special things. so even though we've hit the debt ceiling we continue to fund the government. a big day april 18, took if tens of billions of dollars on tax day. impressive the number of transactions we now do on line. i'm confident we're going to get the debt ceiling raised. i'm hopeful it's before the summer. we have plenty of deway but i think we're going -- leeway but i think we're going to have bipartisan support. we've committed the money. the u.s. government credit is the most important credit. i believe it's a aaa credit and we're going to keep it that way. >> here here. mr. secretary, we wish you the best of luck not only current responsibilities but your legacy. thank you for taking this job on. confidence, we

appreciate everything you're doing. >> thank you very much. [applause] confidence, we appreciate everything you're doing. >> >> wondering what socks i wore today. >> they look good. colorful. >> they do match. >> thank you for being here. you've been going a thousand miles an hour since you took office so we're incredibly grateful.

i know that the public sector gets a bad rap for not working private sector hours but i can asissue you we do. that's one of the big changes. the suits are a lot nicer. you ohen and minuchen as can probably imagine but generally it's the same subject matter so you're still working on health care, funding the government, regulatory reform. so the subject matter is the same but the environment is very different. >> you were a founding member of the freedom caucus. your credentials are very well establish. but what can you tell us about the president's view on deficits? >> great conversations about deficits.

the president understands, there's a lot of neat things having a businessman in chief which is what the president is. the first time we've had a true business person in the office in a long time during my lifetime. he understands debt and he understands, for example, that the one thing that can put a completely well-run, well-financed company in dire straits in a short period of time in being in the wrong place at the wrong time with too much exposure on debt. so he completely understands the challenges and risks that having too much debt can take on. at the same time, he also understands that spending is not the only way to solve our deficit problems. he's very focused and i think he should be on economic. steven talked about that, gary talked about that today. everything is really -- well my world sort of turns around spending and economic growth.

his is driven first and foremost by economic growth. everything we do almost is looked at through that lens. how can we get people back to work, how do we get job participation, workforce participation back up. how do we get people paying back into the system, how do we get people paying back into the social security system. that really drives just about verything that he talks about. >> when i was aufered the job i asked a question, the president and i may disagree from time to

time. are you looking for a yes man? are you looking for some intellectual and well-reasoned dissent? i was told not only was it welcomed it was encouraged. the president wants to surround himself with really smart people who don't agree on everything and let us hash it out. as a result, our policies have been some of the -- look at the skinny budget. the skinny budget is certainly a budget that part reflects me. when you say look at the fact that it doesn't add to the deficit that year that's something you might expect from caucus. of the freedom at the same time, there's a huge caucus. at the same time, there's a huge increase in defense spending. that's the president. that's what he ran on. there's more money in that skinny budget for border enforcement, for the wall along the southern border. that is entirely the president. you have more money in there, for example, for school choice. those are a variety of folks from different back groineds

comic together and the end result is a really excellent articulation of the administration's policies. >> one issue where there's a potential divide between the freedom caucus and the president is on infrastructure pending.

>> there seems to be concern into submission asia about the economic growth agenda but on the budget side. all those hotly contested? you have the fiscal hawks, moderates, self-described economic nationalists. when you get into them to settle on for example, the skinny budget, how hard are you fighting with your colleagues? >> when i was offered the job i asked the question. i said, look, the president and i may disagree from time to time on things. are you looking for a yes-man indisposition or any position? are you looking for some intellectual about recent dissent? i was told not only was to send welcome, it was encouraged. the president wants to find itself with really, really smart people who don't agree on everything and sort of lettuce hash it out. i think as a result of a policy of been some of, look at the skinny budget for example. the skinny budget is certainly a budget that part of it reflects me. when you look at the fact it doesn't add to the deficit that you come that something might expect from a member of the freedom caucus. at the same time there's a huge increase in defense spending. that is the president first and foremost a that's when he ran on and

that's what he wanted to do. there's more money in the skinny budget, for example, for border enforcement for the wall along the southern border. that is entirely the president. you have more money in there, for example, for school choice. that's come up those are variety of folks with different background from different perspectives, together and in result i think is a really excellent articulation of the administrations policies. >> one of those issues where here is a potential divide between that -- thank you very much -- the freedom caucus and the president is on infrastructure spending. gary was here and he gave us a little hint about what you might find out. can you tell us we are currently on an infrastructure package? >> sure. i saw gary. i said i had a secret plan to 77? i let

but when you look at the impact of the deficits, i personally have always looked at spending in different categories. spending on wealth transfer payments is horribly inefficient and leads to a tremendous this allocation of resources we do it. we choose to do we do for social reasons but when it comes to creating economic growth, sometimes they can even be counterproductive because of the inefficiency in wealth transfer payments, typical social spending. at that middle level of sort of maybe it sometimes can be even good spending is infrastructure. even if you do have a government miss allocate resources to a certain extent you still something to show for it and likely to economic development and then probably can dramatically increase economic growth. at the third level which is the best spinner you could have simply letting people keep more of their own money. that's the most efficient allocation of resources. does that mean taxes and add to the deficit? maybe. but at the end of the resources to a certain extent you still something to show for it and likely to economic development and then probably day with everything you're doing is driven by this interest in having a healthy and growing economy, you sort of look at those three things

through three different perspectives. >> when you're thinking about $1 a trillion dollars which expected quite rated toy relief or is the trillion the combination of government pending plus leverage by spanish i think the president is putting one twin dollars spanish i think the president is putting one twin dollars worth of work on the ground. the regulatory relief comes from the bank for the buck. even that if the state government wants to build a new road they have to deal with some of the same like all of the same apartment of a galatians that a private developer does when they built something. if we can forget way to fix that we get even more bang for that trillion dollars. you may see and it impact if he did apples to apples. we spend $1 trillion on infrastructure with regulatory reform you might get as much real hard for such improvements as the previous administration might get with $1.6 $1.6 trillion worth of spending. some no, we don't come it's not come we don't fudge that number. the president wants $1 trillion worth of work on the ground and we expect to give it to spur use -- >> i'm wondering whether there are also in entitlement programs on the table either this budget for going forward this budget for going forward on medicare, medicaid or social security would you expect to put some cuts to those programs on the table? >> certainly let's deal with each of those, let's do medicaid first really when you talk about medicaid reform its wrapped up in the discussion where having about the health care bill, the american healthcare act, the repeal and replace for obamacare obamacare. deals with reforming medicaid and such with a try tremendous savings. does doing so in a way that

makes complete sense. i was in the state legislature for a brief time before washington d.c. and/or and we used to cringe every single year of at the size of the line item in our state budget for medicaid. no one talked to governors and ask them whether popping up when line item is and it's most likely in all states medicaid. it was one of these one size fits all would come and say look yet either use plan a brc to provide healthcare to your need is citizens. are like that looks really great if you live in new york or chicago or los angeles but we have a rural more population in south carolina. we got other ways that we think we can provide for our neediest citizens and do it in a much more efficient fashion that can cost the state less money. better results for less expenditure. the federal government told us to go pound sand. they told us would welcome to do whatever we wanted to but if we wanted the federal matching money we where to do it their way. one of the biggest things that doesn't get any attention in the american health care act is we get rid

of that in large part of the give commence amount of control to the states over how to run a medicaid plan, the options are available. that drives tremendous long-term savings. right now in many cases states at apsley no financial interest, no physical interest in keeping medicaid costs down because they figure out a way to game the system where the federal current pace for 100% of% of the cost. we talk about federal current pace for 100% of% of the cost. we talk about matching and state matching but they figure out a way around it by doing provider taxes and so forth. in essence the government takes up one of% of the cost. there's no incentive at the state level to reduce costs and you can imagine what does to total medicaid spending. we fixed that any american healthcare act. the extended questions with a willing to talk about reforming medicaid, yes. talk about social security and medicare. i laid out a list of potential mandatory reforms to the president on a piece of paper. he looks at that and says that social security, that is a later time it comes that

is medicago ukip touched it. he said that the post i made when i went and i'm going to keep my promise. >> even for people my age? >> even for people make much money as gary cohn does because i was example i used with that. he says i made a promise to people that are not go to touch so secured and medicare, not touch old-age retirement, not quite attached medicare system that folks have become to count on. i respect that. again not what i would do if i were in charge but i'm not in charge and had the ability to lay out the option to 87 yes, yes yes, no, no, no. yes, no. based upon what he thought the party organization to be. very refreshing to have that level of candor from the president. and have him be that into do what he promised. look, i promise people i wouldn't do this. i'm not going to fit i promise people and we do this and i'm going to do that. it makes it a lot easier to manage to if you know what the boss stands, it really does make it

a lot easier to do your job. that's been a lot of fun. >> running up against a big date on the calendar next friday, the current resolution for funding the government expires. congress will have to take action. there's a lot of potential publications including the democratic demand that some of the obamacare subsidies be dealt with. i'm wondering how the administration approach that come what is your strategy and what he think the final bill is good conduct? >> i won't go to the details because were in negotiations right now with the appropriators appropriators, the folks the rent and spending committees in both the house and senate and both republicans and the democrats. i really think what you're going to see is this is the first real test of whether or not the democrats specific in the senate are interested in negotiating, interested in compromise. it was make clear to us in the beginning anything we did on obamacare repeal and replace was going to be on our backs entirely. there's not a a democrat who

would take a vote to repeal president obama's signature piece of legislation from his term in office. we knew from the very beginning it had to be a republican all the go and that's what it is perceived as there when you talk about funding the government, there's an opportunity for us to work together. what we are focusing on is we have our list of priorities. won't surprise anyone want some of them are. we want more money for defense, build affordable, more money for immigration law enforcement. the democrats may have some other own priorities. it indicated making some of these payments for the obamacare subsidies is one of their priorities. okay, that's fine. we're willing to bet that discussion if they want to have it and that's what we telegraph. if they are watching, call a spirit we are ready to talk about this. i will be curious to see how to respond. if they tell us to pound sand, i think that's probably a disappointing indicator of where the next four years is going to go. if they tell us that they recognize president trump won

an election and he should get some of his priorities funded for that reason, elections have consequences as folks who went always like to say, at the same time we understand they have a certain amount of leverage innocent because we do need 60 votes so we need some sort of bipartisan support in the senate. they are entitled under that set of circumstances to get some of their priorities funded. it is ripe for some type of negotiated agreement that gives the president some of his priorities and democrats some of their priorities. we think we've opened the door. i know that we have. >> and all your former colleagues in the freedom caucus prepared to see some of the democratic priorities, you're in such unique position because you know president donald trump really well and also your freedom caucus colleagues -- >> i think my colleagues get a ad name for at least the group that i helped found gets a bad name. people have pointed to the freedom caucus as the reason the health care bill failed. i think that's wholly

inaccurate. we had a really good with count in our office in the white house over who was supporting the bill and who wasn't. about half of the freedom caucus supported the bill. half of the people did not. at the same time there's some centrist leaning republican groups in the house and some of them support the bill and some of them did not. we had 36 knows where it counted at the last count before additionbefore thedecision was made not to go to the floor d roughly half were in the freedom caucus and half were not. i think that narrative the freedom caucus is to blame is not entirely accurate. as to whether or not they're willing to support the spending bill, or willing to support in other piece of legislation, i know what they're going to do because i was one of them. they will look at each bill on its particular marriage. it also are eager to hope the president get his party responded -- particular marriage. there are some folks come some of his support of president donald trump in the presidential campaign were in the freedom caucus. his priorities are their priorities

when you talk about funding the wall, talk about funding defense. this is a big deal for some of those numbers. i think that you'll see support if we get a chance to bring something to the floor. >> on this same thing will have a debt ceiling vote sometime in -- >> i have heard of that one as well. >> we asked secretary mnuchin about it, particularly talked about these extraordinary measures he's using to get us up to the fall and at some point congress want to book a what is the admission she think about to approach that? would you like to see a clean debt ceiling increase? would you expect to attach some provisions to it? >> will again be options, keeping in mind how we go about handling the debt ceiling depends on some other things. i know that sounds like it makes sense in washington only but here's the short version. the debt ceiling can be reconciled which mean that if a budget passes the house and the

senate, keep in mind the president never sent to budget, it's a joint resolution, and if it passes it can have reconciliation instructions which is the way by which you can bypass the senate filibuster. long and short of it is if omething is in a budget that s been approved by the house and the senate with the proper language written in their you only need 50 pounds in the senate to pass something. the debt ceiling is subject to be reconciled. if you have a budget that passes out of the house house and senate and it contains the proper instructions you can raise the debt ceiling with 50 and the senate with the proper language written in their you only need 50 pounds in the senate to pass something. votes. if you don't have a budget and you don't have those reconciliation instructions you need 60 votes to do it and those are two very different scenarios in the scene i can assure you. one of the recently so we don't know yet is we don't really want to know what we're trying to build. we trying to build a bill that would require 50 votes or 60 votes to pass? i don't think we'll know that until we get a feel for the house and senate stand on passing the budget later on in the spring. i will say this, what i would be advocating is history. historical precedents.

it is typical for us as a nation, a reason why we haven't debt ceiling. it's not just to create chaos. in fact, the exact opposite is true victories and where the debt ceiling law is to force us every now and then to step back and say holy cow, how much money have we borrowed? y? nov going to be able to continue to do forever? some of the biggest disco reforms that you've seen in a money have we borrowed? y? nov lifetime actually comes the part of dancing discussion. people point to gramm leach bliley was that i think as part of the density but there's welfare reform was loosely tied to it back in the '90s. so it's not unusual to tie something to density and say we know we have to raise the density because we're already spent all of this money at the think that maybe now is a good time to step back and soberly say we cannot continue in the future the way that we've been in the past i need to make some changes. that's why we abdicated for the president to come up with ideas of how we

can raise the debt ceiling but t the same time bring some more fiscal discipline to the way we spend money. >> we had been put as work about the unprecedented rise in global debt both public and private debt. in the u.s. over the last decade it increased by about 17 trillion. that's government debt, auto loans, student loans, some serious holy cow numbers. in the back of your head are you thinking about this dynamic? how did you view the potential for a debt crisis? in china we have seen a surge in private ector debt. how do you think about that? about that? >> start talking about $20 trillion in total debt. it would make you lose a little bit of sleep. what i tell my colleagues the left, the right, i say this, soon or later we will balance our budget. we are either going to do it on our terms are on somebody else's terms. if you continue like this indefinitely as, at some point someone will refuse to

lend you the money. i don't think that's this year or next year but it could be sometime during my children's lifetime. the question is are you going to fiscal house in order under terms and conditions that you control? are you going to get control and terms and conditions some else dictates to you, the credit markets. other countries are seeing that already. we are not greece and comparisons to greece are probably entirely unfounded but you said you can't look at that as an example of what might happen to another country in the future, you would be foolish not to do that. i think there's some lessons to be learned about overextending yourself on debt. i think the president as a businessman gets that. > everyone in the room knows about your role on budget and policy but they may not know about your role on regulatory policy. you oversee this incredibly important office about your role on budget and called -- which has heard of. -- >> we like it that way. i'd like to these things.

>> it's these basically most of he regulations that go through the administration go through it for review. how do you think about your regulatory priorities, the administration is really ambitious agenda on the side and how are you going to -- >> if you live outside the beltway you've never heard of it and you'll feel it inside the beltway you have no idea what it does. we really are the office of management, budget and predatory affairs. that should be the name of the organization. every single regulation close to a choke point in the only be called office of information writing tory affairs we touch on every single regulation. if it is how they fall and present initiative to go to this two or one system, net zero-dollar system we could talk about that or if you like. but you're specifically is how important is it. it's absolutely critical. the president has made regulatory reform a priority and i think

it's apparent that just doesn't get as much attention. it's not as sexy as taxable or healthcare reform. what the president wants us to do in the regulatory arena is the most dramatic piece of his agenda that he is rolled out so far. we've got really good academic data that suggest regulatory reform can have twice as much of a positive impact on economic growth and tax reform. think about that for a second. not only is it significant in terms of the size of the impact, but also significant in terms of how easy it is to do. 'm not a derogatory reform that we would want to do with the administration does not take legislative approval. some of it does. some of it does pick some of the bigger ones do but there's things we can do by executive order and have already done that takes absolutely nothing more than the presidents pin. there's some things we can do through

the regulatory agencies themselves to hhs, epa form had to go through rulemaking and follow the procedures, follow those rules, get comments and so forth, have missing sessions, comment periods but we don't ultimately need the house and senate to vote on something. there's a lot that we can do to help the economy without having to go through what is very strange system right now in the house and the senate given the political and five and that exist there. the potential for change at the potential for economic growth and putting folks back to work growing the economy again the number one priority is tremendous will look at the regular sort reform. one group came out with an announcement or study today that says in the first 100 days we've already saved the american economy $86 billion on an annual basis in terms of the regulatory rollback we've done to date. i'd love to see us get 100 billion of that savings by the 100th day but that's about where we are, on day 91 at 86 billion come so it's $1 billion a day where saving american

companies, american consumers and taxpayers just by acting unilaterally on migratory reform. .. >> we would have a hearing about it and they would say this would prevent another financial crisis in the inancial crisis cost the conomy $16 trillion. that was their code to say that s the benefit if we could pass

that that supposedly passes the market's so any regulation that s observed and what we will do is go back to the real cost benefit analysis with the consumer cost of business and real benefits. and the environmental rules with the inancial-services. so those that would increase ith then infinitesimal costs associated with the with the

previous administration they tortured that small benefit in terms of cleaner air. with the benefits of society to force the rules down. reassure you about clean air and clean water. and as they bear in the economic lives as they become adults. in effect cost-benefit analysis equation. >> last question of big overnment reform advocate. hat do you really want to do their? >> but that is the biggest single thing and to rethink the very existence and what the government shut the cat and is grown more silly but its nobody

ver says star with a blank iece of paper what does that uild from scratch? o wonder we went bankrupt. hat is the attitude retaking towards the structured settlement. and then we have another six months for the proposal and what we have seen but if you never really good

eason why now says should be in the department of agriculture now is the time to tell us why. that is very invigorating to have the president once to look at a president like that. we that is what keeps you going orking 16 hours a day. >> ease join me in thanking the director. [applause]