CNBC Exclusive: CNBC Excerpts: Former U.S. Treasury Secretary Jack Lew Speaks with CNBC’s “Squawk Box” Today
Following are excerpts from the unofficial transcript of a CNBC EXCLUSIVE interview with former United States Secretary of the Treasury Jack Lew on CNBC's "Squawk Box" (M-F, 6AM-9AM ET) today, Wednesday, May 10th. Following are links to the video on CNBC.com:http://video.cnbc.com/gallery/?video=3000617309, http://video.cnbc.com/gallery/?video=3000617315, http://video.cnbc.com/gallery/?video=3000617319 and http://video.cnbc.com/gallery/?video=3000617316.
All references must be sourced to CNBC.
LEW ON FBI DIRECTOR COMEY'S FIRING
I THINK IF YOU LOOK THREE MONTHS AGO AND TODAY, AND HAD PREDICTED THIS HAPPENING, NOBODY WOULD HAVE BELIEVED THREE MONTHS AGO THAT THE WORLD WOULD HAVE CHANGED SO MUCH. THE INDEPENDENCE OF THE FBI IS VERY IMPORTANT. I THINK THE IMPORTANT QUESTION HERE IS, IS THERE GOING TO BE AN INDEPENDENT INVESTIGATION? HOW WILL THE AMERICAN PEOPLE HAVE CONFIDENCE THAT RUSSIA'S INVOLVEMENT IN OUR ELECTION WILL BE FULLY INVESTIGATED? AND THAT'S SOMETHING THAT THE CURRENT POLICYMAKERS ARE GOING TO HAVE TO RESOLVE BECAUSE IT'S CRITICAL THAT THE AMERICAN PEOPLE HAVE CONFIDENCE IN THE OUTCOME OF THIS INVESTIGATION.
LEW ON U.S. BEING A STABLE SOURCE OF STRENGTH IN THE WORLD
THE RHETORIC COMING IN WAS VERY JARRING TO NOT JUST PEOPLE HERE, BUT PEOPLE AROUND THE WORLD. AS POLICY IS DEVELOPED, IT IS VERY IMPORTANT TO SHOW THAT THE U.S. CAN BE RELIED ON TO BE A STABLE SOURCE OF ECONOMIC AND SECURITY STRENGTH IN THE WORLD. THAT IS A BIG CHALLENGE WITH OR WITHOUT A DAY LIKE TODAY. IT CERTAINLY DOESN'T HELP WHEN THERE ARE QUESTIONS RAISED ABOUT HOW THINGS IN WASHINGTON ON SUCH IMPORTANT MATTERS ARE BEING HANDLED. I THINK, FOR ME, IT GETS BACK TO THE SUBSTANCE OF WHAT ARE YOU DOING ON TRADE? WHAT ARE YOU DOING ON TAX POLICY? WHAT ARE YOU DOING ON HEALTH CARE? HOW ARE YOU GOING TO EXPLAIN THE ACTIONS YOU'RE TAKING IN A WORLD WHERE, NOT JUST THE UNITED STATES, BUT AROUND THE WORLD, THERE'S A KIND OF ANXIETY AND ANGER AMONGST WORKING PEOPLE? WHICH FRANKLY, I DON'T THINK IS ADDRESSED BY A LOT OF THE POLICY THAT WE'RE SEEING DEVELOPED RIGHT NOW. IN FACT, SOME OF THE POLICY GOES IN EXACTLY THE OPPOSITE DIRECTION.
LEW ON TAX POLICY
I THINK THAT THESE ISSUES HAVE NOT BEEN HEADING IN A CLEAR, STRAIGHT LINE. AS I WAS STARTING TO SAY, I THINK THAT THE WAY THE POLICIES ARE SHAPING UP, IS NOT TRUE TO ADDRESSING THE CONCERNS THAT VOTERS HERE, AND INTERNATIONALLY, HAVE HAD. SO I THINK THERE WILL BE SOME BUYERS REMORSE IF PEOPLE ACTUALLY LOOK AT THE DETAILS OF A TAX POLICY WHERE PEOPLE WHO EARN MORE THAN $250,000 IN CAPITAL GAINS GET A TAX BREAK, AND YOU PAY FOR IT BY CUTTING HEALTH BENEFITS THAT GOES TO OLD PEOPLE WHO ARE DISABLED AND AT HOME WITH HOME CARE, AND KIDS WHO ARE DISABLED IN SCHOOL.
LEW ON CHINA
I THINK THAT IF YOU LOOK AT THE RHETORIC ON CHINA AND THE ACTION, THE ACTION HAS BEEN MUCH MORE RESPONSIBLE THAN THE RHETORIC. IT WOULD HAVE BEEN VERY HARD ON THE MERITS TO JUSTIFY DESIGNATING CHINA A CURRENCY MANIPULATOR WHEN THEY'RE INTERVENING TO PROP UP, TO DEFEND THEIR CURRENCY. WHATEVER THEY DID TEN YEARS AGO, THAT IS NOT A CURRENT DESCRIPTION OF WHAT THEY'RE DOING. THE MOST IMPORTANT ISSUE BETWEEN THE U.S. AND CHINA TODAY, NOT THE ONLY ISSUE, BUT THE MOST IMPORTANT ISSUE, IS COOPERATING ON NORTH KOREA. ON THE DPRK. IF THE UNITED STATES HAD DESIGNATED CHINA A CURRENCY MANIPULATOR WITHOUT A BASIS IN CURRENT ACTIONS, THAT WOULD HAVE BEEN A VERY BAD MOVE. I THINK IT'S IMPORTANT TO PUT THESE THINGS IN PERSPECTIVE AND TO LEAVE SOME OF THE RHETORIC BEHIND AND TO TAKE A MORE RESPONSIBLE COURSE. AND THAT DOESN'T MEAN LETTING CHINA OFF THE HOOK.
LEW ON 15 PERCENT TAX
I THINK I HAVE TO BE A LITTLE CIRCUMSPECT ANALYZING A ONE-PAGE PROPOSAL BECAUSE IT IS NOT A FULLY FLESHED OUT PROPOSAL. BUT THE OUTLINES OF IT DO CAUSE SOME CONCERN. I THINK THIS IDEA OF CREATING THIS DISPARITY BETWEEN THE TAX ON PASS THROUGHS, AND THE BUSINESS AND INDIVIDUAL RATE CREATES A HUGE INCENTIVE FOR – WHETHER IT'S HEDGE FUNDS, OR LAWYERS, OR BUSINESSES – TO ORGANIZE IN A WAY WHERE THEY GET TAXED AT 15% INSTEAD OF 35%.
LEW ON THE ECONOMY DURING THE OBAMA ADMINISTRATION
I THINK IF YOU LOOK AT THE PERFORMANCE OF THE ECONOMY, WE LEFT AN ECONOMY THAT WAS GROWING. THE UNEMPLOYMENT WAS COMING DOWN, JOBS WERE INCREASING. AND THAT'S CONTINUED. I DON'T THINK THAT IS A NEW PHENOMENON. WE SAW THAT IN THE LAST FOUR YEARS, AND THAT'S SOMETHING WHERE WE DELIVERED A VERY STRONG FOUNDATION. I THINK IF YOU LOOK AT THE STOCK MARKET IN THE OBAMA YEARS IT RECOVERED FROM THE WORST FINANCIAL CRISIS AND THE WORST ECONOMIC CRISIS SINCE THE GREAT DEPRESSION. SO IT MAY NOT HAVE BEEN THIS ENORMOUS SPARK OF INVESTMENT AND CONFIDENCE THAT WE ALL WOULD LIKE TO SEE, BUT THE ECONOMY AND THE MARKETS DID VERY WELL DURING THE OBAMA ADMINISTRATION.
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