Down, yes. Could everybody please sit down . Thank you. So as you know, i normally open with some scintillating announcements and all those who came to hear those scintillating announcements, youll have to wait a little bit. Because gary is on a tight schedule. So were going to start the interview right now and go for about 50 minutes, and gary will have to leave, go back for an announcement at the white house, and then i will make my scintillating announcements about everything and the main course will be served then. Gary, let me first introduce you, gary is the assistant to the president for the American Economic council. Hes had that position since the beginning of this administration. Hes by background a native of Shaker Heights in the cleveland area. And then subsequently went to work briefly in u. S. Steel then the new york mercantile exchange, he joined goldmansachs in 1994 and rose up to be the head of the Commodities Division and ultimately the currency commodities fixed Income Division and cohead of the Global Securities division and then ultimately in 2006 became the president and chief operating officer and director. And he is under a tight schedule, so im going to start right now. Gary, thank you for doing this. I was just wondering how many of my bu bio you memorized. I memorized most of it. Are the egos bigger in washington or on wall street . You have become very popular, all of a sudden people call you and tell you how their issue is for National Security or National Defense or whatever other reason . No less or no more people call me today than have called me for a long time. Okay. Maybe its just a personality flaw, but it seems like no more, no less. So people arent calling you more than they did a year ago . Not really. You dont have High School Friends calling you all of a sudden saying not really, its been interesting. People sort of let us let me alone, let me do my job and you know im sure once they start seeing what we do and how it impacts them, that may change, i think people reservie the right to call me, but so far they havent exercised that option. The house revealed their version of the bill and youre going to have a meeting with the president later on this afternoon. If that bill went through as is, the president would sign it . So, david, as you know, the group of six of us came out with a frame work, and we got that frame work after starting in really diverse different places the six of us. We got ourselves to a unified frame work. Which really had two driving principles in it. Driving principle number one number two is he had to lower the business tax rate to make us competitive with the rest of the world. The bill that the house delivered today accomplishesobj. In fact they stuck with the frame work we have delivered. The house ways and Means Committee do you have any reason to think that the Senate Finance committee can agree to the same bill . The zmat lisenate like the h going down in regular order. If we needed to we would go to conference at the end. Thats whats going on here, and thats how were going to get the buy in. The house did cooperate with the senate, and the senate did cooperation with the house. I think were going to be in a 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 will pass it and the senate will pass it and the conference will pass it this year. We are working towards it this year. Did the house leadership tell you 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 a lot of time with their Committee Members as well as the rest of their members working on the details. I am confidence in the speaker was in the office, the speaker was in the oval office two weeks ago talking with the president. Im confident the speaker is going to be able to deliver a bill out of the house. When you do these bills, you have a 10year cost, production costs, raises or costs a certain amount of money. That number is prepared by the joint Tax Committee, more or less, so do you accept these numbers . Is it generally, people accept these as gospel because you have no choice . S we will legislate to get it to score 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. Does the treasury have its own revenue estimates . The treasury is very relevant. The treasury is extremely relevant. Yes, they have a large group of people in the treasure that spend a large amount of time on tax and scoring tax and working on that and they have their own revenue estimates and we have our own revenue estimates, and everyone else is going to have their own revenue estimates on tax reform, the impact it will have on the economy. Its only the joint Tax Committee that really matters. In terms of the bill itself, its a bill thats designed to have a 1. 5 trillion of incremental debt over ten years. We like to say less revenue. The instructions are less revenue. Originally, it was supposed to be a revenue neutral bill. Why did the administration and the house go for a 1 1. 5 trillin deficit, increase in debt . The reconciliation instructions give us room to produce a piece of legislation that had 1. 5 trillion of less revenue on the scoring testimony that youre talking about. We do not believea is goi bele that is going to be an actual reality. We want to be much more competitive with the rest of the world. We want to encourage people to come 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, the 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 rove knevenue tha theyre saying will show up, will show up even though were taxing at a lower rate. Its going to take the Corporate Tax rate from 230 to 25 . Do you think its a bigger advantage of doing it immediately versus phasing it in . We do think theres a big advantage to immediate. You have sat in a lot of Corporate Board rooms, boards like to have certainty. We would like to say its certain, but theres nothing more certain than having it happen. We know by having it happen next year and giving the people a fiveyear expensing window where they can do 100 expensing, were 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 20 do and how were going to we dont want people to think about investing in this economy, we want them to do it now. Under an excise tax provision, theres no incentive to keep the cash offshore because youre going to pay a tax one way or the other. Is there any incentive that the people who have it coming back are going to create job snsz. So, david, youre right, the repatriation fee is a 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, youre either going to invest it back into your business or youre going to distribute it out of your business to someone else whos going to invest it in their business. Lets talk about controversial business. Lets talk about state and local income tax deduction. You must be familiar with that. I have heard about it. In states that you are a resident of new york and in states like new york, massachusetts,or 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 . Its sort of correct. There are a couple little provisions that we did add back some real estate tax. Like property taxes . Like property taxes if you two choose to be an itemizer. But as a whole, we have eliminated a vast majority of those deductions. Dont you think that will be hard for 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 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 tax cut. Now the average family of four in the materials that came out today, the immediate dwrmed four is about 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, a tax cut or just neutral . It depends on each and everyones individual circumstances. As you know, the hard part of our taxes is everyones got their own unique set of circumstances, we set out the objectives, we have 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 estate tax and were dealing with other things that affect upper income tax brackets so when you look at the plan in its entirety, were able to touch every taxpayer in some positive way. The estate tax, youre going to phase that out, so it goes away in four or five years under the proposal, why not do away with it right now, immediately . It just costs too much . Its about scoring, i think the house plan is 24, but theyre going to double the exemption on day one, a person 22 million for a married couple. And then in 2024, theyll give you a full exemption on the death tax. The gift tax will stay in place . I dont know what theyll do with the gift tax, but there will be some gift tax restrictions in there. So if you want to give money to your children, youre better off to wait four years to die and youll get it tax free. Youll have to debate that with your children. I think my children prefer i stay alive. I have no doubt that thats the case. Im not sure with my kids. But okay. So lets talk about universities. A new provision that many people didnt anticipate is now in there, which says if youre a university, if you have a private university, not a public university, there will be an endowment, a 2 tax on that endowment income. Why not do with that public universities that have big endowments as well . The house is deciding how they want to raise revenue, how they want to balance the bill, how they want to make it work. Its over a billion dollar threshold. Its not on the first dollar of endowment that you have. Theres also discussion of private entities versus public entities, youre getting into tax legalities that is beyond my understanding of the tax code. You have worked on very complicated corporate transactions, have you ever worked on something as complex as the tax code. Probably not. It has as many moving parts and more constituent s. If it passes with more democratic votes, can with Administration Live with that. We, we prefer to be bipartisan and we have spent an enormous amount of time trying to make it bipartisan, i think you have seen that the president has traveled with democratic members of the senate to their states to talk about the bill, the president has had dinners with Democratic Senate members, we have had bipartisan meetings in both the house and the senate, in the white house, i and secretary mnuchin have spent a lot of time with different democratic groups, we have met with the blue dog ddems several times. We would love to have a bipartisan 60vote bill. If its just a republican bill, the president will definitely sign it . If it delivers a middle class tax break and a Corporate Tax break, and it shows up on the president s desk, i guarantee he will sign it. Is he going to say this is a house problem or a senate problem, or is he going to stay above the fray . The president cares a lot about tax reform. This is one of his main pillars that he ran on. Its all about cleaning up washington, its about making the system fair, its about returning hard earned income back to american families. Lets talk about a few other things before we get back to stackses. Lets talk about trade, another easy issue. Nafta. Do you expect that there will be a renegotiation that will be agreed to or do you think its more likely that well pull out of nafta . Were trying to renegotiate nafta to be fair, to be good for american workers, to be good for american jobs and to make sure that our american countries are being treated fairly in an american trade system. Is so you think you will work out a deal . Were continuously meeting and were trying to get to a point where we think that american based companies and american based manufacturers are treated fairly in the agreement. In terms of trade, 2 president will be going to china shortly. And the president has been upset about the trade deficits with china. Do you think hell mention that with xii injinping . What about south korea . Hes going to vietnam, south korea, japan and china, is that right . Hes going to tokyo. Yeah. And the philippines. So when he goes to south korea, he will mention the trade imbalance . Uhhuh. Okay. Look, hes also got many other issues on his agenda. Obviously north korea is a big issue, hes going to spend a lot of time talking about north korea. With the president going overseas, you have gone with him. But now your responsibility is on this tax code, so youre not going with him . Note th that the trip isnt unbelievably important, i thought my time is better spent staying here and working with congress to make sure that tax reform stays on its agenda while hes gone, its a long trip, hes going to be gone for 12 days. When theyre having markups, we wont be in the sessions of markups but theyll be calling you because your input is going to be valuable so you expect to be in the back and forth . We have great relationships with leadership of the house and senate, the committee chairs, the committee leaders, were in relatively constant dialogue with them, about where theyre headed, what their concepts are and making sure were all working together to get a bill to the president s desk. On health care legislation, do you think that will be revived as a things to do after a tax cut is done . Right now, were planning on looking at health care in the new year. And there was a rumor that maybe the president or somebody wanted to have a the elimination of the Health Care Mandate in the tax bill. Is that off the table now . The president tweeted about it 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 it and look at it quite aggressively if we can get that done as well. The president want toss do a tweet, does he call you and say im going to do a tweet in a certain area, does he consult with you before they go out or not so much . You know, david, sometimes yes, sometimes no, depends on the topic. In terms of your background, you have been very public about the fact that you were not a great student, because you were d dyslex dyslexic. How did you realize you were dyslexic and how did your family get you treatment for that . In the 1960s, when i was growing up as a dyslexic kid, i dont know if dyslexia was sort of a common place name for a disease. So when i was growing up, you know, it was not diagnosed or if it was diagnosed it wasnt called what it was called. In fact i probably wasnt diagnosed until high school or even later. In terms of what my issue was. So before that you didnt realize you were at a disadvantage and you just thought you werent a great student . I knew what was going on, i think it was everyone else that had a problem. I knew where i was, it was everyone else that had a problem. The typical issue was that everyone thought i was lazy, didnt apply myself, didnt care, bad student, i was labelled with all of those issues. Because i could never keep up with the work, i could never get the home work done, i could never be prepared for class because guess what . There just werent enough hours in a day to possibly be prepared for class, and the bad feedback just became a bad feedback loop. It was no ones fault. No one knew any better. Its not is that my parents were trying. You graduated high school and you went to berry. Was it that the problem was easier to spell . I still cant spell it. Dont ask me to spell it today. So you went to American University, did you struggle there or did you do okay . I just saw neil kerwin here, so i know theres an American University crowd here. So, look, i thank American University for accepting me, because that was probably a long shot for them. But when i got to college, it was deplete lcompletely differe. A, when you go to college, you get to completely reinvent yourself, no one knows youre the dumb kid, or youre the kid who cant read. No one knows so you get to walk in with a balloonilank slate. At max, you go to class 16 hours a week, if you take four classes for four hours a week, youre in class 16 hours. College is a class management exercise. I can get prepared to be in class for 16 hours a week, because i can reread the same thing 22 different times. In high school when you have to be in class eight hours a day and you want to be in a sport and you get home at 8 00 and you want to get some sleep, you cant reread something 22 times. Doing okay in college was all about time management. Yeah, i maybe didnt spend as much time having fun. But i was able to get myself through because i was able to manage myself. Were you an athlete as well . I was not a good enough athlete to be an athlete in college. But thats a whole other story. I know the feeling. So after you graduate. You went back to your native area, cleveland, and you worked for u. S. Steel . I did. You werent a steelworker . That was a little joke in my career there. I worked for t