Reporting, what exactly chinese banks are and are not doing Going Forward with north korea . Sure. First of all, thank you for bringing it up. I think its an important topic. I did have the opportunity to go with the president to the u. N. General Assembly Last week. It really was an incredible experience, sitting in the General Assembly and listening to his speech. He also signed last week in new york an executive order, which gives the Treasury Department the most extensive powers on sanctions that we have ever had. These are very important powers. We will be careful in using them, but we think they will have a very big impact. I have to emphasize that its a Going Forward basis. Have they been exercised yet . They havent. We did have sanctions this week that was additional sanctions that were allowed under the executive order, but as it relates to financial institutions, as i have told my counterparts, it will be on a Going Forward basis. Obviously we are concerned about historical activity. We are monitoring the go forward activity, and we are having ongoing discussions. Do you think this will have a big impact . The central bank of china is or is not Going Forward doing business with north korea . Again, i had very direct conversations with the governor. s dont want to comment on all the specifics will they or wont they . Again, they came out and they made the representation as to what they would do and what they wont do. We expect they will follow through. Are you discouraged, as general petraeus says he was, by the trade numbers . Im not discouraged by anything. I think this president has taken a very different position. I think for too long this has been an issue that has continued. I think the president made very clear that the activities with north korea are unacceptable. Threats of Hydrogen Bombs being tested of the pacific are completely unacceptable, and our objective is to denuclearize the peninsula. That want to ask you before we get to tax reform about something you said in the springtime about your role in relation to the u. S. Economy and you were asked a question about Artificial Intelligence and automation. He said it is not even on my radar screen. Someone used to work for, goldman sachs, put out a Research Paper describing it as the Apex Technology of the 21st century American Economy, meeting it is something that is here now. Did you or have you reevaluated that sense of the importance of either automation or Artificial Intelligence in terms of where the u. S. Economy is going and how policy ought to be shaped to deal with it . I he to accuse the fake news of doing things, but this is one of the times when my quote was misrepresented. They didnt say the entire context. What i said was, technology is having a very big impact in the workforce. I specifically think that robotics and i commented at the time robotics are an important part of the workforce, and i think its a positive thing. Jobs thatng over humans need to do. What i was referring to is Artificial Intelligence, and i specifically referenced r2d2, for the star wars fans out there. I said, it is going to be a long time before pure Artificial Intelligence takes over. That was not in that wasnt on my radar screen. That wasnt referencing whether it was robotics, tunnels of automated Cars Technology is here and having a very big impact. And how does what the president introduced yesterday, what Congressional Republicans have embraced largely though not completely, relevant to technology and preparing the American Economy for the 21st century challenges . I think what yesterday was is thathats important we make American Business competitive. That right now, independent of technology and we have been a leader in technology for long periods of time but independent of that, we have one of the highest business tax rates in the world. We tax our worldwide income, which virtually no one else does. We have a concept of deferral, if you leave the money you dont pay, there is trillions of dollars offshore. What the president talked about yesterday is he is focused on Economic Growth. To get Economic Growth we need to have business tax reform. Middle income tax cuts, simplification. Said that the optimistic appraisals of the impact of your tax reform plan could bring domestic growth gdp to 6 . Are you that optimistic . That is optimistic. Is it built into your own framework for paying for it . What we will score it to is to. 9 gdp over 10 years, which is scaling up to 3 . We think that is very, very doable. We think we can do it higher than that. But if we get to that 3 , 2. 9 over 10 years, thats true trillion dollars in additional revenue, thats additional economic activity, and not only will a tax plan pay for itself but it will pay down debt. And that pay for itself comes from the projected Economic Growth. Even when you look at paid fors in the details, according to the Committee First possible i dont think those numbers are right. What we are trying to achieve is 1. 5 trillion static. Describe versus baseline. There are 500 billion versus baseline and policy, to the extent we have a policy and are rolling it over, i think its the right thing to look at. That is a trillion dollars versus policy, and if we get those 2 trillion, that means we go a trillion dollars positive and paying down the debt. As you approach this audience and the country generally on this issue, your position is, dont worry about the deficit, there will be no deficit implications of this tax reform plan is signed into law. I would say it is slightly differently. You should worry about the deficit. We have gone from 10 trillion to 20 trillion of debt. We need to create Economic Growth, and we think our projections are very reasonable. 2. 9 is a very reasonable number to project this to. Mr. Secretary, the statutory Corporate Tax rate is 35 , but there are many studies that say the effective average Corporate Tax rate is about 24 . Cutting it to 20 , how much of the difference would that really make . And is it worth giving up that revenue for a 4 differential . If thats your argument is exactly why we need tax reform, and why we need tax cuts, because people spend so much time trying to figure out how to get around, whether it is special interest or other tax things, to get around paying a very high tax rate and they dont pay it anyways. This is about broadening the tax base and making a fairer. [applause] thank you. When you talk about race, 12 , 25 you still dont have income brackets assigned to those rates. Why not . Again, we have done a lot of work on this. I think the point we are trying to make is we spent a lot of time on this. We cant have six people design the entire tax code. I think we have done a great job, the house and senate. We have everybody on the same page. We talked about brackets. But as opposed to releasing them, we will work with the committees. The committees have the right to have input. They are the ones who read the bills. But let me comment on the 12 rate, because when you raise the standard deduction, effectively and10 rate disappears, people who are paying 10 are going to pay zero. Is about creating middle income tax relief and simplification. Gary cole was on cnbc this morning, a top economic adviser in the white house. He says the president is open to a forced tax rate, maybe 39 , maybe just under 39. 5 . Is that true . We did put in the release that we have designed the race. We have said the committees will contemplate to the extent we do that it would be if we need additional money for the middle class reforms and there are people that have different views on whether we should or shouldnt do that but this is not about a tax cut for the rich and i can tell you in the high tax states i have had the pleasure of living in new york and california my taxes are going up in any event, not down. Onuctions are worth over 5 the high tax states. Can you say to this audience in the country that when this proposal reaches the president s desk, what it must have is a winributional if you this argument the estate tax will be eliminated and the distributional tables will reveal that the top 1 will not get a tax cut. It has been the president cost objective from the beginning and this has been dubbed the madrid general. The minuti roll. We are talking about income taxes and if we change it that has a different distribution. But it is the president s objective that income taxes will not be a cut on the wealthy and different states have different impacts on this but that is our objective. Lets talk about the different states. You mentioned california and new york, one of several higher taxed states. One of the acronyms that get kids around that gets kicked proposal to eliminate federal Tax Deductions for what any earner pays in state and local taxes. 52 Congressional Republicans representing districts and those districts paid higher than the average state and local tax by about 3800 per year. Peter king said he cant vote for any tax reform proposal that eliminates state and local taxes. If you use a large percentage of that, have you pass this . First of all, dont you love that politicians, we have our own language with acronyms . American, ifverage you Start Talking about salt, we will be thinking about dinner. To yes, that is now referred as state and local taxes. This doesnt help me, this hurts me. I think longerterm, getting the Central Government out of subsidizing states is the right ring to do. Its just not fair. The federal government should not be in the business of subsidizing states. This is something that started in the house plan and that we have agreed with. Obviously for people in california and in new york and new jersey and connecticut and other places we understand the impact. That is why as we look at the rates, even at 35, they are not getting a tax rate. This is something we will work with congress on. Is it negotiable . I would say that this is a exercise to get tax reform done. s theesident talk one issue is tax reform and we have a plan that has a lot of support from congress and we look forward to working with the committees. To get tax reform you need a reconciliation mechanism which means you have to pass a budget resolution. The Freedom Caucus members would like to hundred billion dollars in entitlement cuts as part of that can you live with it . As he said, we do need a budget. I believe if we get a tax plan that people want to support in congress we will get a budget that goes along with that. One will lead to the other, and it will go through together but obviously they are connected. Can i get you to be more specific on your orientation to this idea about 60 entitlements as part of that equation . I have a lot of conversations with them and with the senate object this is a congressional issue and we will work with them as budgets are developed in both the house and the senate. As a conceptual idea, are you in favor of getting rid of the debt ceiling as a matter of law and as a matter of practice . I asked the president about this, and he was open to the idea. As you know, there are certain things i come to with a lot of experience and some things i didnt the debts dealing i had heard a lot about that until you actually go through the debt ceiling its a little bit different. I was operating the government like a piggy bank, sitting every day with my team working on our cash numbers and watching what came in and out and we were operating with too little cash. The first thing is i was very happy that the debt ceiling got raised but the first thing i did that day was raisin next or 20 billion for same day settlement to increase cash. My view is that congress has every right to appropriate money and they get to dos white house and it will stop the wind we agreed to spend the money we need to agree to be able to pay for it. Get rid of it or whether we approve a debt ceiling simultaneous with spending, in one way or another we need to give out how this express system because at the end of the day republicans and the democrats agree we are not going to not pay our government debt. It is absolutely inconceivable. Issue and a live there are those in the administration that i have talked to who wonder could any future president s up some of the leverage that comes with a debt owing growth . Others have said it is leverage you can find in other ways and it creates on mrs. Kerry ripples of anxiety, not just in the domestic economy but in the International Appraisal of the united states. This is something we want to figure out on a longerterm basis and my number one issue was making sure the debts dealing raise. I am happy that it not only got raised but that my special powers. Refilled, the treasury superpowers, which takes us into next year. What i would say for now as i am comfortable we can fund the government through january. I dont have enough visibility beyond that. But i am comfortable that we are not going to be in a situation on december 8 where we default on the government if we dont agree. I am hopeful that as part of the december 8 negotiations and it is critical, the president could have done a longer deal but wanted to make sure we had military funding, and thats an important part of the negotiation. I am hopeful that the debt ceiling will be extended. Back to your appraisal of future projections on gdp are pretty we much there now so what is so exciting and dynamic about taxes or with we are going to end up at 2. 9 . Isnt the idea to get higher . I never said we would end up at 3 . What i said is we are very comfortable with that projection , that we can get to higher than 3 sustained gdp growth. I think we are using very conservative numbers and as you said, theres a lot of expectation already in the economy since the president has been elected that its going to get tax reform, we will get more, and we have had numbers that look very, very good, quicker than we expected, that people are reacting to the anticipation of all this economic change. Let me throw this retroactive to the first of this year . Yes or no . We would like to but we will see. Subject to debate, revenue neutral. Clear, on a be static basis it wont be revenue neutral but help the audience understand the difference between static and dynamic. Sure. Static means there is no change in activity. People dont change their lets just take the corporate rate either what we are coming back to theres no question, companies are spent too much time trying to figure out how to keep money offshore. We think this will have a major impact ringing back trillions of dollars. The money will be invested here combined with indoor miss capital investment. Its going to create enormous jobs and enormous revenues. By lowering the tax rate we can get a lot more in revenue. People spend a lot more time to gearing out how to get around taxes when they are 35 versus 20 . And assuming changes in behavior, more Economic Growth you aore let me ask couple other issues that have cropped up. There have been issues raised air, ther use of president said yesterday he was unhappy with the. Has either hear the chief of staff issued a directive to be more specific with cabinet secretarys about what is or is and what heble wants cabinet secretaries to do when it comes to travel by air . I can only comment on the situation as it relates to me, i cant comment on other secretaries because i am not involved but there have been no different directives as it relates to me. I veryve an audit comfortable that we followed all the proper procedures to stop i have never had the government pay for any of my personal travel in the limited number of times we have used it for either Security Issues when i had to have secure communications i am on the National Security council and sanctions arent important part of the job. And there have been times we couldnt get to places when we needed to be there. I understandve and why taxpayers are concerned about these issues. I am very comfortable and i look forward to the report reviewing our travel. What do you think is the future of Paper Currency in general . How much do you think it will be a part of the way americans iansact their business carry very little cash with me so i am curious about that, and alexander hamilton, andrew tubman, Alexander Alexander hamilton was the first treasury secretary let me comment first on currency. I do think the longterm trends are going to be to less physical think you know that we are very happy with a number of electronic returns that we have now. As it relates to government payments, the number of payments we make to Social Security holders and others through ach electronically as opposed to physical checks, i think the trend toward how we can move away from paper checks in hard currency, i inc. Theres a lot of decisions is in the economy i think i am surprised as others are and how there is still a big demand for physical cash. When you look at the number and even though we have many more electronic transactions, they cash in circulation hasnt declined at the rates we may have asked active. And i can comment that i am for theinvolved last two days we has been very involved in figuring out how we can get major amounts of cash to puerto rico. We have made to giant cast shipments and in times like this we want to make sure that people have cash and the economy continues to function. Cash for the first seeable future is not going away. Tubman or Andrew Jackson . What i have said before is that the number one reason we look to make currency changes is anduse of counterfeiting there are three or four