Business Matters - BM20190909
Business Matters - BM20190909
>> "business matters" starts now.
>> good evening, everyone.
We are at the beautiful country club with united states senator pat toomey.
All right, pat, i think we have done this every year.
First of all, thank you.
I know you are busy right now.
Thank you for coming back.
You have been serving in congress and the senate 15 years.
You are a seasoned professional, obviously.
Is this the craziest time you can remember?
What's different about what's going on today?
>> i think it's more polarized than any time i remember in the past.
It's more unpredictable.
It's a bit volatile.no carrierrt gave us the focus now.
A lot of media is left leaning or right leaning, left is in the middle giving the polarization.
You mentioned guns.
I think there is a broad census of people across pennsylvania and the country, i think, that it is reasonable to take measures to try, at least, to keep guns out of the hands of dangerous people.
Violent criminals, people that are mentally ill, we agree they shouldn't have weapons.
Law-abiding citizens are not a threat.
We should make it harder for people that shouldn't have guns to get them.
I think we might have a breakthrough there.
I have been speaking with the president regularly, interested colleagues regularly.
We are trying to figure out how to broaden a background check to determine if someone is in one of the categories that shouldn't have a gun.
I can't make promises, but to continue to work on it.
I feel we are closer than we have been in the past.
>> the response, that could be a trojan horse.
As soon as you open the door, you will take our guns.
It's an incident when the tensions are high that changes the focus.
>> that's true.
There are sporadic efforts, but we have never been able to get across the goal line.
There is a bill to expand background checks.
I'm a big believer in the second amendment.
I'm a gun owner myself.
I'm not interested in fringing on the rights of law-abiding citizens.
I'm interested in those for various reasons shouldn't have a gun.
>> when you say you have been speaking with the president, what's it like speaking with the president?
It's all yours.
>> you know, watch a press conference.
Watch the president on the white house lawn before he gets into marine one.
That's what it's like to speak with the president.
He's the same guy on the phone.
He's very gracious.
There are issues we have that we disagree.
I'm not bashful about letting him know when i think he's going in the wrong direction.
>> does he let you know?
He's not that bashful either.
He's very responsive.
He wants to hear from senators and others throughout the government and beyond the government.
At least it's a constructive, ongoing dialogue.
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Now back to tony iannelli.
>> are you concerned about the turnover relative to leadership?
Do we have that many professionals available that we have had changes within the administration.
Concerns about that, or is that business as usual?
>> it's common for a significant turnover to happen around the midpoint of a presidential term.
Maybe it's more in this administration.
>> let's get to specifics.
I want to talk to you about the second amendment.
You feel there is an opportunity, the bill you and the governor have?
>> that's been the basis of the discussion.
If we are able to get something done, it won't be exactly that.
There will have to be changes.
My democratic colleagues, their positions have changed on this.
We have to bring republicans that didn't support broadening background checks in the past, but we are in intensive discussions both myself with other senators and the president and staff working pretty much daily to see if we can narrow down the difference.
>> the polarization, what is it like -- are you interacting during the days?
Is it more congenial than we may think?
>> the answer is, it varies.
I have colleagues that are not interested in accomplishing things.
They want to elevate their profile or their office.
I have other colleagues that want to get things done.
I focus on the latter group on both sides of the aisle.
We want to get things done, and develop working relationships on both sides of the aisle.
It's sort of candid.
Where are the areas you guys can move a bit.
Here's where i think we can move a bit.
It's a constructive attempt to get an agreement.
>> i wonder do they understand how low the approval rating is and the populous is, do they have the conversations where we have to get things done?
>> we are all pretty much aware that congress has an 11% approval rating.
>> that may be on a good day.
>> that's a media thing.
>> you stepped on it.
>> i know it's your show.
>> the guy's funny.
>> it's interesting.
When i first got into the house, i think there was a tendency for the media to focus on a fight.
Whenever there was a fight, that's what the media wanted to be on.
Now there is more media focus when something is getting done, something across party lines of something being done.
That's reflective of where the people are across pennsylvania.
They want to see things get done.
Put aside differences where you can and see progress.
>> i want to know about tariffs.
Some would say, short-term pain, long-term gain.
We have to take these positions.
I know you have interest in this, keen interest as a business person.
Your thoughts on where we are?
>> it's a big category.
I divide up the world, frankly.
There is china, then there's the rest of the world.
The reason i look at it that way, com china is so large and has political revision threatened over time, can threaten -- >> more so than you may think?
>> i think china wants to be in the western specific, east asia, central asia, china is aggressively and systematically being the dominant power in all of asia western pacific.
That's a threat in my view to the economy.
That's a lot of the world in that part of the world.
If they develop the norms of chinese business, if china becomes the main counterpart, if we are shut out, our ability to move products and services is hampered, that would be a bad development for us.
There is no other country in the world to threaten in that fashion, but china is in the process of developing that type of capability.
I don't see it as a military threat.
It's an economic threat, but it's real.
They engage in offensive behavior with property and forced technology transfers.
I think the president is right to call out the chinese.
I'm not convinced that the tactics have been best, but if in the end he's able to get a significant shift in chinese behavior and important areas and in response the tariffs are lifted, then we might look back to say the pain is worth it, as you are eluding to.
When it comes to tariffs on the canadians and mexicans and europeans, i think that is a complete mistake.
I think we have as a congress over decades, delegated too much authority to the executive, and we should take some of that back.
The constitution assigns congress responsibility for regulating economics with other countries.
>> do you agree that the president in 2020 need it is a foreign relations victory to be -- at this point, it seems like a lot of friction, europe -- would it be good to pull off something with china?
>> it would be great, but i think the president is right to insist on, he's not going to agree to a bad deal.
It has to be a good deal.
I worry, sometimes what his criteria for a gh good deal is.
The president has had policy successes.
He has reestablished the vibrancy with israel which was stretched under the previous administration.
He was right to pull out of the nuclear deal.
We don't have an outcome or assurance that iran will become a nuclear power, but within the context of the deal, we were assured they would become a nuclear power.
Success in the international realm, pre-trade with the u.k. would be a huge success.
A pre-trade agreement with japan with progress, that would be good for our economy and for the president and a strong economy at home has usually been a boost for any president seeking election.
>> north korea, your thoughts on that?
It's a volatile situation.
>> i have no confidence in the regime in north korea.
I think they have determined that nuclear capability is their ticket to staying in power.
I think they'll continue to develop and refine their ability to develop ballistic missiles.
They have demonstrated they have the ability to detonate nuclear weapons.
>> you are not hopeful about the friendship between kim jong un and the president is going anywhere?
>> i don't see meaningful progress.
We have been down this road before.
We need help from the chinese.
It's in their interest too to have a stable north carolina not brandishing nuclear weapons.
Hopefully, we'll make progress.
>> russia, where do you see them playing in this?
>> putin is a dangerous figure.
He clearly pines for the days when the soviet union was one of the great superpowers.
>> you think it's similar to china?
>> it's similar that he would like to reassert russia as a great world power.
The problem he has, russia is really a gas station masquerading as a country.
>> another good line.
>> you can quote me on that.
You have a seriously declining population.
You have what is increasingly becoming a smaller country.
You have an economy totally dependent on energy, and -- >> in abundance.
>> not as much as we do.
Energy crisis are low and going lower.
Economically, they are not in the same league.
They don't belong in the "g" anything.
They are not a significant economic power.
They arguably have the second most powerful military.
>> and a dangerous person at the top?
>> a dangerous person that demonstrated aggressiveness, invading ukraine, interfering in syria and iraq in unconstructive w ways.
Yes, he is a danger.
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Now back to "business matters."
>> immigration, your thoughts on where we are.
First and foremost, you are okay with the progression on the wall.
>> it's frustrating.
I think there is an obvious deal to be done here.
Here is a case where there is polarization prevents both sides from getting together on what would be a reasonable outcome.
From my point of view, a reasonable outcome, a country has to have control of its borders.
Part of getting the control is additional length of wall.
You have several hundred miles of wall.
We have a 1900-mile border.
We don't need a 1900-mile long wall because there are physical and natural barriers in places but our border control folk say we need more wall.
We need interior enforcement.
If people find out that they get past the wall, there is no consequence, so that has to be an element.
Conservatives should offer those brought to the country illegally, but they are at an age not consenting, we should give them a path to citizenship.
They are not kids anymore.
They are adults, but they have known another country.
You can't break a law as a three-year-old.
>> i think i did once.
>> you are an exceptional person, phony.
I think these are the elements of a deal that ought to be able to happen.
I think this is one case where the polarization is getting in the way.
>> you think we'll get there?
>> not in the near term.
Eventually, we will.
I would like to get there sooner.
>> healthcare, your thoughts on where we are?
From a business perspective, the affordable care act is getting expensive and not affordable.
People are getting hit with premiums through the roof.
>> the biggest single problem with obama care in my view was, it was a very, very elaborate, extremely, heavily mandated heavy mechanism for solving an important problem that could have been solved in a better way.
The important problem is people with preexisting conditions who didn't have or lost coverage with their employer, what do they do about getting healthcare?
I don't know anyone that thinks a working class family that has a child with cystic fibrosis has to be on their own.
Nobody d thinks that.
But obama care is insufficient, it's made them unaffordable, drove up subsidies, imposed mandates that allow people to design a plan that works for them.
I want to get away from this mechanism.
It's on the books, as you know.
We eliminated the financial penalty for noncompliance.
I don't think the federal government has the authority to force you to buy a product.
Where is that in the constitution?
We ought to design mechanisms for those that are outliers, those with chronic health issues and maximize the freedom for everyone else to figure out what works for them.
>> do you think then speaker ryan let the party down?
We had opportunities in the republican party to get rid of affordable care.
We lost it by a single vote.
>> it's hard to pin that on paul ryan.
The house passed it.
The senate couldn't get it done.
During the president's first two years, arguably the most productive two years we have had in decades, easily the biggest tax reform from the 1980s.
Major regulatory reform, tremendous progresswith judges across the political spectrum.
I think we accomplished a lot.
Healthcare was a big disappointment.
We worked hard every day to get to a consensus.
>> were you shocked?
>> i wasn't.
I knew it would be one vote one way or the other.
We didn't know how senator mccain would vote.
We found out.
>> all right, i wanted to ask you about a big situation in infrastructure.
We lost real money in terms of infrastructure improvements here in the valley.
Federal government should be doing more?
We hear that in a sense third world.
Airports don't compete with dubai.
Your thoughts on infrastructure and investment?
>> first, i think it's important to understand that federal government spends a lot of money every year.
Transportation is $50 billion year in and year out.
It's true that the gas tax no longer funds the entire amount.
We no longer need to address that.
What we have done, we have shifted from general revenue.
It has not resulted in lower surface transportation infrastructure spending.
That's continued to grow.
There is a bill working through congress to have another increase in annual spending.
Is it enough?
Probably you can make a good case for the boost other than inflation type of boost.
I think we ought to focus on getting costs down where we can.
Any qualified bidder can bid on a project.
We don't do that so we spend 20 to 30% more on highway construction than we have to.
I think the federal government should get out of paying for amenities.
A bike trail is a great thing.
We have them in the lehigh valley.
I have used them.
They are great.
They are local.
People don't typically go across the country to go on a bike ride.
It looks like you may have been riding a bike lately.
>> not a motorcycle.
>> it's an example of how we choose to spend money in ways we don't have to.
Local communities that want bike trails should knock themselves out.
I'm not sure why that is a responsibility in the highway bill.
There is an opportunity to do something more there.
It would be -- i think we could make good use of infrastructure investment.
I'm not sure we'll get a big breakthrough in headline grabbing, trillion dollars bills.
I think it's implemental in the next few years.
>> we are competing internationally.
>> another category, aviation is a spending item, water transportation, we move huge commodities on the river.
We had an upgrade to the dams. >> we are spending a lot of money.
>> we should spend more on roads and bridges.
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Now back to tony iannelli.
>> one thing we don't hear a lot about in this election year is the debt.
I know you are an economics guy.
Some say we have had such growth that the proportionate debt isn't that big of a deal.
Your thoughts on the debt and is it an accident waiting to happen?
Let me point out that the growth with tax reform has gotten growth to be where it was projected to be prior to the tax reform.
We expected the first couple of years it would accelerate.
We are on track to do that.
Number two, the amount of debt as a percentage of the economy is growing.
We are at a point where historically, we are in a dangerous place, but what i will admit that is puzzling to me is that interest rates are at a record low, like almost an all time record low, we have a ten year treasury that yields 10%, a 30 year 2%.
The way markets respond in another context is higher interest rates, com demanding a higher return.
The whole world, 30 to 40% of the sovereign debt in the world has a negative yield.
People lend money to the government with the idea they'll get back less than invested initially.
This is a strange world.
I'm trying to understand what the implications are for the appropriate debt level.
>> in terms of allies, particularly israel, your thoughts?
>> israel is the out post of western civilization in a hostile part of the world in a dangerous neighborhood.
Israel has been one of our closest allies since its founding.
I think we have reciprocated for the most part, a lot of strain in the relationship in the previous administration.
I think president trump has gone a long way toward restoring the relationship we should have.
It's very constructive.
>> how about in europe?
>> europe is a -- the eu is an important trading partner.
The european countries are of course important in many ways.
We have close ongoing ties, and we should continue.
There are trade disputes that created friction.
I think all of that can be overcome.
>> in the long run, you think we'll get through it.
>> we should always be close.
>> before i lose you, 2020?
>> we are having a presidential election election.
>> it will be a wild run.
>> i don't know how to handicap the democratic side.
It looks like the field is narrowing, kind of early, it seems. which of the candidates will emerge, i think it's too early to know.
>> would it be helpful if the president did less pleading?
>> i have been in favor of less pleading.
>> your thoughts going forward?
>> on the economy itself, we are in a very good place, right?
We have nearly record low unemployment, all time high job numbers.
We have wages accelerating.
They are accelerating fastest among lower income worker.
Consumers drive our economy more than anything else.
There are head winds created by trait uncertainty.
We might see growth closer to 2% than 3%.
Fundamentally, we are in a good place.
If we have a couple of trade agreements, have a truce with china and an agreement to behavior better in the economic realm, then i think the economy can reaccelerate and we are poised for growth.
>> what i don't like about the show with you, we are always out of time.
Number two, i don't like that you were funnier than i was.
You are a great guy.
I like what you are doing.
Senator pat toomey.
Don't forget, if it's business, it matters.
See you all next week.