Chairman Brady on CNBC: Trade, Taxes, & the Economy
WASHINGTON, D.C. – Yesterday, House Ways and Means Chairman Kevin Brady (R-TX) joined CNBC’s “Power Lunch” to discuss tariffs, trade, taxes, Social Security, and the economy.
“Right now, we’re focused on helping the President target unfairly traded steel, aluminum, intellectual property, and technology transfers that China frankly has abused for decades––he’s right to challenge them. The challenge is – as you know – how do you punish China’s misbehavior without hurting American workers and businesses as well… Look, trade is a partnership––the President has some authority we’ve delegated to them, we hold most of it, and so we think that a partnership is the right approach here.
“There is a growing frustration that these tariffs – which the President is using to try to bring people to the table – is having [an] impact back home. We’re certainly seeing it on our local businesses in Texas as well and across the country. That’s why we think really focusing on China’s misbehavior is the right way to go.
“Especially now with tax reform, we’re seeing a growing economy, a demand for new workers. We think there’s a demand for more customers which, with free trade done right, can help us grow this economy in a major way. We’re making clear to the President, we think there ought to be exemptions for fairly traded countries and fairly traded products. We think that’s the right way to tackle this. And then focus all [of] your ammunition, so to speak, on those unfairly traded countries and products. And we’re working with the President to do exactly that.”
“I think a pro-growth NAFTA can be incredibly important to our economy. We’ve urged Canada and Mexico and America, stay at the table––we think there are some big wins for the U.S. economy in a new NAFTA. We think taking the strengths of Mexico and Canada, we can compete and win anywhere in the world, including against China.
“So, we think it’s important to have an agreement reached this year [to put us] in a position for us to vote on it next year, but we think this is critically important. And I’ll tell you – and I’ve worked on a lot of trade agreements – I think there’s close enough here, I think they ought to be able to close this out in the months ahead.”
On tax reform and Social Security:
“We have a stronger economy because of tax reform. That’s one of the reasons the Fed is beginning gradually to normalize their rates. But it also is bringing more people back to work with higher wages. That’s good news for Social Security, but that alone won’t save that program.
“So, I think at the end of the day it will take Democrats and Republicans working together to save that program for the long term. And I think that the Trustees Report really emphasizes what we’ve been saying for too long, which is both parties need to get together. We think there are some good solutions to save that program over time––let’s get to work on it now.”
On welfare reform & immigration reform:
“Armed with a new tax code – one of the best in the world – we need more customers, that’s free trade. We need more workers, and to provide that workforce, we think that’s sort of an all-of-the-above strategy. We need to get immigration policy right, we need to get workforce policy right, we need to get welfare reform [right]––move people off of the sidelines and back into the workforce.
“So, we think the bill next week, as it’s shaped up, could be very helpful that way. And I think President Trump’s four pillars, that’s where House Republicans are focused. And I’m hopeful – I haven’t seen the details of the bill, just some framework for it – I think this can take a big step toward securing that border, fixing the problems in immigration, and actually finding a solution.”
On the Federal Reserve and the growing economy:
“The deficits are growing, but they’re not because of this tax code and tax reform. We’re seeing growth from that already, but there’s no doubt we’re going to have to address the spending issue in Washington in a major way. What I’m watching for the closest is the Fed. Now that we have tailwinds from tax reform, I want to make sure that they normalize their rates gradually. They’ve been trying to do too much in monetary policy because the fiscal policy was wrong [and] now, that’s right––on tax reform, and the regulatory approach is far more balanced…
“The new normal that many economists were predicting of two percent and nothing more is gone. We need to allow the U.S. economy to grow at the pace that it’s been at, the average this last century, or more. So, Fed, don’t squash this economy as it’s just getting its head.”