Acting White House chief of staff Mick Mulvaney, in an
appearance at The Wall Street Journal's annual CEO Council meeting
on Tuesday, was noncommittal when asked whether he and Secretary of
State Mike Pompeo would testify in a Senate impeachment
hearing.
"We'll do whatever the president wants us to do, is what it
comes down to," said Mr. Mulvaney. President Trump so far has
barred senior administration officials from testifying in the House
impeachment hearings.
Mr. Mulvaney had more to say on trade talks with China and the
U.S. economy, and he shared his thoughts, and those of President
Trump, with Wall Street Journal Associate Editor John Bussey.
Edited excerpts follow.
MR. BUSSEY: Gordon Sondland , the Trump-appointed ambassador to
the European Union, says that you were in the loop on everything --
the president's effort to pressure Ukraine, to announce an
investigation of the Bidens, and to investigate this debunked
server issue, in return for Ukraine getting an audience with the
president and military aid. He said, you, Pompeo, everybody, were
in the loop on everything. What's your response?
MR. MULVANEY: I'm not going to testify here today, but I will
remind everybody what Sondland said, which is that he very rarely
talked to me and couldn't get me on the phone. The Democrats have
certainly picked and chose what they want to say. ... I very much
look forward to the opportunity, if the president instructs me to
tell my side of the story. I'm looking forward to it.
MR. BUSSEY: Sounds like the White House is taking the fifth. Why
not just say?
MR. MULVANEY: No, John. That's just not right. You take the
fifth when you're in court. That's not what this is. This is a
kangaroo process. And I don't mean to be too energetic about this,
but this was never a level playing field. You're never given the
opportunity to tell your side of the story. Again, would anybody in
this room go into that setting without the White House counsel?
That makes no sense at all. Would you go in not knowing who's going
to be able to ask you questions and for how long? Keep in mind, a
couple different times during this process, the rules changed in
the middle of the hearing.
MR. BUSSEY: Let's talk about the next trade deal, China. Dec. 15
is the deadline that the administration has given [for additional
tariffs on Chinese goods].
MR. MULVANEY: What happens on Dec. 15, I think, will have a lot
to do with what happens between now and Dec. 15. What's the
trajectory of the discussions at that time.
MR. BUSSEY: What is the trajectory?
MR. MULVANEY: I think that the trajectory toward a phase-one
deal is pretty good. Now the phase-one deal is sort of the
smaller-components parts that deal mostly with trade and not with
some of the structural issues. A lot of the agriculture discussion
you've heard would be bound up in phase one. But I think it makes
perfect sense, given the complexities of the deal, to break it down
into smaller pieces. To see if you can walk before you can run and
crawl before you can walk.
MR. BUSSEY: Phase one has been described as, "You're buying more
agricultural goods from us. We're lowering some selective
tariffs."
MR. MULVANEY: I've seen that description. I think that's
probably not unreasonable.
MR. BUSSEY: That seems to be at best a return to a status quo.
And it's after tariffs have been imposed that have cost consumers,
after taxpayers have had to pay additional funds to farmers who
were hit by retaliatory tariffs in China. So it's really not even a
return to the status quo, it's a half step back to the status quo,
and at some cost to the U.S. Not a great report card for three
years of negotiating.
MR. MULVANEY: I disagree. We wouldn't be having any of these
conversations if Donald Trump wasn't president. This was always
going to be hard. I think everybody recognizes the fact that at
some point in time, we were going to have to have these discussions
with the Chinese.
Now I think many of us wish those discussions had been 20 years
ago, but they certainly couldn't wait another 20 years. Let's say
better now than later.
I remember sitting down with some folks inside the White House
early on when I was at OMB [Office of Management and Budget]. OMB
is the clearinghouse for not only the budgetary stuff but also the
regulatory affairs. And we were talking about how excited we were
about the deregulatory successes that we had and a little bit less
excited about the legislative process we had made, even when the
Republicans were in charge of the House.
I remember telling folks, "Look, there are certain things that
are easier than others in Washington, D.C. Dereg is easy, because
it's just us. We don't have to work with Congress to do most of our
deregulatory agenda, which is why it's been so successful. You move
down to legislation, which is sort of the next level of complexity,
and it gets a little bit harder, because then we have to convince
Congress to do something." Even when they were run by our own party
that was hard. Now it's even more difficult.
Trade deals are the hardest of those on that spectrum, because
you have to get another country to change its practices.
At the root of all of this, what is the discussion with China
about? It's about whether or not China wants to join sort of the
first tier of nations. You do a deal with Germany, you're not
required to give away half your business to Germany or to a
German-controlled entity in order to do business in Germany. And
the chances of them participating in an orchestrated attempt to
steal your stuff is probably low on your list of concerns about
doing business in Germany.
China needs to step up to that game. And that's going to be
difficult to do. You look at the big picture, we are raising the
issues that need to be raised. And I think in the long run, the
country will be better off for it.
MR. BUSSEY: That assumes that China's concerned about its
reputational standing and wants to join the first tier, when in
fact, its economic model seems to be working quite well for it.
MR. MULVANEY: But is that sustainable?
MR. BUSSEY: It may not be.
MR. MULVANEY: It's only working to their advantage because we
let it work to their advantage and the Europeans let it work to
their advantage. And you finally stand up and say, "No, stop
stealing my stuff." That's a fair conversation to have.
MR. BUSSEY: But those are the issues that the CEOs and that the
rest of this country is waiting for. That's the big stuff. The
smaller stuff is getting back into, "You buy some of our goods,
we'll lower tariffs." The big stuff is subsidies of the state-owned
enterprises, forced tech transfer, theft of intellectual property.
And there we have not seen progress.
MR. MULVANEY: But that's just human nature. I don't care if
you're Chinese or American or whatever. It's always easier to do a
big deal after you've done a small deal. It's always easier for me
to sit down with one of your reporters for maybe an hour-long, on
the record, detailed interview after I have a relationship with
them over the course of time on smaller things.
So I get what you're saying, but I think you're ignoring human
nature, which is that, it's even more difficult to do the bigger
deals first. Doing something on a phase-one basis to see if you can
develop that relationship, develop the rapport a little bit, that
just makes sense. And it's not surprising you're getting that from
a businessman president.
MR. BUSSEY: President Trump has suggested that we might go past
the election before a deal is struck. Is that language that's
preparing the markets and the American people for the fact that
--
MR. MULVANEY: No, I think that's just the president being
honest. I've seen this before. I've seen people with deal fever
before, who just work so hard on a deal, they have to have a deal,
and at the end, they're willing to do anything to get that deal.
That doesn't exist here. I think you're just seeing the president,
taking his word on that, which is, "Look, I'll do a deal if I get a
really good deal -- but I'm not in any hurry. I think I got a lot
of the cards here."
I think he probably does. I think our economy's proved much more
resilient than people expected. To your point earlier about the
costs borne by the American taxpayer, look, I was on that side of
the argument interior to the White House, you know, on who would
pay the tariffs.
But when you put the tariffs on and inflation goes down, and the
currency devalues, the yuan devalues, there's a real strong
argument that the American consumers are not paying for much of the
tariffs, or at least as much as we thought they were.
MR. BUSSEY: Let's move on to another sticky subject, the
deficit. We can understand why in 2009, 2010 this happened. But
over the last three years of some of the best jobs numbers and some
of the strongest economy we've had in years, it's growing. You were
once a deficit hawk, a Tea Party man. What happened?
MR. MULVANEY: The years that really bother me the most were, I
guess it was the budget years '17 and '18. Because that's when
Republicans held the House, the Senate and the White House, and the
deficit numbers were way too big then. And people said, "Oh,
Mulvaney, you're the budget director, you're a deficit hawk, how
could you allow this to happen?"
Well, the truth of the matter is, what's the president's budget?
The president's budget is essentially a messaging document. And the
message is, "If the president were in charge, this is what the
spending would look like." And that budget had dramatically smaller
deficits than on there [a chart showing annual U.S. budget
deficits]. What that exposes is that, even when the Republicans are
in charge of the House, some Republicans like spending money as
much as Democrats. It's hard to stop spending money.
MR. BUSSEY: Your stated expectations were that the tax cut would
stimulate the economy to the extent that the economy would grow
faster than the deficit would accrue. And that hasn't happened.
MR. MULVANEY: Portions of it have. If you drill down into the
numbers, and again, it's been a year since I've looked at this, I
think almost all of the deficit that's attributable to the tax deal
is related to the child-care tax credit. The corporate tax cut
actually did exactly what we said that it would do, generated a
fair amount of revenue, so I'm very pleased with the results of
that, and certainly we have no complaints about the amount of
growth that we have.
MR. BUSSEY: It's the end of January 2021. The president has been
re-elected to a second term. What are the top three agenda items
for a second term, where he doesn't have to worry about the filter
of re-election?
MR. MULVANEY: Prescription drugs is going to be a big one. Trade
will continue to be a big part of it. I think the president would
love to see further refinements to tax policy. He was always
disappointed we couldn't get that corporate tax rate down just a
little bit more, so we're going to continue to push those types of
things. Also to make some of those cuts permanent, now that we've
proven that they can work and that they do stimulate the economy,
and that supply-side economics works.
People ask me sometimes, what's been the biggest success? And I
think 20 years from now when they write the history of the first
term of the Trump administration, it will be that we proved that
supply-side economics works. And that you can have significant
growth without significant inflation.
(END) Dow Jones Newswires
December 12, 2019 20:47 ET (01:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.