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00:00AND BUDGET DIRECTOR. THANK YOU FOR YOUR TIME. DIR. MULVANEY: THANK YOU. >> YOUR BOSS AND OUR PRESIDENT SAID THERE WILL BE MASSIVE TAX CUTS AS FAR AS AN OVERALL MAX TAX REFORM PLAN. HE WOULD NOT HAVE SAID THAT IF YOU TOLD HIM HE COULD SAY THAT. HE WOULD HAVE SOMETHING TO SHOW IT. I WILL NOT ASK YOU WHAT IS IN THE PLAN, BUT ASK YOU ONE SPECIFIC THING. THAT IS THE BORDER ADJUSTMENT TAX. THIS IS SOMETHING SPEAKER RYAN HAS SAID IS VERY IMPORTANT. THE WHITE HOUSE HAS NOT REALLY COME DOWN ONE WAY OR THE OTHER. HAS THE WHITE HOUSE TAKEN A POSITION? HAS THE PRESIDENT DECIDED ON THE VAT -- THAT -- BAT? DIR. MULVANEY: THE CENTERPIECE OF THE HOUSE PROPOSAL, AT LEAST THE EARLY FORMS, HAVE ALL BEEN PART OF OUR DISCUSSION. I THINK IT IS FAIR TO SAY WE HAVE NOT SETTLED YET ONE WAY OR THE OTHER, BUT MY GUESS IS YOU WILL KNOW BY KNOW WEEK. DAVID: THAT WOULD BE GOOD. AND WE HAD A REAL SUPPORTER PRESIDENT TRUMP ON WITH US YESTERDAY, AND HE SAID THAT THE BORDER ADJUSTMENT TAX WOULD BE A GREAT THING FOR AMERICA, PARTLY BECAUSE IT WOULD BE PART OF A PLAN THAT WOULD GET GROWTH GOING AGAIN IN THIS COUNTRY. THAT WOULD HELP HIS OWN HOME DEPOT HE COFOUNDED. WHAT IS THE HANGUP? WHY NOT HAVE A BORDER ADJUSTMENT TAX? DIR. MULVANEY: HE IS ENTIRELY CONSISTENT WITH WHAT DIRECTION WE ARE COMING AT IT FROM IN THE WHITE HOUSE. EVERYTHING WE ARE LOOKING AT IS KEY TO GROWTH. WE ARE NOT STARTING WITH A TAX PLAN, BUT A GOAL IS ECONOMIC GROWTH AT 3%, OFF INTO THE FUTURE. WE ARE TRYING TO BACK FILL IN FROM THERE. WHAT TAX POLICIES GIVE US THE BEST CHANCE OF GETTING THAT LONG-TERM ECONOMIC GROWTH? BORDER ADJUSTMENT TAX GIVES YOU SOME ASPECTS OF THAT. IT ALSO CREATES DIFFICULTIES. NOT JUST IN TERMS OF THE POLITICAL DIFFICULTIES, BUT IN TERMS OF CERTAIN MARKET PREGNANT THAT DO NOT BENEFIT FROM IT. I UNDERSTAND HIS VIEWS ON HOW IT WOULD BE HELPFUL TO HOME DEPOT. OTHER FOLKS THINK IT IS HER BOWL -- IT IS HURTFUL TO THEM. IT HAS BEEN 30 YEARS PLUS NOW SINCE WE DID A MASSIVE TAX BILL. THERE IS A LOT OF STUFF INVOLVED, EQUITIES AND PEOPLE IN THE GAME. WE UNDERSTAND THAT HE IS A GOOD SUPPORTER, AND WE WILL TAKE THAT INTO CONSIDERATION. DAVID: ONE OF THOSE ISSUES IS AS FAR AS HOW YOU PAY FOR THOSE MASSIVE TAX CUTS. IF YOU CANNOT GO THAT WAY, DO HAVE ALTERNATIVE POINTS TO COME UP WITH 1.1 TRILLION DOLLARS -- $1.1 TRILLION? ASK IF WE DECIDE TO MAKE THE LAW PERMITTED, IT HAS TO BE REVENUE NEUTRAL. IT HAS TO REDUCE THE DEFICIT OUTSIDE THE 10 YEAR BUDGET WINDOW. THAT IS THE ARCADE RULES OF THE SENATE'S BUDGET -- EXCUSE ME, SENATE RECONCILIATION. IF WE DECIDE IT IS MORE IMPORTANT TO GET ECONOMIC GROWTH, THAT IS WHAT IS DRIVING THE DISCUSSION. DEFICITS ARE NOT DRIVING THE DISCUSSION. THERE CERTAINLY PART OF THE DISCUSSION, BUT WE ARE NOT STARTING OFF SAYING HOW WE DO SOMETHING THAT IS DEFICIT NEUTRAL? WE ARE STARTING OFF SAYING HOW DO WE GET ECONOMIC GROWTH? IF WE LOOK AT A LARGER TAX PLAN AND MORE AGGRESSIVE TAX PLAN THAT ADDS TO THE DEFICIT, IT WOULD HAVE TO BE LESS THAN 10 YEARS. THAT IS THE BALANCING ACT WE ARE GOING THROUGH RIGHT NOW. WE HAVE NOT SETTLED YET ON A SMALLER OR SHORT-TERM PLAN, OR A PERMANENT PLAN. IT: YOU ALSO HAVE ANOTHER DEADLINE ON FRIDAY, -- DAVID: YOU ALSO ANOTHER DEADLINE ON FRIDAY? AND BOTH OF YOU THINK IT IS UNLIKELY, EVEN THOUGH YOU ARE BOTH PREPARING FOR THE WORST OF THE SAME TIME. YOU ALSO SAID THERE HAS TO BE NEGOTIATION WITH THE DEMOCRATS, AND WHAT IS THERE IN THAT NEGOTIATION THAT YOU WILL WALK AWAY FROM THE TABLE IF YOU DO NOT GET? IS AT THE WALL? DIR. MULVANEY: LET'S LOOK AT IT THIS WAY. THIS IS NOT JUST A CRITICAL JUNCTURE IN THIS ADMINISTRATION, BUT IN WASHINGTON DC. THE NEXT FOUR DAYS WILL TELL YOU A LOT ABOUT THE NEXT FOUR YEARS. WE HAVE OIL THIS NEGOTIATION DOWN TO SOMETHING WE HAVE WANTED VERY BADLY THAT THE DEMOCRATS DO NOT LIKE, AND THAT IS THE BORDER WALL. AT THE SAME TIME, THERE IS SOMETHING THEY WANT VERY BADLY THAT WE DO NOT WANT, THE COST CHAIR REDUCTIONS TO OBAMACARE PAYMENTS. ORDINARILY, THIS WOULD BE THE BASIS UPON WHICH A NEGOTIATED RESOLUTION COULD BE ACHIEVED. THE QUESTION IS HOW MUCH OF OUR STUFFED WE HAVE TO GET, HOW MUCH OF THEIR STUFF ARE THEY WILLING TO TAKE? THAT IS THE WAY IT SHOULD WORK. THAT IS THE WAY WE HOPE THAT IT WORKS. WE OFFER THEM ONE DOLLAR CFR PAYMENTS FOR ONE DOLLAR OF WALL PAYMENTS. THAT SHOULD FORM THE FUNDAMENTAL UNDERSTANDING THAT GETS US TO A BIPARTISAN AGREEMENT. IF THE DEMOCRATS COME BACK TO US AND SAY LOOK, WE CANNOT DO THAT WHAT DO THIS, THAT IS A GOOD SIGN, NOT ONLY IN THE SHORT TERM BUT THE LONG-TERM. IF THEY WALK AWAY AND CHOOSE TO NOT PARTICIPATE IN THE DISCUSSION, THAT IS A BAD SIGN NOT ONLY FOR SHORT-TERM, BUT THE NEXT SEVERAL YEARS. DAVID: IS THERE A WAY AROUND THIS? DIR. MULVANEY: GIVE ME SOME WALL PAYMENTS AND WE HAVE A BASIS FOR DISCUSSION. DAVID: WHAT ABOUT WE DON'T HAVE THE WALL PUT IN THE BILL YEAH THERE IS MONEY IN THEIR FOR -- IN THEREFORE BORDER PROTECTION, BUT THERE IS NOT ANYTHING ABOUT THE WALL. DIR. MULVANEY: THE ACTUAL PHYSICAL SOUTHERN WALL IS A TOP PRIORITY FOR THIS PRESIDENT. HE RAN ON IT, ONE ON IT, AND AS EVERY WHINNYING -- EVERY WINNING CANDIDATE LIKES TO SAY -- WHEN OBAMA WON, HE GOT SOME OF HIS PRIORITIES, EVEN THOUGH IN 2000 -- 2012 REPUBLICANS CONTROLLED THE SENATE. PRESIDENT SHOULD BE ALLOWED TO HAVE ITS HIGHEST PRIORITIES FUNDED. WE ARE WILLING TO GIVE THE DEMOCRATS LOOK THEIR PRIORITIES IN EXCHANGE, BUT YOU CANNOT BE A PERSPECTIVE RESIDENT -- A PROSPECT OF PRESIDENT WHO JUST WON AN ELECTION AND GIVE UP EASILY. >> WILL HAVE A SERIES OF ONE-WEEK EXTENSIONS. IS THAT A LIKELIHOOD? DIR. MULVANEY: IT IS A LOT MORE LIKELY THAN A GOVERNMENT SHUTDOWN. I DO NOT SEE THE ATMOSPHERE FOR A SHUTDOWN. IT IS NOT A STRATEGY OR A DESIRED OUTCOME, IT IS A SYMPTOM OF A SYSTEM THAT IS NOT FUNCTIONING. I THINK YOU ARE MORE LIKELY TO SEE A SHORT-TERM CR OR A SERIES OF THE SAME OTHER THAN A LAPSE IN FUNDING. DAVID: AND ONE OTHER THING COMING UP SOON, THAT IS HEALTH CARE REFORM. ANOTHER ATTEMPT AT THAT. THE PRESIDENT SAYS IT IS GOING TO COME OUT SHORTLY. DO YOU HAVE TO GET HEALTH CARE DONE BEFORE YOU CAN GET BACK TO TAX REFORM PACKAGES? DIR. MULVANEY: NEXT WEEK WILL BE A TO -- BUSY WEEK. DO YOU HAVE TO? TECHNICALLY, THE ANSWER IS NO, BUT IN PRACTICAL AND POLITICAL SENSE IS THE ANSWER IS YES. THE TAX BILL WOULD NOT BE AS GOOD AS IT OTHERWISE WOULD BE, AND IT WOULD NOT BE AS DRAMATIC OR POWERFUL IF YOU HAVE NOT DEALT WITH HEALTH CARE FIRST. ALSO, THERE IS A JUST TAKE INTO CONSIDERATION. THE VERY REAL FACTOR OF POLITICAL MOMENTUM. FOR A BUNCH OF DIFFERENT REASONS, WE THINK WE COULD GET A MUCH, MUCH BETTER TAX BILL, ONE THE PRESIDENT ACTUALLY WANTS AS OPPOSED TO ONE HE ACTUALLY HAS TO SETTLE FOR. DAVID: AND THE A.J. CA -- A HCA, IT WAS THE FREEDOM CAUCUS. DIR. MULVANEY: TO BE FAIR, IT WAS NOT THE FREEDOM CAUCUS, IT WAS A BROAD SWATH OF PEOPLE ACROSS THE REPUBLICAN PARTY. 18 REPUBLICANS GAVE FREEDOM CAUCUS KNOWS, AND 18 KNOWS FROM PEOPLE OUTSIDE OF THE FREEDOM CAUCUS. I THINK IT IS IMPORTANT TO KNOW THAT THE FREEDOM CAUCUS, THE MORE CENTRIST GROUP IN THE PARTY, AND OTHER PEOPLE WHO DO NOT ALIGN WITH A PARTICULAR FACTION HAVE BEEN TALKING OVER THE COURSE OF THE PAST FEW WEEKS, DISCUSSING HOW THEY CAN COME TOGETHER ON A BILL AND WHAT IS GOING TO NEED TO HAPPEN. IF THE BILL SUCCEEDS, IT WILL SEND A STRONG MESSAGE THAT THE HOUSE HAS STARTED TO MEND ITSELF AND CAN FUNCTION PROPERLY. DAVID: FINALLY, WE ARE COMING UP TO THE 100 DAY MARK. WHAT ARE YOUR PRIORITIES AND THE PRESIDENTS ON DEREGULATION? I KNOW YOU FEEL YOU HAVE MADE A LOT OF AUTOGRAPHS -- PROGRESS. ONE OF THE PRESIDENT'S MAIN PROMISES TO GET GROWTH IN THIS COUNTRY, AS WE TALKED ABOUT EARLIER, 3%, THREE .5% GROWTH. HOW MUCH GROWTH OF -- 3.5% GROWTH. HOW MUCH GROWTH CAN YOU DERIVE OFF OF THIS? DIR. MULVANEY: WE BELIEVE, BASED ON SOME GOOD INTELLECTUAL RESEARCH THAT HAS BEEN DONE, WE GET TWICE THE BOOST OUT OF GDP GROWTH OUT OF REGULATORY REFORMS THAN THE BEST TAX POLICIES WE COME UP WITH. THAT IS HOW OVERREGULATED OUR ECONOMY HAS BEEN. THERE ARE A LOT OF THINGS WE CAN DO AND ARTY HAVE DONE ON THE REGULATORY FRONT TO SEND A SIGNAL TO BUSINESS THAT WE ARE OPEN FOR BUSINESS AGAIN. THIS LAYER UPON LAYER OF REGULATION AND OVERREGULATION -- THAT ERA HAS COME TO A CLOSE.

OMB Director Mulvaney on Tax Plan, Trump's Priorities

U.S. Office of Management and Budget Director Mick Mulvaney discusses tax reform and President Trump's priorities with Bloomberg's David Westin on "Bloomberg Markets." (Source: Bloomberg)

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