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FIRST ON CNBC: CNBC TRANSCRIPT: SENATOR CHUCK SCHUMER SPEAKS WITH CNBC’S JOHN HARWOOD TODAY

WHEN: Today, Thursday, November 2, 2017

WHERE: CNBC's "Fast Money Halftime Report"

Following is the unofficial transcript of a FIRST ON CNBC INTERVIEW with Senator Chuck Schumer and CNBC's John Harwood on CNBC's "Closing Bell" (M-F 5PM – 6PM ET) today, Thursday, November 2nd. Following is a link to an excerpt of video on CNBC.com: https://www.cnbc.com/video/2017/11/02/senate-minority-leader-schumer-we-need-jobs-this-tax-bill-doesnt-do-it.html.

All references must be sourced to CNBC.

MELISSA LEE: YLAN, THANK YOU. YLAN MUI IN D.C. FOR MORE ON TAXES AND TODAY'S BIG FED NOMINATION, LET'S HEAD DOWN TO CAPITOL HILL. JOHN HARWOOD IS IN D.C., SITTING DOWN WITH SENATE MINORITY LEADER CHUCK SCHUMER, A FIRST ON CNBC INTERVIEW. JOHN, TAKE IT AWAY.

JOHN HARWOOD: MELISSA, WE'LL GET RIGHT INTO IT. SENATOR SCHUMER, FIRST OF ALL, YOU KNOW THEY CAN PASS THIS WITHOUT ANY OF YOUR VOTES.

SENATOR CHUCK SCHUMER: THAT'S WHAT THEY'RE TRYING TO DO.

HARWOOD: CAN YOU STOP THEM? AND ARE THERE ANY DEMOCRATS, ESPECIALLY SOME OF THOSE RED STATE DEMOCRATS WHO ARE UP NEXT YEAR, WHO YOU THINK MAY VOTE FOR IN BILL?

SCHUMER: WELL, EACH OF THE RED STATE DEMOCRATS WILL MAKE UP HIS OR HER MIND, THEY'RE INDEPENDENT. BUT WE HAVE A LETTER THAT 45 DEMOCRATS SIGNED AND SAID WE HAD THREE PRINCIPLES: NO TAX BREAKS FOR THE TOP 1%, KEEP – DON'T INCREASE THE DEFICIT, AND DO IT WITH DEMOCRATS, NOT THROUGH RECONCILIATION. THE THREE WHO DIDN'T SIGN BELIEVE IN THOSE PRINCIPLES, YOU CAN HEAR THEIR STATEMENTS, THEY JUST DIDN'T HAPPEN TO SIGN THE LETTER. SO I THINK IF THEY DON'T CHANGE THE PLAN, THEY'RE GOING TO HAVEA ROUGH TIME GETTING DEMOCRATS, BECAUSE THE BILL IS SO SKEWED TO THE WEALTHIEST AND SO MANY MIDDLE CLASS PEOPLE GET TAX INCREASES. AND MOST OF ALL, FOR MANY OF OUR RED STATE DEMOCRATS, THE DEFICIT, THE HOLE IN THE DEFICIT, WHICH SEEMS TO BE ABANDONED BY THE HARD RIGHT, DEFICIT REDUCTION MATTERS TO THEM STILL. THEY'RE CENTRISTS.

HARWOOD: LET ME ASK YOU ABOUT THE CORE THEORY BEHIND THE BILL. BECAUSE YOU TALK ABOUT CUTS FOR THE WEALTHY BUT THE CORE OF THE BILL IS CUTS FOR BUSINESS. AND THE ARGUMENT IS THIS IS GOING TO STIMULATE ADDITIONAL INVESTMENT, IT'S GOING TO CREATE JOBS, AND ULTIMATELY RESULT IN HIGHER WAGES. DO YOU SEE ANY MERIT TO THAT ARGUMENT?

SCHUMER: VERY LITTLE.

HARWOOD: DO YOU REJECT IT ALL TOGETHER?

SCHUMER: HISTORY DISPROVES IT. GEORGE BUSH IN TERMS OF THE DEFICIT DID TWO BIG TAX CUTS AND THEY SAID JOBS WOULD BOOM. THEY DIDN'T. IT SAID DEFICITS WOULD SHRINK. CBO SAID THE DEFICIT WENT UP $1.6 TRILLION TEN YEARS AFTER. AND EVERY TIME THERE HAS BEEN A TAX

CUT, WHETHER IT'S IN THE REAGAN YEARS, IN THE BUSH YEARS, OR RECENTLY IN KANSAS WHERE THE KOCH BROTHERS DOMINATE AND THEY HAD THEIR GREAT EXPERIMENT, "IF KANSAS CUTS TAXES, BUSINESS WILL BOOM, JOBS WILL BE CREATED, AND THE DEFICIT WILL GO DOWN." DEFICIT WENT UP 700 MILLION. THEY HARDLY HAD ENOUGH MONEY FOR SCHOOLS. SOME SCHOOLS WERE GONNA GO FOUR DAYS A WEEK. AND GROWTH IN KANSAS LAST YEAR, .2%, U.S. GROWTH 1.6. IT'S – I JUST – IT'S SELF-SERVING BY SOME VERY, VERY WEALTHY CORPORATE LEADERS, NOT BIG BUSINESS, USUALLY, SORT OF HARD RIGHT PEOPLE LIKE THE KOCHS, AND INDIVIDUALS AND IT DOESN'T WORK.

HARWOOD: DO YOU BELIEVE AS LARRY SUMMERS AND SOME DEMOCRATIC ECONOMISTS HAVE ASSERTED LATELY, THAT TAXES ACTUALLY NEED TO GO UP, NOT DOWN, BECAUSE OF OUR DEFICITS, BECAUSE OF THE RETIREMENTS OF BABY BOOMERS AND MEDICARE AND SOCIAL SECURITY?

SCHUMER: I WOULD RATHER SEE DEFICIT NEUTRALITY. I'M NOT AGAINST REDUCING THE CORPORATE RATE. RIGHT NOW, THE THOUSAND TOP CORPORATIONS PAY AN ACTUAL RATE OF 16%. SO TO CLOSE LOOPHOLES AND REDUCE THE RATES TO MAKE US MORE COMPETITIVE, FINE. I'M NOT AGAINST BRINGING DOLLARS OVERSEAS THAT ARE SITTING OVERSEAS AT A REDUCED RATE, IF THEY'LL PUT THE MONEY INTO REAL JOBS, INFRASTRUCTURE. LAST TIME WE DID IT, THERE WERE NO CONSTRAINTS, 80% OF THE DOLLARS WENT TO BUYBACKS AND THINGS LIKE. THAT WE NEED JOBS IN AMERICA. THIS TAX BILL DOESN'T DO IT.

HARWOOD: THE PRESIDENT TODAY NOMINATED JEROME POWELL TO BE THE NEW CHAIR OF THE FEDERAL RESERVE. HE IS DESCRIBED AS, IF NOT JANET YELLEN, THE CLOSEST OF THE ALTERNATIVES TO YELLEN. DO YOU SEE SUBSTANTIAL DEMOCRATIC OPPOSITION TO HIM? DO YOU THINK THAT NOMINATION WILL GO THROUGH WITHOUT TOO MUCH TROUBLE?

SCHUMER: I THINK THERE'S DISAPPOINTMENT THAT YELLEN WASN'T RENOMINATED. AFTER ALL, I THINK IT'S THE LAST THREE FEDERAL NOMINEES WHO HAVE BEEN RENOMINATED, EVEN SOME THAT

ARE APPOINTED BY A DEMOCRAT RENOMINATED BY A REPUBLICAN. SO I URGED THE PRESIDENT, AND I TALKED TO HIM ABOUT THIS, TO REAPPOINT YELLEN, I THINK SHE'S DONE A GOOD JOB. IF NOT YELLEN, OF THE OTHER FOUR – THE OTHER THREE WHO WERE NAMED, HE'S THE BEST ONE. BECAUSE I BELIEVE OUR GREATER PROBLEM IS NOT INFLATION, BUT JOB GROWTH.

HARWOOD: HE'LL BE APPROVED?

SCHUMER: WE'LL HAVE TO WAIT UNTIL HIS HEARINGS, BUT I DON'T SEE THE KIND OF LIVID OPPOSITION THAT I'VE SEEN TO OTHERS.

HARWOOD: CAN YOU SUPPORT HIM?

SCHUMER: I HAVE AN OPEN MIND I WANT TO TALK TO HIM.

HARWOOD: WHAT WAS YOUR REACTION YESTERDAY WHEN THE PRESIDENT AFTER THAT TERROR ATTACK SENT OUT A TWEET THAT LINKED YOU TO POLICIES THAT WERE CONNECTED TO THAT ATTACK, AND HOW DOES IT AFFECT YOUR RELATIONSHIP WITH THE PRESIDENT GOING FORWARD?

SCHUMER: OKAY. ON MY RELATIONSHIP TO THE PRESIDENT, HE'S PRAISED ME IN TWEETS, HE'S CALLED ME NAMES IN TWEETS, IT DOESN'T AFFECT ME, I STICK TO MY VALUES AND MY DESIRE TO GET SOMETHING DONE WITHOUT SACRIFICING THOSE CORE VALUES. AS FOR THE REACTION, WELL, YOU SAW TODAY, ALL THREE OF THE BIG NEWSPAPERS - A CONSERVATIVE ONE, JOURNAL, A MORE MODERATE ONE, POST, A MORE LIBERAL ONE, TIMES, ALL CONDEMNED HIM AND THOUGHT MY RESPONSE WAS APPROPRIATE.

HARWOOD: AND FINALLY, BEFORE I LET YOU GO, THERE ARE A COUPLE OF BIPARTISAN THINGS HANGING OUT THERE THAT YOU'VE BEEN TALKED ABOUT DOING BUSINESS WITH THE PRESIDENT ON ONE IS A DEAL ON DACA. THE OTHER IS A FIX TO THE OBAMACARE MARKETPLACES. ARE THERE STILL REALISTIC CHANCES OF MAKING A DEAL WITH THE PRESIDENT ANYTIME SOON ON THOSE OR HAVE THOSE BEEN TAKEN OFF THE TABLE?

SCHUMER: ON THE SECOND ONE, I THINK THERE'S A STRONG DESIRE IN THE SENATE TO DO IT. 12 REPUBLICANS, 12 DEMOCRATS SUPPORT IT, ONE INDEPENDENT. THERE ARE 25, A QUARTER OF THE BODY. A REPUBLICAN NOT ON THAT LIST CAME TO ME TODAY AND SAID, "CAN'T WE GET THIS DONE?" I THINK WE CAN GET THAT DONE AS LONG AS THE PRESIDENT STAYS OUT OF THE WAY. AND I BET THAT WOULD BE WHAT IN MOST OF MY REPUBLICAN COLLEAGUES FEEL IN THEIR HEARTS. AS FOR DACA, AGAIN, THERE'S VERY STRONG SUPPORT IN THE SENATE FOR DACA ON THE REPUBLICAN SIDE. AND AGAIN, IF THE PRESIDENT DOESN'T, YOU KNOW, ON THAT ONE HE'S FOR IT ONE DAY, AGAINST IT THE NEXT DAY, DEPENDING ON WHO'S PUSHING HIM AROUND. I MEAN, THERE'S A LACK OF LEADERSHIP IN THE WHITE HOUSE THAT IS JUST APPALLING.

HARWOOD: IS IT GOING TO HAPPEN?

SCHUMER: BUT IT COULD HAPPEN AS LONG AS HE STAYS OUT OF THE WAY. AND EVEN IF HE DOES, IT MIGHT HAPPEN. EVEN IF HE GETS IN THE WAY, IT MIGHT HAPPEN.

HARWOOD: VERY LAST QUESTION BEFORE I LET YOU GO, THE PRESIDENT SAID TODAY HE WANTS THIS TAX BILL SIGNED INTO LAW BY CHRISTMAS. IS THAT POSSIBLE?

SCHUMER: WELL, TAXES ARE SO COMPLEX. AND THE REPUBLICANS ARE RUSHING IT THROUGH BECAUSE THEY'RE ASHAMED OF IT. THEY KNOW IF THE AMERICAN PEOPLE KNOW WHAT'S IN THIS BILL, HUGE DEFICITS, HUGE TAX BREAKS FOR THE TOP CORPORATIONS AND THE WEALTHIEST PEOPLE AND MANY MIDDLE CLASS PEOPLE PAYING AN INCREASE IN TAXES, THEY'LL REJECT IT LIKE WHEN THEY LEARNED ABOUT THE HEALTH CARE PLAN.

HARWOOD: BUT YOU'RE NOT RULING OUT THAT THEY COULD GET IT DONE BY CHRISTMAS?

SCHUMER: I THINK IT'S GOING TO BE VERY HARD FOR THEM. AND THERE'S ONE OTHER INTERESTING DYNAMIC, TO WIN OVER HOUSE MEMBERS, REPUBLICAN HOUSE MEMBERS, THEY HAVE TO KEEP THE DEDUCTIONS LIKE STATE AND LOCAL, YOU KNOW, LIKE MORTGAGE.

HARWOOD: WHICH MAKES IT MORE EXPENSIVE.

SCHUMER: WHICH MAKES IT MORE EXPENSIVE. AND IN THE SENATE, THEY HAVE TO REDUCE THE DEFICIT. SO THEY'RE IN A DIFFICULT POSITION. AND WHEN YOU RUSH THROUGH A COMPLICATED BILL LIKE THIS, THERE ARE USUALLY UNFORESEEN DIFFICULTIES. TODAY ONE OF THE LEADING CONSERVATIVE GROUPS, NFIB, NATIONAL FEDERATION –

HARWOOD: THEY CAME OUT AGAINST IT.

SCHUMER: YEAH, SURPRISE TO EVERYBODY, EVEN TO OUR REPUBLICAN FRIENDS TOO.

HARWOOD: SENATE DEMOCRATIC LEADER CHUCK SCHUMER, THANK YOU SO MUCH.

SCHUMER: GOOD TO TALK TO YOU.

For more information contact:

Jennifer Dauble
CNBC
t: 201.735.4721
m: 201.615.2787
e: jennifer.dauble@nbcuni.com

Emma Martin
CNBC
t: 201.735.4713
e: emma.martin@nbcuni.com

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