and week after the attack of the united states, the wide discretion we were able to gives the fbi and local police investigateto crimes and preserve our safety domestically, there is the potential when the leadership of our country makes a statement that we talk about in terms of the muslim community and how we should be reacting after a terrorist attack, my greatest fear -- and i'm not sure what as farrrent position is as constraining those activities, but it doesn't even rise to the level of going to a judge. those investigative powers that police officers and local police departments are going to have to basically be in a position to intrusively be involved in neighborhoods and communities in ways that are not american.

>> please join me in thinking this great panel for a stimulating discussion. [applause] , andve a 15 minute break we'll reconvene here at 10:45. we will take 10 minutes, decaffeinated, hit the bathroom. and we are trying to reach from date our introductions -- three truncate our introductions. cato.org and find all our bios there. please join us in thanking the panelists.

>> i do think you can learn from failure. i think if the next president wants to aspire to be like somebody they probably want to aspire to be washington or lincoln. you can't re-create the country and you can't have the civil war. so what next? aspire not to be james buchanan. >> tonight, historian robert strauss talks about james buchanan's presidency in his latest book, "worst president ever." differentiation of good presidents and bad presidents -- you have washington and lincoln and fdr always at the top -- they were decisive men. you can't come to the top of the ladder and not be decisive. being alk hated him for

waffler. you doesn't tell them what to do. to tell me what to do. newsmakers return guest this week is congressman kevin grady of texas. he is joining us from houston where it is much warmer than washington, d.c. he is just returning from washington where he has met with members for the new tax code rewriting and the health care act. thank you for being with us, mr. brady. tolet me introduce you reporters. rachel is on newsmakers and richard ruben of the wall street journal is making a return. we will start with taxes. richard: when you were here this

week, meeting with republicans home, on taxes, what did you accomplish? what did you come out with? rep. brady: we had several very good days. america voted for change. we have a new president who wants to make america competitive again at home and around the world. tax reform is key so we focused the whole day on our bill to promote the tax code. focusing on how to create more jobs in america. how can you eliminate any incentive for american companies to move there jobs or headquarters overseas. code soa tax competitive that the best place to sell to america and the best place to sell to the world is right here at home in the united states. so we had key decision points and we reached those decisions.

we are going to be ready on the tax reform initiative. richard: what were those key decision points? what did you come out with on taxes? rep. brady: the major ones were to review the listing we have been doing since june. we unveiled hundreds of town hell -- townhall meetings drop the country. i can't tell you how many meetings we had with business leaders across the country. we wanted to make sure that we have the most pro-growth, boldest tax reform we could but we also focused on certain areas like insurance, financial services, small businesses, making sure we had those tax revisions right going forward. rachel: if i could jump in i would like to ask how you are reconciling the house republican tax blueprint with what donald trump wants to do?

the difference is the corporate tax rate. trump has talked about a 15% tax rate well republicans have talked about a 20% tax rate. where do you think it is going to come down on that and why? rep. brady: i think there is little difference and not much. and the house republicans tax plans began the same. we have had great discussions with the transition team going forward and reaching common ground on a lot of areas. inare really interested getting down our rates on our job traders. want tost we can go, we achieve that. as we do that we want to redesign the code because right now america is competing with .ne hand tied behind our back

we have an advantage for foreign products over made in america products. we have big incentives to move companies overseas. so we are making sure that we level the playing field in america and wherever these products are made and whoever makes them, we will have real competition in america. we want to make sure this is the best place, the 21st century magnet, for the next companies. -- here any concern that republicans talk about wanting a revenue neutral tax reform. rachel: they don't want to lose money. is there concern that if you go to 15% the government will end up costing the country more? --. brady: one of our goals and we designed this to break , countingn the budget on economic growth, solid , you know, toh

lower rates and make changes. you have to lose something else and pull your punches on something else that is equally progrowth so we are waiting that. weighing that. at the end of the day we will have the lowest business rates in modern history. our businesses can compete and win anywhere in the world but especially europe home. richard: so the way you are trying to do this, to encourage , not somade in america novel for the rest of the world. retailers, oil refiners, coke industries, who are really concerned about this proposal. how are you trying to calm them down? what is the conversation?

thathat was the decision you made this week to press ahead with that idea despite some of those concerns? we have made a pretty strong case that for america to compete and win again we need to make changes to the way we tax. take theirpetitors taxes off the goods and services coming our direction so that gives them the advantage over us. don't, spending our products around the world. so we lose both here in america and around the world. that can't stand. this is a key part of the tax this is a key part of the tax code. i think because tax reform affects everyone differently and industries differently, we want to listen to and find solutions with those who rely a lot on imported goods coming into america. we think imports and exports are

both important to the economy but we are going to insist that they be taxed equally in america. richard: the way that adjusts, as you talk to economists, they say that just because the dollar would get a lot stronger which would make those imported goods cheaper and so the importers shouldn't be as worried as they are. but the rising dollar has all sorts of effects. this globalut how turmoil with the rise in the dollar that has already happened . and americans assets that are outside the u.s. might be heard as well. -- might be hurt as well. >> so, making america more competitive again does have an impact around the world. making sure that american progress can compete and win around the world does make a difference. is itries -- what we know

has occurred more than 100 times around the world. more than 100 times. currencies have adjusted because others want to compete in these markets. we know that will occur, but if our local industries are concerned about that transition, bring us your solutions. that is builtcode for growth across this country and we want to listen to those solutions. we think it is important to understand that we cannot leave in place any tax policies, encourage our companies to move their operations overseas, those won't stay. rachel: you have referenced your meetings with the trump transition team. can you tell us about who the key players are around that table? rep. brady: there are a number of them. they are moving quickly on a lot of fronts, from tax reform to

health care, to trade, and on to infrastructure as well. we are intersecting with them in a number of those areas. there is a list of key people and they continue to grow as ,hey make their key officials and will as well with their deputies and secretaries. let me assure you these are constant contacts and i am really encouraged by the direction that we are all going together. rachel: one of the names in the rumor mill would be the appointment of larry kudlow, recognized for his television commentating work as possibly the chair of the economic advisers for president trump. would you welcome him? rep. brady: that would be a grand slam appointment. experience with the federal reserve, his

knowledge of free market principles on tax reform and growth, i cannot think of a better choice for this new administration. i would be very excited by that nomination. rachel: speaking of free markets i wanted to ask you a little bit about how donald trump has been talking in recent weeks about tariffs on american companies that move jobs overseas, potentially a 35% tariff. often, we hear house republicans talking about more of incentives, carrots as opposed to sticks. what do you think about this idea of a tariff? doing thisng to be as part of tax reform? i think it is right at the heart of what america knows, which is the way things are going today we just can't compete and win. we are competing with one hand

tied behind our back. i am convinced that going that direction, where the president wants to take us, by fixing this broken tax code, goes deep to the heart of this and puts us on a level playing field and more importantly, companies will be disadvantaged when they move their operations away from america. at least if we want to sell them to the u.s., we will work closely with them on all of these issues because our goal is exactly the same, which is to strengthen our economy, let us compete and win anywhere in the world. rachel: the goal is the same, but a lot of people would say that is not a free market. it doesn't fall in line with free market and the ideology that conservatives traditionally have. rep. brady: there are several ways to tackle this issue. i suspect that if we are not successful in changing this broken tax code, if we are not

successful in growing more jobs here and leveling the playing field around the world, there are going to be more talks of tariffs. my thought is, let's go straight at the heart of the problem which is fixing this broken tax code. richard: how do you expect this plan to roll forward? when should we start seeing pieces of this bill or the whole bill? what is your calendar for 2017? rep. brady: great question. firstof it ties to the 100 days. is setting. until we see that timing i can't answer for sure. we are working through the holidays, continuing to put the elements together. we continue to listen to industry in a number of these areas because we think we are making a bold change. we are moving from business to

an income tax where things are produced with the profits are booked. it is dramatically more progrowth for the u.s. economy but it is a change. so we are listen carefully to the industry. i expect a lot of work to be done over the next month. but the bottom line is we will be ready for president-elect trump on tax reform. >> we have health care to tackle as well. who is up first? rachel? rachel: maybe tell us a little bit about how would republicans replace obamacare? we know there are a lot of things in flux right now but what are the main things that you are going to change? what can we expect this to look like? rep. brady: this usually gets lost in these discussions about timing and sequence and what happens so thanks for looking at the big picture. we know obamacare isn't working.

premiums are accelerating, few choices are assured. we know it isn't fixable so what we are proposing is to replace that big bureaucracy, the will withmmoths of obamacare the concept of a health care backpack. the freedom for americans to choose a plan that is right for them, that can travel with them throughout their life from job to job and they to state. if they want to start their own business or raise a family and even into retirement. this backpack, the concept means that in addition to choosing a plan right for you, tailored, that can travel with you. we also think the tools in that backpack are easy access to a health savings account that makes it more affordable, those routine costs, and control of your electronic medical records so you could choose to give your medical history may be to your new doctor or your child or the

emergency room if you find yourself in that situation. and what that health care backpack approach requires is to knock down a lot of silos, to focus not on what washington needs but to laser focus on what locales and patients and businesses need. it is a big change from where obamacare is today. do you think that republicans, in the end -- it will be a tax credit? which way are you leaning on that? can you assure the 20 million americans who are on obamacare -- some of them are concerned about losing their health coverage -- what would you say to them? rep. brady: let's start with the second one. i can assure americans that they will have peace of mind, plenty of time and plenty of opportunity to choose a plan that is right for them under the health care backpack concept. as you know obamacare, the plans don't end january 20 with the

new president. those plans will continue and as we outline our new options and choices americans will get, they will have plenty of time to make those choices. americansw is that can't continue to much longer on these plans they can't afford with high out-of-pocket costs. frankly, this isn't working for them anymore. >> you reference, even into retirement. are you signaling changes to the medicare policy? time i think it is important that we save medicare. fund isital trust bankrupt in less than 10 years. this is such an important program for 50 million or more americans. steps,ave to take the small and large, to save medicare. and over time we want to make sure that seniors have options for medicare advantage.

options for their drugs and medicine, which has proven very popular. that they have options for their overall care as well. time, seniors should have another choice to carry that health care backpack, that plan that works for them, into their retirement rather than being forced out of it and taking what they are given. so yes, we will continue to work on improvements for medicare. no date has been set. we have a lot of key issues like health care for americans and tax reform to tackle right off the bat but we will continue to look for solutions and bipartisan solutions as well. richard: you said those 20 million people will remain on .hose plans for 2017 insurers are trying to decide their plans for 2018 because they have to make decisions in

the middle of next year and beyond. what sort of work will republicans be doing to maintain the exchanges and however long is?transition period there rep. brady: we are looking at those transitions. we think it is important right now. the market is very unstable. these premiums are accelerating. i expect they will be looking at another round as well because it is all based on the obamacare structure. that is the problem. we are going to look at ways we can stabilize that market. look for ways to begin the reform and the replacement process. we are looking at options that signal to america that there is a new way and a much better and affordable way to get health care than under obamacare. we are still working through those issues and continuing to have that discussion with the trump team as well.

as you are doing that, either for the replacement or the interim period, the health care law has a whole bunch of taxes on high income households and industries. do you expect to keep those taxes in place during this transition? repealed onceet this repealed bill becomes law? rep. brady: what i can tell you for time, those 23 taxes on and businesses and insurance plans are going. they are part of the problem. we know obamacare is such a mess it can't be replaced overnight. it can't be replaced overnight in a way that gives peace of mind for americans who are using it today. all of those are part of our discussions. election day was all about

change. obamacare was, in the end, it just is harming more people than it helps. in mind.o keep that americans want a better and more affordable way for their health care. to be clear, when republicans talk about -- richard: when republicans talk about repeal, that applies both , thee spending side insurance subsidies, and the funding side, the taxes. we should not necessarily expect those taxes to go away in 2017. rep. brady: it all depends on this,nal timing of all making sure, again, we give americans peace of mind on this transition. in the building was approved by both chambers and vetoed by the president last year, we put a date of 2018 for the end of these taxes. no decision has been made for this year going forward.

all of that is going to be good,ered as we look at a responsible, assuring transition. >> we have four minutes left. rachael: i want to follow up on that timeframe. we keep hearing 2-3 years. the last repeal was two years, as you just mentioned. now we are hearing potentially four years. i am curious. what is this dependent on? are you waiting to hear more from insurance companies about how much time they need? is there concern about how you're going to need to get senate democrats to support a replacement? andthis huge difference what is it dependent on? rep. brady: thank you for this question because this is the perfect disconnect between washington and the rest of america.

is obsessed with this one year, two years, four years, what goes first and what goes second, but the american people simply want to know open can i get that her health care than this? -- my focus is making sure we can deliver the most freedom and the most tailored health care plans for americans. part of that will determine the timing of this. i can tell you republicans in congress -- i think the trump team as well -- is focused on creating and developing the very best solution on health care for americans. timing will be part of that. rachael: you referenced the need to get bipartisan votes and i'm wondering what you will do to attract democrats to whatever plan you put together? the original act was that it was not bipartisan.

is it important to you to attract a significant number of votes? itthe question is, is important to democrats that they provide quality health care. communities like ours, many of their states, their constituents have found a way to get out of obamacare so they know something is wrong as well. we will keep the door open. invite their ideas on health care. there is some common ground going forward in this area. i hope we can find it but at the this delivery, process, everything obamacare wasn't, this is the approach republicans are going to take. it is going to be very much different and we hope democrats will weigh in. they are concerned about health care too. richard: if you don't have enough to do next year, you've also got the need to raise the federal debt limit at some point. ?ow are you thinking about that

republicans have been resistance during the obama administration to break that limit. how is that going to work? >> to be determined is the answer. in the past it was just a hostagetaking by the president to demand higher spending. opportunity to change the way washington works, change the way these budgets are which is just ridiculous. to change the way washington spends. if watching to and were a manufacturing plant it would manufacture spending. if we want to manufacture efficiency and customer service and the balanced budget you have got to retool the plant. for, are bigking changes in the way washington's budgets work, looking for ways not only to tackle the but to lookpending

at the big picture. how can we balanced the budget and start paying down the debt over time? economy,g the restraining spending and tackling the big issues, the big drivers of our debt. this is a fresh look at everything. this mode be the same eight years of debt ceiling crises and discussions. this could be a lot more deliberate and productive. chairmangrady is the -- kevin brady is the chairman of the house initiative. thank you for being on newsmakers this week. we managed to book mr. brady straight off of his session with his colleagues. what did you hear? what came out of that meeting? >> on taxes, what struck me is that he is thinking order adjustments. they are getting all sorts of heat from businesses right now.

they see it as winners and losers and potential losers are concerned about it. he knows they are upset. he knows the economic consequences and they have internalized that and said it raises a lot of money, it is important for the growth goal we have gotten. and we're just going to press ahead. rachael: i think his reaction to the terror question was interesting, republicans have been asking leadership about trumps tariff pitch because it is not typically something we hear republicans proposing and advocating for. a lot of times they say, we have the same concerns. we think tax reform is the better answer. this would have fallen in. the chairman just said they are not looking at a tariff but you said something along the lines of if this works we might talk more about tariffs.

susan: i do not think we are going to see anything like that passed the house anytime soon. richard: what he is basically this thing that we are talking about in our tax reform -y enough.ally tariff a tariff is only on imports. to takes does is try tax imports and apply the same tax that would apply if the product were made in the u.s.. --re is a really different difference there from an economic perspective but politically it sounds the same. they are trying to argue without directly criticizing the president elect, to say "try our thing. it is less destructive." susan: can we assume that when they have met with the transition team that there are

senators at the table as well? have you heard? i would assume that senators were talking to the transition team. i would never assume they were talking to the house. covering congress, the house and the senate don't always talk to each other or agreed. i am not sure. it is a high leadership level but i don't quite get the sense that those house-senate conversations, at least in deep depth have happened yet rachael: . the senate can be a doorstop for any plans of the administration or the house. so what are you hearing about the senate's interest with both of these topics? rachael: the senate moves much slower. the houseeady hearing and the transition team. don't forget, you still need democrats for a lot of these.

repeals, replacements, replacement is going to take time if they're going to try to get democrats to pass this. in the house, they don't really need them. but in the senate if they are going to pass tax reform, through regular order they will need the democrats. i think we are going to see -- and we have seen this -- a lot of butting heads and frustration with the senate over in the house. freedom caucus was not happy when they found out that leadership in the senate wanted between three and potentially four years to repeal obamacare. i know that chairman and people outside washington don't care about that but i beg to differ because we wrote the story on obamacare repealed. it became one of the top stories on our site, all the time. it is a complicated issue.