Where a GOP Senate leader says he'll play ball and where he'll buck President Trump

Senator Thune talks trade, immigration and politics
Senator Thune talks trade, immigration and politics

Sen. John Thune of South Dakota embodies the unexpected turns of the 2016 campaign. Once considered a presidential prospect himself, he watched the primaries from the sidelines, complimenting Senate colleague Marco Rubio but not endorsing him.

Once Donald Trump wrapped up the Republican nomination, Thune started showing up on vice presidential short lists before Indiana Gov. Mike Pence got the nod. By October, after disclosure of taped remarks in which Trump discussed groping women without their consent, Thune called on the billionaire businessman to withdraw from the race in favor of Pence.

Now, as third-ranking member of the Senate Republican leadership and chairman of the Commerce Committee, he's a key ally of the president-elect as the all-Republican Congress moves to implement shared priorities such as tax cuts and repealing the Affordable Care Act. Yet he's also prepared to buck Trump by pressing to curb Medicare and Social Security benefits to address their looming insolvency.

Thune sat down with me in his Commerce Committee hearing room to discuss Washington's path forward in 2017. What follows is a condensed, edited transcript of our conversation.

HARWOOD: So Donald Trump comes in January 20th. Do you think of your job in the Senate and the Congress' job in general is to hit the gas for what he wants, or to pump the brakes?

THUNE: I think our job is to work with him to try and put together something that we think is achievable and doable. I think it's not to over promise. I think it's to set realistic expectations. It may be some of both.

HARWOOD: Now, when you think about his agenda, what are the things, if any, that you yourself think, "No, that's going too far for me."

THUNE: If he's talking about fixing a broken immigration system, if he's talking about fixing a broken tax code — rolling back some of the regulatory overreach, repealing and replacing Obamacare, I think those are things that all, at least generally — that — that there's agreement on.

Now, obviously some of them get more contentious. The immigration issue in the past has been, you know, is a difficult one to work through.

I think that we've got to be engaged in the international global marketplace. And I come from a state that depends heavily upon exports. So some of these things that have been proposed I think are unlikely.
Sen. John Thune of South Dakota, on Trump's plan to rip up NAFTA and slapping a 35 percent tariff on Chinese goods.

HARWOOD: You are not for deporting 11 million people.

THUNE: No. Right. And I suspect that that would be where a lot of my colleagues are on that particular issue.

HARWOOD: And what about ripping up NAFTA and starting with something new, putting a 35 percent tariff on Chinese goods.?

THUNE: I think that we've got to be engaged in the international global marketplace. And I come from a state that depends heavily upon exports. So some of these things that have been proposed I think are unlikely.

HARWOOD: Donald Trump has cast himself as a populist, saying he's going to help the forgotten people who have not done well in this economy. You've got a lot of those people in South Dakota. What, in Donald Trump's agenda, do you envision tangibly, concretely, helping your constituents who are in that group?

THUNE: I think one of the biggest frustrations that you hear from people across South Dakota — this Obamacare stuff is very real for people. Blue Cross/Blue Shield pulled out of the individual market in South Dakota about a month ago. That left 8,000 people without coverage.

This will be the first administration that hasn't had a single year of 3 percent economic growth. A lot of people left the workforce. And wages have stayed flat. We feel that in South Dakota, too.

HARWOOD: Trump's tax plan — the Tax Policy Center did an analysis and said for the middle 20 percent of the population, it would produce an average tax cut of about $1,000 for those families. For the top 1 percent, $214,000. For the top 0.1 percent, $1 million apiece. Are you comfortable with a tax plan with that kind of distribution of benefits?

THUNE: You're going to have to have, to pass anything up here, a tax plan that people believe will, one, benefit them, and two, will generate economic growth. The key to me is that what tax reform ought to be about is growth. We need a pro-growth tax code that gets out all these embedded costs that we have in our tax code today and enables the economy to start growing at a faster rate.

Because that creates better paying jobs. And so I think ultimately that what our objective ought to be is a tax reform proposal ultimately that will unleash the economy and generate that kind of growth.

HARWOOD: The president-elect will be the leader of the Republican Party. He says that he will not touch Medicare, Social Security or Medicaid benefits. Does that mean that's now the position of the Republican Party? Is it now John Thune's position?

THUNE: I think entitlement reform is important. I think we have to deal with programs that are growing at rates that are unsustainable and are not going to be around for future generations of Americans.

So, you know, whether or not that is something that's doable in a Trump administration remains to be seen.

HARWOOD: One of the judgments that markets have made and economists have made is that, given Donald Trump's priorities — no entitlement reform, big tax cut, big defense spending increase, big infrastructure spending increase — that we're going to have higher deficits, and that will stimulate the economy. That will produce higher growth. Is that OK by you?

THUNE: I think in terms of how we deal with deficits and debt going forward, it's really two things. You know, obviously, we've done as much as we can on the discretionary side, or what we call domestic discretionary spending.

But the two-thirds of the budget that represents what we call mandatory spending — that's entitlement programs, Social Security, Medicare, Medicaid — we've got to figure out a way to make those programs work better and cost less.

And that's where I think tax reform comes into play. And then I think we've got to rein in entitlement spending. I think it's twofold. It's reducing government spending, and faster growth in the economy. Tax reform ought to be revenue-neutral, budget-neutral, deficit-neutral.

HARWOOD: Right, but just to be clear, (Trump) has not proposed revenue neutral tax-reform.

THUNE: Correct.

HARWOOD: Steve Bannon, the former chair of Breitbart, has been appointed chief strategist in the White House. Does that trouble you?

THUNE: I don't know him. I've seen reporting, but he ran a very successful election and campaign. He's got a record, successful in the business world. And I think they hired him because they want to have a successful run in the presidency.

In situations like this, when it comes to hiring decisions, you want to give a lot of deference to the administration. Give this team a chance.

HARWOOD: Breitbart has a story that's out in the last 24 hours saying, "Republican lawmakers are already trying to undermine President-elect Trump," and particularly going after Paul Ryan. What do you think about that?

THUNE: I hope not. I mean, I think Paul Ryan's going to be essential to getting anything done up here. If you want to move a legislative agenda or program, you've got to have allies on Capitol Hill. There are always stories and attempts to create wedges. But in my view, it's very early on.

We've got to have some patience, allow these folks to get their team put together, and then see what we can do to work with them to get some things done for the American people. I think that's it. Voters want results. They want us to get things done.

HARWOOD: Let me ask you about a few things before the Commerce Committee. Donald Trump has said he opposes the AT&T-Time Warner merger. Do you?

THUNE: I look at all these in light of, you know, what's the effect on competition out there? And I think it's a little early at this point. I haven't made any pronouncements about that. The Justice Department will look at it, the FTC will look at it.

HARWOOD: Do you have an inclination?

THUNE: Some mergers, when looked at in the overall context of how it affects competition after it's said and done, come out differently than others. there are some where you create undue concentration of market power. And I think you have to look at those differently. But I'm still evaluating this.

Sen Thune: High time to modernize telecom laws
Sen Thune: High time to modernize telecom laws

HARWOOD: Does this look to you like one of those cases?

THUNE: I don't want to say at this point.

HARWOOD: Net neutrality — is that gone? And will it be gone through a rewrite of the Communications Act? Will it be gone by a new FCC chair?

THUNE: I would like to see Congress have an opportunity to weigh in on this. I suspect that with the changeover at the FCC there could be some changes made.

The way to put clear rules of the road in place is to have Congress engage and come up with a legislative framework that updates and modernizes our laws. That Title II reclassification used a 1934 law to do what they did. And I think it's high time that we modernize it. So I hope what comes out of this, and depending on what the new FCC does, is a renewed interest in having the legislative branch weigh in on this and create some clear rules of the road.

Sen GOP leader warning on Russia: Be very cautious
Sen GOP leader warning on Russia: Be very cautious

HARWOOD: But is there no doubt from your standpoint that net neutrality, the policy implemented by the Obama administration, will be gone?

THUNE: I'm not going to speculate about that. That'll be by and large a new FCC decision. But I would not be surprised — based upon the strong views that that generated and the very partisan way in which it was done — that there would be a serious consideration of relooking at that.

HARWOOD: The head of the NSA said (Monday) at The Wall Street Journal CEO Council that no one should have any doubt that Russia got involved in our election for the purpose of achieving a specific effect. Are you concerned about Donald Trump's position on Russia, closeness with Russia, and Russia's role in this election?

THUNE: Russia is constantly looking for ways to undermine and disrupt our democratic systems. I mean, I think they wanted to create doubt, and skepticism, and anything they can do to raise questions about that. So sure.

He's going to shape his foreign policy. But, you know, he'll have, I suppose, some input from Congress on some of these issues. And I just think that you need to be very cautious and very wary of things that we do with the Russians. They're very aggressive in a part of the world. they've demonstrated that they don't have our best interests at heart.
Thune on Donald Trump's stance with Russia.

HARWOOD: Did they succeed in tipping our election?

THUNE: Well, I don't think they succeeded in tipping the election. But they certainly attempted, I think, to be very engaged in the political process this time around. We have to view them skeptically. They have been a historic adversary. And anything that we do with the Russians, I think we need to have both eyes wide open.

HARWOOD: You want Donald Trump to have a different attitude?

THUNE: He's going to shape his foreign policy. But, you know, he'll have, I suppose, some input from Congress on some of these issues. And I just think that you need to be very cautious and very wary of things that we do with the Russians. They're very aggressive in a part of the world. they've demonstrated that they don't have our best interests at heart.