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Steve Mnuchin Defense Record; Mnuchin Talks Taxes; Steve Mnuchin's Congressional Hearing; Trump Attends Luncheon Ahead Of Inauguration. Aired 1-1:30p ET
Aired January 19, 2017 - 13:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
STEVE MNUCHIN, U.S. TREASURY SECRETARY NOMINEE: -- will work with both the Democrats and Republicans. What I've said and I believe, we need housing reform.
We shouldn't just leave Fannie and Freddie as is for the next four or eight years under government control without a fix. That I believe we can find a bipartisan fix for these.
So, on the one hand, we don't end up with a giant bailout. On the other hand, we don't run the risk of completely limiting housing finance.
SEN. MARK WARNER (D) VIRGINIA: I appreciate those comments. I look forward to working with you.
If you could confirm two -- since I took most of the 30 seconds on your statement, I've got two quick questions hopefully can answer them with yes or no answers.
One is, in light of those comments about recap and release, you'll -- you commit not to support any kind of administrate of effort that would bypass the Congress, in terms of efforts to recap and release?
MNUCHIN: So, again, I don't want to make any commitments to legislative or not. What I -- what I will commit -- because it's my responsibility in treasury, you know, as it relates to certain issues with Fannie and Freddie.
What I will commit to it is -- it is my objective to find a bipartisan solution to it, and I would welcome the opportunity to sit down with you on that.
WARNER: And your hope would be the bipartisan consensus that the banking committee, in particular, arrived at was at that solution.
And we can argue or discuss about how we get there. Should end up with the housing finance system that preserves things like the 30-year mortgage.
But also makes sure that there is not the current status which has -- when things are going well, private sector gain but when things hit -- stuff hits the fan, taxpayer holding the bag.
So, we would agree that -- MNUCHIN: I can 100 percent assure you that I have no interest in that. And I think I understand this well enough that you will find that I won't support any policy that has that case.
WARNER: Thank you, Mr. Mnuchin.
UNIDENTIFIED MALE: Senator McCaskill.
SEN. CLAIRE MCCASKILL (D), MISSOURI: Thank you, Mr. Chairman. Mr. Mnuchin, I found a tweet of your future boss that I agree with. Keep it fast, short and direct, whatever it is. So, that's what I'm going to try to do.
First, do you oppose lifting the current sanctions on Russia?
MNUCHIN: Right now I do.
MCCASKILL: You think we should lift the current --
MNUCHIN: Oh, no, I'm sorry. I oppose, right now, lifting the current sanctions without --
MCCASKILL: OK. Do you support -- do you support new sanctions against Russia?
MNUCHIN: Well, it --
MCCASKILL: Yes or no.
MNUCHIN: It's -- the answer is, I don't have the information. I haven't been able to receive classified briefings. I would want to understand the classified information. And I would want to work with others to understand it.
So, I don't have an opinion, right now, as to whether we should have more. I do have an opinion that we shouldn't be lifting the existing ones.
MCCASKILL: Would you agree that your new boss is famous for firing people?
MNUCHIN: Well, he has a show about it.
MNUCHIN: But other than the show --
MCCASKILL: Do you think -- well, sometimes we have -- it's a blurred line, at this point. We're not sure where the show stops and where the reality begins.
Do you think he'll hesitate to fire people if he disagrees with them or believes they're doing a bad job?
MNUCHIN: Well, if he disagrees with them, no. And I can tell you the president-elect and I have disagreed on things. Sometimes I've been able to convince him and sometimes I haven't and I haven't been fired. If people do a bad job, absolutely. He should fire them.
MCCASKILL: Will he be able to fire and hire the ethics officer?
MNUCHIN: The ethics officer, as it relates to his trust? I have no idea. I'm not --
MCCASKILL: Who would hire and fire the ethics officer if it wasn't him?
MNUCHIN: Again, I don't have access to the trust documents and I don't know the answer.
MCCASKILL: Whoa, whoa, whoa, wait. We're not talking about trust. We're talking about he has said he's going to have an ethics officer to oversee him in the government. Who is going to hire and fire his ethics officer? Him?
MNUCHIN: I -- it's a good question. I would be more than happy to ask him and talk to him about it and come back. I think you raise an important issue, and I think he'll understand that. I don't have the answer.
MCCASKILL: He is not divesting any of his business interest, correct?
MNUCHIN: Correct. I believe he sold -- I believe he sold his public stocks and his other --
MCCASKILL: But I'm talking about his business. Would you call -- is it fair to characterize him as an international businessman?
MNUCHIN: I believe so.
MCCASKILL: OK. And he will enjoy the benefits of his businesses success while he is president, correct?
MNUCHIN: Again, I believe he'll do everything legally and as it --
MCCASKILL: No, no, no, no, no, what -- that's -- this is not my question. My question is, he has said, very loudly, he will go back to his business after he is president.
In fact, he even said he'd fire his sons if they hadn't done a good job. So, whatever success his business enjoys during his presidency, he will get the benefit of, correct?
[13:05:01] MNUCHIN: Well, I missed the part about firing his sons, but that sounds like something he may have said. But the -- yes, he's the economic owner so, by definition, I would assume that he would have that.
MCCASKILL: His businesses in other countries and in this country intersect with foreign countries. Do you agree?
MNUCHIN: So I've read, yes.
MCCASKILL: And isn't it true that a lot of his debt is held by foreign interests?
MNUCHIN: I don't know. I've just read it in the papers.
MCCASKILL: Do you think you should know that, as someone who runs the committee on foreign investments. If we're talking about the commander in chief, should you, as secretary of the treasury, know what percentage of his debt -- I am told by people who are familiar with his business, that it is a huge percentage of his debt and is held by foreign interests.
WOLF BLITZER, CNN ANCHOR: All right. All right. So, we're going to break away from the hearing right now. There, you see the president- elect of the United States and his wife, Melania Trump.
They're over at the Trump International Hotel here in Washington for a luncheon before their other formal events begin.
As you saw earlier live here on CNN, the president-elect landed at Joint Base Andrews, what, about an hour or so ago.
Now, he's at the Trump International Hotel on Pennsylvania Avenue. That's right between Capitol Hill and the White House. The president- elect is attending this luncheon at his hotel, a luncheon honoring GOP leaders in the House and the Senate.
The president-elect has a lot going on today. In a little while, he'll be going over to Arlington National Cemetery. He'll lay a wreath over there.
Then, he'll go over to the Lincoln Memorial. There'll be a concert. He will speak at that concert. And then, a formal dinner later tonight.
You know what? Let's listen in quickly.
DONALD TRUMP, PRESIDENT-ELECT OF THE UNITED STATES (live): So, I just want to thank you (INAUDIBLE.) Would you like to say a couple of words?
MELANIA TRUMP, UPCOMING FIRST LADY OF THE UNITED STATES: It's great to be here, and thank you all for your support. And tomorrow, we're starting the work. And a lot of instability, a lot to take care of. And we will make America great again.
BLITZER: Brief words from the president-elect and the upcoming first lady of the United States, Melania Trump. They are at this luncheon, honoring GOP leaders in the House and the Senate.
You see their family members there. The adult children of the president-elect. All of them are here in Washington.
He's speaking once again. Let's see if we can listen in.
DONALD TRUMP: So, I want to thank everybody. We've had such great, great support in this room. And we have -- I think, Mitch is here. Where is Mitch McConnell? There he is. Sitting next to the ambassador. Sitting next to the ambassador, Wade Johnson. (INAUDIBLE.) Congratulations. Thank you.
John Cornyn is here, Senator. Where is John? Thank you, John. John was (INAUDIBLE) for years. And they're always raising money for the Senate. He raised a lot. He had a way of asking for a lot. I didn't even know it, right?
But once a year, I'd get a call. And I'd say, oh, no, it's John Cornyn. And he'd walk in. Hi, Mr. Trump. I'd say, OK, John, so how much is it? Could you go 250? I says, I don't even know you. But for years, I didn't know him. Then when I ran, he was a great -- but (INAUDIBLE.) That's the way politics is.
But he's good to me now and he's a great guy. And I think we're going to have a fantastic relationship. And I appreciate it, John. Thanks for being here.
Cory Booker is here. Cory? Where is Cory? Cory's here. Cory, how are you? I saw you on television yesterday. A great representative. I will tell you that. Thank you, Cory.
And Kevin McCarthy. Where is Kevin? There's my Kevin. Kevin called me in the heat of battle. Right, Kevin? And I'd be fighting with Paul. I love Paul.
I don't know if Paul is here. He's out writing legislation because he's got so much legislation to write. He never had it so good. And he's actually got somebody that's going to sign it.
[13:10:10] (INAUDIBLE.) I'm telling you, I really, really love Paul. We're doing very -- I just want to let the world know, we're doing very well together. We agree.
And I'm wondering, he called me up. He says, do me a favor, Don. Maybe -- this was, like, two days ago. He said, let's not talk about the taxes publicly because we want to do this one first. We're going to work on health care. It's very complicated stuff. And I said, I know that.
The problem is I gave an interview about five or six days before to "The Wall Street Journal." So, I said absolutely, I think you're right. I'll not going to talk about taxes.
And the following morning -- this was an evening call. The following morning, it came out, Trump on taxes, talking about it. I said, no, Paul, believe it or not, that interview was given five days ago.
But anyway. Paul Ryan has done a great job. And Kevin during the heat of battle was there for us and I appreciate it, Kevin. Thank you very much.
Hey, Steve. Where's Steve? Hi, Steve. Great. All my friends. Patrick McHenry. Patrick, what a name. That is a name of a true patriot. Where's Patrick?
I see somebody in the audience, too, by the way, who's become very famous lately. The legendary Jeff Sessions. And Mrs. Sessions. So, is it easier than you thought, Jeff? He said, what the hell did I do this for, right? They love you. You have done so well. So amazingly well.
And, you know, it was so tough on Jeff at the beginning. And then, all of a sudden, I said, man, this guy is smart. I know how smart he is. He's a great guy. He will be one of the outstanding stars of this country. And he's legit all the way. So, Jeff, (INAUDIBLE.)
Anyway. But -- and so many others. Cathy McMorris Rodgers. Where's Cathy? Where's Cathy? She's around here some place. Hi, Cathy.
So, we also have Steve Mnuchin is right now getting grilled. He's getting grilled. He's doing a good job. You know this, right? He's out there doing what you were doing four days ago. But he's doing a fantastic job.
And I will say, all of our folks, cabinet members, I think Nikki is here some place, Nikki Haley. (INAUDIBLE.) And I sent her over to speak to China. And I when I sent her over to speak to everybody. We're going to have -- I think we're going to do a lot of great things, Nikki, right? Thank you for going through this. You did a fantastic job. Thank you.
Tom Price. It was so nice to Tom, right? Where's Tom. He's become a star. Where is Tom? It's a lovely group of people, Tom. They wanted to end his career so fast. And then, they found out, man, he's smart. We have a lot of smart people.
I tell you what. One thing we've learned. We have, by far, the highest I.Q. of any cabinet ever.
We have Betsy. Where's Betsy? Where's Betsy? (INAUDIBLE.) A very easy subject. A very easy subject. It's called education. Very, very easy, right? It's -- and we have a little different take on it, right, Betsy? A little take. It's called, we want our children educated. That's our take. Well, we'll get them educated.
So, we're number one in the world in cost per pupil. Number one in the world. And we're ranked number 18 in the world. In fact, in some charts, we're much worse than that. Eighteen is -- that's on a good day, Betsy. I saw one the other day where we're over 28th, 28 out of 30.
BLITZER: All right. So, the president-elect of the United States there. You saw him speaking to this luncheon over at the Trump International Hotel on Pennsylvania Avenue here in Washington. And a luncheon honoring GOP leaders in the House and the Senate.
Shortly, he and his entourage, they'll head over to the Arlington National Cemetery across the Potomac River, where there will be a wreath laying ceremony. That's supposed to start at around 2:45 p.m. Eastern.
[13:15:00] Then from there he'll go over to the Lincoln Memorial for what they are calling a "Make America Great Again Concert." That will be from 4:00 p.m. Eastern until around 6:00 p.m. Eastern. And then the candlelight dinner over, I think it's at Union Station here in Washington, D.C. Among the entertainers, by the way, Toby Keith, Jon Voight, 3 Doors Down and several others.
Let's assess what we've just heard, what is happening on this historic day. I want to bring in our chief money -- our CNN Money chief business correspondent Christine Romans, our senior political reporter Nia-Malika Henderson, our chief political analyst Gloria Borger. Also with us, CNN contributor J.D. Vance, author of "Hillbilly Elegy: A Memoir of a Family and Culture in Crisis." Joining us as well, CNN political analyst, "USA Today" columnist Kirsten Powers and CNN correspondent Phil Mattingly.
You know what, Christine, I'm anxious to get your thoughts --
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: OK.
BLITZER: On the Steve Mnuchin hearing. He's the nominee to become the next treasury secretary. We had about three hours or so of live coverage.
BLITZER: He was asked a lot of tough questions.
BLITZER: Ethics questions among other issues. How do you think he did?
ROMANS: I think he did well, honestly. He wanted to get out there and really try to correct the record of what he thinks is an unfair portrayal of his role in the financial crisis, after the financial crisis, and buying, you know, failed IndyMac and turning it into a company called One West. You're hearing a lot out there. You're hearing a lot of stories out there pushed by Democrats and pushed by people who oppose him of old women who have lost their homes because of the practices at One West and he really tried to set the record straight on that.
One thing about Steve Mnuchin at that -- at that hearing, he did talk briefly about the dollar. You recall last week Donald Trump made some comments that the dollar was too strong. He sounded much more like a treasury secretary. He said, I'm not going to comment on the value of the dollar, but overall, you know, we're going to have trade policies that are going to keep the dollar strong on global markets. So you could see he was sounding more like a treasury secretary and less like talking -- you know, shooting from the hip on that issue.
So on the taxes front, he's going to be asked a lot of questions about taxes. You heard Donald Trump just talk about taxes in a bit of daylight between him and Paul Ryan on taxes that landed on the front page of "The Wall Street Journal" a few days ago and it sounds like -- it sounds like Donald Trump, the president-elect, is going to start to be a little bit more quiet on taxes as they try to work that out behind closed doors. BLITZER: It's a sensitive issue but it's one he made -- he made a
commitment during the campaign, he was going to lower taxes for everyone. And, presumably, presumably that's going to be a high agenda issue for him.
The president-elect, once again, over at the Trump International Hotel for this luncheon.
Gloria Borger, you were watching the hearings, together with all of us as well. And one thing about Steve Mnuchin, in the face of some pretty angry, tough questions from some Democrats, he didn't back down at all. He was fighting right back.
GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: No, he didn't. And I know that there were some people in the transition nervous about just how he was going to perform. He's not used to this kind of a public arena.
BORGER: And he does have a history of working with George Soros, for example. And so they were -- they were really giving him some tough questions. I do think he handled it well. I agree with you. He did get some tough questions about the offshore accounts --
BORGER: Which you can imagine he would get. And his answer was, like all hedge funds, we set up these offshore entities for pension funds. And he said, in no way did I use them to avoid U.S. taxes. But he also said, as treasury secretary, if confirmed, I'm going to look at these things, because it's very clear that he understands that people use these to avoid taxes. So the Democrats really tried to push at him on that and he pushed right back and said, look, I paid all of my taxes as required by law.
And on his -- there was also some notion that he hadn't disclosed $100 million in his real estate holdings and he said he had been advised that he didn't need to by his lawyer but here it was. It was just an oversight.
NIA-MALIKA HENDERSON, CNN SENIOR POLITICAL REPORTER: Yes, and --
BLITZER: Yes, Claire McCaskill, one of the Democrats on this Senate Finance Committee, there was a tough exchange she just had with Steve Mnuchin. Let me play the clip for our viewers.
(BEGIN VIDEO CLIP)
SEN. CLAIRE MCCASKILL (D), MISSOURI: OK, so what I want to -- get a commitment from you today, is that you will report to this committee what percentage of the debt against the Trump enterprises is held by foreign interests. That is your job as the secretary of treasury. And I want your commitment that you will report to this committee as soon as you are able to get that information from the new president.
STEVE MNUCHIN, TREASURY SECRETARY NOMINEE: I'm not making the commitment today to report to the committee on anything, but what I am willing to do is, to the extent I am confirmed, I am willing to speak to the chairman and make sure that whatever the committee thinks it needs, I will discuss with the president.
MCCASKILL: Well, I can assure you, the American people need to know. And you in your job as secretary of the treasury that is supposed to be determining national security interests based on foreign investment, the American people want to know how much debt that is owed by the Trump businesses is owed to foreign entities and -- because that could have a direct impact on our national security.
[13:20:17] Thank you, Mr. Chairman.
(END VIDEO CLIP)
BLITZER: Tough exchange over there, Nia. There were several similar exchanges. But he didn't -- he wasn't giving up. He was fighting right back.
HENDERSON: Yes. And I think there's a theme here. I mean all of these nominees incredibly well prepared. They're obviously prepped. A lot of them didn't necessarily talk to Donald Trump about any issues beforehand, but that, in a way, enables them to be vague in some of their question and answering there.
I think we've seen from Democrats an attempt to really paint these candidates or these nominees as essentially the foxes who are now going to guard the hen house. We heard Chris Murphy, for instance, talk about one of the nominees yesterday and sort of said that this whole cabinet nominees were essentially part of a get rich quick scheme, right, and that a lot of them could benefit from their positioning and here, I think that's what Claire McCaskill again was getting at for Donald Trump, that he could stand to benefit from being in the White House economically and also perhaps jeopardize some national security. Also pushing for more transparency from all of these nominees and certainly pushing from Donald Trump for more transparency as well.
We heard Donald Trump, for instance, say today that this is the cabinet with the highest IQ ever in the history of the world. I think Democrats want the American folks to feel like this is the richest, you know, kind of pantheon of cabinet nominees that we've ever had.
KIRSTIN POWERS, CNN POLITICAL ANALYST: And it is.
HENDERSON: I think it is, yes.
BLITZER: Highest IQ or --
BORGER: Yes, highest net worth. Yes.
HENDERSON: Yes. Yes.
BORGER: Net worth.
BLITZER: Certainly highest net worth, as they say. POWERS: Exactly. Exactly.
BLITZER: J.D. Vance, you were watching pretty closely as well. How is it going to play around the country, not just here in Washington, D.C.?
J.D. VANCE, AUTHOR, "HILLBILLY ELEGY: A MEMOIR OF A FAMILY AND CULTURE IN CRISIS": Yes, one of the things I noticed as I was watching Democrats question the treasury secretary nominee is that they seem to think that they had a political trump card in the fact that he was a rich guy who had taken advantage of some of these offshore accounts and other loopholes in the tax system and so forth.
VANCE: And it's always occurred to me that that's never been a very effective political selling point.
VANCE: That what people are more concerned about is that these things exist in the first place, not that a few people actually take advantage of them. And I actually thought that where he talked about maybe we should sit down with Congress and get rid of some of these loopholes, make it harder for these offshore accounts to exist was a pretty effective selling point and frankly probably a pretty good policy (INAUDIBLE).
HENDERSON: And it was Donald Trump's argument as well, right, when they -- he would -- when Hillary Clinton would talk about his shirts being made elsewhere, his ties being made elsewhere. He said, well, you've been there for 20 or 30 years. You could have gotten rid of the laws that allowed me to do that.
POWERS: Yes, but --
BLITZER: He wouldn't be, Kirsten, the first Goldman Sachs leader to emerge as a treasury secretary.
BLITZER: A lot of us remember covering Bob Rubin. He was treasury secretary during the Bill Clinton administration. Also a very rich man.
UNIDENTIFIED MALE: Paulson.
POWERS: Right. Right. Exactly.
BORGER: Hank Paulson.
POWERS: I mean and I think -- I think that's a great point. The question is, I was wondering, and maybe Christine can answer this, is, when he says that he wants to get rid of it, but is it that he then wants to cut taxes so dramatically in the United States to make up for it so that companies wouldn't need to go there, well, that's not really what Democrats want, right? So he's sort of telling them what they want to hear in the sense of, yes, we need to look at this and we shouldn't have this. But the solution to the problem probably is not what Democrats want.
ROMANS: I think it's clear that they want tax reform and that's what they're going to be going after here first.
ROMANS: And if you have a real big tax overhaul, maybe they package that in there. The offshore accounts, they package that in there overall.
ROMANS: But I think tax reform is coming.
BLITZER: All right, you know what's coming right now, a quick break. We're going to continue our conversation, continue our analysis. We're waiting for the president-elect. He's over at the Trump International Hotel here in Washington on Pennsylvania Avenue, only a couple of blocks or so away from the White House right now. Much more of our special coverage right after this.
[13:28:20] BLITZER: Want to go back to the Senate Finance Committee. Steve Mnuchin, the treasury secretary nominee, answering questions right now from Senator Maria Cantwell.
STEVE MNUCHIN, TREASURY SECRETARY NOMINEE: 21st century Glass/Steagall as it's part of regulatory reform have a view as to what's appropriate.
SEN. MARIA CANTWELL (D), WASHINGTON: So I just want to be clear because I think in your testimony that I heard you did allude to the damage that was caused by the implosion of our economy, brought on by toxic financial instruments that did not have the backing that they need. According to the Dallas Fed, it's $14 trillion hole in our economy. So I think you -- I think you alluded to the damage that that -- that that caused in your --
MNUCHIN: I did -- I --
CANTWELL: So now what I also -- I think you answered, or at least some of the notes I have here about some of my other colleagues that you believe in the concept of proprietary trading did not belong with a bank.
MNUCHIN: That's correct.
CANTWELL: OK. So where does that -- where does that go then? What -- what -- so you're saying you don't think that today there's a clear prohibition and you want to see a clear prohibition?
MNUCHIN: No, no. What I said is that in the Volcker rule -- today we have a prohibition of proprietary trading in banks. The --
CANTWELL: With loopholes.
MNUCHIN: The problem that we have --
CANTWELL: With loopholes.
[13:29:45] MNUCHIN: Is that the definition of that was left to the regulators to decide. And so the first -- the first issue is -- and, again, I'm a believer in proper regulation, but I'm also a strong believer in, people need to understand the regulation. So we need to be able to explain to banks what's proprietary trading and what's not proprietary trading. I think we would all agree, if we were all sitting in this room and just betting on things that's --