WHEN: Today, Thursday, September 28, 2017
WHERE: CNBC's "Squawk Box"
Following is the unofficial transcript of a FIRST ON CNBC interview with Speaker of the United States House of Representatives Paul Ryan on CNBC's "Squawk Box" (M-F, 6am-9am ET) today, Thursday, September 28, 2017. Following is a link to the interview on CNBC.com: https://www.cnbc.com/video/2017/09/28/rep-paul-ryan-we-will-stick-the-landing-on-20-percent-corporate-tax-rate.html.
JOE KERNEN: JOINING US NOW, HOUSE SPEAKER PAUL RYAN. WE JUST WENT OVER SOME BOARDS LEADER, MARKETS ARE OFF A LITTLE. AND THERE'S AN OLD ADAGE, BUY THE RUMOR, SELL THE NEWS, I DON'T THINK IT NECESSARILY MEANS ANYTHING ABOUT THE PLAN ITSELF; ALTHOUGH, I THINK W'ERE ALL WONDERING ABOUT THE LIKELIHOOD OF HOW EASY IT'S GOING TO BE TO GARNER THOSE VOTES AGAIN. I WISH I WAS TALKING ABOUT BIPARTISAN VOTES, BUT I'M NOT, I'M TALKING ABOUT REPUBLICAN VOTES BECAUSE WE KNOW HOW HARD THAT IS AFTER WHAT WE'VE SEEN. IS THIS GOING TO BE DIFFERENT, DO YOU THINK I'M BASICALLY TALKING ABOUT THE SENATE AGAIN OR THE SAME THREE OR FOUR INDIVIDUALS, CAN THEY HOLD THIS BILL HOSTAGE AS WELL TO PASS IT?
PAUL RYAN: YEAH, I MEAN, THAT'S A LEGITIMATE QUESTION THIS DAY AND AGE. BUT I FEEL VERY, VERY GOOD AND CONFIDENT ON THIS PARTICULAR PROJECT, BECAUSE FIRST OF ALL, OUR DNA IS PRETTY MUCH WIRED THE SAME ON TAX REFORM AND TAXES. WE HAD DISAGREEMENTS WITHIN OUR OWN PARTY AND CAUCUS ON HEALTH CARE. THE HOUSE PASSED ITS HEALTH CARE BILL LAST MAY, AS YOU KNOW. BUT WHAT WE DID DIFFERENTLY IN THIS GO AROUND IS WE SPENT THE LAST FOUR MONTHS BASICALLY WORKING TOGETHER, THE SENATE FINANCE COMMITTEE, THE HOUSE WAYS AND MEANS COMMITTEE, AND THE WHITE HOUSE, MAKING SURE THAT WE'RE ON THE SAME PAGE, SO THAT WE'RE THERE FOR THE TAKEOFF, SO THAT WE'RE THERE ON THE LANDING. MEANING UNLIKE HEALTH CARE WHERE THE HOUSE PASSED A BILL AND THE SENATE WENT A DIFFERENT DIRECTION AND ULTIMATELY DIDN'T GET ANYTHING PASSED, WE'RE MAKING SURE WE DID THE HARD LIFTING, THE TOUGH WORK, AHEAD OF SCHEDULE, AHEAD OF ROLLOUT, SO THAT WE CAME UP WITH THE SAME FRAMEWORK. THAT'S WHY I FEEL LIKE WE'RE WIRED FOR SUCCESS. AND IT WAS DONE BY THE COMMITTEES IN CHARGE OF WRITING THIS LEGISLATION, SENATE FINANCE COMMITTEE, HOUSE WAYS AND MEANS COMMITTEE, ALONG WITH STEVE MNUCHIN THE TREASURY SECRETARY AND GARY COHN, THE NEC DIRECTOR WITH MYSELF, ALONG WITH HOUSE LEADERSHIP INVOLVED. SO I FEEL GOOD ABOUT THAT. I'M EXCITED ABOUT THIS, JOE, I HAVE TO TELL YOU IVE BEEN WORKING ON THIS PRETTY MUCH MY ADULT LIFE. I WAS JACK KEMP'S STAFF ECONOMIST WORKING ON THIS STUFF BACK IN THE 90s AND I WAS CHAIR OF THE WAYS AND MEANS COMMITTEE BEFORE I HAD THIS JOB. AND I'VE GOT TO TELL YOU, THERE IS NOT ANOTHER THING WE CAN DO IN CONGRESS, IN LAW THAT WILL DO MORE TO GROW THIS ECONOMY, LIFT WAGES, HELP PEOPLE GET A RAISE AND BRING CONFIDENCE INTO OUR ECONOMY AND HIT THE 3% GROWTH AVERAGE WE USED TO HAVE THAN DOING TAX REFORM. THIS IS IT. THIS IS THE GAME CHANGER FOR OUR ECONOMY. AND WE ARE SO UNCOMPETITIVE GLOBALLY IT'S CRAZY. WE ARE REALLY, REALLY HURTING OURSELVES WITH OUR TAX CODE, WHETHER IT'S BUSINESSES OVERSEAS WITH TRAPPED CASH, WHETHER ITS THE FACT THAT WERE TAXING OUR BUSINESSES AT MUCH HIGHER TAX RATES THAN OUR FOREIGN COMPETITORS ARE TAXING THERES, OR PEOPLE LIVING PAYCHECK TO
PAYCHECK, THE MIDDLE-CLASS WHO ARE GETTING A SQUEEZE, AND HAVE JUST HAD STAGNANT WAGES FOR SO LONG. THERE'S SO MUCH ECONOMIC ANXIETY. TAX REFORM DOES SO MUCH TO FIX THOSE PROBLEMS AND THAT IS WHY WE ARE ALL IN ON THIS, WE ARE UNIFIED AND WE ARE EXCITED ABOUT THIS.
KERNEN: I WOULD URGE YOU – DON'T LOOK AT CONSERVATIVE WEB SITES BECAUSE THEY'RE SAYING YOU'RE RAISING TAXES ON RICH PEOPLE AND YOU'RE ACTUALLY GOING TO HAVE A SURCHARGE. AND THEN YOU LOOK AT THE LIBERAL -- IM LOOKING AT "USA TODAY" DON'T LOOK AT "USA TODAY" TODAY RYAN. IT SAYS TRUMP'S GONNA REAP MILLIONS, PROPOSALS CUT ESTATE TAXES AND AMT JUST TO BENEFIT THE WEALTHY. CERTAIN PLACES ARE SAYING IT DOESN'T BENEFIT THE MIDDLE-CLASS AT ALL. SO I WOULD IGNORE A LOT THIS STUFF BECAUSE YOU HAVE A JOB TO DO OBVIOUSLY BUT THEN AGAIN SOMETIMES PUBLIC OPINION AND THE WAY IT'S CHARACTERIZED WHEN THINGS GET ROLLING – LIKE, THE REPEAL PLANS NEVER GOT ABOVE LIKE 20% AND I THINK THAT MATTERED IN TERMS OF PUBLIC APPROVAL AND THERE CAN BE PRESSURE ON YOU. I WOULD URGE YOU NOT TO LOOK AT THIS STUFF, BUT YOU'RE GONNA SEE IT. I WONDER IF WHETHER YOU'RE LESS COMMITTED MEMBERS IN THE SENATE WILL FOLD TO THE PUBLIC PRESSURE BECAUSE IT'S HARD TO DO THIS STUFF.
RYAN: THIS IS WHY IT HASN'T BEEN DONE SINCE 1986. LOOK, I'VE BEEN ON THE WAYS AND MEANS COMMITTEE SINCE 2001 TRYING TO DO THIS. CLEARLY, JOE, THIS HAS BEEN A HARD LIFT BECAUSE OF THE THINGS YOU JUST SAID. NOT THE MENTION SPECIAL INTERESTS LOOKING TO KEEP THEIR LOOPHOLES. SO HERE'S THE POINT. LET ME CLEAR UP A COUPLE THINGS. SURCHARGE. WE'RE JUST SAYING THE HIGH INCOME EARNERS WILL NOT RECEIVE THE KIND OF TAX RATE REDUCTION AND TAX CUT THE MIDDLE-CLASS WILL RECEIVE BECAUSE THIS IS ABOUT PEOPLE LIVING PAYCHECK TO PAYCHECK, WITH RESPECT TO AMT, IT'S A CRAZY RIDICULOUS TAX AND ITS VERY COMPLICATED WE DON'T NEED IT EVEN THE ARBITERS ON THIS DEBATE, EVEN THE IRS ADVOCATE SAYS THIS IS CRAZY, YOU SHOULD GET RID OF THIS. BUT OUR RATES ON BUSINESSES ARE SO HIGH – 35% FOR CORPORATIONS, 44.6% TOP EFFECTIVE RATE FOR PASS THROUGHS WHICH IS 80% AMERICAN BUSINESSES THAT'S WHAT WE'RE TAXING BUSINESSES AT AND THE AVERAGE IN THE WORLD IS 22.5 SO THIS IS KILLING US. AND THEN IF YOU MAKE MONEY OVERSEAS YOU CAN'T BRING IT HOME BECAUSE YOU GET TAXED IF YOU DO THAT. SO WE KNOW WE NEED TO FIX THIS AND WE KNOW WE CAN GET MUCH FASTER ECONOMIC GROWTH, MORE BIGGER PAYCHECKS AND MORE JOBS IN THIS ECONOMY WITH TAX REFORM SO I WOULD SAY WE'RE GONNA GET – THE DEMAGOGUERY IS GOING TO COME THIS IS POLITICS THAT HAPPENS. WE KNOW WHAT WORKS AND WE KNOW AMERICANS NEED A BREAK WE KNOW PEOPLE NEED A BREAK ON THEIR PAYCHECKS AND WE KNOW WE NEED FASTER ECONOMIC GROWTH SO WE CAN GET MORE WAGES. WE HAVENT HIT 3% GROWTH SINCE BEFORE THE LAST RECESION, IT'S BEEN ABOUT A DECADE, AND THAT'S WHY YOU HAVE ECONOMIC ANXIOUS SIGHTY THAT IS WHY YOU HAVE STAGNANT WAGES. THIS GETS US A 3% ECONOMY PLUS AND WE KNOW THAT, AND THAT'S WHY WE'RE SO DEDICATED TO DOING THIS.
KERNAN: SPEAKER, THE PRESIDENT YESTERDAY AND GARY COHN THIS MORNING REITERATING WHAT THEY CALLED A BRIGHT LINE ON THIS 20% RATE. MEANING IT WILL NOT GO HIGHER, ARE YOU COMMITTED TO THAT?
RYAN: YES, I TALKED TO THE PRESIDENT LATE LAST NIGHT. I'M EXCITED HE SAID A RED LINE, BRIGHT LINE, WHATEVER LINE YOU WANT TO CALL IT. I COMPLETELY AGREE WITH THAT. LOOK, WHEN WE PULLED THE BORDER ADJUSTMENT FROM OUR BILL IN THE MIDDLE OF THE SUMMER THAT CREATED A BIG REVENUE HAUL AND WE SPENT THE NEXT FEW MONTHS REWORKING THE NUMBERS AND MAKING SURE WE COULD GET TO 20% WHICH WE CAN AND WE'RE EXCITED ABOUT THAT, AND YES, SO WE HAVE TO STICK THE LANDING ON THAT AND WE'RE JUST AS COMMITTED AS THE WHITE HOUSE IS HOLDING THROUGH ON THAT.
MELISSA LEE: ARE THERE OTHER ITEMS IN THE NINE-PAGE FRAMEWORK, SPEAKER, THAT ALSO FALL INTO THAT SAME CATEGORY THAT ARE NON-NEGOTIABLE? OR IS EVERYTHING ON THE TABLE EXCEPT FOR THE 20% CORPORATE TAX RATE?
RYAN: HERE'S THE POINT I'M TRYING TO SAY IS, THE REASON WE PUT THIS FRAMEWORK OUT. GUESS WHO PUT IT OUT? THE HOUSE AND THE SENATE AND WHITE HOUSE TOGETHER. SO NOW WE WORK WITHIN THIS FRAMEWORK. THIS GOES FROM THE FRAMEWORK WE ALL AGREE ON, THAT WE'RE ALL WORK WITHIN THIS FRAMEWORK AND WE MOVE IT TO THE TAX WRITING COMMITTEES FIRST BECAUSE THE CONSTITUTION SAYS THE HOUSE MUST GO FIRST ON TAX POLICY. THE WAYS AND MEANS COMMITTEE WILL FILL IN THOSE DETAILS WITH INSIDE THIS FRAMEWORK AND THEN WE MOVE IT THROUGH THE HOUSE AND SEND IT OVER TO THE SENATE WHO WORKS WITHIN THIS FRAMEWORK. SO DON'T THINK OF THIS THING GOING OUTSIDE THE FRAMEWORK, THINK OF HERE'S THE FRAMEWORK AND THE OUTLINE AND NOW WE PUT THE DETAILS WITHIN THE FRAMEWORK BECAUSE WE'VE AGREED BETWEEN THE HOUSE AND SENATE AND THE WHITE HOUSE ON THIS SET UP, FRAMEWORK.
KERNEN: IT WAS KIND OF A – SPEAKER, BY THE WAY, I DEMOTED YOU EARLIER.
RYAN: HEY, WHERES BACKY, BY THE WAY?
KERNEN: BECKY I THINK IS DOING HER CIVIC DUTY AND I THINK SHE ACTUALLY IS ON A TRIAL.
RYAN: OH, SHE'S ON JURY DUTY.
KERNEN: I HOPE SHE THROWS THE BOOK AT THIS –
LEE: WHATEVER CASE IT IS.
KERNEN: WE DON'T KNOW. MAYBE HES INNOCENT.
OR SHES INNOCENT. WE DON'T KNOW.
RYAN: SORRY I BROUGHT IT UP.
ANDREW ROSS SORKIN: LYNN TILTON FOUGHT THE LAW AND WON.
KERNAN: BUT WITH TRUMP IT'S GUILTY UNTIL PROVEN INNOCENT WITH YOU. NOW YOU WANT TO GIVE THE --
RYAN: I'M SORRY I BROUGHT THAT UP. JUST PLEASE SAY HI TO HER FOR ME.
LEE: WE ARE, TOO.
KERNEN: SPEAKER I'M LOOKING AT THIS ALABAMA SITUATION AND WHAT THEY'RE POINTING TO – I'M GOING TO CALL YOU PAUL, I'VE KNOWN YOU FOR SO LONG.
RYAN: JOE, WE'VE KNOWN EACH OTHER A LONG TIME, GO AHEAD, THAT'S WHAT I GO BY.
KERNEN: THEYRE SAYING IT WAS CAUSED – THEY'RE TELLING SENATOR COLLINS, MURKOWSKI AND
McCAIN ALL TO TAKE A BOW FOR ELECTING THIS -- FOR GETTING THIS TWICE DEFROCKED SUPREME COURT JUSTICE, LUTHER STRANGE, BUT THEY'RE ALSO POINTING AT MITCH McCONNELL AS WELL THAT THIS IS THE KIND OF THING THAT HAPPENS TO VOTERS WHEN THEY GET TOTALLY DISGRUNTLED ABOUT THE WAY THINGS ARE GOING. IS THIS GOING TO MAKE IT HARDER?
RYAN: NO. GETTING TAX REFORM DONE OR--?
KERNEN: THE WHOLE OBAMACARE DEBACLE, I WONDER WHETHER IT MAKES IT HARDER OR EASIER.
RYAN: WE'RE PRETTY FRUSTERATED ABOUT THIS AS WELL. AS YOU KNOW, WE PASSED OUR OBAMACARE BILL LAST MAY AND WE USED THE RECONCILIATION RULES THAT ARE NOT RULES TO WRITE THE BILL WHICH WE DIDN'T LIKE DOING BUT WE DID BECAUSE WE WANTED TO GET LAW. WE'RE REALLY FRUSTRATED WE'VE PASSED 373 BILLS HERE IN THE HOUSE. 270 SOME ARE STILL IN THE SENATE. SO IN THE HOUSE – WE'VE PASSED MORE BILLS IN THE HOUSE IN THIS STAGE OF THE TRUMP PRESIDENCY THAN THEY DID IN THE OBAMA PRESIDENCY, THE CLINTON PRESIDENCY AND BOTH BUSH PRESIDENCIES. SO IN THE HOUSE WE'RE ROCKING AND ROLLING, GETTING OUR WORK DONE. WE PASSED OUR APPROPRIATION BILLS AHEAD OF SCHEDULE, THE FIRST TIME A REPUBLICAN MAJORITY HAS DONE THAT SINCE 2004. WE PASSED A REPEAL AND REPLACE OF DODD/FRANK, WE PASSED BORDER SECURITY BILLS, WE PASSED OUR VETERAN'S BILLS, OUR EDUCATION REFORM BILLS, OUR MILITARY READINESS BILLS. WE'VE PASSED THESE THINGS WE SAID WE WOULD PASS WHEN WE SAID WE WOULD PASS THEM. SO WE'RE FRUSTRATED. THE SENATE HAS RULES THAT PERPLEX US AND FRUSTRATE US BUT IT'S THE WAY OUR SYSTEM WORKS. AND THEY HAVE A RAZOR THIN MAJORITY – I MEAN, 2 PEOPLE MAJORITY, AND THEN THEY HAVE TO APPROVE ALL OF THESE JUDGES AND AMBASSADORS AND CABINET SECRETARIES WHICH TAKES A LOT OF THEIR TIME AS WELL. SO THEIR SYSTEM IS DIFFERENT THAN OURS AND WE'RE THE ONES WHO HAVE BEEN PASSING THESE BILLS AND WE'RE A LITTLE FRUSTRATED TOO, BUT WE HAVE TO GET THIS STUFF DONE. THERE'S JUST NO EXCUSE FOR NOT GETTING THINGS DONE. AND ONE OF THE REASONS WHY I'M SO BULLISH ON TAX REFORM IS BECAUSE WE WILL USE RECONCILIATION FOR TAX REFORM WHICH MEANS TWO THINGS, THEY CAN'T STRING THE DEBATE FOREVER, IT HAS TIME LIMITS ON DEBATE AND THEY CANNOT FILIBUSTER AND THAT'S WHY WE'RE BULLISH ON TAX REFORM BECAUSE WE KNOW THIS IS THE BIGGEST THING WE CAN DO TO HELP ECONOMIC GROWTH, TO HELP PEOPLE STRUGGLING IN THE MIDDLE CLASS, TO MAKE AMERICAN BUSINESSES MORE COMPETITIVE, TO KEEP COMPANIES IN AMERICA AND NOT INVERTING AND MOVING OVERSEAS AND TO GET MANUFACTURING, LOOK, A 20% CORPORATE TAX RATE WITH FULL EXPENSING FOR FIVE YEARS IN A TERRITORIAL SYSTEM, WE'RE GONNA KNOCK IT OUT OF THE PARK WITH THAT. BRINGING THE PASS THROUGH RATES DOWN FROM 46 DOWN TO 25, WE'RE GOING KNOCK IT OUT OF THE PARK. AND GIVING MIDDLE-CLASS TAXPAYERS A BREAK WHO ARE MOVING PAYCHECK TO PAYCHECK, THIS IS GOING TO BE GOOD FOR OUR COUNTRY, YES WE HAVE TO GET THROUGH THE WHOLE K STREET BONANZA, WE HAVE TO GET THROUGH THE PRESSERS AND DEMAGOGUERY AND THE MISINFORMATION AND ALL THE NEWS, AND FOCUS ON DOING OUR JOBS WE HAVE THE VOTES AND TOOLS TO DO IT BECAUSE WE'RE USING RECONCILIATION AND THAT'S WHY I'M BULLISH GETTING THIS DONE.
KERNEN: I KNOW THE SENATE IS TALKING ABOUT GETTING DEMOCRATS. DO YOU THINK THE HOUSE YOU'LL GET A FEW?
RYAN: I DO. WE TALK TO THEM QUITE A BIT. WE HAVE A LOT OF FRIENDS ON THE OTHER SIDE OF THE AISLE AND WE HAVE CONVERSATIONS WITH THEM AND THERE ARE STILL MODERATES LEFT. AND I WOULD SAY THEY LIKE WHAT WE'RE DOING. THEY'VE TALKED TO US ABOUT WHAT THEIR ISSUES AND CONCERNS ARE SO I DO BELIEVE -- LOOK, IF YOU'RE FROM INDIANA OR NORTH DAKOTA OR MISSOURI OR MONTANA, ALMOST ALL OF YOUR BUSINESSES ARE PASS THROUGHS, A BUNCH OF YOUR BUSINESSES ARE MOVING OVERSEAS, YOUR WORKERS - YOUR CONSTITUENTS A STRUGGLING AND THEY KNOW TAX REFORM GETS US GROWTH. SO I REALLY DO AT THE END OF THE DAY I BELIEVE WE WILL PROBABLY GET SOME DEMOCRAT SUPPORT BECAUSE RATHER THAN VOTING IDEOLOGY OR PARTY LINE I THINK THEYLL VOTE FOR THEIR CONSTITUENTS, THEY KNOW THIS IS GOOD SO I DO BELIEVE AT THE END OF THE DAY IN MY HEART OF HEARTS WELL GET THOSE VOTES.
KERNEN: YOU'RE NOT IN THE SENATE AND I HEAR YOUR FRUSTRATION LOOKING OVER AT THAT -- THOSE LEGISLATORS TO OVER THERE DO YOU THINK YOU'LL NEED DEMOCRATS?
RYAN: I DONT THINK SO.
KERNEN: SO YOU THINK McCAIN WILL VOTE FOR THIS?
RYAN: I THINK JOHN WILL.
KERNEN: AND RAND PAUL AND SUSAN COLLINS? THEY'LL VOTE FOR THIS?
RYAN: YEAH BECAUSE AGAIN HEALTH CARE IS AN ISSUE WHERE WE HAVE DIFFERENCES OF OPINIONS AS REPUBLICANS, NUMBER ONE. NUMBER TWO JOHN HAD PROCESS ISSUES, WE ARE GOING THROUGH REGULAR ORDER. WE NEGOTIATED A FRAMEWORK BETWEEN THE HOUSE AND SENATE AND WHITE HOUSE NOW WE'RE GOING THROUGH THE COMMITTEE SYSTEM AND GOING TO THE FLOOR. DOING IT EXACTLY THE WAY THE PROCESS WAS MEANT TO BE DONE. SO BECAUSE WE'RE -- WE'VE HAD HEARINGS ALL THE TIME THIS YEAR IN THE HOUSE AND SENATE WAYS AND MEANS AND FINANCE COMMITTEE SO WE'VE HAD HEARINGS, WE'RE DOING REGULAR ORDER, WE'RE USING THE RULES AS THEY WERE INTENDED TO BE USED SO YEAH, I DO BELIEVE AND BY THE WAY TAXPAYERS IN ARIZONA AND MAINE ARE STRUGGLING JUST AS MUCH AS THEY ARE IN WISCONSIN AND WE KNOW THIS RELIEF IS MUCH NEEDED. AND WE REALLY BELIEVE AND KNOW THAT WE CAN GET 3% ECONOMIC GROWTH BUT OUR TAX CODE IS HOLDING US BACK AND WE ALL KNOW THAT. AND THAT'S WHY I'M REALLY CONFIDENT WE CAN GET THIS DONE?
KERNEN: SO FIRST YOU HAVE TO DO THE BUDGET, RIGHT?
RYAN: YEAH, WE'RE BRINGING IT TO THE FLOOR IN THE HOUSE AND I THINK THE BUDGET COMMITTEE IS MARKING IT UP IN THEIR COMMITTEE NEXT WEEK.
KERNEN: SO THAT'S GOING TO WORK?
RYAN: YEAH, I THINK YOU KNOW THE PROCESS, YOU GET THE BUDGET THROUGH, YOU GET THE BUDGET RECONCILIATION AND INSTRUCTIONS WE CALL IT. AND THEN YOU BRING THAT TAX BILL OUT OF THE WAYS AND MEANS COMMITTEE, SEND IT TO THE BUDGET COMMITTEE, AND THEN BRING IT TO THE FLOOR, PASS AND SEND IT TO THE SENATE. THAT'S HOW IT WORKS.
KERNEN: THE BLUE STATES SEEM LIKE IF THIS -- ARE YOU CONFIDENT THAT THE STATE TAX DEDUCTION, DOES THAT MAKE IT TO THE -- DOES THAT SEE THE LIGHT OF DAY WHEN IT'S SAID AND DONE?
RYAN: I THINK IT HAS TO BECAUSE IT HAS TO BECAUSE THE NUMBERS ARE SO GREAT AND THAT GETS YOU A MIDDLE-CLASS TAX CUT, EVEN FOR PEOPLE IN EVERY STATE SO THAT GETS YOU THE ABILITY TO GIVE MIDDLE-INCOME TAXPAYERS, PEOPLE WORKING PAYCHECK TO PAYCHECK.
KERNEN: CALIFORNIA AND NEW YORK IT TO YOU DO I WANT YOU TO STICK IT, I DO. NEW JERSEY, CAN THERE BE A NEW JERSEY EXCLUSION?
RYAN: WE'RE GETTING A LOT BETTER IN WISCONSIN BUT WE'RE CONSIDERED A HI-TECH STATE AS WELL. WISCONSIN HAS DONE A LOT TO IMPROVE IT. BUT YOU GOT TO REMEMBER, THIS IS ABOUT LOWERING TAXES FOR MIDDLE INCOME TAXPAYERS AND THAT GETS US THE ABILITY TO DO THAT. SO PEOPLE NEED TO LOOK AT THIS IN ITS TOTALITY. LOOK AT THE FACT THAT NINE OUT OF TEN TAXPAYERS, THEY'RE GONNA BE ABLE TO FILL THEIR TAXES OUT ON A POSTCARD. WHEN YOU DOUBLE THAT STANDARD DEDUCTION AND KEEP THINGS LIKE CHARITY AND MORTGAGES YOU DRAMATICALLY SIMPLIFY THE TAX CODE. AND WHEN YOU LOWER TAX RATES ACROSS THE BOARD FOR MIDDLE AND LOW INCOME TAX PAYERS, AND YOU MAKE THE SYSTEM SO MUCH SIMPLIER AND FAIRER.
KERNEN: ANDREW, YOU'VE GOT HAVE HIM HERE, YOU HAVE SOME REAL CONCERNS.
RYAN: OK, SORKIN, WHAT'S YOUR CONCERNS?
ANDREW ROSS SORKIN: FIRST AT THE BOTTOM OF THIS, WHICH TALKED TO GARY COHN ABOUT IT WALK THROUGH THE IDEA OF GOING FROM 10% ON THE BOTTOM TO 12?
RYAN: YEAH. NO, NO. YOU GOT IT WRONG YOURE GOING FROM 10% ON THE BOTTOM TO ZERO. SO, BY DOUBLING THE STANDARD DEDUCTION THE PEOPLE WHO ARE CAPTURING THAT 10% RATE THEY GO TO 0% RATE. 15% BRACKET COMES DOWN TO 12%. THAT'S THE POINT YOURE LOOKING AT THIS OPTICALLY OH, A 10 GOES TO 12. AND THOSE PEOPLE PAY A HARDER RATE. NO WE'RE EXEMPTING THOSE PEOPLE FROM THE 10% RATE FROM MANY MORE DOLLARS OF THEIR INCOME. WE'RE GETTING A LOWER INCOME TAX CUT FOR THOSE PEOPLE AS WELL
SORKIN: SPEAK TO THE ESTATE TAX ISSUE AND TO THE DEGREE YOU WOULD REMOVE IT WHAT WOULD THAT DO TO ECONOMIC GROWTH IN THIS COUNTRY?
RYAN: LOOK, YOU GUYS -- I DON'T KNOW WHERE YOU LIVE, ANDREW. BUT WHERE I LIVE BUSINESSES ARE FAMILY BUSINESSES. BUSINESSES ARE MULTI-GENERATIONAL FARMS, MANUFACTURERS. AND THIS TAX IS DESTROYING THE INNER GENERATIONAL TRANSFER OF BUSINESS TO BUSINESS, OF FATHER TO DAUGHTER AND ON TO THE NEXT GENERATION. JUST QUITE FRANKLY WE DON'T THINK THAT SHOULD BE A TAXABLE EVENT. WE DON'T THINK IT'S FAIR. YOU PAY TAXING ALL YOUR LIFE SOMETIMES TWO OR THREE TIMES ON THE SAME DOLLAR. WHEN YOU DIE YOU DO IT AGAIN? WHAT ENDS UP HAPPENING WHEN WE DO THAT TO PEOPLE IS WE DESTROY FAMILY BUSINESSES. WHY ON EARTH WOULD WE WANT TO BE DOING THAT? SO—
SORKIN: I MAKE THE ARGUMENT TO YOU THAT ACTUALLY THE ESTATE TAX -- I CAN MAKE THE EXACT ARGUMENTS YOU'RE MAKING. I JUST WANT TO BE CLEAR, IT'S A PHILOSOPHICAL ARGUMENT LESS THAN AN ECONOMIC GROWTH ARGUMENT.
RYAN: PHILOSOPHICAL BUT BIG ECONOMIC GROWTH FOR THOSE WHO LOSE THEIR BUSINESSES OR CUT THEIR BUSINESSES IN HALF WHEN THE OWNER DIES. THAT'S BAD GROWTH FOR THOSE FAMILY BUSINESSES FOR RANCHERS AND FARMERS. PEOPLE IN THIS COUNTRY HAVE BUSINESSES WHO ARE ASSET WEALTHY, BUT CASH POOR.
SORKIN: 100%. THEN THE OTHER QUESTION IS GARY COHN TALKED ABOUT THIS FOURTH TIER THAT THEY'VE EFFECTIVELY SAID THERE NEEDS TO BE A FOURTH TIER WERE GAME FOR IT OR AT LEAST OPEN TO IT. IN YOUR MINE WHAT KIND OF TIER ARE WE TALK ABOUT? WHAT KIND OF INCOME WOULD A FAMILY NEED TO HAVE BEFORE YOU EVEN BEGIN THAT DISCUSSION?
RYAN: SO, THE PURPOSE OF THAT FOURTH TIER, AND I'VE SPOKEN WITH THE PRESIDENT ABOUT THIS MANY TIMES, I'VE SPOKEN TO GARY MANY TIMES ABOUT THIS, IS THAT WE DON'T WANT VERY HIGH INCOME EARNERS – I'M TALKING ABOUT WAGE AND SALARY EARNERS, NOT THE PASSERS - VERY HIGH INCOME EARNERS - DON'T GET A GIANT TAX BREAK BECAUSE WE WANT THE TAX BREAKS TO GO TO THE MIDDLE CLASS.
SORKIN: BUT WHAT KIND OF NUMBER ARE WE TALKING ABOUT:
RYAN: WE'RE NOT TALKING ABOUT RAISING RATES. IT'S ALREADY THE TOP STATUTORY RATE IS 36%. NOBODY IS TALKING ABOUT GOING ABOVE THAT. IT'S JUST DOES THAT 39.6 GO DOWN TO 35 OR SOMETHING ELSE. SO THAT YOU CAN PUT THAT FISCAL SPACE, THAT MONEY INTO MIDDLE CLASS TAX CUTS. THAT'S WHAT THAT'S ABOUT. NO ONE IS TALKING ABOUT BRINGING RATES UP FROM WHERE THEY ARE, ITS JUST DO THEY DROP AS FAR AS THEY WOULD OTHERWISE? AND ON THE FOURTH RATE,
NO, THEY LIKELY WON'T.
SORKIN: WHAT I'M ASKING ABOUT THAT FOURTH RATE WHAT KIND OF INCOME MILLION DOLLARS, $2 MILLION, $500,000?
RYAN: I DON'T KNOW - THAT'S SOMETHING THE WAYS AND MEANS AND FINANCE COMMITTEE WILL HAVE TO DEAL WITH. I THINK OFF THE TOP OF MY HEAD THE BREAK POINT FOR 39.6 IS 477 GRAND. THAT COULD GO UP, CLEARLY I THINK. BUT THAT'S GOING TO BE DECIDED BY THE WAYS AND MEANS FINANCE COMMITTEE.
LEE: LAST QUESTION, SPEAKER. THIS WILL PASS THIS YEAR, BY THE END OF THE YEAR?
RYAN: YEAH. LOOK. YOU'RE NOT GOING TO GET 3% GROWTH IN 2018 UNLESS YOU GET THIS DONE IN 2017. SO WE'RE REALLY SERIOUS ABOUT THAT. WE HAVE THE TIME AND SPACE TO DO IT. ONE OF THE DEALS THE PRESIDENT WAS ABLE TO DO ON THE DEBT LIMIT AND THE CR WAS GIVE US THIS TIME AND SPACE TO GET THIS MOVING. INSTEAD OF HAVING SOME POSSIBLE GOVERNMENT SHUTDOWN ISSUE ON THE FLOOR WE HAVE THE BUDGET ON THE FLOOR NEXT WEEK, WHICH GETS US TAX REFORM. SO WE'VE DONE A GOOD JOB OF CLEARING THE DECKS, GETING FOCUSED ON THIS. WE HAD A HALF DAY RETREAT WITH OUR MEMBERS WALKING THROUGH ALL OF THIS. WE BELIEVE -- AND LOOK, IN THE HOUSE IS MORE NIMBLE, FASTER BECAUSE WE USE RECONCILIATION AND TIGHT TIMELINES ON THAT. WE CAN GET THIS DONE THIS YEAR GET IT DONE IN 2017 SO WE WAKE UP IN 2018 WITH A NEW TAX SYSTEM AND AN ECONOMY THAT'S TAKING OFF SO WE CAN GET ABOVE 3% GROWTH.
KERNEN: OKAY. THANK YOU FOR ALL THE TIME, TODAY. I KNOW YOU HAVE TO RUN. THANK YOU.
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