♪ john: welcome to our special bloomberg coverage of donald trump's inauguration. every night this week, we are looking at policy repercussions. ofay, spending and the costs some of those promises donald trump has continued to make since his election victory. i am asking congress to support the construction of new roads, bridges, tunnels, and railways all across our nation. we are going to do it.

we are going to build it on time, on budget, not for three times what it is supposed to cost. rebuildilitary, we will our badly depleted military and ensure service members have equipment and training, technology and resources, everything they need to get the job done. now hopefully we will never have to use that great tower that we are going to build. we are going to build the strongest military that we have ever had. on immigration, we will build a great wall and put an end to illegal immigration and stop the drugs from pouring into our country. america spends more on education than any country by far, and yet, our results are terrible. pupil than anyer nation in the world by far, and you look at sweden and denmark and norway and china and japan,

and they are all at the top, and you look at us, spending much more per pupil and we are down at the bottom. we are going to change that. spend $4.2 billion for an airplane so i can fly around, all right? for air force one, i don't think so. we are going to negotiate tougher deals, don't we agree? where we get more equipment for less money. our: we will put journalistic hip waiters on. first, the president-elect scrounging up $1 trillion of public and private funding for roads, bridges, airports, and other public infrastructure projects, including some form of public and private investment, combined amounts to three times

as much as the highway bills signed by barack obama and george w. bush. transportation spending does appear to be one of the few areas where democrats may be willing to work with the incoming president, maybe. expressingck schumer optimism about that very prospect in an interview with me the press in november. surprisingly on certain issues, candidate trump voiced progressive and populist opinions, for instance, getting rid of the carried interest loophole, changing our trade laws dramatically, a large infrastructure bill, cleaning up the swamp in washington. these are things that democrats have always stood for, and frankly, republicans have been against. john: so mark, the big question, what are the biggest hurdles that trump will face as he tries

to pull off this promise? tok: three things, one is define what kind of projects he wants and convince people and congress -- in congress that this will be boondoggles. does he want democratic support, shape it to win some token or big democratic support? three, getting it through the pipeline, egg infrastructure, tax reform, the affordable care act. it's going to be tough. this is as much as anything, you talk to steve bannon, how true's populist politics could be made manifest in policy. this infrastructure bill is the headline. has theican party that view that it had of barack obama's stimulus spending will find it hard for practical,

political, and ideological reasons to get behind anything on this scale. if they can induce private investment, that will be easier. big players in the trump administration have an idea of how to get a lot of investment in, but trump will have to have democratic votes, because there are a lot of republicans who will not vote for this. whetherer question is chuck schumer is open to it or whether it collapses of its own republican weight? mark: this is where the democratic pressure to oppose anything will come headlong into union support and democratic support for big projects if it is framed and things that democrats think should be built. if trump can build a bipartisan coalition, he will work the bipartisan muscle in a way that could have implications for tax

reform and anything else that comes later, assuming they frontload this, which i assume they will do. john: a lot of democrats will say these are not boondoggles. they will say this is all going to be about corporate corruption, payoffs, and a lot of those arguments will get made. if this is done in the right way and accomplished in a bipartisan way, it could be one of the biggest political wins in terms of expanding his support in the country. let's move on to immigration, donald trump has said his order wall will cost between $8 billion and $12 billion. almost all agreed that trump's number is probably low. trump has said he would like to start building with the u.s. funds, but will get the mexican government to reimburse the expense. the cost of ending the catch and approach, tripling

border personnel, installing a tracking system, all the other trump proposals on immigration, the likely price tag could exceed $100 billion. it is unclear what legislation republicans will settle on, but when it comes to getting immigration reform through congress, what are the biggest hurdles? john: the biggest are the fact that his plan is totally ridiculous on a million levels. there will not be a border wall, a great wall of china, and mexicans will not be paying for it. mark: i'm not saying it will go across the border -- john: there are things there already. that's not what he's talking about. he's talking about building a giant wall. be a trickyill issue, because i don't know -- these are one of the issues

whether trump believes anything or it was purely political. democratsa reason why and republicans have had a hard time passing immigration reform. ,ark: on most of these issues i'm not willing to predict on most, but on this one, it will be what barack obama did, deport people, put more resources on the border, and trump unfairly will get more credit than barack obama for doing it. he will do photo ops and kick the can down the road until he can get democratic support on other issues, then tried to pass a comprehensive immigration reform with democratic votes. john: it is such a central issue for him that it is incumbent stand in front of a pile of bricks and say i built a wall. mark: a lot of americans want better border security. john: a lot of americans want

comprehensive immigration reform. did not get obama enough credit for not letting employers get away with it. hireu let employers illegal people, that is the magnet. barack obama did not get enough credit. he would do, rent to reform if he can build a bipartisan commission. john: this is one of the things ugly during the campaign that could get ugly now regardless. donald trump likely to drop another fiscal bomb when it and the g money bestary, promising the equipment known to mankind, updating the nations weapons arsenal and expanding the army and marine corps. enterprisen institute estimates the plans for the pentagon would cost $100 billion for the next four years, and on the other side of the ledger, trump has suggested the

u.s. should decrease its footprint in conflict zones around the world, and tweeted about reining in defense contracts and projects that have become too bloated. case in point, a washington post story uncovered an internal pentagon study of $125 billion in bureaucratic waste swept under the rug. when it comes to military spending, what are the big obstacles trump will face if he tries to pull off his plan, but there you go. mark: this is where having secretary of defense james mattis will be a big deal. theing a way to increase ability of america to defend itself while still cutting -- is, what newt gingrich what trump tries to do. my guess is we will see an increase in defense spending, all the republicans will do that and not worry about offsets at

this point. they are not that concerned with deficit reduction, then you will see whether trump can find a way aing jawboning to provide defense at the same time cutting spending, but the defense budget will be big. i think they would do some things, including increased personnel. john: i can't stress enough. i agree. made onstress enough we this program yesterday, which is that, at least that i made, that the government will get bigger. there is no place where trump is exercising restraint in terms of spending, and this is where he will be pushing on an open door, spending a whole bunch more money. the question is will the money gets spent well and to what these forces too. mark: does europe, how much goes to europe and asia?

the king of debt. we will be right back. ♪

mark: donald has said he wants to eliminate the nations national debt within eight years. top to do, especially since trumpet is trying to keep expensive campaign promises. the committee for a responsible federal budget, trump's proposals could add $3.5 trillion to the national debt. here is why that could cause an itty-bitty bit of tension for republicans in congress. >> donald trump has been all over the map. in 2016, he said he would like to get rid of the national debt quickly, a proposition that budget experts noted was absurd

given the fact that doing so that created cuts a depression. trump seem to walk back that, but wants to focus on infrastructure spending and the economy. donald trump's budget proposals do not add up to his promise to lower the deficit. a nonpartisan committee estimated that his collective proposals would increase the deficit by $5.3 trillion. he has proposed to cut taxes massively and grow the military spending and promise not to security and medicare spending, a huge pile of money that he has put off the table for cuts. over 10 years, that would not reduce the deficit and debt would continue to rise. republicans in congress seem somewhat resistant to allowing the deficit to rise. mitch mcconnell and paul ryan

have said any tax reforms should be revenue neutral, but the question is who's going to stand big taxm, for not only cuts, but a large infrastructure program? facesso john, if trump pressure to keep the campaign promises and keep down the national debt -- john: [laughs] mark: will the notion of debt and deficit intrude on his plans and 2017? john: not at all. i think it will be a wild drunken spending spree out of washington dc. the republicans have been two-faced on this for some time. if stimulative spending and tax cutting generates a huge economic boom, the debt will go down a little bit. i do not think there will be spending restraint, nor do i think there will be a chip in

the debt. you and i agree on donald trump's proclivities and inclinations. what strengthens his hand is you did not hear republicans talk about that and deficit reduction during the campaign. nominations, paul ryan, so not only does that give him license to do it, but also means that if people call him on it, he can basically said i would do --se things, and while it is i believe looking at the clinton experience and the realities of washington, you need more toenue, but the best way start paying down the deficit and debt is with more robust economic growth. that is what trump is banking on. john: the reality is, as we said

millions of times during "with all due respect", this pledge to reduce the deficit in this ridiculous way he's going to trillione deficit, $19 , getting rid of waste, fraud, and he, it was the first time i heard about it. he never talked about it on the campaign trail. that's the one he talked about least, so at least you can accuse him of making a promise and going back on it. be disastrous for the economy, but we will see. interesting ife republicans, rand paul, will be a leader on it. assuming they have had a big infrastructure bill, a tax-cut all, whether that becomes spokesperson for this who is donald trump's opponent, john mccain and lindsey graham have on foreign policy issues. john: that is a big question. mark: up next, some of the

lowest hanging fruit for any republican cost-cutting agenda. that, after this. ♪

talking have been about donald trump's expected spending spree. so, i want to do a round robin, same question to all three of you, and let's start with nancy. nancy, low hanging fruit, donald trump once to be serious about the debt and deficit, what is the easiest set of things that

he can go out and cut right now and get a quick agreement and get it done? >> it is not easy, but he might look at entitlements, because that is where the real money is here they are always looking at the discretionary budget and appropriations, trying to find cuts they are, but that's not where the money is. it's harder to cut benefits, as you know. john: kathleen? >> this is a very interesting question because there is no low hanging fruit. valor trump to rebuild the military, rebuild the veterans health administration. that alone adds $1 billion. .e is cutting taxes it's going to be a lot of money. what they are talking about is cutting nondefense discretionary spending, child care, housing andstance, national parks, to do that, he has proposed a

plan to cut one penny from every dollar you spend each year. 2026, that would have nondefense appropriations 29% below current levels, so it adds up. well that get through congress? how will be american people feel about that? the tax cuts and spending boost will boost the economy and make up for it, but this to me is where they will go, and you have to wonder how easily they will get that done. john: so far, no low hanging fruit inside. do you have anything for me? >> the first thing they say they want to do is repeal obama care, and endearing, depending on how you do that, that could save money, but it could be offset by the $8 billion to $10 billion they want to spend on a wall, $7.2 trillion that it is estimated to be lost through the tax reform plan, and they are

talking about a tax credit for infrastructure spending, another $140 billion, so low hanging fruit is hard to find now. mark: one of the more interesting picks donald trump fromade, mick mulvaney south carolina, a deficit hawk. what are people thinking his massaging andn shepherding through the first trump budget? >> that is huge. mick mulvaney is like the founder of the house freedom caucus, and that sent a signal that the deficit hawks, the people who had been creating so many problems are going to have a lot more to say about the discretionary spending budget. to put him in charge of the office of management and budget says a lot. so, i think even though the president does have to submit a budget for this year, his fingerprints are going to be all over everything, and he will be

a big negotiator this spring when they have to reconcile those spending bills that they did not get done last fall and held over until the spring. that could be a real battle with democrats, and he will be at the forefront of that. my theory is that trump has chosen certain people as symbolic picks to appease people on the right, including deficit hawks, but that he will use that personnel as a smokescreen to not go for a lot of deficit reduction and allow mold a need to say people on the hill trust me, long-term we will get to it, but give us this year to deal with other priorities. what you think of that theory? falldon't think you are off. mole vein he is comfortable saying no, one of the hallmarks of what the house caucus has done so well. they have not been a legislating group of people, and in that regard, he is comfortable saying

no to his colleagues and trump. you could see a year where they are so mired in the process of repealing the aca and talking about tax reforms, that people are saying we will work on deficit reduction later, or they could say this is how we are going to reduce deficits, how we will make up money through growth, and they will look the onus on this idea of growth that may or may not come in the future. mark: kathleen, four years experts have said interest rates will rise because the deficit is intolerable. we are seeing the interest rates go up, high debt and deficit. if trump does not to attend to this at all, other things that don't restrain the rate of growth in spending, will the markets and the fed respond badly? >> the first reaction was surprise, surprise, donald trump got elected. donald trump is talking about stimulating the economy, making

it grow faster with his tax cuts and spending increases, that will boost inflation and cause the fed to raise rates more. stocks rallied, the dollar got stronger, and the bond market pushing yields up. now people doubt that trump can get this done so quickly. it is hard to say how the markets will react. this willthing is how grow, and the second thing is the deficit. it's not so much budget reduction, it is spending cuts. that is what this tea party as all about. john: thank you for coming on the show. games on capitol hill, we look at congress and more when we come back. ♪

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private wifi for your business. strong and secure. good for a door. and a network. comcast business. built for security. built for business. anything with a screen is a tv. stream 130 live channels, plus 40,000 on demand tv shows and movies, all on the go. you can even download from your x1 dvr and watch it offline. only xfinity gives you more to stream to any screen. download the xfinity tv app today. mark: during the campaign, donald trump promised a lot of things, and tonight, we discuss

plan squareending with reality. it is a tough equation. when we need to know what trump is really thinking, we say to ourselves -- that is a knee slapper. whoing us now is the man inspires so many pieces of bad , theng on this program american conservative union, and a man who will thrive in this new year and a trump era, i suspect. thank you for joining us again. >> good to be with you. i feel like i'm in high school. thing ont is the domestic policy that will move first? reform, there, tax aca repeal, what is the first thing donald trump will sign into law of those three, if any, in 2017? >> in their minds, they would probably like it to the

infrastructure. infrastructure is the most clear-cut, but i think it will be obamacare repeal and replace, and as you know, they have started this with the budget resolution process, and i actually think the replace piece, which i continue to read about the fact that it is true have somelicans unanimity in what it is, but they know what the ranges. the question is can they be aggressive and get democrats. that is a valid concern, because they will need them. tom price can do a lot if he quickly gets through his confirmation process. and taxes, every time you have tax reform, it looks like it will be happening within ins up getting bogged down, so tax reform will slide and take longer. reform, just go through the politics of that for me. to seehat companies want

corporate tax reform for a long time. the trump tax plan now is weighted towards benefiting the wealthy and not the voter who we think of as the trump based, so how do square that circle and make tax reform happen in a way that is not seen as a giveaway thereforeh, and there d do the thing trump wants to get done? first.s take republicans their biggest problem is that republicans want to cut taxes. that is their shocker, but they have this issue where individuals pay a high rate when percent, really high, and the corporate tax rate of 35%, and some corporations pay an effective rate of 35%, so most people in d.c. are focused on getting that corporate rate down, but why would you lower

the corporate rate for the biggest companies and leave small business tax rate so high, so republicans want to take down both rate so they are the same. wereast time democrats involved in tax reform was when ronald reagan was president in 1986. they control the house of representatives and had a large number of senate seats, and they wanted tax reform because there were a lot of people in this anytry who weren't paying taxes at all, any income taxes at all, a lot of rich people, so they wanted to get rid of those the duction. the question i have is are there republicans who want to reduce both tax rates. are there eight or nine? mark: to get eight or nine would require moving towards the center, right? >> absolutely. mark: do you think there is an

appetite to lose some republicans, but let's get some democrats, or do this as a republican-only a fair? -- a ffair? >> you might have a couple of show votes or test votes to see if democrats come on board, and if they find they can't get the requisite number of democrats in the senate, you have no other choice constitutionally but to sit down and hammer out a package. that's what happened in 1986, and that's what will have to happen again. we willm with you that have a bunch of drunken sailors in washington, a big government administration, government grows, as it always does. i know there are some conservatives that care about debt and deficit, but trump does not seem to exhibit much interest in doing something about them. how do you think the debt and deficit questions will play out on the hill, and donald trump

and others who again pay lip service to it but don't want to make the hard choices involved? statement to say donald trump did not exactun on a constrained federal government. by the same token, he did raise the idea that when you are $20 trillion in debt, you can't continue to do everything. he is a lot more sensitive to that then maybe was in his campaign and political rhetoric, and i think the whole tea party movement in the republican party , it was so much about spending and a government that is too big and does too much, and i think that the president-elect trump vice president-elect mike pence and the team understand at the end of the day that a lot of what this political coalition that put them into office, yes, it's about our sovereignty and getting the economy going, but a lot of people believe that there is such a stranglehold on the private economy because the

government is too big and spends too much money, and they will have to be sensitive to that or they will hit choppy waters. reasonax reform, the that it happens less in a one generation is that you have special interests that rise up. how is it going to be that donald and paul ryan and mitch mcconnell will be able to stop them from just killing tax reform? >> it is a great question. you are right, that's why it does not happen. the reason why i think it will happen is that the biggest motivation this time is that the u.s. corporate tax rate is out of sync with our major competitors. we have one of the highest rates on the globe, and that's without putting in state tax rates. not competitive. u.s. seen the headlines, american companies that go to europe or other parts of the world to headquarter so they can

pay a lower rate of income tax on the corporation, and because of that, which is different than 1986, this is motivating to more democrats who say we can't keep losing these corporations, and i think that's why the democrats are at the table on the corporate tax rate, and i think that, as they say on the hill, that might be the grease that gets the pig through the door. you referred to the schlapp household -- mark: there is another schlapp pond in the prompter. thank you for joining us. we will get to the democratic side and all of this. chris van hollen joins us after this. ♪

john: the topic, donald trump and spending. our next guest is chris van hollen, democratic senator of maryland joining us from capitol hill. good to see you. >> good to be with you guys. john: donald trump says he will ever lemonade the national debt within eight years by figures flee eliminating waste, fraud, and abuse in the government and growing the economy to increase tax revenues. how possible is that promise? .> not very it sounds like trump math, which does not add up. he said a lot of things during the campaign that did not add up, and this is one of them. he has made a lot of promises to the american people, but i think

you get bipartisan agreement, that doesn't work. mark: i have not had a chance to speak with you since you went from house to the senate. congratulations. >> thank you. it is good to be here, although the senate out has started out in a rush to pass this budget reconciliation procedure, which feels more like the house of representatives than the senate because it is designed to strip the powers and extend the debate of the minority party. stay inwould have said the people's body, but not the house of lords. now you are stuck there. tell us about the van hollen plan for deficit reduction. what taxes would you race and how much would it reduce the deficit? in theplan i put forward past, including the house democratic budget we had last time the house marked up a budget, really had a mix of

things. raisedrevenue that was similar to many revisions in the president's plan, closing special interest tax breaks. it also would have put in place reforms in the medicare system to build on the efforts in the affordable care act that move us in a direction of paying for value, not volume. it also would have allowed the government to negotiate drug prices, prescription drug prices, under medicare, which has substantial savings, so there are a number of provisions that combine would reduce our deficit. mark: by how much over what time? i want to set a baseline here. those things plus the other things reduce the deficit by how much over what time? >> let's put it this way, the deficit grew by less than 3% a year, and at the end of the 10 years, the debt would be lower

than today as a percentage of gdp. which is around today between 70% and 80% of gdp. senator, we talked earlier about donald trump's infrastructure proposal or plan or maybe dream, $1 trillion over 10 years, that's the kind of plan that under normal circumstances that democrats might want to get behind. that, is this your attitude, do think yourself that if it's good on the merits, i will support it, or do you think back to eight years ago and want to take more of a mitch mcconnell approach? , ilook, we have been clear have been clear, where we can find common ground and this idea of modernizing our infrastructure is the one that has gotten the most attention,

we will work with the administration. now clearly they are often a different direction from the start. we have not seen anything about this plan. i put forward plans to modernize our infrastructure that were at least in part paid or by closing some of the international tax theks, but we have not seen trump plan, and i don't think anybody knows what is in it, but the idea of working together to modernize our national infrastructure, look, in the state of maryland, we have a lot of big infrastructure needs him a roads, bridges. i would extend that to broadband in rural areas and a clean energy grid. look, there is a lot of work we can do together. the devil is always in the details. there has been talk of trump trying to deal with this third the tax side and tax incentives and i don't think that will work, so let's wait and see what he proposes. senator, have you had any

conversations with donald trump or anyone from the incoming administration since election day? >> i have not had any interaction with the donald trump. i have had interaction with some of his nominees for different we havepositions was so had some of that, but let's, some of these nominees i think right to, he has a have folks in the agencies of the government, but others he recordinated that have a of trying to undermine the mission of the agencies they are supposed to head on behalf of the american people, so we are working through that right now. mark: you get asked all the time on what you will work on. if he called you up and had a real conversation with you and said, senator, i want your support for tax reform. you know where i stand here you know the realities of paul ryan and mitch mcconnell, but i want your vote.

where do you see the possibility on tax reform where he could win your vote given the constraints he is under and what he has proposed and what paul ryan has proposed? >> i should say first that it would be good if the president-elect would interact with the folks on the hill that way. so far, it has been a tweet -- mark: i have to clarify, your colleague has said he has talked to donald trump more than he talked to barack obama in eight years. >> well, i think you know that the headted him to be of one of the agencies, so obviously they had conversations about that, but look, when it comes to tax reform, i think president obama put forward a pretty good plan. it did not get a lot of attention because it landed in a republican house controlled by republicans on both sides, but i'm happy to have a conversation on tax reform. mark: what are some specific

elements that you think could get the votes through mitch mcconnell's controlled senate? individual things, mr. president, include this and you might get my vote. >> look, when it comes to for example international corporate tax reform, many of us on both sides of the aisle have been trying to find a smart way to get the trillions of dollars that are parked overseas right now back to the united states, but do it in a way that does not create a future incentive for corporations to continue to park money until they get another break, and so i have proposed and supported the idea of a isrid change to that, which a mix between a territorial system and a worldwide system. you would have some worldwide minimum tax level for u.s. profits overseas, but it would be a lower rate of course than the current worldwide rate of

35%, although obviously that is subject to do duction's. there has area where been a lot of discussion in the past, but also a lot of disagreement as to where to draw that line as to what would be an minimum worldwide tax rate. those are the kinds of things where the devil is in the details, but there has some agreement on the overall approach. than 30 have less seconds, but given the rapidly shifting terrain on the aca, in the in, do we end up with obamacare surviving or something like obamacare rebranded, or do you think the law remains in fundamental jeopardy ? >> there are a growing number of republicans who realize that it reckless toolutely destroy the aca without some kind of comparable replacement. aree have always said we happy to work with republicans to fix some of the issues in the

aca, some of the issues that have created higher premiums in some of the exchanges, but we will not let them blow it up and say we will work with them to put the pieces together, because you can't do that. there are only two real ways to deal with comprehensive health care reform, one is medicare for all, the other was what you all know was a republican heritage foundation plan that became romney care in massachusetts that says everyone has to take responsibility for their health care. that is why everybody has to be in the pool. that idea was part of the conservative mandate at the time , then you have to have tax credits for people who cannot afford it on their own. those are the essential elements of obamacare, so there are only two models, and that's why republicans in the last six years have not been able to come up with their own plan that meets the same needs, because it would look very much like obamacare. hollen,nator chris van

new member of the upper chamber, enjoying himself already. thank you very much. we will be back with closing thoughts on the opening days of donald trump's presidency. ♪

mark: we have talked about donald trump's plans for immigration, infrastructure, the military, and more, so john, when it comes to federal spending, how much pushback will trump get from fellow republicans, if any, in the first months of the administration? been making my drunken sailors shore leave comments for several days, so i think not very much.

in the first 100 days, most of these things will not be on the table. tax reform will take a bigger chunk of space, the infrastructure thing in. is important, but will take a while to cook. i don't think spending is where the initial fight, tax reform and the aca, that to me will consume in addition to regulatory rollback, that's what the first hundred days will be about. trump is in reform, league with republicans, regulation reform, and that gives him a chance to accomplish some things that will be relatively popular with a broader group than just the base of the republican party. those are the things that republicans espouse that are popular in the short term. infrastructure and repeal of aca , that's where things get more complicated, but in terms of pushback, mike pence, you can call him the prime minister of united states, but -- john: one is a very grand title.

mark: it is a little unclear to me exactly what will be deferred and delegated to mike pence, but that miker to me pence is going to be the trump whisper, and will allow republicans to feel comfortable, you have to give him a chance. he is pushing what he ran on. you have to give him a chance. i think you will see when the tough votes come, the white house, the administration, the presidency depends on passage of this. you have to vote for it. john: it will be good if he is the whisper, while the other one shouts. we will be right back. ♪

for: thank you so very much watching our special inauguration we coverage. we will be back tomorrow to look at donald trumps drain the swamp agenda. bloomberg technology is next. until tomorrow, sayonara. ♪

♪ announcer: from our studios in new york city, this is "charlie rose." charlie: we begin this evening with a look at president-elect donald trump's plans for health care administration. in an interview this weekend with "the washington post," he said he was almost done with his plan to end the affordable care act. they held votes on repealing the law. in the interview, trump said his plan's goal was to provide insurance for everybody and vowed to have drug companies negotiate directly on medicare and prices. bob costa is a "washington post"