we need a more competitive tax rate, but i do believe as well that in a world where the whole nature of work is changing, where no one the social contract that started in the 20st century has disappeared, no one is going to work for most of your firms for 30 years and the real disadvantage spot right now for low and moderate income people not having the training they need to continue to upgrade their skills. So if were going to do repatriati repatriation, which i agree, and give folks an enormously advantageous rate, why not say part of that repatriation would be a meaningful Worker Training Program for anybody that makes less than 80,000 a year so there is some assurance that the benefits that are going to go writ large to Corporate America will at least flow through to some of the work force. Why not think about a portable benefit system so people can move from job to job . We have the most 20th century social benefit system where you only get social benefits if you work longterm as a fulltime employee. Those jobs are disappearing. Think about a tax code reform thats going to be forwardleaning and unfortunately i dont think thats whats taking place right now. Im going to ask you both a pointblank question i think is of interest to the people here. Do you, yes or no, approve of a 20 Corporate Tax rate, senator klobuchar. I dont approve of the bill thats there with that rate in it for a lot of the reasons mark outlined but i want to bring down the Corporate Tax rate. Ive always supported that. Ive always supported bringing the money back from overseas. I have 18 fortune 500 companies which i always like to tell him, in my state. She thinks shes got more than virginia. Im not going to go there. Its been very important to our state. We have like a 3 unemployment rate, between 3 and 4 and so i would like to bring that rate down. I want to simplify the taxes. My issue with this reform bill is the debt piece, the 1. 5 trillion but also the fact that if we want to get this done, and i want to get something done, i wish we had led with this, i wish when the president had gotten elected that he had worked with senator schumer who wanted to do something about the overseas money and tied it in with infrastructure dhur which had always been our plan and then combined that with things that could truly help the middleclass which would be include minimum wage increase that we havent seen for years infrastructure. Doing something about student loan refinancing. Theres a number of things that we could have done but right now this waited until all this divisiveness and we are where we are. We still have an opportunity but not with the bill as it is. From my perspective. Perhaps well cobble it together but theres real issues here, i think gene sperling, if you want to know why its not popular put something out explaining the senate bill that 65 Million People making under 100,000 would either get a tax increase this is the Senate Version or a tax decrease of 100 or less so that is why youre not seeing people saying this is so great for me. They see it as a shift. Im talking about somebody taking the Corporate Tax rate down that is more of a compromise. Should i take that as a long no . Okay. Im going to give a preface and then a shorter answer. 100 basis point increase in Interest Rates ads about 160 billion a year in Additional Debt payments. Thats more than we spend federally at the department of education, department of Homeland Security together. This 1. 5 trillion and if youve got if people believe there will be this growth, put a trigger in there that would snap back some of these rates if we dont if we end up driving up the debt that much. That and a loan adds 250 billion of Additional Debt service over the next decade. To me, whether the rate is 20 , 25 , 23 is more a question of what is the effective rate . We have a nominal rate and effective rate. Is there going to be some guarantee that we dont end up with a system where thats frankly right now if youre domestic and if youre retail you get hosed in this tax code. But i dont want to create theres nothing in this tax code that will discourage International Companies from continuing to use tax havens in a way that i think will see further abuse than we have right now and so whether the rate is 20 250r, if you have large multinationals paying effective rates of 2 , 3 , that is not fair to our Domestic Corporations who will pay a much higher rate in the current plan and theres nothing being done to block that abuse and the kind of minimal tax, de minimus tax issues theyve got in there. It could work to its reverse based on how you where you place your intellectual property so lets look at real rates, not just nominal rate. Democrats have had elections in virginia and new jersey and Washington State last week. One lesson from each of you on what we should take away from that. If the Republican Party continues down this civil war and an agenda that is antiimmigrant, divisive in an america that is increasingly diverse theyre going to get wiped out and not just traditional areas but in the suburbs and increasingly we saw in parts of rural virginia a shift around so i think those of us who are probusiness, procompetitive ought to take a and maybe there could be some strange new alliances. You want to take away senator klobuchar. They didnt like how gillespie ran the campaign but its also virginia and new jersey and i would agree on the immigrant front. Im a big believer in comprehensive immigration reform, i see it as an economic driver and all this negativity is going to boomerang back at the people that run campaigns like that. Well go to audience questions in just one second. Saturday night live poked some fun at the age of the democratic leadership on saturday night, is it time for new leadership going into crucial elections . Versus the age of the Republican Leadership . [ laughter ] this is a you know, i work in the only place in america where heres youre my friend. Heres what both Political Parties right now are caught up in 20th century debates. Some on my side of the isaisle e talking about commanding control of economy. Some on the other side have strong mannism or unfettered markets alone. I dont think either party, people what scares me the most and as we see people move to the extremes is people are losing faith in Free Enterprise system. I spent longer in business than i have in politics. I believe that modern american capitalism is not working for enough people. I think theres enormous pressure on many of you that focus on short termism versus long value. Those iconic Telecom Companies have been created because the founders have kept responsibility and ownership with different kind of share structures the why not talk about how we create a new social contract that works. The i think the Democratic Party does better when its forward leaning. I think this left right, lib cal c liberal conservative is not it. Lets get another question. Can i just say for a second . Youre now running your businesses in a time of opportunity and not crisis. Thats how we should be governing. That should be the message of our party that means everything from the Work Force Training he was talking to changing our immigration laws to bringing in talent and acknowledging that 70 of our fortune 500 companies are headed up by immigrants. 25 are born in other countries and bringing people together on an economic message instead of just appealing to every single interest group. Question. Tell us who you are. Im from snap on tools. Im a u. S. Manufacturer. One of the things we beheld is manufacturing in the u. S. Has an asm ase ase asemitric burden. My question is what moves the Congress Forward on uniformly accepted problem which is the a aasymmetric tax brea asymmetric tax break. When either Political Party tries to do something really big with only their team you get no guarantee of permanence. You can look at that in terms of obamacare or doddfrank or the republican efforts on repealing health care. You want to do tax reform, im all in. Lets do a real process and argue these things out and lets have a long enough time to review that bill so we dont create more problems in the rush to get a low rate than we had in the fore front. Theres been a group of us on the Banking Committee that have worked for a couple of years now on some doddfrank reform thats targeted toward community banks. Its the kind of reasonable compromise that we ought to do a lot more. That was driven by people sitting together at a table and working through wishes. Thats not what happened on this tax bill. Right here. Could you give us an update to bipartisan on health care . Sure. There was quite a breakthrough this year and that was the petty murray Work Together to make changes to the Affordable Care act focused on the exchanges. This is to allow cost sharing and some of the reinsurance that we have seen helping in states like alaska and like in our home state of minnesota where we live. Right now that bill got a number of us, im a cosponsor, 12 democrats and 12 republicans. Its far cry from where we have been for so long. Now the hope is that it gets part of one of the big bills at the end of the year and we can get it done that way and we move on from there. Of course, thats the beginning. Theres other things we need to do on pharmaceutical prices which weve done nothing about for years and years and years. Youve seen this major escalation there. For so long its just been either repeal it or keep it in place and we really havent been working on Long Term Care or some of the other issues we should be. Im hopeful this was the first breakthrough in changes. Let me add ten seconds on that. Congress never gets big things right 100 the first time. I doubt if many of your original Business Plans are 100 right. What we have lost in the last number of years whether its taxes or health or banking regulation is the notion of you take a big step and then you come back and recalibrate. That has not happened in health care. Other questions . I see another hand out here. Could i just add one more . Youve been a driving force behind an antisexual harassment bill that received bipartisan support in the senate last week. Theres hear ing in the house o that issue. How big of an issue is this for capitol hill in industry and in hollywood . I think everyone in this room knows that its suddenly in every company this america and just as there is on the hill, new found interest in this. There was a saturday night live skit that everyone saw with claire hyper ventilating over the calls she had. I think thats a good thing its not easy and its not all going to be positive. Its something that has to happen and it has to happen on the hill. Thats the first step. We have to look at our reporting process and what happened. This is not, to me, about bringing down top wing people in power. To me its about allowing people to grow in the workplace who have felt pushed down, who have felt afraid in a toxic environment and thats good for business when you allow people to do better and to succeed. Thats just not been happening for a number of women and its part of the reason we dont have as many women in high ranking positions including in the senate like we should. Can i wrap up just with one more question about the message of the Democratic Party. Youre in an elevator with a millennial. You have 15 secs to pitch the Democratic Party. What is the message that you want to impart to that new voter whos going to be voting for many years to come . Whats the message . We get the fact the nature of work is changing. There needs to be a social contract to help you through the changes. We have to create a capitalism 2. 0 where every american has the opportunity to earn a good living. We look like you. We are you. We believe under have an opportunity to succeed no matter where you come from and we believe in america. America is working together on one team and moving ahead. Thank you. All this week American History tv is in prime time. Coming up next well take a look at president Herbert Hoover and his relationship with other president s including calvin coolidge. Up next, Herbert Hoover scholar talks about the president and his oval office predecessor calvin coolidge