time -- >> mr. chairman, can i get an extra 30 seconds? >> can i just answer this so you get more tomb. these are very important entities to provide the necessary liquidity for housing finance and what i've committed to is that i will work with both the democrats and republicans. what i've said and i believe, we need housing reform. we shouldn't just leave fannie and freddie as is for the next four or eight years under government control without a fix. that i believe we can find a bipartisan fix for these so on the one hand, we don't end up with a giant bailout. on the other hand we don't run the risk of completely limiting housing finance. >> i appreciate those comments and look forward to working with you. since i took most of the 30 seconds on your statement i have two quick questions hopefully can answer them with yes or no answers. one is, in light of those comments about recap and release, you commit not to support any kind of administrate

of effort that would bypass the congress in terms of efforts to recap and release? >> i don't want to make any commitments to legislative or not. what i will commit because it's my responsibility in treasury, you know, as it relates to certain issues with fannie and freddie. what i will commit to is it is my objective to find a bipartisan solution to it, and i would welcome the opportunity. >> and your hope would be the bipartisan consensus that the banking committee in particular arrived at was that that solution, and we can argue or discuss about how we get there, should end up with the housing finance system that preserves things like the 30-year mortgage but also makes sure that there is not the current status which has -- when things are going well, private sector gain but when stuff hits the fan, taxpayer holding the bag. >> i can 100% assure you that i have no interest in that. and i think i understand this

well enough that you will find that i won't support any policy that has that casing. >> thank you. >> senator mccaskill. >> thank you, mr. chairman. mr. mnuchin, i found a tweet of your future boss that i agree with. keep it fast, short and direct, whatever it is. so that's what i'm going to try to do. first, do you oppose lifting the kunc current sanctions on russia? >> right now i do. >> you think we should lift -- >> i'm sorry. i oppose right now lifting the current sanctions without -- >> do you support new sanctions against russia? >> well, it -- >> yes or no. >> the answer is, i don't have the information. i haven't been able to receive classified briefings. i would want to understand the classified information, and i would want to work with others to understand it. so i don't have an opinion right now as to whether we should have more. i have an opinion we shouldn't

be lifting the existing ones. >> would you agree your new boss is famous for firing people? >> well, he has a show about it, but other than the show -- >> do you think -- >> sometimes it's a blurred line at this point. we're not sure where the show stops and where the reality begins. do you think he'll hesitate to fire people if he disagrees with them or believes they're doing a bad job? >> if he disagrees with them, no, and i can tell you the president-elect and i have disagreed on things. sometimes i've been able to convince him and sometimes i haven't. i haven't been fired. if people do a bad job, absolutely. he should fire them. >> will he be able to fire and hire the ethics officer? >> the ethics officer as it relates to his trust? i have no idea. i am not -- >> who would hire and fire the ethics officer if it wasn't him? >> again, i don't have access to the trust documents and don't know the answer. >> we're not talking about trust. we're talking about he has said he'll have an ethics officer to

oversee him in the government. who is going to hire and fire his ethics officer? him? >> i -- it's a good question. i would be more than happy to ask hum aim and talk to him abo it. you raise an important issue, and i think he'll understand that. i don't have the answer. >> he is not divest anything of his business interest, contribute? >> correct. i believe he sold his public stocks and his other -- >> i'm talking about his business. is it fair to characterize him as an international businessman? >> i believe so. >> okay. and he will enjoy the benefits of his businesses success while he is president, correct? >> again, i believe he'll do everything legal me and -- >> no, no, this is not my question. my question is, he has said very loudly he will go back to his business after he is president.

he even said he'd fire his sons if they hadn't done a good job. so whatever success his business enjoys during his presidency, he will get the benefit of, correct? >> well, i missed the part about firing his sons, but that sounds like something he may have said. but the -- yes, he's the economic owner, so by definition, i would assume that he would have that. >> his businesses in other countries and in this country intersect with foreign countries. do you agree? >> so i've read, yes. >> and isn't it true that a lot of his debt is held by foreign interests? >> i don't know. i've just read it in the papers. >> do you think you should know that as someone who runs the committee on foreign investments if we're talking about the commander in chief? should you as secretary of the treasury know what percentage of his debt i am told by people familiar with his business that it's a huge percentage of his

debt is held by foreign interests. >> all right. so we're going to break away from the hearing right now. there you see the president-elect of the united states and his wife melania trump over at the trump international hotel here in washington for a luncheon before their other formal events begin as you saw earlier live here on cnn. the president-elect landed at joint base andrews about an hour or so ago. now he's at the trump international hotel on pennsylvania avenue that's right between capitol hill and the white house. the president-elect is attending this luncheon at his hotel honoring gop senators in the house and senate. he had a lot going to today. later he'll be going over to arlington national cemetery and lay a wreath over there. then the lincoln memorial. there will be a concert. he'll speak at that concert. and then a formal dinner later tonight. let's listen in quickly.

[ applause ] >> so i just want to thank you. would you like to say a couple of words? >> it's great to be here, and thank you all for your support. and tomorrow we start the work. and we will make america great again.

>> brief words from the president-elect. the upcoming first lady of the united states, melania trump, here at this luncheon honoring gop leaders in the house and senate. you see their family members there. the adult children of the president-elect. all of them are here in washington. he's speaking once again. let's see if we can listen in. >> so i want to thank everybody. we've had such great, great support in this room. and we have, i think, mitch is here. where is mitch mcconnell. there he is. sitting next to the ambassador. sitting next to the ambassador. congratulations. thank you. john cornyn is here, senator.

where is john? thank you, john. john was always raising money for the senate. he had a way of asking for a lot. i didn't even know it, right? once a year i'd get a call. i'd say, oh, no, it's john cornyn. and he'd walk in, hi. >> i said, okay, john. how much is it? >> could you go 250? >> i don't even know you. but for years i didn't know him. then when i ran, he was great. that's the way politics is. but he's good to me now and he's a good guy and i think we'll have a fantastic relationship. and i appreciate it, john. thanks for being here. where is cory? i saw you on television yesterday. thank you, cory.

kevin mccarthy. where is kevin? there's my kevin. called me in the heat of battle, right? i love paul. i don't know if paul is here. he's out writing legislation. he's got so much legislation to write. never had it so good. and he's actually got somebody that's going to -- really, really love paul. we're doing very -- i just want to let the world know we're doing very well together. we agree. and he called me up. do me a favor. maybe, this was like two days ago. he said, let's not talk about the taxes publicly because we want to do this one first. we're going to work on health care. it's very complicated stuff and i said i know that. the problem is i gave an interview about five or six days before to "the wall street journal." so i said absolutely. i think you're right. i'll not talk about taxes.

and the following morning, this was an evening call, the following morning, it came out, trump on taxes. so i called paul, believe it or not, that interview was given five days ago. he's done a great job. and during the heat of battle, kevin was there for us. and i appreciate kevin. hi, steve. all my friends. patrick mchenry. patrick. what a name. that is a name of a true patriot. where's patrick? i see somebody in the audience, too, by the way, who has become very famous lately. the legendary jeff sessions. and mrs. sessions. so is it easier than you

thought, jeff? he said, what the hell did i do this for, right? they love you. you have done so well. so amazingly well. and so tough on jeff at the beginning and then all of a sudden they say, man, this guy is smart. i know how smart he is. he's a great guy. he will be one of the outstanding stars of this country. and he's legit all the way. so, jeff -- [ applause ] anyway, and so many others. kathy mcmorris rogers. where's kathy? she's around here some place. hi, kathy. so we also have steve mnuchin is right now getting grilled. he's getting grilled. he's doing a good job. you know this, right? he's out there doing wat you were doing four days ago. but he's doing a fantastic job. and i will say, all of our folks, cabinet members, i think

nikki is here some place, nikki haley. i'm going to send her over to speak to china. we're going to have -- i think we're going to do a lot of great things, right, nikki? thank you for going through this. you did a fantastic job. thank you. tom price. it was so nice to tom, right? where's tom. he's become a star. where is tom? it's a lovely group of people, tom. they wanted to end his career so fast. and then they found out, man, he's smart. we have a lot of smart people. i tell you what. one thing we've learned. we have, by far, the highest iq of any cabinet ever. [ applause ]

where's betsy devos. she was -- [ applause ] very easy subject. it's called education. right? we have a little different take on it, right, betsy? it's called we want our children educated. that's our take. so we're number one in the world in cost per pupil. number one in the world, and we're ranked number -- in some charts, we're worse than that. i saw one the other day, we're over 28th. 28 out of 30. >> all right. so the president-elect of the united states there you saw him speaking to this luncheon at the trump international hotel on pennsylvania avenue in washington. and a luncheon honoring gop leaders in the house and the senate. shortly, he and his entourage

will head to the arlington national cemetery across the potomac river where there will be a wreath laying ceremony. that's supposed to start at around 2:45 p.m. eastern. then from there, he'll go over to the lincoln memorial for what they are calling a make america great again concert. that will be from 4:00 p.m. eastern until around 6:00 p.m. eastern and the candlelight dinner over, i think union station here in washington, d.c. among the entertainers, toby keith, jon voight, 3 doors down and several others. let's assess what we've just heard. what is happening on this historic day. want to bring in our chief money -- our cnn money chief business correspondent christine romans, our senior political reporter nia-malika henderson, chief political analyst gloria borger. also with us j.d. vance, author of "hillbilly -- memoir of a

family and culture in crisis." also "usa today" columnist kirsten powers and cnn correspondent phil mattingly. i'm anxious to get your thoughts on the steve mnuchin hearing. he's the nominee to peculiar the next treasure secretary. we had three hours of coverage. he was asked a lot of tough questions. ethics questions among other issues. how do you think he did? >> i think he did well. he wanted to get out there and correct the record what he thinks is an unfair portrayal of his role in the financial crisis, after the financial crisis and buying failed indymac and turning it into one west. you are hearing a lot of stories out there push by democrats and people who oppose him. old women who have lost their homes because of the practices at one west and he really tried to set the record straight on that. one thing about steve mnuchin at that hearing. he talked briefly about the dollar. you recall last week donald trump made in comments the dollar was too strong.

he said i'm not going to comment on the value of the dollar. we'll have trade policies that will keep the dollar strong. you could see he was sounding more like a treasury secretary and less like talking -- shooting from the hip on that issue. so on the taxes front, he's going to be asked a lot of questions about taxes. you heard donald trump talk about taxes in a bit of daylight between him and paul ryan on taxes that landod the front pauj page of "the wall street journal." they'll be more quiet on taxes as they try to work that out behind closed doors. >> he made a commitment during the campaign to lower taxes for everyone. and presumably, presumably that's going to be a high agenda issue for him. president-elect once again over at the trump international hotel for this luncheon. gloria borger, you were watching the hearings together with all of us. one thing about steve mnuchin, in the face of some angry, tough questions from some democrats, he didn't back down at all.

he was fighting right back. >> there were some people in the transition nervous about how he was going to perform. he's not used to this kind of a public arena. and he does have a history of working with george soros, for example. so they were really giving him some tough questions. i do think he handled it well. i agree with you. he did get some tough questions about the offshore accounts, which you can imagine he would get. and his answer was, like all hedge funds, we set up these offshore entities for pension funds. and he said in no way did i use them to avoid u.s. taxes, but he also said as treasury secretary, if confirmed, i am going to look at these things because it's very clear that he understands that people use these to avoid taxes. so the democrats really tried to push at him on that. and he pushed right back and said, look, i paid all of my taxes as required by law.

and on his -- there was also some notion he hadn't disclosed $100 million in his real estate holdings and he said he'd been advised he didn't need to by his lawyer but here it was. just an oversight. >> claire mccaskill, one of the democrats on this senate finance committee, a tough exchange she just had with steve mnuchin. let me play the clip for our viewers. >> okay, so what i want to get a commitment from you today is that you will report to this committee what percentage of the debt against the trump enterprises is held by foreign interests. that is your job as the secretary of treasury, and i would -- your commitment that you'll report to this committee as soon as you are able to get that information from the new president. >> i am not making the commitment today to report to the committee on anything, but what i am willing to do is to the extent i am confirmed, i am willing to speak to the chairman

and make sure that whatever the committee thinks it needs, i will discuss with the president. >> i can assure you the american people need to know, and you and your job as secretary of the treasury that is supposed to be determining national security interests based on foreign investment, the american people want to know how much debt that is owed by the trump businesses is owed to foreign entities and -- because that could have a direct impact on our national security. thank you, mr. chairman. >> tough exchange over there, nia. there were several similar exchanges. but he didn't -- he wasn't giving up. he was fighting right back. >> there's a theme here. all of these nominees incredibly well prepared. they are obviously prepped. a lot of them didn't necessarily talk to donald trump about any issues beforehand, but that in a way enables them to be vague in some of their question and answering there. i think we've seen from democrats, an attempt to really

paint these candidates or these nominees as essentially the foxes who are now going to guard the hen house. we heard chris murphy, for instance, talk about one of the nominees yesterday and said this whole cabinet nominees were essentially part of a get rich quick scheme. a lot of them could benefit from their positioning and here, i think that's what claire mccaskill again was getting at for donald trump. he could stand to ben put it from being in the white house economically and also perhaps jeopardize some national security. also pushing for more transparency from all of these nominees and pushing from donald trump for more transparency as well. we heard donald trump say today that this is the cabinet with the highest iq ever in the history of the world. i think democrats want the american folks to feel like this is the richest, you know, kind of pantheon of cabinet nominees. >> and it is. >> certainly highest net worth.

j.d. vance, you were watching closely as well. how is it going to play around the country, not just here in washington, d.c.? >> one of the things i noticed as i was watching democrats question the treasury secretary nominee is that they seem to think they had a political trump card in the fact he was a rich guy who had taken advantage of some of these offshore accounts and other loopholes in the tax system. and it's always occurred to me that that's never been a very effective political selling point. what people are more concerned about is that these things exist in the first place, not that a few people actually take advantage of them. and i thought that where he talked about maybe we should sit down with congress and get rid of some of these loopholes, make it harder for these offshore accounts to exist because pretty effective selling point and probably pretty good policy. >> and it was donald trump's argument as well when he -- when hillary clinton would talk about his shirts being made elsewhere, his ties being made elsewhere. you've been there 20 or 30 years. you could have gotten rid of the

laws that allowed that to happen. >> he wouldn't be the first goldman sachs leader to emerge as a treasury secretary. a lot of us remember covering bob rubin during the bill clinton administration. also a very rich man. >> exactly. >> paulson. >> i think that's a great point. the question i was wondering is when he says that he wants to get rid of it, but is it that he then wants to cut taxes so dramatically in the united states to make up for it so that companies wouldn't need to go there in that's not really what democrats want. he's telling them what they want to hear. y we need to look at this and shouldn't have this but the solution to the problem is probably not what democrats want. >> they want tax reform and that's what they're going after here first. if you have a real big tax overhaul, maybe they package that into the overshore accounts. i think tax reform is coming. >> what's coming now is a quick break. we're going to continue our conversation, continue our analysis. we're waiting for the president-elect. he's over at the trump

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a new trial on innovativeg hearing technology. you will be asked to evaluate a remarkable a product that's virtually invisible. call 1-800 beltone want to go back to the senate finance committee. steve mnuchin answering questions right now from senator maria cantwell. >> 21st century glass/steagall as part of regulatory reform has a view as to what's appropriate. >> so i just want to be clear because i think in your testimony that i heard, you did allude to the damage that was caused by the implosion of our

economy, brought on by toxic financial instruments that did not have the backing that they needed. according to the dallas fed, it's $14 trillion hole in our economy. so i think you alluded to the damage that that caused in your -- so now what i also, i think you answered, at least some of the notes i have here about some of my other colleagues that you believe in the concept of proprietary trading did not belong with the bank. >> that's correct. >> okay. so where does that go then? so you're saying you don't think that today there is a clear prohibition and you to see a clear prohibition? >> no, what i said in the volcker rule -- today we have a prohibition of proprietary trading in banks. >> with loopholes. with loopholes. >> the problem that we have is that the definition of that was left to the regulators to

decide. and so the first issue is -- and again, i'm a believer in proper regulation, but i'm also a strong believer in people need to understand the regulation. so we need to be able to explain to banks what's proprietary trading and what's not proprietary trading. i think we would all agree if we were all sitting in this room and just betting on things that's proprietary trading. what i referenced is the federal reserve had their own independent report on a lack of liquidity in many of the important markets. so what i'm in favor of is that we have clear definition around the volcker rule and that the regulators come out with that and do it in a way so that it doesn't eliminate liquidity in many of the important markets. >> so you would basically just tighten what you think are the rules that are out there.

so you would lessen the rules that are already passed in dodd/frank? >> no, that's not what i've said. i want to be very clear. what i've said is that i support the volcker rule but there needs to be proper definition around the volcker rule so that banks can understand exactly what they can do and what they can't do and that they can provide the necessary function of liquidity in customer markets. i'm referencing a problem that the federal reserve has independently raised. >> well, i think, to me, i think this election was a lot about the frustration of the american people on the implosion of our economy and the fact that they haven't recovered. and i think the president-elect, whether he directly or mant to or -- i was pleased that his party adopted coming up with a very bright line of separating commercial from investment banking. so now i think where we are

today, we're not sure. hopefully we'll get a chance to vote on this, all our colleagues, now that our colleagues have to answer to pl platforms and committees. but i will tell you that not only is this an issue of people wanting to see a bright line and be protogethered from this ever happening again, when it comes to the tax code and the tax policy, the american people have not recovered. so lowering the corporate tax rate without getting a plan for the average american who lost pension, couldn't send their kids to school, maybe lost their home, what is the tax policy the president-elect and you are going to pursue that is going to help restore them from that major implosion and protect them from this ever happen again? >> let me just tell you, from having traveled with the president-elect for the last year, i absolutely understand why he got elected.

and that is because, as you point out, the average american worker has gone nowhere. the unemployment rate is not real. the average american worker has gone nowhere. and president-elect is committed, as am i, as his economic adviser to work for the american people and grow the american economy so that the average american worker does better. and that's why i've been willing to sell all my investments, okay. i've been willing to give up my businesses. my desire is to work for the american people to create a better economy, and i understand that. i've traveled for the last year. i've seen this. and the president-elect understands that very clearly. >> so just one question on that. i know my time is expired. did you mention in your -- what tax break policy you would give to that american worker? >> absolutely. we specifically said the objective is to create a middle income tax cut and to create

business taxes that incent businesses to grow and make businesses more competitive and higher more people -- >> no not specific to education or pensions, a broad tax break to -- >> as we've talked -- as we had a chance to talk about, i think pensions are a very important issue. >> thank you. >> i'd be happy to work with your office another time, okay? i think that the people who have earned pensions absolutely deserve to have those pensions maintained and be safe. and i am very concerned about the retiree issue in this country and that's something that i look forward to working with you and others on. we need to protect the pensionholders in this country. >> thank you. thank you, mr. chairman. >> we're going to take a ten-minute break here. my friends on the other side have requested a second round. and we're going to grant that.

and so let's just recess for about ten minutes or a little longer. >> orrin hatch, the chairman of the senate finance committee ordering what he says will be a ten-minute break in this hearing. steve mnuchin has been nominated to become the next treasure secretary of the united states. we're going to continue our special coverage. it's just very, very interesting what we just heard, christine. what he said about the unemployment rate is not really real. we've heard that from donald trump all of the time. he's always saying the numbers that the labor numbers coming out are really not realistic. they are way too low. the real numbers are way higher. but go ahead and explain. >> so donald trump for many months now has said the unemployment rate is not reasonable 4.9 or 4.7%. 25 to 42%. and he says 96 million people in

america who want a job. that's just not true. that is -- there are people who are sidelined by the economy. and there are people who are no longer in the labor market. some of those people are retiring. some of those people are stay-at-home parents. some of those people are not working because they just dropped out, but many of them are not working because they don't want to work. my grandmother is one of those 94 mill yen people. she's not going to go out and get a job. you heard him say the unemployment rate is not real. wat what i think he's trying to highlight is there are those whose wages have not grown. people who feel they're not moving up in the labor market. people working part-time but would like to be working full time but working full time but it's two part-time jobs. there's 300,000 manufacturing jobs open today. there are several million jobs that are open today that aren't matched with skills. there are big are policy issues about fixing that sideline in the economy and, you know, i worry when you say the

unemployment rate is not real when all these people in the labor department who work so hard to compile those numbers are about to work for thus administration. i worry that that dilutes their argument when they are using numbers that aren't quite precise. >> it raises the question when donald trump becomes president is that the kind of language he continues? when he gets numbers from the bureau of labor statistics, maybe the unemployment rate goes up or down. does he question those metrics? if there's only 70,000 jobs created, does he start to question those metrics? when things look pbad for him, when things go wrong, does he then start attacking the source which would be his administration? >> i think you'd like the metrics when the rate is low. >> he should be riding high on the economy that he has inherited here. and since the election, ceos tell us they think there will be pro-growth policies. they think there will be cuts in corporate taxes. and so they are planning on hiring more this year. that's very good for

president-elect trump. >> david gergen makes a fair point. a lot of people have jobs but not the salaries they used to have and they aren't as satisfied. as a result, maybe that's what city of mnuchin was talking about. they are not making what they used to be making before the great recession. >> i was more impressed with mnuchin than i thought i would be. let me go to the broader point. it is true. 40% of the people are unemployed is outlandish to say. but there's a widespread view that a lot of people have dropped out of the labor market. so 4.7%, 4.8% for a lot of americans does understate the problem. it puts a rosier face on the problem. >> there's a number for that called the under employment rate. it's more like 9%. >> it has been coming down but 9% is a pretty darn high number

and does reflect -- i think you have to give, on this one, i think trump makes a lot of wild assertions, but on this one, i don't think -- >> presumably, donald trump tomorrow will be sworn in as the next president of the united states. a lot of people agree those unemployment numbers are not realistic. >> that's what steve mnuchin said. this is one of the reasons donald trump got elected. he understands there are a lot of people out there who feel left behind. to be fair, both parties kind of do this depending on who is in office and who is out. if they want to downplay how well the president is doing in terms of the jobs numbers. they will always go to the fact that there are people who have dropped out. it's a game both sides play. it doesn't make it illegitimate. >> but it does speak to the larger question of people feeling like they are treading water and they haven't -- their incomes haven't risen the way they should and the notion that they believe their children are going to be less well off than they were when they were their

kids' age. and to your point, wolf, that played very much into the election of donald trump. they say they are going to create a middle income tax cut to help those -- to help those families. the question that i have is what are republicans thinking about this? because how are they going to -- how are they going to pay for all of this? >> and one of the criticisms if you talk to moderate democrats will have of the obama agenda, moderate democrats care a lot about economic inequality, there wasn't enough on economic growth. so that is something that actually matters and matters to people who are looking for jobs. to gloria's point, it does matter if your income is down if you dont feel like you can grow. >> student loan debt is a bug part. this is the biggest generation of student loan debt. they feel their kids aren't moving ahead. we have senior citizens who have social security payments garnished because they have unpaid student loan debt for them or their kids. that's a big part. i haven't heard the policies yet. >> we'll get back to the hearings.

they are about getting ready to resume this hearing. let's take a kwquick break. we'll resume our special coverage right after this. cold . it shortens colds, so you get better, faster. colds are gonna call. answer them with zicam! zicam. get your better back. now in great tasting crystals.

welcome back. we're standing by to resume our

special coverage. the senate finance committee hearings. the confuirmation hearings of te treasure secretary nominee steve mnuchin. it's been more than three hours already. taking a quick break and will resume the hearing momentarily. we'll go back to it once it starts. he's facing some very tough questions from a lot of the democratic members of the committee. in the meantime, just want to remind our viewers, later this afternoon, the president-elect and the vice president-elect in about an hour or so they'll go to arlington national cemetery. they'll lay a wreath at the tomb of the unknowns and from there go over to the lincoln memorial for what's called the make america great again welcome celebration. a concert with all sorts of sprain e entertainers, toby keith, lee greenwood, 3 doors down. and later tonight a candlelit dinner over at union station here in washington. the president-elect, the vice

president-elect, they'll be thanking their big donors. all that coverage coming up on this day before the inauguration. david gergen is with us. if you take a look at the 15 sort of traditional cabinet positions and we've got some graphics we'll show our viewers. trump cabinet by the numbers. gender, 13 men, two women. political parties, no elected democratic politicians among those 15. cabinet members, never elected to public office, ten of them have never been elected to public office. elected to public office, five. racial makeup, ethnic makeup. one black, one asian and zero hispanuc. >> we've had two presidents in a row, actually three, bill clinton, george w. bush and barack obama who all believed in

diversity. and built cabinets in which white men were the minority. this is a break with that tradition. he is the disruptor. he's the one that's going to throw out a lot of the norms. but i do think that it fuels the sense of being separated out by the black community, for example. that's one of the reasons the john lewis thing blew up so quickly. a lot of these african-american members of congress are not coming because i think when you -- when they don't see themselves represented in the cabinet and they don't see more women there. just next door, with the trudeau government, more than half of trudeau's cabinet, women. and to have so few, i think it creates some distance. if he can overcome it. if there is his team to get back and talk about the economy and jobs, creating more jobs, they can get themselves ouft of this

hole. they have so many distractions. >> i think his cabinet looks a lot like the coalition that elected him. that's not a defense of it. i think he should make more of an effort to find more diverse team. these are the people willing to serve with him because of the type of people who voted for him. sean spicer was arguing earlier, pushing back that it's not that diverse. i wasn't really connecting with his argument but he was saying, let's wait. there will be thousands of other positions. but it's missing the point. these are the top positions. and they are very -- they send a very important message to the country. >> it's the first time since the reagan era where there wasn't a latino in the cabinet. and also we're used to having a member of the other party in the cabinet, at least one. and there were -- >> never seen again. >> donald trump just elected -- he talked about reagan democrats who were voting for him. and we don't see a politician

from the other party also in this cabinet. so i think trump believes in loyalty. >> right. >> more than anything else. >> and he is rewarding the people who stuck with him, whether it's giving woody johnson ambassadorship to the court of st. james, fine. they reward their friends. these are people he's known and trusts and has said publicly, i believe in success. and these people are successful. and who better to put in cabinet positions than people who are wealthy who have made a lot of money and know how to succeed because now you're their client. >> and this was such an untraditional campaign. he alienated a lot of people. so many never trumpers. some of those never trumpers came around. nikki haley was a never trumper and will now serve in the cabinet at the u.n. post. there was that problem. and then there are people who fran frankly didn't want to join this cabinet for all sorts of

reasons, join the administration or white house. i was just talking to a republican about that just the difficulties that he might have, donald trump, in bringing people into this white house. bringing people into his cabinet. the hispanuc thing is glaring but maybe not so surprising. given some of the rhetoric from donald trump during this campaign. so, you know, in some ways, it's not surprising. >> the right part of your screen, you're seeing security at the trump international hotel in washington, d.c. the president-elect getting ready to leave the hotel and head to arlington national cemetery. the wreath-laying ceremony at the tomb of the unknowns. that will be taking place very soon before the make america great again welcome celebration. a concert there. christine romans, there was a lot of conversation with the secretary of the treasury nominee steve mnuchin about the offshore deals. the cayman islands investments. there was a lot of exchange going on. i think we have a clip of that.

let me play that. why were you setting up these accounts. the accusation is to cheat the american government from taxes. >> no, i wasn't trying to cheat anyone. how about when we do tax reforms, let's get rid of them. he's not the first person to face grilling who has had offshore accounts. we had presidents who had offshore accounts. so this is something that's in the tax code that rich people do to either diversify their assets or shield their income. and it's legal. >> totally legal. the point is that it's legal. >> legal for a long time. if members of congress and the president of the united states wanted to change it they could pass legislation to make it illegal. >> he did it for pension funds but not for himself. >> in no way did i use them to

avoid taxes. as treasury secretary, we ought to look at this and hopefully he will. >> let me play the clip. >> i, like all other hedge funds and many, many private equity funds set up offshore entities that are primarily intended to accommoda accommodate. u.s. corporations or u.s. partnerships and in no way did i use them whatsoever to avoid any u.s. taxes. u.s. taxes. i can asure you i paid all my taxes as was required. >> you see the motorcade on the right part of your screen leaving the trump international hotel on pennsylvania avenue, they'll be heading over to

arlington national ceremony at for laying a wreath at the tomb of the unknowns. you understand david gergen why it causes alarm with a lot of people even though it's very, very legal. >> it should cause alarm. it is widening the gaps, the inequality in this country, and you know, i was glad that he came back and said listen, let's get rid of them. that was a good thing to say. >> hold that thought for a moment because the hearing has just resumed, ron widen is questioning steve mnuchin. >> that's very specific and i'm asking it far reason. i don't want to have to repeat it if you are a policy that cuts payroll for the top one or two percent for those low or middle income doesn't that violate the mnuchin rule? >> i said the primary objective

is to deliver a middle income tax cut and simplification on the high-end. >> but you are already fudging on this commitment that you made to american people that you wouldn't give an absolute tax break to well to do people and the reason i'm asking this is because this is exactly what aca repeal was all about in the last congress and every single republican up here voted for it so i hope you will think this over but this is exactly what troubles me. we've got two tax systems in america. you are nudging our way saying maybe you wouldn't give a break to the well to do. i'm asking you about a specific situation you said gee, i don't know we'll have to go and see. now. let me turn to a second area that working class people care a lot about and involves their

purchasing power, a lot of questions about the 35 to 45% border tax that the president-elect is doing a fair amount of tweeting about. could you tell the american people what products would be subject to this tax, and i'm not interested now in all the complicated theories about the dollar. i think it's a question worth talking about and the like, but americans want to know what products would be subject to it? working class people want to know, is gas going to be part of this? give me your response. is there any products exempt? >> first of all thank you i think that's an important issue an i think this week the president-elect came out and suggested that he had concerns about the house g.o.p. order adjusted tax and part of it is the complexities around it -- >> i'm not talking about what the house is doing with border

adjustment, i want to hear about the border tax, the president has been talking about. >> he hasn't suggested a border tax. what he's suggested is that for certain companies that move jobs, okay, there may be repercussions to that, he has nod suggest -- not suggested in any way a 35% border tax and if anything quite the contrary, as you said he has concerns about things impact the price of gas and others. >> so what products would be off the table what i call border tax and you want to say is kind of something else, what products that working class people buy would be exempt? >> again, i think when he's referred to a border tax, he's referred to a small number of companies that have moved their jobs or are moving their jobs

putting products back into the united states and taxing them, so he has in no way contemplated a broad 35% border tax that couldn't be further from anything he would possibly consider. >> let me turn to another topic of tax policy because we're trying to gather at least a bit of information about how you would deal with some of these kind of common tools that would be in your jurisdiction if confirmed as treasure secretary. inequality has grown substantially over the last 30 years. there has been bipartisan support in the past for the earned income tax credit. there are a number of proposals pending now in the congress. do you have any thoughts on that? >> again, first of all, as i suggested to you when we met, i hope we can sit down and talk about taxes with democrats an

republicans and see where we can agree on bipartisan solutions. i think as it relates to any specific component of this, i think we need to look at the overall tax reform that we're going to put through and where things fit in at but i would welcome the opportunity to follow-up and work with you on that. >> mr. mnuchin, again, and i want to be respectful on this point. because you have not been involved in these policy fields in the past -- and i respect that because there's lots of leadership that a person still can provide -- when i asked about medicare, you would be the managing trustee, you really didn't have any thoughts on that. i just asked you about the earned income tax credit. tremendous interest among democrats and republicans. i gather you're not aware that the speaker has long been

advocating improvements that democrats are interested in. and i will tell you we're going to have the chance to go into some other questions, i'm very troubled about the fact that on these basic tools you would have if confirmed you seem almost unscathed by the subject. so thank you, mr. chairman. >> i'm sorry that you're troubled by that. i hope i earn your respect and not troubled if confirmed going forward. again, i don't want to comment on specific legislation on tax on the tax credit. i think tax reform needs to be looked at as an overall policy and i've laid out certain frame work for what i believe the president-elect believes in for tax reform without commenting on specifics. >> i'm over my time for this round. i hope because i'm interested in those discussions with you about

tax reform, you're not talking about putting the earned income tax credit on the table as something you might throw in the trash can because if you do you're going to have opposition from me and you're going to have opposition from the speaker of the house. >> i'm not saying that, i'm just saying i'm not going into every single specific of the tax item. thank you. >> i want to try to cover three quick, maybe not so quick questions, the first is to return back to the discussion and freddie mack, housing policy reform. i'm sure you're aware that senator warren and i and others have worked some time on legislation to try to deal with this circumstance. we currently have a situation in which fannie mae and freddie mac are in receivership. the federal government is basically running them and the