>>> WELCOME BACK TO "MORNING JOE."
LET'S BRING IN NOW THE HEAD OF THE FREEDOM CAUCUS CONGRESSMAN
MARK MEADOWS. GREAT TO HAVE YOU WITH US.
THANK YOU FOR BEING HERE. >> IT'S GREAT TO BE BACK WITH
YOU, JOE. THANKS.
>> DURING THE PRESIDENT'S CAMPAIGN, HE TALKED ABOUT HEDGE
FUND MANAGERS AND CRITICIZED CARRIED INTEREST LOOPHOLE.
HE SAID THEY WERE PAPER PUSHERS WHO GOT AWAY WITH MURDER BECAUSE
OF THIS LOOPHOLE. BUT THIS TAX BILL THAT -- IF I'M
NOT MISTAKEN, BLUMBERG AND OTHERS ARE REPORTING IT KEEPS
CARRIED INTEREST FOR HEDGE FUND MANAGERS AND A LOT OF REAL
ESTATE MOGULS. WHY IS THAT?
IS THAT SOMETHING THAT YOU SUPPORT, AND WILL YOU SUPPORT
THAT IF IT'S IN THE FINAL BILL? >> I THINK, JOE, THAT ACTUALLY
WILL END UP BEING ONE OF THOSE THINGS THAT COMES OUT WHETHER
IT'S IN THE MARKUP GOING THROUGH THE HOUSE OR OVER IN THE SENATE.
I CAN TELL YOU I WAS IN THE OVAL OFFICE WITH THE PRESIDENT WHEN
THIS VERY SUBJECT CAME UP. AND HE WAS VERY EMPHATIC THAT
LIKE HE WAS CONSISTENT ON THE CAMPAIGN TRAIL ABOUT THE HEDGE
FUND MANAGERS AND THE CARRIED INTEREST PROVISIONS THAT HE FELT
LIKE IT NEEDED TO BE DONE AWAY WITH.
OBVIOUSLY YOU'VE GOT REAL ESTATE DEVELOPERS AND SOME OF THOSE
THAT USE IT AS PART OF THE WAY THAT THEY DO BUSINESS, AND SO
TRYING TO ADDRESS THAT IN A FAIR WAY THAT CONTINUES TO ALLOW FOR
ECONOMIC GROWTH IS KEY. BUT I CAN TELL YOU THAT THE
PRESIDENT HIMSELF HAS WEIGHED IN ON THIS PARTICULAR PROVISION.
I THINK AT THE END OF THE DAY, IT WILL GET ADDRESSED WHETHER
IT'S IN THE HOUSE OR SENATE OR FINAL BILL.
>> THESE ARE THE SORT OF PROVISIONS THAT MEAN THAT HEDGE
FUND MANAGERS IN NEW YORK CITY AND CONNECTICUT MIGHT BE 13% OR
14% FOR TAXES IN A YEAR WHILE PEOPLE IN YOUR DISTRICT MAY BE
PAYING 35%, SOME SMALL BUSINESS OWNERS UP TO 45 %.
DO YOU OPPOSE THE LOOPHOLE FOR CARRIED INTERESTS AND WILL YOU
SPEAK UP AGAINST IT? >> I'VE ALREADY SPOKEN UP FOR IT
AGAINST HEDGE FUND MANAGERS. THIS MAY BE A NEWS BREAKING
THING THIS MORNING. YOU AND I AND THE PRESIDENT ALL
AGREE THAT THAT CARRIED INTEREST PROVISION FOR HEDGE FUND
MANAGERS NEEDS TO GO AWAY. AND REALLY, WE CAN USE THAT
MONEY FOR THE MIDDLE INCOME HARD WORKING AMERICAN TAXPAYERS TO
MAKE SURE THEY GET THE RELIEF THEY NEED.
THE HEDGE FUND MANAGERS ARE NOT NORMALLY A LARGE CONSTITUENCY IN
WESTERN NORTH CAROLINA. >> RIGHT.
ALL RIGHT. THEY'RE ALSO NOT IN JANESVILLE,
BEFORE SOME REASON IT'S IN THIS BILL.
LET'S GO RIGHT NOW TO STEVE RATTNER AT 30-ROCK.
STEVE? >> CONGRESSMAN, I'M ALSO A
LITTLE MYSTIFIED ABOUT THE HEDGE FUND THING.
THIS IS A 500-PAGE BILL WITH TINY PROVISIONS INCLUDING SMALL
TAXES ON LARGE ENDOWMENTS. LET ME MOVE ONTO ANOTHER SUBJECT
WHICH IS THAT YOU HAVE BEEN AS LEADER OF THE FREEDOM CAUCUS,
OUTSPOKEN IN YOUR OPPOSITION TO THE NATIONAL DEBT AND VOTED
AGAINST NATIONAL DEBT INCREASES. WE HAVE IN FRONT OF US A
PROPOSAL THAT WOULD INCREASE BY ITS OWN CALCULATIONS, THE
NATIONAL DEBT, BY A TRILLION AND A AND A HALF DOLLARS OVER THE
NEXT TEN YEARS. HOW CAN YOU SUPPORT A BILL THAT
DOES THAT GIVEN ALL YOUR PAST AN SITUATION TO DEBT?
>> WELL, I CAN TELL YOU THAT IT'S NOT JUST PAST OPPOSITION.
IT'S CERTAINLY ONGOING OPPOSITION, AND YOU'RE RIGHT
WITH MY RECORD ON BEING A DEFICIT HAWK.
REALLY, THERE ARE TWO ISSUES WORKING AGAINST EACH OTHER.
THE FISCAL RESTRAINT THAT MANY OF MY COLLEAGUES HERE ON CAPITOL
HILL ARE NOT WILLING TO SHOW IN TERMS OF ACTUALLY LOOKING AT
REDUCING SPENDING AND SO AS WE LOOK AT THAT GOING FORWARD,
WHETHER IT'S WITH DEFENSE OR NONDEFENSE DISCRETIONARY
NUMBERS, THOSE NUMBERS CONTINUE TO RISE AND HAVING TO ADDRESS
THAT. THERE'S ONLY TWO WAYS THAT YOU
CAN DO THAT. EITHER YOU CAN CUT BACK ON THOSE
AREAS, OR YOU CAN HOPEFULLY GROW THE ECONOMY.
THIS PRO GROWTH TAX REFORM IS DESIGNED TO NOT ONLY GROW THE
ECONOMY. THE INITIAL NUMBERS ARE EXCITING
IN TERMS OF WHAT WE WILL SEE. I BELIEVE THAT A SHORT-TERM
DEFICIT WILL END UP OVER A 15-YEAR PERIOD PAYING FOR ITSELF
AS LONG AS WE GET THE KIND OF GDP GROWTH THAT IT APPEARS WE'RE
GOING TO GET, AND SO IT'S ONE OF THOSE THINGS THAT YOU TAKE WHAT
YOU'VE GOT ON A PARTICULAR ISSUE.
IT'S ONE OF THOSE -- IT'S A CHOICE BETWEEN VERY TWO
DIFFICULT REASONED APPROACHES. AT THIS PARTICULAR TIME, WE HAVE
TO GET THE ECONOMY GOING AGAIN. >> YOU'RE SAYING LET'S DO THE
EASY STUFF, CUT TAXES FIRST, AND DO THE HARDER STUFF LIKE CUT
SPENDING LATER. >> STEVE, I DON'T KNOW THAT TAX
REFORM IS EVER EASY, AND I'M GLAD TO HEAR YOU SAY THAT,
BECAUSE OVER THE NEXT FEW WEEKS, IT IS GOING TO GET VERY
DIFFICULT. I DON'T SEE IT AS AN EASY TASK.
>> I DON'T DISAGREE WITH THAT. LET ME MOVE ONTO ONE OTHER
THING. WHEN YOU LOOK AT THE TAX CUTS ON
THE NET BASIS, YOU TAKE THE CUTS AND BACK OUT THE INCREASES BY
REMOVING DEDUCTIONS AND LOOPHOLES, YOU FIND BUSINESS IS
GETTING ABOUT A TRILLION DOLLARS FOR BUSINESS OVER THE NEXT TEN
YEARS. CONSUMERS ARE GETTING 300
INDIVIDUALS ARE GETTING $350 MILLION OVER THE NEXT TEN YEARS.
HOW IS THAT A FAIR ALLOCATION OF THE BENEFITS OF TAX CUTS?
>> WELL, I DON'T KNOW WHO DID YOUR ANALYSIS.
I CAN TELL YOU -- >> MY ANALYSIS WAS DONE BY THE
WAYS AND MEANS COMMITTEE. >> HERE'S WHAT I'M SAYING.
THAT ANALYSIS WAS NOT DONE BY THE WAYS AND MEANS COMMITTEE
WHEN WE'RE REALLY LOOKING AT THIS, I CAN TELL YOU AS WE'RE
STARTING TO GET INTO THIS, WE'RE LOOKING AT A FOUR TO FIVE
TRILLION DOLLAR TAX BENEFIT, AND WHEN WE START TO LOOK AT EACH
INDIVIDUAL AREA, YOU'VE GOT TO TAKE IT IN A WHOLE.
IT IS NOT JUST CORPORATIONS THAT GET THE BENEFIT.
AND EVEN IF YOUR ANALYSIS IS SPOT ON, HERE'S WHAT WE HAVE.
IT'S WHEN WE LOOK AT THE ABILITY FOR OUR CORPORATIONS TO BRING
THOSE JOBS HOME, WE SEE WAGES GO UP.
WE SEE ECONOMIC GROWTH HERE. AND SO IT'S HARD TO TAKE IT IN A
STATIC ENVIRONMENT TO SUGGEST THAT YOU'VE GOT ONE BLOCK OF
BENEFITS AGAINST ANOTHER. AND I CAN TELL YOU THAT I WAS UP
UNTIL MIDNIGHT, GOT UP VERY EARLY THIS MORNING LOOKING AT
ALL THE DETAILS. I WANT TO MAKE SURE THAT MY
VOTERS ARE THE ONES THAT BENEFIT, AND ULTIMATELY IN THE
FINAL BILL THAT'S WHAT'S GOING TO HAPPEN.
>> CONGRESSMAN, DURING THE OBAMA ADMINISTRATION THE ARGUMENT WE
USED TO HEAR FROM REPUBLICANS IN CONGRESS WAS THE DEMOCRATS ARE
IRRESPONSIBLE. THEY WANT TO SPEND NOW.
THEY SAY THEY'RE GOING TO DEAL WITH THE DEFICIT DOWN THE ROAD.
THAT'S THE ARGUMENT YOU'VE JUST MADE.
YOU'RE SOUNDING JUST LIKE A DEMOCRAT.
WE'RE GOING TO HAVE OUR TAX CUTS NOW AND SORT OUT THE DEFICIT
DOWN THE ROAD. YOU WEREN'T SATISFIED WITH THAT
ARGUMENT WHEN IT WAS THE DEMOCRATS MAKING THAT ARGUMENT.
WHY SHOULD PEOPLE BELIEVE THAT YOU CAN DO ANY MORE ABOUT IT
NOW? >> WELL, I DON'T KNOW THAT THE
DEMOCRATS WERE EVER DOING A PRO GROWTH TAX THING THAT ACTUALLY
CUT TAXES FOR THE AMERICAN MIDDLE INCOME WAGE EARNER.
PART OF THAT ARGUMENT IS RIGHT. BUT WE HAD A VOTE ON THE HOUSE
FLOOR JUST A FEW WEEKS AGO WHERE THE DEMOCRATS, THE PROGRESSIVE
BUDGET LOOKED AT A $10 TRILLION BUDGET.
NOW, IF WE'RE ALL CONCERNED ABOUT DEFICITS, PERHAPS THAT
VOTE ON THE BUDGET SHOULDN'T HAVE HAD EVERY DEMOCRAT VOTING
FOR THAT BUDGET. AND SO, LISTEN, WE'RE HERE IN
TRULY A DEFINING MOMENT FOR OUR NATION.
WE'RE GOING TO ACTUALLY GIVE MORE MONEY OF THE AMERICAN
TAXPAYER'S DOLLARS BACK TO THEM. AND THAT'S -- IF THE DEMOCRATS
HAD FOUGHT THAT BACK WHEN THEY WERE MAKING THE ARGUMENTS, MAYBE
THEY WOULD HAVE HAD MORE OF A BIPARTISAN APPEAL THERE AS WELL.
>> CONGRESSMAN, JOE AGAIN. I WANTED TO ASK YOU SORT OF MY
ONGOING OBSESSION, AND IT HAS BEEN MORE 25 YEARS AS WE TALK
ABOUT THE DEFICIT AND THE DEBT. ENTITLEMENT REFORM.
WE'RE TALKING ABOUT TAX CUTS. I DON'T THINK I WOULD BE QUITE
SO CONCERNED ABOUT DEFICITS IN THE FUTURE ON THESE TAX CUTS IF
I THOUGHT CONGRESS COULD FOLLOW UP AND REFORM SOCIAL SECURITY
AND REFORM MEDICARE AND REFORM MEDICAID IN A WAY THAT DOESN'T
HURT CURRENT ENROLLIES BUT ENSURES IT'S SAVED FROM DEBT 10
YEARS FROM NOW. I REMEMBER REPUBLICANS BEING
ELECTED SAYING THEY'RE GOING TO EMBRACE IT.
BARACK OBAMA, HIS FIRST TWO MONTHS SAID WE CAN'T KICK THE
CAN DOWN THE ROAD ANYMORE. IT'S BEEN KICKED DOWN THE ROAD.
DONALD TRUMP SAYS NOBODY IS GOING TO TOUCH MEDICARE OR
MEDICAID OR SOCIAL SECURITY. YOU AND I BOTH KNOW THAT IS NOT
SUSTAINABLE. MY QUESTION IS WITH YOU BEING
THE CHAIRMAN OF THE WHITE HOUSE FREEDOM CAUCUS, WHEN WILL
MEMBERS GET SERIOUS ABOUT THE TOP FISCAL ISSUE THAT CONFRONTS
US, AND THAT IS RUN AWAY ENTITLEMENT SPENDING NOT JUST
FOR MEDICAID BUT FOR THE MIDDLE CLASS ENTITLEMENTS TOO, SOCIAL
SECURITY AND MEDICARE. >> JOE, EVERY TIME I COME ON, I
WANT TO MAKE SURE I SHOOT STRAIGHT WITH YOU, AND YOU'RE
RIGHT. THAT IS THE TOP FISCAL THING WE
HAVE TO WORRY ABOUT AND QUITE FRANKLY, NOT ENOUGH IS BEING
DONE. I CAN TELL YOU MEMBERS OF THE
FREEDOM CAUCUS HAVE NOT ONLY PUT FORTH A BILL THAT LOOKS AT
DEFINING AND REFORMING MEDICARE, BUT ALSO OTHER ENTITLEMENT
PROGRAMS. I BELIEVE YOU'LL SEE SOME
INITIATIVES STARTING IN THE FIRST QUARTER OF NEXT YEAR.
NOT NECESSARILY ON SOCIAL SECURITY AND MEDICARE BECAUSE
YOU'RE RIGHT. THE PRESIDENT HAS WEIGHED IN ON
THOSE, NOT WANTING TO TOUCH THOSE, BELIEVING HE MADE A
CAMPAIGN PROMISE THERE. BUT THE OTHER PART OF THAT IS
LOOKING AT SOME OF THE WORK REQUIREMENTS IN TERMS OF
WELFARE. SOME OF THE THINGS THAT ACTUALLY
BILL CLINTON DID WHEN HE WAS PRESIDENT AND THAT HE NEED TO
REVISIT AND BRING BACK AND SO I THINK YOU WILL SEE SOME OF THOSE
STARTING IN EARNEST IN THE FIRST QUARTER OF NEXT YEAR.
YOU'RE RIGHT. WE HAVE TO GET SERIOUS ABOUT IT.
IF WE DON'T, ALL THE PRO GROWTH TAX REFORM IN THE WORLD IS NOT
GOING TO BALANCE OUT WHERE WE NEED TO GO AS A NATION FISCALLY.
>> AND WE HAVE TO APPROACH, OBVIOUSLY, WE HAVE TO BE
CONCERNED ABOUT MEDICAID, BUT MEDICARE IS JUST AS BIG OR A
BIGGER PROBLEM IN THE LONG RUN. WE HAVE TO ADDRESS THOSE MIDDLE
CLASS ENTITLEMENTS WHETHER IT'S POPULAR OR NOT.
THANK YOU. WE APPRECIATE YOU BEING WITH US.
>> WE'RE GOING TO CONTINUE THIS CONVERSATION WITH A MAN WHO
PIECED TOGETHER THAT LONG