Commerce Secretary Wilbur Ross told Newsmax TV on Thursday that tax reform is "the most important thing" on President Donald Trump's legislative agenda, but he is facing a Congress that is "more concerned about procedure than results."
"It's the Congress. That's where the flaw comes," Ross told economist and moderator Larry Kudlow in an exclusive interview on the "Newsmax in the Nation's Capital" special sponsored by Newsmax and Google. "You can do whatever you want in the administration.
"Congress is much more about process than about results," Ross added. "That will be tragic for the American economy."
Conducted at Google's Washington headquarters, Kudlow's wide-ranging interview with Ross will re-air on Newsmax TV, as well on DirecTV 349, FiOS 615 and U-Verse 1220 – and other outlets. More Info Here.
It will be re-broadcast Thursday at 10 p.m., Saturday at 1 p.m., and Sunday at 10 a.m., all times Eastern.
Overall, Ross told Kudlow "the animal juices are starting to flow" in the American economy — causing record gains on Wall Street — because of President Trump's regulatory reforms.
"Every day, CEOs are coming into our office, usually looking for something new, but they usually begin by saying how happy they are and how much better they're doing because of the reduced regulatory burden.
"It's coming back big time," Ross added of confidence in the nation's economy. "A number of them have announced plans to expand even before the tax code comes onto the horizon.
"Assuming we get the tax cut that will really be very, very powerful for the economy — because it'll have a multiplier effect on everything else we're doing."
President Trump's tax cuts — scaling back the number of brackets for middle-class Americans and a 20 percent maximum rate for corporations — are key to his reform blueprint announced last month.
"Most middle-income wage earners are employed by somebody," he said. "Most of them are not self-employed people.
"If more employment comes in, if there are more capital expenditures, more growth, clearly it will benefit those folks."
Ross was optimistic Congress would pass the tax-reform plan, telling Kudlow that "I can't imagine that any sane Republican in the Congress will vote against the tax cut."
But Trump's economic plan must be put through what Ross called "this mechanic" — the federal budget reconciliation process, which includes scoring by the Congressional Budget Office.
"The problem is there's this mechanic," Ross explained. "We have to use reconciliation.
"There are a lot of artificial things. It's not a law, but it's practice."
The CBO estimates Trump's tax plan would reduce the federal deficit by $3.4 trillion over 10 years.
Ross slammed attacks by former Clinton administration Treasury Secretary Larry Summers on Trump's tax outline, saying "ad hominem attacks don't add much to economic theory.
"I wouldn't call him disingenuous about that," he added. "I just think he's plain wrong."
Ross said Summers and others are critical because "they're petrified that it just may work — and if it does work, it's not good for their future."
Turning to the North American Free-Trade Agreement, Ross said the 1994 accord "has worked pretty well for the big multi-national corporations.
"Where it hasn't worked so well is with Mr. and Mrs. America," he added. "They're the ones who have lost their jobs because they aren't as mobile.
"You can put a factory in Guadalajara just as well as you can in St. Louis. But if you're a 50-year-old person, you're not that mobile."
Other countries not originally part of NAFTA, including Southeast Asia and China, have benefitted — not the U.S., Ross said, because of many of its outdated rules.
"What kind of a trade agreement is it that encourages imports from outside the trade agreement, as opposed to developing indigenous facilities within it?" he asked Kudlow. "It was poorly conceived."
NAFTA also needs to be renegotiated because "the world is not a free-market economy," Ross said. "That's the missing piece."
He cited China, in particular, noting the heavy U.S. trade imbalance and President Trump's "good biochemistry" with President Xi Jinping that could help in future trade talks.
The U.S. trade deficit totaled $42.4 billion in August, down slightly from July, including a $29.7 billion imbalance with China.
The Chinese deficit was also down somewhat from July, according to the Commerce Department.
"We are dealing with a planned economy," Ross told Kudlow. "It's called China.
"Their plan is to export a lot more than they import — and I don't think anybody can doubt that the reason China has grown so fast is that it achieved that very well.
"It's very well-managed."
In his exclusive Newsmax TV interview with Kudlow, Ross also:
- Bemoaned the state of vocational education in the United States. "Our high schools are not properly equipping people for the jobs in the new-technology world."
- Said "I think everybody's hacking everybody," when Kudlow asked about technology breaches by Russia and China.
- Declined to predict who would succeed Federal Reserve Board Chair Janet Yellen. "The Federal Reserve is not in my silo."