Announcer President Trump director gary cohn outlined the tax reform bill earlier today. He spoke for about one hour. Garrett will have to leave, go back to the white house, and then i will make my scintillating announcements about everything and the main course will be served then. Let me first introduce you. Y is assistant to the went to American University. Subsequently worked briefly at u. S. Steel. Then it Goldman Sachs in 1990. Became a partner in 1994 and rose up to be the head of the commodities position. And cohead of the Global Securities division. And then ultimately in 2006 became the president and chief operating officer and director. And he is on a tight schedule, so im going to start right now. Thank you for doing this. Im just wondering how much of my bio you memorized. Well, i memorized it a little bit. Pretty good. So, are the egos bigger in washington or wall street . What egos . No egos. None . Neither place. Okay. And have you found since youve become one of the two point men on the tax bill that youve become very popular . All of a sudden people call you and tell you how important their issue is for National Security or National Defense or whatever other reason . No less or no more people called me today than have called me for a long time. Okay. Maybe its just a personality flaw. It seems like no more, no less than before. So people arent calling you more than they did a year ago . Not really. You dont have High School Friend call you, oh, this a few of that. Not really. Its been interesting. You know, people let me do my job. Im sure once they start seeing what we do and how it impacts them, that may change. I think people reserve the right to call me, but so far they havent exercised that option. Okay. So yesterday or today the house leadership unveiled their bill. And you are going to have a meeting at the white house with the president and leadership at i guess 1 30. So in talking about it, is the bill that was released or supposedly today is that something the president can support . If that bill went through today the president would sign it . David, as you know, the group of six of us came out with a framework. And we got that framework after starting in really diverse different places, the six of us. We got ourselves to a unified framework, which really had two driving principles in it. Driving principle number one is we had to deliver a middle income tax cut. Number two is we had to lower the business tax rate to make us competitive with the rest of the world. The bill that the house delivered today accomplishes both of those objectives. In fact, they stuck very much to the framework that we had delivered. So, yes, the bill that the house has delivered, the ways and Means Committee delivered today , is a bill that the president can support. And do you have any reason to think the Senate Finance committee will agree to the same bill . I think the senate like the house is going down their paths in regular order. One of the other components that we agreed to as a group of six is that we were going to do tax reform in what we would call regular order. We would go through normal committee processes, the Tax Writing Committee in the house, the Tax Writing Committee in the senate, they would write their own bills, they would go through their committee process, they would go to floor. And if we needed to, we would go to conference at the end. Thats exactly whats going on here. And thats how were going to get the buyin in the process. The senate is doing that. They are cooperating with the house. And the house did cooperate with the senate. So we are going to get bills that have a lot in common. Im not sure theyre going to be 100 in common, but i think were going to be in good enough position to deliver a tax bill to the president s desk this year. This year . This year. So youre very confident that the house and senate will pass and the conference will pass it this year . We are working towards this year. Okay. So did the house leadership tell you that they have the votes in the house to pass it now . The bill just got dropped this morning, we know that the house has been spending enormous amount of time with their members, with their Committee Members as well as the rest of their members working on the details. I am confident and speaker was in the oval office two days ago talking about the bill with the president. We were there together. Im confident the speaker is going to be able to deliver a bill out of the house. When you do these bills, you know, you have a tenyear cost of something, a production cost or costs a certain amount of money. That number is prepared by the joint commitee. Do people accept it as gospel because you have no choice . You just answer the question. We have to accept the score to get the legislation through. History will tell us the results will not be what the score says it will be. Bille will legislate to a that gets the score that we need to get to get it through the legislative process. And we happen to very strongly believe that we are going to way, way surpass what theyre going to score on the revenue side of the equation. Okay. Does the treasury have its own revenue estimates or are they are just not relevant in terms of these things . No, treasury is extremely relevant. They have a large group of people in the treasury that spend enormous amount of time on tax and scoring tax and working on that. And they have their own revenue estimates. We have our own revenue estimates. Everyone else is going to have their own revenue estimates on what the Economic Impact of tax reform, what it will do to the economy. But in the end when theyre marking the bill up, its only the joint Tax Committee numbers that really matter. So in terms of the bill itself, its a bill that is designed to have 1. 5 trillion of incremental debt at the end of ten years. Wed like to say less revenue. Okay. Thats how the instructions are. The instructions are less revenue. Okay. Now, originally it was supposed to be a revenue neutral bill. Why did the administration and the house go for a 1. 5 trillion deficit increase in debt . So the reconciliation instructions give us room to produce a piece of legislation that has 1. 5 trillion of less revenue on the scoring system that youre talking about. Right. We do not believe that is going to be the actual reality. We believe that by lowering the business tax in the United States and becoming much more competitive with the rest of the world and dropping our rates down, we will encourage businesses to come back to the United States and redomicile back to the United States. We are going to grow our economy at a faster rate than the model is going to suggest. We also believe that by lowering the tax rate on middle american hard working families, they are going to spend more money, velocity is going to increase in the system and the economy is going to grow. So we do believe that theres going to be more growth in gdp, more revenue to be taxed, and therefore, the revenue that theyre saying wont show up, we believe it will show up and we will be able to tax it even though we tax it at a lower rate. Okay. Lets talk about the Corporate Tax cut. Its going to take the Corporate Tax rate from 35 to 20 . Now, theres some people who say , why not phase it in over five years . It would cost less money. The administration wanted to do it immediately. Do you think theres a big advantage of doing it immediately versus fazing in . We do think theres a big advantage to bringing it in. Look, youve sat in a lot of corporate boardrooms, ive sat in a lot of corporate boardrooms. Boards like to know whats going to happen and they like certainty. Yes, itd be nice to say that its certain, but theres nothing more certain than by having it happen. We know that by having it happen next year and on top of that giving people a fiveyear expensing window where they can do 100 expensing, we are sending a very clear message that we want you to invest in this country. We want you to move jobs back. We want you to hire people. And were not making it ambiguous. Were making it clear what we want you to do and how were going to grow the economy. The phase in we dont want people to think about investing in this economy. We want you to do it now. So repatriation provision would be under excise, so theres no incentive to keep tax cash offshore because youre going to pay it back one way or another. So that money will all come back presumably. Is there any incentive that the people who bring it back, companies who bring it back have to create jobs . Or what are they likely to do with the cash . Does anybody have any idea . So, david, youre right. The repatriation fee the deemed fee, so its not like you get the choice to bring it back or not bring it back, were going to collect a tax on you over the tax window whether you bring the money back or not. Were going to create an environment where we hope that you invest it back in your business. But ultimately either youre going to invest it back in your business or you can distribute out of your business to someone else whos going to reinvest it back into another business. Okay. Lets talk about some of the controversial provisions. Of course controversy is in the eye of the beholder, but lets talk about state and local income tax. Deduction. You must be very familiar with that. Ive heard about it. Right. So in states like new york, massachusetts, other high taxing states, high state and local income tax, they will no longer residents of those states will no longer be able to deduct that income tax, is that correct . Under this proposal . It is sort of correct. There are a couple little provisions in there that we did add back some real estate taxes property tax if you do choose to be an itemizer. As a whole, we have eliminated the vast majority of those deductions. Wont you believe that will be very difficult for high state tax representatives or centers senators to agree to that provision . David, at the end of the day this comes down to are we delivering a middle income working family tax cut or not . We believe that the house plan is delivering that. And when you score it out and when you see the distributions and the distribution tables will be out relatively shortly, the distribution tables will determine whether were delivering that tax cut or not. We believe that this plan that the house laid out is able to adequately deliver that distribution to those working families, where we told you we were going to deliver that, that tax cut. The average family of four in the materials that came out today is medium family of four income is 59,000 and they will get a tax cut of about 1140 or Something Like that, roughly . I wont argue for 40. So the median family of four will get it. What about the people who are in the upper income . Will they be getting a tax increase or a tax cut or just neutral . Look, it depends on each and everyones individual circumstances. As you know, the hard part about taxes is everyone has their own unique set of circumstances. We set out with the objective as i said we had two objectives, middle income tax relief and Corporate Tax relief. We have not targeted the upper income brackets, but we do believe there is quite a bit in for the upper income families. Were dealing with a state tax. And were dealing with other things that affect upper income taxpayers. So we do believe when you look at the package in its entirety, were able to touch every taxpayer in some positive way. Tax, we phasetate that out. Why not just get rid of it immediately . 24. Think the house plan is they will double the exemption and in 24 they will give you a tax. Exception on the death there will be gift tax restrictions. So if you want to give money to your children, you should die and you can give it to them taxfree. Lets talk about universities. Peoplerovision that many did not anticipate that is not there, if you are a private university, you get a tax on that endowment income. The house is making their decisions on how they want to bill revenue and down the balance the bill. Ws in the some la system about taxing private versus public entities. Youre getting into a layer of legality that is above my understanding of the tax code. You worked on very complex corporate transactions, at it worked on anything as complex as the tax code . Probably not. It has more moving parts than any transaction i have seen. This bill is designed to pass the congress but it is designed past without any democratic votes. We have spent an enormous amount of time trying to make a bipartisan. The president has traveled with the democratic members of the senate to talk about the bill. The president had dinner with Democratic Senate members and we had bipartisan meetings in the white house and the house. We had met with the blue. Democrats trying to get bipartisan support for what we are doing. Would like to have a bipartisan bill. Only, it is republican the president will still silent. It delivers middleclass tax relief and it shows up on his desk, i guarantee he is going to sign it. Is the president going to lobby members for votes or is he going to say it is a house problem . The president cares a lot about tax reform. Its all about making the system fair and returning low income families their income back. Issue oftalk about the trade. Nafta, you expect there will be a renegotiation that will be agreed to argue think we will were trying to negotiate nafta to be fair and good for american jobs. Want to make sure americanbased companies are treated fairly in the freetrade system. Were trying. Negotiators are continuously meeting. And were continuously trying to get to a point where we think that american based companies an american base manufacturers are treated fairly in the agreement. In terms of trade the president will be going to china shortly. He has from time to time been upset with the trade deficit we have with china. Is he going to mention anything to xi jinping when he is there . I would probably assume it gets mentioned. Ok. And what about south korea . Hes not going there but hes been upset about the treaty we have with south korea. He is going there. Oh, im sorry, hes going to vietnam, south korea, japan and china, is that right . Hes going to tokyo and then, yeah, and the philippines. So he goes to south korea he will mention the trade imbalance . Uhhuh. Ok. Let me ask you, hes also got many other issues on his agenda. Obviously north koreas a big issue. Hes going to spend a lot of time talking about north korea. With the president has gone overseas before, you have gone with him but now your responsibility is to get the tax bill so youre not going to go on this trip . Yes. I had a long discussion with the president where i thought it was a better use of my time. Not that the trip isnt unbelievably important, but tax reform is so important that i thought being here and working with congress along with secretary mnuchin, working to make sure tax reform stays on his agenda. We should stay here and that is what were going to do. You expect to be involved in all the back and forth. Director cohn we are in constant dialogue on where they are heading and what their concepts are and making sure were working together yo to get a bill to the president s desk. G ont now we are plannin looking at health care during the new year. There was a rumor that maybe the president or somebody wanted to have elimination of the mandate in the tax bill, the health care mandate, 8 the president tweeted that yesterday. So its not off the table. Its something that could be looked at. And we are spending a little bit of time looking at that. And if it works and we have votes, the president would be inclined to have us look at that aggressively. The president , when he does a tweet, does he call you and say im going to do a tweet in a certain area . Does he consult with you sometimes or not. Director cohn sometimes yes, sometimes no, depends on the time. Ok. In terms of your background, you have been very public about the fact that you were not a great student because you were dyslexic. Uhhuh. How did you realize you were dyslexic . And how did your family get you treatment for that . Director cohn well, i try and explain this to people. This audience might be the right age to understand this. In the when i was growing up as 1960s, a dyslexic dyslexia not know if was a commonplace name or disease. But i was growing up, it was not diagnosed or if it was diagnosed that was not what it was called. In fact, i was not diagnosed until high school or even later. Before that he did not realize you are at a disadvantage or you did not think you are a great student . I knew what was going on. I thought it was everyone else had a problem. I knew where i was, everyone else had a problem. So the typical issue was that everyone thought i was lazy, did not apply myself, did not care. That i was a bad student. I was labeled with all of those issues because i can never keep work or keep the homework done. There were not enough hours to be prepared for class. The negative feedback loop became so negative that you fallen to a rut. It was at ones it was no ones fault. You graduated from high school. Barely. Barely. Did you ever think it would be easier the word for the problem was yourself, starts with a d, thats all i know. So you went to American University. So did you struggle there or you did ok . Director cohn so i know theres, i just saw, i know theres an American University crowd in here somewhere. The president of the university is right here. Oh, right in front of me. So thank you to American University for accepting me because i was probably a long shot for them. But when i got to college it was completely different. College and you get to reinvent yourself. No one is your the gun kid or you are the no no one as you are the dumb kid. You get to refine yourself. Class 16 hoursto a week. College is a time management exercise. You tell me i need to being class 16 hours week, i can give get prepared. Can was not easy, but doing good in college was all about time management. Throughle to get myself because i was able to manage my summer. Were you an athlete as well . I was not. I was not a good enough athlete to be an athlete in college. I know the feeling. So after you graduate you went back to your native area of cleveland and you worked for u. S. Steel. I did. What were you doi