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Incoming White House Spokesman Gives First Briefing; Trump's Controversial Treasury Pick Faces Senate. Aired 10:30-11a ET

Aired January 19, 2017 - 10:35   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


SEAN SPICER, WHITE HOUSE PRESS SECRETARY: And I think it should be no surprise to anybody that immigration, job creation, manufacturing, tax reform are all at the top of that list.

[10:30:00]

And so, it's just, frankly, a question of sequencing. But right now he is committed to getting those things done and we're working on the timing.

SPICER: Zeke Villard (ph)?

QUESTION: Thank you, Sean.

In terms of getting Brett McGurk into (inaudible), in terms of the campaign against ISIL or ISIS, the ongoing strikes, the U.S. troops who were on the ground, in training or other in the past few (inaudible). Will those all -- will all those continue as the president-elect preparing to make to provide any new orders on that -- on that 12 to one mark to change that -- change the ISIS -- the current ISIS strategy?

SPICER: Right.

With respect to ISIS, I mean I think he's talked about very clearly, that he wants a plan from the joint chiefs very quickly, to combat ISIS, what -- how -- how we look at a whole government approach to that. He's continuing to meet with his national security team about what's in place and what he needs to do with it.

I'm not gonna get in front of what decisions he'll make tomorrow. We'll announce all of that. But again, I think what we've insured is that for the time being, we've got a team in place that will continue to advise him and make sure that the country remains safe and that our priorities are carried out.

Shane (ph)?

(CROSSTALK)

SPICER: Shane (ph)?

QUESTION: Sean, last week, Trump's lawyers talked a lot about separating from his business interests. Both last night and today, he scheduled to visit his own hotel to promote the dining room there, the food there. How do you support these two things?

SPICER: That he's going to his own hotel? I mean, I think that's pretty smart. I -- again, I think the idea that he's going to his own hotel, shouldn't be a shocker. It's a beautiful place. It's somewhere that he's very proud of and I think it's symbolic of the kind of government that he's gonna run.

On time, under budget -- or excuse me, ahead of time and under budget, same kind of theme that the vice president-elect expressed earlier. This transition, 20 percent under budget, $1.2 million returned to the Treasury.

He's very proud. It's an absolutely stunning hotel. I encourage you to go there, if you haven't been by. But I don't think the idea that President-elect Trump is having a reception at the Trump Hotel should be a shocker to anybody.

Yeah?

QUESTION: Trey (ph) (inaudible), American News (ph). Now that the Cabinet nominations are filled, what message do you have for senators on Capitol Hill when it comes to the speed of the confirmations?

SPICER: Well, look, I think -- I've talked about this before. It's important that we get these individuals up in front. There's no one that's really questioning their -- their qualifications, or their caliber, or their ability to lead their department.

They're understanding and grasping the issues. These are amazing individuals that have a commitment to enacting an agenda of change. And -- and so my message is simply, let's get it done. This is not time for partisan politics. This is time get the American -- to ensure that the American people have a government in place that can get that done.

Yeah in the back?

QUESTION: Coming from Israel, (inaudible) the Middle East there are plenty of reports that the president might move the American embassy from Tel Aviv to Jerusalem.

SPICER: Right.

QUESTION: Can you confirm that he decided to do it?

SPICER: What I can tell you is stay tuned, there'll be a further announcement on that. I think the president's made very clear that Israel is -- is not -- not gotten the attention it deserves or the respect in the last eight years.

He intends to really show his respect for Israel, the importance of it in the Middle East. And -- and I think he's continued to talk with his team, both Ambassador Designate David Friedman, Jared Kushner, others, Rex Tillerson, about how we're going to -- to work with Israel.

I think first and foremost, how to make sure that we continue to support our ally Israel. That is something that's going to be the priority of this administration.

Yes, ma'am?

QUESTION: (OFF-MIKE) you said the president was focused in finding the best and the brightest people for his government. But I wonder, can you understand that with 56 million of the Hispanic people in the U.S., it's like adding offense to the injury to say that there was nobody bright enough for the president...

SPICER: That's not what I said. You know, I -- he has tremendous respect. And again, I think you have to look at the totality of -- of diversity that exists within this Cabinet.

There are so many ways to express this, both in terms of gender and background, race, ideology. He continues to put together an amazingly diverse Cabinet. And I think so if you're looking specifically at Hispanics, I think as we move forward, we've got 5,000 jobs to fill.

There is going to be a tremendous number of -- of Hispanic Americans that fill those posts. And I just -- I caution people to stay tuned, lots of great things are coming.

Julia Pace (ph)?

QUESTION: Hey, Sean. Are you guys gonna send anybody from Syria talks (ph) on Monday?

SPICER: I'll have an update for you soon. I -- I'll try to read that out to the pool. But...

(CROSSTALK)

QUESTION: ... the numbers that you were talking about earlier? Because I just wanna make sure we're not conflating different things. You talked about the 536 people on the beachhead team.

SPICER: That's right.

QUESTION: What does that mean in terms of the 4,000 political...

SPICER: That's a great question. Thank you for clarifying that.

So there's 536 individuals that are on these beachhead teams. They are temporary employees that serve as assistants to the secretary designee's office. Those individuals are able to work in the various departments as temporary officials for -- I think it's up to 120 days. In some cases they stay on; it will be up to the secretary or the administrator of the department or agency to decide whether to maintain them on. Maybe they choose to not stay on board. But in any case, that will be a decision that gets made. If they stay, then they are counted as part of that overall thing.

But again, that's a mutual decision that the incoming secretary or administrator or director would make in consultation with the individual, whether or not that they wanted to stay on board and whether the individual wanted to stay on board. QUESTION: And what does that mean, then, in terms of where you guys are on the 4,000 number of ...

SPICER: Well, that's -- so those people are temporary. So, in some cases, until the secretary or administrator or director is confirmed, they are unable to make a permanent appointment.

We are working at -- as I mentioned before -- very, very aggressively at the deputy secretary, undersecretary, assistant secretary and ambassador levels to have individuals ready to go.

Now that the Cabinet is filled, I think that you will see a lot more activity at that level. But the president-elect wanted to make sure that his entire Cabinet was locked and loaded before he started getting to the deputy, under- and assistant level.

Now that that is complete as of this morning, with the appointment of Sunny Perdue as the next secretary of agriculture, I think you'll see a lot more activity at that lower level. Once those individuals are then confirmed, I think you -- they will make a decision whether or not any of those 536 individuals become part of the overall package going forward.

Thank you, guys, very much. It's been a pleasure. I look forward to seeing you on Monday. Have a great weekend and tomorrow's going to be a very special day. Thank you.

[10:35:50] WOLF BLITZER, CNN ANCHOR: We're going to break away. Sean Spicer, the incoming White House press secretary, briefing reporters on a whole range of issues but making an important point from his perspective, Jake, that he's blaming the Democrats in the Senate for delaying what he calls the consensus Cabinet selections. They want to get started obviously on day one. But only a few of the Cabinet nominees are going to be confirmed as of tomorrow afternoon.

JAKE TAPPER, CNN ANCHOR: That's right. He was talking about the ones that he called consensus nominees, people like Elaine Chao who is nominated to be secretary of Transportation and should not have any problems getting confirmed. She served previously in the George W. Bush administration as secretary of Labor, saying why can't she get a -- a quick appointment. We want to get the government up and running. A very swift condemnation by Sean Spicer there about Democrats. He said they were being partisan. They are impugning the integrity of these nominees. It was unfair.

He also was trying to defend the diversity of the Cabinet, and we should just point out as a mathematical measure, this is the least diverse Cabinet in decades. There are 23 positions, Cabinet or Cabinet level and of those 23, President-elect trump filling it out -- finally filling it out with his pick for secretary of Agriculture yesterday, Sonny Perdue. 18 of the 23 of these picks will be white men. 18 of the 23. That is the least diverse Cabinet we've seen in generations. The first time no Latino has been named to a Cabinet since 1988.

Sean Spicer's response was that you can't look at these positions here that we were -- that people in the media are cherry picking the Cabinet secretaries, that's an interesting formulation, but you have to look at the totality of the diversity of the Trump administration, that he said that would be second to none, which seems a questionable comment.

BLITZER: Yes. I know. And he also said if you look beyond these Cabinet level positions, throughout the administration, it is diverse. That was one of the points he made.

TAPPER: I don't know how he arrived at that statement. But let's go now to the confirmation hearing of one of these Cabinet picks, his pick for secretary of Treasury, Steven Mnuchin. Let's listen in.

SEN. PAT ROBERTS (R), KANSAS: I think that to date -- Mike (ph) what have you done with my -- here it is.

Senator Wyden, I've got a Valium pill here that you might want to take before the second round.

ROBERTS: Just a suggestion, sir.

SEN. SHERROD BROWN (D), OHIO (?): Just another suggestion, we've got a lot of colleagues waiting if you could be brief, it would be helpful.

ROBERTS: I am going to very brief. Mr. Mnuchin, from the distinguished ranking members remarks, I understand you were in charge of the great recession...

BROWN (?): Mr. Chairman, Mr. Chairman. I hope that that comment about Valium doesn't set the tone for 2017 in this committee. I just -- I like Senator Roberts but I just can't quite believe that he would say that to a distinguished Senator from Oregon.

ROBERTS: I said that to the President of the United States at one...

BROWN (?): Perhaps you did.

ROBERTS: Yes.

BROWN (?): But I would hope that that doesn't set the tone for this session, OK?

ROBERTS: It was just...

(CROSSTALK)

BROWN (?): --the relationship that we're building is so different from...

ROBERTS: I have the time, please.

BROWN (?): This is just outrageous.

ROBERTS: I don't know about outrageous but I think just a little pen prick of humor might help this committee from time to time, which I engage it. And I appreciate the gentleman's contribution with regards to Agriculture Committee, and he's a good member of the committee. We worked together on the ethics committee. So, I'm sorry if I have, you know, incurred your wrath, sir. So we'll be all right.

BROWN (?): Well let's turn...

ROBERTS: OK. The path (ph) through things on...

SEN. RON WYDEN (D), OREGON: Mr. Chairman, we have many colleagues waiting to speak for Senator...

ROBERTS: Fine, Ron. I'm done. Thank you.

[10:40:01]

SEN. ORRIN HATCH (R),UTAH: Mr. Mnuchin, we would take your statement at this point.

STEVE MNUCHIN, NOMINATED TO BE SECRETARY OF THE TREASURY: All right, thank you very much.

Chairman Hatch, Ranking Member Wyden and members of the committee, it is an honor to appear before you today. I am grateful and humbled by President-elect Trump nominating me to serve as secretary of the Treasury.

It is truly an honor and a privilege to be considered for this position. Thank you to all the members I've already had an opportunity to meet with during this process. I enjoyed meeting with you and learning more the issues that are important to you. For those few members that I didn't get a chance to meet with, if confirmed, I look forward to meeting with you as well.

I would like to thank Chairman Hatch and his staff for taking so much time to work with me and support me through this process. In addition, I would like to introduce my fiancee, Louise Linton and my children, Emma, JP, and Dylan, who are here with me today. And thank them for their unwavering support.

I would also like to introduce my brother, Alan Mnuchin and his wife, Alessandra and my father, Robert Mnuchin, who has always supported me and taught me that hard work, determination and the ability to bring people together, can make anything possible.

I would to acknowledge my late mother, Elaine Terner Cooper, who was an inspiration to me. I would also like to acknowledge my grandparents, Emanuel (ph) and Matilda (ph) Terner, who were also a tremendous influence in my life.

My grandfather was a first-generation American, whose father emigrated from Europe. He truly embodied the American dream. He started blowing glass bottles by hand and later built Midland Glass into one of the largest glass manufacturing companies in the United States with five factories employing thousands of workers. My first job ever was in his factory when I was in high school. It was there that I learned the importance of humility, hard work and commitment. For those of you who don't know my background, I studied economics at Yale University. At the age of 22, after graduating from Yale, I got a job at Goldman Sachs, where I spent the next 17 years. I started on a folding chair in the mortgage department. Nine years later, after many sleepless nights, I was put in charge of mortgages, U.S. government bonds, municipal securities.

Several years after that, I worked directly for future secretary of the Treasury, Hank Paulson, as the firm's chief information officer. In that role, I oversaw 5,000 people and a one billion dollar budget. While at Goldman Sachs, I learned the importance of the financial markets, in providing liquidity and capital to business, governments and consumers.

A few years later, I decided to leave Goldman Sachs to build an investment business. After working briefly at ESL Investments, I started my own investment business, Dune Capital Management. Throughout my career, my commitment was to my clients and shareholders, for whom I worked tirelessly to get the best results.

Thirty years later, my commitment is now to the American people, for whom I will work tirelessly by helping to grow our economy and create jobs. I'm eager to share with you why I believe I will serve well as America's next secretary of the Treasury. But first, I want to correct the record about my involvement with IndyMac Bank.

Since I was first nominated to serve as treasury secretary, I have been maligned as taken advantage of others, hardship in order to earn a buck, nothing could be further than the truth. During the summer of 2008, I saw the devastation that was caused by the housing crisis when I watched people line up to get their life's savings out of IndyMac Bank.

It was the middle of the financial crisis and despite the global panic, I saw a way to save the bank. I applied for a banking charter and submitted a bid to the FDIC for IndyMac. On December 31st -- just before midnight -- we signed a binding agreement with the FDIC. They later confirmed that our bid was almost a billion dollars higher than the next best bid.

MNUCHIN: We were willing to invest $1.6 billion into the most costly bank failure ever to the FDIC deposit fund.

[10:45:07]

We did this because we believed in our ability to rebuild to create a successful regional bank. We believed in the recovery for the American economy.

Let me be clear, my group had nothing to do with the creation of the risky loans in the IndyMac loan portfolios. When we bought the bank we assumed these bad loans, which had been originated by previous management. Some of those individuals had to answer to federal authorities for their bad lending decisions. We invested $1.6 billion into a failing financial institution when most investors were running for the hills. We renamed the business One West Bank and save thousands of jobs. We developed a prospering community banking franchise in Southern California, as most banks were pulling back.

Over the next two years, we bought two more struggling banks from the FDIC. First Fed of Santa Monica and La Hoya bank, both through competitive bidding. Combined we had almost 70 branches and built a robust lending business, especially for small and medium-sized businesses.

As chairman of the bank, I met with hundreds of business people from all walks of life who were seeking loans to grow their business and prosper.

Like many banks at the time, IndyMac and its reverse-mortgage division, Financial Freedom, was unstable due to the large amount of distressed credit mortgages in its portfolios. We bought IndyMac. These legacy loans were included in the purchase. The responsibility landed on me to clean up the mess others make that we inherited.

We worked very hard to help homeowners remain in their homes through modifications wherever possible. Ultimately, One West extended over 100,000 loan modifications to delinquent borrowers to try to help them out of a bad situation. I am proud of the fact that loan modifications started at IndyMac under the leadership of the FDIC. However, the FDIC loan modification program did not work for everyone.

When the FDIC took over IndyMac, they estimated that more than half the foreclosures would not meet their test for a loan modification, and they demanded many policy conditions, extend assistance to sympathetic borrowers by establishing affordable and sustainable payments by borrowers, increase the net present value of cash flows to the owner of the loan, and stabilize housing markets.

My group had to adhere to servicing agreements that limited our ability to make loan modifications that could have helped more borrowers.

In the press it has been said that I ran a foreclosure machine. This is not an accurate description of my role at One West bank. On the contrary, I was committed to loan modifications intended to stop foreclosures. I ran a loan-modification machine. When we could do loan modifications, we did them. But many times, the FDIC, Fannie Mae, Freddie Mac and bank trustees imposed strict rules governing the process of these loans.

I am proud to be able to say our bank was able to do over 100,000 loan modifications that allowed people the opportunity to stay in their homes.

Unfortunately, not all the homes were able to be saved through these programs, and despite my best efforts, some were sadly subject to foreclosure.

So sincere was my concern over this, that in 2010, I instructed my lawyers to sue HSBC as trustee of the securitized loans, to allow us to do loan modifications on loans and mortgage trusts that they oversaw. We won on summary judgment and were consequently allowed to do more loan modifications and keep more Americans in their homes.

Similarly, in 2015, when HUD issued a mortgagee letter 2015-11, I wrote HUD and asked them to change the policy so we didn't have to foreclose on senior citizens that were behind small amounts of money on taxes and insurance. I was so troubled by this that I discussed it with our primary regulator, the Office of the Controller of the Currency.

MNUCHIN: Unfortunately, HUD did not agree, and we were forced to foreclose on senior citizens even if they only owed one dollar.

[10:50:07]

Not complying with these HUD policies would have subjected the bank to penalties and losses from HUD. Despite our inability to save every home from foreclosure, I am proud of the fact that OneWest Bank was the only one of 14 banks that was able to complete the independent foreclosure review that was conducted by the OCC.

Every one of the 175,000 borrowers that were in the foreclosure process during 2009 and 2010, were able to have an independent review of their loan. We have a very low error rate and independent government reviews routinely showed that we had the most effective loan modifications of any bank.

If we had not bought IndyMac Bank, the bank would likely have been broken up and sold in pieces to private investors, where the outcome for consumers could have been much more bleak. Overall, I helped many homeowners stay in their homes and escape financial ruin through my management of OneWest Bank.

My experience confirmed that we must identify and eliminate unwise and burdensome policies, which contributed to the disastrous outcomes that came in the wake of the financial collapse. Many Americans are still suffering from the disastrous ripple effects the 2008 crisis had on our nation.

Faithfully ensuring this does not happen again, means supporting careful oversight of a financial system, which prioritizes the needs of everyday Americans over the wishes of the financial institutions or the Federal Government.

I felt great empathy for the millions of hard-working American families who lost their homes, because the system failed them. If confirmed as Treasury secretary, I will work diligently and compassionately for the American people so that we never see anything like the meltdown of 2008 ever again.

I was deeply honored when Donald Trump asked me to join his campaign, as finance chairman. I had the opportunity to travel with him and hear firsthand from hard-working Americans, about their concerns for the American economy.

Over the last year, I visited over 50 cities and 26 states. I remember attending my first rally with him in Indianapolis. It was an unforgettable experience. As we arrived into the stadium, packed with 20,000 people, I saw the excitement that people had for a Trump presidency.

On our trip to Flint, Michigan, I went with the president-elect to visit the water treatment facilities and saw firsthand, the crumbling pipes and the devastation caused by that led-tainted water. We met with water engineers and saw the impact it had on that communities and the families that live there.

Across the country on my travels with the president-elect, we heard the pained and heartbreaking stories of Americans who had lost their jobs to workers in foreign countries. We heard the concerns of people in small business, burdened by high taxes, just trying to make ends meet.

In my meetings with you over the last month, you shared the concerns of your constituents, like farmers who worry about the death tax wiping out the family farms, or workers who are nervous about whether their retirement accounts will be safe from ruin.

One of the greatest reasons I was drawn to President-elect Trump's campaign, was it was predicated on a commitment to stimulating prosperity for Americans of all backgrounds where they lived in the inner city of Detroit, rural North Carolina, the coal country of Ohio, or West Virginia, or any place in between.

I share the president-elect's goal of economically empowering every citizen. We will not rest in our mission, until that is a reality. Among president-elect's signature issues in this campaign, was reviving trade policies that put the American worker first.

I will enforce trade policies that keep our currency strong on the world exchanges and create and protect American jobs. We will also make America the best place for companies to do business.

Sensible regulation is a necessity for healthy markets. However, I saw firsthand how regulatory excess can inhibit lending by financial institutions, resulting in a lack of access to capital for small businesses and entrepreneurs.

[10:55:12]

MNUCHIN: Alexander Hamilton remarked that wealth of a nation may be promoted by, quote, "Multiplying the objects of enterprise." Hamilton knew the unique value of entrepreneurial activity to a thriving economy. From our nations earliest days, American business has been the greatest repository of ingenuity and entrepreneurial spirit in the world.

We need to unleash that power to generate jobs and create abundance for American's of all backgrounds. We will work diligently to limit regulations, lower taxes on hard-working Americans and small business and get the engine of economic growth firing on all cylinders again.

In this age of unprecedented online attacks, we must also be vigilant about cybersecurity. If confirmed as secretary of the Treasury, I will use my expertise in technology to protect American's information at the IRS and keep our financial architecture safe from malicious attacks. I will use the Treasury Department's Office of Terrorism and Financial Intelligence to stop the financing of terrorism. I will partner with other government agencies in our shared goal of allowing our financial markets to operate free from digital and physical threats. If I am confirmed as Treasury secretary I promise I will work hard with this committee, all members of Congress and the administration to put forth policies that will help American families reach and maintain prosperity. We will make America great again.

Thank you and I look forward to answering your questions.

HATCH: Well thank you, Mr. Mnuchin. Thank you Mr. Mnuchin. We appreciate your comments.

I have some obligatory questions I ask all nominees, or we do on this committee.

First, is there anything you are aware of in your background that might present a conflict of interest and the duties of the office to which you have been nominated?

MNUCHIN: I am not. I have worked with the ethics office and signed an agreement -- dispose of all my investments that could create any conflicts.

HATCH: Do you know of any reason, personal or otherwise, that would in any way prevent you from fully and honorably discharging the responsibilities of the office to which you expect to be nominated? MNUCHIN: I do not.

HATCH: Do you agree without reservation to respond to any reasonable summons to appear and testify before any duly constituted committee of the Congress if you are confirmed?

MNUCHIN: Absolutely, I look forward to it.

HATCH: Finally, do you commit to provide a prompt response in writing to any questions addressed to you by any senator of this committee?

MNUCHIN: Well I provided over 5,000 pages to the staff. I think I have the record of that. So I commit if there is any additional questions I will respond to them promptly.

HATCH: All right, I have to go outside here for a minute. So instead of my starting the questions period, I'm going to turn to the ranking member, my partner in this matter, and then I'll ask questions when I come back.

WYDEN: Thank you very much, Mr. Chairman.

Mr. Mnuchin, Medicare finance is about taxes, and it would be your responsibility if confirmed, with the attempt to repeal the Affordable Care Act, Medicare's solvency is threatened. What steps are needed in your view to strengthen this program that every senior in America relies on?

MNUCHIN: Well first of all senator, thank you very much and I very much appreciated the opportunity for us to meet yesterday, and especially the opportunity to talk about tax reform with you, which I think is very important.

I completely agree with you, that Medicare is very important and a very important program and the safety of that is an important issue and if confirmed that is something that I look forward to working with your staff on and make sure that we have the appropriate policies.

WYDEN: Now, if you're confirmed Mr. Mnuchin, you would be the managing trustee for Medicare. Now, wouldn't you like to offer something by way of discussion, about what you would be doing if confirmed? This is an important part of the job.

MNUCHIN: Senator, I acknowledge that it's a very important part of the job and there is many parts of this job that I consider myself an expert on and understand and there's certain parts of this job that if confirmed I will work diligently with this committee and others.

[11:00:00] And there is obviously a significant staff. This is a very important issue and as I've said I'm committed to be very responsible in my position there and make sure that I properly provide the support from the Treasury Department and I would take my responsibility very seriously.