Wisconsin Senator Ron Johnson On Confirmations Hearings for General Kelly and Rex Tillerson, “Repeal and Replace” and “Tax Reform”
United States Senator Ron Johnson joined me today:
HH: I’m joined by United States Senator Ron Johnson of the great state of Wisconsin, frequent guest on this show. Congratulations, Senator Johnson, on your reelection. It was terrific. It was unexpected. You may have won the most unexpected victory in November, so welcome back to Washington. We need your reformist approach back there.
RJ: Well, good morning, Hugh, Happy New Year, I hope your voice clears up here pretty quick.
HH: You know, that just comes and goes. Unlike Meryl Streep, though, I’ve got serious things to ask you about. Look, you are on Homeland Security, you’re a member of the Foreign Relations Committee. You’ve got some key appointees coming before you. Let’s start with Homeland Security. I can’t imagine anyone voting against General Kelly, do you agree with me?
RJ: I totally agree with you, and I was incredibly pleased. When I first heard his name being floated, I, you know, I do have a texting relationship with Reince Priebus, so I texted him immediately that General Kelly would make an outstanding choice for Homeland Security, and they chose him for that position. As head of Southern Command, he’s really, in many respects, been America’s top diplomat south of the Mexican border for all of, you know, the Americas. And he’s gotten presidents together. He understands the danger of the drug cartels combining with trans-national criminal organizations. He understands how vulnerable we are not securing our border, so no, he’s just an outstanding individual, a four-star general, a gold star parent. You couldn’t ask for a higher integrity individual to be our next secretary of Homeland Security.
HH: And I hope it really sets a precedent that that job ought to be a non-civilian job, that they ought to have a professional in there, because the threat matrix is so large, the number of threat streams so immense and growing, that he really ought to have professionals in there. Let’s turn to foreign relations and Mr. Tillerson. The day after he was nominated, I got a call from Dan Poneman, who was the under deputy secretary of Energy for President Obama, long time friend of mine, my very close friend, and he said Tillerson is an amazing guy. Then Dick Cheney said he’s an amazing guy. Then Condi Rice said he’s an amazing guy. It turns out Bob Gates suggested him to the President-Elect as an amazing guy. I don’t know Rex Tillerson. But when you’ve got people from Poneman to Cheney and everyone in between saying he’s an amazing guy, I have to conclude he’s an amazing guy.
RJ: Well, it wouldn’t surprise you somebody else coming from the private sector, you know, where I actually have witnessed excellence in organizations. Then you come here to the dysfunction in Washington, D.C. I actually like the profile – somebody from the private sector coming and serving in government. And somebody like Rex Tillerson rolls from being engineer at Exxon-Mobil to becoming the CEO of America’s largest corporation, traveled the world, had relationships with world leaders around the globe in the energy sphere, detailed conversations with world leaders. I think it’s a wonderful background, great experience, obviously highly intelligent, very capable. I think he’s an excellent choice.
HH: You’re also on committee on Budget. Do you get Mulvaney for OMB then?
RJ: Well, I actually have him as Homeland Security. We have joint jurisdiction, so he’ll come before both the Budget Committee and my committee, Homeland Security.
HH: Anticipate any trouble there, either? He seems, you know, he’s a hawk. I hope he’s not a Defense hawk. We need to rebuild the American military. But I hope, he seems very well qualified for the job.
RJ: Well, he’s certainly a roll back regulations hawk.
RJ: …which is certainly in my camp. To me, that’s the greatest harm being done to our economy right now is the $2 trillion dollar per year or $14,800 per year per household regulatory burden that we’re all bearing. That’s just a shackle on the American economy, so he fully understands that. And he’s been dedicated to moving toward a balanced budget, which is also incredibly important.
HH: And then finally, your committee on Commerce, Science and Transporation, you’ll get Wilber Ross, I assume. Who else comes before that committee?
RJ: Oh, we’ll have, you know, undersecretaries and I’m right now focusing on my hearing with General Kelly here today. But you know, what’s important there is that we, you know, re-unleash the internet once again, to remove the shackles of what Chairman Wheeler did in the FCC in terms of over-regulating the internet. So that innovation can occur, and broadband can be expanded rather than contracted.
HH: Now Senator Johnson, yesterday I had your colleague, Chris Murphy, on from Connecticut. And I like talking to Democrats, and Chris Murphy confirmed that the Reid Rule is a precedent that applies to Supreme Court nominees. In fact, let me play you that cut for you, what Senator Murphy and I had this conversation:
HH: So Harry Reid changed it vis-à-vis the nominees. Straightforward question, Senator Murphy, that precedent has not yet been applied to a Supreme Court nominee. But it is clearly applicable, is it not?
CM: The precedent, yeah, I mean, I think the precedent of changing the rules in the middle of the Congress, right, was, you know, was the basis on changing the number from 60 to 50 for presidential appointees, so I assume that that precedent still holds. You can argue against it for policy grounds, but I’m not sure that the precedent changes in this Congress.
HH: So Senator Johnson, are you surprised by what I call an admission against interest by Senator Murphy?
RJ: A little bit. But you know, let’s face it. I think right now, they’re kind of ruing the day when they did break the rules to change the rules, because you know, as long as Republicans are united, there’s not a nominee that we can’t confirm.
HH: There’s actually not a piece of legislation you can’t pass with 50. That’s a different category. But the precedent that Reid set was changing the rules in the middle of a Congress. It wasn’t about nominees. And I think that Harry Reid did more damage to the Democrats than they’ll ever know. Let’s talk about tax reform and health care, Senator. You read my Wall Street Journal op-ed yesterday. Are you a yay or nayer with me?
RJ: Oh, I’m highly sympathetic with you. I’ve been saying for quite some time, ever since I got here, you know, people come into my office, they’re all for lowering the rates and broadening the base, just make sure you preserve the mortgage deduction, or health insurance deduction, or life or charitable deduction, or state and local tax deductions. So I’ve been a real skeptic that you’re ever going to achieve that type of tax reform. I actually don’t like the word tax reform. I like the word tax simplification.
RJ: And the reason I wanted to get on your show right away, because I thought you wrote an excellent column, and you’re exactly right. There’s a simple way to solve this one, Hugh. Just have an optional system.
RJ: Just design a completely simple system based on two principles – raise the revenue we need, and do no economic harm. Stop trying to socially and economically engineer the tax code. We do a terrible job resulting in all kinds of uneconomic behavior. So give people a choice. Say listen, if you love your deductions, if you love this complex system, 70,000 pages, be my guest. Or you can have this elegantly simple tax system. And by the way, the way I would design it would be an infinite scale of taxation, slightly progressive, based on exactly what people are paying today. I don’t see how there could be any controversy on that. Take the effective tax rate of taxpayers, and the different income categories, come up with a very simple system, and let people choose.
HH: I could not agree with you more, Senator, because that then, if people want to give up the reliance that they put their life on, if they want to say okay, I’ll leave California and I’ll go over to this other system and save money, they can do it. And I fully support, provided you guys make mobility between states easy enough to do so the Franchise Tax Board doesn’t chase me forever, I will be happy to do that. But I just don’t want a jam down that will be a political nightmare on our hands, because I do, I am afraid that some of the purists in the House want to blow up the tax code and not realize they’re striking at people that built their entire life on reliance upon certain deductions.
RJ: Yeah, people make all kinds of business decisions and personal decisions based on the tax code. You can’t pull the rug out from underneath them. You can’t just change the rules in the middle of the game. Again, a very simple solution here, I’ve been talking about this for six years, hasn’t gained a whole lot of traction. That’s why I thought I’d call up the influential talk show host like yourself. Maybe we can get this one on the table, the Johnson solution here. Let’s have two tax systems, and let the American people choose one elegantly simple, and one, the nightmare that we currently have.
HH: I am in favor of the Johnson solution. I have a new book out, Senator, called The Fourth Way, which I think I’m delivering to every member of the House and Senate at your retreat in a couple of weeks, and it has an extended version in there about this. I didn’t use the term Johnson solution, but I will going forward, because I think the Johnson solution is what people need. Let’s now talk about health care this segment and next. I also think there’s an elegant, simple solution here, which is one national market. If you’re selling an individual policy anywhere, you’re going to sell it everywhere. We’re not going to have a penalty if you don’t buy health insurance. Some people don’t want to buy a Vermont insurance policy in New Mexico, obviously, but if you’re in the business of selling insurance policies, you put it in the Federal Employees Health Benefits-like program, you put it on the web, and people can buy it and presto, done, get rid of these interstate restrictions and move forward. I think it’s a disaster to delay the replacement. I think we’ve got to repeal and replace. What do you think?
RJ: Well, what I’ve been saying is what we should start doing is voting on the elements that start repairing the damage. I’ve been using slightly different, you know, dramatically different terminology. Ever since Obamacare got implemented, I think our first, our first responsibility is start repairing the damage done by Obamacare and start transitioning to a system that actually works. I’m not opposed to something you’re talking about in terms of having the federal government at least bless, you know, this is what this insurance policy is. You can be confident that if you buy this insurance policy, this is what’s covered. These are the things that are excluded from it, you know, basically regulate that. But also give the states the ability to do that and give people the capability of selling whatever kind of insurance policy they want. So what I bristle against is a federal definition of the one health care.
HH: Yeah, yeah.
RJ: And that’s what’s driven it up. And here’s the problem with what a lot of people are talking about. You know, the repeal we’re talking about now only repeals two of the three main elements of Obamacare. We repeal the taxes, repeal the subsidies. We leave in place all the market reforms that are driving up the cost of insurance, what is actually resulted in people in the individual market having their premiums double and triple. We’re not even touching those. We have to touch those.
HH: I’ll be right back with Senator Ron Johnson of Wisconsin. He’s one of the great innovators in the private sector. He won the greatest upset in 2016. He speaks for reform. We’ll talk about more of that when we return.
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HH: Senator Johnson, I am curious about your relationship with the President-Elect. He seems to be the subject of serial attacks whether it’s on ethics or on, you know, for conflicts that don’t yet exist, or the Russia intervention over which he had no control, or his tweets, whatever it is, it just seems to me that the serial overreaction is wearing people out, and that he’s pretty soon going to be immune from everything because of people crying wolf.
RJ: Well, the American people for the last number of elections have voted for change. They didn’t give Barack Obama, I’ve been referring to President-Elect Trump for quite some time as the political equivalent of a disruptive technology. He represents real change and a completely different mindset and perspective. I’m a business guy here in Washington, D.C. The difference between a business perspective and a governmental perspective is just night and day. First of all, when you operate successfully in the private sector, you have to get results. You have to be accomplishing things day in and day out. Often times in government, elected officials, their primary accomplishment in life is getting elected.
RJ: And once in office, about all they’re doing is trying to get reelected. In business, no, you actually have to perform. And so I think that’s a completely different mindset, and Donald Trump obviously was a highly successful business person. He can, I suppose, quibble with certain elements of that, but you know, I’m not a billionaire. Are you?
RJ: I didn’t win the presidential primary against a really strong field. I didn’t win the presidency of the United States, nor did anybody else. He did. You’ve got to give the guy credit. He’s got a different approach. I have been unbelievably impressed with his energy level, his activity level. I ran a tough campaign. So did he. I got to take a couple of days off. He hasn’t. I’ve been incredibly impressed with his cabinet selections, you know, people like General Kelly, General Mattis. I think Rex Tillerson will be an excellent Secretary of State. He’s appointing competent, intelligent people with the background in the areas that they’re going to be addressing. We’ve got a real mess on our hands in this country. We’ve got to clean up this mess. And that’s what he’s going about doing. So you know, give the guy a chance to set up his administration. Give him a chance to govern. And if you don’t like the results, then you can carp at him, but let’s not assume he’s going to do a bad job. I’m really, you know, excited about working with a business person who has just, you know, he’s driven to get results, to accomplish things. This is totally different than what you normally see in government.
HH: At every level. I know Any Puzder pretty well. He’s going to be a terrific Labor secretary, private sector guy. I know Scott Pruitt, who’s not. He’s a lawyer, but he owned a minor league ball club, so he was a businessman for a while. He’s going to be a terrific EPA secretary. I think Jeff Sessions, fine lawyer, is probably the most qualified attorney general nominee we’ve had, and I worked for two of them – Bill Smith and Ed Meese. They’re great. But let me ask you about one particular line of attack on President-Elect Trump. They’re arguing that his hotels have to close under the Emoluments Clause. Laurence Tribe wrote that. That is simply not historically accurate, in my view. And he acknowledges that there is debate about this, but I think George Washington as a planter sold produce to the British. I think that James Madison, Thomas Jefferson, no one thought fair market, arm length transactions were emoluments. Do you think they’re crying wolf too much on this stuff, that he’s got to divest from everything? Or can his White House Counsel team work around these things?
RJ: Yeah, I do think they’re making too big a deal out of this. I’m not a lawyer myself to know all the detailed, you know, laws that have been written, you know, the layer upon layer of precedent here. But the fact of the matter is that the American public, knowing full well who Donald Trump was, understanding he had holdings around the world in real estate, elected him. And they didn’t seem to have a problem with it. And as many, as much as people were demanding his tax returns, he didn’t turn them over and he still got elected. And so you know, in the end, the American people made a choice. Elections matter. And I think we need to move forward. I don’t see why we should be demanding the president of the United States divest himself of all of his financial interests. I think…
HH: I agree.
RJ: You know, he’s not doing this to get rich.
HH: I agree.
RJ: I really don’t think he ran for president to become rich. How much of his own money did he spend getting elected?
HH: I agree.
RJ: He’s doing this because he’s concerned about the direction of this country.
HH: Last question, Senator Johnson, we’ve got 45 seconds. I expect the Supreme Court nominee to be confirmed. It might be from your state, Diane Sykes. But no matter who it is, and 13 appellate judges to be confirmed, is that your expectation as well?
RJ: It is.
HH: And in quick fashion?
RJ: Yeah, I think so. You know, the Democrats are going to, you know, probably screech and howl on a Supreme Court pick. In terms of everybody below that, we just need 50 votes, and I’m sure we’ll get them.
HH: Thank you. I think you need 50 as well from testimony of your colleague, Mr. Murphy, yesterday on this show. Senator Johnson, great to speak with you, come back early and often.
End of interview.