This is a rush transcript from "Your World," December 1, 2016. This copy may not be in its final form and may be updated.
NEIL CAVUTO, HOST: You know, I have a lot I want to talk about with Karl Rove, great mind, great bestselling author.
But, Karl, first off, if you don't mind, on this move today, going out to Indiana, continuing this thank you tour, as he's calling it, but his intervention here that some liberals have blasted as too interfering, picking favorites, you say what?
KARL ROVE, FORMER SENIOR ADVISER TO PRESIDENT GEORGE W. BUSH: Well, fortune favors the audacious.
And he called -- he made the Carrier decision an issue during the campaign and then talked to the Carrier leadership. And they found a way to keep the jobs. And so what greater symbolism about what is to come than him going to Indianapolis, then having a big rally in Ohio, and then going to Iowa?
And the message is, he's already saving jobs. Symbolism matters, particularly here at the beginning. By the time he gets into the presidency, results will matter more. And 1,000 is a nice symbol, but rising prosperity, broadening prosperity, increasing paychecks, that is going to be the real test.
CAVUTO: All right.
Also, there were some concessions and incentives built into this to keep Carrier in Indiana, largely done through Indiana. But you wrote an interesting column today in The Wall Street Journal talking about some of the mixed messages we would get out of Donald Trump even from fellow Republicans, referring to his stimulus plan, public works plan, infrastructure plan, more to the point, that Congress Republicans -- quoting here -- "will feel hinky about the trillion-dollar price tag, having spent years decrying the costs and feeble results of President Obama's $830 billion stimulus, especially true given the vote coming next March on raising the debt ceiling."
I thought about that and how he has to spin that. He says, I'm going to pay that by getting back money here that is held offshore.
Does he have to do that quickly, before he commits this money, or what?
ROVE: Well, they're going to have -- he said during the campaign it was going to be deficit-neutral, which means, if he wants a trillion dollars' worth of spending on infrastructure, he is going to have to find places to either cut elsewhere or generate revenue.
And as I put in my piece, there are ways to fund some of this infrastructure by having a smaller tax rate on repatriated foreign earnings as you work to hopefully a territorial system where we no longer tax the foreign profits of U.S. companies twice.
But the leaders the House Ways and Means Committee have already signaled they want to use those repatriated tax earnings to help pay for lower corporate tax rates.
ROVE: So, the point of my article was to say, you have got to take into account this isn't going to be easy and you need to work with the Republicans in Congress and realize that you can't say things like we are going to rebuild every shipyard and every iron plant, as one of the president's designate advisers said, president-elect's advisers said, because Republicans are sitting up there on Hill saying, we have been critical of Solyndra.
Do we really want to rebuild -- anybody want to have their iron plant or their shipyard rebuilt? We will be happy to do it. That's going to find a rough sledding in the -- particularly among House Republicans.
CAVUTO: Well, a lot of them have been sort of cowering a little bit, maybe in awe, surprise, shock, whatever, to Donald Trump on this stuff.
And I'm wondering whether Mitch McConnell and watching him closely warrants a good deal more attention than we're giving it, because he has been against this idea of infrastructure spending, certainly up front, immediately, and maybe altogether.
How do you think that is going to go? I know his wife, Elaine Chao, is coming in as transportation secretary. No doubt that is part of a little bit of deal-making behind the scenes here. I have no idea.
But do you think it's going to be rough sledding for Donald Trump with fellow Republicans?
ROVE: No, I think if he realizes where they're coming from and adapts.
You put your finger on the critical issue, which is the length of time for these things to happen. The things that are going to cause business confidence and consumer confidence to rise are regulatory changes and wiping out some of this stuff and beginning to make a start on doing the things that he said he would do, creating -- getting rid of Obamacare and replacing it, passing a comprehensive tax reform, redoing our trade practices.
In the short run, it's going to be people saying, well, you know, he's moving in the right direction. In the long run, infrastructure will help in the medium and long term, but only if it is securely funded for long term, because if you're -- let's say you're a highway contractor.
You're not going to go out there and hire people and train them and go get additional equipment unless there's a long-term funding for the highway bill. And the Highway Trust Fund is only kept solvent by occasionally dropping big dollops of general revenue into it.
So, my point in the article was, if you really want to have -- focus on thinks that are going to cause confidence to rise, that will help but in the short run, but in the medium and the long term, any kinds of these infrastructure programs, we ought to rely upon the tried and the true, namely the Highway Trust Fund and the Army Corps of Engineers, both of which have plenty of projects that could be built out for many years.
Give them secure long-term funding, and then look for things that can be done better by the private sector that the government doesn't need to do, like the air traffic control system. There are over 60 countries in the world that have already turned after that over to a nonprofit organization funded by the stakeholders.
Canada, for example, our neighbor to the north, has a superb system. And that's another approach that the administration could use.
CAVUTO: Yes, I read that one. And that one worried me. I want my planes to get there safely. I'm sure it works, but we will talk about that.
ROVE: Well, so you keep the safety function in the hands of the government, but have the air traffic control function -- the air traffic control function has got certain specific parameters regarding safety, but the structure for safety is set by the government, executed by the nonprofit organization, funded by the airlines.
CAVUTO: All right, I don't understand what you're saying, but it worries me.
But, Karl -- I'm kidding.
CAVUTO: It's always good having you, my friend. Thank you very, very much.
ROVE: Thank you, Neil.
CAVUTO: Karl Rove.
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