"new york times" and north korean leader kim jong-un's letter to president trump. his is about 45 minutes. sarah: good afternoon. >> good afternoon. >> the september jocks report continues america's economic winning streak under president trump, evidenced by strong job creation, rising wages, rapid business growth, soaring consumer confidence and increased manufacturing activity. to go into greater detail i'd like to welcome kevin hassett, chairman of the counsel of academic -- council of economic advisors to the podium. and i apologize in advance for kevin's really bad calculus

jokes. with that, kevin. >> thanks. it's really a great pleasure to be back here and turks sarah, for the kind introduction. one of the high poth these that's been floating around is that the strong economy we're seeing is just a continuation of recent trends and shins we're the nerds at the white house we decided that this is a testicle high poth thinks so we can go out and estimate recent trends. that is trends that ran in the economy up to the points of the last election and then compare the latest data to the recent trends in most cases the estimates of the trends we submit are very sfiss camed. -- as always, i'll show you a few slides. the first slide is small business optimism and this is basically for parallel construction, you'll see that

each of the slides is going to look a lot like this. the blue part to the left of the slide is what happened from the 2012 election through the 2016 election and the dotted blue line is the trend that president trump inherited from the previous president and the red line is what actually happened with the data. so if you look at this charlotte you can see the first thing is small business optimism. the middle chart is percent reporting now is a good time to expand, the last one is expecting higher real sales in six manages. you'd say geez, that doesn't look like a continue ways of recent trends. the next chart is something that in my first presser here last fall we talked a lot about, business investment, which is more hahn -- than $300 billion over the trend. on the blue line on the left,

the first is nonresidential fixed investment and the dotted line is the trend that president trump inherited. the middle one is structures. the dotted line is headed straight down and then the final charlotte is equipment investment and that went straight down before president trump was elected. and if anyone were to assert that the exam spending boom we're seeing right now was a continues weighs of the trend president trump inherited they wouldn't get a high grade in graduate school for that assertion. the next charlotte. doable goods orders, capital goods orders. it's a key part of the economy and one of the factors we look at most closely because it characterizes mostly the good-paying jocks. the jobs that affect normal, blue-collar americans. the first chart is core capital goods orders and the second,

core capital goods shim." . the blue, again, shows a clear downward trajectory in billions of dollars and that reversed itself completely when president trump was elected. if youmple going to aserment that the current good news is of recent ntinuation trends you'd be sharply incorrect. here is a survey of people who are purchasing managers for manufacturing firmings so they're the folks that -- as the title suggests, manages the purchase. it's a great indicator of the economy because you could say hey, have you been buying lots of stuff this month or have you not? you can see that the trend on the purchasing managers' index was pretty much flat when president trump took office and the red line shows you what happened since.

there's a clear inflection right at the election and a clear break in the trend. let's turn to the next one, please. one of the things that i can remember that the american expertise institute talked a lot about before i came in here was the fact that enter nurship in america was falling off. one of the ways this is measured is that if you start a new business you have to apply for a fax i.d. number for your new business in this charlotte we've charted the effort i. applications for new businesses. at the blue line, they were heading up because we were in a recovery but there's clear upward trajectory way above the trend at the end. sarah is a calculus geek and she said geez, that looks like a very strong second derivative to me. and i said i didn't know you liked calculus.

she said i like it better than talking to these guys. the next charlotte is pry mates workers, reentering the labor force. one of the reports said we'd have 3% growth. we said president trump's policies were going to bring spending back to the u.s. and bring people back into the labor force at precisely the right time. once again you can see there's a clear break in the trend. so if you see a break of the trend in the capital spending, the new plant formation that gives blue-collar workers their jocks, then maybe we see a trend in blue collar workers' employment. this is for people in goods-producing industries. if you look at the blue participate on the left, there's a clear downwarmed trend for president obama and then a clear inflection, timed almost precisely once again at the

election and the notion again that somewhat you might want to assert that this is a continuation of a trend is almost laughable if you look at that chart and the rest of them. somebody might sail well, geez it depends on when you malt is the trend and i'm sure if you went back and began your estimate of the trend at the civil war maybe we'd get a different answer but another way to sort of test whether the dat i-i just showed you is a fair representation of what a trend looked like when president trump was i -- elected is to compare it to what nonpartisan bodies were saying. so look at my final charlotte here. i heard a sigh of relief when i said my funny chart. the funny chart you'll see the black line is in june of 2007, what the c.e.o. congressional budget olves -- office, a non-

partisan agency, what they said would happen to capital spending in 2017. so blue line is what they said in april 2018 and the red line is what's actually happened. so i would assert that if you look at the collective body of evidence, the notion that what we're seeing right now is just a continuation of recent trends is not super defensible and i know that we're in a political time and passions are high but as geeky economists, we have to think about what historians will think about. i promise you they'll 100% accept the fact that there was an inflection at the election of donald trump and that a whole bunch of data items started heading north. they, will of course, argue for a long time about why that happened but my final thought for you is just this -- that when they do that and when you

watch people do that in the media going forward, you should watch out for ex--post theorizing. i care about something that happens before and let's watch the data and see if it agrees with a theory. that's how you test a theory. i came back here last fall and told you that if we had the tax cuts that president trump pursued. if we passed them then there'd be a boom in capital spending this year. in fact, we provided estimates at that time last fall that the capital spending this year would go up about 11% because of the tax cuts. so far in the first half of the year, capital spending is up 10%. and you don't have to reach for a theory of what happened. president trump reregular -- deregulate it would commitment. the tax cuts have had the predicted results on the economy. that's brought factories back to the u.s. and created jobs for

ordinary americans. there's been a trend break and with that i look forward to taking a few questions be and i'll let mr. roberts go first and then maybe try one for each rope. >> based on the information that you have given us, where does the revenue derive from all of these increasing trends meet deficit lines? >> it's a great question. one of the things we could talk about -- in fact, sarah, let's have a whole other breaching after the calculus briefing on the receive -- department of sit. but there's been a big change in tax law and a big change in spending policy and in the tax law side, you can remember that the dynamic score for the corporate tax was that it would have a very, very low cost and i think that the cost estimate not dynamically scored was about $400 billion in the final bill

over 10 areas and clearly the growth and the investment boom that was projected by c.b.o. was a significant underestimate for what's happened already. so i think that the notion that the corporate tax side has about paid for itself is clearly in the data. on the individual side, about $700 billion was a refundable child credit. they got the votes they needed to pass it at the last minute. it's a sound policy for people who care about equality of opportunity or families with children. president trump supported it wholeheartedly but not at the size that it came out. the child credit, though, is not something you would expect to pay for itself. the tax cuts have increased the department of sit a little bit. not the tax cuts the democrats are attacking. i'll go to row two -- i'm sorry, i don't know your name. >> there's another chart that is

not there, that's the chart in spike in consumer prices. the cost of goods, inflation. >> i know. i knew that. [laughter] >> americans are paying more for their goods now than they did in recent years. can you explain to what extent americans should be concerned about the fact that the price of goods is increasing at a high rate? >> right. americans should be concerned that prices are going up and if you look at the consumer price index over the most recent year, it's a little bit short of 3% and i know that that's something that affects americans when they go to the grocery store, the gas station and they should be concerned about that, but the best defense against increase in inflation isen an increase in wages and the c.e.a. put out a report that document real after-tax wages are growing about 1.4% in year. that means that the wage growth that president trump has helped create with his policies is

overpowering the inflation numbers right now. what credit, if any, does former president obama deserve to the state of the economy? >> i think that requires identified polies and then talk look what effect did this policy or that policy are? i think that president obama sometimes, on the partisan trail, gets criticized with numbers that are clearly incorrect because people blame him for the great recession, which was there when he started and it's not fair. if i look specifically at president obama's policies, there were a bunch that were very negative for growth. the affordable care act lifted ndividual tax rate on workers, so and he en-- increased tax rates on small business. i can look at the policies and talk about them one by one.

i think he also advocated policies he said would help growth that clearly did not. i kind of wonder what was going on in the heads of the economies that told him they would like cash for clunkers that didn't have much effect at all. to say he troy destroyed the economy, that's not something the c.b.o. should do. >> you're coming out talking about the economic numbers. it seems like it might be time -- president obama's speeches on friday and saturday in which he talked about some of these issues. is that why you're here today? >> thank you for asking that. sarah can tell you that i've been pushing her to show these slides for quite a while. i don't know about the three-week lack, i think

sensible people in the white house sometimes take a break in august. but yeah, we were prepared to do this briefing a few weeks ago and there's not in any way a timing that's related to president the president -- i'm curious, he had told private companies how to run their business. do you believe that stimulus economic growth? mr. hassett: the president has strong opinions about everything. i think we wouldn't have had all the policy success if he hadn't been such a strong advocate for the things we have seen. i think his opinions sometimes area stretch outside.

and i don't counsel. i once said i don't run the council of twitter advisors. i will go back to the blue shirt in the back. i will come forward. >> a quick question. the president said the gdp rate is higher than the unemployment rate for the first time in over 100 years. that is just not true. mr. hassett: i can tell you what is true, and the history of thought -- the history of how errors happen is not something i can engage in like from the , initial fact, i don't know the whole chain of command. but what is true is it's the highest in 10 years, and at some point somebody probably conveyed it to him. i can say the numbers geeks in

the white house are grateful. we don't like making mistakes, but we are grateful when they are pointed out, because we want to correct them. i gave sarah a bad number a few weeks ago, 100% my fault. i apologize. the correct number is 10 years. that i said i would come forward -- >> former president obama said trump would need a magic wand to get to 4% gdp. the president suggested that was a direct quote from president obama. did president obama say that? mr. hassett: i'm not the chairman of the council of twitter advisors. >> on wage growth the white house put out a number that uses a different way to calculate wage growth. it seems unfortunate because you get apples and oranges. why is it important to do that? in the new calculation, things that are not cash benefits like vacation time.

why do that midstream? why not just base your analysis on wage growth? mr. hassett: thanks for the question. there were a lot of news stories that i thought were very well done and thoughtful about the piece. i think the question for americans, what they want to know is how are president trump's policies affecting our lives. it turns out the statistic that got the most attention in the media is not a very reasonable us to question. we talk about how to better measure that. it was not a criticism of the bureau of labor statistics. we use their data to come up with a better measure. a better measure will account for the fact that people get benefits. a better measure well account for the fact that people had just had tax cuts. they will account for the fact that the labor force is changing because so many people are coming in and the people who are out for a while tend to be lower skilled so they can bring

averages down. just as consistent with our 4.2% gdp growth, we're seeing a massive amount of wage growth as compared to projections when president trump took office. should i keep going? i will go back there. i have been right-handed. that's really terrible. >> how important is it for you to have a new north american free trade agreement including canada? mr. hassett: thank you for the question. the first thing before i turned -- turn to the trade part, some people have said the economy is strong, that that is not a sugar high. the capital spending boom we promise would happen if we pass the tax cuts is underway. the cool thing about capital spending is people build factories. that is what capital spending in -- is. and they do that in the first half of the year. 10% at the beginning of the year.

then the second half of the year those factory start producing , outputs, so the idea is the trend may not continue. it is just inconsistent with the form that the growth is taking. the whole team has been in negotiations with canada, we continue to be hopeful they will sign on to the 21st century deal with mexico. they should sign on to that. i will come over here and go back to you. >> i have a question about income inequality. can you talk about whether you have seen that income inequality is strengthening, and are you all concerned whether or not people are -- not just people in the economy but poor people living beyond the poverty line, are they being improved by this economy? certainly to think about it, all the new entrance -- entrants that get a job, they go from having zero wage to

having a wage, but they won't show up in the wage statistics. there are a number of other ways people were off to because of the growth in the economy. also because of policies that had given resources to families that are needy. , we put out a different report over the summer of what is going on. there is some important data coming out this week, which will look at how income inequality has changed, not in this year but in the previous year. my expectation is that data will start to turn and we are going to see a decline in income inequality because blue-collar wages are starting to grow. it's a really important point that you bring up. i want to emphasize it does i care so much about it. the fact is we are at a historic moment because we are deep into a recovery, the unemployment rate is really low, and we have created a capital spending boom. what normally happens is people start to bid up the wages for

folks, but they are bidding them up because there is a shortage of labor. people have better machines to work with and their productivity is going up. that means the recovery can last longer, and that's good for workers, especially on the low end. it is precisely at this moment of economic history, where you look at past economic moons -- booms, when income inequality has declined. if we were to have a recession because of bad policy right now, we will lose and a norm is opportunity on income inequality. this is the last question? do you like this bag? ok. >> you would rather blame policies rather than individuals. [indiscernible] how do you decide when to start that, given that -- robert lucas, from the university of chicago, got the nobel prize for answering your question back in the early

1970's. the point is america's businesses, essentially, their activity is forward looking. if you want to model their investment today, you have to understand the fact that they are forming expectations, not just about this month, but the next 10 years. when you look at the moment when president trump was elected in terms of equity markets people , started to ratchet up their expectations for what would happen to the economy. everybody perhaps clinton supporters were starting to do that right after the election. those expectations turned out to be rational. let me hand it back to sarah. anyone who wants to follow up and talk about the data, you can tell i like to do that. feel free to reach out to me at the press office. ms. sanders: thank you, kevin. a couple of announcements and updates. last week the senate judiciary committee under chairman grassley conducted a thorough

and transparent week of hearings, allowing each senator judgetime to review kavanaugh. unfortunately many committee democrats and protesters attempted to turn the hearing into a circus. judge kavanaugh demonstrated why president trump nominated him. he showed his respect for the constitution, and technical quality -- impeccable qualifications, and an extraordinary temperament. judge kavanaugh reinforced the bedrock principles in the rule of law. on another matter later today and by tomorrow in person at the white house, president trump is scheduled to receive a briefing from dhs nielsen and fema administrator long. the latest briefing as part of the presidents monitoring or multiple storms that are predicted to affect the u.s. in the coming days. the white house has been in contact with governors offices.

-- offices in guam, u.s. virgin islands, hawaii, north carolina, virginia, maryland west , virginia, delaware, pennsylvania. lines of communication remain open. the federal government stands ready to assist. these tropical storms and very dangerous, and we heed the warnings of the state and local officials. lastly, we extend our deepest condolences to the family of col in johnson. agent johnson has served as country honorably. he was larger than life. he was a great friend, father, husband, and member of the united states secret service. the men and women in the secret service are among the most honorable and dedicated public servants you can find anywhere in the world, and colin was among the best of them.

neededthere when anyone help. our prayers are with his entire family. i'll take your questions. >> the anonymous op-ed in the -- in "the new york times, the -- times," the president said on friday that he thought it would be a good idea for jeff sessions to look into this. is there anything that would warrant an investigation by the department of justice? ms. sanders: there is an individual, whether or not -- we don't know who they are. if that individual is in meetings that national security is being discussed or other important topics and they are attempting to undermine the executive branch, that would certainly be problematic and something the department of justice should look into. >> would that be a suggestion of misuse of classified information?

and what realm with that fall under? ms. sanders: that's for him to make that determination. >> does -- is is the white house trying to actively find out who this person is? ms. sanders: we focus on things that actually matter, not to undermine the great work that this president and administration was done. we are going to continue to focus on that. it is sad and pathetic that a gutless anonymous source could receive so much attention from the media. i think the american people will be better served if we actually spent some time talking about some of the really important things facing our country. justin? >> the president received the kim jong-un letter from the state department. can you share any details about the contents? ms. sanders: the president has received the letter from kim jong-un. it was a very warm, very positive letter. we won't release the full

letter unless the north korean leader agrees we should. the primary purpose was to request and look to schedule another meeting with the president, which we're open to and we are in the process of coordinating that. the president has achieved tremendous success with his policy so far. the letter was further evidence of progress in that relationship. the remains have come back. there has been no testing of missiles or nuclear material, and, of course, the historic summit between the two leaders. this letter is just further indication of the process. certainly, something that we want to take place. >> you mentioned the remains, the hostages, the lack of testing.

which were all happening when the president cited a lack of -- so other than these really is therds from kim, what new progress that warrants this new sense of optimism? ms. sanders: one of the first ames that they have had parade similar where they were highlighting the nuclear arsenal. we consider that a sign of good faith. again, the letter from kim jong-un on to the president certainly showed a commitment to continuing conversations, continuing to work on the progress they have had since their meeting just a few months ago, and also continued commitment to focus on denuclearization of the

peninsula. >> president trump continues to call woodward a liar and the book is a completely work of fiction. he mentioned libel laws. is president trump considering filing a lawsuit against woodward? ms. sanders: we will keep you posted, but we have been extremely clear from the beginning. many of the book sources have spoken out to refute. a couple of them, john kelly, aggressively pushed back. john mattis aggressively pushed back. john dowd pushed back. and a number of people came out and said woodward never reached out to corroborate statements that were attributed to them, which seems incredibly reckless for a book to make such outrageous claims, to not even take the time to get a $10 fact checker to call around and

verify some of these quotes were happening. when no effort was made it seems like a careless and reckless way to write a book. >> the president said he was looking whether or not to take action. does the president not think that op-ed is protected by the first amendment? does he really think the federal government should contemplate action against a newspaper for publishing an article? ms. sanders: i think it is less about that part of it and whether summary is actively trying to undermine the executive branch of the government. they don't want to be part of that process, they should not be here. this goes back a little while. he tweeted the justice department should not be investigating, should not be prosecuting the two republican congressman because it may hurt republican chances in november.

is the president really trying to suggest or outright saying the justice department shouldn't be investigating or prosecuting allies of the president? certainly, the president thinks no one is above the law. we would like to see it fair playing field. there have been a number of concerns raised about the individuals in the fbi and the department of justice that have been ignored and we would like to see those as well. >> he doesn't want to go forward because they are his allies? ms. sanders: i can't weigh in on an active investigation. but i can tell you the president doesn't think anyone is above the law. we are simply stating there should be cause of concern over a number of things that happened, both in the department of justice and the fbi. >> how soon would you like to have this second meeting? ms. sanders: i don't have any specifics on the exact timing. these conversations for the sick

-- for the second meeting are taking place now. i will let you know. [indiscernible] we continue to have ongoing with the canadians. conversations >> does he believe that it is someone from within? and does he believe a lie detector test should be issued like the vice president volunteered to do on sunday? >> no lie detectors are being looked at as a possibility. frankly, the white house and the staff here are focused on doing our jobs and trying to show up here every day and do what we can and help the american people not deal with cowards who put -- that refused to put their s.mes in anonymous letter

>> he said 14 days for $4 million. no collusion. what was he talking about? ms. sanders: i would have to go back and check and look at that. >> the price tag of the russian investigation, if so, it is highly inflated. >> what does he plan to accomplish? ms. sanders: the focus will be on remembering that horrific day and remembering the lives that were lost and certainly honoring notindividuals who were only lost that day, but also put their lives on the line to help in that process. he will be there, and the vice president will be in washington, d c, at the pentagon. >> thank you. i am assuming you have read the bob woodward's book. a lot of us have.

other than repeated denials from general mattis and general kelly, can we expect the white house to give up a list of all the things in the book that are wrong? ms. sanders: i think that would be a complete and utter waste of our time. >> hold on a second. because then that goes back to this today, 55% of americans believe the op-ed writer in the -- in "the times" is right and the president is getting a 60% 60% negative rating. does the president think he can win a credibility battle with bob woodward, a member of the press corps who helped take nixon down, how can he win that credibility battle? ms. sanders: i would take the actual on-record account from people who are here working in this building interacting day in and day out, like general mattis and kelly and myself, not disgruntled former employees that refuse to put their name on things when they come out and attack the president. i think those are far more credible sources and far more

reliable voices within the administration that can accurately tell what is taking place in the building behind me. >> the president is a more credible voice? ms. sanders: absolutely. said a lot, the president said a lot of the president said a lot about the publication of the op-ed you and the president have called it betrayal. an act of disloyalty. the president mentioned quite a few times calling on the department of justice to investigate the publication of this op-ed. and there is no violation of the criminal code that goes along with the publication of this op-ed. i am a little curious as to what it is that the president believes may have been violated in the law as it relates to the publication of the piece. ms. sanders: we would consider someone who is actively trying to undermine the executive branch of our government, and it is something that would cause

concern and they should take a look at it. once again, we are just saying this gives a great level of concern and they should look into it. >> he said violation of the law. ms. sanders: i am not an attorney. the department of justice would make that determination and we're asking them to look in and make that determination. they certainly are fully capable of doing that. but someone actively trying to undermine the duly elected president and the entire executive branch of government seems quite problematic to me and summing they should look at. john? >> thank you. to just to try to specify a bit, is the white house treating the anonymous op-ed writer as a full-fledged breach of security matter and is the fbi investigating both staff and the means of communications? cell phones and computers and

the like? ms. sanders: i'm not aware of that level. it is not somehow would be a part of. we think there is a concern here and it should be looked into. go ahead. >> one other question. obviously, the whole world wants -- watched when the front running brazilian president -- last week. has the president called or send any statement to his family at all? ms. sanders: i am not aware if the president has it i believe members of the ministration have. >> what does the president make of this talk of the 25th amendment and some of what he hears on media outlets regarding the word "crazy talk." it seems like a lot of talk in the mainstream media about that. ms. sanders: it is as ridiculous as most of bob woodward's book. the fact that that is being

honestly discussed is ridiculous , and it is insulting to the nearly 62 million people that came out and overwhelmingly supported this president, voted for him, supported his agenda, and are watching and cheering on as he successfully implements that agenda every single day. >> what documents is the forident considering declassification sometime in the next two weeks? when exactly do we expect those? ms. sanders: we will let you know when we have specifics. >> what are the specifics on those documents -- ms. sanders: i cannot get into it now. >> they will close the palestinian mission here in washington. palestinian ambassador to the u.s. in palestinian accused of murdering the peace process undermining his role in the peace process. the state department says it is not retreating from our efforts get to a lasting peace.

the united states still an honest broker in the process? ms. sanders: we have been honest that we want to see peace and have those conversations and help broker that deal. we will continue to push forward, or beyond that, i do not have anything specific on it today. >> the palestinians are saying the u.s. can no longer be in on it. another example, the fact of the u.s. is aligned with israel. is that not the case? ms. sanders: we have a great deal of support with our friend and ally in israel and we are as committed today as we have ever been to the peace process. >> on pride -- on friday, the president talked about a new deal he is creating. ms. sanders: i know that a number of administration officials recently came back from india and expressed a willingness to negotiate new and better trade deals and those conversations are at the beginning stages and we will keep you posted as we get further into the process.

>> i want to follow up on the question of the peace process. you say the door continues to be open and you are still working on it. but is it realistic if the president achieve peace in the can actually achieve peace in the middle east in his first term in office as he promised, when the administration is taking steps and the palestinians themselves do not help? ms. sanders: we are committed to the process and hopeful we can get there. >> and a move seems to be an aversion to -- this administration is now shifting to a more hard-line stance then why is the u.s. so concerned? ms. sanders: the president is committed to defending our national sovereignty and all security interests, which would means any means necessary to protect our system -- citizens. and those of our allies from unjust prosecution by the icc. if they proceed with that, the

united states would consider as later today -- that ambassador bolton laid out today. >> what is the -- us theyers: they told were on the verge of making that decision, and i will take one last question. the editor of "the global times" wrote on twitter that the president blames china on north korea >> a bit, and now that there seems to be some improvement, this china deserves some credit. i think the president deserves the credit in this process. he has been the lead voice to

put the pressure on north korea. the president has publicly expressed his gratitude toward president xi for the role that he has played. we would still like to see them step up and do more, but the in this but the credit process belongs to president trump. we will continue to hopefully work with president xi and his administration. >> given the second meeting, it sounds like the meeting with kim jong-un. does the president think that he has to negotiate personally k with kim -- ms. sanders: i do not know if it has gone poorly considering steps have been taken by the north koreans to show signs of stepsaith -- but other have been taking, so i would not say it has gone poorly. at the end of the day, it will be best when you can have the two leaders sit down,

particularly from the north korean side as we know, most decisions will have to be run through kim jong-un. certainly, he is going to want to talk to his counterpart in president trump. we think it is important, and we are glad we are making progress. have a great day. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] [captions copyright national cable satellite corp. 2018] ." "washington journal profileco editor will key races. and brian jenkins discusses the state of homeland security 17 years after 9/11. beach sure to watch "washington journal," live at 7:00 eastern on tuesday morning. join the discussion. art's 17th

anniversary of the september 11 terrorist attacks. on c-span, president trump will mark the anniversary in shanksville, pennsylvania, live at 9:30 eastern. on c-span2 we will be d we'll retear all the september 11 remoirls tomorrow night. during the session, prime minister turnbull was removed by vote of fellow members after members of his own liberal party disagreed with his approach to climate change policy and his refusal to pull australia out of the paris climate acard -- accord. this is about 30 minutes.