CONNELL: DRIVING THE ECONOMY.
CONSUMER SPENDING CONTINUES TO
SPIKE AND DID SO IN THE
THIRD QUARTER, PARTIALLY THANKS
TO THE PRESIDENT'S TAX CUTS.
BUSINESSES THOUGH ARE CURBING
THEIR ENTHUSIASM, AS THE
WALL STREET HE HAD HEADLINE PUT
IT THIS MORNING.
DAVID MACINTOSH FROM THE CLUB
FOR GROWTH WHERE HE IS PRESIDENT
TO TALK MORE ABOUT THIS.
GOOD TO SEE YOU, DAVID.
IT IS INTERESTING, RIGHT?
ONE OF THE THINGS THAT HAS
DRIVEN THE STOCK MARKET, THE
ECONOMY IS THE TAX CUTS.
THERE IS NOT MUCH DISPUTE ECONOY
THERE IS NOT MUCH DISPUTE ECONOT
THERE IS NOT MUCH DISPUTE ECONOE
THERE IS NOT MUCH DISPUTE ECONOS
NOT MUCH DISPUTE ABOUT THAT, BUT
THE QUESTION, YOU KNOW, ARE THE
BEST TIMES OVER.
AND IF BUSINESSES AREN'T
SPENDING AS MUCH AS THEY WERE, I
GUESS THE ANSWER IS MAYBE.
WHAT DO YOU MAKE OF IT?
>> YES, THE KEY IS CERTAINTY FOR
BUSINESSES TO BE ABLE TO
CONTINUE THE DEPLOY THE CAPITAL
THEY NOW HAVE BACK INTO THE
MARKETPLACE.
CONSUMERS SPEND ON A CASH BASIS,
SO THEY SEE THEIR TAKE-HOME PAY
GOING UP BECAUSE OF THAT.
THERE REALLY IS A MIDDLE CLASS
TAX CUT THAT WAS PART OF THAT,
AND THEY'RE SPENDING.
BUSINESSES, THEY PLAN OUT AHEAD
ON A QUARTERLY OR YEARLY BASIS,
AND WHAT THEY HEARD IN THE LAST
ELECTION WAS MAYBE THE DEMOCRATS
WILL TRY TO REPEAL THE TAX CUTS.
SO THEY DON'T KNOW FOR CERTAIN
THEY'RE GOING TO BE THERE ONE,
TWO, THREE YEARS OUT IN THE
FUTURE EVEN THOUGH IN THE LAW
THEY'RE A PERMANENT TAX CUT.
SO THE MOST IMPORTANT THING,
THAT FRANKLY, THE REPUBLICAN
SENATE AND THE PRESIDENT NEED TO
DO IS SAY WE WILL REJECT ANY
EFFORT TO TRY TO REPEAL THOSE
TAX CUTS.
YOU CAN PLAN ON THEM AND GO
FORWARD AND INVEST BASED ON.
THAT.
CONNELL: OKAY.
RIGHT NOW, AND WE WERE SHOWING
THIS DUKE UNIVERSITY SURVEY ON
THE SCREEN, IF YOU TALK TO CHIEF
FINANCIAL OFFICERS -- WHICH DUKE
DID -- THEY FOUND THAT THEY
EXPECT CAPITAL SPENDING TO GROW
5.7% OVER THE NEXT 12 MONTHS
VERSUS 11% IN THE FIRST QUARTER
OF THIS YEAR.
SO YOU SEE THE BACK HALF OF
THOSE CHARTS, THINGS ARE SLOWING
DOWN.
NOW, WE'RE HAVING A DEBATE OVER
WHAT TO DO NEXT ON TAXES.
I KNOW THE PRESIDENT AT THAT
CRAZY NEWS CONFERENCE THE OTHER
DAY, ONE OF THE THINGS THAT
ACTUALLY CAME OCCUPY, AND OUR
OWN BLAKE BURMAN BROUGHT IT UP,
WAS WHAT TO DO ABOUT TAXES.
PRESIDENT TRUMP HINTED THAT HE
MIGHT BE WILLING TO MAKE SOME
SORT OF AN AN ADJUSTMENT, AS HE
PUT IT, IN ORDER TO GET A MIDDLE
CLASS TAX CUT.
THAT WOULD KIND OF WORK AGAINST
THIS A LITTLE BIT.
DO YOU THINK THAT'S WORTHWHILE,
GIVING IN ON BUSINESS TAXES?
>> NO.
THINK THAT WOULD BE A BAD
TRADE-OFF.
I HOPE WHAT THE PRESIDENT SAYS
IS CORPORATE TAXES ARE WHAT THEY
ARE.
I WANTED THEM LOWER, SO IF YOU
WANT TO ADJUST THEM, LOWER THEM.
I DON'T THINK THAT'LL HAPPEN.
BUT THEN SAY, HAMMER THE
DEMOCRATS AND SAY YOU ALL
CAMPAIGNED ON A MIDDLE CLASS TAX
CUT.
I DON'T NEED TO GIVE UP THE
CORPORATE TAX CUT, YOU OWE IT TO
THE AMERICAN PEOPLE TO JOIN ME
IN PASSING ONE AND MAKING THAT
PERMANENT.
CONNELL: I ASSUME THEY'LL COME
BACK BECAUSE DEMOCRATS HAVE BEEN
ACCUSED OF SPENDING TOO MUCH,
BUT THIS TIME THEY'LL COME BACK
AND SAY, WELL, WHAT ABOUT THE
DEFICIT?
>> THAT'S RIGHT, ASK YOUR ANSWER
IS THE RIGHT ONE.
THE SPENDING SIDE OF THE
EQUATION IS WHERE, FRANKLY, BOTH
PARTIES IN CONGRESS HAVE FAILED
UTTERLY, AND SOMEBODY NEEDS TO
START LEADING AND SAYING TO GET
DOWN -- REDUCE THE DEFICIT, WE
NEED TO REDUCE THE SPENDING.
CONNELL: YOU CAN'T HAVE BOTH
THEN, RIGHT, BECAUSE YOU GET IN
A SITUATION WHERE IF YOU'RE
FOCUSED ON CUTTING THE DEFICIT,
YOU'RE NOT SO MUCH FOCUSED ON
TAX RELIEF, AND THEN YOU GET
INTO THE QUESTION OF HOW'S THE
ECONOMY GROWING.
SO GOING INTO 20, WE COULD BE
LOOKING AT AN ECONOMY THAT'S
SLOWING.
ARE YOU ONE OF THOSE PEOPLE
WORRIED ABOUT RECESSION?
>> I THINK IF THEY DON'T DO
SOMETHING ABOUT SLOWING THE RATE
OF SPENDING INCREASES, THEN
THERE'S GOING TO BE PRESSURE FOR
TAX INCREASES, AND THAT WOULD
BRING TO A HALT THE ECONOMIC
GROWTH.
THE OTHER THING IS ON THE TRADE
SIDE, THE PRESIDENT HAS USED
TARIFFS WHICH ARE ANOTHER FORM
OF TAXES TO FORCE COUNTRIES TO
COME TO THE TABLE.
BUT NOW THAT WE HAVE THE NORTH
AMERICAN AGREEMENT, HE OUGHT TO
LIFT THE TARIFFS ON STEEL AND
ALUMINUM.
THAT'LL BE A BOOST TO THE AUTO
INDUSTRY AND THE BIG SECTORS ON
THE MANUFACTURING SIDE.
CONNELL: HE MIGHT DO THAT, BUT
THEN THERE'S CHINA WHICH IT
DOESN'T SEEM LIKE HE'S MOVING
ANYTIME SOON ON, BUT I ASSUME
YOU'RE ENCOURAGING HIM TOO?
>> YEAH, AND I WAS ENCOURAGED
WHEN LARRY KUDLOW SAID IT'S ON
THE TABLE.
CLEAN UP THE NORTH AMERICAN
SIDE, THAT'LL HELP US WITH
MANUFACTURERS, AND THEN BRING
PRESSURE ON CHINA.