Today we are launching another new series – “Not So Fintech News”. By chance, we received the full transcript today of the CNBC interview with Speaker Paul Ryan from their communications team.
Is this fintech? Not really, although the discussion of repatriating offshore funds certainly affects a myriad of American industries, including finance and tech, and what goes on in the halls of Congress affects ALL American industries, inclusive of fintech. This is reprinted as it was sent, so there may be typos, etc., but now you’re in the know on what was actually quoted. We take no sides, but it was interesting to be on the media list to receive this transcript, and we decided to take advantage of that and print it in full for our readers.
(Cindy Taylor, Publisher)
“Ylan mui: Speaker Ryan thank so much for joining us today on “power lunch”.
Paul Ryan: Thanks for having me, Ylan. Good to be here.
Mui: The president went after you today on twitter and said he had asked you and mitch mcconnell to attach a debt ceiling increase to the va bill and you didnt do it and now everything is a big mess. What happened?
Ryan: I dont really take it as going after me thats an option we were looking at but the va deadline came up and we werent able to do that then im really not that worried about this. We have plenty of options ahead of us. We will pay our debts and we will make the debt limit, we’ll hit the increase before this is penetrated, meaning we will pass a debt limit increase before we hit the debt limit, plenty of options in front of us. That one just wasnt available for us.
Mui: Do those options include a clean hike in the debt ceiling?
Ryan: There’s a bunch of different options in front of us. Im not going to negotiate to the media but we have a lot of options in front of us i’m really not worried about getting this done, because i know we will get this done and we will pass the increase before we hit the debt limit.
Mui: That deadline for the debt comes a day before the government funding deadline comes you said yesterday youre looking at perhaps short term solution that will get you through december
Ryan: Yes only because the senate has double duty they have to pass personnel, meaning judges and appointments and ambassadors and subcabinet officials and cabinet officials so the senate is a little slower in the first year of a presidency because they have all of these people they have to process. Were going to finish our appropriations in about a week or so. It will take more time for the senate to process these bills. I would absolutely anticipate we are going to have to have an extension so we can process all of these bills with respect to the border security, i think whats that youre getting at with the president. We passed that already in the house so we passed the funding for the border security. Thats something we feel very strongly about and we feel think its very necessary. But jist to make congress work we’ll have to have an extension because the senate is also doing double duty on making sure the president gets the people he needs in his administration so that takes them some time as well.
Mui: All the time that is spent on this funding fight, on the debt ceiling negotiations, thats less time available for talking about tax reform —
Ryan: Not really.
Mui: Is there time to get this done in 2017
Ryan: Yes there is
Mui: You keep saying that. The markets are skeptical
Ryan: We can walk and chew gum at the same time. Heres what im doing on tax reform i’m criss-crossing the country this month talking about tax reform last month i was at new balance in massachusetts i was at miller brewing in milwaukee. National association of manufacturers in d.c., yesterday in portland with intel, today here at boeing talking with the american people about the need to reform our tax system we havent done it since 1986. It is a big drag on growth in america. We all know this ive been working on this literally pretty much my adult life, tax reform this is something were all in on, were solely focused on it and our tax writer, ways and means committee the finance committee are deep into the details producing the bill and yes those of us who are leaders can multitask and work on funding and debt limit while the committee of jurisdiction works on getting this tax bill ready. Its the way congress works. Lots of committees and lots of pots on the stove and we can get these things done and we can stick the landing, no pun intended on tax reform this calander year.
Mui: You have been working on this your whole adult life. You have been putting in the shoe leather to sell tax reform to the american people. The president seems to have other priorities at this moment. Do you need him to be actively out there stumping for tax reform in order to get it done?
Ryan: He is, look, we have a shared agenda the president and congress we are eye to eye on this agenda and on these priorities. I’ve spoken to the president more times than i can remember about how we agree on getting tax reform done. This isnt one of these issues where you have a difference in priorities between the house and senate and white house were totally on the same page on this. I think theres kind of a much ado about nothing there on that point. Which is we all agree weve got to reform the tax system, raise wages and increase economic growth, more take home pay, more productivity, better competition for American businesses who are really have their hands tied behind their backs when it comes to competition in the tax code we all agree with that s so now we are actually getting on common ground on how to move forward on tax reform to get this done this fall. Yes, we have a lot on our plate this fall and weve got to process all of these things and thats what you do in congress, you multitask.
Mui: Treasury Secretary Steven mMuchin has said when it comes to tax reform, permanent is better than temporary but temporary is better than nothing, do you agree with that?
Ryan: Sure. First of all, permanent gets you the kind of planning you need. A company will not make a multi year multibillion dollar investment decision if they are unclear what their tax rate will be in the future. We very passionately believe permanence is very, very important the big decision making provisions in the tax code those have to be permanent. There are other things you can do that can time dates on it to make sure the numbers work but the big macro-economic policies that rates and things like that that stuff has to be made permanent the other point is there are some who have said because of our budget process we might want to go temporary. It doesnt work that way we do believe its got to be permanent and something the ways and means committee and the finance committee is passionate about, i as well is passionate about it permanence works, permanence is necessary and permanence is absolutely doable.
Mui: If its permanent, it means you have to work with democrats to get it passed or pay for it. So which one is it going to be?
Ryan: So reconciliation, we think, is the better way to go. But we’ve already shown and demonstrated we can show reconciliation. Some people say, “well gosh – health care was tough. Won’t tax reform be tougher?” It’s the other way around. The problem we ran into on reconciliation with health care is reconciliation is basically a fiscal tool but health care is regulatory and fiscal. We can only really put our fiscal policy in that bill and all of the other things we want to do in health care, we couldn’t really put in this piece of legislation. The point i’m trying to make, with tax reform, the entire bill – the entire tax reform goes into one bill, one reconciliation, 50 votes in the senate. So makes this so much easier and more importantly, we as republicans we’re really on commonground and i do believe there are democrats that agree with this – get our rates down, go to a territorial system, be in favor of expensing. Everyone, generally speaking who is in the middle and right of center is for this. And so that’s why i really am confident we’re going to get this done.
Mui: But if you use reconciliation, that means a tax reform bill wouldn’t be able to add to the deficit. When you think about the pay force, that’s the hard question. We’re here at boeing, many businesses want to bring the rates down, but they don’t want to give up the goodies that they would need to make that happen.
Ryan: You have to get rid of the goodies, you’ve got to get rid of loopholes, you’ve got to get rid of redundant reductions. You have to broaden the base to lower the rates. Every tax reform exercise is like that. This will be no different than that. And more importantly, we have a tax system written in 1986 for the 20th century and well into the 21st century and rest of the world is passing us by. We are really — we have such an antiquated, anti-competitive tax system that dropping rates without fixing the actual system would not be nearly as growth producing as a permanent reform which also cuts taxes and lowers rates for workers and families and businesses. So you do need to clean out the old garbage of the tax code to get us a tax code that is wired for growth, that primes us for the 21stcentury so we can be in good competition. Look, look at these planes. This company is taxed at 35%. Their competitor in europe is taxed at 25%. Their competitor in china is taxed at 15%. And we’re hitting these guys at 35% tax rates.
Mui: But i’m sure boeing would like to hold on it the r and d tax credit — as well. Are there any deductions on the corporate side that are completely off the table?
Ryan: Look, we’re gonna let the tax writers do this. We don’t like to negotiate these things in the media, with all due respect Ylan. The tax writers are going to make this work and we are confident, confident, that we can have a very good pro-growth tax system that is enduring and permanent so that big businesses, small businesses can make good long-term decisions and that’s why permanence matters.
Mui: You also mentioned that you want to encourage people to own a home, save for retirement and donate to charities. On the personal side are those things not going to be touched at all?
Ryan: Yeah. Those are three that we’ve said we want to emphasize. I think you can actually improve those policies by cleaning some of these up. We have a lot of redundant deductions that can be consolidated—
Mui: — Mortgage interest deducations –
Ryan: — And so we’ve already said in the house and i think the senate agreed with this, which is we do want to have preferences for things like charity and homeownership and retirement savings. How exactly you structure that? That’s gonna be left up to the ways and means and the finance committee and the members of congress, as part of the bottom up process that we have. But the point we’re trying to make is, those are important things that are broad based for all american families and workers. When you raise the standard deduction like we’re proposing, that dramatically simplifies the whole code so much that even with the three preferences i mentioned, you could have a postcard sized tax form. We think that brings us tremendous fairness and simplicity. More importantly by consolidating the brackets from 7 to 3, we’re cutting people’s taxes, we’re cutting people’s tax rates. We’re letting people keep their own hard earned money so they can decide what they want to do with it. We think it’s really good for families, for workers and for economic growth.
Mui: It’s sometimes complicated for people to understand when they look at the tax returns at the end of the year. When you talk about the mortage deducation, it’s something that is so popular and so essential to so many people, how might that be changed? You’re willing to let that be changed? —
Ryan: I won’t get into differences on that. Only that we recognize and acknowledge and believe you need to maintain the mortgage interest deduction. Whether it can be improved in how it works that’s the decision and discussion we’ll have in an ongoing basis. And that’s what the ways and means committee has all their hearings and their process for. The point being, we’re gonna maintain some of those critical things because we think they are really important. Homeownership, charitable giving, saving for retirement. These are things everybody needs to do, everybody wants to do in conjunction with dramatically simplified tax code, lower tax rates and cleaned up irs. That is what people want to see and that is what we ran on and what we’ll deliver on.
Mui: — You talked a couple of times about the importance of a territorial tax system. How do we get there if border adjustment is dead?
Ryan: Yeah – no that’s a good question. You can do it. I mean, when i was ways and means chair, we were talking on income tax territorial then went to the boarder adjustment. We agreed in the house, that the border adjustment just wasn’t ready for prime time. We dont have the necessary political consensus we need to do that. So we’ve already agreed well go back to income tax reform. You can go to a territorial system with income tax, and many other countries do that. So we know exactly how to do that and the best way to do it is a one time deemed tax on overseas profits, where you tax it once at a low rate.
Ryan: Mandatory across the board. That means you reset the system and pay for the conversion from a worldwide to territorial system. That is basically what we’ve been talking about for many, many years. We’ve refined this proposal that ways and means finance committee, microrefinancing this proposal. Basically the deal is you tax overseas profits once and its done, and all of that money is deemed repatriated and from there out you have a territorial system which we think is critical. We have $3 trillion in trapped cash overseas that can’t come back because of crazy tax laws. We’ve gotta fix that. That money will come back and that will help economic growth.
Mui: Final question for you, Kevin Brady yesterday said if you don’t get tax reform done in 2017, it wouldnlt be the end of the world but could it mean the end of gop control of congress?
Ryan: Look we made a promise and ran on this said this is necessary i think we have a word to keep and we have to keep our word and i feel as strongly as kevin does about that.
Mui: Any chance democrats are gonnal come on board with you
Ryan: I think some will. I actually think some will. I mean those who are idological—
Mui: In the senate or house?
Ryan: I think sort of the Bernie Sanders, Elizabeth Warren wing of the party, the liberal progressive wing – they won’t touch this. But i think there are going to be more moderates coming from states that are manufacturing states like north dakota and missouri or indian. I think some of them will come on board and support this because this is common sense. We are shooting ourselves in the foot as americans with our tax system. It’s high time we liberate ourselves and get a tax code built for growth and competition. I do believe there will be democrats who will come on board at the end of the day of this.
Mui: Speaker Ryan, thanks so much for joining us.
Ryan: Thanks Ylan. I appreciate it.”