at 9:00, prime minister's questions from the british house of commons, one day after they voted to reject prime minister theresa may's >> joining us on "newsmakers" is larry kudlow. he is the white house national economic advisor. joining us also is nancy cook from politico and damian paletta from the washington post. let me begin on the issue of china and trade. the president this past week saying we are moving closer to a new agreement. last week you said, "we have china over a barrel." where do things stand? mr. kudlow: actually, we are making good progress. i were trade negotiator was on hishill a lot of this week basic message is we are gaining on it, we are moving forward,

closing on a deal. there are still issues to be resolved, particularly in the enforcement area. i also want to say as i have in the past, the discussions here have gotten deeper than at a ny time in u.s.-china trade relations. way beyond anything we have done. on the whole, they have been quite successful. three weeks ago, he came with his top deputies and that went very well. of course, he has to go back and get clearance from president xi and the bureau. then we had whatever it is, teleconference meetings, everyday last week. this week, our principles, which is steven mnuchin, treasury secretary, and bob lighthizer made a lot of good progress. they are not quite there yet.

there are still some places to go, but bob lighthizer has taught me everything about trade. he's a very cautious man, but he is indicating that we are gaining on it and we have some things to do. one of the most interesting things or two of the most interesting things, china's people's congress, that is probably not the right name of it, but they passed a law that will restrain any intellectual property theft and will also restrain any forced transfer of technology, which is an ownership question that will allow the united states companies operating in china to own their own companies and these joint ventures, which forced us to give up blueprints in technology, so the people's

congress passed laws to deal with that. that is extremely promising. the currency fixes very well. no competitive devaluations and absolute transparency for any intervention in the open market. that is breaking new ground. what we are left with now is more enforcement kinds of issues. we have proposed a very comprehensive enforcement, which would move through -- if an american company complains, it would go through three layers between china and the united states teams and get to the principles. if we designate they are not in compliance, we will resort to tariffs in a proportionate way, and the chinese have agreed not to retaliate. we are waiting on a final signoff off on that. it is a very clever approach. president trump himself, i was

in a meeting the other day with the republican senators in the cabinet meeting. the president spoke very well on that. we need a final signoff, but i think for moving ahead nicely. over to damian paletta of the washington post. >> i think there was talk about completing this agreement at mar-a-lago at the end of the month. do you think that is happening or is it possible this slips into april because there needs to be more time for discussions? mr. kudlow: i don't want to get into that forecasting business. i think a little more time is going to be necessary. this is a 140 page document and they are going through it line by line. i'm on the trade principles committee, but maneuver to and and lighthizer are doing -- minh nguyen -- steven mnuchin and lighthizer are doing the actual negotiations. if you can imagine my my line on the phone late into the evening,

it takes a little more time. there was some talk about how a president xi says it was canceled. that is simply untrue. you cannot cancel something that was not scheduled. i would say perhaps the month of april. it is not in cement. all i say is, to repeat bob lighthizer, i want to quote him just to get it right, u.s. and china negotiations are closing in on a deal. the hope is we are in the final weeks of the agreement. that is what bob lighthizer is saying. he is my mentor in this. i am his message maker on that. we are close. i don't know whether it is the first week of april, second week of april, third week, the more you get into april, the nicer it will be for me to go down to mar-a-lago and the weather will be fantastic. we will see. here's my point.

we are getting close. reports from some media outlets that we want to spur the stock market is utter nonsense. as i have said publicly, it has to be right. again, president trump told the meeting with the republican senators on wednesday it has to be a great deal. it has to protect our workers, farmers, ranchers, our businesses, our technology. has to. that's the key point. we are getting closer. >> if you don't reach a deal, what do you think will happen to the markets? mr. kudlow: i don't want to do really do what if predictions on that sort of thing. i suppose there might be some disappointment. then again, it depends on the conditions. mind you, if we don't get something done in its entirety

in the second week of april, the third week of april, that does not mean it is over. that just means it is taking a little longer. i think everybody knows we would like president xi and president trump to get together and sit down and sign off on this and it is not a time factor. it is a right factor. it has to be good. the president contradict in the -- contradicted me in the cabinet room the other deal. i said it had to be a good deal . and he said, actually it has to be a great deal. i'm all for that. the enforcement mechanism is very important. i will say this. republican senators, predominantly free traders, are absolutely behind us and agree with us, so patience. patience. patience is a virtue here. quickly, there has been

some reports of disagreement in long ate house about how deal has to be scheduled with president trump. does it have to be precooked before they set up that meeting? mr. kudlow: that is a good question. i think it should be mostly done before the two leaders get together. whether it has to be entirely done, i don't really want to speculate on that. we are going to have to be close , maybe settle a few less details in order to get the leaders together. i think the negotiators on both premier, who in my opinion is a man of great integrity and a true free-market reformer, he knows that, and sosident xi knows that, the closer, the better. i don't want to mislead you.

we don't necessarily know all that. again, we are getting close. that's what mr. lighthizer said. has taught mewho literally everything i know about trade in the year i have been in this office, is a cautious man. he is a cautious man. for him to say we are getting closer on it is a positive development. >> in that tutorial, would one thing surprise you? one thing that you did not know that you learned in the process? mr. kudlow: that is a great question. it has been a year. i'm not a trade expert. i have learned a lot of things. two points. president trump has proven, and i am the free trader in the building -- president trump has proven that tariffs can be and are an essential negotiating , and he believes, and i

tariffshat our use of with china helped bring them to the table in more serious ways than ever before. our economy is the hottest economy in the world. the china economy has been slumping for quite some time. slumping because they have been departing from their market oriented reforms, and because our tariffs hurt them. i think they want to rescue their economy. their economy, i'm told, is the most important, paramount issue with regard to president xi's own thinking and his policies. i think president trump has tariffs lot of us that can be very useful negotiating tools. iwant to add to that because

have worked very closely with the president, whether it is g7, g20, china, any of these places, tariffs are not an end to themselves. this is his view. he wants a free share and reciprocal trading system. zeros.it the three i wrote a column about this before the g7 last year. we would love to see a world of zero tariffs and non-tariffs barriers and subsidies. we would love to see a world that is fully reciprocal so they treat us as we treat them. they cannot have an 80% tariff on something and we are at 20% or 10%. that has to change. that has done damage to our own economy and workforce. i think skeptics here in town ' use ofess, presidents tariffs have been very instrumental and positive in negotiations. are looking at

true, ian -- it is have experienced this with europe. i helped work on that. certainly, bob lighthizer's most brilliant new template for trade deals. nothing wrong with using tariffs. other presidents shied away. this president refused to let go of the china story. not just a few press releases. he actually dug in. it hurt them and it got a response from them. >> larry, part of the presidents economic agenda has been deregulation, more business friendly environment, the tax cut law, but there have been critics in the past weeks who have said may be the administration was too friendly with a company like boeing. after what we saw happen, every

other major country in the world grounded these planes and the u.s. was the last to act. the ceo of boeing made personal calls to the president. can you walk us through what happened and why the trump administration moved so slowly on this and in retrospect, maybe they should have moved more quickly? happened to be sitting in on the phone call between the -- thent and the head of president, i don't know if you have ever had the experience of a potus cross-examination. i'm out there all the time doing policy stuff. you better be ready and he had a lot of tough questions for boeing. i'm not going to go into the details of a private conversation, but the fact that

we waited a day is of no consequence. i would not read anything into that. decisions were made over the department of transportation. we are still trying to find the black box and open it up. we had some trouble with the ethiopians. they wanted to go to a third party or this and that. it will be squared away. we will learn many more facts. it has nothing to do with commercial considerations as far as we are concerned and it has everything to do with safety considerations. i would not read a thing into that. >> do you think it will take a long time for them to sort out whether these planes are safe? i'm sure a lot of americans and people around the world are wondering, these planes are everywhere, is it safe to get on one?will it be fixed ? mr. kudlow: i'm not directly involved in that. i can't answer that. i'm not an expert on that. you can be sure that the ot and faa will not reopen the boeing routes and so forth until we are 100% satisfied of the safety. and from what i gather, boeing

has come forward to make some adjustments in flight plans and software and sensors, pilot training, all sorts of things. i'm not blaming here, just giving you a narrative. they won't be back on the runways until we are absolutely thatsatisfied to pay -- they are safe. >> my reporting was that the new data the other morning made you ground the planes and that is why president trump announced it to reporters in the spray in the oval office. data?as the new other countries like canada head data that made them ground the planes 24 hours earlier. mr. kudlow: i'm going to lead -- leave those details alone. first of all, i'm not an expert. the president himself, and you have seen his tweets and statements, has been somewhat

skeptical about the advanced computerization of these planes. i'm not going to go there because it is not my field of expertise. we will find the data, get the black box, it will be examined. there is no higher priority than the safety of the united states and world travelers here. boeing is a fine company. they may have to make fixes. again, i'm not an expert. i don't want to point to any one thing. i just want to say i think we did the prudent thing and we will continue to act accordingly. budget, it was a trillion dollar debt. at what point -- mr. kudlow: it is actually a little less than that, but who's

counting? >> still a lot of money. mr. kudlow: it is funny. the american economy is $20 trillion real gdp. household net worth, assets owned by men, women, families, businesses, is well over $100 trillion. i don't regard that as alarming. i do not regard that as alarming. i know people like to talk about that. the trick here, first and foremost, more than any other factor, is to grow the economy to its maximum potential. growth solves a lot of problems. for example, in our latest

budget out this past week, spending is about 5% gdp and we -- actually the deficit is about 5% of gdp, too. we are showing a longer-term baseline where we will be cycling down those ratios and it is based on two things. number one, we are sticking with our view that lower marginal tax rates create incentives to work, produce, and invest, and that we are, in effect, rebuilding the american economy in ways that are 20 years old plus. we are maintaining our efforts to roll back all manner of unnecessary regulations. it is very interesting. if you look into a statistic called new business applications and new business formations --

these are the small businesses -- i think that the face of the new trump economy right now is twofold. men and women starting and owning their own companies because low taxes and regulations not only give them itincentive reward, but make easier, because the paperwork is lighter. of course, we have opened up the energy sector and we have also made trade reforms. individual men and women owning small businesses. . we haven't seen that in a long time. workers, blue-collar we have the best employment increases since i was here the reagan cub scout in 1980's. by the way the blue-collar pay , scales are the fastest-growing -- blue-collar pay scales are growing faster than white-collar pay scales. i'm not saying they are higher, they are just growing more rapidly. finally, i'm very proud of this.

the newest, biggest, most powerful entrance to the labor force are women. we have not seen that in a long time. something like 62% or more of the new jobs in the past year or so have come from women. which isloyment rate, 3.8% over all, you go down the line, african americans, women, asians, hispanics, even things like people who do not have college education, they are coming back into the labor force because of high wages and they are being retrained and re-skilled by your friend and colleague. a ivanka trump has done a great job on this. this is the trade that will eventually lower and lower the

debt burden on the economy so it is not a problem. that is what i'm saying. >> the u.s. economy had a really strong year last year, growth and jobs, but we are all europe closely, china as well, particularly with brexit. thene really knows what impact would be on the u.s. economy if there is a messy divorce. have you thought through this? what do you think should happen? what should americans prepare for if this is not play out well? mr. kudlow: i talked to the -- i talked to the british ambassador constantly. we are following it. i don't know if she is losing votes left and right in parliament, different plans don't seem to be working out. i personally favored brexit, so did the president. i still think it could be a great idea, but it seems to have sort of lost its thrust. i refer to it as magna carta 2.0. you can have a dynamic british economy and not the over regulate and overtax deal economy. >> should they have a do over

vote? mr. kudlow: i think if you do the over, you would rip british democracy into many different pieces. they voted for it. now get it done. that is just my opinion. with the irishay prime minister, a very smart chap. nobody really knows. point, no, it will not disrupt the american economy. the dynamic here -- and i'm aware the whole european economy is flat on its back, very near recession, and china is the weakest it has been in decades, and so is japan, so forth and so on -- we are the engine of growth. we create the incentives after-tax, after regulation, to promote economic growth and jobs and technological advances. the u.s. drives the rest of the world. . can't make that point enough

in fact, even our trade deficits, which do not thrill us, we are the only source of demand these other countries have. we had the g7 meetings and the g20 meetings. we will go again with japan and france. i love to go to the by let's -- bilats. i urged them and said prime minister abe, who i love, you really should slash your tax rates. you need to get down there. you should perform your labor -- reform your labor markets so you can add -- the dynamism that's missing from the rest of the world. president trump on the other hand has ended the war on business, he has ended the war on success. some of these crazy socialist

people in the opposing party don't seem to have a clue about how that works. we are free market economy to exercise our god-given talents. . when you reward people, they will work. . the incentive model works. lower tax rates work. i guess it wouldn't be right to pitch my book. john f. kennedy did it, ronald reagan did it. donald trump is doing it. we drive the world economy. are we immune from that? no. it is just a small piece. >> but larry, in the budget that just came out, the federal budget proposal, they were projecting the rate of economic growth would continue to be 3% over the next decade. a lot of independent economists and the cbo disagree with that assessment. they think it is more like 1%. what makes you confident that the u.s. can sustain such a high rate? won't the effects of the

tax legislation peter out? mr. kudlow: no. i'm glad you asked that. it is this sugar high thing. i think damian writes about this all the time. one year sugar high thing. i'm just kidding. look, the corporate tax rate percent to 21%40 is actually permanent. >> 35%. kudlow: from 40% to 21% is actually permanent. that is five years, but it has four more years and the repatriation from overseas is permanent. by the way, the repatriation is

coming in at $750 billion for 2018, which i'm sorry, i cannot remember the joint tax numbers, it has to be three times more than they anticipated and that money is going into wages, bonuses, dividends, share buybacks and capital spending. capital spending which is the heart of it. investing as never before. money is coming in from all over the world. the dollar is strong because we are working and they are not, and everybody wants to invest in the hottest economy because of the change in our laws. to play thating game, the sugar high one year, let's get the facts right. it isn't one year. it is a whole bunch of years going well out to whatever, 2024, 2025, and so on.

why should it end? we will have a soft first-quarter, we always do. the government shut down. during that period i called it a glitch, but i think you will see it pickup very nicely in q2 and q3. we are already seeing a nice move up in the stock market and consumer confidence. pleased the federal reserve is on hold. nobody was thrilled about their interest rate hikes in the fourth quarter. i will say this, too. supply-side tax cuts, which produce more investment on the supply side of the economy, more production, productivity output per hour in a capitalist economy, that is the center of it, 1.8%, that is the best number we've had in many many years. why can't this go on for quite some time? >> can i ask -- there's another question --

kudlow: in my old age, i don't want to forget the fact that there is no inflation. modelsl those metric that have argued for so many decades, and i have been in this for so many years i can't even remember -- the fact that an economy can grow faster from supply-side tax cuts and deregulation, the fact that the economy can grow faster with a steady dollar does not cause inflation. that old phillips curve --more people working is bad? no. more people working with higher productivity and getting higher wages is bad? no. there is no inflation. look at the market signals. the bond market spreads are telling you know inflation. the 10 year, we are worried about the budget deficit and so forth, so how come the 10 year treasury bond is 2.6%?

if it was really such a crisis, it would be way higher than that. markets are giving you a signal. the economy is giving you a signal, and i'm glad. i praise the federal reserve now for shifting its policies. they will not be raising rates anytime soon. >> quick follow up with one minute left. >> one thing we are hearing a lot about on the campaign trail is this big tech idea that something needs to be done about big technology companies like google, facebook, others that are gathering all of this personal data and doing whatever they want with it. do you have a view on that? is the white house looking at addressing this in some way? mr. kudlow: i will not give you a clear view, but i will say we are looking at it. it is very important issue. i do want to add, however, one other adjunct. we are doing well in 5g. we are. there is this idea that it is a catastrophe and nothings happening. we are doing very well on 5g. we are well ahead of our chinese

counterparts, at least in the united states, and we will do more and more. do know why? free-market entrepreneurial private sector investment always wins. government control and socialism and health care for all and paying everybody whether they work or not, and the green new deal which will probably cost $100 trillion and take 10% gdp out of the economy, i am -- maybe we can come back and talk about that. i am putting socialism on trial. i'm going to convict socialism. this is a teaching moment. the young people, the so-called millennials who are going to our, i believe will come to point of view. you remember what winston churchill said. he said it to me personally many years ago.

when you are in your 20's, if you are not a socialist you have no heart. when you are in your 30's if you are not a capitalist, you have no brain. we are entering into the 30's capitalist brain part. i don't mean this to be condescending, i think it is a teaching moment. our system with its freedom and prosperity is the greatest system in the history of history. i don't want to change it. i do not wanted change it. i don't want to punish people. i want to reward them. and 5g and many other places, we, the usa, have the lead and will remain in the lead. >> we want you back anytime. i want to conclude with a personal question. this weekend marks one year at the white house. in the last interview, you recounted your heart attack a couple weeks into the job. how are you feeling? mr. kudlow: cardinal dolan calls it my cardiac episode. you are very kind to ask. i feel great. i absolutely feel great.

this is the greatest job i have ever had. i was here years ago at a lower level job at omb. it's a great honor for me. i love working with president trump. i see him and i'm with him all day, every day. he has been wonderful to me. right policiese to rebuild america, and it is an honor for me to be part of it. thank you. >> larry kudlow, director of the white house national economic council. thank you for being with us on "newsmakers." >> we continue the conversation with damian paletta of the washington post. nancy cook, let's begin on china. if you could read the tea leaves what is going to happen next? ,where do things stand? >> larry kudlow presented a very optimistic view of the administration's dealing with china and wanted to make the point that the talks were going well. he made a little bit of news in just saying it seemed like the meeting with president trump and

president xi, the possibility of it slipping until april. we thought it would originally be at the end of march. that signaled there may be some sticking points, which he talked about over enforcement. it is a little more slow-growing than the administration thought. >> he seemed to downplay the $22 trillion debt. did that surprise you? >> the other thing he downplayed i the train at talks, which thought was interesting, was the idea of how the markets would react if a deal did not come together. he also said they would be a little disappointed. that's a huge understatement if there is no deal on china and if there are tariffs, the market would be hugely disappointed and there would be repercussions for president trump and the gop. the debt and deficit, those concerns he downplayed. i think he is just mirroring not only his own views on that but president trump. president trump is a republican

interestingly who has not been terribly concerned about those things in office. >> your line of questioning first on boeing and what happened this past weekend big tech. >> i was surprised because the white house really went out of its way to defend the wing. -- boeing. the u.s. was the last country to not ground the planes. larry tells us, which i had not heard before, that president trump was president tough on the ceo of boeing, asked a lot of hard questions, and that they will not let these planes back on the runway until they are 100% certain the planes are safe. we had not heard that before. also on big tech, we are all kind of curious where the white house stands with this emerging debate about big companies and all this information they are collecting and selling. larry could blow said, which i think was for the first time, that the nec is studying this closely and thinking about doing something. >> we heard that from elizabeth warren. clearly this will be an issue in the democratic primaries. >> exactly. republicans have been making similar comments.

how much information to these companies store? how come they are not being more transparent? we will be hearing more about that on the campaign trail and on the hill. >> they have been presenting themselves as a pro-business administration. this would be one instance in which they might be thinking about how to rein in the technology companies or reevaluate power. >> nancy cook, white house reporter. her work available online at politico.com. and damien polenta has the white house economic policy beat for the "washington post." to your questions and insight thanks for being with us on , c-span. [captions copyright national cable satellite corp. 2018] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] >> tonight on "q and a." >> tragically, i had no expectation that we would be sitting here in 2019 talking about this war in afghanistan.

. the way it has been escalated, the way it has escalated every year, the countless lives that have just been wasted, and continual suffering. >> iraqi war>> veteran and former state department official matthew hoh on his article. was the same i had seen in iraq in 2004, 2005, 2 thousand six, as well as when i worked on issues at the pentagon and state department in between those times. there was no difference in administrations. the administrations were both -- the desire was to win for political reasons, domestic political reasons. everything else was secondary. >> tonight at 8:00 eastern. >> monday night on "the communicators," democratic congressman mike doyle, chair of

the house subcommittee overseeing technology and communications. he talks about net neutrality. he is interviewed by a technology reporter for x io's. -- axios. >> the priority is to get this in statute and finalize once and for all after 15 years of watching this issue ping-pong back and forth between fcc commissioner. i think the public overwhelmingly supports net an end towants to see this issue. >> monday night at 8:00 eastern on c-span two. >> commerce secretary wilbur ross testifies about the 2020 census before a house committee. members questioned him about the decision to add a citizenship question to the form and whether he had been truthful about the decision process in testimony before congress last year.