How Senate heavyweight Schumer plans to fix Congress' gridlock

Sen. Chuck Schumer is up for re-election this year, but that's not why he's becoming a focus of attention. His New York seat is safe.

If enough other Democrats win, however, Schumer stands to become the next Senate majority leader. To make that happen, Democrats need a net gain of five Senate seats. If Hillary Clinton wins the presidency, allowing her vice president to break ties in the Senate, Schumer needs only four.

Even as a politician with sharp instincts, he would face steep challenges in overcoming the gridlock that has largely paralyzed the capital. In any event, the Senate will be closely divided along partisan lines, and Republicans remain favored to retain control of the House.

Schumer said down near Wall Street over bagels with me to discuss an array of issues: his constituent Donald Trump, his former Senate colleague Clinton, how he'll differ from outgoing Democratic Senate leader Harry Reid, prospects for legislative progress in the post-election lame-duck congressional session and beyond. What follows is a condensed, edited transcript of our conversation.

HARWOOD: You've known Donald Trump for a long time. He's been a donor of yours. Is this the person that you have always known or has something surprised you?

SCHUMER: Yes, but what's surprised me is more so. Everyone knew he had a big ego. Everyone knew that he would just sort of like to talk about himself. But the extreme of it surprised me.

HARWOOD: He likes to say that when he donates to politicians, he owns them, and they do what he wants. Did he own you?

SCHUMER: No. I don't recall him ever asking me for something.

HARWOOD: [Last Thursday], he was talking about a conspiracy to stop him. He used terms referring to Hillary Clinton and international bankers that some people have historically had associated with anti-Semitism.

SCHUMER: He is totally tone-deaf to what is racism, what is bigotry. I wouldn't accuse him of being a racist or bigot himself, but he tolerates it and uses it in ways. Whether he's aware or not, it's poisonous to America.

HARWOOD: A lot of Americans are looking at the end of this election and saying, "What is going on?" What do you say to that?

SCHUMER: I'd say the number one thing going on is that middle class incomes are declining. When middle class incomes decline, America is a different place. In general, we're a bright, sunny, optimistic people. The only time America becomes sour is when middle class incomes decline.

So candidates who say, "I'm going to just blow up the whole system. I have no idea what I'm going to put in its place" — a la Donald Trump — you know [who] could never even get started 10-15 years ago, but have some traction now.

HARWOOD: What would be your candid assessment of Hillary Clinton's flaws as a candidate?

SCHUMER: I served with her for eight years. and we're both Type A personalities. I'm from Brooklyn. I can tell a B.S. artist pretty good. She is not. She's a straight person in the sense that she doesn't try to say one thing and mean another and all of that.

She's more cautious than I am. That's her nature. That's who she is. That's not a bad trait for a president with difficult decisions. She's a very careful person — very careful.

CNBC

CNBC’s John Harwood sits down with New York Senator Chuck Schumer at Gee Whiz Diner in NYC.

HARWOOD: Given that we've got three weeks left, things are flowing in a direction that you're going to be the majority leader next year?

SCHUMER: Certainly more likely than not. We have a lot of things going on for us. The one big thing against us is all this Koch brother money. The Koch brothers are putting in an obscene amount of money into politics. You don't see a lot of it. A lot of it's dark.

HARWOOD: If you become the leader, you're going have a narrow majority in any circumstance. So those middle class families whose incomes have been going down — what can you do for them?

SCHUMER: I believe we have to get things done. I don't want to just put things on the floor of the Senate that fail [then] say, "See? We tried," and go home and use it as an election issue.

HARWOOD: On that point, you're going to have on your left flank, Elizabeth Warren, Bernie Sanders putting intense pressure on you and Hillary Clinton. Tell me how you're going to balance that pressure.

SCHUMER: Look, they know we've got to get things done.

HARWOOD: Do you actually think Elizabeth Warren intends to be a team player?

SCHUMER: Absolutely. She's going to surprise everybody. She's going to be both a progressive and a constructive force.

HARWOOD: What should the sequencing be for infrastructure, immigration, tax reform?

SCHUMER: Immigration reform, which passed the Senate 68-32 — Schumer-McCain. The mainstream conservatives in the Senate and House, who are a majority — and I don't mean to be cliche but some of my best friends in the Senate are in this group — they will say to the hard right, to the 50 congressmen who seem to tie things in a knot and Paul Ryan, you know, go take a hike.

The two things that come, that pop to mind — because Schumer, Clinton, and Ryan have all said they support these — are immigration and some kind of international tax reform tied to a large infrastructure program. If you can get overseas money to come back here, even if it's at a lower rate than the 35 percent it now comes back at, and you can use that money for a major constructive purpose such as infrastructure — if you did an infrastructure bank, for instance, you could get $100 billion in equity in the bank and get a trillion dollars of infrastructure.

HARWOOD: But it would be a permanent lower rate, not a holiday rate?

SCHUMER: Yes, you can't do a one-shot deal.

HARWOOD: They say you guys will never, ever, ever agree to overhauling entitlement programs to make them more solvent. Will you?

SCHUMER: Middle class income's declining. That's job number one. In terms of cutting those benefits, I am not interested a bit.

HARWOOD: If you're a Republican senator, what will you find different about Chuck Schumer than Harry Reid?

SCHUMER: I'm not going to compare myself to Harry Reid, but you will find that Chuck Schumer's calling you up and saying, "What is on your mind? How can we work in a way that you and I can, or my caucus and your caucus can, agree on things?"

HARWOOD: If you encounter a situation where you can't get 60 votes for a Supreme Court nominee for a President Clinton, would you consider changing the rules?

SCHUMER: I hope we won't get to that. And I'll leave it at that.

HARWOOD: Would you say the same thing about a legislative filibuster?

SCHUMER: I'm not going to speculate about if we get to a bad place. I'm going to work hard to get to a good place.

HARWOOD: I'm not hearing about the hallowed traditions of the Senate and how they can't be disturbed.

SCHUMER: I am hopeful we can keep those traditions and get a lot done.

HARWOOD: Tell me about, in terms of getting stuff done, the rest of the year. There has been a lot of hope from the White House, the administration, some of the business community and others who believe in trade expansion, that the Trans-Pacific Partnership can get done before the next president takes office. Is that going to happen?

SCHUMER: There's only one person who will decide that. Just one: Mitch McConnell. If he puts it on the floor, it could get done. If he puts it on the floor, it may well get its 51 votes in the Senate even if some Democrats change their views. But it's an iffy question for the House to get a majority.

I don't know what he's going to do. That's what got me onto Bob Dylan: You don't need a weatherman to know which way the wind blows. So the Republican electorate is more against free trade than the Democratic electorate. That's an interesting fact that I didn't know until this year.

HARWOOD: Merrick Garland — do you see the Republicans, if Hillary Clinton wins the presidency, going ahead and putting him up for a vote and him being confirmed?

SCHUMER: A lot of it depends on the election results. If Hillary gets 350 electoral votes, and we have 52-53-54 senators, it's more likely he'll do that than if Hillary wins by a narrow margin and we have 50 votes. And it's probably certain he wouldn't do it if Trump wins or if he has the majority — either one.